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Coskata Inc. grows many microbes in how, in its efforts to find natural bacteria that optimally produce ethanol. These little guys are the key to Coskata's new method. Its current generation features high efficiency, live in-gas in an aerobic environment, and reproduce naturally.

A Coskata employee mans the ethanol reactor.  (Source: Coskata Inc.)

Tubing with selective membranes separates the reactor's output into pure water and pure ethanol.  (Source: Coskata Inc.)
GM and Coskata partner to bring transform the way ethanol is mass produced

At the General Motors section of the North American International Auto Show (NAIAS) at Detroit, the biggest news wasn't cars -- it was fuel.  GM unveiled and detailed its efforts to take Ethanol from a impractical technology into a viable alternative energy strategy.  Not too long ago it looked like the end of ethanol fuel, with advent of a hungry microbial hydrogen production research effort, which promised better efficiency than current ethanol production.

The biggest current downside of current ethanol infrastructure is simply its source; current ethanol can only be produced using the chemical breakdown of sugar-laden crops, such as corn and sugar cane.  This makes ethanol more expensive and extremely agriculture dependent.  Most U.S. experts agree that the amount of land needed to grow enough sugar crops to power the nation's vehicles would be prohibitive.  Microbial hydrogen currently has ethanol trumped on this count, as it can use anything from crop waste to household table scraps as a source of hydrogen.

Ethanol is down, but certainly not out.  An advanced new approach, dubbed "cellulosic ethanol production," developed by Coskata Inc. located in Warrenville, Illinois promises to make ethanol cheaply and efficiently from virtually anything organic-based.  The long list of possible sources include used tires, crop waste, sewage, household kitchen waste, yard waste etc. 

GM, inspired by Coskata's innovation, announced a major partnership with firm last night.  GM reportedly looked into as many as sixteen ethanol startups offering different processes, and picked Coskata as the winner.  GM invested a small amount of equity to cement the relationship, and both firms are aggressively moving ahead to bring the technology to the market. 

The alternative energy auto market is not unfamiliar ground for GM.  The company showcased leading designs with its Provoq fuel cell concept, its Volt electric car, and its fleet of 100 fuel cell-equipped Equinox SUVs that are currently being deployed in California and New York.

In an interview with GM's Vice Chairman of Product Development, Bob Lutz, DailyTech was provided exclusive insight into exactly how this process works.  Lutz, in response to DailyTech's question, began by stating, "All the other companies use enzymes, which are incredibly expensive.  This has been a major stumbling block."

Lutz went on to detail how instead of enzymes -- which are tricky to mass produce and prohibitively expensive -- GM turned to nature.  GM's approach starts rather traditionally by putting the various organic waste materials, such as tires, crops, crop waste and yard waste into a grinder.  The remaining powder is then exposed to plasma, which causes the organic powder to ferment, releasing carbon-chain gas.  It rises into the air where natural anaerobic bacteria eats the gas molecules and excretes ethanol and water vapor.  This mixture then rises, and travels through a series of tubes with a separating membrane.  The yield is pure water and pure ethanol.

"The bacteria are from nature so no patent was needed.  And they reproduce on their own," Lutz explained, excitedly.  The process, Lutz elaborated, is a down-to earth approach that does not use designer organisms or chemicals.  Further it eliminates many steps in traditional or enzymatic processing, including the need for a centrifuge or still. 

The process trumps traditional production in efficiency.  Less than a third as much water is needed to produce a gallon of ethanol, which makes the process more affordable and easier to implement.  Further an analysis of the process conducted at Argone National Laboratory reveals that for every unit of energy Coskata uses, it creates approximately 7.7 times as much energy, a ratio well above current tradition ethanol production.

Lutz emphasizes the importance of reducing reliance on foreign energy via ethanol fuel.  He also explained that the move will take GM and other auto makers "out of the firing line" of accusations that they contribute to everything from "out-of-control global warming, to funding terrorism."

GM plans to aggressively fund Coskata and deploy the technology.  While many alternative energy research technologies languish in the development phase, GM announced that a pilot plant will begin producing fuel before the close of 2008.  By 2011 a full scale plant will come online, capable of producing 50 to 100 million gallons of ethanol a year.  Such a plant would almost amount to 1% of the world's total ethanol production, including ethanol used for industrial sources.

The price per gallon to produce the fuel is approximately $1 per gallon, but Lutz stated that with Coskata profits, shipping, taxes, storage, and a retailer's cut, the fuel would likely raise the price to a still very affordable $2 per gallon. 

Lutz said that while such a fuel would be very attractive to the consumer, the big hold up is the oil companies.  He points out that while GM has sold 6 million flex-fuel vehicles in the U.S. capable of using ethanol, less than 1% of pumps in the U.S. are ethanol-equipped. 

Will GM's new advanced ethanol process win out over hydrogen fuel cells and other efforts?  With promises of mass production by the end of the year, and $2 per gallon fuel costs that don't dip into American agriculture, Coskata and GM might end up in the spotlight a lot in 2008.

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RE: Great, even more ethanol BS
By masher2 on 1/15/2008 12:06:38 PM , Rating: 2
> "Why don't you enlighten me on the "Hidden Costs"

Glad to. A hidden cost is one you don't pay directly. The hidden costs for ethanol are twofold. First is the government subsidy package, which totalled about $3.4B in 2006. That's money you and I pay in taxes, even if we don't see the cost at the pump. The second hidden cost is the lost mileage for ethanol, which forces us to buy more gallons to travel the same distance.

> "I think if you look at the farm bill you'll find money for food stamps, school lunch, foreign aid and many other programs"

Yes. So what's your point? That one government program deserves another?

> "In a free market the market decides the winners"

That's just the point. Subsidizing ethanol distorts the free market. Alternatives which might truly be cheaper appear not to be, due to the subsidy. Ultimately, that only slows introduction, and forces us to waste resources on less efficient alternatives.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 1:10:03 PM , Rating: 2
$3.4 B is nothing. Administrative costs eat a lot of that. I also think you have lumped some of the program costs of the programs I've mentioned in that figure. A figure that you seem to dislike paying taxes for, but you don't mind paying less for food you buy. It's much like taking money from one pocket and putting it in another. Unless of course you don't think that that tax expense is reflected in the lower price you pay at the grocery store. The farm program could have been viewed as a social program, a cheap food program, it subsidizes production and is reflected in lower prices to the consumer. Ethanol wasn't even on the screen when the last farm bill was passed, so it's a bit of a stretch to ascribe the cost to ethanol. I think they are working on a new one right now.

I do agree the blender tax credit and lack of the tax credit on imported ethanol is troublesome. But I'm not sure the argument that alternative sources of energy production are being suppressed because of the "subsidy" is a bit of a reach. I repeat I do not see ethanol as "the answer." I personally view it as an alternative energy source that is opening the door for other alternative energy sources. But to blame current market conditions entirely on ethanol is to deflect the blame from poor planning in the past. Some people seem to be using Ethanol as a smoke screen and ethanol has become a convenient "evil" plot device.

RE: Great, even more ethanol BS
By masher2 on 1/15/2008 2:11:00 PM , Rating: 2
> "$3.4 B is nothing."

Whoa there! Glad you're not my congressman. And you have to remember that's just for the very small amount of ethanol already produced. The lion's share of that money is the $2.5B spent on the 51 cent/gal blender credit. Which means if we buy ten times the ethanol, the government subisidy rises to nearly $30B.

> "Administrative costs eat a lot of that"

No they don't...and even if they did, it would change nothing. It's still a hidden cost you and I have to pay regardless.

> "But to blame current market conditions entirely on ethanol"

I don't see anyone doing that. The fact that other problems exist, however, doesn't change the rational analysis of ethanol.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 2:48:22 PM , Rating: 2
I don't see a $2.5B tax not collected as a subsidy. I also see I wasn't writing about the same "subsidy" as you were, sorry.

Actually a lot of bad press is not based on a rational analysis. If corn had not been so dirt cheap ethanol production from corn would never have gained traction. Even now it seems to be economically viable.

"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke

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