Cellulosic Ethanol News Ebbs and Flows

By Susanne Retka Schill | February 15, 2011

This issue of Ethanol Producer delivers another month of solid reporting from our team. Associate Editor Holly Jessen takes a look at the U.S.’ 2010 DDGS exports and reports that—no surprise here—China blasted past Mexico and Canada to become the No. 1 DDGS customer. She also reports on USDA’s long-term projections for DDGS that suggest the growth in the ethanol coproduct supply will probably not exceed its export and domestic use potential.

Associate Editor Kris Bevill takes us around the country in her feature stories this month, discussing issues arising around California’s low carbon fuel goals and Iowa’s use of its Power Fund to attract advanced biofuel projects to the Hawkeye state. She also fills us in about the boost given to the cellulosic ethanol process development by South Dakota’s KL Energy in its partnership with Petrobras. The Distilled news section reports the good news for three other cellulosic ethanol developers who landed USDA loan guarantees: Coskata, IneosBio and Enerkem, and unfortunately, a brief update on Range Fuel’s struggles.

I’ve been wondering if working out the kinks of a larger-scale process is at the core of Range Fuels’ seemingly slow progress after being quick out of the starting blocks. Iogen Corp.’s leadership made a strong point that they believe running their demonstration plant continuously for several months to work out issues will be key to their success. I’ve also wondered what the story is behind Verenium’s sale of its cellulosic interests to its backer, BP. That business development may have less to do with the challenges of process fine tuning, and more to do with the ability to stay in the game if BP were ready to invest more. Shortly after my visit to Ottawa last summer, Iogen announced the retainer of financial advisors to plan how to maintain a 50 percent stake in its joint venture with Shell.

We often suspect that the multiplicity of company news releases on incremental steps by start-up companies is mostly intended to keep investors interested. More than once when a company has landed a big investment, the news releases dry up. Quite often, we run into companies that deliberately stay under the radar, not wanting to announce their existence until they’ve perfected their process.. That certainly saves on the embarrassment of not meeting projected milestones. This may be the situation regarding news about cellulosic ethanol developments; many firms going after grants and loan guarantees had to go public when they would have preferred not to.

Author: Susanne Retka Schill
Editor
sretkaschill@bbiinternational.com