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Wood-chip ethanol maker opens plant

Coskata says its hybrid ethanol technology, using thermochemical and biological processes, can produce environmentally friendly ethanol cheaper than gasoline.

Start-up Coskata on Thursday is starting up a facility that can turn wood chips into ethanol, a step toward producing at large scale next year.

The "semi-commercial" plant in Madison, Pa., will use a variety of techniques to convert the cellulosic material in plants or even municipal trash into liquid fuel that's cheaper than gasoline, according to the company. Its method reduces greenhous gas emissions dramatically and uses less than half the water than is needed to process gasoline, according to the company.

A 1,500-gallon bioreactor at Coskata's demonstration ethanol facility. Coskata

It plans to test a number of different feedstocks at the Pennsylvania plant, called Lighthouse, and is now negotiating with feedstock providers for planned large-scale operations next year, Coskata CEO Bill Roe said in a phone interview. It is also designing a 50 million to 100 million gallon per year facility somewhere in the southeast U.S. that would use southern pine wood chips, he said.

The ethanol industry has slowed down significantly over the past two years with a number of producers shutting operations in the face of falling gas and commodity prices. Corn ethanol has also been accused of having questionable environmental benefits. Meanwhile, there still aren't commercial-scale second-generation ethanol operations with use nonfood, cellulosic biomass for fuel.

Roe said Coskata's demonstration facility will give it a technical and engineering blueprint to scale up. Financially, it intends to license its technology and to finance at least it first plant, he said. General Motors, a supporter of flex-fuel vehicles, is an investor and is testing its fuel.

Coskata's hybrid process combines different technologies, including a gasifier and a bioreactor that uses micro-organisms to produce ethanol.

At the Pennsylvania facility, Coskata will use a plasma gasifer from Westinghouse Plasma that converts biomass, such as wood chips, into what's called synthesis gas, a combination of carbon dioxide, carbon monoxide, and hydrogen, Roe explained.

Then genetically optimized, proprietary bacteria digest the synthesis gas and convert it into ethanol. There is a third step for upgrading that liquid into fuel-grade ethanol, with a lot of the water being recovered in the process, according to the company. The greenhouse gas reduction compared with gasoline is 96 percent, it says.

The facility in Pennsylvania will be able to produce about 40,000 to 50,000 gallons per year. Once scaled up, the cost will range depending on the feedstock but it will be about $1 per gallon, Roe said.

"Because we have the ability to use a wide array of feedstocks, the cost point for this ethanol will be world class. It's a whole new game. If you're limited to one feedstock like a grain, you're probably setting yourself up for challenges," he said.