GENERAL MOTORS ANNOUNCES $1-A-GALLON ETHANOL PRODUCTION TECHNOLOGY
Hummer HX & Saab 9-4x concept cars unveiled at 2008 North American International Auto Show
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Joseph Cabadas,
Friday, January 18 2008
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 Although some members of the automotive press seemed underwhelmed by the production and concept vehicles unveiled at the 2008 North American International Auto Show, an ethanol production technology highlighted by General Motors may hold a fairly immediate answer to America’s “addiction” to foreign oil.
As part of the unveiling of the Hummer HX and Saab 9-4x concept vehicles that could run on E85 ethanol fuel, General Motors Chairman and Chief Executive Officer Rick Wagoner also announced it was partnering with an Illinois company to manufacture ethanol for less than $1 per gallon. Coskata Inc. has developed a proprietary process using microorganisms and bioreactor designs to manufacture ethanol for about half of today’s the cost of producing gasoline.
“We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum,” Wagoner said.
Coskata has “put in place some real amazing processes to reduce the amount of water usage” producing about one gallon of ethanol for one gallon of water, where traditional grain-based ethanol uses three to four gallons of water, added Beth Lowery, GM vice president of Environment and Energy. “This reduces the costs of making ethanol (used to make E85 fuel), plus Coskata’s methods can use a variety of feedstocks (raw material sources) including biomass and plastics and old tires.”
 E85 is a blended fuel of 85 percent ethanol and 15 percent gasoline. Many automakers, including GM and Ford, have produced so-called “flex fuel” vehicles that can run on either gasoline or fuel blends up to E85, and have received U.S. federal government credits towards meeting the standards of the Corporate Average Fuel Economy (CAFE) standard of 27.5 miles per gallon (mpg) for passenger cars and 22.2 mpg for light-duty trucks.
In December 2007, the Congress raised the fuel economy standard – an average based on the gas mileage of the total number of vehicles that a manufacturer sells – to 35 mpg for cars and light trucks by 2020. This 40 percent increase will require enormous changes in the ways cars are designed including unheard of engine technologies not yet invented, and weight reductions.
If all 6 million E85-capabile vehicles (also called “flex fuel”) – 2.5 million made by GM alone – already on American roads used the fuel, it would drastically reduce the nation’s oil consumption, Wagoner said. By 2012, GM will make half of its fleet flex-fuel. Currently the automaker sells 11 flex fuel vehicles and will increase that to 15 models for the 2009 model year.
“It’s too early to say how GM’s ethanol announcement will play out in terms of cost, volume and environmental impact,” said Therese Langer, transportation and program manager, for the American Council for an Energy-Efficient Economy. The ACEEE is a non-profit organization based in Washington D.C. that advocates technologies to improve energy efficiency.
“Only a very small percentage of gas stations carry E85,” Langer continued. “Detroit’s interest in ethanol, for years, was limited to the credits they achieved toward their fuel economy targets by manufacturing flexible fuel vehicles. If they are now engaged in making environmentally friendly, alternative fuel vehicles a reality that is good news.”
"This may be one of the most significant announcements we have heard over the last 50 years,” said automotive analyst David Cole, chairman of the Center for Automotive Research of Ann Arbor, Mich. “We know what it takes to make (a flex fuel) car, which is less than $100. The Holy Grail is the cost of making the renewable fuel, and that’s about $1 a gallon. (Coskata’s) technology takes us there… This is a real game changer.”
Based in Warrenville, Ill., Coskata reports that its technology can be used practically anywhere where carbon-based feedstock is available. Additionally, the Argonne National Laboratory analyzed Coskata’s process and has noted that for every unit of energy used to produce ethanol, it generates up to 7.7 times that amount of energy, and reduces carbon dioxide emissions by up to 84 percent when compared with a well-to-wheel analysis of gasoline.
Having taught automotive engineering classes and an acknowledged expert on the workings of internal combustion engines, Cole said the “energy bounce” that GM-Coskata reports is significant. Corn-based ethanol only provides 1.3 units of energy for every unit of energy put in – “and until recently, it was a negative number.”
“This is over 7.5 units; that is big,” Cole added. “In terms of climate change gases – carbon dioxide is carbon dioxide no matter where it’s coming from – if it is from old carbon, such as oil, coal, and natural gas or more renewable fuels. With ethanol from food-based products, you get a 10 percent reduction in green house gases. With the non-food-based ethanol or bio-fuels, it’s over a 90 percent reduction.”
A skeptic of most alternative fuel vehicle technologies – because he sees a lack of consumer enthusiasm on the sales floor – is Mike J. Jackson, chairman and CEO of AutoNation Inc., the largest dealer group in the United States with 257 new car stores across the nation. When asked about the GM-Coskata announcement, he said, “I think it is a breathtaking development.”
By being able to produce relatively inexpensive ethanol, “you’ve moved away from oil… The real issue is 97 percent of all transportation moves on petroleum and we import 60 percent of our oil,” added Jackson, who was the former president and CEO of Mercedes-Benz USA. “To the American consumer to use E85, you need a breakthrough that gives ethanol a price advantage over gasoline. If this is the breakthrough, we could see consumers using it over the next five years and that’s great.”
Coskata’s pilot plant will begin supplying General Motors with its ethanol by the fourth quarter of 2008. The fuel will be used in test vehicles at GM’s Milford (Mich.) Proving Grounds, Lowery said. The automaker also is partnering with other ethanol suppliers and encouraging gasoline stations to encourage greater availability of E85 fuel.
“We have been working on projects in about 15 states,” Lowery said. “We have created partnerships with 300 stations. In Michigan, we have worked with Meijer (the Grand Rapids, Mich.-based supermarket/retailer) to provide E85 at up to 40 of their stations.”
The timing of the GM-Coskata partnership coincides with President George W. Bush’s signing of the Energy Independence and Security Act in December 2007. The act calls for a dramatic increase in biofuels – from 7.5 billion gallons in 2012 to 36 billion gallons in 2022. Corn- and other grain-based ethanol are expected to account for up to 15 billion gallons of that new requirement with 21 billion gallons coming from cellulosic and biomass sources.
One of the criticisms of cellulosic ethanol is that its development is several years away, but Coskata CEO and President Bill Roe that technology is here today.
“We will have our first commercial-scale plant making 50 to 100 million gallons of ethanol running in 2011, and that includes the two years it will take to build the plant,” Roe said. “Success in delivering on our business plan means that we could account for a significant portion of the biomass ethanol mandated in the new Renewable Fuels Standard within 10 years.”
Coskata’s technology is based on some of the research by its co-founder and chief scientific officer, Rathin Datta, who has more than 32 years of chemical engineering experience. A native of India, he has a Ph.D. in chemical engineering from Princeton University and has received numerous awards and commendations for his work, including a Presidential Green Chemistry Award in 1998.
Coskata was initially formed with funding from Advanced Technology Ventures (ATV), GreatPoint Ventures, and Khosla Ventures.
 “As a nation, we’ve been dependent on oil for so long, we continue to think we will be dependent on oil to meet our future energy needs,” said Vinod Khosla of Khosla Ventures. “Scientists, technologists and entrepreneurs like Coskata are here to prove it doesn’t have to be this way. With the development of an economically-viable ethanol solution, Coskata has the propensity to change the types of fuel consumers find at the pump – providing fuel derived from widely-available national resources, rather than foreign imports.”
GM has acquired an undisclosed equity stake in Coskata as part of its partnership that will include joint research and development into emissions technology and investigation into making ethanol from GM facilities’ waste and non-recyclable vehicle parts.
“One of the things we are concerned about is if you are about to have an inexpensive alternative, the energy producing companies are going to reduce the price of petroleum,” Cole warned. “People say that can’t be. Well, back a generation ago – in the late 1970s and early 1980s – we were in the same situation today and were running off in the direction of bio-fuels and alternative energy technology. We woke up one day and found out petroleum was between $10 and $15 a barrel and that just killed it. We can’t afford to have that happen again.”
For his part, Jackson noted that long-time U.S. Representative John D. Dingell (D-Mich.) has recently proposed raising the federal gasoline tax as a way to encourage motorists to turn to more fuel-efficient technologies. The AutoNation executive says raising the price at the pump by $1 during the next 10 years – if the money is invested in alternative energy infrastructure improvements – might be a solution.
The Coskata partnership builds on a quarter century of GM research into biofuels and is part of GM’s five-fold approach to providing energy alternatives for automobiles, Lowery said. These include continued efforts in making fuel-efficient engines; E85 ethanol; hybrids; electrically driven vehicles and hydrogen fuel cells.
“There is no question in my mind that making ethanol more widely available is absolutely the most effective and environmentally sound solution,” Wagoner said. “And it’s one that can be acted on immediately.”
 Underscoring GM’s emphasis on ethanol as one of America’s energy solutions, GM’s concept vehicles were the Hummer HX concept, a two-door, four-seat vehicle is powered by a 3.6-liter V6 that can be fueled by E85. It was the first Hummer ever to feature a V6, said Mark LaNeve, GM vice president of Sales and Marketing.
The HX has removable roof panels, doors, and fenders that can make it “smaller, lighter, more efficient and more environmentally friendly,” LaNeve said.(It also makes the vehicle more closely resemble a Jeep Cherokee.)
 The Saab 9-4x Biopower concept had a turbo 2-liter, 4-cylinder flex-fuel engine that can achieve 300 horsepower and 295 lb.-ft of torque and substantially reduced carbon dioxide emissions.
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