In the latest AutoblogGreen podcast, we featured an interview with Coskata president and CEO Bill Roe. This is a transcription of that interview. For a way-too detailed look at the GM-Coskata cellulosic ethanol partnership discussed in this chat, check out this post.
ABG: I'm here with Bill Roe, CEO of Coskata, and we just listened to the presentations and had a little tour of the laboratories here on the site. I am a little bit interested in this partnership, that is kind of what we are learning about here today between your company and GM. We heard a little bit about what GM can do for you, some of the promotion, bringing it to other people and you said during lunch that other car did approach you and GM sort of was the best fit for you. Can you talk a little bit, now that the tape is rolling, about how that partnership came to be? And why you are excited to work with GM on this.
Roe: I think that the two companies, and for similar and yet dissimilar reasons, have an understanding of what is going to have to happen if there is going to really truly be a revolution in transportation fuels. General Motors clearly had undertaken a study to determine who is out there and what are the best bets, and who is going to be quickest to market in the next generation ethanol space. We did not know that. But concurrently we were looking at the enormity of what has to happen for the billions of gallons of ethanol that conceiveably can be produced to ultimately get to market because there is a tremendous amount of infrastructure change and infrastructure development that is going to have to take place. And so, when we began to look at, in our partnership model, who the players would be that we would necessarily want to talk to that had a long range, and I would emphasize that word "long-range", long view of what had to be done, obviously, the automotive firms came to mind. It just so happened that when we begun to work our way into General Motors to see who could we talk to about this, we found out that they were doing an independent study of their own of next generation ethanol companies, and so we fit right into that discussion. And, they went through the same diligence process with us that they did with – I think they said 14-16,18 other companies, and said; we like many attributes of many of those companies. But we see in Coskata something that is elegantly simply, fast to market and with economics that look like there is as good or better than anything will be in the perceivable future, and that is when they made their decision to partner. That is when we made, certainly, our decision to say "thank you" for supporting us because, again, these really is going to take lots and lots of collaboration and cooperation between major corporations, entrepreneurial start ups, technology companies, universities, and governments to make happen.
Read much more after the jump.
ABG: Some of the things that were described about the partnership was that GM bought an equity stake in the company. A lot of those details you are not talking about.
Roe: Right.
ABG: What does the-as far as the technology that you are developing here, when that soon that when the plant start being produced; what happens to that fuel is not like it can only into on GM cars or anything -
Roe: Not at all.
ABG: I mean, what is GM get of helping you, it is sort of-they can say we are working with a cellulosic ethanol company. What are the boundaries for-you know, what that partnership means for you? Are there any limitations placed on you?
Roe: None. Again, I think the way the think of this is: General Motors, very clearly expects to win in alternative fuel space but they know that somebody has to produce bio-fuels. Somebody has to transport and distribute. Somebody has to retail, and it isn't going to be just one entity; it is going to be a whole host of entities. And so, no, there are no restrictions in these or whatsoever. I expect that they will be doing similar things with other companies that both produce ethanol or transport it or retail it and they will try to create interconnections between all of that. So that, again, as fast as possible, these new fuel production and delivery mechanism begins to take place. That is the biggest hurdle right now to having viable alternatives to gasoline today is the infrastructure just isn't there to the extent that it can be. We will be dealing with other people as well. We will be dealing with partners who will get in to the biofuel business because they have raw materials. There is a major forestry company for example that has their own forest. They want to use wood and wood-by product to make biofuels. They want to be in the business of building and owning of operating ethanol plants. And, they want to use our technology and we will help them to do that, and we will participate in that. And, they will have off-take partners who will take that ethanol that is produced into the marketplace and to the retailers and et cetera. That is the way this would work, but none of these relationships are going to be significantly binding from the standpoint of restriction.
ABG: So, it is also very mutual and beneficial for anyone involved.
Roe: Absolutely.
ABG: Some of the slides we saw earlier today pointed out or reemphasize the importance of bio-fuels in the 2007 energy bill-that was pass last month, 36 billion in 2025?
Roe: 2022
ABG: 2022. Long term, GM is working on the Volt, battery-powered cars, hydrogen fuel cars. What do you think the status of ethanol will be in GM or even in the American fuel use in 20 years, in 50 years or are you just focus on getting these to commercialization quickly, and it can be used for as long it is viable?
Roe: I think it is practical to think that these transportation fuels are going to be viable for significant periods of time. Gasoline is not going to go away, no matter what the alternatives might be. It is always going to make sense to have a wide variety of choices, which we do not have today. And, there is going to be economies that develop around those things, clearly. I think that one thing that I find GM saying that I think will be true is that as you begin to see electric cars or hybrid type vehicles coming more and more into the product selection, you will see more ethanol alternatives for the liquid fuel portion of that as well. So, I believe that ethanol have staying power. And remember, as much ethanol that is produced today is all primarily being done as E10 with very little E85, and E85 is really going to magnify the amount of ethanol that is going to be required. So, we are not really concerned right now about whether or not this is just a stopgap and then something else takes over. We should be so fortunate as a race of people on the planet if that would be the case, but these things tend to have a very, very long life cycles, as evident by the fact that we have been using gasoline for decades and probably we will be using it for decades as well.
ABG: Right. Yeah its, there is no end in sight for gas use even though the price is going sky ward. People have done some calculation and figured out that if we took all the corn that we grow in America and made it into ethanol, it would still make up a small portion of the gasoline that we use.
Roe: That is correct.
ABG: Considering the tremendous variety of biomass that you can use with your process, is there really a limit or is it limited by the amount of facilities that you can make to produce it?
Roe: Ultimately, the limits will shift and they will continue to expand but that will only come as U.S. agriculture or other countries, but let us just talk about the U.S. for the moment. U.S. agriculture adapts to the possibilities. I will give you an example. Today, forests have, on average. A 25- to 30-year type of maturity before the tress are cut and utilized, and so you've got trees at all different stage as being carefully grown and cultivated, and ultimately used without deforestation, right? In the future, we could be using a lot more of that wood to produce fuels but we will also be doing is there be planting row crops between the rows of trees. It will be switch grass, or it will be miscanthus, or it will be this other high-energy yielding crops that will change the phase of forestry and agriculture, but it will take time for that to develop. So, a crystal ball is very difficult to gaze into with regard to the future here because these is going to be an evolution, and it will grow and change with time, and there will be practical limits that we will hit just as corn hit, less we end up having issues and problems, but we also believe that for the next five to 10 years for sure there are a lot of other materials that we can convert that are simply waste. Construction debris for example, when some house gets torn down, is a perfect fuel for this process and there are collection centers for construction debris and construction waste that we can plug into. Same is true in areas that are tornado allies or hurricane allies, unfortunately tears down a lot of trees, tears down buildings and there are collection centers for that kind of material. We can build a lot of ethanol plants around those types of material and this doesn't have anything to do with agriculture, does not have anything to do with growing things, it is just collecting them or setting up processes continuous to those, and that is what is going to happen.
ABG: And I think that will excite a lot of the people who come check out AutoblogGreen or are interested in this aspect of the automotive industry or even sort of the environmental movement in general, is finding ways to repurpose stuff that right now is considered waste or unusable. Somehow taking it out of the landfill, taking out of the disposal stream and making it something useful.
Roe: Well, and fortunately the folks that are in, the big players in waste handling and waste aggregation, and waste management are thinking the same way. They understand that landfills need to be a thing of the past, they understand that, and they want to still have a business, and so what that means is, if they are going to be the gatherers, what are they going to do with the stuff. We do a poor job in the U.S. of segregating and sorting waste to compare to some countries. It is much further along in some parts of Europe. And, with minimal handling in segregation of waste, we can turn a lot of that waste material, before it ever sees a landfill into other useable products, and this happens to be one of them. It can be ethanol because we can gasify that material and once gasified it is a relatively strict forward conversion to biofuel.
ABG: Have you been talking with landfill operators or anyone in that side of the-
Roe: We have and we fully expect to have commercial arrangements that we can announce in upcoming weeks and months around plans to work with those people with this technology to convert waste, that is waste today, to useful fuels tomorrow.
ABG: Anything you can talk about as far international plans or you sort of briefly mentioned it. Anything that you can hint that, as far as what might be coming?
Roe: Yes. We talked about the fact that food for fuel is a non-starter in many countries, but some of those countries are rich in other resources, either they have biomass or they have coal, which is a perfect feed stock for these, we just do not talk about much here because of the CO2 footprint being so much different. When you talk about India, or talk about China, those areas were loom large, we believe, and we will be able to use feedstock of that nature, for example, to make liquid fuels locally from their own raw material. There is an interest in this technology in the Far East and in Asia by a major corporation that has the capability to help set up and make arrangements for utilization technology with Asian feedstocks, and then do trading and transport of the fuels. So, my guess is the way these would likely go is that the first dozen plants or so will likely be built here in the U.S. But, at that point we begin to look at moving into these other areas with our partners, our manufacturing partners, our collaboration partners like GM, into the areas were they want to see and need to see and want take ethanol fuel for transportation vehicles.
ABG: Can you explain a little bit more, why it makes more sense to possibly use coal as a way to create the syngas in other countries than it does here?
Roe: It makes sense from a raw material point of view if you use coal, period. Simply because it is relatively inexpensive. It is very concentrated. It is material handling into gasifiers as well known and well understood. The power of the CO2 footprint isn't as attractive, for obvious reasons, and so as a result, we think it is important to position the company in its early going as a company that can and will produce fuels from truly renewable resources and coal is not a renewable resource. Now as soon as I tell you that, if you ask, "will these process ever be use to make fuel from coal?" I hope so. It would be stupid not to but we have to be mindful of the big picture story here and the big picture impact. I really think that in short order there will be some strong environmental arguments that can be made for coal-to-liquids using this process. So, as not confuse people with where we are headed and what we are really all about, that's next. They will not be the first plants that we build, that is for sure, and at some point down the track, I am sure that is going to happen.
ABG: Okay. We will definitely be watching it.
Roe: Very good.
ABG: Thank you very much.
Roe: Thank you.
ABG: I'm here with Bill Roe, CEO of Coskata, and we just listened to the presentations and had a little tour of the laboratories here on the site. I am a little bit interested in this partnership, that is kind of what we are learning about here today between your company and GM. We heard a little bit about what GM can do for you, some of the promotion, bringing it to other people and you said during lunch that other car did approach you and GM sort of was the best fit for you. Can you talk a little bit, now that the tape is rolling, about how that partnership came to be? And why you are excited to work with GM on this.
Roe: I think that the two companies, and for similar and yet dissimilar reasons, have an understanding of what is going to have to happen if there is going to really truly be a revolution in transportation fuels. General Motors clearly had undertaken a study to determine who is out there and what are the best bets, and who is going to be quickest to market in the next generation ethanol space. We did not know that. But concurrently we were looking at the enormity of what has to happen for the billions of gallons of ethanol that conceiveably can be produced to ultimately get to market because there is a tremendous amount of infrastructure change and infrastructure development that is going to have to take place. And so, when we began to look at, in our partnership model, who the players would be that we would necessarily want to talk to that had a long range, and I would emphasize that word "long-range", long view of what had to be done, obviously, the automotive firms came to mind. It just so happened that when we begun to work our way into General Motors to see who could we talk to about this, we found out that they were doing an independent study of their own of next generation ethanol companies, and so we fit right into that discussion. And, they went through the same diligence process with us that they did with – I think they said 14-16,18 other companies, and said; we like many attributes of many of those companies. But we see in Coskata something that is elegantly simply, fast to market and with economics that look like there is as good or better than anything will be in the perceivable future, and that is when they made their decision to partner. That is when we made, certainly, our decision to say "thank you" for supporting us because, again, these really is going to take lots and lots of collaboration and cooperation between major corporations, entrepreneurial start ups, technology companies, universities, and governments to make happen.
Read much more after the jump.
ABG: Some of the things that were described about the partnership was that GM bought an equity stake in the company. A lot of those details you are not talking about.
Roe: Right.
ABG: What does the-as far as the technology that you are developing here, when that soon that when the plant start being produced; what happens to that fuel is not like it can only into on GM cars or anything -
Roe: Not at all.
ABG: I mean, what is GM get of helping you, it is sort of-they can say we are working with a cellulosic ethanol company. What are the boundaries for-you know, what that partnership means for you? Are there any limitations placed on you?
Roe: None. Again, I think the way the think of this is: General Motors, very clearly expects to win in alternative fuel space but they know that somebody has to produce bio-fuels. Somebody has to transport and distribute. Somebody has to retail, and it isn't going to be just one entity; it is going to be a whole host of entities. And so, no, there are no restrictions in these or whatsoever. I expect that they will be doing similar things with other companies that both produce ethanol or transport it or retail it and they will try to create interconnections between all of that. So that, again, as fast as possible, these new fuel production and delivery mechanism begins to take place. That is the biggest hurdle right now to having viable alternatives to gasoline today is the infrastructure just isn't there to the extent that it can be. We will be dealing with other people as well. We will be dealing with partners who will get in to the biofuel business because they have raw materials. There is a major forestry company for example that has their own forest. They want to use wood and wood-by product to make biofuels. They want to be in the business of building and owning of operating ethanol plants. And, they want to use our technology and we will help them to do that, and we will participate in that. And, they will have off-take partners who will take that ethanol that is produced into the marketplace and to the retailers and et cetera. That is the way this would work, but none of these relationships are going to be significantly binding from the standpoint of restriction.
ABG: So, it is also very mutual and beneficial for anyone involved.
Roe: Absolutely.
ABG: Some of the slides we saw earlier today pointed out or reemphasize the importance of bio-fuels in the 2007 energy bill-that was pass last month, 36 billion in 2025?
Roe: 2022
ABG: 2022. Long term, GM is working on the Volt, battery-powered cars, hydrogen fuel cars. What do you think the status of ethanol will be in GM or even in the American fuel use in 20 years, in 50 years or are you just focus on getting these to commercialization quickly, and it can be used for as long it is viable?
Roe: I think it is practical to think that these transportation fuels are going to be viable for significant periods of time. Gasoline is not going to go away, no matter what the alternatives might be. It is always going to make sense to have a wide variety of choices, which we do not have today. And, there is going to be economies that develop around those things, clearly. I think that one thing that I find GM saying that I think will be true is that as you begin to see electric cars or hybrid type vehicles coming more and more into the product selection, you will see more ethanol alternatives for the liquid fuel portion of that as well. So, I believe that ethanol have staying power. And remember, as much ethanol that is produced today is all primarily being done as E10 with very little E85, and E85 is really going to magnify the amount of ethanol that is going to be required. So, we are not really concerned right now about whether or not this is just a stopgap and then something else takes over. We should be so fortunate as a race of people on the planet if that would be the case, but these things tend to have a very, very long life cycles, as evident by the fact that we have been using gasoline for decades and probably we will be using it for decades as well.
ABG: Right. Yeah its, there is no end in sight for gas use even though the price is going sky ward. People have done some calculation and figured out that if we took all the corn that we grow in America and made it into ethanol, it would still make up a small portion of the gasoline that we use.
Roe: That is correct.
ABG: Considering the tremendous variety of biomass that you can use with your process, is there really a limit or is it limited by the amount of facilities that you can make to produce it?
Roe: Ultimately, the limits will shift and they will continue to expand but that will only come as U.S. agriculture or other countries, but let us just talk about the U.S. for the moment. U.S. agriculture adapts to the possibilities. I will give you an example. Today, forests have, on average. A 25- to 30-year type of maturity before the tress are cut and utilized, and so you've got trees at all different stage as being carefully grown and cultivated, and ultimately used without deforestation, right? In the future, we could be using a lot more of that wood to produce fuels but we will also be doing is there be planting row crops between the rows of trees. It will be switch grass, or it will be miscanthus, or it will be this other high-energy yielding crops that will change the phase of forestry and agriculture, but it will take time for that to develop. So, a crystal ball is very difficult to gaze into with regard to the future here because these is going to be an evolution, and it will grow and change with time, and there will be practical limits that we will hit just as corn hit, less we end up having issues and problems, but we also believe that for the next five to 10 years for sure there are a lot of other materials that we can convert that are simply waste. Construction debris for example, when some house gets torn down, is a perfect fuel for this process and there are collection centers for construction debris and construction waste that we can plug into. Same is true in areas that are tornado allies or hurricane allies, unfortunately tears down a lot of trees, tears down buildings and there are collection centers for that kind of material. We can build a lot of ethanol plants around those types of material and this doesn't have anything to do with agriculture, does not have anything to do with growing things, it is just collecting them or setting up processes continuous to those, and that is what is going to happen.
ABG: And I think that will excite a lot of the people who come check out AutoblogGreen or are interested in this aspect of the automotive industry or even sort of the environmental movement in general, is finding ways to repurpose stuff that right now is considered waste or unusable. Somehow taking it out of the landfill, taking out of the disposal stream and making it something useful.
Roe: Well, and fortunately the folks that are in, the big players in waste handling and waste aggregation, and waste management are thinking the same way. They understand that landfills need to be a thing of the past, they understand that, and they want to still have a business, and so what that means is, if they are going to be the gatherers, what are they going to do with the stuff. We do a poor job in the U.S. of segregating and sorting waste to compare to some countries. It is much further along in some parts of Europe. And, with minimal handling in segregation of waste, we can turn a lot of that waste material, before it ever sees a landfill into other useable products, and this happens to be one of them. It can be ethanol because we can gasify that material and once gasified it is a relatively strict forward conversion to biofuel.
ABG: Have you been talking with landfill operators or anyone in that side of the-
Roe: We have and we fully expect to have commercial arrangements that we can announce in upcoming weeks and months around plans to work with those people with this technology to convert waste, that is waste today, to useful fuels tomorrow.
ABG: Anything you can talk about as far international plans or you sort of briefly mentioned it. Anything that you can hint that, as far as what might be coming?
Roe: Yes. We talked about the fact that food for fuel is a non-starter in many countries, but some of those countries are rich in other resources, either they have biomass or they have coal, which is a perfect feed stock for these, we just do not talk about much here because of the CO2 footprint being so much different. When you talk about India, or talk about China, those areas were loom large, we believe, and we will be able to use feedstock of that nature, for example, to make liquid fuels locally from their own raw material. There is an interest in this technology in the Far East and in Asia by a major corporation that has the capability to help set up and make arrangements for utilization technology with Asian feedstocks, and then do trading and transport of the fuels. So, my guess is the way these would likely go is that the first dozen plants or so will likely be built here in the U.S. But, at that point we begin to look at moving into these other areas with our partners, our manufacturing partners, our collaboration partners like GM, into the areas were they want to see and need to see and want take ethanol fuel for transportation vehicles.
ABG: Can you explain a little bit more, why it makes more sense to possibly use coal as a way to create the syngas in other countries than it does here?
Roe: It makes sense from a raw material point of view if you use coal, period. Simply because it is relatively inexpensive. It is very concentrated. It is material handling into gasifiers as well known and well understood. The power of the CO2 footprint isn't as attractive, for obvious reasons, and so as a result, we think it is important to position the company in its early going as a company that can and will produce fuels from truly renewable resources and coal is not a renewable resource. Now as soon as I tell you that, if you ask, "will these process ever be use to make fuel from coal?" I hope so. It would be stupid not to but we have to be mindful of the big picture story here and the big picture impact. I really think that in short order there will be some strong environmental arguments that can be made for coal-to-liquids using this process. So, as not confuse people with where we are headed and what we are really all about, that's next. They will not be the first plants that we build, that is for sure, and at some point down the track, I am sure that is going to happen.
ABG: Okay. We will definitely be watching it.
Roe: Very good.
ABG: Thank you very much.
Roe: Thank you.
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