Verenium Appoints John F. Dee to Board of Directors
May 12, 2008: 04:01 PM EST
CAMBRIDGE, Mass., May 12 /PRNewswire-FirstCall/ -. Verenium Corporation (Nasdaq: VRNM), a pioneer in the development of next-generation cellulosic ethanol and high-performance specialty enzymes, today announced the appointment of John F. Dee to its Board of Directors. The Company also announced that Geoffrey Hazlewood, Ph.D., Senior Vice President of Research, has resigned for personal reasons effective May 31, 2008 and will be returning to his native England. Dr. Hazlewood will remain as an exclusive consultant to the Company and will also join its scientific advisory board, enabling him to play an ongoing role in bringing many of Verenium’s important research projects to a successful conclusion.
“We are very pleased that John has joined the Verenium Board, as his extensive executive-level experience working with emerging-growth companies in strategic, financial and operational development will contribute valuable perspective while the Company rapidly accelerates into a commercial-scale producer of next-generation biofuels,” said Carlos A. Riva, President and Chief Executive Officer at Verenium. “I’d also like to thank Geoff Hazlewood for his many years of significant service and contributions to Verenium and look forward to his continuing involvement.”
Mr. Dee served as President, Chief Executive Officer, and Director of Hypnion, Inc., a privately-held neurosciences drug discovery company, from its founding in July 2000 through its $315 million acquisition by Eli Lilly and Company in April 2007. Before Hypnion, Mr. Dee spent three years as a “turn- around” CEO, specializing in reviving under-performing biotechnology companies including Genta, Inc. Prior to his move into biotechnology, Mr. Dee spent several years as a senior management consultant at McKinsey & Co., Inc., an international management consulting firm, where he led teams of senior executives in the development and implementation of new strategic directives and performance improvements.
Mr. Dee currently sits on the Board of Directors for NeuroPhage Inc., a pioneering neuroscience company focused on Alzheimer’s, and BioProcessors Corporation, a privately-held company that develops innovative biomanufacturing workflow methods and technologies for biopharmaceutical companies around the world. Mr. Dee holds an M.S. in Engineering from Stanford University and an M.B.A. from Harvard University.
Verenium Corporation is a leader in the development and commercialization of next-generation cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the alternative fuels, specialty industrial processes, and animal nutrition and health markets. The Company possesses integrated, end-to-end capabilities in pre-treatment, novel enzyme development, fermentation, engineering, and project development and is moving rapidly to commercialize its proprietary technology for the production of ethanol from a wide array of cellulosic feedstocks, including sugarcane bagasse, dedicated energy crops, agricultural waste, and wood products. In addition to the vast potential for biofuels, a multitude of large-scale industrial opportunities exist for the Company for products derived from the production of low-cost, biomass-derived sugars. Verenium’s Specialty Enzyme business harnesses the power of enzymes to create a broad range of specialty products to meet high-value commercial needs. Verenium’s world class R&D organization is renowned for its capabilities in the rapid screening, identification, and expression of enzymes-proteins that act as the catalysts of biochemical reactions.
Verenium operates one of the nation’s first cellulosic ethanol pilot plants, an R&D facility, in Jennings, Louisiana and has entered the start-up phase at its 1.4 million gallon-per-year demonstration-scale facility. In addition, the Company’s process technology has been licensed by Tokyo-based Marubeni Corp. and Tsukishima Kikai Co., Ltd. and has been incorporated into BioEthanol Japan’s 1.4 million liter-per-year cellulosic ethanol plant in Osaka, Japan — the world’s first commercial-scale plant to produce cellulosic ethanol from wood construction waste. For more information, visit http://www.verenium.com.
The company plans to begin construction on its first commercial plant, next to a Southern California landfill, by the third quarter and to deliver cellulosic ethanol from it next year.
by: Jennifer Kho
May 08, 2008
Arnie Klann, CEO of BlueFire Ethanol
BlueFire Ethanol plans to break ground on its first commercial cellulosic-ethanol plant in the next few months.
The Irvine, Calif.-based company is in the final stages of obtaining building permits and expects to begin construction this quarter or the beginning of the third quarter, CEO Arnie Klann told Greentech Media. In April, the company announced it had selected Brinderson as its contractor for the project.
The facility, which will be adjacent to a county landfill in Lancaster, Calif., will have the capacity to produce 3.1 million gallons of ethanol from garden and wood waste and nonrecyclable paper, he said.
BlueFire expects to begin operations at the plant next year and to sell ethanol from the facility starting around June, he said. It also hopes to double the plant’s capacity in a few years as the amount of biomass coming to the new landfill grows, he said.
“We’re excited about the ability to take the materials that we as a society value the least and convert them into a value-added product,” Klann said. “It helps us as a country reduce our imports from foreign oil and become more self-sufficient, and it benefits the communities that we’re in, not only in terms of job creation, but because we’re creating a cleaner-burning fuel that lowers the greenhouse gases.”
Last year, BlueFire, which is traded over the counter under the ticker “BFRE,” won a $40 million grant from the U.S. Department of Energy to develop a 19-million-gallon-per-year plant at another landfill in Corona, Calif. The company expects that second commercial facility to be up and running by 2010 (it previously had announced an expected start-up date of 2009).
The company expects that facility to convert about 700 tons of biomass into ethanol each day, while the Lancaster plant will consume about 175 tons per day.
Ethanol companies have faced some financial difficulty, as prices for corn has increased, and controversy as scientists have questioned biofuels’ environmental impact, energy use and effect on land use and food.
Advocates hope that cellulosic ethanol — which is made out of nonfood materials such as switchgrass, wood chips and corn cobs — could help temper those concerns, reduce costs and make ethanol mainstream.
But the technologies haven’t yet lived up to their promise.
So far, cellulosic ethanol remains more costly to produce and manufacturing plants haven’t reached mass production. The difficulty of economically harvesting and collecting enough cellulosic material to continuously run a large plant is another challenge, as most of the material is spread around instead of gathered into one place (see Q&A: Harvesting Cellulosic Ethanol).
BlueFire plans to circumvent that difficulty by locating its plants at landfills that already separate out green waste such as tree and bush trimmings.
The company uses a “concentrated acid hydrolysis” process based on technology licensed from Arkenol, and says it has developed a number of its own improvements.
The technology has been tested in three pilot plants: one in Orange County that BlueFire operated for five years to develop its intellectual property, and two that the Japan Gas Co. built in Japan four years ago as part of a licensing agreement.
According to Klann, the company begins by grinding the waste down to a certain particle size.
BlueFire then combines the particles with sulfuric acid, which breaks down the biomass and releases the lignin structures, he said. The lignin is screened out, using a sugar press, and burned to provide electricity back to the facility. The acid is separated from the sugar (and reused), and the sugar is converted into ethanol using a standard yeast-fermentation process.
The process delivers about 70 gallons of ethanol per ton of green waste, Klann said.
The company has designed modular plants so they can be produced in a factory and put together “like an erector set,” he said. “It’s like doing a pre-fab home, only for a process plant.”
The Lancaster design represents the smallest module that BlueFire expects to sell.
“It’s the smallest [BlueFire] plant you can build that’s actually economically viable,” Klann said. “We designed it that size because that’s the amount of feedstock that’s available, and we see it as a standard design that we’re going to deploy around the world in areas that are limited in terms of how much [feedstock they can collect].”
The company also plans to sell a 19-million-gallon-per-year module, such as the one it is building in Corona, and has designed a 55-million-gallon-per-year plant, he said. And BlueFire expects even its smaller first plant to make money, he said.
Aside from selling ethanol, BlueFire plans to bring it revenue by selling carbon credits. It expects even its smaller project to make money, Klann said.
The company plans to develop, own and operate its facilities – not a small goal in a market where financing can be hard to get – and plans to build about 50 plants in the next 10 years, he said. It also aims to grow its revenue to between $4 billion and $5 billion by then, he said.
And BlueFire later hopes to expand into other feedstocks, including forest thinnings and crop residues, such as rice straw, corn stover and sugarcane bagasse, he said.
Nobody can accuse the company of aiming low.
Because green waste is so diverse, BlueFire could find itself dealing with many different types of sugars, some of which might not get broken down as part of standard fermentation, he said. The risk is that other organisms that eat those sugars could enter and contaminate the process, he said.
“Not only will you decrease yield, but you may have another operational issue to deal with,” he said.
The process also requires the fuel to be reconcentrated, in which water is evaporated out of the mixture, and that can use up a lot of energy, he said. Wastewater treatment also could prove challenging, he said.
Finally, even though BlueFire expects the green waste to be separated out in advance, it could run into some logistical issues, McMillan said.
“There would be some issues with construction debris – how do they deal with nails, metals and things like that?” he said. “The same thing with yard waste – what about rocks and dirt that might come along with it? There’s a question about how much source separation is going on and how they screen, if they only can take a portion of [the waste they get].”
Still, he said, the news is good for BlueFire and for cellulosic ethanol.
“It is a very robust approach and it’s good to see it moving,” McMillan said. “Los Angeles certainly has a lot of waste and with [this approach], instead of just burying it all, you’re tapping into it.
Posted by Martin LaMonica, May 5, 2008 8:15 AM PDT
Source: GreenTech Blog, Cnet
When it comes to next-generation biofuels, it’s a competition for both technology and capital.
Range Fuels expanded its previously announced series B funding from $100 million to $166 million, according to reports. Private Equity Hub on Monday cited a regulatory filing, saying Morgan Stanley Capital Group joined the round. VentureBeat reported the expansion last week.
The money will be used to build the first phase of its ethanol plant in Soperton, Ga., which will use forestry waste as a feedstock. The plan is to complete a 20 million gallon-per-year plant next year that uses a gasification process.
There’s growing awareness of the problems associated with corn-based ethanol, which research shows does not significantly reduce greenhouse gas emissions compared to gasoline. The high demand for ethanol, driven by government mandates, is also being blamed as one reason for higher food prices.
Cellulosic ethanol from wood chips, grasses, or agriculture waste is considered a better alternative than corn, but production has not yet been done on a commercial scale.
With a planned plant for 2009, Range Fuels will be one of the first providers in operation.
Other companies on the hunt to make cellulosic ethanol on a large scale include Coskata, which signed a deal with General Motors and intends to have a pilot plant running next year. Coskata uses a combination of gasification and microbe processing to convert a range of carbon sources to ethanol.
GM last week said it has also invested in Mascoma, a company using a third approach: genetic manipulation of bacteria optimized for breaking down sugars and fermentation.
Gulf Ethanol Announces Duel Fuel Strategy
HOUSTON–(BUSINESS WIRE)–Gulf Ethanol Corporation (OTC:GFET) announced today that it will pursue a dual biofuel development strategy focused on processing feedstocks for ethanol in the U.S. and manufacturing biodiesel in Central America. Ethanol has become the dominant alternative transportation fuel in the United States. Gulf will focus on its technology for efficiently processing non-food feedstocks for ethanol manufacturers here. By contrast, Central America has ample feedstocks, such as palm oil, for the production of biodiesel. In these markets Gulf expects to manufacture biodiesel.
“Alternative energy is developing with a strong regional focus,” noted JT Cloud, Gulf’s President. “In Europe it is solar and biodiesel, in Brazil it is ethanol, in the U.S. it has been wind and ethanol. We are tailoring our technology to fit the feedstocks of the regions where we expect to develop operations,” he explained.
Certain parts of the world are already experiencing the impact of advanced clean energy. In Brazil biofuels, mostly ethanol, are now mainstream; in Germany photovoltaic is proliferating. Examples of recent investment impetus include British Airways (London: BAY.L) recent investment in New Energy through its pension fund; General Electric’s (NYSE: GE) announcement that it is doubling its renewable energy investments to $1.5 billion. About $20 billion per year is currently invested in clean energy technologies.
About Gulf Ethanol Corporation
Gulf Ethanol (OTC:GFET) is an alternative energy company focused on the development of cellulosic ethanol technologies with a particular emphasis on Texas and the Gulf Coast. The Company is focused on the procurement and development of cellulosic ethanol technologies. For more information please visit our homepage at: http://www.GulfEthanolCorp.com.
April 7, 2008 1:48 PM PDT
Coskata CEO explains how to get to $1 a gallon ethanol
Posted by Michael Kanellos
Source: Green Tech Blog
Nearly every cellulosic ethanol company claims it will be able to produce fuel at $1 or less a gallon in a few years. William Roe, CEO of Coskata, in a meeting on Monday explained how his Warrenville, Ill., company will do it.
It’s one of the more interesting processes out there, because it combines both biological (i.e., microbes) and thermochemical (heat and chemicals) processing. Menlo Park, Calif.-based ZeaChem is also taking a mixed approach, but it combines thermochemical and biological processes in a different manner. Most other companies are using primarily chemical or biological processes. We don’t know who will win, but the mixed approach on paper does seem to have advantages.
Here are the highlights from the meeting with Roe:
• First, the company can use a wide variety of feedstocks for making fuel: wood chips, weeds and non-food crops like miscanthus, human waste, and carbon-heavy garbage (such as tires). Biomass, ideally easy-to-grow crops that don’t require much water, will likely be the primary feedstock. The ability to exploit various feedstocks reduces exposure to crop failures or shortages. Coskata, which has received an investment from General Motors, also makes fuel from the lignin in biomass. Some companies making ethanol from strictly biological processes can’t use lignin to make fuel.
“You can imagine biorefineries in every single state. This is an enormously efficient process,” Roe said. “We don’t need ‘eurekas’ anymore. We think it comes down to execution.”
Conceivably, Coskata could even produce fuel from the carbon monoxide from steel mills. If you could capture all of the carbon monoxide that comes out of mills worldwide, you could make 50 billion gallons of fuel a year, or close to a third of the U.S. annual consumption of fuel.
• Handling all of these different feedstocks is actually a little simpler than it looks from the outside. The first stage in Coskata’s process revolves around converting the feedstocks into synthetic gases. The different feedstocks can be segregated and processed differently. Waste can be converted to gas with plasma technology, for instance, while plant matter can be gasified with less energy-intensive methods. This allows the company to optimize on different gasification processes. It also reduces variability in processing.
“There’s actually a lot of innovation going on in gasification,” Roe said.
• Coskata has happy microbes. Once the syngas is produced, it is fed to microbes that convert it to liquid fuels. The microbes live in large colonies that collect on membranes. Fuel is produced when the gas passes through the membrane. Part of the company’s intellectual property revolves around coming up with a way to let the microbes live as colonies and form slimes. Yum. Some other companies swirl their microbes in water and keep them in perpetual motion. Letting them live in colonies allows more of the gas to be converted to fuel.
The company is experimenting with five microbes and is particularly fond of two.
• Less distillation. Microbes can create a fluid that contains a small percentage of alcohol or so by volume but can’t get it to 99 percent purity on their own. That’s why distilled spirits are stronger than beer.
Rather than fully distill the fluid, Coskata will distill to about 50 percent and then employ a membrane from Membrane Technology Research in Menlo Park to purify it the rest of the way. This cuts processing costs and energy. Coskata actually doesn’t need the membrane to get to $1 a gallon. “This is gravy,” Roe said.
• Coskata doesn’t want to make fuel. Unlike several other companies (such as Range Fuels and Imperium Renewables) Coskata doesn’t want to build and operate megaplants. It will set up demonstration plants and some moderate-sized production plants, but it primarily wants to earn revenue and profits as time goes on from licensing the technology to big companies. The company has talked to large forestry concerns, petroleum producers, and chemical manufacturers. The interesting part about this approach is that it leaves the onerous challenge of building billion-dollar plus facilities to those who have been doing it for decades. Start-ups just aren’t geared for that.
Soon, Coskata may make an announcement with another partner. Roe wouldn’t give us names, but Chevron has cut a number of development deals in this area recently, including one with Solazyme, which has come up with a way to ferment algae for biodiesel.
Coskata will have a formal coming-out party for its 40,000 gallons a year demonstration facility. Construction is already under way. Roe wouldn’t tell us what state it is in, but will announce it April 24 with the governor of the mystery state.
Coskata’s process and fuel is relatively clean, he added. Overall, it cuts greenhouse gas emissions by 90 percent, well-to-wheel (or stump-to-pump, if you prefer) compared with gas. It also uses less water than most ethanol processes, which rely on food crops.
To clarify, the $1 a gallon figure is how much the fuel will cost to produce. It includes the cost of the feedstock, the cost of the energy required to convert raw materials into fuel, and labor. It does not include paying off the capital of the facilities, taxes, retail mark-ups, or other expenses that can be added as the fuel wends its way through distribution. On the other hand, the $1 a gallon figure does not include subsidies, which lower the cost to consumers. (Ultimately, adding in all these factors can raise the price to around $1.50 a gallon, Zeachem CEO James Imbler estimated in a recent interview.)
Still, at $1 a gallon, that’s half the equivalent costs for gasoline, which is around $1.95 to $2.00 a gallon.
Verenium struggles in cellulosic ethanol quest
By Sarah Smith
Source: Ethanol Producer Magazine
Web exclusive posted April 3, 2008 at 2:45 p.m. CST
Successfully commercializing cellulosic ethanol technology has become a quest that many companies have tried – and failed at. For Massachusetts-based Verenium Corp., the difficulty of that quest started on page 37 of its 200-page annual regulatory filing to the U.S. Securities and Exchange Commission, and extended through the remainder of the report.
After noting it had raised $174 million from 2006 into 2007, Verenium reported a total of nearly $240 million in net losses for 2005, 2006 and 2007. The company, which needs $90 million to support continued cellulosic ethanol research, detailed accumulated debt of $437 million and looming cash deficits. It planned to generate additional working capital from a sale of $71 million in notes, corporate partnerships, grant funding and “incremental” product sales. “If we are unsuccessful in raising additional capital from any of these sources, we may need to defer, reduce or eliminate planned expenditures, restructure or significantly curtail our operations, file for bankruptcy or cease operations,” the statement said. The company didn’t return Ethanol Producer Magazine’s calls seeking further comment.
“We have experienced, and may continue to experience, significant delays or cost overruns related to our cellulosic ethanol plant construction projects,” the company said, referring to plans to develop a 1.4 MMgy demonstration plant. “We may not achieve any or all of our goals and, thus, we cannot provide assurances that we will ever be profitable or achieve significant revenues,” the company admitted in a March 17 filing. “Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis.” And the company acknowledged a “material weakness in internal controls” over its financial reporting.
By Elizabeth Douglass, Los Angeles Times Staff Writer
April 1, 2008
Source: LA Times
Pacific Ethanol Inc., a California biofuels darling that boasts political connections and an investment from Bill Gates, is short on cash and suffering from higher corn and plant construction costs, which threaten to derail the once-promising biofuels maker.
The Sacramento company on Monday posted record-high sales but a larger-than-expected $14.7-million loss in the fourth quarter, reflecting a financial squeeze that has clouded prospects for ethanol producers nationwide.
Pacific Ethanol reported the loss just days after it shored up its depleted coffers with a $40-million cash infusion from Lyles United, a company whose affiliates have provided construction services to Pacific Ethanol and had previously lent it funds.
The Lyles investment provided a bit of good news for the company and helped remedy several violations of Pacific Ethanol’s credit agreement with a group of lenders. The company recently postponed construction of its Imperial Valley ethanol plant, said it suffered from large construction cost overruns and admitted to having a “material weakness” in its financial controls — problems it says it has since fixed.
“Pacific Ethanol is probably having a harder time than other, larger peers,” said Eitan Bernstein, energy analyst at Friedman, Billings, Ramsey & Co., who doesn’t own shares in the company and rates the stock “underperform.”
The company operates ethanol plants in Madera, Calif., and Boardman, Ore., and has a major interest in an ethanol production plant in Windsor, Colo. Two others have yet to come on line; a plant in Burley, Idaho, is in the start-up process and a plant in Stockton is set to open this year.
Pacific Ethanol’s chairman and co-founder is Bill Jones, a second-generation farmer and cattle rancher who served more than a decade in the California Legislature and spent eight years as secretary of state.
Chief Executive Neil Koehler on Monday attributed the fourth-quarter loss primarily to sharply higher corn costs combined with lower prices for ethanol caused by industry overexpansion. Pacific Ethanol, like most other U.S. ethanol producers, makes its biofuel from corn.
For the three months ended Dec. 31, Pacific Ethanol’s gross margins — the difference between the cost of production and the selling price of the ethanol — plummeted to 1.3% from 14.6% in the final quarter of 2006. For the full year, the margin slipped to 7.1%, down from 2006’s margin of 11%.
The lower margins couldn’t cover the company’s debt and overhead expenses, Koehler said. The quarterly loss equaled 39 cents a share, well off average analyst expectations of a 17-cent loss, according to a survey by Thomson Financial. In the fourth quarter of 2006, the company lost $3.1 million, or 11 cents a share.
The margin crunch has taken a toll industrywide. Grain giant Cargill Inc. suspended plans for an ethanol plant near Topeka, Kan.; an ethanol producer in Illinois fell into bankruptcy protection; and VeraSun Energy Corp. scrapped plans for an ethanol plant in Reynolds, Ind. — a community that had hoped to call itself BioTown USA.
During the quarter, Pacific Ethanol also recorded special charges of $5.5 million, or 14 cents a share, reflecting financing fees from the suspended plant and a decrease in fair value of interest-rate hedges.
For the full year, Pacific Ethanol recorded a loss of $14.4 million, or 47 cents a share, compared with a loss of $142,000, or $2.50 a share, in 2006, when there were fewer shares outstanding.
Net sales for 2007 more than doubled to $462,000, reflecting record volumes of ethanol deliveries that were partly offset by lower sales prices. The firm sold 190.6 million gallons of ethanol last year, up 87% from 2006.
Shares of Pacific Ethanol fell 45 cents to $4.40 on Monday, a losing day for ethanol producers after the U.S. Agriculture Department released estimates showing that farmers intended to plant 8% less corn this year. The stock, which traded above $40 in 2006, sold as high as $17 last April.
“It’s a pretty levered business model,” Bernstein, who had expected a 20-cent loss for the quarter, said of the company’s situation. “The question is, how do we get confident and comfortable about earnings going forward?”