GM Invests
Roe credits Bolsen for getting GM’s attention. “In April 2007, Wes thought it would be a good idea to let major automakers know about [our technology],” Roe says. “Most said ‘no thanks.’” GM was an exception. Behind closed doors, the auto manufacturer was planning to increase its FFV offering to 50 percent of its fleet by 2012. However, it wanted to make sure ethanol would be readily and sustainably available for years to come. Recognizing corn-based ethanol might not be the fuel of the future, it compiled a list of 18 cellulosic ethanol companies to explore. When Bolsen called GM, Coskata wasn’t on the list.

GM conducted due diligence on those 18 companies for approximately eight months, and as if fate planned it, the auto manufacturer decided to invest an undisclosed amount in Coskata in late 2007. It was the first time GM had invested in a nonautomotive company in nearly 20 years. “Its process seemed to make sense to us,” says Mary Beth Stanek, GM’s director of environment, energy and safety policy. “We think all of those companies will have success, but we had to work with efficient processes that are affordable and ready to go.” In October 2007, Coskata wanted to publicly announce its technology, but GM had a better idea. Why not announce GM’s ownership stake in Coskata at the North American International Auto Show, an event attended by 700,000 people? Coskata agreed, and on Jan. 13, GM Chairman and Chief Executive Officer Rick Wagoner introduced the world to Coskata. “We came out of stealth mode with GM’s announcement,” Bolsen says, adding it was one of GM’s most media-covered announcements. Stanek agrees. “We did receive a very positive response from a company-image standpoint,” she says. “It made sense to align with a leading-edge company that could bring about ethanol from waste. It is a good decision.”

GM sold approximately 400,000 FFVs last year and aims to ramp up to 800,000 by 2010. By 2012, it will be producing approximately 1 million FFVs. In addition to manufacturing, GM works on policy-related issues on Capitol Hill and distribution concerns with gas retailers to ensure a fuel supply for its consumers. “GM has had good success with retailers across the country, such as Meijer and Kroger, to market E85,” Stanek says. “We’re looking to promote the fuel. When Coskata opens, we’ll make sure retailers will merchandise its fuel.”

With that said, Stanek adds that GM isn’t in the fuel business. “We have to focus on our products, but there are things we’d like to enable, such as this technology,” she says. She points out that because Coskata is making ethanol so cheaply and is located closer to the end market, consumers will be getting quite a deal compared with gasoline.

On May 1, GM announced a similar investment in Mascoma Corp., another company on its list of cellulosic ethanol technologies. “[Mascoma’s technology] is a different approach but with a lot of good science,” Roe says. “I think of GM’s [investments] as bookends. One is a fast strike (Coskata) and one is more long term (Mascoma).”

Future Plans
With its first demonstration plant sited and a key partnership with GM solidified, Coskata aims to announce a full-scale commercial plant site, alongside a new partner, by the end of this year. Bolsen says the company’s next goal will be to enter the commercial-scale market through various partnerships, one of which is Colwich, Kan.-based ICM Inc., Bolsen’s former employer. “We’re ready to commercialize,” Bolsen says. “We want to open a 50 MMgy to 100 MMgy plant, which will take two years to build, and we’re working on the engineering right now.” To reach that end, he says ICM was an obvious choice. “I knew the quality of ICM and respected Dave Vander Griend, and it is the best [company] at commercializing,” he says. A strategic alliance was announced by GM Vice President Troy Clark at the Chicago Auto Show in February. Construction of the commercial-scale plant is slated to begin in 2009 and end in 2011.

Financially, Coskata will be conducting its third round of equity funding, which Bolsen says will hopefully be the last before the company starts collecting revenue. “When you’re a small company, you’re a takeover target, but right now, we may plan a potential public offering,” he says.

There are also plans to add more staff.. Earlier this year, Coskata added a chief financial officer, and it also plans to hire a vice president of manufacturing to rapidly commercialize the company’s technology.

With all the business being conducted in Coskata’s front offices, Bolsen reiterates that the company isn’t getting ahead of itself either. “We were put in the public light very quickly, but we’re still focused on research,” he says.

Jessica Sobolik is Biomass Magazine managing editor. Reach her at jsobolik@bbibiofuels.com or (701) 373-0636.

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