Coskata E85
Coskata uses items like old tires and wood chips to make ethanol instead of traditional feedstock like corn and sugarcane.

Will $2 a gallon fuel ever return? A small engineering firm in the suburbs of Chicago says yes, and it's planning to do it with old tires, wood chips, switch grass, and biowaste--even diapers. Sound crazy? General Motors doesn't think so. It's partnering with ethanol pioneer Coskata to deliver efficiently produced and affordably priced ethanol fuel to the marketplace. But how far off is it, and is E85 really the way to solve our energy crisis?

The E85 Debate

E85 is a blend of 85 percent ethanol mixed with 15 percent gasoline. The ethanol is a type of alcohol made from fermented and distilled plant material, often corn or sugarcane.

Proponents of this alternative fuel believe that it's a homegrown solution to many of the oil-related problems facing the U.S. Since it can be grown and processed on U.S. soil, it is a renewable fuel, unlike the depleting reserves of crude oil purchased from other, sometimes unstable, countries. Another pro of E85 is that over six million vehicles on American roads today are already E85-compatible, according to the National Ethanol Vehicle Coalition. Any of these flex-fuel vehicles can run on regular gasoline at any time.

Flex-Fuel Vehicles
General Motors has over 3.5 flex-fuel vehicles on the road today.
New-car buyers can select from 24 2008 models that can run on E85. Choices include cars, minivans, SUVs, and pickup trucks. Click here for the full list.

Opponents of this technology discount it as a solution to the U.S.' oil problem for a number of reasons. So far, E85 is relatively easy to get in the Midwest, but there are a lot of states where it is unavailable or tough to find and the price isn't all that much lower than gasoline, if at all. Also, fuel economy suffers significantly in flex-fuel vehicles. E85 has a lower energy content per unit of volume than gasoline, so you consume more of it to drive the same distance. For example, Consumer Guide's test E85 Chevrolet Tahoe averaged 14.1 mpg on gasoline and just 11.5 mpg on E85.

Another argument is that the raw material used to produce ethanol is also a food source for both people and animals. Amid rising food costs, many question whether harvesting corn for fuel will upset our economic crop balance. And if we import it, we're back in the same situation of buying fuel from foreign markets instead of relying on U.S. resources.

It's looking more and more like corn and grain-based ethanol isn't the answer, and that we can't use it to fill both our gas tanks and our stomachs. That's where fledgling energy company Coskata and its alternative cellulosic ethanol production plans come in.

How It Works

Coskata, a biology-based renewable energy company, borrowed its name from a Nantucket, MA nature preserve when it was founded in July of 2006. It is developing ways to feed carbon-heavy waste to patented anaerobic microorganisms that will convert it into fuel-grade ethanol.

Stated simply, Coskata's system takes carbon-heavy materials like old tires, wood chips, and other landfill waste and turns it into fuel. It breaks down this feedstock in a hot gas chamber and feeds it to microorganisms in a bioreactor. The byproduct is ethanol.

Coskata E85
The above diagram illustrates the different steps of Coskata's ethanol production process.

The group claims that this fuel-grade ethanol can be produced for around $1 a gallon, and sold for around $2. And that's just the beginning of the pros.

To Coskata, one man's trash is this company's treasure. Because some of the raw materials are items littering landfills, it would be using waste that would otherwise be rotting in a garbage dump. This "dump to pump" philosophy, as the company calls it, not only saves landfills from becoming the permanent home of non-biodegradable waste, it cuts down on raw material costs. These raw materials are flexible, meaning Coskata can use a variety of different types of feedstock to produce the ethanol, not just plant material.

According to the company, this can be done locally, so unlike current corn-based E85's popularity in the Midwest, this type of ethanol could be created virtually anywhere. In terms of production, Coskata claims this method of extracting the fuel takes less water to produce; only one gallon compared to the two to four gallons used in producing corn-based E85. Coskata also asserts that it can make 100 gallons of ethanol from one dry ton of waste material, compared to the 67 gallons of ethanol produced from one dry ton of corn.

Timeline

So how far off is the supposed $2 a gallon fuel? Currently, you can't buy Coskata's fuel; it only exists in test facilities and the company has no mass-production facilities of its own. Its long-term goal is to license the proprietary microorganisms to an existing ethanol production company, which would then manufacturer the fuel using its own plants.

Coskata's first step toward making $2 a gallon ethanol a reality is the opening of its Madison, PA production and demonstration facility, slated for early 2009. From this facility, it aims to deliver 40,000 gallons of ethanol a year. GM plans to use this first batch of test fuel at it Milford, MI proving grounds. Further down the line, Coskata and ethanol plant design, engineering, and support firm ICM, hope to open a 50-million to 100-million gallon-per-year commercial plant by the year 2011.

Will it work? It depends who you ask. GM has an equity stake in the company and a vested interest in making this happen. It produces more than one million flex-fuel vehicles a year and has 3.5 million on the road globally. Currently 95 percent of GM's cars in Brazil can run on E85 and the automaker promises to have at least 50 percent of its total fleet flex-fuel capable by 2012. The widespread availability of $2 fuel would put those vehicles in high demand.

Coskata E85
Chevrolet plans to offer the first flex-fuel compact car for 2009, the HHR.

However, it appears that other manufacturers are not as committed to E85. Automakers like Chrysler and Ford offer consumers a few flex-fuel choices, but others like Honda and Toyota don't have any. They are focusing on other alternative fuel solutions, like hybrid technology. Still other manufacturers, like Mercedes-Benz and Volkswagen, are committed to diesel fuel technology.

GM is spending money on a variety of different alternative fuel technologies, but put its money where its mouth is with this Coskata partnership. Whether or not that was the right decision remains to be seen. But if $2 a gallon E85 becomes a reality, we should see the value of flex-fuel vehicles skyrocket.

05.14.2008