At the same time, Governor Phil Bredesen alluded to a “major biofuels investment” that is possible for Tennessee, or at least one other state, that will be announced “before the end of the year.”

State Rep. Curry Todd told WSMV that “It looks like we’ve been sold a bill of goods down here in the General Assembly on this plant.”

Governor Phil Bredesen said in an interview yesterday:  “I think the behaviour of the executive director of the fiscal review committee was outrageous. But I can’t recall in any administration that kind of sandbagging taking place by an executive director. Some of the accusations – the change in the contracting party and nobody knew about it – and the output of the plant and nobody knew about it – are just ridiculous. I went back and those things all went through the Buidling Commission – they were all discussed.

“The Building Commission is a public body which reporters and members of the legislature are perfectly welcome to attend . When it comes to changing the contract, I remember holding a press conference on it – this was all a year ago, more than a year ago.

“So to come in and act like you’ve discovered a great secret about the biofuels project and you’re going to act as a prosecutor in front of this committee I think is very, very poor behavior. And I hope that the chair and the vice-chair of that committee can get this thing straightened out.

“The reason I am irritated – more than irritated – mad about it – we have been getting very close to announcing a large investment in east Tennessee,  in biofuels, driven by the presence of this project, by the end of the year. I emphasize a very large investment. We are scrambling like mad today to keep this together because  – their reaction to this stuff – and we got this out of another state they were going to – if the legislatiure is going to politicize this stuff in this ridiculous way, I don’t want to play in that game and I am going to look at going somewhere else.

“And they may have single handedly cost an awful lot of jobs. I am working on it, and I am hope to pull this back together but it is a real problem today.”

Tennessee’s Governor lashes at legislators over ‘ridiculous’ biofuels flap: “They may have single-handedly cost an awful lot of jobs.” is a post from: Biofuels Digest

BlueFire Ethanol receives $3.8 million reimbursement from DOE; proceeding with Fulton, MS development is a post from: Biofuels Digest

Based in: California
2008-09 rank: 19

Business: Synthetic biology and algal fuel developer.

Model: R&D partner

Past milestones:

ExxonMobil, the last of the oil majors to commit to a major investment in biofuels, announced that its Research and Engineering unit will invest $300 million into in-house algae research, and up to an additional $300 million in La Jolla-based Synthetic Genomics, the genetics firm founded by J. Craig Venter that has been working on algae-to-energy research since 2005.

SGI has developed techniques for harvesting algal oils, and will focus research on increasing lipid content by manipulating algal strains. The ExxonMobil investment in SGI is contingent on the meeting of R&D goals, according to a report in the New York Times.

“This agreement between SGI and EMRE represents a comprehensive, long-term research and development exploration,” said Venter. “We are confident that the combination of our respective expertise in science, research, engineering and scale-up should unlock the power of algae as biological energy producers in methods and scale not previously explored.”

“After considerable study, we have determined that the potential advantages and benefits of biofuel from algae could be significant,” said Emil Jacobs, EMRE’s VP of R&D.

The venture is presented as a research collaboration rather than a commercialization effort at his stage, and could be classified to some extent opposite a $500 million investment made in 2007 by BP in the Energy Bioscience Institute. Chevron has also previously partnered with Solazyme and the National Renewable Energy Laboratory on research efforts in the algae-to-energy field. But for sheer magnitude of investment, the focus on a single bioenergy feedstock, and the focus on a single R&D partner in Synthetic Genomics, the announcement is without parallel in biofuels history.

It may not be possible to interpret this investment as, in itself, a new and imminent path towards algal fuel commercialization, but it can be regarded as confirmation that ExxonMobil, after a famously long delay, has entered the renewable energy arena, and is placing its bet on algae.

What does this bode for other high-profile algae-to-energy companies?

“We think it’s good for algae, and good for us,” said Tim Zenk, VP of Corporate Affairs for Sapphire Energy. “The research collaboration announced today sends a loud and clear message that drop-in-replacement liquid transportation fuel produced from algae, above all other biologic choices, is the most viable option to replace crude oil.  Algae fuels have significant environmental benefits over crude oil with lower carbon emissions, and are scalable to help nations transition to a secure energy future.”

Algae 2020 author Will Thurmond was similarly bullish. “Exxon-Mobil’s $600 million dollar commitment to algae based bio-crude and biofuels,” Thurmond said, “represents another affirmative commitment by major petroleum companies, research laboratories, private investors and governments that are looking beyond the research and development phase, and are now entering the next stage to scale up and build out industrial-scale systems based on innovative, emerging and disruptive technologies.”
Future milestones:
In California, a report on Craig Venter in Discover focuses on the Syntehtic Genomics founder’s ambitions to develop synthetic life forms. While researchers have succeeded in “stitching together pieces of synthesized DNA” and transplanting that to a host bacterium; but the bacterium has been rejecting the genome as an invader, until recent efforts to add methyl tags to M. mycoides allowed the genome to go unnoticed by the bacterial defense system.

The prize? Energy microbes that become monocellular biorefineries, consuming waste energy and converting it to biofuels. It is unclear whether the Synthetic Genomics research effort with ExxonMobil in algae will directly benefit from the R&D effort, as algae is a much more highly complex organism than bacteria. But Venter told the Times, “Assuming we don’t make any errors, I think it should work and we should have the first synthetic species by the end of the year.”

Metrics:
$300 million commitment to SGI is reportedly on a milestone-based, stage-gate basis.

The Hot 50 for 2009-10 will be released Tuesday, 12/1. Between now and then, you’ll see profiles of potential candidates in the Digest, and you’ll have a chance to vote for your favorites. Reader response will count for 50 percent of a company’s overall score in the preparation of the rankings. The remaining 50 percent is voted by a panel of experts.

Synthetic Genomics: 50 Hottest Companies in Bioenergy candidate profile is a post from: Biofuels Digest

The heart of the Catilin process is based on its T300 heterogeneous catalyst — a non-toxic direct replacement for sodium methylate.  Catilin’s T300 catalyst is able to operate at industry standard pressures and temperatures, resulting in quick retrofits. The process also results in a 98%+ purity in glycerine, which qualifies as technical grade and enhances overall value.

Catilin says its solid catalyst process reduces cost of biodiesel production by up to 19 cents per gallon is a post from: Biofuels Digest

Bioenergy PROFITS Principle - Reality

Successful companies build core areas of content.  This may be a technology platform or a basic product upon which to expand. This core is the basic element though you may later customize your offerings,

What can you do to deal most effectively with reality, especially when you have other plans?

• Create the foundation
• Face facts
• Honker down to develop new potential offerings

What is your core capability?  Can you build upon it?  Are these core capabilities unique in your industry?

Create the foundation

All Blackberrys are PDAs and differ from an iPhone’s application.  Though there are many versions of Blackberrys, they all are built on the same data driven foundation.

Codexis and other biofuels companies that we’ve recently featured start with a technology that is applicable to pharmaceutical and bioindustrial/biofuel industries.  Though this may not be the initial plan, these companies are ahead of their competitors.  They are able to build upon a foundational platform and then add additional relevant processes for varied customers.

Codexis, for example produces intermediaries to make chiral alcohols, esters, nitrates and other products which serve to improve therapies, product safety and efficacy.

And companies do not have to do this alone.  Creating strategic alliances make good sense for the purpose of companies complementing their core competencies and forming a potentially broader customer base.  Codexis does this to optimize enzymes through its molecular breeding technology and creating biocatalyst pathways for pharmaceutical partners.  A senior executive states, as far back as 2006, “One idea behind acquisitions is to see if we can accelerate adoption by seeding the marketplace with off-the-shelf or wild-type enzymes that are easier for our customers to access.  Companies can then turn to us for more sophisticated optimization and process development.

The company’s technology platform includes millions of mutated enzymes and a dozen or more different reaction platforms.  They can screen compounds against actual enzymes and their own databases.  These bioinformatics capabilities allow Codex is scientists to accelerate its directed evolution process by producing the amount of gene shuffling and specific mutations needed along with the likelihood and length of time for reaching a target.

From there, pharmaceuticals in particular want to form strategic alliances and even help Codexis further its research using its own R&D resources.  For example, Codexis worked Pfizer with chiral hydroxynitrile, an intermediate in the synthesis of atorvastatin, the active ingredient in Lipitor.

And sometimes, the best of plans must stall until market conditions are more favorable.

Face facts

Companies, as well as individuals plan.  We all need a roadmap that directs us in setting and reaching our goals.  However, sometimes plans and reality do not mix well.  Each time there is a conflict between plans and reality…..reality wins.  We can say this builds character.  However, no matter what story we tell ourselves when faced with this dilemma, we must adapt and work with the reality of the market, our customers, our employees and our finances.

Codexis did not go forward with a planned IPO in 2008, even though it already signed papers with the Securities and Exchange Commission.  As disappointing as that was, Codexis realized that market conditions did not portend well for success.  Raising up to $100 million was not realistic in an economy where investors were bearish.  The company had already raised over $75 million in private equity, and included investors from BioOne Capital, Chevron Technology Ventures, CMEA Ventures, Maxygen, Pequot Ventures and Pfizer.

Other biofuel related companies, including Iowa-based Renewable Energy Group, a biodiesel producer, intended to raise $150 million and Seattle-based Imperium Renewables, also a biodiesel producer also set aside their IPO, which intended to raise $345 million.

Codexis CEO, Alan Shaw states, “I don’t believe that venture-backed companies can compete in energy,” he says. “The VC model doesn’t work in this space.”  As for Codexis, says Shaw, “We think our process will be up and running and making money for people by 2013.” In a partnership with Royal Shell, Codexis aims to be first to market with a next-generation biofuel. In 2006 and 2007, Shell invested $33.5 million for a 13% stake in Codexis; it made an additional equity investment (the amount was undisclosed) in March this year. Shell pays Codexis’ biofuels research costs and will pay a royalty upon commercialization.

Shaw says Codexis is on firm ground, in large part because of the Shell deal. It already has revenues–$50 million in 2008–from its biocatalyst and enzyme business with pharmaceutical companies like Pfizer.

Smart companies hedge their bets and bide their time, usually improving their existing processes and products, as well as streamlining and cutting costs.

Honker down and develop new potential offerings

Business cycles offer us the opportunity to focus our company internally and to sometimes focus on the external market and our customers.  Both activities are important. We may not always like the timing of the market and we may prefer to be market driven than to focus on improving our process.  Learning to adapt and developing flexibility presents us with the opportunity to be more innovative, financially prudent and streamlined as we learn new ways to customer oriented.

Cutting-edge chemical processes are expensive and have long development timelines.  Codexis, like other companies, can always become a better strategic partner through better research and development and marketing efforts.  Shortening process development and reducing costs also provide more time and financial resources to improve existing manufacturing processes.

During the current downturn, Codexis is expanding its product offerings to target the emerging market for carbon capture and storage, according to CEO, Alan Shaw.  Codexis plans to market an enzyme that helps captures carbon dioxide from smokestacks of coal-fired power plants. “Coal is not going anywhere fast,” Shaw said. “There’s an urgent need to take carbon dioxide out of coal-fired power stations.”

Coal-fired power plants provide about half of the electricity in United States, but account for about 80 percent of carbon dioxide emissions from domestic power generation, making them top targets for environmentalists.  Coal companies, governments and environmental activists are hoping for breakthrough technologies that will help trap, transport and bury underground carbon dioxide, the main greenhouse gas blamed for global warming.

Shaw said the company, which also counts General Electric Co and Pfizer Inc as shareholders, has successfully completed testing its product in the last couple of months and is looking to commercialize the technology.  ”We need a partner and are actively talking” to companies, he said, citing a huge interest in the market for such a technology. “The market is meeting us more than halfway.”

Codexis is seeking a partnership with an industrial equipment maker that would help engineer a system to introduce the enzyme to the carbon dioxide on the smokestacks.

A company like GE could be a great partner, Shaw said, but he declined to say if Codexis was in talks with the industrial conglomerate. Shaw said the company plans to aggressively scale-up its plans for the carbon market in 2010.

No commercial scale projects exist to demonstrate the carbon capture and storage technology, but the European Union has pledged to have 10-12 pilot plants in operation by 2015.  The U.S. Energy Department is also providing up to $408 million in funding for two projects aimed at developing clean coal technologies. “They have to put a price on carbon for it to truly work,” he said. The air sector has the most potential if concrete goals for carbon emissions are put in place at the international talks on climate change in Copenhagen in December, Shaw added.

In Summary:

Can you develop your abilities to create the foundation, face facts and

honker down to develop new potential offerings

Today’s topic, Reality is one of the seven Bioenergy PROFITS Principles.  This series highlights proven principles to running your business more effectively (from the newly released book, run Your Business Like a Fortune 100: 7 Principles for Boosting PROFITS, by Rosalie Lober, Ph.D.) and illustrates key points of the successful company, Codexis develops biocatalysts for the pharmaceutical and biodiesel industries. Its technology produces biofuel from plant material and is also working with other markets to use its technology to manage CO₂ emissions from coal-fired power plants and treat wastewater.

Bioenergy PROFITS Principles: Reality, and Codexis is a post from: Biofuels Digest

Based in: Canada
2008-09 rank: 18
Business: Cellulosic ethanol production

Model: Owner-operator.

Past milestones:

In 2009, a Shell station in Ottawa became the first in the country to serve cars with cellulosic ethanol, offering a 10 percent blend of gasoline and wheat straw ethanol manufactured at a demonstration-scale cellulosic ethanol plan jointly owned by Shell and Iogen.

A representative of the joint venture said that a decision on expansion would be reached within 12 months, and did not rule out the possibility of constructing a commercial-scale facility in Idaho, where the company abandoned an effort to build a demonstration-scale plant.

Last October, Iogen announced that it had commenced shipments of a 47,000 gallon cellulosic ethanol order from venture partner Royal Dutch Shell. The companies first partnered in cellulosic ethanol in 2002 when Shell invested in Iogen. Shell subsequently increased its ownership stake in Iogen’s technology to 50 percent in 2007.

Under an expanded agreement with Shell, Codexis will optimize the efficiency of Iogen Energy’s cellulosic ethanol catalysts, as well as developing new to convert biomass directly into green gasoline or green diesel.

Future milestones:

The Saskatchewan provincial government signed an agreement with Iogen to support development  the province’s first cellulosic ethanol plant at a former pulp mill at Prince Albert owned by Domtar. Iogen will operate the plant, which will be a commercial-scale expansion of its wheat straw ethanol demonstration plant in Ontario. The Canadian government has pledged up to 40 percent of the cost of the project in the form of development grants.  The plant will also feature power generation from forest residues.

In 2008, the Canadian federal government approved a $500 million cellulosic ethanol project plan by Iogen Corp for construction in Saskatchewan. Iogen execs said that they hoped to launch the 23 Mgy plant north of Saskatoon by 2011, using wheat straw and other cellulose as feedstock. Iogen is backed in the venture by Shell, Goldman Sachs and Petro Canada.

Metrics: The Iogen technology has been operating at a 480,000 gallon per year capacity since 2004, and is currently evaluating options to construct an 18 Mgy plant in Saskatchewan, near Prince Albert.

The Hot 50 for 2009-10 will be released Tuesday, 12/1. Between now and then, you’ll see profiles of potential candidates in the Digest, and you’ll have a chance to vote for your favorites. Reader response will count for 50 percent of a company’s overall score in the preparation of the rankings. The remaining 50 percent is voted by a panel of experts.

Iogen: 50 Hotttest Companies in Bioenergy candidate profile is a post from: Biofuels Digest

The announcement is also the first between an oil major and an algal fuel developer expressly aimed along a commercialization path. Previous tie-ups have featured early-stage investment and R&D partnership.

In a statement, Indian Oil Company said that the two companies will initially partner on adapting the algal strains and technology developed by PetroAlgae to suit Indian conditions. Thereafter, a pilot facility is proposed to demonstrate the commercial viability of the technology, with a 60 Mgy commercial production facility proposed for the the near future, along with a high-value protein that can be used as feedstock for animal feed production.

Indian Oil said that it has been exploring commercial ventures in all form of alternate energy including, solar, wind and biofuels. Significant progress has been made by the Corporation in energy crop plantation. The company expects to complete plantation of 100,000 acres of jatropha plantation, primarily in Madhya Pradesh and Chhattisgarh states.

Indian Oil Corporation Ltd. (Indian Oil) is currently India’s largest company by sales with a sales of $60 billion. Indian Oil is ranked #116 in the Fortune ‘Global 500′, and is the 18th largest petroleum company in the world.

Petrobras, the Brazilian state oil company, has announced extensive investments in ethanol and cellulosic ethanol development, but to date the tie-ups between algal fuel developers and  oil companies had involved only private enterprise.

Florida Governor (and 2010 Senate candidate) Charlie Crist visited the PetroAlgae facility in Fellsmere, FL yesterday. On the left is PetroAlgae CEO Ottmar Dippold, at right is Crist.

The line-up of announced tie-ins is now:

ExxonMobil – Synthetic Genomics
Shell – Cellana
BP – Martek
Chevron – Solazyme
Indian Oil – PetroAlgae

Valero, Marathon Oil, Petrobras, Total, BP, Shell, and Chevron are extensively invested in other forms of advanced biofuels development, including drop-in renewable fuels as well as cellulosic ethanol. Sunoco, Valero and other companies are also invested in first generation fuels.

Dow is among other companies outside of the oil and gas sector now investing in algae, through its partnership with Algenol. Companies such as Proctor & Gamble are also exploring renewable chemicals, in P&Gs case through a partnership with LS9.

More about PetroAlgae in “Biggie Smalls: Microcrops go mainstream“.
More about oil companies entering the biofuels sphere, in “Big Oil on Biofuels Prowl?“.
More about the investors in biofuels, in “Who’s Your Daddy?”

Indian Oil becomes fifth oil major, first NOC, to join algal fuels race; signs with PetroAlgae is a post from: Biofuels Digest

POET’s pilot-scale plant in Scotland, S.D. is already producing cellulosic ethanol at a rate of approximately 20,000 gallons per year. A documentary about POET’s pilot cellulosic ethanol plant is available here.

POET stages Project LIBERTY Field Day, showcasing 16 companies in advanced biofuels; video of Scotland cellulosic ethanol plant available is a post from: Biofuels Digest

In California, BioCentric Energy Holdings and Renewed World Energies, an established closed loop photobioreactor manufacturer, agreed to merge. BioCentric will be the surviving entity. The Huntington Beach, California facility will be the designated corporate headquarters with the Research and Development arm located in Prague, Czech Republic and the Georgetown, South Carolina location will be the heavy engineering equipment manufacturing and ALGAE production unit of the consolidated companies. The companies announced $6 million in orders for their closed-loop photobioreactors.

In Texas, Zenergy International announced that it will acquire Greenlight Biofuels, which operates a 5 Mgy biodiesel facility in Littlefield. The transaction will be completed within a few weeks and funded internally, as not to cause significant dilution to shareholders.

BioCentric Energy, Renewed World Energies to merge; Zenergy acquires Greenlight Biofuels is a post from: Biofuels Digest

Business: Cellulosic ethanol production, now in demonstration stage, constructing a facility in Vonore, TN, and a switchgrass feedstock supplied by Genera Energy and corn cobs supplied by Sun Grant.

Model: Licensing.

3 top milestones for 2008-09

1. Formation of JV
2. Site and funding of demonstration facility
3. Start up of Vonore, TN demonstration facility by end of 2009 (250,000 gallons operated on cobs and switchgrass)

3 major milestone goals for 2010-11

1. Site 25 Mgy cob plant
2. Site 15 Mgy switchgrass plant
3. Develop and sell beta licenses for early deployment

Metrics: Received  $140M funding from parents. 90 scientists from DuPont and Danisco dedicated to project. State of Tennessee has granted $40 million towards the demonstration plant.

The Hot 50 for 2009-10 will be released Tuesday, 12/1. Between now and then, you’ll see profiles of potential candidates in the Digest, and you’ll have a chance to vote for your favorites. Reader response will count for 50 percent of a company’s overall score in the preparation of the rankings. The remaining 50 percent is voted by a panel of experts.

DuPont Danisco: 50 Hottest Companies in Bioenergy candidate profile is a post from: Biofuels Digest