Cellulosic Ethanol Refinery Proposal Loses Major Partner

Cel­lu­losic Ethanol Refin­ery Pro­pos­al Los­es Major Part­ner 

- by War­ren John­ston, August 11, 2013. Source: Val­ley News

[For more infor­ma­tion on this facil­i­ty please read “Cel­lu­losic Ethanol: A Bio-Fool’s Errand”]

Mas­co­ma Corp., the Lebanon-based devel­op­er of cut­ting-edge bio­fu­els tech­nol­o­gy, has lost its major part­ner in a pro­posed $233 mil­lion ethanol plant in Michigan. 

Although Mas­co­ma did not con­firm the depar­ture of the Texas-based ener­gy giant Valero Ener­gy Corp. and its promised $50 mil­lion invest­ment, the com­pa­ny did say in an emailed state­ment Fri­day that a fund­ing part­ner is being sought to build the Kin­ross, Mich., facil­i­ty and anoth­er plant in Alber­ta, Canada. 

Bill Day, Valero’s exec­u­tive direc­tor of com­mu­ni­ca­tion, con­firmed Fri­day that the ener­gy com­pa­ny is no longer part of the Kin­ross plant project.

“Mas­co­ma is work­ing on secur­ing the nec­es­sary project financ­ing to con­struct its two planned cel­lu­losic ethanol plants,” the com­pa­ny said.

Build­ing the Michi­gan plant is crit­i­cal to the future of the bio­fu­els com­pa­ny, which has incurred at least $150 mil­lion in debt and has relied pri­mar­i­ly on gov­ern­ment grants and small­er amounts of ven­ture cap­i­tal for its existence.

The pro­posed plant is expect­ed to pro­duce mil­lions of gal­lons of ethanol using Mascoma’s pro­pri­etary tech­nol­o­gy and to gen­er­ate the company’s first earned revenue.

“Mas­co­ma is pro­ceed­ing with the devel­op­ment of a planned 72 mil­lion liter per year mul­ti-prod­uct biore­fin­ery in Dray­ton Val­ley, Alber­ta,” the emailed state­ment said.

“This facil­i­ty will use Mascoma’s pro­pri­etary … tech­nol­o­gy plat­form to con­vert woody bio­mass to cel­lu­losic ethanol, iso­propanol, puri­fied xylose and bio-elec­tric­i­ty. Mas­co­ma is work­ing with the Sus­tain­able Devel­op­ment Tech­nol­o­gy Cana­da, a foun­da­tion fund­ed by the Cana­di­an gov­ern­ment, on this project.

“In addi­tion, Mas­co­ma has com­plet­ed the detailed design engi­neer­ing and final­ized the engi­neer­ing, pro­cure­ment and con­struc­tion bids for the planned cel­lu­losic ethanol facil­i­ty in Kin­ross, Mich.

“Mas­co­ma is cur­rent­ly focused on secur­ing the remain­ing financ­ing for project and will not pro­ceed until there is a firm com­mit­ment for all the required fund­ing,” the state­ment said.

The part­ner­ship with Valero was announced in Decem­ber 2011, when the ener­gy com­pa­ny agreed to pro­vide up to $50 mil­lion need­ed to con­struct the plant. The project was expect­ed to be com­plet­ed by the end of this year, but ground has yet to be bro­ken, the Mid­west Ener­gy News report­ed last week.

At the time of the part­ner­ship announce­ment, Mas­co­ma Pres­i­dent and Chief Exec­u­tive Offi­cer Bill Brady her­ald­ed the agree­ment as val­i­da­tion for the company’s tech­no­log­i­cal lead­er­ship, as well as its abil­i­ty to attract sig­nif­i­cant investment.

Mas­co­ma also was prepar­ing for an ini­tial pub­lic stock offer­ing at that time, although no offi­cial date was announced.

The IPO has appar­ent­ly been put on hold. The com­pa­ny had hoped to raise $100 mil­lion from the sale of stock.

In a side arrange­ment, Valero had agreed to use Mascoma’s yeast in the ener­gy giant’s oth­er corn ethanol plants. It’s unclear if that pact is still in place.

On Fri­day, Mas­co­ma said in the state­ment that the com­pa­ny has been work­ing close­ly with the Depart­ment of Ener­gy and the state of Michi­gan on the sta­tus of the project, “and to date, Mas­co­ma has met all of the grant oblig­a­tions for the state and fed­er­al fund­ing that the com­pa­ny has received.

At this time, Mas­co­ma can­not deter­mine the start date for con­struc­tion of the Kin­ross project, but the com­pa­ny con­tin­ues to pur­sue new options and active­ly engage with inter­est­ed parties.”

Pro­fes­sors from the Thay­er School of Engi­neer­ing at Dart­mouth start­ed Mas­co­ma in 2005, and the busi­ness was hatched at the Dart­mouth Region­al Tech­nol­o­gy Cen­ter, a busi­ness incu­ba­tor that has been an essen­tial part of the area’s grow­ing biotech­nol­o­gy sector.

Mas­co­ma now has a build­ing on Etna Road for research and devel­op­ment and offices in New York, the Boston area and in Canada.