Biofuel investing on the rise
A Los Angeles-based biofuels company called Altra Inc. has secured $50 million (U.S.) in financing from Kleiner Perkins Caulfield & Byers, Khosla Ventures, Sage Capital Partners, and others — yet another sign of growing interest in ethanol and other biofuel technology companies. This announcement is actually a month old, but Kleiner Perkins decided to tout the investment on its own this past week.
Altra doesn’t appear to have anything special going for it, other than its desire to aggressively acquire and improve the performance of existing ethanol facilities, on top of building new ones. Its CEO Larry Gross — you remember, that Idealab guy from those glorious dot-com days — has said that Altra wants to do for ethanol what Standard Oil and John D. Rockefeller did for oil. I suppose he means aggregate, consolidate and eventually dominate on a national basis.
What’s interesting is that Nicholas Parker, chairman of the Cleantech Venture Network, told Red Herring as part of its story on Altra that he’s not convinced biofuels on a large scale is the way to go. “There are real social and environmental issues with biofuel… It’s going to replace the food supply and genetically modify it. There’s a lot of hype, and frankly, there is a niche for it, but it’s not the future.”
Nick repeated this comment last week during lunch, and I generally agree with his position, at least with respect to using corn and other “food” to make ethanol. I have high expectations for cellulosic ethanol production, as promoted by companies such as Iogen, so perhaps there’s some hope there. I think if E85 ethanol made from agricultural waste could be used in a flex-fuel plug-in hybrid, we may be okay. But using corn to save the U.S. from having to use oil from the Middle East for internal-combustion SUVs is, well, just plain silly.
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
May 21st, 2006 at 1:14 am
Keep an eye on bioconversion technologies involving “synthesis gas fermentation” as defined by the U.S. Dept. of Energy. Its advantage over Iogen’s enzymatic hydrolysis is huge – it embraces the widest variety of biomass as feedstock including blends of waste and fossil fuels, co-generates electricity, and produces ethanol at a very high EROIE. Los Angeles (home to Altra) is embracing it with its RENEW LA plan to replace landfill deposal program for municipal solid waste.
May 22nd, 2006 at 8:27 pm
Thanks for pointing that out. I think anything that can use agricultural and other bio-waste to make ethanol and other fossil-fuel replacements is the direction we must take. Otherwise, using corn and other “food” crops to make fuel is bound to become unsustainable over time.