Mascoma

There has been a lot of talk the past few weeks about Mascoma. The Boston based startup has successfully made \"test\" quantities of ethanol from wood chips at its new demonstration facility in Rome, NY. They secured $49M combined from the DOE and state of Michigan to build their much anticipated 40 million gallon per year plant, to be located in Michigan. The company has now raised more than $100 million in private investments an... More >>

There has been a lot of talk the past few weeks about Mascoma. The Boston based startup has successfully made \"test\" quantities of ethanol from wood chips at its new demonstration facility in Rome, NY. They secured $49M combined from the DOE and state of Michigan to build their much anticipated 40 million gallon per year plant, to be located in Michigan. The company has now raised more than $100 million in private investments and another $125 million in public funds, including some undisclosed equity share from GM. All these accomplishments point to Mascoma being a contender in the race to build the first commercial scale cellulosic ethanol plant. <a href=\"http://www.xconomy.com/boston/2009/03/17/verenium-struggles-to-make-ends-meet/\">(Especially, since it was recently disclosed that Verenium\'s ability to continue as a business is in question)</a> <br /> <br />Let\'s look past the trees and see the forest shall we.. <br /> <br />First, there is my opinion (shared by many) that cellulosic ethanol processes do not have a net positive energy balance. As I mentioned in my other posts cellulosic feedstock maybe better than corn based processes given decrease in water and land usage but ultimately still not creating cheaper energy source. However, It seems that investors and the like are looking past these scientific facts since ethanol companies continue to get funded, presumably they are hopeful the government will continue to mandate ethanol usage in the future <a href=\"http://i-r-squared.blogspot.com/2009/03/wsj-hates-ethanol.html#links\">(Everyone hates Ethanol)</a>. <br /> <br />Second and most importantly, Mascoma\'s process will require a significant amount of wood for their Michigan plant. The amount is so significant that many are questioning the ability to meet the requirements. According to Mascoma\'s partners JM Lonyear\'s CEO, the new plant will require 375,000 cords of wood every year. This figure is concerning many forestry experts and placing into question the ability to have a sustainable long-term source of feedstock, without completely destroying the wildlife and habitat. One official, working in the Hiawatha National Forest was quoted as saying \"That would take the entire annual harvest in Eastern Hiawatha forest in 180 days.\" Other officials suggested that Mascoma, the State of Michigan, and JM must be assuming that feedstock will come from both public and private lands, since the public land is not sufficient. It\'s not clear to anyone how they plan on securing enough feedstock to operate in the long-term. <br /> <br />The Mascoma project is fraught with issues, however, that doesn\'t mean they will not eventually build this thing. Even if they are successful, the new findings severely impact the viability of their process having any significant impact on the nation\'s gasoline supply. I don\'t think anyone is prepared to cut down every tree in the country to make insignificant amounts of ethanol. << Less