Coskata Switches Focus from Biomass to Natural Gas; to Raise $100M in Natgas-Oriented Private Placement
by Jim Lane (Biofuels Digest) Coskata, looking at CAPEX opportunities, political uncertainty, and the investor climate — switches to an “all natural gas” feedstock strategy. Initiates a $100M private placement, puts Alabama project on hold. In today’s Digest, we look at the rationale, the impact and the way forward.
“In North America there’s a golden opportunity,” Coskata CEO Bill Roe says, in bringing the Digest up to speed with changes at Coskata. “The sea of natural gas is almost a problem, leading to historic price dislocation, and a level of availability that has not been seen for a long time. With our technology, it will give us a lower ethanol cost on a per gallon basis, and a remarkably lower capital cost because the kit that one needs to aggregate and gasify biomass, and then condition the syngas, is appreciably more than reforming natural gas.”
Accordingly, the company now plans to utilize natural gas as its exclusive feedstock for its first several commercial-scale projects.
…Where’s the ethanol going to go – especially if, produced from natural gas, it finds itself outside of the RFS2 scheme because it does not produce sufficient emissions improvement compared to conventional fuels.
“Right now – based on our discussions with obligated parties and big ethanol marketers, we do not see restrictions in entering into the same markets today. For those looking at ethanol in terms of the RFS2 compliance structure, they can buy a 2 cent corn RIN to match up with the natural gas product. This pathway will not attract a RIN, but the cost point is so low.”
…“We certainly are aware of the ATJ developments,” Roe said. “Overall, we see the opportunity but it is not a cakewalk to get there. I am not exactly sure that we are convinced that ethanol as the base material is the best way to go. There are other alcohol products that could be better feedstock materials, and though we have initially focused on C2, we have work going on with C3 (propanol), C4 (butanol) and another higher alcohol. We are 18-24 months away from a C4 butanol.”
...Others in the queue that may switch to natural gas
Well, in recent months, there’s been Sundrop Fuels, and Primus Green Energy – with Coskata we now have three, and that makes a trend.
Who’s next? Siluria has been focused on natural gas for quite some time. Accelergy has been pursuing a combination of coal and biomass in China within an overall XTL focus, and let’s see how their project opportunities change.
Others that may see striking opportunities with natural gas reformation, to create their syngas for catalytic conversion?
Clearly, LanzaTech and INEOS Bio have to be considered to be in that mix – given that they also have technologies that offer biobased fermentation of syngas to produce biofuels and chemicals. READ MORE and MORE (Consumer Energy Report)