Shell, Iogen, and Cancellation in Manitoba: Answers to Your Questions
by Jim Lane (Biofuels Digest) Shell and Iogen cancel their long-contemplated Canadian cellulosic ethanol project, and announce 150 layoffs.
…In Canada, Shell and Iogen announced that they will not pursue the jointly owned 23 million gallon Iogen Energy cellulosic ethanol project in southern Manitoba.
The announcement, according to the partners, “will lead to a smaller development program at Iogen Energy and a loss of 150 jobs,” although Iogen Corporation will continue to employ approximately 110 people at its Ottawa headquarters and “plans to expand its line of offerings with new technology for the production of advanced and cellulosic biofuels.”
…“The whole environment now is just not right for any form of renewable energy really,” Bill Cruickshank, an Ottawa consultant and former official at Natural Resources Canada, told the Globe and Mail. “The focus on the tar sands is just unbelievable. What frustrates me is the lack of a big plan to meet our targets from Canada.”
…Shell is proceeding with Virent, and the technology may well go far. We’ll know more in the next two years, but certainly there will be less competition around Shell’s hallways for attention and capital.
…There are three ways to look at this for Codexis.
Door number one. Good news, in a straightforward way. They like Brazil more than Manitoba, and are going forward there, and focusing more and more on bagasse.
Door number two. Good news in a roundabout way. Iogen could be tough to work with, Shell is tightening its portfolio, and didn’t see the results in Manitoba working out, in having two enzyme technologists in bed on the same project. They’ll watch and see the results from the Codexis-Chemtex partnership, in Italy, on someone else’s dime, and if it works they will find a way to commercialize the solution in Brazil, and possibly elsewhere.
Door number three. Good news in a Machiavellian way. Codexis is now a company in the Shell orbit without a pretreatment partner or a go-to-marklet strategy in fuels. They may buy out some freedom in fuels – if not a full buy-out like they did in chemicals, at least a wider freedom to operate (with Shell retaining a ‘most favored nation’ costs status vis-a-vis the technology). Or, they may be acquired out of the Shell orbit entirely, should Shell decide that the thermocatalytic path is the right one for bagasse. Several companies might well be hotly interested in getting control of Codexis’ cellulase enzymes for their own cellulosic strategies. READ MORE