Gevo Turns to Marine, Off-Road Markets With Latest Biofuel Deal
by Carleton English (The Street) The Colorado biofuels company announced a partnership with Musket Corp. a week after a similar collaboration with Alaska Air. — … The Colorado-based biofuels company announced that it partnered with Musket Corp., which is owned by Oklahoma-based Love’s Family of Companies, to provide its isobutanol product as a blend for gasoline for marine and off-road markets.
“We believe Musket is an excellent partner to expand the use of isobutanol in gasoline blends, as our isobutanol production at Luverne builds,” CEO Pat Gruber said in a statement announcing the partnership. “Musket and Love’s are significant players in fuel distribution and retail in the U.S., so they have great reach to get our isobutanol into the market.”
Even though agreements with Love’s and the flights with Alaska are endorsements of Gevo’s products, the company still has a lot of work ahead of it — particularly in getting its products ready for commercial use.
“Our problem is, we don’t have a scale production capacity big enough to make a difference for anybody right now. We’re at a demo-plant scale for our jet fuel,” Gruber told Real Money.
“One of the challenges of biofuels is just making it — having a producer who can make a commercial volume at cost parity,” Carol Sim, Alaska Air’s director of environment regulation, said in a phone interview with Real Money Wednesday. “The other challenge is having it delivered to the airport, having it blended and putting it in the aircraft.”
Excerpt from Biomass Magazine: Initial target markets are expected to include the marine and off-road markets in Arizona, Nevada, and Utah.
The supply program is expected to begin with railcar quantities of isobutanol (a railcar holds approximately 28,000-29,000 gallons). As isobutanol production ramps at Gevo’s production facility in Luverne, Minnesota, and isobutanol-blended gasoline becomes more established at retail outlets, Musket expects to expand its purchase quantities. Musket is initially targeting retail pumps at Lake Havasu in Arizona, followed by other large marine markets such as Lake Powell, Lake Mead, as well as other large lakes in the western states. Later, Musket also anticipates expanding distribution into its core Oklahoma market.
Gasoline demand for the marine market in the U.S. is estimated to be approximately 1.7 billion gallons per year. READ MORE