Advanced BioFuels USA

by Sam Nejame & James Evangelow (Biofuels Digest/Promotum and Chemical Strategies)  Sad to say Cobalt Technologies is dead – no really they’re dead – it’s not just double secret probation anymore. Although you’d almost not even know it given how quiet the company’s been over the last few years. And after the venture guys cleared out the Rick Wilson administration circa 2012 things got pretty quiet. Add a name change – goodbye Cobalt Biofuels, hello Cobalt Technologies and a pivot away from core biofilm technology and you have what might be called teen company identity crisis. A Series E placement without an exit in sight and a few high profile sector meltdowns (thank you KIOR) sealed the deal.

Now, with the Mountain View HQ closed, team dispersed and pots, pans, IP and strain library in the auction process, Cobalt is absolutely, officially, financially, technologically over. If they owe you money you have until October 15, 2015 to get in touch with the disposition guys.

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So, what do we take away from Cobalt’s demise? What does it mean for the rest of us still climbing the mountain?

Well, for one, there was clearly a lot of good work done getting clostridium to grow on C5/C6 sugars… and the company definitely built a formidable library of product tolerant non-GMO organisms. And we know fixed bed reactors get you high productivity numbers and lower CAPX, but we’ve also learned the siren song of distressed ethanol plants is hard to resist and what already exists in receivership is even cheaper to retrofit. So, Cobalt pivoted from biofilm and started to look more like its competitors.

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Such as what happens to all those relationships and plans to use Cobalt butanol as a platform for jet fuels, plastics, synthetic rubber, etc? What about the patent license agreement with the Navy for biojet and the relationship with the Naval Air Warfare Division at China Lake? What about the strategic butadiene work in Asia? Or the Solvay/GranBio relationships in S. America. Are those up for grabs? The vultures are circling.

Of course, it’s NOT all bad news for n-butanol.

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Other than GBL (Green Biologics), where do we see progress?

Maybe with the new kids on the block… Will Celtic Renewables ride away with it on their draff and pot ale powered bike? Should we take little White Dog Labs and their critical fluids separation seriously? Phytonix makes butanol from waste carbon dioxide, waste CO2 is pretty cheap, but where’s the money and land to grow cyanobacter going to come from? And in this increasingly decentralized decision making world, what about Butrolix’ quorum sensing peptides? Seems like pheromones could be very very useful at getting bugs to produce in lock step instead of just when they feel like it.

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Now imagine you’re a petrochemical company and you’ve made the wise decision to ride the fracking wave and the flood of unconventional gas. All your crackers have switched to ethane and you are not going back to cracking naptha. You’re now short the propylene you need to make n-butanol and you’re building propylene on demand facilities, lots of them. You’re building them in the United States and China. They cost half a billion dollars each…

Then the Saudis decide they are going to open the spigots and crush oil and take naptha and propylene prices along for the ride. They are going to do this for the next five years, maybe longer.

Remember you’re in a bike race. It’s a long one. Who’s in more pain? Who’s going to win?  READ MORE