Coskata Responds

Following my previous essay explaining my skepticism that Coskata can make ethanol economically with their process, Wes Bolsen (see his profile here), the Chief Marketing Officer & Vice President of Coskata dropped by and made some comments.

One thing I believe in strongly is fair play, so I will provide his entire comments below without interruption. Wes and I plan to speak on Wednesday, and I will ask some pointed, and on the record questions. If you have a specific question that you would like to see me ask, let me know in the comments following this essay. I already have a list, and I can assure you that they are not to be found in Coskata’s FAQ. My questions will focus on things like the patents and patents pending, who is commercially using the plasma gasification technology and membrane separation technology, whether the yields and selectivities are public information, etc.

Without further ado, Wes’ response:

This is Wes Bolsen, CMO & Vice President of Coskata. I am really sorry that we were not able to talk before you posted this. I will always try to make myself available.

The division you did above was performed properly, you just didn’t have complete information. The ~$25 million project that Coskata is doing in Pennsylvania includes operating costs for approximately a year, capital for improvements to the Westinghouse site before we even get there, and other expenses not incurred on other plants. Either way, I agree with you, commercial demonstrations, even if the Capex were as low as $10 Million for Coskata’s portion is expensive. In fact, that is why we would never want to build a 1 or 2 Million gallon plant, or anything like this for making ethanol.

If you want the approximate capital cost for Coskata’s 100 Million gallon per year facility, it is approximately $400 million or $4 per gallon of installed cost. This is the engineering design that has been signed off by a major US engineering firm based on 2008 vendor quoted materials and process flow diagrams. The production cost is still looking to be less than $1/gallon, which is confirmed more and more every day that our pilot facility outside of Chicago runs. The Pennsylvania facility you are talking about is simply the final step in Coskata’s rapid commercialization.

Hopefully this additional information is helpful to you and the readers of the blog. Like I said, I am always willing to talk through our numbers, our strategy, and how Coskata is working to commercialize the technology. Feel free to contact me any time.


Wes Bolsen
CMO & Vice President

More from me after I speak with Wes.

16 thoughts on “Coskata Responds”

  1. I have to give points to Wes Bolsen for his even response to the original RR post. After all, RR had just called his company a “dead man walking.”
    I sure hope Coskata’s process works.
    Oil dumping again today. The oil bull has been gored and hard. We could see $60 before $160. And we may not see $160 for a long, long, long time.

  2. Could you ask him if the “anaerobic organisms” they discovered at the bottom of a lake is a strain of yeast Robert? There are thousands of yeast strains out there. It seems like they came upon what LS9 is trying to accomplish in the lab. Their organisms won’t make gasoline or biocrude,but it seems to eat anything,and leave no waste. That might be even better.

  3. $4/gallon*yr equates to $61k/barrel*day of production, so still somewhat more than the $25k for a corn ethanol plant.

    One question not answered im their FAQ is whether their $1 figure includes feedstock cost.

  4. Please ask what feedstock they use when estimating the fuel cost.

    Please ask for their estimate of greenhouse pollution per gallon of fuel produced (i.e. the wells-to-tank) based on their feedstock choice.

    Their FAQ lists feedstocks such as switchgrass, wood chips, agricultural residues, old tires, and municipal solid waste. Many of those would be greenhouse pollution producing feedstocks. For example, tires represent carbon that would not enter the atmosphere as CO2 without Coskata’s help. Most municipal solid waste is the same (some turns into methane, but a lot remains in the landfill).

  5. I still say that using any kind of organic feedstock will present increasingly big problems in the future because of (1) the growing world population putting more pressure on farmland (even “marginal land”) through increased food demand, (2) expensive fertilizers and fuel, and (3) the gradual return to organic inputs to compensate for the high cost of chemical fertilizers. Good luck.

    $60 oil? Well, could be. Maybe even $40 oil — but that means one heck of a lot of demand destruction. I just don’t see that much, at least not voluntarily.

    People can be encouraged to cut their consumption and to invest more in renewables by higher prices, and in fact that is just what we are seeing now. But if oil falls back to $60 or so, that will begin to undo the progress that expensive oil has induced. That’s why oil needs to stay in the triple digits to enforce change. If lowering production is what it takes, that’s good, as it will also let oil-producing countries husband what’s left of this precious resource.

  6. OT, but RR had a post a few days back about a huge solar PV deal, 800 megawatts in Nor. Ca. Now SoCalEdison just inked a bigger one: “Southern California Edison said Monday it has signed a 20-year contract with DCE, an affiliate of Caithness Energy, to provide up to 909 megawatts of wind power.’
    You know, if the GM Volt works, and the US starts to tax gasoline, the real question will be: Whay do we need oil for?

  7. I’d like to know how many steps they plan to take between this 40k gpy plant and the eventual 100m gpy plant he mentioned. That’s way too big a jump to do without one or (preferably) two intermediate steps.

    Also, why do they think ethanol is the best thing to make from syngas? It seems like a low value output, especially considering the energy required for separation.

  8. “You know, if the GM Volt works, and the US starts to tax gasoline, the real question will be: What do we need oil for?”

    I don’t think we’ll need more gas taxes Benny. Electricity costs less than $1 per equivalent gallon. That’s pretty powerful incentive already. People like myself are stuck like Chuck with high gas prices. No amount of taxes will cure the fact I’ve got a 7 member household. Ever try finding a vehicle that’ll carry 7 people AND get good mileage? I’ve considered getting the Ford Escape Hybrid and leaving a couple kids behind though. 30 MPG ain’t bad for an SUV at that price. The Escalade Hybrid gets 21 MPG and carries 8 people…but it’s $71,000. For now,I’m stuck with an ’05 Oddysey that was supposed to get 20/25. In reality,it gets more like 17/23.

  9. Robert,

    I am interested in their claims on membrane separation reducing the energy requirements by 50% (I’m making the assumption that this is distillation/dehydration only and not the entire process). You have indicated your plans to ask on suppliers, and commercial examples of this technology. I have worked in this industry for a number of years, and am quite skeptical about their claims without having any industrial examples.

    Will their pilot plant incorporate this technology? Does the plant outside of Chicago currently incorporate this technology? Most examples of this that I have seen use membranes coming right off of the beer stripper to achieve the energy reduction, yet in this case the methanol will remain. How do the membranes handle the methanol/ethanol separation, especially with the increased methanol concentration? What are the selectivity’s for methanol/ethanol/water? Will the methanol pass with the water, and if so, how will the water be cleaned up? (experience shows that the methanol will generally pass 50/50 retentate/permeate).

    At what pressure/temperature will the process work? If the process is vapour permeation, how is the membrane tolerance to liquids, as this will likely significantly reduce the operating life of the membranes. What do they think the operating life of the membranes will be?

  10. membrane separation reducing the energy requirements by 50%

    50% compared to what?Old-style straight distillation starting at Coskata’s lower concentration? Or modern distillation columns with molecular seives starting at the higher concentrations typical of the latest corn ethanol plants?

    Better yet, just tell us BTU/gallon. I assume they get these BTU’s from somewhere else in the process (e.g. gasification), but it’s still important as it reduces net output energy available to the final consumer. Again, my question is why ethanol?

  11. Maury-
    As a father, I sympathize, empathize, and offer condolences. A seven-member household? I hope you have a den with a locking door. God gives big shoulders to those…oh, never mind.
    Have you considered buying a used diesel, and then converting it to run on vegetable oil? A great lesson for kids, and you can find some guy in craigslist to do for 2k. Veggie oil you can usually get for free from greasy restaurants.
    Or a 150 cc Chinese scooter? Not for the whole family, of course, but trips to the liquor store or local bar (in your case, completely understandable).
    I do not think we can devise a meaningful national energy policy based on outliers — people who live far from their jobs, or who end up in charge of seven-member households.
    The only way to damp down demand is the price mechanism. Either we do it through higher gasoline taxes, and transfer money to the US Treasury, or thug states will do it, and we transfer money to ugly, repressive regimes while undermining our own economy.
    Anyways, the way we subsidize roads in this country is sinful. We are taxing income, retail sales and property to build roads — they should be financed through user fees. That’s good economics.
    I do sympathize with you, and hope your seven-member troupe appreciates you, the way my loving wife and faily so appreciate me (ha-ha).

  12. “The only way to damp down demand is the price mechanism. Either we do it through higher gasoline taxes, and transfer money to the US Treasury, or thug states will do it …”

    Take a step back, Benny, and look at your statement from the perspective of the oil exporter.

    If the over-burdened western consumer is to pay the equivalent of $300/bbl for oil, who should reap the economic benefits?

    At the moment, the answer to that question is — those high-taxing European government. But is that fair? Is it sustainable? There is definitely room for debate on that.

    For some time, I have been expecting Russia to announce (during a winter, of course) that it faces a problem — it needs to invest more in exploration & development so that it can keep supplying oil & gas to the world's biggest fossil fuel importer, the EU.

    Perfectly reasonably, Russia will propose that the EU consumers who benefit from Russian oil & gas contribute to ensuring continued re-investment & supply — by having their governments rebate, say, 33% of the taxes collected on Russian oil products back to Mother Russia.

    After Georgia, my guess is that those freedom-loving EU governments would sign up without a murmur. And the European press would support the rebate as simple justice for the long-suffering Russian people.

  13. Kinu:
    First the good news:
    “The price for crude oil produced by the Organization of the Petroleum Exporting Countries (OPEC) fell slightly on Tuesday, to $108.26 a barrel, data released by OPEC showed on Wednesday.” That’s from Rigzone.
    Oil is dumping. Why? Consumers are responding to higher prices.
    I argue we can keep this good trend on a roll by taxing consumption.
    My second argument is completely sound, based on conservative economics: Subsidizing any activity is bad.
    We subsidize roads in America. They are largely financed by taxes on income, sales and property. A toll road at every corner is imparctical, so $3 a gallon gasoline tax is a good, conservative policy.
    I wholeheartedly concur with you that Russia is a thug state (after Georgia, perhaps we should say a “pig state” as well) and that Europe will be hard-pressed to deal with the ugly ursine.

  14. Ask Mr. Bolsen about the stability of Coskata’s biofilm reactors. They need to use biofilms for rapid mass transfer of syngas into the medium. But biofilms are notoriously unstable – they dry out easily, are prone to phage attacks, etc. etc. I am unaware of any commercially successful applications of biofilm reactors. How will Coskata make biofilms practical?

  15. Ask Mr. Bolsen about the stability of Coskata’s biofilm reactors.
    I have several concerns about the feasibility of Coskata’s process, but biofilm stability isn’t one of them. Biofilms are widely used in the wastewater industry both for treating gases (odor removal) and liquids (nitrogen removal).

    To prevent the biofilm drying out, you just need to keep the humidity high enough in the feed gas.

    I suspect Coskata is counting on plasma arc gasification to zap any phage (or other biological agents) into oblivion, I mean syngas.

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