The Scale-up Challenge. Biofuels Digest talks to Gevo CEO Pat Gruber
BD: Why has it been so hard for the industry to scale up?
PG: A lot of the people who can do this are concentrated ADM and Cargill, there’s not much experience elsewhere with this kind of technology at scale; people have to go through the learning curve.
BD: What’s different about Gevo’s team?
PG: They have the experience. For example, my guy who did all the PLA stuff at NatureWorks is with us here, he knows how to plan to hit the target. In part that is why it was attractive to work with an anaerobic fermentation process.
BD: But there are still scale up issues.
PG: Sure, the real work is when you scale up. But notice I own the plant. I don’t want to have to deal with someone about changing stuff when we need to. Plus, Luverne was an outstandingly economic ethanol plant, very well run – it just had small scale. For us, that works, because we are going to change stuff, and if I had 50 or 100 million gallons, there are just way to many streams in the animal that are affected by changes. We knew that we needed latitude to learn. All that went into the thinking.
BD: In this industry, a lot of focus is on the fermentation – what the bug can do – as opposed o the separation process. You’ve focused a lot on separation. Is it that big?
PG: Huge! What happens with liquid extraction technologies, they float their product and there other lipid like substances, things that mix with the product. We went through a lot of this at Cargill. It sounds good, until you try and control all of that at the scale you need. This is why we flash it out as a vapor; we leave all the detritus of a fermentation behind.
I think anytime in 2013 is recent enough...all some do is bash bash bash...well maybe, Gruber, though absent some of the great company presentation skills some would like, knows what the hell he's talking about and is taking the company in the right direction afterall......okay....now let's hear about the dam salary again since bashers ONLY have that in their arsenile. give one of these numbnut bashers a chance to run a company and it'd be run into the ground in no time and yet, here they are....telling everybody how exactly it should be done.........oh, brother!
BD: Looking at supply and demand – true to say that you wouldn’t be in a position to supply aviation biofuels for awhile, given that you are sold out for a couple of years on your output?
PG: We’ve sold out first two plants, and we have a number of LOIs that cover future production from other sites.
The dread Butamax litigation
BD: The Butamax-Gevo lawsuit. Are you surprised that that judge has not ruled on a preliminary injunction yet?
PG: Yes, but I don’t believe that she’ll rule against us. We have been very upfront in terms of our schedule, she knows damn well, that it’s a wholly different game in terms of impact now that we have proceeded to start-up.
BD: You said once that, while it isn’t any fun to be in litigation, on some level it’s flattering when companies like BP and Dupont come after you.
PG: It’s no fun at all. What the dispute shows is the value of this molecule, and of the value of this pathway is making it. Big companies do not sue over failing technologies that will not matter in the long run.
BD: How fast is the industry moving towards commercial scale and affordable prices for fuels?
PG: Watch guys like Chemtex, if Guido [Ghisolfi[ is right and he can do 10 cent sugars, then the process economical now, no subsidies. If not, I believe oil is going to rise faster than carbs, and it is just a matter of time. The trick is to have niche markets, then be able to turn it on when the crossing point is reached.
Talking through the issues with investors
BD: As you say, there aren’t many companies practicing the dark arts of fermentation, and most of them have been conglomerates like Cargill and ADM. With newer, smaller companies through the issues with observers, analysts?
PG: We try and teach everyone to think about yield. That’s what its about, and it’s easy to discover the economics, it’s a very simple calculation. From there, we talk about the value of a drop-in. That’s the proposition, in then end, can you make a known molecule cheaper. It’s a different game when you have end products of unknown value.
BD: The stock price is down; it’s been a rough ride for every public company in the sector. Anything surprising to you in what has happened?
PG: There’s shocking naivete out there; it’s worth noting that the trading has been very little from the institutional and a lot of retail.
Aviation biofuels, and Gevo’s production capacity and offtake
BD: Aviation biofuels – can they be commercialized now?
PG: The alcohol to jet spec won’t even be through the ASTM certification process until 2014. So, not in the near term, and not at parity cost today. But I have to say that the US Congress is acting pretty cynically. They say they want new technologies, new options, but they don’t want to pay for them. It’s a hard and fast rule for me: never count on anything with government.