ZeaChem, Pursuing the Dream of Ethanol from Wood Chips, Faces First Large Scale Test
The political classes chattered about cellulosic ethanol after President Bush’s 2006 State of the Union address. Bush used that speech to raise the profile of fuels made from ordinary biomass like wood chips, cornstalks, or sugarcane, making it sound like a potential key to the U.S. strategy to break the addiction to foreign oil.
Four years later, no one has yet come close to fulfilling this vision of making cellulosic ethanol in a large-scale way that makes the planet greener, and generates major cash. But one of the interesting early attempts is advancing inside a small lab operated by ZeaChem in Menlo Park, CA. The company, headquartered in Lakewood, CO, will undergo a critical test over the coming year at a $50 million facility along the banks of the Columbia River in Boardman, OR.
ZeaChem (pronounced ZEE-uh-kem) is one of the many small companies around the country seeking to make at least some kind of progress toward Bush’s ambitious goal of reducing oil imports from the Middle East by 75 percent by 2025. The ZeaChem effort has attracted more than $40 million in venture capital from well-known backers (Mohr Davidow Ventures, Firelake Capital, etc.), interest from a big oil refiner (Valero Energy), some sizable tax breaks from the state of Oregon, and a $25 million grant from the U.S. Department of Energy. If ZeaChem’s chemistry and math is being extrapolated correctly, the company says it should be able to make ethanol fuel for about $50 a barrel in operating costs within two to three years.
It all hinges on how well it can put together a couple of lab processes at a new plant under construction in Oregon, which will seek to show the lab work in Menlo Park can be reproduced at industrial scales. The Oregon plant is scheduled to be up and running in 2011.
“We believe we’ve developed a process that has better yield than any other ethanol process,” says Dan Verser, ZeaChem’s co-founder and executive vice president of R&D. “It’s a huge opportunity.”
The ZeaChem story goes back to 2002, years before Bush put cellulosic ethanol into the nation’s vocabulary. The company was started by Verser and Tim Eggeman, who had worked together at Coors Brewing on a biopolymer project until that was sold to agricultural giant Cargill. They both have doctoral degrees in chemical engineering, and experience working together, so they set out looking for some new venture they could start or expand.
One of the ideas they scoped out in the late ’90s was a corn-derived ethanol project that never really got off the ground. Part of the problem is that corn kernels aren’t nearly as abundant as the corn cobs and stalks, and any effort to use corn as a raw material for fuel is going to run into a PR buzzsaw called the “food versus fuel” debate. Plus, the existing process for producing ethanol also consumed lots of energy, so it didn’t appear to be a viable business, especially when oil was much cheaper.
“Tim and I looked at it and said ‘what’s wrong with this project? Is there a technical solution?’” Verser says. “We actually came up with a better way to make ethanol.”