Re: Valero moving in on cellulosic ethanol production via Mascoma
Current costs on wood ethanol (not corn ethanol) are around $1.77 per gallon to produce without subsidies. The premier project and the first commercial facility to produce in the world is being built in Kinross, MI. (Upper Peninsula) The facility will be 20 million gallons and the offtake contract to buy all of the ethanol is through Valero. The lead investors include BlackRock (with over $1.4 trillion under asset management), Flagship Ventures (Vinod Khosla-co-founder of Sun Microsystems) as well as Valero, SunOpta and Marathon Oil. The facility will cost $232 million to build with DOE money and Valero picking up most of the tab. There will be many of these plants built around the Great Lakes and there are already over 10+ million cars that can take E-85. At $1.77 per gallon to produce without subsidies, the cost at the pump will only get lower as advanced microbial applications come into play. These would include consolidated bioprocessing techniques using advanced C5 (xylose/pentosan) conversion and simultaneous saccharification and fermentation organisms.