Firm Banks On Ethanol From Wood, Grass

Mascoma Corp. in Lebanon says it has moved ahead of the pack in creating a commercially viable way of making ethanol, announcing a "proof of concept" that cuts the company's cost of production to less than half of last year's.

Last week's announcement, which researchers called "a true breakthrough" toward achieving commercial ethanol production, keeps the company on track to build a full-scale ethanol plant by 2012.

"This advance leads to more than 60 percent reduction in the real cost from a year ago and takes us pretty close to our commercial target," said Jim Flatt, executive vice president of research, development and operations, in an interview yesterday.

Mascoma Corp. works with cellulosic ethanol, which is made from nonfood sources like woodchips and grass. There are other companies working to find cost-effective ways of turning woody materials into ethanol. Some, like Mascoma Corp., have test plants for research, but so far none has found a way to make it on a commercial scale.

Mascoma's breakthrough involves "consolidated bioprocessing," or CBP, considered the most efficient way of breaking down material and fermenting it into fuel. There are a number of ways to create cellulosic ethanol, using enzymes, algae, yeast and bacteria.

Creating a CBP, or super organism that could break down and ferment the material, would be the most efficient way.

Mascoma said it is getting very close to doing just that, with improvements to both yeast and bacteria.

"This has really demonstrated, for the first time, the development of the CBP strain that can affect a significant reduction in the cost of production," Flatt said.

"Many had thought the CBP was years or even decades away, but the future has just arrived," said Bruce Dale, a Michigan State University professor who is also on Mascoma's scientific advisory board, in a statement.

One of the major advances was engineering yeast that needs less cellulase - a kind of enzyme - to convert hardwood into ethanol, and also doesn't need any enzymes to turn waste paper sludge into the fuel. Another development involved bacteria that could grow at high temperatures and are 60 percent more efficient than a year ago.

Until last week, that goal of creating a CBP seemed much further away. Recently in Forbes magazine, Helena Chum of the National Renewable Energy Laboratory said she thought "there is a possibility this nut can be cracked," though she still spoke of it in distant terms.

"This is the golden dream," Chum said. "All of the processes in one super-organism. That would be the lowest cost possible."

Last week's news could mean a financial boost for Mascoma. It is trying to get backing for a full-scale ethanol plant to be built in Michigan by 2012.

In February, Mascoma Corp. brought online a demonstration plant in Rome, N.Y. Its capacity is 200,000 gallons of the fuel additive a year. The Michigan plant is expected to produce up to 40 million gallons a year.

Having proven technology, especially in a time of tight credit, was of huge importance for Mascoma Corp. to grow, Flatt said. "In this environment, lending, generally speaking has become much more restricted," Flatt said. "We're confident we will be able to get that financing."

So far, Mascoma has received $26 million from the U.S. Department of Energy and $23.5 million from the state of Michigan.

Locally, Mascoma Corp. will begin moving staff up from Boston next week as it relocates its corporate headquarters to Lebanon. The company was founded on research at Dartmouth College and has kept its labs here since 2005.

The company is moving to new offices being built near the intersection of Etna Road and Route 120, and should be set up there by September. For now, it is working out of cramped space in Centerra at the Dartmouth Regional Technology Center. The company has around 90 people in total.

"It's definitely a logistical challenge," Flatt said. "Fortunately, everybody is being flexible."