Warrenville firm opens new facility in Pennsylvania

Coskata Inc., a Warrenville-based startup with General Motors support, is looking to Pennsylvania and other sites to build a future for different formulas for ethanol.

The alternative-fuel company Thursday debuted its first major plant in Madison, Penn., which will help it refine its fuel products and eventually build another four plants in the next few years.

Unlike other technologies and facilities that rely on one source, such as corn, Coskata's new facility will produce ethanol from wood, agricultural waste and construction waste. The company is partnering with Westinghouse Plasma Corp., a subsidiary of Alter NRG, for their plasma gasification technology.

"This is a major milestone that is so important and critical to the commercialization path that we're on," said Coskata CEO and President William Roe, who returned from retirement to lead Coskata after spending 29 years at Naperville-based Nalco Holding, a global water treatment company.

In January 2008, Coskata was launched under a partnership with GM, which aimed to put the new ethanol on the fast track.

Coskata - named after a wildlife refuge near Nantucket - now has 52 employees and more are expected to be hired, including several engineers.

The company is working with patented microorganisms to produce ethanol for less than $1 a gallon, or about half of today's cost of producing gasoline. That means consumers could get a less expensive fuel alternative that's better for the environment and provides better gas mileage.

"Our goal is to design and build a facility to allow us to answer all the questions and to migrate to bigger facilities," Roe said.

Roe hopes that by observing the mistakes and successes in Pennsylvania, his engineers will perfect the ethanol that's being produced.

"It's very important here," he said. "This is all about learning."

It's also about licensing, which Coskata aims to do as production progresses, he said.

The new Pennsylvania plant has the capability of producing up to 50 million gallons. Some of the ethanol that is being produced at the facility has been delivered to the General Motors Milford Proving Grounds, 30 miles west of Detroit, Mich., for early testing.

Globally, GM has produced more than 5 million flex-fuel vehicles. In the United States, there are more than 3.5 million GM flex-fuel cars and trucks on the road. For the 2010 model year, 17 E85-capable flex-fuel vehicles include Chevrolet, Cadillac, Buick and GMC brands. GM is on track to make more than half of its vehicle production flex-fuel capable by 2012, the companies said.

"We invested in Coskata so that we could enable the rapid deployment of commercially viable and environmentally sustainable ethanol globally," Bob Babik, GM vehicle emissions director, said in a statement. "We're proud to say that we have already accepted some of Coskata's ethanol at our Milford facility."

The Pennsylvania plant is also a good sign for the entire ethanol industry, said

Matt Hartwig, spokesman for the Washington, D.C.-based Renewable Fuels Association.

"It's very exciting to hear what Coskata is doing," Hartwig said. "Instead of corn, they're using new technology to produce ethanol and a variety of products. It's a natural evolution in the industry."

Roe is counting on that evolution to possibly spin off Coskata into a publicly traded company or sell it to another company sometime in the future.

"But we're in no rush," Roe said.