Exploring New Ethanol Sources

General Motors is buying into a Boston-based renewable energy company that produces ethanol from sources other than food.

The investment from one of the Big Three auto makers comes as several Massachusetts firms are trying to stake their claim in the fast emerging biofuels market.

That story from WBUR's Business and Technology Reporter Curt Nickisch.

Audio for this story will be available on WBUR's web site later today.

TEXT OF STORY:

CURT NICKISCH: Right now the US makes most of its ethanol from corn. That's been driving up grain prices because it takes a lot of corn out of the food supply. Other plant materials, such as grasses and wood chips, have more energy. But it's harder to get to because it's stored in a sugar called cellulose. Boston-based Mascoma is working on a way to make this so-called cellulosic ethanol. CEO Bruce Jamerson says his company has engineered bacteria to break down plants the same way cow stomachs do.

BRUCE JAMERSON: And so instead of doing it in animals, we're doing it in large steel tanks. And that process can be done on a very economical, low cost basis.

NICKISCH: It's one reason General Motors is paying an undisclosed amount to own part of Mascoma. GM's Mary Beth Stanek says her company needs to invest in ways to reduce dependence on oil.

MARY BETH STANEK: And there's a number of pathways to get there. More fuel efficient vehicles. More advanced technologies. But the single greatest thing we can do to really make a dent is to get to cellulosic ethanol as quick as possible.

NICKISCH: If it can be done efficiently, GM and other US automakers stand to gain, says John Reilly. He's an agriculture and energy economist at MIT's Sloan School of Management. In four years, GM wants half of the cars it makes to run mostly on ethanol.

REILLY: And if they're kind of betting on that technology, then helping to make the fuel available is part of that strategy.

NICKISCH: Mascoma's not the only Massachusetts company trying to make the fuel available. Sun Ethanol came out of research at UMass-Amherst. Another is Verenium, a publicly traded company in Cambridge. It just started testing large-scale production, and hopes to produce millions of gallons in the next couple of years.

It's not clear that any of these companies will be able to make cellulosic ethanol cost-effectively. But the flurry of activity stems partly from a new federal law that requires using more ethanol from new sources.

GOVERNOR DEVAL PATRICK: We need to encourage the commercialization of these breakthroughs.

NICKISCH: Governor Deval Patrick also wants to strengthen this emerging market. He told Boston business leaders yesterday he wants to waive the state fuel tax on cellulosic ethanol, and will ask other states in the region to do the same.

For WBUR, I'm Curt Nickisch.