– by Almuth Ernsting, March 14, 2016, Independent Science News
Photo: Independent Science News
Biofuels consumed today are usually ethanol made from the sugar in sugar cane (or sugar beet) or they may be made from starch in grains. In the US this is mostly corn starch. Alternatively, biodiesel may be made from plant oils such as soybean or canola oil.
Cellulosic biofuels, on the other hand, are biofuels made from crop residues (e.g. corn stover), wood, or whole plants, especially grasses (e.g. switchgrass). Cellulosic biofuels include cellulosic ethanol (made by isolating, breaking down and then fermenting the complex sugars in the cell walls of plants), as well as ‘drop in biofuels’. These biofuels are chemically almost identical to fossil-fuel based kerosene, diesel or gasoline.
In November 2014, cellulosic biofuel company KiOR filed for bankruptcy, having shut down their refinery in Columbus, Mississippi earlier that year. There have been many unsuccessful biofuel ventures of this type, but KiOR’s stands out for four reasons:
1) They had sold the first-ever cellulosic biofuels made in a commercial-scale facility in the US and produced the first cellulosic gasoline ever accredited as such by the US Enviornmental Protection Agency (EPA);
2) They were the highest valued ‘advanced’ biofuel company backed by venture capitalist Vinod Khosla and his company, Khosla Ventures, having been valued at over $1.5 billion when they launched on the stock market. Khosla has been one of the most influential advocates of cellulosic biofuels in the US. Back in 2010, the EPA set a target for cellulosic ethanol, that relied almost entirely on Khosla’s promises about what another company he’d invested in – Cello Energy – could deliver. Cello Energy filed for bankruptcy that same year, after they had been found guilty of fraud;
3) KiOR had obtained a $75 million loan from the State of Mississippi of which they had repaid just $6 million by the time they filed for bankruptcy. The Mississippi Attorney General Jim Hood has described this as “one of the largest frauds ever perpetrated on the State of Mississippi.” He has initiated a fraud suit against former KiOR executives as well as against Vinod Khosla, alleging that they misled investors about the quantities and yields of biofuels they could achieve. A separate class suit has been raised on behalf of shareholders who claim to have incurred financial losses because they bought shares as a result of misleading claims by KiOR executives and Vinod Khosla about the company’s achievements and capabilities.
4) As a result of the bankruptcy proceedings and the fraud suits, information about what went wrong are entering the public domain.