Submitted by EnergyTechStocks.com

Coskata Inc., the privately-held biofuel developer partnering with General Motors Corp. on cellulosic ethanol that can be made from almost any carbon source, expects to have tens of millions of gallons of its “green gasoline” ready for market by late 2010. “That’s the fastest it can be there,” Wes Bolsen, the company’s vice president of business development, said during an interview in which he expressed his belief that Coskata and a small number of other advanced biofuel developers ultimately will climb into the ranks of the Fortune 50, as advanced biofuels become as much as one third (60 billion gallons) of America’s transportation fuel by 2030.

With pump prices in the U.S. pushing toward $4 a gallon, Coskata’s patented process, which utilizes microorganisms and bioreactors, is attracting increased investor attention because it promises to make it possible to manufacture ethanol from garbage, wood and agricultural waste, even old tires, for less than $1 a gallon, less than half of what it costs now to make gasoline. Coskata’s cost advantage seems likely to grow in a world increasingly aware that there is no more “cheap” oil. Other significant advantages of the Coskata process reportedly are that it uses far less water than other ethanol-production processes, and that compared with gasoline, it reduces carbon dioxide (CO2) emissions by up to 96% on a full wheel-to-wheels basis.

Bolsen foresees an industry turning out 40 to 60 billion gallons of advanced biofuels from hundreds of plants throughout the United States, many built by Coskata with partners. Each will take advantage of locally available feedstocks including woody biomass, bagasse, coal and garbage, this last feedstock being universally available for what he expects will be one to two plants built near major cities such as New York and Chicago.

There is, however, one “gaping hole” in this vision of the future, Bolsen admitted. “A massive amount of investment by the private market will be needed,” he said. He estimated that bringing this new advanced biofuels industry to life will cost about $250 billion. “We’re not yet seeing $2 to $5 billion,” he said, adding that the capital markets aren’t going to get on board until it becomes clear that Washington is fully committed to moving beyond corn-based ethanol into cellulosic ethanol and other advanced biofuels. Bolsen said he is encouraged by what appears to be the recent “aggressive shift” in Congress toward advanced biofuels in the wake of growing global food shortages.

Eventually, Bolsen believes that Coskata will be one of at least two and maybe as many as four advanced biofuel firms in the Fortune 50, which would also be good news for General Motors since GM recently took an undisclosed equity stake in Coskata. Coskata’s other investors reportedly include cleantech venture capital leaders Khosla Ventures, Advanced Technology Ventures and GreatPoint Ventures.