GM To Partner With Coskata On Ethanol

Update: The group blogger interview with Bob Lutz clarified a few things on the Coskata deal. Firstly, the dollar a gallon is the production cost, a quick back of the envelope per gallon retail would be something in the order of $2 per gallon. The attractiveness of Coskata's deal is that the feedstock for the fuel could be most anything, there are no propriety enzymes involved in production (no distilling)and only a 1/3 of the water normally needed to product ethanol is required. The concern that GM has is what will motivate gasoline stations to actually install E85 pumps? Lutz and Wagoner think the answer might be in the form of a government mandate. For example, a gasoline that pumps over X amount of gasoline a day would be required to have one pump and so forth. This type of requirement would exempt small operations from the expense of installing a separate tank and pump while requiring high volume stations to step up and install the equipment. E85 contains less energy per gallon than gasoline, so it takes more to go the same distance. Adjusting for that difference, E85's cost is between midgrade and premium gasoline, says travel group AAA. The U.S. average price for gasoline was $3.095 per gallon, AAA reported Friday, while E85's energy-adjusted price was $3.325. You can find out more about Coskata's ethanol production process by clicking here.

GM has announced plans to partner with Coskata to produce ethanol with a projected cost of less than one dollar a gallon. More details to follow.