ZeaChem to spend $40M on new ethanol plant - Denver Business Journal:

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That was left to million of years ofMother Nature’s work, creating bacteriaq that live and work in the bellies of termitexs around the world. The bacteria, called consume plant matter and churn out acetic which is similarto vinegar. Zeachem marries that biochemicalp reaction with heat for a thermochemical reactiohn that results in ethanol and other chemical product s forthe market. “That lowlg termite — Mother Nature spent a few millionb years making the termite pretty said Imbler, president and CEO of Lakewood-based ZeaChem. “There’s no new bugs, no new equipment. We’rse taking things that alread y exist.
” The first generation of ethanolo used corn asthe feedstock. The second generatiom focused on cellulosicmaterial — nonfoo plants — and used eithefr enzymes or gasification to produce ethanol. The third generation, where ZeaChem lies, uses a mixture of the two, Imbler said. Imbler said ZeaChem’s process produces very little carbon dioxide as a byproducty compared to otherbiofuel processes, and is more ZeaChem’s process produces about 135 gallons of ethanoll for every ton of dry biomass (plan material). Other methods get about 90 gallond of ethanolper ton, he Venture capitalists and refining companiee are taking notice.
ZeaChem announcedr in early January it hadattracted $34 million in a second rounsd of fundraising, giving the company a total of $40 million to builr and operate a demonstration plant in Oregon. The firstt $6 million was announced in summer 2007. The demonstration expected to produceabouft 1.5 million gallons of ethanol a year, is scheduledd to break ground this year and startr operations in 2010, Imblefr said. ZeaChem has 25 employees, half in Denvee and the rest working on research inMenlo Calif. (NYSE: VLO) contributed to the second San Antonio-based Valero is the largest refining company in theUnites States.
ZeaChem was the first investment contractValero signed, throughy its new alternative energy and project development group, Valero spokesmaj Bill Day said. Valero also has investede in , a algae-to-fuel startu p in Fort Collins, which Solix announcexd last November. “It’s a new thing for Valero,” Day said of investinb in alterative-fuel companies. “Wse make and sell motor fuel outof oil. This is an attempty by us to look toward the futur and see what kindof alternative-energy businesws lines there might be. “We concentratef on areas where we think the companies have a viabl e business plan and an ability tomove forward.
” ZeaChem also has funding from Firelake Capital Management LLC, based in Palo Alto, Calif., which investerd in both rounds. “We believe that the ZeaChenm technology offered the highest carbom yield of any of the biofuels that welookesd at,” said Martin Lagod, a co-founder and managing partnef of Firelake, and a ZeaChem board member. “We believd it’s a mistake to focus on biofuelx that require food asa feedstock, and we’vd focused exclusively on nonfood biomass,” Lagod said. Another Denver-area biofuel company to score fundingis Broomfield-based The U.S.
Department of Agriculture gave it a conditional commitment foran $80 million loan guarantee to help build Range Fuels’ first commerciak cellulosic plant in the company announced Jan. 19. Range Fuele will use Georgia’s wood and wood waster from its pine forests toproduce ethanol. ZeaChem uses a combination of biochemistryh and thermochemistry tomake ethanol; Ranger Fuels uses only thermochemistry.