Gevo ramps up isobutanol output

Gevo will increase isobutanol production at the Luverne plant to nearly 1 million gallons in 2016, nearly 10 times the rate of current production.
Corporate officials made the announcement last week on the heels of a patent lawsuit settlement with Butamax in August.
“The settlement with Butamax eliminated a significant cost and uncertainty in our business,” said Gevo CEP Patrick Gruber.
“We are now in a position to devote the majority of our resources to the commercialization of isobutanol, now that this distraction is behind us.”
The new production goals will require roughly $5 million worth of capital investments in the Gevo plant in Luverne over the next three to six months.
The improvements are designed to cut production costs in half by bringing processes to Luverne that were previously done by third parties.
While isobutanol production is ramping up, total product output at the plant remains modest, according to company officials.
It won’t affect jobs, city utilities or rail transportation, because the plant is simply replacing its ethanol production with isobutanol.
“In other words the 750,000 to 1 million gallons of IBA we are targeting over the entire year of 2016 will still represent a relatively small amount of the overall production of the plant for 2016,” Gruber said.
The plant is currently producing ethanol at a rate of 1.4 million gallons per month, but it has the capacity to produce 22 million gallons per year of ethanol and 18 million gallons per year of isobutanol.
According to Luverne City Administrator John Call, local utilities are prepared to accommodate the plant when and if it reaches output capacity.
“We hope that Gevo has a great year in 2016 and beyond,” Call said. “Our municipal utilities are ready for the increased production.”
He said the city has invested $500,000 in Gevo’s electrical circuit and $4 million in the city’s water production facilities in recent years.
Also the Lewis and Clark pipeline will be connected to Luverne by the end of the year, and that will augment the city’s daily water production by 850,000 gallons. 
While Gevo’s announcement won’t result in increased plant output in the short term, it is good news for the company’s financial future, Gruber said.
“Deploying this capital at Luverne will be an important driver for Gevo’s overall growth plans,” he said. “Throughout 2015 we have been operating Luverne to maximize cash flow from the facility.”
This meant sole production of ethanol over certain periods of time, with occasional campaigns to produce isobutanol for market development and sales.
“The planned capital improvements are expected to drive meaningful costs out of our isobutanol production, which will allow us to increase production rates without driving up our cash burn rate,” Gruber said.
“We believe that increased production and improved economics will greatly facilitate the commercial adoption of isobutanol, both in terms of licensing and product sales.”
With additional isobutanol production, Gruber said Gevo will be in a stronger position to increase sales into its core markets such as the marina, off-road and solvents markets.
It is also expected to provide feedstock for Gevo’s hydrocarbons biorefinery in Silsbee, Texas.
This means Gevo can continue to produce jet fuel for testing purposes with commercial airlines, as well as isooctane to meet demand for renewable sources of fuel blend components that do not compromise the performance characteristics of gasoline formulations.
 
Background
Gevo purchased the former Agri-Energy plant in Sept. 2010 and in 2012 began producing isobutanol.
The Luverne plant was built in 1996 by a group of local farmer investors and went online with ethanol production in 1998.
By the time it was sold in 2012 it was producing 22 million gallons of ethanol per year.
At that time, 28 people worked at the Luverne plant, which Gevo officials praise as being among the most efficient in the nation.
Gevo is a renewable technology, chemical and biofuels company.
It uses a combination of synthetic biology, metabolic engineering and chemical engineering to produce isobutanol, ethanol and animal feed at its fermentation plant in Luverne.
Gevo has also developed technology to produce hydrocarbon products — such as jet fuel, octane and polyester — from renewable alcohols. It has a list of prominent partners including The Coca-Cola Company, Toray Industries Inc. and Total SA.
According to it’s website, “Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water.”
More information is available at gevo.com.