By Cathy Dobson, From The Observer www.theobserver.ca
Lanxess’ latest investment in a U.S. corporation that’s developing advanced biofuels and renewable chemicals is laying the groundwork for the possible construction of a large isobutanol plant on Vidal Street.
It’s early yet but discussions are ongoing with Colorado-based Gevo Inc. to locate a production plant in the Lanxess bioindustrial park in Chemical Valley, says Archie Kerr, the park’s sustainability director.
Lanxess’ $17-million investment this week follows an earlier $10-million investment, giving Lanxess 9.1% of Gevo’s initial public offering (IPO).
Gevo is developing a process that uses corn to produce the organic compound isobutanol. At the same time, Lanxess is working on a new process to convert isobutanol to isobutene, a key to manufacturing butyl rubber.
Lanxess is the world’s second-largest producer of butyl rubber, which is sold to the tire and rubber industry. The company currently uses fossil fuels but wants to start making rubber with renewable resources, Kerr said.
“It’s going to be a long process but, happily, it has started,” he said.
Gevo is converting a small plant in Minnesota that’s expected to be ready in 2012 for production of organic isobutanol.
Lanxess has successfully produced butyl rubber from isobutanol and is planning full-scale trials, said Kerr.
“We also have to talk to our customers so they can evaluate the product in their finished goods.”
The next step is for Gevo to build a full-scale commercial plant capable of producing 100 million gallons of isobutanol a year. It’s that plant that Lanxess wants to attract to its 200-acre bioindustrial park on Vidal Street South.
Kerr estimates a plant large enough to provide Lanxess with enough isobutanol could cost as much as $200 million.
It would be ideal for Lanxess if Gevo was located right next door to avoid transportation costs, he said.
“We could be Gevo’s largest customer, at least to begin with … They are going to build somewhere or convert an ethanol facility, wherever they can get the best financing or incentives or loan guarantees to take the risk out of a new facility.”
Lanxess is working with the Sarnia-Lambton Economic Partnership and the Sarnia sustainability chemistry alliance, and has approached the federal and provincial governments for help attract Gevo.
“To locate in Sarnia would take a lot of political will,” he said. “There is an opportunity to develop a bio-hybrid chemical cluster in Sarnia Lambton, the same way that the chemical industry developed here in the 1930s and 1940s. We’re encouraging the government, wherever we can, to take a look at how they would support a new industry.”
Lanxess’ investment in Gevo could “give us … a stake in some of the decisions they might make,” Kerr added.
Sarnia-Lambton’s high-volume corn production might also be considered an asset by Gevo. Meanwhile, the science is still developing.
“Gevo is moving along and they believe they can make isobutanol economically and we believe we can convert it from isobutanol to isobutene.
“If you can make it run in a small plant, you can make it run in a large plant,” Kerr said.
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