Visalia-based Edeniq engineering ethanol’s future

Published on 03/02/2015 - 9:38 am

Written by George Lurie

Edeniq’s Chief Technology Officer Tom Griffin stands on a platform above the company’s Visalia pilot plant.With oil currently trading around $50 per barrel, Brian Thome says 2015 is “going to be a very interesting year for ethanol.”

Thome is president and CEO of Edeniq, a Visalia-based company that just received $16 million from venture capitalists betting the company’s patented technology will help boost the biofuel’s future.

Lower oil prices, Thome said, translate into “lower prices for ethanol too. That means margins for ethanol producers will be squeezed” — a scenario that plays right into Edeniq’s wheelhouse, which is finding new and more economical ways to produce ethanol from corn, sugarcane and a variety of non-edible cellulosic materials.

Edeniq — pronounced ee-den-ic — has been in business since February 2008 and has 45 employees in Visalia and 15 others working in branch offices in Nebraska and Brazil.

The company is an offshoot of Altra Biofuels, a now-defunct South Valley-based operation that at one time produced ethanol at the Western Milling plant in Goshen.

Thome, 42, a Nebraska native and former banker, has run Edeniq since 2010. He succeeded the company’s founding CEO Larry Gross.

Earlier in his career, when he worked for First National Bank in Omaha, Thome helped manage one of the largest ethanol lending portfolios in the industry. “That’s how I first got into the ethanol business,” he said.

The past six or seven years have been tough times for many ethanol producers: the Great Recession significantly cut ethanol demand in the U.S. while a multi-year drought sent corn prices skyrocketing, a one-two punch that wiped out nearly 40 percent of the country’s ethanol producers.

Sacramento-based Pacific Ethanol actually puts its plants into bankruptcy in 2009 but the company has bounced back nicely during the past year, raising $28 million in a stock offering last year and reporting $7.8 million in earnings during the first three quarters of 2014.

Edeniq is not yet profitable, and Thome said the company has relied primarily on grant funding and investments from venture capital firms. “The investments allow us to accelerate our expansion in the U.S. and continue to build valuable partnerships abroad,” Thome said. “[But] we want to transition over time to surviving on our operating revenues.”

While there is no current plan to take Edeniq public, during a recent interview, Thome did not rule out the possibility. “As a venture-capital backed company, a public offering at some time could be one of the possible exit strategies we keep an eye on.”

Meanwhile, at its 4-acre facility on North Shirk Road on the outskirts of northeast Visalia, Edeniq is currently operating a fully integrated, two-ton-per-day pilot plant utilizing proprietary processes and machinery that convert cellulosic feedstock into ethanol.

Thomas Griffin, Edeniq’s chief technology officer, said the company’s latest breakthrough, called the PATHWAY Platform, increases ethanol yield at existing plants “by 3 to 6 percent through a more complete conversion of starch and cellulosic corn kernel fiber.”

Key to the process, Griffin added, is the mechanical pretreatment of biomass material with a patented piece of equipment called the Cellunator.

The latest version of the Cellunator, a small, blue bucket-shaped mechanism, is currently being tested at the pilot plant and the equipment’s design is so closely guarded that company officials would not allow photographs in the area. 

Griffin explained that Edeniq is actually working on three different types of ethanol production processes, which the company refers to as “Gen 1,” “Gen 1.5” and “Gen 2.”

Gen 1 — short for Generation 1 — is the traditional form of ethanol manufacturing and involves making the biofuel from corn.

The Gen 1.5 process converts non-edible parts of the corn kernel (ie: corn kernel fiber) into ethanol and cellulosic ethanol.

Gen 2 ethanol, also referred to in the industry as cellulosic ethanol, is made from purely non-edible materials like corn stover, the stalk from sugarcane, which is called sugarcane bagasse, as well as switchgrass and wood products.

Cellulosic ethanol remains the holy grail of the industry. Research has shown that when used as a fuel, cellulosic ethanol reduces greenhouse gas emissions by 85 percent compared with reformulated gasoline.

“The industry is still early in the migration to cellulosic ethanol,” Griffin said.

Two of the company’s three pilot plants are testing Gen 2 production. The third plant is working on the Gen 1.5 process.

As part of its Visalia operation, Griffin explained, Edeniq also operates an on-site lab to track cellulosic conversion efficiencies at the pilot plant — “and for our customers and prospective customers.”

There are currently just a handful of companies producing ethanol in California, including Pacific Ethanol, which is one of Edeniq’s operating partners.

“We sit down and look at each other’s data and try to see how we can improve their overall operations and output efficiencies,” said Griffin.

E Energy Adams, an ethanol producer located in Adams, Nebraska, is the company’s oldest Gen 1 partner. Edeniq is also working with Midwest ethanol producers Flint Hills Resources in Wichita, Kansas, and Plymouth Energy in Merrill, Iowa, as well as with foreign partners in Brazil and China.

Edeniq’s Chinese partner, Global Bio-chem, located in Jilin Provin