Cobalt Technologies goes global

By Luke Geiver
Posted August 17, 2010, at 11:40 a.m. CST

Big dreams are coming true in California, just ask biobutanol developer Cobalt Technologies. After signing a partnership agreement with the global engineering and project manager Fluor Corp., the Mountain View-based company now has the chance to move that advanced biofuel dream from its small-scale testing facility to large-scale commercialization. The two companies decided to partner during a re-engineering exercise of Cobalt's technology, performed by Fluor, that reduced Cobalt's energy costs by 40 percent and capital costs by 25 percent

As part of the agreement, Fluor will provide engineering consulting services to help Cobalt commercialize its production technology including "rigorous design and engineering to assure the system works once it is built," Wilson said. The Texas-based engineering company can also manage construction while potentially provide access to business partners and project finance. "Most of the technical and economic challenges we face are not biology related," said Rick Wilson, CEO of Cobalt, but instead are related to process engineering. "Our partnership gives us access to a huge range of world experts in process engineering, and we have used them extensively in developing and improving our technology."

Fluor is not the first big name to work with or support the California company. In January, Gov. Arnold Schwarzenegger visited Cobalt's facility, telling the crowd in attendance that "Cobalt shows us that what is good for the environment can also be good for the economy." John Hopkins, group executive of business development for Fluor seems to agree with the Governor. "We have examined many different Biofuels technologies, and are choosing to work with those companies that we believe have the greatest potential to be commercialized economically," he said. "We believe Cobalt's technology has great potential and are looking forward to helping them scale up rapidly."

Part of the potential exists in the buzz word "capital light," which Wilson uses to describe the company. "For us that means co-location, putting our plants next to an ongoing business to take advantage of what is already there including feedstock handling, tanks, electricity, steam and buildings." Wilson noted pulp mills, corn ethanol plants using cobs and biomass cogeneration facilities as possible suitors.

Cobalt's butanol technology, which ferments both C5 and C6 sugars from biomass fifteen times faster than typical processes due to its bioreactor technology, also gains "geographic reach" through the new partnership, according to Wilson. "We are building a global business, and we can now execute a project anywhere in the world." Along with other investors, Pinnacle Ventures, Vantage Point Venture Partners, Burrill and Co., Malaysian Life Sciences Capital Fund, Life Science Partners, @Ventures and Harris & Harris, "Flour gives us global access to relationships in refining," Wilson said.

In two years, Wilson expects those relationships to pay off. "Expect us to have an operating demonstration unit, which will be the first profitable biorefinery." By 2012, he also said several facilities will be using Cobalt's technology. The reach of the company doesn't end however, with biobutanol. "Expect us to be not only in the butanol chemical business, but potentially chemical derivatives and jet fuel."