Cheap Ethanol - and not from Corn

General Motors announced a partnership with Coskata of Warrenville, IL, a new company that claims it can make ethanol from wood chips, grass, and trash--including old tires--for a dollar a gallon. That's significantly less than it costs to make the biofuel from corn grain, which is the source of almost all the ethanol made in the United States.

Coskata executives, who until the announcement had kept the company's existence and technology under wraps, say they have developed a hybrid approach involving both thermochemical and biological processes for making ethanol. Until now, most researchers have focused on developing either thermochemical or biological methods. Coskata says that besides being cheaper than other ethanol production processes under development, its technology uses less energy and water.

GM will give financial, technical, and marketing support to Coskata to help it scale up its process, which so far has been demonstrated only at the lab scale. Coskata is completing a pilot-scale ethanol production facility and will announce locations for a 40,000-gallon-per-year facility and a 100-million-gallon-per-year commercial-scale plant later this year.