In a nutshell
What: Virent Energy Systems Inc.
Where: 3571 Anderson St., Madison
Mission: To develop a process to economically replace fossil fuels by transforming biomass into carbon-neutral liquid fuels, gases and chemicals.
Annual budget: About $10 million operating and $2 million capital
Major investors: Cargill Inc., Honda Strategic Ventures, Venture Investors LLC, and Advantage Capital
Web site: www.virent.com
It's not the Louvre; neither is it Rosslyn Chapel. No, Virent Energy Systems is headquartered in a nondescript, gray brick building across the street from the MATC campus on Madison's east side. And yet, the words 'Holy Grail' and 'Virent' may someday be spoken in the same breath. That's because Virent is well on its way to making energy that's cheap, renewable and doesn't increase carbon in the atmosphere.
Initially focused on using plant materials to produce hydrogen for fuel cells, as well as hydrogen/alkane gas to power electrical generators, the company has recently set its sights on making actual gasoline from biomass.
'The original goal was hydrogen generation ' but wide-scale deployment depends on a hydrogen infrastructure that is many years away,' says company co-founder Randy Cortright. 'We still work with it, but we're more interested in making gasoline. That's the game changer.'
The company's work has, for obvious reasons, stirred the interest of government as well as private investors.
'There are a number of technologies that show strong promise, and Virent's technology is one of them,' says Patrick Serfass, director of program and technology development at the National Hydrogen Association in Washington, D.C. 'Virent has the legs to become a strong player. Its technology is very important.'
Indeed, it is a technology that promises to reform the global economy, removing a major source of international conflict and environmental degradation. But first there are many hurdles to overcome.
By their very nature, high-tech start-ups like Virent are crapshoots. As promising as they seem, they may go years without generating revenue and are totally dependent on venture investors who will fund those years of money-losing operations on the chance of a huge payoff down the road. There is no guarantee of success (see sidebar, 'The Challenge for Virent').
Virent's stated vision is of 'a sustainable, carbon-neutral world, in which global commerce and industry are driven by renewable energy and products.' Its goal is to enable 'the widespread replacement of fossil fuels by economically transforming biomass into universally used fuels and chemicals.'
But the company's modest headquarters gives little sense of its grand ambitions. A parking lot separates several clumps of identical-looking buildings off Anderson Street. Winding around to the back, a small door labeled 'Virent' overlooks a dirt field.
As I enter the building, there are no buzzers to press or security cameras keeping watch. A few feet from the door, a pleasant young man with pale blond hair dressed in a long-sleeve black shirt and black pants looks up from the reception desk ' a trifle monastic-looking, yes, but a far cry from a fierce Templar knight.
As he goes off to fetch Mary Blanchard, Virent's director of marketing and strategy, I can't help noticing how bland and 'corporate' the facility appears. The reception area backs up to an extensive network of padded, oatmeal-colored cubicles. The ceilings are high, but far from 'cathedral-like,' and the pale yellow walls create a jarring contrast to the charcoal-gray industrial carpeting.
In short, everything is inexpensive and utilitarian. There are no frills, nothing in the facility intended to impress or inspire. It is the antithesis of a Gothic cathedral, a medieval palace or a high-end law firm ' but that may be the point.
Blanchard leads me to a small conference room overlooking the parking lot. Almost the entire floor space is taken up by an imitation wood conference table surrounded by padded maroon swivel chairs.
We are joined by company CEO Eric Apfelbach and, shortly thereafter, Cortright. A UW-Madison chemical engineer, Cortright co-founded Virent in 2002 and is now the company's chief technological officer.
Virent, which is Latin for green, has developed a process that converts sugars found in plants into fuels and chemicals that ordinarily come from fossil fuels. It is, asserts Cortright, 'more cost-efficient and a greener technology.'
The BioForming process, originally known as Aqueous Phase Reforming, was initially designed to create hydrogen fuels for cars. According to Blanchard, the sugars from plants ' referred to as 'feedstocks' ' are put in a reactor that uses low temperatures and low pressure to break down the plant sugars and then reconstruct them into renewable hydrocarbons.
Our primary energy sources ' crude oil and natural gas ' are the product of compression and heating of ancient organic materials over geological time. Scientists believe oil is formed from the preserved remains of zooplankton and algae; terrestrial plants tend to form coal. By placing biomass feedstocks in a BioForming reactor, Apfelbach says, 'We're just advancing the process by a few hundred million years.'
The fuels produced at Virent are referred to as 'carbon-neutral.' This means that, when burned, they emit the same amount of carbon into the atmosphere as they removed when they were living plants. In contrast, says Blanchard, 'With fossil fuels, in a short period of time we're emitting carbon removed from the atmosphere over hundreds of millenniums.'
Besides generating high-energy fuels from renewable sources, the BioForming system has the additional advantage of being 'untethered.' This allows the system to operate off the electrical grid and independently of natural gas supplies. Production can be localized to create 'on demand' fuel production with low capital investment.
This gives Virent's method the potential to not just deliver a new energy source to developed nations, but possibly bring clean electricity to remote rural markets throughout the Third World. Access to cheap electricity is key to obtaining refrigeration, communication and water purification.
'We are developing a platform technology that generates motor fuels and chemicals from biomass without affecting food supplies,' says Cortright. 'This development will allow us to decrease the world's dependence on fossil fuels and to reduce the production of greenhouse gases responsible for global warming. Since this technology can utilize the waste biomass from food and fiber production, it will maximize land utilization, and enhance the rural economies in Wisconsin, in the United States and around the world.'
The 30 employees at Virent working to make this happen include scientists and engineers, as well as the executive and clerical staff. Blanchard says the company is actively seeking additional employees to work in engineering and research and development. The company is engaged in ongoing research to determine which feedstocks, temperatures and pressures work best to produce specific energy products.
One of Virent's most interesting existing products is a hydrogen/alkane gas that the company uses to fuel a generator producing 10 kilowatts of electricity ' enough to service the needs of about 10 homes during non-peak demand. Virent has sold a prototype of this generator to Madison Gas and Electric, which is putting the generated electricity onto the grid.
Recently, Virent was awarded a $2 million grant from the U.S. Department of Agriculture and Department of Energy to investigate making additional products through the BioForming process. The goal is to convert glycerol, a waste product created during the formation of environmentally friendly biodiesel fuel, into propylene glycol ' a chemical usually made from petroleum that is an essential ingredient in antifreeze solutions, liquid detergents, paints and other products.
'We just kicked off our chemical development effort with USDA-DOE money, and we're evaluating which chemicals will be most profitable to produce with the BioForming process,' says Apfelbach. He hopes some products from this research will be marketable and begin generating income for Virent in the near future.
Despite considerable success in producing hydrogen for fuel cells, or alkane gases to power electrical generators, the company is putting greater emphasis on the production of 'green' gasoline. Virent's scientists are concerned that the hydrogen economy is too far off.
Although BMW is coming out with a hybrid car that runs on both gasoline and hydrogen, and General Motors predicts that 20% of cars will be powered by hydrogen fuel cells in 20 years, Apfelbach remains skeptical. 'The internal combustion engine will be around for a while,' he says.
And so Virent is now looking for the most efficient way to create liquid fuels with the BioForming process. 'You can put sugar in our reactor, run it through one tube, put it in a lawn mower and cut the grass,' Apfelbach recounts, adding that this is something Virent has actually done.
Virent is not the first company to derive fuel from plant sugars. Ethanol has been around for years and is a major player in the Midwest's economy. But Blanchard is quick to list the ways Virent's product is superior.
'It takes a lot of energy to produce ethanol,' she says. 'Our process will generate about two times the BTUs as ethanol on a net basis' ' that is, including all the energy that goes into production. In other words, the Virent process will double the amount of energy that can be produced from a bushel of corn ' what Apfelbach called the 'field to wheels' yield.
Also, it will be possible to transport the gasoline from Virent's process via pipeline, like regular gasoline. Because ethanol attracts water, which causes the fuel blend to break down, it must be trucked, which is far more costly.
Another advantage to Virent's fuel, says Blanchard, is that it is compatible with existing technology. 'Ethanol presently available at the pump is only 10% of the fuel mixture,' she explains. 'To use ethanol in higher concentrations ' say 85% ' you need a 'flex fuel' engine.' Virent's gasoline product will require no such engine modification.
Even with significant competition from other renewable energy start-up companies, Virent's technology has managed to attract a $9.5 million round of private financing. The chief investor is the venture capital arm of Cargill Inc., a major provider of agricultural, food and risk-management products.
'The beauty of their system is that it's adjustable to produce a variety of fuels, from pure hydrogen, to various gas mixes, to liquid fuels,' Paul Bieganski, chief technology officer of Cargill Ventures, has been quoted as saying. '[I]t's safer and more cost-effective than alternative conversion technologies.'
Virent has also received backing from several other venture capital firms, including Honda Strategic Ventures, as well as from private 'angel' investors, including Tim Erdman. The chairman and CEO of Erdman Holdings, the parent company of Techline USA and other investments, he got involved after attending a venture fair at Monona Terrace in late 2003.
'There were these guys saying they could make hydrogen out of sugar,' recalls Erdman, who knew enough about the underlying science to be excited and is, himself, the owner of several hybrid vehicles. 'The potential is huge. The potential is to convert us from a fossil-fuel economy into a biomass economy.'
For Cortright, such reactions are part of what gives him hope. 'Growing as a company, one of the things that's fulfilling is that a number of outside entities recognized the potential [of the technology], and they want to be part of it,' he says. 'They get it.'
Randy Cortright will never be mistaken for Sir Galahad or any other legendary seeker of the Holy Grail. Dressed in denim jeans and a slightly rumpled button-down shirt topped by a fleece vest, he looks like your prototypical laboratory scientist, albeit without the white coat.
Raised on a Michigan farm where he really did have to walk a mile and a half to a one-room schoolhouse, Cortright is a picture of Midwestern modesty and self-effacement. He grasps the vast potential impact that a cheap, nonpolluting substitute for petroleum products could have on geopolitics and the global environment. But he keeps his comments down to earth.
'I'm confident that [our process] will work,' he says. 'But I don't want anyone to congratulate me until it's up and running and making money.'
Plants producing gasoline from biomass are at least five years away, says Cortright. Currently, Virent fuels its reactors on corn sugar bought from Archer Daniels Midland, as well as table sugar and Grandma's Desulphured Molasses bought from the grocery store.
The gasoline-producing plants Cortright envisions will be equivalent in size to today's ethanol plants. They will convert waste biomass ' like the part of the corn plant that isn't used as food or the leftover material from wood and paper processing ' to fuels. Later on, he hopes to use switch grass or plants that have been genetically modified to become ideal biomass for liquid fuels.
CEO Apfelbach says the company is now working with models to demonstrate that its processes can work economically on a much larger scale. He estimates that a plant capable of producing 40 million to 100 million gallons of gasoline from the Virent process per year can be built for about $1.50 per gallon of capacity.
Virent's current plant occupies 16,000 square feet of laboratories and workspace. Apfelbach, Blanchard and Cortright march me past rooms filled with copy machines and cubicles to cavernous empty rooms with unpainted walls. Apfelbach explains that the company has yet to fully move into this recently acquired space.
Finally, after several twists and turns, Cortright opens a door onto what looks like a factory shop floor. In the center of the room is a machine about the size of six refrigerators. This is the reactor and generator currently used by MGE to produce the 10 kilowatts of electricity that powers Madison homes and businesses.
Could it be that, from this small beginning, Virent will one day help humankind achieve cheap, plentiful energy that leaves the air clean and the climate normal?