What’s needed for a biodiesel boom

He worked at Microsoft, built another software company, took it public, and has been a software investor.

But these days, Martin Tobias is focused on fuel. Biodiesel, specifically.

Martin joined Imperium Renewables to drive strategic direction in May 2005, after personally investing in the company in late 2004. He’s still a partner at Ignition Venture Partners, working on Ignition's infrastructure software investments. But Imperium is now his main gig.

Martin Tobias works on his first coffee of the morning.

Martin was previously CEO of Internet audio and video company Loudeye Technologies, now part of Nokia, which he founded in 1997 and took public in March of 2000. He previously spent six years in operational roles at Microsoft and spent time with Andersen Consulting (Accenture).

On or about July 1, 2007, Seattle-based Imperium Renewables is to pump the first gallon of an expected 100 million gallons of biodiesel from its Grays Harbor, Washington facility currently under construction. When built, it is to be the largest biodiesel production facility in the United States. The company is already in discussions to site at least three additional 100 million gallons-per-year facilities elsewhere in the U.S. and abroad, yielding an annual capacity of 400 million gallons per year in 2008.

Cleantech Group caught up with Martin in Palm Springs, CA.

President Bush’s State of the Union implied big things are coming for ethanol.

Other people probably weren’t obsessing as much as I was, but he mentioned biodiesel before ethanol.

Do you think that was a subtlety?

No, it was intentional. Bush knows a lot about biodiesel. He visited a biodiesel refinery two years ago, a year ahead of Hillary Clinton coming and visiting our refinery in Seattle. He’s actually been involved in promoting biodiesel and ethanol than most people suspect.

I think he realizes we need to do all the options, that we’re not just going to get there with ethanol. He mentioned biodiesel first and then mentioned cellulosic and other feedstocks. You’re not going to be able to make it just with corn.

Your feedstock is coming from where?

Right now, it’s all American Midwest soybean oil. In the future, when we open Grays Harbor in July, which will be the largest biodiesel refinery in the country, it’ll be palm oil from Malaysia, as well as soybean oil from American and canola oil from Canada. All the Malaysian oil is being sourced from responsible suppliers, from plantations that have not been clearcut.

At ThinkEquity’s recent event in San Francisco, you said you were a big fan of algae from biodiesel, that you would move to algae as a feedstock if it was available.

Quite a few people hold algae out as the great white hope for biodiesel.

What we need to do for renewable fuels in general is to base it on an infrastructure of crops grown for fuel. The corn based ethanol industry and today’s biodiesel industry is built on the back of an industry designed to grow crops for food. Our corn crop, our corn harvesting system, everything, is optimized for growing corn for food. We designed soybean crops for the soy meal proteins that now go into so many things – the oil was a byproduct. Canola is a great oil, but it’s more expensive than soy because it was engineered to express certain healthy attributes of oil that don’t have trans-fatty acids in it, to be better for your heart.

What we need to do as an industry is move to an infrastructure optimized for fuel from the beginning. What that’s going to mean in the case of biodiesel is to get the yield of oil per acre up significantly.

Soybeans only produce about 30 gallons of oil per acre. The most efficient palm oilseed crop on the planet is about 680 gallons per acre. The promise of algae is 7-10,000 gallons per acre over time. But it’s going to take longer than anyone thinks.

Algae doesn’t have to be eaten. You can design it specifically for oil. We’re spending money and R&D resources to try to make algae happen.

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