But at GM’s very first press conference, there was GM’s supremo, Rick Wagoner, up on stage, extolling the virtues of Coskata, a company the automaker had recently taken an undisclosed stake in, and a company that has a profound relationship with an ethanol-excreting micro-bug.

GM was pumped about this bug’s ability to not only produce ethanol in great quantities, but also about its ability to produce this fuel without the major drawbacks associated with current grain-based ethanol production — namely high cost, high energy inputs, and its reliance on source material that would otherwise would be headed for the food chain.

GM’s short-term religion

But before we get to the magic of digestion, and the twists and turns of Coskata’s development work and business model, we must first ask: Why is GM all wiggly about ethanol in the first place?

Well, for starters, GM makes more flex-fuel cars and trucks than anybody. (Flex-fuel vehicles can run on either ordinary gasoline or E85 — a blend of 85 per cent ethanol and 15 per cent gas — or any combination of the two.) GM figures there are about 3.5 million of its flex-fuel units currently on the road around the world. For 2008, it will offer 11 flex-fuel models, and is committed to making half its fleet flex-fuel capable by 2010.

But if you happen to own one of these bi-sexual vehicles, and don’t live in the U.S. Corn Belt, you already know the problem — E85 is hellishly difficult to find.

“There is no question in my mind that making ethanol more widely available is absolutely the most effective and environmentally sound solution,” Wagoner said. “And it’s one that can be acted on immediately.”

GM estimates that electric and hydrogen vehicles will not be able to make an impact on the energy/eco front for a decade or so. The Chevrolet Volt plug-in gasoline/electric hybrid may be in production by 2010/2011, but initial volume will be limited to about 10,000 units, and there will be no huge ramp up in volume until the technology is fully developed.

GM thinks ethanol has the most potential to become the eco impact player during the years before the electric/hydrogen utopia arrives, citing how relatively easy it is to make current engines E85 compatible, and how many millions of vehicles could potentially be converted.

While GM seems convinced of ethanol’s eco status, others aren’t so sure. Boosters point to its plant-based origins, which theoretically make it renewable. Detractors point to the CO2 that is produced by current farming methods. How clean it ultimately is, seems hinged on how cleanly you can source inputs, and how cleanly you can break that down into ethanol.

Going cellulosic

Grain-based ethanol production has pretty much been perfected. This is the same distillery process used for centuries by some of our favourite companies — Seagram’s, Glenfiddich, Jack Daniels, etc.

When you try to get alcohol or some other spirit from inputs that don’t have a lot of natural sugar in them, things get a might more complicated. These inputs are called cellulosic, and it might be plant waste, garbage, and even old tires — anything with some carbon in it.

The current cellulosic process involves introducing tailor-made enzymes to the material, to leach out the stuff that can be made into ethanol. The remaining stuff is then centrifuged, scraped off the walls, powdered, and eventually fed into stoves, to heat the stills, to complete the distilling process.

Going cellulosic by bugs

After the press conference, we spoke to Wes Bolsen, Coskata’s chief marketing officer and vice-president of business development. He told us about Coskata’s new way of making cellulosic ethanol:

“The first step is turning it (the input material) into gas. It’s a very hot process. Put a tree in there, and it is soon reduced to its gases — carbon monoxide and hydrogen.”

Guess what Coskata’s micro-bug likes to eat? Carbon monoxide and hydrogen. You already know what it excretes — ethanol.

“It’s an anaerobic organism,” says Bolsen. “It lives in the absence of oxygen. If it were exposed to air, it would die… it’s a bacterium, but we think of it as a thoroughbred racehorse.”

This tiny horse was initially researched and developed by a bio-fuels consortium, working at the University of Oklahoma and Oklahoma State. The consortium patented the resultant athlete, and licensed it to Coskata for 21 years.

Coskata subsequently developed and patented the rest of the equation — how to grow the bug, how to feed it, how to house it, etc.

It hatches, lives, breathes, excretes, breeds, and dies, in what Coskata calls a “bio reactor.” Gas goes in one end and ethanol comes out the other.

There is no energy-intensive distillation process. That’s one of the reasons why Coskata claims to be wildly efficient: For every one unit of energy used, the Coskata system generates 7.7 times that amount of energy, compared to 1.3 times for corn ethanol.

Coskata also says its process uses less than one (U.S.) gallon of water to make one (U.S.) gallon of ethanol; considerably less than other processes, which typically use three gallons or more to make that one gallon of ethanol.

With such efficiencies, no wonder also that Coskata is going on record saying it can produce one (U.S.) gallon of ethanol for less one (U.S.) dollar.

It gets better. Notes Bolsen: “If you make me pay fifty bucks for a ton of wood chips, I’ll be close to that dollar. But if you pay me to take away trash that I can use, the ethanol will be considerably less than a dollar.”

(Note that this does not mean that the pump price would be a dollar a gallon).

Scalable and mobile

Trash is part of the Coskata dream. Bolsen envisions a scenario where a Coskata-style plant would be located close to wherever suitable trash is generated, or even wherever suitable new-style “energy crops” could be grown, to mitigate transportation costs and issues, and to further crank up the efficiency quotient.

The technology is also scalable, so plant size could be tailored for specific applications.

Coskata will build its own plants, but hopes to build partnerships that would also build plants. “We want to make an impact,” says Bolsen. “So we have to let go of some of the economics. We would love to see 100 plants built in a year — no one company can do that.”

It will be about 2.5 years before any Coskata ethanol gets to the pumps. “It will take us that long to get the first plants up and running. Not because we’re waiting for the technology — we’re waiting for the steel to get into the ground.”

And there is still the issue of infrastructure, which is currently the purvey of ethanol’s prime competitor — the oil industry. “They are our distribution channel, as well as our customer, as well as our competitor,” notes Bolsen. “It’s a fine line to balance… but I believe we will see new players there at some point.”

GM’s head product guy, Bob Lutz, is particularly smitten with Coskata’s potential.

In a separate interview he noted that the Argonne National Laboratory analyzed the Coskata’s process, and found it sound, as did GM’s own scientists.

“We can’t find a reason why this wouldn’t work.”