The Pearson Fuels’ business model can be explained in a dozen words.  A massive government mandate flows through the pipes.  Spigot owners win.  The Renewable Fuel Standard mandates a blending of transportation fuels from renewable sources increasing annually to a target of 36 billion gallons in 2022.  California could account for 20% of the mandated amount.  Obviously, renewable fuels represent a longer list than just ethanol.  However, in the short run ethanol is the only renewable transportation fuel being produce in any meaningful quantity.  The pace of development in ethanol technology bodes well for ethanol as one of the long term solutions.

Over the last two years I have attended over 100 clean tech meetings in southern California.  On any topic of discussion there are supporters for a wide spectrum of views except on the economic viability of ethanol from corn.  O.J. has more defenders.  Around here, it is universally understood that the reason for corn ethanol’s existence is to fuel the political machine.  The Pearson Fuels / AE Biofuels combo is attractive because of their intention to move to cellulosic ethanol over time.  Time will tell.  In the mean time they have their hands on the spigots.

The boom and bust that represents the ethanol business in our nation’s corn belt is being challenged by alternatives which are not disruptive to the food chain. Today, AE Biofuels Inc. of Cupertino and Pearson Fuels said they have been awarded a $6.9 million grant from the U.S. Department of Energy through its Clean Cities program. The two companies will build and supply 55 public E85 ethanol-fueling stations across California over the next 42 months.

Pearson Fuels will establish the stations. AE Biofuels Inc. will supply the product. The technological focus of the project will be the production of cellulosic ethanol from crop wastes such as corn stover and wheat straw, or energy crops such as switchgrass, sugar cane bagasse and miscanthus. The fuel produced will be identical to the ethanol derived from corn. It’s a win-win. Drivers get their fuel and bourbon distillers get their corn. As near as I can determine, nobody is making whiskey out of switchgrass.

Link to Pearson Fuels

Link to AE Biofuels Inc.