By PAUL MERRION
Publication: Crain’s Chicago Business
Date:  Monday, October 19, 2009

Stinkweed smells sweet to former Caterpillar Inc. CEO Glen Barton.

Mr. Barton is chairman and one of several Peoria-area investors in a local startup, Biofuel Manufacturers of Illinois LLC, which plans to build a $40-million factory near Peoria next year that can make biodiesel out of just

about anything, from soybeans to animal fats to stinkweed—a wild plant growing throughout Illinois that’s more formally known as field pennycress.

Despite heavy government support, similar biofuel factories are struggling, but BMI’s plan to use pennycress as one of its main raw materials could give it an edge.

“It’s a novel idea,” says Mr. Barton, a lifelong Cat executive who successfully led the global heavy-equipment maker through five turbulent years before exiting in early 2004 near the firm’s mandatory retirement age of 65. “I’m involved because I like novel ideas.”

Backers say pennycress has advantages over soybeans, the most common biodiesel feedstock now. In addition to having twice the oil content of soybeans, it stays liquid at much lower temperatures than diesel made from soybeans or animal fats.

But the biggest plus is that pennycress germinates after corn is harvested and lies dormant during the winter, sprouting in the spring before soybeans are planted.

That means farmers can produce the plant’s inedible oil between existing crops, averting the food-for-fuel problem that threatens the growing use of corn and soybeans to make alternative fuels. It also avoids the clearing of forests and fields to make more biofuel, which would negate much of the environmental benefit.

Last but not least, using idle land puts extra money in farmers’ pockets, like adding a second shift at a factory, Mr. Barton notes. “It’s a win-win-win for a lot of people, including planet Earth.”

BMI estimates that its 45-milliongallon-a-year plant, which needs a $25-million state loan guarantee to begin construction, will inject $100 million a year into the Illinois farm economy, and the state has enough cropland to support about 18 to 20 such plants.

The company expects to make about three times as much biofuel per acre compared to soybeans. That assumes it can use the remainder of the pennycress seed, after the oil is removed, to make more biofuel, using a process it is seeking to patent.

“When that discovery was made, it excited us beyond anything that’s happened so far,” says BMI CEO Sudhir Seth, a native of India who was a computer consultant in New York before moving to Peoria three years ago to live closer to his parents.

Harvesting will use existing farm equipment. “The only investment the farmer has to make is to buy duct tape,” says Peter Johnsen, BMI’s chief technology officer. Farmers need only patch holes or cracks in bins and trucks to keep the tiny seeds from falling through.

Making biodiesel from soybeans is barely profitable at current oil prices, even with a $1-per-gallon federal subsidy, but it will cost about 50 cents a gallon less to make it from pennycress. Within five years, it could be profitable even without subsidies, says BMI’s Mr. Seth, as farmers learn how to grow more pennycress per acre and reduce its cost.

But it’s no simple matter to turn a weed into a cash crop. First, you need seeds. BMI has enough to plant 1,800 acres of pennycress, but its biodiesel plant eventually will require 500,000 acres to supply its needs. Lousy weather has delayed harvesting of this year’s crop of corn, and it will soon be too cold for pennycress to germinate and take root before winter.

Beyond that, “farmers won’t take the risk of planting a crop they can’t get insured,” says Peoria’s freshman Republican congressman, Aaron Schock. Weeds don’t qualify for federal crop insurance, but he’s been urging the U.S. Department of Agriculture to cover it under the Noninsured Crop Disaster Assistance Program.

If pennycress takes off, engineering a better variety should be worth the cost. Pennycress is a cousin of the much-studied mouse-ear cress, the first genetically mapped plant due to its simplicity. “It’s the fruit fly of the plant world,” says Jason Hill, resident fellow at the University of Minnesota, who did his doctoral thesis on it. “It’s an easy plant to modify.”

Mr. Hill also co-authored a National Science Foundation paper on the total life-cycle costs and benefits of alternative fuels, which concluded that corn-based ethanol creates only 25% more energy than it takes to produce, while soy-based biodiesel creates 93% more. Using pennycress, he says, could be even more cost-effective.

“I certainly applaud them for looking at ways to use our cropland more efficiently,” Mr. Hill says. “But how is it going to scale up?”

That’s where Mr. Barton lends BMI credibility, he adds. “It doesn’t get much bigger scale than Caterpillar.”

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