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Published: February 19, 2010
Picture this: A congressional staffer laden
with a massive, multivolume set of books containing the
president's 2011 budget. We all saw this a couple weeks ago,
when Mr. Obama released his blueprint for the government's next
fiscal year.
It's a ridiculous document, not because of its roadmap of how to
spend some $4 trillion in public funds, but because no one is
going to read the thing. All four volumes are 2,450 pages long.
The set weighs 10 pounds. Anyone in his right mind is going to
use
the online version. But the White House orders the budget
printed every year, mostly so news photographers will record the
image I mentioned. After all, staffers carrying huge documents
around make for good Page One art. Your government in action,
doing the hard work of, well, of whatever is in that massive
document that no one is going to read.
The budget is printed a stone's throw from Union Station in
Washington, D.C., at the Government Printing Office (Proud
motto: "Keeping America Informed"). The Printing Office, five
blocks from the Capitol, is the largest printing facility in the
world and encompasses the U.S. Government Bookstore, where
shoppers can find such intriguing reads as the proceedings from
"The Thirteenth International Conference on Computerization of
Welding."
It's not much of a page-turner, but it's what these pages can be
turned into that's exciting.
Paper, of course, is made from plants. Most paper comes from
wood pulp, though it sometimes can be made from linen. U.S. bank
notes are printed on 100% cotton. All of these materials share a
common property: Each contains cellulose, a sugar found in the
cell wall of plants that can be converted into ethyl alcohol, a
clear substance most people know as ethanol.
Which brings me to Fiberight, a Maryland startup that has big
plans for all the paperwork Washington generates. Its idea is to
turn the budgets, bills, working papers, reports and everything
else made of paper and convert it into cellulosic ethanol.
According to its website, "Fiberight has leveraged the best
innovations and technology from the waste and biofuel industries
for a new, integrated approach to solving the challenge of
creating a cost-effective, sustainable, and practical biofuel
product." It can derive 85 gallons of biofuel from a ton of
useless trash -- a remarkable figure given that a ton of corn, a
perfectly good food crop, yields only 95.2 gallons.
Writ large, Fiberight's process could produce 10 billion gallons
of fuel from the 170 million tons of trash U.S. citizens
generate each year. That's more than 1,500 times the
government's current mandated cellulosic ethanol output quota
for 2010 and more than half the output expected in 2022. (The
2010 figure was just revised:
See my recent article about it and learn about another
company that's going to benefit from the cellulosic ethanol
boom.)
In other words, Fiberight has found a way
to actually get something useful out of Mr. Obama's budget.
(Sorry, I just can't resist sometimes.)
Problem: Fiberight is privately held. You can't buy stock in it.
Which brings me to Cellic CTec2.
This is not, admittedly, a brand name that rolls easily off the
tongue, but this Novozymes (OTC: NVZMY) product is the
backbone of the Fiberight business model. When Fiberight said it
had leveraged "the best innovations and technology from the
waste and biofuel industries," it was talking about this enzyme.
CTec2 can produce cellulosic ethanol for less than $2.00 a
gallon, which is roughly equal to the cost of producing
gasoline. The enzyme, which has taken 10 years to develop, will
be used in cellulosic ethanol plants that are expected to go
online next year.
Readers of my
Government-Driven Investing newsletter have read my
latest research into the biofuel arena and heard me discuss the
potential gains to be earned as the energy industry moves closer
to the inevitable green future. As Washington produces new
legislation to support the green-energy future -- and as
Fiberight promptly turns them into E85, a mixture of 85% ethanol
and 15% gasoline -- investors who latched onto the companies
that control the key technologies -- like Novozymes -- are
likely to be richly rewarded.
Let me be clear: No part of this article is science fiction.
Fiberight is right now driving a cellulosic-ethanol-powered
Chevy HHR around Washington to demonstrate the technology.
Novozymes just unveiled CTec2, which, incidentally, was
developed with a $29.3 million grant from -- wait for it -- none
other than the U.S. federal government.
-- Andy Obermueller
Chief Investment Strategist
Government-Driven Investing |
