Range Fuels, a cellulosic ethanol producer racing to finish construction of a plant in Soperton, Ga., said this morning that it is bringing in David Aldous, a former Royal Dutch Shell exec, as its CEO. Former CEO Mitch Mandich, who was previously senior VP of worldwide sales for Apple, will remain connected to the company as director of the board, according to a news release.
The reasons for the switch aren’t entirely clear, but with Aldous’ traditional oil industry background, he could help prepare the company for commercial production and distribution as it gets closer to finishing the first, 20 million-gallon-per-year phase of its plant. Range Fuels was previously looking to finish that construction this year, but several months ago it estimated 2009 was a more likely completion date. When fully finished, the Soperton plant is supposed to produce 100 million gallons of ethanol a year from wood waste out of Georgia’s pine forests.
Mandich was able to get the startup into construction phase and raise significant financing. The company is backed by more than $100 million from Passport Capital, BlueMountain, Khosla Ventures, Leaf Clean Energy Co. and Pacific Capital Group (with participation by CalPERS, the California Public Employee Retirement System.) But it’s not uncommon for a startup to change its CEO as it moves from an early to later stage in the company’s lifetime.
Aldous has a hard task ahead of him, though. It’s not such a good time to be a cellulosic ethanol producer pre-production (i.e., before any revenues are coming in) — particularly if the company needs to raise more funding for plant construction. The difficult ethanol markets of the past year, combined with the credit crunch, are wreaking havoc on some ethanol firms. VeraSun Energy filed for Chapter 11 bankrupcy, and other producers like Bluefire Ethanol are scaling back.
Range Fuels is betting that its technology, which uses a thermochemical process to turn biomass into synthetic gas and then fuel, will enable it to win out in the end. The process supposedly has significantly lower capital and production costs than using enzymes alone. But other early-stage biofuel startups, like Coskata, Mascoma, and Verenium are betting their methods are the lowest cost, too.