Michael Kanellos 08 20 09, 12:09 PM

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A CEO Swap at Mascoma as It Hunts for Money

CORRECTION: See below.

Mascoma, one of the first companies to tout exploiting super microbes to make cellulosic ethanol, said today that CEO Bruce Jamerson is shifting his job.

Jamerson will resign as CEO and become chairman of Mascoma and chairman of Frontier Renewable Resources, a wholly owned subsidiary that is trying to build a 40 million gallon per yer plant in Michigan. The price tag for the plant has been estimated to be around $250 million to $300 million. It is something of a fitting move – Jamerson comes from the fuel industry – but it is also a bit mysterious. Plus, it won't exactly help the public perception of Mascoma, which has suffered through some delays and had to scale back some factory plans.

A search for a new CEO for Mascoma proper is underway.

If you are looking for a company that symbolizes the highs and lows of cellulosic ethanol, Mascoma wouldn't be a bad choice. The company emerged from biological research at Dartmouth conducted by Lee Lynd. The idea behind the company was to create a superbug that could handle the cellulose-to-sugar and sugar-to-alcohol conversions. Combining two steps in one, potentially, would save time and money. Mascoma also wanted to increase the microorganisms' tolerance for alcohol. Alcohol kills microbes – that's why wine isn't 80 proof like vodka. Making them hard drinkers eases the process of sucking out fuel at the end of the process.

"There are several species of [so-called] superbugs that we are working on. That is the ultimate game changer," Jamerson told me in 2007. "But it will be several years before that is perfected."

Meanwhile, the company attracted investments and celebrity coverage. New York and Michigan gave the company millions in grants to build facilities. So did Tennessee.

Enter reality. Tennessee scaled back. The New York pilot plant was opened late and then scaled down from 500,000 gallons a year to 200,000 gallons. Gas prices sunk from the mid-2008 highs, the worldwide economy crashed, and VCs and investors retreated from biofuels.

Meanwhile, various competitors – ZeaChem, Coskata, Biolight Harvesting, Solazyme etc. – have pushed forward with biofuel systems that relies less on creating exotic, multifunctional microorganisms.

CORRECTION: we said Jamerson was CEO of Frontier earlier.