Special Feature: A conversation with LS9's new CEO, Ed Dineen

Ed Dineen is taking over the reigns at LS9 from Bill Haywood, who led the company from 2008, and from a #25 ranking to #4 in this year’s 50 Hottest Companies in Bioenergy. Salutes to Bill, and a welcome to Ed.

Dineen was most recently COO of the fuels and chemicals multinational LyondellBasell, based in Houston. We spoke with him to find out more about the future direction of what clearly is regarded as a must-watch company in the sector.

(Readers note: Though Dineen was not able to update us formally on financing in this interview, credible rumors on the street are that the company has indeed wrapped up a Series D financing in the “$25-$32 million range”. It looks like we will have to wait a week or so until we find out if our sources have correctly surmised the situation)

BD: What persuaded you to come over to the world of green fuels and chemicals?

ED: It’s a combination of things, a journey that started earlier this year when I met
with a number of investors in the space. There were some opportunities discussed then that were not as interesting or did not fit my background as well, but it piqued my interest, and I continued to follow the space very closely.

BD: And, what drew you to LS9?

ED: A couple of months ago I was approached on LS9, and it was plain to see that it was an industry leader with great technology, a great engineering team. It had the yields and productivity, the one stop approach to processing, the feedstock flexibility and the product scope that I felt was needed. As I looked at the space, I found that it was unparalleled in the renewables space.

BD: Why were those characteristics key to you, in terms of being successful in the sector?

ED: Simple operations are lower cap, lower cost, and generally safer. And feedstock flexibility, well we always put a lot of value on that. The opportunity to dial a lot of products is a formula for success. There a number of companies in the space that make one product, then have to perform additional chemistries and unit development to make other things. We may find other businesses where we have to do that as well.
But our potential in yields, our abilities and flexibility on product, and the potential to make products in a simplistic one step fashion. Add to that the Procter & Gamble relationship, Chevron’s participation, a supportive board and investor group. Those

BD: People will look at your background – COO of a major chemicals multinational – and look at Amyris’s direction, and others, and guess that this means a shift into chemicals, from fuels. Tell us about that background.

ED: I have that background in chemicals, but have also done a lot in the fuel space. The first business I ran was an oxygenated fuels business, working with alcohols and ethers, develop blending deals with various refiners. It was a business that really took off with as part of Clean Air Act’s impact, and is still a good business for LyondellBasell. I had two refineries as part of my responsibility, in Houston and France.

BD: So is this a signal of a change of direction for LS9?

ED: I don’t view this as a change of direction, but a broadening of the vision and strategy. We’ll continue to push with diesel and jet fuel, but we will be broadening the spectrum. We’re very pleased with the P&G relationship, and I would say it would be fair to expect additional alliances of that kind.

BD: The company has been raising capital this year, and some of that effort was focused on the financing of your Florida demonstration project? Is that still on track, where are you on the financing?

ED: We’re not in a position to disclose on the financing, but maybe as soon as next week, so ‘watch this space, more to come’. The Florida project is in commissioning phase, and we’re getting it prepared to be the demonstration unit. The ultimate scope of the project – well we want to get our arms around it more, but its a key asset in moving the technology forward.

BD: In addition to its current technology, developing products from sugar – the company has been collaborating with Jay Keasling’s lab at Berkeley on a project to develop one-step conversion of cellulosic sugars to LS9’s wide range of fuels and chemicals. How soon is that project going to reach commercialization, and how core will that be to the strategy going forward? Too soon to tell?

ED: It’s a little too soon, and I’ve not gotten into that in detail, here on day two. For sure, our core focus is to be the best company  in taking sources of sugar and  making them into products. There’s a lot of work going on regarding the feedstocks and the process. The Berkeley effort  to enhance and develop new sources  of sugar, and alliances with others. Overall, there’s going to be a continuous broadening of our slate, as we focus on our mission of being the best at taking those sources of sugar to product.

BD: Speaking of sources of sugar, LS9 hasn’t yet announced a major alliance yet in Brazil. Where is that in your list or priorities?

ED: Right along with priority to push fuel development is getting firmly established in Brazil, and we are setting up meetings as we speak. I’ve been to brazil many times. In the oxygenated fuels business, we did source quite a bit of ethanol in Brazil, which we processed into ETBE for export to Japan, Europe and the Caribbean. We’ll build on those contacts and relationships, among others.

BD: A series of alliances is developing between American technologies and Brazilian feedstock. Is this a temporary alliance of convenience, where we should expect to see more feedstock options developed by US companies, and advanced technologies developed in Brazil? Or is this the base for long-term partnership?

ED: I’ve been doing business in Brazil for a long time, but clearly it is a different market. Think back to the old days, the real to the dollar was much different, among many things that have changed to make Brazil even more attractive than in the past. It’s clearly a good source of sugarcane and a growing market. So I  think its a long term platform. It may differ depending on product. Chemicals made through those partnerships may likely to be global, fuels may be local. But it won’t the only geography where we play – we continue to develop a perspective on other regions.

BD: Such as?

ED: India is on our screen, #2 after brazil, though there are more issues around food needs.  Thailand is also a place of interest, and China is also a fairly big sugar producer and also has a growing demand for fuels and chemicals.

BD: Most advanced biofuels producers are pointing to the 2013-14 time frame for the expectation of reaching commercial scale, though pilots are in many cases open, and demonstrations under construction. Still a fair estimate?

ED: The 2013-14 timeline is still realistic, its hard to see it happening much faster given the time to develop projects. But that’s to me one of the advantages of having a unique drop-in products and a one-step process. You can shave the timing, and reduce the amount of capital required.

BD: Will a shift in emphasis to chemicals improve or otherwise affect that timing?

ED: Well, in the fuel side you got to have the scale. On the chemicals side, the scale ups are not as daunting. And our process will cost less to build, less to operate. I will continue to talk across the spectrum -we can do both -fuels and chemicals. For now, there’s still a lot we have to prove as we build out.

BD: Such as?

ED: We need to continue to move forward on the technical side, and getting the alliances – multiple. And move forward on the scale up. Tolling arrangements, and our opportunities in Florida, all of those will be factors.