4 Minutes With… Eric McAfee, Chairman & CEO, Aemetis

August 31, 2014 |

McafeeBest known as one of the founders of Pacific Ethanol and later the founder of Aemetis — less known for his family’s farms and its Organic Pastures businesses — and as a  mentor to countless young entrepreneurs.

Tell us about your organization and it’s role in the Advanced Bioeconomy.

Aemetis owns and operates 110 million gallons per year of ethanol and biodiesel facilities in the US and India, and is upgrading the plants using patented technology to produce lower carbon, higher value advanced biofuels and chemicals using lower cost, non-food energy sources and feedstocks.

Tell us about your role and what you are focused on in the next 12 months.

– The EPA has an opportunity to affirm the existing US government commitment to renewable, domestic, cleaner, lower-carbon, lower-cost fuels by announcing a 14.4 billion gallon 2014 ethanol mandate and a 15 billion gallon 2015 ethanol mandate under the Renewable Fuel Standard. If the EPA fails to enforce the law, the industry should respond with a suit to enforce full compliance with the 14.4 million 2014 mandate. Any lower amount violates federal law, which states that the mandate should be enforced if adequate production capacity exists.

– As a $200 million Nasdaq-listed public company, Aemetis is uniquely advantaged to deploy our strong positive cash flow to upgrade our plants to lower-cost feedstocks and energy sources. An EPA change in the RFS damages the financing of new technologies, allowing Aemetis to acquire these technologies cheaply.

– If the EPA enforces the RFS, Aemetis cash flow will increase, allowing expanded investment in our high technology adoption projects.

What do you feel are the most important milestones the industry must achieve in the next 5 years?

– Enforce the Renewable Fuel Standard to break the gasoline station monopoly.
– Obtain debt financing in the form of high yield bonds for plant construction and upgrades
– Upgrade byproducts: corn oil makes renewable diesel and jet fuel; DDG makes oil well chemicals; CO2 makes algal oils and dry ice
– Ethanol makes biodiesel and oilfield chemEOR

If you could snap your fingers and change one thing about the Advanced Bioeconomy, what would you change?

– A President that understands the value of corn farming and domestic ethanol molecule production
– Media/politicians that understand 28% of corn is protein, oil and fiber: none of which makes ethanol
-Ethanol plants use the 72% of lower-value starch in corn kernels to feed cars, while using the other 28% to feed animals at lower cost than corn

Of all the reasons that influenced you to join the Advanced Bioeconomy industry, what single reason stands out for you as still being compelling and important to you?

I founded four publicly-held oil production and service companies. It was obvious to me that tar sands, offshore and fracking were more expensive than first gen oil production. With the Internet driving demand in India and China, oil prices were definitely going up

At $100 oil, renewable molecules are both less expensive and provide high value

You’ll be speaking at the next ABLCNext conference in San Francisco this November. What’s special about that week for you?

This is a small industry, with few leaders that are funded and even fewer companies that are positive cash flow. Introductions to new technologies, new financing structures and new advisors provide unique advantages to attendees. Though more prevalent at the DC event, the EPA, DOE, USDA, Navy and other agencies get to meet industry leaders.

What was your undergraduate major in college, and where did you attend? Why did you choose that school and that pathway? 

Management with emphasis in Statistics at Fresno State University, graduating as the top student from 832 classmates. I went to Fresno State so I could run a farm (now 480 acres of organic almonds) and then was co-founder of Organic Pastures Dairy Company, a 1,000 cow raw milk dairy, bottler and distributor that is now the largest in the US.

Who do you consider your mentors?

– Ronald Reagan: The Strategic Defense Initiative was genius. Win against the Russians by promising to build a high tech innovation that did not exist, but the Russians could not afford to create or deploy
Lesson: Use position of being able to innovate and commercialize as an advantage to win against those whom cannot fund either innovation or commercialization

– General Washington: Patience, commitment and prayer. The cold winter at Valley Forge found GW on his knees in the snow, seeking the power to believe, commit and achieve

Lesson: It took seven years to win the Revolutionary War, and almost the same amount of time to recover from the 2008 financial crisis

– Winston Churchill: Among his many speeches and writings is the gem, “Never, never, never give up.”
Lesson: Since failure is not an option, you need to make a better plan on how to win

– George Shultz: Calm, diplomatic, global, fair, honest and respected
Lesson: Do your best and treat people well

What’s the biggest lesson you ever learned during a period of adversity?

  • Focus on what can kill you today.
  • Take problems apart and deal with each part as a series of issues.
  • Make a plan on how to win because everyone else is losing.
  • Keep the core team together through the tough times, and keep them with you when times are better.
  • Ask for help from others. (This is the hardest to do.)

What hobbies do you pursue, away from your work in the industry? 

  • Take red eye flights so I can be with my wife and daughters to enjoy their basketball games and show jumping competitions.
  • Play principal trumpet in our church orchestra and praise band, and play lead trumpet with a Christian big band for Christmas shows in the community
  • Talk to startup entrepreneurs about their businesses to expand knowledge

What are 3 books you’d want to have with you, if you were stranded on a desert island?

Kon Tiki! (how to build a boat from native foliage)
Mere Christianity (C.S. Lewis)
The Prize (a history of the oil business – showing how the ups and downs of the industry were managed by business greats such as Rockefeller)

What books or articles are on your reading list right now, or you just completed and really enjoyed?

Biography of GHW Bush: A kind man with courage and good intentions whom left a legacy of public service for his children
Ronald Reagan – How an Ordinary Man Became a Great Leader: Shows Reagan was not supported or understood by his own staff on many of his greatest decisions.
Forbes – a good balance of people, businesses and economics

What’s your favorite city or place to visit, for a holiday?

Saratoga, California (for holidays at home with family)
Bass Lake (near Yosemite for family waterskiing)
Vienna, Austria (for orchestra music)

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Category: Million Minds

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