Patent Fight Starts in Renewables (GEVO, DD, BP)
About two weeks ago development-stage renewable fuel maker Gevo Inc. (NASDAQ: GEVO) was awarded a US patent for recovering alcohol cheaply during the fermentation process. The recovered alcohol is then used to produce biobutanol, a form of a naturally occurring…
About two weeks ago development-stage renewable fuel maker Gevo Inc. (NASDAQ: GEVO) was awarded a US patent for recovering alcohol cheaply during the fermentation process. The recovered alcohol is then used to produce biobutanol, a form of a naturally occurring substance called isobutanol. It’s the stuff in scotch whiskey that makes it taste different from bourbon.
On the day it announced the patent, Gevo also announced a lawsuit against a company called Butamax Advanced Fuels and E.I. du Pont de Nemours & Co. (NYSE: DD) for infringing the new patent. BP plc (NYSE: BP) is a partner with DuPont in Advanced Butamax Fuels.
Isobutanol is a big deal in the renewable fuels sector. It is not only a substitute for ethanol, but it contains more energy, about 80% of the same amount of gasoline compared with less than 70% for a gallon of ethanol. Gevo’s patent could be worth a fortune if the company can scale up its technology for making biobutanol.
Gevo’s shares have been rising since the January 24th announcements, and have spiked another 20% today, to $10.12. That’s good, but the stock’s 52-week range is $5.18-$26.36, so shares are still well off their highs. And Gevo is still a speculative play, not a value play — at least until it begins producing a few million gallons of its biobutanol every year.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.