Innovating to Meet the Challenges in Biofuels

“I really think it’s important that the best and brightest in the colleges today should take a look at these problems.  If we can resolve the energy problem then clean water isn’t far behind. And if you’ve got  inexpensive renewable energy worldwide, and if you have clean water, once you take those major problems away for the planet there’s a lot less to fight about.”  – Jack Baron, CEO of Sweetwater

KissMyCountry continues our ‘CEOs Saving the Planet’ series with Jack Baron, CEO of Sweetwater , a biofuels company in Rochester, New York that’s working on some exciting solutions, including a replacement for jet fuel. Jack, best known for co-founding the telecommunications firm PAETEC, took the helm at Sweetwater to make a difference in renewable energy today. Jack talks about the importance of renewable fuels for saving our planet, and the most interesting green technologies that people are working on today, as well as the places he loves in Rochester.  Enjoy!

KissMyCountry: Jack, Sweetwater is an exciting company that brings new ideas to biofuel production. You’ve got great technology. In layman’s terms, can you tell us a little bit about Sweetwater and your breakthrough technology?  Why are you excited, and what would you like us to know about Sweetwater?

Jack: In a nutshell, Sweetwater has patent-pending technology that drives down energy and cost in the biofuels supply chain.  We have designed—and are now contracting to build—farm-based processors that help turn crops into biofuels less expensively than any other process we know of.  We believe that liquid fuels are a very important part of America’s fuel needs today and for the future, particularly in aviation. We’re even looking at ways we can potentially help the U.S. military in that respect, and we’re having discussions about deploying these processors around the world.

KissMyCountry: What motivated you to become CEO and Chair of Sweetwater?   What attracted you to biofuel and a startup company at this point in your career?

Jack: I believe strongly that the energy issues facing the U.S. and facing mankind are arguably the most important issues facing us today.  Renewable energy technologies are, I think, the best answer, and if you look at renewable energy technologies that are widely deployed today, the real impact is almost limitless.  Besides hydro, biofuels are the largest renewable energy industry in the United States.  Over $24 billion in biofuels transactions last year.  The Renewable Fuels Association estimates all the people employed in biofuels in the country right now makes it about a $65 billion industry.  I wanted to be involved in renewable energy that was going to be extremely impactful today.  I’m involved with some folks at MIT—some early-stage solar companies, a wind company, and a high-capacitor company both from an advisory and from an investment standpoint. Those are all very interesting technologies and I think over the course of the next 20 to 25 years they will have a very real impact for the United States.  In fact the high-capacitor company I’m working with could have an impact within the next 5 years.  That said, solar is going to be a huge part of the nation’s energy future someday, but when you look at the cost per watt today it’s clear that it won’t have that impact for some time, unfortunately.  But with biofuels, the impact can be dramatic today.

KissMyCountry: You’ve worked in a number of industries – banking, education, communications and now biofuel.   Of all you’ve learned and experienced, what do you find yourself drawing on the most in your day-to-day management at Sweetwater?

Jack: Number one I’m drawing on leadership skills, especially with an early stage company.  I’ve run early-stage operations, with the co-founding of PAETEC and subsequently small companies within PAETEC.  The most important skills I think for the leader are vision, pulling together an extraordinary team, and leading by example.  You can’t understate the importance of value setting and hiring the right team that can really live by those values.  That’s extremely critical.  Also I’ve had a great deal of hands-on experience with customers and customer relationship management.   On a day-to-day basis those are pretty practical skills that are useful not only for a startup but really in any company that’s trying to commercialize and serve its customers, and make a difference.

KissMyCountry: Sweetwater is currently working with MIT and a Fortune 100 company on a replacement for jet fuel.  At KissMyCountry we are about saving the planet and enjoying the planet, so a replacement for jet fuel is very exciting.  What can you tell us about this project, and what do you plan to accomplish?  What are your goals?

Jack: Well, we are predominantly a feedstock company.  We’re working with biomass and a variety of crop feedstocks and converting those into low-cost sugar in the cellulosic realm, as it’s called.  Part of the reason cellulosic biofuels are so attractive to the community and to the federal government is because they don’t compete with food crops and there is a logistical way to process them economically.  They represent a stable fuel—a renewable fuel that can give the nation real energy independence and security.  In the Energy Independence and Security Act of 2007, Congress set forth the Renewable Fuel Standard I and II, which have been recently supported by Congress and by the Obama administration. It’s all about energy independence and America’s leadership in energy.  And it’s clearly about American jobs.  We’ve hired six people since December and the average salary is well in excess of $70,000. These are long-term jobs, and all the jobs, including those we are placing in Iowa, Nebraska, Wisconsin, and throughout the nation, are high paying jobs.  Going back to the work with MIT;  MIT has said that among all the feedstock companies they are working with from around the world that our feedstock is the best.  And they’ve also put their money where their mouth is because they’re referring us to their Fortune 10 partners.  They would like us to be their feedstock partner in their operations around the world to make jet fuel.  There’s real urgency there because once the oil runs out, how do you fly jets?  That’s a pretty daunting problem for the world, but there are many, many applications that now use oil, such as plastics, that you might not think about, so you start to see how renewable biomass is going to become more and more crucial in the years to come.

KissMyCountry: Besides MIT, Sweetwater is working with a number of other universities, including the University of Rochester, Cornell University, and Texas A&M.  Clearly you believe in the importance of universities to develop technologies that can be commercialized.  What are the challenges to working with universities, and what are the rewards?

Jack: There are challenges working with universities, but the rewards I think far exceed the challenges, which is why we’re spending so much time working with them.  Probably the largest single challenge is speed; in the commercial world we tend to operate very quickly compared to universities.  Secondly, I think the issues in terms of intellectual property and ownership are always something that need to be worked out from a contractual agreement standpoint.  Fortunately, we’ve found some fantastic people at a number of these universities both in the research realm and really in the technology transfer areas. We’ve been blessed by virtue of the fact that Sweetwater owns its technology, and the universities own theirs.  For instance, Cornell University and Texas A&M are working on the crops themselves, and the University of Rochester is working on fermentation as well as comprehensive energy audits.  Rochester Institute of Technology is working on process and some of the manufacturing side of the equation with us.  And then last but not least MIT, where we’re working on what we should almost call third-generation biofuels—advanced fermentation for the manufacturing of jet fuel.

KissMyCountry: Many young adults want to pursue Green careers after college.  What do you think will be the most important industries for Green over the next 10-15 years?  Where do you think we will see the most growth and opportunity?

Jack: Going back to the earlier discussion, I’m in biofuels first and foremost because it has game-changing, world-wide impact today.   In fact we’re speaking with Kristine Johnson, the Undersecretary of the Department of Energy, and she believes that over the next 10 to 15 years biofuels is the number one priority behind conservation.  Different ways to conserve are of course immediately impactful.  The last time we had a really national focus on conservation was probably in the ‘70s when we went through the oil crisis. Solar was popular for a while, but of course gasoline prices went back down and the risk deteriorated.  Everyone lost sight of that unfortunately.  Another area worth getting involved in, if you’re in school right now and you’re focusing on technology, is certainly smart grid technology. It’s going to be big for probably the next 40 to 50 years, maybe even much longer than that.  Smart office, smart home, energy controls, energy awareness—anything to conserve.  And efficiently storing all that energy—some of the most interesting research going on at MIT right now involves very  large-scale storage, such as batteries the size of a house.  As storage transforms, so the grid transforms.  Scientists are trying to shrink these storage structures to something as small as your refrigerator to allow you to store solar or wind power so those intermittent energy sources can still power your home or your office or your building without interruption.  And then you get into fuel cells which are fascinating.  Fuel cells have lots of other applications that are quite interesting.  Fuel cells can be run on natural gas and landfills.  And then combined heat and power and co-generation, there’s a lot of technology going on in that space where even in office buildings you’ve got the heat from the power generator, the electric generator and all of it being recaptured and reused to cool buildings.  I think that’s fascinating.  And the last thing I’ll mention is geothermal.  That is pretty old technology believe it or not, and it’s based on pretty simple concepts of heat exchangers much like the back of your refrigerator, and it really does work.  It’s 30- or 40-year-old technology that can cool and heat your home, and I’ve got some friends who are doing just that.

KissMyCountry: In your opinion, which are the most exciting biofuels or renewable energy companies today – the ones who truly show the greatest promise to make a difference?  If you weren’t managing Sweetwater, which companies would you want to manage or be involved with?

Jack: As I mentioned, biofuel is probably one of the most exciting arenas.  Let me tell you the companies that I think are some of the best in the space.  I think there are very sharp people at POET and they are making ethanol at lower cost and with greater efficiency than anyone else in the world.  They have one cellulosic facility making ethanol from corn cobs called their Liberty Plant.  ADM, BP, and Valero are doing some great, progressive work. I think that many of the companies to watch are the regional biorefineries in Iowa, Wisconsin, Nebraska, and Minnesota. With the large assets that they have, the large production facilities are single entities and technology like Sweetwater’s can deploy thousands of processers over the years for renewables.  From an impact standpoint one facility in Alabama for example is going to make a huge difference around Montgomery but from an impact standpoint I’d much rather be able to play on a world stage with something like Sweetwater with literally thousands or tens of thousands of locations, and impact energy production in those locations, and make energy production local.  It’s going to happen with renewable energy in general.  Historically energy has not been local.  It’s been produced by large utilities and piped to places.  We talk about the grid a fair amount, but you will see a lot of energy coming off the grid.  Sweetwater’s another example of the way that you can do that where we’re talking about ethanol or other biofuels being grown locally, processed locally, and driven and used locally.  And towns and villages will be able to grow their own fuel.

KissMyCountry: Sweetwater has made a great start, and you’re well poised for growth.  What’s next for Sweetwater?  What do you plan to achieve in the next 5 years?

Jack: We’re working with our partners right now to scale the science and the economics.  Frankly over the course of the next five years as we grow it I’d like to accelerate the growth, grow faster and faster and get the solution out more broadly as time goes on.  In order to do that we’re going to need a great deal of capital.  So it’s quite likely within the next few years the company will be public, and it will be large.  How large it gets is of course based on our success.  But I would not be a bit shocked if we are well over a billion dollars within 10 years.   In fact our pro forma calls for us to be almost a $600 million company within 5.  And that is only capturing 2% of the feedstock market in biofuels.  So this is a big idea. It’s big technology and we’ll have a very large impact.

One point I wanted to make going back to your earlier question. I was thinking about people who are in school today, thinking about green jobs.  The reason I went into this as opposed to starting up another telecom company or just going into something else where I could just make more money is that I believe that the best and brightest minds today should be working on the biggest and most important problems, and I believe that, whether the folks are in science or they’re in business.  I think if the most talented people aren’t working on the most important problems then they’re letting everybody else down.  I really think it’s important that the best and brightest in the colleges today should take a look at these problems.  If we can resolve the energy problem then clean water isn’t far behind.  And if you’ve got  inexpensive renewable energy worldwide, and if you have clean water, once you take those major problems away for the planet there’s a lot less to fight about.  I don’t think it’s going to end all wars, of course, but if you think about it, there’s a lot less to fight about if we solve those problems.

KissMyCountry: Jack, at KissMyCountry we like to talk about the places we love.  What are your favorite places to live or travel?  What places do you love?

Jack: We live on Irondequoit Bay, which is a bay off Lake Ontario.  It’s about five miles wide and it’s about a mile and a half wide, and it’s simply gorgeous.  And that goes to one of your last questions too which is when you visit Rochester where should you go, the first place that they should go is Irondequoit Bay.  I went to the University of Rochester and in the summers I painted houses for a living and I played in a band.  I’ll never forget the first time I was driving over the Bay Bridge and I was a junior by this time already and I’d never been to Irondequoit Bay.  I looked to the right and said my God—what is that?  I couldn’t believe it was in Rochester.  So… Irondequoit Bay.  I’m fortunate enough to live on it now.

The places I like to visit?  I’ve been in 45 states in the U.S. and quite a few places around the world as well.  I’ll just talk about in the U.S. because there are so many great places to visit in the US.  We’re planning family trips to many of the national parks over the next few years.

KissMyCountry: Is there a place you’ve visited that surprised you in any way – either good or bad?  What surprised you about that place?

Jack: The Midwest has really surprised me.  I’ve spent a lot of time in Minnesota, Iowa, Wisconsin, Nebraska.  And what has surprised me about the Midwest, I hate to generalize or stereotype, but I’ve met some of the nicest people in the world.  The people in the Midwest are really great folks and very entrepreneurial.  I did not expect that.

KissMyCountry: What places in Rochester do you recommend for anyone visiting there?  Where do you like to take people when they come to Rochester?  Any great spots we shouldn’t miss?

Jack: There are the beaches on Lake Ontario.  If folks come to Rochester, especially if they come from other parts of the country and they haven’t seen the Great Lakes—the Great Lakes are simply awesome.  And to see them and see that they look much like the ocean and would remind everyone of the ocean, because it’s certainly not like a lake from anyone’s perspective.   Also, see Letchworth Park, which is called the Grand Canyon of the East. That’s just outside Rochester.  Niagara Falls is not too far away.  And then there are many cultural things that Rochester is known for as well.  There’s the Rochester Museum and Science Center, the Memorial Art Gallery, and those are some of the highlights.  There’s a lot more culture than a typical city this size.  There’s the Rochester Philharmonic Orchestra, and of course the Eastman School of Music, and the University of Rochester is a place to visit.  The Eastman School of Music is one of the top music schools in the world. Go to Eastman Theater, which is newly renovated.  It’s something that really can’t be missed.

KissMyCountry: Thank you so much.  We’d like to stay in touch as you grow, and we really, really appreciate you giving us so much of your time today.

Jack: I think it’s great that you do this.  I think your questions are really spot on, they really made me think.  I really enjoyed speaking with you.  Thank you.

Article appearing courtesy KissMyCountry.

photo: Raise the Roof; Dave Heuts; dougtone