Follow-Up File: Paso’s E-Fuel isn’t exactly idling ...

Job: Co-founders

Business: E-Fuel Corp.

What they said then:

In January, E-Fuel Corp. in Paso Robles was preparing to produce E-Fuel 100 MicroFueler units to fill “thousands of orders” from America, Europe and Asia.

Paso Robles inventor Floyd Butterfield and Silicon Valley technology entrepreneur Tom Quinn founded the company in 2007 to revolutionize the energy industry by decentralizing fuel production.

The MicroFueler converts sugar into ethanol fuel that can be used in vehicles or generators. Units are priced under $10,000.

Early orders came from wineries, breweries and other alcohol manufacturers interested in converting alcohol waste into ethanol. The state of California also ordered some for pilot program to fuel its vehicle fleets.

“We’re not going to put 1,000 machines out there the first month,” said Butterfield, then overseeing a team of four at the Paso plant.

By shipping small lots of converter-pumps, E-Fuel could make sure the invention was working correctly in the field, continuing to double production the next month.

What they say now: Still wrangling with financing, the owners have discovered an unexpected market: education.

“We think it’s a multibillion-dollar market,” Quinn said. “That’s where we’re going to focus. They have a free work force. Students collect and process waste as part of the educational system.”

Universities in places such as Louisiana and Kentucky want the units to convert food waste or sugar into ethanol. They would train a rotating crew of students to operate the machines.

Quinn hopes those students who know how to use a MicroFueler may later buy one for home or business.

There are now 30 Microfuelers being used around the world, including schools in Ireland, Vienna, Canada, Japan and Thailand, Quinn said. Another 50 are being built.

Only a few additional workers have been added in Paso Robles. A setback in bank funding is behind the recent delay in growth.

“We are currently raising the financing required to expand production so that we can build hundreds of machines per month,” Butterfield said. “We started our manufacturing line in Paso in April and went up to about 15 employees there for two months. During that period we tested and revised the manufacturing process.”

But its standing in the Ecomagination Challenge, a contest sponsored by General Electric, could help. GE and a group of investors are sponsoring the contest to fund and develop ideas to build “the next-generation power grid to meet the needs of the 21st century.”

The MicroFueler has earned more than 620 votes on the contest’s web site http://challenge.ecomagination.com/ideas. It recently ranked in the top 20 among all ideas submitted and in the top 10 in the “Create Power” or “Renewable Energy” category.

Idea submission and voting close Sept. 30. GE will announce later in the fall the companies with whom it pursues commercial relationships.

Whether or not E-Fuel is selected, the contest has helped garner attention in Business Week. The national magazine plans to highlight E-Fuel in its coverage of the GE contest.

— Raven J. Railey