The theme of this year’s recent Advanced Biofuels Leadership Conference was “Go Big, Stay Strong,” an allusion to the move of biofuels out of the lab and into commercialization.

But the theme emerging from the remarks of the more than 100 biofuel executives who spoke at the conference was that biofuel companies should execute this “go big” strategy in carefully considered steps rather than in giant leaps and that the key to staying strong is to hedge their bets at every opportunity, including by increasing the range of feedstock, product and financing options.

In other words, although the mood was one of optimism due to macro trends such as the rising price of oil and the increased energy demand from developing countries like China and India, that optimism has to be tempered with a cautious realism that is cognizant of the pitfalls attendant to bringing new technologies out of the lab and into production, including moving too fast.

Like many other conference participants, Primus Green Energy, an alternative fuels company, is pursuing a strategy of incremental commercialization, which I like to call “proving out what’s most provable.” Since many process technologies are multi-stage, it’s often possible to bring the most developed element to market first instead of waiting to perfect the entire process.

Primus Green Energy has developed an innovative and highly efficient thermo-chemical biomass conversion process yielding a product that is a drop-in substitute for gasoline. We have a pilot plant in operation, we are constructing an integrated demo plant and we are working with Bechtel Hydrocarbon Technology Solutions on plans for our first commercial plant, on which we intend to break ground in 2013.

While we remain committed to producing gasoline from woody and herbaceous biomass, we are moving ahead with our gas-to-liquids (GTL) fuel synthesis process, which produces gasoline from natural gas, rather than waiting for our biomass gasification process to be proven out. Why? For the simple reason that our GTL process – which we term, STG+ – is ready to go and the low price of natural gas makes this option economically attractive.

The advantage of an incremental strategy is that it reduces technology risks and capital costs, generating the funds and the investor confidence to prove out the rest of the technology – in Primus’ case, our proprietary biomass gasification process. We plan to integrate our biomass gasification process, which lags in development behind the STG+ process, into our production line once it is fully proven out.

As Voltaire, that Enlightenment-era proponent of the force of reason said, “The perfect is the enemy of the good” – the good in this case being natural gas that is abundant and cheap. The current price of about $2.25 per 1,000 cubic feet represents a 10-year low, and industry analysts have predicted the price could drop to below $1.00. We would be foolish not to take advantage of such an opportunity.

As journalist and author Fareed Zakaria recently noted in the Washington Post, “The United States now has, at current consumption rates, at least 75 years’ worth of recoverable natural gas. More important, the United States has become the world’s low-cost producer of natural gas.”

The same flexibility that allows us to use biomass, natural gas or even waste methane as feedstocks also allows us to produce a variety of end products. We began as an ethanol producer, but shifted to gasoline because of the demand for a drop-in substitute. And if the market demands that we shift to diesel, jet fuel or aromatic chemicals, we can do that as well through simple adjustments to our production process.

We also are flexible in our financial strategies. As an industry, we need to recognize that current market conditions and the experience of biofuel companies that tried to do too much, too fast, particularly in going public too early, may have dampened enthusiasm among some members of the financial community.

Thus, we need to bring an “all of the above” strategy to the financial task of moving new biofuel technologies out of the lab and into production. This includes the potential for government grants and guarantees for strategic investors who will fully fund construction, as well multi-party, multi-tier project financing in which technology and commodity risks are borne by knowledgeable parties.

We also need to plan for less leverage, higher fees and rates, and more time to put deals together, as well as for the use of sophisticated financing tools such as structured insurance products and commodity hedges against price fluctuations.

Although commercializing a first-of-its-kind biofuel technology isn’t easy, it isn’t impossible either. To achieve success, however, flexibility at the front and back ends of the production process is critical, as is the ability to take advantage of all the tools in the financial universe. It’s also important to keep in mind that the impact of your success extends far beyond the boundaries of your plant.

The wave of new advanced alternative fuel plants that is expected to come on line over the course of the next three years promises to reduce reliance on foreign oil, enhance national security, create jobs, promote national prosperity and revitalize the imperiled farming community. It’s a big mission.

Mr. Robert J. Johnsen is Chief Executive Officer at Primus Green Energy, and was formerly the CEO of three advanced alternative fuels companies where he managed their transformational growth from start-up into high-value commercial entities.

He held this position at BC International Corp., which was one of the first advanced biofuels companies of any kind and now serves as the core of the cellulosic ethanol business of BP biofuels; Mascoma Corp., which is commercializing a landmark consolidated bioprocessing cellulosic ethanol production platform; and Promethegen Corp., which is developing processes to produce biodiesel from waste paper sludge through the use of a patented breakthrough microbial technology licensed from MIT.

Johnsen’s management experience builds on his over 20 years as an investment banker, during which time he completed more than $3 billion in financings in over 100 transactions, primarily in private placements and asset and energy project finance where he completed complex structured transactions for large corporations including U.S. Steel, Airbus Industries, AT&T, and MCI and for independent power projects. He was also a senior banker at leading financial and entrepreneurial institutions, including Dain Rauscher Wessels (managing director), Johnsen Wallace Inc. (president) and Lehman Brothers (vice president).