Today in Biofuels: Key climate change conference opens in Bali, as Canada ups biofuels support and Case approves B100 for eight tractor brands

Top Story:

The UN Conference on Climate Change in Bali, Indonesia opens today. Participants at the week long conference hope to frame a successor to the 1997 Kyoto Accords, which expires in 2012. The leading greenhouse gas emitter, China, was exempted from the Kyoto agreement and the second-largest, the US, did not sign. The third-largest emitter, Indonesia, is host to the UN conference.

Producer News:

In Virginia, a City Council vote is expected this week on Osage Energy’s proposed 55 Mgy ethanol plant in the town of Hopewell. Ethanol experts said the proximity of the town to the proposed plant raises the potential of smell and the traffic from trucks bringing in feedstocks.

In Nebraska, the E3 BioFuels plant has filed for bankruptcy after mechanical problems made the rate of production unprofitable. The plant has shut down production pending reorganization. The plant, which opened in June, was one of the first to use a “closed-loop” system where methane from 28,000 head of cattle was used to provide power to the plant, and distillers grains from ethanol production were fed to the cattle.  A boiler explosion was blamed primarily for the loss in production capacity.

In Illinois, construction firms filed $20 million in mechanic’s liens against Central Illinois Energy, which owns a Canton, Illinois ethanol plant. The liens were filed after non-payment of construction and engineering bills for the plant.

International News:

In Kazakhstan, two new plants are expected to be constructed in the next year, taking advantage of the country’s extensive wheat production and growing canola capacity. One plant has been constructed in the country, near Taiynsha, but is currently idle due to restrictions on imports in the countries Kazakhstan has targeted for biofuels export. The new plants include an ethanol plant that will open in Taraz, and a combined ethanol and biodiesel facility that will be state-owned and is expected to open in mid-2009. 23

In Canada, the federal government will invest $1.5 million in research on biofuel production potential in British Columbia. The study will focus on ethanol production from spring wheat, flax, barley and peas. 20 percent of the funds will be used for a business plan for a biodiesel plant.

In Canada, the federal government will introduce amendments to the Canadian Environmental Protection Act to allow enforcement of a mandate for 5% renewable fuel blending by 2010.

Research News:

In Oregon, an Oregon State University assistant professor presented findings on ethanol based on cost, energy and greenhouse gas accounting, showing that ethanol does not measure up in any of the three scenarios. Corn was used as the ethanol feedstock. Professor Egelkraut said that increasing gas taxes and fuel efficiency standards were better propositions.

Policy and Policymakers:

In Maryland, a panel of experts has concluded that current incentives to produce biofuels are not sufficiently attractive, and recommended an additional $4 million be earmarked for biofuels promotion and a faster conversion for the state vehicle fleet.

In Washington, the Energy Bill is expected to clear the House this week with a provision that extends, to 2020, the 1.2 mpg credit to car manufacturers for production of “flexible fuel” vehicles. The provision was scheduled to be phased out in 2010.

Consumer and Fleet News:

In Wisconsin, Case IH has approved B100 for more of its vehicles. The company said that its B100 OK now applies to its JX Series, JXC Series, JXN Series and JXU Series tractors, and all of its Maxxum, Puma and Magnum tractors, and all new Steiger tractors except the Steiger 535.

The Oregon Pilots Association is seeking an exception to state biofuels requirements for the 1,000 members who use automotive fuel for their planes. The Association said that ethanol blends damage their engines.  State officials are currently drafting regulations that support HB 2210, which implemented the ethanol mandate.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 0.90 percent Friday to close at 105.41. Pure-play ethanol stocks surged on the news of the VeraSun (VSE) and US BioEnergy (USBE) merger. VeraSun was up 7.66 percent to $11.81, while US BioEnergy rose 7.72 percent to $9.07, and Aventine (AVR) rose 6.37 percent to $9.85 although Pacific Ethanol (PEIX) lost 7.7 percent to close at $6.11 after experiencing a major surge earlier in the week. Among larger caps, The Andersons (ANDE) rose 3.87 percent to close at $42.42, while Xethanol rose 16.67 percent to lead the small caps.

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