Today in Biofuels: General Motors invests in Khosla cellulosic ethanol venture; Schumer introduces bill to repeal ethanol tariff; Philippine Biofuels Act author backpedals over food concerns

Top Story:

General Motors announced that it will invest in Coskata, a cellulosic ethanol venture backed by Vinod Khosla. GM is reported to have made the move in part to convince its customers that the company aims to be the leader among car makers in developing environmentally friendly vehicles. Coskata aims to produce 100 Mgy of cellulosic ethanol based on five bacteria strains developed at research labs in Oklahoma. The company will produce 40,000 gallons of fuel on a pilot basis, using woodchips from a co-located chemical plant as feedstock. The company aims to produce fuel for $1 per gallon.

Producer News:

In Iowa, Monsanto and Cargill have joint ventured in a company called Renessen that will extract corn oil from corn kernels prior to conversion to ethanol. The Eddyville-based company said that the process will improve cycle time for ethanol production, produce a superior brand of distiller’s grains, and produce a corn oil product that will be refined by Cargill for use in food products. The livestock feed will be branded Epro for cattle and Ecorn for hogs.

In Florida, Global Renewable Energy will plant a 100-acre sweet sorghum pilot crop this spring near Palm Bay. Based on a successful test, the company will expand to 3,000 acres using land owned by the Sartori family, one of Brevard County’s largest private landowners. Crest Biotech of India is providing a feasibility study for the venture, which has been expanded steadily from an initial 10-acre project in Indian River County. The project is one of the first in the US to feature sugar ethanol.

International News:

The Nigerian Cassava Growers Association said that ethanol will allow Nigeria to save over $6.1 billion by 2012 on the importation of kerosene and gasoline. The group also said that a study by SJH Associates demonstrated that a $60 million investment in an ethanol plant results in more than $110 million in increased economic activity, and that farmers who invest $20,000 in ethanol plants receive an average 13.3 percent return on their investment.

In Sweden, the 1,000th E85 station opened in October, and by December the country had registered more than 80,000 ethanol-powered vehicles. The Swedish Society of Green Motorists said that the country is opening 50 E85 stations per month, and that E85 car registrations increased 121 percent between October 2006 and October 2007 and represented 16.7 percent of all car sales.

In Indonesia, an industry official told Reuters that palm oil biodiesel production is expected to double, to 1.3 million tonnes, in 2008 with capacity reaching 1.9 million tonnes, based on strong export demand. Meanwhile, Thai officials insisted that rising crude palm oil prices will not derail their B2 and B5 implementation plans.

In the Philippines, the author of the country’s Biofuels Act said that the Bill has been overhyped and she is calling on the country to slow down implementation to ensure that biofuel production is sutainable. Senator Miriam Defensor-Santiago said that biofuel production will compete with food production and that the government had to apply the brakes to development by strengthening the Biofuels Oversight Committee and prioritizing wind, solar and other renewable energies ahead of biofuels.

Research News:

In Australia, the Pongamia Pinnata tree is being investigated as a potential feedstock producer for biofuels. The tree has flourished as a share provider in the northern state of Queensland, but its ability to produce oilseeds and survive in conditions unsuitable for food production have made it a candidate for sustainable production of biofuels. The University of Queensland ARC Centre of Excellence for Integrative Legume Research is leading research efforts.

Policy and Policymakers:

Newsday has contrasted the biofuels policies of Sen. Barack Obama and Sen. Hillary Clinton. Obama has been a consistent supporter of corn ethanol subsidies and mandates, while the paper said that she opposed the measures because of the potential impact on New York fuel prices until two plants opened in New York in 2006. Obama had supported the 2005 Bush energy bill, but Clinton had opposed it on the grounds of $14 billion in oil and coal industry subsidies.

In New York, Sen. Charles Schumer (D-N.Y.) said that he would introduce a bill to temporarily repeal the ethanol tariff, to make more corn available for dairy farmers and reduce milk prices. He noted that milk prices have increased 38 percent in the past year in New York, and that the ethanol tariff of 54 cents on every gallon of imported ethanol, had made the problem worse. The ethanol tariff, he pointed out, was established in 1980 when ethanol production was negligible, but that production had increased to more than 7 billion gallons in 2007.

Consumer and Fleet News:

In California, the first E85 pumps have opened on Highway 99, a vital north-south corridor joining Fresno and Bakersfield to Southern California. California has 300,000 flex-fuel vehicles but only two stations now sell E85; the other station is in San Diego.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 2.41 percent to 124.91 amidst a broad market pull back that sent the Dow Jones Average tumbling more than 200 points. For the day, decliners led gainers 7 to 2, paced by diversified agribusiness Archer Daniels Midland (ADM) which fell 2.11 percent to close at $43.64. Among mid caps, Aventine Renewable Energy (AVR) fell 9.77 percent to close at $10.80 while VeraSun Energy (VSE) tumbled 7.67 percent to end at $11.91. Among small caps, GreenShift (GSHF.OB) fell 14.29 percent to close at $0.12 while while Intrepid Technology & Resources (IESV.OB) recovered 11.76 percent to end the day at $0.019.

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