Today in Biofuels: Activists hurl insults at Vinod Khosla over new articles on biomass; new algae extraction process; gasoline prices to reach $4 per gallon by summer

Top Story:

“Vinod you are still totally clueless” and “there will be pie in the sky by-and-by” were among comments hurled at billionaire investor Vinod Khosla in response to a second three-part series of articles posted at Grist. The second series focused on Biomass, including regulatory standards, “better agronomy for energy crops”, and “cellulosic ethanol yields”. Among dozens of responses, writers accused Khosla of turning his “self delusion” on carbon cycles into a “mass delusion”, adding comments such as “cellulosic ethanol is such BS and that’s not just for the fertilizer.’

Producer News:

In California, Green Star Products is expected to announce today that it will license technology from Biotech Research for a new, low-cost method for extracting algae oil and cellulose sugar from microscopic algae biomass. The process replaces the mechanical dry-and-press process which has bedeviled algae oil economics, and continuously strips oil from algae as well as reducing biomass into carbon chain carbohydrates, and protetins. Green Star has been operating a 11,000 gallon demonstration-scale production facility in Montana since last April. The company recently completed a winter production demonstration in temperatures as low as -18 F, which slowed but did not stop outdoor algae production.

In Minnesota, a proposed corn ethanol plant, in Watonwan County in the south-central part of the state, is on hold pending improvements in economic conditions. Watonwan Energy has pinned its development hopes on a reduction in corn prices, which topped $5 a barrel this week for the March contract at the Chicago Board of Trade.

In Colorado, LiquidMaize is expecting to receive its air permit for the $24 million corn ethanol project slated to be built eight miles north of Pueblo. LiquidMaize has not yet applied for its water permit for the project, which received its building permits in November 2006.

International News:

In India, the Bureau of Indian Standards (BIS) has endorsed the increase of the ethanol blending mandate from 5 percent to 10 percent in October.

In Thailand, the Agriculture and Cooperatives Ministry is promoting sugarcane production for ethanol in the cadmium-contaminated Mae Sot district of Tak, where food crops have been banned for health safety reasons. The Mae Sot Clean Energy plant, a joint venture between Padaeng Industry, Thai Oil and Petrogreen, will be completed in 2008 to produce sugarcane ethanol in the district.

In Finland, UPM-Kymmene and waste management company Lassila & Tikanoja announced that, in conjunction with the Technical Research Centre of Finland (VTT), they had developed an ethanol and energy generation concept using paper, cardboard, wood and plastic, and would begin testing at VTT’s Rajamäki unit.

In Thailand, Solvay will invest $184 million in a epichlorohydrin facility to produce feedstocks for epoxy resins. The plant will use Solvay’s Epicerol process, based on the transformation of glycerine, a biodiesel by-product. The plant is expected to be operation in 2009.

Research News:

The U.S. Department of Energy will pull the plug on an $1.8 billion project to build a power plant that stores carbon emissions underground. The FutureGen project, which had aimed to build its first facility in Mattoon, Illinois, has been beset with delays and cost overruns.

Gasoline prices are expected to spike higher than $3.50 per gallon as blenders move from winter to summer gas formulations amidst a shortage of the alkylate additive which has replaced ethanol as the summer oxygenate additive of choice for many blenders. Prices in selected east coast markets could approach $4 per gallon as blenders scramble for alkylate, which replaces MTBE as a an additive to reduce tailpipe air pollution from unburned oxygen. Ethanol is also used to boost oxygen, but has a high evaporation rate.

Policy and Policymakers:

In Washington, midwestern lawmakers have vehemently opposed moves by the Bush administration to reduce or eliminate the tariff on Brazilian ethanol imports. Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee, said on he opposed the Bush administration move, while Sen. Ben Nelson of Nebraska said the protection for US ethanol would be eliminated “over my dead body”.

Consumer and Fleet News:

In Michigan, Kroger Stores debuted E85 at its Michigan locations, with an 85-cent-per-gallon E85 promotion that prompted lines of up to 20 minutes for low-cost gas at the Burton store.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI) remained flat yesterday, rising 0.02 percent to 121.93 as slight increases at Archer Daniels Midland (ADM) and a bullish roar on Pacific Ethanol (PEIX) offset a biofuels investor retreat. For the day, declines led advances 5 to 2, with Archer Daniels Midland (ADM) up 0.12 percent to $42.99, and Pacific Ethanol (PEIX) leaping 11.49 percent to $6.21 on news that it had received a $24 million grant from the Department of Energy for its cellulosic ethanol developments. Among small caps, Green Plains Renewable Energy GPRE) was up 5.74 percent to $12.16, but biofuels stocks and the broader market failed to rally on the half-point interest rate cut by the Federal Reserve.

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