Today in Biofuels: “Bad, bad biofuels”, more Science magazine reaction, and downloads to complete underlying data; US institutions pledge $10 billion in green tech investment over next 2 years

February 15, 2008

Top Story:

Reaction to two articles published in Science magazine continues to pour in from the world’s media, almost universally dismissing the potential for biofuels to reduce greenhouse gas emissions.
But the lead author of one of the studies, Timothy Searchinger of Princeton University, offered some hope in a Science magazine podcast interview.

“The key,” he said, “is you want to avoid using productive land because for the most part that productive land is either producing a lot of carbon benefits, carbon savings right now or food that has to be replaced. So that means, for example, if we make biofuels out of waste products, we donâ€™t have that land conversion problem. And thatâ€™s a pure benefit.”

“There is also some thought that you might be able to find really degraded, marginal cropland and use that to produce biofuels on,” Searchinger added.Â “That may, in fact, be true in some cases, but itâ€™s going to be very, very specific because if itâ€™s degraded, not producing a lot of crops, the question is whether it will produce a lot of biofuels.”

Supporting online material from the Searchinger study, including well-to-wheel emission tables can be found here. Plus, round-up links to responses in major media are here.

Producer News:

In Arizona, Amereco and AZ Biodiesel are expanding their efforts to produce biodiesel from waste vegetable oils and grease. Amereco is paying up to 20 cents per pound for grease and has production capacity of up to 15 Mgy for their Phoenix-based faciliuty. AZ Biodiesel has established its own collection company for grease, and will produce 5 Mgy from collections at 300 restaurants, averaging 75 gallons per restaurant per month.

International News:

In Fiji, the Sugar Cane Growers Council, Fiji Sugar Corporation and Sojitz (Japan) will form a joint venture to produce 5 Mgy of sugar cane ethanol, with production capacity reaching 10 Mgy at full operation. The $24 million project is expected to ultimately generate $13 million in annual revenue for the local economy.

In Brazil, Cosan announced that it will acquire the Usina Benalcool ethanol plant for $61 million, plus assumption of $20 million in company debt. Benalcool has a 1.3 million tonnes of cane a year, and is located in Aracatuba, Sao Paulo state. The plant will be Cosan’s fifth in the area.

In Thailand, PTT will convert from B2 to B5 biodiesel at its 600 nationwide stations in July, based on the successful acquisition by its Thai Oleo Chemicals of sufficient palm oil for the transition. The company expects to sell 121 million gallons per month of B5, and will triple that demand by July. B5 costs 1.5 cents per gallon less than B2. PTT competitor Bangchak Petroleum Plc has sold only B5 at 740 service stations since 2004.

In Brazil, Petrobras will construct a new 193 Mgy “superplant” for biodiesel production, and will make biodiesel directly from seeds rather than oils. The new technology is being tested at a pilot plant in Guamare, Rio Grande do Norte state. Petrobras is already constructing three smaller plants that will each have a capacity of 15 Mgy. Total project investment for the four plants will be $300 million.

Our European correspondents report that the Swiss Government will give a tax exemption to biofuels that reduce CO2 levels by a minimum of 40 percent. The car makers Volkswagen, Audi and Skode announced last week that most of their produced models are suitable for the new E10 fuel. After starting up the bioethanol plant in Kleinwanzleben, Nordzucker will begin to produce biogas from sugar beet. The SDP Party in Germany will support an increase in the biodiesel quota from 4.4 percent to 7 percent in 2008, to help the German biodiesel industry stave off collapse.

Research News:

In England, DuPont and BP announced that test results showed that Bu16, a blend of 16 percent biobutanol and 84 percent gasoline, caused no harm to engines and did not “phase separate” in engine testing. The companies have established a $36 million research lab in Hull, using wheat as a feedstock. The companies, along with Associated British Foods, previously agreed to develop a 400 million ethanol plant at the Hull location. The joint research efforts has resulted in 60 patent applications to date in its drive to establish a commercially viable butanol production process by 2010.

Policy and Policymakers:

In Iowa, State Sen. Jack Kibbie, president of the Iowa Senate, has proposed giving gas stations the right to remove labeling from E10 ethanol blended fuel, as a measure to stimulate ethanol usage. A similar move in Kansas has resulted in higher ethanol sales. Kibbie told the Des Moines Register that E10 ethanol is stalled at a 73 percent usage rate in Iowa, in part because of resistance to ethanol from out-of-state residents.

The U.N. Food and Agriculture Organization’s World Food Program said that they are seeing an urgent problem with world hunger resulting from rising food prices. The FAO’s global food price index rose 40 percent in 2007, and the executive director of the World Food Program said that the diversion of 100 million tons of cereals for biofuels, are the cause of falling reserve stocks that are creating the price surge. The director said that the market will eventually adjust to produce more grain, and that in the long term, higher prices would result in investment in African farming for the first time in decades. http://news.mongabay.com/2008/0214-fao.html

Consumer and Fleet News:

The president of Shell Oil (US) said that Americans would not give up their SUVs despite new laws requiring US automakers to increase fuel efficiency by as much as 40 percent. John Hofmeister said that a tour by Shell executives had uncovered deep hostility to oil companies and deep loyalty to SUVs and big cars in general. He added that new vehicle fuel efficiency standards would have only a “modest” impact on overall fuel consumption.

Financial News:

Treasurers in 11 US states, and institutional investors such as Calpers, pledged at a UN meeting to invest more than $10 billion over the next two years in green technologies.

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 1.05 percent Thursday to 122.43 as ethanol stocks and diversified agribusiness slipped back after five consecutive days of advances. For the day, diversified agribusiness The Andersons (ANDE) fell 1.69 percent to close at $45.29. Among ethanol stocks, Pacific Ethanol (PEIX) fell 4.70 percent to $5.88, while BlueFire Ethanol (BFRE.OB) fell 5.13 percent to $3.70 despite a round of investor presentations. Among small caps, Intrepid Technology & Resources (IESV.OB) fell 13.33 percent to $0.013 while Green Energy Resources (GRGR.PK) gained 14.29 percent to close at $0.16. Overall, advances and declines were even for the day.