Today in Biofuels: Science magazine article respondents bite back; China facing food crisis
February 18, 2008
Top Story:
In Washington, biofuels associations and academics continued to respond to Science magazine articles published last week that condemned US biofuel production efforts. The Argonne National Laboratory’s Transportation Technology R&D Center, said that the Science article authors’ models did not factor in changing crop yields, which have been rising sharply in recent years. The Argonne study was not able to support the Science conclusion that US policies were responsible for price increases or land-use changes, since US exports of corn were flat in 2006-07.
The Institute for Local Self-Reliance (ILSR) said that increases in corn prices are not tied to land-use conversion in the United States. Finally, the Institute said that the Science magazine article did not account for distillers grains, a major by-product of ethanol production that is used as cattle feed.
Producer News:
In Illinois, a proposed 60 Mgy biodiesel plant in Quincy has been delayed due to rising construction costs, and uncertainty over feedstock and biodiesel prices. The $77 million project had been proposed by America’s Renewable Energy, and received its construction permit in July 2007.
In North Dakota, the Northwood Mills oilseed crushing plant will switch from processing soybeans for biodiesel to processing canola for the food markets. The company said that declining demand for soybean meal from the Canadian hog industry, as well as reduced demand from biodiesel producers, prompted the switch. The owners said that US biodiesel production was running at 25 percent of capacity.
In Oregon, GreenWood Resources announced that it will to supply poplar for ZeaChem’s 1.5 Mgy cellulosic ethanol plant. The companies said that they will expand the relationship to accommodate capacity increases by ZeaChem.
International News:
In Pakistan, the Pakistan Ethanol Manufacturers Association (PEMA) and Pakistan Sugar Mills Association (PSMA) have called on the central government to impose an E5 ethanol mandate, and to amend excise rules to waive permit fees and excise duties on ethanol. The association called the imposition of excise fees “outdated” in light of the country’s focus on diversifying its energy source mix.
In China, food prices have soared 60 percent on selected goods, prompting fears that food riots, similar to those which precipitated the 1989 uprising, may occur in major Chinese cities. Strong curbs on production of fuels from food crops is expected, to reduce pressure on prices, as the country emerges from an extreme cold crisis, on top of major crop failures. Tariffs of up to 25 percent have been placed on export of key biofuel feedstocks.
In Jamaica, the government will take over the Rockford ethanol facility in May. The plant had been jointly operated by Jamaica and Brazil, and is a centerpiece of the governments efforts to establish a renewable fuels industry to reduce price pressure caused by rising oil prices. The minister for Energy, Mining and Telecommunications , Clive Mullings, said that the country will impose an E10 mandate based on rising domestic production of ethanol.
Research News:
In Iowa, scientists at DuPont unit Pioneer Hi-Bred International have identified a gene that determines oil yield in a corn, and have modified the gene to boost the yield of edible fats in corn by up 107 percent. The study was based on a comparison of 71 strains of maize.
In Indiana, researchers at Purdue University have developed an oil price-based model that predicts ethanol production and prices based on current oil prices and government ethanol mandates. Wally Tyner, Purdue professor of agricultural economics, said that the he hidden cost of the Renewable Fuel Standard is an extra $1.05 per gallon when oil is $40, and that the Standard will only be successful if oil prices stay high.
Policy and Policymakers:
In Africa, food riots broke out in Mozambique, as scientists in Africa have called for a moratorium on new biofuels projects. From west Africa to the Congo, Tanzania to Ethiopia, governments have assigned large-plantation tracts to biofuels companies in moves that remind many of colonial administration. Africa is expected to suffer the most from climate change, and maize production could drop by 33 percent by 2028, according to Stanford University.
Lester Brown, president of the Earth Policy Institute, said that the fuel and food economies have begun to fuse.
Consumer and Fleet News:
In Arizona, the House majority leader introduced a bill to provide grant covering 40 percent of the $50,000-$100,000 cost of converting gas stations to ethanol. Meanwhile, the executive director of the Valley of the Sun Clean Cities Coalition, said that 150,000 Arizona cars are capable of running on E-85, 230,855 on biodiesel. There are 13 E-85 stations and nine biodiesel stations in Arizona.
Financial News:
The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, gained 1.20 percent Friday to close at 123.90 as Archer Daniels Midland and leading ethanol producers made recoveries from Thursday declines. For the day, sector giant Archer Daniels Midland (ADM) gained 1.38 percent to close at $44.13.
Among ethanol stocks, Aventine Renewable Energy (AVR) improved 0.84 percent to reach $8.40 by close, while Pacific Ethanol (PEIX) fell 1.02 percent to $5.82.
Among small caps, Texcom (TEXC.PK) fell 19.19 percent to $0.08, while Intrepid Technology & Resources (IESV.OB) gained 7.69 percent to close at $0.014 after a major fall on Thursday. Overall, declines led advances 3 to 2 for the day.
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