Today in Biofuels: US states buy 40,000 flex-fuel cars to avoid using alternative fuels; 20 new VE85 stations in Texas; fire chiefs say US cities and towns unprepared for ethanol fires

Top Story:

Using a loophole in federal law, states are buying flex-fuel cars in order to avoid using alternative fuels.
Under the Energy Policy Act, federal law mandated that 75 percent of new state vehicles must be able to run on alternative fuels, but the Act does not require states to purchase or use alternative fuels. Consequently, governments have been buying flex-fuel vehicles that qualify under the Act, but 30 states do not provide E85 at any state fuel depots. In total, there are only 34 state fuel depots in 20 states, yet governments have purchased more than 40,000 flex-fuel vehicles.

Producer News:

In Kansas, Cargill canceled plans to construct a 100 Mgy corn ethanol plant near Topeka, citing tough economic conditions. The proposed plant had been in the permitting stage with no construction yet underway.

In California, the $2.4 million 3 Mgy Whole Energy biodiesel project in Pacifica is awaiting final approval from the California Coastal Commission, after securing approval from the Pacifica local council. The project, developed by Whole Energy in conjunction with local officials and the non-profit Liveability Project,  has been in planning for three years for a site adjacent to the Calera Creek Water Recycling Plant. Local residents have strongly opposed the plant on health and environmental grounds.,

In New Jersey, a federal bankruptcy judge dismissed the Chapter 11 case of Bioenergy of America after the company was unable to pay administrative expenses associated with continued operation and the bankruptcy filing. With the withdrawal of a proposed $400,000 loan from Paragon Biofuels to fund continuing operations, the company does not have sufficient cash to pay employees, who have been working since early January without salary. The company appears headed for liquidation.

International News:

In China, China Agro-Technology announced that it has secured $300 million in financing for biodiesel acquisitions and operations. The company is focused on building capacity to process jatropha oil to supply the growing demand lower-cost biodiesel.

In El Salvador, Southridge Enterprises will commence construction this month on its 20 Mgy Salvadorean ethanol plant. The company will construct a 15 Mgy ethanol drying facility for export markets and a 5 Mgy sugar cane ethanol plant for local consumption and export. The company will produce ethanol from its own sugar cane fields, and burn bagasse to reduce energy costs by 60 percent.

In England, Valtra has approved B100 biodiesel for use in all its engines, including Sisu’s latest Common Rail units and SisuDiesel engines.

Research News:

The US Department of Transportation has awarded $435,000 in grants to develop improved conversion rates for cellulosic biomass into ethanol. The DOT awarded the four-year grants to a University of Wyoming team, which received $50,000 in matching funds from the UW School of Energy Resources.

Policy and Policymakers:

The International Association of Fire Chiefs said that that most local fire departments do not have the materials or training to put out ethanol fires. Ethanol, fires require special alcohol-resistent foams that cost 30 percent more than standard foams used to smother gasoline fires. Ethanol eats through standard foams and continues to burn, while water is not effective with fuel fires because it  spreads the fires and carries it into areas such as drains and sewer systems. Ethanol trains, carrying up to 2.5 million gallons of fuel, travel through more than 20 US states and hundreds of communities.

In Minnesota, the state government is preparing plans for ending subsidies to ethanol plants in the state. The last payments, under a state plan designed to incentivize ethanol production in the state, are scheduled for 2010, and only six plants are still receiving per-gallon incentive payments.

Consumer and Fleet News:

In South Dakota, VeraSun Energy and Kroger announced that they they would open 20 more “VE85″ branded fuel locations in Texas. All the pumps will be located at existing Kroger stores in the Dallas and Houston metro areas.

In Florida, the Central Florida bus system, Lynx, will convert its 290 buses and four support vehicles to B20, which it will blend at its own facility in Orange County. The blending station will also support the diesel fleets of Orange County and the Orlando Utilities Commission. The agencies expect to use 1.2 Mgy of diesel fuel blended at the facility.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, gained 2.43 percent Tuesday to close at 128.12 as diversified agribusiness jumped and ethanol stocks recovered from a week-long slide.  For the day, The Andersons (ANDE) gained 4.48 percent to close at $47.06, to lead diversified agribusiness stocks.

Among ethanol stocks, Aventine Renewable Energy (AVR) gained 2.76 percent to $6.70 after a meltdown following a weak earnings release. Among small caps, Green Energy Resources (GRGR.PK) rose 7.69 percent to close at $0.14.  For the day, advances led declines 6 to 1.

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