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Today in Biofuels: DOE awards $33.8 million in research funds; UK halts biofuels target, pending review; Clinton campaign $$, legislative efforts linked to personal ethanol investments

February 28, 2008

Top Story:

The U.S. Department of Energy awarded $33.8 million in research grants to four cellulosic ethanol projects in California and New Jersey. The four-year research grants come from a $1 billion fund the DOE established to finance cellulosic ethanol research.  The grants are for projects researching advanced enzymes for converting cellulose into sugars. Industry will add another $37 million to the research effort.  Grants were awarded to DSM Innovation Center, Genencor, Novozymes and Verenium. The latter three are based in California, while DSMN is based in New Jersey.

Producer News:

In Florida, the Renewable Fuel Association said that “naysayers notwithstanding, 2007 was a seminal year for the industry”. Bob Dineen, executive director of the RFA, in his State of the Industry address at the annual RFA conference in Orlando, said that domestic production reached 6.5 billion gallons, consumption exceeded 7 billion gallons, 29 new refineries opened, and the new Renewable Fuel Standard set out a path for industry growth through 2022. He called the “food-vs-fuel” debate a “fallacy”, noting that ethanol producers do not use the protein in corn, and called articles in Science magazine a “worst case scenario”. However, writing in the Financial Times, Mark Thirwell raised the specter of Malthus and the question of how long the present imbalances between agricultural supply and demand will last, and can last.  Henry Miller writes in World Politics Review that politician are ” drunk with the prospect of corn-derived ethanol” and “starvation and malnourishment are becoming worse among the poorest of the poor.”

In Pennsylvania, Diamond Star Energy has proposed a 35 Mgy biodiesel plant for Neville Island, in the Ohio River north of Pittsburgh.  Diamond Star and Land Gas Technologies will be a con-investor in the project, and is negotiating with Ashland Chemical for a lease of a proposed island-based site. The proposed plant, using an undisclosed feedstock, would ultimately be expanded to a capacity of 100 Mgy.

In Illinois, a federal judge has approved a sale process for the bankrupt Central Illinois Energy plant in Canton, while turning down an undisclosed Florida group who offered $25 million for the plant and equipment. The $80 million Credit Suisse offer is the only offer that has not yet been rejected for the plant, which ran up costs of more than $130 million and was not completed.

In New Mexico, the Carlsbad City Council approved a loan of $1.1 million in federal funds for Cetane Energy, which will enable the plant to obtain final permits and commence construction. The funds are provided by the federal Waste Isolation Pilot Plan Acceleration Funds, but are controlled by the local council, and are awarded annually by the council to offset the impact of the nuclear waste repository closing.

International News:

In Thailand, Energy Minister Poonpirom Liptapanlop announced a 15-year Renewable Energy Development Plan that will detail incentives and tax breaks for ethanol, biodiesel, wind and solar power. Lt Gen Poonpirom said that ethanol would be initially targeted for export, and biodiesel built up through increased palm cultivation over a 6-year period. Thailand produces 125 Mgy of ethanol at nine plants, with annual consumption at 67 Mgy. The plans calls for expansion of production capacity by 220 Mgy this year, and the introduction of a B10 standard this year.

In China, ASB Biodiesel announced a 100,000 Tpy multi-feedstock biodiesel plant that will be built in the Tseung Kwan O industrial area of Hong Kong. The plant will primarily utilize used cooking oil, waste animal fat and grease trap waste as feedstock.

In England, Environment Minister Ruth Kelly said that “We are not prepared to go beyond current UK target levels for biofuels until we are satisfied it can be done sustainably.” The UK Renewable Fuels Agency has been tasked to produce a study on the economic and environmental impacts, including indirect impacts, of biofuels. The study will be used by the Environment Ministry to help determine UK and EU’s policies, and EU biofuel targets after 2010.

Research News:

In Malaysia, Godrej International projects that crude palm oil will reach a price of $1400 per tonne in the September 2008 - February 2009 period.  Oil World projects $1090 per tonne in 2008; LMC International forecasts $1213 per tonne in 2008m, while Prudential Bache forecasts a range of  $930-$1550 per tonne. In Canada, Syntec Biofuel said that record feedstock prices have caused a surge in inquiries for its thermo-chemical cellulosic ethanol catalyst technology, which pushes yields up to as high as 150 Gpt from waste biomass, compared to an industry standard of around 92 Gpt for corn ethanol production.

Policy and Policymakers:

In New York, reports have linked Senator Hillary Clinton to investments in several ethanol projects owned indirectly by controversial international investor Ron Burkle. The New York Times reported that President and Senator Clinton hold interests in several projects owned by Yucaipa, a private equity fund founded by Burkle, as compensation for advisory work done by the former President for the fund. Burkle has raised more than $100,000 for the Clinton presidential campaign, and Senator Clinton has sponsored legislation to provide massive government investments in ethanol. Yucaipa has, in turn, invested in numerous ethanol companies, including Cilion.

In Iowa, the chief of the state Fire Service Training Bureau said that reports that firefighters are not trained for ethanol fires should not be exaggerated. He said that 17 HAZMAT fire teams exist around the state of Iowa to respond to complex fires, and that ethanol trains generally travel through rural areas where there is less exposure to risk. However, he confirmed that local fire teams do not have ethanol fire-fighting foam.

Consumer and Fleet News:

Sir Richard Branson, in remarks surrounding the Virgin 747 biodiesel test flight, said that algae would almost certainly be the feedstock for commercial aviation biofuels, implying that the selection of coconut and babassu oil had been made in light of an algae oil shortage. Jon Dee, founder of Planet Ark, said “it is good to show that you can fly major airliners on alternative fuels. I think that it is vital that as quickly as possible we move away from business as normal. But what we should be looking at, I think, is how we get that biofuel derived from algae. That is the best way to go when it comes to biofuel.” Meanwhile, the World Development Movement called the Virgin 747 biodiesel test flight a “publicity stunt with dangerous consequences for the planet” and said that Virgin owner Sir Richard Branson should back a campaign to include aviation in the climate change bill.”

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 1.34 percent Wednesday to close at 126.40 as diversified agribusiness retreated from gains early in the week.  For the day, The Andersons (ANDE) slipped 1.68 percent to close at $46.27, to lead the downward trend in diversified agribusiness stocks.  Among ethanol stocks, Aventine Renewable Energy (AVR) recovered 4.78 percent to $7.02. Among small caps, Texcom (TEXC.PK)  plunged 28.57 percent to close at $0.05 while Bluefire Ethanol rose 2.78 percent to reach $3.70.  For the day, advances led declines 5 to 3.

  • Clinton ethanol legislation support linked to campaign contributions, personal investments in ethanol
    • In New York, reports have linked Senator Hillary Clinton to investments in several ethanol projects owned indirectly by controversial international investor Ron Burkle. The New York Times reported tha...
  • South Africa to review biofuels policy; 2 percent target likely to be increased
    • In South Africa, a senior official in the Department of Minerals and Energy confirmed that the government is likely to review its biofuels policy and increase the proposed mandate. The 2 percent manda...
  • Brazil’s Brenco projects $3.2 billion from IPO this year or in 2009
    • In Brazil, Brenco said that it expects to raise $3.2 billion from an IPO no later than 2009, and will use the proceeds to construct 10 ethanol plants by 2015 with a planned capacity of 1 billion gallo...
  • Clintons among investors at Brazilian ethanol plant with “degrading” worker conditions
    • In Brazil, an ethanol plant connected to an investment group including former US President Bill Clinton has been described as providing "degrading" conditions for its field workers. Brazil Renewable E...
  • News analysis: Hillary Clinton energy policies
    • Senator Hillary Clinton trails significantly in the primary popular vote and delegate count, but it has been pointed out repeatedly that 800 unelected "super-delegates" will make the decision at the D...
  • Primafuel, US Sustainable Energy receive biofuels research and development awards
    • In California, Primafuel has received a World Economic Forum "Technology Pioneer Award" for innovation in biofuels production and distribution infrastructure, while John Rivera of US Sustainable Energ...

    Written by Jim Lane · Filed Under The Daily Biofuel Summary 

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