Today in Biofuels: Greenest Cities in America; EU leaders says biofuels moratorium a mistake; is VeraSun a cheap stock?
Top Story:
Corvallis, Oregon was declared the “greenest city in America” in the second annual Best Green Places report released by Country Home magazine. The study That “analyzed hundreds of cities on key points, such as official energy policies, green power, green buildings, and the availability of fresh, locally grown food, according to the magazine’s editors. Among major cities, Portland placed second in overall rankings, #8 was Minneapolis, #11 was San Francisco, and #13 was Seattle. 17 of the top 25 cities were in the eleven western states, while the remainder included seven from the midwest and one (Pittsfield, Massachusetts) from the northeast. Oregon and California placed six cities each in the top 25.
Producer News:
In Ohio, the state Rail Development Commission has awarded a $50,000 grant to Liberty Fuels for improvements of its rail facilities. The improvements will give the biodiesel plant the ability to handle additional feedstocks as it changes to a multi-feedstock mix.
In South Dakota, VeraSun Energy’s stock has hit a series of 52-week lows, but the Motley Fool sees value in VSE. In a report, the Fool identified a 113 percent increase in quarterly sales, a 50 percent drop in overhead expenses per gallon, and a superior financing strategy that left the company with more cash than any of its cash-strapped rivals such as Aventine Renewable Energy or Pacific Ethanol. The Fool also pointed to Monsanto’s projection that corn yields would double by 2030.
International News:
In Canada, the Prince Edward Island environmental and renewable industries committee recommended that the province should create an “aggressive biofuels portfolio”. The committee said that the policy would diversify the provincial energy mix, improve the economy, and assist in meeting meet greenhouse gas emission targets. The committee identified extensive cellulosic biomass feedstocks such as wood, grasses, straw and crop residues that could be utilized for fuel, heat and power.
In the Dominican Republic, the government has authorized E7.5 blends for sale across the country, citing high fuel costs of $5 per gallon. The government also announced that it would distribute low-energy light bulbs and switch vehicles to compressed natural gas to save on fuel costs. Meanwhile, companies such as Brazil’s Infinity Bio-Energy Ltd. and Dominican Bioetanol Boca Chica are investing up to $200 million towards establishment of a Dominican ethanol industry based of the country’s extensive sugar cane resources.
In Brazil, Petrobras has inked agreements with the states of Mato Grosso do Sul and Parana for feasibility studies of a second ethanol pipeline, from Campo Grande in the western part of the country to Paranagua, a port city in the south.
In Argentina, the national government will place a tax on soybean and soy oil exports in an attempt to contain soaring local prices. Previously, increased controls were placed on beef exports, in an attempt to control prices, but led primarily to the conversion of land to the (then) tax exempt soybeans. The government said that its sliding scale of export duties would bring price stability, while farmers complained that it would reduce fund for investment in technology and land.
Research News:
Crude oil prices dropped on global markets yesterday, falling to $104.48 a barrel at the New York Mercantile Exchange, prompting a 4.3 percent drop to $11.75 per pound for sugar on the ICE Futures exchange. Overall, sugar and oil are both up more than 8 percent this year, and traders say that sugar is now tracking oil, because of the rise of sugarcane ethanol production.
Policy and Policymakers:
In the Netherlands, the Dutch environment minister and the EU Commissioner on Agriculture said a moratorium on biofuels in Europe would accomplish little, but that Europe could take a leadership role in defining sustainable biofuels instead. The Commissioner said that biofuels should only count towards an emissions target if it saved more than 35 percent in greenhouse gas emissions compared to fossil fuels, and that Europe should exclude biofuels produced on land with a “high biodiversity value” or from land with high existing carbon stocks. The Dutch environment minister, Jacqueline Cramer, told Reuters that “We could opt for a moratorium, but my fear is that the rest of the world will go on with this development without taking into account the sustainability aspect. We (had) better show how it should be done rather than just criticising and not intervening.”
In Florida, the state House is considering a bill that would create a seven-member Florida Energy and Climate Commission. The bill would also create a cap-and-trade system for reduction of greenhouse gas emissions by utilities, a renewable portfolio standard requiring 2.25 percent use of renewables by utilities commencing in 2009, and green-friendly construction standards and procurement policies.
Consumer and Fleet News:
In Washington state, the Puget Sound Clean Air Agency is partnering with the Washington State Ferries to test biodiesel on the 124-car ferry Issaquah. The Issaquah will run a B5 blend and increase the percentage of biodiesel every 30 days. A previous test in 2004 had failed to clean filters and tanks before conversion and produced inconclusive results.
Marathon Oil will convert 16 stations in Indiana, Kentucky, Michigan, Ohio and Wisconsin to “E10 only”. Marathon has more than 220 Mgy in ethanol capacity from investments in two ethanol plants in Indiana and Ohio.
Financial News:
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, tumbled 3.29 percent yesterday to close at 115.55 as diversified agribusiness and ethanol stocks slumped. For the day, Archer Daniels Midland (ADM) fell 3.06 percent to close at $42.19, while among ethanol stocks Verasun Energy (VSE) dropped 6.06 percent to a 52-week low of $5.74; US BioEnergy (USBE) fell 5.53 percent to $4.61. Pacific Ethanol (PEIX) fell 12.53 percent to $4.33. Declines led advances 15 to 1.
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