Today in Biofuels: Shell ventures into biogasoline; US corn exports up 6 percent in ‘07 in food vs. fuel surprise; India condemns Western ethanol policies, doubles ethanol requirement

March 27, 2008

Top Story:

In the Netherlands, Royal Dutch Shell and Virent Energy Systems announced a 5-year partnership to make biogasoline from a catalytic process from biomass. The Virent Bioforming process uses undisclosed catalysts to convert plant-based sugars into gasoline-resembling hydrocarbons, instead of fermenting into ethanol The process uses non-food feedstocks. Shell did not disclose their investment in the project, but indicated that a demonstration plant for the technology was planned for 2010. Shell biofuel spokesmen said that biogasoline could use existing gasoline infrastructure for marketing and distribution, and that they expected biofuels to provide 10 percent of the global fuel supply by 2030.

Producer News:

In Iowa, Red Rock Renewables won approval for its 110 Mgy corn ethanol plant proposed for a site near Pleasantville. Opponents had criticized the plant’s location, traffic impact , safety plan, and potential for pollution as well as raising issues with water usage. Construction is expected to star later this year.

In Kansas, Orion Ethanol acquired a Texas wet milling plant from Dimmitt Ethanol. The purchase price was $2.5 million. Orion plans to convert the facility to ethanol production, with a total cost of the project estimated at $66 million, compared to more than $130 million for construction of a new dry milling ethanol facility. Orion’s project includes the construction of 60 Mgy of ethanol capacity, a 10 Mgy edible oil extraction plant, a 10 Mgy cellulosic ethanol plant, a 12 Mgy biodiesel facility, and up to 75 MW in wind and methane capacity.

A top engineering executive said that, based on a recently completed US roadshow with 15 major ethanol-related lenders, ethanol development is “dead” until 2009 at the earliest. Bateman Litwin CEO Shuki Raz told Reuters that financing issues and high feedstock prices were the concerns influencing the drying up of capital.

International News:

In India, Petroleum and Natural Gas Minister Murli Deora said that the national government would raise the required ethanol content in gasoline from 5 percent to 10 percent in October. Meanwhile, Indian Finance Minister P Chidambaram, speaking at a conference in Singapore, called the policies of developed nations converting food into fuel “outrageous and must be condemned” and that the world’s poor are feeling the impact of higher food prices. “It is a sign of the lopsided priorities of certain countries that they will resort to measures that will produce fuel at a cheaper cost in order to meet the transport requirements of a section of their population,” he said. He did not offer comments on India’s rapidly expanding capacity to do the same thing.

In Canada, Investeco Capital said that they would invest in cellulosic ethanol producer Woodland Biofuels of Ontario. Investeco said that Woodside’s Catalyzed Pressure Reduction technology have it a material advantage over other cellulosic ethanol producers as well as first-generation biofuels. Woodside recently received $9.8 million from Sustainable Development Technology Canada towards the cost of its demonstration plant, but Investeco’s capital infusion was not disclosed.

In Sweden, Svenska Statoil said that E85 sales increased 180 percent in February over the corresponding period in 2007, to 1.26 million gallons. Sales increased by 4 percent over January 2008. The company operates 280 ethanol stations in Sweden, offering E5 and E85 blends.

Research News:

The Ethanol Promotion and Information Council responded to recent report in a Florida newspaper that US ethanol production had led to Haitian villagers being forced to eat mud pie. In its response, EPIC noted that US corn exports in 2007-08 market year were 2.25 billion bushels, 6 percent more than in 2006-07 and the highest since 1990, and that the largest increase in sales went to Mexico, “one of the very nations that we are supposedly starving to death.” EPIC also noted that US ethanol subsidies, totaling $3 billion, have resulted in a $6 billion reduction in crop price supports and a $15 billion drop in US oil imports. EPIC said that the true reason for rising food prices was rising labor, packaging and fuel costs, and rising wealth and demand from China and India.

Policy and Policymakers:

In California, Pacifica ratified the US Mayors’ Climate Protection Agreement. The agreement, developed by the U.S. Conference of Mayors, includes commitments by US cities and towns to: measure carbon footprints, set emission reduction targets, promote energy efficiency, promote sustainable building practices, increase fuel efficiency in municipal fleets and convert diesel vehicles to biodiesel, and increase recycling rates.

Consumer and Fleet News:

The National Biodiesel Foundation announced the BioTrucker Fuel Card, which gives the cash price (or a discount of up to $0.02) and a waiver on fuel transaction fees at 149 truck stops around the country that sell biodiesel.

In Canada, Student Transportation of Canada will convert 235 of its 1,000 school bus fleet of 1,000 buses to biodiesel. The blend ratio was not disclosed but the company said it expected to generate emission reductions of up to 40 percent from the conversion. STC is the fourth-largest school bus fleet in North America with a total fleet of 5,000 buses and school vehicles in the US and Canada.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 0.53 percent to close at 117.53 as weakness in larger caps overshadowed a broader advance. For the day, Archer Daniels Midland (ADM) fell 0.75 percent to close at $42.38. Among ethanol stocks VeraSun Energy (VSE) gained 2.10 percent to close at $7.77, while Pacific Ethanol (PEIX) lost 1.09 percent a week before dismal quarterly earnings are expected. Along small caps, Nova Biosource Fuels (NBF) gained 9.42 percent, to $1.51. Overall, advances led declines 6 to 1.

Virent Systems ramps up R&D operations for biogasoline from Aqueous Phase Reforming process

In Wisconsin, advanced biofuels pioneer Virent Systems, which has a joint R&D agreement with Royal Dutch Shell to produce biogasoline from plant sugars using catalysts and the Aqueous Phase Refo...

US House expected to pass Energy Bill today; oil association chief says ethanol requirement will “break the nation’s fuel supply system”

In Washington, the House Democratic leadership prepared for a vote today on the Energy Bill. According to the latest reports, a 36 billion gallon biofuels mandated target for 2022 was in the bill, ...

Chevron Technology Ventures partners with C2 biofuels on forest product biofuel research

Chevron Technology Ventures has partnered with Georgia Tech, C2 Biofuels, the Georgia Research Alliance and one of the U.S. Department of Energyâ€™s new BioEnergy Research Centers to explore the ...

Indian officials admit far short of ethanol for meeting E5 goal

Indian official admitted today in an article published in the Times of India that they are far short of the ethanol acquisitions needed to make E5 a reality. India projects that it will have acquired ...

Today in Biofuels Opinion: NY Times corrects, says poor countries, not G8 finance ministers, criticized Western biofuels policy

The New York Times corrected its major article on Western biofuel policy: "Because of an editing error, an article on Tuesday about the effect of biofuels on the price of food misidentified the repres...

Shell president says company is “investing and believes in cellulosic ethanol”; says Shell is researching algae

The president of Shell said that his company is investing and believes in cellulosic ethanol. John Hofmeister said that in 10 to 20 years, the company would produce fuel from waste products, wood chip...

Written by Jim Lane · Filed Under The Daily Biofuel Summary