Today in Biofuels: Two research teams report cellulose-to-gasoline breakthrough; NY Times op-ed calls for “pushback against biofuels”

Top Story:

In Massachusetts, a group of researchers at the University of Massachusetts announced, in the latest edition of Chemistry & Sustainability, Energy & Materials, a new “green gasoline” process that directly converts plant cellulose into the chemical components of gasoline, while a companion article by researchers at the University of Wisconsin reported on a “green gasoline” process that yielded the chemical components of jet fuel in an integrated process. In Texas, Sustainable Power Corporation, a pioneer in the catalyst-based production of bio-crude, said that the president of the Central American Parliament (Parlacen) had joined the company’s board and would be on hand Wednesday to announce a major expansion of the company’s biocrude production capacity in Guatemala.

World Opinion:

New York Times Op-Ed Columnist Paul Krugman in “Grains Gone Wild” writes that “The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.” You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.” Krugman is less sure about alternatives, offering a suggestion that there be more aid to the U.N.’s World Food Program, an undefined “pushback against biofuels”, and the bromide that “cheap food, like cheap oil, may be a thing of the past.”

The Star reports that the price of rice has reached $760 per tonne, and that “For 3 billion people around the world that was the most important news report of today and will almost certainly be the most important story for years to come….Just a few weeks ago, its price was one-third lower at $580 a tonne. The higher the price of rice, the less gets eaten by those now spending 50 to 70 per cent of their meagre incomes on food.” The post is of importance, despite the fact that except in small test projects in Japan, rice is not converted into biofuels. Is this a knock-on effect from the increasing presence of speculators in food commodities? As carry-through from shortages in other staple foods such as wheat, that have caused consumers to turn to rice? A knock-on effect of biofuel production?

A most interesting argument on the “paradox of production” appears in the Archdruid Report, pointing out that “every other energy source currently used in modern societies gets a substantial “energy subsidy” from oil…..the energy used in uranium mining and reactor construction, for example, comes from diesel rather than nuclear power, just as sunlight doesn’t make solar panels.

Liberty Maven wrote that ethanol has “nine strikes” and “retired the side”, saying that ethanol consumes more energy than it produces, quoting the 2005 Pimentel/Patzek study as its first strike, and adding that wood waste and switchgrass are worse.

Earthtimes reports remarks by Dr. Thomas Elam, president of FarmEcon that “the policy favoring ethanol and other biofuels over food uses of grains and other crops acts as a regressive tax on the poor….The biofuels policy that is driving higher prices of corn, other grains, and soybeans will cost the U.S. economy more than $100 billion from 2006 to 2009….It is inevitable that these costs will be passed along to consumers.”

Cleantech reports on an email circulating the internet, revealing that “Last year, your government spent more than $8 billion of your tax dollars to achieve the following results: Dramatically increase the emissions of carbon dioxide and other greenhouse gases into the atmosphere, Accelerate the destruction of the Amazon rainforest, Raise the price of milk, bread, beef and other grain-dependent products by more than 20%, Increase world hunger. How did they do this? Two words: ethanol subsidies.”

Cleantech is currently running a poll, offering respondents an choice of statements that include:  “Biofuels Kill”, “Industrial Agrofuels — Feeding the Planet to Our Cars”, “Biofuels — Destroying the Biosphere One Car at a Time”, and “None of these. You are a shill for big oil and a bad person!”. Option two currently has more than half the votes, and “biofuels kill: currently leads “you are a shill for Big Oil”.

Gristmill ran a post saying that biofuels are “Worse than coal”, calling “Industrial agrofuels” an “enemy of the entire planet”, adding that “Replace [liquid fossil fuels] with today’s biofuels, and you would have an unmitigated ecological disaster of planet-killing proportions.

Producer News:

In Missouri, Northwest Missouri Biofuels said that it had completed a capacity expansion to 15 Mgy, and was using animal fat feedstock that it said was allowing it to continue to produce at 100 percent capacity while soybean-based plants were reducing capacity or shutting down.

In Illinois, the CEO of Coskata detailed how the company can create fuel for less than $1 per gallon using its combined thermochemical and microbe-based approach to cellulosic ethanol production. William Roe said that the company’s process can use multiple “true waste” feedstocks such as wood chips, weeds, human waste, used tires, or carbon monoxide.

In Ohio, VeraSun Energy said its 110 Mgy facility in Bloomingburg had commenced production. This is the 11th VeraSun facility and the fourth ethanol plant in Ohio, and brings the company’s production capacity to more than 1 Bgy.

International News:

The European Bioethanol Fuel Association said that ethanol production in the EU rose 11 percent in 2007 to 468 million gallons. The increase follows 70 percent growth rates the previous two years. Output in France grew 97 percent to 152 Mgy, Germany was down 9 percent to 104 Mgy, while Sweden production dropped 50 percent to 19 Mgy. Overall consumption for 2007 was reported at 714 Mgy.

In India, Tata Chemicals will establish a sweet sorghum-based ethanol plant in Nanded, Maharahstra with an initial capacity of 3 Mgy.

In Canada, Nova Scotia announced an investment of $20 million in Minas Basin Pulp and Power for a facility that will convert 4,000 tons of plastic waste into biodiesel. The government commitment facilitated an equity investment of $27 million in the project by Minas.

In England, D1 Oils launched a shareholder rights offering with a goal of raising up to $60 million from existing shareholders, who would buy discounted additional stakes in the company. D1 said that talks are “advanced” with a number of key shareholders regarding the planned investments.

Research News:

Raymond James analyst Pavel Molchanov, in a note to clients, has projected ethanol prices to average $2.42 and $2.48 per gallon in 2008 and 2009 respectively, while projecting corn costs at $5.48 and $5.45 per bushel. A “crush spread” of $0.46 per gallon in 2008 and $0.53 per gallon in 2008 is based upon a yield of 2.8 gallons per bushel.

Policy and Policymakers:

In Colorado, the state Senate passed a $26.5 million incentives bill earmarked for support of biofuel technologies based on Colorado bioscience research, in addition to other biotech industries that could be supported by the legislation, that was passed by the House in a materially similar version in February.

Consumer and Fleet News:

Research firm R.L. Polk said that US consumers bought 1.8 alternative fuel vehicles in 2007, up 16 percent over 2007, but said that with E85 available at less than 1 percent of the nation’s gas stations, the vehicle purchases were unlikely to have a marked impact on gasoline purchasing habits.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, gained 1.35 percent to close at 119.61 led by continuing strength in diversified agribusiness.  For the day, Archer Daniels Midland (ADM) gained 1.46 percent to close at $43.15, while The Andersons (ANDE) rose 0.23 percent to close at $43.54. Among ethanol stocks, VeraSun Energy (VSE) gained 2.14 percent to close at $8.60.  Among small caps, Green Energy Resources (GRGR.PK) fell 11.11 percent to $0.12, and Bluefire Ethanol (BFRE.OB) rose 1.59 percent on appointment of a new CFO.  Overall, advances led advances 6 to 5.

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