Today in Biofuels: UN Sec-Gen calls for biofuels review, bowing to food pressure; D1 Oils to exit UK; new low-cost enzymes discovered

April 9, 2008

Top Story:

The UN secretary-general, Ban Ki-moon, has called for a review of land-use conversion by biofuel producers, in response to the global increase in food prices. Ban, who placed climate change at the top of the UN agenda, is responding to internal pressure from UN food agencies facing a crisis over rising prices. The Guardian reports that some senion UN officials are attacking the Secretary-General for being “out of touch” and not knowing “what is really going on in our agencies”. Ban said “This steeply rising food price is a new phenomenon,” he said. “We have only seven years left to meet the target of 2015,” referring to the Millenium Development Goal of halving global hunger by 2015, adding “This is very serious.”

World Opinion:

The Financial Post reports that “prices of staples have jumped 80% since 2005…..Factors behind the surge in prices are varied, including bad weather in some regions, soaring demand from growing populations, and US$100-a-barrel oil…..But no factor gets more consistent credit for food price turmoil than the international biofuels stampede….Warnings that ethanol programs, brought on by absurd national energy policies and myths about reducing the risk of climate change, could severely disturb food production and prices, have been issued for years. Now that the consequences have materialized, a new policy stampede is in the making.”

Opednews.com ran a post suggesting “The problem with programs like carbon sequestering and bio-fuel production is that they are treatments for symptoms, not treatments for the disease that caused the symptoms.”

Canadafreepress.com writes from the anti-climate change consensus point of view, “There is absolutely no need for biofuels and especially ethanol to stop global warming or climate change. Environmentalism exploited for political purposes is the short answer. Sadly, biofuels are just the beginning. Other madness includes the carbon credit shell game that does nothing to reduce CO2; the myth that fossil fuel resources are running out; the myth of the viability of other alternative energies; the myth that pollution problems are getting worse in most of the world; the erroneous belief that CO2 is a pollutant.”

The Times of India interviewed the chief of the UN Energy and UN Industrial Development Organisation (UNIDO), Kandeh K Yumkella, who said “There is a close link between energy poverty and income poverty. Modern bio-energy could make energy more widely and cheaply available in remote areas, supporting productivity growth in agriculture and other sectors with positive implications for food availability and access.

In the Oregonian, a team from Cascadia Capital writes “Alternative fuels can deliver robust returns if investors focus on the right capital and technology efficiencies, and second, we must find a way to unlock alternative fuels’ potential given soaring oil prices and an uncertain economy…Waste or waste byproducts are the most sensible alternative fuel inputs…Despite several misguided stumbles, we are still believers and look forward to the revenue and profits that Biofuel 2.0 is certainly capable of generating.”

Laverne Chadderdon writes in Highlands Today that as “retail bakers of America complain that ethanol makers burn up our food supply and jack up the price of bread…which form of ethanol production is the U.S. government and its taxpayers subsidizing? Corn, of course. On which form of ethanol production does the United States levy a 53 cents a gallon import? Sugar cane, naturally.”

Producer News:

In North Dakota, farmers are taking lands back from the Conservation Reserve Program to put them back into production. “Last fall,” according to the New York Times, “they took back as many acres as are in Rhode Island and Delaware combined.” Farmers say that government payment for grasslands in the program “aren’t even comparable anymore” to the revenue potential from returning the land to production to provide livestock feed.

In Louisiana, Verenium will move from development to startup phase at its demonstration-scale cellulosic ethanol plant in Jennings. The company’s plan is to move into construction of its first generation of plants following cost model validation at the demonstration-scale plant, with completion of its commercial-scale facility in 2010.

The Securities and Exchange Commission suspended trading in the stock of Alternative Energy Technology Center to complete an investigation of statements made in press releases and email regarding the company’s ownership of cellulosic ethanol technology attributed to Meridian Biorefining. The company’s shares are scheduled to resume trading on April 15.

In Idaho, Pacific Ethanol is nearing launch of its 60 Mgy corn ethanol plant in Burley. The company hopes to supply the entire ethanol demand for Idaho from the plant, as well asÂ up to 500,000 tons of distillers grains for livestock feed.

International News:

In Australia, the state premier has requested State Departments to use more ethanol after it was revealed that only his own department met the government’s 2 percent biofuel target in February. “I can’t expect industry to the right thing if Government doesn’t lead the way,” New South Wales Premier Morris Iemma said.

In Malaysia, Dubai Group invested $49.5 million for a 30% stake in GBD Investment. GBD has started production at a 200,000 metric ton biodiesel plant at Lahad Datu in the Malaysian state of Sabah.

In England, D1 Oils completed a $32 million capital raise, primarily from existing shareholders, and said it would exit the UK biodiesel refining business and concentrate on its plantation and science businesses, including its JV with BP. “We believe that UK (biodiesel) demand will largely be met by subsidized US imports. We do not see the UK as offering a viable location for refining and trading to meet domestic demand for the foreseeable future,” the company said in a statement. The company will close or sell its two UK plants, affecting 80 staff.

Research News:

In Illinois, researchers announced the discovery that new enzymes, able to be grown in corn, will break down plant cellulose for ethanol production. Typical enzymes are grown in energy-intensive bioreactors, and are a significant cost factor in cellulosic ethanol.

Policy and Policymakers:

The National Center for Policy Analysis released a study concluding that US policymakers should study Brazil’s oil production efforts, rather than ethanol production, in order to reduce US dependence on foreign oil.Â “The facts about Brazil’s energy policy are often misrepresented,” said NCPA Graduate Student Fellow D. Sean Shurtleff, the paper’s author.

Consumer and Fleet News:

The Energy Information Administration said that US gasoline demand is dropping, and will decline up to 3.5 million gallons per day this summer, compared to 2007 according to EIA Administrator Guy Caruso. “Personal disposable income in the period rose by an estimated 0.3%, while gasoline prices rose 31.8% from a year earlier, to average $3.11 a gallon,” said the EIA report.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, gained 0.01 percent to close at 119.62 as ethanol weakness balanced gains by diversified agribusiness.Â For the day, Archer Daniels Midland (ADM) gained 0.19 percent to close at $43.23, while The Andersons (ANDE) rose 1.84 percent to close at $44.34. Among ethanol stocks, VeraSun Energy (VSE) fell 7.09 percent to close at $7.99.Â Among small caps, Green Shift (GERS.OB) gained 8.33 percent to close at $0.13.Â Overall, advances and declines were even for the day.

UN Secretary-General calls for review of land-use conversion for biofuels, bowing to international and UN food agency pressure

The UN secretary-general, Ban Ki-moon, has called for a review of land-use conversion by biofuel producers, in response to the global increase in food prices. Ban, who placed climate change at the top...

IMF report relays concerns on use of food as biofuel feedstock; calls for elimination of trade barriers to alleviate pressure on food prices

A biannual IMF report on the world economy said that "The use of food as a source of fuel may have serious implications for the demand for food if the expansion of biofuels continues. One country's po...

Illinois researchers develop low-cost path to cellulosic ethanol enzymes

In Illinois, researchers announced the discovery that new enzymes, able to be grown in corn,Â will break down plant cellulose for cellulosic ethanol production. Typical enzymes are grown in energy-...

UK orders biofuels review by June; will move against EU targets if review calls for change

In England, prime minister Gordon Brown signaled a pullback on biofuels, saying it no longer fully supported the 10 percent European biofuel target because of the world food crisis. Food prices have r...

D1 Oils raises $32 million, exits UK biodiesel business

In England, D1 Oils completed a $32 million capital raise, primarily from existing shareholders, and said it would exit the UK biodiesel refining business and concentrate on its plantation and science...

Today in Biofuels Opinion: Missouri Governor says biofuels not to blame for food prices; National Review calls for end to ethanol mandate

The Portland Tribune carried an article by the Special Assistant to the Director of the Oregon Department of Agriculture, saying that "Whatever else one may criticize about corn ethanol, or biofuels i...

Written by Jim Lane · Filed Under The Daily Biofuel Summary