Today in Biofuels: Speculators drive commodity prices up, up, up; new biofuels 2020 forecasts; moringa oil gains popularity as feedstock

Top Story:

World Bank president Robert Zoellick called demand for biofuels a “significant contributor” to world commodity prices as they soared out of control. “I think you have a perfect storm of things coming together,” Zoellick told NPR. “You have high energy prices. You have the increase in demand from some of the developing countries. … As the Indian commerce minister said to me, going from one meal a day to two meals a day for 300 million people increases demand a lot.”

Leading the price rise was crude oil, which reached a record $112.21 a barrel yesterday. Crude palm oil reaching $1079 per tonne, soybeans at $13.56 per bushel for May delivery, wheat at $9.23 per bushel and corn at $5.94 per bushel for May delivery. Commenting on the oil market, Stephen Schork, president of the Schork Group, told Oil Voice that reported that “This is a market that’s being driven by speculation as much as it is by the fundamentals.”

World Opinion:

A post at Renewable Energy Access said that “It is important to note that biofuels growth has not been primarily driven by environmental concerns. Instead, worries over energy security and demands for rural development have provided the greatest impetus. With oil at record prices and supply uncertainties increasing, these drivers are only becoming stronger. Placed in this economic and political context, it becomes clear that the choice is not between biofuels or not, but between sustainable and unsustainable biofuels.”

A commentator writes at Canada.com, “History may record that the legacy of outgoing U.S. President George W. Bush was the mess in Afghanistan and Iraq, but he will have done far more damage with his 2005 mandate to blend 35 billion U.S. gallons of ethanol into gasoline by 2017.”

European Commission president José Barroso said that biofuel is “not significant” as a contributor to rising food prices, blaming oil price increases.

BF Oils chief Robert Starling said “Some companies are using the biofuels debate to mask what’s happening internally. In the UK, we have made the mistake of building a manufacturing plant and then finding the feedstock. You are almost best securing the supply of feedstock first.”

Producer News:

In South Dakota, POET signed an agreement with the City of Sioux Falls to access methane from the Sioux Falls Regional Sanitary Landfill; the methane will partially power POET’s Chancellor ethanol plant. Under the agreement, the methane will initially displace 10 percent of the ethanol plant’s natural gas usage, increasing to 30 percent in 2025 as additional methane is generated. According to Sioux Falls Public Works Director Mark Cotter, the project will cost $4.3 million and generate $1.8 million annually for the city.

In Utah, Syntec Biofuel has joined the Brigham Young University Fischer-Tropsch Consortium. Working with the BYU Catalysis Laboratory, Syntec will develop proprietary Fischer-Tropsch catalysts and process for producing diesel and jet fuels. The Syntec process will gasify waste biomass, and prtoduce a sulfur-free, carbon neutral synthetic diesel.

International News:

In Nigeria, Oando will donate ethanol testing equipment to the federal government. It was revealed that the absence of equipment for testing ethanol content was partially responsible for a fuel crisis in the country, when rogue shipments of E22 ethanol caused massive car breakdowns and a withdrawal of supply across the country amidst confusion over blend ratios.

In Germany, the head of the Industrial Ethanol Association repeated its call for the European Commission to close customs loopholes which give heavily-subsidized ethanol producers in countries like Brazil, Pakistan and Ukraine carte blanche to import their product into the EU without paying customs duties. Ian Kersey, IEA Chairman said “The Commission must intervene to close these loopholes and achieve a level playing field for the European ethanol industry”.

In Canada, Mantra Venture Group signed a Letter of Intent with Northwind Ethanol regarding an investment in Northwind’s cellulosic ethanol process. The companies will evaluate the feasibility of an ethanol plant in British Columbia, using waste wood feed stock from pine beetle infestations.

In the Philippines, SECURA International said that demand is growing for Moringa oil, extracted from the malunggay plant, as a biodiesel feedstock. The company said it is now cultivating malunggay on 500,000 hectares for US clients such as North American Biodiesel.

Research News:

Several new studies are on the market, providing biofuels forecasts and company data. Emerging Markets has released a new edition of its definitive Biodiesel 2020 study. Petroleum researchers Wood Mackenzie has released Global Biofuels 2020 with bottom-up forecasts of biofuels supply and demand. Biofuels Media has released the Biofuels Industry Directory 2008, listing more than 600 companies providing services from fields to wheels.

Policy and Policymakers:

On a campaign stop, Barack Obama told KPC News, “Oil companies have not invested in the refinery capacity expansion that we need, given all the profit that they are sitting on…It is important to recognize that we aren’t going to be able to simply increase supply. We have to decrease demand. That’s why I place such a heavy emphasis on increasing fuel efficiency standards in cars. If you increased fuel efficiency in cars to 40 mpg we would save the equivalent of all the oil we import from the Persian Gulf….Long term we have to invest in research on biodiesel, biomass and new forms of ethanol as well as pursuing the possibility of cars that are plug-in hybrids that could get 100 to 150 miles per gallon.

Consumer and Fleet News:

KQED aired a feature, “Biofuels: Beyond Ethanol,” focused on second-generation biofuels and featuring Jay Keasling of the Joint BioEnergy Institute in California.

In British Columbia, Vancouver’s Aquabus has converted 7 of its 11 multi-colored ferryboats to biodiesel. The ferries will use a B20 blend in winter and B50 in summer, from waste vegetable oil collected locally.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 0.93 percent to close at 119.20 as ethanol and agribusiness both soured. For the day, The Andersons (ANDE) fell 2.16 percent to $42.65, while VeraSun Energy fell 3.28 percent to $7.38 as ethanol stocks dove. Among small caps, Green Plains Renewable Energy (GPRE) rose 7.30 percent to $10.00 as the company swung to profitability in its latest quarterly results. Overall, declines led advances 5 to 2 for the day.