Today in Biofuels: Thai PM strikes at UN for bashing biofuels nations, not oil nations, over rising food prices; Texas researchers

Top Story:

In Thailand, Prime Minister Samak Sundaravej said the World Bank and the United Nations are criticizing biofuels exporting nations for driving up food prices, but not saying a word about the role of oil exporting nations in driving up both food and energy costs. “Let me ask the World Bank whether they used to ask oil exporting countries before pointing their fingers and blaming us that we have to use rice fields to grow biofuel crops. They have unreasonably continued to inflate oil prices even though the oil supply is not running out yet.” Oil prices, which are up more than 150 percent since 2005, are estimated to have three times more impact on food prices than increases in grain prices.

Producer News:

In California, Amyris announced agreements with two Brazilian companies, fuel distributor Crystalsev and ethanol producer Santelisa Vale, to produce sugar cane based diesel fuel using an Amyris technology that converts biomass into hydrocarbons rather than alcohols. The company said that conversion into biodiesel, jet fuels and synthetic gasoline would offer more flexibility than ethanol, which has a 30 percent lower energy density than gasoline and can only be used in specially-modified engines.

In New York, the St. Lawrence County Farm Bureau has opposed a project by Bion Environmental Technologies that would use cattle manure from 84,000 cows to produce ethanol. The Farm Bureau said that there are “too many unanswered questions” regarding the $180 million project proposed for upstate New York. Bion is seeking local and state grants and incentives to assist in the financing of the venture.

In Illinois, the sale of Central Illinois Energy to Credit Suisse is now expected to close April 30 after a federal bankruptcy judge approved the deal. Credit Suisse and the Central Illinois Energy Cooperative had invested more than $90 million in the 37 Mgy plant since 2001, which requires up to $30 million more to complete construction. Central Illinois Energy Cooperative shareholders will lose all their money in the deal, which was opposed by Lurgi, the main contractor. Credit Suisse will pay $80 million in total for the project in the sale.

International News:

In Taiwan, the newly elected government of Ma Ying-jeou is expected to halt biofuels development, and shift policy from the production of fuel from crops to increasing food productivity. The incoming chairman of the Council of Agriculture, Chen Wu-hsiung, told the China Post that biofuels are not feasible for Taiwan because of the limited land for agriculture.

In England, the CEO of maritime organization Lloyd’s Register said that mixed messages from the British government are leading to a shortage of fleet to carry biofuels. Richard Sadler said that comments by the prime minister and energy minister that biofuels mandates may or may not be scrapped are creating too much uncertainty for ship construction financing. An additional 400 ships are needed to transport the biofuels that would be required under European mandates of 10 percent biofuel content by 2020.

In Germany, Lurgi will construct an $8 million pilot plant in Wolfsburg that will convert methanol to synthetic biofuel. The project is supported by the Federal Ministry of Food, Agriculture and Consumer Protection, as an experiment into alternatives to the Fischer Tropsch synethsis.

World Opinion:

The ranking Republican on the House Agriculture Committee, Representative Robert W. Goodlatte of Viriginia, said that Democrats were to blame for rising food prices because of including ethanol mandates in the Energy Independence and Security Act. “When corn prices go as high as they were going, people shift their production out of wheat into corn, out of soybeans into corn, out of rice into corn, even out of cotton into corn,” Mr. Goodlatte said. “The mandate basically says ethanol comes ahead of food on your table, comes ahead of feed for livestock, comes ahead of grains available for export.” The mandate was originally proposed by President Bush in the 2007 State of the Union Address, and was signed into law in December. The mandates in the new legislation take effect commencing in 2009.

Business and Media reported that the ABC, NBC and CBS news networks ran 69 stories about corn ethanol since January 2007 and said that half of the stories mentioned a connection between ethanol and rising food prices. “On the ABC “World News with Charles Gibson” April 10, David Muir reported that “the soaring cost of food is fueling anger and depression” in Haiti. Rice is up 147 percent in the last year, Muir reported. Grain is up 47 percent; dairy is up 80 percent. “Those biofuels are, in fact, a large part of the equation,” Muir said, making him one of only three network reporters to connect ethanol to the crisis. “Many farmers around the world who once grew wheat and rice, now grow corn and sugar cane instead, to produce ethanol.”

Research News:

A research team from the University of Texas has developed a new blue-green algae (cyanobacteria) that secretes a soft cellulose, glucose and sucrose. The team told Science Daily that the microbe “could provide a significant portion of the nation’s transportation fuel if production can be scaled up.” The cyanobacteria is grown from sunlight and salty water at facilities on non-agricultural land. The team said that the cellulose is a soft, gel-like type that is easy to break down, and that the microbes secrete the sugars and cellulose, making it possibly to continually harvest biofuels feedstock without destroying organisms and using powerful enzymes to extract sugars.

Policy and Policymakers:

In Massachusetts, a report on biofuel policy initiatives by the Massachusetts Energy and Environmental Affairs office, including an exemption from the state’s gas tax for cellulosic ethanol and a blending requirement for biodiesel, has received endorsements from congressional Rep. William Delahunt and the New Fuels Alliance.  “Advanced biofuels companies located right here in the Commonwealth and their investors are looking for state leadership. This report will be welcome news to those who are actively working to reduce our use of petroleum,” said Andrew Schuyler, director of the Northeast Biofuels Collaborative. Schuyler added that much of the recent coverage of biofuels has been misleading. “While biofuels have been blamed for driving food prices higher, the truth is nothing poses a bigger threat to grocery aisle prices than the skyrocketing price of oil.”

Consumer and Fleet News:

The B100-powered, 78-foot trimaran Earthrace will commence its attempt on the world record for powerboat circumnavigation of the globe on Sunday. Earthrace’s crew are aiming to circumnavigate the globe in 65 days, beating the current record of 74 days. The $3 million trimaran failed on an earlier attempt on the record, and has spent the past year on a fundraising and publicity tour.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, rose 0.21 percent to close at 130.69, on slight strengthening of ethanol stocks.  For the day, The Andersons (ANDE) gained 1.76 percent to $43.97, while VeraSun Energy (VSE) led a rally in ethanol stocks, gaining 6.25 percent to $6.64.  Among small caps, Intrepid Technology & Resources (ITRP.OB) lost 6.98 percent to close at $0.40.   Overall, declines led advances 5 to 4 for the day.

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