Today in Biofuels: Republican Party splits over ethanol; India OKs ethanol from sugar cane; “reducing energy dependence” now most popular US foreign policy goal
Top Story:
In Washington, the Republican Party began to break ranks with President Bush over ethanol, when Texas Senator Kay Bailey Hutchinson said she will introduce legislation to freeze the biofuel mandate passed in the Energy Independence and Security Act last December. Senator James Inhofe of Oklahoma called on the EPA to impose ” “an immediate waiver from [biofuels] mandates” while a review of the impact of ethanol production on the global food crisis is undertaken. “People are starving to death because of this transfer from food to fuel,” Inhofe said. “As the ranking member of the EPW committee, which has jurisdiction, I’m going to ask for an immediate waiver to stop this mandate.”
Producer News:
In Idaho, Pacific Ethanol commenced production at its 60 Mgy corn ethanol plant in Burley. The plant will use 21 million bushels of corn, and will provide the equivalent of up to 7 million bushels of grain to livestock markets in the form of distillers grains.
In Minnesota, the state Department of Commerce’s Office of Energy Security awarded $150,000 to Chippewa Valley Ethanol for an evaluation of the plant’s process for producing energy from corn cobs. The plant utilizes the cobs to provide heat fro the plant, in lieu of natural gas.
In Texas, Direct Fuels has opened a 10 Mgy biodiesel plant in Euless, alongside its oil refinery operations. The plant opening follows on from the opening of the company’s ethanol distribution complex in January. The company projects that up to 40 percent of its 2008 revenue will come from renewable fuels. The company, which will produce blends of B5 to B100 for its customers, said it would pursue BQ-9000 ratings for its fuel.
In Colorado, Dr. Patrick Gruber, CEO of Gevo, received the inaugural George Washington Carver award from BIO, the world’s largest biotech organization. The award recognizes significant contribution by an individual in the field of industrial biotechnology and its application in biological engineering, environmental science, biorefining and biobased products. Gevo is the developing biobutanol for use as a fuel and green chemical intermediate. “Dr. Gruber has dedicated his career to creating sustainable alternatives to petroleum-based chemicals and materials,†said Doug Cameron, Khosla Ventures. “Pat has a passion and drive for creating new bio-based alternatives that compete with petroleum-based materials on cost, performance and environmental benefits.â€
International News:
In India, the state government of Uttar Pradesh has given the go-ahead to sugar mills to produce ethanol directly from sugarcane. Previously, ethanol could only be produced from molasses, an intermediate step that made commercial scale ethanol production economically unfeasible. The move will also allow sugar cane farmers to lessen the impact of the global slump in sugar prices. The move comes as India is expected to move from a 5 percent to 10 percent biofuel blend in October.
In Indonesia, the state oil firm, Pertamina, has reduced its biodiesel blend ratio from B2.5 to B1, owing to increase in the the price of crude palm oil. The biodiesel blend was previously reduced from B5 to B2.5 last year. Crude palm prices have increased by 45 percent in the past year.
In Argentina, Integrated Biodiesel Industries announced it would build a third plant in Argentina, by retrofitting the Imperial Chemical plant in San Lorenzo, 180 miles north of Buenos Aires. The plant is expected to open this November with a planned initial capacity of 14 Mgy, and expanding to 38 Mgy by the end of 2009.
World Opinion:
From Public Agenda and Foreign Affairs: The Spring 2008 edition of the “Confidence in U.S. Foreign Policy Index” from Public Agenda and Foreign Affairs shows that 60 percent of Americans say reducing energy dependence would strengthen our nation’s security “a great deal,” the highest percentage since the Index’s inception and now the most highly rated of 12 basic strategies to improve national security explored in the survey. Reducing energy dependence is the highest national security priority for the American public.”
Transcript from the Colbert Report, the hit show on the Comedy Central Network: “I’m becoming increasingly concerned about climate change. And not just because we won’t have enough ice floes for our elderly. You see, I’m concerned because people won’t shut up about it. I don’t understand. We solved the energy crisis. The answer was ethanol. Corn plus magic equals gasoline. Leave it to the british to rain on our petro parade. A recent article by the Royal Society of Chemistry blasted ethanol claiming the fuel for one transatlantic flight would require a year’s worth of corn from 30 soccer field. The Royal Society calls this a very inefficient process. It is very efficient. You get to fly across the Atlantic and destroy soccer at the same time.”
Research News:
In Washington, the global agricultural research consortium CGIAR said that an immediate biofuels moratorium would lead to a decline in corn prices of 20 percent and a 10 percent decline in wheat prices by 2009-2010. President George W. Bush said, “In terms of the international situation, we are deeply concerned about food prices here at home, and we’re deeply concerned about people who don’t have food abroad. The truth of the matter is, it’s in our national interest that we — our farmers — grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us.”
Policy and Policymakers:
In Washington, a vote by the US House and Senate conference committee on the Farm Bill is expected this week, with an expectation that the bill will contain a reduced 45 cents per gallon ethanol subsidy and a $1.01 per gallon subsidy for cellulosic ethanol. Tax credits for biodiesel were removed from the bill, and the tariff on Brazilian ethanol is extended through 2010.
Consumer and Fleet News:
In Brazil, Fiat Powertrain Technologies said it will launch a new ethanol-powered engine for trucks and agriculture machinery engine in 2010. The engine will reduce costs for ethanol producers by allowing them to run on their own ethanol fuel at cost, instead of purchasing retail diesel. The engine will be an adaptation of existing technology, and will use a nominal amount of diesel fuel for initial ignition, and subsequently run the engine on ethanol fuel. Fiat said that the two fuels would not be mixed except in the combustion chamber, because of safety concerns.
Financial News:
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, plunged 3.86 percent to close at 126.26, on slumping agribusiness and falling ethanol stocks. For the day, Archer Daniels Midland (ADM) fell 3.88 percent to $45.58 after the release of quarterly earnings, while Aventine Renewable Energy (AVR) fell 7.47 percent to $4.09 to lead an ethanol downhill sprint. Among small caps, Xethanol (XNL) gained 2.63 percent to close at $0.39. Overall, declines led advances 4 to 1 for the day.
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