Biofuels Digest

Top Story:

It’s not food, it’s not fuel, it’s China, concludes an expanded report on China’s impact on the global grain market, prices and food shortages.  China’s growing demand for corn could empty global grain stocks by September 2010, according to a new study from Biofuels Digest, now available for free download. The Study, “Meat vs Fuel: Grain use in the U.S. and China, 1995-2008” concluded that, even if the U.S. ethanol industry were shut down tomorrow, rising Chinese demand for meat, and the ensuing livestock feed demand, would empty global grain stocks as soon as 2013. The report offers gloomy news for policymakers who have hoped to address global food vs. fuel concerns by restraining U.S. ethanol demand.

Producer News:

In New York, Albany Renewable Energy is investigating molasses as a substitute for corn for its proposed 100 Mgy ethanol plant for the Port of Albany. Rising corn prices have led to the search for new feedstocks. Westway Trading is in talks with ARE to supply the new feedstock; however, the plant has not yet commenced its financing drive pending negotiation of the Port District lease.

In North Carolina, Iredell County Superior Court Judge John L. Holshouser denied an inunction to opponents of a local biodiesel plant, clearing the final hurdles before facility construction. Iredell Neighbors for Rural Life and 23 other plaintiffs had opposed the plant on noise and emissions grounds.

In Texas, the National Algae Association will hold a July 17th forum for networking, research and to present business plans. Algae oil production companies, algae researchers and algaeprenuers will present leading-edge technologies for commercialization of the “new oil” on July 17th in The Woodlands, Texas.  The NAA brings companies and researchers together to share ideas and exchange information to overcome technological hurdles and commercialize this fast growing renewable oil industry.

International News:

In Brazil, the ethanol industry is up in arms after the federal government lowered a gasoline tax, making gasoline more affordable and reducing the spread between ethanol and gasoline prices that drives demand for ethanol. Ethanol makers typically market their fuel at 30 percent less than gasoline, and say that the government’s refusal to increase gasoline prices, combined with increased tax breaks, is stressing their business models to the breaking point. Petrobras has not raised gasoline prices since 2005, despite an 85 percent increase in global crude oil prices.

In Australia, the federal government refused to rule out scrapping a $40 million program providing research grants for ethanol, pending review of the impact of ethanol on world food prices.

In Brazil, ethanol production is expected to grow 19 percent this year to 7.238 billion gallons, with a potential increase in exports of 23 percent to 1.1 billion gallons, according to the Brazilian agriculture ministry.

World Opinion:

UN under-secretary general for humanitarian affairs John Holmes told AFP:  “I think we should avoid a knee-jerk response. Biofuels were developed in response to a very serious problem, which is the effects of climate change, the need to mitigate the effects of climate change and reduce emissions. They weren’t invented just for fun. Clearly this is something that needs a new look in present circumstances… a careful, sophisticated and differentiated” approach.

InForum writes in an editorial: “More than a bushel of nonsense is being peddled by special interests bent on destroying the ethanol industry. The latest scam is blaming the apparent worldwide shortage of food and the rising price of food to the diversion of U.S. corn into ethanol production. It’s an appealing proposition, especially for multinational oil companies and the livestock lobby, but the facts of corn production, global demand for food and energy prices don’t support the argument. Indeed, if every bushel of corn now going into U.S. ethanol plants were back in the production of corn flakes, cattle feeds, corn oil and other foodstuffs, it would have virtually no effect on the price of food here at home or the availability of food on global markets.

Research News:

The National Biodiesel Board awarded a $1.2 million research grant to the Donald Danforth Plant Science Center to fund a three-year project to enhance the oil yield from soybeans. The grant was administered by NBB on behalf of the Department of Energy.

Policy and Policymakers:

In South Dakota, a storm has broken out between the Governor and the state Legislature, over new tax reporting provisions ordered by Governor Mike Rounds that his critics in the state Senate are saying amounts to a new tax. “I heard some of the spin out there that said I’m creating a new law. I’m not creating a new law,” Rounds told reporters.The new provisions are aimed to simplify tax reporting from multiple blends of ethanol and gasoline, South Dakota allows its residents to customize their preferred ethanol and gasoline blend, and with E85 taxed at 10 cents per gallon and regular unleaded taxed at 22 cents per gallon, retailers have reported difficulties in reporting taxes.

Consumer and Fleet News:

The biodiesel-powered trimaran Earthrace, attempting to break the global circumnavigation record for powerboats, is east of the Azores today en route for Puerto Rico, after leaving Spain on Sunday.  Earthrace Captain Pete Bethune wrote “For those of you watching our speed closely, you may have noticed it dropped off over the last 24 hours.  The reason was a blockage in the lift pump.” The Earthrace is now undertaking the longest single leg of its global voyage.  GPS tracking of the trimaran is available at the earthrace.net website.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 3.11 percent to close at 122.33, as a second day of major declines in agribusiness offset some recovery by ethanol stocks.  For the day, Archer Daniels Midland (ADM) fell 3.33 percent to close at $44.06, while Aventine Renewable Energy (AVR) gained 7.33 percent to $4.39 to lead ethanol stocks. Among small caps, Bluefire Ethanol (BFRE.OB) gained 7.33 percent to finish at $4.20.   Overall, advances and declines were even for the day.