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Indy Racing League tech director said cars can get better mileage on E100 than gasoline; engine optimization is the issue

In Indiana, Indy Racing League Senior Technical Director Les McTaggert told Hoosier Ag Today that with modifications to compression, and the elimination of unneeded horsepower, cars would achieve the same or better mileage on E100, saying that loss in mileage experienced by customers of E85 stems from the fact that  “the engine is principally designed to run on hydro carbon fuels. You change certain dynamics of the engine to optimize it to run on an alcohol fuel and get better gas mileage.”

Biofuels Digest Index drops 2.58 percent to 117.18 on poor reaction to $2 billion equity issue by ADM

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, slumped 2.58 percent Tuesday to close at 117.18 on  a drubbing of ADM shares following a financing announcement by the agri-giant.

For the day, Archer Daniels Midland (ADM) fell 2.83 percent to close at $41.95, while Pacific Ethanol (PEIX) took a 1.44 percent dip to fall to $4.12. Among small caps, Texcom (TEXC.PK) leaped 114.29 percent to close at $0.15. Overall, declines led advances 3 to 2 for the day.

Archer Daniels Midland Company announced yesterday that it plans to offer and sell, subject to market and other conditions, 35,000,000 equity units and to grant the underwriters an option to purchase 5,000,000 additional equity units to cover over-allotments. Each equity unit has a stated amount of $50, for a possible aggregate offering amount of $2 billion if the underwriters exercise their over-allotment option in full.

North Carolina goverment official pleads guilty to accepting $200,000 bribe from Agri-Ethanol; faces up to 30 years in prison

In North Carolina, former state Environmental and Natural Resources Department lobbyist Boyce Hudson pleaded guilty to accepting $200,000 in bribes from Agri-Ethanol Products to fast-track a permit for the company, which used the deal to fast-track its capital-raising activities. Hudson faces up to 30 years in prison and a $500,000 fine. The company was ultimately unsuccessful in its bid to raise more than $200 million in financing.

Liberty Renewable says proposed 121 Mgy plant in Michigan still a go, despite financing woes

In Michigan, Liberty Renewable Fuels denied rumors that the 121 Mgy corn ethanol plant project would be canceled, and said that it had stopped construction to raise more capital for the $233 million facility and had encountered delays due to financing conditions. The company has raised $30 million in equity from farmers and other private investors.

Hawaii extends public land leasing rights to biomass producers in new legislation

In Hawaii, Governor Linda Lingle signed legislation that expands the definition of “renewable energy producer” to include feedstock growers.  Previously, leasing rights to public land were reserved to biofuel producers, although producers typically needed commercial and industrial sites and feedstock growers use public lands to grow biomass. The legislation will facilitate more effective use of land, where previously producers were incentivized to site their plants on agri-friendly public lands in order to secure the leases for cultivation of feedstock.

Thailand chops E85 excise taxes in bid to reduce oil imports by $3.3 billion

In Thailand, the government announced that a biofuels incentive package that reduces the excise tax on E85. The government said that the incentives, combined with the launch of E85 at 50 stations controlled by state oil firms, would result in a savings of $3.3 billion in oil imports.

US B-1 bomber breaks sound barrier using synfuels as military steps up on biofuels

A US Air Force B-1 bomber mission, code named Dark 33, became the first jet to reach supersonic speeds using synthetic jet fuel. The test flight was carried out at the White Sands Missile Range in New Mexico. The project is one of several sponsored by the US military, which is the world’s largest consumer of fuel at a rate of more than 340,000 barrels per day and $13.6 billion per year. A Honeywell UOP biocrude project is underway with the Defense Advanced Research Projects Administration (DARPA). Unconfirmed rumors have continued to circulate that a third project, with a “black budget”, is investigating the potential of biofuels to provide a less-detectable heat signature and make US aircraft more “stealthy”.

An ethanol-kerosene blend is a candidate for reducing combustion temperature and boosting power efficiency compared to kerosene or Jet-A fuel. The higher octane rating of ethanol would allow for more power to be generated, and could result in smaller engines for comparable payloads.
The Defense Advanced Research Projects Agency said that the BioFuels project has successfully passed through the first stage of laboratory testing. Project managers say that they expect to produce JP-8 jet fuel with a production cost of less than $3 per gallon, primarily from soy and camelina. The project will ultimately use a multi-feedstock approach with a non-food focus. Project management said that cellulosic feedstocks such as algae and waste biomass were two to three years away, and that the primary challenge to using algae was the feedstock cost. The United States Air Force has set a goal of producing 50 percent of its fuels by alternative means by 2016.

In March, Rep. Henry Waxman (D-CA)., and Rep. Tom Davis (R-VA) called on the Department of Defense to comply with section 526 of the Energy Independence and Security Act by discontinuing purchase of fuel made from Canadian tar sands or US coal-to-liquid technology. The two sources of fuel are prohibited under the Act because of environmental impacts.

UOP, a division of Honeywell, announced last June that it expected to develop military aviation jet fuel, using a synthetic biocrude made from algae. The UOP project is backed by $6.7 million in funding from the Defense Advanced Research Projects Agency (DARPA).

The program is currently outlined in a recently issued broad agency announcement and is known as The BioFuels program. The goal of the BioFuels program is to develop an affordable alternative production process that will achieve a 60 percent or greater conversion efficiency, by energy content, of crop oil to military aviation fuel (JP-8) and elucidate a path to 90 percent conversions.

DARPA seeks processes that use limited sources of external energy, that are adaptable to a range or blend of feedstock crop oils, and that produce process by-products that have ancillary manufacturing or industrial value.

Current biodiesel fuels are 25 percent lower in energy density than JP-8 and exhibit unacceptable cold- flow features at the lower extreme of the required JP-8 operating temperature range (minus 50 degrees F).

Today in Biofuels Opinion: “A biofuels executive threatened that I might become “roadkill” if I did not change the subject”

Kenneth E. Feltman, Xenia Gazette: “The corn-ethanol lobby is well organized, aggressive and nasty. Last year, I wrote three articles saying that corn-ethanol production takes farmland out of food production, uses huge amounts of increasingly scarce water, and leaves poor people in countries such as Mexico hungry because their cost of food increases beyond their means as corn and other grains are diverted to fuel. After the second article, a biofuels executive threatened that I might become “roadkill” if I did not change the subject. Another corn-ethanol advocate accused me of siding with “an enemy of America” when I wrote that Venezuela’s Hugo Chavez accused the U.S. of starving the poor to “feed automobiles.”

Iowa State University economist Bruce Babcock: “Corn is getting a bad rap.  People just think, ‘Well, if the price of corn has gone up $3 or $4 a bushel, that must mean it’s responsible for everything that’s happening with food prices. A colleague of mine, professor Hayes and his graduate student, did a study on [ethanol's role in reducing gas prices] and they came up with about 30 cents a gallon.”

Nations protest US Farm Bill at WTO talks

At a World Trade Organization meeting aimed at reviewing new proposals for the Doha Round of trade talks, New Zealand’s WTO ambassador Crawford Falconer reported that a number of countries had expressed unhappiness over the new US Farm Bill, just passed last week over President George Bush’s veto.

Under WTO rules, the US would have to amend the Farm Bill to bring it into compliance with the Doha Round trade agreement, if WTO negotiators can produce a breakthrough for the stalled trade talks. Agricultural protection by rich nations is the stumbling block to progress on a new world trade agreement.

The Farm Bill was enacted into law when the US Senat and the US House of Representatives voted to override President Bush’s veto. The $289 billion bill includes more than $200 billion for food stamps and nutrition programs over the next five years, an increase of $10 billion to recognize the higher cost of food. The Senate is expected to vote today, and is also expected to override. If the Senate votes to override the veto, the bill will become law on Senate passage.

The bill contains a historic two-tiered ethanol incentive, with corn ethanol subsidies dropping to $0.45 per gallon and a new $1.01 subsidy introduced for cellulosic fuels. A last minute amendment had changed the language of the higher subsidy from “cellulosic ethanol” to “cellulosic fuels”, which otherwise would have exempted companies such as LS9 and Gevo.

The Farm Bill had not been vetoed since 1956, and originally observers did not think that an election-year veto was possible, since the top ten states in farm subsidies control half the electoral votes
for the presidential campaign. The White House budget director said that the bill “doesn’t have hardly enough reform.”

A controversial feature has been the cap on farmer income in order to receive subsidy payments. The new bill forbids subsidies to farmers with more than $750,000 in income, or $1.5 million for a married couple.

EWG has published a list of the leading subsidy recipients, who received as much as $900,000 in subsidy payments in 2006.

In Iowa, Senator John McCain said that, as drafted. he would veto the Farm Bill because of excessive subsidies, which he called unnecessary. McCain added, “I do not believe we should have tariffs against imported products, but I want to promise you as president of the United States of America I will recognize one fundamental fact, and that is the farmer in the state of Iowa and the United States of America is the most productive, the most efficient and the best, and I will open every market in the world to your products
and I will sell them.”

The Farm Bill bill contains 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.

The bill contains $900 million for biofuels development, $900 million for nutrition programs aimed to offset higher food prices, while land stewardship programs would received an additional $4 billion, and specialized crops $1.35 billion.

Negotiations over the stalled Farm Bill had put existing ethanol incentives in peril last month, according to House Agriculture Committee chairman Collin Peterson. The chairman said that, in order to offset $9.5 billion in increased spending, Senate negotiators had proposed a $0.05 per gallon cut in the ethanol blender tax credit and reductions in other incentives for a total of $1.226 billion in ethanol support cuts.

World Wildlife Fund exonerates ethanol on Amazonian deforestation and food production

The World Wildlife Fund has concluded, in a new study profiled on the BBC, that “ethanol production is not having a significant impact on food production, and that it is not contributing to deforestation in the Amazon.” The report concludes that sugar cane ethanol has a positive impact on the environment. The report called for strict monitoring to protect remaining rainforest areas.”

In Brazil, the federal government announced a crackdown on illegal deforestation in the Amazonian rainforest. Biofuels producers have been accused of causing deforestation, however the authorities are targeting soy farmers, cattle ranchers and illegal timber operators in 36 pockets where increased deforestation has occurred. An emergency meeting of the Brazilian cabinet had been been called by President Luiz Inácio Lula da Silva after a 50 percent jump in deforestation rates, following a steady three-year decline.

A German academic has analyzed the factors that are causing deforestation of the Amazon, and concluded that sugarcane ethanol production in south-central Brazil is not pushing cattle and soy farming into the Amazon region. Peter Zuurbier, Associate Professor and Director of the Wageningen UR Latin America Office, said that the problem is unclear land titles, unscrupulous timber companies, and poor soil conservation practices by cattle ranchers. He said that after illegal clear cutting by timber companies, the land is occupied by nomadic cattle herds that, over a period of 3 to 4 years, ruin the thin soil of the Amazon areas, which causes fertilizer-based soy farming to be brought into the area to improve productivity.

Researchers say that Amazonian deforestation has increased in pace in 2007 and is likely to rise throughout 2008. Carlos Nobre, a scientist with Brazil’s National Institute for Space Research, said that 2,300 square miles of forest had been converted to farmland in the past four months, compared with 3,700 square miles in the 12 months ending last July.

A Leeds University professor and expert on deforestation issues said that recent data indicates that, on a global basis, some types of tropical forest have increased since 1990, rather than decreasing. He said that losses in areas such as the Amazon have been more than offset in tropical forest gains in countries such as the Gambia and Vietnam.

In Bali late last year, the World Wildlife Fund released a report concluding that half of the Amazon rainforest would disappear by 2030 and would release 100 billion tonnes of carbon dioxide into the atmosphere as a result, or twice the annual emissions of all countries combined. At the Clinton Global Initiative earlier this year, primate scientist Jane Goodall said that crops growing for biofuels is damaging rain forests in Asia, Africa and South America and adding to the emissions blamed for global warming.

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