National Conservation, Environment and Energy Independence Act introduced in US House: oil drilling, coal-to-liquid, Renewable Energy Reserve Fund planned
July 31, 2008
23 members of the US House of Representatives have introduced the National Conservation, Environment and Energy Independence Act that would lift many restrictions on offshore oil drilling, while providing a projected $2.6 trillion in lease and royalty payments that would generate $390 million for a Renewable Energy Reserve Act. The bi-partisan bill introduced by 11 Democrats and 11 Republicans, working outside of party leadership, would ban drilling in the Arctic National Reserve but open up other offshore areas more than 25 miles offshore. A bipartisan group of 10 Senators is working on a similar plan. “There’s going to be substantially more drilling and substantially more conservation,” Sen. Mary L. Landrieu (D-La.) said of the Senate plan.
Today in Biofuels Opinion: “We don’t want it to be a pro-ethanol hearing but a pro-fact hearing”
July 31, 2008
Senator Ben Nelson of Nebraska, remarking on food vs fuel hearings scheduled for next month by the Senate Agricultural Committee: “We don’t want it to be a pro-ethanol hearing but a pro-fact hearing. American farmers are producing enough for our food and feed needs, and they’re producing enough to also help with our country’s massive fuel problems.”
Baltimore Sun editorial: “The Environmental Protection Agency is weighing a request that the ethanol requirement be dropped by half to 4.5 billion gallons to help rein in soaring feed and food costs. The local poultry industry is backing that proposal, and we believe the EPA should comply to allow time for a sober assessment of the long-term impact of ethanol production on food and fuel costs.
Miscanthus ethanol yields are 2-1/2 times corn in 3-year trial; switchgrass disappoints
July 31, 2008
A study that will be published in Global Change Biology reveals that miscanthus will produce up to two and a half times the per-acre ethanol yields as corn. In the same 3-year field trial, in Illinois, switchgrass produced only half the yield of ethanol as corn. Yields of 30-61 tonnes per hectare were achieved “with minimal agricultural inputs”, while switchgrass yielded 10 tonnes per hectare, according to the study. The researchers reported that 20 percent of US fuel needs could be satisfied with miscanthus grown on 9.3 percent of US cropland at the low end of the yields realized from the trial, with fewer nitrogen and fossil energy inputs.
A slideshow of the findings is here.
Miscanthus background
Researchers at University of Illinois at Urbana-Champaign surveyed local farmers and report that the major challenge in developing cellulosic ethanol will be to persuade farmers to grow the crop. Farmers indicated in the survey that they would only grow cellulosic crops if they could be persuaded that the cellulosic crops such as switchgrass and miscanthus can compete with soybeans and corn in terms of profitability.
German biodiesel taxes to rise 40 percent in January: producers cry “extinction!”
July 31, 2008
In Germany, the biodiesel industry is facing a new extinction threat if federal government carries forward with its plant to increase biodiesel taxes by 40 percent in January. The tax hike, from 15 cents to 21 cents per liter, is part of a based increase of green fuel taxes until they are the same as conventional fuel taxes. A previous tax hike last January removed the price advantage of biodiesel over conventional diesel and resulted in a massive decline in biodiesel output.
Germany background
The Federal Environment Ministry said that it plans to reduce the biofuels target from 17 percent to 12 percent by 2020, because of “changes in circumstance”. The current German target is 6.25 percent in 2009, and the government said that the failure of E10 in the market meant that the 2009 quote would have to be lowered to 5 percent and the gasoline portion from 3.6 percent to 3 percent.
A survey by the Center for Advanced Technology found that 27 percent of German oilseed mills had shut down production entirely and that 36 percent are running on less than 50 percent of capacity.
A 95 Mgy Südzucker ethanol plant, the largest in Europe, commenced production in Zeitz last month. The plant uses sugar beet syrup as a feedstock, and will also produce its own biogas that will power special burners that eliminate all aromatic compounds associated with the production process.
Lufthansa said last month that it would convert up to 10 percent of its fuel usage to biofuels by 2020, as a part of its overall effort to reduce emissions by 25 percent in that time frame
Sweet sorghum boom in Florida; pending trials will determine ethanol expansion potential
July 31, 2008
In Florida, Global Renewable Energy has planted a 10-acre test patch of sweet sorghum and said that it plans to expand to 10,000 acres and buld an ethanol plant if scientific tests reveal sufficient sugar yields per acre. The project is one of at least four proposed sweet sorghum projects in Florida.
The state government has awarded $7 million in grants to U.S. EnviroFuels for a $20 Mgy plant in Venus, and $1.5 million to Renergie which said it planned to build 50 Mgy in capacity at 10 ethanol plants.
DeGrande BioFuels has proposed a $30 million project in Flagler County to produce ethanol from sweet sorghum. The company said that 10,000 acres of the crop would be needed to support the proposed facility, and that the sandy soil of Florida was ideal for cultivating multiple crops per year. The company’s CO said that the fact that sweet sorghum was not a traded commodity would shield it from speculators driving up the price of feedstocks and making the plant economically unviable.
Florida background
Diversified Ethanol announced that it would complete its first waste-to-ethanol plant in Dade City, rather than Pomona, California as previously announced under its feedstock agreement with Master Recycling. The company said that faster-tracking in permitting, plus more favorable construction costs led to the decision to complete the Florida plant first.
Diversified Ethanol designs and builds small scale, modular ethanol plants using brewery, beverage or food processing waste. The company’s Butterfield system includes a proprietary water recycling system reducing water use by up to 85%.
Entrepreneur Howard Melamed has offered to lease 192,000 acres of land from the State of Florida for $120 million per year and produce up to 120 million gallons of sugarcane ethanol. Melamed said that following a 30-year lease, the land would be contributed to the Everglades restoration project. Florida recently agreed to purchase the land from US Sugar for $1.7 billion.
Gov. Charlie Crist announced that E85 would become available at three stations along the Florida’s Turnpike system. The first E85 pumps, at Turkey Lake Service Plaza, will open this week, while service plaza at Port St. Lucie/Ft. Pierce and Pompano will add E85 in August. Prior to the launch of E85 along the Turnpike, the 500,000 flex-fuel cars in Florida could only obtain E85 fuel in Miami or Tallahassee. The $1.5 million Turnpike cooperative initiative with Martin Petroleum will make it possible to travel the length of the system, and Florida, on E85.
Bunge to invest $639 million in three Brazilian ethanol plants: report
July 31, 2008
In Brazil, it has been reported in Valor Economico that Bunge will invest $639 million in three sugar ethanol plants in Tocantins state, in the north of Brazil. The new plants, the first of which will be operational in 2011, will be ultimately supported by 100,000 hectares of sugarcane.
Brazil background
Leaders at the sugarcane association, Unica, said that following the collapse of the Doha round of world trade talks, the association will consider litigation in the United States to open markets for Brazilian ethanol. The association said that it will also reach out for allies in working to eliminate or lower the ethanol tariffs through lobbying efforts. “We want to export more ethanol and it’s unfair to see the markets closed,” association president Marcos Jank told Dow Jones. Brazilian Doha negotiator Roberto Azevedo told the Associated Press that a formal WTO complaint was a “strong possibility”.
Infinity Bio-Energy Ltd said that it had entered into an agreement to acquire the 1.2 million tonne Destilaria Guaricanga sugarcane mill from BER Brasil Energia Renovavel Participacoes, with the deal scheduled to close in September. The acquisition price was not announced, but the existing plant had assets last December of $205 million and recorded a loss of $3.5 million last year. Infinity said that it would increase the production capacity of the plant by 20 percent to 1.5 million tonnes for the 09/10 harvest.
The Inter-American Development Bank OKd a 15-year loan of $260 million for three sugarcane ethanol plants being built by Santa Elisa Vale do Rosario in partnership with US private equity. The total project cost is $1 billion, and includes a $360 million commercial bank finance facility in addition to the IADB loan and private equity.
Integrated Biodiesel Industries said that it has acquired a 10 percent stake in Ireland’s South Cone Agriculture, a developer of jatropha plantations. South Cone said that it would use the funds from the investment to develop plantations in Angola, Brazil and Argentina, and will initialize harvesting later this year it its first plantations. IBI, which will have a total production capacity of 135,000 tonnes by the end of 2008 from its plants in Argentina, said that it sought to develop alternative feedstocks to soy oil.
The national government has fined 24 ethanol producing companies more than $75 million dollars for violations relating to destruction of Atlantic coast rainforest. The companies were found to be operating without permits and growing sugarcane in areas reserved for Atlantic rainforest (as opposed to Amazonian rainforest). The producers will also be forced to restore 143,000 acres of rainforest.
• Noble Group will invest $300 million in a new sugar and ethanol mill in Sao Paulo state, with a processing capacity of 8 million tonnes of sugarcane. The mill is expected to be operating in 2010.
• Sugar Cane Technology Center research leaders said that Brazil would enter the cellulosic ethanol industry at the commercial-scale with a first plant opened as soon as 2011.
More layoffs at Imperium as 100 Mgy biodiesel plant struggles
July 31, 2008
In Washington state, Imperium Renewables has announced a new round of layoffs, affecting corporate staff, just as a storm of protest erupted in Hawaii over Imperium’s switch to supplying biodiesel to Hawaii Electric from its Grays Harbor, WA plant instead of constructing a new biodiesel plant in Hawaii. The Seattle Post-Intelligencer is reporting that “only a handful” of corporate staff remain.
Imperium background
In Washington state, a former Imperium Renewable employee has sued the company for as much as $12 million in back payments, punitive damages and attorney’s fees. The suit alleges that Kenneth Orr was dismissed after earning more than $58 million for the company trading commodities, in order to avoid an expensive series of bonus payments on the proceeds from trading. Imperium, in its response, noted that it experienced cash difficulties in 2007, and Orr was laid off after the company concluded it needed to free up capital by ceasing commodities trading activity.
Imperium Renewables slashed its workforce early this year in a cost-cutting move. The biodiesel maker did not make more details available about job losses, but said that operations at its 100 Mgy plant in Grays Harbor were not affected.
Just before Christmas, Martin Tobias resigned as CEO of Imperium, which closed a $113 million venture capital round in 2007 as well as securing a $100 million bank debt financing, but had not closed a planned $345 million IPO. Imperium is backed by Paul Allen, co-founder of Microsoft, where Tobias formerly was employed before joining Imperium. Imperium founder John Plaza was named interim CEO and director Nancy Floyd was named chairman.
Imperium Renewables canceled its planned IPO due to “unfavorable market conditions.” The company had planned a $345 million IPO in May that would have financed the construction of three new biodiesel plants, including a $90 million project with Hawaiian Electric.
Imperium had been instrumental not only in developing its own strategy, but had provided initial funding for Propel Biofuels in the form of a loan. Propel announced a goal in April of installing its biodiesel fuel equipment at 20 stations in Washington, Oregon and California. Currently, the company has eight sites in Washington state in the permitting stage.
Biofuels Digest Index gains 0.50 percent to 82.76 on ethanol uptick
July 31, 2008
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, gained 0.50 percent to 82.76 as agribusiness and ethanol stocks advanced slightly. For the day, Archer Daniels Midland (ADM) inched up 0.35 percent to $28.98, while Aventine Renewable Energy (AVR) rose 3.34 percent to close at $6.81 and pace the ethanol stocks. Among small caps, Nova Biosource Fuels (NBF) rose 5.13 percent to $0.41. Overall, advances led declines 5 to 1 for the day.
Biodiesel magazine debuts online, interactive US, Canada plant map
July 31, 2008
The publishers of Biodiesel magazine have introduced an online, interactive Biodiesel Plant Map for the US and Canada, with zoom in features, and pop-up data including capacity, feedstock, builder and star date.
Agrana launches 240,000 tonne sugar beet ethanol plant in Austria
July 31, 2008
In Austria, Agrana has launched a 240,000 tonne corn and sugar beet ethanol plant in Pischelsdorf. The $180 million project will employ a staff of 69. The company had delayed a planned opening in March due to high feedstock prices, saying that high wheat grain prices had forced a switch to corn as a feedstock. Austria has an E4.3 mandate which it meets using imports from the Hungarian producer Hungrana.
Austria background
Raiffeisen Landesbank Oberstereich CEO Ludwig Scharinger said that the bank will lead a $40 million rescue of the Enns biodiesel plant, and said that the plant would be fully operational in 2009. RLB had been a minority shareholder in the enterprise, which succumbed to the impact of rising feedstock prices in Europe.
Austrian oil baron Rudi Roth announced that MOL has increased its ownership to 33 percent in the 43 Mgy canola-based Rossi Biofuels biodiesel plant in Komarom. Roth will invest a total $50 million in the project, which will be the largest environmental joint venture between Austria and Hungary. MOL previously said it would own 25 percent, Roth had previously pegged his investment at $50 million.
In Hungary had been experiencing numerous setbacks in the development of its biofuels industry.
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