The Biofuels Daily Summary for August 14
Top Story:
In South Dakota, POET Energy said that it was accelerating the schedule for its $4 Million pilot cellulosic ethanol plant in Scotland, and would open the facility by December. “Our expanded research effort has led to several significant strides in the development of cellulosic ethanol technology at the lab scale in recent months,” said Jeff Broin, CEO of POET. “In the past few months, our scientists have been able to achieve significant ethanol percentages in fermentation and improve the yield of ethanol from biomass. Additionally, in our work with farmers and agricultural equipment manufacturers, we had a very successful harvest of corn cobs last fall and anticipate further advances during an expanded harvest this fall.”
POET’s 125 Mgy cellulosic ethanol plant, “Project Liberty” is expected to commence construction in Emmitsburg, Iowa in 2009 and will be operational in 2011. The plant will produce 100 Mgy of conventional corn ethanol and 25 Mgy of cellulosic ethanol from corn fiber and cobs. The project is expected to increase pr bushel yields from corn by 11 percent, to 3 gallons per bushel, and per-acre yields by 27 percent.
Producer News:
Raymond James analyst Pavel Molchanov, in a note to investors in BioFuel Energy regarding its liquidity crisis, wrote that “there is a realistic prospect of obtaining additional working capital, and we believe management’s roadmap toward resolving this liquidity crisis by year-end is credible. Therefore, at this point, we do not foresee bankruptcy or some other drastic outcome.” BioFuel Energy posted a loss of $0.41 per share for the second quarter and has racked up $46 million in hedging losses this year when corn prices eased.
In Hawaii, Imperium Renewables closed the door on a once-bright Hawaiian future when it closed its Honolulu office and laid off additional personnel, including Chief Operating Officer David Leonard. The company had planned to construct a $90 million biodiesel plant and supply Hawaiian Electric’s newest power plant with up to 12 Mgy. The company, which did not proceed with a planned IPO this year, has scaled back plant construction, laid off more than half its staff, and intends to supply HECO with biodiesel from its Washington state-based biodiesel plant. HECO will pass along the added costs for production and distribution to consumers under an existing agreement with the Hawaiian state Public Utilities Commission.
At the American Coalition for Ethanol annual conference this week in Nebraska, presenters highlighted new markets for products from ethanol plants. VeraSun touted the extraction of corn oil, while Chippewa Valley ethanol touted its food flavoring extract alcohols, aromatherapy products, hairspray and “priairie” brand organic vodka.
World Opinion:
Brent Searle, economist with the Oregon Department of Agriculture: “We’re kind of at the stage with biofuels where we were in early computers. They were big. They were clunky. They weren’t as efficient as we’d like them to be. Looking back, they looked pretty silly compared to what we have now … (but) you gotta start somewhere with this stuff.”
An editorial in the Rapid City (SD) Journal: “The corn model for producing ethanol has become so successful it has become a victim of its own success. While low corn prices mean profits for the South Dakota ethanol industry, increasing demand for corn drives prices higher and ethanol profits lower. ?Cellulosic ethanol will be the next frontier for ethanol. But the technology to produce cellulosic ethanol is in its infancy. The 21 billion gallon federal requirement is more than aggressive — it’s unrealistic — primarily serving as a notice to investors and developers that the market will be there when the product is.”
International News:
In Malaysia, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui, said that the lowered price of crude palm oil made it possible for the country’s 15 biodiesel plants to resume full production at full capacity and make a profit. The government, he said, would buy 500,000 tonnes of biodiesel in the next year and would distribute a B5 biodiesel blend. The minister said that if crude palm prices decrease further, the country would consider a B10 mandate.
In Kenya, an article in IRIN highlighted the struggles of the newborn local jatropha industry. The industry profile highlighted the impact of rising diesel costs, and a 500 percent increase in the price of jatropa seeds from $15 per kilo to $92 per kilo. Test planting results have shown that local jatropha would take up to four years to reach maturity and that colder weather impacted projected yields.
In Thailand, General Motors announced an agreement with state oil company PTT to support research into cellulosic ethanol, expend biodiesel sources, develop alternative fuels including compressed natural gas, as well as expand R&D for hybrid and fuel cell engine technologies. GM also announced a partnership with the Thailand Automotive Industry Association that would propose an alternative energy strategy for the Thai automotive industry. The announcements tied in with a new $445 million diesel engine production plant that GM will undertake in Thailand.
Research News:
Researchers at Ames Lab are reporting that they have developed metallic alloy-based mesoporous nanospheres, akin to microscopic sponge balls with thousands of channels running though them, to increase the surface area of syngas catalysts by 100 times. The research team had previously found that ethanol yields from syngas can be increased if the surface area of catalysts, which activate carbon monoxide molecules, could also be increased to increase CO adsorption on the catalyst surface. In related news, researchers at Oxford Catalysts have developed a cobalt-based catalyst that can increase yields from the Fischer-Tropsch biomass-to-fuel process. Fuel yields from the F-T process have typically been in the 42 gallons per tonne of biomass range, making F-T uneconomic in many cases.
Policy and Policymakers:
The International Herald Tribune published a useful comparison of the energy policies of Senator John McCain and Senator Barack Obama, including comparisons on offshore drilling, the strategic petroleum reserve, windfall profits tax, alternative energy, speculation on futures markets, nuclear power, gas tax holiday, climate change, oil use, the arctic national wildlife refuge, energy research, vehicle fuel economy and electricity.
Consumer and Fleet News:
In Georgia, John Deere announced that it would integrate the AGRIS V9 business system, used by agribusiness and biofuels plants, with the RINSTAR system for generating Renewable Identification Numbers (RINs) and reports to meet requirements of the Renewable Fuel Standard. The partnership will provide users of AGRIS V9 with a simplified means of managing RIN compliance, and Clean Fuels Clearinghouse said that the agreement would result in more certified RINs and more transparency and confidence in renewable fuel transactions.
Financial News:
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 0.84 percent yesterday to close at 76.64 as large cap jitters offset a recovery by Biofuel Energy (BIOF). For the day, Archer Daniels Midland (ADM) fell 0.02 percent to close at $26.88, while BIOF moved up $0.32 to close at $1.25. Among small caps, Panda Ethanol (PDAE) rose 14 percent percent to $0.80. Overall, advances led declines 3 to 2 for the day.
