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July 18, 2008
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Reaction to Gore speech on renewable electricity
July 18, 2008
Reaction to the July 17 speech by former Vice President and Nobel laureate Al Gore on climate change, a carbon tax on oil and coal, and switching US electricity generation to 100 percent renewable sources by 2018:
Robbie Diamond, president of Securing America’s Future Energy, a bipartisan think tank: “The country is not going to be able to go cold turkey. We have hundreds of years of infrastructure with trillions of dollars of investment that is not simply going to be made obsolete.”
Illinois Sen. Barack Obama, Democratic presidential candidate: “I strongly agree with Vice President Gore that we cannot drill our way to energy independence, but must fast-track investments in renewable sources of energy like solar power, wind power and advanced biofuels, and those are the investments I will make as president.”
Arizona Sen. John McCain, Republican presidential candidate: “There may be some aspects of climate change that he and I are in disagreement (on),” but “if the vice president says it’s doable, I believe it’s doable.”
T. Boone Pickens, Texas oilman and wind-power booster: “Former Vice President Al Gore put forward a framework of a plan that is focused on global warming and climate issues. … My plan is aimed squarely at breaking the stranglehold that foreign oil has on our country. We import 70 percent of our oil, and that number is growing larger every year. Vice President Gore’s plan does not address this enormous problem.”
Jim Owen, spokesman for Edison Electric Institute: “We cannot do the job with renewables and energy efficiency alone. We have to have a balanced energy portfolio that includes all those things in even higher percentages, but also has to include nuclear. And we frankly think that nuclear should be increased.”
Sen. Barbara Boxer (D-CA).: “The vice president’s main effort is to mobilize the American people behind meaningful action and less talk about global warming.”
Gene Karpinski, League of Conservation Voters president: “It’s a very aggressive, bold, comprehensive proposal, and it’s great to challenge the politicians to go where they need to go.”
Former Rep. Bob Barr, Libertarian presidential candidate: “None of us can walk away from this issue without agreeing with him that we do have a very serious problem, and it’s only going to get worse unless we do something about it. … I hope to be a part of that, and I would like to see the free market take the lead, not the government.”
Rep. Jay Inslee (D-WA): “It pointed out that the only way we have a chance to drive down oil prices is if we become free of the slavery of oil. If we can give Americans choices of electrical cars or … biodiesel cars, then and only then do we have a chance of dealing with this cost issue. That is why $4-a-gallon gas is not an enemy of action, it’s an ally of action.”
Pure Power to set up “Brains Trust” for lignocellulosic R&D
June 19, 2008
In New Zealand, Pure Power announced that it is increasing its R&D effort by setting up a “Brains Trust” in lignocellulose. Under the leadership of one of Dr Jim Watson, Pure Power’s Energy Evangelist, Pure Power will focus on conversion of lignocellulosic feedstocks and other biomass into bioethanol, biodiesel, biocrude and a large range of bioproducts such as bioplastics and biochemicals.
Pure Power’s washing processes preserve and recover lignin, converting the biomass into three product streams: bioethanol, xylose and natural lignin, which can then be used to make hundreds of different bioproducts including paints, glues, resins and chemicals such as phenol, which are currently derived from petroleum. In addition the process also yields xylose, from which xylitol (a sugar substitute) can be made.
Pure Power background
Pure Power said last week that it would establish corporate headquarters in Singapore for its renewable energy business. Pure Power recently acquired a stake in Aquaflow Bionomic, a New Zealand company which is harvesting wild microalgae and is supporting the Air New Zealand biodiesel trail scheduled for later this year. Pure Power also acquired BioJoule Limited, a cellulosic ethanol concern. In a statement, management said that the International Energy Agency forecasts a 57 percent increase in energy needs by 2030, and that two-thirds would come from developing countries, led by China and India.
New Zealand’s Aquaflow Bionomic has achieved commercial-scale algae harvest levels at its plant in Marlborough, and said that its new bioreactor installations are expected to bring the company to c0mmercial-scale production of biocrude “within the next few months”.
Aquaflow is rumored to be the fuel supplier for the upcoming Air New Zealand biodiesel test flight.
nbr.co.nz reported that the company has appointed aviation engineering consultant Des Ashton to lead operation development related to aviation projects. Last month, Virgin CEO Sir Richard Branson said that the Air New Zealand flight would use algae-based biodiesel, after the initial Virgin Atlantic flight using a mix babassu palm and coconut oils.
Finland’s St1 to open central dehydration plant to serve more than 20 ethanol plants across the country
June 19, 2008
In Finland, St1 will open a 12 Mgy dehydration plant in Hamina, that will serve to dehydrate ethanol produced at multiple Etanolix waste biomass plants in Lappeenranta and Närpiö. St1 expects to open twenty units in Finland in the next two years that convert waste biomass, including waste from candy factories and bakeries, into 85 percent ethanol, which will now be dehydrated in Hamina.
Finland background
In January, UPM-Kymmene and waste management company Lassila & Tikanoja announced that, in conjunction with the Technical Research Centre of Finland (VTT), they had developed an ethanol and energy generation concept using paper, cardboard, wood and plastic, and would begin testing at VTT’s Rajamaki unit.
Finland’s Neste Oil recently announced a plan to construct the largest biodiesel plant in the world, in Singapore. The 430 Mgy plant would be completed by the end of 2010. The plant would use palm oil certified by the Roundtable on Sustainable Palm Oil (RSPO). Estimated project cost is $814 million. Singapore is considered ideal for palm oil biodiesel because of its proximity to the feedstock plantations in Malaysia, Indonesia and Thailand as well as its world-class fuel terminal facilities.
Neste also recently announced that it will launch the “Neste Green Diesel” line of hydrotreated vegetable oils and said that the fuel will be suitable for all diesel vehicles despite a biofuel content of more than 10 percent. The company said that its hydrotreatment proces, where vegetable oils and hydrogen are blended, made it possible to exceed the 5 percent biodiesel blend limit that it currently considered safe for all diesel vehicles by vehicle makers.
Bill Gates dumping Pacific Ethanol stock; converting preferred at $8 to sell at $3.83 or less
June 3, 2008
In California, Bill Gates has commenced selling half his 20 percent stake in Pacific Ethanol for prices between $3.45 and $3.83 per share. The company said that they expected Gates to sell half his shares, and that he was converting shares from preferred stock into common stock at $8 per share in order to sell them. The sale seals a loss of more than $9.5 million for Gates for the 2.3 million shares he has sold to date. Gates had initially invested $84 million in the plant for his holdings.
Vinod Khosla lashes back at Wall Street Journal over accusation that famed VC is living on “federal dole”
May 21, 2008
Vinod Khosla responded to a scathing Wall Street Journal editorial which accused the famed venture capitalist of living on the “federal dole” and was advised to “take a vow of embarrassed silence” regarding biofuels.
Khosla replies: “I have not advocated subsidies for food-based ethanol. In fact, I strongly believe any nascent technology that cannot exist without subsidies beyond an introductory period will not gain market penetration and is not worth supporting. I have consistently argued that food-based ethanol cannot scale beyond roughly 15 billion gallons or so in the US, and that making a material impact on replacing oil requires cellulosic or other advanced biofuels. The corn ethanol subsidies that exist today were part of the 2005 Energy bill, a time when I had no contacts with Washington.”
The complete text of the Khosla post on CNet is here.
Writing in Forbes earlier this year, Vinod Khosla said that the best way to frame the renewables policy question was: “What is the cheapest way in dollars per ton to reduce carbon emissions from automobiles?”
He said that hybrids are a “PR gesture” because they can’t pay back their upfront investment in a reasonable amount of time, and added that McKinsey found that hybridization costs $90 per ton of carbon offset, the most expensive of all technologies. He added that battery technology is not moving fast enough to make electric cars feasible, except plug-in hybrids that will use coal-fired electricity that will increase emissions, not decrease them. Khosla said that GM’s Hummer V6 flex-fuel vehicle, running on Coskata cellulosic ethanol, would have half the emissions of a Prius running on gasoline.
Earlier this week, Khosla and Big Oil started a “food fight” at the Wall Street Journal’s ECO:nomics conference, where Khosla accused the American Petroleum Institute of hyping the link between food price increases to ethanol production, saying “The API started issuing press releases about food. Suddenly they got interested in the welfare of poor Africans.â€
“We have never said anything about ethanol being responsible for food prices,†said American Petroleum Institute President Red Cavaney. “It was Federal Reserve Chairman Ben Bernanke in recent Congressional testimony who linked a 4.5% increase in food prices to rising worldwide demand and the amount of corn going to ethanol.”
Recently, “Vinod you are still totally clueless” and “there will be pie in the sky by-and-by” were among comments hurled at Khosla in response to a three-part series of articles posted at Grist.
The second series focused on Biomass, including regulatory standards , “better agronomy for energy crops” , and “cellulosic ethanol yields“.
Among dozens of responses, writers accused Khosla turning “self delusion” on carbon cycles into a “mass delusion”, adding comments such as “cellulosic ethanol is such BS and that’s not just for the fertilizer.”
Among other proposals, Khosla endorsed a CLAW standard for sustainable production of biomass:
C — COST below gasoline
L — low to no additional LAND use; benefits for using degraded land to restore biodiversity and organic material
A — AIR quality improvements, i.e. low carbon emissions
W — limited WATER use,
Last December, the Biofuels Digest Editorial Board voted Khosla a bronze Biofuels Digest Medal for Highest Achievement in Biofuels in 2007, along with George W. Bush, Elliott Mannis (CEO, D1 Oils), Bob Dineen (President, Renewable Fuels Association), Jeff Broin (CEO, Poet), Al Gore, Dr. Chris Somerville (scientist, University of California) and Ban Ki-moon (Secretary-General, United Nations). Luiz Inácio Lula da Silva, the President of Brazil, received the silver, and Don Endres, CEO of VeraSun Energy, received the Gold medal.
Moreover, I look forward to the WSJ’s complaints about oil’s subsidy bonanza, from tax breaks for drilling, loopholes that allow royalty-free offshore oil leases, manufacturing tax breaks, as well as roughly $7 billion in subsidies in the wake of the Katrina disaster. At a recent WSJ Conference, 75 percent of its erudite audience “voted” (rightly) that oil was more highly subsidized than ethanol.” Khosla’s extensive answer to the Wall Street Journal, as well as links to calculations supporting his conclusions, are here.
Biofuels Digest readers receive 50 percent off fees at Second Generation Biofuels Development conference, May 13-16
May 8, 2008
Biofuels Digest readers will receive 50 percent off at the Second Generation Biofuels Development Summit in Maryland.  The event features two back-to-back meetings: Innovations in Biofuels 2008 (May 13-14) and Accelerating the Commercialization of Second Generation Biofuels (May 15-16). Organizations that frequently appear in the Digest such as DuPont, Gevo, Mascoma, US Department of Energy, US Department of Agriculture Sandia National Labs, and the National Algae Association will be presenting at the conference.
A participatory workshop on sustainable development will kick off a global effort called the International Sustainable Biofuels Initiative, aimed at developing consistent and stable terminology and criteria for sustainability to spur biofuels investment and development. The workshop will be led by the Department of Energy, the Energy Voyager Institute and Biofuels Digest.
Only 27 percent of US corn planted, slowest pace since ‘95, as rains raineth; corn prices surge to $6.0625 as shortage concerns grow, oil escalates to $122 per barrel
May 7, 2008
The July contract for corn reached $6.0625 per bushel as oil prices rose to $122 per barrel, and fears rose over production when it was revealed that only 27 percent of the US corn crop is planted, due to unrelenting rains in the Midwest. The planting pace is the slowest since 1995, according to the US Department of Agriculture. In interday trading, corn surged as high as $6.22 per bushel.
The Zaner Group estimates that the US corn crop must expand from 86 million acres in 2008 to 89 million acres to alleviate the potential for shortages. “The usage numbers and a trend line yield of 154 bushels could leave us with a carryout of 650 million bushels next year, which does not allow for any problems or errors this coming summer…I think we can afford to lose a few bean acres partly because we have two huge crops a year via South America and the United States. But we really can’t get corn down tighter than this.â€
The U.S. Department of Agriculture (USDA) released 2008 report on crop plantings, projecting that US corn acreage would drop 8 percent to 86.0 million acres. Soybean production is expected to rise 18 percent to 74.8 million acres. Wheat production will rise 6 percent to 63.6 million acres.
“This news is inherently bullish for corn, as it indicates that last year’s record corn crop will almost certainly not be repeatable this year,” said Pavel Molchanov, analyst for Raymond James, in a note to shareholders. “Following today’s report, corn futures for the next two years rose an average of 2-3%, with several 2009 contracts now above $6.00/bushel. For context, we are currently projecting an average price of $4.95 in 2008 and $5.15 in 2009,” Molchanov said.
Senate proposes $1.01 per gallon ethanol tax credit; ethanol tariff 50/50 chance of expiring this year, analyst projects
April 29, 2008
A report from Raymond James analyst Pavel Molchanov said that “the reduction in the [ethanol] tax credit is not likely to have a direct impact on ethanol producer margins, if only because the economics of the credit are currently being captured in their entirety by the blenders.”
The Senate has proposed that the cellulosic ethanol tax credit be set at $1.01 per gallon, expiring in 2012. Commenting on the impact of the food-vs-fuel debate, Molchanov said ” The reduction in the tax credit for corn ethanol has been discussed in Washington before, and we do not view this decision as a direct response to the recent global food price escalation.
However, as we argued in our April 16 industry brief titled “Ethanol & Biodiesel Update: Wave of Food Price Concerns May Spur Policy Responses,” it is possible that the changing political landscape surrounding biofuels may result in this credit sunsetting altogether in 2010. The prospects of its extension will depend in part, on the trend of corn prices between now and then. More near term, at year-end 2008, the $0.54/gal ethanol tariff will expire unless extended. As we noted on April 16, we believe that there is now at least a 50% chance that the tariff will in fact, be allowed to expire.”
The tax credit will be part of the finalized Farm Bill.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.
Earlier this month, the US House of Representatives had voted to extend the existing Farm Bill until April 25 to give lawmakers more time to resolve differences between the House and Senate versions of the new Farm Bill, which includes tax breaks and incentives for biofuels. The current law expires on April 18. President Bush has stated that he will not sign legislation extending the current Farm Bill for another year.
The Farm Bill was passed by the Senate in in the fall, while the House version passed in July. Senate Agriculture Committee chairman Tom Harkin said the bill would earmark $1.3 billion for biofuels over the next five years.
The Senate passed an overall funding measure on October 5, but the Agriculture Committee under committee chairman Tom Harkin had been working on specific program allocations until November, which include ethanol tax credits and next-generation biofuel investments. The Senate finance committee previously proposed cutting the ethanol tax credit to 46 cents per gallon.
President Bush has raised the threat of a Farm Bill veto, the first since 1956, over subsidies. Among those in hot dispute is the Brazilian ethanol tariff, which protects US ethanol producers but creates higher prices in the US and retards US ethanol demand growth.
News analysis: Hillary Clinton energy policies
April 23, 2008
Senator Hillary Clinton trails significantly in the primary popular vote and delegate count, but it has been pointed out repeatedly that 800 unelected “super-delegates” will make the decision at the Democratic convention, owing to the closeness of the race.
The super-delegates will be looking at “who can win”, and Sen. Clinton does lead in one statistical category: Electoral College votes. Sen. Clinton has, to date, won 16 primaries and caucuses representing 274 electoral votes this November under the “winner take all” system used in the US presidential election. Sen. Obama has won 28 states that represent 218 electoral votes. 48 votes are still at stake in six more primary and caucus contests.
Proposed Clinton Administration policies on energy are:
- A new cap-and-trade program that auctions 100 percent of permits alongside investments to move us on the path towards energy independence;
- An aggressive comprehensive energy efficiency agenda to reduce electricity consumption 20 percent from projected levels by 2020 by changing the way utilities do business, catalyzing a green building industry, enacting strict appliance efficiency standards, and phasing out incandescent light bulbs;
- A $50 billion Strategic Energy Fund, paid for in part by oil companies, to fund investments in alternative energy. The SEF will finance one-third of the $150 billion ten-year investment in a new energy future contained in this plan;
- Doubling of federal investment in basic energy research, including funding for an ARPA-E, a new research agency modeled on the successful Defense Advanced Research Projects Agency
- Aggressive action to transition our economy toward renewable energy sources, with renewables generating 25 percent of electricity by 2025 and with 60 billion gallons of home-grown biofuels available for cars and trucks by 2030;
- 10 “Smart Grid City” partnerships to prove the advanced capabilities of smart grid and other advanced demand-reduction technologies, as well as new investment in plug-in hybrid vehicle technologies;
- An increase in fuel efficiency standards to 55 miles per gallon by 2030, and $20 billion of “Green Vehicle Bonds” to help U.S. automakers retool their plants to meet the standards;
- A plan to catalyze a thriving green building industry by investing in green collar jobs and helping to modernize and retrofit 20 million low-income homes to make them more energy efficient;
- A new “Connie Mae” program to make it easier for low and middle-income Americans to buy green homes and invest in green home improvements;
- A requirement that all publicly traded companies report financial risks due to climate change in annual reports filed with the Securities and Exchange Commission; and
- Creation of a “National Energy Council” within the White House to ensure implementation of the plan across the Executive Branch.
- A requirement that all federal buildings designed after January 20, 2009 will be zero emissions buildings.
In endorsing cap-and-trade, Clinton is in agreement with Senators Obama and McCain, although implementation details may differ. Senators Clinton and Obama agree on a 10-year, $150 billion fund for alternative energy research. Senator Clinton calls for 55 MPG Cafe standards by 2030, compared to “doubling by 2026″ for Senator Obama. The National Energy Council is unique to the Clinton campaign, but the Obama campaign is more agressive on a global front, calling for a Global Energy Forum including the G-8, China, Mexico, India, Brazil and South Africa.
The Obama campaign calls for the increase in the Renewable Fuel Standard to 60 billion gallons of cellulosic ethanol by 2030, a mandatory 10 percent reduction in low-carbon petroleum fuels, and increased incentives for local investment in biofuels plants.
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