We condense the day’s global biofuels news, and deliver it free to you each weekday morning. In a four-minute read, you have the biofuels “news you can use”.

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McCain was speaking at the Vestas Wind Technology plant in Portland, Oregon.

Last week, Sen. McCain led a revolt of 24 Senate Republicans have asked the EPA to waive, or restructure, the Renewable Fuel Standard passed in December. In a statement, Sen. John McCain said that “This subsidized (ethanol) program — paid for by taxpayer dollars — has contributed to pain at the cash register, at the dining room table, and a devastating food crisis throughout the world.” The Senators said that waiving the ethanol mandate would encourage farmers to grow other crops, as opposed to growing corn for food markets.

John McCain’s environmental record and policies are profiled in an investors.com article. The article focuses on his conversion to environmentalism after the 2000 elections, and his sponsorship of cap-and-trade legislation in 2003, 2005 and 2007 with Senator Joe Lieberman. The current bill would limit emissions among commercial & industrial users to 2004 levels by 2012 and moved down steadily until 2050. McCain favors an auction of emission certificates in his cap-and-trade proposal.

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.”

Avantium, a research and development company spun off from Royal Dutch Shell in 2000, cancelled its IPO earlier this year owing to adverse market conditions. Avantium provides R&D services to companies such as BP, Royal Dutch Shell, Sasol, and Pfizer, including research on next-generation biofuels.

Avantium announced only last month that it would pursue an IPO after the completion of a successful proof-on-concept engine test for a new proprietary biofuel, and the extension of its strategic research partnership with BP. BP also has strategic biofuels partnerships with D1 Oils relating to African jatropha development, and with DuPont relating to second-generation butanol production.

From Bloomberg (German Environment Minister Sigmar Gabriel): “We’re struggling with the U.S. government to cut these subsidies”. Gabriel added that the US is contributing to the deforestation of the Amazon by giving a $1 per gallon credit to Argentine and Brazilian soy biodiesel.

Algae-based research and development continues to pick up in pace, even though the US Defense Department is estimating that the current production cost of algae oil exceeds $20 per gallon. Recent developments include:

• In Florida, Neptune Industry will use a “floating sock” algae system, based in a rock quarry to produce algae for biodiesel. The facility will also use fish waste to accelerate the algae growing process. The Florida City site is funded by a Florida Farm to Fuel grant, and utilizes carbon dioxide tanks to provide CO2 to the algae, and uses its “floating sock” system to rotate the algae to provide CO2, sunlight and nutrients to the entire system. Neptune’s owners projected yields of as much as 10,000 gallons per acre from their process.
• In Florida, PetroAlgae said that it hoped to reach its commercial production stage next year, as algae producers begin to differentiate over varying methods of getting past the algae “shade wall” and other issues in achieving commercial scale.
• New Zealand’s Aquaflow said that it has developed a scalable method for producing and harvesting algae in the wild, and envisioned expanding to a series of 1,000 acre facilities in the US and other countries.
• A research team from the University of Texas has developed a new blue-green algae (cyanobacteria) that secretes a soft cellulose, glucose and sucrose. The team told Science Daily that the microbe “could provide a significant portion of the nation’s transportation fuel if production can be scaled up.” The cyanobacteria is grown from sunlight and salty water at facilities on non-agricultural land. The team said that the cellulose is a soft, gel-like type that is easy to break down, and that the microbes secrete the sugars and cellulose, making it possibly to continually harvest biofuels feedstock without destroying organisms and using powerful enzymes to extract sugars.
• The University of New Hampshire Biodiesel Group said it would cost $308 billion to build enough algae farms to replace gasoline with algae-based biodiesel, and $47 billion per year to run the production system for 140 billion gallons, or $0.34 per gallon before transportation and retail costs. The National Renewable Energy Laboratory said it would take an algae field of up to 15,000 square miles. Producers and researchers are disagreeing over the wisdom of closed bioreactors versus open algae ponds. Proponents of reactors point to the control of the process, while companies such as Aquaflow Bionomic point to the affordability of open ponds.
• In California, tests on Soladiesel from Solazyme were conducted by the Southwest Research Institute concluded that algae-based biodiesel has superior performance under cold weather conditions than biodiesel derived from other feedstocks.
• The National Algae Association held its first meeting, which sold out as hundreds of algae investors and producers convened in Texas in April to discuss new ventures, and paths to profitability.
• In the Netherlands, AlgaeLink announced a new process for extracting algae oil without using chemicals, drying or an oil press. The company said that its patent-pending technique uses 26 kilowatts of power to produce 12,000 gallons of algae oil per hour, with a yield of 50 percent from the initial algae paste.
• In Texas, the state’s Emerging Technology Fund will provide $4 million to Texas AgriLife Research and General Atomics to conduct microalgae research and development.
• In Virginia, researchers at Old Dominion University have successfully piloted a project to produce biodiesel feedstock by growing algae at municipal sewage treatment plants. The researchers hope that these algae production techniques could lead to reduced emissions of nitrogen, phosphorus and carbon dioxide into the air and surrounding bodies of water. The pilot project is producing up to 70,000 gallons of biodiesel per year.
• In Minnesota, Xcel Energy has pledged $150,000 to assist in funding an algae-to-biodiesel research project sponsored by the University and the Metropolitan Council. The grant is a follow-on to more than $4.5 million given to five other University of Minnesota projects from the Xcel Energy Renewable Development Fund.
• The US Department of Energy recently partnered with Chevron in a research effort to develop higher-yield strains of micro algae. The Defense Advanced Research Projects Agency is working on a project with Honeywell, General Electric and the University of North Dakota.
• In Texas, US Sustainable Energy is awaiting lab results from a test of biocrude production using 20 pounds of algae as a feedstock. The company recently ran its initial test of 20 pounds of 5% oil-content algae feedstock with 40 percent water content, and resulted in an ignitable oil product.
• In Arizona, PetroSun BioFuels Refining recently signed a joint venture to develop and operate a 30 Mgy algae biodiesel facility in Coolidge. Construction is projected to commence in the third quarter of this year. Late last fall, PetroSun announced a letter of intent to supply 54 million gallons of algal oil to a new 54 Mgy Bio-Alternatives biodiesel plant in south Louisiana. The initial delivery to Bio-Alternatives refinery will be in the third quarter of 2008.

A change in Chinese meat consumption habits since 1995 is diverting eight billion bushels of grain per year to livestock feed and could empty global grain stocks by September 2010, according to a new study from Biofuels Digest, now available for download here in an expanded version.

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, will 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.

“It’s not food, it’s not fuel, it’s China,” said Jim Lane, editor of Biofuels Digest and author of the report.

In China, the Chinese and Italian governments have initiated a feasibility study for jatropha biodiesel at Sichuan University. The project received $650,000 in support from Italy. The project is the third signed by Italy and China, promising cooperation in biofuels research since mid-April. The others covered industrial waste oil-based biodiesel in Hubei Province, and thin-film solar cells in Shanghai.

In Italy, national biodiesel production fell 40 percent for 2007, to 450,000 tons. Production was 750,000 tons in 2006. Producers blamed regulatory changes for the drop, but said that Italy would increase capacity by 750,000 tons through 2009.

Meanwhile in China, experts are warning that plans to produce biofuels in the China’s southwest will threaten biodiversity in the last remaining section of virgin forest in the country. Speakers warned against the planting of jatropha trees, which would threaten native grasses and a diverse range of animal species, said academics attending the International Workshop on Biodiversity and Climate Change in Beijing.

Jatropha continues to be the subject of intense development interest from China. Recent projects include:

• China Agro-Technology announced that it has secured $300 million in financing for biodiesel acquisitions and operations. The company is focused on building capacity to process jatropha oil to supply the growing demand lower-cost biodiesel
• In China’s largest state oil company, Sinopec, said it will invest $5 billion in jatropha and palm plantations in Indonesia.

The WTO has commenced an investigation into US farm subsidies following protests from Canada and Brazil. The Canadians and Brazilians allege that the US has exceeded its $19.1 billion cap on farm subsidies in six of the past eight years, including subsidies for biofuel feedstocks such as corn and soya.

It will be the first time the World Trade Organization has ruled on energy subsidies.

The convergence of energy and agriculture in the biofuels industry is expected to pose thorny questions for the WTO. While neither sector has enjoyed free trade conditions, the subsidy mechanism which has supported national agriculture interests has attracted negative attention far more than the cartel approach employed in the oil industry.

The issue is a key point of contention imperiling the Doha round of global trade talks. The United States and European Union have blocked a Brazilian proposal to include biofuels among “environmental goods” scheduled for tariff reduction or elimination in the next world trade treaty. The US and European position is that the environmental designation rules are for industrial products, not agriculture.

 

Miami was last in the news when Oilsource Holding and Greenline Industries announced a 60 Mgy biodiesel plant in Miami. The $96 million project is expected to open in the first quarter of 2009.

In Florida, legislation is expected to be signjed by Governor Charlie Crist mandating E10 throughout the state by the end of 2010. The 10×10 legislation may be unnecessary, according to local reports that pure gasoline will becoming difficult to find after ExxonMobil and BP commence selling E10 at their Florida stations next week. Shell commenced selling E10 in March, and Chevron will follow in July. Hess was the first major retailer to convert, making the switch late last year.

Gov. Jim Doyle said in  March that Wisconsin will award $150 million over 10 years from the Wisconsin Energy Independence Fund, to encourage energy efficiency and renewable energy. The governor called for the state to generate 25 percent of its power and fuels from renewables by 2025.