Oil Company Invests in Cellulosic Ethanol

Cindy Zimmerman

MarathonMarathon Oil has made a $10 million equity investment in the research and development of cellulosic ethanol at Mascoma Corporation

The investment is part of $61 million raised in Mascoma’s third round of funding. As part of the investment, Marathon Senior Vice President Cliff Cook has joined the Mascoma Board of Directors.

“This investment in Mascoma’s leading-edge technology reflects our commitment to address increasing energy demand by bringing to market environmentally friendly, renewable fuel derived from non-food domestic biomass,” said Clarence P. Cazalot, Jr., Marathon President and CEO.

MascomaIn addition to Marathon, General Motors Corporation and several other investors participated in the third round of financing. During a press conference last week announcing General Motors’ investment, Mascoma Chairman and CEO Bruce Jamerson deferred questions about the company’s financing. “We are not talking today about financing, this is GM’s day,” said Jamerson. “But we will soon.”

With the completion of this round of financing, Mascoma has raised approximately $100 million in equity investment. Mascoma has also received commitments for over $100 million in state and federal grants, including a $26 million grant from the U.S. Department of Energy.

Cellulosic, Ethanol, News

Ethanol Standard Debated as Oil Prices Rise

Cindy Zimmerman

House EnergyAs the House Subcommittee on Energy and Air Quality heard testimony regarding the Renewable Fuels Standard (RFS) on Tuesday, oil hit yet another record high of $122 a barrel.

RFA
Renewable Fuels Association president Bob Dinneen reminded the committee of that several times during the hearing, having to correct his own pre-prepared remarks. “Mr. Chairman, the RFS made sense when you passed it in December and prices were $90 a barrel,” Dinneen said. “It makes more sense today with crude oil prices at $120 a barrel. I’m sorry, just while this hearing has been going on, the market has increased and we’re now looking at $122 a barrel oil.”

“Ethanol is the only tool we have today that can address the nation’s most serious economic issue – our dependence on imported oil and the rising price of gasoline and crude oil,” he said.

EPAEnvironmental Protection Agency Deputy Assistant Administrator Robert Meyers told the hearing that the request by Texas for a waiver of the RFS will go through the administrative process required by law.

“It’s our intent to shortly issue a federal register notice on this matter and establish a docket to receive public comments,” Meyers said. “EPA is required under the Clean Air Act to approve or disapprove a state petition within 90 days of receiving it.”

Besides Dinneen and Meyers, other witnesses on the issue included Nathaneal Greene with the Natural Resources Defense Council, Charles Drevna with the National Petrochemical and Refiners, Randy Kremer of cellulosic ethanol producer KL Process Design Group, Scott Faber with the Grocery Manufacturers Association, Rick Tolman with the National Corn Growers Association, Dr. Mark Stowers with POET, and Gawain Kripke of the food aid group Oxfam America.

corn, Ethanol, Government, News, RFA

Fungus Could Aid Ethanol Production

Cindy Zimmerman

A fungus capable of breaking down cotton and other fibers could hold the key to improvements in the production of biofuels.

Biofuel FungusResearchers led by Los Alamos National Laboratory and the U.S. Department of Energy Joint Genome Institute announced this week that the genetic sequence of the fungus Trichoderma reesei has uncovered important clues about how the organism breaks down plant fibers into simple sugars.

The fungus is best known for eating through uniforms and canvas tents during World War II but that appetite could mean a more efficiently and cost effective way to convert corn, switchgrass and even cellulose-based municipal waste into ethanol.

“The sequencing of the Trichoderma reesei genome is a major step towards using renewable feedstocks for the production of fuels and chemicals,” said Joel Cherry, director of research activities in second-generation biofuels for Novozymes, a collaborating institution in the study. “The information contained in its genome will allow us to better understand how this organism degrades cellulose so efficiently and to understand how it produces the required enzymes so prodigiously. Using this information, it may be possible to improve both of these properties, decreasing the cost of converting cellulosic biomass to fuels and chemicals.”

The research paper was published in the journal Nature Biotechnology on Monday.

Cellulosic, Ethanol, News

Algae-based Biodiesel Makers Getting Closer to Marketable

John Davis

For a while, we’ve been telling you about one of the hottest trends in the biodiesel business: turning algae into biodiesel.

petgreensola.gifThis entry from C|Net.com’s Green Tech Blog says that at least three companies are close to making the green pond scum into green fuel with even more close on their heels. Florida-based PetroAlgae wants to test a commercial algae-biodiesel system next year, while GreenFuel Technologies and Solazyme (both previously featured on this blog… GreenFuel on October 3, 2007 and Solazyme as recently as last April 17th) say they’re close to commercial applications as well. In addition California-based LiveFuels has a target of 100 million gallons of biodiesel from algae in the next two years. All of this is very good news for the very green fuel source:

These companies are pursuing algae because its potential as a fuel is so promising: it’s a non-food crop, removes large amounts of carbon dioxide from the air, and grows fast.

Algae has a relatively high energy density compared to soybeans, which means more soy on more land needs to be planted for the same amount of fuel yield.

“What’s happening is there has been more focus recently on the food-versus-fuel debate, more focus on the price of feedstock, and more understanding that using an agricultural-based crop as a fuel is not sustainable,” said Michael Weaver, the CEO and co-founder of Seattle-area algae start-up Bionavitas. “We’re seeing that reflected in the marketplace.”

Experts admit that algae is not a panacea for all the issues facing biodiesel. It’s still an experimental process, and just like any new venture, the article points out there have been some growing pains. But many agree that it will be just a matter of time before the non-food algae becomes a major player in the biodiesel market.

Biodiesel

Biodiesel Helping Food and Feed Prices

John Davis

So often lately, we’ve heard from biofuels naysayers who make all kinds of outrageous charges about how biodiesel and ethanol are pushing prices for human and livestock food through the roof. Too many times those complaints are coming from folks in the agriculture community, especially cattle and hog producers. But some are starting to recognize that biodiesel could actually help the price of livestock feed.

Recently at a hearing before the Missouri House’s Transportation Committee on a pending 5 percent biodiesel mandate in the Show-Me State, members of the Missouri Dairy Association spoke up about the benefits of the green fuel:

“The Missouri Dairy Association supports biodiesel and this bill,” said [executive director Dave] Drennan. “As more soybeans are crushed to meet the demands of biodiesel producers, more soybean meal is made available to livestock producers in greater quantities. Affordable feed is important to maintaining any dairy operation. By increasing the supply of soybean meal, biodiesel helps dairy producers keep costs down.”

High fuel prices have also impacted dairy prices. According to the Missouri Department of Transportation, 85 percent of all products that are produced and purchased in the state are shipped by diesel-powered trucks. Despite local dairy production, Missouri is a milk-deficit state and imports 1.7 billion pounds of milk from other states each year.

“If you put that much milk in tanker trucks end-to-end, the line would stretch westward from downtown St. Louis past Salina, Kansas,” said Drennan. “We are talking millions of dollars in transportation costs alone. We could put that money to work in Missouri if we could grow our dairy industry and use more biodiesel.”

Research from the Food and Agricultural Policy Research Institute at the University of Missouri says that while soybean oil prices have been strengthened by biodiesel production, the process has meant more soybean meal, and thus, lower prices for the livestock feed.

So the next time someone tries to blame biodiesel for the high cost of feed, you’ll have one more fact… and another group of livestock producers… to prove them wrong.

Biodiesel

Cellulosic Ethanol Start Up Reports Growth

Cindy Zimmerman

A pioneer in the development of next-generation cellulosic ethanol and high-performance specialty enzymes is reporting record growth and advancement towards the commercialization of cellulosic ethanol.

Verenium PlantMassachusetts-based Verenium Corporation reports that total revenues for the quarter ended March 31, 2008 were $15.2 million compared to $11.3 million for first quarter of 2007.

Verenium CEO Carlos Riva says he is encouraged by the overall results and achievements of the first quarter. “As planned, our demonstration-scale cellulosic ethanol facility entered the start-up phase and is proceeding on schedule despite significant cost escalation and labor shortages being experienced across the energy sector,” said Riva in a statement.

“We are at a transformational time for both the next-generation biofuels industry and Verenium, as the world is now actively seeking alternate sources of ethanol, particularly those derived from cellulosic biomass,” added Riva.

Verenium operates an R&D cellulosic ethanol pilot plants in Jennings, Louisiana and has entered the start-up phase at its 1.4 million gallon per year demonstration-scale facility. In addition, the company’s process technology has been incorporated into BioEthanol Japan’s 1.4 million liter-per-year cellulosic ethanol plant in Osaka, which is the world’s first commercial-scale plant to produce cellulosic ethanol from wood construction waste.

Cellulosic, Ethanol, News

Opposition to Ethanol Waiver Demand

Cindy Zimmerman

Two dozen Republican Senators, including presidential candidate John McCain, are urging the Environmental Protection Agency to waive the Renewable Fuels Standard they just passed as part of the energy bill in December in an effort to cut food prices. Other senators disagree.

HarkinSenate Agriculture Committee Chairman Tom Harkin of Iowa says the request would cut short the promise of biofuels for our nation’s energy security and is without merit. He says that “singling out increased biofuels production and use in the United States, European Union and other countries as the chief cause of higher world food prices is an over-simplification of the problem.”

ThuneSouth Dakota Senator John Thune says the call for a waiver from the national ethanol mandate due to higher food prices is simply “misguided.”

“We have an opportunity here to become more energy independent and ethanol has played a big role in that process,” Thune says. “I think if the EPA were to go back on our commitment to renewable energy it would be a misguided policy for the country.”

“It’s convenient right now to make ethanol the whipping boy for food prices when in fact oil prices have a lot more to do with the high price of food than the price of corn does,” Thune said. “It’s very fashionable right now to attack ethanol and everybody seems to be piling on.”

Renewable Fuels Association president Bob Dinneen says cutting ethanol production would have the opposite effect intended by the Senators – it would actually increase food prices by driving the price of gasoline even higher.

“If you take 4.5 billion gallons of ethanol off the market today, the impact on gasoline prices would be significant,” Dinneen said.

Economist John Urbanchuk of LECG estimates that an ethanol waiver “would add about $1.10 to the price of a gallon of gasoline in the short term because you’ve got to go out and replace that 4.5 billion gallons of ethanol.”

Ethanol, Food prices, Government, News, RFA

Florida Requires Ethanol Use

Cindy Zimmerman

Despite all the outcry about ethanol in the media, Florida is bucking the trend and establishing a renewable fuel standard, requiring ethanol to make up 10 percent of Florida’s total fuel supply by 2010.

FL Farm to FuelFlorida’s comprehensive “Green Energy” bill passed by the 2008 Florida Legislature last week includes a variety of other initiatives, prompted by Governor Charlie Crist, who praised the legislature for their work on the bill. “I’m very, very proud of the House and Senate in these difficult times they continue to move Florida forward and keep Florida green and make it even better,” Crist said.

There is a strong push in Florida to move toward producing more alternative crops for biofuels. The driving force behind that push has been Agriculture Commissioner Charles Bronson who says they are looking at a wide variety of alternative energy crops, especially those that can be grown using less water. “We have the capability of being on the ground first with real fuel,” he said. “Agriculture needs to be at the table when that process is put together.”

Bronson estimates that within ten years, Florida can produce three billion gallons of ethanol and biodiesel, and he believes that can happen without impacting food production in the state. “What we need to do is keep our food production up and grow as a second or third crop these fuel crops,” he said.

Bronson’s department is busy planning the third annual Florida Farm to Fuel summit, which will be held July 30th – August 1st in Orlando. Among the topics that will be addressed is renewable fuels initiatives in the new state energy bill, the federal energy bill, and the farm bill and how Florida can play a role in meeting the demand.

Biodiesel, Ethanol, Government, News

Iowa State Study Finds Ethanol Lowers Fuel Prices

John Davis

card.jpgClaims that ethanol production drives up gas prices don’t hold up after a study from Iowa State University. ISU’s Center for Agricultural and Rural Development has taken a look at the impact of ethanol production on U.S. and regional gas prices and found that ethanol production actually lowers prices at the pump.

Using pooled regional time-series data and panel data estimation, we quantify the impact of monthly ethanol production on monthly retail regular gasoline prices. This analysis suggests that the growth in ethanol production has caused retail gasoline prices to be $0.29 to $0.40 per gallon lower than would otherwise have been the case. The analysis shows that the negative impact of ethanol on gasoline prices varies considerably across regions. The Midwest region has the biggest impact, at $0.39/gallon, while the Rocky Mountain region had the smallest impact, at $0.17/gallon. The results also indicate that ethanol production has significantly reduced the profit margin of the oil refinery industry. The results are robust with respect to alternative model specifications.

Agribusiness, Ethanol, News

POET Cancels Construction of Ethanol Plant

John Davis

poet.gifA long delay in permitting has led POET, the world’s largest producer of ethanol, to cancel plans for construction of a new facility in Glenville, MN. Larry Ward, Vice President of Project Development for POET, says permitting has delayed the project for over a year.

“When we selected Glenville for a second ethanol production facility, we believed that we would be holding its grand opening sometime around today,” said Larry Ward, Vice President of Project Development for POET. “Early discussions with the appropriate authorities indicated there wouldn’t be any unusual permitting concerns due to the plant’s close proximity to another POET plant. However, permitting has delayed the project by more than a year and has caused a significant amount of additional costs making it less attractive than other potential projects in the Eastern Corn Belt. Our existing plant in Glenville continues to perform very well and it’s still possible that we may construct a second plant in that area sometime in the future, but it likely won’t be in the next few years.”

POET has opened three new ethanol production facilities in the Eastern Corn Belt states of Indiana and Ohio over the past seven months and will open three more in those states before the end of the year. “We also have four additional sites in the eastern Corn Belt that are in some stages of due diligence and we continue to be excited about the possibilities for increased production in those areas,” said Ward.

Energy, Ethanol, Facilities