Biodiesel Continues March Out of Midwest

John Davis

It used to be the image of a modern oilman was a Middle Eastern sheik. But more and more, it’s an American Mid-WESTERNER. Case in point, this article from the Bangor (Maine) Daily News. The town of Bucksport, Maine could become the home of one of the largest biodiesel plants in the Northeastern United States.

Dirigo Biofuels, an Iowa-based company whose owners have experience developing similar refineries in the Midwest, is working on plans for a plant in Bucksport that would produce 30 million gallons of biodiesel fuel from vegetable oil each year.

Tobin Bush, the project coordinator for Dirigo Biofuels, tells the Bangor Daily News that Bucksport is a good choice because it is close to where people would be using it and has a deep-water port.

“Most of the feed stock [raw materials] is being grown in the Midwest, but the final product is used on the coast,” he said. “Maine is right in the heart of the home heating fuel market.”

The company plans to rely on the deep-water access in Bucksport to bring in the vegetable oils it will use in the refinery, and, potentially, to ship the finished product to customers.

Plans are for the plant to be up and fully running by the end of the year, but Bush admits there’s still a distance to go to finish the deal.

Biodiesel

Minnesota Professor Looks at Economic Viability of Using Animal Fat for Biodiesel

John Davis

EidmanRecently, both Cindy and I have been telling you about using the leftovers from meat processing (chicken fat, in particular) to help make biodiesel. Now, I’ve talked with Vernon Eidman, Professor Emeritus in Applied Economics with the University of Minnesota about the economic viability of using these alternative feedstocks in alternative fuels. Check it out!

Listen To MP3 Professor Eidman
(5 min MP3)

Biodiesel

E85 Moves Down Under

Cindy Zimmerman

Saab Biopower Saab has become the first car maker to introduce a flex-fuel vehicle in Australia.

Saab officials say the BioPower program will help them gauge demand for ethanol powered vehicles and renewable fuels in Australia, even though E85 is not yet commercially available in the country.

According to AutoWeb Australia, Saab introduced the vehicles this week at a promotional event in Queensland and they will now be “loaned to media, government, industry and fleets for real world evaluation. Vehicles are already scheduled to join the fleets of the Queensland Government and ethanol producers such as the Manildra Group.”

Ethanol, News

Three More Ethanol Plants For Iowa

Cindy Zimmerman

A Dallas company plans to built three new ethanol plants in Iowa that could produce up to 300 million gallons of fuel a year.

According to the Des Moines Register, Harvest BioFuels LLC is scheduled to begin construction of a plant near Galbraith in eastern Kossuth County in April, with onstruction of plants near Garner in Hancock County and near Gilmore City in Pocahontas County to begin later this year.

Iowa is already the top ethanol producing state in the country with 25 ethanol plants producing 1.7 billion gallons a year. Twenty-one more plants are either under construction or being expanded.

Ethanol, News

Bill Would Increase Biofuels Infrastructure

Cindy Zimmerman

ThuneSalazarSenator John Thune (R-SD) and Senator Ken Salazar (D-CO) this week introduced bi-partisan legislation designed to increase the availability of alternative fuels at the pump.

According to Sen. Thune’s press office, the Alternative Energy Refueling Systems Act would provide for increased energy security for Americans by providing incentives for gas station owners across the country to install alternative fuel tanks, giving consumers greater opportunities to opt for cleaner, more environment-friendly fuels such as E-85, compressed natural gas, or bio-diesel, in an effort to reduce our nation’s dependence on foreign oil.

This bipartisan legislation would provide gas station owners with grants for 30 percent of the costs (not to exceed $30,000) for the replacement of a petroleum tank, or the addition of an alternative fuel tank.

American Coalition for Ethanol Executive Vice President Brian Jennings praised the legislation, saying it would help the U.S. take great strides forward in making alternative fuels like E85 available to motorists. “Expanding infrastructure is of paramount importance to expanding the use of homegrown alternatives to oil,” said Jennings. “This legislation recognizes that infrastructure hurdles stand in the way to the widespread use of E85 and provides an important shot in the arm to help develop that critical infrastructure.”

Biodiesel, Ethanol, News

Biofuels at Green Week

Cindy Zimmerman

It’s International Grüne Woche (Green Week) in Berlin, the annual global exhibition for the food industry, agriculture and horticulture. And while food has always been the focus of this event, fuel is stealing some of the thunder this year.

Messe Berlin is the company that organizes Green Week and CEO Raimund Hosch welcomed agricultural journalists at the kickoff for the show this week.

International journalist Chuck Zimmerman (my husband) is covering the event and interviewed Hosch, who told him that renewable energy is a growing segment of the show.

Listen to Hosch’s comments here. Listen To MP3 Hosch (1 min MP3)

EU Commissioner of Agriculture Mariann Fischer Boel also talked about biofuels and renewable energy when she spoke at the event. You can read more about that and listen to her comments on agwired.com.

International

Upcoming Biomass Conference

John Davis

Mark your calendars for Biomass and Biorefinery Deals 2007 March 26th-28th in Washington, D.C. Industry leaders along with government officials, and equity and venture financiers will get together at D.C.’s AED Conference Center to discuss the financial end of biomass operations.

They will address federal incentives and programs for the development of new biomass energy projects, as well as the potential for extension of current tax incentives and implementation of more federal legislation under the incoming Congress. They will examine the prospects for obtaining financing from private equity and other “new” sources, offering helpful hints on how to take advantage on the diverse revenue streams possible in these deals and optimally structure deals to fully capture the value of bio-energy projects and assure financing. Finally, they will review some of the practical issues involved in developing and financing projects using diverse feedstocks, technologies and revenue sources.

Gotta make at least SOME money to make an industry viable, and it looks like this conference will give some insight on how to best use government money and private finvestment and how to attract in those sources of investment.

Biodiesel, Ethanol, Government

CBOT Official Says Biodiesel Contracts Still in the Future

John Davis

CBOTFollowing up on Cindy’s post about the Reuter’s Global Biofuels Summit, I ran across this bit of news about the future of biodiesel futures from Reuters.

The chief economist at the Chicago Board of Trade, Dave Lehman, told attendees at the summit that the biodiesel market is still not big enough to be a hedging tool.

The biodiesel market is roughly 1/40 the size of the $8-billion U.S. corn-based ethanol market, Lehman said.
“It needs to grow by a factor of four or five just to get to our minimum” to support a futures contract, Lehman said.

In comparison, Lehman points out that the board already trades five to 10 ethanol contracts each day. But that is still not enough for ethanol to be considered a price-risk management tool. He also expects the dry distillers grain market… of course, the by-product of corn-based ethanol production… to be traded before biodiesel.

Lehman expects things to be much more rosy for the ethanol futures in the near future… possibly five THOUSAND contracts a day… as the renewable fuel standards really kicks up production.

Biodiesel, Ethanol

Reuters Global Biofuels Summit

Cindy Zimmerman

Reuters Reuters News Service held a Global Biofuels Summit this week featuring industry leaders addressing a number of topics.

Venture capitalist Vinod Khosla told Reuters that he predicts “a rapid rise in cellulosic ethanol production and utility-grade solar power.”

Khosla says cellulosic technology is getting closer and closer to the market. “Remember, last year (cellulosic ethanol) was six to 10 years (away). Now people talk about four to six years. And my bet is (that) by the end of this year, they will talk about two to three years,” Khosla said. “So we are maybe making two years of progress every year.”
He also predicts that tariffs on ethanol imports “will be on their way out.”

Another Reuters report addressed the need to improve ethanol transportation.

Monte Shaw, president of the Iowa Renewable Fuels Association, told the summit that the “United States will need to make big improvements in shipping ethanol from the U.S. heartland — perhaps even building pipelines from the Midwest to the coasts — to transport the fuel to markets.”

Ethanol, News