Biofuel IPOs On The Rise

Joanna Schroeder

The biofuels industry is making a come-back with several successful IPOs (initial public offering) over the past few months. Today, KiOR announced its initial public offering of 10,000,000 shares of Class A common stock at $15 per share. The company raised nearly $138 million of proceeds from the IPO which occurred on June 24.

Other successful IPO’s include the much-awaited IPO of Gevo back in February. The company raised an estimated $123.3 million after setting the share price at $15. In total, the company sold 8.223 million shares. There were concerns as to what level of interest the IPO would generate after Amyris went public last September with less than stellar results. In total, Amyris raised $84.8 million after setting in shares at $16. The company had originally hoped to go out with an offer between $18-$20 a share.

But despite set-backs for the biofuels industry, the real IPO winner so far this year has been Solazyme who raised nearly $227 million – nearly double the money raised by others in the biofuels sector. The per share price was $18, ironically 10 percent higher than company execs predicted several weeks prior to the official IPO.

So why did Solazyme rake in the big bucks while the others merely fared well? While I am by no means a financial guru, I believe part of their success lay in the fact that Solazyme is already making profits by selling bioproducts and biochemicals. Earlier this year, the company launched a cosmetic product that is being sold in Sephora stores nationwide. The other companies, while they have contracts and are producing fuels at smaller scales, are not making profits yet. Therefore, investing in these companies is a bigger gamble.

Another reason why Solazyme’s strategy may be effective is that they are able to use their profits from their bioproducts and biochemicals to help fund it algal-biofuels research while companies like Gevo have no products yet. Therefore, Gevo needs to raise funds just to deploy its technology at commercial scale, which it is now doing. They have broken ground on the retrofit of an ethanol plant in Luverne, Minnesota.

With a solid showing on Nasdaq, at least for now, hopefully these second generation biofuels companies are paving the way for more IPOs and more private investment dollars – a much needed element if the industry is to move to commercialization.

algae, biofuels, biomaterials, Opinion

Stabilizing Food Prices

Chuck Zimmerman

Our latest ZimmPoll asked, “What can G20 ag ministers do to stabilize food prices?” The answer is Nothing, 31%; Increase productivity, 23%; End biofuels production, 18%; Regulate markets, 17%; Improve crop reporting, 8% and Stockpile food, 3%. Can they actually do any of these things? Well, I guess they can do nothing. They met recently and did come up with “a plan.” Interestingly, stockpiling food is part of their plan. Hmm . . .

Our new ZimmPoll is now live. We’re asking the question, “What do you think of USDA’s proposed GIPSA rule?” Let us know what you think. Don’t know much about GIPSA? Check out this link to find a series of posts on the subject.

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

ZimmPoll

Bob Dinneen Keynotes Fuel Ethanol Workshop

Chuck Zimmerman

At the 2011 Fuel Ethanol Workshop the Reverend of Renewable Fuels, Bob Dinneen, CEO, Renewable Fuels Association took the stage as a keynote speaker. Bob started his presentation with a report on several policy issues and then moved to a “conversation” with attendees in which he took questions.

Bob first touched on yesterday’s EPA announcement of a label for E15. He says it’s not everything they hoped for but it’s not as bad as had been feared. It does show that the EPA considers E15 a viable fuel. Hopefully we’ll see the fuel in the market soon. Bob then moved on to the latest votes in Congress and what was really going on in the background and what those votes really mean. You can listen to Bob’s presentation here: Bob Dinneen Keynote

You can also watch Bob on stage with the first part of his presentation before he took questions and answers:

2011 FEW Photo Album

Our coverage of the 2011 Fuel Ethanol Workshop is being made possible by the Renewable Fuels Association.

Audio, Ethanol, Ethanol News, FEW

Dr. Bruce Dale Receives FEW Award of Excellence

Chuck Zimmerman

This morning at the 2011 International Fuel Ethanol Workshop, the 2011 Award of Excellence was presented to Dr. Bruce Dale, Michigan State University, by BBI International VP, Tom Bryan.

Dale, professor of chemical engineering and associate director of the office of biobased technologies at Michigan State University, received the award for his extensive research in the areas of indirect land use change (ILUC) and the production of cellulosic ethanol. Earlier this year, he co-authored an analysis of ILUC which found no correlation between U.S. biofuel production and land use change in other countries.

In accepting the award, Dr. Dale recounted how he was the son of a mining engineer and that the towns where he grew up are now ghost towns because the ore has been depleted. “Because the industry on which they were based is not a renewable industry,” he said. When he became a chemical engineer and realized that he was most likely to end up working for the oil industry, he committed himself instead to develop large-scale renewable fuels.

Listen to the rest of his remarks here: Dr. Bruce Dale Remarks

2011 FEW Photo Album

Our coverage of the 2011 Fuel Ethanol Workshop is being made possible by the Renewable Fuels Association.

Audio, Ethanol, Ethanol News, FEW, University

Ethanol Wins at Sonoma

Joanna Schroeder

The ethanol industry was in full force this past Sunday during the NASCAR Toytota/Save Mart 350 race at Sonoma Infineon Raceway. The winner of the race was Kurt Busch driving the #22 car and ethanol-sponsored Clint Bowyer #22 finished in fourth place. Rounding out the top spots were Jeff Gordon #24 finishing second and Carl Edwards #99 finishing in third place.

Among the estimated 100,000 fans at the race was ethanol enthusiast Paul Wikoff. He reported, “The air was full of the loud sound of E15 fuel powerfully propelling these cars forward at speeds averaging over 90 miles per hour on this twisty track of 1.99 miles, with 110 laps for completion.” The track has 11 turns and cars finishing the race completed 1, 210 turns, a different challenge compared to the traditional oval track.

The National Corn Growers Association hosted dozens of ethanol enthusiasts during the race and Dr. Mike Lynch, Managing Director of Green Innovation for NASCAR, made a visit to the grandstand box sponsored by American Ethanol. Lynch is credited with helping to bring Sunoco Green E15 to NASCAR and said during his remarks that the drivers and the dyno testing witness the added horsepower gain for the race cars.

Darrin Ihnen, Chairman of the National Corn Growers Association, was also in attendance and voiced his special gratitude to those in California that have embraced clean, renewable, and domestic ethanol fuel. The ethanol industry has been facing some hurdles in recent months with proposed legislation that would make ethanol ineligible for state funding programs including the California Ethanol Producer Incentive Program.

Ethanol, NASCAR

Biomass Crops to Be Grown on Airport Property

Joanna Schroeder

Michigan State University (MSU) is partnering with Wayne County Airport Authority (WCAA) who operates the Detroit Metropolitan Airport and Willow Run Airport to grow, harvest and process biomass crops on airport owned land. This is the first of its kind partnership in the Midwest and demonstrates WCAA’s commitment to advancing aviation biofuels development.

“How does aviation protect itself in the future against the depletion of fossil fuels and the uncertainty of foreign sources of energy?” asked WCAA Interim CEO Genelle M. Allen. “Part of the answer may be to grow it.”

The AgriEnergy Technology Demonstration project is funded by a $476,000 grant from the Michigan Energy Office, part of the Michigan Economic Development Corporation. Combined, the two airports have nearly 1,700 acres of property that could be suitable for growing biomass crops. Already, WCAA has leased three acres of land to MSU Extension where several biomass crops have already been planted, including canola and oriental mustard seed, and this fall will be harvested, refined and tested.

Allen added, “WCAA has been interested in exploring the potential of developing airport-owned property around both airports for bioenergy production for some time. If successful, this project could attract businesses to the vicinity of the airports that would produce alternative fuels for use in aircraft and other vehicles. This project has possibilities for not only bringing economic development to Southeast Michigan, but also protecting land around our airports from further encroachment.”

In addition to airport property, the grant also includes bioenergy sites on other types of land not traditionally used for growing biofuel crops such as vacant urban lots and highway right-of-ways. According to MSU Extension Project Manager Dennis Pennington, he expects the project will also determine the economic impact of growing, refining, storing, and transporting the biomass as a drop in fuel alternative, aka biojet fuel.

The project is expected to be completed by February 2012.

Biodiesel, biojet fuel, biomass

DDCE Selects Nevada, IA for Cellulosic Ethanol Plant

Joanna Schroeder

DDCE has selected Nevada, Iowa for its cellulosic ethanol biorefinery to be located adjacent to Lincolnway Energy, LLC’s corn-ethanol plant. The company has entered into an agreement to purchase land when completed, where the plant will be sited. The biorefinery will be one of the first commercial scale cellulosic ethanol plants producing fuel from corn stover, corn cobs and leaves, remaining after grain harvesting. Currently, DDCE is producing fuel at its demonstration facility in Vonore, TN and is in the process of scaling up the process to globally license its end-to-end production system.

“We’re producing cellulosic ethanol sustainably and economically today, and the market is ready and interested to deploy large-scale biorefineries,” said Joe Skurla, CEO of DDCE. “We are purchasing the site next to Lincolnway because it will meet the business needs for our project, and provides potential economic and environmental synergies for both facilities.”

This fall, the company plans to collect thousands of tons of stover from Iowa fields with its 2011 Stover Collection Program. This program will help create cost effective harvesting and distribution techniques. DDCE is collaborating with Pioneer Hi-Bred and Iowa State University to establish best practices in harvesting, storage, and transportation, and assure the agronomic and environmental integrity of cornfields.

biofuels, Cellulosic, Ethanol

Rick Serie Joins ACE

Joanna Schroeder

Ethanol industry veteran Rick Serie has joined The American Coalition for Ethanol (ACE) as its Director of Market Development. Brian Jennings, the organization’s executive vice president, said Serie’s talents make him a perfect fit for ACE and will help the advocacy fulfill its mission to make U.S. ethanol the consumer fuel of choice.

Ron Lamberty, ACE senior vice president said its members are becoming increasingly interested in supplying E85 and midlevel blends at the plant level. “Plants are becoming impatient with ‘kinks’ in the supply chain, and Rick’s experience as a supplier of E85 and midlevel blends at the ethanol plant level will be a great resource for producers considering their options,” said Lamberty. “The addition of Rick as Director of Market Development gives ACE unmatched real-world expertise in getting ethanol from the plant to the pump.”

Serie said he is excited to be part of such a dedicated team. “I am passionate about ethanol and rural America and I am thrilled with this opportunity to work with ACE members in helping expand and develop new markets for the ethanol industry,” said Serie.

Ethanol, Ethanol News

Sydney, Australia Home of New Algal Biomass Facility

Joanna Schroeder

Algae.Tec Limited in collaboration with Manildra Group have announced the construction of an algae demonstration facility in Shoalhaven One, in Nowra south of Sydney, Australia. Manildra Group is the country’s largest ethanol producer. Algae.Tec Executive Roger Stroud said the partnership contract has been signed and final logistical plans are being made and submissions for permits are also in the works.

“The Algae.Tec algae photo-reactors will be sited next to main facility and take a carbon dioxide feed from the main ethanol fermenters,” said Stroud. “Algae.Tec is one of only a few advanced biofuels companies globally with a technology designed to grow algae on an industrial scale and produce valuable biofuels that replace increasingly expensive fossil fuels.”

According to Algae.Tec, their technology captures carbon pollution from power stations and manufacturing facilities which feeds into the algae growth system. Currently, photo-reactors are being assembled at their Algae Development & Manufacturing Centre in Atlanta, Georgia. These photo-reactors use one-tenth of the land that is required when growing algae in ponds and the company said their enclosed module system is designed to produce the highest yield of algae biomass in nearly any environment on Earth.

algae, biofuels, International

Four Ethanol Plants to Install Advanced Oil Systems

Joanna Schroeder

Four ethanol plants have committed to installing ICM’s new patent-pending Advanced Oil System (AOS) corn oil extraction technology. According to ICM, AOS uses an emulsion-breaking approach to deliver a higher oil recovery rate than other technologies. The system can be added to plants without any current corn oil technology via separate skid mounted units or a modified version can be added to plants that currently have ICM’s first generation corn oil extraction technology.

Chris Mitchell, executive vice president of ICM said, “We’re thrilled to announce the deployment of our Advanced Oil System™ technology, and we’re eager to demonstrate how we’ve focused our efforts on creating solutions that deliver rapid payback and continuous value-added co-product streams for the renewable energy industry. We believe our competitive advantage comes from equipping our customers with the highest yielding and most efficient oil separation technology available.”

Ethanol, Ethanol News