Pacific Ethanol Files for Bankruptcy

Joanna Schroeder

pei_logo_topPacific Ethanol, Inc. announced today that its has filed for Chapter 11 of the U.S Bankruptcy Code. Pacific Ethanol is just one of many ethanol plants that have filed bankruptcy protection over the past 12 months. The Company and its marketing subsidiaries, Kinergy Marketing LLC (“Kinergy”) and Pacific Ag. Products, LLC (“PAP”), have not filed for Chapter 11 bankruptcy protection. 

Pacific Ethanol is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries’ ethanol and feed production under existing Marketing Agreements. Pacific has reached a financing agreement with WestLB AG that will allow them to meet customer needs, but the financing deal still needs approval from the bankruptcy court. 

In a company statement today, Neil Koehler, Pacific Ethanol’s CEO and President said, “We have worked well with our creditors to develop a plan that we believe allows us to continue operations and meet our commitments to our customers and vendors.  We are unwavering in our vision of being a leading producer and marketer of low carbon fuels in the Western United States.  While the market environment for the ethanol industry has been challenging over the last several quarters, we remain confident that a restructured company will grow and prosper as the demand for low carbon fuels increases.” 

Pacific Ethanol’s Chairman of the Board, Bill Jones, added, “We appreciate the support of West LB, Wachovia and the work of our management team. Our objective is to move this process forward as quickly as possible so that we can maintain our focus on serving our fuel and feed markets.”

Company Announcement, Ethanol

Valero Invests in Cellulosic Company Qteros

Joanna Schroeder

logoValero continues to position itself as a growing player in the ethanol industry through its investment in Qteros (formerly SunEthanol), a Massachusetts based company who owns the Q Microbe(TM) technology which turns biomass into ethanol. The investment was established through its acquisition of certain assets of Verasun Energy. Valero purchased several Verasun Energy plants this past April.

Qteros, has developed a proprietary technology known as “C3” (Complete Cellulosic Conversion), using the naturally occurring Q Microbe(TM). First discovered in Western Massachusetts by Qteros Founder and Chief Scientist Dr. Susan Leschine, the Q Microbe(TM) has the unique ability to transform virtually any cellulosic material into ethanol in a single step, avoiding the usual two-step process in which expensive enzymes are used to break down the biomass before it can be fermented.

In a company statement released today, Qteros’ CEO Bill Frey said, “Investment from established energy companies like Valero enables us to continue developing and scaling-up our technology. Qteros is moving ahead with our plans to open a pilot plant this year, as we continue preparations to expand to commercial scale production.” Frey was the former head of Dupont’s biofuels division.

valerorenewables_logoIn addition to the Valero investment, the company recently received $2 million in U.S. government appropriations towards a pilot plant it plans to open this summer in Springfield, Mass. This is one of several grants they have received from the U.S. Department of Energy. The company has also received funding from Venrock, Battery Ventures, BP, and Soros Fund Management.

Cellulosic, Company Announcement, Ethanol

Ramona Tribe To Build Renewable Energy Eco-Resort

Joanna Schroeder

logo_catalyx_6853549Looking to take an eco-friendly vacation? Well, your resort options just got bigger with the announcement that Catalyx Inc., has been contracted to build a 100% Eco-Tourism resort owned by the Ramona Band of the Cahuilla Indian Tribe.

This energy friendly resort will be located in the Anza Valley which is near San Diego, California. It is designed to operate completely off-the-grid by employing several alternative energy technologies to meet all of its energy needs. The site will reuse much of its own waste byproducts, such as sewage, biogas and restaurant food waste, and the completed project is expected to produce 1 megawatt-Hr (1000 KW-hrs) per day of renewable energy, with propane as a back up energy source until the project is complete.

“We want to create a truly natural retreat which mirrors our ancestral heritage of living in harmony with Mother Earth,” said John Gomez, Cultural Director for the Ramona Band.“When finished, this resort will not be a burden on the environment. All energy will be renewable and all waste and wastewater will be recycled.” 

Phase one is expected to be complete in August, 2009 and is being made possible by a joint venture between the Ramona Band, the Department of Energy, the United States Department of Agriculture, and multiple other Federal agencies. Upon completion it will offer visitors a peaceful retreat and an educational experience about the Native American culture, habitat, natural remedies, and care of the environment through the use of green energy and sustainable lifestyle practices. 

Gomez noted, “This resort will be a model for other tribes to generate revenues for themselves in a more appealing manner that is true to their heritage.” 

Catalyx, Inc. will provide multiple renewable energy and water treatment technologies as well as contract with third parties for additional technologies to be used at the resort and throughout the reservation.

biomass, Company Announcement, Solar, Wind

More Time for Higher Ethanol Blend Comments

Cindy Zimmerman

The Environmental Protection Agency is allowing another 60 days for comments on the proposal to allow an increase in the amount of ethanol that can be blended into regular gasoline.

epaThe original public comment period was to end on May 21 and will now end on July 20. Growth Energy CEO Tom Buis said, “We are aware of over 10,000 Americans who have already voiced their support for a higher blend of ethanol in our fuel supply and this extension makes it possible for thousands more to participate.”

National Corn Growers Association (NCGA) President Bob Dickey said the extension will give farmers behind on planting more time to get comments submitted. “Because of the importance of this issue to America’s farmers and the pressing need to get our crops in the ground, we asked EPA to extend the time for comments from 30 to 90 days. Our growers need this extra time to be full participants in this important public policy process,” he said.

The current limit on the amount of ethanol that can be blended into a gallon of gasoline is at ten volume percent ethanol (E10) for conventional (non flex-fuel) vehicles. Growth Energy and 54 ethanol manufacturers submitted the E15 waiver application on March 6, and EPA must make a decision by December 1, 2009.

corn, Ethanol, Growth Energy

House Bill Seeks to Improve Renewable Fuels Standard

Cindy Zimmerman

The House Agriculture Committee last week introduced a bill to change provisions in the Renewable Fuel Standard (RFS) that are “limiting the potential for clean, homegrown renewable biofuels to meet our nation’s energy needs.”

The Renewable Fuel Standard Improvement Act (H.R. 2409) was introduced by House Agriculture Committee Chairman Collin Peterson (D-MN) and Ranking Member Frank Lucas (R-OK) along with a bipartisan group of 42 other members of Congress.

“The unreasonable restrictions placed on the biofuels industry in the 2007 Energy Bill were never debated by Congress, and I’ve spent the past two years trying to undo the damage that we’re seeing now that EPA has published the proposed regulations that will make it impossible to meet the RFS,” Peterson said. ““In order to ensure that a clean, homegrown biofuels industry will succeed in the United States, we need to have Federal energy policies are flexible, practical, and innovative.”

Lucas says the most important provision in the bill is the expansion of the acreage eligible to produce biomass feedstock. “This will ease pressure on the current corn production system and it will open the way for more rapid development of next generation ethanol,” he added.

The bill eliminates the requirement that the Environmental Protection Agency consider indirect land use when calculating the greenhouse gas emissions associated with advanced biofuels. Currently, there is no reliable method to predict accurately how biofuel production will affect land use in the United States or internationally.

It also strikes the restrictive definition of renewable biomass included in EISA and replaces it with the definition included in the 2008 Farm Bill. The Farm Bill definition of renewable biomass was developed in consultation with appropriate Federal agencies and other Congressional Committees and was discussed and debated in a transparent manner, unlike the EISA provisions, which were never openly discussed or debated in Congress.

Biodiesel, biofuels, Ethanol, Government

Fourth Florida Farm to Fuel

Cindy Zimmerman

Florida farm to fuelPlans for the fourth Florida Farm to Fuel® Summit are progressing well and organizers expect the event on July 29-31 to be bigger and better than ever.

This year’s summit will once again include leaders from the agricultural, government, academic, technology, and financial communities who will share their progress in reaching the commercial production of biofuels and renewable energy in the Sunshine State. Topics to be addressed will include sustainability, biomass feedstocks, environmental and land use approvals, and agriculture and forestry in a reduced carbon economy.

Registration and more information is available at FloridaFarmtoFuel.com.

Biodiesel, biomass, conferences, Energy, Ethanol

BrightSource, Cal PG&E Ink World’s Biggest Solar Deal

John Davis

brightsourceenergyCalifornia utility PG&E and BrightSource Energy have signed a deal that will expand the two companies’ solar power agreement.

This story from Fortune Magazine says the utility will buy 1,310 megawatts of carbon-free electricity to be generated by seven giant solar power plant projects – the world’s biggest solar deal to date. This latest deal comes after BrightSource made an agreement in February to provide 1,300 megawatts of power to Southern California Edison:

PG&E had previously signed a power purchase agreement with BrightSource in April 2008 for 500 megawatts with an option to buy another 400 megawatts. The new 1,310-megawatt deal will supply enough electricity to power about 530,000 homes in California.

brightsourcepic2Those are impressive numbers, but not an electron of electricity has been produced yet. BrightSource now faces the challenge of licensing, financing billions of dollars in construction costs and then building nearly a dozen large-scale solar power plants to meet a 2016 deadline for the Southern California Edison (EIX) contract and a 2017 completion date for PG&E (PCG). (The big wild card is whether transmission lines will be available to connect the power plants to the grid.) The first PG&E project is set to go online in 2012 with the first SoCal Edison solar farm to begin generating electricity the next year. Those first two power plants are part of a 400-megawatt complex BrightSource is planning for the Ivanpah Valley on the California-Nevada border.

The article goes on to say that the Oakland, California-based BrigtSource now holds more than 40 percent of the big solar contracts in the U.S.

Solar

Biodiesel Starts Shipping Out of Port of Milwaukee

John Davis

innovationfuelsBack in January, I told you about how a New York-based renewable energy company had announced plans to move biodiesel and ethanol out of the Port of Milwaukee.

Now, this story from Milwaukee’s BizTimes.com says Innovation Fuels has started selling biodiesel to folks from around the world out of the port on Lake Michigan:

The company’s 312,000-barrel (45,000 metric tons) capacity terminal at the Port of Milwaukee is located on ten acres. The terminal is the first in the country that is totally dedicated for the sale and distribution of renewable fuels, the company said.

The terminal was originally built as Shell Oil’s Milwaukee headquarters in the 1950s. The terminal, acquired by Innovation Fuels from NuStar Energy L.P., includes a 20,000-square-foot warehouse, executive offices and a garage.

“The commencement of selling biodiesel via our Milwaukee terminal will significantly lower the cost of our biodiesel to customers in the Great Lakes due to lower transportation charges,” said Innovation Fuels CEO John Fox. “We also bring along a mindset of quality at a reasonable price, which is backed by our BQ9000 credentials as a marketer and producer in the Northeast United States. It is highly advantageous for us to be marketing Milwaukee based biodiesel to customers in Milwaukee and greater Wisconsin as well as to Chicago and the entire Midwestern region.”

Innovation officials say that this is just the beginning of using the Milwaukee port as a biofuels hub.

Biodiesel

Tax Credit Loss Idles Conoco/Tyson Biodiesel Plant

John Davis

conoco-phillipstysonA joint venture by ConocoPhillips and Tyson that would have the fuel giant turning the meat giant’s animal fat waste into biodiesel has folded because of the halving of a key federal tax credit.

This story from CNNMoney.com says the Borger, Texas refinery was idled last fall during changing economic conditions and government policies:

A spokesman for Tyson Foods Inc. (TSN), Conoco’s partner in the project, said production could resume if government incentives are reinstated.

Speaking to reporters after the company’s shareholder meeting in Houston, ConocoPhillips Chief Operating Officer John Carrig said the project became idle after subsidies for the project were cut in a half.

Carrig said the company stopped the biofuels production “as result of some actions taken last fall by Congress that reduced some incentives for biofuels that applies to us, particularly the removal of subsidies.”

In a statement, Tyson Foods said the bailout bill approved by Congress and signed by President Bush in late 2008 reduced the tax credit for renewable diesel “co-processing” from $1 per gallon to $0.50 per gallon.

“As a result, the project was no longer economically feasible and was put on hold last fall,” said Tyson spokesman Gary Mickelson. “Tyson and ConocoPhillips continue to discuss ways to resume the project. However, until the full tax credit is reinstated, production will likely remain suspended.”

When the refinery was first opened, the hope was that it would make 175 million gallons of biodiesel a year… coming at a critical time when the push for renewable energy sources was gaining strength in the face of skyrocketing petroleum prices. Now, there are concerns that this will be a sign that other major oil won’t hesitate to halt their renewable fuel efforts if they turn unprofitable… especially if they don’t have government help.

Biodiesel

Wind Turbine Blade Test Center Gets $25 Mil Grant

John Davis

masstechProgress on what could become the country’s first commercial facility in the United States able to test wind turbine blades longer than 50 meters should take a big step forward with some help from a $25 million federal grant.

This story in the International Business Times says the U.S. Department of Energy is giving the state of Massachusetts the money for the Massachusetts Wind Technology Testing Center, set to start construction in September and to be completed by the end of 2010:

masswindtech“Testing the next generation of wind turbines here will make Massachusetts a hub for the fastest-growing energy source in the world,” [Massachusetts Governor Deval Patrick] said.

The center will attract companies to design, manufacture, and test their blades in the United States, the Department said, rather than shifting them to Europe.

Improving technology for longer blades will be especially useful for large-scale offshore wind power projects, the department said.

Officials believe the facility will help move wind turbine technology along, helping reduce production costs.

Wind