Reuters Biofuels Summit Focus on Cellulosic

Cindy Zimmerman

Cellulosic was all the buzz at the Reuters Global Agriculture and Biofuels Summit this week and prognosticators are now saying it is much closer to reality than ever before.

ReutersOne speaker at the summit said that biomass ethanol is just 2-3 years away. “We should see the first commercial-scale plants coming on line in late-2009, early-2010,” said Richard Hamilton, President and CEO of California-based Ceres.

Ceres develops high biomass yielding crops such as switchgrass and miscanthus for future use as dedicated energy crops.

A US Department of Energy official speaking at the summit said that researchers are on track to make cellulosic ethanol cost-competitive with conventional gasoline supplies by 2012.

“We are on our way to meeting that,” said Katharine Fredriksen, principal deputy assistant secretary at the Energy Department’s Office of Policy and International Affairs.

And the head of the nation’s largest ethanol producer POET told the summit they are focusing on making next-generation ethanol by 2011 from corn-cob waste.

“Our facilities are surrounded by a significant supply of cellulose … we’ve chosen to focus on corn cobs,” said POET CEO Jeff Broin.

Cellulosic, Ethanol, News

Ethanol Price Rebound

Cindy Zimmerman

Ethanol prices are up.

This story in the Wichita Eagle reports that ethanol prices have gone up 35 cents a gallon since mid-November.

ICM“It’s a little bit of a surprise to see how much the market has rebounded,” said Dave VanderGriend, president of ICM at Colwich, one of the nation’s largest designers and builders of ethanol plants.

“There’s still an oversupply to work through, but certainly this price rebound is helping stabilize the industry.”

VanderGriend pointed to a marked slowdown in the pace of plant construction and expansion as a factor in helping the market recover.

“New startups are about three to four months behind schedule,” he said. “That’s partly a result of a slowdown in financing and partly a backlog in being able to get parts for new plants.”

Ethanol, News

One Million Gallon Milestone

Cindy Zimmerman

Flex-fuel vehicle owners in Oshkosh, Wis. have purchased over one million gallons of E85 at the Renew fuel station located at Highway 76 and 41. Consumers took 830 days to purchase one million gallons of E85 and are well on their way to purchasing more. This marks the first time a Wisconsin gas station has sold more than a million gallons of E85.

Ethanol Promotion and Information Council (EPIC) Interim Executive Director Robert White congratulated the station and the ethanol industry for reaching that historic mark. “The industry reached a milestone when the Renew station sold its millionth gallon of E85. Consumers are sending the message that the demand for E85 is rising and more E85 stations and flex-fuel vehicles are needed,” said White.

RenewRenew, an independent brand of fuel stations based in Oshkosh, has offered E85 since the station opened on September 26, 2005. The company expects Oshkosh station customers helped save approximately 43,500 barrels of oil by choosing E85 over straight gasoline. Jay Stoflet, Director of Retail Marketing for Renew explains, “While there is no perfect solution for immediately reducing our country’s dependency on oil, E85 is a great first step that is helping make a change. These customers are really making a difference, one gallon at a time.”

E85, EPIC, Ethanol, News

ND Gov Disputes National Geographic with Renewable Energy Successes

John Davis

hoeven.jpgNorth Dakota Governor John Hoeven is strongly disputing the contents of a National Geographic article that paints the Northern Plains state in a less-than-flattering light.

The article entitled “The Emptied Prairie” talks about how so many towns have been abandoned because of tough times. But in a letter to the editor of the National Geographic, Hoeven points to how biofuels and wind energy are helping North Dakota’s future:

January 14, 2008

Mr. Chris Johns
Editor-in-Chief
National Geographic Magazine
PO Box 98199
Washington, D.C. 20090-98199

Dear Mr. Johns:

The recent article about North Dakota in the January 2008 issue of National Geographic was way off the mark. To give the magazine’s readers a more accurate picture of our state, I’ve asked our Commerce Commissioner and Tourism Director to contact your editors and invite you back to cover what you left out – the fact that North Dakota is a growing 21st Century state with a bright future….

…new ethanol and biodiesel facilities are transforming rural communities like Richardton, Underwood, Hankinson, Casselton, and Velva. Just a few years ago, North Dakota produced less than 40 million gallons of ethanol a year. With these new facilities, we will produce half a billion gallons. Your article also makes mention of the “moan of the wind” on the prairie, but that same wind is on its way to producing nearly 1000 megawatts of clean renewable energy on commercial wind farms across North Dakota.

Hoeven suggests National Geographic editors need to look at the whole picture… a picture in North Dakota that definitely includes renewable fuels.

Biodiesel, Ethanol, News, Wind

GM Makes Cellulosic Investment

Cindy Zimmerman

GMAn announcement by General Motors CEO Rick Wagoner at the opening of the North American International Auto Show in Detroit yesterday made for big alternative energy news nationwide.

CoskataWagoner announced GM’s partnership with Coskata, an Illinois company that has a process for for turning wood chips, grasses, or municipal waste into ethanol.

Coskata uses a proprietary process that leverages patented microorganisms and bioreactor designs to produce ethanol for less than $1 a gallon, about half of today’s cost of producing gasoline.

“We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum,” GM Chairman and CEO Rick Wagoner said.

GM will receive the first ethanol from Coskata’s pilot plant in the fourth quarter of 2008. The fuel will be used in testing vehicles at GM’s Milford Proving Grounds.

Car Makers, Cellulosic, Ethanol, News

Thar Receives $1.9 Mil Grant for Biodiesel Production

John Davis

tharlogo.jpgA Pittsburgh-based maker of supercritical fluids… replacements for solvent-based technologies in the pharmaceutical, food, chemical, and electronics industries… is getting some money to help improve the efficiency of biodiesel production.

This story from the Pittsburgh (PA) Tribune-Review says Thar Technologies, Inc. has received a $1.9 million grant from the National Institute of Science and Technologies:

Unlike most biodiesel-producing techniques, the new Thar process doesn’t use the hazardous air pollutant hexane to extract oil from oilseeds. Instead, the Thar process will use liquified carbon dioxide.

“We use carbon dioxide that we compress into a liquid and use that as a solvent in the process,” said Lalit Chordia, Thar’s CEO, during a news conference at the company’s operations center at Harmar to announce the federal grant. “Our process can use any source of oil, even oil shale and low (grades) of coal as a n oil source and convert it to biodiesel.”

The company says the process is profitable at $2.30 a gallon… and doesn’t even need the federal dollar-a-gallon subsidy to make money. Thar hopes to put up a 40-million-gallon-a-year biodiesel plant in Western Pennsylvania by 2010.

Biodiesel

Jobe: Biodiesel Growth Faces Challenges

John Davis

nbb-logo.jpgHigh input costs could put the damper on biodiesel growth in 2008, despite the fact that demand for the green fuel will grow. But the long-term outlook still looks pretty positive.

This story from Reuters says that assessment comes from the head of the industry’s largest trade group:

joe-jobethumbnail.jpg“The economics overall for the biodiesel industry are extremely challenging right now. There’s no question about it there’s been a cooling off what has been some irrational exuberance that has gone on in the investment in biodiesel production capacity over the last two years,” Joe Jobe, CEO of the National Biodiesel Board, told the Reuters Global Agricultural and Biofuels Summit in a telephone interview.

The biggest culprit behind the sliding profit margins has been soaring input costs, Jobe said. The price of soybean oil, the primary feedstock to produce U.S. biodiesel, has reached levels never seen before in history — making it difficult for many plants to make a profit.

Domestic biodiesel margins are running about 10 cents per gallon to a minus 30 cents per gallon, industry analysts said.

The article goes on to point out that biodiesel production in the U.S. went from 25 million gallons a year in 2004 to 450 million gallons in 2007… pretty impressive growth. This year, biodiesel production is expected to hold steady at current levels. But with the passage of the new energy bill, biodiesel production could jump by five times over the next 15 years from what it currently is. Jobe says by 2015, his industry wants to replace 5 percent of the U.S. diesel pool with biodiesel… upping production to 1.85 billion gallons.

Biodiesel

Biofuels Demand Driving Corn & Soybean Price Spikes

John Davis

graintraders.JPGCorn and soybean prices have gone to record levels as producers struggle to keep up with food and biofuel demands.

Bloomberg.com says a new U.S. government report prompted traders to push soybean prices to a record of about $13 a bushel while corn prices hit an 11-year high of $4.95 a bushel:

The world soybean harvest will fall 6.5 percent this year, U.S. corn inventories will be 20 percent less than estimated a month ago, and wheat farmers in Kansas and Texas planted less even as the price of the grain doubled, the Department of Agriculture said in separate reports today.

“We can’t grow our way out of this grain-shortage hole,” said Jim Gerlach, president of A/C Trading Inc. in Fowler, Indiana. “We’ll have to price our way out. I’m bullish until further notice. We’ll see ups and downs, but the trend will remain higher.”

What this ultimately means for ethanol and biodiesel producers is a high cost for feedstocks, cutting into already tight margins for biofuels. Ironically, it’s the success of the green fuels that is driving up the cost for what makes them.

Biodiesel, corn, Ethanol, News

FAPRI Analyzes Energy Bill

John Davis

fapri.jpgThe Food and Agricultural Policy Research Institute at the University of Missouri has completed an analysis of the new energy bill, and the results seem to point to some pretty positive results from the legislation.

FAPRI reports the Energy Independence and Security Act (EISA) of 2007, signed into law by President Bush on December 19th, will have positive consequences for biofuels in the short and long term. From the report’s summary:

Relative to baseline projections developed in early 2007, the implementation of the selected provisions of EISA would have important implications for biofuel and agricultural markets.

• Under a range of plausible assumptions, the EISA mandates result in more ethanol and biodiesel production than would otherwise occur.

• Higher levels of biofuel production translate into increased use of corn and vegetable oil. This increase in demand results in higher prices for corn, soybeans and most other agricultural commodities.

• Higher crop prices translate into reduced taxpayer costs of government farm programs and higher levels of crop producer income.

• Impacts of higher mandates are very sensitive to the price of petroleum and assumptions regarding the extension of current biofuel tax credits and tariffs.

You can read the full analysis by clicking here.

Biodiesel, Ethanol, Government, News

Galveston Biodiesel Plant Back On

John Davis

A Galveston, Texas biodiesel plant that looked like it was done after oil giant Chevron backed out of a deal to expand operations, now looks like it is back to expanding its efforts.

This story in the Houston Chronicle says Galveston Bay Biodiesel will spend $15 million to do some improvements and settle legal claims against it after Chevron left the project high and dry last year:

Galveston Bay Biodiesel, the partnership that owns the plant, said the money is coming from one of the original investors in the project but did not identify the investor.

In a statement, the partnership said it will use $2.2 million of the money to settle lien claims filed last year by J.M. Davidson, a Corpus Christi-based construction firm, and other vendors who said they weren’t paid fully for work performed at the plant.

Other money will go to finish some modifications and expansions of the plant, which the partnership contends were halted last year when Chevron decided not to invest more money in the project.

The article says Chevron claims it was in the deal just to get things started, but the partnership says Chevron breached its agreement and misrepresented itself to up its part in the plant. The Chevron infusion was suppose to help the plant go from 20 million gallons a year to 100 million. This new investment should help the plant expand to 40 million gallons a year.

Biodiesel