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

Interview with Jerry Bagley, Chicken Fat Oilman

John Davis

Back on January 4th, we told you about a plant near Dexter in Southeast Missouri that is using chicken fat to make biodiesel. Read the original AP story here.

Today, I talked with Jerry Bagley, one of the co-owners with Global Fuels, LLC. He told me that he thinks they are just on the edge of the potential for this type of fuel.

Check out the interview. Listen To MP3 Global Fuels (4 min MP3)

Biodiesel

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

Ethanol Should Drive Farm Machinery Sales

Cindy Zimmerman

When farmers are making money, they tend to spend it on better farm equipment. With grain prices higher and the biofuels business booming, the outlook is bright for farm machinery sales in 2007.

According to a Reuters report, sales of farm equipment were disappointing last year despite the higher corn prices, but one industry analyst expects that to turn around this year.

“Before when you had a spike in corn prices, it was a function of supply. Your corn prices went higher but you had less corn to sell,” said Credit Suisse industrial machinery analyst Jamie Cook, citing the last time U.S. corn prices were at current levels after the drought of 1996.

“This time it’s different in that demand is driving the corn prices higher so we have higher prices, more corn, which means more money in the farmer’s pocket,” she said

Ethanol, News

Diamond Investment Opportunity

Cindy Zimmerman

DiamondMeetings begin this week in Illinois to interest investors in the Diamond Ethanol plant at Charleston.

Green Lion Bio-Fuels is the developer of the plant and others underway in Streator (Emerald Ethanol LLC), and Beardstown (Prairie Breeze Ethanol LLC).

The meetings will offer interested farmers, landlords, and other off-farm investors an opportunity to buy shares in the Diamond Ethanol plant. Stock offerings for the Emerald Ethanol and Prairie Breeze Ethanol plants conclude later this month.

More information can be found on the Diamond Ethanol website.

Ethanol

Pacific Ethanol Announces Idaho Groundbreaking

Cindy Zimmerman

Pacific Ethanol Pacific Ethanol will soon begin construction on a 50 million gallon per year ethanol facility in Burley, Idaho according to a company announcement.

The plant would be located mid-way between Boise and Salt Lake City, Utah and is expected to begin construction within the next thirty days.

The Burley Idaho plant site is located on a parcel of 177 acres, with direct access to both the Union Pacific Railroad and Interstate 84. Burley, Idaho is in the Magic Valley region of the state, where a resident population of over 300,000 dairy cattle and 100,000 feedlot cattle will be sufficient to consume all wet distiller’s grain from the new ethanol facility. A fuel blending rack is within eight miles of the plant site.

Ethanol, News

Ethanol and Hydrogen Working Together

Cindy Zimmerman

EPA The Energy & Environmental Research Center at the University of North Dakota is leading a project to demonstrate the production of hydrogen at existing and future ethanol facilities in a unique, economical way, providing a near-term path toward a hydrogen economy.

According to a center press release, the hydrogen produced could be used on-site in fuel cells to provide additional power for the plant or as fuel for hydrogen vehicles.

“Hydrogen production integrated with an ethanol facility will provide an important source of renewable energy for both stationary and transportation fuel cell applications in a hydrogen-based economy,” said Chad Wocken, EERC Research Manager. “This technology will help facilitate regional and national growth in hydrogen utilization.”

The EERC will highlight this research project as well as many other efforts in renewable fuels and energy during the North Dakota Department of Commerce Renewable Energy Day, this Friday January 19 at the State Capitol Building in Bismarck, North Dakota.

Ethanol, Hydrogen, News, Research

State of the Union Speculation

Cindy Zimmerman

The anticipation is mounting for President Bush’s 2007 State of the Union address to be made on January 23. The media is already busy speculating about what the president will talk about, with stories out this week that global warming will be on the teleprompter, although the White House is denying reports that Bush will advocate mandatory emissions caps in an effort to combat global warming.

Spokesman Tony Snow said, “If you’re talking about enforceable carbon caps, in terms of industrywide and nation wide, we knocked that down. That’s not something we’re talking about.”

However, promoting alternative energy sources such as hydrogen and ethanol is expected to be emphasized in his speech, as it was last year. Such alternatives would be in line with White House support of voluntary steps to curb greenhouse emissions.

Reuters and other news outlets are saying that Bush “is likely to call for a massive increase in how much fuel ethanol that U.S. refiners must mix with gasoline in coming years.”

Ethanol, News