Media Rates Bush Energy Record

Bush Union 06 News coverage in advance of the president’s State of the Union address Tuesday is comparing the rhetoric of last year’s speech to what has really been accomplished so far when it comes to energy independence.

The Associated Press reports President Bush is expected to renew concerns about energy security in his State of the Union address. But will the rhetoric be followed by action? Up to now, the record has been mixed.

The president is expected to call for a “sharp escalation of ethanol use in his speech,” which is a “political sure bet as ethanol has widespread bipartisan support.” But the article says the administration has been criticized for “not living up to the rhetoric” since not enough funding has been provided for research into cellulosic ethanol development, as promised last year.

E85 Moves Down Under

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.”

Three More Ethanol Plants For Iowa

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.

Bill Would Increase Biofuels Infrastructure

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.”

Upcoming Biomass Conference

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.

CBOT Official Says Biodiesel Contracts Still in the Future

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.

Reuters Global Biofuels Summit

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 Should Drive Farm Machinery Sales

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

Diamond Investment Opportunity

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.

Pacific Ethanol Announces Idaho Groundbreaking

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 and Hydrogen Working Together

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.

State of the Union Speculation

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.”

Biofuels Buoy Cargill’s Second Quarter Earnings

cargillCargill reported that its second quarter earnings for last year jumped 34 percent over the same time a year ago… due in part to the increased demand for ethanol and biodiesel. Earnings went from about $500 million in the same quarter in in fiscal year 2006 to more than $660 million dollars for the quarter ending November 30th. In addition, the first six months of FY2007 Cargill earned $1.16 billion. That’s a jump of about 16 percent!

In a company statement
, Cargill Chairman and CEO Warren Staley, said “Similar to the first quarter, we experienced fast-changing markets in the second period, brought about by the interest in biofuels, investor flows into commodity futures and other markets offering diversification, and expansionary economies in many parts of the world. ”

Cargill runs two ethanol plants… one in Eddyville, Iowa and one in Blair, Nebraska… and this past spring has just opened a biodiesel plant in Iowa Falls, Iowa.

Research to Work on Ethanol from Beet Pulp and Wheat Bran

DyadicBiotech firm Dyadic International, Inc. has joined with a consortium in Europe to work on producing ethanol from sugar beet pulp and wheat bran.

According to a company release, the Florida-based company will be working on the research and development project with one of Europe’s leading producers of bioethanol, Royal Nedalco, and other partners funded by the Netherlands government.

Jan Verdoes, Ph.D., Research Director, Dyadic Nederland BV, said, “Sugar beet pulp, with its currently low value, high volume at centralized locations and abundant carbohydrate content, is an attractive feedstock for the production of bioethanol. Wheat bran, a byproduct of wheat processing, is another attractive bioethanol feedstock. However, the enzyme preparations to economically extract sugars from these materials and the yeasts required to ferment these unusual sugars for large-scale ethanol production need to be further developed. Our research projects are designed to overcome these technical problems and contribute to the development of economically viable renewable fuels for the future.”

First New Fuel Ships for Indy

TankerThe first tanker truck loaded with 100 percent fuel-grade ethanol to power this year’s IndyCar® Series left the Renova Energy plant in Torrington, Wyoming this week bound for Indianapolis.

According to a release from the Ethanol Promotion and Information Council, the plant was contracted to supply approximately 120,000 gallons of the fuel to the IndyCar Series in 2007. Renova Energy currently produces 10 million gallons of ethanol a year, with new construction planned for a 20 million gallon plant in Heyburn, Idaho.

All IndyCar Series cars will run on the 100 percent fuel-grade ethanol for the first time when the series holds the first Open Test of the season at Daytona International Speedway Jan. 31-Feb. 1.