Daily Biofuels Summary for September 24

Top Story: Three meetings in the US this week will help shape the near-term debate on climate change and biofuels. In New York,  the UN hosts a summit meeting today to discuss approaches to a new global climate change treaty. Brazil’s President Lula, California Gov. Arnold Schwarzenegger and former Vice President Al Gore will join other national and global leaders for the meeting hosted by UN Secretary-General Ban Ki-Moon. The UN will use this week’s event to promote the UN convention on climate change which will be held in Bali in December…In Washington, President Bush will host a high-level conference Thursday and Friday at the State Department for leaders of the major world economies to coordinate climate change policy….And in New York, the Clinton Global Initiative host a meeting that will include leaders from will convene in New York from business, academia, entertainment and environmental groups.

Producer News: In Iowa, the town of Sioux City and the executives of Chief Energy are optimistic that they will proceed with a planned renewable fuels business park despite the difficult economic outlook for ethanol….In Kansas, Emerald Renewable Energy, a Cargill subsidiary, ran into tough opposition for its proposed 100 Mgy ethanol plant in Shawnee County. Nearly all 29 speakers at a public hearing opposed the plant,  which would release 300 to 400 tons of emissions per year, equivalent to the emissions of 50-70 cars. The proposed plant would also produce 330,000 tons of distillery grains, use 1.2 million gallons of water per day, and create 40 jobs….In Virginia, the proposed $400 million International Bio Energy ethanol plant is in trouble because it says it can’t comply with 75 stipulations imposed by the Chesapeake City Planning Commission, or reduce ethanol output to 108 million gallons in the first year without a permit to expand to  216 million gallons in the future.  International Bio Energy says that bank loans will not be feasible with the lower production figure….Indiana Biofuels has announced plants to develop a 110 Mgy ethanol plant in Indiana. The plant will also produce 275,000 tons of distiller dried grain (animal feed), 15,000 metric tons of corn oil and 270,000 tons of raw carbon dioxide per year and produce 135 million tons of pollutants.

International News: Infinity Bio-Energy has acquired sugarcane ethanol facilities in Brazil that will generate 30 megawatts in power for $192 million.  The deal to acquire the Brazilian assets of Disa will include acquisition of a controlling share in the company that supplies the sugar cane for the Disa plants. The plants will crush 8.3 million metric tons of sugar cane….The Czech Republic has moved to a B2 mandate using canola oil as a feedstock, with E2 in force in 2008, and E3.5 and B4.5 in 2009, and E5.75 and B5.75 to meet an EU mandate. An article on the changeover indicates that carmakers are not honoring any warranty which uses a fuel mix outside vehicle operating manual specifications….Abengoa says it has shut down ethanol production at its largest Spanish plant because ethanol production is currently unprofitable due to high feedstock prices and the current outlook for ethanol in Spain. The plant was idled for the same reason earlier this year….In China, Guangxi province has mandated E10, as the provinces 65 Mgy of ethanol production capacity comes online. Capacity in the province is expected to reach 100 Mgy by next year when  a Beihai Gofar Marine Biological project is completed….In Australia, a researcher called on the Australian and South Australian governments to get behind biofuels research and development. The researcher noted that Australia’s goal of 1% conversion to biofuels lags far behind the EU’s 5.75 percent mandate by 2010. Meat and Livestock Australia has put $1 million into research for converting tallow into biodiesel and the South Australian government has $5 million to support a national research facility for algae….In Thailand, a survey of the country’s cassava production capabilities has been published, highlighting improving cassava yields. Yield have improved from 0.9 tonnes per acre in 1995 to 1.4 tonnes per acre in 2006/2007. Currently, Thailand has one ethanol plant which generates 1.9 million gallons of ethanol from cassava, but plants under development will bring this total to 322 MGY per year. To meet this goal, Thailand has set a goal to increase yield to 1.8 tonnes per acre.

Research News: A infrared device used at Hawkeye Renewables and 20 other plants measures ethanol yield from corn and provides a yield report to local farmers on and plants.  The device compares the spectrum of the analyzed corn against the spectrum of proven high-yield corn. Executives said that using high-yield corn can improve productivity by up to eight percent….In India, experts say that palm oil prices will come down faster globally if the US discontinues subsidies for imported palm oil used in biodiesel production and blending. Experts hope that prices will come down 20% from last years highs, with price falls commencing in January….In Iowa, DuPont announced that its Pioneer Hi-Bred subsidiary will provide $1 million in support for Iowa State University’s New Century Farm project that will focus on producing cellulosic ethanol, biomass crop breeding, crop rotation needs and ways to efficiently store and process biomass material.

Policy and Policymakers: An editorial in the Houston Chronicle warned against US ethanol mandate bills which would raise ethanol usage to 36 billion gallons in 2022 and 60 billion gallons by 2030. The editorial stated that “The government-supported push for ethanol will not only increase taxes and damage the environment, but will add to Americans’ burden of high fuel and food costs and especially hurt people on fixed incomes. And it will do almost nothing to reduce dependence on foreign oil — all of the ethanol production this year will replace less than 5 percent of the gasoline sold.” It cites an Iowa State study that estimates that ethanol production has caused food prices to rise by $47 per person in the past 12 months.

Consumer and Fleet News:  In Minnesota, an article sheds light on the state of rail infrastructure used to move ethanol to national markets. The Minnesota Prairie Line can move ethanol at a maximum speed of 7 miles per hour and ethanol trains are restricted to 30 cars, which requires that they be sent to a staging point near Minneapolis to be joined with 82 other cars in a 112 car train that heads for California and other markets. The restrictions were put in place after a rail snapped last December. The line has applied for $50 million for improvements….In California, firefighters in Napa have requested the City Council to convert the city’s fire truck fleet to biodiesel. San Francisco is using a B20 blend and expects to move to B100 by the end of 2007, according to the Napa firefighters proposing the changeover….In Colorado, Colorado Springs officials promoted the city’s new municipal E85 pump that will fuel 92 city and utility flex-fuel vehicles. The city has converted its 2100 truck fleet to B20. The city fleet manager confirmed that the city was paying t $2.21 a gallon for E85 compared to its unleaded fuel contract price of $1.96 a gallon, and a 3-30% drop in mileage depending on the vehicle and emits 13 percent less greenhouse gases.

Financial News: The Biofuels Digest Indexâ„¢ (BDI), a basket of 21 major public biofuel stocks, rose 1.12% Friday to 99.98 as biofuel stocks rose in line with the general market despite analyst pessimism about the prospects for corn ethanol. Among biofuel stocks, losers led gainers by 10 to 9, but Aventine (AVR), VeraSun (VSE) Archer-Daniels-Midland (ADM) all rose around 1% today despite sector downgrades based on slashed third quarter analyst profit estimates. Brazilian energy firm Cosan denied that it was in talks to be acquired by ADM which is a minority shareholder. Microcaps recorded a mixture of losses and gains, with Xethanol leading the winners, up 4.51% to $0.7525, and MGP Ingredients heading the losers, down 4.92% to $12.18. In the broader markets, the Dow Jones industrials gained 53.49 points to close at 13,820.19, the S&P 500 rose 7.00 to 1525.75, and the Nasdaq rose 16.93 points to 2671.22.

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