Daily Biofuels Summary for October 9: Obama outlines energy policy, Petrobras expects ethanol to dominate by 2020

Top Story: US Presidential Candidate Sen. Barack Obama (D-Ill.) released his energy policy, which called for a cap-and-trade emissions policy and investment of $150 billion in new alternative energy technologies. Senator Obama proposed a 80% greenhouse gas emission reduction target for 2050.

Producer News: In New York, a 13 year waste-to-ethanol project is headed for arbitration as construction start dates have passed with no activity in sight. Pencor-Masada Oxynol is the developer of the $287 million facility for the the City of Middletown….In Iowa, state ethanol producers hope to double sales of distillers grains to Cuban livestock producers. Cuba imported 100,000 tons of distillers grains last year from the US. DDGs are produced after starch is removed from corn kernels to make ethanol. The high protein grains are promoted as livestock feed but skyrocketing ethanol production has strained distribution for the product….In Missouri, Glacial Lakes Energy has suspended construction their Meckling-based Missouri Valley Energy ethanol project. The company said that current ethanol pricing made it impossible to secure financing at acceptable rates.

International News: In Brazil, Sempra Commodities announced that it signed a 20-year agreement to market 190 Mgy of ethanol from three new plants developed by Etanalc. The plants will be located in Pedro Afonso, Colinas and Guarai in the state of Tocantins, Brazil. The plants are expected to be operational in 2010….In the Philippines, President Gloria Macapagal-Arroyo has asked the Philippine Biofuels Board to submit a roadmap for sugar-based ethanol production. The country has set a 10 percent ethanol target and expects to utilize 345,000 acres for sugarcane production to support demand….In the Dominican Republic, the Inter-American Development Bank (IDB) has pledged to “provide all the help the country needs” to develop ethanol and biodiesel projects.

Research News: In Brazil, Petrobras, the Brazilian state oil company, projects that, by 2020, 71 percent of all Brazilian cars will be flex-fuel; and 57% of fuel used by flex-fuel cars will be ethanol. Flex-fuel cars now represent 85% of new car sales in Brazil….Monsanto has projected that corn yields will reach 300 bushels per acre by 2030, vs 155.8 projected for this year’s harvest. The company projects increases from molecular breeding and other biotechnologies will produce the gains….In Australia, a renowned climate researcher said that the IPCC Synthesis Report, expected to be published in November, will state that greenhouse gases by mid-2005 reached 455 parts per million of CO2-e. “We thought we’d be at that threshold within about a decade,” Tim Flannery said ion Australian television.

Policy and Policymakers: In New Zealand, the Green Party has proposed an amendment to the Biofuel Bill to require that biofuel not be produced from food stocks or cause “undue environmental harm”. The amendment is expected to pass.

Consumer and Fleet News: In Kentucky, UPS will convert its Worldport air hub in Louisville to a B5 biodiesel fuel blend in 2008, with the federal government providing $515,000 federal grant to help with conversion costs. 366 ground vehicles will be converted.

Financial News: Yesterday, the Biofuels Digest Index, a basket of public biofuels stocks, fell 0.54% in light holiday trading as weakeness in diversified agribusuesses such as Archer-Daniels-Midland (ADM) and The Andersons (ANDE) pulled the sector down. ADM was down 0.72% to $32.87 and ANDE was down 0.55% to $47.27. Overall, losers led gainers 2 to 1 but pure-play ethanol company VeraSun (VSE) was amongst the gainers, moving up 3.64% to $11.67. Other pure-plays such as Pacific Ethanol (PEIX), Bluefire Ethanol (BFRE.OB) and Aventine Renewables (AVR) were down on the day.

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