Daily Biofuels Summary for October 12: UN official calls for five-year biofuels ban; Gore wins Nobel Prize, ethanol stocks jump on price hopes

Top Story: The United Nations Special Rapporteur on the Right to Food, in a report that will be submitted to the UN General Assembly on October 25, has called for a five-year ban on conversion of land for biofuels. The Special Rapporteur, Jean Ziegler of Switzerland, said that using land for biofuels would cause “massacres” and said that biofuels are “a total disaster for those who are starving”.

Producer News: Two US firms suspended construction on new ethanol plants in the Midwest. Glacial Lakes Energy’s plant in Meckling, SD and Chippewa Valley’s 40 Mgy plant in Benson, MN received the axe. Both companies said that the fall in ethanol prices and increase in construction costs were the cause of the decision….In Ohio, an ethanol train derailed, caught fire, exploded and forced the evacuation of 1300 homes of people from their homes. Thirty of the 112 cars derailed, including eight that carried the ethanol that caught fire. The train carried one tanker of  liquefied petroleum gas, which did not catch fire….In Indiana, Benefuel and Seymour Biofuels will invest $25 million to build a solid-catalyst biodiesel plant in Seymour. The 10 Mgy plant will commence operation in 20101, and will be operated by Seymour Biofuels.  Solid-catalyst biodiesel uses a solid acid reactor to convert a wide variety of fats and oils into biodiesel without extensive pre-processing.

International News: The declining US dollar has created problems for the Brazilian ethanol industry. “Of the roughly 80 ethanol mills that were announced to be built in the 2007-08 market year, 11 of them have already stepped away from their plans,” Marcelo Coelho, an ethanol consultant, told CNN Money….Australian biofuels developer Agri Energy will abandon Australia and make the US the base for its projects going forward. The company acquired the Beatrice Biodiesel project in Kansas last year and has focused its efforts on plant completion….In Mozambique, the executive director of the Kenya-based African Agricultural Technological Foundation (AATF), Mpoko Bokanga, told All Africa that using cassava for ethanol production will not threaten African food security.   “On the contrary, people should be more optimistic, because opportunities will be opened to solve the problem of poverty”, he said….In Brazil, Petrobras, the state oil company, has established Suape, a deepwater port in the northeastern state of Pernambuco near Recife, as its base for ethanol exports to Europe….In Argentina, a new biofuels bill was introduced by the federal government extending biofuels incentives to the Argentine sugar industry.  The national biofuels bill was signed in March, and mandates a 5% ethanol or biodiesel blend, as well as extending incentives for domestic biofuels projects owned at least 50% by Argentines….The president of the Zimbabwe Academy of Sciences, Christopher Chetsanga, said that “It is important for Zimbabwe to engage in the development of biotechnology energy crops such as Jatropha, soyabeans and sugarcane so that the country can quickly work towards reducing the amount of fuel that it is importing by systematically replacing it with biofuels….The President of Brazil, Luiz Inacio Lula da Silva, who recently concluded a tour of Scandinavia to promote biofuels, will visit the Republic of Congo, Burkina Faso, South Africa and Angola next week. The president will promote Africa as a production source for alternative fuels and feedstocks.

Research News: In New York, Bob Dinneen, CEO  of the Renewable Fuels Association, said ethanol prices are “at or near a bottom“, and said he expected to see an increased renewable fuel standard in the final energy bill now before the US Congress.

Policy and Policymakers: The VP of Legislative Affairs of the American Meat Institute told the Wall Street Journal that “Our single biggest priority is for Congress to reject a new renewable-fuels mandate“, while the executive director of the Illinois Beef Association told RFD Radio that “That doesn’t mean that they speak for the National Beef Cattlemen’s Association or this state,” adding that her association supported the expansion of the Illinois ethanol industry….In Norway, former US Vice President Albert Gore Jr and the U.N. climate panel were awarded the Nobel Peace Prize “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change,” according to the Nobel award citation.

Consumer and Fleet News: The president of Volvo Europe said that biofuels need to be more focused. He said it was impractical for the auto industry to support multiple feedstocks using multiple processes to produce at least seven fuels….San Antonio’s CPS, the nation’s biggest city-owned utility, will increase its E85 fleet by 100 vehicles. CPS has converted 230 vehicles to E85 since 2003. San Antonio’s failure to meet EPA clean-air standards has been a catalyst for the switch.

Financial News: Biofuel stocks continued their surprising rebound as comments by industry insiders boosted confidence that ethanol prices will recover. The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 2.27% yesterday to close at 103.22. It was the second-biggest daily jump and the second-highest closing price ever. Archer-Daniels-Midland (ADM) jumped 4.49% to $34.90 on the good news on ethanol prices, while pure-play ethanol stocks such as VeraSun (VSE) and Pacific Ethanol (PEIX) also rose more than 2% in the days’ trading. Overall, losers led gainers 11 to 7 as small caps fell, among them Intrepid Technology & Resources (IESV.OB) which lost 12% on the day. Environmental Power fell 0.97% to $5.10 despite announcing a long-term renewable natural gas agreement with Pacific Gas & Electric. Biodiesel stocks were up, with Better Biodiesel rising 2.86% to $1.05 and Nova Biosource Fuels gaining 1.57% to close at $2.58.

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