Daily Biofuels Summary for October 18: Protesters land cream pie on BP Fuel CEO’s face; six more ethanol plant projects halted

Top Story:

In England, 15 climate change activists from protest group Food Not Fuel disrupted the BioFuel Expo & Conference in Newark. The protesters threw a cream pie in the face of Oliver Mace, CEO of BP Fuels. Protester Thomas Bradshaw told IndyTimes “Biofuels will be taking food from the mouths of the hungry when there are already 800 million people suffering from malnutrition. These corporations are effectively encouraging the erosion of valuable arable farmland and rainforests vital for combating climate change.” The hall was cleared and the scheduled speeches were postponed because of the disruption.

Producer News:

In Illinois, three corn ethanol projects have been canceled or delayed. Aventine Renewable Energy canceled a plant expansion in Pekin, and Alternative Energy is facing financing delays for its proposed plants in Kankakee and Greenville. The Pekin project would have added 113 Mgy in production capacity. In all, Aventine has suspended work on five projects with 565 Mgy in planned capacity.

In Minnesota, the Isanti City Council approved a $299,000 subsidy, conditional use permit and site plan for the Ever Cat Fuels biodiesel plant that will use the Mcgyan Process. The Mcgyan Process can reduce biodiesel production cost and time by using a metal oxide-based catalyst reactor to convert coverts oils and animal fats to biodiesel. The Mcgyan process does not consume the catalyst, is less water intensive, and doesn’t require large quantities of strong acids or bases.

In Iowa, Catalin has received enquiries from producers representing 30 percent of global biodiesel capacity, seeking information about its microscopic, solid catalysts that could reduce production costs by as much as 25 cents per gallon. The microscopic spheres replace the need to use sodium methoxide, strong acids and water in the biodiesel production process. Also, the catalytic spheres are recovered and reused.

VeraSun Energy announced that it will not pursue biodiesel production until industry economic conditions improve. The company is developing a process to extract corn oil from distillers grains, which could be used as a biodiesel feedstock, and the company is constructing a plant in Aurora, SD for oil extraction, and will also build similar facilities in Fort Dodge, IA and Charles City, IA. But VeraSun said it would concentrate on selling the oil to other producers, rather than entering the biodiesel production business.

International News:

In China, the Tiger Ethanol announced that the Hami Ethanol plant is expected to complete construction in November, more than four months ahead of schedule. The plant’s owners notes that local ethanol prices have increased 15% for ethanol in the past seven months and 50% for distillers grains, while feedstock prices have remained steady. The plant will use a balance of 85 percent corn and 15 percent sugar.

In Jamaica, Jamaica Broilers said that US ethanol prices are depressed because, as the US ethanol industry expanded distribution, “manufacturers in the US Midwest corn belt were forced to drop their prices in order to cost-effectively move the product by rail or truck to the east coast” according to JB Chairman Richard Levy. Levy said that sugar ethanol plants, of the type JB is creating in Jamaica, can be built for a fraction of the price of a US corn ethanol plant, saying that a 60 Mgy facility required only a $20 million investment.

In Angola, the Brazilian company Odebrecht agreed with Angola-based Sonangol and Damer to invest US$200 million in sugar ethanol and electricity projects in Malanje province. The project will cover 30,000 acres, of which 20,000 will be for sugar cane and the remainder for an ethanol plant and for crop rotation land. The joint venture will producel two million tons of cane, producing 160,000 tons of sugar, 50,000 cubic meters of ethanol and 140 megawatts of electricity per year. Damer and Odebrecht will each hold 40 percent of the venture and Sonangol will have the remaining 20 percent. The venture will be known as Biocom.

In the Congo, Brazil has agreed with Congo Republic to provide training, technology and financing for sugar ethanol and palm oil biodiesel production. Brazilian President Luiz Inacio Lula da Silva said that Africa had sufficient land to produce biofuel and that using that land for biofuels would alleviate energy concerns in the continent.

In Malawi, Brazilian flex-fuel vehicles were launched at an event in Blantyre, Malawi that can use 100 percent ethanol or any blend of ethanol or gasoline. The Malawi department of science and technology and the Ethanol Company of Malawi (ETHCO), are promoting the vehicles to reduce Malawi’s dependence on foreign oil.

In Fiji, Sugar Minister Mahendra Chaudhry said the country would concentrate on producing ethanol instead of major investments in crop diversification. Recently, Citizen’s Constitutional Forum chief executive Reverend Akuila Yabaki said that “200,000 people in Fiji, depend on this industry in some way, and In the long-run, the reality is that the sugar industry will have to be phased out.” The Sugar minister said that rising oil prices made ethanol an attractive alternative market for Fiji’s sugar industry.

In the Netherlands, Nedalco launched a new process for fermenting sugar, with a yeast extracted from elephant dung. The project received a $16 million grant from the Dutch government, but the project developers say that the grant, which represents less than 10 percent of the project cost, is not enough, and is symbolic of the EU’s lack of aggression in developing biofuels. The European Union has set a target of 10 percent conversion to biofuels by 2020, or 15 billion gallons, and 5.75 percent by 2010. Currently the EU produces less than 2 billion gallons of biofuels, of which more than 1.4 billion gallons are biodiesel. Biodiesel has been helped by an EU requirement that farmers take 10 percent of their land out of food production, but are able to use the land for biofuel productino and also receive a $25 per acre subsidy to grow rapeseed, the primary feedstock for canola oil-based biodiesel.

In England, Green Biologics has raised more than $3 million to exploit its Butafuelâ„¢, a butanol fuel that is a more sustainable liquid biofuel for transportation. In addition to butanol, the company produces acetone, an important solvent and chemical ingredient for polymers and plastics. GBL has focused its efforts on re-commercializing bio-butanol, which was replaced by a petroleum based butanol process in the 1960s, in light of rising oil costs. Green Biologic

In Burkina Faso, Brazil and the West African Economic and Monetary Union (UEMOA) signed an agreement to accelerate development of biofuels. Under the deal, UEMOA and Brazil will seek partners to promote the use of biofuels within UEMOA. The UEMOA group includes mostly non oil-producing countries; its membership includes Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Niger, Togo, Mali and Senegal. UEMOA officials have stressed on other occasions that biofuels are only part of an African energy and development solution.

Research News:

A study by the University of Wisconsin’s Madison Nelson Institute for Environmental Studies ranked 226 countries for their potential to produce high volume, low cost biodiesel. The top countries cited included Thailand, Uruguay, Ghana, the United States, Brazil, the Netherlands, Germany, Belgium and Spain. The study ranked Malaysia, Thailand, Colombia, Uruguay and Ghana as the best developing nations for biodiesel investment, citing stability and agricultural potential as major factors.

The president of Shell said that his company is investing and believes in cellulosic ethanol. John Hofmeister said that in 10 to 20 years, the company would produce fuel from waste products, wood chips and switch grass. Hofmeister also confirmed that Shell is investigating the potential of algae as a feedstock. Shell has a partnership with Iogen and Volkswagen to develop cellulosic ethanol.

A biannual IMF report on the world economy said that “The use of food as a source of fuel may have serious implications for the demand for food if the expansion of biofuels continues. One country’s policy to promote biofuels while protecting its farmers could increase another (likely poorer) country’s import bills for food and pose additional risks to inflation or growth.” The report said that greater international cooperation on biofuel production was needed, and that eliminating barriers on biofuel imports in the US and the European Union would alleviate pressure on the cost of food.

Policy and Policymakers: In Washington, Sen. Chuck Grassley is leading an effort to close a loophole allowing oil companies to circumvent the tariff on Brazilian ethanol. The loophole allows oil companies to receive a rebate of taxes paid on importing Brazilian ethanol when they export jet fuel. More than 434 million gallons of Brazilian ethanol were imported into the United States last year. “It’s nonsensical to say ethanol is the same as jet fuel,” Sen. Charles Grassley, R-Ia. “The (drawback) law makes no sense.” There is a 54 cent per gallon tariff in place on Brazilian ethanol imports. The tariff is designed to offset the 51-cent per gallon credit given for each gallon of ethanol blended with gasoline, regardless of where the ethanol is produced. Otherwise, US taxpayers would be subsidizing the Brazilian ethanol industry with the excise tax credit.

The European Union reduced subsidies for biofuel crop cultivation after production reached the 2 million hectare threshold. Under the EU program, farmers may receive up to 45 euros per hectare devoted to biofuel cultivation, up to a total of 2 million acres, and 31.5 euros for additional hectares.

In Washington, South Dakota Senator John Thune is meeting with the director of President Bush’s economic council to push for an E20 mandate to increase demand for ethanol. Thune said that lack of support from automakers was unimportant compared to the importance of reducing US dependence on foreign oil.

Former CIA Director James Woolsey, now an officer at Booz Allen Hamilton, said that developing biofuels was in the national security interest. “The people who produce large amounts (of oil) have a lot of leverage that we don’t want them to have,” he said. He added that oil prices could rise as high as $200 per barrel as a result of terrorist activity.

Consumer and Fleet News:

In New Hampshire, Mount Sunapee Resort will convert its snow grooming and snow removal equipment to B20 biodiesel, and convert its hearing systems to B5.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 1.47 percent yesterday to reach 104.17, just 0.05 short of a 52-week high, as larger cap stocks advanced in line with a modest rise in the broader markets.

Sector heavyweight Archer-Daniels-Midland (ADM) gained 1.43 percent today to close at $35.35 as Morgan Stanley initiated coverage of the clean tech sector with an “Attractive” rating. Other winners on the day included a surging VeraSun Energy (VSE) which finished up 6.71 percent at $12.40, and Aventine Renewable (AVR), up 2.41 percent to $10.18.

Winners led losers 6 to 5, but winners were concentrated in the larger cap stocks. Only Pacific Ethanol (PEIX), down 0.89 percent to $8.88 and US BioEnergy (USBE), down 1.80 percent to close at $7.10, were down for the day among larger cap stocks.

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