Daily Biofuels Summary for October 30: US Senator Dorgan, fuel marketers, Energy Secretary reveal highly divergent views on ethanol incentive structure
Top Story:
Speaking in North Dakota, US Energy Secretary Samuel Bodman said that government mandates are less than ideal but might be necessary to boost the use of alternative fuels. “Sure, I’d like to get things done without mandates,” Bodman was quoted in chron.com as saying, adding that mandates are “proven to be a requirement in order to get a lot of these things done more effectively,” he said. Speaking at the same conference, Sen. Dorgan touted his legislation to set up tax incentives to stimulate installation of E85 pumps, the lack of which are a primary opportunity for ethanol expansion. But Mike Rud, president of the North Dakota Petroleum Marketers Association, said that fuel marketers need upfront incentive money, not tax incentives, because fuel marketers don’t make money at the pump and so tax incentives are not helpful. Rud added that there are only about two dozen E85 pumps in North Dakota and that there is little demand from consumers to add more.
Producer News:
Standard Ethanol Madrid, a unit of Mid America Bio Energy and Commodities, commenced production Monday at its Nebraska plant.
In North Dakota, two 55 Mgy ethanol plants are seeking grants from the North Dakota Agricultural Products Utilization Commission. Lakota Biofuels and Buffalo Creek Energy are each seeking $100,000 for business planning and accounting. The Lakota project has a projected cost of $171 million and Buffalo Creek $109 million.
Nano Chemical Systems has acquired BioCentric Energy in a reverse merger. BCEI shareholders will own 66% of the merged entity.
International News:
In Angola, more details emerged regarding Biocom. The plant, which is projected to open in 2010, will operate at 30 percent of capacity in its first year and will reach full capacity in 2012. The sugar, ethanol and power produced by the project are expected to be used domestically rather than for export, due to local shortages of these commodities.
In India, Pioneer Distilleries will increase production capacity to 12.5 Mgy, double its previous capacity, as demand from petroleum companies has increased.
In Australia, ethanol has become an issue in the upcoming national election. A group representing feed grains users and livestock owners opposed ethanol mandates, while the Deputy Prime Minister, Mark Vaile, have campaigned for expansion of a sustainable ethanol industry.
In Singapore, the Singapore’s Economic Development Board is aiming for a leading position in second-generation biofuels. Julian Ho, executive director for energy, chemical and engineering services at Singapore’s Economic Development Board, told the International Herald Tribune “We feel that if we’re going to focus on a sustainable type of activity we need to look beyond first-generation biofuels: Those made from food crops. Right now, everybody in the region seems to focus more on first-generation biofuels, but what we really want is to be the leading place for second-generation biofuels in Asia.”
In Mozambique, more details emerged regarding the launch of the Central African Mining and Exploration Company (CAMEC) biofuel project. CAMEC will invest US$510 million, and in produce 32 Mgy of ethanol from 30,000 hectares of sugar cane. The venture is expected to create 7,000 jobs.
Mali Biocarburant is intending to be the first jatropha biodiesel company to commence production in Africa. The company buys jatropha nuts from farmers who have planted 20,000 km of jatropha fences in Mali that protect crops and limit soil erosion. The company did not release details on the volume of jatropha nuts it planned to obtain.
In Thailand, the government reduced the price of B5 biodiesel to stimulate demand. The price of B5 biodiesel has been reduced as part of a government-backed plan to encourage more motorists to use the alternative fuel. B5, a mixture of 5% biofuel and 95% high-speed diesel, will now cost 3.18 per gallon, 3 cents less than petroleum diesel. The price reduction was accomplished by reducing taxes on blended biodiesel.
In Colombia, Oilsource Holding Group has formed a joint venture with Abundant Biofuels to produce jatropha-based biodiesel in Colombia. The joint venture plans to plant 100,000 hectares with jatropha curcas, in an investment program totaling $45 million.
In Brazil, the country’s largest petrochemicals company, Braskem, announced that it will invest $150 million in the production of polyethylene from sugarcane-based ethanol. The 200 Kty capacity plant will be operational in late 2009 following a successful experience with a pilot plant that commenced polyethelene production in June.
The Chinese government will wind down 1.6 mln tons of ethanol production by 2010 according to the National Development and Reform Commission. The government is eliminating unproductive plants as a part of its goal to reduce energy consumption per GDP unit by 20 pct by 2010.
Research News:
The Colorado Center for Biorefining and Biofuels awarded grants of $50,000 to 10 renewable-energy projects, including five to research teams from CU-Boulder, two each to teams from CSU and and the Colorado School of Mines, and one from NREL. The Colorado Center for Biorefining and Biofuels is a joint venture of the University of Colorado at Boulder, Colorado State University, the Colorado School of Mines and the National Renewable Energy Laboratory, and 27 energy-industry companies.
Policy and Policymakers:
The European Commission is planning to cut biofuels crop subsidies, according to Sega. The program of 45 euro per hectare subsidies was initiated when 310,000 hecrates had been devoted to biofuels. In w2007, the figure has jumped to 2,840,000 hectares.
Financial News:
The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 1.59 percent yesterday to 105.24, a 52-week high, on strong performances by diversified large-caps such as Archer-Daniels-Midland (ADM) and The Andersons (ANDE), as well as pureplay ethanol stocks such as Pacific Ethanol (PEIX), VeraSun Energy (VSE) and Aventine Renewable Energy (AVR) – all were up on the day.ADM was up 1.71 percent to close at $35.66, while Pacific Ethanol closed at $7.84, up 3.16 percent, to lead their sectors. Among smaller-caps, MGP Ingredients was up 7.31 percent to $9.39, while Better Biodiesel (BBDS.OB) was down 20 percent to close at $1.20.
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