Daily Biofuels News Digest for November 20: Florida readies to blend ethanol, India and France nix ethanol subsidies

Top Story:

In Florida, the state government is poised to change regulations on fuel volatility to allow for year-round blending. Due to a restriction which can affect ethanol-blended gasoline in the summer months, Florida is currently not blending ethanol with gasoline. By contrast, 100 percent of California supply is blended and 38 percent in Texas. Florida is the third-largest state gasoline market. A similar rule change has been completed in Tennessee and is under review in Georgia. A 10 percent blend in Florida would increase national ethanol demand by 860 Mgy.

Producer News:

In Iowa, DuPont division Pioneer Hi-Bred today introduced QualiTrak, a new measurement system that predicts ethanol yield on individual loads of corn delivered to plants. The reports generated by the system, when shared with farmers, will allow for the selection of higher-yield hybrids.  The company did not disclose a projected improvement in yield from implementation of the system.

An investment company owned by Bill Gates, Cascade Investments, will file to convert its preferred shares in Pacific Ethanol to common stock and register a potential sale. Cascade owns 21 percent of Pacific Ethanol and has lost more than $60 million on the stock since August. Cascade invested $84 million in 2005. Pacific Ethanol has lost nearly $300 million, or more than 60 percent, of its market value this year. The company lost $4.8 million in the third quarter.

In Oklahoma, Syntroleum announced today that it secured $12 million to finance its joint venture with Tyson Foods. The joint venture, known as Dynamic Fuels, will manufacture biodiesel in Louisiana using waste animal material from Tyson’s food production operations as a feedstock.

International News:

In India, the Agriculture and Food Minister, Sharad Pawar, said that the Government will not create a subsidy program for ethanol producers. E5 ethanol is mandatory throughout the country excepting Jammu and Kashmir, some north-eastern states and the island territories.  E10 is mandatory from October 2008.

Also in India, the Standing Committee on Petroleum and Natural Gas has asked the Government to report on the availability of domestically produced ethanol, after multiple reports by Indian Sugar Mills Association (ISMA), All India Distillers’ Association (AIDA), and the Indian Chemicals Manufacturers Association (ICMA) have created confusion over the amount of domestic supply.

In France, the Government is proceeding with plans to eliminate ethanol subsidies, and observers feel it will spell the end of the industry in the country. France offers a lower tax on ethanol-blended fuel, which makes it competitive with gasoline, but discussions are reported in The Guardian to be very advanced on eliminating the subsidy, or slashing it.

In Laos, Mitr Phol will construct a new sugar processing facility, opening at the end of 2008, that will process 500,000 tonnes of cane and refine 60,000 tonnes of sugar. Crushing capacity will increase to 1 million tonnes per year after 2010. Concurrently, the company announced that they will take a 35 percent stake in a joint ventured 19 Mgy ethanol plant in Tak province. Padaeng Industry holds 35 percent stake, and Thai Oil holds the remaining 30%. Thai Oil will be the sole customer for ethanol, which will be blended for domestic consumption.

Research News:

In South Dakota, the North Central Regional Sun Grant Center awarded $940,000 to five projects out of more than 50 proposals. The grants are supported by the U.S. Department of Transportation Biobased Transportation Research Program. Grant winners include a project on 1. Sustainable Cropping Systems for Harvesting Corn Stover for Biomass at Iowa State University;  Developing Sustainable Renewable Energy Systems for Practical Utilization of Bulky Biomass at the University of Minnesota;  Diversifying Midwestern biofuel feedstock: An evaluation of nitrogen-fixing Alnus and Salix germplasm at the University of Minnesota; Developing a Sustainable Feedstock and Next-Generation Processing Technologies for Biofuels Production at South Dakota State University; and Novel Recoverable Enzyme Nanoparticles for Cellulose Hydrolysis at the University of Wyoming.

In Illinois, AlterVia Fuels has developed a process to convert the byproducts from corn ethanol production into corn protein suitable for human consumption. Previously, the by product was processed into distillers grains which have been used in livestock feed. The corn protein would be marketed as an alternative to whey and soy protein, which have increased dramatically in price this year.

Policy and Policymakers:

In Massachusetts, a biofuels policy facing the state legislature is generating “overwhelmingly positive” reaction from lawmakers according to the state’s Secretary for Energy and Environment Affairs. But the bill has  drawn criticism from some industry groups and legislators.The bill requires all diesel and home heating fuel sold in the state to contain 2 percent of renewable alternatives by 2010, increasing to a 5 percent by 2013. The bill also exempts cellulosic ethanol from the state gasoline excise tax. Sen. Michael Morrissey (D-Quincy) said he hoped to address criticisms of the bill in time to present a complete package within 45 days.

Berkshire Biodiesel opposed the bill because it did not provide a means of supporting state-based industry such as the new Berkshire Biodiesel plant under construction. The Massachusetts Oilheat Council said that the biofuels infrastructure was too young and could not handle the the increase in demand, and suggested that the mandate should be imposed only after domestic production reaches a minimum threshold. That approach is used in Minnesota and Oregon among other states.  The Massachusetts Petroleum Council called the bill “il-advised” and said it would increase natural gas prices. Overall, the bill is expected to create 3,000 new jobs in Massachusetts and add $320 million to the domestic the economy.

Consumer and Fleet News:

In Australia, Yahoo conducted an online poll regarding Australian policy on climate change. 31 percent said that the country should put the climate first and the economy second; 53 percent the country should balance climate change action with the needs of the economy, and 10 percent said the country should put the economy first and climate second. 6 percent said the country should take no action.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, fell 4.25 percent yesterday to close at 104.20 as losers led gainers 8 to 1 among BDI stocks. Sector giant Archer-Daniels-Midland (ADM) was down 3.96 percent to close at $36.39, while Pacific Ethanol (PEIX) fell 22.3 percent to $4.43 on news that Bill Gates’ investment arm, Cascade Investments, would register to sell its 21 percent stake in the company. Among small caps, GreenShift (GSHF.OB) fell 21.1 percent to close at $0.03 while Texcom (TEXC.PK) was among the few sector highlights, closing at $0.13, up 8.33 percent.

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