Today in Biofuels: 2007 US Energy Bill imminent; India’s fuel marketers say red-tape is killing E5

Top Story:

In Washington, agreement is reported to be imminent on the 2007 Energy Bill. The House and Senate have been working to reconcile the provisions in their respective bills since the summer. Reports from Washington say that the agreement could be finalized as soon as today. Compromise provisions in the bill are expected to include a 35 mpg Corporate Average Fuel Economy (CAFE) standard by 2020, which would include mileage credits for flex-fuel vehicles. The Renewable Fuel Standard of 36 million gallons by 2022 is expected to survive, with some provisions for different biofuels still under evaluation. The mandate that utilities generate 15 percent of their power from renewable resources, and a repeal of the $16 billion tax break for the oil and gas industries, are not expected to appear in the final bill.

Producer News:

In Kansas, Ethanex has proposed a 132 Mgy ethanol plant to be constructed at the Jeffrey Energy Center in Pottawatomie County . The proposed plant will have zero carnon emissions and will not require an independent water source.

In Arizona, Earth Friendly Fuels has proposed a 59 Mgy ethanol plant for Camp Navajo, near Flagstaff. The proposed complex at Camp Navajo would also include a biomass-based power plant and a brewery.

International News:

In India, a report in the Economic Times states that oil marketing companies, which are experiencing cash flow difficulties, are unable to switch to E5 blends that would save them $1.52 for every gallon of petrol replaced with ethanol. The reason? A complex web of state regulations and tax issues , as well as entry barriers in various states.

In Malawi, Ethco (The Ethanol Company) is supplying ethanol and test vehicles to the Malawi government for a 5-year, $1 million study on the impacts of ethanol. Ethco manufactures 2 Mgy at its plant, while Presscane produces 3 Mgy in Chikwawa. Ethco is encouraging the Malawi government to encourage the expanded use of ethanol to offset climate change effects.

In Brazil, Cargill announced that they will build a soybean processor unit in Mato Grosso state, which would commence operation in 2009. Mato Grosso will also be home to a new crushing facility operated by Bunge. Rapidly increasing soy prices and livestock feed demand have led to the announcements, after numerous shutdowns in past years due to poor margins.

In the UK, Ineos confirmed that it has given the green light to its $100 million expansion of the Baleycourt biodiesel plant in France. Capacity will double to 65 Mgy. The project is a joint venture with German oil company C Thywissen and SICLAÉ, a French farming cooperative.

In Malaysia, New Forests and the Sabah state government have agreed on the establishment of a conservation bank for the region. Under the agreement, palm oil producers will purchase biodiversity credits from the group in return for the right to expand their production. In turn, the bank will invest those credits in biodiversity projects and plantations, The immediate beneficiary is the 34,000 hectare Malua Forest Reserve, home to several endangered species including orangutans.

Research News:

Researchers in Lees, England have developed a process to convert glycerol to hydrogen gas. The new process is reported to be substantially cheaoper than water electrolysis, the most popular production method for hydrogen. In the process, researcher mix glycerol with steam and produce water, carbon dioxide and hydrogen, producing pure hydrogen gas after the carbon is absorbed by special filters.

Policy and Policymakers:

The United Nations Development Program called today for the elimination of the Brazilian ethanol tariff imposed by the US and Europe. The UNDP report said that Brazilian ethanol reduces greenhouse gas emissions by up to 70 percent, compared to 13 percent for corn ethanol, and that trade barriers are preventing the reduction of worldwide dependence on oil.

Gov. Bill Richardson outlined his energy plan yesterday in Iowa. Proposed programs and policies include: tax credits for alternative energy production, a 30 percent greenhouse gas reduction target for 2020, and a reduction of 50 percent of US dependence on foreign oil.

Consumer and Fleet News:

In Maryland, Cato Gas & Oil has agreed with Greenlight Biofuels to distribute biodiesel produced at Greenlight’s Princess Park facility. Cato has invested $5 million in a new biofuel terminal.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 0.51 percent to 102.36 yesterday as large cap diversified agribusiness recovered even while mid cap ethanol stocks fell across the board. The Andersons (ANDE) was up 1.55 percent to close at $41.20 while, among mid caps, Aventine (AVR) fell 2.74 percent to close at $8.52. Among small caps, Better Biodiesel (BBDS.OB) rose 37.25 percent to close at $0.70, reversing Monday’s decline.

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