Today in Biofuels: 20 billion gallon biofuel mandate still in US Energy Bill as deal nears; $300 million investment in Brazil; Asian water crisis looms

Top Story:

In Washington, details continued to emerge regarding the imminent Energy Bill. According to reports, the proposed legislation would mandate the use of 20.5 billion gallons of biofuels by 2015, including 15 billion gallons of conventional ethanol from corn, and one billion gallons of biodiesel. The bill’s language would require the use of “advanced biofuels”, meaning primarily cellulosic ethanol, commencing in 2013 increasing to 21 billion gallons by 2022. There were conflicting reports regarding the mid-range (2015-1016) targets for cellulosic ethanol, but in the 3 billion to 5.5 billion gallon range.

Producer News:

In Kansas, Ethanex Energy will acquire the 26 Mgy Midwest Renewable Energy corn ethanol plant. The base price for the existing plant is $50 million, with a formula for a total price of $220 which includes the financing of the completion of the plant’s expansion to 111 Mgy.

In Illinois, Ag Energy Resources has cleared all regulatory and financial hurdles and is set to begin construction of its 7 Mgy corn ethanol plant. Financial backing for the plant came from People’s National Bank in Benton and a $4.6 million loan from the USDA.

In Pennsylvania, Falls township gave the green light to American Biofuel’s 115 Mgy corn ethanol plant. The $200 million plant will be constructed on a 72-acre property that was formerly home to US Steel.

International News:

In Brazil, Comanche Clean Energy will invest $300 million in ethanol and biodiesel production in the state of Maranhao. The ethanol plant will have a capacity of 79 Mgy, while the biodiesel operation has a planned capacity of 38 Mgy.  Last year, Comanche acquired two ethanol plants in Sao Paulo state and a biodiesel facility in Bahia for $150 million.

In England, Pursuit Dynamics will commence production of a new product next year that, in tests, have increased ethanol yields up to 3.3 gallons per bushel. Current optimal yield are in the 2.8 gallon per bushel range. This could push production in the US over 500 gallons per acre and result in up to a 15 percent decrease in ethanol prices.

In the Philippines, PNOC Alternative Fuels Corporation chairman Renato S. Velasco said that he expected that at least 700,000 hectares of jatropha would be planted in the country, noting that it had been identified as an ideal cultivation locale by the FAO. He said the bulk of cultivation would be in Mindanao. Using a yield of 300 gallons per acre, the potential capacity represented by his forecast is 455 million gallons of biodiesel. The Chairman stressed that jatropha would be grown only in currently unused land and that no food production land would be switched to fuel.

In Malaysia, New Britain Palm Oil will be listed on the London Stock Exchange in a US$100 million flotation. The owner of New Britain Palm Oil, Kulim, said that between New Britain and Guadalcanal Plains Palm Oil it has more than 30,000 hectares of mature oil palm trees. It also said that its biodiesel plant in Tanjung Langsat in Johor, would be ready for testing by the end of 2007.

Research News:

Acta stated its belief that a hydrogen fueled transport system is ten years away, not 20 to 30 years. The company made its pronouncement after inking a development project deal with an unnamed Asian carmaker. Acta produces hydrogen from on-board catalysts that use ammonia or ethanol and can work with the existing fuel infrastructure.

Argus Media, a leading source for energy price information, is launching a price service for palm oil biodiesel in Singapore, Malaysia and Indonesia. The service will provide daily FOB price information, as well as trading information including bids and offers for EN14214 (European compliant) biodiesel.

Policy and Policymakers:

A report released by the Asian Development Bank outlined a looming crisis in Asian water supply. The report blamed neglect of wastewater management practices for the crisis, and said that the rising popularity of biofuels would make the situation worse unless Asian nations addressed their water usage practices.

Consumer and Fleet News:

The first biodiesel fuel station has opened in Connecticut. Gov. M. Jodi Rell was on hand for the opening at Berkshire Country Store in West Cornwall. The fuel had previously only been available in Connecticut at private pumps for government and commercial fleets.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 0.99 points yesterday to close at 103.37, as rising prices for pure-play ethanol stocks offset mixed results from large cap agribusiness. Among large caps, Archer-Daniels-Midland (ADM) led the sector, up 0.76 percent to $35.97. Pacific Ethanol was up 1.08 percent to $4.64 despite a downgrade to “Sell” by Goldman Sachs, with VeraSun Energy (VSE) up 4.93 percent to $10.64 leading among ethanol pure-plays. AMong small caps, Xethanol (XNL) was down 21.05 percent to $0.30 while GreenShift (GSHF.OB) rose 10 percent to close at $0.33.

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