Today in Biofuels: Senate passes historic Energy Bill; US, EU seek compromise at Bali; Brazilian exports plummet; massive second-generation biodiesel plant to open in Germany

Top Story:

In Washington, the United States Senate passed the Energy Bill 86-8 after $13 billion in oil company taxes were dropped from the bill. Voting on an earlier version of the bill with the tax package still included, the Senate came up one vote short (59-40) of ending a filibuster staged by Senate Republicans in support of the oil companies. The bill will now go to the House where it is expected to pass, and the President is expected to sign the legislation into law before the end of the year.

Producer News:

In Missouri, ethanol plant development has slowed to a standstill, indicative of a national trend, according to the state’s Department of Natural Resources. After boom conditions in recent years, no new plants have submitted new or revised permit applications since July, and of three plants that had previously received construction permits, none have proceeded to begin construction. The approved but not as-yet-built plants are Bootheel Agri-Energy, Renewable Power of Missouri and Ethanex.

AgMotion announced that it had acquired UBE Services and United BioEnergy Ingredients from US BioEnergy Corporation. UBE services is a distillers grains marketing service, while AgMotion is a Minneapolis-based commodity trader. US BioEnergy is scheduled to merge with VeraSun Energy after the first of the year.

In California, Great Valley Ethanol received approval for its 63 Mgy ethanol facility in Bakersfield. The plant, which will commence construction in 2008 and open in fall 2009. The Central Valley has been a hotbed for ethanol plant construction, with a 35 Mgy Pacific Ethanol plant in Medera and a 25 Mgy Phoenix Biofuel plant in Goshen. Cilion and Pacific Ethanol are building 50 Mgy plants in Keyes and Stockton, respectively.

In New Jersey, East Coast Energy Solutions announced plans for a 40 Mgy corn ethanol plant in Belvidere. The $120 million project will create 40 jobs, and serve East Coast refineries along the New Jersey Turnpike.

International News:

In Brazil, November ethanol exports were down 40 percent from 2006, falling from 132 million gallons to 80 million. The fall in US demand, resulting from a production glut in the United States, caused the fall, and resulted in more than 63 percent of shipments to go to Europe. 20 percent of shipments were headed for the US or to Caribbean ports where it is typically re-exported. 83 percent of northbound shipments went to Caribbean ports, where it can be re-exported tax free to the US.

In Germany, Choren Industries announced that it will build a 57 Mgy biodiesel plant in Schwedt. The plant, which will open in late 2010, will use a second-generation process, called biomass-to-liquid, which uses sawdust and wood chips as feedstock among other waste materials. The plant will eventually have five production units and has a total planned capacity of 285 Mgy by 2015. Choren’s first commercial-scale plant, which will produce 4 Mgy of biodiesel from wood waste, opens in spring 2008 in Freiburg.

In Slovakia, the Slovak Oil-producers Association said that the country was the first of the Visegard countries – Slovakia, the Czech Republic, Poland and Hungary – to meet the goal of increasing biofuels share to 2 percent of the total fuel market. Nearly all Slovakian production is exported to Germany and Austria. The country is committed to increasing biofuel’s share of market to 6 percent by 2010.

Research News:

The Energy Information Administration released long-term projections that the US will derive 83 percent of its energy needs from fossil fuels, down only 3 points from the 86 percent figure for 2006. The EIA, which projected in its study that biofuel consumption would increase to 17 billion gallons by 2030, may have to revise its figures in the light of the passage of the Energy Bill. The Bill mandates that 36 billion gallons of biofuel fuel consumption by 2022, or more than 25 percent of total fuel use based on 2006 consumption.

Policy and Policymakers:

In Bali, the EU eased up on criticism of the United States at the UN Conference on Climate Change. EU officials had threatened a boycott of next month’s Washington conference on climate change over 2020 emission reduction targets.  The draft final text from the Bali Conference still contains emission reduction targets, as the Europeans insisted, but the targets have been softened somewhat to require that emissions peak no later than 2022 and fall 50 percent by 2050.

Consumer and Fleet News:

In Maine, the state’s first ethanol terminal opened in Auburn. Safe Handling, the developer of the distribution hub, said that increasing demand from gasoline wholesalers for ethanol-blended gasoline provided the economic base to expand Maine’s storage and distribution infrastructure.

In Washington, Propel Biofuels will open an unmanned, 24-hour, four pump, biodiesel-only station in Seattle in March 2008. Seattle-based Imperium Renewables, which operates a 100 Mgy biodiesel plant in Washington state, will provide the fuel.

Coleman Oil said that they will open 22 new biodiesel pumps in northern Idaho and Eastern Washington between now and spring 2008. The pumps will serve B20, supplied by Blue Sun Biodiesel of Colorado. Coleman previously had opened pumps in Lewiston and plan to expand to Post Falls, Coeur d’Alene and Sandpoint.

Financial News:

The Biofuels Digest Index™, a basket of public biofuel stocks, fell 0.60 percent to 111.75 as losers led gainers 5 to 4 and drops in Pacific Ethanol (PEIX) and Archer-Daniels-Midland (ADM) led the index downwards, despite the passage of the US Energy Bill in the Senate. For the day, Archer-Daniels-Midland was down 1.14 percent to $38.29 and Pacific Ethanol lost 4.88 percent to close at $6.04.  Among mid cap ethanol stocks, US BioEnergy was up sharply (USBE), 8.89 percent to $10.78, on news of the sale of two small units, while Better Biodiesel (BBDS.OB) was up 25 percent to $0.75.

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