Today in Biofuels: Imperium CEO in shock departure; Central Illinois, Moses Lake plants in distress sales; Germany’s Petrotec restarts production; Biofuels Digest Index hits 52-week high

Top Story:

In Seattle, Martin Tobias resigned as CEO of Imperium Renewables, the owner of the world’s largest operating biodiesel facility, the 100 Mgy plant at Grays Harbor, WA. The company did not discuss reasons for Tobias sudden departure. Imperium closed a $113 million venture capital round in 2007 as well as securing a $100 million bank debt financing, but had not closed a planned $345 million IPO. Imperium is backed by Paul ALlen, co-founder of Microsoft, where Tobias formerly was employed before joining Imperium. Imperium founder John Plaza was named interim CEO and director Nancy Floyd was named chairman.

Producer News:

Central Illinois Energy has put its 37 Mgy Canton, OH ethanol plant up for sale after failing to secure $30 million in additional funding. Credit Suisse, the lead bank among the lenders, is reportedly forcing the sale. The plant was originally projected to cost $40 million, but has spent nearly $130 million on the project.

In Florida, five ethanol projects are underway as the nation’s fourth-largest state plays catch-up in ethanol production. Florida Crystals Corp.’s $20 million cellulosic ethanol demonstration plant is expected to open in 2009. United States Envirofuels corn ethanol plant in Tampa will commence construction next month. Southeast Biofuels has applied for a $500,000 grant for a cellulosic ethanol plant that will convert citrus waste to ethanol. A similar 4 Mgy project sponsored by Citrus Energy is in the proposal stage. A cellulosic ethanol plant that will convert yard waste, wood waste and citrus peel into ethanol, hydrogen and electricity is in the design stage.

In Washington state, Liquafaction Corporation has put its partially built, 12 Mgy ethanol facility at Moses Lake up for sale to obtain completion financing. The company, which requires $6 million to complete its plant, offered the plant for sale on Ebay for $21 million plus half the bank debt.

International News:

In India, the Bureau of Indian Standards will release its specification for E10 in March 2008. The country is scheduled to move to E10 in October 2008 at the beginning of the next sugar season. Following the imposition of an E5 mandate in October, oil companies have blended only 58 million gallons, compared to the 145 million gallons required under the mandate.

In Norway, Norske Skog has formed a joint venture with forest owner cooperatives to produce wood-based ethanol at Follum. Total investment in the project is project at up to $36 million, and Norske Skog will own 60 percent of the venture, the company said.

In Germany, Petrotec said it will restart production in January at waste vegetable oil biodiesel plants in Suedlohn-Oeding and Emden. The plants were on hiatus as of October due to slow order volume.

In Mexico, the agriculture ministry said that the country will focus on beets, yucca root and sorghum based biofuels as of next year. The ministry also said that they will offer support for biofuel crop cultivation, but that no food stocks would be used as biofuel feedstocks.

Research News:

The US Defense Department is estimating that the current production cost of algae oil exceeds $20 per gallon. The Department is exploring the potential of algae oil as a jet fuel source, but said that they need the cost of the oil to get down to $3 per gallon. The US Department of Energy recently partnered with Chevron in a research effort to develop higher-yield strains of microalgae. The Defense Advanced Research Projects Agency is working on a project with Honeywell, General Electric and the University of North Dakota.

Policy and Policymakers:

In Missouri, an E10 mandate takes effect this week, but the state is already at 90 percent complianace. Missouri has a unique feature in its ethanol mandate allowing fuel retailers to switch back to unblended gasoline if the price of ethanol exceeds the price of gas. There are concerns that, if the price of ethanol drops below gas and retailers again sell E10, that they will have co-mingled fuels in their tanks that would bring them below the minimum blending requirement.

In Oregon, nine counties in the northwest of the state will switch to E10 when the next phase of Oregon’s new Renewable Fuel Standard takes effect on January 15. E10 will be mandatory in Multnomah, Clackamas, Washington, Clatsop, Columbia, Tillamook, Yamhill, Polk, and Marion counties. Linn, Lane, Benton, Lincoln, Douglas, Coos, Jackson, Josephine, and Curry counties will move to E10 on April 15th, and all remaining counties will convert in September 16.

Consumer and Fleet News:

In Vermont, more than half of state biodiesel consumption is accounted for by blended home heating oil. In 2006, home heating oil accounted for 40 percent of biodiesel consumption, and more than 10 percent of heating oil dealers are selling biodiesel blends. Statewide biodiesel consumption has increased from 9,000 gallons in 2003 to a projected 750,000 gallons in 2007. Companies are typically offering B2 and B5 biodiesel blends.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 2.88 percent to a 52 week high of 129.85 as investor enthusiasm continued to build following the signing of the Energy Independence Act last week. Among diversified agribusiness, Archer Daniels Midland (ADM) was up 2.26 percent to $44.27, while VeraSun Energy (VSE) rose 15.71 percent to $17.75 to lead mid cap ethanol stocks, which received favorable coverage in the Motley Fool last week in an article spotlighting high performing but “unloved” stocks. Among small caps, Green Plains Renewable Energy (GRGR.PK) rose 15.93 percent to $13.61.

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