Today in Biofuels: PetroChina to develop 600 Mgy in ethanol capacity; US Energy Act has “escape clause”; commodity prices confound “food vs fuel” gloomsayers

Top Story:

Vinod Khosla, George W. Bush, Al Gore and Richard Branson are profiled in a series on the 23 finalists for the Biofuels Personality of the Year award.

Other finalists include: Gloria Arroyo (President, The Philippines ), Ban Ki-Moon (UN Secretary-General), Jeff Broin (CEO, POET), Fidel Castro (former President, Cuba), Red Cavaney (President, American Petroleum Institute), Hugo Chavez (President, Venezuela), Bob Dineen (CEO, Renewable Fuels Association), Dr Jacques Diouf (Director-General, UN FAO), Donald Endres (CEO, VeraSun), José Sergio Gabrielli de Azevedo (CEO, Petrobras), Tom Harkin (Senator, Iowa), Tony Hayward (CEO, BP), Luiz Inácio Lula da Silva (President, Brazil), John McCain (Senator, Arizona), Elliott Mannis (CEO, D1 Oils), Willie Nelson (singer, bioactivist), Rubens Ometto (CEO, Cosan), David Pimentel (Professor, Cornell), Bill Richardson (Governor, New Mexico), Dr. Christopher Somerville (Director, Energy Biosciences Institute), Dr. Jean Ziegler (UN Special Rapporteur on the Right to Food).

Voting continues on the biofuelsdigest,com website through December 31st.

International News:

In Israel, Ampal-American Israel announced an agreement to acquire up to 35% of Merhav’s sugarcane ethanol project in Columbia. Ampal has provided $20 million in loans at LIBOR plus 2.25 percent to the project which include a one-year option to convert into equity, secured by Merhav’s shareholding in Ampal. In addition Merhav has signed a Memorandum of Understanding with Ecopetrol who will take up to 25 percent of the equity in the project.

PetroChina announced that it will invest $109 million in a 33 Mgy non-grain ethanol plant in Nanchong, Sichuan. PetroChina said that its ultimate aim is to construct 600 Mgy in non-grain ethanol capacity and 52 Mgy of wood-based biodiesel capacity from China’s forest resources.

Research News:

Commodity analysts are predicting that 2008 prices for oil will drop, while soy and corn will continue to rise after spectacular gains in 2007. For the year, Rick Mueller, an analyst with Energy Security Analysis of Wakefield, Mass, is predicting oil prices in the $80 – $85 range, with a drop to $71 if the US falls into recession. http://www.csmonitor.com/2007/1226/p01s01-usec.html. Meanwhile, the March contract for soybeans reached $12.03, the highest price since 1973, while the March contract for corn stands at $4.33, up 14 percent this year after an 81 percent rise in 2007. By contrast, the primary feedstock for ethanol, sugar, has been falling. The March contract for white sugar on the LIFFE exchange stood at 13.57 cents per pound, with sugar down 14.5 percent for 2007.

Policy and Policymakers:

US Senator Jeff Bingaman told Newsweek that the Energy Act has an escape clause if lawmakers don’t feel that the US is making sufficient progress in developing viable advanced biofuels technologies. if the US “can’t meet the [biofuels] goals in any particular year then we can adjust the requirement,” he said. “If it turns out the use of biofuels doesn’t prove to be a valid way to offset our need for petroleum products then we would have to put more emphasis on something else like plug-in hybrids. The truth is we are trying to move ahead in the various areas where we think technology will provide us with solutions. At this point, we don’t know what will prove to me the most useful.”

Consumer and Fleet News:

In Washington state, Propel Biofuels will construct and operate a standalone biofuel station in Seattle, expected to open in March. The station, which will feature four pumps offering B20 and B99 grades of biodiesel, is in contrast to other stations which add single biodiesel pumps at conventional gas stations.

In Colorado, the Aspen/Snowmass ski resorts have converted their snowcats to biodiesel.

Financial News:

The Biofuels Digest Indexâ„¢, a basket of public biofuels stocks, rose 1.06 percent to close at a 52-week high of 131.25 as the markets closed for the US Christmas holiday period. Diversified agribusinesses led the way, with The Andersons (ANDE) up 2.38 percent to $46.04. Mid cap ethanol stocks were down as investors took profits from the recent run-up in stock prices; VeraSun Energy (VSE) was down 9.63 percent to $16.4. Among small caps, Xethanol jumped 52.53 percent to $0.8999 while Green Energy Resources (GRGR.PK) fell 6.67 percent to $0.14.

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