Today in Biofuels: Earth Policy Institute calls ethanol “misguided effort”; Abu Dhabi unveils $15 billion renewables initiative; 1700 gallon per acre yield projected for sago palm ethanol project

Top Story:

In Washington, the Earth Policy Institute released a report calling the US’s focus on ethanol “misguided effort to reduce its oil insecurity,” and said that the consequences will be hunger and malnutrition in the Third World as well as price increases for grains hitting US consumers. The Institute said that 400 million more people will live in hunger in 2025 than today. The report was authored by well-known policy adviser Lester Brown.

Producer News:

In Ohio, Coshocton Ethanol will commence operations today, after completion of a two-year construction period. The 55 Mgy corn ethanol plant will utilize 20 million bushel of corn and create 41 direct jobs. The company is a subsidiary of Altra.

In South Dakota, a subsidiary of VeraSun Energy has purchased 200 acres southwest of Tilton for undisclosed purposes. Tilton city officials and VeraSun execs were tight lipped about plans for VeraSun Tilton LLC, which is recorded as the owner of the land. VeraSun currently operates five plants in South Dakota, Iowa, Nebraska and Indiana, and has a capacity of 560 Mgy, with four facilities under construction in Iowa, Minnesota, Ohio and Indiana that will bring capacity to 1 billion gallons. VeraSun and US BioEnergy have announced a merger that would create a 1.5 billion gallons capacity ethanol company. The company also has 150 retail outlets that sell its VE85-branded fuel.

In New York, Xethanol said that it would discontinue development at two sites in Georgia and North Carolina, and that it was losing money at a 5.6 Mgy facility in Iowa that represented its sole operating facility. The company said that it would sell the former Pfizer site in Augusta, where it had planned to have a 35 Mgy ethanol plant online in 2007. Xethanol also announced that it would discontinue development efforts in Spring Hope,m NC. Following losses of $1.3 million in the 4th quarter, the company is facing the prospect of being delisted from the American Stock Exchange.

International News:

In Japan, New Century Fermentation Research will build a small pilot plant in Malaysia that uses sago palm as an ethanol feedstock. The company says that it can produce up to 1700 gallons per acre from sago, more than any other existing ethanol feedstock. The company said that residual biomass from ethanol processing could be used for generation of heat and power. The company uses its proprietary “Ishizaki process”, which uses the Zymomonas bacteria in fermentation.

In Nigeria, the federal government is planning to send 50 officials to the World Ag Expo in February to seek biofuel investment partners and technological expertise. Nigeria is a major oil producer, but the high price of oil has prompted the federal government to use oil for exports while focusing on the development of biofuels for domestic purposes, including three 20,000 hectare farms set up by the government for ethanol production.  In related news, the central government of Malawi is seeking engineering firms to manufacture components for an ethanol-based stove, which the government hopes to use to reduce dependence on charcoal, firewood and paraffin.

In China, Gushan Environmental Energy has commenced biodiesel production at its 50,000 tonne Beijing facility. Capacity at the Beijing plant will be increased to 100,000 tonnes by the 4th quarter of 2008. Gushan is on track to open a new 50,000 tonne facility in Shanghai in the second quarter of this year, with 30,000 tonne plants opening in Chongqing and Hunan later in the year. Overall, the company has set a goal of 400,000 tonnes of biodiesel capacity by the end of 2008.

In the United Arab Emirates, the Crown Prince of Abu Dhabi announced an $15 billion investment project in solar, wind, hydrogen, carbon reduction, sustainable development, education, manufacturing and research. The investment will be managed through the emirate’s Masdar Initiative, which will leverage the initial investment through joint ventures and other partnerships that will greatly expand the portfolio size.

Research News:

In Missouri, researchers have developed a new process for butanol production. The research team at Washington University, led by Lars Angenent, assistant professor of energy, environmental and chemical engineering, uses fiber by-products of ethanol production from the USDA research facility in Peoria, Illinois as feedstock. A culture of thousands of different microbes are used to convert the biomass into butyrate, which is then fermented into butanol.

Policy and Policymakers:

In Switzerland, the CEO of Nestle said that there needed to be a true price associated with the use of water, saying that it takes 2,400 gallons of water to make one gallon of biodiesel. Peter Brabeck said at the World Economic Forum that it took less than a gallon of water to make a gallon of oil, but that it would take as many as 65 gallons of water to make a gallon of oil if heavy oil and oil sands were tapped as energy sources.

In England, Dr. Andrew Boswell, a Green Party councillor in England, said that “The biofuels route is a dead end”, and predicted massive damage to the environment and social unrest in tropical countries if biofuels were pursued. Boswell has produced a study which, according to Business Week, said that “vast swathes of forest have been felled and burned in Argentina and elsewhere for soya plantations” The study pointed to the release of CO2 from peat bogs and rainforests that have been converted to agricultural use.

Consumer and Fleet News:

In Colorado, the Winter X Games has converted to biodiesel; buses and snowcats will be powered by fuel made from kitchen grease. The organizers of the Games said that they would make compost from left overs and make plates and napkins from sugarcane byproducts, in an effort to demonstrate concern for the environment.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, leapt 3.16 percent to close at 119.64 as large cap diversified agribusiness and mid cap ethanol stocks continued to rally as recessionary fears subside. For the day, Archer Daniels Midland (ADM) rose 3.48 percent to close at $42.27, while Aventine Renewable Energy (AVR) rose 1.45 percent to $9.78 to lead the mid caps. Among small caps, Intrepid Technology jumped 23.08 percent to $0.016 on news that its biogas had successfully completed a rigorous testing program conducted by the Gas Technology Institute. Overall, advances led declines 5 to 3.

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