Today in Biofuels: “We owe a debt of gratitude”, Science article responses flow in; Argentine biodiesel exports set to jump 300 percent; new product increases ethanol efficiency 50 percent

Top Story:

Nathanael Green, senior policy analyst with the Natural Resources Defense Council, offered the most thoughtful analysis to date of two articles that appeared in Science magazine regarding biofuels and greenhouse gas emissions.

The articles have received coverage in the New York Times, Wall Street Journal, NPR and most other major media for their startling revision of greenhouse gas calculations for biofuels.

“Do yesterday’s Science articles mean that all biofuels are bad and that the recently passed RFS is going to harm the climate? The short answer is no and no,” Green writes, adding that “The dynamics the authors have identified are undeniable–if you clear land to grow crop for biofuels you have to account for the emissions from that clearing and if you induce clearing by driving up crop and land prices, you also have to take responsibility for those emissions.

“For laying out these dynamics and giving us a sense of the scale,” Greene continues, “we all owe them a debt of gratitude, particularly Searchinger and his team because the emissions from indirect land are hard for many to understand.” However, he added, “Fortunately, we knew about these dynamics before yesterday, and we’ve won a preemptive victory in getting the dynamics written into the legislation in the form of the land-use safeguards and minimum lifecycle GHG standards.”

“So I would caution folks from assuming that either article means that no crop-based biofuels will be able to comply with the RFS or that their analyses are definitive.”

More on the Science magazine controversy:

Biofuels emissions authors say biofuels OK if made from waste, perennials, or abandoned land

93 percent increase in greenhouse gases? Renewable Fuel Association says fossil fuels created the “carbon debt we can never repay”

Nature Conservancy study says converting land for biofuels increases net carbon usage

Producer News:

In Missouri, American Green Holdings announced the launch of the Ethanol Reformer, a patent-pending technology that improves ethanol efficiency in irrigation systems by more than fifty percent, while improving emissions. The Reformer, uses ethanol’s flame speed to match the engine’s work load in a more efficient process than fuel injection and carburetion alone. “Ethanol’s higher octane number allows us to do the same amount of work with a great reduction in fuel,” a company spokesman said, adding that the technology was also available in AGH’s EcoOutlaw motorcycles.

In Illinois, Whitebox Advisors will make a credit bid of $80 million for the bankrupt Central Illinois Energy ethanol plant. The plant’s new owner will acquire technology problems, $22 million in mechanics’ liens, and a bill for $25 million to complete the plant.

In Texas, Beacon Energy will purchase the operating assets of Smithfield BioEnergy, including a 12 Mgy biodiesel plant in Cleburne. Beacon will finance the transaction via a private equity placement.

In California, Allegro Biodiesel has commenced processing of jatropha oil into biodiesel on a test basis. Allegro is receiving shipments from Global Clean Energy Holdings, which is developing jatropha plantations in Latin America. The two companies announced a testing and production agreement to produce biodiesel for both the US and European markets.

International News:

In Argentina, director of the Argentine Association of Biofuels and Hydrogen predicted exponential growth of biodiesel. Claudio Molina projected that exports will increase to $1.1 billion, up from 268 million in 2007. The opening of seven new plants, at a cost of $400 million, is credited with the increase, as production capacity increases to 1.6 million tonnes this year with the opening of a 300,000 tonne Louis Dreyfus plant in Santa Fe province.

In Brazil, Infinity Bio-Energy Ltd has acquired a $75 million stake in Disa Overseas, with the capital to be used for construction of two new sugar cane processing and ethanol plants, and a 30 MW power plant in Itaunas, in Espiritu Santo province.

In Malaysia, Carbon Capital Corporation has established a joint venture with Japan Carbon Mercantile to build a multi-feedstock biodiesel plant in Tanjung Manis in Sarawak and a biogas facility in Sarawak under the Clean Development Mechanism. The $308 million project will use jatropha and palm oil as feedstocks.

In Australia, Agri Energy halted trading in its shares after collapse of its efforts to secure US financing. The company, which abandoned plans for ethanol plants at Swan Hill and Murtoa, in Victoria, due to lack of government support and a poor outlook for feedstock and biodiesel prices. The company said it would continue to pursue financing in the US.

Research News:

In Washington, the USDA’s Office of the Chief Economist released 10-year projections for global agriculture. The online version is available here. The report projects a very strong outlook for world agriculture including high petroleum and energy prices, a profitable outlook for corn-based ethanol, increased global interest in biofuels production, falling US soy production, and a reduction in meat production through 2013 before a return to growth in 2014.

Policy and Policymakers:

In Texas, chairman of DKRW Advanced Fuels told the Cambridge Energy Research Associates’ 2008 conference that refining coal into liquids is the logical step to succeed corn-based ethanol. “Does it make sense to burn your food supply … to make what is in our estimation an inferior transportation fuel?” Robert Kelly asked. “We’ve got a huge amount of coal here,” Kelly said after a breakfast presentation, noting U.S. coal reserves are among the world’s largest. “It is a huge fuel source for the next 50 years if we do it responsibly.”

Consumer and Fleet News:

In Nebraska, the state has shut down the Shell Time Saver #7 station in North Platte for selling E15 advertised only as “Ethanol Enriched”. The station is adjacent to Conoco and BP stations cited in 2007 for deceptive trade practices.

An entertaining backgrounder is available on Joshua Tickell, the “man who wanted to change the world one tank at a time,” whose decade-long involvement with biodiesel culminated in the award-winning documentary “Fields of Fuel” that included Julia Roberts and Woody Harrelson among its interview subjects. The report traces his story bac to the 25,000 mile odyssey of the “Veggie Van”, which was powered by used oil from fast-food franchises and home-brewed into biodiesel.

Financial News:

The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, rose 1.12 percent Friday to 122.39 as continuing investor enthusiasm for diversified agribusiness offset waning demand for ethanol stocks. For the day, diversified agribusiness Archer Daniels Midland (AMD) gained 1.47 percent to close at $43.58 after Banc of America analyst Eric Brown said that ethanol margins had improved but downgraded The Andersons (ANDE). Among mid caps, US BioEnergy (USBE) rose 0.41 percent to $7.37. Among small caps, Green Plains Renewable Energy (GPRE) fell 11.25 percent to $9.07 while Green Energy Resources rose to $0.15, up 7.14 percent. Overall, declines led advances 3 to 1.

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