Today in Biofuels: Newsday calls biofuels supporters “biofools”; Mozambique diesel riots reported as “food riots” in western press

Top Story:

Reaction to last week’s shocking Science magazine articles continued, with a negative editorial in Newsday that called biofuels supporters “Biofools”. The editorial stated that “ethanol and other biofuels actually hurt the environment. When the full emission costs of producing these “greener” fuels are considered, they create more greenhouse gases than fossil fuels.”

Producer News:

In Virginia, the prospects for a new ethanol plant in Hopewell improved when the state supreme court rejected a lawsuit aimed at blocking the plant’s construction. The lawsuit, filed by a Hopwell City Council member Curtis Harris, alleged that the city of Hopewell did not have the right to sell the land intended for the plant. The appeal followed a rejection of a request for an injunction to delay construction. Harris contends the city had no right to sell the land where the plant is slated to be built.

In Missouri, the controversial 100 Mgy Gulfstream Bioflex Energy corn ethanol plant in Rogerville will receive its air permit from the Missouri Department of Natural Resources. The project was delayed by a local resident lawsuit alleging that the project would damage the quality of local groundwater. The lawsuit is pending on appeal after the courts ruled in the company’s favor in May 2007.

In Arkansas, the 4.5 Mgy Arkansas SoyEnergy Group soy-based biodiesel plant will open near DeWitt today. The company will expand productino capacity to 7 Mgy in a second phase of construction. The plant will be the first in Arkansas with its own soy-crushing capability.

In Tennessee, switchgrass farmers who applied for incentives under the Tennessee Biofuels Initiative will commence planting this spring for a fall 2008 harvest. The five-year, $70 million cellulosic ethanol program will incentivize both feedstock production and construction of a pilot ethanol plant which will be constructed in Vonore. The $100 million plant will open in 2010.

International News:

A recent uprising in Mozambique that was characterized as a “food riot” in the UK Independent and other international media, was in fact a series of fuel riots, Biofuels Digest has learned. The protests occurred when local drivers called on the government to increase fares by 15 percent after a 30 percent increase in the cost of diesel. Roadblocks of burning tires and dumpsters appeared at bus depots, and men armed with rocks and clubs threatened local drivers. Riots erupted in Chokwe, in the southern Mozambican province of Gaza, as well as Maputo. Four deaths were reported in the uprising, which resulted in a rollback in the scheduled fuel price increase.

In the UK, Tory party leader David Cameron said that Britain will feel a global “food crunch”, and that national food security was a vital national interest. He noted that the UK was 60% self-sufficient in food in 2008, compared to 72% in 1996, and that the average meat consumption in China has increased from 20 kilograms per person per year in 1985 to more than 50 kilograms today, and that Britain cannot count on other countries to make up for a domestic food shortage.

In Mali, Mali Biocarburant will receive investment support from Kia automobile owners in the Netherlands, under a private, voluntary carbon tax program supported by Kia. New car buyers will pay between 15 and 85 euros on a voluntary basis for carbon offsets, which will support jatropha planting in Mali to provide feedstock for the Mali Biocarburant plant. The program is managed by Trees for Travel, which expects to plant more than 1.5 million jatropha trees under the program. Mali Biocarburant is backed by the Netherlands government, the Royal Dutch Tropical Institute, the Dutch Railway pension fund, and a local Mali farmer’s union.

In Papua New Guinea, a $100 million cassava ethanol plant is under development in Launakalana, in Central province. The developers, Changhae Tapioka, will select varietals from a pilot growing program and 43,000 acres when the plantation development effort is complete.

In India, the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), based in Hyderabad, said that sweet sorghum is ideal as a “food and fuel” crop for India, based on the plant providing 8 units of energy for every unit of fossil-fuel energy invested. The National Sorghum Producers’ research director added that India has a 4 Mgy sweet sorghum plan in operation and that China is planning a 40 Mgy facility. Sorghum is grown in hilly and semi-arid areas where food crops have low yields that are not commercially viable.

In South Africa, the Department of Minerals and Energy has underspent its biofuels budget by 15 percent, although the department has helped finance four projects to date. Critics of the program say that limiting government support to 20 percent of the capital cost of a project has affected the project development rate. The program also limits projects to maximum cost of $13.7 million with a minimum of 1 MW of electricity, 240,000 gallons of biodiesel, or 400,000 gallons of ethanol, too small for many projects to be commercially viable.

Research News:

Seeking Alpha projects that oil will reach $125 per barrel in 2008. Commentator Byron Wien said “China and India are consuming less than two barrels of oil per person per year while we consume 26 barrels, Western Europe consumers 13 to 15 barrels, Japan, Korea the same amount. As China and India increase their consumption, even if the two and a half billion people there only increase their consumption a quarter of a barrel of oil per year, there’s no way the world can meet that demand. So I think the price of oil is going a lot higher.” Other notable predictions by seeking alpha were a recommendation to focus on sugar as opposed to ethanol stocks, a prediction that coal prices would double in 2008, and that rising oil prices will spur investment in micro-car development in China and India.

Policy and Policymakers:

In Washington, the Environmental Protection Agency raised the 2008 Renewable Fuels Standard for ethanol to 7.76 percent of the nation’s gas supply — from 4.6 percent in November — to comply with the new Energy Independence and Security Act. US ethanol consumption reached 6.5 billion gallons in 2007.

Consumer and Fleet News:

The award-winning documentary, “Fields of Fuel”, is expected to launch a 50-city U.S. tour at the Tribeca Film Festival in New York in April. The director, Joshua Tickell, will then lead a biodiesel-fueled caravan that will tie-in with music concerts, and reach 1,000 screens before reaching Washington, DC in time for the November elections.

Financial News:

Markets were closed in the United States for the President’s Day Holiday. The Biofuels Digest Indexâ„¢ (BDI), a basket of public biofuels stocks, gained 1.20 percent Friday to close at 123.90 as Archer Daniels Midland and leading ethanol producers made recoveries from Thursday declines. Overall, declines led advances 3 to 2 for the day.

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