Today in Biofuels: OECD says environmental solutions are “available, achievable and affordable”; Canadian, Nigerian ethanol halts

Top Story:

In starkly competing views of the future, the OECD said “Solutions to the key environmental challenges are available, achievable and affordable” in its 2008 Outlook, while the UK’s Chief Scientific Adviser  said “It’s very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food. Professor John Beddington was addressing a sustainability conference in the UK, where he said that the world’s food supply needed to double by 2080.

By contrast, the OECD report provides environmental and economic forecasts through 2030, and identified four areas for policy action: climate change, biodiversity loss, water scarcity and the impact on human health of pollution and toxic chemicals. The report said that greenhouse gas emissions would grow by 37 percent if no policy action was taken, but spending one percent of economic growth on climate change would reduce that figure to 12 percent.

Producer News:

The Oklahoma Bioenergy Center will plant 1,000 acres of switchgrass near Guymon, in four varietals, and the resulting research crop will be provided to the Abengoa cellulosic refinery under development in Hugoton, Kansas.

A roundup on algae developments profiles the three main techniques for cultivation: the open-pond approached pioneered by the National Renewable Energy Laboratory and employed today by LiveFuels and GreenStar, among others; the bioreactor approach employed by Mighty Algae, GreenFuel Technologies, and Algae-Link; and feeding sugar to algae while growing in the dark, the approach used by Solazyme. Yield estimates continue to range from 5,000 to 15,000 gallons per acre.

In Michigan, the Romulus City Council members have delayed approval of the 11 Mgy Altenergy plant over concerns of disposal of an undisclosed by-product. The $14 million poroject is a joint venture between Altenergy and Romulus-based RKA Petroleum.

In North Carolina, the saga of Piedmont Biodiesel, which began as a biodiesel co-operative and ended up a contract biodiesel producer for European export, is chronicled in an entertaining story at biofuels.coop. “The biodiesel business is simple,” it begins. The story covers their roller-coaster ride on soy prices, followed by a roller-coaster ride on chicken fat prices, followed by a sojourn in the world of yellow grease, before settling down as a contract producer, leaving feedstock and fuel prices to others to worry about.

International News:

In China, Guangxi Zhuang Autonomous Region will convert to a cassava-based ethanol blend as of April, in an attempt to reduce greenhouse gas emissions and imported fuel costs, while avoiding the use of grains for ethanol feedstocks.  The region produces 200,000 tonnes of ethanol annually at a plant in Behai City.

In Nigeria, the federal government has placed sanctions on oil giant Oando, and banned Swiss importer Gunvor from the country, in the aftermath of a distribution of unlabeled E20. The 14,000 metric tonne distribution has left thousands of vehicles disabled. Oando and Guvnor have each said they are not to blame for the fuel crisis, which will likely have a damning consequence for the Nigerian government’s plans to ramp up ethanol distribution over the next two years. Oando did not conduct a test on the fuel to determine ethanol presence, saying that they had never ordered nor dealt previously with ethanol-blended fuel. Guvnor said that they routinely distribute ethanol-blended fuel.

In Canada, the provincial government on Prince Edward Island announced a biofuels moratorium for several months while awaiting a report on sustainability. Atlantec BioEnergy, which intended to commence production at a sugar beet-based ethanol plant this summer, has been delayed by the annoucnement. The company said that it would have to make a decision this week whether to proceed with planting more than 5,000 acres for sugar beet feedstock, or to move its project to a new location.

In New Zealand, BP testified that biofuel requirements proposed to take effect July 1st would result in a price increase of 27 cents per liter or more, for diesel and gasoline. The oil refiner said that the cost increase, on a target of 0.53 percent biofuels content in 2008, rising to 3.,4 percent in 2012, would come as a result of infrastructure requirements to move and store the fuels. Primarily the building of storage and blending facilities in multiple terminals. Oil companies face a fine of as much as $20 million for missing their obligations, rising to $30 million by 2012.

Research News:

In Florida, chief analyst for the Oil Price Information Service said that gasoline prices would rise to between $3.50 to $3.75 a gallon by summer, but decline in the second half of the year. Tom Kloza said that he did not expect gas to reach $4 per gallon, in part because of the reduced cost of ethanol that is blended into the fuel. The April contract for Texas light, sweet crude closed at $105.47 a barrel on the New York Mercantile Exchange yesterday.

Policy and Policymakers:

In Iowa, the state Senate Agriculture Committee will vote on legislation that will assist with infrastructure for selling biodiesel and ethanol blends higher than E10, by expanding the $9 million Renewable Fuels Infrastructure Program, first created in 2006, and which will have $9 million to distribute in the next budget year. State Senate leader Jack Kibbie told iowapolitics.com ” When I drive from Emmetsburg to the State Capitol, I pass by only one E85 pump.  If given the option, Iowans would rather use the fuels we produce here in our state rather than import it from the Middle East.”

Consumer and Fleet News:

Bentley Motors has introduced will introduce renewable fuel versions of all its production cars by 2012, the company said. It added that it expected a 15% reduction in carbon dioxide emissions by 2012 from improved efficiency and a 40 percent reduction from a new powertrain design.

Financial News:

The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, fell 1.05 percent to 127.30 as major ethanol stocks fell sharply.  Pacific Ethanol (PEIX) fell 10.90 percent to $4.25 while VeraSun Energy (VSE) fell 9.03 percent to close at $7.25. Among diversified agribusiness, Archer Daniels Midland (ADM) fell 0.67 percent to $46.27, while The Andersons (ANDE) recovered 0.37 percent to close at $43.77. Declines led advances 3 to 2.

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