Corn Futures Up, Ethanol Stocks Down
What bad luck for U.S. ethanol makers. The very day when oil hits a record high, even when adjusted for inflation, corn also hits a record high. High oil should make ethanol more desirable, but the high corn prices are more than offsetting any benefits from the oil rally.
As a result, some corn ethanol stock are at or near their own records - well, record lows. Verasun Energy (VSE) posted its lowest close ever of $7.75 Tuesday, 66 percent down from its offering price of $23 a share. U.S. BioEnergy (USBE) fell to $6.19, also a low point, and 43 percent down from its IPO price of $14.
But there’s a morsel of good news for ethanol makers. Corn prices fell back 2 percent Wednesday amid expectations that animal-feed consumption will taper off in the U.S. and demand for corn abroad will also slow.
Nearly all of the ethanol stocks bounced back Wednesday by two or three percent. That’s really not much considering that some, like Verasun and U.S. BioEnergy, were suffered double-digit declines when corn hit its record high. There may be some investors looking to get in on what they believe are bargains. But it’s still not clear what when these companies’ operations will recover, and why.
Sourse: Corn Futures Up, Ethanol Stocks Down
Nebraska Ethanol Producers Form New Association
Nebraska.tv reports that the Association of Nebraska Ethanol Producers was recently formed to support pro-ethanol legislation and increase public awareness of ethanol. Members of the association hope the new group will help give them the power to grow the ethanol industry.
Sourse: Nebraska Ethanol Producers Form New Association
Biofuel Startup Claims It Can Make Ethanol for less than $1 per Gallon
The startup is funded by GM and other investors, and uses gasification to turn organic materials into carbon monoxide and hydrogen by reacting the raw material at high temperatures with a controlled amount of oxygen.
What is unique about this company is that, “Rather than fermenting that gas or using thermo-chemical catalysts to produce ethanol, Coskata pumps it into a reactor containing bacteria that consume the gas and excrete ethanol. Richard Tobey, Coskata’s vice president of engineering, says the process yields 99.7 percent pure ethanol.” Gasification is a questionable way to go, because were it feasible and cost-effective, we wouldn’t still be throwing away valuable, carbon-rich garbage into overflowing landfills when it could be converted to energy.
The use of bacteria to convert the gas into ethanol sounds like a great idea, and may just work. Using a living, renewable resource like bacteria and algae as a part of an industrial process that helps to reduce the global footprint and repair the earth is a definite win. I previously posted about converting CO2 into biofuels using algae here.
Here is an exerpt from the Wired article:
A biofuel startup in Illinois can make ethanol from just about anything organic for less than $1 per gallon, and it wouldn’t interfere with food supplies, company officials said.
Coskata, which is backed by General Motors and other investors, uses bacteria to convert almost any organic material, from corn husks (but not the corn itself) to municipal trash, into ethanol.
“It’s not five years away, it’s not 10 years away. It’s affordable, and it’s now,” said Wes Bolsen, the company’s vice president of business development.
The discovery underscores the rapid innovation under way in the race to make cellulosic ethanol cheaply. With the Energy Independence and Security Act of 2007 requiring an almost five-fold increase in ethanol production to 36 billion gallons annually by 2022, scientists are working quickly to reach that breakthrough.
…Coskata won’t have a pilot plant running until this time next year, and it will produce just 40,000 gallons a year. Still, several experts said Coskata shows enough promise to leave them cautiously optimistic.
…
Gasification and bacterial conversion are common methods of producing ethanol, but biofuel experts said Coskata is the first to combine them. Doing so, they said, merges the feedstock flexibility of gasification with the relatively low cost of bacterial conversion.
Cautious optimism is better than apathy and despair. Hopefully such reasonable and sustainable alternative methods of creating ethanol fuel will succeed, because otherwise the Energy Independence and Security Act of 2007 mandating ethanol production will encourage unsustainable methods of biofuel production. More specifically, the act will blanket the country in corn fields. Converting food crops into ethanol is a terrible idea that wastes farmland, raises food prices, damages the ecosystem, pollutes the earth, and only benefits those that profit from the forced use of ethanol. Let’s just hope Coskata finds renewable sources of carbon-rich biomass, and doesn’t decide to start using trees for fuel.
link to the Wired article Startup Says It Can Make Ethanol for $1 a Gallon, and Without Corn
Plugging The Ethanol Argument
State policies drawn up with long-term goals in mind are often subject to abrupt disruptions as a result of change in government. The stated return of LPG subsidy is the latest example. While the previous military-appointed government wanted prices of liquefied petroleum gas to float in line with global markets, reduce financial burden and encourage consumers to conserve energy, the new administration led by Samak Sundaravej wants to reverse the policy, a pledge it made to voters.
Subsidised LPG prices, according to some car companies, may also persuade drivers to switch from compressed natural gas to LPG _ the opposite of what the Surayud government envisaged.
Toyota is set to become the third manufacturer to offer a bi-fuel model that can run on both CNG and petrol for the new Corolla. The first one was the factory-equipped Mercedes-Benz E-class and the second retro-fitted Chevrolet Optra.
”While the LPG subsidy may be a detriment for carmakers investing in CNG-powered cars, it could also be seen as a way to contain the growth of CNG-powered cars,” commented one veteran car critic.
Filling stations with CNG heads are still few, although PTT is gradually increasing the number of outlets nationwide. Read on…
Food and Fuel Plant Fuels IndyCar
LifeLine Foods, a pioneer in the production of food and energy, will be the official supplier of the 100 percent fuel-grade ethanol used in all IndyCar Series cars.
The St. Joseph, Mo. facility will supply about 120,000 gallons of the fuel. With the transition to an ethanol-blend in 2006 and then fuel-grade ethanol 2007, the IndyCar Series was the first motorsports league to require use of a renewable fuel.
“The IndyCar Series is the perfect showcase for the environmental and performance attributes of ethanol,” said Bill Becker, CEO of LifeLine Foods. “We are proud to be on the cutting edge of renewable energy technologies and provide fuel for cutting edge race cars.”
LifeLine Foods is a unique company that uses corn to produce food and fuel. One portion of the kernel is processed and marketed to the food industry while the remainder of the corn kernel is used for, among other things, cattle feed and energy needs.
The St. Joseph plant produces 50 million gallons of ethanol per year, providing an economic boost to the community, while minimizing its environmental footprint.
The 16-race IndyCar Series season opens March 29, 2008 under the lights at Homestead-Miami Speedway.
Source: IndyCar, DrivingEthanol, Lifeline Foods
First public ethanol station opens in the Valley
From East Valley Tribune:
The Valley’s first E85 fueling station serving the public has opened in Phoenix. Western States Petroleum opened the station at 450 S. 15th Ave. this week, said owner Bob Kec.
So far most customers have been National Football League officials in the Valley for the Super Bowl, with league vehicles […]
Sourse: First public ethanol station opens in the Valley
Reports of Ethanol Tariff’s Demise Exaggerated
Reports of the demise of the ethanol tariff in the new White House budget were apparently greatly exaggerated.
Despite hints from Energy Secretary Sam Bodman last week that changes might be made to the expiring U.S. ethanol import tariff in its new 2009 government budget that was sent to Congress on Monday, no such changes were included.
Reuters reports that an energy department spokesperson said while the 54-cent-a-gallon tariff is set to expire at the end of December during the 2009 budget year, which begins this October 1, the administration will have discussions with lawmakers later this year on what should be done with the tariff.
The tariff is designed to protect the U.S. ethanol industry from other countries taking advantage of the 51 cent per gallon blenders’ tax credit.
Sourse: Reports of Ethanol Tariff’s Demise Exaggerated
Standard Ethanol Plant Waiting on Water
McCook Gazette reports that Standard Ethanol’s new 44 Mgy plant is almost ready to begin operation in Cambridge. National Resources District officials recently mailed letters to all proposed ethanol plants in the district to explain that new rules require big consumers of water to watch their overall consumption. Standard Ethanol’s plant will built under the old rules which allowed all water users in the district to offset any new water consumption from industrial and nonmunicipal operations.
Sourse: Standard Ethanol Plant Waiting on Water
Report Compares Existing Global Standards Specifications for Bioethanol and Biodiesel
The governments of the United States, Brazil and the European Union (EU)—the world’s major producers of biofuels—released an analysis of current biofuel specifications with the goal of facilitating expanded trade of these renewable energy sources.
One potential obstacle to achieving greater efficiency in the global biofuels market is confusion over differing—and sometimes conflicting—standards for characterizing the make-up and properties of biofuels. To clarify the current situation and identify potential roadblocks to improved compatibility, the US and Brazilian governments and the EC convened a task force of experts from standards developing organizations (SDOs) to compare critical specifications in existing standards used globally (factors such as content, physical characteristics and contaminant levels that govern a fuel’s quality) for pure bioethanol and biodiesel.
The resulting White Paper identifies where key specifications in the standards are similar (and can be considered compatible); different, but could be reconciled in a short period; or irreconcilably different as they stand.
The experts found that these three sets of bioethanol and biodiesel standards, and the specifications they contain, share much common ground and, therefore, impose few impediments to biofuel trade.
Nine of the 16 ethanol specifications reviewed, the task force states, are “in alignment” and all but one of the remaining specifications could be aligned in the short term. A significant difference among the three sets of standards is water content, which is set at different levels primarily due to the varying ethanol concentrations permitted in gasoline and the gasoline distribution differences:
- The EU currently utilizes up to E5 and has the lowest limit of 0.24 vol%.
- The US has the highest limit of 1.0 vol%.
- Brazil does not have maximum water content in its specifications, but levels are calculated to be a maximum of 0.4 vol% based on a minimum total alcohol content of
99.6 vol%
For bioethanol, the Task Force concluded that there is no technical specification that constitutes an impediment to trade given the current situation. However, it is recognized that additional drying and testing will be required by Brazil and US exporters wishing to supply the EU market.
For biodiesel, the report lists six specifications out of 24 as in alignment. It suggests that many of the remaining differences could be handled in most cases by blending various types of biodiesel to create an end product that meets regional specifications for fuel quality and emissions.
However, the report notes, that while bioethanol is a single chemical compound, biodiesel is not a single chemical entity, but is derived from several types of feedstocks that can translate to variations in the performance characteristics of the finished fuel.
The “White Paper on Internationally Compatible Biofuels Standards” was produced by the joint task force after a six-month review process that considered thousands of pages of technical documents produced by ASTM International, the Brazilian Technical Standards Association (Associação Brasileira de Normas Técnicas or ABNT) and the European Committee for Standardization (Comité Europeén de Normalisation or CEN). Standards developed by these three SDOs are currently being used in support of biofuels commodities trading between nations.
Recognizing that many of the issues relating to variations in specifications can be traced to different measurement procedures and methods, two leading metrology institutes—the US National Institute of Standards and Technology (NIST) and Brazil’s National Institute of Metrology, Standardization and Industrial Quality (Instituto Nacional de Metrologia, Normalização e Qualidade Industrial or INMETRO)—are collaborating on the development of joint measurement standards for bioethanol and biodiesel to complement the efforts of the SDOs.
Initial efforts focus on creating certified reference materials to support development and testing of bioethanol and biodiesel, and analytical measurement methods for source identification (to determine if a fuel comes from a renewable or non-renewable source and the source of origin of biodiesel, e.g., soy, palm oil, animal fat, etc.) by the end of 2008.
The United States, Brazil and the EU are all members of the International Biofuels Forum (IBF) and will continue to engage other IBF governments in future work. The named SDOs will also seek to involve their counterparts in the other IBF member countries—China, India and South Africa—in the effort to make biofuels standards compatible worldwide.
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The US Ethanol Import tariff is under review
The 54-cent litre import duty on ethanol into the US could be reviewed in the 2009 budget, according to a report on Reuters discussed breifly on Facts About Ethanol. As the writer says the President proposes but Congress disposes. It will be interesting to see who lines up on which side of the debate,and wheter there is any protection for truely second generation technology (ceulluosic ethanol derived from chemical/biological means instead of pyrolysis)…
Sourse: The US Ethanol Import tariff is under review
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