Biodiesel Tax Credit Back In US Budget Deal
by Jim Lane
In Washington, the US Congress passed its budget deal, and among the items in the deal was a retroactive restoration of the $1 per gallon biodiesel tax credit for 2017. The bill did not include a provision for 2018 and future years.
The budget compromise had run into headwinds in the Senate, in the form of a voting delay imposed by Rand Paul of Kentucky, while opposition in the House from a group of Democrats and hardline conservatives had put the bill into some degree of jeopardy.Renewable Energy Group CEO Randy Howard said “We are pleased that Congress recognized...
FutureFuel’s Future
by Debra Fiakas CFA Last week the president of renewable chemicals producer FutureFuel Corporation (FF: NYSE) turned in his resignation. Lee Mikles is around sixty and seems a bit young for retirement. He had been with the company from day one and served as the chief executive officer through the end of 2012. He owns 2.3 million shares of FutureFuel stock or about 5% of the outstanding shares. Maybe Mikles is just looking for a better paycheck. The last time the company disclosed compensation, Mikles was down for $36,000 in compensation as a director. Along with...
FutureFuel: Still Future, Less Fuel
by Debra Fiakas CFA The last post “From Fuel to Fudge” discussed how the old Solazyme developer of algal-based renewable fuel has been transformed into a new company called TerraVia, (TVIA) which is pursing algal-based food and personal care products. Solazyme is not the only renewable fuel company to make an about face. Granted FutureFuel Corporation (FF: NYSE) has not changed its name or stock symbol like Solazyme. However, its ability to produce specialty chemicals has given FutureFuel an alternative to biofuels and its early plans to build a plant that could eventually produce 160 million gallons of...
REG Sells More Biodiesel, Earnings Drop, Acquisitions Are Future Wild Cards
Jim Lane Biodiesel giant Renewable Energy Group (REGI) is up on gallons, down on dollars as market prices weigh on results. In Iowa, REG announced net income of $10.8 million for the second quarter on revenues of $332.9M, a drop from its Q2 2013 net income of $19.6 million, and a 13% drop in revenue despite an 11% lift in gallons produced. The company noted that net income was boosted by a tax benefit of $11.9 million, recognized primarily from the release of a valuation allowance resulting from recording deferred tax liabilities related to the...
Fretting Over FutureFuel
by Debra Fiakas CFA Earlier this week FutureFuel Corporation (FF: NYSE) reported financial results for the second quarter ending June 2015. Sales of the company’s biodiesel and specialty chemical products increased 53.7% to $104.6 million compared to the prior-year quarter when reported revenue was $68.0 million. The company delivered a profit as usual, but traders appeared unimpressed. The stock gapped lower on the news and two days later set a new 52-week low price. Granted net income was lower year-over-year by 30.9%, coming in at $3.8 million or $0.09 per share. A closer look...
Ten Solid Clean Energy Companies to Buy on the Cheap: #7 Deere & Co....
The first and last word in any discussion of biofuels should always be "Feedstock." Feedstock is the "Bio" out of which biofuels will eventually be made, whether it be corn, sugar, jatropha, algae, palm oil, switchgrass, forestry waste, or municipal solid waste. Before the era of peak oil, we lived in a world of plenty, which meant that we could squander energy, not only by driving Hummers, but by feeding energy intensive products such as corn crops to livestock, and by dumping "free" sources of energy such as garden waste and used cooking oil into landfills. The era of...
Renewable Fuels’ Dunkirk
by Jim Lane
It’s been a very busy week in Washington DC, the high point being a letter to seven senators sent late Thursday by EPA Administrator Scott Pruitt, who took significant (and as of a few days ago, unexpected) steps toward strengthening the foundation for ethanol and renewable fuels.
The truth? It’s a Trump Administration back-down. EPA overreached on de-clawing the Renewable Fuel Standard on behalf on some grumpy oilpatch donors (known as GODs), and the Trump Administration managed to revive a Grand Alliance around renewable fuels — one that now includes almost 40 members of the United States Senate,...
Renewable Energy Group Profits Exceed Subsidies
by Debra Fiakas CFA Earlier this month biodiesel producer Renewable Energy Group, Inc. (REGI: Nasdaq) reported a tidy profit of $22.3 million on record $1.0 billion in total sales. Reported net income was $43.5 million, including accounting treatments for corporate recapitalization undertaken in the year. Results from 2012 were noteworthy on a couple of counts. It was the first time in the company’s ten-year history (including years of operation among predecessor firms) that sales exceeded $1.0 billion. REGI produced 188 million gallons of biodiesel from a variety of feedstock, including non-edible corn oil, used...
Green Diesel At Scale
Jim Lane A now-complete 142 million gallon green diesel monster project will easily deliver big on renewable energy targets and greenhouse gas emissions reduction. But it also offers a material path to profits for its parents, Valero Energy and Darling International. In Louisiana, Darling International (DAR) announced that Diamond Green Diesel, the joint venture between Valero (VLO) subsidiary Diamond Alternative Energy LLC and Darling International , has reached mechanical completion and the startup process will lead to full production of renewable diesel. Once in full operations, the 9,300 barrel-per-day (142.5 million gallon) plant in Norco,...
Renewable Energy Group Raises $72 Million in Biodiesel IPO
Jim Lane In Iowa, the Renewable Energy Group IPO priced last night, and the company’s shares began trading Thursday on NASDAQ under the REGI symbol. The company sold 7.2 million shares at $10 per share, well below its midpoint target of $14 per share announced last week, with total proceeds of up to $82.8 million if all over-allotments are covered by underwriters. Without over-allotment sales, the offering will raise $72 million. UBS Securities LLC and Piper Jaffray & Co. are acting as joint book-running managers for the offering. Stifel, Nicolaus & Company, Incorporated and Canaccord...
Hither and Yon: Transmission and Biofuels
In the most recent two installments of Energy Tech Stocks' interview with me cover my views on transmission stocks, and biofuel stocks. Readers of AltEnergyStocks know that I am a big fan of electricity transmission, a theme I keep coming back to. You also know that I have a very ambivalent relationship with both ethanol and biodiesel. So I liked Bill's transmission article, but I just wasn't able to convey to him the subtleties of how I feel about biofuels. But he got one thing right: the owners of biofuel feedstock are likely going to be the biggest winners....
Amyris hits the comeback trail
Jim Lane Biofene production starts up in Paraiso, Brazil – sales expected to commence in Q1 2013 – Total, Temasek, Biolding inject fresh capital. What’s next for biofuels’ “Comeback Kid”? By now, most of the “smart set” that found itself excited about Amyris (AMRS), and about advanced synthetic biofuels during the IPO fever, have moved on. They read Dan Grushkin’s “The Rise And Fall Of The Company That Was Going To Have Us All Using Biofuels” in Fast Company, wrote off Amyris and possibly the entire sector, and presumably migrated their enthusiasm to low-cost natural gas, battery...
Conversions To Renewable Diesel
by Helena Tavares Kennedy
The seasons are changing in many parts of the world right now, but what really is changing this autumn is how the world is looking at renewable diesel. Phillips 66 and REG’s announcement about a new renewable diesel plant on the U.S. West Coast planned for 2021 comes after a notable increase in refineries that are being converted and changed over to renewable diesel. Change is good, especially in this case.
As Bob Dylan sang, “For the loser now, Will be later to win, For the times they are a-changin’.” And who knew he was singing about the RFS...
Renewable Energy Group Teams Up With ExxonMobil For Cellulosic Biodiesel
Jim Lane Two giants hook up to bring cellulosic biodiesel to scale. A new source of biodiesel feedstock, and a new source of renewable fuels. In Iowa, ExxonMobil (XOM) and Renewable Energy Group (REGI) have agreed to jointly study the production of biodiesel by fermenting renewable cellulosic sugars from sources such as agricultural waste. REG has developed a patented technology that uses microbes to convert sugars to biodiesel in a one-step fermentation process similar to ethanol manufacturing. The ExxonMobil and REG Life Sciences research will focus on using sugars from non-food sources. Terms were not disclosed. Readers will...
Fortunately, Unfortunately: The Spring Saga of American Ethanol
by Jim Lane
The ethanol signals from Washington DC are more inexplicably mixed than cocktails with names like Sex on the Beach. Let’s parse through the wigwagging over the future of American biofuels supply and demand — ethanol and otherwise.
Fortunately: Trump backs year-round E15 ethanol blends
In Washington, President Trump endorsed year-round E15 ethanol availability as an emerging compromise between oil refiners and US farm sector.
The Renewable Fuel Standard is a federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. The RFS originated in a bi-partisan Congress with the Energy Policy Act...
What I Sold: Dynamotive Energy Systems (OTC:DYMTF)
This entry continues a series on companies I sold as part of a portfolio cleanup prompted by the mess on Wall Street. In the first entry I described what I plan to do with the cash, followed by the reasons why I sold Carmanah Technologies and Pacific Ethanol. UQM Technologies was one I didn't sell. I have not mentioned Dynamotive Energy Systems (DYMTF) before. I have mixed feelings about the company. They use fast pyrolysis to make cellulosic biofuels, which I believe will prove to be one of the more economic pathways to cellulosic biofuels. However, I believe that...
