Renewable Diesel and Biodiesel

It's no secret that money is flooding into the alternative energy sector, but not all of this money comes from sophisticated, investors. Unsophisticated investment is a lighting rod for the scam artists. Because there is both an urgent need to deal with the the problems posed by global warming, energy security, and resource depletion, and the new money is rapidly accelerating the advance of technology in renewable energy, new innovations are very plausible. There are many ways to lose money in alternative energy, even without being taken by a scam. The current emotional...

Green Star Products Inc (GSPI) announced that they have developed and successfully commercially tested their advanced biodiesel reactor. GSPI reactors require an amazing two minutes to complete the biodiesel conversion reaction versus over one hour for the rest of the industry. This means that GSPI's processing rate through the reactor is at least 30 times faster than the rest of the biodiesel industry.

Jim Lane “On the way” forever, talked up by all, deployed by some – technologies that handle high free fatty acid feedstocks like used cooking oil are coming into their hey-day, via players like REG, Novozymes, Pacific Biodiesel, Blue Sun, Piedmont, COMAC and more. Christmas come early for advanced biofuels? One of the most alluring targets in advanced biofuels although cruelly mis-named is in the world of free fatty acids. Most of the oils currently used for biodiesel are sourced from soybeans, palm or rapeseed, and precisely because they contain less than 0.5%...

by Debra Fiakas CFA Who doesn’t like a bargain?  FutureFuel Corporation (FF:  NYSE) is trading near $13.15 per share, below nine times net earnings.  Yet, the enticing earnings multiple might be only part of the story. The stock has gapped down in price twice in the last six months, trailing off after each leg down.  The stock now appears oversold. Based in Missouri, FutureFuel produces biodiesel and biobased speciality chemical products.  In the twelve months ending June 2014, the company reported $396.9 million in sales, providing $53.5 million in net income or $1.52 per share. ...

Jim Lane US biodiesel leader heads for the EU – what’s up with used cooking oil, and what is REG’s path forward with the German-based biodiesel producer? In Iowa, Renewable Energy Group and IC Green Energy announced that REG will acquire ICG’s majority equity ownership position in German biodiesel producer Petrotec AG (XETRA: PT8). Closing of the transaction is expected before year end. REG CEO Dan Oh Last month, REG CEO Dan Oh told The Digest, “We’re not done growing, that’s for sure! We’ve done something of...

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,...

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...

by Debra Fiakas CFA Biodiesel and biochemical producer FutureFuel Corporation (FF:  NYSE) will report fourth quarter 2015 financial results after the market close today.  No conference call will be held due to low attendance on recent calls.  The single published estimate for FutureFuel is for $0.28 in earnings per share on $122.5 million in total sales.  Despite an increase in this estimate in the last week, the number still represents a significant decrease in earnings compared to the prior-year period.  The Company has missed the consensus estimate in both of the last two quarters and we do not...

by Debra Fiakas CFA This week Darling Ingredients (DAR:  NYSE) reported earnings of $100,000 on net sales of $874.7 million in the first quarter ending March 2015.  Darling is a recycler of sorts, collecting by-products of the food production industry and recycling the left-overs and waste into proteins, fats and leathers.  Nothing goes to waste.  Every last chicken feather, hide, gallon of used cooking grease and cake crumb gets up-cycled to a usable material for feed, food, fuel or clothing.  Its customers include pet food producers, personal care manufacturers and textile users, among others. Darling used...

Jim Lane The biggest US biodiesel, renewable diesel producer Renewable Energy Group (REGI), or "REG" buys the biggest US facility in asset deal. The fully-operational 100-million gallon nameplate capacity biorefinery will be renamed REG Grays Harbor. The facility includes 18 million gallons of storage capacity and a terminal that can accommodate feedstock intake and fuel delivery on deep-water PANAMAX class vessels as well as possessing significant rail and truck transport capability. REG will pay Imperium $15M in cash and issue 1.5 million shares of REG common stock in exchange for substantially all of Imperium’s assets. In addition to...

In Washington, the Environmental Protection Agency released its final Renewable Fuel Standard renewable volume obligations for 2018. The agency finalized a total renewable fuel volume of 19.29 billion gallons , of which 4.29 BG is advanced biofuel, including 288 million gallons of cellulosic biofuel. As the Renewable Fuels Association explained: “That leaves a 15 BG requirement for conventional renewable fuels like corn ethanol, consistent with the levels envisioned by Congress in the 2007 Energy Independence and Security Act. The 2018 total RFS volume finalized today represents a minor increase (10  million gallons) over the 2017 standards, and a modest increase...

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...

Jim Lane At 8:30am, there’s a standing daily meeting of the key traders in Gary Haer’s sales group at Renewable Eenergy Group's (NASD:REGI aka REG) headquarters in Ames, Iowa. And they’re not kidding. Everyone stands. For 15 minutes there’s the rat-a-tat-tat of rumor, fact, competitors, pricing, spreads, the who’s selling what and where, the buying and selling of diesel, renewable diesel and biodiesel across North America. On most minds this Friday morning, what’s going to happen with corn prices? The USDA late on Thursday released its annual spring plantings report and it was a shocker. Corn acres...

Jim Lane Leading a series this week, “The Strategics Speak", in which we’ll look at what a number of major strategic investors see in the landscape relating to industrial, energy and agricultural investment, Biofuels Digest visited with Dan Oh, CEO of Renewable Energy Group (REGI), which has long been the US’s leading independent biodiesel producer but in recent years has steadily diversified and expanded operations. In many ways, REG is the entire industrial biotech business in a nutshelll. They’re fermentation (through REG Life Sciences), and thermocatalytic (through REG Geismar and their extensive biodiesel business). They use both...