FutureFuel, Present Buying Opportunity
Tom Konrad CFA FutureFuel Corp. (NYSE:FF) manufactures chemicals, biofuels (mostly biodiesel), and other biobased products. About 60% of revenues have historically come from the Chemicals unit, with the balance of 40% coming from the Biodiesel unit. Both units saw sharp declines in revenues over the last two quarters for reasons that seem likely to be temporary (at least in part.) The stock has sold off sharply as a result, falling from the $18-$21 range this spring to its $12 recent price Biodiesel The entire biodiesel industry has been suffering from the expiration of the biodiesel blender's tax...
North American Outlook on Biofuels Challenges and Opportunities
Challenges and Opportunities in Biofuels
By Steve Hartig, Former VP of Technology Development at ICM
The North American biofuels market can be split into three main segments all of which have major dynamics. What I would like to do is give a high-level overview of what I see as some of both the challenges and opportunities across these.
Ethanol which is a produced from corn and sorghum in about 200 plants mainly across the Midwest and blended at about 10% with gas. Majors such as POET, Green Plains, Flint Hills, Valero, ADM and Cargill do a bit more than half of the 16...
Solazyme’s Oilcane Boom
Jim Lane Though building capacity globally, Solazyme’s operations in Brazil are getting traction fast – and raised $235M last week. How much oil could be produced in Brazil via sugar-munching microalgae? Today, the Digest looks at Solazyme’s (SZYM) progress and the bigger picture. In California, two monster announcements came out of Solazyme headquarters last week. One related to project finance and one related to raising cash. In midweek, Solazyme Bunge (BG) Renewable Oils received approval for project financing in the form of a $120M (R$245.6M) loan from the Brazilian Development Bank (BNDES). ...
Rapidly Growing Alternative Energy Companies
The last post highlighted several companies in the alternative energy, conservation and environment technology fields that have delivered exceptional price performance over the last year. Prospects for growth in sales or earnings appeared to be key drivers of the price movement. It makes sense to seek indicators of growth as cues for those companies that may become tomorrow’s price movers.
Crystal Equity Research’s novel alternative energy indices were a good place to go on a ‘quest for growth.’
Beach Boys Index - Biodiesel
The two analysts who publish estimates for Renewable Energy Group (REGI: Nasdaq)apparently expect a surge in growth in the current year followed by a leveling...
Neste Sells 1 Billionth Gallon of Renewable Diesel
Neste reaches 1B gallons renewable diesel sale, runs in fire trucks, ambulances and school vehicles
In Texas, Neste U.S., Inc. (NEF.F, NESTE.HE, NTOIF, NTOIY) is celebrating its 1 billionth gallon of Neste MY Renewable Diesel sold in North America which has effectively helped reduce more than seven million metric tons of greenhouse gas emissions in the Earth’s atmosphere. This is the equivalent of removing 1.6 million passenger vehicles from the road for one year.
“There’s never been a better time to take a closer look at the steps we’re taking to ensure we’re leaving our planet in a healthier state for future generations,”...
EPA Reneges on Trump’s Biofuels Deal
by Jim Lane
“EPA Reneges on Trump’s Biofuels Deal”, said the Iowa Renewable Fuels Association in reacting to the US Environmental Protection Agency’s new plans for fulfilling federal renewable fuel requirements. EPA released a proposed supplemental rule for the Renewable Fuel Standard today, and the bioeconomy is up in arms, and the outrage is centered in farm country, once a Trump bastion of support.
“IRFA members continue to stand by President Trump’s strong biofuels deal announced on Oct. 4, which was worked out with our elected champions and provided the necessary certainty that 15 billion gallons would mean 15 billion gallons, even after...
Interview With Dan Oh, CEO Of Renewable Energy Group
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...
Neste’s Growing Circular Economies
by Jim Lane
In California, waste feedstock from the city of Oakland is now being converted to Neste (NEF.F, NESTE.HE, NTOIF, NTOIY) MY Renewable Diesel and fuels the city’s fleet.
The city, Neste, fuel distributor Western States Oil and local collectors for used cooking oil joined forces to gather waste cooking oils from restaurants and other businesses in the Oakland metropolitan area and convert it to fuel the city’s fleet. By making waste more valuable and supporting jobs that collect and treat it, this concept helps the local economy in the city while the cleaner-burning Neste MY Renewable Diesel improves the lives of its...
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...
New Biodiesel Vehicles and Emissions Reduction Estimates
The makers of the world’s favorite advanced biofuel — a/k/a the biodiesel industry — descended upon Texas to mingle, make and renew ties at the 2018 National Biodiesel Conference. And, to champion new ideas and find new supply chain and distribution partners.
Bummer that there wasn’t a biodiesel tax credit extension on offer. (UPDATE: The new budget includes the biodiesel tax credit.) Bummer that diesel’s getting a bad rap in the press. Bummer that Tom Petty isn’t with us any more to sing:
“I’ll Stand My Ground, I Won’t Back Down,
I know what’s right, got just one life
in a world’s that keeps on...
Solazyme’s Parity-Cost, Algae-Based Biodiesel on Sale to Public
Jim Lane $27 per gallon? $15 per gallon? Fooey! Try algae-based fuels at “the same cost as regular diesel.” Month-long pilot program kicks off in the San Francisco Bay Area. In California, Propel Fuels and Solazyme (SZYM) are bringing algae-derived fuel to retail pumps for what we believe to be the first time in history. The two leading renewable fuel brands have come together to offer Solazyme’s algae-based SoladieselBD to drivers through Propel’s Bay Area network of retail renewable fuel locations. The month-long pilot program provides the industry’s first opportunity to test consumer response to this advanced...
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...
Future Fuel’s Enticing Earnings
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. ...
DAR the Rins Blow!
by Debra Fiakas CFA Last week the management of Darling Ingredients (DAR: NYSE) staged a webinar on its opportunities in biofuels. Darling produces biodiesel in Kentucky and Canada and is in a renewable diesel joint venture with Valero Energy (VLO: NYSE) in Louisiana. As a recycler of wastes and excess from the food production processes, the production of energy with organic feedstock is a logical extension of Darling’s collection and aggregation infrastructure. The event did not do much for Darling’s share price, but the presentation triggered a few questions about RINs - shorthand for...
Ethanol and Biodiesel: Production Cost and Profitability
For a number of years, this (now old and outdated, but) very useful chart has been in circulation in energy circles, mapping the supply of energy to the world by looking not at prices, but at production costs. For one thing, it goes a long way to explaining why the price of oil can tumble so quickly when there is a fall off in demand, and explains why OPEC is troubled by unconventional oil in a way it is not so bothered by other energy sources such as renewable fuels. Renewables not only have been traditionally at the...
EPA Ups Renewable Diesel Mandate By 30%
Jim Lane Biodiesel pump photo via Bigstock What will bigger targets mean for producers, livestock, obligated refiners, and the diesel-using public? In Washington, the EPA issued its final rule for 2013 establishing 1.28 billion gallons as next year’s biomass-based diesel volume requirement under the Renewable Fuel Standard (RFS), up from 1.0 billion gallons in 2012. “This 1.28 billion gallon level is in-line with what the EPA had originally proposed for 2013 dating back to last year,” commented Raymond James energy analyst Pavel Molchanov. “However, the...
