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...
Aemetis: Indian Breakthrough, California Expansion
Aemetis, Inc. (AMTX: NasdaqCM) just announced sales of biodiesel to gas stations in India. The sales follow on the heels of a significant ruling in November 2018, by the Bombay High Court to remove restrictions on biodiesel that had barred direct to consumer sales by biofuel manufacturers. The breakthrough into the India market is significant for the company, which has been operating a 50-million gallon integrated chemicals and fuels facility in Kakinada, India for several years.
Demand for renewable fuels has been strongest among fast growing economies like India, where decision makers fear dependence upon imported fossil fuels. India produces only about 1% of global...
Biobased and Biofuel Investments: A System
Jim Lane A Biofuels and Biobased investment primer: An 18-combination, 8-character system for classifying bio investments Here’s our investment primer on how to size up the risks and the rewards and tune them to meet your goals. And, a system for organizing opportunities. So, you’re thinking about investing in bio? Here’s the good news – you’re not alone. Here’s the bad news – you’re not alone. There are retail, private equity, hedge fund, sovereign wealth, strategic, grower, VC and institutional investors snooping around too, and making active investments. For one thing, carbon’s making a comeback as the...
Insider View on REGI
by Debra Fiakas CFA Insider buying is not one of my regular screening criteria in selecting long plays in the small cap sector. However, to learn a chief executive officer has taken out his/her check book to buy shares in their company is influential. In November 2016, the CEO of biofuel producer Renewable Energy Group (REGI: Nasdaq) reported an increase in his stake in the company in recent months. With REGI shares just above the prices paid by the CEO just three months ago, it is timely to look more closely from the outside. In...
REG Buys Imperium Renewables
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...
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...
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...
Neste Renewable Diesel Capacity Hits 2 Million Tons But Feedstock Constraints Loom
Finland’s Neste Oil Corporation
(NEF: F)
brought its fourth renewable diesel plant on-line in September 2011,
earning bragging rights to the world’s largest facility of its
kind. Located at the Port of Rotterdam, the plant has the
capacity to produce 800,000 metric tons of renewable diesel that
Neste brands NExBTL and claims is the “cleanest and highest-quality
renewable diesel on the market today.” Along with Neste’s
three other plants already in operation in Finland and Singapore the
fourth plant in Denmark brings Neste’s total production capacity to
2.0 million metric tons per year.
Darling Ingredients: At the Margin
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...
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...
Will Petrosun’s Algae Biodiesel Grow on Investors?
by Tom Konrad Celluslosic Ethanol is all the rage. A less noticed, but significant "Biofuel 2.0" is biofuel based on algae. Follow the Biomass As I have consistently argued (see these recent articles on John Deere, Biogas, Cellulosic Ethanol vs Biomass Electricity, and Renewable or Green Diesel) the people most likely to make money from biofuel are not the processors and distributors (who compete directly with petroleum or other fossil fuel-based products, and so have little pricing power), but the producers of feedstock, which, like oil, is in very limited supply, and so they will have pricing power....
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...
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...
A (nearly) Pure-play Biodiesel Stock
On January 29th, M~Wave and private vertically integrated Biodiesel distributor Blue Sun Biodiesel announced a merger between the two, with Blue Sun becoming a division of M~Wave, and the merged company being renamed Blue Sun Holdings. Managerial control will also pass to "certain directors and the officers of SunFuels." If this merger goes through as planned in the second quarter of 2007, US investors will have their first opportunity to invest in a stock focused on a biofuel which is much less controversial among environmentalists than corn-based ethanol. Estimates of the well-to-wheels Energy Return on Energy Invested...
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....
