The Green Plains Way
Jim Lane As the renewables industry searches for effective business models, a strong one emerges in its midst. We look at Green Plains (GPRE) and its businesses. A recurring theme among the 300+ delegates at ABLC Next this week in San Francisco is the recognition that successful companies change the world not science projects, or failed companies and that any route that leads across the Valley of Death to commercial success is the first step towards a sustainable economy, and that strong lead products are the oxen that get settlers across the desert. Renewable...
Aemetis’ Cellulosic Ethanol From Orchard Waste Project
by Jim Lane
There were more than 100 presentations at ABLC last week and not a clunker amongst them, but if I were to point the reader’s attention at one or two that stood out from the rest because of the short-term or long-term implications, I’d start with the news from Aemetis (AMTX) that they are embarking now on a $158 million cellulosic ethanol plant — to be built in Riverbank, California, in partnership with LanzaTech.
Cellulosic ethanol is selling for such a high price in California right now — the value jumps north of $4.00 per gallon at times —...
More Than Ethanol at Green Plains
Last week ethanol producer Green Plains (GPRE: Nasdaq) reported financial results for the quarter ending June 2018. As expected the company reported a net loss, but actual results were far better than expected. The news gave traders a reason to celebrate with bids that led to a gap higher at the opening on the first day of trading following the announcement. Cooler heads came into the market as the day wore on and the stock closed below the open on heavy volume. Nonetheless, the stock finished the week higher and appears prepared to challenge lines of volume-related price resistance in the trading sessions ahead.
There may...
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...
Mascoma’s IPO: The 10-Minute version
Jim Lane No appetite for 200 pages of IPO-speak in Mascoma’s S-1 registration statement? Here’s our 10-minute version. In Massachusetts, Mascoma Corporation announced that it has filed an S-1 registration statement relating to a proposed $100 million initial public offering. The number of shares to be offered and the price range for the offering have not yet been determined, and the company has not indicated yet which exchange it will apply to for a listing of its shares. Here’s the S-1 registration, in a conveniently downsized 10-minute Digest version – with some commentary along the way...
A Simple Fix To Farmer’s Tariff Woes?
by Jim Lane
As most know by now, the US and China have fired opening salvos in a trade war, with the US targeting a range of commodities including steel and aluminum, and China retaliating with, to date, stiff tariffs on a range of agricultural products, but primarily hitting soybeans and corn because of the volume of trade in those agricultural goods. Overall, China imports $24 billion of agricultural goods from the US and is a leading export market for the US.
The trade wars prompted North Dakota farmer Kevin Skunes, president of the National Corn Growers Association, to state:
“Farmers are...
Current Structure of the US Ethanol Industry “Problematic”, Says the IMF
The International Monetary Fund released its Spring 2007 World Economic Forecast today. Fuel Vs. Food There is a short sub-section in Appendix 1.1 ("Recent Developments in Commodity Markets") that I thought might be worth sharing with you. If you download the PDF version of the report and scroll down to page 44, you will find the said sub-section under the heading "Food and Biofuels". In it, the IMF notes that food prices (as measured by its own food price index) rose by 10% in 2006, driven partly by a poor wheat crop in certain countries but...
Corn Fractionation Improving Ethanol Production
Ethanol and isobutanol producer Gevo, Inc. (GEVO: Nasdaq) is installing equipment in its Luverne, Minnesota plant to improve efficiency in corn processing. The company is leasing a proprietary corn fractionation or slicing process developed Shockwave, LLC based in DesMoines, Iowa. The new equipment is intended to increase by-product output, including feed protein products and food-grade corn oil. With sales of more valuable by-products Gevo expects to improve overall profit margins. Shareholders can expect to see results after the first quarter 2019, when the equipment installation is expected to be complete.
Shockwave keeps a low profile with no corporate website and no one to answer phone calls. However,...
Green Plains Bets on Ethanol Recovery
by Debra Fiakas CFA Last week the Chief Executive Officer of Green Plains Renewable Energy, Inc. (GPRE: Nasdaq), Todd Becker, revealed during conference calls following its quarter earnings report that the company has been in discussions to sell ethanol to industrial users in Mexico. It is news that could be music to shareholders ears. U.S. storage tanks are brim full of ethanol as producers like Green Plains stock pile inventories waiting for better selling prices. Green Plains has made claims to Mexico sales before, but has never revealed customer names or volumes. None were named...
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,...
Veridium Receives Order from South African Ethanol Producer for Corn Oil Extraction Technology
Veridium Corp. (VRDM.OB) announced its receipt of an order from Ethanol Africa for the use of Veridium's patent-pending Corn Oil Extraction System(TM) at Ethanol Africa's new Bothaville, South Africa ethanol production facility. Veridium's proprietary new Corn Oil Extraction Systems(TM) extract high grade corn oil from an ethanol by-product called distillers dried grain ("DDG"). Veridium's technology has the capability of removing up to 75% of the corn oil from within the DDG in two stages. I have been finding more signs that this looks like its a real company and not just a shell to take advantage...
Ethanol Blends: High Octane, Low Carbon, High Controversy
by Jim Lane, Biofuels Digest
For every ethanol blend everywhere these days, there seems to be a war on.
A war in India over 22% blends. A war in Brazil over exactly what baseline blend ratio (somewhere int he 20s) is ideal. A war on in Europe to roll back first-gen ethanol to around 2% blending. A war in New South Wales, Australia over whether there should be any ethanol mandating at all. A war in the US as conservatives aim to haul belnding down to 9.7% while ethanol producers have clearly aimed at a 15% baseline blend.
And so on and...
Novozymes Ignites Yeast Wars
Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) moved into yeast this week with a new organism, Innova Drive.
It’s saccharomyces cerevisae — the workhouse yeast that has been powering wine fermentation since the days of Noah and the Ark. But here’s a new strain engineered to cut fermentation times up to two hours, and yield boosts of up to two percent.
A 2% yield increase and a 5% faster rate of production — let’s illustrate it — would mean something like 7.1 million gallons per year of more ethanol from the same standard 100 million gallon nameplate plant. Retailing at up to $10 million dollars, per year (yes,...
Trump Takes Down Ethanol in Pincer Move
by Debra Fiakas, CFA
The Trump Administration is using tariffs on China goods as a trade war tactic to pressure China into relenting to U.S. trade policy demands. Unfortunately, the fallout has been heavy and widespread. Farmers have taken the heaviest hits as China has dropped orders for corn and soybeans. Ethanol producers have been ensnared in the trade war skirmish as well and in recent weeks have been caught an uncomfortable ‘pincer-like’ squeeze by the Trump Administration.
Trump’s Environmental Protection Agency has continued its practice of granting waivers to oil and gas refiners, eliminating the requirement to blend biofuel with the refiners’ petroleum...
What I Sold: Pacific Ethanol (NASD:PEIX)
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 describe what I plan to do with the cash, and the second was about Carmanah Technologies. UQM Technologies was one I didn't sell. In May of last year, I took a look at competitive forces in the corn ethanol industry. While I was rather negative on the industry at the time, when ethanol stocks fell in the summer and fall of 2007, I called the bottom much too soon, and...
Dyadic International (DYAI.PK), A Stock To Avoid
Tom Konrad, Ph.D., CFA Dyadic International hopes to use proprietary gene discovery to revolutionize cellulosic biofuel and pharmaceuticals. Investors should stay away. Dyadic International (DYAI.PK) says they are applying their "proprietary enabling biotechnologies for multi-billion dollar markets in industrial enzymes, biofuels and biotherapeutics." A very exciting prospect, and just the sort of thing I've long warned investors to avoid. In short, they are a company with gigantic claims and not a lot of track record to back them up. Why I Care (I don't, really) In our survey of readers, one respondent asked that I write more about stocks...
