Ethanol

Jim Lane In California, Aemetis (AMTX) will acquire all of Edeniq’s outstanding shares in a stock plus cash merger transaction. In 2015, Edeniq generated approximately $20 million in revenue and $6 million in positive EBITDA. Headquartered in Visalia, California, Edeniq has 30 employees working at advanced research and development facilities, as well as pilot plants funded through grants from the DOE and the California Energy Commission. Under the terms of the agreement, Aemetis expects to issue between one and two million shares of its common stock (depending on whether Edeniq stockholders elect to receive part of their consideration...

Andersons Inc. (ANDE) will conduct a groundbreaking ceremony April 27, 2006, at 11:30 a.m. for its 110 million gallon ethanol plant in Clymers, Indiana. When completed by the first quarter of 2007, the Clymers plant will be the largest of its kind east of the Mississippi River. Along with the 110 million gallons of ethanol, the plant will produce 350,000 tons of distillers dried grains, an animal feed ingredient.

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...

by Debra Fiakas CFA Sorghum Bicolor photo by Matt Lavin    Like the Fairy Godmother in Cinderella, the Environmental Protection Agency has waved a wand and given sorghum a new dress and slippers.  Sorghum has been designated as an eligible feedstock under the Renewable Fuels Standards for production of advanced biofuel.  Only biofuels produced from non-corn starch, sugar, or lingo-cellulosic biomass, which reduces carbon intensity by 50% or more from a gasoline baseline, qualify as ‘advanced.’ Sorghum qualifies for advanced fuel status as the result of a 53%...

Jim Lane In Washington, an explosive new peer-reviewed report from ICF found that greenhouse gas emission reductions from typical corn-based ethanol production have soared to 43 percent compared to 2005-era gasoline. The report projects that by 2022, corn-based ethanol will achieve a 50 percent reduction, and could reach “76 percent in 2022 if there is more widespread adoption of optimal crop production and biorefinery efficiency.” The report, issued by the U.S. Department of Agriculture, based its revolutionary emissions math on a November 2014 study by researchers at Iowa State University, which found that farmers around the world have...

Romm v. Kholsa In a persuasive series of articles, entitled "Pragmatists vs. Environmentalists" (Parts I, II, and III) on Gristmill, Vinod Khosla provides the reasoning behind his "dissing" of plug-in hybrids, which drew the ire of Joeseph Romm.  Neither seems to think the argument is settled, and Joeseph Romm returns fire here. As someone who knows as much about investing as Joe Romm and has written as much about Climate Change and Energy Policy as Vinod Khosla, I feel the need to jump into the debate and settle the matter.  (Will either of them will notice?)...

Jim Lane  Part I of II Cellulosic ethanol arrives at scale “The five years away forever” put to rest but are there troubling waters still ahead? For whom, and why? There’s a gigantic disconnect between two sections in the country as to whether the United States should be celebrating the success or the failure of cellulosic biofuels biofuels made from crop residues, energy crops, and other feedstocks including municipal solid waste, and which feature a 60 percent or greater full-lifecycle reduction of greenhouse gas emissions compared to conventional gasoline. The supporters On the one...

Tom Konrad, CFA Representatives of Dyadic International (DYAI.OB) were quite upset when I called the company "A Stock to Avoid."  The company has now released audited financial statements for 2007 and 2008.  The lack of such statements was one of the several reasons I said to avoid the company.  Should I retract my article? Mark Emalfarb, Dyadic International's CEO sent me an email this morning with attached audited financial statements for 2007 and 2008, saying, I hope that you will act responsibly as journalists and publish a retraction to your article "A Stock To Avoid" which Tom...

Biofuels: Panacea or Pandora's Box? Last night, I attended a talk in the Rocky Mountain Institute's "Quest for Solutions" lecture series titled "Biofuels: Panacea or Pandora's Box?"  We were told that a video of the event will soon be up on RMI's website.  Most of us were probably there to hear Amory Lovins speak, and no doubt most of the news coverage of the event will focus on him.  Amory is a visionary as well as an engaging speaker, and Tom Foust of the National Renewable Energy Lab helped shed light on the science of biofuels, but for stock...

by Debra Fiakas CFA In the last two posts Pacific Ethanol (PEIX:  Nasdaq) and Aemetis, Inc. (AMTX:  OTC/BB) got all the attention.  Both companies have crafted their facilities to accept lower-cost sorghum as an alternative feedstock, opening up the door to lower carbon intensity measures for their ethanol output.  There are other ethanol producers in the state, which we believe are still relying on corn as feedstock.  Which companies will remain in operation in California is not yet clear.  Standards sets by California Air Resources Board (CARB) for the carbon intensity of alternative fuels favors local producers and...

Dana Blankenhorn I am a big booster of alternative energy. Harvesting the wind, the Sun, the heat of the Earth, the tides – I'm there and NIMBYs be damned. But I am increasingly having second thoughts about one type of green energy. Corn-based ethanol. (I would toss in sugar cane, too, but America doesn't grow enough to matter here.) Corn ethanol was one of the first biofuels to find a market. Pushed by companies like Archer Daniels Midland (ADM) and Cargill, corn ethanol is now an integral ingredient in many blends of gasoline. It is...

In the face of a declining overall energy market today, three of our favorite alternative energy stocks posted strong gains on high volume. The Oil Services HOLDRs ETF (OIH) was down 2% and the PowerShares WilderHill Clean Energy ETF (PBW) was down 1.7%. Indeed, the vast majority of the energy stocks that we track were in the red. But bucking the trend were two energy stocks that we have profiled in the recent past and a third company that we will begin covering today. First on the list is our favorite wind energy play, Welwind Energy International...

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...

by Debra Fiakas CFA The drumbeat of deals in the ethanol industry is sounding louder, or so it seems from the proliferation of notices in my e-mail inbox.  I received no less than four messages in one morning from ethanol producer Green Plains, Inc. (GPRE: Nasdaq) heralding the purchase of the Hopewell Ethanol plant in Virginia from FutureFuel, Inc. (FF:  NYSE).  The acquisition represents the ninth transaction for Green Plains in the last five years, adding another 60 million gallons in annual production capacity to Green Plains’ existing total capacity of 1.02 billion gallons.   Indeed, Green...

How Solar PV is like Ethanol Tom Konrad, CFA High levels of competition in the the solar photovoltaic (PV) industry mean that buy-and-hold investors should look elsewhere. In May 2007, I published a competitive analysis of the corn Ethanol industry based on Michael Porter's classic Five Competitive Forces model.  At the time, Ethanol stocks were flying high, but my conclusion was that "the prospective ethanol investor should be very careful about investing in corn ethanol producers at random."  If anything, I understated the case. This chart shows three ethanol stocks that have survived since 2007.  As...