ADM raises capacity of N. Dakota biodiesel plant
Archer-Daniels-Midland Co. (ADM) s increasing the capacity of a biodiesel plant under construction in North Dakota to 85 million gallons a year, a company spokesman said on Wednesday. ADM originally announced the plant in Velva would produce 50 million gallons of biodiesel a year using canola oil. ADM decided to increase capacity to take advantage of economies of scale, said Greg Webb, vice president of public affairs.
EPA Makes Sorghum an Advanced Biofuel Feedstock
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%...
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,...
Butamax and Gevo: Bio’s Montagues and Capulets get it on, and on, and on
The 2-Minute Guide to Butamax vs Gevo, and vice-versa
The Andersons: E14 Ethanol Blend
by Debra Fiakas CFA The Andersons (ANDE: Nasdaq) is not one of the first companies that comes to mind as an alternative energy company. However, ANDE has been in the Ethanol Group in our Beach Boys Index for some time. Ethanol is one of six revenue sources for The Andersons, contributing $743 million to the top line in the year 2012. That represents about 14% of The Anderson’s total revenue base. The company produces ethanol in four plants located in the Midwest with a production capacity of 330 million gallons per year. ...
Why Have Ceres’ Sorghum Plans Soured?
Jim Lane Sorghum Bicolor photo by Matt Lavin As Ceres points towards minimal plantings of its sweet sorghum hybrids in its key market of Brazil for next year, investors ask two questions. Will sweet sorghum realize its vast potential, and when? Just when many observers hoped that Ceres, Inc. (CERE) would dramatically expand hectares planted with its Blade hybrid sweet sorghum, the 2014 planting outlook was released last week and the total hectares crashed from 3000 in 2013 to 1000 in 2014. It’s a far cry...
California’s Other Ethanol Producers
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...
Earnings Roundup: Covanta, NFI Group, Green Plains Partners
by Tom Konrad, Ph.D., CFA
Earnings Season Continues
Below are three more updates on second quarter earnings which I've been sharing with my Patreon supporters. If you'd like to support my writing and see those thoughts in a more timely manner, consider becoming a patron. becoming a patron.
For everyone else, I'm reprinting those thoughts below.
Covanta Earnings
(published August 2nd)
Waste to energy company Covanta Holding Corp (CVA) saw most of its business recovering towards the end of the second quarter. Management is reluctant to predict if the positive trend will continue into the third quarter and for the rest of the year, but...
Ten Solid Clean Energy Companies to Buy on the Cheap: #7 Deere & Co....
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...
Lessons From Tesla: Building An Ethanol Market
Jim Lane E85 ethanol? Been stuck with low sales for years – with producers pointing to “no market access”. Yet, Tesla was faced with “no market access” and built its own market. What lessons can be learned? Last week, Tesla Motors (NASD:TSLA) announced the completion of its transcontinental US Supercharger Corridor, a network of stations that enable Model S owners to (somewhat) rapidly recharge their Teslas on a cross-country drove. And intrepid Tesla blgger Hamish McKenzie relayed the news last week that two Tesla Model S sedans completed a 76-hour coast-to-coast all-electric crossing. The news follows...
Cosan: No Haven for Ethanol Investors
by Debra Fiakas CFA The stark reality of basing their business model on a food commodity has been brought into sharp focus for ethanol producers. The drought settling across the U.S. corn crop is helping drive up corn prices for hog producers, chicken farms and ethanol plants alike. Investors who simply must have a position in ethanol might think the sugarcane-based ethanol producers could offer a safe haven against the supply and margin squeeze that is certain to hobble GreenPlains Renewable Energy (GPRE: Nasdaq), Pacific Ethanol (PEIX: Nasdaq) and Poet (private), among others relying on corn feedstock....
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...
Biofuels & Biobased Earnings Roundup: Aemetis
by Jim Lane
The Top Line. In California, Aemetis (AMTX) reported that Q2 revenues increased $4.3 million and gross margins increased by $1.1 million compared to the second quarter of 2017. Similarly, during the first half of 2018, revenues increased $15.7 million and gross margins increased by $3.5 million compared to the first half of 2017.
Revenues were $45.0 million for the second quarter of 2018 compared to $40.8 million for the second quarter of 2017, driven by an increase in ethanol sales volumes from 15.6 million gallons to 16.4 million gallons and by stronger wet distillers grain and glycerin demand and pricing.
Operating loss...
Where Are The Cellulosic Ethanol Gallons?
Jim Lane We've seen a number of high-profile cellulosic projects open in recent years, and not much ethanol being produced? Wondered why? Here are answers to your questions. As Jack Webb used to say on Dragnet, just the facts, ma’am. Fact one. There’s not much ethanol being produced at the new generation of cellulosic projects. Fact two. We have seen significant changes in senior leadership at a number of key developers. Industry rumor going around: Psst! These facts are linked! For sure, Dorio Giordano has been appointed CEO at Beta Renewables, Dan Cummings has been...
An Insider’s Take on the Ethanol Industry
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...
A Disappointing Supreme Court Biofuel Decision. Why It’s Not Over Yet
By Jim Lane
The case
Last week’s decision stems from a May 2018 challenge brought against EPA in the U.S. Court of Appeals for the Tenth Circuit by the Renewable Fuels Association, the National Corn Growers Association, National Farmers Union, and the American Coalition for Ethanol, working together as the Biofuels Coalition. The petitioners argued that the small refinery exemptions were granted in direct contradiction to the statutory text and purpose of the RFS and challenged three waivers the EPA issued to refineries owned by HollyFrontier Corp. and CVR Energy Inc.’s Wynnewood Refining Co.
The case is HollyFrontier Cheyenne Refining, LLC v....
