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....
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...
Enerkem’s $125M IPO: The 10-Minute Version
Jim Lane The second technology focused on unlocking value in municipal solid waste comes to the public markets. Here’s our 10-minute version of the filing, with a translation of the risks into English. In Canada, Enerkem has filed an F-1 registration statement for a proposed $125 million initial public offering. The number of shares to be offered in the proposed offering and the price range for the offering have not yet been determined. The lead book-running managers for the offering are Goldman Sachs, Credit Suisse and BMO Capital Markets. The company is currently ranked #7...
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...
Dyadic International (DYAI.PK): Update
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...
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...
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
Earth to Cellulosic Ethanol: Glad You’re Here, What Took So Long?
Jim Lane Part II 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. Supporters and detractors alike saying that the wave of commercial-scale cellulosic ethanol refineries is a new wave in technology or the latest round in a wave of unimportant hype. We looked at the supporters, the detractors, the...
Ethanol, NAFTA, Tortillas and Walmart?
Author Neal Dikeman is a founding partner at Jane Capital Partners LLC, a boutique merchant bank advising strategic investors and startups in cleantech. He is the founding contributor of Cleantech Blog, and a Contributing Editor to AltEnergyStocks.com. Quick, what do Ethanol, NAFTA, Mexican Tortillas and Walmart have in common? Don't know? Well here's the story. I am fascinated by the discussion about ethanol feedstocks issues. There has been a lot of talk about corn production for ethanol either crowding out beef or food production, or driving up the price of food, or failing to supply the demand...
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...
Baron’s Thinks Archer Daniels Stock to Rise on Ethanol Harvest
Barons profiles Archer-Daniels-Midland Co. (ADM) in the April 3rd edition. They feel that ADM shares are poised to climb further, literally fueled by its dominance of the ethanol market as investors seek alternative energy investments. Archer Daniels was believed to have secured a 50-cent per gallon increase in ethanol contract pricing to $1.85 per gallon in recent negotiations. Given ethanol price rises seen in the commodities market, Archer Daniels could reap significant further increases in its next round of talks for October contracts.
EPA increases US Renewable Fuel Standard Volumes, But Only Slightly
Jim Lane In Washington, the U.S. Environmental Protection Agency announced final volume requirements under the Renewable Fuel Standard program today for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. This rule finalizes higher volumes of renewable fuel than the levels EPA proposed in June, boosting renewable production and providing support for robust, achievable growth of the biofuels industry. “The biofuel industry is an incredible American success story, and the RFS program has been an important driver of that successcutting carbon pollution, reducing our dependence on foreign oil, and sparking...
US Ethanol Industry Upset With 2019 Renewable Fuel Standard Proposal
The 2019 proposed US Renewable Fuel Standard proposed volumes attracted a major raspberry from the ethanol industry.
As the American Coalition for Ethanol noted:
“Unfortunately, EPA continues to take actions which undermine the letter and spirit of the statute and harm the rural economy. While refiners are reporting double-digit profits, the heart of America is being left behind. Farmers are losing money while refiners have the best of both worlds: fat profit margins and minimal RFS compliance costs. EPA needs to discard its refiner-win-at-all-costs mentality and get the RFS back on track.”
“While the proposed rule purports to maintain the 15-billion-gallon conventional...
Clearfish Research Profiles Pacific Ethanol (PEIX)
Pacific Ethanol (PEIX) is building a refinery in California for corn based ethanol production in the heart of the California agricultural and dairy land (the biggest agricultural and dairy producer in the country). The refinery is supposed to come on line in Q4 2006, and there are plans for 4 more subsequent refineries. As there is unlikely to be any increased ethanol demand in California (see background above), the supply capacity they are bringing online must be able to disrupt the current out-of-state supply and/or undercut the current prices. They are one of the biggest distributors of that alternate...
Dyadic: a 5-Minute Guide
Jim Lane Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Address: 140 Intracoastal Pointe Drive Suite 404 Jupiter, Florida 33477 Year founded: 1979 Stock Ticker: Pink Sheets: DYAI Type of Technology(ies) Patented and proprietary C1 platform technology based on a unique fungal microorganism which is programmable and scalable in producing enzymes and proteins in large quantities ...
Throwing Corn off the Green Bus
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...
