Ethanol

Last Friday (Feb. 2), the Globe & Mail's business section (the G&M is Canada's top national newspaper) ran an interesting piece by a senior business writer on cellulosic ethanol. I wish there was a way to view this article for free, but, unfortunately, the G&M charges for access to certain of its articles, and this is one of them. The gist of the argument is as follows: (a) forget corn-based ethanol, the future lies with cellulosic (yyaawwnn...); (b) deep down inside, Bush knows this; (c) to make cellulosic ethanol competitive, you need super-enzymes that speed up the process...

by Debra Fiakas CFA Last week Cosan Limited (CZZ:  NYSE) revealed a decision to delay the spin-off and recapitalization of its natural gas distribution network, COMGAS.  Management cited unfavorable capital market decisions.  Cosan has a mix of businesses, of which we have been most interested in its Raisen Energia sugar cane agriculture and ethanol production.  Raisen is a joint venture with Royal Dutch Shell that was initiated in 2011.  The operation squeezes over four million tons of sugar from cane grown in its fields and two billion liters of ethanol each year. The ethanol is sold through Shell’s...

Pacific Ethanol, Inc. (PEIX) announced that it has received all necessary permits to begin construction on a 35 million gallon per year ethanol facility at the Port of Morrow, located on the Columbia River near Boardman, Oregon. The Company further stated that it expects to begin construction, which should take approximately 12 months, within the next thirty days. The Oregon ethanol facility will provide ethanol for the Pacific Northwest gasoline markets, helping to increase supply in that area and provide a CO2-reducing fuel for the transportation sector. It is expected that the plant's distillers grains will be sold...

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...

Jim Lane Eight technologies, seven public stocks – who’s adopting what, who’s in the lead? Perhaps you have written off ethanol as a bum investment. That’s understandable. Though, as a general rule, all acts of mind-closing should be made while chanting Michael Dell’s mantra from 1997, writing off Apple as a bum investment. It’s a good chant, you could try it. Here’s how it goes. “What would I do?” Hari Rama. “I’d shut it down.” Rama Krishna. “And give the money back”. Krishna Rama. “To the shareholders.” Rama Rama. Missing the biggest gold rush. Krishna Hari....

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 —...

Jim Lane  It towers above the surrounding Iowa countryside like the Launch Assembly Building lords it over Cape Canaveral it’s the new DuPont (DD) cellulosic ethanol project, on the outskirts of the town of Nevada. Functional yet inspiring, imposing yet accessible when it opens before year end 2014 it is sure to be a monumental addition to the cellulosic biofuels landscape. Last week we wrote: “There are strategic reasons to develop this new industrial bioscience business in central Iowa not just the “we’d love to have you, wages are low, cost of...

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...

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,...

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.

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...

The Future is Cellulosic It is now widely accepted that the future of ethanol is cellulosic: Rather than distilling corn for ethanol to fuel our cars, accepted wisdom is now that we will be able to replace a large fraction of our current fuel consumption with ethanol distilled from agricultural and forestry waste, as well as dedicated energy crops, such as switchgrass and hybrid poplar.  Cellulosic ethanol also has the potential to alleviate the greatest stumbling block of corn ethanol as a potential replacement of gasoline: that there is simply not enough of it.  Corn ethanol will only be...

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...

by Jim Lane In Delaware, DowDuPont (DWDP) announced that it intends to sell its cellulosic biofuels business and its first commercial project, a 30 million gallon per year cellulosic ethanol plant in Nevada, Iowa. The Nevada project is still going through start-up. In an official statement, the company said: As part of DowDuPont’s intent to create a leading Specialty Products Company, we are making a strategic shift in how we participate in the cellulosic biofuels market. While we still believe in the future of cellulosic biofuels we have concluded it is in our long-term interest to find a strategic buyer for our...

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%...