ADM and Siouxland Ethanol Announce Marketing Agreement
Archer-Daniels-Midland Co. (ADM) and Siouxland Ethanol LLC are pleased to announce the formation of an ethanol marketing agreement. As part of this marketing agreement, ADM will market all ethanol produced by Siouxland Ethanol at its forthcoming 50 million gallon Jackson, Nebraska facility. Construction has begun and the plant is expected to be operational in early 2007. In addition to producing ethanol, the plant will produce an estimated 165,000 tons of distiller grains on an annual basis.
EPA Administrator Scott Pruitt Resigns
by Jim Lane
In Washington, EPA Administrator Scott Pruitt has resigned.
US President Donald Trump announced the exit on Twitter, commenting, “President Donald Trump announced Pruitt’s exit, saying on Twitter “I have accepted the resignation of Scott Pruitt as the Administrator of the Environmental Protection Agency. Within the Agency Scott has done an outstanding job, and I will always be thankful to him for this.”
Deputy Administrator Andrew Wheeler becomes acting administrator.
The Digest’s Take
Elsewhere in the media, it is widely reported that Pruitt was undone by a growing number of controversies and investigations relating to his conduct as EPA Administrator, particularly relating...
ADM Separates Ethanol Business
Prelude to a spin-off?
by Jim Lane
The Archer Daniels Midland Company (ADM) is breaking news of breaking off their ethanol unit…and a tumbling 40% decline in profit.
In Chicago, Archer Daniels Midland Company reported their financial results for the quarter ended March 31, 2019, but most interesting to us, they are looking at separating their ethanol business with the option of spinning it off completely. They are also taking other actions to restructure and deal with challenges they say include weather issues and trade pressures.
ADM announced a “series of measures to continue to underpin long-term-value creation” which included:
“First, to meet growing customer...
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...
Earth to Cellulosic Ethanol: Glad You’re Here, What Took So Long?
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...
Eight Upsides of the New Ethanol
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....
The Battle for California’s Ethanol Market
by Debra Fiakas CFA For all the fuss, investors might think California’s ethanol market is another Gold Rush. The Midwest-based ethanol producers are up in arms over California’s attempt to set standards for renewable fuels sold in the state. My recent post, describes legal maneuverings by South Dakota-based ethanol producer Poet, LLC and others to block a ‘carbon intensity’ standard imposed by the California Air Resources Board (CARB). Under the CARB standard the carbon intensity of alternative fuels includes elements for power and other inputs as well as transportation and distribution. The formula CARB is...
Cosan’s Crush
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...
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...
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....
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...
The Ethanol Industry’s Persecution Complex
If the Ethanol industry is going to rehabilitate its image, it needs to understand the issues. Tom Konrad, Ph.D., CFA In his opening remarks at the 25th annual, 2009 Fuel Ethanol Workshop, Mike Bryan, the CEO of BBI International called on the attendees to "Take back control of the industry's image." It's no secret that the ethanol industry is having problems, mostly, in my mind, due to a classic commodity squeeze: the industry has no pricing power either for its inputs (corn and natural gas,) or its products (ethanol, with a price which closely tracks gasoline.) ...
EPA Slashes Corn Ethanol Targets Under Proposed Renewable Fuel Standard
Renewable Diesel Takes Smaller Cut Jim Lane “EPA continues to assert authority under the general waiver provision to reduce biofuel volumes based on available infrastructure,” says BIO. “This is a point that will have to be litigated. It goes against Congressional intent.” In Washington, the EPA released its proposed standards for 2014, 2015, and 2016 and volumes for renewable fuels. The volumes, as widely expected, include substantial reductions from the statutory standards in the original 2007 Energy Independence & Security Act. The EPA also released a 2017 proposed standard for biomass-based diesel. Yet, while attracting significant...
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 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...
Xethanol to Acquire Plant in Georgia
Xethanol Corporation (XTHN.OB) announced that its CoastalXethanol subsidiary has signed a letter of intent with Pfizer, Inc. to purchase Pfizer's pharmaceutical manufacturing complex located in Augusta, Georgia. While details are yet to be finalized, CoastalXethanol and Pfizer are working together to complete the transaction. The state of the art, 40 acre site includes: an 89,100 square foot manufacturing facility, a 25,000 square foot warehouse facility, 7,300 square feet of laboratory space, and 16,000 square feet of offices and conference rooms. CoastalXethanol intends to retrofit the site to produce 35 million gallons per year of ethanol. The facility will...
