The Future of Alternative Fuels: Ethanol
Besides a slew of clean car announcements connected to the North American International Auto Show, the alt energy topic that has made media and blog headlines most often over the past week has been alternative fuels. We are thus going to run a 2-part series on alternative fuels this week as follows: ethanol today and coal-to-liquids tomorrow. ETHANOL: INVESTOR FRIEND OR FOE? I’m going to start this post with a statement of opinion: I don’t really like corn-based ethanol (as an investment), I never have, and, as a result, I haven’t followed this space as closely as...
An Interesting Way To Play Cellulosic 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...
Ag Goddess Smiles Favorably on Ceres, Investors Frown
by Debra Fiakas CFA Recently, in compiling our lists of remarkable small-cap stock trades, I was surprised to find the shares of Ceres, Inc. (CERE: Nasdaq) among stocks setting new 52-week lows. Ceres has only been trading since its initial public offering in February 2012, when the company sold 5.0 million shares at $13.00 per share. After a brief trade higher in the early spring, Ceres shares have been steadily losing ground, finally setting an all-time low of $6.02 last week. Named after the Greek Goddess of Agriculture, Ceres is a self-styled energy crop producer. Ceres...
DowDuPont To Exit Cellulosic Biofuels
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...
The Green Plains Way
Jim Lane As the renewables industry searches for effective business models, a strong one emerges in its midst. We look at Green Plains (GPRE) and its businesses. A recurring theme among the 300+ delegates at ABLC Next this week in San Francisco is the recognition that successful companies change the world not science projects, or failed companies and that any route that leads across the Valley of Death to commercial success is the first step towards a sustainable economy, and that strong lead products are the oxen that get settlers across the desert. Renewable...
Fulcrum Bioenergy’s $115M IPO: The 10-Minute Version
Jim Lane The first zero-cost feedstock biofuels company comes to the public markets with its IPO. Like to see how this “Back the the Futuresque” technology unlocks value by converting household garbage into transportation fuel? Here’s our 10-minute version of the IPO from Fulcrum Bioenergy. In California, Fulcrum Bioenergy has filed an S-1 registration statement for a proposed $115 million initial public offering. The number of shares to be offered and the price range for the offering have not yet been determined. The company proposes to list under the symbol FLCM. UBS Investment Bank...
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...
Enzyme Breakthroughs From The Majors
by Jim Lane
Three big product announcements just in…
DSM (e) breaks through on yield, efficiency with new yeast, enzyme offerings for corn fiber conversion.
Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) launches breakthrough techs “Fortiva” and “Innova Force”.
DuPont (DD) extends with corn oil extraction tech.
In Indiana, DSM leads the news out of the Fuel Ethanol Workshops with their latest yeast and enzyme offerings, eBOOST GT and eBREAK 1000F.
Up to 60 percent GA reduction
We’ve seen the eBOOST brand over the past year — so here’s a significant cost savings opportunity in the form of a line extension. eBOOST GT, which has been tested and qualified at commercial...
Trump Takes Down Ethanol in Pincer Move
by Debra Fiakas, CFA
The Trump Administration is using tariffs on China goods as a trade war tactic to pressure China into relenting to U.S. trade policy demands. Unfortunately, the fallout has been heavy and widespread. Farmers have taken the heaviest hits as China has dropped orders for corn and soybeans. Ethanol producers have been ensnared in the trade war skirmish as well and in recent weeks have been caught an uncomfortable ‘pincer-like’ squeeze by the Trump Administration.
Trump’s Environmental Protection Agency has continued its practice of granting waivers to oil and gas refiners, eliminating the requirement to blend biofuel with the refiners’ petroleum...
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,...
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.
Ethanol Stocks Reviewed On Seeking Alpha
With oil and gasoline prices rising ever higher, investors are shifting attention to alternative energy stocks as a promising high-growth sector. A particular area of interest is ethanol stocks and forthcoming ethanol IPOs. Here are companies recently reviewed on Seeking Alpha Archers Daniels Midland Company (NYSE: ADM) Pacific Ethanol (PEIX) Xethanol (XTHN) VeraSun (VSE) MGP Ingredients (MGPI) Aventine Renewable Energy (AVR) Green Plains Renewable Energy (GPRE) Andersons Inc. (Nasdaq: ANDE) Veridium Corporation (VRDM)
EPA Reneges on Trump’s Biofuels Deal
by Jim Lane
“EPA Reneges on Trump’s Biofuels Deal”, said the Iowa Renewable Fuels Association in reacting to the US Environmental Protection Agency’s new plans for fulfilling federal renewable fuel requirements. EPA released a proposed supplemental rule for the Renewable Fuel Standard today, and the bioeconomy is up in arms, and the outrage is centered in farm country, once a Trump bastion of support.
“IRFA members continue to stand by President Trump’s strong biofuels deal announced on Oct. 4, which was worked out with our elected champions and provided the necessary certainty that 15 billion gallons would mean 15 billion gallons, even after...
Another Sign of Ethanol Oversupply in the Midwest
Priming the E85 Pump This Sunday, I had dinner with my aunt, who lives in Chicago. She recently bought an Impala LT (she's a loyal GM customer), and was surprised when she received a $1000 debit card with which to buy E-85, the 85% Ethanol, 15% gasoline blend used in flex-fuel vehicles. I was not able to find any web reference to this offer (including on the GM website), but Google still had a cached article from HowStuffWorks.com which explained: To help defray fuel costs, GM, as part of its "Live Green, Go Yellow" E85 ethanol...
The API Bushwhacks Ethanol
Jim Lane Who’s right, in the fight of their lives over E15 ethanol blending? Whose data’s a Looney Tune, whose is from the real-world? Yesterday the American Petroleum Institute, in an apparent impression of Yosemite Sam, held a press conference in DC to highlight a new report from the Coordinating Research Council on E15 ethanol blends. The report is here. The API: Blast your scuppers, now I gotcha, ya’ flea-ridden riff-raff! Use of the ethanol gasoline blend E15 may endanger fuel systems in millions of 2001 and newer vehicles,...
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....
