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...
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...
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.
Ethanol Producers Vs. California Air Resources Board
by Debra Fiakas CFA Sometime back Poet, LLC, the private producer of ethanol based in Sioux Falls, SD (my home state), filed a lawsuit against the State of California, strenuously objecting to rules related to ‘carbon intensity’ adopted by the California Air Resources Board (CARB) When the dust settled, the California rules were still standing and Poet skulked off to the appeals court. The appeal was filed this week in the California’s Fifth Appellate District in Fresno. Originally approved in 2009, California’s ‘low carbon fuel standard’ (LCFS) is aimed at sorting apples and oranges in the renewable...
The Other Cellulosic Fuel
by Debra Fiakas CFA In an article posted in November I incorrectly named the product of Kior, Inc. (KIOR: Nasdaq) as cellulosic ‘ethanol’. Kior does indeed use cellulosic biomass - wood chips to be exact - but the company’s catalytic pyrolysis technology turns out crude oil that can be further refined into gasoline or diesel. Ethanol, on the other hand, is the product of a fermentation process. There is nothing new about catalytic pyrolysis - superheating in a container with no oxygen. Oil refiners have been fracturing large, complex hydrocarbons using heat and catalysts for...
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...
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....
Novozymes Ignites Yeast Wars
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,...
Advantage Biodiesel
By Tom Konrad, Ph.D., CFA
Because of rising fertilizer prices, farmers are planting more soybeans than corn. Soybeans are a legume, meaning that they can fix their own nitrogen in the soil, meaning that they need less nitrogen fertilizer, the price of which is spiking due to rising natural gas prices. Corn, in contrast, needs more nitrogen than most other crops.
High gas prices are rising because of Putin’s war on Ukraine, which is also preventing Ukrainian farmers from planting this year’s wheat crop, while sanctions are likely to disrupt wheat supplies from Russia as well.
Corn and (to a lesser extent,...
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...
ADM Selects Columbus, Nebraska as First Location for Ethanol Expansion
Archer-Daniels-Midland Co. (ADM) announced that it has selected Columbus, Nebraska as the first location for its ethanol capacity expansion. The Company will build a dry corn milling plant with an initial annual capacity of 275 million gallons adjacent to the existing ethanol plant in Columbus. In September, ADM previously announced that it planned to expand ethanol capacity by 500 million gallons through the addition of two dry milling plants at existing ADM ethanol facilities. Construction, expected to be complete in early 2008, is subject to applicable governmental approvals.
Sketches of DuPont’s Cellulosic Ethanol Project in Nevada, Iowa
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...
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....
Beyond ZEVs: The Negative Emission Vehicle
by Jim Lane
Wandering the halls at the BIO World Congress and later to be seen again at ABLC NEXT this November, we ran across one of the most interesting technologies relating to ethanol production and markets we have seen in a month of Sundays, perhaps two months’ worth.
The problem
First, let’s revisit the problem. There’s simply too much ethanol being produced for the markets to absorb, given the Trump Administration’s massive cutbacks in US ethanol targets —In the resulting massively oversupplied market, the inevitable has happened, ethanol producers, growers and the Midwestern economies are being crushed. And they thought they...
Green Plains, Green Profits
by Debra Fiakas CFA Green Plains Renewable Energy, Inc. (GPRE: Nasdaq) is one of the few U.S. ethanol producers to turn a consistent profit. The company is half way through its fifth consecutive profitable year. Sales in the most recently reported twelve months totaled $3.4 billion, on which the company earned $40.5 million in net income. During this period Green Plains generated $100.0 million in operating cash flow. Tracing Green Plains profits requires a bit of effort by investors. The company channels its products through a marketing and distribution division. Thus while, ethanol production...
REX American: Culturally Frugal
by Debra Fiakas CFA Among the surviving public ethanol producers in the U.S. is REX American Resources (REX: NYSE). Based in Ohio, REX American is an ethanol fuel producer with owned nameplate capacity near 215 million gallons per year. Additionally, the company distributes by-products of the ethanol production process, including distiller grains and non-food grade corn oil. REX has full or partial ownership in six ethanol production plants located in the Ohio, South Dakota, Illinois and Minnesota. The company relies on corn feed stock for its dry milling ethanol production process. Like any other ethanol...
