BIOFUELS UPDATE
NOVEMBER 2006
McIlvaine Company
AROUND THE WORLD
U.S. Elections Give Ethanol a Boost
After the Democrats took control of both the House and Senate, ethanol and other alternative energy stocks posted strong gains. This was on the belief that the Democrats would increase funding.
Winners included Archer Daniels Midland (up 6.6 percent), Pacific Ethanol (8 percent), the Andersons (5.8 percent) and VeraSun (9 percent).
Ethanol Trade Predicted to Rise Six-Fold by 2015
The global ethanol trade will increase six-fold by 2015, with a projected surplus in the Americas and a deficit in the European Union and Asia, said Christopher Berg, deputy director of the sugar-research company FO Licht GmbH.
The EU is forecast to import more than 3 billion liters by 2015, compared with 500 million liters currently, Berg said at the FO Licht World Ethanol Conference in Amsterdam. The Americas, led by Brazil, are forecast to have a surplus of more than 6 billion liters by 2015 that will be exported predominantly to Europe and Asia. Africa is projected to have a surplus by 2014 as production takes off in countries such as Mozambique and South Africa, he said.
The government interest in biofuels, made from corn sugar or vegetable oils, is motivated by a desire to replace fossil fuels, limit greenhouse gases and support the farming sector. Support programs are the main driver of industry growth, especially in Europe, says the International Energy Agency (IEA).
Global biofuels output stood at 20 million tonne in 2005, representing 1 percent of the global transportation-fuel market, says IEA.
Brazil’s October Ethanol Exports Up 1.5 Percent on the Year
Brazil’s volume of ethanol exports for October totaled just under 307 million liters, up 1.5 percent from the 302 million liters shipped abroad in the same month a year ago, a spokeswoman from the Sao Paulo sugar cane industry association, or Unica.
Unica’s estimate differs greatly from preliminary export data released by the Trade Ministry, which reported a record 544.8 million liters exported in October, up 91 percent from the 285.5 million liters shipped abroad in the same month in 2005. The ministry bases its data on export registrations filed by businesses, while Unica’s numbers are compiled from shipments made from Brazil’s ports.
Cattlenetwork.com reports Unica’s figures correspond with what local traders have been saying in recent weeks. They have noted that Brazil’s ethanol exports have fallen sharply in the last quarter of this year as U.S. interest dims.
Brazil to Raise Ethanol Percentage
Bolstered by record ethanol exports, Brazil is considering raising the current 20 percent mixture of ethanol in gasoline to 25 percent. Carmen J. Gentile, UPI Energy Correspondent, explains surging global demand for sugar-based ethanol from Brazil — the world’s largest producer — prompted energy officials to lower the domestic fuel level to 20 percent in March.
However, Brazil is expected to produce a record 819 million gallons of ethanol for export as a result of the 2006-2007 harvest, making it possible for domestic use to return to previous levels.
Total production for the season is projected to exceed 4.2 billion gallons. Though that’s a record, stocks of ethanol would still be stretched thin if the level in fuel was increased to 25 percent in the coming weeks or months.
Energy analysts had predicted that the new 25 percent level could go into effect November 1, or at latest, by the start of 2007.
Others predicted that Brazil will likely be able to meet both its domestic and export demand with the level raised to 25 percent.
Infinity Bio-Energy Investing $700 Million in Brazil
Bermuda-based investment company Infinity Bio-Energy plans to produce 1 billion liters of ethanol by 2009 in Brazil in order to supply international markets, company CEO Sergio Thomson-Flores told BNamericas.
As a result, the company is investing US$700 million. “We will do this [reach the target] through acquisitions and investing in Greenfield projects,” he said.
The company has invested some US$260 million since it started in March 2006, buying control of three sugar and ethanol producing mills in Brazil with capacity to produce 300 million liters per year of ethanol.
The balance of the US$700 million in coming years will go to acquire two more mills and start construction of three mills this year and five in 2007.
Productivity of Land Growing Sugar Cane Predicted to Double
The productivity of Brazilian land growing sugar cane for processing into ethanol will more than double by 2023 because of new technology, according to Brazilian commodity brokerage Sociedade Corretora De Alcool Trading SA.
The capacity to convert sugar cane into ethanol will increase to 13,000 liters of ethanol per hectare of arable land, from 6,000 liters, said SCA director Jacyr Costa Filho. Sugar cane yields more ethanol than other feedstocks used to produce ethanol. Corn yields 3,700 liters of ethanol a hectare and wheat 1,130 liters.
Technical Cooperation Agreement Signed
A technical cooperation agreement considering bioethanol and biodiesel products was signed between the São Francisco and Parnaíba Valley Development Company (Codevasf), the Agricultural Cooperation Company (Campo) and Itochu Corporation. These biofuel projects are based on sugar cane farming on irrigated areas in Minas Gerais, Bahia and Piauí.
Codevasf, a company connected to the Ministry of National Integration, is going to supply information about the development of irrigation projects and agricultural data about sugar cane and bioenergy in Brazil.
Campo, in turn, will provide information about the production of bioenergy, including ethanol, and about the cultivation of sugar cane in the Brazilian savannah. The company brings together enterprises specialized in agricultural matters in the country and works on the diversification of cultures, new agrarian models and technical and environmental innovations.
Itochu will supply figures about the alcohol market in Japan and around the world. The signing of the technical cooperation agreement was scheduled in Brazilian capital Brasília.
German Sugar Company to Develop Biofuels Plant in Chile
Chile’s government is in the process of signing an agreement to allow German company Südzucker — Europe’s biggest sugar producer, with over 50 sugar factories — to develop biocombustible energy in Chile. According to Beatrice Karol Burks with MERCOPRESS, CropEnergies, a subsidiary of Südzucker, opened the Orafti inulin plant earlier this year in Chile. The plant extracts the soluble fiber inulin from chicory for use in foods. The company is now looking to expand its operations in Chile, developing both biodiesel and bioethanol from wheat and beetroot.
Südzucker’s investment, which is expected to be big, will help President Michelle Bachelet deliver on her election promise to diversify and expand Chile’s energy sources. Bachelet pledged that 15 percent of the nation’s energy should come from alternative, renewable sources by 2010.
“The production space is available,” assured Álvaro Rojas, Minister of Agriculture. “We can increase our current production of 300,000 hectares of wheat to 700,000 hectares.
Based in Zeitz, Germany, CropEnergies operates Europe’s largest bioethanol plant. The company’s predicted turnover for 2006 is US$160 million, which translates into 210,000 cubic meters of bioethanol. Currently using wheat and barley as base products, the company will start production from sugar in 2007.
EU Expects to Miss Biofuels Target
The European Union will probably miss a 2010 target to use more alternative fuels, the second time it will fall short, in five years, said Hans van Steen, an EU official in charge of promoting renewable energy.
The EU wants biofuels to account for an average of 5.75 percent of transport fuel by 2010, van Steen told the F. O. Licht World Ethanol Conference in Amsterdam. The EU set a target of 2 percent for 2005, and member states averaged 1 percent, he said. The 2 percent target was only achieved by Sweden and Germany, Van Steen said. He added in a separate interview that the two countries and France were the only ones likely to meet the 2010 objective.
Half of all new cars sold in Europe run on diesel. European biodiesel production is forecast to increase almost fourfold to 12 million metric tons by 2010, bolstered by $3.8 billion of investment, according to Goldman Sachs Group Inc.
Swedish Biogas Plant Supplies Fuel for City Buses
Since 2005, biowastes and energy crops from Västerås in Sweden have been treated in an integrated biogas plant. The plant produces fuel equivalent to 2.3 million liters of petrol each year for all the city’s buses and waste trucks and 500 other vehicles, generation of heat and power, and valuable fertilizers for local farms. Sweden has declared its intention of becoming completely independent of oil in the coming 20-30 years.
This particular system takes separated household biowastes, together with a grass crop grown and harvested by local farmers, and generates biogas for use as a vehicle fuel in the nearby city of Västerås, while surplus gas is used in a combined heat and power plant to provide electricity which feeds into the grid, and heat for the local district heating system.
China Offers Incentives to Farmers to Produce Feedstocks
China aims to use 6.7 million tonnes of ethanol and 11 million tonnes of biodiesel by 2010, meeting 10 percent of its forecast transport fuel demand, a government economist said recently.
The country’s emphasis will be to develop ethanol from cassava, sweet potato and corn, and biodiesel from animal and vegetable waste oil, said Wang Zhongying, director for the Centre for Renewable Energy Development at the policy-setting National Development and Reform Commission (NDRC).
“China has incentives for farmers to produce feedstocks,” Wang told a biofuels conference in Singapore.
China unexpectedly emerged as an exporter of ethanol this year, but this 10 percent level of biofuel use could leave the country needing imports, given domestic plans to produce only 3.0 million tonnes by 2010, three times current output, reports Reuters.
The country has plans to reserve 44 million hectares of land for biofuel feedstock growing, Wang said. Longer term, China will look to develop diesel from wild crops such as jatropha and cellulose ethanol agricultural and forest waste, as it forecasts 9 million tonnes of ethanol use and 15 million tonnes of biodiesel by 2020, he said.
India to Introduce 10 Percent Ethanol Blend
India plans to introduce the mandatory blending of 10 percent ethanol into gasoline across the entire country from June 2007, Petroleum Secretary M. S. Srinivasan said this month.
He said the use of 5 percent ethanol mixed petrol, currently used in three states, was expected to be spread to the rest of the country by November 15.
“We have already tied up 50 percent of the 560 million tonnes of ethanol needed for 5 percent mixing at Rs 21.50 a liter,” Srinivasan said.
India will need 1.12 billion liters of ethanol a year for the move to 10 percent blended petrol.
“We expect substantial availability of ethanol for 10 percent blending as new capacities are being created and we are expecting a bumper crop of sugar cane,” he said.
India also plans to replace around 5 percent of its current 40 million tonnes of annual diesel consumption with jatropha biodiesel within about five years, as it tries to limit oil imports that account for 70 percent of its needs.
Bajaj Hindusthan Ltd., India’s biggest sugar maker, and rival mills plan to more than double sales of ethanol to meet government alternative fuel targets, helping boost earnings as prices of the sweetener slump.
The mills would get an extra 12 billion rupees (US$263 million) in revenue from ethanol over the next year, Indian Sugar Mills Association director-general S. L. Jain said.
Passage of Bill in The Philippines Mandating 10 Percent Ethanol Likely
The biofuels bill in the House of Representatives and the Senate is expected to pass before the bicameral conference committee before Congress takes its Christmas break on December 20.
Deputy Speaker for the Visayas Raul del Mar told reporters that both legislative chambers may reconcile House Bill 4629 and Senate Bill 2226, which both seek to establish a “national biofuels program” requiring the use of biofuels or ethanol in automobiles.
Once fully implemented, the prices of gasoline and diesel will be reduced by as much as 10 percent because the ethanol that will be included in the blend of petroleum products will be exempt from the prevailing 12 percent value-added tax (VAT).
Among the sources of ethanol are sugar cane, cassava, corn and tuba-tuba (jathropa, a tree that produces a fruit from which fuel can be extracted), all of which are available locally.
The bioethanol bill seeks the “mandatory blending of all gasoline locally sold with 10 percent bioethanol, whose production the bills seeks to jumpstart by providing tax breaks to those who will manufacture it.”
Indonesian Government Building Plants Using Jathropa as Feedstock
Indonesia plans to produce more than 15,000 tonnes of biofuels from jatropha by the end of 2007, an industry ministry official said.
The plan calls for 52 micro-sized plants, and is part of the country’s drive to cut a hefty oil subsidy bill inflated by high global prices by encouraging alternative sources of energy.
“Initially, the government was planning to build eight big biofuel plants, but later we decided to build much smaller plants with a capacity of 300 tonnes per year each.”
While the government focuses on jatropha as a feedstock, the bulk of Indonesian production will come from palm oil-based biodiesel produced by the private sector.
Senegal Working with Brazil and India on Biofuels
Senegal will cooperate with Brazil and India to launch a biofuel production program by 2007. Through public-private partnerships, Brazil will provide scientific and technological know-how. Indian entrepreneurs will supply the capital, and Senegal will offer land and labor.
The project is part of a plan by the Senegalese government to regenerate its rural economy through investment in biofuels to eventually replace the country’s daily consumption of 33,000 oil barrels.
FEEDSTOCKS
Iowa Reports Discuss Impact on Corn Acreage and Prices
Two reports out of Iowa, one from the Iowa Ag Review and one from Iowa State University’s Center for Agricultural Research and Development, look at potential changes in the price and acreage of U.S. corn in the future. Both reports deal with the effects of the ethanol industry on corn, the Farm Futures staff reports.
A report in the fall edition of the Iowa Ag Review by Bruce Babcock and David Hennessy, points out that although ethanol demands are expected to spur higher corn acreage next spring, farmers will also be taking soy prices into consideration.
In order for farmers to change their corn-soybean rotations, the report says that corn prices would need to climb to at least $3.40 a bushel if soybeans were $6 a bushel, and if soybeans were at $7, corn prices would have to approach $3.80 a bushel to convince farmers to switch to corn.
The hypothesis takes into effect the decline of corn yields when corn is planted in the same field two years in a row. Due to lower yields and higher fertilizer requirements, among other issues, farmers would need a significant advantage in corn prices over soybean prices in order to make the switch, the report predicts.
Another study, from Iowa State University, looks at the ethanol industry’s expansion. According to this report, the break-even corn price for ethanol is $4.05 per bushel at the current tax rates and oil and distillers grains price levels.
This projection has ethanol reaching 315 billion gallons, or 20 percent of yearly U.S. fuel consumption, by 2015. This figure would require 95.6 million acres of corn, an acreage figure far surpassing any in recent years.
Mascoma to Apply Funding to Cellulosic Pilot Plant
The Mascoma Corporation, which is trying to produce ethanol from nontraditional sources, announced that it has received $30 million in financing from a group of prominent venture capital investors.
Mascoma, which is based in Cambridge, MA, plans to use some of the funds to begin building a pilot plant and eventually a commercial processor to produce cellulosic ethanol, which can be made from grass, wood or various agricultural or forestry waste products.
The investment is led by General Catalyst Partners and includes Khosla Ventures, Flagship Ventures, Kleiner Perkins Caufield & Byers and others.
“This is obviously a substantial commitment from the venture community to the cellulosic ethanol space,” said Colin South, Mascoma’s president.
Khosla Ventures’ founder, Vinod Khosla, was a co-founder of Sun Microsystems and as a partner at Kleiner Perkins, became of the most successful venture capital investors in Silicon Valley. Since founding Khosla Ventures in 2004, he has emerged as an evangelist for alternative fuels.
Possibility of Growing Feedstocks on Brownfield Sites Studied
Researchers in Michigan are researching the possibility of growing green crops on brownfield sites. Soybeans, canola and sunflowers for biodiesel production, as well as corn and switchgrass for ethanol production, were planted this year on a two-acre former industrial dump site in Oakland County, MI., according to Kurt Thelen, associate professor and extension specialist for Michigan State University (MSU).
The idea behind the three-year study is that land not fit for growing crops for human consumption could be used to grow feedstocks for biofuels. The first objective of the study is to see if it is possible — logistically and economically — to produce quality crops with good yields at former industrial sites, Thelen said. Secondly, researchers will scrutinize quality to make sure the biofuels produced would meet national standards. A third objective will be to look into whether planting crops on brownfield sites cleans up the soil, he said. That won’t be the main objection, however.
Georgia Pines Proposed as Feedstock
Roger Reisert has run petrochemical processing plants and designed products to speed oil through Alaskan pipelines. In an interview by Dave Hirschman of The Atlanta Journal-Constitution, Reisert advocated converting Georgia pines to ethanol as a strategy for cutting pollution, reducing dependence on foreign oil and increasing jobs and investment in rural parts of the state.
“I’ve looked at fuel cells and hydrogen and all sorts of other technologies,” he said. “Some of them are very intriguing — but they’re a long way off. Our transportation system is 98 percent dependent on liquid fuels, and it would take many years to convert our infrastructure to handle anything else.”
Reisert explained there have been tremendous advancements in developing enzymes that convert complex sugars from cellulose into simple sugars necessary for the production of ethanol. It’s a multistep, chemical process that didn’t make economic sense when oil was selling for $30 a barrel.
When it went above $40 a barrel in April of last year, I thought the time was right and started C2Biofuels says Reisert.
Reisert continues we want to build a pilot facility in 2007 to prove the technology of converting Georgia pine to ethanol. We’d like to build a demonstration plant in 2008 and a commercial plant in 2010. Our company will own the pilot facility, but the demonstration and commercial plants will be owned by separate entities.
We’re looking at $200 million for each installation. Each facility would produce about 50 million gallons of ethanol annually and consume about 2,000 tons of pine trees a day. Biofuels could provide up to 30 percent of our gasoline needs.”
Peanut Biodiesel Being Studied
Tests are underway at the University of Georgia to develop non-edible peanuts that are high in oil, and could be grown specifically for biodiesel production. These varieties are higher in oil content than currently grown runner and Virginia type varieties and would not compete on the world market with peanuts grown for food and commercial cooking oil products.
The primary oil used in the United States to make biodiesel fuel is soy oil. Peanut oil produces approximately 123 gallons of biodiesel per acre, compared to 50 gallons for soy oil. The problem is peanut oil on the world market is more valuable than soy oil, making conversion to biodiesel economically impractical.
Biodiesel from peanut oil is compatible with fossil fuel-based biodiesel and can be mixed in any combination. Compared to fossil-based biodiesel, there will likely be a 2 percent to 5 percent reduction in miles per gallon with either soy or peanut oil-based fuel.
TECHNOLOGY IMPROVEMENTS
New Solid Catalyst Technology Reduces Cost of Making Biodiesel
New Century Lubricants announced that the company has entered into an exclusive worldwide agreement with National Chemical Laboratory (NCL), a constituent laboratory of the Council of Scientific and Industrial Research in India, to demonstrate and commercialize NCL’s breakthrough double-edged technology (ENSEL) for transesterification of seed oils and etherification of glycerin.
According to New Century president Dr. William Summers, ENSEL will overcome most of the problems and limitations associated with conventional biodiesel production methods. “We can use less expensive unrefined oils in a truly continuous process, and generate no wastewater,” notes Summers. “Furthermore, our process can make biodiesel with either methanol or ethanol. ENSEL can also manufacture premium biolubricants by running the reaction with higher alcohols such as octanol,” he adds.
Another major benefit of the ENSEL technology is that it provides a profitable solution to the glycerin dilemma now faced by the biodiesel industry. The glycerin recovered from the transesterification reaction is etherified with methanol, ethanol or butanol using another proprietary heterogeneous catalyst. The end products, primarily di- and tri-ethers of glycerin, are valuable oxygenates for diesel fuels.
New Century intends to build and operate a 1 ton-per-day ENSEL pilot plant in India to evaluate different feedstocks from all over the world, generate scale-up data and optimize catalyst performance. The pilot plant is being engineered and designed by Unitel Technologies, and will be operated under the technical supervision of NCL scientists.
Pavilion Technologies Provides Millions in Annual Value
Pavilion Technologies, a provider in model-based software, announced that East Kansas Agri-Energy is expected to achieve an estimated annual value of well over $2.5 million through the deployment of Pavilion’s ethanol solution at its Garnett, KS plant. The success of this project further bolsters Pavilion’s leadership position in delivering significant value to the ethanol industry.
East-Kansas Agri-Energy deployed Pavilion’s dry application to optimize efficiency across production processes including the dryer and cook section of the plant’s dry mill. Through this installation, pavilion has enabled the plant to increase yield of dried distillers grain with solubles (DDGS) and wet distillers grain with solubles (WDGS).
DISTILLERS DRIED GRAINS
Standardized Tests Being Developed
FarmWeek reports the ethanol industry is considering development of standardized testing methods for distillers dried gains (DDGs) in order to reassure customers about the quality of the product, according to industry representatives.
Samantha Slater, director of regulatory affairs for the Renewable Fuels Association (RFA), told FarmWeek that the general mood within the ethanol industry is that the “time has come” for standardized testing methods for DDGs.
“Standardized testing methods will help (buyers) know about what they’re getting as an end product,” Slater said.
Some ethanol plants are providing “spec sheets” detailing protein, fat, crude fiber, and other attributes of DDGs, according to Tamara White, Illinois Farm Bureau senior director of commodities. But there are no established industry-wide standards.
End-users of DDGs are advised to establish their own specifications and obtain samples before signing a contract to purchase DDGs. That is where standardized testing methods could be useful.
GS AgriFuels to Convert Corn Oil into Biodiesel
GS AgriFuels Corporation announced its plans to co-locate integrated corn oil-to-biodiesel production technologies onsite at ethanol production facilities.
GS AgriFuels’ biodiesel production technologies, developed by recently-acquired NextGen Fuel, Inc., are modular and can be integrated directly into existing and new ethanol production facilities in a plug-and-play manner. The technologies allow host ethanol facilities to quickly and cost-effectively participate in the benefits of corn oil biodiesel production.
GS AgriFuels’ sister company, GS Clean Tech Corporation, a process engineering and technology transfer company, sells technology and equipment to ethanol facilities designed to extract corn oil from distillers dried grains (“DDG”), a co-product of corn ethanol production that is currently sold as a feed product.
GS CleanTech sells its Corn Oil Extraction Systems to participating facilities and maintains the right to purchase the extracted corn oil at a substantial premium to its current value locked in the DDG. The ethanol facility receives 100 percent of the economics from the corn oil purchases.
The jointly-owned biodiesel facility will acquire this oil and convert it to biodiesel on site. The host ethanol facility not only receives a stake in the biodiesel facility and its pro rata share of profits, but also the right to acquire or market all of the biodiesel output.
DDG has a value of only $0.035 per pound while fuel prices exceed $0.30 per pound and therefore it is highly advantageous to convert as much as possible of this DDG by-product into fuel.
GS Clean Tech’s patent-pending corn oil extraction technology extracts roughly 7 million gallons of the fat in the DDG in the form of corn oil that can then be converted into biodiesel on close to a 1:1 volumetric basis.
VeraSun to Produce Biodiesel from Distillers Grains
VeraSun Energy Corporation announced plans to produce biodiesel from oil extracted from dried distillers grains (DDG), a co-product of the ethanol production process.
VeraSun is currently evaluating locations for a 30-million-gallon-per-year biodiesel production facility, with plans to commence construction in 2007 and begin production in 2008. The company has contracted with Lurgi PSI, Inc. for design and engineering services for the biodiesel facility and with Crown Iron Works Company for oil extraction equipment. As a result of the exclusivity provisions in these contracts, VeraSun expects to be the first to develop large-scale facilities using this technology. The company has also filed a provisional patent application with the U.S. Patent Office for the production process.
COMPANY NEWS
ADM to Invest in Cellulosic Ethanol
Patricia A. Woertz, who took over in May, said ADM, the grain-processing giant, would seek to maintain its leadership in biofuels, like ethanol, by diversifying its production sources beyond corn.
The plan includes possible investments in Brazil to make sugar for ethanol and in Indonesia to make palm oil for biodiesel, as well as export opportunities for biofuels in India and elsewhere.
Despite saying the company’s goal was to be the global leader in bioenergy, which includes ethanol and biodiesel, Ms. Woertz said ADM would not necessarily strive to be the market-share leader in ethanol and biodiesel. “We are interested in profitable growth,” she said.
Dozens of new ethanol plants being built in the United States continue to eat away at the company’s market share, which once topped 60 percent in the 1970s. ADM has about 20 percent of the American market today; it is also the leader in biodiesel production in Europe. The company plans to expand its ethanol capacity in the United States to 1.6 billion gallons a year by the end of 2008, from 1.1 billion gallons a year now.
Ms. Woertz also said ADM would look to invest in so-called cellulosic ethanol made from agricultural waste and nonfood crops. But she and other company officials declined to say which kind of crop ADM favored for such production.
MPG Ingredients Announces First Quarter FY 2007 Results
MGP Ingredients, Inc. reported net income of $6,976,000, or $0.41 in diluted earnings per share, for the first quarter of fiscal 2007, which ended October 1, 2006. This compares with net income of $3,731,000, or $0.23 in diluted earnings per share, for the first quarter of fiscal 2006. Income from operations in the first quarter of fiscal 2007 was $10.7 million (pre-tax) compared to income from operations of $6.6 million (pre-tax) in the prior year’s first quarter. Total sales in the first quarter of fiscal 2007 were $84,995,334, an increase of 10 percent above sales of $77,046,067 in the prior year period.
The improvement in first quarter operating results from a year ago resulted from increased sales in the distillery products segment. Distillery products sales rose by over $14.4 million, or 26 percent, above sales in the first quarter of fiscal 2006. Ingredients sales in the first quarter declined by $6.5 million, or nearly 29 percent, from the prior year’s first quarter.
Total sales of distillery products in the first quarter of fiscal 2007 rose by approximately $14.4 million, or 26 percent, compared to the first quarter of fiscal 2006. This improvement was principally due to a $9.4-million, or nearly 34 percent, increase in sales of fuel grade alcohol and a $4.3-million, or 21 percent, increase in sales of food grade alcohol. The increased sales of fuel grade alcohol resulted from significantly higher average selling prices, which offset slightly lower unit sales compared with the prior year period.
Neste Oil Moving into Biodiesel
Neste Oil, the Finnish oil refiner, has plans to become the world’s largest biodiesel producer, and intends to spend billions of Euros over the next 10 years building new plants to produce the alternative fuel, according to the Financial Times.
Neste’s primary focus is in Europe where it plans to open a 10,000-barrels-per-day biodiesel plant in Finland next year, which will be the first of what the company hopes to be many plants around the world producing fuel from renewable sources.
Shell Working on Creating Biofuels Infrastructure
John Hofmeister, president of Shell Oil Company, spoke on “Energy Security…What Does It Take?” at the fall 2006 Hoyt C. Hottel Lecture in Chemical Engineering held at MIT on November 3.
Even though Shell invests around 5 percent of its total budget in alternative energy sources, Hofmeister warned it will take 20-25 years before these fledgling technologies meet even 10-15 percent of the country’s energy needs. The alternatives to fossil fuels are still based on “immature technologies” that markets are not quite ready for, he said.
“Shell is working on creating a biofuels infrastructure in select markets in the Midwest to make ethanol available at the pump to vehicles that can use blends of biofuels. Although the United States plans to produce 7 billion gallons annually of ethanol by 2010, we would need to produce 15 billion gallons to meet even 10 percent of the country’s transportation fuel needs,” Hofmeister said.
Grace Forms Biofuels Group
W. R. Grace says that its Grace Davison unit has established a biofuel technologies group that will oversee product development in the renewable fuels industry. The first areas the biofuels group will focus on include catalysts and adsorbents for enhanced biodiesel and bioethanol production, as well as chromatography-based analytical and quality control tools.
Dyadic Closes Stock Purchase Agreement with Abengoa Bioenergy
Dyadic International, Inc., a biotechnology company, announced that it has closed the previously-announced three-year research and development (R&D) agreement and stock purchase agreement with Abengoa Bioenergy R&D, Inc., an Abengoa Bioenergy Company, Under the terms of the stock purchase agreement, Abengoa Bioenergy has purchased 2,136,752 shares of Dyadic Common Stock at $4.68 per share, or a total of $10 million.
Dyadic International, Inc. is engaged in the development, manufacture and sale of biological products using a number of proprietary fungal strains to produce enzymes and other biomaterials, principally focused on a system for protein production based on the patented Crysosporium lucknowense fungus, known as C1. Dyadic is applying its technologies to produce enzymes for use in converting various agricultural products (e.g., corn) and waste products (e.g., switch grass, wheat straw, sugar cane bagasse, etc.) into fermentable sugars, which can then be used in the production of traditional and cellulosic ethanol as well as other products currently derived from petroleum.
Abengoa Bioenergy is considered to be the second largest ethanol producer in the world with production facilities located in Europe and the U.S.A. Abengoa Bioenergy is one of the five business units of Abengoa, S.A., a technology company that applies innovative solutions for sustainable development in the infrastructures, environment and energy sectors.
New Executives for Xethanol
Xethanol Corporation, a biotechnology-driven ethanol company, announced that the Board of Directors has elected William P. Behrens as non-executive Chairman of the Board and David R. Ames as President and Chief Executive Officer of the company. In aligning his interests with shareholders, Mr. Ames will be drawing an annual salary of $1.00. In the near future, the Compensation Committee of Xethanol’s Board of Directors is expected to implement a non-cash compensation structure for Mr. Ames. Both Mr. Behrens and Mr. Ames were appointed to Xethanol’s Board of Directors on October 3, 2006.
The company also announced that Marc J. Oppenheimer resigned his board position after not being elected Chief Executive Officer and that Louis B. Bernstein resigned as interim CEO, President and Director. Both Mr. Oppenheimer and Mr. Bernstein cited philosophical differences with other board members as a rationale for their resignations.
VeraSun Reports Third Quarter Results
VeraSun Energy Corporation, the nation’s second-largest ethanol producer, announced its results for the third quarter of 2006 ended September 30, 2006. Earnings were $32.0 million or $0.40 per diluted share. Operating cash flows were $62.0 million and cash on hand increased to $444.0 million, including $81.3 million of restricted cash for the construction of the Charles City, IA, production facility.
The company experienced growth in production volume due to the Fort Dodge, IA, facility being in operation during the 2006 period. Ethanol shipments increased to 56 million gallons during the quarter, a 92 percent increase from shipments during the third quarter of 2005. VeraSun’s Charles City facility is now expected to open ahead of schedule, by the end of the second quarter of 2007. The company also finalized a contract with Fagen, Inc. to construct their previously-announced and fully-funded facilities in Welcome, MN, and Hartley, IA, as well as an additional facility at a site yet to be determined.
As announced on November 3, 2006, VeraSun will utilize an innovative process to produce biodiesel from distillers grains, a co-product of the ethanol production process — creating two biofuels from the same feedstock. VeraSun expects to begin construction of a facility in 2007. The company anticipates its biodiesel refinery will have a capacity of 30 million gallons per year, or mmgy, will utilize oil extracted from distillers grains, and will be the first large-scale use of this technology in the biodiesel industry. The company has also filed a provisional patent application for this process. In addition, VeraSun is on track to take over the marketing of its ethanol in the second quarter of 2007.
Panda Ethanol Completes Merge into Cirracor
Panda Ethanol, Inc. announced that stockholders of Cirracor, Inc. have approved, and the companies have completed, the merger of Panda Ethanol with and into Cirracor. The surviving company will be called Panda Ethanol, Inc. and its common stock will continue to be available for quotation on the Over-The-Counter Bulletin Board.
In connection with the merger, the prior stockholders of Panda Ethanol were issued 28,800,000 shares of Cirracor common stock. The combined company now has 30,000,000 shares outstanding.
Panda Ethanol, Inc. is headquartered in Dallas, TX. Panda Ethanol is currently developing fuel ethanol plants in the United States. Panda Ethanol anticipates that its ethanol facilities will operate on a continuous basis and, where available, will utilize biomass gasification technology as a thermal energy source. Panda Ethanol is currently developing ethanol production facilities in Hereford, TX, Haskell County, KS, Yuma, CO, Lincoln County, NE, Muleshoe, TX, Sherman County, TX, and various other locations.
Metabolix Initial Public Offering Priced at $14.00 Per Share
Metabolix, Inc. announced that its initial public offering of 6,800,000 shares of common stock was priced at $14.00 per share. Net proceeds of this offering are intended to be used to make investments in equipment for pilot manufacturing and commercial formulation of Natural Plastic and to fund working capital needs, including for pre-commercial manufacturing and marketing activities, for switchgrass biorefinery program research and development, for hiring of additional personnel, for other research and development and for general corporate purposes. Metabolix has granted the underwriters a 30-day option to purchase up to an additional 1,020,000 shares of common stock at the initial public offering price to cover over-allotments, if any. The shares will trade on the NASDAQ Global Market under the symbol “MBLX.”
Founded in 1992, Metabolix, Inc. is developing and commercializing environmentally-sustainable and totally biodegradable Natural Plastic as a clean alternative to petroleum-based plastics. The company is taking a systems approach, from gene to end product, to integrate sophisticated biotechnology with current industrial practice to produce plastics, fuels and chemicals from renewable resources. In addition to its microbial fermentation platform for production of Natural Plastic, Metabolix is also developing a proprietary platform technology for co-producing, in non-food plant crops such as switchgrass, Natural Plastic and biomass for biofuels such as ethanol and for chemical products.
Heartland Energy Spins Off Subsidiary
Heartland Energy Group Inc. announced that its Board of Directors has approved a distribution to affect a “spin-off” of its subsidiary, Go Baby Racing, Inc.
The spin-off will be effective immediately. Heartland Energy Group Inc. shareholders will receive, on a pro rata basis, one share of Go Baby Racing, Inc. common stock for every ten shares of Heartland Energy Group Inc. common stock held on November 10, 2006. The distribution will be completed on or about January 1, 2007. Notice will be mailed to all registered shareholders.
Go Baby Racing, Inc. is a full-service Thoroughbred Horse Racing Company offering breeding, training, transportation, feed, buying, selling and racing.
Roy Thornhill stated, “We are pleased to have completed the spin-ff of Go Baby Racing, Inc. We can now focus our efforts on developing alternative fuel resources and capitalize on the growing renewable resource market.”
Orion Ethanol Raises $12.43 Million
Orion Ethanol, Inc., formerly known as RTO Holdings, Inc. announced the completion of a private placement of convertible notes in the aggregate principal amount of $12.43 million. The proceeds will be predominately used to make required deposits with Orion Ethanol’s primary EPC contractor, Lurgi PSI, Inc., for the construction of its new Enid, OK and Shattuck, OK ethanol plants. The payment of the deposits for these two new facilities will ensure price protection against future capital cost increases.
Alternative Energy Sources to Acquire Flex Fuels
Alternative Energy Sources Inc. plans to acquire Flex Fuels USA Inc. and its affiliate, ACN Energy Consulting Inc. in a stock-for-stock deal that would give Alternative Energy access to Flex Fuel’s proprietary ethanol production technology.
Huntsville, AL-based Flex Fuels has developed methods of producing cellulosic ethanol made from biomass and other types of waste rather than corn or sugar, making it less vulnerable to price or supply fluctuations. Kansas City, MO-based Alternative Energy Sources has signed a letter of intent to acquire all the company’s outstanding capital stock and was expected to sign a merger agreement by September 15.
With the acquisition Alternative Energy Sources, which develops, builds and operates ethanol production plants, plans to build the first cellulosic ethanol facility in the U.S.
GreenShift Announces Mergers
GreenShift Corp., New York, NY, announced merger initiatives affecting several of its operating companies in order to better align business interests. First, GS Agrifuels Corp. plans to merge with GS Energy Corp., a move that will bring GS Energy’s specialty equipment manufacturing company, Warnecke Design Services, Inc., to GS AgriFuels, where it will focus on the manufacturing of GS AgriFuels’ fuel production infrastructure. In a second move, GS Carbon Corp., GreenShift’s “carbon intensity reduction” unit, has acquired the R&D arm GS Advanced Applications, Inc. GS Carbon plans to use GS Advanced Application’s license agreement with another GreenShift unit, GS CleanTech, and its testing laboratory to initially focus on commercializing new technologies that increase the efficiency and reduce the emissions profile of coal-derived energy production.
Nova BioSource Fuels Selects Emerson’s PlantWeb
Emerson Process management, a business of Emerson, announced that the company has been awarded a contract to provide PlantWeb digital plant architecture and engineering support for the construction of multi-feedstock biodiesel refineries by BioSource America, Inc., a wholly-owned subsidiary of Nova Biosource Fuels, Inc.
Nova Biosource Fuels, Inc. synthesizes and distributes renewable fuel products. BioSource America is Nova’s design/building subsidiary manufacturing multi-feedstock biodiesel production facilities internationally.
Emerson will provide instrument specifications, system design and engineering support, and will supply its PlantWeb digital plant and engineering support capabilities for the multiple projects under contract. The three currently active projects have an estimated $2,100,000 worth of Emerson content.
South Dakota Plants Merging with Minnesota Company
Two ethanol plants in South Dakota are merging with a Minnesota company.
The deal involves Advanced BioEnergy LLC of Minneapolis and Dakota Fuels Inc., the managing partner of the Heartland Grain Fuels plants in Aberdeen and Huron.
Under the agreement Advanced BioEnergy will own 100 percent of the Heartland partnership. Heartland owners will invest in Advanced BioEnergy and will receive about $16.8 million in cash and about 2.6 million of newly-issued shares in Advanced BioEnergy. Each unit is worth about $20, said Bill Paulsen, general manager of the Aberdeen plant.
Aurora Biofuels Team Wins Intel, Berkeley Tech Challenge
Aurora Biofuels won the second global Intel+UC Berkeley Technology Entrepreneurship Challenge on October 26 at the UC Berkeley campus.
The global business plan competition invited entrepreneurial teams from 19 Arab, Chinese, Indian, Mexican, Russian, Singaporean, and U.S. universities. The competition sponsored by Intel and hosted by the Lester Center for Entrepreneurship & Innovation at UC Berkeley is designed to promote the unique combination of technical innovation and entrepreneurial skills at higher education institutions around the globe. The Challenge brings together the best research institutions around the world in partnership with regional business plan competitions to find teams and technologies with the potential for positive global impact.
Aurora Biofuels won the Intel Foundation’s grand prize of $25,000 for presenting technology which confronts consumer demand for green energy.
ETHANOL USE
U.S. Automakers Agree to Double Production of Flex-Fuel Vehicles by 2010
President Bush met with U.S. auto industry leaders earlier this month. The auto executives said they pressed their concerns about health care and trade issues, while making clear that the troubled industry does not want a federal bailout.
The GM Chief said the automakers told the president that by 2012, up to half of their vehicles could be capable of running on ethanol blends of up to 85 percent, known as E85. He said automakers would need assurance that the alternative fuel would be adequately available. Currently, only about 700 of the 170,000 gasoline stations nationally offer E85; most are in the Midwest.
The three automakers said earlier this year they would double their production of flexible-fuel vehicles by 2010.
Chicago School Buses Moving to Ethanol-Diesel Blend
Chicago Public Schools and Falcon Transportation said they’re converting 27 school buses to O2 Diesel, an ethanol-diesel blend, from diesel fuel. The new fleet was unveiled this month as a news conference.
Officials say the additional cost per bus is between $500 and $600. It’s being picked up by the CityHome program, a national partnership between public and private entities that promotes reducing diesel fuel emissions. CityHome said it’s prepared to sponsor additional costs if Chicago’s pilot program expands.
Ethanol Will Power 2007 IndyCar Series Season
The IndyCar Series is poised to open its 2007 season on March 24 at the Homestead-Miami Speedway with the debut of the new 3.5 liter Honda Indy V-8 engine fueled by 100 percent fuel-grade ethanol.
The ethanol industry is proud to be involved in the most significant racing fuel change in recent history. The cutting edge technology developed for this series has performed flawlessly in extended testing. The combined efforts of the ethanol industry and the IndyCar Series have helped drive consumer awareness of ethanol and its performance and environmental benefits.
The Ethanol Promotion and Information Council (EPIC) is responsible for providing the fuel and has contracted Renova Energy, based in Torrington, WY, to supply ethanol to the IndyCar Series throughout the 2007 season.
Volvo Expanding FlexiFuel Models
Volvo Cars is launching FlexiFuel models powered by renewable bioethanol on several European markets this autumn. The green model range is also being extended and even Volvo’s new C30 will be offered with eco-optimized FlexiFuel power. First to get Volvo’s FlexiFuel cars outside Sweden will be Britain, Ireland, France, Spain, the Netherlands, Belgium, Switzerland and Norway. Expanded model range three of Volvo’s nine models — the C30, S40 and V50 — are now available in an environmentally-optimized FlexiFuel alternative.
Alabama Encouraging Installation of E85 Pumps
The installation of the first ethanol-and-biodiesel-blended-fuel pumps along Interstate 65 in Alabama should begin in early 2007, state officials said.
State officials are talking with interested gasoline-selling convenience store operators and working quickly to make alternative-fuel purchase an option for drivers. It is part of a project that will place thirty-one E85 stations along I-65 in Alabama, Tennessee, Kentucky and Indiana. The sites in Alabama will be less than 100 miles apart.
ADECA and the Central Alabama Clean Cities Coalition have begun hosting workshops and events to recruit retailers that would like to add E85 or B20 pumps in the chosen areas. The grant funds cover up to 50 percent of the $50,000 cost per retailer, and the federal government offers a 30 percent tax credit for installation, up to $30,000 per year.
Ford Promoting E85
In 1907, ethanol was the primary fuel for Ford vehicles because it was the most widely available fuel, said Ron Westby, director of public policy for Ford Motor Company, speaking at the Agri-Growth Council annual meeting. Ford switched to gasoline after the Volstad Act outlawed alcohol in 1918, Westby said, because then gasoline was more readily available.
Ford has put 2 million flexible fuel vehicles on the road in the last decade and the Big Three automakers combined have put 6 million on the market, Westby said.
Converting from gasoline to flexible fuel isn’t free, he said. An additional $150 to $200 is spent on parts in each vehicle. Fuel tanks are different, injectors are unique and calibration is special.
Ford Motor Company is promoting E85 for its energy security potential and its stand-alone capabilities, he said.
Toyota’s Brazilian Unit to Produce Flex-Fuel Cars
The Brazilian unit of Japanese automaker Toyota will start producing flex-fuel vehicles, which run on any combination of gasoline and ethanol, in 2007, the company’s vice president said.” We are going to launch flex-fuel vehicles in our Corolla model in 2007, but we don’t yet have a definite date,” said Luiz Carlos Andrade Junior, Toyota Brasil’s vice president.
The popularity of the flex-fuel vehicles should help the company improve on its relatively modest Brazilian sales. In 2006, Toyota expects to close the year with a market share of 3.8 percent, up from 3.6 percent in 2005, Andrade said. “This will be a fundamental step to strengthen our presence in Brazil,” Andrade added.
Flex-fuel vehicle sales account for more than 75 percent of Brazilian domestic vehicle sales, according to the latest figures from the Brazilian Motor Vehicle Manufacturers Association, or Anfavea.
CONCERNS
Underwriters Laboratories Developing E85 Dispenser Safety Requirements
Underwriters Laboratories Inc. (UL) reported advancement toward developing safety requirements for E85 ethanol dispensers following a two-day forum at its global headquarters November 1-2.
The technical forum, co-sponsored by the U.S. Department of Energy (DOE), featured 32 national experts discussing E85 fuel-dispensing system materials and the development of safety standards for E85 dispensers. Participants included automobile and petroleum company representatives, ethanol producers, dispenser and component manufacturers, industry associations, agencies and researchers.
UL, North America’s leading safety testing and certification organization, said additional technical data is necessary from forum participants to assist in the standards development process. Forum participants agreed to provide UL with requested technical data no later than November 15.
UL’s engineers will review all data collected and make a determination whether the technical information is sufficient for UL to draft test program requirements for E85 dispensers. Once the safety requirements are finalized, UL will immediately accept E85 dispenser investigations. UL would then propose the requirements for formal adoption through its normal standards development processes.
On October 23, UL distributed a communication to Authorities Having Jurisdiction (AHJs) explaining that it had suspended authorization of E85 dispenser components and that it would be updating its requirements. The primary concern addressed in UL’s communication with the AHJ community was any potential material compatibility issues, specifically corrosive effects that E85 may have on dispenser components. To date, UL has not certified any motor fuel dispensers for use with E85.
Quality Concerns Face Biodiesel
Tom Webb, writing for the Pioneer Press, reports one-third of the fuel from America’s new biodiesel plants is failing quality tests, raising concern that Minnesota’s old headaches with soybean-based biodiesel might return this winter — but this time, on a national scale.
Last winter, Minnesota truckers grew angry over clogged fuel filters, stalled trucks and cold-weather breakdowns traced to bad batches of biodiesel. Minnesota has since fixed its biodiesel problems, but identical flaws are showing up from coast to coast, with winter quickly approaching.
Alarmed industry officials are warning biodiesel producers they must address the problems quickly, or they’ll jeopardize a young industry that has been riding a great wave of investment, optimism and growth.
Last fall, Minnesota became the first state to require that every gallon of diesel fuel sold have 2 percent biodiesel blended into it. But when quality problems quickly arose, the mandate was temporarily lifted — twice. The main culprit was too much glycerin, a substance that turns waxy in cold weather, clogging fuel filters. Minnesota’s three biodiesel plants eventually fixed the problem and state-run tests show quality has remained high since.
Study Questions Ethanol Subsidies
Tax breaks and subsidies to produce biofuels will range from US$5.5 to $7.3 billion this year alone, according to the Global Subsidies Initiative in “Biofuels — At What cost? Government Support to Ethanol & Biodiesel in the United States.” GSI is part of the International Institute for Sustainable Development and funded by the governments of the Netherlands, Sweden and New Zealand.
The largest subsidy is the 51 cents a gallon tax credit to refiners for using ethanol, but the study also includes subsidies for growing corn as well as state and federal incentives to encourage production and use of ethanol. The group argues that there are better and less expensive means to reduce the use of fossil fuels than to subsidize and mandate the use of green fuels.
NEW PROJECTS — U.S.
Alabama
Independence Renewable Energy Corp. will build a $15-million plant in Monroe County that will have the capacity to produce up to 40 million gallons of biodiesel annually from soybean oil.
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Southeast BioEnergy LLC will construct a $9-million biodiesel company capable of producing 4 million gallons of biodiesel per year.
Arizona
A company is proposing to build an ethanol plant on a 19-acre parcel in eastern Yuma County. The plant proposed by Agrinext Ethanol AZ LLC would be located near the site of an oil refinery that has also been proposed for the area.
California
Calgren Renewable Fuels, LLC, Pixley, CA, commissioned Lurgi with the construction of a bioethanol plant. The plant is to go on stream in early 2008 and generate more than 150,000 tpy of bioethanol from corn. As a by-product the plant produces distillers grain that is to be sold directly to the neighboring dairy farms.
Lurgi will build the plant in California on a lump sum turnkey basis. The contract has a value of over €73 million and is already Lurgi’s sixth order of this kind in the U.S.A. this year.
Illinois
A Kansas City company headed by two former executives of Archer Daniels Midland Co. announced that it plans to build a $220-million ethanol plan in southwestern Illinois to take advantage of increasing demand for the corn-based fuel.
The company, Alternative Energy Sources Inc., has an option for 100 acres at a business park in Greenville and said construction of the plant, capable of producing 110 million gallons annually, will begin next year. The plant is expected to begin operations in 2008.
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Construction of the proposed Alternative Energy Sources ethanol plant on the south side of Kankakee remains on target for a late 2008 opening, its chief operating officer said.
Lee Blank said the company hopes to break ground by late spring or early summer next year and the plant could be producing the alternative fuel 18 months later. The plant, anticipated to employ 45 to 55 workers, would consume some 40 million bushels of corn annually to produce an estimated 110 million gallons of ethanol yearly.
The company is still working through the permit process with the Illinois Environmental Protection Agency and hasn’t hit any major snags with that yet, he said.
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Patriot Renewable Fuels, LLC broke ground on a new 100-million gallon-per-year ethanol biorefinery outside of Annawan, IL. Once operational, the facility will consume 37 million bushels of local corn and produce more than 320,000 tons of distillers dried grains with solubles (DDGS).
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The president of Dial Energy, which is proposing a 100-million gallon ethanol plant just north of Abingdon, said the project will cost nearly $200 million to build.
Abingdon Mayor Stephen Darmer said Abingdon officials are considering either a tax increment financing district or an enterprise zone as an incentive to help bring the 45 jobs to Knox County, as well as another huge market for area grain.
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Construction of a 50-acre ethanol plant in Chenoa could begin as early as April. Representatives from the New York-based firm U.S. Ethanol met the City Council in a special meeting to announce the plant, which could employ up to 65 full-time employees.
U.S. Ethanol has hired AGAR Industries of Merrill, WI to design and build the facility, which will be built in the newly-formed 500-acre industrial park on the city’s south side.
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The new ethanol plant on Rockford’s west side continues to cause controversy. The developer, Wight Partners International, is now asking for about 55 additional acres of land south of the plant. Wight would use the land to install unit trains to transport ethanol and other products around the plant.
Residents are raising the red flag on the plan. Neighbors waved red pieces of paper in disapproval and voiced their concerns to the county zoning board of appeals. They fear the trains will add to noise, pollution and danger and further decrease property values.
Indiana
Sioux Falls-based Broin Cos. announced it will build its 30th ethanol plant in Bluffton, IN. The $115-million plant will be called Wells County Ethanol and is projected to open in spring 2008. It will produce 60 million gallons of the fuel per year, using 21 million bushels of corn. This is near another plant already in the works.
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A group of concerned Morgan County residents is looking for investors in a project to develop ethanol production in south central Indiana. The group, led by Morgan County resident John Webster, is incorporated as Heartland Renewable Fuels LLC. Webster is the spokesman for the group, which includes a three-member board of directors. Each board member represents a prominent farming family from the county, Webster said.
Heartland Renewable Fuels already has a customer as a part of its plan to produce close to 45 million gallons of ethanol per year after it builds it plant.
The estimate of how much fuel a plant could produce in south central Indiana was determined in conjunction with Morgan County’s Purdue Extension office. Using grain supply estimates from Morgan and surrounding counties, Webster and Chris Parker of the extension determined that a plant in the area could produce ethanol on par with several other plants in the state.
Webster said his company has found a customer for distiller grains (DDG), a by-product of ethanol production that is fed to livestock. Details of the deal are not yet available, but Webster said a Japanese firm would use the grain in China, Korea and Malaysia.
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The Steuben County commissioners gave unanimous approval to a zoning change that would allow an ethanol plant to be built on property near Ashley, over a negative recommendation of the county’s plan commission. Although the vote effectively changed the zoning of the land from agriculture to general industry, the three commissioners’ votes came with a stipulation that any future use of the property other than an ethanol plant must be approved by the commissioners.
Hoosier Ethanol Energy has expressed interest in buying land adjacent to Klink Trucking, northeast of Interstate 69 and Steuben County Road 800 South. About 50 acres were rezoned from agriculture to general industry. About 40 acres on the property already are zoned industrial.
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Indianapolis-based Midwest Bio Management has proposed constructing a local ethanol plant. The company has submitted a letter of intent with the local economic development group to construct an approximately $185-million plant in Casey that would produce an estimated 100 million gallons of corn-based ethanol per year. The plant would employ 40 to 50 full-time workers.
Iowa
Red Rock Renewables LLC announced that it plans to build a 55-million gallon-a-year ethanol plant in the Pleasantville area. Charles Watson of Oskaloosa, one of the organizers of the effort, said the company has options to buy 250 acres in Pleasantville’s industrial park. Watson said the feasibility study to be finished next year will consider, among other things, the area’s available corn supply.
Red Rock Renewables would need to buy about 20 million bushels of corn a year to produce 55 million gallons of ethanol, Watson said.
Iowa State University economist Robert Wisner said Polk, Warren, Marion and Jasper counties produced a total of 70.4 million bushels of corn in 2005. The 20 million bushels of corn projected to be used each year by the Red Rock Renewables ethanol plant represents about 28 percent of the four-county corn crop, Wisner said.
The plant would cost more than $100 million to build, and it would provide 35 to 40 jobs, Watson said.
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Two companies are vying to build an ethanol plant in southeast Des Moines. One, Lincolnway Energy of Nevada, IA, would burn coal, as it does in its Story County plant. The other, Vision Fuels of Urbandale, would burn natural gas, used by most Iowa ethanol facilities.
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Broin Companies is expected to announce in the coming months the site of its first cellulosic ethanol plant, and although company officials declined to confirm it, conversion of the company’s Voyager Ethanol, LLC near Emmetsburg will be the location for the new 125-million gallon ethanol plant.
Mike Lockrem, a spokesman for Broin Companies, said the target date to start up the cellulosic plant is slated for 2009, utilizing the Broin technology of dry mill fractionation. “The project will cost $200 million and we will produce 125 million gallons of ethanol a year from corn stover.”
Broin recently announced along with DuPont a partnership to bring cellulosic ethanol to the forefront of the biofuels industry by converting one of its existing Iowa ethanol plants to make cellulosic ethanol.
Kansas
A site east of Wright has been chosen as a potential site for a new ethanol plant. Boot Hills Biofuels, of Liberal, told the Ford County Commission that it wants to build an ethanol plant capable of generating at least 110 million gallons of ethanol. Boot Hill Biofuels is a partner with the Seward County-based group Conestoga Energy Partners, which said earlier this year it wanted to build an ethanol plant somewhere in Ford County.
If the plans are approved, construction of the $185-million plant would start sometime between April and July 2007, and the plant should be operating by fall of 2008, said Boot Hill Biofuels President Gary Harshberger.
He said the plant would employ between 40 and 45 people with an estimated payroll of $2 million. The site near Wright would be the best location for an ethanol plant because it is close to a grain source, water and transportation, he said.
Louisiana
The expedited permit process for a proposed ethanol plant to be built by Tiger State Ethanol in St. James Parish was carried out with unusual speed, said consultant Wilma Subra who provides technical assistance to the Louisiana Environmental Action Network.
The proposed ethanol plant in Convent would produce 110 million gallons per year of fuel-grade ethanol, Subra said.
Maryland
Officials in Kent County continue to ponder a proposal to build a 40-million gallon a-year ethanol plant near Massey. The proposal, advanced by David Leager on behalf of an investment group, seeks county clearance for a facility for “grain processing, distilling and biofuel production.” The proposal is working its way through various governmental bodies. The cost of construction is between $60 million and $80 million.
As envisioned, the plant would be located near the Bramble industrial site, be powered primarily by natural gas, would offer employment of about 35 jobs and add about $400,000 to $500,000 to the county tax coffers. Proponents said that the plant could generate between 5 cents and 10 cents per bushel for local corn farmers.
Jack Steinmetz, the county’s director of economic development, said his concerns about the project included the plant’s demand for water and where it was going to come from its treatment of waste water, pollution and odor control, and the impact sales to the ethanol plant would have on existing corn markets in the area.
Michigan
A group of local laborers rallying at the construction site of the Marysville ethanol plant said they will continue their efforts indefinitely or until local laborers are hired.
Since September 5, up to 300 laborers have organized about a dozen rallies in front of the plant, claiming Fagen Inc. of Minnesota, the company in charge of the project, has been using out-of-state workers.
Marysville Ethanol, LLC is constructing a $95-million fuel ethanol plant. The plant will produce over 50 million gallons of fuel ethanol a year and purchase approximately $40 million worth of corn each year from predominately local growers.
Missouri
An abundant supply of water is available from a test well just completed on the site of a proposed $165-million ethanol plant at U.S. 60 and Porter’s Crossing Road east of Rogersville.
Opponents are concerned that the plant’s projected water usage will negatively affect the underground water supply
Nebraska
After a raucous public hearting lasting more than two hours, PRIME Biosolutions CEO David Hallberg said the company would not build its $85-million “closed-loop” cattle feedlot-methane-ethanol plant in rural Homer, NE.
PRIME’s facility would involve up to 30,000 head of cattle on a slatted floor in a covered feedlot. The manure would be washed into closed tanks several times a day, then used to produce methane gas in anaerobic digesters. The methane would be used to power a small ethanol plant and the cattle would be fed the wet distillers grain by-product ethanol manufacturing.
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Representatives from central Bio-Energy, LLC, met with the Seward County Commissioners during the Board’s October 31 meeting.
Senior Vice President of Operations Dennis Schulz, Senior Vice President of Development Danny Petersen and Tim White outlined their company’s plans to build a $160-million ethanol plant east of Tamora capable of producing 100 million gallons of ethanol per year.
The plant is expected to provide approximately 65 jobs with salaries ranging from $40,000 to $50,000 per year and a benefits package worth “a minimum of one-fourth of the salary.” Schulz also estimated that building the plant would add around 200 construction jobs.
Most of the 36 to 40 million bushels of corn needed for ethanol production will come from local producers, the company representatives said.
The plant’s by-products will benefit area producers as well as the company anticipates selling one-third to one-half of the corn mash locally as animal feed, with the remainder to be shipped elsewhere.
Representatives said the plant’s water needs would average 350 million gallons per year, approximately 60 percent of which would be returned to the local watershed. They stressed that the plant plans to use the most water-efficient technology on the market.
Oklahoma
Nova Biosource Fuels Inc. will build a $50-million biodiesel refinery at the Port of Muskogee Industrial Park, the Houston-based alternative energy company said.
The 60-milllion gallon-per-year biodiesel plant could create up to 25 jobs and generate $100,000 in annual revenue for the port, the company said.
“We chose the Port of Muskogee because its easy access to the Arkansas and Mississippi Rivers allows us to transport biodiesel efficiently and economically,” said Kenneth T. Hern, Nova’s chairman and chief executive officer.
Pennsylvania
Plans are in the works to convert Sony’s vacant video glass plant in Westmoreland County into an ethanol production facility, and they’re getting closer to becoming a reality. Commonwealth Renewable Energy will be investing well over $100 million to produce ethanol at the plant.
If everything works out, about 100 jobs would be created.
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Developers of a planned $300-million ethanol plant in Schuykill County believe the project will create jobs and boost the economy. But neighbors worry that it will pull water from wells, create dangerous traffic problems and emit contaminants into the air. The plant, to be built in Porter Township, will eventually produce, store and distribute ethanol fuel.
David Fink, Green Renewable’s vice president of operations, said water for the plant will come from the Lincoln, Westwood and Tracy mine pools in Porter Township and surrounding areas.
The company is also buying the adjacent Westwood energy plant, Green Renewable treasurer Jack McNamee said. “We’ll be taking the steam from the plant,” he said. “That’s where we’ll be getting our energy.”
The plant is expected to turn 40 million bushels of corn into 100 million gallons of ethanol each year.
Plans for the ethanol plant, which will have a 50-acre footprint, are moving ahead with help from $1.61-million state grant to build rail lines.
The railroad also will get $600,000 to support the project by putting ties under the Tremont branch to help handle the new loads.
Texas
Panda Ethanol announced it will build an ethanol plant near Muleshoe in Bailey County. The company plans to turn 40 million bushels of corn into 100 million gallons of ethanol every year. This is just one of three plants currently in the works for the West Texas Area.
In terms of the Muleshoe plant, two area resources will be used, corn and cow manure. Over a billion pounds of manure are expected to be used in powering the plant, making it the largest biomass-fueled ethanol plant in the United States.