The Big Biofuels Blog

Ethanol puts enough pressure on Minnesota's water reserves for the state to ask the Environmental Quality Board to look at the demands that planned ethanol plants could put on water in the state, according to the Associated Press.

Hattip to the Worthington Daily Globe

How should you spend your slice of Bush's Federal Stimulus package? On ethanol of course,that's Burl's top tip over on Cleanfuels. I'd be tempted to do the same thing only with a slightly different emphasis, but I don't live in the states.

Indonesia might use up to 1.5m kilolitres of biofuel/year domestically if it takes on board the recommendations of the National Biofuel Developement Committee, according to the Jakarta post.
Hattip to Green Car Congress

Kevin Downing on the MaRS blog thinks that it is going to get harder to fund new ethanol plants. I think that he's right, not only because the regulatory framework that biofuels plants will operate in is likely to change over the coming months and years, but also I think the economics of biofuel production will also slow the rate at which new plants are built. Not only is credit getting tighter and more expensive, but also the cost of corn has risen dramatically over the past 12 months. According to the FAO the annual average price of corn (US No2, US Gulf Friday) has risen 85% from $88.38/ton in 2000 to $164.26 in 2007. In the same period, the annual average price of wheat has grown 137% from $98.75/ton to $234.76/tonne.
The rate of annual price change is accelerating. In 2007, according to these figures the price of a ton of corn in the US rose by 34% and the price of a tonne of wheat rose by 48 % compared to rises of around 24% for corn in 2006 and 34% for wheat in 2006.
I've no idea what's happened to the price of dried distillers grains, the usual second cash stream from plants, but with the volume of ethanol increasing then I'm going to guess that the price of distillers grains has fallen. Putting the squeeze on anyone trying to build a plant from scratch. And that ignores the price of fuel (also up over the past year) and the cost of water, which could also rise. Biofuels policy should reflect what's best for the environment, not what's best for special interest groups like farmers, bankers,bloggers or VC! ;=).

The price of dried distillers grains could have a significant impact on the economics of biofuels production, but its one of those commodities which are probably traded pretty locally to plants. I've found some guideline prices for dried distillers grains in the mid West.
The distillers grains are spent grains from fermentation.

Jim Lovell of Apollo 13 spoke at the recent National Biodiesel Board meeting in Orlando, covered by my colleague Stephen Burns for ICIS and caught for posterity on his camera phone.

The European Biodiesel board is worried enough about the US exports of biodiesl to the Europe to start drafting a complaint to the World Trade Organisation about it, and warned the US National Biodisel Board meeting in Orlando, Florida that US biodiesel exports to the EU threaten global biodiesel industry.

Hattip to Stephen Burns, a colleague on ICIS news.

Then you might like to head along to hear Dr Michael Webber, assistant professor of mechanical engineering at the University of Texas talking about the chances of ethanol taking off.

There's a long and thorough going piece over on Farm Futures about the Biofuel Smear Campaign. I'm not sure that I agree with it entirely. It is based on the US experience, and that as far as it goes is OK. In the US the price of food is only partly determined by the price of food based ingredients, if food is processed then energy is used to do the processing. So the rising price of corn (up 67% in two years) is less important in the price paid by the consumer of a box of breakfast cereal fortified with sugar, salt and 97 vitamins, than it is to people who mill their own grains to make their food directly.
That said. I like the parts about US Farm policy and the sign off paragraph, which I could have written myself.

Biofuels are not a perfect answer to the problem. They are only one piece of the puzzle. But to dismiss their potential impact on foreign oil dependence is short-sighted at best. There is no more cheap petroleum in the world. American consumers need to wake up and realize the goal to move beyond oil is attainable, but not without a change in attitude and yes, some sacrifice.

Non-impact man has two thoughts about biofuels, both of which are pretty fair. He lives in New York,so I suggested that he might like to start investigating pryrolising waste... that should keep him quiet for a bit.

I've been twittering with a chap called Biotechnologist for a couple of months now and I've just had a look at his website: biotechnologist2020. It looks like a starting point if we you're looking for a biotechnology job in India.

You can follow my tweets by making Biofuelsimon a friend at Twitter.com

Its a really bad day for biofuels, according to the Reality Based Community blog.it looks like they've put two and two together. I'm not sure if they've come up with either four or twenty two...

Dear All,

I'm on Holiday or working out of town until 26 February. I'll be back, shoulder to the wheel, nose to the grindstone, foot in the door and shoulders to the yolk on 26th... well that's the plan.

Many things have happened since I went on holiday... the most momentous is Richard Branson fuelling an aero engine plane with a combination of coconut and Babassu nut fuel and using it on a747 with three conventionally fueled engines to fly from London to Amsterdam. Useful because it shows that you can make aviation fuel out of coconut and a nut which grows in the rain forest.
Bad because, as far as I can see babassu oil is an edible oil...

Food prices are rising and this is putting increasing pressure on food aid, according to the United Nations, and reported in yesterday's Guardian. That report, which has a list of food hotspots, says:

"We will have a problem in coming months," said Josette Sheeran, the head of the UN's World Food Programme (WFP). "We will have a significant gap if commodity prices remain this high, and we will need an extra half billion dollars just to meet existing assessed needs."

With voluntary contributions from the world's wealthy nations, the WFP feeds 73 million people in 78 countries, less than a 10th of the total number of the world's undernourished. Its agreed budget for 2008 was $2.9bn (£1.5bn). But with annual food price increases around the world of up to 40% and dramatic hikes in fuel costs, that budget is no longer enough even to maintain current food deliveries.

In a BBC TV news report yesterday the UN stressed that there is enough food to feed the world but increased wealth in developing countries is helping to increase demand for crops to feed food animals and also the use of grain for biofuels is helping to drive costs up. At least in the short term.

Green Car Congress tells us that 19 state governors have signed up to an agreement to speed the adoption of biofuels in their sates. Which sounds fine as long as they have got plans to manage the increased water demand that this might produce... I wonder.

Some of the Department of Energy's thinking on the use of biofuels in the US from our Houston Bureau.

D1 Oils' chairman (Ron) Lord Oxburgh has responded to the Guardian Newspaper's columnist George Monbiot's piece on 12 February about biofuels today , you can see the full text of the exchange on in the comments on this post D1 oils says Jatropha is different in Bali.

Monbiot is a journalist who makes part of his living out of writing things that people will want to read (like me). Oxburgh is a business leader trying to develop a profitable business. One has to write for his readership, the other has

There was an interesting speech, the other day by Joseph Glauber, the US Department of Agriculture's cheif economist. The key passage for us is:

The U.S. corn market will continue to be dominated by ethanol production in the coming year. Ethanol corn use for 2008/09 is projected to increase 28 percent and account for 31 percent of total corn use as ethanol production capacity continues the unprecedented expansion begun in 2006.
Based on monthly production data from the Energy Information Administration, ethanol production capacity exceeds 7.3 billion gallons annually (figure 6). With plants under construction and expansion coming on line over the next 18-24 months total capacity will reach 13.4 billion gallons. The Energy Independence and Security Act of 2007 raises mandated levels of renewable fuel use to 9 billion gallons for 2008 and 10.5 billion gallons for 2009. This is sharply higher than the previous mandated level of 7.5 billion gallons in 2012. The current pace of plant construction and expansion indicates that annual ethanol production capacity will surpass 9 billion gallons before this summer and exceed 12 billion gallons early in the 2008/09 marketing year (figure 7). Corn prices, as currently forecast, support profitability for the sector, but plant utilization rates will be increasingly sensitive to prices for ethanol and co-products and heavily influenced by prices in the energy sector.
The relative tightness of the corn balance sheet in 2008/09, combined with increased risk premiums and growing investment in commodities, is expected to push farm prices higher again in 2008/09. The average price received by farmers is projected at a record $4.60 per bushel, up $0.60 from the mid-point of the 2007/08 forecast.

It don't take a slide rule to work out that if the US is really going to take 57% of the corn crop by this time next year. It don't take a degree in economics to forecast that level of demand will have a knock on effect across the whole economy in the US.

If you haven't factored in a big increase in the price of corn, and you're building a plant right now, you might want to sell it quick.