Biofuels

Jim Lane Mud/salt formations on the Badwater, Death Valley plain. Image by Daniel Mayer. What makes a winner in advanced biofuels? Five companies – Abengoa (ABGOY), INEOS Bio, Mascoma, Gevo (GEVO), and American Process reflect on the essential ingredients for success. “We are industrial technology businesses, making a commodity, we have to control costs everywhere and learn, learn, learn.” – American Process CEO Theodora Retsina You could call it VODville, VOD for valley of death that is – a stretch of hard desert that...

Jim Lane Lies, Truth, and Disbelief via BigStock Photo Are you missing out on great investment returns – is the Dow really headed for 20,000? Is the advanced biofuels rally for real? Why are investors sitting on the sidelines in the Valley of Disbelief? This year in the United States, despite awesome returns in the stock market and miserable bond yields, the Investment Company Institute estimates that $85.4 billion in new investment has poured into bonds by contrast, only $73.2 billion into stocks. Seth Masters, CIO of...

by Debra Fiakas CFA Last week Cosan Limited (CZZ:  NYSE) revealed a decision to delay the spin-off and recapitalization of its natural gas distribution network, COMGAS.  Management cited unfavorable capital market decisions.  Cosan has a mix of businesses, of which we have been most interested in its Raisen Energia sugar cane agriculture and ethanol production.  Raisen is a joint venture with Royal Dutch Shell that was initiated in 2011.  The operation squeezes over four million tons of sugar from cane grown in its fields and two billion liters of ethanol each year. The ethanol is sold through Shell’s...

Bill Paul In the wake of the massive Gulf of Mexico oil spill, it’s clear the U.S. needs to end its crude-oil addiction as much to protect its economy as the environment. To move the future forward, America needs one company in particular to come through on behalf of all Americans. In a cruel twist of fate, that company is ExxonMobil (XOM), which is working on arguably the most important energy-research project in the world today. Namely, a project to replace crude with genetically-modified algae that can be cost-effectively refined using existing refinery equipment. A year...

In Washington, the Environmental Protection Agency released its final Renewable Fuel Standard renewable volume obligations for 2018. The agency finalized a total renewable fuel volume of 19.29 billion gallons , of which 4.29 BG is advanced biofuel, including 288 million gallons of cellulosic biofuel. As the Renewable Fuels Association explained: “That leaves a 15 BG requirement for conventional renewable fuels like corn ethanol, consistent with the levels envisioned by Congress in the 2007 Energy Independence and Security Act. The 2018 total RFS volume finalized today represents a minor increase (10  million gallons) over the 2017 standards, and a modest increase...

by Debra Fiakas CFA The last post “From Fuel to Fudge” discussed how the old Solazyme developer of algal-based renewable fuel has been transformed into a new company called TerraVia, (TVIA) which is pursing algal-based food and personal care products.  Solazyme is not the only renewable fuel company to make an about face.  Granted FutureFuel Corporation (FF:  NYSE) has not changed its name or stock symbol like Solazyme.  However, its ability to produce specialty chemicals has given FutureFuel an alternative to biofuels and its early plans to build a plant that could eventually produce 160 million gallons of...

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...

Jim Lane Is it just coincidence that KiOR’s stock is down sharply as Aemetis has been on a tear?  Just a lucky break for ethanol based on attractive “crush spreads”? Or something important about the strategy and how it has played out? On a clear morning last October at ABLCNext in San Francisco, two companies joined us on stage to discuss their technologies, and their pathway to commercialization. They had a lot in common. Both companies produce advanced biofuels for the American domestic market. Both utilize advanced technologies deployed at commercial-scale in the past 24 months. Both...

by Debra Fiakas CFA Last week the management of  Darling Ingredients (DAR:  NYSE) staged a webinar on its opportunities in biofuels.  Darling produces biodiesel in Kentucky and Canada and is in a renewable diesel joint venture with Valero Energy (VLO:  NYSE) in Louisiana.  As a recycler of wastes and excess from the food production processes, the production of energy with organic feedstock is a logical extension of Darling’s collection and aggregation infrastructure. The event did not do much for Darling’s share price, but the presentation triggered a few questions about RINs  -  shorthand for...

Jim Lane Following a stinging WSJ editorial board critique on cellulosic biofuels, we leave a fact-filled voice mail for News Corp to hack. Meanwhile, Mascoma lands $80M and heads for scale. The Wall Street Journal editorial page writers recently published a stinging indictment of cellulosic biofuels. Bottom line: the Journal is offering the shortfall in the cellulosic biofuels pool (around 2% of the overall US Renewable Fuel Standard this year), as evidence that government mandates and subsidies do not work, and that the US government has shoveled a lot of money into advanced biofuels for nothing....

Green Plains Renewable Energy Inc. (GPRE) announced that its project in Shenandoah, Iowa is progressing as planned. The Company received its air permit from the Iowa Department of Natural Resources late last week. Fagen Inc. has set up their on-site construction offices and anticipates construction of the plant to begin early next week. The Company anticipates that the Shenandoah plant will begin producing ethanol in the Spring of 2007.

Jim Lane “Electric power is cheap”, and “cellulosic biofuel costs less than $1.00 per gallon”. The Tesla Model S, from the unveiling on 26-Mar-2009. (Photo credit: Wikimedia Commons) So why isn’t everyone buying a Chevy Volt? And why can you get lower interest rates on your Visa Card than next-gen biofuel developers face? It’s the old capex-opex (Capital Expense vs. Operating Expense) fallacy. Earlier this week, a new study from researchers at UC Santa Barbara determined photovoltaics to be much more efficient than biomass at turning sunlight into energy to...

Jim Lane Should biofuels have its own reserve accounting system and accompanying balance sheet booster, just as the oil & gas industry has? Ceres CEO Richard Hamilton says “yes”, and explains why, and how. At the Advanced Biofuels Markets conference earlier this month in San Francisco. Richard Hamilton, CEO of Ceres, advanced the remarkable proposition that biofuels companies – on the “level playing field” theory advanced by opponents of government mandates and subsidies, should   have the right to book their reserves of crude renewable oil production, in a parallel to the reserve accounting system which forms the bulk...

In the most recent two installments of Energy Tech Stocks' interview with me cover my views on transmission stocks, and biofuel stocks.  Readers of AltEnergyStocks know that I am a big fan of electricity transmission, a theme I keep coming back to.  You also know that I have a very ambivalent relationship with both ethanol and biodiesel.  So I liked Bill's transmission article, but I just wasn't able to convey to him the subtleties of how I feel about biofuels.  But he got one thing right: the owners of biofuel feedstock are likely going to be the biggest winners....

Ernst & Young recently came out with its quarterly rankings of the investment attractiveness of the main national biofuel markets (PDF file). The report contains three indices: the All Biofuels Index, the Ethanol Index and the Biodiesel Index. No big surprise with most of the results. The report also outlines some of main deals to have occured in the global biofuels space in Q2, and notes two worrying developments. First, the German biodiesel market appears less than healthy at the moment, with many refiners operating at below...

While New York's Mayor Michael Bloomberg was busy unveiling a package of measures aimed at making NYC green (including reducing CO2 emissions by 30% by 2030), the state's Governor, Eliot Spitzer, was making his reservations about corn ethanol known, as reported in the Globe & Mail. This adds yet one more (powerful) voice to the chorus of those skeptical about the viability of the corn ethanol industry. The article also notes that Dr. Dan Kammen, an influential Berkeley academic and advisor on climate change to California Governor Arnold Schwarzenegger, is also among those who doubt that corn...