IFB Ethanol Blog

Ethanol Plant Closures

Ethanol plant closures continue, along with reductions in production. Iowa State’s Roger McEowen reports 37 of the 193 US ethanol plants are out of business, 23 of them built since 2005. He says that represents 19% of the plants and 18% of production capacity, totaling 2.2 bil. gal. Read more.

(Thanks to Farmgate blog)

Biodiesel Industry Needs 'Stabilizing Signal'

Amid headlines about ethanol bankruptcies and restructuring, it may be easy to overlook hard times in the biodiesel industry.

National Biodiesel Board (NBB) President Joe Jobe nonetheless is optimistic biodiesel producers can weather the economic downturn through feedstock diversification and federal policies that “send a stabilizing signal” to the industry.

“The biodiesel industry hasn’t been spared by the recession,” Jobe told FarmWeek. “Diesel fuel demand is down; diesel fuel prices are way down.

 “The general state of the economy, lack of access to capital and credit -- all those factors combined are having a real crippling effect on the biodiesel market right now. And then combine that with unstable signals from Washington.”
He stressed need for long-term extension of the federal biodiesel blenders tax credit now set to expire by year’s end. The credit has helped generate 100 biodiesel “refineries” and more than 50,000 “green jobs,” Jobe said.

NBB also seeks to restructure the credit as an incentive for biodiesel producers, rather than merely blenders, to help stimulate supplies. The national renewable fuels standard (RFS) calls for 500 million gallons of U.S. renewable diesel fuels use in 2009 alone.

Ethanol and biodiesel producers share anxieties over potential U.S. Environmental Protection Agency (EPA) RFS rules.

(Source: FarmWeek)

 

Blackhawk Biofuels Update

Blackhawk Biofuels LLC has announced completion of construction upgrades that should result in new production capabilities and broader feedstock use at its Danville biodiesel plant.

The 45-million-gallon-per-year facility can now use a wider array of fats and oils such as recycled kitchen grease.

The improvements were announced roughly one week after Texas-based Nova Biosource Fuels, which owns a 60-million-gallon-per-year biodiesel operation in Seneca, IL, filed for Chapter 11 bankruptcy protection.  The company reportedly hopes to continue operations at least in Illinois and Iowa.

(Source: FarmWeek)

Biofuels and Water Use

The production of bioethanol may use up to three times as much water as previously thought, a new study finds, becoming the latest work that could burst the biofuel bubble.

A gallon of ethanol may require up to more than 2,100 gallons of water from farm to fuel pump, depending on the regional irrigation practice in growing corn, according to the study detailed in the April 15 issue of journal Environmental Science & Technology.

But the water usage isn't quite so high everywhere: A dozen states in the Corn Belt consume less than 100 gallons of water per gallon of ethanol, making them better suited for ethanol production, the study found.

Aventine Files Chapter 11 Bankruptcy

Aventine Renewable Energy has filed for Chapter 11 bankruptcy protection, after suffering from declining liquidity and margins.
 
The Pekin-based ethanol producer and six affiliates filed for protection from creditors on Tuesday with the U.S. bankruptcy court in Wilmington, Delaware. It said it had $799.5 million of assets and $490.7 million of debts at year-end.
 
 

Higher Ethanol Blend May Endanger Power Tool Users

Picture a chainsaw calmly idling. But then its blade suddenly starts spinning on its own, as if someone had goosed the throttle.

The power equipment industry warns that such a scenario could happen if the federal government agrees to increase the percentage of ethanol mixed into gasoline. Upping the ethanol content would add more oxygen to the fuel, causing the engine to idle at a higher speed and literally fooling the chainsaw into acting as though its clutch were engaged.

"For us, it's principally a safety issue," said Kris Kiser, executive vice president of the Outdoor Power Equipment Institute. "We make bladed and clutch equipment that is inherently dangerous."

On Wednesday a coalition backed by the power equipment, petroleum, boating and automobile industries voiced concerns to the Senate Clean Air and Nuclear Safety subcommittee that a higher ethanol mix could destroy engines, in addition to voiding warranties on vehicles designed for a 10 percent ethanol blend.

Downturn for Cellulosic Ethanol

The next generation of biofuels made from plant cellulose is suffering from the economic downturn the same as the ethanol industry. Cellulosic ethanol is made from such things as crop residue and wood chips and holds promise to help reduce the nation’s use of fossil fuels.

Although refiners must, by law, start using at least 100 million gallons of cellulosic ethanol next year, industry officials say they won’t be able to meet that target or the targets that have been set for the following years.

Investors and lenders for commercialization of cellulosic ethanol are difficult to find and many firms are struggling to stay in business. "Right now at this juncture the biggest barrier we’re facing is financing,” said Gerson Santos-Leon, an executive vice president at Abengoa Bioenergy. “Private lenders and public lenders are not interested. They don’t even want to talk

NYSE Delisting Aventine

The New York Stock Exchange said Monday it will suspend trading of ethanol producer Aventine Renewable Energy Holdings Inc. before the market opens on March 30.

Aventine shares fell 3 cents, or 15 percent, to 17 cents in Tuesday morning trading.

The NYSE said the Pekin, Ill.-based company's market cap fell below its required $15 million level for 30 consecutive days. The exchange recently relaxed the rule from $25 million because of market volatility and decline.

Aventine last week said it may need to seek Chapter 11 bankruptcy protection if it cannot raise sufficient cash in the very near-term.

Valero Buys 7 VeraSun Ethanol Plants

    NEW YORK, March 18 (Reuters) - Oil refiner Valero Energy
<VLO.N> beat out Archer Daniels Midland <ADM.N> in buying bankrupt
VeraSun Energy Corp's <VSUNQ.OB> ethanol plants because ADM was
only interested in buying the entire company, a lawyer for VeraSun
said on Wednesday.
    VeraSun announced on Tuesday that Valero, the largest U.S. oil
refiner, had won an auction to buy seven of its ethanol plants
while three VeraSun creditors would buy the rest of its plants for
a total of about $1.05 billion, topping ADM's bid of $700
million.
    U.S. Bankruptcy Court Judge Brendan Shannon told a hearing in
Wilmington, Delaware on Wednesday that he would approve the sale,
saying VeraSun had held "a thorough and complete auction."
    Valero won the auction with a bid of $477 million, but will
pay about $537 million in total to cover working capital and other
costs. It expects to close the deal in April.

Ethanol Pipeline Announced

In other news, Magellan, a storage and pipeline company, and Poet, a large ethanol producer, announced yesterday a study to build a dedicated 1700 mile pipeline for ethanol only from the Midwest to northeastern US.