Wednesday Edition

05.07.08

GLOBAL

High oil prices and an array of government incentives are leading to soaring rates of investment in renewable energy, according to the United Nations' annual "Global Trends in Sustainable Energy Investment" report. The UN report calculates global investment capital flows into renewable energy companies reached $100 billion for the first time in history last year. More than $30 billion of the total was the result of mergers and acquisitions led by investment banks such as JP Morgan and Goldman Sachs.

Oil could rise to $200 within the next two years as part of a "super-spike" driven by poor growth in oil supplies, investment bank Goldman Sachs said in a research note. "We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," Goldman said. "The possibility of $150-$200 per barrel seems increasingly likely over the next 6 to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," Goldman said.

NORTH AMERICA

Biodiesel producer Nova Biosource Fuels announced that its 20 million gallon per year biodiesel plant in Seneca, IL produced more than 1 million gallons of ASTM standard biodiesel in the first 25 days of production.

Used cooking oil from restaurants is reportedly being stolen. Last month, a legitimate cooking oil collector reported to authorities that a tanker truck was illegally pumping oil from a Burger King, among four thefts he reported in one month in which thieves broke bin locks to get the oil. Cooking oil refining company Griffin Industries has employed detectives to investigate cooking oil thefts in Kentucky, Texas, Florida, Missouri, and Arkansas.

The governors of Texas and Connecticut, along with 26 senators, including presidential candidate John McCain, are asking the Environmental Protection Agency to cut this year's RFS mandate for 9 billion gallons of ethanol in half to ease food costs. Robert Meyers, an EPA deputy assistant administrator, told a US House hearing Tuesday the agency will respond to the request as quickly as possible, but doubts anything will be forthcoming for about three months.

Plans by a Toronto company to launch a $245 million ethanol production plant in Niagara Falls, NY have gained support from the New York Power Authority. Officials say the Canadian company plans to purchase a 47th Street parcel in Niagara Falls, NY from Praxair Inc. for construction of the new ethanol facility, as well as offices, a laboratory, and a warehouse. Production capacity would be 108 million gallons of ethanol per year from 37 million bushels of corn.

Global Clean Energy Holdings, through its subsidiary GCE Mexico I, has acquired approximately 5,000 acres of land in Yucatan, Mexico to be used for cultivation of jatropha. When fully planted, the company said, the land will support over 4 million Jatropha trees to produce oil and biomass for more than 30 years.

SOUTH AMERICA

Three Brazilian states in the country's northeast signed a letter of agreement last week to begin studying a massive ethanol pipeline, the Tocantins government said. The agreement was signed between the Tocantins governor and the vice governors of Piaui and Maranhao in New York City at a Wall Street forum on sustainable development. The states agreed to study ways to build and finance the pipeline that would run through the three states up to the Itaqui Port in Maranhao. The port would enable the three states to export ethanol to the Caribbean or directly to the US.

EUROPE

Biofuels are being used as a “scapegoat” to explain a sudden rise in food costs, but bigger influences on price are increased demand from emerging countries, adverse weather that has reduced wheat output globally, and increased speculative interest, the EU Farm Commissioner said yesterday. Commission analysis shows that the EU’s 10% biofuel target for 2020 will not place an excessive strain on land resources or food and feed markets, as yield increases will generate an additional 34 million mt of cereals by 2020. Second-generation biofuel will account for 30% of demand by then, according to the Commission.

Neste Oil's biodiesel plant in Porvoo, Finland failed to reach the targeted production in the first quarter of 2008 due to certain modifications at the facility.

German engineering companies Süd-Chemie AG and Linde Group announced an agreement to develop and market plants for the production of second-generation biofuels. Dr. Günter von Au, Managing Board Chairman of Süd-Chemie AG, said, “The aim is to successfully develop to market maturity economic plants for climate-friendly biofuels that offer a high level of energy efficiency."

The Daily Mail reports that not all UK service station tanks were properly cleaned before start of the RTFO and bacteria is getting into biodiesel and gelling, causing clogged filters, increased engine wear, and destroyed pipes and seals of cars. Garages are now being warned they must flush out their tanks regularly to prevent problems after a number of motorists complained about engine problems.

ASIA / PACIFIC

Dow Jones reports that global palm oil prices are likely to stay at an average of around $1,000/mt in 2008, up from $812/mt last year, according to Malaysia's Minister for Plantation Industries and Commodities. He foresees greater demand for palm oil from India after its recent import tariffs cut. Malaysia's government is due to announce a new biodiesel blending program in two to three months, he said.

Malaysia and Indonesia have agreed to cooperate in development of the jatropha industry, the Plantation Industries and Commodities Ministry said today. The cooperation will cover research and development of agronomic practices, breeding of quality seeds, and processing technologies.

Vietnamese scientists say they have extracted biodiesel from the seeds of wild sesame trees. Dr. Thai Xuan Du from Tropical Biology Institute's Cell Technology Department said oil can be extracted from wild sesame trees using local technology and equipment, while the waste from extraction process can be used to produce organic fertilizer and pesticides. The seeds of wild sesame contain about 31% to 37% oil and the trees blossoms all year round, especially in the rainy season.

MIDDLE EAST

Israel's second-largest energy company Paz Oil is considering building biofuel, petrochemical, and desalination plants on the unused land at a petroleum refinery at the port of Ashdod, the Jerusalem Post reported.

AUSTRALIA

Jatoil and USA-based Imperium Renewables have agreed to share strategic information and resources in the production and commercialization of sustainable biofuel based on jatropha, according to the Australian Stock Exchange.

Mission Biofuels says current high feedstock prices make it unviable to consistently produce biodiesel for the foreseeable future. The company is currently using crude palm oil, but its ultimate goal is to use Jatropha, which it is cultivating in India. The company expects to produce and sell about 4,000 mt of biodiesel this month and is increasing production of glycerin at its biodiesel plant in Malaysia in between biodiesel production runs.

Australian Renewable Fuels is considering selling land at its Picton plant near Bunbury and its Adelaide operation in order to raise capital to ensure its continued survival. The company, which converts tallow into biodiesel, has been hit by soaring tallow prices.

AFRICA

Swedish company SEKAB is working with Tanzania to increase local production of electric power and ethanol. With its tropical climate and unused areas with good access to water, Tanzania has excellent conditions for growing biomass for electricity and biofuels. SEKAB, which has acquired a large piece of land in Bagamoyo to plant sugarcane, says it will develop over 400,000 ha for biofuels production.