Today in Biofuels: TIME “scam” biofuels cover story draws fire, kudos; India proposes 20 percent renewable fuel mandate; gas prices 45 cents lower due to ethanol
Submitted by Biofuels Digest Blog
Top Story:
An article on biofuels in Time Magazine titled “The Clean Energy Scam” has drawn strong reaction from around the globe. In the article, author Michael Grunwald, says “Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous. Even cellulosic ethanol made from switchgrass, which has been promoted by eco-activists and eco-investors as well as by President Bush as the fuel of the future, looks less green than oil-derived gasoline…The grain it takes to fill an SUV tank with ethanol could feed a person for a year. Harvests are being plucked to fuel our cars instead of ourselves. The U.N.’s World Food Program says it needs $500 million in additional funding and supplies, calling the rising costs for food nothing less than a global emergency. Soaring corn prices have sparked tortilla riots in Mexico City, and skyrocketing flour prices have destabilized Pakistan, which wasn’t exactly tranquil when flour was affordable.”
Reaction:From Slate: “The U.N. World Food Program’s executive director told the Los Angeles Times that “a perfect storm” is hitting the world’s hungry, as demand for aid surges while food prices skyrocket.”
From Energy Tribune: “Ethanol is a scam. We said exactly that on the cover of Energy Tribune two years ago. It’s about time that magazines like Time started to take notice. Now if we can just get Congress to listen.”
From the Marshall Independent: “The current issue of Time magazine puts biofuels squarely in its sights…It doesn’t wholly succeed, but the six-page report in a major newsweekly will make it harder for supporters of biofuels to advance their industry and their case.”
From the Ethanol Promotion and Information Council: “Though Grunwald draws attention to the vitally important need for evaluation of global land-use changes, the environmental finger pointing at corn-based ethanol by his sources has come to the point of ridiculous.”
From SFGate.com: “Michael Grunwald, author of the cover story, “The Clean Energy Scam,” posits a worldwide epidemic that could end up being a greater disaster than all the alleged evils of fossil fuels combined.”
Producer News:
In South Carolina, Lincoln Oil will invest $10 million in a biofuels distribution center near Belton, in Anderson County. The ethanol distribution, storage and blending facility will support 96-car unit trains with access to two national pipeline companies. The facility is expected to handle more than 5,000 car loads in its first year of operation, and generate more than $500,000 in county tax revenue.
International News:
The European Commission’s chief US representative said that US taxpayers are “effectively subsidizing European motorists to the tune of around $300 million“, referring to “splash and dash” exports to Europe by US biodiesel producers picking up a $1 blending credit in the US. “You have to look for every market you can find,” the chairman of Western Iowa Energy told the Shreveport Times, while Bruce Babcock, an economist at Iowa State University, called splash-and-dash “kind of bizarre” and said it put upward pressure on soybean oil prices and hurt US taxpayers.
In India, the Ministry of New and Renewable Energy has called for a mandatory 20 percent blending rate for renewable fuels, and included the proposal in a draft plan for the new National Biofuel Development Board.
In Belarus, Greenfield Project Management said that it will invest $100 million in proposed ethanol plants in Mozyr and Bobruisk that will be constructed under the supervision of Sweden’s SEP Scandinavian Energy Project AB. The plant is expected to complete preliminary planning and permitting by the third quarter of 2008, and commence construction at that time. Plant capacity was not disclosed. Greenfield and subsidiaries of Belbiopharm are the primary investors in the project.
In Canada, the British Columbia government introduced a 5 percent renewables fuel mandate that will take effect in 2010. The bill also includes fines for major polluters.
In Australia, a poll by Galaxy Research found that 76 percent of Aussies want renewable energy funded in the federal budget, compared with 17 percent who said that fossil fuels subsidies should be included in the budget. A previous poll by Greenpeace last month found that 60 percent of Australians supported government funding of renewables. The political group GetUp, in commenting on the study, said that the government currently spent $28 on fossil fuels for every dollar of support for renewables.
Research News:
A Merrill Lynch study estimated that U.S. gas prices would be 45 cents per gallon higher without the effect of ethanol blending, confirming a similar finding from the Ethanol Promotion and Information Council last summer.
Corn prices increased to $5.81 per bushel for the May contract, on news of reduced corn planting from US farmers. Corn planting, which increased 27 percent in 2007, was projected to decrease 8 percent in 2008, according to the annual USDA forecast.
Policy and Policymakers:
The Canadian Centre for Policy Alternatives (CCPA) reported that Saskatchewan biofuel subsidy programs “are failing both as rural economic development and environmental protection policy.” The study: Biofuels: Bonanza or Boondoggle for Saskatchewan? said that policies were based on flawed assumptions of grain surpluses and low feedstock prices. The report says that “alleged environmental benefits have turned out to be illusory,’’ but critics of the study said that the CCPA study was based on discredited research.
Consumer and Fleet News:
In Oregon, gas stations in nine southern Oregon counties will switch to an E10 blend effective April 15th. The planned introduction was announced last year, and counties in the northwest of the state converted in January, with eastern counties converting next September.
Financial News:
The Biofuels Digest Index™ (BDI), a basket of public biofuels stocks, gained 1.73 percent to close at 116.18 on gains in agribusiness and ethanol stocks. Sector giantArcher Daniels Midland (ADM) rose 1.85 percent to close at $41.92. Among ethanol stocks, Pacific Ethanol (PEIX) recovered 4.09 percent to close at $4.58, while VeraSun Energy (VSE) lost 1.36 percent to $7.25 on the date of its official merger with US BioEnergy (USBE). Among small caps, Xethanol (XNL) fell 7.50 percent to close at $0.37. Overall, advances led declines 3 to 1.
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