By admin | August 28, 2008 - 8:11 pm - Posted in Uncategorized

Submitted by DTN Ethanol Blog

Range Fuels, Inc., a company focused on developing cellulosic ethanol, said in a news release that Greg King, president of private consulting company GCK Ventures, LLC and former president of Valero Energy, has joined the company’s Board of Directors.

EIA: US Ethanol Production Fell in June

Midwest Agriculture and Ethanol Industry Forms Coalition

Maryland to Build New E85 Pumps for Fueling State Fleet

GreenHunter Biodiesel Refinery at 50% Production Capacity

Railroad Cos Buy into Ethanol

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By admin | August 27, 2008 - 11:38 am - Posted in Uncategorized

Submitted by DTN Ethanol Blog


U.S. ethanol production for June fell by nearly 1 million bbl from the May level, while imports rose sharply, according to fresh data from the Energy Information Administration.

Midwest Agriculture and Ethanol Industry Forms Coalition

Maryland to Build New E85 Pumps for Fueling State Fleet

GreenHunter Biodiesel Refinery at 50% Production Capacity

Railroad Cos Buy into Ethanol

Focus on Fuels 8-25-08

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By admin | August 26, 2008 - 9:42 am - Posted in Uncategorized

Submitted by DTN Ethanol Blog

In an era when critics question the U.S. ethanol industry’s long-term effect on the environment and its ability to develop and maintain markets without government subsidies, an ethanol hybrid locomotive has the potential to create a new market for the biofuel and help U.S. railroads meet emissions standards.

Focus on Fuels 8-25-08

Ethanol Pipelines Need Aid

Iowa: Pronto Markets Sold E85 as Regular Unleaded or E10

Neb. Station Owner, Distributor Overcharged for Ethanol

Focus on Fuels 8-18-08

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By admin | - 9:42 am - Posted in Uncategorized

Submitted by DTN Ethanol Blog

In an era when critics question the U.S. ethanol industry’s long-term effect on the environment and its ability to develop and maintain markets without government subsidies, an ethanol hybrid locomotive has the potential to create a new market for the biofuel and help U.S. railroads meet emissions standards.

Focus on Fuels 8-25-08

Ethanol Pipelines Need Aid

Iowa: Pronto Markets Sold E85 as Regular Unleaded or E10

Neb. Station Owner, Distributor Overcharged for Ethanol

Focus on Fuels 8-18-08

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By admin | August 14, 2008 - 9:34 am - Posted in Uncategorized

Submitted by DTN Ethanol Blog

Ethanol company Poet announced Wednesday that it expects to complete construction on its pilot-scale cellulosic-ethanol plant in South Dakota sometime in the fourth quarter of 2008. All told, the Poet corn-cob technology will be capable of producing 11 percent more ethanol from each corn bushel and 27 percent more ethanol from an acre of corn.

VeraSun Preparing Startup of Hartley, Iowa, Ethanol Plant

VeraSun Q2 Earnings at $73M

Pacific Ethanol Sees $8.3M 2Q Net Loss on Corn Price Surge

Focus on Fuels 8-6-08

Eco-Energy to Buy All Output from ICB NC Biodiesel Plant

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By admin | August 13, 2008 - 10:06 am - Posted in Uncategorized

Submitted by BIOconversion Blog

One prominent feature of the 2007 Energy Independence and Security Act (EISA) is its renewable fuel standard that sets the trajectory for satisfying America’s newfound thirst for alternative fuels. 36 billion gallons per year production by the year 2022. Considering that the U.S.’ current annual production of biofuels is about 8 billion gallons that is a considerable amount of growth being virtually mandated by the U.S. Congress under the watchful eye of the Environmental Protection Agency.

Where is this fuel likely to come from? Can we “piggyback” any comparable industry and its existing infrastructure to help ease the transition between fossil fuels and biofuels?

The paper and pulp industry is starting to see a way to recover from its decades long fighting retreat. They are the biorefineries of the present. Their byproducts (paper and pulp) are more plentiful and valuable than the biopower and biofuels than they produce. But even so, the current combined output of heat, steam, and electricity made from combusting woody biomass and “black liquor” process residues make these mills the number one source of renewable energy in the country - more than all other alternative energy sources combined (including hydroelectric).

According to many within TAPPI (the Technical Association of the Pulp and Paper Industry) the time is ripe for retooling the more than 200 chemical paper mills operated within the country.

TAPPI held its annual 2007 TAPPI Conference in Atlanta last May. This year’s event is August 27-29 in Portland. It will be interesting to see how the organizers address the latest attempts to engage the industry in what may be a renaissance of its mission and accomplishments.

Below is an excellent story by the Senior Editor of TAPPI’s monthly magazine. He highlights some of the key features of this established industry that may very well piggyback the future of bioenergy.

———————
Pulp and Paper Industry Poised to Take Center Stage in Global Bioenergy Arena
International bioenergy conference explores new and emerging pathways, technologies, financial, legal, and operation issues.

by Ken Patrick

The pulp and paper industry is uniquely positioned to immediately produce significant amounts of biofuels, bioenergy and bioproducts. With a mature, operating infrastructure capable of delivering double-digit billions of gallons of biofuels annually, generally without adding any new fiber processing capacity, many pulp and paper mills around the world are only a one-step investment away from becoming major renewable energy producers. Especially important, paper industry capacity that can be re-aligned and re-purposed toward bioenergy co-production would be 100% cellulosic feedstock based, with no agricultural attachments at all.

Considering that there are 200 or more similar chemical pulp mills in the U.S., and at least an additional 100 in Canada, basic arithmetic shows this barrelage capacity for Fischer-Tropsch synthetic crude oil could total somewhere upwards of 420 million barrels per year, or between 15 and 20 billion gallons per year for the entire North American pulp and paper industry.

Pulp Mills as Biorefineries

Pulp mills are ideal sites for integrated biorefinery operations for four basic reasons. First, they are already set up to receive and process massive amounts of delivered roundwood and woods chips, served in this capacity by rail, truck and some also by barge operations. In the U.S. alone, pulp mills use more than 120 million dry tons of wood per year, and they have access to at least an equal amount of forest residuals and even a greater amount of agricultural wastes and energy crops if needed.

Second, these mills have basically the same existing infrastructures for warehousing and shipping out finished products around the country. Third, they have a well-established in-place administrative infrastructure and related human resources that can be extended to serve a biorefinery business without incurring significant new costs. Fourth, pulp mills have operating utility support systems for process water, electricity, steam and waste/environmental treatment that can easily be umbrella’d to support biorefinery operations without major new investments.

And possibly as a strong fifth reason, chemical pulp mills already operate as biorefineries of sorts, producing fiber used to make paper and paperboard as well as some specialized dissolving pulps used to make viscose types of “bio-plastics” and rayon materials. Bio-byproducts made from sulfate (or kraft) spent cooking liquors (black liquor) include ingredients used in making coatings, adhesives, detergents, paint, varnish, ink, lubricants, waxes, polishes, gasoline additives, agricultural products, etc. Turpentine is obtained by condensing exhaust vapors during the pulping of softwoods with the kraft process. There also is a spectrum of lignin-based byproducts produced from refinement of black liquors.

This same black liquor that, in fact, after it is thickened through evaporation and the byproduct streams removed, is currently used as a “fuel” to fire what are known as chemical recovery boilers, so named because their initial, primary purpose was to burn the hemicellulose/wood sugar content of the thickened, spent cooking liquor, resulting in a char bed deposit that can be regenerated backing into fresh cooking liquor chemicals. Heat from the combustion process is used to co-generate steam used in the process and electricity via turbo-generators. Today’s mills produce on the average 60% of their power from wood residuals and spent pulping liquors.

Cellulosic Pathways to Bioenergy

Rather than burning these high volumes of spent cooking liquors directly in recovery boilers, integrated biorefineries can process them into an array of value-added cellulosic biofuels, including ethanol, various synthetic gases (syngas), synthetic crude oil and biodiesel. These fuels could be used to offset petroleum-based fuels being burned in the mill and/or to sell as transportation/motor fuels.

There are as many as 12 clearly defined pathways into integrated biofuel/bioproduct production at pulp and paper mills. These include the thermochemical approaches that generally involve gasification of either biomass and/or spent cooking liquor streams alone or in combination with advanced gas-to-liquid technologies such as Fischer-Tropsch-based systems, and various pyrolysis techniques involving fluidized bed boilers.

Other pathways involve established sugar platforms and value-prior-to-pulping (VPP) approaches, where hemicellulose content is extracted before cooking of wood chips in digesters in various ways, such as cooking in pure water to produce a “prehydrolyzate” that can be fermented to mixed alcohols or gasified to produce a syngas.

The American Forest and Paper Association (AF&PA) recently conducted a detailed study of the most feasible routes to integrated biofuel production at pulp and paper mills, versus stand-alone cellulosic biorefineries, as part of its Agenda 2020 program. This study is detailed in a two-part series of reports just completed in the July issue of Paper360° magazine, the official publication of TAPPI (the Technical Association of the Pulp and Paper Industry) and PIMA (the Paper Industry Management Association).

A committee of Agenda 2020 CTO’s, representing 90%-plus percent of chemical pulp producers in the U.S., evaluated four general pathways that appear to be most likely for chemical pulp and paper mills based on existing infrastructures and operations. This study focuses basically on thermochemical approaches as being the most feasible, and looks generally at four related pathways.

The business case discussed in the AF&PA report is based on a post-2010 gasification biorefinery operation at a kraft pulp and paper mill as described in a recent report by Princeton University. The reference mill is in the Southeastern U.S. and produces 1,580 dry tpd of kraft pulp using a 65/35 mix of hardwood and softwood.

Compelling Payoff Potential

The main economic benefits of biorefining in the cases outlined by AF&PA for this reference mill include additional revenues from sale of synthetic fuels (511 tpd of dimethyl ether to be used as an LPG (propane) blend stock, or 2,362 barrels per day of petroleum equivalent or 4,757 barrels per day petroleum equivalent of Fischer-Tropsch synthetic crude oil for refining to diesel and gasoline blendstocks at petroleum refineries), as well as a savings of 226 tons per day of pulpwood due to increased pulp yield, and slightly overall lower steam use.

Considering that there are 200 or more similar chemical pulp mills in the U.S., and at least an additional 100 in Canada, basic arithmetic shows this barrelage capacity for Fischer-Tropsch synthetic crude oil could total somewhere upwards of 420 million barrels per year, or between 15 and 20 billion gallons per year for the entire North American pulp and paper industry, based on existing infrastructure and operations only, without adding any new capacity.

This is a very significant potential considering that the President’s 2007 renewable fuel standard (RFS) is 36 billion gal/yr by 2022, and that at least 21 billion gallons of this are to be obtained from cellulosic ethanol and other advanced biofuels. This clearly indicates that the forest products industry, and pulp and paper mills in particular, are in a very unique position to help meet this critical national challenge.

TAPPI Bioenergy Conference

These issues, and specifically the AF&PA position paper study, will be explored in considerable detail at the TAPPI International Bioenergy and Bioproducts Conference (IBBC) to be held in late August in Portland, Oregon.

The 2008 Technical Conference Program features 14 sessions that will take attendees through an in-depth analysis of where the industry currently is on the biorefinery front to where it will be in the next five years and beyond. A key issue underlying all sessions is the immediate need to attract investment community involvement on an on-going basis. The intensive program explores not only the latest biorefinery technologies, but also developing markets and the legal-legislative-investment sides of the bioenergy/bioproducts equation

The IBBC program includes several sessions that examine biorefinery approaches already in commercial operation, with from-the-field updates by those “already doing it.” Systems technologies being reported in these sessions cover pyrolysis, gasification/gas-to-liquid, acid hydrolysis, enzymatic, and other fermentation-based approaches.

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By admin | August 11, 2008 - 6:09 pm - Posted in Uncategorized

Submitted by DTN Ethanol Blog

Pacific Ethanol announced Monday net sales of $113.8 million, up 74 percent for the same period a year ago. However, the West Coast-based marketer and producer of ethanol posted a net loss for the three months ended June 30 of $8.3 million compared to net income of $2.2 million for the same period in 2007.

Focus on Fuels 8-6-08

Eco-Energy to Buy All Output from ICB NC Biodiesel Plant

BP, Verenium Work on Cellulosic Ethanol

PetroSun Withdraws From Algae-to-Biofuel Program

Green Plains Renewable Energy Produces First Million Gallons

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By admin | August 6, 2008 - 4:02 pm - Posted in Uncategorized

Submitted by DTN Ethanol Blog

PetroSun, Inc. announced Tuesday that it was withdrawing from a research program to produce jet fuel from algae for the U.S. Department of Defense, according to a news release from the company.

Green Plains Renewable Energy Produces First Million Gallons

Focus on Fuels 8-4-08

Profits Improve at Neeley Biofuels

US Ethanol Imports for May Fall Sharply

Ethanol Production, Demand Climbs in May

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By admin | - 4:03 pm - Posted in Uncategorized

Submitted by DTN Ethanol Blog

.S. Ethanol Margins Could Take a Hit as More Production Comes Online

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) — Though the hypothetical Neeley Biofuels Inc. ethanol plant in South Dakota has recently crawled out of a seven-month net-profit hole, one expert said the industry as a whole will struggle to stay profitable through much of 2009 as more U.S. plants come online and production continues to outpace demand.

About one week ago Neeley Biofuels’ 50-million-gallon plant recorded a positive profit margin of around 25 cents per gallon as corn prices dropped by more than $1 a bushel in less than a month to around $5.15, before spiking to around $5.45 in this latest update.

Yet the profits rollercoaster continues, and as of July 30, Neeley Biofuels recorded a net profit of about 6 cents per gallon.

Though the latest numbers are less than stellar, the change represents a 44-cent improvement since July 1 when Neeley Biofuels paid nearly $7 a bushel for corn.

Eitan Bernstein, an analyst with capital markets company Friedman, Billings, Ramsey & Company, Inc., based in Arlington, Va., wrote in a July 18 research report that overall ethanol profitability is expected struggle for the foreseeable future.

“Our updated supply/demand data suggest that the U.S. ethanol market is now in oversupply and will likely remain in that condition until demand catches up with available supplies in late 2009,” Bernstein wrote. “This suggests ethanol production margins will face increasing downward pressure, and the producers’ earnings will be negligible. Additionally, cash flow concerns will continue.”

FBR tracks publicly traded ethanol companies VeraSun Energy Corp., Aventine Renewable Energy and Pacific Ethanol.

One good indication of struggling profit margins, Bernstein said, is Brookings, S.D.-based VeraSun’s decision to delay the startup of two of its plants in Hartley, Iowa, and Welcome, Minn.

In recent weeks the U.S. industry pushed production capacity up to around 9.8 billion gallons, with that capacity to reach upwards of about 13 billion gallons sometime in early 2009.

“Ethanol is an attractive, low-cost gasoline additive for petroleum refiners and blenders,” Bernstein wrote in his report, “but with most of the major metropolitan centers already blending ethanol and the Midwest approaching saturation, future consumption growth will have to come from smaller, coastal markets, which will take time.”

Donna Funk, a certified public accountant with Kennedy & Coe in Salina, Kan., which provides profitability and other consultation services for about 10 ethanol plants, said the clients she works with have had a profitable month despite all the concerns.

“July was going to be tighter,” she said. “But they have been consistently in positive margins.”

Funk said part of the reason many producers are staying in positive territory is because many of them locked in both lower corn prices and good ethanol prices long before the recently tight economics.

The reason why Neeley Biofuels continues to ride a rollercoaster, she said, is because the hypothetical plant bases its profit numbers on volatile swings in the cash markets for corn, ethanol, natural gas and dried distillers grains.

Other producers that have been in the business for two to four years, Funk said, still might have cash on hand from the ethanol profit heyday seen about 18 months ago.

Neeley Biofuels benefited from a drop in the average DTN corn price paid by South Dakota ethanol plants from $6.74 on July 1 to about $5.45 on July 30.

In addition, the plant’s profitability improved as a result of a significant decrease in what it paid for natural gas on July 30 compared to July 1. On July 30, Neeley Biofuels paid about $9.08 per million British thermal units for natural gas, a drop of about $4.26 since July 1.

On the ethanol-sales side, the plant did see a drop in the average rack price paid in South Dakota from about $2.72 on July 1 to around $2.63 on July 30.

From July to October 2007 the plant was in negative territory, but profits rebounded to as high as 18 cents in January; since the middle of January, however, the plant had been reporting a net loss.

The hypothetical plant was established in DTN’s ProphetX Ethanol Edition as a way to track ethanol industry profitability and see how the changing market is affecting the plant’s net-profit margin per gallon of ethanol sold — the difference between total costs and revenues.

To compute net margins — what’s left in profits after all costs are deducted — DTN used industry-average figures from Iowa State University economist David Swenson. These included annual labor and management costs of about $2.9 million, transportation costs of $10 million, debt-servicing costs of $7.8 million and depreciation costs of $8 million and maintenance costs of $800,000.

Though Neeley Biofuels is paying nearly $16 million in debt-service and depreciation costs on its plant — or about 32 cents per gallon of ethanol produced — many real plants are not in debt and are more profitable. If Neeley Biofuels was not in debt, it would have been operating at a net profit of about 38 cents per gallon on July 30.

Those plants that are seeing profits hover slightly above break-even, Funk said, most likely are looking at ways to develop additional revenue streams within their plants.

This could include installing dry fractionation systems to separate out the parts of the corn kernel to create additional products, or even to use dried distillers grains as an energy source to run ethanol plants.

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