They will test fly an Air New Zealand plan on UOP derived Jatropha biojet. Very cool to see this keep building in the light of the overall downturn in the biodiesel market. Remember, Imperium made the first biojet for Boeing under my direction….
I said the MECO/BlueEarth was a a project that would never happen beginning. Now the lawyers are going to settle it. What a mess. Bummer for the health of the maui residents. They need to keep sucking in diesel fumes for a couple more years.
Yesterday, Mark over at SNS published the whole special letter that I wrote about here. If I do say so myself, it is a good read. Four years in the biofuel business, how did we loose round 1 to the dinos? What should we do. Real the full letter here. And subscribe to SNS if you can.
What I like and don't like about the "second generation" biofuel companies that were funded in Q2
Ok I am a big fan of biofuels. I spent the last four years and substantial personal resources building Imperium Renewables and the largest biodiesel processing plant currently operating in the US at over 100M gallons per year. Lots of people ask me what I think of the "next generation" crop of companies being sold to investors today. Here are a couple general comments then some specific company comments.
- the primary problem of biofuels today is oversupply relative to RFS mandates causing refined biofuel prices to significantly lag refined petroleum products. More biofuels actually makes the problem worse.
- Political will supporting biofuels has weakened measurably over the last year.
- Liquid fuel distribution infrastructure has remained largely stangnant for over 30 years. Most mid and downstream assets are owned by companies with capital structures optimized for cash dividends as opposed to investment for growth. High blends of ethanol requires new distribution infrastructure all the way up and down the chain.
- Debt markets remain closed and skeptical of new technologies.
Range Fuels: Triple the capital cost of first generation. While multiple feedstocks may be technically possible, actual availability of feedstock and transportation logistics will likely significantly change economics once plant is built. While Khosla likes to pay lip service to investing in technologies that are economic w/o government incentives, cellulosic ethanol generally through the 2.5x RFS credits, and Range Fuels specifically through large DOE grants have been showered with government money. If the plant eventually does get up and running
Sapphire Energy: Inventing an algae bug that will produce a crude oil substance compatable with today's light sweet crude refineries is not that hard. The Aquatic Species program of the DOE found thousands of them over a decade ago. The probelm is building the algae farm and cultivation system at a cost per acre that pays an acceptable ROI. I like the strategy to skip the big oil controled refined products channel and go direct to independent crude oil refiners, but the devil is in the details. What will be the actual yield? How will the refined products perform? Will customers accept the products? While the company announced significant funding, it has yet to enter pilot testing and hopes to one day produce "up to 10,000 barrels per day" of algae crude. Ok, that would be 0.011834 % of US daily crude requirements TODAY. Despite the many challenges and my reservations, Sapphire Energy is my favorite biofuel company funded last quarter.
EdeniQ: Actually the smoking dusty remains of the Altra train wreck "still in formation stage". While at Imperium I reviewed and dismissed as non-economic the Port of Morrow site they hope to develop. Maybe I missed something. On technology side they use all the right buzzwords about low capital costs, ellimination of catalyst and additives. All I can say is "show me".
Mascoma: Again, more non-specific "non-grain biomass" as feedstock. GM invested, that hasn't seemed to help their stock price. More government hand-outs (over $60M) and sky high capital costs. Show me the money.
Aurora BioFuels: $20M ain't nuthing when measured against their plans. Their mission statement lays out too much wood to chop in my opinion and not enough focus. It is not at all clear from public information what Aurora is planning to do new, different and proprietary from anyone else. See Sapphiire: Algae in the lab is easy. Making a million barrels a day (about 1% of US needs) is HARD.
Gevo: While the company is "working on an alternative jet fuel for Virgin Airways", Imperium actually supplied Virgin with such a fuel and flew Richard Branson around in the plane back in January. The company's "advanced" fuels like isobutanol and butanol face many distribution, field test, engine warranty and other implementation issues already overcome by first generation refined biofuels. This one is going to be a LONG burn.
Fulcrum Bioenergy: Waste seems like a good source of fuel. Unfortunately the energy balance has never worked for anything but sucking methane off garbage piles. Again the ethanol oversupply problem, the US is already long corn ethanol through at least 2012. From press releases the company seems more like a build own and operate project developer rather than a technology company. While this is a fine model, I am not sure it garners venture capital returns. Permitting of the first facility in collaboration with Casella Waste Systems is supposed to "start" in next 12 months. If the plant is running by 2010, I will give you $100.
Greenline Industries: No comment (too many NDA's).
GreenFuel Technologies: The long struggling Greenfuel may have finally found their stride. They arguably know more about the implementation details of growing algae for biofuels than any other company and have the scars to prove it. Their first pilot grew algae so fast they couldn't harvest it. Not much good. I like the strategy of co-locating algae farms with carbon emitters for multiple revenue streams. I like the folks at GreenFuel and wish them well. They still face the massive problem of getting the cost per acre of the algae farm down to an acceptable ROI. After 5 years, problem still not solved.
Amyris Biotechnologies: Originally founded with quite a different mission, these opportune scientists are marketing their lab skills to the fuel markets these days. More fancy bugs that look good under a microscope and are years away from any scale. If they suceed in making more than 100 gallons of anything by 2010 I will give you $100.
Station Open HouseFriday, June 27 11:30 3:00 pmTo celebrate the opening of our South Lake Union location, Propel invites you to lunch and a tour of the site on Friday, June 27. Stop by between 11:30 and 3:00 to meet the Propel team, learn about our fuels, and see Seattles most sustainable station. Join Propel in welcoming better energy choices to South Lake Union. South Lake Union Open House (map)June 27, 11:30 - 3PMWestlake & Valley in South Lake UnionFare provided by Skillet
Last Fall, due to my increasing concerns about economic stability and sensibility of the Argentinia rulling duo (couple), I canceled Imperium's expansion to Argentina. None too soon. The socialist president raised taxes on soy bean exports AGAIN, now 44% and the middle class is rioting in the streets. Whew.
WSDOT is back four years after a failed biodiesel test. This time they are comparing Soy versus Canola biodiesel. Since the tanks are single lined and sit below the water, the fuel is very cold (the Puget Sound is 42 degrees). They also didn't use an anti-algae syde last time. They are this time. I am completely confident that the Imperium Renewables Canola will kick ass on the midwest soy (which is actually mostly animal fat now). Go Canola!
This story is heartening. What do you do when soy prices are high and biodiesel prices are high? Back off from renewables and let the industry die? Let oil win? No, you double down and ensure the success of the industry.
It takes 7.7 pounds of soy oil -- or $4.34 (at $.56/lb) -- to produce a gallon of biodiesel, according to the Food and Agricultural Policy Research Institute. Add overhead and other processing costs (about 70 cents per gallon), federal and state taxes (54 cents), and subtract the dollar tax credit, and a gallon of biodiesel could sell for $4.58 at the pump. Regular diesel sold for $4.15 a gallon today in Seattle. So biodiesel is more expensive than petro diesel. But not actually by much. I will dig up my historical graph and put this in persepctive later this week. The $.43/gallon difference is less than 10%. Would you pay a 10% premium to save the planet? I would.
With veg oil prices sky high and the spread between veg oil and diesel negative, the importance of co-products is increasing. If a biodiesel producer can significantly increase revenue from glycerine or other co-products, they may be able to make up the negative spread. A group in Brazil is claiming they can make "green propane" out of glycerine. I have reviewed many of these so called technologies and most dont have good energy balance. But at these prices maybe. Unfortunately the Brazil team is saying 2013 until commercial production. Add 5 more years because it is Brazil. Not something t help biodiesel today. The best thing is to simply refine to technical grade glycerine. That takes your price from $.12/lb to over $.25/lb.
Remember the biginning of the the fight with big Tobacco about the harmfulness of cigarettes? Remember the flood of "science" that claimed cigarettes were not so bad for you, created lots of jobs, had global warming benefits, etc.? One of the first tools in an entrenched monopoly business that is selling a product that kills you is to use it's vast wealth to try and convince the public that their product really isn't that bad. Tool 1a is to spend some of that money to convince us that the alternatives are just as bad or worse. That is what we are starting to see around biofuels. Like this British report. Hey, sure biofuels aren't a silver bullet and yea sure we need to address the vehicle design, hybrids, etc. But come on, you are trying to tell me that a renewable carbon neutral source of fuel is worse that non-renewable dead dinosaurs? Get real.
Many government funded reports are so watered down by the committees that write them that they are of no use in the end. Fortunately the Western Governors Association has a different view. Their new report on Transportaion Fuels of the future is a good read and spot on. The first paragraph is:
"Among the most critical issues facing our nation is our dependence on petroleum for nearly
all of our transportation fuel. This dependence and global competition for the resource present
enormous risks to our future energy supply, the environment and to our nations economy."
wow, a governement admitting a problem and proposing actual actions through elected officials that actually can get them done. Wow. A new day in America.
Biodiesels value to human health receives international attention in the new special issue of Inhalation Toxicology, the key forum for international exchange of the latest advances in pulmonary toxicology. "The use of biodiesel is an important medical, public health, social and economic issue, one that health and medical scientists, epidemiologists, toxicologists, and policymakers cannot afford to ignore," states Dr. Bailus Walker, Jr. PhD, MPH who served as the guest editor of the special issue. The publication features contributions by Dr. Jonathan M. Samet of the Johns Hopkins Bloomberg School of Public Health, U.S. Department of Agriculture Senior Economist James A. Duffield, National Renewable Energy Laboratory Principal Engineer Robert McCormickand Medford New Jersey Township Director of Operations and Technology Joe Biluck, Jr.
Have you ever wondered how much youre helping clean the air through your use of biodiesel? Theres a tool available on the National Biodiesel Board (NBB) website that can calculate emissions reductions based on the amount of biodiesel and the blend level youre using. Just visit the site to see what a difference youre making by using cleaner burning biodiesel.
Today's WSJ has a cover story on a middle school teacher in Michigan who is preparing his family for the end of easy oil. Unlike many of the previous end of the world zealots who are forecasting world doom from some cataclysmic (usually religious inspired) event, people concerned about oil depletion come from all backgrounds and base their fears on facing the facts of life today. Oil is running out. The question is when. The other question is will our companies and governments tell us the truth or wait till it is too late? My guess is they wait. They have already done largely nothing as the price of oil went up 75% last year. Where is that money being spent? Oh yea the sovereign wealth funds are buying up American banks and companies with the oil dollars we just shipped them. If American's don't wake up and start innovating our way to real alternatives, in a few short years it will all be over.
With ethanol companies tanking (again). I have to pinch myself and remember to read the biodiesel carve-out in the energy bill which was signed into law before christmas. This WILL lead to a viable biodiesel business in this country.
So the Senate punted the tax extension for biodiesel credit from the energy bill to the farm bill yesterday. I think this is chickenshit, but then they passed the farm bill. I guess that is progress Washington DC style.
CongressNow Staff Friday, December 14, 2007 4:16 PM
Senate today overwhelmingly passed the 2007 farm bill, capping a prolonged
debate that saw hundreds of proposed amendments whittled down to a few dozen.
By a 79-14 vote, Senators approved the $288 billion measure,
which authorizes federal farm programs for five years.
“We have a good farm bill,” said Senate Agriculture, Nutrition
and Forestry Chairman Tom Harkin (D-Iowa) following the vote.
Sen. Saxby Chambliss (R-Ga.), the ranking Republican on the committee, acknowledged
regional differences that emerged during the debate but noted broad bipartisan
support for the measure.
Sen. Kent Conrad (D-N.D.) said today’s tally represented the most votes for a
farm bill since 1973.
The bill contains billions for conservation, energy, specialty crops and rural
investment. “We have met our obligations not just to farmers and ranchers but
to rural communities,” Harkin said.
Harkin said he would meet with House Agriculture Chairman Collin Peterson
(D-Minn.) next week to begin preparations for a January conference committee.
Harkin has said the conference should be completed by the end of January. The
White House has repeatedly criticized the bill, but a presidential veto of the
popular bill is considered unlikely.
Today’s vote followed a two-week procedural standoff over the decision Senate
Majority Leader Harry Reid (D-Nev.) to limit the scope of debate, which
culminated with a failed cloture vote before Thanksgiving. The bill was revived
last week after the two parties settled the dispute by agreeing to 20
In an effort to complete the bill today, several amendments were agreed to and
adopted in a manager’s amendment.
Not included was a Harkin amendment to limit junk food in schools. He vowed to
revisit the issue.
“We’re not giving up,” he told reporters.
The bill includes a package of agriculture tax measures attached by
Senate Finance Committee Chairman Max Baucus (D-Mont.).
These provisions include the creation of a $5.1 billion trust fund to help ranchers
and farmers hurt by crop and livestock losses, the conversion of a number of
conservation payment programs into fully offset tax credit programs, and
additional incentives for rural economic development and energy-related tax
relief to aid agricultural producers.
“Our hardworking agricultural producers deserve a strong safety net and more
money in their pockets through this much-needed tax relief,” Baucus said. “The
agriculture tax provisions the Senate approved today will recognize the
sacrifices of farming families, reward their efforts to conserve American land,
and revitalize the rural communities where they live.”
be in print next week. Will get a few copies for you. Picture wasn’t online,
but it will be in print
Wednesday, Dec. 12, 2007
Gambling on Green
By BRYAN WALSH
Harbor, a foggy bay 90 minutes outside Seattle,
has been known for two things: paper mills and the rock star Kurt Cobain, who
was born there in 1967. Both are memories now, and in recent years the area had
fallen on the hard times familiar to blue-collar communities across the U.S. But Grays
Harbor is showing new color, thanks in part to the Seattle biofuel company Imperium Renewables,
which just opened the nation's largest biodiesel plant there. The
four-month-old refinery positively gleams (and smells vaguely like lawn
clippings because of the vegetable oil used to make the biodiesel). As he
scales a 500,000-gallon (1.9 million L) holding tank, plant manager Sid Watts
can't conceal his pride. He points to the dock, where ships bring in vegetable
oil from places like Indonesia
and to the rail terminal, where trains will help transport 100 million gallons
(380 million L) of biodiesel a year to Imperium's customers. Watts is happy to
see his refinery jump-start the economy of Grays Harbor,
but he knows the benefits of Imperium's green, low-carbon fuel will be felt
well beyond the town. "It just makes you feel good to work on something
that's helping the planet," he says. "That matters to us."
of this would have happened, however, without a spark of venture capital. That
came from Martin Tobias of Seattle-based firm Ignition Partners. A restless
ex-Microsoft executive, Tobias thought software had maxed out, and by 2004 he
was looking for the next big thing. He found it in the emerging clean-tech
sector — which encompasses renewable energy, environmental efficiency and water
— and discovered the struggling start-up Seattle Biodiesel, which had just been
launched by a former airline pilot. Tobias injected badly needed capital,
eventually buying 20% of the company and becoming CEO of the renamed Imperium
Renewables. ("Less local," he explains.) More funding came from angel
investors and successful rounds of venture financing, and today Imperium is set
to break ground on new plants in Hawaii, Pennsylvania and Argentina, and is preparing to go
public. With Imperium, Tobias knows his money is making a difference.
"Investors want to do something good, and they want to make money,"
he says. "Clean tech is a way to do that."
the province of those with long hair and short credit lines, today clean tech
is a prime target for the smartest — and richest — investors in the world.
Green investment by American venture-capital firms reached $2.6 billion in the
first three quarters of 2007, the highest level ever recorded and nearly 50%
more than the total for the whole of 2006. The European clean-energy sector is
already producing winning companies in countries like Germany and Spain, and in
rapidly growing China nearly 20% of all venture capital was channeled into
clean companies in 2006 — double the percentage in the U.S. Green start-ups
searching for cash "have gone from a desert to drinking from a fire
hose," says Nancy Floyd, head of the alternative energy–focused venture-capital
firm Nth Power, which also has invested in Imperium Renewables. Like Tobias,
Silicon Valley stalwarts who helped power the IT revolution see clean tech as
an investment opportunity that could have no ceiling — and that comes with the
side benefit of potentially saving the world. Vinod Khosla, famous for being a
co-founder of Sun Microsystems, has put massive bets on biofuels, while his
former partners at leading venture capital firm Kleiner, Perkins, Caufield
& Byers (Kleiner Perkins) have belatedly followed in a big way, investing
more than $270 million in the green-tech sector and hiring Nobel prizewinner Al
Gore as an active partner. As Kleiner Perkins' Bill Joy told a recent gathering
of clean-tech CEOs in Boston,
"We really do believe that energy and green technology is the largest
economic opportunity we've seen so far this century."
capital is already paying off. Revenues for companies in solar energy, wind,
biofuels and fuel cells surged from $40 billion in 2005 to $55 billion in 2006,
according to the research group Clean Edge. Clean energy–related companies
raised over $10.3 billion in ipos in 2006, up from $4.3 billion in 2005, and
hot new companies such as First Solar, whose stock jumped from $25 to $215 in
the past year, are angling to become green Googles. In turn, green venture
capital in the U.S.
is projected to rise to $18 billion by 2010, according to Nicholas Parker of
the research group Cleantech Network. "There are huge problems facing us,
and the only way to solve them is through innovation," says Khosla.
"That's what venture capital does best."
new new thing
For CEOs who founded clean-tech companies before this explosion of interest,
the sudden materialization of capital can seem too good to be true. When Tom
Todaro launched Seattle-based Targeted Growth, which uses genetic engineering
to greatly enhance the yields of crops, he thought the company's ability to
multiply the amount of feedstock available for biodiesel or ethanol would make
it a star of the emerging biofuels sector. But it was the late 1990s, when
clean tech made up less than 1% of total venture-capital spending, and
investors weren't interested. "I went begging to friends and families and
small investment firms," Todaro recalls. "At one point we were 90
days away from having to cut back operations."
they couldn't be more different from former dotcom darlings like Pets.com, clean-tech
start-ups were hit hard by the vaporization of venture capital in the wake of
the tech and Internet bust of 2000. Funding for green venture capital plunged
over the next three years. But it wasn't just flashbacks to that meltdown that
initially kept venture capitalists cool on clean tech. Starting up an Internet
company required relatively low levels of capital — at least before you started
buying your employees massage chairs — and dangled the possibility of a quick
and lucrative payoff. Cracking the energy sector, with its powerful incumbent
companies and forbiddingly high capital costs, requires a more patient investor.
"There may be some VCs willing to finance a $100 million project plant,
but most can't," says Howard Berke, a veteran tech entrepreneur and
co-founder of the solar company Konarka. "It could mean a longer [wait]
for returns than what early-stage venture capitalists are accustomed to."
tide began to turn in 2004, thanks partly to rapidly climbing oil prices that
instantly made alternative energy more competitive, and partly to government
action in the U.S.
and elsewhere that provided support for clean tech. The Gore-approved narrative
of climate change — as both a threat and an economic opportunity — penetrated
the venture-capital community. Adam Grosser, a venture capitalist at the Silicon Valley firm Foundation Capital, struggled to
convince his partners that they should expand beyond their traditional IT focus
into clean tech. "When I first proposed it, my partners scoffed," he
says. But Grosser persisted, and today clean tech accounts for 10% of
Foundation's portfolio. "This is not a problem that is going away
soon," he says. "This will be a trend like PCs were for the 1980s and
networking was for the 1990s."
2006, the clean-tech sector was absorbing 11% of all venture capital in North
America and Europe. Investors started knocking
on Todaro's door, and they haven't stopped since. "We went from hat in
hand to not being able to return investor calls," Todaro says. The company
won millions in financing, and has just announced a deal with a firm called
Green Earth Fuels to develop 100 million gallons (380 million L) of biodiesel
by 2010. Says Richard Kaufman, CEO of the international sustainable investment
company Good Energies: "There is just a wall of money out there now."
single venture capitalist may be more responsible for that shift than Khosla,
who formed Khosla Ventures in 2004 in part because his Kleiner Perkins partners
were still hesitant to dive into clean tech. Khosla had no such fears, and he
has emerged as a clean-tech evangelist. "By 2000, I felt that software and
other businesses were reaching a dead end," he says. "But energy was
an area where there were large markets that could benefit from
innovation." Khosla hasn't held back — in the first nine months of 2007,
Khosla Ventures participated in 14 deals worth nearly $70 million. He has
spread his bets along a range of clean-tech sectors, with a particular focus on
biofuel start-ups such as Range Fuels, which is close to commercializing
biofuel out of agricultural residue like wood chips, rather than food crops.
Nothing has paid off big for him yet — in fact, prices for corn-based ethanol,
which Khosla has also invested in, crashed in 2007, largely due to
overproduction. But Khosla, who sees corn as a stepping stone to superior
cellulosic ethanol, is undaunted. "This is a great market with great
fundamentals," he says.
the dotcom bust casts a shadow, with fears that once again too much money is
chasing too few good ideas. The drive to go green, so strong today, could
rapidly lose momentum if oil prices were to drop significantly, and it hasn't
escaped notice that clean tech has yet to produce a bank-breaking success like
Netscape, which made Kleiner Perkins a fortune. "Everybody with a dollar
thinks they're a clean-tech investor now," says Foundation Capital's Grosser.
"A ton of people could lose a lot of money on solar or biofuels." But
defenders point out that the burgeoning energy needs of China and India mean that oil prices are
unlikely to fall to previous levels, while the political push to put a higher
price on fossil fuels through emissions caps or a carbon tax will make
renewables a neccesity. "It's either a very important hedge against the
future, or it could become the future," says Peter Bance, CEO of Ceres
Power, a London-based fuel-cell company.
names from the mainstream business world are migrating into the clean-tech
sector — because they want to help the planet and their bankbook. Lois Quam, a
pioneering health-care executive, who was last year named one of Fortune's 50 Most Powerful
Women in Business, joined the Minneapolis-based investment bank Piper Jaffray
to guide its rapidly growing alternative-energy portfolio. "You see so
many good companies and entrepreneurs entering this space," says Quam.
"This is the biggest business opportunity for this country."
That's a message much of the rest of the world has already absorbed. Though the
U.S. is easily the biggest
player in green venture capital, Europe may be ahead on clean tech itself,
thanks largely to the kind of generous government subsidies that have yet to be
enacted in Washington.
The enormous capital expenditure required to compete in the energy market makes
government support all the more important. Many of the world's top solar and
wind companies — like Germany's
Q-Cells and Spain's
Iberdrola — are based in the E.U., and with the region set to enact even
stricter caps on carbon emissions, this head start is unlikely to disappear
soon. "Europe is the clear leader in
clean tech, from a market side, but also the technology side," says Felix
von Schubert, a partner at London-based investment firm Zouk Ventures.
both Europe and the U.S. may
be less important than the nation that will soon be the world's top CO2
Cleaning up China is both
the biggest challenge to green tech and its biggest opportunity, and venture
capitalists are staking their claim, with their investments in green companies
rising by 147% to $420 million between 2005 and 2006. Much of that money is
being channeled into meeting China's
ravenous energy needs — especially solar, which already has a homegrown success
story in billionaire Shi Zhengrong, founder of Suntech Power. Water
conservation and filtering is a growing field, too — a reminder that clean tech
is about more than just carbon emissions. Another difference is the faster
payoff for green investment in China,
driven by lower fixed costs and intensifying demand for clean energy. "All
clean ventures in China
are nearly immediately profitable," says Roman Shaw, founding partner of Shanghai-based
venture-capital fund DT Capital. "That rarely happens in the U.S." But
while China is almost certain to become the world's biggest market for clean
tech — the government is calling for 15% of the country's energy to come from
renewables by 2020, the same target that President George W. Bush has
threatened to veto in the U.S. — the nation's businesses have yet to show that
they can create green innovations on a large scale, rather than buying and
selling those developed elsewhere.
pressing need for innovation is the ultimate challenge for everyone involved in
the green sector, including the venture capitalists funding it. Some
environmentalists like to say that we already have the technology we need to
defeat global warming. This is not true. Creating the advances needed to
rapidly decarbonize our energy supply — at a price the developing world can
afford — will require the investment of countless billions of dollars for
research and development. At the moment, we're not even close to victory, but
many of the best, smartest and richest investors around have now joined the
battle. At the end of a presentation on Kleiner Perkins' green-tech initiative
at this year's TED (Technology, Entertainment, Design) conference, an
invitation-only gathering of global thinkers, legendary venture capitalist John
Doerr silenced his audience when he briefly broke down, pondering the future
his 15-year-old daughter would face if nothing were done to stop climate
change. "We face irreversible and catastrophic consequences," Doerr
said. "We must act and we must act decisively." Investors like Doerr
have financed revolutions before. Let's hope they spark another.
reporting by Alex Altman/London and Kathleen Kingsbury/Hong Kong
Thanks Fed for higher oil (oh and thanks EIA for raising price estimates and demand estimates too)...
When the dollar gets cheaper (as it did today with .25bp drop by fed), Oil gets higher. It is physics. Look for oil to go even higher. Oh, and then there is demand and tightness in supply. Most wall street investment banks have oil at a $60-$65 price in 2008. Only Goldman has it up at $80. Well the leading independent analyst of this, the EIA today went up to $80. That now puts the big banks on the low end of government estimates. Do not expect this to last.
From Lehman today:
·Market Settle: The front
month NYMEX WTI futures contract closed up $2.16 to $90.02. The 48-month NYMEX
WTI futures contract closed up $0.71 to $85.24. The front month ICE Brent
futures contract closed up $1.95 to $89.99. The 48-month ICE Brent futures
contract closed up $0.56 to $84.99. The front month DME Oman futures contract
closed up $1.65 to $85.45.
·DOE Stats Preview – Crude to draw, gasoline to build, distillate to
·EIA revises monthly estimate for global oil demand by 1.4m b/d;
U.S. and China by 30k b/d each
·Oklahoma oil pipelines resume operations after power failure
·Darfur rebels halt 35k b/d of Chinese production
Houston Ship Channel
reopens to tanker traffic, ending two-day closure
CARB enacts new port measures to reduce diesel particulate
Times are a changing on the water. I have written before on how ports are a big source of pollution and how converting the trucks and equipment to biodiesel could significantly reduce pollution. In Seattle, SSA has done this. Royal Carribean, one of Imperium Renewables customers has also converted a significant number of ships to biodiesel in part for economics in part to get a jump on regulations. Now CARB has made a number of things mandatory by 2014 which I believe will significantly drive the demand for biodiesel in ports. Go CARB.
Chevron says it may stop further investments in Galveston biodiesel plant
More evidence that Chevron is only paying lip service to biodiesel and not following through on real investments.
FO Licht's World Ethanol & Biofuels ReportFriday December 07 2007
Chevron Corp. has signalled it may stop investing in a biodiesel fuel plant in Galveston, clouding the future of an operation that had been counting on the oil company's backing to expand, according to people familiar with the situation.
The oil giant's hesitation has created uncertainty for the plant's Houston-based owner, Standard Renewable Energy, which runs the plant through an affiliate called BioSelect Fuels.
The companies are still negotiating, the sources said, and San-Ramon, California-based Chevron still may decide to increase its investment in the project, the Houston Chronicle reports.
Chevron would say only that it remains a partner in the venture, without speculating on its future role. Officials at Standard Renewable Energy declined comment.
With Chevron's role in question, Standard Renewable Energy has begun rethinking initial expansion plans that would have made its Galveston Bay
Rather thancharging ahead with plans to increase the plant's production capacity from about 20 mln gallons per year today to more than 100 mln gallons per year, the focus has turned to upgrading storage and transportation infrastructure at the site, sources said.
That more cautious approach, however, may be driven by factors beyond Chevron's potentially reduced involvement.
Kent Robertson, a Chevron spokesman, stressed that Chevron, through its Chevron Technology Ventures subsidiary, remains a minority investor in the Galveston plant. The unit holds a 22% stake.
But he declined to say whether Chevron will inject more money into the project. "We haven't announced plans for future investment," he said.
Chevron is one of the only US oil companies to invest in the actual production of biofuels. Some competitors only blend biofuels with conventional petroleum fuels or invest in biofuels research.
Yet Chevron, the second-largest US oil company, remains focused on oil and natural gas exploration, as it made clear today with the release of its 2008 capital expenditure budget. Capital spending will increase 15% percent to $22.9 bln, with more than $17 bln going to oil and gas production. The balance will go to oil refinery upgrades and other activities that include research in renewable fuels, the company said.
Chevron has said it expects to spend more than $2.5 billion between 2007 and 2009 on alternative and renewable energy technologies, including biofuels.
In May, Chevron officials were in Galveston for the plant's grand opening and held up the facility as an example of the company's commitment to renewable energy technologies.
"Our involvement with BioSelect Galveston will allow us to apply our world-class capabilities in transportation fuel manufacturing and distribution while expanding our knowledge and experience in large-scale biofuels production," said Donald Paul, Chevron's vice president and chief technology officer.
At the same event, Standard Renewable Energy CEO John Berger said Chevron was "setting an example for the energy industry."
But after investing money in the project five separate times over two years, Chevron balked at the latest request to invest more in the plant, sources said.
The Galveston Bay Biodiesel plant has been touted as one of the nation's first large-scale production plants. The initial goal was to boost production to 60 mln gallons a year by fall 2007 and 110 mln gallons by 2008.
Beyond the Galveston facility, BioSelect had plans to open more US biofuel plants, hitting 470 mln gallons of capacity by 2010.
It's not clear how those plans might change in a sluggish biodiesel market and without additional investment from Chevron in the Galveston Bay plant.
Eric Melvin, CEO of Mobius Risk Group, a Houston-based commodity risk advisory firm that owns asmall stake in the Galveston plant, said he hadn't heard of plans by Chevron to stop investing in the facility. But he said he has his own doubts about the durability of the plant in the face of clear market challenges for biodiesel.
The Portland Water Bureau did a good thing this year. It switched eight of their trucks to run B99, nearly pure biodiesel. Unfortunately they chose biodiesel from Sequential Biofuels which was most likely made from waste vegetable oil using the traditional batch process with a water wash. The result? A high cold flow plug point. That meant that at first frost the trucks fuel turned solid. I have run B100, PURE BIODIESEL, for the last three years and have never had a tank turn solid. Why? Because I use only biodiesel made from virgin veg oils, specifically canola, from Imperium Renewables. And yes that is my company so I have a dog in this fight. This morning there was a frost on the ground and a temp in the 30s. The Touareg started right up on problem. In the tank, B100 from Canola with a CFPP of around -14C. Go ahead, run B100 all winter. Just buy from a company that makes the highest quality biodiesel you can find. It is not all the same.
prices are today at record levels. Check the blow from OPIS. Oil companies have learned that the demand for diesel is relatively inelastic. But Gas demand is pretty elastic above $3.50. So what do they do with $97 oil? raise diesel prices faster to keep revenue equal without destroying gas demand.
In other news, while most of America is fixated on the
price of gasoline, the price of diesel fuel has quietly moved to numbers that
are up more than 80cts gal from last year, and by well over twice what was paid
in December 2003. According to data compiled by OPIS for AAA this morning, 24
U.S. states now have average prices above $3.50 gal.
diesel in the country shows up in South Carolina, where the average price is
"just" $3.30 gal. The most expensive diesel is in Hawaii, where
recent refinery woes have combined with high global prices to send the average
price to $3.845 gal. The most expensive mainland state is Montana, where the
average price is $3.732 gal.
that vary anywhere from about $2.75 gal to $2.85 gal for ultra low sulfur
diesel U.S. bulk markets are the primary culprit behind the surge. But
wholesale prices for low sulfur diesel in Europe have advanced to over $3.00
gal recently, leading to a vibrant export market from Gulf Coast and even
Middle Atlantic ports.
In contrast, the
average price for retail diesel one year ago today was
$2.642 gal. The end of November 2005 saw an average price
of $2.629 gal; while this day in 2004 saw a $2.1654 gal average. If one goes
back four years, the average price for diesel on November 26, 2003 was just
$1.5477 gal. Hence, today's prices are up by about 125% from the numbers
witnessed just four years ago.
Propel Fuels just had a soft launch of their new CleanDrive program. Enter your vehicles and buy biodiesel from Propel stations, get a report saying how much carbon you are saving ongoing. You can actually track the difference you are making. Very cool. I just joined.
I have been saying for some time that the speculative premium baked into soy oil on the expectation of massive consumption by biodiesel is WAY overblown. Soy oil has been trading in line with crude oil as if it were a direct substitute. It is not. It requires lots of processing. The refinery capacity for that is not at scale yet (with the exception of Imperium). Yet the USDA report showing US soy consumption by biodiesel producers has been up and to the right for the past 6 months. Graphing that out showed a huge percentage of the soy crop going to biodiesel. I have been saying this grossly underestimates the effect of today's negative margins, the pullback on plant financings and the negative economics of midwest biodiesel in general. Finally this month, the USDA report reflects the facts. Notice a HUGE drop off in Sept of soy oil going to biodiesel.
vegetable oil usage to methyl esters down 20% from August's number.
* Soy usage in methyl esters down about 25% versus
* Given what I've seen about how the Census number
affects the USDA number, I'd expect next week's USDA report to be flat or down
slightly on the soy usage in methyl esters.
* Composition changing: Soy's share of feedstock usage
down considerably versus tallow and other sources relatively flat.
Does anyone really believe the oil companies want to solve our oil addiction? Monopolists never have an interest in true change. Their only interest is in delaying true change. Witness the Cigarette companies "researching" health effects of smoking. And bringing "low tar" and "filtered" cigarettes to the market. Witness Microsoft saying "all bugs will be solved in the next release". Every time, every release. Witness the blatant greenwashing BP is engaged in. Do you really believe "it is a start"? Now Chevron joins the put off party with a huge bunch of guilt money going to NREL to "Collaborate on research to produce transportation fuels using algae". Wait a minute, isn't this the same NREL that was already paid by the Federal Government for OVER A DECADE to study the VERY SAME PROBLEM? Yessiree it is.
Well I bought one that already does that from EcoRider, but some students in Aus have rigged one together as well. Unfortunately they chose a 10HP engine and i bet the thing can't make it over 30mph. Go Neander!
I have been talking for some time about the extra values that are available from burning biodiesel versus petro diesel. One of these is the value of carbon reductions (since biodiesel produces 78% less carbon than diesel). There are a number of organizations trying to get a protocol approved from an exchange to value the credits. The current leading market which should approve biodesel carbon credits first is the Chicago Carbon Exchange (CCX). Biodiesel Mag has an article on this. I expect this to happen by Q1 08. This will be a very interesting development for the overall biodiesel industry.
Researchers predict 12 fold increase in lipid yields around the world
I have been talking for some time about the fact that current oilseed industry has been developed and optimized for food production. That if you were to manage and optimize the crops for fuel production you could get a radical increase in oil production. These researchers affirm that.
Propel Biodiesel is starting to put their stations in the ground! We know the Propel guys well (in fact they are hanging in our office). These stations will carry the best fuel on the planet, Imperium's! and are the most convenient way to hook up with biodiesel. They are rolling out 20 in the next couple months.
Australian bioidiesel company buys development of palm oil plantations
Saw this on the tape today.
I expect more of this vertical integration, although I have no idea if this deal will work or not. I see this as just an option buy (the cost of that option is not mentioned). As an option buy, it is not clear how it could affect EBITDA in the near term. I expect there is little to no effect other than losses as the plantations are developed.
STERLING BIOFUELS ACQUIRES 70% OF UTE POWER
Australia's Sterling Biofuels (ASX: SBI) has acquired a 70% stake in UTE Power, a Malaysian company that has development rights for oil palm plantation.
UTE Power has the right to develop 10,600 acres of land owned by a Malaysian state government body into an oil palm plantation. The development rights are for a period of 60 years with an option to renew for another 30 years.
This acquisition will ensure a regular supply of feedstock to Sterling's biofuel plants and also protect the company from future spikes in the price of its palm-based feedstock.
Under the acquisition terms, Sterling will be responsible for funding the development of the proposed oil palm plantation. As such, it will pay only a nominal upfront payment for the acquisition of its interest in UTE.
Sterling will have control of UTE management and a first right of refusal over any future plantation development rights that the initial promoters may source.
The cost of developing the oil palm plantation is estimated to be AUD 15m (USD 12.6m) over 5 years. Sterling does not expect to raise equity capital to fund this initiative.
Since Malaysian rules on foreign equity ownership restrict Sterling's ownership of UTE to 70%, Sterling will have to apply for Malaysian regulatory approval to acquire a further 15% of UTE from the initial promoters. This option to purchase additional equity in the plantation development is exercisable over the next four years at an agreed price.
Worldwatch report food Vs Fuel; the winner Fuel and the small farmer
Worldwatch report sees many benefits from biofuels
FO Licht's World Ethanol & Biofuels Report
Tuesday August 07 2007
increase in world agriculture prices caused by the global boom in biofuels
could bring major benefits to the world's rural poor who have been suffering
under low prices for decades, according to the Worldwatch Institute.
is a conclusion of a major study entitled Biofuels for Transport: Global
Potential and Implications for Energy and Agriculture, co-ordinated by the
German Agency for Technical Cooperation and just published by Earthscan.
implemented in smart ways on the basis of strong policies, hundreds of millions
of the world's poorest people, the majority of whom live in rural areas, stand
to benefit massively from the global biofuel transition, which will result in
reduced food insecurity and increased incomes.
report confirms many previous scientific assessments on the poverty alleviating
potential of bio-based energy and products.
of declining agricultural prices have been reversed thanks to the growing use
of biofuels. Rural farmers in some of the poorest nations have been decimated
by US and European subsidies to crops such as corn, cotton, and sugar. But
today's higher prices may allow them to sell their crops at a decent price.
However, major agriculture reforms and infrastructure development will be
needed to ensure that the increased benefits go to the world's 800 million
undernourished people, most of whom live in rural areas", said Christopher
Flavin, president of the Worldwatch Institute.
for Transport, undertaken with support from the German Ministry of Food,
Agriculture, and Consumer Protection, assesses the range of 'sustainability'
issues the biofuels industry will present in the years ahead, ranging from
implications for the global climate and water resources to biological diversity
and the world's poor. The report finds that rising food prices are a hardship
for some urban poor, who will need increased assistance from the UN World Food
Programme and other relief efforts.
as many experts have stressed, a far larger group of poor people stands to
benefit from biofuels, namely those who live in rural areas. The researchers
stress that the central cause of food scarcity is poverty, and seeking food
security by driving agricultural prices ever lower will hurt more people than
fact, rising agricultural prices may have major economic benefits, especially
to the vast mass of the rural poor. Biofuels can, for the first time, bring
increased incomes and boost the food security of these people.
Sub-Saharan Africa more than 60% of people make a living off the land and low
agricultural prices as well as trade barriers and subsidies in the wealthy west
have kept them in dire poverty. Biofuels offer a unique opportunity to break
this lethal status quo, according to the report.
the tripling in oil prices since 2002 has been an economic disaster for poor
nations which in the future may be able to purchase fuel from their own farmers
rather than spending scarce foreign exchange on imported oil. Of the 47 poorest
countries, 38 are net importers of oil and 25 import all of their oil. The result
of this disastrously costly dependence is a potential collapse of poverty
alleviation, health, education, hunger and development efforts that are felt by
all the weakest segments of society.
UN recently found that some of the poorest countries are already forced to
spend twice as much on oil imports, than on health care.
the Biofuels for Transport study was researched, biofuels growth has
skyrocketed. According to the latest estimates, world biofuels production rose
by 28% in 2006 to 44 bln litres, with fuel ethanol increasing by 22% and
biodiesel rising by 80%. Although biofuels comprise less than 1% of the global
liquid fuel supply, the surge in production of biofuels in 2006 met 17% of the
increase in supply of all liquid fuels worldwide last year.
rapid growth is having unintended impacts. Large-scale biofuels production can
threaten biodiversity, as seen recently with palm oil plantations in Indonesia that are encroaching on forests and
edging out the endangered orangutan population—worrying European consumers who
have begun importing palm oil from Southeast Asia.
book concludes that the long-term potential of biofuels is in the use of
non-food feedstocks, including agricultural and forestry wastes, as well as
fast-growing, cellulose-rich energy crops such as perennial grasses and trees.
Following the model of Brazil's
sugar cane-based biofuels industry, cellulosic ethanol could dramatically
reduce the carbon dioxide and nitrogen pollution that results from today's
book recommends policies that protect natural resources, support a speedy
transition to cellulosic technologies, and facilitate a sustainable
international biofuels trade. Freer trade in biofuels should be coupled with
and environmental standards and a credible system to certify compliance.
alone will not solve the world's transportation-related energy problems,"
concludes the report. "Development of these fuels must occur within the
context of a transition to a more efficient, less polluting and more
diversified global transport sector. They must be part of a portfolio of
options that includes dramatic improvements in vehicle fuel economy, investment
in public transportation, and better urban planning."
for Transportation: Global Potential and Implications for Sustainable
Agriculture and Energy in the 21st Century. Published in the UK by
Diesel demand in Germany, France and the UK is expected to rise 2.2% in 2007
to 20,676,000 mt, according to International Energy Agency data analysed by
Platts, as Europe trends towards diesel powered transportation.
The agency estimates that France, the largest consumer of diesel in Europe,
will have 7,834,000 mt of demand in 2007 averaging 652.8kt per month which is a
1.1% increase from the previous year.
Germany, the second largest consumer will have 7,521,000 mt of demand in
2007 averaging 626.7kt a month, a 3.4% build from 2006 and the UK will have
5,321,000 mt of demand in 2007, up 2.38% from 2006.
Europe has been moving towards a majority diesel fleet since the European
Commission encouraged lower taxes on diesel fuel to encourage its spread at the
This is because diesel engines are more fuel efficient and therefore more
economical burning less CO2.
The lighter tax burden has kept diesel prices below gasoline across much of
Europe for a number of years, except in the UK, making diesel cars more
economical with cheaper running costs proving popular amongst consumers.
As a result, diesel demand into France, Germany and the UK has risen 23.9%
from 16,684,000 mt per year in 2000 to 20,676,000 mt this year which equates to
approximately 1000 cargoes of diesel.
At the same time, gasoline demand has declined as a higher percentage of new
cars being sold are diesel cars.
Diesel cars are cheaper to run and as a result of advances in diesel engine
technology amongst manufacturers, they are cleaner and quieter than they used
Data provided by PSA, the collective Peugeot and Citroën brand, shows that
the percentage of the European fleet [18 EU countries including France, Germany
and the UK] of new car registrations has risen from 22.3% in 1997 to 50.8% in
It is the first time that more diesel powered cars were sold than gasoline
The country with the highest percentage of diesel cars is France with 71.4% of
new cars registered in 2006 diesel totaling 1,427,698 units.
EPA finally implements the national RFS (two years late)
on Sept. 1, the EPA finally started enforcing the national Renewable Fuel Standard that was passed into law way back in 2005. The goals are today under the actual production and there is no carve out for Biodiesel, but that is changing. Lets hope that now that the administrative enforcement is in place, the policy makers can pass some actual stretch goals.
Jay Leno's EcoJet powered by Imperium Renewables gets more play
U.S. Secretary of Agriculture Mike Johanns (photo, R) and thousands of attendees at the Farm Progress Show last week got to see what millions have heard about on late night television. Tonight Show host and auto enthusiast Jay Leno has worked with GM in developing the EcoJet concept car that is propelled by a jet engine powered by B100 biodiesel. To build on this positive recognition of biodiesels benefits, New Holland displayed Lenos EcoJet in its exhibit at the Farm Progress Show in Decatur, Ill. on Aug. 28 and 29. The National Biodiesel Board (NBB) CEO Joe Jobe appeared with Leno in a webisode of Jay Lenos Garage earlier this year. Leno uses biodiesel in the New Holland tractor that moves his cars in the garage. Leno also did a three-part series on the EcoJet. The EcoJet is one more example of how biodiesel enhances future vehicle technology, said Jobe. We appreciate the support of Jay Leno and New Holland for bringing the EcoJet to the Farm Progress Show. It helps us raise awareness for the important role that biodiesel plays in our nations energy security. Click here for sound clips, photos and more. Don Scott, NBB technical and regulatory engineer, has also traveled across the nation with the EcoJet on a promotional tour.
Malaysian palm trader buys into US biodiesel production
2007-05-10 10:08:12 EDT
***MALAY PALM FIRM BUYS BUDDING U.S. BIODIESEL PRODUCER
Felda Holdings Bhd, a Malaysian company said to be the world's largest palm oil producer, announced yesterday that it agreed to buy a U.S. oleochemical and biodiesel producer with big plans for expanding its biofuel output.
With an eye to expanding its biofuel presence around the world, Felda inked a memorandum of understanding with Quincy, Mass.-based Twin Rivers Technology that would give it a controlling interest in the company. Terms of the deal, which is still subject to due diligence and approval of both company boards, were face down, but sources said Felda had sought a 70%-80% stake infamily- owned Twin Rivers. The deal should be completed over the next three months.
Annual revenues at Twin Rivers were said to top $200 million. Some of its biggest customers include biodiesel producers Peter Cremer and Stepan Co.
Twin Rivers has a long history in biodiesel, though not extensive. The company was formed in the mid-1990s with the idea of retrofitting a former Procter & Gamble plant in Quincy to make its "EnviroDiesel" biodiesel. The company instead ended up focusing on fatty acids, glycerin and other products used in soap and cosmetics industries -- only producing small volumes of biodiesel at Quincy.
However, Twin Rivers aggregated additional facilities and other assets over the last several years that it planned to, in part, devote to biodiesel. Along with its Quincyoperation, the company has facilities in Cincinnati and Painesville, Ohio, as well as the Fore River Transportation Co. short line railroad that services Quincy with access to the national rail system.
In essence,it has been back to the future as far as its latest biodiesel plans. Twin Rivers recently set out a phased expansion into commercial biodiesel production that would eventually push its output to 70 million gal/yr. Next year, the company expected to beginretrofitting its Cincinnatiplant to make biodiesel at the rate of about 35 million gal/yr. Following that, expansion work to around 35 million gal/yr was pegged for Quincy. The Painesville plant has also been tapped as a future biodiesel production site.
Twin Rivers also offers ship access, as well as bulk liquid terminals and warehouse facilities scattered through several Midwest and East Coast states.
The Felda deal provides strong financial backing for Twin Rivers growth projects, commented one industry player, as well as a very special connection to the palm oil markets. By some accounts, Felda provides up to 8% of world palm oil demand. Felda officials said they expect to grow Twin Rivers operations, but provided little specific details.
Spencer Kelly, email@example.com
Look what could happen if you choose the wrong one who is not a credit worthy co-party.
Shares plunge in Renewable Power and Light
FO Licht's World Ethanol & Biofuels ReportTuesday July 17 2007
Shares in Renewable Power and Light Plc have lost more than half their value because it expects to make a loss in 2007 instead of a $25 mln pre-tax profit predicted by the house broker, the firm said on July 13. The company blamed the turnaround on the loss of its supply of palm oil which it planned to use to generate electricity in two power plants it is converting to run on biodiesel.
Renewable Power is suing its supplier, Safari Group Inc, in the United States for breach of contract for failing to deliver the palm oil for an earlier agreed price. Its oil palms are grown in West Africa. Palm oil prices doubled since the start of 2006, before recently falling back. They are still up over 70% for the period, driven by demand for biofuel. Renewable Power now faces difficulty buying palm oil at a price to make its operations profitable unless it can secure the supply from Safari at the agreed tariff.
It has obtained a temporary restraining order preventing Safari from transferring the palm oil to anyone else. Renewable Power is considering its strategy, including using other feedstock crops, buying feedstock firms, or growing its own palm oil, while it sues Safari, a spokesman said on Friday.
Oil rises to 11-month high as production drops
. Crude oil rose to an 11-month high in New York and London after a pipeline shutdown and maintenance work reduced North Sea Brent oil production. Chevron Corp. and ConocoPhillips said they lost output from North Sea fields that produce oil and gas after BP Plc closed the pipeline. BG Group Plc said its Armada oil field in the North Sea has been shut for maintenance since June. The International Energy Agency said in a report today that global oil demand will rise 2.5% next year. Crude oil for August delivery rose $1.37 to $73.87 a barrel at 2:24 p.m. on the New York Mercantile Exchange. Futures reached $73.89, the highest intraday price since Aug. 15. Oil is up 1.3% this week.
FOX Sports Chooses All-Star Fuel for All-Star GameSports network commits to B20 for MLB All-Star Game and other sporting events
JEFFERSON CITY, Mo. Fans who tune into the Major League Baseball All-Star Game tonight will be watching a broadcast powered by biodiesel. FOX Sports will use B20, a blend of 20 percent biodiesel and 80 percent diesel, in all of its generators, satellite trucks and other diesel equipment at its television compound in San Francisco. Whats more, the company has committed to using B20 to power its broadcasts of the World Series, Super Bowl, the Bowl Championship Series and other major events. The move is part of the Cool Change Initiative introduced by News Corporation, the parent company to FOX Sports. This initiative is an attempt to reduce our carbon footprint to neutral by 2010, said Michael Davies, Director, Field Operations - FOX Sports. The All-Star game presents the opportunity to start implementing some of these environmentally friendly practices, part of which is using B20 in our equipment. Davies said that biodiesel came recommended from other contractors in the ever-greening entertainment industry. Many musicians, actors and festivals use biodiesel in their generators and vehicles, including Tim McGraw and Faith Hill, Sheryl Crow, Norah Jones, Pearl Jam, Willie Nelson, Daryl Hannah, the Coachella Music Festival, and the Bonnaroo Music Festival. The entertainment industry has led by example when it comes to using and promoting biodiesel, said Joe Jobe, CEO of the National Biodiesel Board. Its refreshing to see such high profile stars and companies embracing biodiesel and letting it help them take control of their impact on the environment and oil imports. The All-Star Game marks the first occasion that the sports network has tried B20. Biodiesel was an easy decision for us because it works in our regular generators without having to retool our existing equipment, Davies said. Biodiesel is a renewable fuel made from any vegetable oil or animal fat. It is most commonly made from soybean oil. American soybean farmers, through a program called the soybean checkoff, launched the U.S. biodiesel industry more than 15 years ago. Biodiesel significantly reduces emissions, including carbon monoxide, particulate matter and life cycle carbon dioxide. For more information about biodiesel, visit Biodiesel.org.
· Unilever consumes more than 300,000,000 gallons of palm per year (1 mm metric tonnes) Source: Unilever (http://www.unilever.com/Images/Palm%20Oil%20-%20A%20Sustainable%20Future%202002_tcm13-5315.pdf)
· The entire US biodiesel industry consumed less than 250,000,000 gallons of veg oil in 2006, over 90% of which was soy oil. A maximum of 10% of US biodiesel production came from Palm leaving a maximum of 25 million gallons of palm oil were used for US Biodiesel. Now what is 25M as a percent of 10B? 0.25%.
Now how can the US biodiesel industry that consumed (even by very generous math) less than a quarter of 1% of the palm oil in the world be the root of all palm oil evil? Check the ingredients on your food packages, in your fast food restraunts and your detergents. You will find MUCH more palm oil there.
RSPO Statement: Sustainable Palm Oil Certification and Trading Systems 26 June 2007
Kuala Lumpur, 26 June 2007: The Roundtable on Sustainable Palm Oil (RSPO) took another step closer towards its stated objective of bringing sustainable palm oil to the market. A Certification protocol with recommendations for a complete scheme for certifying palm oil production against the RSPO Principles & Criteria for Sustainable Palm Oil Production (RSPO P&C, which includes the generic Guidance and Indicators) has been approved by the RSPO Executive Board. Trial or pilot audits using the draft system are already underway. It is expected that results from these audits will be shared at the upcoming 5th Roundtable Meeting on Sustainable Palm Oil (RT5) scheduled during 20-22 November 2007 in Kuala Lumpur. The Certification systems Protocol gives clear guidance to Certification Bodies on how to become accredited (i.e. registered) as RSPO certifiers. This will allow palm oil producers to approach these Certification Bodies with the request to undertake an RSPO audit. The Certification Protocol is now available on the RSPO web site. A document detailing which steps producers need to take to engage with Certification Bodies is in preparation.In addition to this, a document has been developed which describes a range of trading systems and options for trade in certified palm oil. The document on Supply Chain Options is now available on the RSPO web site. This document covers the following 3 options:
Segregated supply chains (which will lead into a Separate Commodity Grade in case of sufficient volume of Sustainable Palm Oil)
Controlled Mixing of certified and non-certified palm oil (also referred to as Mass-balance)
Parallel Certificate Trading (Book and Claim)
It is the view of the RSPO Executive Board (EB) that all options as well as rules for the use of claims together with transaction and trading systems would be implemented in the future when trade in certified palm oil increases. The allowance of more options provides flexibility and robustness in supplying the market with certified sustainable palm oil. For the time being, allowed claims can vary as follows:
"This product supports the trade in sustainable palm oil" (option 3)
Further elaboration of claims is in process.
As well, the RSPO EB endorsed GreenPalm Brokers Ltd U.K. in the trading of RSPO palm oil certificates. GreenPalm would act as the sole RSPO endorsed broker for trade in certificates of RSPO palm oil. RSPO will maintain a clear database for volumes of certified oil and certificates traded to ensure the integrity of the system.
Diesel cars are coming back With ultra-clean fuel available at pumps, diesel cars are re-entering the U.S. NEW YORK (CNNMoney.com) -- With rising gas prices, diesel cars and SUVs are gearing up for a major American comeback after a brief appearance 25 years ago. But if all you remember are the smell and noise, you might not recognize the new leaner, cleaner versions.
Back in the early 1980's, 80 percent of the cars Mercedes-Benz sold in the U.S. were diesel powered. General Motors sold diesel Oldsmobiles and Cadillacs.
The reason then was obvious: Adjusted for inflation, the cost of gasoline then was about $3.15 a gallon. Buyers were looking for a more fuel-efficient way to drive.
Diesel engines were noisy, they were slow and they puffed out nasty polluting smoke. But they used much less fuel than gasoline engines, so buyers were willing to put up with the downsides.
As gas prices went back down, relative to other costs, and environmental regulations became stricter the tide of diesels rolled back across the Atlantic leaving only memories of clanky, foul smelling diesel cars.
Today, while half the cars sold in Europe are diesels, diesel market share in the U.S. is about 3.5 percent and that's mostly pick-ups, according to R.L. Polk & Co.
With a hungry European market to feed, diesel development has continued, creating turbocharged diesel engines that perform better and pollute less. Today's diesel cars are virtually indistinguishable from their gasoline-burning siblings. Except they use a lot less fuel.
"Anyone who's spent time overseas has seen and driven some very competent diesels," said Charlie Vogelheim, vice president for automotive development at J.D. Power and Associates.
Meanwhile, gas prices have gone back up in the U.S. and new low-sulfur diesel fuel has opened the way for even cleaner-burning diesel engines than the Europeans have. (New exhaust cleaning technologies would have choked on all the sulfur in the old diesel fuel.)
Diesel engines are more efficient than gasoline engines in part because diesel fuel contains more energy than gasoline.
Diesel engines combust the fuel by squeezing air to extremely high pressure inside the cylinders. Just as the air is being squeezed to maximum pressure, fuel is injected into the cylinder where it combusts immediately in the hot air. (When the car is first started the cylinder is pre-heated by a "glow plug.") That high-pressure ignition - higher pressure than is possible in a gasoline engine - also results in more power.
These modern diesels have exhaust that, on a mile-to-mile basis, is close to gasoline in terms of smog-forming pollution. Already, because they don't need to burn as much fuel, they emit less carbon dioxide than gasoline engines. Excess CO2 has been blamed for global warming.
Even with the new fuel, scrubbing diesel emissions this clean isn't cheap or easy. That's one reason most car companies are entering the market with diesel-powered SUVs first. Heavier vehicles have easier emissions standards.
"Those are the vehicles that are in greatest need of greater fuel economy," Diesel Technology Forum executive director Allen Schaeffer said of SUVs, offering another reason diesel engines are appearing first in those larger vehicles.
Mercedes-Benz, for example, will soon be selling new diesel versions of its M-class, R-class and GL-class SUVs here and will be phasing out the E320 diesel sedan it currently sells here.
The new Mercedes SUVs, unlike the car and the diesels SUVs the company sells here now, will be available for sale in all 50 states. Even the cleanest European diesels now available can't meet emissions standards in five states - California and New York among - that are even stricter than the federal government's.
Chrysler, the American arm of DaimlerChrysler, and Volkswagen already sells "45 state" diesel SUVS. Chrysler sells version of its Jeep Grand Cherokee SUV that uses an engine from German division Mercedes-Benz.
Volkswagen sells a 10-cylinder diesel version of its Touareg SUV here. Until 2006, VW sold a full line of diesel-powered cars here, including the Golf, Jetta and New Beetle. But those vehicles weren't clean-burning enough to meet stricter emissions standards for cars that were phased in this year.
The diesel Jetta sedan will be back next year, however, in a cleaner running version that will meet emissions standards in all 50 states, VW says.
BMW plans to begin selling one or more vehicles with a 3.0 liter twin turbo diesel engine here by the end of 2008. The BMW diesels will be available in all 50 states and, BMW promises, they will drive just the way people expect a BMW to drive.
Audi is expected sell a diesel version of its Q7 SUV here. Nissan and Honda will be entering the market with diesel cars. Nissan recently announced it intends to bring a diesel version of its Maxima sedan to the U.S., and Honda says it will sell a diesel four-cylinder car here in a few years. What car, exactly, that will be hasn't been announced.
Korean automaker Hyundai is planning to bring a diesel version of its just-introduced Veracruz SUV to the U.S. in 2009 or 2010.
Neither Ford nor GM has any plans to try again with diesel passenger cars or SUVs for their home market. It wouldn't be cost-effective for them, a Ford spokesman said, because Ford cars available in Europe as diesels aren't sold here. And the market is too small for them to develop U.S.-only diesels.
Market acceptance of diesel passenger vehicles should grow here again, Vogelheim said, as consumers experience the new, cleaner engines.
Diesels performance characteristics should appeal to Americans who like a lot of "off the line" power for quick acceleration, said Allen Schaeffer, executive director of the Diesel Technology Forum. Diesel engines produce a lot of low-speed torque, the twisting power needed to get the wheels moving, but that power is produced in a rather narrow range of engine speeds.
Almost all modern diesel engines today are turbocharged, which helps to improve performance to something more like what drivers are used to from a gasoline engines.
Whether we start regularly seeing diesels on American roads will probably depend more on the supply of vehicles than demand, said Vogelheim. Once gasoline tops $3.00, there should be plenty of demand, he said.
I have written how Jatropha may be the future of biodiesel feedstocks. Well I got some seeds and planted them in a pot. This sprout which is over 9 inches tall came out over the weekend. Friday nothing. Monday 9:00am, 9 inches. Wow.
I am in Hawaii for the week working on our refinery here. On friday I went out to see the future of biodiesel feedstocks: jatropha. While the current biodiesel industry has been built on the back of industrial scale food crops like soy, palm and canola, the future is energy specific crops like Jatropha, mustard, camellina, castor and others. So I drove out into the red fields and got my picture taken with the future.
check out all the biodiesel legislation in california!
The bills as drafted:
SB 70: Defines biodiesel as a fuel and not an additive
SB 71: Mandates use of biodiesel B20 in state / local / government fleets.
SB 72: Mandates use of B20 in school busses
SB 73: Tax credit for production of biodiesel
SB 74: Sales and use tax exemptions for infrastructure
SB 75: Requires state to only purchase diesel vehicles warrantied to B20 or higher.
OPEC and Middle East news...
PFC Energy, an energy consultancy, has released a research report that states the main, long-term threat to oil supplies is resource nationalism. According to their research, only now are the full effects of the nationalism efforts of the 60s and 70s impacting the market. This ties to the Global Investment Strategys theory that productive spare capacity is now nearly exhausted; the result of years of underinvestment in new production and not allowing multinational oil companies to use their sophisticated recovery techniques to maximize production. The result of this lack of spare capacity is that if demand rises, little can be done to stop prices from doing the same.
With nations such as Venezuela forcing out the multinationals and non-OPEC production likely to decline in coming years, the problem will likely persist and worsen as demand is expected to show continued growth. Thus, the world will likely rely on nations such as Saudi Arabia, Angola, Nigeria, and central Asian states such as Kazakhstan to meet future demand growth and provide any supply cushion that may be available.
MENL reported that in April the U.S. military sustained over 100 casualties as explosively formed projectile attacks set a new record at 69, up 31 from March. DEBKA reports that since January, car bombings in Iraq have increased 30%. U.S. troop commanders believe that with 30k additional troops coming to Iraq in June to help stop al Qaeda operations in the nation, its likely casualties will increase. One of the problems the U.S. military is running into is that they are taking the offensive directly to the insurgency, but that means they are moving into areas they are less familiar with. This complicates operations and can lead to more casualties.
The U.S. efforts against the Sunni insurgency may be further complicated by the fact that Iran is supporting them. Weve noted before that Iran was likely playing both sides of the fence. On Wednesday a U.S. military spokesman in Iraq was reported by DEBKA as confirming Iranian intelligence officials were acting in support of insurgent groups in Iraq. Any links between al Qaeda in Iraq and Iran are at best sketchy, but it wouldnt be too surprising to hear the Iranians are supporting al Qaeda solely to inflict mass casualties on the U.S. in hopes of forcing a withdrawal of coalition forces. Noting previous reports that only Sunnis conduct suicide attacks in Iraq, this would likely be one of the best ways to engage the U.S. without having to suffer too many casualties.
On the Iranian offer to help the U.S. form an exit strategy, we think Iran is probably serious about this, as they would welcome a U.S. exit; the problem is that Iran would likely be charged with working to control the Shiite community in the nation. We note the Shiite community has seemingly become more fractionalized. This would likely complicate any Iranian efforts in helping stabilize Iraq as their influence over the Shiite population may be less than when dealing with a more unified Shiite community.
In Palestine, the nation is merging its militias, including Hamas, into an umbrella military. Earlier this year there were reports suggesting Hamas was attempting to form an army. It appears the majority of troops will come from the Palestinian National Forces, and the PNF would serve as central command. Also from Palestine, Farfour, the martyr mouse that looked strikingly similar to Mickey Mouse, has been pulled from the air for a review of the show. The mouse character has in the past called on children to engage in resistance against both Israel and the U.S.
Yesterday, a Movement for the Emancipation of the Niger Delta (MEND) statement from Jomo Gbomo said MEND played a significant part in getting Nigerian VP Goodluck Jonathon his post. This is the first time a political patron of the group has been identified. In the near-term, we view the inauguration of Yaradua as an event that will decrease infrastructure attacks and Delta violence. Over time though, wed anticipate the militant umbrella that is MEND to splinter and attacks will likely resume.
I have said for some time that big oil is employing tried and true monopolist tactics to surpress options to their product. One of these is funding faulty science or denial science. ExxonMobile seems to have shifted: Big oil undermining biofuel research, warns watchdog | Inside Greentech from denying climate change exists to saying biofuels won't help or are worse. Who do they think we are? Ethanol is worse than crude oil??? come on
I have been writing for some time about the upcoming clash of titans between clean diesel from Europe and the hybrids from Japan. America will be ground zero in this war. Thanks Aron for an update below...
Tired of taking it on the chin from Toyota, the German car-makers are starting to honk their horns about the easy benefits to be had from vehicles running on diesel -- even in comparison to the much vaunted hybrids made by the Japanese.
Carbon dioxide emissions from new, clean diesel engines meet -- or even exceed -- the benchmark set by hybrid cars. However, the public relations battle so far has been won by the hybrid-makers who have branded themselves to a significant degree around the beneficial qualities of their low emission vehicles, and have benefited from the celebrity love affair with hybrids (granted, some are turned off though by the sight of some silly Hollywood star preening in a Prius). But that may be set to change.
For example, Volkswagen's new diesel Polo BlueMotion emits a mere 102 grammes of CO2 per km -- and that's less than a Toyota Prius. The Mercedes-Benz E320 Bluetec, which can take you 700 miles on a single tank of diesel, won the 2007 Green Car Award at the New York car show. The other two finalists were also German: BMW's Hydrogen 7 and the aforementioned Polo BlueMotion.
Though Toyota is commonly thought of now as the green consumer's top choice of auto-maker, those consumer might be surprised to learn that last year those hybrids accounted for barely 3.5% of Toyota's overall sales. Even more interesting: Toyota's fleet emits more CO2 than VW's. Additionally, people are starting to pay attention to something we have long pointed out as problematic about hybrids: their extensive battery-pack system. Batteries have always been one of the most environmentally negative aspects to a vehicle, due to their toxic composition and recycling difficulty. Hybrids can magnify this matter because of their almost obese usage of battery power.
For its part, BMW has high hopes for its new 1 Series, which went on sale in Europe this March. The vehicle uses a diesel engine emitting only 123 g/km of CO2, which is below the industry's current target and is quite close to the EU's target for 2012 calling for 120 g/km.
BMW's engineers are making strides with their new designs by way of a multitude of modifications to conventional vehicles: using lighter materials, improved fuel injection and better aerodynamics, and employing the "stop-start" function that hybrids already use. Whereas hybrids tend to realize their best mpg benefits in urban driving situations, diesels maintain their efficiency at freeway speeds. A modern diesel engine enjoys on average 30% superior mileage than its gasoline engine equivalent.
And all of this is true when those diesels are running on traditional fuel; things get really exciting once you add Biodiesel into the mix.
from AGE today. Lets see, highest carry-over volume since 2004, hummm why are prices so high?
The Brazilian Vegetable Oils Industry Association announced today that Brazil's soybean stocks as of March were 12.4 million metric tons. This represents the highest carry-over volume since 2004 (when 10 million tons were available from the previous crop). February figures were just 5.2 million tons.
April figures are expected to show another record high since Brazil is now in the final stages of harvesting a large 58.9 million ton soy crop.
The crushers bought 9.5 million tons of soybeans from farmers in March, up from 5 million in February. In March of last year, 8.4 million tons were purchased.
Most of the soy is bound for export, with a record 26.6 million tons anticipated to be shipped in the market year 2007-2008 (Feb to Jan).
In the face of growing demand for soyoil from Brazil's biodiesel producers, oil nonetheless fell in March to 226,000 tons, from 229,000 tons in February. March of last year saw soyoil consumption of 259,000. Consumption this March for soyoil marks the lowest rate in five years.
From Lehman analyst on Valero: "We applaud Valero's new strategic steps - restructuring of the portfolio to divest non-core and lower quality assets, return more cash back to shareholders and invest to increase diesel yield of their refineries. We think it reflects management's foresight to prepare the company for changing macro trends in the industry. "
From WSJ article today on Diesel in US:
The oil industry likes diesel because the fuel is increasingly profitable. In March 2004, reflecting a long-standing differential, the spot price for a gallon of regular gasoline on the U.S. Gulf Coast was 14 cents higher than for a gallon of diesel, according to the U.S. Energy Information Administration. Now, with demand rising and tougher emissions rules limiting supply, the prices have switched. Last month, the spot price for a gallon of diesel was six cents higher than for a gallon of gasoline.
Globally, robust economic growth has pushed up the demand for diesel, which powers everything from trucks to construction equipment to farm machines. Demand growth has been particularly strong in China. In Europe, refiners continue to shift to diesel, reflecting the move within the light-vehicle fleet.
Also they note Marathon investing in a $3.2B expansion of a refinery, all new diesel capacity. this is a BIG bet, but in the right direction.
The UK climate change group, Friends of the Earth has come out with a position paper on biofuels and palm oil: palm_oil_biofuel_position.pdf . The summary: join the RSPO and make this new crop work. don't whine about how it could be bad, make it work.
ConocoPhillips and Tyson hyjack the Biodiesel tax credits
in a move that will potentially transfer millions of tax payer dollars to big oil companies, ConocoPhillips and Tyson are exploiting a loophole called 'renewable diesel' in a big way; Bloomberg.com: News. i have written about this before. Basically big oil can pay pennies for old chicken and turkey guts, throw them into their hydrocrackers, cook at 3000 degrees and collect $1/gallon from the US taxpayer for what comes out. That is ON TOP of the normal diesel price they get as they will just blend in the guts and never tell anyone it is there in the diesel. The hydrocracker makes all carbon atoms equal. Taxpayers paying big oil to cook big Ag's chicken guts was not the intent of this tax credit. While you could argue that a gallon of guts offsets a gallon of foreign crude, it does nothing for the carbon footprint, there is no offset, there is no new industry created in the US, nothing. This simply increases the price of tallow. In fact it makes the tallow almost more valuable than the meat. Maybe we should throw in the whole cow. Now that would be an efficient use of BTUs. What do cows eat? Soy and canola meal. I say cut out the cow and just use the agricultural products.
The letter to Chevron said: "Mr. O'Reilly, certainly you are aware that the motor fuel contract and Image Agreement that all independent Chevron dealers must sign contain provisions inserted by your legal department that make it all but impossible for a Chevron dealer to deploy E85 or biodiesel. The same holds true for other oil companies with branded stations."
The letter, also signed by independent oil analyst and gasoline retailer representative Tim Hamilton, cites contract language that requires stations to install costly new underground tanks and separate islands and canopies to sell any alternative fuels.
"Gas station owners would have to spend up to $250,000 to satisfy Chevron's contract requirements, even if they had the space to install new underground tanks, which most do not," said Hamilton. "The company's contract restrictions mean that its recent embrace of renewable fuels is little more than a public relations greenwashing." FTCR's letter also cited restrictions imposed by Chevron's billing systems, which in practice would require the installation of a separate credit card station for alternative fuels.
Oil companies are making much of their biofuel
investments and self-serving donations to academic research,
while preventing widespread use of the one
thing that would most quickly reduce dependence on
petroleum-renewable fuels -- said FTCR. The group
noted that even BP's much-publicized new "green" gas
station in Los Angeles, Helios House, sells nothing but
"If Chevron and other oil companies meant what
they're belatedly saying about renewable energy, they
would be offering incentives to gasoline dealers willing
to sell E85 and biodiesel," said Dugan. "Instead, Big Oil
is using its dealer contracts to ensure that renewable
fuels won't ever cut into its market for petroleum fuels."
An important new site exposing Big Oil's Greenwashing
Is BP really "beyond petroleum"? Does Chevron investing in biodiesel really matter? What about the ConocoPhillips $22M to Iowa State for "research"? What is really going on? Check out: What Big Oil doesn't want you to know: Insider news & analysis from America's top consumer advocates and find out. See how much big oil is really putting into what. How their greenwashing is really executed. They are engaged in a standard blocking and delaying action. Get the details here. Share them with your friends. Do NOT let big oil get away with it.
Cummins Inc. announced today that they "approve" of the use of B20 biodiesel blends in their engines, for use in 2002 and later engines.
Cummins cited three main reasons for moving from approving B5 (which was their previous position) to B20: The American Society of Testing Materials specification ASTM D6751 is now inclusive of an important B100 stability specification; BQ-9000 certified biodiesel is increasingly available for purchase; Cummins completed its own proprietary testing which allowed them to be completely comfortable recommending B20 usage.
Cummins states that it is committed to participating in the growth of the industry producing high-quality biodiesel and its usage in their engines.
After two years of development, the crazy Germans have a running big bore diesel motorcycle! check out the pics!
Here is their update from the news letter.
Hello Friends of NEANDER,
The motorcycle season has opened, and with the first sunbeams, we grabbed at the chance to make the final engine tests on two wheels.
Our team of test drivers allowed our prototype to taste the spring asphalt, by running it from Munich through France into Southern Spain and back, and thereby testing its heart and kidneys.
The gang even opened up the throttle in the Land of Sangria and allowed the prototype to thrash the racetrack in Cartagena, making a proper impression.
Were attaching what could be the last pictures of the prototype and sending them to you, because in the meantime, we have almost completed the chassis construction for the "real" NEANDER. With its full-grown wheel length of 1930 mm and the daunting twin-forks, shes really looking sensational! Finally, this summer: The World Premiere. We will present the NEANDER live!!!
At this point, we would like to give our great partners, who have energetically supported us from the development phase right up to equipping the work shop, a huge "THANK YOU"! You will find an overview at our web site under the heading "Partners".
Aside from this, we have added several languages to our Internet pages.
Anyone, who always wanted to know what "First Turbo-Diesel Motorcycle in the World" means in Swedish, Italian, Spanish or French, can expand their knowledge here:
... And, we will continue to add new languages to our Internet site.
We wish you a successful beginning to the season, and will be in touch shortly with the latest from our NEANDER workshop.
Total-Neste renewable diesel deal DEAD like i SAID
Thanks Aron for the update on the dead and dying Neste-Total deal. Apparently it was not enough to admit the first time that the deal was too expensive, the companies had to say it again Tuesday in Paris. This is a continuation of the trend that marginal technologies will be hard to launch in this environment. Part of the "expense" calculation in addition to the high capital cost of the traditional petroleum hydrocracking pieces and parts is the fact that fuel made by this process may not have been eligible for all the tax credits given to true "biodiesel" (mono-alkyl esters). The fuel may have qualified under "renewable diesel", but there was probably alot of regulatory work in addition to the capital expense. While this particular project seems dead, the desire of the oil companies to participate with existing assets in renewable fuels is not. I expect more attempts in the future.
At the World Refining Association's European Fuels Conference in Paris on Tue, Jean-Jacques Mosconi of Neste-Total (senior vp of strategy & development & research) stated that their previously proposed biodiesel plant in France has been "deferred" rather than dropped altogether. However, he did admit that the plant was "unlikely to be resurrected.
Originally having been expected to bring product onstream in 2008, the proposed 200,000 barrel per day plant was to be located in Dunkirk, in northern France.
The effort is unlikely to be restarted unless "we discover that there is a big part of the project we have overlooked," said Mosconi.
Neste is also working on a joint venture with OMV AG of Austria, building a biofuels plant close to Vienna. According to an OMV employee who has worked on the Dunkirk deal, the numbers did not add up for the project based on a few factors (including their technology process), but "management seems to want it" because of the environmental cachet it adds to the company's brand and marketing.
As any capitalist would tell them, cachet flows forth from a business that can ultimately produce positive cash flow, so this deal would seem to be dead, if not yet buried.
The premium you pay for a hybrid over a diesel does not pay for itself. You take 10 years to pay off the hybrid premium and by then you will have needed new batteries which will push your pay-back out another 10 years. Just buy a diesel and get payback in a couple of years with no battery bullet out there...
In October 2006 hybrid, gas-electric, vehicle sales accounted for 2.1% of total domestic vehicle sales. According to Edmunds.com the gas-electrics now make up about 1.8% of total sales. Heres the problem, according to BusineessWeek, if gasoline costs $2.50/gallon it would take the Honda Accord 10 years to recoup the premium consumers must front at purchase. According to Global Insight the automakers are set to release another 40 hybrids over the next 20 months. There are about 12 currently.
Interestingly, one way the automakers are hedging their gas-electric hybrid bets is by forging ahead with plans for more diesel models.
The premium of a hybrid over its standard model is partially found in the cost of batteries. We note that all electric-only car models have failed in the U.S. primarily because their batteries were inadequate. The NYT says A123Systems new lithium ion car battery delivers faster acceleration than any other battery in the same size. Additionally, the safety and battery life have been improved by A123 using iron phosphate in place of cobalt oxide.
The crew down at Imperium Renewable's Gray's Harbor facility has grown significantly to well over 120 people a day working away. Today they stopped for a break and took a picture in front of the new processing building. Wow, that is alot of people!
Stepan Company cancels expansion plans for biodiesel
This week Stepan announced in : Biodiesel Magazine they will not expand biodiesel capacity due to narrowing margins in 2007. Last month, Future Fuels Corporation, an AIM listed SPAC said the same thing. The weak are being washed out. This is a good thing for the industry.
The US Department of Energy (DOE) and US Department of Agriculture (USDA) have published the results of the Biodiesel Lifecycle Inventory Study. This compared findings for a comprehensive “cradle to grave” inventory of materials used, energy resources consumed and air, water and solid waste emissions generated by petroleum diesel fuels and biodiesel in order to compare the total “lifecycle” costs and benefits of each of the fuels. This 3.5-year study followed US Environmental Protection Agency (EPA) and private industry approved protocols for conducting such research.
The study was designed to provide policy-makers with comparative information that they could use to formulate appropriate policies regarding biodiesel.
The major findings of the study are:
The total energy efficiency ratio (ie total fuel energy/total energy used in production, manufacture, transportation and distribution), the report notes, shows: “Biodiesel and petroleum diesel have very similar energy efficiencies.”
The total fossil energy efficiency ratio (ie total fuel energy/total fossil energy used in production, manufacture, transportation and distribution) for diesel fuel and biodiesel shows that biodiesel is four times as efficient as diesel fuel in utilising fossil energy – 3.215 per cent for biodiesel vs 0.8337 for diesel. The study notes: “In terms of effective use of fossil energy resources, biodiesel yields around 3.2 units of fuel product for every unit of fossil energy consumed in the lifecycle. By contrast, petroleum diesel’s life cycle yields only 0.83 units of fuel product per unit of fossil energy consumed. Such measures confirm the “renewable” nature of biodiesel. ‘The report also notes: “On the basis of fossil energy inputs, biodiesel enhances the effective utilisation of this finite energy source.”
The overall lifecycle emissions of carbon dioxide (a major greenhouse gas) from biodiesel are 78 per cent lower than the overall carbon dioxide emissions from petroleum diesel. “The reduction is a direct result of carbon recycling in soybean plants,” notes the study.
The overall lifecycle emissions of carbon monoxide (a poisonous gas and a contributing factor in the localized formation of smog and ozone) from biodiesel are 35 per cent lower than overall carbon monoxide emissions from diesel. Biodiesel also reduces bus exhaust-pipe emissions of carbon monoxide by 46 per cent. The study observes: “Biodiesel could, therefore, be an effective tool for mitigating CO.”
The overall lifecycle emissions of particulate matter (recognised as a contributing factor in respiratory disease) from biodiesel are 32 per cent lower than overall particulate matter emissions from diesel. Bus exhaust-pipe emissions of PM10 are 68 per cent lower for biodiesel compared to petroleum diesel. The study notes: “PM10 emitted from mobile sources is a major EPA target because of its role in respiratory disease. Urban areas represent the greatest risk in terms of numbers of people exposed and level of PM10 present. Use of biodiesel in urban buses is potentially a viable option for controlling both life cycle emissions of total particulate matter and exhaust-pipe emission of PM10.”
The study also finds that biodiesel reduces the total amount of particulate matter soot in bus exhaust-pipe exhaust by 83.6 per cent. Soot is the heavy black smoke portion of the exhaust that is essentially 100 per cent carbon that forms as a result of pyroysis reactions during fuel combustion. The study notes there is research confirming the relationship between exposure to diesel soot and cancerous growths. Beyond the potential public health benefit from substantially reduced soot emissions, the study also notes: “There is an aesthetic benefit associated with significantly less visible smoke observed from the exhaust-pipe. For urban bus operators, this translates into improved public relations’.
The overall lifecycle emissions of sulphur oxides (major components of acid rain) from biodiesel are 8 per cent lower than overall sulphur oxides emissions from diesel. Biodiesel completely eliminates emissions of sulphur oxides from bus exhaust-pipe emissions. The study notes: “Biodiesel can eliminate sulphur oxides emissions because it is sulphur-free.”
The overall lifecycle emissions of methane (one of the most potent greenhouse gases) from biodiesel are almost 3 per cent lower than those from diesel. The study notes: “Though the reductions achieved with biodiesel are small, they could be significant when estimated on the basis of its CO2 equivalent-warming potential.”
The bus exhaust-pipe emissions of hydrocarbons (a contributing factor in the formation of smog and ozone) are 37 per cent lower for biodiesel than diesel. The fact that biodiesel’s hydrocarbon emissions at the exhaust-pipe are lower means that the biodiesel life cycle has beneficial effects on urban pollution.
The overall lifecycle production of wastewater from biodiesel is 79 per cent lower than overall production of wastewater from diesel. The study notes: “Petroleum diesel generates roughly five times as much wastewater flow as biodiesel.”
The overall lifecycle production of hazardous solid wastes from biodiesel is 96 per cent lower than overall production of hazardous solid wastes from diesel.
New Holland is raising the bar for blends on biodiesel with their new equipment. New Holland highlight biodiesel-tolerant CNH engine. The engine will actually run B100, but it is important that a major producer is supporting B20, 4x the B5 most car makers are stuck at.
Praise Toro! New turf for Toro: Biodiesel. I have been waiting to ditch my old two cycle for a diesel lawnmower and now I can. Bye bye old, hello new! I am getting closer to 100% biodiesel engines in my life. With the purchase of my new 2007 Touareg and selling of my Avalanche, I am 100% auto diesel (Dodge Sprinter and VW Beetle the other two). Still on the path to be 100% biodiesel powered. Thanks Toro.
Argentine President Nestor Kirchner signed a law last week implementing tax breaks and fuel-content mandates for biofuels.
The Biofuels Act includes tax breaks for companies investing in the biofuels sector and mandates that fuel contain 5 percent biodiesel or ethanol by 2010. Argentina's Agriculture Secretariat said the country would need 600 million metric tons of biodiesel and 160 million tons of ethanol to satisfy the demand created by the law.
Also last week, U.S. State Undersecretary for Political Affairs Nicholas Burns visited Argentina to discuss cooperating on biofuels development. President Bush is trying to cut gasoline consumption by 20 percent by 2017, which would require nearly five times the alternative fuel production target of 7.5 billion gallons by 2012.
Although the United States has a tariff on imported ethanol, Argentina is hopeful it could contribute to supplies. Agricultural companies announced 13 different biodiesel projects in Argentina during the first eight months of 2006, totaling $285 million in investments, according to online consultants Abeceb.com.
"We're seeing many countries starting to require ethanol content in their petroleum, and the U.S. could be a major importer of Argentine ethanol," said Martin Farguio, executive director of corn lobbying group Maizar (Shane Romig, Wall Street Journal [subscription required], Feb. 14).
I have mentioned before that the Neste Oil NextBTL process was too expensive to build. Today (thanks AGE) Total in France killed an announce implemtation of the technology because of that very reason:
"It was announced today that Neste Oil has terminated a deal with Total to build a biodiesel plant in France, at a Total refinery.
While Neste Oil's other biodiesel plans remain in place, a feasibility study (begun during the Summer of 2005) showed that the prospective plant in Dunkirk would have been too expensive for the company to stomach.
Neste Oil has a similar plant under the final phase of construction at its Porvoo refinery in Finland, and that plant is expected to come on-stream during the first half of this year. Not long ago, the company decided to build a second, identical plant at the same site, which is scheduled for the end of 2008. It is not known if that decision was related to the termination of the Dunkirk project.
The two Porvoo plants will produce a combined output of 340,000 t/a, and the projected cost for both plants is approximately EUR200 million.
Also, Neste Oil is working with OMV to build a biodiesel plant at a site near Vienna, Austria. That plant is to be based on NExBTL technology.
NExBTL is Neste Oil's proprietary technology, which facilitates the creation of "premium-quality" biodiesel from multiple feedstocks."
This came over the wire today:
"DaimlerChrysler AG is set to perform a fleet test in the U.S. no later than the first quarter of 2008 of more than 20 Dodge Sprinter plug-in hybrid vehicles.
Capable of traveling up to 20 miles electrically from a single charge, the Sprinter PHEV will also have either a diesel or gasoline engine. The diesel version will provide the highest fuel economy, and will have the distinction of being the first ever fleet test of a diesel hybrid plug-in.
According to the company, four such vehicles are already in service with some customers. "
I found a german post about the vehicle as well. With the Sprinter already taking over the light duty delivery market (and the surf rig market like mine), this will only solidify the vehicle. Can't wait!
From OPIS today. It is a bit further out than the US, but it will definitely drive more demand. Note the specific mandate for biodiesel vs ethanol. America needs to get on that stick. Good good good.
UNVEILS NATIONAL RFS; SEPARATE BIODIESEL STANDARD
As expected, Canada will require 5% of its gasoline contain renewable fuels by 2010, but the government is also mandating a separate carve out for biodiesel, requiring 2% penetration of the diesel pool by 2012, according to an announcement earlier today by the federal government.
In its election platform, the Conservative government said it would have a 5% renewable fuels standard (RFS) by 2010, but a general framework wasn't outlined, nor was the break-out for biodiesel, until today.
"Our government understands Canadians' concerns around the quality of the air we breathe. We know that cleaner fuel means less pollution," said Canadian Environment Minister Rona Ambrose. "Requiring the use of renewable fuels fulfills a commitment by our government. Through these regulations, we are keeping with our approach toward meaningful action, and we will ensure that our objectives are met," she said.
According to a backgrounder on the announcement, while gasoline in Canada is used almost entirely on-road, a large share of the diesel fuel pool is not used for transportation. Therefore, the 2% requirement for biodiesel is equivalent to a 5% mandate for on-road diesel fuel.
The biodiesel carve-out is similar to what has been discussed in the U.S.
The U.S.' RFS requires 7.5 billion gallons of biofuels by 2012. The lion's share of the requirement is expected to come from ethanol, leading some U.S.
lawmakers to push for a separate biodiesel standard, although nothing has been enacted.
Canada currently produces approximately 615 million liters/yr (162.4 million
gal/yr) of ethanol and the RFS will require about 2.1 billion liters/yr by 2010. Meanwhile, the country produces approximately 52 million liters/yr of biodiesel. The federal requirement will call for almost another 600 million liters/yr by 2012.
The government will now focus on developing and implementing the RFS, as part of the Canadian Environmental Protect Act of 1999. "The regulations are expected to be complex and take at least two years to develop. Design and implementation of a regulation will require consultation with provinces, territories, affected sectors and other stakeholders. A Notice of Intent will be issued in early 2007, with discussions, consultations and studies undertaken throughout 2007," the government said.
It's unclear whether a credit trading provision, also seen under the U.S.
RFS, will be included or whether U.S. ethanol or biodiesel imports would be barred from being used to meet the Canadian standard.
In addition to today's announcement, the Canadian government also announced two capital grant programs worth C$345 million. The first, a C$200 million, four-year capital formation assistance program, is designed to encourage agricultural producers' participation in the biofuels industry. The program will provide repayable capital funding arrangements to biofuel projects, starting April 1, 2007. The second, a C$145 million, five-year program, is designed to promote R&D and the commercialization of agricultural bioproducts, including biofuels, in Canada. Each project may receive a total of up to C$25 million from 2007-2011. Eligible participants include universities, the private sector, federal government departments and agencies and other public sector research organizations.
This is the second time the federal government has offered biofuel producer grants. In 2004 and 2005, the government offered C$118 million in funding through its Ethanol Expansion Program. Eleven ethanol projects received funding and the government estimates that through the program, approximately 1.2 billion liters/yr of new ethanol capacity will be online by the end of 2007.
While the Canadian Petroleum Products Institute did not respond to requests for comment, the association previously said it supported a national RFS to avoid the patchwork of boutique fuels that may occur as several Canadian provinces moved forward with biofuel mandates. That was the same rationale given by the U.S. American Petroleum Institute for support of the RFS.
The Canadian Renewable Fuels Association (CRFA) was pleased with today's announcement. "This is the best type of Christmas announcement. It sets solid targets and gives farmers a chance to benefit from the growing renewable fuels industry year-after-year," said CRFA spokesman Robin Speer.
In the next year, CRFA plans to work with the government to reduce the tax rates on renewable fuels "to a level competitive with those found in other countries," he said.
Similar comments came from the Canola Council of Canada (CCC). "The two percent standard and access to funds for farmers to invest in biodiesel production are key steps in getting this industry off the ground," said CCC President Barb Isman. "But without government investments that put Canada on par with the U.S., there is no biodiesel industry in Canada. We need to ensure this piece of the puzzle is in place as soon as possible or the opportunity for Canadian farmers and the economy will be lost," he said.
The CCC is working with the petroleum industry to ensure biodiesel meets performance standards. Once that program is complete, CCC said the government could move the biodiesel requirement up by two years, to match the ethanol timeframe.
Meanwhile, at least one company may have been influenced by today's announcement. Rumor has it that Greenfield Ethanol (formerly Commercial Alcohols), Canada's largest ethanol producer, is set to announce a joint venture agreement with a cellulosic ethanol pretreatment company for plans to build a 40 million liter/yr cellulosic ethanol plant in the country.
Rachel Gantz, firstname.lastname@example.org
I was on a panel at the Think Equity conference last week. InsideGreenTech reports: Biofuel from algae on horizon, say experts | Inside Greentech. I may have been a bit of a wet blanket on the optimizm there. We are building a 100M gallon per year refinery. We need oil now. We won't get it from Algae any time soon.
Taking a page from the Cargill/ADM playbook, there is a move afoot in Malasia to create vertically integrated palm company to produce food and fuel. Now things are getting interesting....
The deal is complex, and I'm still scrutinizing aspects of it, but some companies linked to the Malaysian billionaire Robert Kuok have announced an all-stock merger valued at approximately $4.3 billion. The merger makes the combined companies one of the world's most mammoth integrated palm oil plantations and oleochemical companies.
In an attempt to vertically integrate palm oil activities, the deal combines PPB Oil's sizable plantations with Wilmar's portfolio of refiners and biodiesel plants across the geography of Indonesia, Malaysia and Singapore.
The merger consolidates assets and activities in the palm oil industry in a way that will provide the company with close access to China, which is the world's biggest palm oil consumer.
The company will control 434,426 hectares of palm oil plantations and 25 refineries across Malaysia and Indonesia. They become an even more potent player in the emerging biodiesel market than was the case separately.
At some point next year the Singapore-based company will start operations at three biodiesel plants in the Riau island of Indonesia. Projected annual capacity for those plants is 1.05 million metric tons.
Ethanol yields 25% more energy than the energy invested in its production, whereas biodiesel yields 93% more. Compared with ethanol, biodiesel releases just 1.0%, 8.3%, and 13% of the agricultural nitrogen, phosphorus, and pesticide pollutants, respectively, per net energy gain. Relative to the fossil fuels they displace, greenhouse gas emissions are reduced 12% by the production and combustion of ethanol and 41% by biodiesel. Biodiesel also releases less air pollutants per net energy gain than ethanol. These advantages of biodiesel over ethanol come from lower agricultural inputs and more efficient conversion of feedstocks to fuel.
Democrat presidental candidates to make alternative fuels a core platform
Iowa Governor Tom Vilsack, a Democrat candidate for president, said that renewable energy has the potential to unite the country, reinvent the economy and make the country more secure. (My prediction is that this will be a consistent theme amongst politicians across party lines moving forward, what I've been referring to as the Biopartisan nature of this issue).
Vilsack stated that this will be one of the pillars of his campaign platform, following a speech at the University of Colorado School of Law. He highlighted his state's leadership status in corn-based ethanol and soy-based biodiesel production.
Though Vilsack is officially the only Democrat contending for the office of president in 2008, unofficially there are a number of his party peers who are presumed to be running and are better known than he is. Vilsack has planned a multi-state tour to begin Nov 30 to formally announce his bid for office. He stated bluntly, "I think I'm the one person in this race who's doing something about it. There are a lot of people talking about it, but we've actually done something to promote renewable fuel."
Driving aroudn jonesing for biodiesel? Surf over to www.nearbio.com on your phone. Enter the zip code, city and state OR GPS coordinates (for the Really geeky) and find the station! Thanks to: Biodiesel finder for your cell phone | Inside Greentech for the pointer. Now all they need is google earth integration...
Usually I steer clear of the New York Times. But today they did a good job reflecting on Kurt Cobain and biodiesel: Biofuel Plant Raises Hope Where a Rocker Brooded - New York Times. I am a huge fan of Kurt Cobain. I was at Nirvana's last show in Munich Germany. I still have the ticket in my safe. Kurt looked like he wanted to die. The past is always haunting the future.
Verasun stumbles into biodiesel with weak promises
The ethanol business is hard these days. Both Verasun and Aventine are trading below their IPO prices. Gas prices are down 30% from summer highs. Ethanol prices are down 50% from summer highs. Two recent ethanol deals have been pulled from the IPO process. Investors have definitely popped that bubble. So what is a struggling ethanol company to do? One tactic would be to promise a new ethanol technology like cellulosic, but it is simply not ready for market (see Xethanol) and when your shareholders figure that out, they may sue you. Another tactic would be to diversify and look like some kind of leader in the next renewable fuel. VeraSun for now seems to be taking the later by announcing their intention to make biodiesel from their corn oil.
"VeraSun is currently evaluating locations for a 30-million-gallon-per-year biodiesel production facility, with plans to commence construction in 2007 and begin production in 2008. The Company has contracted with Lurgi PSI, Inc. for design and engineering services for the biodiesel facility and with Crown Iron Works Company for oil extraction equipment. As a result of the exclusivity provisions in these contracts, VeraSun expects to be the first to develop large-scale facilities using this technology. The Company has also filed a provisional patent application with the U.S. Patent Office for the production process."
A couple observations:
1. This is not innovative. It has been talked about for years and in fact was announced by Verasun as part of SunSource, LLC last summer.
2. The absolute amount of corn oil that comes out of the ethanol process is very small. It is estimated that out of a 100M gallon ethanol refinery, you would get around 3M gallons of corn oil. Ethanol producers are going to have to aggregate alot of corn oil and ship it around alot to get to scale. This aggregation and shipping will add cost to the corn oil and reduce the attractiveness of the economics.
3. Corn oil is a very low quality feedstock for biodiesel. It has a high free fatty acid content which requires extra processing. The capital and variable cost to produce biodiesel will be much higher than the industry average. This may be offset by the low internal transfer price of the corn oil, but the economics are unclear at this time. Lurgi and Crown are the most expensive biodiesel facility manufacturers in the industry. It is interesting that VSE did not note the cost of the 30M gallon refinery. I would estimate over $45M.
4. The resulting fuel also will have different performance characteristics especially around cold flow characteristics and cetane value. It is unclear the marketability of the fuel.
5. Taking the oil out of the distillers grains takes value out. While VSE has probably done the math at a deeper level than we have, our calculations don't come out as a net gain. I will be interested to see the actual marketability of DDS sans oil.
6. While a 30M g corn oil biodiesel refinery would help ethanol producers in the midwest recover some cost, it is not a competitive facility in the overall biodiesel market. And it won't be on-line before the middle of 2008. Imperium Renewables will have a 100M facility on-line in Q2 2007 utilizing multiple feedstocks and being built for much lower capital cost.
VSE is doing the right thing to try to squeeze every last dollar of revenue out of their feedstock. In the end the capital investment may be worth it. But do not mistake that as an actual biodiesel strategy. Imperium Renewables will open a 100m gallon refinery in Q2 which will be able to process corn oil, soy, canola, palm, anything at far superior scale economics than these small scale add-on facilities.
***KUBOTA OKAYS BIODIESEL BLENDS IN EQUIPMENT
Japanese-owned Kubota Tractor Corp. of Torrance, Calif., gave its official okay for the use of lower-level biodiesel blends in the diesel-powered equipment it produces and sells in the United States and elsewhere.
Kubota, which distributes its branded tractors, construction, as well as agricultural and consumer lawn care equipment throughout the U.S., said today that it tested and approved biodiesel blends up to B5 -- 5% biodiesel with 95% petroleum diesel -- in specified equipment. The approval comes with the caveat that the fuel meets certain standards, including compliance with American Society of Testing Materials D6751 for the biodiesel component, and ASTM D975- spec for the diesel portion.
The company also suggested that to assure quality biodiesel, it should originate from a BQ-9000 approved producer. BQ-9000 is the voluntary quality standard set up by the biodiesel industry through the National Biodiesel Board.
"Kubota is committed to environmentally sound practices and the support of renewable, agriculturally based products used in fuels," company president Tetsuji Tomita explained.
-Spencer Kelly, email@example.com
After a couple visits to Jay Leno's garage, monday he unveiled his jet powered biodiesel burning supercar: Inside Line: 2006 SEMA Show - GM Ecojet Concept. Imperium Renewables is providing the fuel. Jay got comfortable with our fuel by first burning it in his turbine motorcycle. This EcoJet car is significant in that both GM and Alcoa were involved as official sponsors. And Jay insisted it run on our biodiesel!
Definition of biodiesel good, definition of non-akyl ester diesel bad.
check it out:
Biodiesel is defined as a fuel substitute produced from nonpetroleum renewable resources meeting the registration requirements established by the EPA under 42 U.S.C. § 7545, including biodiesel derived from animal wastes, including poultry fats and poultry wastes, and other waste materials, or municipal solid waste and sludges and oils derived the treatment of wastewater. This includes both mono-alkyl esters meeting ASTM specification D-6751 and non-esters that are intended for use in engines designed to run on conventional, petroleum-derived diesel fuel and made from the above feedstocks. EPA proposes two separate categories: (1) biodiesel (mono-alkyl esters) and (2) non-ester renewable diesel (e.g., “renewable diesel” produced by the Neste process or diesel fuel produced by processing fats and oils through a refinery hydrotreating process). Any combination would qualify for credit.
The "Neste" process technically means that conventional oil refineries can throw raw veg oil into their existing refineries and get the $1/gallon credit even if the resulting fuel is 99% petroleum diesel. 100% veg oil biodiesel good. Petroleum refineries getting more subsidies: bad.
The country's largest biodiesel refinery takes shape in Gray's Harbor, WA
A bit self-promoting, but here is a shot from Imperium Renewable's construction site in Gray's Harbor Washington. We are a bit ahead of schedule building this 100MGPY refinery, the largest in the country. Go biodiesel!
Ted Turner on how to save world trade talks: biofuels
How to save Doha with soybeans
I want to vote for Ted Turner for president ... of the world. Turner gave a speech at the World Trade Organization's Public Forum this morning in Geneva that is equal parts inspiring and enlightening, and cuts right to the core of what this blog cares about. It is, in short, a program for making the world work.
The purpose of the speech is to call for the resuscitation of the Doha trade talks -- the so-called development round. Turner, who says he's been a "free trader" since high school, rightly pins the blame for the trade round's failure on the resistance of the U.S. and E.U. to cut agricultural subsidies. The intractable problem, he says, is that the developed world produces too much agricultural product, which depresses prices, which means that farmers in the developed world can't make a profit without subsidies, and farmers in the developing world can't make a profit, period. But politicians in the developed world will not end subsidies, because they would quickly find their own terms in office ended by disgruntled farmers.
Turner offers a solution: biofuels. If the problem with agricultural production as it stands now is that there is not enough demand to match supply, then the problem with biofuels is the exact opposite: not enough supply to match demand. And that, says Turner, "is what I would call a business opportunity." Turner proposes that the current system of agricultural subsidies be phased out and replaced by incentives for biofuel production.
"This gives developed countries a chance to end the stalemate over agricultural subsidies by giving farmers incentives to grow biofuels and by giving consumers incentives to use them. If -- over the next ten years -- WTO nations adopt policies that support an entirely new market in bio-based energy -- and if production expands to provide 15 to 20 percent of global fuel needs, the market in global agriculture could double or triple in value. In this market of unmet demand, the effect of government incentives for biofuel production will be totally different from normal crop subsidies. The unmet demand for transportation fuel is almost endless. This guarantees that support for domestic production will not displace foreign competitors or reduce the prices paid abroad. Farmers will be getting their income from the market, not from the government."
Biofuel's potential to address energy needs has come under sustained criticism from the left -- there are worries that the rain forest will be replaced by soybean or palm oil plantations, or that the whole push is being orchestrated by American agribusiness companies looking for new ways to exploit the world's poor farmers. But perhaps no critique is as emotionally charged as the argument that crops for fuel will displace crops for food, thus even further imperiling the livelihoods of the world's poorest. But Turner, whose entire speech is hinged on the moral imperative of improving the lot of the developing world, has no patience for this alleged quid pro quo.
"By investing in biofuels, developing countries can start solving these problems. They can produce their own domestic transportation fuels, cut their energy costs, improve public health, create new jobs in the rural economy, and ultimately, build export markets. By converting part of their output of food and fiber to fuel, they will be entering a market with higher prices and rising demand, and are more likely to attract the kind of foreign investment that can modernize their agricultural practices -- and increase their food production as well."
"This is a critical point, because there should be no food vs. fuel debate. We can absolutely produce both -- all that's required is investment. Economic growth, especially in rural areas, will help developing countries meet their food needs more easily. The answer to hunger is not more food, it is less poverty.
Turner's speech is passionate, smart and, above all, dedicated to making the world a better place for everyone. Read it.
-- Andrew Leonard
They know the Europeans are coming to get them on the hybrids and they are going to have to compete on diesel.
Honda unveils ultra-clean diesel system
Some work is still needed before the system could be made available in the U.S.
September 24 2006: 10:54 PM EDT
HAGA-GUN, Japan (Reuters) -- Japan's Honda Motor Co. has done it again.
The car maker that floored the world in the 1970s with the first gasoline engine to meet U.S. clean air guidelines without a catalytic converter said it has developed a new and simple diesel powertrain that is as clean as gasoline-fuelled cars.
The technology marks a big step forward for Honda at a time when rivals are racing to come up with ways to clear the world's strictest emissions regulations, called Tier II Bin 5, that the United States will usher in next year.
Diesel engines, which now power half of Europe's new cars, are slowly gaining traction with fuel-conscious consumers around the world since they typically get 30 percent better mileage than gasoline cars. Their weakness has been the higher exhaust levels of nitrogen oxide (NOx), a greenhouse gas.
Honda said on Monday its new diesel drivetrain features a unique method that generates and stores ammonia within a two-layer catalytic converter to turn nitrogen oxide into harmless nitrogen.
Honda engineers said the technology is superior to a process pioneered by Germany's DaimlerChrylser AG because the latter requires a complex system and heavy add-ons to generate ammonia from urea-based additives.
Some technical hurdles remain.
The system would need fine-tuning for the wide-ranging types of diesel fuel found in the United States. Honda also needs to develop technology to measure emissions levels according to U.S. On-Board Diagnostic System requirements.
But Japan's third-biggest auto maker said it planned to roll out the advanced diesel engine in the United States within three years. DaimlerChrysler, which along with VolkswagenAG already sells diesel cars in the world's biggest auto market, is preparing its next-generation diesel car for a 2008 launch.
"Just as we paved the way for cleaner gasoline engines, we will take the leadership in the progress of diesel engines," Honda Chief Executive Takeo Fukui told a news conference at the auto maker's R&D center north of Tokyo.
Fukui said Honda would be "open to considering" the licensing of its new diesel technology once it was perfected.
Honda has long been at the forefront of green powertrain technology, perhaps most famously with the development in 1973 of the CVCC (Compound Vortex Controlled Combustion) engine which gave the popular Civic its name.
Earlier this year, it became the first in the world to announce voluntary global carbon dioxide reduction targets for its products and production processes.
Fuel cells, flex fuel
In a demonstration of other new power plant technologies, Honda also showed off a prototype of its next-generation fuel cell vehicle which runs on a newly developed compact and more powerful fuel cell stack.
The new stack is designed to allow the hydrogen and water formed during electricity generation to flow vertically instead of horizontally, making the component 20 percent smaller and 30 percent lighter than the previous version.
Honda's new FCX fuel-cell car now has a driving range of 570 km (354 miles) -- a 30 percent improvement from the 2005 model -- a maximum speed of 160 km (100 miles) per hour and can be driven in temperatures as low as minus 30 degrees Celsius (-22 F).
Honda plans to begin marketing the car in limited numbers in 2008 in Japan and the United States.
Honda said it also developed a flexible fuel vehicle (FFV) system that can operate on any ethanol-to-gasoline ratio between 20 percent and 100 percent. That car will be sold in Brazil, the biggest market for ethanol-based vehicles, later this year.
"Way out in the future, the ultimate green car will be fuel cell vehicles," Fukui said. "But in the meantime, you need a wide range of green technology to meet varying local needs and fuel supply."
This from them this week:
Loren Beard, Senior Manager of Fuels for DaimlerChrysler, said that, "Diesel will be good for America, and biodiesel makes diesel better."
He said that diesel engines provide 30 per cent better fuel economy and 20 per cent less CO2 emissions. He also pointed out that biodiesel would use 20 per cent plant based fuel that had been grown in the USA, not imported from the Middle East.
According to the American government's own figures, if diesel had a 33 per cent share of cars and pick-ups, the U.S. would reduce its oil consumption by up to 1.4 million barrels of oil per day.
That would mean it could stop importing oil from Saudi Arabia altogether.
They are pomoting it because they have a strong pipeline of clean diesels coming to the US. I expect next year to be the beginning of a battle royale for the hearts and minds of US consumers between Japanese hybrids and European clean diesels.
The market is over-reacting to short term inventories in gasoline. There may be a problem for Ethanol companies as ethanol prices track unleaded very closely. But look at the Diesel demand!!! up 7.7%! Demand on diesel keeps rising and with winter approaching, more diesel is going to be made into home heating oil, further reducing diesel supply and supporting price there. If there were public biodiesel companies they would be a good buy now.
Here is what Jacques Rousseau, CFA from FBR said about the Refinery (and ethanol) companies last week:
Wednesday's DOE petroleum inventories report (for the week ended September 1) was negative for refiners due to an unexpected rise in gasoline inventories and a greater-than-expected increase to distillate stocks. The data show that the gains were driven by increased production and a high level of imports but that demand trends remain positive for gasoline (+1.4% above year-ago levels over the past four weeks) and diesel (+7.7%). We are concerned that refined product inventories have risen over the past month (+8% versus the same calendar week of 2005), but we view demand as the most important indicator, since supply changes from week to week, and with the decline in margins, we expect imports to moderate over the coming weeks. We maintain our Overweight rating on the sector and recommend investors buy on the recent pullback on the stocks. Outperform-rated Holly (HOC) and Valero Energy (VLO) are our top recommendations.
America needs more diesel cars and trucks. So the other day when I saw this AutoTrader.com listing for a diesel GMC Denali I immediately called the dealer. My hopes were dashed. This is a mis-print. It is a gas engine gets 11mpg and GMC doesn't plan on making it in diesel. Bummer..
for a traditional diesel engine: Diesel-powered "car" edges on half the speed of sound - Engadget. Up to 350mph from previous 237mph. Wow! That is just the normal diesel engine speed record. The overall land speed record is being broken by a jet powered vehicle running biodiesel. Diesel isn't only for efficiency anymore!
“Biodiesel is defined as mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats which conform to ASTM D6751 specifications for use in diesel engines. Biodiesel refers to the pure fuel before blending with diesel fuel. Biodiesel blends are denoted as, "BXX" with "XX" representing the percentage of biodiesel contained in the blend (ie: B20 is 20% biodiesel, 80% petroleum diesel).”
When you hear about diesel alternatives made from waste, garbage, chickens, natural gas, coal, and other things, they may burn in a diesel engine, but they are NOT biodiesel.
At one station, $.49/gallon less for biodiesel than diesel!!!!
SEATTLE, Wash. (Aug 15, 2006) - As oil prices rise in response to Middle East turbulence and production shutdowns on Alaskas North Slope, customers are turning to a more price predictable alternative.
While oil prices continue to fluctuate, the price of biodiesel remains stable, says Rob Elam of Propel Biofuels. On Monday, August 15th the spread between biodiesel and diesel prices reached its largest margin
SNS publishes guest letter on liquid fuel alternatives, misses the mark
Mark Andersen at SNS published a guest letter today from Glenn Spacht, CTO of NanoDynamics. He attempts to give an overview of liquid transportation fuel alternatives, but unfortunately misses the biodiesel boat, trashes the ethanol boat (with some good points) and points to (surprise) a fuel cell alternative that his company makes. Here is my letter to Mark in response as well as Glenn's letter.
Thanks Mark for this insightful summary of alternatives from Glenn. Unfortunately I believe he did your readers a serious disservice by glossing over Biodiesel and pointing to Yet Another Fuel Cell. Glenn's primary knocks on ethanol are the fossil fuels required to make it and the lower gas mileage. While the energy balanceis positive, it is barely so. He is right that ethanol is a push on energy balance and a negative on fuel economy.
Biodiesel is completely different. The Life Cycle Inventory of Biodiesel and Petroleum Diesel for Use in an Urban Bus study concluded that the net energy ratio of Biodiesel made from soybeans was +3.2 units out for every one in (Sheehan, et al). A corn ethanol plant runs at 1200 degrees and has 20% of the COGS of a gallon in natural gas for its boiler. A Biodiesel plant runs at room temperature or slightly above requiring less than 2% of the COGS to be heat. In Imperium Renewable's refinery we use electricity generated from our waste stream and actually contribute green power to the grid. In our process there is zero traditional hydrocarbons used for heat. The mileage of Biodiesel is equal to or slightly greater than petroleum diesel depending on what you make it out of. Today running canola based Biodiesel in my VW Beetle, I actually get about 8% better mileage than I do with petroleum diesel. While Ethanol is limited to a 10% blend in existing vehicles, Biodiesel can run at a 100% pure level in 100% of the existing diesel vehicles (62 Billion gallons). Since January, Biodiesel has been less than petroleum diesel at the pumps across the nation ($3.04/gal in seattle vs $3.24).
Biodiesel is a viable, energy balance positive, equal fuel economy, cheaper renewable fuel available today in today's vehicles. Don't wait for a fuel cell. Buy any diesel off the lot and start running Biodiesel.
Publisher's Note: Many Americans today are having a hard time understanding the government's general lack of policy or interest in a subject that is causing wars and costing lives. While other nations have more coherent, and effective, policies (Brazil, for instance, has just become independent of oil, based on many of the ideas espoused in this piece), this frustration no doubt extends beyond U.S. borders. Why is it so hard to get leaders focused on causes, instead of symptoms?
Cynics will point to Bush family oil money, Carlyle group investments in oil and war, ongoing Cheney Halliburton payments, and a general lack of urgency among these ranks in withdrawing from oil addiction. Meanwhile, it has become clear to me that the only real answers will come from the private sector, from California entrepreneurs like Elon Musk and the Tesla Motors project he has helped start up (the subject of our last issue), creating perhaps the world's first fleet of commuter-practical all-electric cars.
Or Martin Tobias, who wrote earlier on his move from tech into Biodiesel, a project he continues as his firm builds the largest refinery on the West Coast of the U.S., if not in the country. I am reminded of space enthusiast Burt Rutan, in attitude at least, who told us at FiRe 2005, "I decided I'd do it myself," when confronted with the immense inertia of NASA.
These are the people, and these are the attitudes, that will change the world, and that will provide a new energy program. As Glenn so carefully notes, they'll probably have to fight the lobbyists and bureaucrats every step of the way.
Glenn Spacht asked us a short time ago whether a review of alternatives in creating energy independence would be a useful Special Letter, and we immediately agreed. Those who think, as I do, that nano-scale catalysis will have a prominent role to play in fuel cells, will understand Glenn's interest in this issue, since his firm is a global leader in things nano.
And perhaps, by sending this to our members around the world, we can each do something to push the bureaucrats and the vested interests aside, and provide solutions that make better economic sense, create less conflict, and just make good sense.
Those readers who laughed when I predicted $80/bbl oil last year, are not laughing any longer. And those who now take my $100/bbl prediction of last spring seriously, are no doubt even more concerned. Certainly the Federal Reserve is now in that boat, together with the central bankers of the world.
Perhaps Bob Dylan said it best, back in 1963:
Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside
And it is ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'. - mra.
TOWARD ENERGY INDEPENDENCE
By Glenn Spacht
Vice President and CTO, NanoDynamics, Inc.
As we pump $3+-per-gallon gasoline into our cars this summer, a lot of Americans are asking what the government is doing to help the situation. After all, we have a national energy policy, which will lead us from this wilderness, right? Well, there's good news and bad news. The good news is that there appears to be a way out of this debacle. The bad news is that the federal government is following a series of misguided policies that will need to be reformed to allow market forces to lead us to the promised land of energy independence and affordable fuel.
As the cost of gasoline has spiraled upward, we've heard a lot about supply and demand, China's burgeoning economy, ethanol, E-85, alternative-fueled vehicles, fuel cells, and the hydrogen economy. The promise of fuel-cell-powered automobiles has been dangled in front of our noses like a carrot in front of a mule since the mid '90s. Given that the earliest a commercial fuel-cell-powered car may reach the market is 2010 (according to GM), what should we be doing in the meantime?
Solutions in Progress
I: Corn-Based Ethanol
Well, GM and Ford will point out that they make vehicles that can run on ethanol. Ethanol is a liquid fuel, currently produced from corn, that is renewable (unlike petroleum). If we can operate our automobiles on alternative fuels, we can reduce the demand for imported oil. In fact, the oil companies are using 10% ethanol in conventional pump gasoline in place of MTBE to reduce pollution. No matter how much it may rattle its sabers, OPEC still is subject to the pressures of the free market, and reduced demand will ultimately result in lower oil prices. Lower oil prices will lead to lower heating and utility costs, which in turn will spur the economy. Sounds good, huh? Put down the champagne. There are a couple of minor problems with this plan.
The ethanol on the market today is produced from corn by a process reminiscent of the manufacture of white lightning in a still. In commercial production, hydrocarbons (e.g., natural gas, etc.) are used to convert corn to ethanol. Now here's the rub: there is a debate about whether it actually takes more energy to create a gallon of ethanol than the energy contained in a gallon of ethanol. According to Report No. 814 from the Office of the Chief Economist of the U.S. Department of Agriculture, corn ethanol contains 1.34 times the energy required to manufacture it. It is clear that the manufacture of ethanol from corn is not very energy-efficient, and through its production process, ethanol's cost is strongly linked to international energy costs.
The impact of high-energy consumption in the ethanol manufacturing process is a high price for a gallon of ethanol. The wholesale price of a gallon of ethanol was recently in excess of $5, but has now fallen to less than $4. Last year, the price of ethanol was $1.30 per gallon. The escalation in price reflects an increase in demand as gasoline refiners began adding ethanol into their fuel products. In fact, a portion of the increased price of gasoline at the pump this past year in certain states is associated with adding approximately 10% ethanol to the fuel in place of MBTE to reduce tailpipe emissions. The refiners are replacing 10% of $2.25-per-gallon (wholesale cost) gasoline with an equivalent amount of more expensive fuel.
GM proudly claims that it has at least 1.9 million vehicles on the road that can use E-85 (gasoline with 15% ethanol content). Are consumers actually going to buy significant quantities of E-85 in place of gasoline with an ethanol price? Fortunately, there are a number of ethanol refineries under construction and due to come on-line in the next 18 months. With an increase in supply, we can expect a reduction in price, bringing the pump price of ethanol more in line with the pump price of gasoline. With the price of ethanol more competitive with gasoline, we should have no problem eventually reducing our dependency on gasoline. Except for one little fact....
Even if the cost of a gallon of ethanol production were equal to that of a gallon of gasoline, the energy content of a gallon of ethanol is less than that of a gallon of gasoline. The effect is to reduce the "gas mileage" of a car operating on ethanol by about 66%, which means that about 33% more ethanol than gasoline is required to drive a fixed distance. Therefore, to be economically competitive with gasoline, the pump price of ethanol actually must be no more than two-thirds the price of gasoline.
The U.S. government, at the urging of corn producers, provides a subsidy for refining ethanol of $.51 per gallon ($21.42 per barrel). Conversely, a gallon of gasoline is not subsidized at all. Guess why all the ethanol refineries are being built. With the incentives in place, the ethanol refiners are making tidy profits from each gallon sold. To make matters worse, we are physically limited by how much corn-based ethanol we can produce by the amount of land that can be converted to growing corn, which is aggravated by the fact that only the grain is used to create ethanol.
II: Sugar-Cane-Based Ethanol
There are, however, alternative methodologies for creating ethanol. The simplest near-term solution would be to use sugar cane in place of corn as the feed stock. This simplifies the refining process and requires less energy. Unfortunately, the U.S. government imposes a tariff on sugar cane to improve the competitive position of corn syrup (yup -- the same special-interest group that is behind the corn-ethanol subsidies). This tariff acts as a disincentive to make ethanol from sugar cane. This must have been an oversight in our comprehensive national energy policy.
III: Cellulose-Based Ethanol
There are longer-term solutions. In a period of about five years, we could be producing ethanol in quantity from cellulose. Cellulose is found in a variety of plant material, including the stalks of the corn plant. The process for production of ethanol from cellulose does not require large amounts of hydrocarbons and is, therefore, much less expensive. If the federal government continues to provide large subsidies for corn-derived ethanol, however, we are in effect providing a disincentive to make capital investment in cellulose technology. The corn lobby will fight tooth and nail, but in the end, democracy, just like the free market, has a way of doing what is right and sensible. In this case, that would see cellulose-derived ethanol become widely available in the marketplace.
Would this lead to energy independence? No, but it is a significant stride in the right direction. There is no silver-bullet solution to our addiction to foreign energy. Multiple emerging renewable-energy technologies -- including solar and wind power, along with ethanol derived from cellulose -- will have to contribute to the solution over a period of time.
There is something else to consider, however. The amount of carbon dioxide in the atmosphere needs to be reduced, or at least the rate of increase brought to zero, in order to avoid the climatic impacts associated with global warming. Consuming ethanol or gasoline in an internal combustion engine produces carbon dioxide. In fact, for the same amount of power, switching to ethanol could reduce carbon dioxide emissions by approximately 6%. Is there an alternative that would lead to larger reductions in carbon dioxide emissions?
The president touts hydrogen as the fuel of the future. Hydrogen has the advantage of producing only water vapor when it reacts in an internal combustion engine. The United States Department of Energy (DOE) has spent hundreds of millions of dollars developing proton exchange membrane (PEM) fuel-cell technology, which is even more efficient than an internal combustion engine in producing energy from hydrogen, while exhausting only water vapor. Therefore, it is considered to be a zero-emissions (no carbon dioxide emissions) fuel.
Hydrogen, however, has a dirty little secret. In general, hydrogen is produced by electrolysis, wherein an electric current is passed through water, releasing hydrogen and oxygen. Currently most hydrogen is made using natural gas, which emits carbon dioxide into the atmosphere. As the demand for hydrogen increases, the demand for power will increase, the availability of natural gas will be out stripped, and another source of electrical power will be required.
It is hoped that advances in solar-power technology can allow local generation of hydrogen in homes, but the technology to accomplish such a feat has yet to be invented. In fact, calculations of the amount of power required for the hydrogen economy indicate that it would be necessary to cover an area roughly the size of the state of New Mexico with solar cells to create enough power to meet the eventual demand for hydrogen. When pressed, the DOE admits that in order to produce the electricity required to generate the hydrogen necessary for a hydrogen-powered economy, a large number of nuclear power plants will have to be built. It is far from obvious that the U.S. populace is ready to accept a profusion of nuclear power plants. In fact, widespread use of hydrogen would leave the United States facing a future dependent on a huge expansion of the number of operational nuclear plants at a time when the security of such plants from terrorist attack is of growing concern.
Furthermore, widespread distribution of hydrogen has its own challenges. Besides the fact that even if it is stored at very high pressures (4,500 pounds per square inch), hydrogen occupies more storage volume than gasoline, is highly flammable, and tends to easily leak. The infrastructure necessary to support refueling hydrogen-powered automobiles with the ease and freedom of choice of refueling location currently enjoyed with gasoline will not develop in the near term. As a result, the PEM fuel-cell cars that may be offered for sale as early as 2010 will be tethered to a relatively limited number of hydrogen filling stations. It is highly likely that when the first fuel-cell vehicles become available they will be operated as fleet-service vehicles (e.g., taxicabs, package delivery, etc.) that return to a common service area each evening for refueling.
Reducing CO2 Emissions: A Device Alternative
If hydrogen is not readily available, then we need to seek an alternative to the internal combustion engine to reduce carbon dioxide emissions. One approach is to process cellulose-derived ethanol in a reformer to produce hydrogen and carbon dioxide, then feed the mixture to a proton-exchange membrane fuel cell to make electricity. The process does make less carbon dioxide than an internal combustion engine, but the entire system is too large and costly to be considered as a meaningful alternative to internal combustion engines.
What is needed is a device that can operate directly on cellulose-based ethanol, bio-diesel, or low-sulfur diesel fuel that will produce less carbon dioxide than an internal combustion engine at roughly the same size and cost. Although not nearly as well-funded by the government, such a device is currently under development. It's called a solid oxide fuel cell (SOFC). The U.S. DOE is funding the development of this technology through the Solid State Energy Conversion Alliance. Unfortunately, only relatively modest funding is being invested by the DOE in SOFC development in comparison to the funds being directed toward improved methods for hydrogen storage and distribution, as well as improving the durability and reducing the production costs of PEM fuel cells.
A solid oxide fuel cell differs in several important ways from the more widely known PEM fuel cell. First, an SOFC can operate on hydrogen, similar to a PEM fuel cell -- but more important, it can operate on hydrocarbons, including propane, methane, and natural gas, as well as ethanol, diesel fuel, and others. This multiple fuel flexibility is an attractive weapon in the war for energy independence because it reduces the impact of shortages of a single fuel type.
A solid oxide fuel cell operates at much higher internal temperatures (generally between 800 and 1000 degrees Centigrade) than a PEM system. To resist this environment, a portion of most solid oxide fuel cells is usually made of ceramic material. The higher operating temperature makes the SOFC more fuel-efficient than a proton-exchange membrane fuel cell or an internal combustion engine. Reduced fuel consumption, in turn, results in a reduction in carbon dioxide emissions.
The solid oxide fuel cells, like PEM fuel cells, do not respond to instantaneous load changes. As a result, transportation applications employing solid oxide fuel cells (i.e., cars, trucks, etc.) will inevitably be hybrid systems wherein a battery, capacitor, or both provide instantaneous power to handle spikes in the system loading, such as that created by rapid acceleration for passing or merging with traffic. When the vehicle is cruising, a portion of the power from the fuel cell is used to replace any charge that has been depleted from the battery.
The greatest challenges facing the application of solid oxide fuel cells in transportation applications are related to their operating temperatures. An operating temperature in excess of 700 degrees Centigrade promotes high fuel efficiency, but it means that a solid oxide fuel system requires time to heat up before it can produce power. In fact, some large stationary solid oxide fuel cells take days to slowly warm to operating temperature.
In a transportation application, the SOFC will need to reach operating temperature in a matter of minutes, during which time the battery of the hybrid system must provide the power required to operate the vehicle. The longer the SOFC start time, the larger the battery becomes, in the end leading to a larger, more expensive, less energy-efficient vehicle.
Developing an SOFC that can start rapidly and has a durability equivalent to an internal combustion engine in terms of miles or hours of operation, including thousands of start and stop cycles, is a challenge. Small portable systems have demonstrated the ability to make power in 10 minutes. To be meaningful in transportation applications, the size of these portable systems must be increased by three orders of magnitude while the start time is reduced perhaps by about a factor of three. This is a significant technical challenge, but not impossible. Laboratory experiments have demonstrated the ability of small solid oxide fuel cells to reach operating temperature in as little as 15 seconds repeatedly without suffering any performance degradation.
How Policy Can Help
What is needed to further the development of both cellulose-based ethanol as a fuel and a fast-starting SOFC is a comprehensive national policy. It needs to be more than just an energy policy, because it should recognize that energy consumption and environmental quality are linked and must be managed with a coherent public policy. Such a policy would reflect the reality that there is no national infrastructure to produce, store, or distribute hydrogen, and that the time to develop such an infrastructure may likely be measured in decades, not years. A comprehensive policy would provide the vision to guide the development of technologies whose full realization is perhaps decades in the future while simultaneously developing and deploying more near-term solutions that will move the nation in the direction of reduced energy dependence, if not outright energy independence, within the next decade.
The government policy would support the development of production processes for ethanol from a variety of plant sources with a goal of minimizing the production cost per gallon. Subsidies and barriers to market entry for specific feed stocks would be eliminated over time, allowing the free market to dictate the feed stock / manufacturing process of choice.
Finally, the government, through the DOE, should support research and development of technologies such as the SOFC which efficiently convert renewable fuels, such as cellulose-based ethanol, to electricity. The ideal system would be fast-starting, fuel-flexible, inexpensive to manufacture, suitable for the vibratory and shock environment experienced in transportation operation, and require minimal maintenance; a standard set by modern internal combustion engines.
International events and natural disasters conspire to drive imported energy prices higher. Currently, our government is subsidizing an unaffordable renewable fuel, heavily funding development of an alternate fuel for which there is no executable plan for creating a national distribution network, and failing to adequately fund power production.
As discussed above, there are technologies that could simultaneously reduce our energy demands, operate from fuel distributed within the existing system, and reduce carbon dioxide emissions. The time to alter our national course has arrived. Failure to do so will leave us politically and economically captive to foreign states for perhaps a generation.
The author would like to thank Lawrence J. Goldstein for his advice and support in preparing this article.
About Glenn Spacht
Glenn is the Vice President and Chief Technology Officer of NanoDynamics Inc., a leader in the commercialization of nanomaterials and nanotechnology-enabled components and systems. The company was formed in 2002 and has already introduced commercial products for the microelectronics, biomedical, chemical, semiconductor, defense, and alternative-energy (fuel-cell) markets.
Glenn also had over 26 years' experience as an executive at Grumman Aerospace, where he oversaw research and development teams of over 2,000 people involved in tactical aircraft, weapons systems, electronics, and related development programs. He was responsible for program budgets exceeding $250 million and was elevated to the position of Vice President and Chief Engineer for Grumman Aerospace and Electronics in 1990. After leaving Grumman, he helped establish Fuel Cell Components and Integrators Inc., where, as Executive Vice President, he was responsible for a number of successful fuel-cell integration programs, including a fuel-cell-powered wheelchair.
In addition to his professional responsibilities, Glenn was the Chairman of NASA's Committee on Manufacturing Technology Development and was named a Fellow of the American Institute of Aeronautics and Astronautics in 1995. In 1986, he was awarded the AIAA Aircraft Design Award for the design, development, and test of the X-29 advanced technology demonstrator aircraft.
Glenn was selected as an Outstanding Engineering Alumnus of Pennsylvania State University in 2005. He graduated from Penn State with a BS in Aerospace Engineering in 1964 and holds an MS in Aeronautics and Astronautics from New York Polytechnic, awarded in 1972.
Copyright (c) 2006 Strategic News Service LLC and Glenn Spacht. Redistribution prohibited without written permission.
World Watch institute issued a detailed analysis of diesels versus Hybrids last year. The conclusion: Hybrids win only on greenhouse gasses if diesels run the old American formula of diesel. A diesel running more than 50% biodiesel wins hands-down. And financially it wins too when diesel is within 20% of gas. Now biodiesel is cheaper than diesel and cheaper than unleaded since January of this year. What are you waiting for? Ditch the Prius and get a diesel running 100% biodiesel!
I hear questions about biodiesel and engine warranties alot. Here is a good explanation of the issue. Basically it is a red herring. Biodiesel does not cause warranty issues. Imperium Renewables stands behind our fuel.
All diesel engine companies warranty the product they make - engines. They warranty their engines for “materials and workmanship.” If there is a problem with an engine part or with engine operation due to an error in manufacturing or assembly within the prescribed warranty period, the problem will be covered by the engine company.
Typically, an engine company will define what fuel the engine was designed for and will recommend the use of that fuel to their customers in their owner's manuals.
Engine companies do not manufacture fuel or fuel components. Therefore, engine companies do not warranty fuel - whether that fuel is biodiesel or petrodiesel fuel. Since engine manufacturers warranty the materials and workmanship of their engines, they do not warranty fuel of any kind. If there are engine problems caused by a fuel (again, whether that fuel is petrodiesel fuel or biodiesel fuel) these problems are not related to the materials or workmanship of the engine, but are the responsibility of the fuel supplier and not the engine manufacturer. Any reputable fuel supplier (biodiesel, petrodiesel, or a blend of both) should stand behind its products and cover any fuel quality problems if they occur.
EIA Estimates 1.8-2.7% of gulf production will be out this year due to storms
I predict oil over $90 per barrel from this.
EIA Expects Storms to Impact Gulf Energy Production this Year
With the National Oceanic and Atmospheric Administration (NOAA) predicting an active tropical storm season in the Atlantic basin this year, the odds are good that there will be at least some disruption of oil and natural gas production in the Gulf of Mexico, according to a new report from DOE's Energy Information Administration (EIA). The EIA performed a statistical analysis of the impacts of past storms and compared it to the forecast to find that between 1.8 and 2.7 percent of annual Gulf crude oil and gas production is likely to be shut in due to hurricanes this season.
The EIA notes that the forecast carries a large amount of uncertainty, and shut-in production could easily exceed 6 percent if the producing region is struck by one or more significant hurricanes. The EIA also warns that NOAA could revise its tropical storm forecast upward in August, as it did last year. At the same time, the EIA advises that Gulf energy producers have stocked up on replacement parts, upgraded communication systems, and beefed up their platforms to better weather the storms. See the EIA report, "The Impact of Tropical Cyclones on Gulf of Mexico Crude Oil and Natural Gas Production" (PDF 760 KB).
Neander Motors over in Germany are a bunch of crazy Germans who love their power and torque. Who needs a 1.4 litre diesel that puts out 100HP and 200Nm/144FTlb torque? Nobody. But EVERYBODY WANTS one. Who doesn't want to go 0-60 in under 4 seconds on a motorcycle powered by biodiesel?
Think deeper behind the BP announcement of "biodiesel"
seems like everyone wants to be making "biodiesel". I even got taken by the BP announcement out of Australia that they would make lots of "biodiesel". But read this: This is the main page for the association. What BP is making is not technically "biodiesel". Hydrogenated tallow fat is NOT biodiesel. It may be a fuel that may burn, but it is not the mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats that are recognized by the ASTM and EN as "biodiesel". It is some other kind of fuel that BP is trying to make cheap, blend with petroleum diesel and get tax credits for. Expect more of this kind of sillieness form the majors.
Every bullet point you ever wanted to know. Fun facts about biodiesel fuel- Pasadena Weekly. Even I learned something. Biodiesel is has the highest eneregy content of ANY alternative fuel (120,000BTU) and it's high flash point (above 300F) makes it safer than regular diesel to handle and transport.
Took this picture in Kauai last month. I was totally appalled at the time since gas prices in seattle were hovering around $3.00 per gallon for regular. Now these prices seem like a bargain. San Francisco in the city is higher. Will take a picture next time I am down there.
so I parked at the airport last week. This is the only spot I could find. Surrounded! And you wonder why we are paying such high oil prices? Look at these beasts! I was at a fundraiser for a politician last week and when he talked about the energy situation, he said "you all came here on foreign oil". I raised my hand and said "no, I came here on American soy beans".
Well I what would you guess I found in the most recent issue of AgriNews? Biodiesel supporters ask Congress to extend incentives. Who would have thought I a tech geek like myself would be reading AgriNews anyway? Well I don't actually, I let Google read everything and tell me what is important. This article has the most realistic estimate of new biodiesel capacity to come on-line in next 18-24 months (total 245Mg) that I have seen as well as (industry) arguments to extend the CCC credit program set to expire next month. I doubt it will be extended, but if it is, great!
Yesterday I was in Berkley visiting Biofuels Oasis and ran into the crazy kayaker boys running the Welcome to Oil and Water!. These guys stopped by a couple months ago to our Seattle Refinery at the start of their journey where we fueled them up with bio and sent them on their way. Yesterday they showed me the map of all across the US and Canada and back again (over 7,000 miles). Their rig shows the miles but they say they have run every mile on biodiesel or straight veg oil with the exception of 4 gallons in the middle of the desert once.
The guys are coming back through seattle in a couple weeks on their way up to Alaska then back down the west coast for the "real" trip. This is American entrepreneurship and adventure alive and well in 2006!
I spoke at the Jefferies conference last week in NYC. lots of public companies and only a handful of private companies. Imperium Renewables is noted in the summary here for our differentiated strategy and potential faster growth than ethanol. Mention of a private company at a public company conference is quite rare. The full report is here: Jefferies' Alternative Energy Conference Recap.pdf
As of last week, the retail price of dino diesel soared again above the price of biodiesel. In Seattle: Click here to buy biodiesel Biodiesel.org - Retail Fueling Sites you can buy B99 for $2.99 whild Dino Diesel is around $3.14-$3.19. This is well before the summer driving season and the huricanes. Last summer we had price inversion for 6 weeks this summer I expect over four months.
Another interesting note, University Volkswagen sold 20 TDI's in the last two days. Better go get yours now!
Consider those for a moment. The diesel-powered Audi A8 4.2 TDI is not only more economical than the gasoline-powered A8 4.2, it also produces fewer greenhouse gases and, most importantly for readers of this Web site, it's also significantly quicker.
Business week has a cool click-through slide show. The one I want is the Citroen C6 or BMW 7 series. Europe's Hottest Diesels. Look for most of these cars to be available next year in the US. The key has been getting Ultra low sulfur diesel fuel into US pumps. These cars require clean diesel fuel and ours has been too dirty for these advanced engines. But we will be up to speed with the rest of the world by next year.
Oil Price Pressure Driving Global Switch to Biofuels
ROME, Italy, April 25, 2006 (ENS) - Worldwide momentum is gathering for a major international switch from fossil fuels to renewable bioenergy, the UN Food and Agriculture Organization (FAO) said today. The move is driven in part by record high oil prices, as oil jumped to an all-time high above $75 a barrel last week.
"The gradual move away from oil has begun. Over the next 15 to 20 years we may see biofuels providing a full 25 percent of the world's energy needs," Alexander Müller, the new assistant director-general for the FAO's Sustainable Development Department, said here.
Factors pushing for such a momentous change in the world energy market include environmental constraints - increased global warming and the Kyoto Protocol's curbs on emissions of carbon dioxide and other greenhouse gases - and a growing perception by governments of the risks of dependence on oil.
"Oil at more than 70 dollars a barrel makes bioenergy potentially more competitive," Müller said. "Also, in the last decade global environmental concerns and energy consumption patterns have built up pressure to introduce more renewable energy into national energy plans and to reduce reliance on fossil fuels."
His view is shared by a growing number of investors, including Bill Gates, who recently decided to finance a U.S. ethanol company to the tune of US$84 million. Other new entries in the field are a French company better known for making foie gras, and Hungary, which plans to turn one million hectares of farmland over to biofuel crops in the next few years.
PHOTO: Filling up at an e85 pump in Lexington, Kentucky. E85 is 85 percent plant-based ethanol fuel and 15 percent petroleum. (Photo courtesy EIA)
FAO's interest in bioenergy stems from the positive impact that energy crops are expected to have on rural economies and from the opportunity offered countries to diversify their energy sources. "At the very least it could mean a new lease of life for commodities like sugar whose international prices have plummeted," noted Gustavo Best, FAO's senior energy coordinator.
U.S. Energy Secretary Samuel Bodman, who is in Doha for the 10th International Energy Forum, said that high oil prices are causing great pain to the U.S. and global economies.
"Clearly these very high oil prices cause great dislocations around the world, they are very painful, they are very painful in every quarter of the world. That is certainly true of my country," he told a press conference.
The three-day forum, which officially opened Sunday, has brought ministers and representatives of some 58 countries together in order to foster dialogue between producers and consumers.
What the rest of the world could do tomorrow, Brazil, the world's biggest producer of bioethanol, is doing now. A million Brazilian cars run on fuel made from sugar cane, and most new cars hitting the road there are powered by flex fuel engines. Introduced three years ago, they use either gasoline or bioethanol, or any mix of the two.
According to senior motor industry executives, the flex engines are spreading faster than any previous innovation in the automobile sector. In Brazil, which started producing biofuel 30 years ago, a barrel of bioethanol is currently half the price of a barrel of oil.
Some 1.5 million farmers are involved in growing sugar cane for fuel in Brazil. And "sun fuel" can be made from a variety of crops including soya, oil-palm, sugar beet, and rapeseed.
Europe lags behind Brazil in bioethanol production and consumption, and European prices are roughly twice Brazilian ones. But the EU has set itself the target of increasing the share of biofuels in transport to eight percent by 2015.
However, if oil prices stay high, things could move even faster. According to studies by the European Union, biofuels grown on available cropland could substitute 13 percent of petroleum-based fuels in the short term.
Diesel can be made from virtually any oil seed. "The world's first diesel engine actually ran on peanut oil," noted Best.
PHOTO: Biodiesel pumps stand beside petroleum diesel at a filling station in British Columbia, Canada. (Photo courtesy BC Sustainable Energy Assn.)
Europe is already the world's largest producer of biodiesel from rapeseed, soya or sunflower seeds, and the sector is growing fast.
Various countries such as Germany, Ukraine and others, and many private and public companies are considering a big move into biodiesel from these crops and other sources.
"The beauty of bioenergy is that production can be tailored to local environments and energy needs," Best said. "Where there's land, where there's farmers, where there's interest, bioenergy may be the best option. And if we add some sound analysis and good business models, we will get that option right."
Farmers, particularly in tropical areas, are seeing new opportunities for increasing production and raising their incomes. "But we also need to be careful," Best warned. "We need to plan. Competition for land between food and energy production needs to be converted to positive common benefits."
One worry is that large-scale promotion of bioenergy relying on intensive cash-crop monocultures could see the sector dominated by a few agri-energy giants - without any real gains for small farmers. But to date no comprehensive attempt has been made to address the complex technical, policy and institutional problems involved, said Best.
In order to fill this gap FAO has set up an International Bioenergy Platform (IBEP), to be officially presented at the United Nations in New York on May 9.
The IBEP will provide expertise and advice for governments and private operators to formulate bioenergy policies and strategies. It will also help them develop the tools to quantify bioenergy resources and implications for sustainable development on a country-by-country basis.
It will further assist in the formulation of national bioenergy programmes, drawing on FAO's experience in promoting national, regional and global bioenergy development.
"The aim is to help us grow both enough fuel and enough food," Müller said, "and make sure that everyone benefits in the process."
All in one ethanol and biodiesel energy balance page
It seems that critics keep bringing up bad science around the energy balance of ethanol and Biodiesel. This page: Is ethanol energy-efficient?: Journey to Forever gives a very comprehensive list of all available studies and rebuttals (including Pimentel). Read for yourself the weight of evidence in favor of VERY positive energy balance.
I have my order in for the:Neander - Motors - Dieselmotor. A superbike in the line of the Audi V12 that won Sebring. Was supposed to go over to Spain next month to test ride it, but they e-mailed saying the test rides are delayed. I hope this isn't another Indian story of a bike that never runs. I NEED this bike!
I am currently driving a VW Beetle which has been chipped to go faster. Have run it on 100% biodiesel from day 1 and never had any problems. Hopefully Mercedes will have some interesting cars next year. Can't wait!
This just in: Green Car Congress: US Diesel Liberty Sales Double That of Original Plan. I drove the car pre-release. Kinda small for my tastes, but pretty peppy and GREAT mileage vs the gas. They sold 100% more than their plan and I bet they could have sold 500% of plan if the vehicles had been avaiable. I know of people waiting for them. Expect to see way more Jeep models in Diesel and more promotion of the diesel option in coming months.
My friend Eric Bowen has started a biodiesel blog: All Things Biodiesel. An investor and project finance view of things. Eric also attends probably all the important biodiesel finance events and will post about them. He is also very involved with E2 and the SF Biofuels project in Berkley. I have enjoyed reading.
"In 2002, there were about 7 million barrels a day of spare production capacity, or about 10 percent of world consumption. Today, spare capacity amounts to about 1 million barrels a day, less than 2 percent of world consumption."
"Politically motivated attacks on oil pipelines in Iraq have kept more than 1 million barrels per day off the global oil market. Had this oil been in the market, the price per barrel would have been $10 to $15 lower, according to most energy analysts. For the United States, an importer of more than 11 million barrels a day, the terrorist premium alone costs $40 billion to $60 billion a year. Higher oil prices mean a transfer of wealth of historical proportions from oil-consuming countries -- primarily the United States -- to the Muslim world, where 70 percent of global oil reserves are concentrated. The windfall also benefits jihadists as petrodollars trickle their way through charities and government handouts to madrassas and mosques."
wow, America is paying a $40-$60B per year "terrorist premium" for oil just because of capacity not available in Iraq. And that doesn't count the actual money we are spending in Iraq itself to protect what little production there is. There has got to be a better way.
The EPA: Renewable Fuel - OTAQ - EPA released guidelines for meeting the national RFS earlier this year. Some states, including Washington are implementing their own due to the lack of real enforcement in the Federal RFS. It is clear that the 2.78% RFS for 2006 will be totally met with current Ethanol production. See the EPA comment:
"In addition to meeting the need for clarity in the limited timeframe available, we believe that the collective approach to compliance for 2006 is reasonable given our expectation that the default standard will be met on a collective basis in 2006 even without imposition of any RFS obligations. Estimates from the U.S. Department of Agriculture and Department of Energy project total ethanol production for 2006 to be above 4.0 billion gallons, which also meets the 2.78 percent default standard. The Renewable Fuel Association has also indicated that total ethanol production capacity already exceeds 4 billion gallons and that additional production capacity currently under construction exceeds 1.2 billion gallons. If the default standard is not met on a collective basis for 2006, a deficit carryover provision will allow for make-up of any shortfall by adjusting the applicable collective industry standard in 2007 commensurately."
It is also clear from this that they are looking at ethanol refining capacity and not really purchases. I doubt the national RFS will impact the Biodiesel business this year.
The EPA: Renewable Fuel - OTAQ - EPA released guidelines for meeting the national RFS earlier this year. Some states, including Washington are implementing their own due to the lack of real enforcement in the Federal RFS. It is clear that the 2.78% RFS for 2006 will be totally met with current Ethanol production. See the EPA comment:
"In addition to meeting the need for clarity in the limited timeframe available, we believe that the collective approach to compliance for 2006 is reasonable given our expectation that the default standard will be met on a collective basis in 2006 even without imposition of any RFS obligations. Estimates from the U.S. Department of Agriculture and Department of Energy project total ethanol production for 2006 to be above 4.0 billion gallons, which also meets the 2.78 percent default standard. The Renewable Fuel Association has also indicated that total ethanol production capacity already exceeds 4 billion gallons and that additional production capacity currently under construction exceeds 1.2 billion gallons. If the default standard is not met on a collective basis for 2006, a deficit carryover provision will allow for make-up of any shortfall by adjusting the applicable collective industry standard in 2007 commensurately."
It is also clear from this that they are looking at ethanol refining capacity and not really purchases. I doubt the national RFS will impact the Biodiesel business this year.
In Oregonlive.com there is a good current update of the biodiesel projects in the northwest. One crazy claim that a guy in Yakima will invest $100-$200M (no way). Write your legislator and vote for these RFS mandates.
The show was 3X bigger than last year: SignOnSanDiego.com > News > Business -- Biodiesel's buddies. This year saw the performance vehicles show up. A 700hp custom Willy's pickup with a hummer motor and a chopper with a 38hp diesel. I liked the motorcyle the best. The show was sold out and there were more than 60 vendors (vs 20 last year). I didn't go to one session, only talked with people and had meetings in the hall. A very good show. Check out the web site for many of the materials.
Last friday: Clinton Aims to Boost Alternative Fuels Hillary Clinton and Maria Cantwell took a tour of Seattle Biodiesel. They introduced legislation to create a new agency to fund biofuels research to help create more companies like Seattle Biodiesel. Then last night Bush made a strong emphasis on renewables and biofuels in the State of the Union. Hey, I am even quoted!
tonight at 8:00 seattle time, the TV show Serious Money will feature me talking about Seattle Biodiesel. Just finished taping it. Trying to explain how Washington State can be energy independent in 15 minutes is a hard job. I can't wait to see how I did.
While it may seem like everyone on the plant supports renewable fuels, I have always contended that we are not really into the fight yet. So far the industry is so small that BIG OIL is not paying much attention to it. But now that there is a national RFS, Minnesota has implemented one and many other states including Washington are considering implementing an RFS and significantly increasing the use of renewable fuels, the nay-sayers are starting to get some attention. While most of the "news" outlets that publish the negative reports will say they are just trying to be "fair and balanced", in this case they are mainly passing along flimsy science, baseless accusations, knee jerk emotional reactions, and skin deep analysis. At best the media outlets are guilty of shoddy journalism, at worst they are stoogesof BIG OIL. Make no mistake, the harm done to this nation by our addiction to petroleum is worse than tobacco and the conspiracy to cover the harms with phony science and emotional appeals is just a great if not worse. By simply reprinting opinions or press releases without independent research or verification, media outlets can give tacit approval and are just as guilty in this conspiracy as the manufacturer's of the lies in the first place. In the category of the media distributing outright lies, the Pimentel study is faulty, non-peer reviewed corporate funded "science" that is just plain wrong.
In the less obvious, but none the less damaging category of well intentioned "opinions" that are simply ill-informed, we get a guest editorial in the Seattle Times today by Bob Benze up in Silverdale, Wa. There has been allotof press lately about political support for a Washington state RFS and Mr. Benze is none too happy about it. With politicians from both sides lining up in favor of the RFS, Mr. Benze, a man with political aspirations himself (thwarted), is speaking up. He has spoken up before as a self described "environmental engineer" on Hood Canal issues and taken some heat for his opinions. While I applaud his pluck and sympathize with a Republican in a Democratic state, I have to take issue with some of the conclusions and assertions he makes in his article. Let me note a few:
Mr. Benze makes unsupported allegations about Biodieselproducing more NOX. With a little more looking one finds that while some studies that seem to point to negative NOX results, more recent studies show Biodiesel equal or slightly better than diesel. A deeper analysis of the NOX issue reveals that the science is inconclusive at this time.
Any potential negative NOX impact is not weighed against the other Carbon Dioxide, particulate, renewable, national security and other benefits. You must to a total life cycle analysis to get the NET benefit of this new fuel. A comprehensive 300-page study of the energy and environmental impacts of biodiesel made from soybeans was conducted jointly by the U.S. Department of Energy and the USDA, and published in 1998 (Sheehan, Camobreceo et al. 1998) . That report finds biodiesel offers dramatic savings using 70% less fossil energy than its petroleum counterpart. Small scale WVO operations report an even higher, 7.8:1 positive energy balance.
Mr. Benze also mis-characterizes the findings of Huber and Mills, most recently summarized in their book The Bottomless Well. While petroleum accounts for a smaller percentage of our overall energy use the reason is because electric powered devices have multiplied an order of magnitudefaster than petroleum hogging devices. In absolute numbers (barrels per year), America's petroleum consumption increases every year. The real problem though, as Mills and Huber point out on page 11, figure 1.6 of their book is that transportation fuels are 100% petroleum with NO OPTIONS. The problem IS petroleum and our lack of options for it in transportation, not use of it for electricitygeneration (for which there are many options). When there are no options and few suppliers, you are at the mercy of the monopolist producers.
Biodiesel costs more than diesel. Duh? That is because it is a tiny industry today competing against the most profitable industry in the world thatfully paid for their R&D and infrastructure 50 years ago. Remember when "recycled" products were way more expensive in the stores? That was because industry hadn't yet reached economies of scale. Early customers demanding the products and many purchasers mandating them provided the basis for the industry to reach scale and today you have priceparity in many recycled products vs the virgin. Same thing is happening with Biodiesel. We use 1 Billion gallons of diesel in this state. TheRFS at 2% for diesel would create a 20 million gallon market for biodiesel. Not enough to change the price of diesel (only a 2% blend) but enough for the industry to get a foothold to grow on its own to compete. Due in large part to RFS style programs, today in Brazil you can run your car on ethanol for half the price of petroleum gas. Washington state drivers deserve the same options.
Not enough land to produce biodiesel. Mr. Benze makes another unsupported contention that there is only enough land to replace 10% of our diesel with biodiesel. His conclusion is that therefore we shouldn't even try. Wow this guy must be a blast a parties. First the premise that you shouldn't even try is silly. Second, the "federal estimate" he (does not) refer to is based on 100% soy bean oil. Soy as an oilseed crop is one of the most inefficient in terms of gallons of oil per acre. Canola is about double Soy (wow up to 20% that easy) and other crops are much higher. You can make biodiesel out of any kind of oil or fat. No-one has bothered to do the R&D on anything but soy because the market is small today. But with an RFS and a guaranteedmarket, the R&D dollars will flow and we will find enough sources of oil to make the US (at least diesel) petroleum independent. Michael Briggs at UNH estimates that it would take only 15,000 square miles (9.5 million acres - less than 1% of our farm/grazing land) we could produce 140 billion gallons of biodiesel, enough to replace ALL our current petroleum consumption nationwide (if all vehicles were diesel). Renewable energy independence is possible. We just have to want it bad enough.
Mr. Benze contends that diesel engine technology is solving all the problems so we don't need biodiesel. While many environmental objectives can be achievedthrough engine redesign, I have yet to see a car pump and refine it's own crude oil into fuel. Diesel consumption in this country is growing at 3-4% per year. Today 100% of that is dead dinosaurs that will eventually run out, cause us to fight wars on foreign soil, cause others to hate us, and pollutethe environment. Is Mr. Benze advocating sticking his head in the sand? If you had to choice of petroleum versus a renewable fuel at the same price, what would you choose?
I know what Mr. Benze is against and understand how he has gotten mis-guided. Change can be scary. With our addiction to petroleum though,no-change is simply not an option. The Dinosaurs WILL run out. The easy oil has been found. The technology to become independent of the Mid East oil princes resides right here in the state of Washington. Why wouldn't we want to give it a little boost? While change may be scary, for me, no change is even scarier.
This: Powering a new generation of cars | CNET News.com is a couple weeks old, but worth the read. Toyota is tinkering with the injection process to get rid of the sparkplug (basically a diesel compression ignition) for 20% more fuel efficiency. As I have noted before VW's whole fuel efficiencey strategy is clean diesel. Forget Fuel cells, Diesel is the future.
The LA times: Diesel Hits Record as Gasoline Prices Fall - Los Angeles Times notes that even though gas prices are falling slightly, diesel prices continue to go up. Why? 18% of the US refining capacity is out of service. While lots of refineries around the world can make our formula of gasoline and are exporting now, not many can make our diesel. Diesel demand has is fairly inelastic (doesn't go down when prices go up) and in fact has been heightened with all the reconstruction and heavy machinery moving in the Gulf. Nationwide Diesel is well over $3.20/gal and in California it is over $3.38/gal. Biodiesel in Seattle continues at $3.10/gal.
So I'm stuck in Atlanta at the BBI Biofuels Workshop and flipping through the channels cause I can't sleep. There on David Letterman is Woody Harldson giving David a primmer on Biodiesel and how it can save the planet! He points David to his activism web site: Woody Harrelson and Laura Louie's VoiceYourself where you can find all sorts of biodiesel resources. Very cool day for biodiesel.
400HP diesel/electric hybrid made by highschool students
All I can say is Wow... some high shool students in Philidelphia made a super car diesel/electric hybrid: . There is some discussion on how much this costs. The video on their web site says $15K, but the kit car costs around $75K (complete). And they used a diesel from a junkyard, etc. Either way, they are using off the shelf parts to build a very fuel effieient very fast diesel/electric hybrid. Wow, cool.
Mark Anderson, founder of Strategic News Service, asked me to write a few paragraphs about my transition from bits to barrels and the opportunity I see here. A few paragraphs turned into alot, so here it is....
Publisher's Note: Martin Tobias is the quintessential entrepreneur. I've now known Martin for a decade or more, and I am continually impressed by the energy, focus, intelligence and sincerity he brings to each new venture. Martin's contribution this week is particularly interesting for three reasons. First, he has spent the last couple of years at the well-known Seattle firm Ignition Partners. As you'll discover, he had to go through a personal transition to get from bits to barrels, from venture investing in software and wireless to an operating role in an industrial firm. This change was radical and so inspiring that I asked him to spend a few paragraphs describing it himself. Second, Martin's efforts will directly promote increased climate sustainability on a local, regional and perhaps even national scale. And, finally, as world events such as Hurricane Katrina continue to drive oil toward the SNS $100/bbl figure, finding alternatives to this fuel is both timely and provides direct assists to our economy and security. It might even create Martin's next fortune.
I gave a speech at a Digital Divide conference in Seattle a few years ago in which I suggested that cleaning up diesel emissions was the single most simple and dramatic thing we could do to reduce air pollution. At a time when it is becoming painfully clear that small airborne particulates, such as those in typical diesel transport emissions, are causing real deaths among the very old and very young in our cities, the importance of solving this problem grows. And while firms like Detroit Diesel continue to work on the engine side of the equation, firms like Martin's Seattle Biodiesel will be cooperatively hastening this process, taking it out of the amateur fast-food-chain days, and bringing it into the days of global mass production, and a reduced dependency on fossil fuel.
As Martin notes, there may be nothing else today which is more important. - mra.
FROM BITS TO BARRELS
By Martin Tobias
Having been a longtime subscriber to SNS and participant in FiRe, I should really blame this mess all on Mark. Yes, now that I think about it, that makes all the sense in the world. It is ALL MARK'S FAULT. Without the brain damage (and I mean that in the most complimentary way) of SNS and FiRe, I doubt this tech geek would have ever become CEO of a biodiesel company. I would have been happy living in the world of bits without much of a larger world view. Someone else with good intentions was worrying about the barrels, right? But I am getting ahead of myself.
In the Beginning...
There was a fairly typical tech-geek trajectory. In high school, programming Timex/Sinclairs in the drugstore to loop profanity on the screen, using a cassette deck as "mass storage" for my TRS-80, breaking a toe dropping my Kaypro "luggable," president of the Science club... you get the picture.
In college, Marketing/Computer Science double major, COBOL/FORTRAN programming using a card reader, winning a NEC TV for selling the most dot-matrix printers, selling the first Leading Edge PCs to the university, copying research papers off Compuserve, being the first student to take an essay test on a computer (the Zenith Lunchbox portable with 5.25 floppy and fold-down keyboard), an HP 12C always in my shirt pocket, thinking the IBM AT was the "ultimate PC."
Accenture came knocking right after graduation and pressed me into five years of programming IBM S/38s and AS/400s, until Microsoft saved me from the suits. After six years of serious hard work around the world on various missions, I opted for more pain and started my own software company in 1997. Loudeye Technologies (LOUD) went from napkin to 450 people and IPO in less than three years. (Ah, the good old days.) After a much-needed break, I wanted to get back to helping start companies (the fun part), and I have been doing so as a VC with Ignition Partners ever since.
So there I sat, just over a year ago, listening to yet another wide-eyed software entrepreneur tell me how he was going to be "the Google of XXXX," or was it "the Microsoft of XXXX" - no, it was the "Cisco of XXXX" - oh, I forget. Suddenly, David Byrne's "Burning Down the House" came into my head:
Watch out you might get what you're after
Cool babies strange but not a stranger
Then "Once in a Lifetime":
And you may find yourself living in a shotgun shack
And you may find yourself in another part of the world
And you may find yourself behind the wheel of a large automobile
And you may find yourself in a beautiful house, with a beautiful wife
And you may ask yourself - well...how did I get here?
And you may ask yourself
Where does that highway go?
And you may ask yourself
Am I right? ...am I wrong?
And you may tell yourself
My god!...what have I done?
Well... how did I get here? Where does that information superhighway go? After a lifetime of solving software- and computer-related problems and looking over that horizon for what was next in that field, I was suddenly left wanting. A strong desire to build something REAL took hold of me. When the PC was in its infancy, there were many very tall mountains to climb, and climbing them made a big difference in the world. While there still is a lot of work to do, the path seems fairly well laid out, and there are plenty of very smart people on that path.
So where does the world need help? What is the #1 issue that will define this nation, and in fact much of the world, over the next 10 years? Energy.
There I sat, a lifelong Republican tech-geek software venture capitalist, wondering how I could make a dent in the nation's energy picture. The next day I started canceling meetings and rescheduling my life around figuring out what new energy technologies were going to make a difference in the near term (as in: in my lifetime). It became immediately clear that looking at barrels and BTUs from a bit-and-byte perspective could possibly lead to new solutions.
The Big Energy Picture
Today we use fuels of all types for primarily three forms of work/energy: (1) to generate electricity (natural gas, coal, hydro, nuclear); (2) to provide direct heat (natural gas, wood, oil); and (3) for transportation (oil). Electricity has replaced a long list of mechanical activities (manual typewriters, screwdrivers, adding machines, watches, etc.) and continues to increase its share of the total, primarily due to the exponential growth of new electronic items in our daily lives.
We have multiple fuel sources to generate electricity and provide direct heat. Scaling up production in those areas is largely within our control (as a nation, we know the way, although we may not have the will). For transportation, there is only oil (well, okay, 99% oil, 1% electric buses/trains, bicycles, skateboards and rollerblades). Therein lies a problem, and quite possibly, an opportunity.
I may be an outsider on energy issues, but here are some assertions this outsider will make:
1. We don't have an "energy crisis," we have a "petroleum crisis."
2. Americans are fundamentally convenience-oriented and do not have the appetite for wholesale transportation platform change.
3. Non-petroleum-based fuels that work in today's engines (no platform change) offer the fastest route to petroleum independence.
Petroleum has a monopoly on transportation. A small handful of global oligopolies control the production, distribution, and consumption infrastructure and technologies. The DOJ should take notice. The U.S. is by far (4x China, but they are growing faster) the world's largest oil consumer, at over 20 million barrels per day - nearly $500B per year at today's prices (http://www.eia.doe.gov/emeu/cabs/topworldtables3_4.htmlWe import more than 12 million of those barrels. After a brief flirtation with small cars and alternative fuels in the early '80s, Americans went back to the well with a vengeance in their SUVs. We are punch-drunk at the bar, with a heroin needle in both arms, yelling "Drinks for everyone!"
This is an industry built on technology (combustion engines and mechanical drivetrains) well over a century old. Transportation is an incredibly inefficient use of energy. Less than 2% of the energy that starts out as crude oil ends up propelling me to work in the morning. Cars, trucks, and airplanes combined (http://www.ecobridge.org/content/g_cse.htmare the #1 cause of global warming, contributing 36.5% of the carbon in our air (yes, more than power plants [36%], but just barely). World oil discoveries have been dropping every decade since the '50s.
Worldwide demand is today roughly equal to supply, at just over 84 million barrels per day (http://money.cnn.com/2005/08/30/markets/oil.reut/index.htm?cnn=yesA recent oil shockwave scenario (http://www.secureenergy.org/shockwave_overview.phpshowed that as little as a 4% reduction in oil production (terrorist, boycott, civil unrest, weather, whatever) would increase prices over 170%.
Supply/demand is so tight that any disruption at all can cause a price spike. Down in the Southeast Gulf states, where over 25% of American crude comes from and over 40% of our refining capacity resides, Hurricane Katrina has just inflicted over $26B in property damage (early estimates) and put a significant amount of our production/refining capacity offline or under repair. What will be the energy costs to the economy from that disaster? While some in Europe are making a concerted effort to address oil consumption, Americans sit idly by in our SUVs while the sucking sounds from China and India are only getting louder.
In the last decade, less than 1% of the more than $500 billion spent on venture capital went to alternative energy companies, and most of that went into long-term bets on the "hydrogen economy." Very little of what has been funded will show any tangible benefit to our energy picture in the next three to five years. Existing players have ZERO incentive to innovate; they are making too much money! Here is an industry ripe for change.
Yet it ain't going to be easy. Here is the bit-head way to parse the transportation industry: There are three major platforms in transportation, each built around a unique protocol (incompatible with the others): Gasoline, Diesel and Jet Fuel [kerosene]. The standard for each platform is open and defined by international bodies (ASTM, E.U., etc.). Each platform has been optimized for a specific set of applications:
Gasoline: passenger transport and light trucks
Diesel: heavy equipment and machinery, distributed electricity generation, heavy trucks, boats, some passenger cars, and railroads
Jet fuel: flying airplanes.
Each platform is supported by a large, integrated network of very mature refineries, pipelines, terminals, trucking companies, and retail locations. A huge ecosystem of companies (GM, Ford, Chrysler, GE, Cummins, etc.) support each platform with a wide variety of hardware and software offerings as well as a world wide network of sales, service, and support for their products. The platforms are worldwide, employ tens of millions of people all along the value chain, have been adopted by nearly every person on the planet, and enjoy significant government support in every country at all levels. Makes you want to jump right into the fray, doesn't it?
So Why Biodiesel?
The vast majority (http://www.energy.ca.gov/gasoline/whats_in_barrel_oil.htmlof each crude barrel of oil consumed in the U.S. is refined into gasoline (140B gallons/year), diesel fuel (50B GPY), or jet fuel (40B GPY). To reduce our transportation grid's near-total reliance on distillate products from crude oil, you can attack the problem from either production (substitute fuels, use existing vehicles and distribution system - a backward-compatible version upgrade) or consumption (substitute vehicles, fuel, AND distribution system - the platform upgrade). Natural-gas buses are an example of the latter. Implementation requires a whole new fleet of vehicles, a new fueling infrastructure, scaling up production of natural gas, etc.
Despite years of evangelism and vehicle research, natural gas is still not a practical option for anyone except a few scattered (okay - Los Angeles), very centralized fleets with centralized fueling. It is like getting someone to switch operating systems or hardware platforms. Lots of pain awaits. What about all your favorite old applications? A drive to the beach house for the weekend? Oops, can't - no natural gas stations out there. A quick jaunt to the mountains with a carload of friends for some snowboarding? Oops, can't - the natural-gas car doesn't have enough room or power.
Fuel cells for transportation are an even uglier platform upgrade. You need new vehicles of all types, new wholesale and retail distribution systems for the hydrogen, service and support infrastructure, and, oh yeah, an energy-efficient way to reform massive amounts of hydrogen from a cheap, renewable source. So why are Big Oil, Detroit, and Pres. Bush selling us that song? Good old-fashioned Fear, Uncertainty, and Doubt about change to the current platform. "Be happy with what you have today and place all your faith in a future upgrade." I have seen this movie before: "Everything will be fixed in Longhorn [the next MS operating system], so don't bother me to fix anything in the current version." No, I don't believe anyone selling a platform upgrade is serious about solving our dependence on oil anytime soon.
What it is going to take is a version upgrade. An upgrade of either the fuel or the vehicle would allow you to leverage the existing infrastructure investment. Since gasoline is the largest liquid-fuel market, you would expect the first traction for upgrades to come in that market segment. The Prius is a vehicle version upgrade for the gasoline platform: some new technology in basically the same form factor that is plug-compatible with existing infrastructure while providing unique new benefits (lower emissions and higher fuel economy). This is just the first baby step in the siliconization of the automobile. If you want details on how "the electric power train is overwhelmingly superior to the mechanical - five orders of magnitude better on every key metric," read The Bottomless Well by Huber and Mills.
Ethanol (made from plant starch) is a plug-compatible fuel version upgrade that is replacing an older flawed technology (MTBEs) as a gasoline additive of up to 10% (3B gallons were mixed into the US fuel supply last year). A higher blend of ethanol (85%E, 15% gas), when combined with an automobile version upgrade (flex fuel vehicle - basically a computer timing upgrade), will yield even greater reduction in petroleum usage and more environmental benefits.
Alas, I have never been much of a hardware engineer, so no upgrading the vehicle for me. The ethanol industry is fairly mature and is mainly a capital deployment business today. While there is the promise of some technology change on the horizon (cellulosic production from the whole plant instead of just the starches: http://www.eia.doe.gov/oiaf/analysispaper/biomass.htmlthe first commercial plant has yet to be built, and it will still take more R&D and 10 years to make a difference. The market also has a natural cap on it, in that no more than a 10% ethanol blend is backward-compatible with all existing gasoline engines (the 85% blend requires a new car with the new computer program). What about jet fuel? Humm, redesign a jet to be more fuel-efficient (already a top design criterion), or convince airlines to take a chance on a new, untested fuel? Looks like another LONG road.
That leaves the diesel platform. Most of the early advances in the gasoline platform do not transfer. Ethanol can't be mixed with diesel effectively. Hybrids are okay for light commuting, but have been a total failure in heavy-duty applications. The city of Seattle tried some hybrid diesel buses and found that dragging the extra weight of the electric engine and battery packs up and down the hills resulted in WORSE total fuel consumption than straight diesel. The much-trumpeted Lexus Rx 400h just turned in 10% worse mileage over a 5,200 km road trip test against the Mercedes ML 320 CDI - all diesel: http://www.b100fuel.com/archives/2005/08/mercedes_ml_320.html.
While America turned away from diesels for consumers (as I did after an underpowered, dirty 1980 VW Rabbit diesel experience), relegating it to heavy industry, Europe embraced clean diesel technology, and today diesels power more than 50% of the consumer vehicles (in addition to the heavy industry). Europe also developed an alternative fuel in the form of biodiesel: http://www.biodiesel.org.
Biodiesel is a one-for-one replacement for petroleum diesel that can be made from a variety of vegetable oils, animal fats, and waste grease. Biodiesel is backward-compatible, with 100% of the existing fleet (minor fuel hose replacement in much older vehicles) and fueling infrastructure. It is biodegradable and nontoxic. It can be blended in any ratio with petroleum diesel or used in its "neat," 100% pure form (as I have been doing in two cars for over a year). 100% biodiesel is renewable, carbon-neutral (the plants consume the equivalent amount of carbon that comes out the tailpipe), with lower emissions of all types across the board (although the scientists are still debating NOx).
In Europe, they make almost a billion gallons of biodiesel a year out of rapeseed. In America, soybean farmers have been driving the development of biodiesel, largely because they have an extra 1B gallons of soybean oil a year. The National Biodiesel Board has done the hard work of getting the fuel certified as an "alternative fuel" under federal guidelines and is carrying the torch for more government support of the industry. Last year, America made about 30 million gallons of the stuff (less than 0.0005% of our diesel consumption). Coincidentally, Seattle consumed over 10% of that and has the highest per-capita biodiesel consumption in the nation. The analysts project the market growing at over 100% a year for the foreseeable future.
The basic chemistry for making biodiesel is pretty simple. Vegetable oil is a triglyceride molecule that looks kind of like a three-legged stool. A glycerin molecule is the seat, and three ester (fatty acid) molecules are attached at the legs. The chemical name for biodiesel is methylester [alcohol] (you can also make ethylester, but I digress).
Those of you who didn't sleep through chemistry class (as I did) have already figured out that what you have to do is detach the glycerin molecule from the esters and re-attach a methanol molecule to each ester leg, and voila! You have biodiesel. I have done it using salad oil in a blender (makes great margaritas afterward!). The glycerin and biodiesel separate like oil and water (different specific gravities), and after a little more cleaning, your biodiesel is ready to use. If you are going to sell it commercially, it must pass a battery of tests defined by the American Society for Testing and Materials (www.astm.org
So if there is a more environmentally friendly, renewable, ready alternative to diesel that is easy to produce, what is the problem? You could just as easily ask why everyone isn't running Windows XP or the latest version of Office. Even backward-compatible version upgrades have issues. There are bugs in the new code that need patches. There may be field-compatibility issues with the many various configurations in the field. In biodiesel's case, there are more issues. While soy is the largest crop in the world, soy is a fairly inefficient oilseed crop, at less than 14% oil. If one were to grow a crop primarily to produce vegetable oil to make biodiesel, one would not choose soy.
The first American refineries have been built by the same Austrians and Germans that are building the European refineries. They use first-generation technology that is highly engineered and very expensive per pound (think IBM mainframe). Good old American ingenuity and PC-style economics have yet to take hold. Even with recent crude oil spikes, it still costs more to make a gallon of biodiesel than it does to make a gallon of dinosaur diesel. Only government subsidies get the prices close to parity (in some locales, even less than diesel).
So I say to myself, "If someone could make a series of inventions (in crops, process technology, etc.) that lead to being able to make a gallon of biodiesel cheaper than a gallon of dinosaur diesel (with crude at, say, $45/barrel), well, that someone would have cracked a nut that really needs cracking." This may be one of those rare cases in which one can do something good for the world and put a little jingle in the pocket, too.
So here I am, Chairman and CEO of Seattle Biodiesel, charging up the hill again. Last time I made it over the top, but the weight of the arrows in my back caused a bloody and painful trip back down. This time I am better prepared and plan to take it a bit slower and with laser focus. This mountain is worth taking. I invite you to join the climb. Mark, thanks for encouraging me to take the first step.
California diesel/biodiesel hits price inversion, others to soon follow
What happens when the price of a substitute product becomes cheaper than the incumbant? You got it, massive product switching. Since Biodiesel is a direct replacement for diesel (and tied to the commodity price of Soy instead of crude oil) you would expect big behavior switch when it becomes cheaper than diesel. This has already happpened in Hawaii where Biodiesel is consistently about $.40 a gallon cheaper than diesel (due to the fact that biodiesel is made on the island and #2 Diesel is imported). Now it has happened in California. The average price of #2 Diesel in Bakersfield is $3.17 and about $2.80 for 100% biodiesel. The price of #2 Diesel is up over $1.00 in a year, the price of Biodiesel only up about $.50.
Here in Washington, we are still waiting for cross over, but we are getting there quickly. The average price of #2 Diesel in Seattle is $2.85 a gallon up from $2.13 a year ago. 100% biodiesel is $3.10 up from $2.78 a year ago. Washington is going to take longer to go up in #2 diesel price because we have refineries quite close and don't have the special blend requirements of California.
Back to the original question. What causes a tipping point in a commodity market? What about when the replacement commodity becomes cheaper?
There have been a number of news studies recently quoting bad science with claims that it takes more energy to make biofuels than petroleum fuels. Independent third-party, peer-reviewed studies show biodiesel has the highest energy balance of ANY fuel. A prominent USDA/DOE study shows for every unit of fossil fuel used to make biodiesel, 3.2 units of energy are gained in energy output. That's a 320% increase and includes soybean planting, harvesting, fuel production and transportation. I trust the USDA/DOE more than tenured professors who have been crying wolf for 20 years.
Unbelievable. Who would have thunk just a month ago when $50 seemed like the end of the world. Now we are playing with $60. It will still take a few weeks for this to be reflected in the summer driving numbers at the pump, but I expect diesel prices to break through the $3/gallon price within two months. This is BAD BAD BAD for the US economy. And we need more venture capitalist investing in solving this problem. I am.
Interesting snippet from Set us Free news letter today:
June 21, 2005 Update to friends
Going up. Oil prices broke another record this week climbing to $59 per barrel. Who would believe some months ago that we'd be edging the $60 mark. At such a price level the U.S. sends $650 million overseas per day, every day! "Our dependence on foreign energy is like a foreign tax on the American Dream - the tax our citizens pay every day in higher gas prices, higher cost to heat and cool their homes - a tax on jobs," said President Bush recently. "Worst of all, it's a tax increasing every year." No game. This tax also endangers America's global posture. Henry Kissinger, former U.S. secretary of state, warned that the global battle for control of energy resources could become the modern equivalent of the 19th century "great game" the conflict between the UK and Tsarist Russia for supremacy in central Asia. "The amount of energy is finite, up to now in relation to demand, and competition for access to energy can become the life and death for many societies. It would be ironic if the direction of pipelines and locations become the modern equivalent of the colonial disputes of the 19th century," he said. Getting louder. Another voice that joined the call for action on foreign oil dependence is the Committee on the Present Danger. The Committee is an international, non-partisan organization dedicated to protecting and expanding democracy by winning the global war against terrorism and the movements and ideologies that drive it. The Committee supports policies that employ a variety of means--military, economic, political, social--to achieve this goal. Among the members of the Committee are Senator Jon Kyl, Senator Joseph Lieberman, Steve Forbes, Newt Gingrich, Jack Kemp, Jeane Kirkpatrick, Elie Wiesel, Dov Zakheim and Vaclav Havel. The Committee's Co-chairmen former Secretary of State George Shultz and former CIA Director James Woolsey co-authored an "Oil and Security" paper which proposes six ways to reduce dependency on petroleum. The authors spell out the risks of petroleum dependency, particularly vulnerability of the petroleum infrastructure on the Middle East to terrorist attack. They agree with many other experts that a single well-designed attack there could send oil to well over $100 a barrel and devastate the world's economy.
Jim Woolsey, holding a bumper sticker that reads "bin Laden hates this car," with Senator Harry Reid.Shultz and Woolsey make the case for two types of alternative fuel, cellulosic ethanol and biodiesel derived from various waste streams. They cite the fuel efficiency of hybrid gasoline-electric vehicles and "modern, clean" diesels, and they urge the use of manufactured carbon composites in on-road vehicle construction that are now used in aircraft and racing cars. They also emphasize plug-in hybrid vehicles, cars that combine an internal combustion engine and liquid fuel tank (so they have the full range of a "standard" car) with a battery that can be optionally plugged in and charged, so that most of the day's driving can be done on electricity. Since less than 3% of U.S. electricity is generated from oil, that faciliates a shift from imported oil to the domestic energy resources the U.S. and other big consumers like China and India have in abundance. Plug-in hybrids would be charged at home overnight, a time when electricity is in low demand and thus inexpensive.
So I am driving my new Beetle with the RocketChip stage 3 tuning for about three weeks now. Now the Beetle comes standard from teh factory with 100hp. Stage 3 puts your boost up to 20psi, adds 55hp and 90ftlbs. Yea, you read right, a 55% increase in HP. And all that extra torque on such a light car. I haven't received my other "upgrades" from TVA yet, so the car isn't finished. Took it over to the VW dealer to get my plates friday. I tossed the salesman the keys. He came back five minutes later with a big grin on his face and said "are you kidding me?". He has never had so much fun in a Beetle in his life. Neither have I. I tried driving it without traction control and the tires spin totally out of control. Remember this is a front wheel drive diesel! Jeff over at RocketChip said that I shouldn't punch it with the wheels turned more than 25 degrees because I might rip my CV joints off. Yea, that is the one I want! I recommend it for everyone!
Senator Cantwell proposes more Biodiesel incentives for Washington
She was down at the new Biodiesel station in Laurelhurst: komo news | The Push For Cheaper Alternative Fuel. With the price of biodiesel already close to the price of regular diesel, this ammendment (if she has the chops to get it passed) would ensure that is is 30-50 cents CHEAPER. Very cool. I understand she is taking some Seattle Biodiesel to the Senate floor this week to help make her case.
While Rich is optimizing for bike and large family hauling, I am optimizing for around town economical driving with biodiesel. So fter reading the TDI forum alot: TDIClub forums: Viewing forum: New Beetle TDIs, I had the Beetle TDI itch. Have been itching to buy another TDI (after the Touareg). Sunday I decided to get the New Beetle and called all over town (Seattle). Found a great one at University VW, Platinum Grey, DSG Auto, leather, Xenon, MonSoon, etc. Being the end of the month they were dealing and I just went down and picked it up.
After some searching here, I ordered the following upgrades:
Weathertech rubber trunk liner black (TVA)
VW Splash gaurds (TVA)
fog lamp covers - the metal mesh, are the solid orange ones better?(TVA)
Clear G2 tail lamps (TVA)
TVA aluminum sport locks (an impulse) (TVA)
and the RocketChip (rocketchip)
Just filled it up at Dr. Dan. He had a cool chrome "Biodiesel" emblem to put on instead of a TDI emblem. I like it...
Good story last night from King5. KING5.com | News for Seattle, Washington | KING5 Top Stories. I was down at Seattle Biodiesel for this, but they edited me out of the shots (with good reason). The spin that this is a very early adoptor thing is really not correct. Any diesel car or truck today could switch today. The problem is not "is there a market" it is more "when will people realized it is CHEAPER on the whole to buy biofuels. Soft benefits like less global warming are hard to sell to the masses. But the cost of petroleum diesel will keep going up and the cost of biodiesel will keep going down. Soon (i believe within two years) the lines will cross and the mass market will choose Biofuels simply on price.
Ok, I said I would take the Biodiesel thread over to B100fuel.com, but this one is just too good. Where was Apple computer started? HP? Amazon? A garage. How many tech start-ups today are in the garage? You get where this is going.
In the garage today are crazies with a passion. There are quite a few of them messing around with making their own fuels. Bio Lyle's Biodiesel Worskshop is a great example. You must watch the video! Check out the guy's garage. He REALLY makes the stuff from used cooking oil he slurps out of 55 gallon bins behind the chinese restraunt. With a little weekend elbo grease Bio Lyle is able to drive his car all week for free. This is the spirit of innovation that got us here. This is the spirit of innovation that will get us to the next stage. It seems that some of that spirit has been lost to software and tech entrepreneurs these days. Come on, go out to your garage!
Finally got the Touareg TDI V10 today! All I can say is WOW! 310 hp and lighter than the Cayenne S. Much more low end torque. This thing is a bat out of hell! If you stomp on the gas (biodiesel) off the line you can spin all four tires (all wheel drive). The first ones to come in have all the options including heated everything (including steering wheel), nav system, air suspension, proxmity sensors, OnStar, soft leather, three position memory seats and much more. The coolest thing is the glow of the instruments, very stylish. We got Silver outside with black leather interior. After Alex drove it I asked if I could and she said "only once then never again!". "Don't even leave a scrap of paper in there". I may even have to get rid of the Avalanche for this one! 17 city, 23 highway. Will report how it does on biodiesel. I bet those numbers are not putting your foot into it though.
It came with a full tank of regular diesel, so after about a 1/4 tank, I took it down to Dr. Dan's for a biodiesel fill-up. He said going immediately to 100% would be fine. Everyone came out and wanted to look under the hood and inside as it is the first one in Seattle. The engine is totally covered with plastic so you can't see anything except the oil stick hanging out. Well I pre-paid my 40 gallons for $3.47 a gallon and got a key to the pump. Honor system down there you know. He has plans to build a real gas station for CNG and Biodiesel, but needs to sell a couple more gallons. Now I gotta teach Alex how to fill up down there.
The state just signed into law a comprehensive alternative energy bill that focused on requiring a 10% of the electricity in the state to come from renewables. They also passed a bill to encourage fleet use of alternative fuel vehicles, primarilly biodiesel. Good facts in all the releases and the bill. I sure wish Washington would pass a similar bill.
Governor Rendell also signed Senate Bill 255, the Alternative Fuels Incentive Act, which establishes a fund to help people and organizations buy alternative-fuel vehicles and convert existing vehicles to allow them to use alternative fuels. A one-time transfer of funds this fiscal year will support research and installation of alternative energy systems that produce power. The National Biodiesel Board (NBB) hailed the bill. See the governor's press release, the full text of Senate Bill 255, and the NBB press release (PDF 27 KB).
Thanks Rob for the pointer to: the new Honda commercial for their new cleaner and quieter diesel engine. This is not your father's diesel. Especially with the new 2007 standards coming, the new diesel engines are an order of magnitude quieter and less poluting. Especially if you run Biodiesel!
My Touareg TDI is MIA. Should have been here friday. Still waiting.
Thanks Rob for the link to this story on Google Blog. The guys at Google have a shuttle from campus up to San Francisco. It has wireless internet access (of course) and runs on biodiesel. Very cool. They make the calculation that even though the fuel costs more, getting people on the bus and out of their cars saves even more money and environmental damage. Go Google!
Out with the Cayenne, in with the VW Touareg V1 TDI. I have decided to put some money where my heart is. I have been a truck and fast car guy all my life. But recently the social political costs of gas guzzlers has gotten the better of me. I have been looking for the past two years for a way to get performance out of an efficient and preferable renewable powersource for my autos. Hence, my interest in Biodiesel. You can pour 100% biodiesel made in the good old US of A by strapping farmers in Iowa straight into any diesel automobile and it runs like a charm. The US sadly is way behind in selection of diesel autos. I didn't want to with a full size work truck from Dodge or Chevy and didn't like the sedan options either (although the new Mercedes E320 D is attractive in a Bellevue sort of way). So last month I got to drive a VW Touareg V10 TDI. 310 HP (you can chip it up to over 400) and all the comforts of any high-end SUV. The only problem is that there were only 4,500 of them imported in 2004 and you can't buy one to save your life. But after a couple of weeks, my trusty friends at Seattle Auto Gallery found me one outside Chicago somewhere. At this very moment it is traveling on the back of some petro diesel guzzling semi on its way to my door here in Seattle. I can't wait!
These guys are buying Google Adwords and showing up on my posts! Google is a GREAT channel for niche products like this. At some point, someone should do a review of all these home systems. Don't know if there is one already, I will keep looking: Biodiesel Solutions - Start Making Your Own Biodiesel Today Selling a $2,995 kit.
The definitive Biodiesel/Petrodiesel lifecycle report (1998)
this report is apparently the latest. Its conclusions are pretty good though:
According to a comparative life-cycle study by the US Department of Energy's National Renewable Energy Laboratory, biodiesel requires only 0.31 units of fossil energy to make 1 unit of fuel.
"By contrast, it takes 1.2 units of fossil resources to produce 1 unit of petroleum diesel," the study says.
We wonder what the energy efficiency figures for biodiesel would be if fossil fuels were eliminated from the equation and the entire production process powered by biofuels, from planting the seeds to filling the tank?
Thanks Google Ads: Core: Alternative Fuel Storage Systems. These guys seem to have a larger selection of pre-configured storage solutions which include all certified tanks, pumps, etc. And some are VERY large for your commercial uses. 250-24,000 gallon capacity, these guys are serious! Sell alot to the government.
Dr. Dan sells a biodiesel fueling station for $1,800. 250 gallon tank w/pump and 250 gallons of B100. You can get started selling today!
You can buy a 300 gallon plastic tank for your home for about $580 here. Then you just need a pump.
more tanks and pumps. They have a handy dandy 28 gallon pump with wheels on it.
A 210 gallon tank for $302. Cool.
Ah, here are the pumps. If you want to go cheap and hand-crank you can do that for less than $100. But I would pony up for the electric pump with the normal gas station handle/nozzle on it for $315.
Haven't been following this much over the last couple of months, but had a very nice chat with some folks yesterday that want to build a consumer brand in BioDiesel. I like the idea. It is a classic chicken and the egg problem. The wonderful thing about biodiesel is that you can just pour it into any diesel car and it works. The B100 (100% bio) is about $3.35 a gallon, so about 1/3 more than dinosaur diesel. The B20 (20% bio, 80% dinosaur) is about 25cents more and still gives you significant mileage and emissions savings. So the issue is, how do you either get the price down to match dinosaur or get consumer demand up to match the premium price? Starbucks took a commodity and convinced us to pay a premium price for it. No-one has been sucessful in creating a premium brand in fuel. I wonder if you could? One of the problems is that the distribution of normal gas is an oligopoly controled by the majors. There are few independent gas stations. The margins on Texaco, BP, et al are controled by the manufacturer and kept low. The owners make all their money on beer and cigarettes. And these things are everywhere. What if there was a gas station that had all the regular gas plus BioDiesel, electric vehicle hook-ups, healthy food, natural car care products, etc.? Would you go out of your way to patronize it? What if it's prices were higher? A large part of the problem is that there are environmental regulations on where you can put a gas station. There is no such restriction on Starbucks (maybe there should be).
Humm. How to start a business creating a branded commodity like biodiesel? interesting exercise.
A reader and I have been having an off-line conversation about BioDiesel and good vehicles to run it in. I thought I would share his recommendations here for everyone:
If you are interested in a relatively inexpensive diesel that will last forever I would suggest a 1980's vintage Mercedes Benz. We have a 1987 300SDL with over 175K miles and it still goes like it was new. A great car to drive. I have run many tanks of B100 through it with no adverse effects on the fuel lines or pump.
My other car is a 2001 VW Jetta TDI. It has a much more advanced diesel engine and averages about 47 mpg. I run various blends of biodiesel through it as well. When running B100 it is as quiet as any gas engine.
Check out www.tdiclub.com for lots of information on Volkswagen TDI's and other diesels. For Biodiesel information take a look at www.biodieselnow.com or for a more hands on look check out www.veggieavenger.com. The latter has lots of information on brewing your own biodiesel if you are interested in how the stuff is made.