Biofuels Digest, BIO Invite Responses to the Q2 2011 Bioenergy Business Outlook Survey

Biofuels Digest, the world’s most widely read biofuels daily, and BIO are inviting responses to the quarterly Bioenergy Business Outlook Survey, today through Friday June 17.
The 21-question survey examines growth expectations and opportunities from a company, national and organizational point of view and is open to companies and organizations in all sectors of the industry.
The Spring 2011 Survey found that nearly 40 percent of the industry expected strong to moderate growth, anywhere from 5 to 20 percent, with rising demand for alternative fuels, new technology or intellectual property, and partnering in R&D, production and marketing driving growth.
The Summer 2011 Survey will indicate whether those expectations are still as strong.

Aviation Industry an Enormous Growth Challenge for Biofuels

To meet the demand for sustainable aviation biofuels with algae, the industry would have to build a new plant every month for the next 20 to 30 years, Biojet Corp. Chairman Chuck Fishel noted during Tuesday’s General Plenary Session at BIO’s World Congress.

Michael Lakeman of Boeing put forward a more cautious goal of meeting 1 percent of jet fuel demand with biofuels by 2015. That would still require 60 million gallons, though, and from Boeing’s perspective, they must be truly sustainable.

Fishel still worries whether the airline industry is an attractive market for algae and advanced biofuels. Biotech companies can make more money by pursuing low-volume, high-value chemicals than high-volume, low-value jet fuels. So would airlines be able to compete for these sustainable solutions?

Navy Director of Operational Energy Chris Tindal, however, is far more certain about the Defense Department’s needs for sustainable biofuels, particularly from algae. The Navy has set a goal of using 50 percent renewable energy by 2020 and launching the Great Green Fleet by 2016. Currently, the military uses about 2 percent of all energy used in the United States, with most of that represented by transportation fuels. So, it is a niche market, but one that still requires cost competitiveness as well as a sustainable level of greenhouse gas emissions.

Navy Asst. Sec. Chris Tindal Speaking at the 2011 BIO World Congress

Tindal also made clear that what the Navy wants is to be able to pull into ports around the world to refuel with biofuels. Relying on a single large producer of fuel and a long worldwide supply line would recreate one of the problems with the military’s reliance on oil.

Business Outlook Survey: Bioenergy Industry Is Optimistic

The results of the latest Biofuels Digest/BIO Quarterly Business Outlook Survey show that 85 percent of bioenergy industry executives say they are more optimistic than 12 months ago both about their organization’s prospects for growth and industry growth. Biofuels Digest drew comparisons to the previous two Business Outlook Surveys, conducted in September 2010 and December 2010.

Nearly 20 percent of respondents predicted that their organization’s revenue would increase 11 to 24 percent in the coming year, while an additional 17 percent predicted more modest growth in the 5 to 10 percent range. Likewise, more than 40 percent of respondents projected industry revenue growth in the 5 to 10 percent range.

The biggest drivers of growth for organizations, each identified by more than 40 percent of respondents, were rising demand for alternative fuels, new technology or intellectual property, and partnering in R&D, production and marketing.

The survey received responses from more than 700 executives in the bioenergy sector.

Biofuels Digest, BIO Launch Spring 2011 Bioenergy Business Outlook Survey

Biofuels Digest and the Biotechnology Industry Organization (BIO) invite the industry to take part in the Spring 2011 Bioenergy Business Outlook Survey.

The survey examines growth expectations and opportunities from a company, national and organizational point of view. It also examines the role of research, government policy, finance, and research and market partners in creating opportunities or barriers to the growth of green jobs, energy security and reductions in greenhouse gas emissions.

The survey is open to organizations in all sectors of the industry – including producers, research and teaching organizations, associations, equipment suppliers, offtake partners and suppliers of services to the industry.

Respondents to the 21 question survey will receive a detailed summary of the survey’s findings and commentary on trends from the Biofuels Digest editorial team. Summarized results will be published in Biofuels Digest, but the customized, in-depth summary will be available only to respondents.

The Winter 2010 Bioenergy Business Outlook Survey conducted in December drew responses from companies representing an estimated 4,200 green jobs and more than $3 billion in annual sales. That survey showed that 80 percent of bioenergy executives were more optimistic both about their organization’s prospects for growth and industry growth, than 12 months prior. It also showed that confidence about industry growth prospects had jumped 11 percentage points in the final quarter of 2010.

Follow this link to go straight to the 2011 Spring Bioenergy Business Outlook Survey.

Pacific Rim Summit Focuses on Drop In Fuels for Military

BIO’s Pacific Rim Summit came to a close on Tuesday, but not before giving attendees a preview of what the industry expects to be two of the hottest trends for 2011, as recorded in a recent BIO/Biofuels Digest poll.

Department of Defense interest in biofuels is expected to increase, due to the national security implications of reliance on oil. As Chris Tindal, director of Operational Energy for the U.S. Navy, explained to attendees of the Summit, “While the Department of the Navy is a significant consumer of fuel, neither DoN nor DoD can affect the price of oil. Therefore, both are at the mercy of the market – both the stability of supplies and fluctuations in price.”

Tindal noted that the DoD used 119 million barrels of petroleum in FY08. The Blue Navy used 29.4 million barrels (not including Marine Corps). And the airline industry and the Department of Defense collectively consume 1.5 million barrels of jet fuel per day. The Navy has set a goal of replacing 50 percent of petroleum in the commercial fleet by 2015.

Tindal also noted that the Defense Energy Support Center and the Air Transport Association of America signed an Alternative Fuels Pact on March 19, 2010. The pact sets shared goals of spurring the development and deployment of commercially viable and environmentally friendly alternative aviation fuels.

Commercialization of Bioproducts
Paul Bryan, Biomass Program manager at the Department of Energy, gave some detail behind the second expected trend for 2011, that attention will be given to bioproducts and renewable chemicals in addition to biofuels. Bryan emphasized that we need to “develop technologies and supply chains to replace the whole barrel and all products made from crude today.” Because so many products are made from each barrel of petroleum, and biofuels displace a portion of each barrel, oil refineries have no incentive to make a shift.

If we reduce total petroleum usage as a percentage of one market, we need to think about how that impacts other markets. The most obvious issue is that we have to replace diesel and jet in proportion to gasoline, since their combined volume is approximately three-quarters that of gasoline, and their markets are projected to grow significantly faster than that for gasoline. But other products are important, too. The largest chunk of the ‘other products’ in the barrel is the petrochemical industry, virtually all of which is based on crude oil and natural gas.

Biofuels Digest Surveys Readers on 2011 Industry Trends

Biofuels Digest, the world’s most widely read biofuels daily, is asking readers to rank the trends that will drive the biofuels and biorefining industry in 2011. Will Congress debate new energy legislation? Which federal agency will support construction of the first commercial advanced biofuel biorefinery, USDA, DOE or DOD? How important will biobased products and renewable chemicals be as advanced biofuels producers look for an economically viable model?

BIO member companies weighed in to suggest the trends. Now, we’re encouraging everyone interested in the industry to read Biofuels Digest and rank the trends they think are most important.

BIO and Biofuels Digest will co-publish the top trends in coming weeks and continue watching throughout the coming year.

The Latest in Advanced Biofuels and Climate Change

“Four more BIO interviews remaining in the pipeline (woohooo!). This one is my interview with Dennis McGrew, Genomatica’s new executive vice president of business development and chief business officer.”

So begins the post by Doris de Guzman of ICIS Green Chemicals .

Guzman interviewed Dennis McGrew, Genomatica’s new executive vice president of business development and chief business officer.

“Genomatica,” Guzman writes, announced at the BIO industrial biotech conference that it was able to achieved pilot-scale validation of its bio-based 1,4 butanediol (BDO) at 3,000 liter-batches, a 100-fold increase from lab scale within two months. The scale-up was performed at MBI, a not-for-profit technology company affiliated with Michigan State University’s BioEconomy Network.

The next step is another 10x scale up between 20,000 and 50,000 liters within the next several months. Genomatica plans to have an integrated demonstration facility to come online in the second half of 2011, and commercial production either late 2013 or early 2014 for their bio-BDO.”

“We’ve taken BDO through piloting and demonstration phase on our own but for other products in the pipeline, we’re looking to partner more early. Partners will help drive the selection of which products from amongst the other 19 chemicals that we can work on — that will be a primary criteria from which one of those to move forward,” said McGrew,

“Another update,” writes Guzman, ” is Genomatica confirming that they have shelved the bio-methyl ethyl ketone (MEK) project for now. McGrew said they were able to show proof of concept for the chemical in the course of 4 months but current market opportunity is not as compelling compared to BDO.”

“Genomatica started research on bio-MEK in the second half of 2008, when corn ethanol producers were being squeezed. At the time, the company expected to produce MEK from plants being idled by ethanol producers. The downtrend in global economy and change in ethanol economics have made the bio-MEK project not as attractive, said McGrew.  “We want to focus on driving BDO as quickly as possible instead of focusing to develop two projects simultaneously,” he added.”

Earth2tech announced their top 15 algae fuel start-ups

“Two and a half years ago we put together this cheat sheet on 15 algae fuel startups you need to know, which turned into one of our most popular posts of all time. But boy have things changed since then. In early 2008 GreenFuel Technologies was still in business, Aurora Algae (then called Aurora Biofuels) was still focusing on fuel, Petro Algae hadn’t yet filed for an S-1, and it was unclear then that Craig Venter’s Synthetic Genomics was going to become a dark horse in the algae fuel world. Here’s our updated 2010 version of our original 15 algae fuel startups bringing pond scum to fuel tanks.”

And they are….

1.  Solazyme

2.  Aurora Algae

3.  Synthetic Genomics

4.  Petro Algae

5.  Sapphire Energy

6.  Bioalgene

7.  Phycal

8.  Live Fuels

9.  Solix Biofuels

10.  Aquaflow

11.  Bionavitas

12.  Seambiotic

13.  Bodega Algae

14.  Algennol

15.  General Atomics

According to Solve Climate News

Another biofuel company is about ready to go public.  This time it’s Gevo.

“Colorado-based Gevo makes isobutanol, a second-generation biofuel that it says has a number of advantages over ethanol and biodiesel, including higher efficiency and the ability to be transported through existing pipelines. But the company’s proprietary technology produces and separates isobutanol using a fermentation process that still needs food crops like corn, wheat, sugar cane or sugar beets as a feedstock”

“With the promise of cellulosic ethanol — biofuel from non-food sources — still a distant vision, Gevo is hoping investors will see the $150 million initial public offering it announced this month as a smart bet that provides a bridge to the future.”

Solve Climate News writes,

“It’s [Gevo] banking on a business model that involves retrofitting existing ethanol plants, which it says can cut the time and capital required to get a production facility running.

“The technology they have is promising,” as is their plan to build upon existing facilities, Tammy Klein, assistant vice president of Hart Energy Consulting, told SolveClimate News. But ultimately, she said, the company’s decision to file for an IPO probably has more to do with tight credit markets and a lack of access to capital during the economic downturn than the strength of the biofuels sector as a whole.

“Raising capital is an issue,” Klein said. “That’s why Gevo is doing this.”

“For Gevo—which tallied $660,000 in revenue and $19.9 million in losses in 2009—and its brethren” writes Solve Climate News, “success may be a matter of riding out an initially tough market, according to a 2009 report by market research and consulting firm Pike Research.

“In the near term, the biofuels market looks like a train wreck,” Pike’s managing director Clint Wheelock said in a statement when the report was released. “The economics of ethanol and biodiesel are not yet competitive with petro fuels, and governments have pulled back some of their support.

“However, in the 10 to 15 year timeframe, the outlook remains very positive. The long-term commitment of national governments to foster robust biofuels markets remains solid, and technological advances and economies of scale will dramatically improve the economics of biofuels versus petroleum.”

In Pennsylvania things aren’t looking up for biofuels.

According to Erin Voegele of Biodiesel Magazine,

“Legislation currently pending in Pennsylvania could negatively impact the state’s biodiesel industry. On Oct. 6, the Pennsylvania House of Representatives adopted an amendment, SB 901, which seeks to impose a new fuel tax on businesses that sell biodiesel fuel by amending the state’s Biofuel Development and In-State Production Incentive Act of 2008.”

According to John Kulik, executive vice president of the Pennsylvania Petroleum Marketers and Convenience Store Association, the amendment would levy a new fee, or tax, on companies that sell biodiesel within the state. Under the amendment, each convenience store, service station, truck stop or other retail location selling biodiesel would be required to pay a new $100 fee in addition to existing local, state and federal fees and taxes.

According to information released by PPMCSA, some of its members have also expressed concern over a $5,000 blender fee contained in the proposal. The association notes that the new fee could severely impact its members’ ability to import regular diesel and blend biodiesel from surrounding states, which could have a significant impact on fuel distribution patterns and the price of fuel.

The amended legislation establishes a total of four of these registration fees:

  • $5,000 for each biodiesel manufacturing facility within the state
  • $5,000 for each location within the state where biodiesel is blended
  • $100 for a person, other than a person that operates at a biodiesel production or blending facility, that sells, offers sale or otherwise transfers biodiesel or a biodiesel blend within the state, whether or not the that person operates a location within Pennsylvania where such activities are conducted
  • $100 for each location, in excess of one, within Pennsylvania where a registered person sells, offers for sale or otherwise transfers title of biodiesel or a biodiesel blend