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.

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

Record soy exports expose critical flaw in land use theory

As has been pointed out multiple times on this blog, there are serious flaws in the theory of indirect land use change (ILUC) and the models used to predict it. But that’s not where the flaws end. There are also significant errors in data. As National Biodiesel Board CEO Joe Jobe said in a recent interview regarding ILUC theory: The elements that are not predictions, that are known, quantifiable data are actually wrong.

Well, another piece of known, quantifiable data came out today and again it exposed the flaw of ILUC theory. As you can read from a Growth Energy policy briefing (pdf), the theory of ILUC is essentially that corn for ethanol displaces other crops, namely soy, and therefore farmers in Brazil cut down the rainforest to grow soy and fill the demand.

The problem is that the theory does not square with known, quantifiable data. The U.S. Soybean Export Council released export data for U.S. soy export marketing year 2008-2009, which ended September 30, 2009. It was the third record year of soybean exports in a row as exports increased 11% from the previous marketing year. These record exports come at the same time that ethanol production is rapidly increasing. If the theory of ILUC was correct, an increase in corn used for ethanol should result in a decrease of soy exports, not an increase. How much more data contradicting the theory do we need before we put this theory out to pasture?