On Monday, Richard Stuebi at Cleantech Blog highlighted the extent to which NBC is in the dark about energy efficiency. I couldn’t agree more with Stuebi here – this idea is so painfully bad that it’s a bit of a mystery why anyone in their right minds would agree to it. In the space of a few minutes, GE likely managed to undermine over two years of flashy press events and other publicity stunts aimed at convincing investors and the populace that “green is green.” If Alt Energy Stocks awarded a prize for misplay of the week, this would certainly be it. On Monday, James Kanter at The Business of Green wondered why oil majors were so keen on renewable energy. I’m not sure I agree with the thesis put forth in this article. It seems to me that, ceteris paribus (especially with regards to forex), scarcer oil means higher prices (at least in the short term), and that, given the inelasticity of demand for oil, this should drive up top line growth and share prices (and, by extension, option values). Regardless of the answer, the question is worth posing: do oil majors invest in alternative energy because they see a business case or are they doing it for reputational reasons. The jury is out. On Wednesday, Tyler Hamilton at Clean Break argued that geothermal was flourishing under the shadow of solar. A few months ago, I had a chat with an investment banker who worked on a number of alternative energy deals, and he too was of the opinion that geothermal was a fundamentally great alternative energy play. Here’s a list of geothermal stocks I recently came across. On Wednesday, Scott Miller at BIOConversion Blog told us about the groundbreaking of the country’s first commercial-scale cellulosic ethanol facility. This indeed should eventually usher in a new biofuel era for North America. Don’t hold your breath, however, because cellulosic will continue to account for a small percentage of total ethanol production over the next couple of years. Nevertheless, this is where you want to be looking long-term, especially given cellulosic’s new appeal with policy-makers. Al Gore, among others, also seems to like cellulosic ethanol. On Friday, Xavier Navarro at Autoblog Green green discussed China’s recent mission to the European Parliament to study CO2 regulations. China is already the single largest market for CDM carbon credits (PDF document), and there is no doubt it soon will be a major cleantech and alternative energy market. This should be good news for close China watchers. On Friday, our very own Tom Konrad appeared on Consuelo Mack’s WealthTrack. For the unfortunate few who missed it, you will soon be able catch the discussion here. The Week in Cleantech is a weekly roundup of our favorite cleantech and alt energy blog posts and stories from across the web. If you know of a good piece that you think should be included here, don’t hesitate to let us know!
The Biggest Ethanol News of the Week
Vaperma Inc. (Quebec City) announced plans to commercialize an industrial membrane that continuously filters a 40/60 vapor mix of ethanol/water into 99% pure ethanol. The new filter technology replaces the rectifier and the molecular sieve used in a conventional ethanol plant. This eliminates the energy intensive distillation process and reduces energy cost by 50%. Likewise, this will cut the consumption of natural gas in half, for all first generation corn and grain ethanol refineries. This translates into higher profits for all plants retrofitted with Vaperma filtration, and possibly lower, more competitive prices at the pump for fractional blends and E-85. The energy balance of first generation ethanol will easily become a better than 2 to 1 return…
There is another important development in first generation ethanol that will transform the industry, increase profits and lower the price of ethanol at the pump: Take note of the term “Integrated BioRefinery”. XL Dairy Group, Inc. has integrated a dairy farm with a dual biofuel refinery in Vicksburg AZ – about 100 miles West of Phoenix. (Search: xldairygroup Vicksburg.)
This is a 2,300 acre dairy farm that fractionates corn, distills ethanol from the starch, extracts the corn oil to produce biodiesel, feeds the high protein distillers grains bi-product to 7,500 onsite dairy cows, produces milk from them, and converts the cow manure to production power and process heat. This state of the art plant is totally self-powered and DISCONNECTED from the GRID. Their intent is to develop algae to replace the corn, and convert oil rich algae to biodiesel, ethanol, and feed for the cows. This facility has a price tag of $400 million US to build, and is expected to generate $180 million per year in revenue – not your typical ethanol plant. The company claims an energy efficiency ratio of 10 to 1.
Now, implement Vaperma Filtration into the Integrated Biorefinery, and you have a new model for pre-cellulose ethanol that Rocks.
First generation fermented ethanol (including corn, grain sorghum, sweet sorghum, sugarcane, cassava, cheese whey, etc.) is the backbone of today’s commercially viable biofuel industry. The evolution of biofuels involves integrating biorefineries with dairy farms, poultry farms, feedlots, algae installations, waste management systems, biomass burn co-generation plants, coal burning power plants (co-firing biomass and algae pellets), sewage disposal plants, and landfills – with the added benefit of eliminating sources of methane now being released into the atmosphere.
As first generation ethanol continues to evolve, it will become more cost competitive with gasoline. Near its source, you can buy E-85 for around $2 per gallon, whereas gasoline is around $3 per gallon. Therefore, local production and consumption of biofuels is most efficient and cost competitive. This localization trend will continue, as many new ethanol and biodiesel plants are being built in all parts of the country, not just in the corn belt. Beware: by the time pipelines are built to ship ethanol thousands of miles to distant markets, those markets will already be served by cheaper, locally produced biofuels.
OIL COS INVESTING IN ALT ENERGY–
if investing seriously in some form of alternative, advertising/highlighting would be the last thing done- until their business plan was done/near completion.
they don’t need the $$ to begin, nor do they need publicity to draw $$ in. they might [might have to] publicize joint ventures.
beyond that, no comment until it’s advantageous to release info. this is just good business practice.
ALL ELSE IS HYPE/FEEL GOOD ADDS.
if it does become a viable source, i hope the macro-logistics are better thought thru than was case for corn ethanol. minimize the impact on water sources, heat source [nat gas,etc], optimize travel/fuel logistics/use [perhaps plant sites on major rivers for water/transport.
not another greedy rush to get the most $$ quickly, giving today’s helter-skelter another go.