Eight Upsides of the New Ethanol

Jim Lane Eight technologies, seven public stocks – who’s adopting what, who’s in the lead? Perhaps you have written off ethanol as a bum investment. That’s understandable. Though, as a general rule, all acts of mind-closing should be made while chanting Michael Dell’s mantra from 1997, writing off Apple as a bum investment. It’s a good chant, you could try it. Here’s how it goes. “What would I do?” Hari Rama. “I’d shut it down.” Rama Krishna. “And give the money back”. Krishna Rama. “To the shareholders.” Rama Rama. Missing the biggest gold rush. Krishna Hari....

Green Plains Nabs 3 Ethanol Plants On The Cheap

Jim Lane In Nebraska, word has arrived from Green Plains (GPRE) that it will purchase the Madison, Ill., Mount Vernon, Ind. and York, Neb. ethanol facilities from Abengoa (ABGOY) Bioenergy with combined annual production capacity of 236 million gallons per year, for approximately $237 million in cash, plus certain working capital adjustments. The company said it was the successful bidder on three ethanol plants for sale conducted under the provisions of the U.S. Bankruptcy Code. Upon completion of the acquisitions, Green Plains will own and operate 17 dry mill ethanol facilities with combined production capacity of nearly 1.5...

ADM raises capacity of N. Dakota biodiesel plant

Archer-Daniels-Midland Co. (ADM) s increasing the capacity of a biodiesel plant under construction in North Dakota to 85 million gallons a year, a company spokesman said on Wednesday. ADM originally announced the plant in Velva would produce 50 million gallons of biodiesel a year using canola oil. ADM decided to increase capacity to take advantage of economies of scale, said Greg Webb, vice president of public affairs.

Ethanol Blends: High Octane, Low Carbon, High Controversy

by Jim Lane, Biofuels Digest For every ethanol blend everywhere these days, there seems to be a war on. A war in India over 22% blends. A war in Brazil over exactly what baseline blend ratio (somewhere int he 20s) is ideal. A war on in Europe to roll back first-gen ethanol to around 2% blending. A war in New South Wales, Australia over whether there should be any ethanol mandating at all. A war in the US as conservatives aim to haul belnding down to 9.7% while ethanol producers have clearly aimed at a 15% baseline blend. And so on and...
fractionation of corn

Corn Fractionation Improving Ethanol Production

Ethanol and isobutanol producer Gevo, Inc. (GEVO:  Nasdaq) is installing equipment in its Luverne, Minnesota plant to improve efficiency in corn processing.  The company is leasing a proprietary corn fractionation or slicing process developed Shockwave, LLC based in DesMoines, Iowa.  The new equipment is intended to increase by-product output, including feed protein products and food-grade corn oil.  With sales of more valuable by-products Gevo expects to improve overall profit margins.  Shareholders can expect to see results after the first quarter 2019, when the equipment installation is expected to be complete. Shockwave keeps a low profile with no corporate website and no one to answer phone calls.  However,...

7 Bleeding-Edge Technologies Reinventing First-gen Ethanol Plants

Jim Lane The US Ethanol Fleet reinvents as super-advanced technologies target the old fleet for new purposes. Ethanol Plant Photo via BigStock For some time, perhaps one of the toughest assets to manage in the Western World possibly the Milky Way Galaxy or even the local galaxy group has been a starch ethanol plant. They’ve been through it all, just about. Food vs fuel, indirect land-use change, the ethanol blend wall, attacks on the RFS from cattle and dairy interests, attacked on ethanol tax credits,...

Dyadic: a 5-Minute Guide

Jim Lane Dyadic International, Inc. is a global biotechnology company that uses its patented and proprietary technologies to conduct research, development and commercial activities for the discovery, development, manufacture and sale of products and solutions for the bioenergy, industrial enzyme and biopharmaceutical industries. Address: 140 Intracoastal Pointe Drive Suite 404 Jupiter, Florida 33477 Year founded: 1979 Stock Ticker: Pink Sheets: DYAI Type of Technology(ies) Patented and proprietary C1 platform technology based on a unique fungal microorganism which is programmable and scalable in producing enzymes and proteins in large quantities ...

EPA Slashes Corn Ethanol Targets Under Proposed Renewable Fuel Standard

Renewable Diesel Takes Smaller Cut Jim Lane “EPA continues to assert authority under the general waiver provision to reduce biofuel volumes based on available infrastructure,” says BIO. “This is a point that will have to be litigated. It goes against Congressional intent.” In Washington, the EPA released its proposed standards for 2014, 2015, and 2016 and volumes for renewable fuels. The volumes, as widely expected, include substantial reductions from the statutory standards in the original 2007 Energy Independence & Security Act. The EPA also released a 2017 proposed standard for biomass-based diesel. Yet, while attracting significant...

Dyadic International (DYAI.PK), A Stock To Avoid

Tom Konrad, Ph.D., CFA Dyadic International hopes to use proprietary gene discovery to revolutionize cellulosic biofuel and pharmaceuticals.  Investors should stay away. Dyadic International (DYAI.PK) says they are applying their "proprietary enabling biotechnologies for multi-billion dollar markets in industrial enzymes, biofuels and biotherapeutics."  A very exciting prospect, and just the sort of thing I've long warned investors to avoid.  In short, they are a company with gigantic claims and not a lot of track record to back them up. Why I Care (I don't, really) In our survey of readers, one respondent asked that I write more about stocks...
for and against oil refinery bailouts

Billionaire Bailouts v. Biofuels

Trump in a pickle: support his beleaguered EPA Administrator over oil refinery bailouts, or rally his Midwestern farm-state base? In Washington, Senator Chuck Grassley of Iowa tweeted: “I’ve supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & he should step down & let someone else do the job of implementing Trump agenda if he refuses.” Grassley explicitly called on Pruitt to back a key campaign pledge from 2016 that helped unlock farm state support and propel Trump into the White House. 1/19/16 Trump at IA Renewable fuels summit: EPA...

EPA Makes Sorghum an Advanced Biofuel Feedstock

by Debra Fiakas CFA Sorghum Bicolor photo by Matt Lavin    Like the Fairy Godmother in Cinderella, the Environmental Protection Agency has waved a wand and given sorghum a new dress and slippers.  Sorghum has been designated as an eligible feedstock under the Renewable Fuels Standards for production of advanced biofuel.  Only biofuels produced from non-corn starch, sugar, or lingo-cellulosic biomass, which reduces carbon intensity by 50% or more from a gasoline baseline, qualify as ‘advanced.’ Sorghum qualifies for advanced fuel status as the result of a 53%...

Why Have Ceres’ Sorghum Plans Soured?

Jim Lane Sorghum Bicolor photo by Matt Lavin As Ceres points towards minimal plantings of its sweet sorghum hybrids in its key market of Brazil for next year, investors ask two questions. Will sweet sorghum realize its vast potential, and when? Just when many observers hoped that Ceres, Inc. (CERE) would dramatically expand hectares planted with its Blade hybrid sweet sorghum, the 2014 planting outlook was released last week and the total hectares crashed from 3000 in 2013 to 1000 in 2014. It’s a far cry...

Biofuels Industry Reacts To The New RVO Requirements

by Jim Lane What a whirlwind weekend after the U.S. Environmental Protection Agency announced their final renewable volume obligations (RVO) under the Renewable Fuel Standard program for 2019. “It’s just numbers,” some say, but oh no, not in the biofuels world. It’s never just numbers. This time it’s about waivers, fixing the damage done, and ensuring a bright future for biofuels. It’s about hollow chocolate bunnies and two steps back for some. French mathematician Rene Descartes is best known for “I think, therefore I am,” but he also said “Perfect numbers, like perfect men, are rare.” So true in this case as not...

Solar Headwinds, Part I

How Solar PV is like Ethanol Tom Konrad, CFA High levels of competition in the the solar photovoltaic (PV) industry mean that buy-and-hold investors should look elsewhere. In May 2007, I published a competitive analysis of the corn Ethanol industry based on Michael Porter's classic Five Competitive Forces model.  At the time, Ethanol stocks were flying high, but my conclusion was that "the prospective ethanol investor should be very careful about investing in corn ethanol producers at random."  If anything, I understated the case. This chart shows three ethanol stocks that have survived since 2007.  As...

A Decade Of Unexpected Curves In The Bioeconomy

By Jim Lane Over the years we’ve all seen a lot of curveballs in the advanced bioeconomy. You see companies like Valero, which lobby the United States Congress with unbridled intensity to get rid of the Renewable Fuel Standard, on the verge of becoming the single-biggest producer of RINs in the United States (with news that they might take capacity at Diamond Green Diesel up to 540 million gallons). You see companies like Solazyme which love the Renewable Fuel Standard and drive up to nearly a billion-dollar post-IPO valuation based on delivering fuels at volume, then announcing that there are even...

The Ethanol Industry’s Persecution Complex

If the Ethanol industry is going to rehabilitate its image, it needs to understand the issues. Tom Konrad, Ph.D., CFA In his opening remarks at the 25th annual, 2009 Fuel Ethanol Workshop, Mike Bryan, the CEO of BBI International called on the attendees to "Take back control of the industry's image."   It's no secret that the ethanol industry is having problems, mostly, in my mind, due to a classic commodity squeeze: the industry has no pricing power either for its inputs (corn and natural gas,) or its products (ethanol, with a price which closely tracks gasoline.) ...