Throwing Corn off the Green Bus

Dana Blankenhorn I am a big booster of alternative energy. Harvesting the wind, the Sun, the heat of the Earth, the tides – I'm there and NIMBYs be damned. But I am increasingly having second thoughts about one type of green energy. Corn-based ethanol. (I would toss in sugar cane, too, but America doesn't grow enough to matter here.) Corn ethanol was one of the first biofuels to find a market. Pushed by companies like Archer Daniels Midland (ADM) and Cargill, corn ethanol is now an integral ingredient in many blends of gasoline. It is...

Mascoma’s IPO: The 10-Minute version

Jim Lane No appetite for 200 pages of IPO-speak in Mascoma’s S-1 registration statement? Here’s our 10-minute version. In Massachusetts, Mascoma Corporation announced that it has filed an S-1 registration statement relating to a proposed $100 million initial public offering. The number of shares to be offered and the price range for the offering have not yet been determined, and the company has not indicated yet which exchange it will apply to for a listing of its shares. Here’s the S-1 registration, in a conveniently downsized 10-minute Digest version – with some commentary along the way...

Groundbreaking Set for Clymers Ethanol Plant

Andersons Inc. (ANDE) will conduct a groundbreaking ceremony April 27, 2006, at 11:30 a.m. for its 110 million gallon ethanol plant in Clymers, Indiana. When completed by the first quarter of 2007, the Clymers plant will be the largest of its kind east of the Mississippi River. Along with the 110 million gallons of ethanol, the plant will produce 350,000 tons of distillers dried grains, an animal feed ingredient.

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...

The Future of Alternative Fuels: Ethanol

Besides a slew of clean car announcements connected to the North American International Auto Show, the alt energy topic that has made media and blog headlines most often over the past week has been alternative fuels. We are thus going to run a 2-part series on alternative fuels this week as follows: ethanol today and coal-to-liquids tomorrow. ETHANOL: INVESTOR FRIEND OR FOE? I’m going to start this post with a statement of opinion: I don’t really like corn-based ethanol (as an investment), I never have, and, as a result, I haven’t followed this space as closely as...

Dyadic International (DYAI.PK): Update

Tom Konrad, CFA Representatives of Dyadic International (DYAI.OB) were quite upset when I called the company "A Stock to Avoid."  The company has now released audited financial statements for 2007 and 2008.  The lack of such statements was one of the several reasons I said to avoid the company.  Should I retract my article? Mark Emalfarb, Dyadic International's CEO sent me an email this morning with attached audited financial statements for 2007 and 2008, saying, I hope that you will act responsibly as journalists and publish a retraction to your article "A Stock To Avoid" which Tom...

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.

Cosan: No Haven for Ethanol Investors

by Debra Fiakas CFA The stark reality of basing their business model on a food commodity has been brought into sharp focus for ethanol producers.  The drought settling across the U.S. corn crop is helping drive up corn prices for hog producers, chicken farms and ethanol plants alike.  Investors who simply must have a position in ethanol might think the sugarcane-based ethanol producers could offer a safe haven against the supply and margin squeeze that is certain to hobble GreenPlains Renewable Energy (GPRE:  Nasdaq), Pacific Ethanol (PEIX:  Nasdaq) and Poet (private), among others relying on corn feedstock....

Green Plains Renewable Energy, Inc. Announces Commencement of Construction of Its 50 Million...

Green Plains Renewable Energy Inc. (GPRE) announced that its project in Shenandoah, Iowa is progressing as planned. The Company received its air permit from the Iowa Department of Natural Resources late last week. Fagen Inc. has set up their on-site construction offices and anticipates construction of the plant to begin early next week. The Company anticipates that the Shenandoah plant will begin producing ethanol in the Spring of 2007.

Pacific Ethanol Completes Permitting for Planned Ethanol Plant in Boardman, Oregon

Pacific Ethanol, Inc. (PEIX) announced that it has received all necessary permits to begin construction on a 35 million gallon per year ethanol facility at the Port of Morrow, located on the Columbia River near Boardman, Oregon. The Company further stated that it expects to begin construction, which should take approximately 12 months, within the next thirty days. The Oregon ethanol facility will provide ethanol for the Pacific Northwest gasoline markets, helping to increase supply in that area and provide a CO2-reducing fuel for the transportation sector. It is expected that the plant's distillers grains will be sold...

New York, New York!

While New York's Mayor Michael Bloomberg was busy unveiling a package of measures aimed at making NYC green (including reducing CO2 emissions by 30% by 2030), the state's Governor, Eliot Spitzer, was making his reservations about corn ethanol known, as reported in the Globe & Mail. This adds yet one more (powerful) voice to the chorus of those skeptical about the viability of the corn ethanol industry. The article also notes that Dr. Dan Kammen, an influential Berkeley academic and advisor on climate change to California Governor Arnold Schwarzenegger, is also among those who doubt that corn...

ADM to build 275-million gallon ethanol facility

Archer-Daniels-Midland Co. (ADM) said it will build an ethanol plant with 275-million gallon annual capacity in Cedar Rapids, Iowa as it looks to expand production of the alternative fuel. The expansion comes on top of ADM's plans to build a 275-million ethanol plant in Columbus, Nebraska.
yeast feast

Enzyme Breakthroughs From The Majors

by Jim Lane Three big product announcements just in… DSM (e) breaks through on yield, efficiency with new yeast, enzyme offerings for corn fiber conversion. Novozymes (Copenhagen:NZYM-B; OTC:NVZMY) launches breakthrough techs “Fortiva” and “Innova Force”. DuPont (DD) extends with corn oil extraction tech. In Indiana, DSM leads the news out of the Fuel Ethanol Workshops with their latest yeast and enzyme offerings, eBOOST GT and eBREAK 1000F. Up to 60 percent GA reduction We’ve seen the eBOOST brand over the past year — so here’s a significant cost savings opportunity in the form of a line extension. eBOOST GT, which has been tested and qualified at commercial...