Category Archives: Biofuel

In And Out: Can We Innovate Our Way Past Oil?

By Kate Weinkauf  

In a recent Newsweek article, “Learning From the Oil Shock,” Robert J. Samuelson discusses Jeffrey Rubin’s (of CIBC World Markets) view on the future of oil consumption. Rubin suggests that gasoline will rise to $7 per gallon and oil to $225 per barrel by 2012. Rubin goes on to muse that there may be one benefit to this striking rise in price: Because rising ocean-freight costs will make importing goods more expensive, some outsourced production will have to return to the United States, benefiting U.S. manufacturers. Conversely, Rubin also suggests that the home-building and auto industries will be the hardest hit. As the article states, “Higher gasoline prices push people to mass transit, bicycles and their feet.” Hmmm…those can’t be our only options, can they?

In this article, there is little mention of future solutions outside of augmenting oil supplies by domestic drilling and developing new biofuels. No mention at all of the burgeoning electric vehicle industry or plug-in hybrids or the many businesses poised on the brink of developing technologies that could begin to repair this problem. Rubin is correct that we got ourselves into this mess, but does he not believe that we can also take some responsibility and get ourselves out?



Sunny Bioreactor To Give Boost To Fuel-Producing Algae

By Michael d'Estries  

algae.jpgI just spied a new patent application by David Bayless, professor of mechanical engineering at Ohio University in Athens, US, for a bioreactor fitted with optical fibres for channeling sunlight into the reactor. Something of this nature would be enormously beneficial to microalgae — a high yield biofuel-producing crop that’s sometimes limited with access to sunlight — especially if they’re being stored inside. Here’s how Bayless plans to remedy that:

“A bioreactor apparatus in which a container has sidewalls, a floor and a ceiling defining a chamber that contains a slurry of water, nutrients and photosynthetic microorganisms. A plurality of optical fibers, each of which has a first end disposed outside the chamber and a second end in the mixture. A light collector spaced from the container has light incident on it and focuses the light onto the first ends of the plurality of optical fibers, thereby permitting the light to be conveyed into the mixture to promote photosynthesis.”

With announcements this week that Virgin airlines will be using a mixed biofuel based on algae for one of their planes, we may see a new industry of commercialization for the green stuff. Check out Bayless’s patent for more info.

More Ethanol = More Fertilizer Needed for Corn

Taking stock of fertilizer company stocks

By Beth McKenna  

There is a flip side to just about everything in life, isn’t there?

Take corn-based ethanol. It’s a plus for the Midwestern farmers growing corn as it provides them with more demand for their crop. It’s a negative for people buying food as the additional demand drives up food prices.

To be fair, let’s note that there are also other factors that have driven up food prices to historic highs: rising transportation (fuel) costs; and growing affluence in Asia, which has led to an increase in demand for meat, which in turn has driven demand for grain to feed livestock. 

As many readers likely know, the US already has ethanol subsidies in place. And, as some may know, Congress just passed a bill increasing those subsidies (and Bush has said he’ll sign the bill now that several of the original clean energy subsidies were removed).

So, for now, there’s no sense debating whether increased ethanol subsidies are a good or bad thing. For our purposes, this saying applies: IT IS WHAT IT IS.

The bottom-line: More corn being grown to produce the additional ethanol means that more fertilizer will be needed. Fertilizer company stocks, which have posted scorching returns over the past year (and longer), should continue to do well.

Here’s a look at some of the major fertilizer companies (in order of market cap*):

  1. Potash (NYSE: POT) – Canadian firm specializing in potash**, a form of potassium carbonate, as well as nitrogen and phosphate, fertilizers. Some stats: $39.7 B market cap; 173% 1-year stock return; 1.9 beta; 24% Return on Equity (ROE); 30% operating margin (OM); 39% quarterly revenue growth & 67% quarterly earnings growth.
  2. Mosaic (NYSE: MOS) — Minnesota-based company that is the industry’s other giant potash producer. Stats: $36.6 B market cap; 276% 1-year return; 1.5 beta; 15% ROE; 14% OM; 55% Q revenue growth & 180% Q earnings growth.  
  3. Agrium (NYSE: AGU) – Canadian company involved in nitrogen-based, potash, sulfur, and phosphate-based fertilizers. Stats: $7.8 B market cap; 92% 1-year return; other stats not immediately available (not listed on Yahoo Finance).
  4. CF Industries (NYSE:CF) — Illinois-based company that operates in two segments, nitrogen and phosphate fertilizers. Stats: $5.4 B market cap; 304% 1-year return; 0.9 beta; 27% ROE; 18% OM; 46% Q revenue growth & 1085% Q earnings growth.  
  5. Terra Industries (NYSE:TRA) — Iowa-based company that produces nitrogen and methanol products for agricultural and industrial markets. Stats: $3.6 B market cap; 260% 1-year return; 1.9 beta; 15% ROE; 23% OM; 28% Q revenue growth & 426% Q earnings growth.  
  6. Terra Nitrogen (NYSE:TNH) — Iowa-based limited partnership (LP) with a focus on nitrogen fertilizer products. Stats: $2.3 B market cap; 272% 1-year return; 2.3 beta; 98% ROE; 27% OM; 45% Q revenue growth & 232% Q earnings growth.  

*Market capitalization (cap): # shares of company stock x stock price

**Potash: There’s a limited amount of potash production globally, thus, it’s a very profitable product for those companies producing it. Potash comes from mines, and the cost of replicating these massive mines represents a major ”barrier to entry” or “moat” (meaning other companies can’t easily get into this biz).

Before investing, do with information what those Midwestern farmers do in soil: dig, dig, dig! 

This article is not a recommendation to buy or sell any securities.

Energy Bill Boosts Ethanol Prospects

By Bill Hobbs  

Thomson Financial News reports on the winners and losers in the stock market thanks to progress in the Senate on an energy bill. Big winner: ethanol stocks. But the end of tax breaks for solar power isn’t likely to hurt solar stocks, analysts say.

Alternative-energy shares traded broadly higher Friday after the U.S. Senate passed an energy legislation bill that set a mandate for expanded use of biofuels and increased fuel-economy standards for new vehicles and energy-efficiency standards for appliances and buildings. Ethanol shares, in particular, got a boost from the bill, which includes a renewable-fuel standard of 36 billion gallons of biofuel by 2022 and set a mandate for nine billion gallons of blended biofuel in 2008.

The Powershares Wilderhill Clean Energy Portfolio (NASDAQ: CLNE), an exchange-traded fund, surpassed its annual high Friday by 4 cents, rising to $26.53, while the Global Alternative, another exchange-traded fund, traded near its annual high of $60.78 with a high Friday of $57.86.

Some analysts think ethanol stocks could potentially rise by 20% to 30% from their current level, if the legislation passes.

The American Coalition for Ethanol is pleased.

The House takes up the legislation next week.

Study shows higher ethanol blends may improve fuel economy

By Tim Plaehn  

One of the criticisms of ethanol as a vehicle fuel is that fuel economy is reduced due to the lower BTU content of a gallon of ethanol vs. gasoline. However, a recent research study has shown ethanol blends of up to E30 may actually improve fuel economy for cars on the road today!

The research was performed by the University of North Dakota Energy and Environmental Research Center and the Minnesota Center for Automotive Research. Their report is titled Optimal Ethanol Blend Level Investigation.

The testing was performed using four cars, all 2007 models, a Toyota Camry, a Ford Fusion, a regular fuel Chevrolet Impala and a flex-fuel Chevrolet Impala. The vehicles were tested using the U.S. EPA fuel economy test procedures and they were also tested using the EPA standard emission tests for pollutants. The vehicles were each tested using regular gasoline, ethanol blends at 10% intervals up to E70 and E85. Here are some of the more interesting findings:

  • Three of the four cars had better fuel economy at either E20 or E30 than with regular gas. The best was the flex-fuel Impala, which had an improvement of 15% on E20. The others has a small improvement on E30.
  • All of the cars has significantly reduced emissions on higher ethanol blends.
  • The non-flex-fuel cars were able to run and perform without problems on blends of up to E45.

What I take from this is that cars on the road today could run on ethanol blends up to around E30 without a loss of fuel economy or performance and flex-fuel designed vehicles may even have improved fuel economy. The U.S. currently consumes 400 million gallons of gas per day. Replacing 25% of gasoline with ethanol would reduce annual gasoline consumption by 40 billion gallons, and probably send the Saudis to the poor house!

The report said the government should do further testing to confirm the results of this relatively small sample. If the results are verified it could be very good news for the ethanol industry.

Source: Alternative Energy News

Wastewater + Microbes = Electricity

By Bill Hobbs  

Researchers at Washington University in St. Louis are using a combination of beer, wastewater and microbes to demonstrate fuel-cell technology.

Lars Angenent, Ph.D., assistant professor of energy, environmental & chemical engineering, has received a $400,000 Career grant from the National Science Foundation to develop microbial fuel cell (MFC) kits and an accompanying booklet of physics, chemistry and biology lessons that pertain to the cell. In addition, Angenent will make the kits available to high school science teachers everywhere as an exciting, visual, hands-on way to teach science. As part of the grant, he will be working with Victoria L. May, assistant dean for science outreach in Arts & Sciences and director of the university’s Science Outreach program.

Using MFC technology, Angenent is treating wastewater donated by local brewery Anheuser-Busch, and in so doing creating electricity in a six-liter device a bit bigger than a large thermos. He uses a mixed medium containing thousands of organisms and optimizes environmental conditions to select for a bacterial community with improved electron transfer in anode biofilms, thereby increasing the electron transfer rate. In addition, he plans to work with a single-culture biofilm to allow a full understanding of how to use operating conditions to manipulate electron transfer in anode chambers.

“Anheuser-Busch is supporting us not with money, but with wastewater, of which they have an ample supply,” said Angenent. “They’re very happy to be working with us because they have a keen interest in biofuels and bioenergy.

I bet they do - beer-making is energy intensive and produces a lot of wastewater. Research like this might one day lead to a “greener” beer.

Biodiesel production could yield many benefits to India

By Tim Plaehn  

I read a headline today on plans in India to use satellite imagery to find land that is currently wastelands that could be used to grow jatropha curcas as a biodiesel feedstock. A little research revealed the cultivation of jatropha in India may provide some valuable additional benefits.

First up are the better known benefits of biodiesel:

  • Renewable fuel to reduce dependence on oil.
  • Cleaner burning than traditional diesel for lower emissions.
  • Biodiesel can be used at different blend levels to work best with local vehicle requirements.

Some additional benefits that could result:

  • Using land that is currently considered wasteland to grow the oil feedstocks does not displace and food crops.
  • Advanced technology can be used to locate the plantations to have optimum results in land use, refining and transportation costs.
  • The jatropha plantations could provide additional employment to to India’s large population.

An Indian government study shows 20% of the country or about 64 million hectares qualified as wasteland. This study hypothesized a 5 hectare jatropha oil plantation would provide a family a 60,000 rupee annual income at today’s prices.

To sum up the benefits I will take a quote from the study above: (NCR is the region around Delhi)

“As NCR has both urban as well as rural areas, the bio-diesel production will thus lead to growth of economy in both urban as well as rural sector. In urban sector, it will provide an environment friendly fuel, which will save the non-renewable sources of energy and would thus save the urban area from more pollution. In rural sector, it will provide employment to many people and will thus solve the problem of unemployment to a great extent. Also, the well-connected road network in this area would thus help in transportation of fuel as well as raw material in an efficient manner. “


Out of Africa: A Grand Plan for Powering Europe Via the Sun

By Bill Hobbs  

Global-warming prophets warn of a world becoming more desert-like, but, ironically, a measure of salvation from that future just might come from one of the world’s greatest deserts.

Europe is considering plans to spend more than 5 billion English pounds - about $10.3 billion - to build a string of giant solar power stations along the Mediterranean desert shores of northern Africa and the Middle East, reports London’s Guardian newspaper. 

More than a hundred of the generators, each fitted with thousands of huge mirrors, would generate electricity to be transmitted by undersea cable to Europe and then distributed across the continent to European Union member nations, including Britain. Billions of watts of power could be generated this way, enough to provide Europe with a sixth of its electricity needs and to allow it to make significant cuts in its carbon emissions. At the same time, the stations would be used as desalination plants to provide desert countries with desperately needed supplies of fresh water.

The project is amazing in its proposed scope, and has the backing of Prince Hassan bin Talal of Jordan, who last week presented details of project - named Desertec - to the European Parliament.

‘Countries with deserts, countries with high energy demand, and countries with technology competence must co-operate,’ he told MEPs. The project has been developed by the Trans-Mediterranean Renewable Energy Corporation and is supported by engineers and politicians in Europe as well as Morocco, Algeria, Libya, Jordan and other nations in the Middle East and Africa.

Here’s bin Talal’s white paper on the project.

In addition to solar power, Desertec would include not only solar power but wind - with wind-energy turbines located along the southern Mediterranean coast - as well as generation of hydro, biomass and geothermal power. It would supply power not only to Europe but also to the Middle East and North Africa.

This is the kind of big-idea thinking that the world is going to need more of. If such a project can work in the Mediterranean region, why is there no similarly ambitious plan at least being discussed to tap the enormous solar power and wind-power potential of such regions as the American desert southwest and parts of northern Mexico?

One reason may be cost. The Guardian story admits that the cost of power generated by the project would, at present realities, be about double what Europe now pays for power from coal. But the cost realities are changing. And cost isn’t the only factor to be considered.

The Desertec solar collectors would use a design called “concentrating solar power,”  in which banks of several hundred giant mirrors covering large areas of land, around a square kilometre, are set to focus the sun’s rays onto a central metal pillar filled with water, heating the water inside to to 800 degrees Celsius. The water vaporises into superhot steam which drives turbines that generate electricity.

Desertec envisions a thousand such solar power stations being built along the Mediterranean coast of northern Africa the Middle East, generating up to 100 billion watts of power, some of which would be exported to Europe via undersea cables. (For comparison, Britain’s total electricity generating capacity is 12 billion watts.)

In addition to power, the system would produce fresh water:

The superheated steam, after it has driven the plant’s turbines, would then be piped through tanks of sea water which would boil and evaporate. Steam from the sea water would piped away and condensed and stored as fresh water.

“Essentially you get electricity and fresh water,” said physicist Gerhard Knies, co-founder of the project. “The latter is going to be crucial for developing countries round the southern Mediterranean and in north Africa. Their populations are rising rapidly, but they have limited supplies of fresh water. Our solar power plants will not only generate electricity that they can sell to Europe, they will supply drinkable water that will sustain their thirsty populations.”

Could not a similar project simultanously benefit the United States and, say, Mexico?

5 Benefits of Bioenergy

By Tim Plaehn  

C. Scott Thomas, a consultant to bioenergy companies, recently gave a speech where he outlined what he calls: Bioenergy’s “Top Five” List. I see it as the five benefits of bioenergy. Here is Mr. Thomas’ list with links to further details of each point:

  1. Convert solar energy into liquid fuel. Points out we need liquid fuels for many of our energy uses, not available from wind and solar power. link to details
  2. Reduce greenhouse gases. link to details
  3. Remediate ecological disasters. link to details
  4. Revive depressed economies. link to details
  5. Expand energy freedom of choice. link to details

I found the discussion of the individual points interesting and though provoking. To me, point three had a different slant on excess biomass in both forests and urban areas that can be converted to liquid fuel. Also, some good information on the advanced technologies coming in the biofuel industry. Take a quick scan or read in detail. You will get some good information.

Is Sugar the Fuel of the Future?

By Bill Hobbs  

Brazil has proven that sugarcane-based ethanol is a great alternative to gasoline. Now comes news , via AZoNano News (”The A to Z of Nanotechnology”), that researchers from Oita University in Japan have developed an experimental fuel cell that uses sunlight to convert glucose (sugar) into hydrogen to power itself. The article, sourcing the info to the International Journal of Global Energy Issues, says renewable sources of biomass such as starch, cellulose, sucrose, and lactose can be converted into glucose “with little energy cost through fermentation processes.”

It’s experimental and the device only produces “several hundred millivolts,” but just imagine the possibilities if it scales.

To recap: Sugar in your gas tan - bad. Sugar in your fuel cell - good.




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