The credit crunch and biofuel woes in Florida

Despite the government push to promote biofuels as part of its effort to create 'green jobs' through renewable energy economy, the current economic crisis is making it hard to find investors.
That's especially true in Florida, writes the South Florida Sun-Sentinel.
Reporters Doreen Hemlock and Jaideep Hardikar write that "scores of promising projects remain in early stages and face uncertain futures, experts say, unless the government, venture capitalists and others loosen purse strings soon."

Despite more than $700 million in stimulus funds for biofuels, the distribution of funds has been slow, partly due to a lack of qualified staffers to handle the requests, experts tell the paper. Investors are also skittish on biofuels nowadays because of oversupply in the U.S. market to meet the slowly rising biofuels mandate (currently 10.5 billion gallons).

The paper cites these revealing investment figures:

    * Worldwide, investments in new assets for biofuels projects fell from $17 billion in 2007 to $14.4 billion last year and $3.3 billion in the first half of this year (according to New Energy Finance.)
    * Venture capital for biofuels, directed mainly to new-generation feedstocks such as woody waste, dropped from $643 million last year to $111 million in the first half this year.

It also mentions several stalled projects in Florida, including Biomix Energy, a Miami company hoping to build biodiesel plants, and Citrus Energy, a Boca Raton-based firm with plans to convert citrus peels to ethanol.

(Photo of Governor Charlie Crist addressing the 2007 Farm to Fuel conference in St. Petersburg.)

David Adams, Times Staff Writer

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Climate compromise bill drops renewables target, but attracts big lobbying muscle

Democratic leaders in the U.S. House announced late Tuesday night that they have hammered out a compromise bill on combating climate change, Greenwire reports. The bill calls for a goal of 17 percent, according to Bloomberg.

That exceeds President Obama's target of 14 percent, but falls far short of the 20 percent in the original bill or the 25 percent by 2025 that groups such as the Southern Alliance for Clean Energy had been pushing for.

The original draft also included a separate "energy efficiency resource standard" that would have required electric and natural gas utilities to implement efficiency programs that reduce consumer demand, notes Greenwire. But that is no longer in the measure.

Instead, the utilities would get a big gift from the government.

"Instead of collecting some $624 billion in revenue from the selling of pollution permits to industry, most of those permits would be given away free of charge, in what is called a cap-and-trade system," the Christian Science Monitor noted. "There would be little money to fund clean energy or subsidize the poor for higher costs."

No matter what the House Democratic leaders agree on, though, expect a big fight both in Congress and in the airwaves.

"The number of climate change lobbyists in Washington rose to 2,430 last year – an increase of 300% over the previous five years – which works out to about four lobbyists for every member of the Senate and House of Representatives," the Guardian noted this week. "But since Obama came to the White House in January, the oil, gas and coal industry has increased its lobbying budget by 50%."

--Craig Pittman

Feel-good biofuel not all it's cracked up to be? Questions arising about jatropha tree

Earlier this year, Time magazine ran a story on Florida entrepreneur Paul Dalton's new business growing jatropha trees, and the headline said, "The Next Big Biofuel?"

What made jatropha's biofuel seem promising, the story noted is that "unlike corn and other biofuel sources, the jatropha doesn't have to compete with food crops for arable land. Even in the worst of soils, it grows like weeds."

Well...not exactly, according to the latest issue of the Yale School of Forestry's newsletter "Yale Environment 360," which reports that Robert Bailis, an assistant professor at the Yale School of Forestry & Environmental Studies, along with Yale Ph.D. candidate Jennifer Baka, recently launched the first detailed “life cycle” environment assessment of jatropha as a biofuel.

"Although their study is in its early stages, Bailis notes that it’s already clear that, while jatropha can indeed grow on lands with minimal water and poor nutrition, 'if you plant trees in a marginal area, and all they do is just not die, it doesn’t mean you’re going to get a lot of oil from them,' " the story reports.

If you grow it in good farmland, though, it does just fine. But that's not good news. “If you grow it in better agricultural conditions, all the alarm bells go off as you get into the same food-versus-fuel debate we’ve seen with [biofuel from] corn," Bailis told the newsletter.

It's no idle concern, either. "According to the Indian environmental group, Navdanya, government foresters have drained rice paddies in order to plant jatropha in the poor and mostly tribal state of Chhattisgarh," the Yale newsletter reports. "As early as mid-2007, protests broke out in the mostly desert state of Rajasthan over a government scheme to reclassify village commons lands — widely used for grazing livestock — as 'wastelands' targeted for biofuel production, primarily jatropha."

Meanwhile, on the Philippine island of Mindanao, "protests erupted in late 2008, with indigenous leaders insisting that jatropha plantations had begun to displace needed crops of rice, corn, bananas, and root vegetables."

This all hits home for the Tampa Bay area, incidentally, because last year a Dallas company called GreenHunter Energy announced it would invest up to $100-million in a biodiesel plant and terminal at Tampa's Port Sutton terminal to produce 50-million gallons a year from biofuel -- including from jatropha plantations in Central and South America.

[Associated Press photo of jatropha tree]

--Craig Pittman

Good news: Obama backs biofuels; bad news: EPA says corn ethanol makes warming worse

The Obama Administration unveiled a new plan Tuesday "to shield corn ethanol producers from the credit crisis, work with them to cut their use of natural gas and coal in ethanol production, and nudge the auto industry toward production of vehicles that can use ethanol at concentrations of up to 85 percent," the New York Times is reporting.

"There is over $1.1 billion of opportunity here, created by the Congress, to assist in building biorefineries, in helping existing refineries convert from fossil-fuel power to renewable power," Agriculture Secretary Tom Vilsack said.

(read White House press release here)

That's the good news for biofuels producers. The bad news: "The Environmental Protection Agency says that corn ethanol — as made today — has a worse impact on climate than gasoline when land use changes are considered," the Associated Press says.

So the EPA has "proposed a new alternative-fuel standard that will likely prohibit some corn-ethanol production processes based on their greenhouse-gas emissions and encourage other advanced biofuels," according to CNN.

Restricting some ethanol-production processes "provides a greater market incentive for advanced biofuel technologies such as sugarcane," CNN noted -- and that's good news for Florida, where companies are experimenting with turning cane into biofuels.

More on emissions rules for ethanol from Matthew Wald of The New York Times.

Craig Pittman, Times Staff Writer

[Associated Press photo]

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Continental Airlines joins the biofuels quest

Another airline has announced testing of veggie fuel for its fleet as a way to cut costs and greenhouse gas emissions. Continental Airlines announced Tuesday it will conduct a flight test today  using a passenger-less Boeing 737 powered by fuel made from algae and jatropha seed. New Zealand Airlines recently conducted tests and Japan Airlines has said it plans to follow suit. Virgin Atlantic was the first airline to conduct a test flight using biofuel in February last year.
Airline officials aren't sure what kind of cost savings can be achieved using biofuels due to the current volatility in commodity prices, The New York Times reports. But experts say jatropha produces half the CO2 emissions of regular fuel.

- David Adams, Times staff writer.

Passenger plane tests jet bio-fuel mix.

A passenger plane powered partly by vegetable oil has performed a two-hour test flight in New Zealand.
One engine of the Boeing 747-400 was fueled by a 50-50 mixture of jatropha oil and standard jet fuel. The test was a success, according to the BBC.
Another test flight earlier this year used a Brazilian bio-nut fuel. International authorities say they want a 10th of aviation fuel to come from biofuels by 2017.

- David Adams

Flab to fuel? Doc says he ran his SUV on fat from his liposuction patients

Talk about the ultimate in recycling -- a Beverly Hills doctor claimed he was running his Ford Explorer and his girlfriend's Lincoln Navigator on fuel made from the fat he sucked out of his clinic's patients, according to Forbes.com.

"The vast majority of my patients request that I use their fat for fuel — and I have more fat than I can use," Dr. Alan Bittner wrote on his website, lipodiesel.com, which has since been taken down. "Not only do they get to lose their love handles or chubby belly, but they get to take part in saving the Earth."

Of course, as Forbes points out, "using fat to fuel cars might be environmentally friendly, but it's definitely illegal in California to use human medical waste to power vehicles, and Bittner is being investigated by the state's public health department." Bittner, who was also accused of allowing unlicensed employees do the actual liposuction work, has now shuttered his clinic and moved to South America.

Wired magazine -- which last year exposed as a hoax a story that a Norwegian businessman wanted to buy the liposuction fat from a Miami hospital for similar purposes -- is questioning whether Bittner was telling the truth about what it called his "thigh-test" fuel.

After all, there is no diesel version of the Lincoln Navigator. "No diesel, no lipodiesel — just a Lincoln with high cholesterol," Wired noted. Still, we're sure Tyler Durden would've approved of the theory.

--Craig Pittman

How will lower gas prices impact alternative energy solutions?

Here's a question on many minds: How will lower gas prices affect the push for alternative fuels?

Here's a couple of thoughts, plus a link to an article in the Washington Post today examining the new scenario. The New York Times followed up Tuesday with a similar article.
The first point I would make is that we have seen so many swings in gas prices over the past year that I can only imagine no one is making any firm bets where prices will be in six months. That uncertainty is not good for either fossil fuel producers or alternative energy promoters, who both need a stable financial environment to make their business plans.
Second, I would recall months ago being told by renewable fuel advocates that ethanol was a viable product while oil was at $50 a barrel. While oil has been falling, $50 still seems like a long shot today.
Falling consumer demand in the power sector (see our recent story) could also disrupt plans for new energy production in some markets (including Florida) currently considering the expensive nuclear option.

From cocaine to biodiesel. Could biofuels help wean Colombia's peasantry off coca leaf production?

I was in Colombia last week looking at efforts being funded to find crop alternatives to wean peasants off  the coca bush, the leaves of which are processed into cocaine.

One solution being looked at is biodiesel. I visited the small rural town of La Macarena, once the heartland of left wing FARC guerrillas. Today the area is under firm military control, though guerrilla militias are still active.
La Macarena is Colombia’s largest municipality with a population of only 27,000 spread over 4,400 square miles. There are no paved roads in the entire region. The nearest major town is over 100 miles away along a dirt road which is often impassable in the rainy season. Unemployment is 57 percent, and there are few jobs besides agriculture and cattle ranching.

The mayor Eliecer Vargas (see photo), a bright young agricultural economist, is running field trials with the plant 'higuerilla,' (castor oil plant). He says the results have been excellent. "It adapts well to the soil and produces after only 70 days," he said. The plant produces a fruit in a soft, spiky green ball, with a 52 per cent oil content. After two initial big harvest, the plant then produces continuously. Vargas said yields ran about 170 gallons per acre (annually). "This is the new mafia," he joked. "But this one is legal."

U.N. agency joins criticism of biofuel subsidies

The United Nations food agency has called for an urgent review of global biofuel subsidies, warning that they had contributed significantly to rising food prices in poor countries.

Current policies should be “urgently reviewed in order to preserve the goal of world food security, protect poor farmers, promote broad-based rural development and ensure environmental sustainability,” said the report released by the United Nations Food and Agriculture Organization (FAO).

Critics say biofuel subsidies sometimes mean that farmers find it more profitable to plant crops for fuel than for food. Not all biofuel crops are used for food, experts point out. But US reliance on corn for ethanol, for example, as well as soy beans, does have a significant impact on food supplies.

The UN report adds to a list of publications by environmental groups and other experts who have criticized subsidies for biofuels, which have in recent years been promoted as a partial solution to global warming and fossil fuel dependency.

In announcing the report, Jacques Diouf, the executive director of the United Nations Food and Agriculture Organization, stopped short of suggesting that the world end biofuel subsidies. Instead, he said they should be looked at closely to see how they impact poorer countries.

- David Adams, Times Staff Writer