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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Seven myths about alternative energy (including nukes & biofuels)

Award-winning writer Michael Grunwald has penned a provocative list for the Financial Times called "Seven Myths about Alternative Energy." Among them:

"Nuclear Power Is the Cure for Our Addiction to Coal." Nope, says Grunwald, because of timing and cost. "The West needs major cuts in emissions within a decade, and the first new U.S. reactor is only scheduled for 2017 -- unless it gets delayed, like every U.S. reactor before it...The bigger problem is cost. Nuke plants are supposed to be expensive to build but cheap to operate. Unfortunately, they're turning out to be really, really expensive to build; their cost estimates have quadrupled in less than a decade."

"Renewable Fuels Are the Cure for Our Addiction to Oil." No they aren't, says Grunwald, because the push for more biofuels has led to greater deforestation of the planet and thus greater carbon problems. "In 2007, researchers finally began accounting for deforestation and other land-use changes created by biofuels. One study found that it would take more than 400 years of biodiesel use to 'pay back' the carbon emitted by directly clearing peat for palm oil."

--Craig Pittman

Airlines to use synthetic biofuel at LAX

Eight airlines at Los Angeles International Airport (LAX) have signed an agreement to use synthetic biofuel for ground services starting in late 2012, according to the Air Transport Association (ATA), which represents major airlines.

The airlines -- Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways -- have agreed to buy up to 1.5 million gallons per year of renewable synthetic diesel produced by Rentech, a California-based renewable energy firm.

The agreement is said to be the first of its kind to supply renewable synthetic fuels to multiple domestic airlines. The renewable "RenDiesel" fuel to be supplied to the airlines would be produced from green waste at Rentech’s proposed Rialto Renewable Energy Center.
The makers say RenDiesel has a carbon footprint of near zero and exceeds all applicable fuel standards, and is compatible with existing engines and pipelines. These characteristics make it an ideal solution to help companies meet the targets established by California’s Low Carbon Fuel Standard.

"We expect this agreement to serve as a model for future supply relationships at other airports and for other fuels, including Rentech’s synthetic jet fuel, which was recently approved for commercial airline use," said D. Hunt Ramsbottom, president and chief executive officer of Rentech.

Use of antibiotics in ethanol production called into question

Here's an interesting angle on the debate about overuse of antibiotics. The ethanol industry is being called upon to stop the unnecessary use of antibiotics in the production process, according to a new investigative report by the Institute for Agriculture and Trade Policy (IATP).
More than 70 percent of all U.S. antibiotics are used as feed additives for healthy beef cattle, pigs and poultry to promote growth. But evidence suggests the overuse of antibiotics in livestock is contributing to rising antibiotic-resistant bacterial infections in humans, experts say.

Ethanol producers also add antibiotics to the ethanol fermentation process to control bacterial outbreaks, though it is being gradually phased out thanks to the development of alternative methods.

David Adams, Times staff writer

Exxon to invest $600 million in biofuel from algae

In a marked shift in its thinking on biofuels, oil giant Exxon Mobil is investing $600 million to produce liquid transportation fuel from algae. The biofuel effort is in partnership with Synthetic Genomics, a biotech company founded by J. Craig Venter, famous for decoding the human genome.

Exxon, the world’s largest private sector oil company, has in the past been reluctant to accept global warming theories, and has dismissed the role of renewable fuels. However, the company told The New York Times that any large-scale commercial plants to produce algae-based fuels are at least 5 to 10 years away.

But Exxon's apparent change of heart could help push biofuels forward. The New York Times notes that currently, about 9 percent of the nation’s liquid fuel supply comes from biofuels, most of it corn-based ethanol. By 2022, Congress has mandated that biofuel levels reach 36 billion gallons.
Since the potential for corn-based ethanol production is not expected to exceed 15 billion gallons, the other 21 billions gallons will have to come other sources. Most of the attention is focused on cellulosic ethanol, produced from non-food crops, such as woody biomass, and grasses.
But if algae technology proves successful, it could also make a significant contribution as it offers potentially far greater yield per acre (x8) than corn.

We recently wrote this story about a company in Florida, PetroAlgae, that is also researching biofuels production from algae.

- David Adams, Times staff writer

Biofuels pass Boeing flight tests for fuel efficiency and emissions reduction.

Airlines and aircraft manufacturers are sounding more enthusiastic about the use of biofuels for jet engines, after a new study and a successful test flights.
The study by Boeing released at the Paris Air Show, found that in a series of tests - including test flights by Japan Airlines, Air New Zealand and Continental Airlines - biofuel blends performed "as well or better" than traditional jet fuel made from petroleum, according to Forbes.
In the tests the fuels met key standards such as freezing point, viscosity and fuel density, Boeing said. The tests also found the blends had greater energy content by mass than regular jet fuel, meaning they could improve fuel economy.
Continental Airlines announced today that greenhouse gas emissions from its demonstration flight are estimated to be reduced by 60 percent to 80 percent as compared to traditional jet fuel.
So far, the testing has been done mainly with algae and plants like jatropha and camelina.
"The announcement .... that gas emissions are reduced 60 to 80 percent when using biofuels instead of traditional jet fuel is a landmark announcement for the role that biofuels will play within the coming months and years," said Riggs Eckelberry, CEO of OriginOil, developer of an algae fuel technology.
However, since jet biofuels require a more sophisticated production process than other biofuels, they continue to be more expensive than regular jet fuel.

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