Wisconsin state makes a big bet on developing a value added biofuels industry. The state is pushing to become more than just a source for feedstocks. From the Wisconsin Ag Connection online.
First step. $4 million investment grant towards a soy crushing facility. This grant being matched from the ag industry as well.
Living in the Pacific Northwest are big issue is getting feedstock supplies lined up for production. Getting the fields to grow rotations of oil and appropriate carbohydrate crops for biofuels.
In Wisconsin it turns out the issue isn't getting the feedstocks grown. Its getting them used in state. From the article:
WSA Director Bob Karls says Wisconsin soybean farmers have been working for 15 years to bring a soybean processing facility to the state. While Wisconsin is the 13th largest soybean producer in the country, it is the only one of these states without its own soybean processing facility.
Wednesday, October 31, 2007
I don't believe the hype a.k.a. Reasoning for record setting petro
Something I came across at NPR (looking for more info on the last post).
Over the last year I've become tone deaf to the arguments for why oil has hit a new record high. There are plenty of great reasons to explain it convincingly without having to dust off a new theory. Regardless I still couldn't help but read a recent story about why.
According to the AP via NPR the explanation for record oil prices is traders reacting to low stocks of petroleum crude. What I wonder (and I am uneducated in this) is what is the effect of crude lacking in the U.S. overall?
My Opinion:
As the world keeps expanding its refinery capacity the west coast in particular should be seeing wider supplies of refined finished products shipped to market. Our energy needs will grow with GDP, our refinery capacity is not keeping pace - doesn't take a genius to see where the arbitrage opportunity is. In fact I've been told by multiple industry insiders that Asian firms and brokers moving product from Asia are fighting to find tankage to enter markets throughout the U.S..
In the mid-90's the major oil players consolidated with sub $10 a barrel oil. This leaves huge amounts of room for many new players today in the world of $90+ oil. With crack spreads (the value for refining product) fattening out with oil prices the economics of supplying the U.S. change a bit. Specifically it removes a great deal of pressure off of the U.S. refiners (and therefore crude inventories) as the world steps up and takes advantage of the larger crack spreads to be had in U.S. markets.
We are in a world market for energy. China's refineries, Korea's refineries, Canada's refineries, Russia's refineries, India's refineries etc.... might as well be considered our refineries as well. No different than t-shirt and gym sock factories just larger dollars and volumes. I don't have an immediate number but I've read plenty of stories of large investments in foreign refinery capacity. World wide refinery capacity is up not down.
I've read and seen alot about the pinch in refining in the U.S. Being here in Portland, Oregon (without refineries only storage terminals) I see the real influence on markets in a world economy not being refining but storage. We could double refining within the U.S. but without tanks to keep the product in it means nothing. I have yet to see a technology that fits more gallons into the same volumetric space (other than higher Btu content of a fuel and with cleaner diesel fuel Btu's drop not increase - so even less energy is stored in the same tanks).
Over the last decade the world has seen a housing boom. Newer, larger, ever growing cities are popping up all over the U.S. Being as I've never heard a word about new terminals being built to serve these newer cities I would expect refineries and U.S. crude inventories to have less of an impact.
In short, I think the argument that traders are influencing high prices is hard to believe. Traders are reacting to market prices. Their influence may be on day of a trend. Traders are not the trend setters though. Markets are.
There is a great many other factors influencing price all of which influence traders and distill down to an assumption about inventories, costs, supplies, and ultimately prices.
As a non-expert applying just common sense I would expect U.S. crude inventories to continue to decline. This will happen as increasing foreign refinery capacity becomes available. It will happen as lower cost markets produce finished products in newer facilities and ship it to wealthier high value energy markets. Just like gym socks, t-shirts, and baseball caps.
Just my thoughts.
Over the last year I've become tone deaf to the arguments for why oil has hit a new record high. There are plenty of great reasons to explain it convincingly without having to dust off a new theory. Regardless I still couldn't help but read a recent story about why.
According to the AP via NPR the explanation for record oil prices is traders reacting to low stocks of petroleum crude. What I wonder (and I am uneducated in this) is what is the effect of crude lacking in the U.S. overall?
My Opinion:
As the world keeps expanding its refinery capacity the west coast in particular should be seeing wider supplies of refined finished products shipped to market. Our energy needs will grow with GDP, our refinery capacity is not keeping pace - doesn't take a genius to see where the arbitrage opportunity is. In fact I've been told by multiple industry insiders that Asian firms and brokers moving product from Asia are fighting to find tankage to enter markets throughout the U.S..
In the mid-90's the major oil players consolidated with sub $10 a barrel oil. This leaves huge amounts of room for many new players today in the world of $90+ oil. With crack spreads (the value for refining product) fattening out with oil prices the economics of supplying the U.S. change a bit. Specifically it removes a great deal of pressure off of the U.S. refiners (and therefore crude inventories) as the world steps up and takes advantage of the larger crack spreads to be had in U.S. markets.
We are in a world market for energy. China's refineries, Korea's refineries, Canada's refineries, Russia's refineries, India's refineries etc.... might as well be considered our refineries as well. No different than t-shirt and gym sock factories just larger dollars and volumes. I don't have an immediate number but I've read plenty of stories of large investments in foreign refinery capacity. World wide refinery capacity is up not down.
I've read and seen alot about the pinch in refining in the U.S. Being here in Portland, Oregon (without refineries only storage terminals) I see the real influence on markets in a world economy not being refining but storage. We could double refining within the U.S. but without tanks to keep the product in it means nothing. I have yet to see a technology that fits more gallons into the same volumetric space (other than higher Btu content of a fuel and with cleaner diesel fuel Btu's drop not increase - so even less energy is stored in the same tanks).
Over the last decade the world has seen a housing boom. Newer, larger, ever growing cities are popping up all over the U.S. Being as I've never heard a word about new terminals being built to serve these newer cities I would expect refineries and U.S. crude inventories to have less of an impact.
In short, I think the argument that traders are influencing high prices is hard to believe. Traders are reacting to market prices. Their influence may be on day of a trend. Traders are not the trend setters though. Markets are.
There is a great many other factors influencing price all of which influence traders and distill down to an assumption about inventories, costs, supplies, and ultimately prices.
As a non-expert applying just common sense I would expect U.S. crude inventories to continue to decline. This will happen as increasing foreign refinery capacity becomes available. It will happen as lower cost markets produce finished products in newer facilities and ship it to wealthier high value energy markets. Just like gym socks, t-shirts, and baseball caps.
Just my thoughts.
Tuesday, October 30, 2007
Venezula's Magic Number
Heard it on NPR.
Venezula's "magic number" is $55 a barrel.
The magic number being moment that the price of oil drops to a point where Hugo Chavez starts bleeding deficits. Or a better way of describing is as the figure upon which an oil producing nation places its budget upon a house of cards.
Being that ten years ago $12 a barrel was the expected real price you'd see a barrel of oil at consistently Venezula has lost no time ratcheting up their budgets with oil revenues. I've been wrong for a long time but the longer oil stays above $40 a barrel the more likely new technologies are going to take hold that push it back below $40 a barrel (all biofuels technologies aside).
I suppose Chavez is gambling on petroleum lasting another hundred years as the dominant motor fuel. For some reason I don't feel bad at all betting against Chavez.
Venezula's "magic number" is $55 a barrel.
The magic number being moment that the price of oil drops to a point where Hugo Chavez starts bleeding deficits. Or a better way of describing is as the figure upon which an oil producing nation places its budget upon a house of cards.
Being that ten years ago $12 a barrel was the expected real price you'd see a barrel of oil at consistently Venezula has lost no time ratcheting up their budgets with oil revenues. I've been wrong for a long time but the longer oil stays above $40 a barrel the more likely new technologies are going to take hold that push it back below $40 a barrel (all biofuels technologies aside).
I suppose Chavez is gambling on petroleum lasting another hundred years as the dominant motor fuel. For some reason I don't feel bad at all betting against Chavez.
Camelina News in Montana
What makes this a wonder crop?
Camelina can grow on less productive soil, no irrigation, no fertilizers or pests, and it has a great deal of high value potential (or that's how it looks today). In particular the fact that the oil contains Omega 3 fatty acids means a great deal of feed and human food potential. There is also a predeveloped, yet small market for European camelina for use in cosmetics.
It also can be harvested with pretty much the same equipment as wheat (meaning most farmers in the Northwest already have what they need to grow and harvest it in rotation without a large investment). Additionally it has low tillage needs. From what I've been told this crop is planted in the winter while there is still snow on the ground. Farmers broadcast it over the fields and when the snow breaks up it plants itself and starts growing.
There is a great story by the Prairie Star, an Ag paper in Montana, covering the potential for this crop both as a food grade crop and a biofuel crop. The article talks numbers below:
With an average yield of 1,200 pounds per acre at 10 cents per pound, a grower could make $120 per acre when sold into the bio-diesel market. “It can't compete with $7 wheat, but as a rotation crop, it's worth something,” said Pilgeram.
Camelina can grow on less productive soil, no irrigation, no fertilizers or pests, and it has a great deal of high value potential (or that's how it looks today). In particular the fact that the oil contains Omega 3 fatty acids means a great deal of feed and human food potential. There is also a predeveloped, yet small market for European camelina for use in cosmetics.
It also can be harvested with pretty much the same equipment as wheat (meaning most farmers in the Northwest already have what they need to grow and harvest it in rotation without a large investment). Additionally it has low tillage needs. From what I've been told this crop is planted in the winter while there is still snow on the ground. Farmers broadcast it over the fields and when the snow breaks up it plants itself and starts growing.
There is a great story by the Prairie Star, an Ag paper in Montana, covering the potential for this crop both as a food grade crop and a biofuel crop. The article talks numbers below:
With an average yield of 1,200 pounds per acre at 10 cents per pound, a grower could make $120 per acre when sold into the bio-diesel market. “It can't compete with $7 wheat, but as a rotation crop, it's worth something,” said Pilgeram.
All in all camelina is probably a great displacement for soy and canola oil. A higher value lower production oil crop. One thing the food versus fuel arguments usually miss is that higher ag prices usually mean more substitute crops enter the fray. We will see more diversity and choice as the higher prices allow more crops to compete.
I would suspect to see this be the path for all food products. As oil prices push up biofuel prices, food growers will start diversifying. Less productive land will be able to throw off enough cash flow to justify crops like camelina at the new higher prices for ag goods. Especially if the product has a superior food grade quality.
Monday, October 29, 2007
New "Green Build" Standard Announced
From the Environmental Leader
The National Association of Home Builders is launching a National Green Building Program at the 2008 NAHB International Builders’ Show in Orlando in February.
The national initiative will link dozens of state and local green building programs with a universal online certification tool, national registry of green homes and green builders. To date, about 100,000 green homes have been built through programs run or supported by local building associations around the country.
“We are bringing green building into the mainstream,” said NAHB President Brian Catalde, a home builder in Southern California. “The NAHB National Green Building Program isn’t a new way to build green. However, it’s a low-cost administrative and certification system that will help keep green affordable – and that’s the key to market acceptance.”
NAHB’s standard would compete with the U.S. Green Building Council’s LEED rating tools for residential and commercial buildings, Greenwire reports (via WBCSD).
The National Association of Home Builders is launching a National Green Building Program at the 2008 NAHB International Builders’ Show in Orlando in February.
The national initiative will link dozens of state and local green building programs with a universal online certification tool, national registry of green homes and green builders. To date, about 100,000 green homes have been built through programs run or supported by local building associations around the country.
“We are bringing green building into the mainstream,” said NAHB President Brian Catalde, a home builder in Southern California. “The NAHB National Green Building Program isn’t a new way to build green. However, it’s a low-cost administrative and certification system that will help keep green affordable – and that’s the key to market acceptance.”
NAHB’s standard would compete with the U.S. Green Building Council’s LEED rating tools for residential and commercial buildings, Greenwire reports (via WBCSD).
Fw: PRESS RELEASE: Fueling Oregon with Sustainable Biofuels - A new report from the Oregon Environmental Council
For Immediate Release
For More Information:
Jeremy Graybill, Communications Director
503-222-1963 ext. 111
Fueling
A new report from the
and pitfalls associated with
However, not all biofuels are equal from a sustainability perspective. Fueling Oregon with Sustainable Biofuels makes the case that biofuels can and must be produced – from "field to wheel" – with environmentally and socially sound practices. The report suggests ways to maximize the environmental potential of biofuels, from practices on the farm to practices in biorefineries. The report discusses the many different types of biofuels feedstocks feasible in
To capitalize on
- Support only biofuels that reduce greenhouse gas emissions on a life-cycle assessment basis
- Process biofuels with minimum fossil fuel inputs
- Protect air and water quality
- Grow biofuel feedstocks using sustainable agricultural practices
- Conserve water
- Protect biodiversity
- Avoid conversion of native ecosystems
- Support socially responsible and locally owned biofuels production
- Provide consumer information
In the near-term, one of the most important steps the state can take is to adopt a Low-Carbon Fuel Standard, which would require all fuel providers to gradually reduce the greenhouse gas intensity of the fuels they sell. The Oregon Environmental Council hopes that Fueling Oregon with Sustainable Biofuels will provide the analysis and tools needed to help make
Biofuels are only as sustainable as the agricultural and industrial processes that produce them. "Biofuels can clearly provide positive environmental benefits," said OEC director of programs
NOTE: The report Fueling Oregon with Sustainable Biofuels is available for download and reading online at www.oeconline.org/economy.
About the Oregon
The Oregon Environmental Council safeguards what Oregonians love about
###
Take a look: BIOenergy Blog Ring
The first link that caught my eye was the BIOconversion Blog with an article about woody biomass as a feedstock consideration. In particular the role woody biomass can play in sequestering carbon as well as producing wealth. This blog is part of a series of blogs shown in the graphic below. All worth checking out.
In the BIOenergy blog post, the author C. Scott Miller, starts with a map (see below) of renewable energy developments throughout the U.S. and asks the question: What about the blanks spaces in the map?
I highly recommend taking a look.
In the BIOenergy blog post, the author C. Scott Miller, starts with a map (see below) of renewable energy developments throughout the U.S. and asks the question: What about the blanks spaces in the map?What renewable energy should be considered if you don't have a wind, solar, or agricultural resource immediately available. The answer of course being woody biomass. He also points to the wealth generating and economic development success of ethanol in his argument. This argument for biofuels being a potential urban/rural political divide bridge in Oregon (see quote below).
"The revitalization of the Corn Belt is illustrative of what could happen in the forest regions of the country- hundreds of biorefineries, billions of gallon of liquid fuel, stronger feedstock prices, revitalized communities, tens of thousands of jobs, rising land equity and stronger communities."
I came across this over the weekend. A really good blog examining the big questions floating around the piece forest thinning might play in the clean-tech energy sector. It also offers depth rarely seen explaining cellulosic ethanol and wood. The depth of his knowledge, information provided, and most of all his examination is pretty impressive.I highly recommend taking a look.
Friday, October 26, 2007
Criticism of Net Energy Analysis
This is the first out right critique I've ever seen publishes around Net Energy Analysis and Life Cycle Analysis and energy policy.
Came acrossed it at ScienceDaily.com. Two excerpts below:
However, Professor Bruce Dale from Michigan State University claims, "Net energy analysis is simple and has great intuitive appeal, but it is also dead wrong and dangerously misleading -- net energy must be eliminated from our discourse." Instead, Dale recommends comparing fuels by assessing how much petroleum fuel each can replace, or by calculating how much CO2 each produces per km driven.[]
[]The problem with net energy, says Dale, is that it makes an assumption that all sources of energy (oil, coal, gas etc) have equal value. "This assumption is completely wrong -- all energy sources are not equal -- one unit of energy from petrol is much more useful than the same amount of energy in coal...and that makes petrol much more valuable," says Dale.
Bruce Dale of Michigan State University continues his arguments further in depth in an article titled: "Thinking clearly about biofuels: ending the irrelevant 'net energy' debate and developing better performance metrics for alternative fuels."
Came acrossed it at ScienceDaily.com. Two excerpts below:
However, Professor Bruce Dale from Michigan State University claims, "Net energy analysis is simple and has great intuitive appeal, but it is also dead wrong and dangerously misleading -- net energy must be eliminated from our discourse." Instead, Dale recommends comparing fuels by assessing how much petroleum fuel each can replace, or by calculating how much CO2 each produces per km driven.[]
[]The problem with net energy, says Dale, is that it makes an assumption that all sources of energy (oil, coal, gas etc) have equal value. "This assumption is completely wrong -- all energy sources are not equal -- one unit of energy from petrol is much more useful than the same amount of energy in coal...and that makes petrol much more valuable," says Dale.
Bruce Dale of Michigan State University continues his arguments further in depth in an article titled: "Thinking clearly about biofuels: ending the irrelevant 'net energy' debate and developing better performance metrics for alternative fuels."
Progress on the Algae Front
Algae Link announces a new type of algae photobioreactor (or what I call algae growing tubes). Shipped as a sheet and folded into a tube when it arrives. Making it the least expensive to ship, store, and construct (or so the Press Release says).Algae hobbyists, scientists, and inventors rejoice.
Just a mention. The big hurdle with algae is keeping the strain you farm clean. There are so many strains of algae and its so prevalent everywhere in the world its always the case for an unexpected (and less productive/non productive) strain to pop up in your algae system. When a manufacturer or inventor starts talking about a nano-tech filter that guarantees algae purity - that's when to start listening.
Thursday, October 25, 2007
Chrysler Promotes Diesel with the NBB
First I've ever seen. An Original Equipment Manufacturer (OEM) working hand and hand to promote every day use of small diesels for personal use. There was also an actual hint that Chrysler wouldn't just approve B20 but brag about it.
Saw it in the NAFTC eNews letter. According to the article Chrysler in a sign of support for biodiesel extended a discount to National Biodiesel Board (NBB) members on the Jeep Grand Cherokee diesel and the Dodge Ram with the Cummins Turbo Diesel.
We'll know if Chrysler is serious if we see small sedan diesels start penetrating the US market. By the way just to mention it. In these cases usually the only reason a OEM doesn't embrace biodiesel wholeheartedly is the issue of consistent specification of biodiesel products.
In Europe the specifications (their equivalent of ASTM) is much higher developed and the feedstocks are more consistent. In the US we have a much more distributed producer base of biodiesel with a significantly more complex flow of feedstocks that are ultimately refined into biodiesel. As ASTM and "Quality Assurance" standards become more robust and accepted across the US these issues will drop away.
There is also concern from the OEM's that biodiesel's "oxidative stability" could create problems with low tolerance high pressure fuel systems. Oxidative stability being a fancy word for biodiesel biodegrades and breaks down easier than petroleum. This not being a real issue unless you store the vehicle for prolonged amounts of time.
Biodiesel as a fuel has millions of miles and thousands of vehicles operating for years as a track record over the last decade in the US (let alone a longer one in Europe approved up to B100). Its about time that the auto manufacturers embraced the opportunity of actually giving customers the choices they have always wanted. A domestic, renewable and low carbon fuel option. Especially considering that most customers have just been doing it regardless.
Biomass to Hydrogen
Is it me or has this been the week of hydrogen crossing over into biofuels? The USDA must be doing a good job of finding well developed science and unleashing it on new biofuel and biomass efforts..
Here is another one: Microbes plus sugar equals hydrogen...
Using the collection's database information, the team is searching for microbes that "eat" biomass sugars (e.g., glucose and xylose from corn stover) and are electrochemically active. That means they can transfer electrons from fuel cell sugars without help from costly chemicals called mediators. The electrons, after traveling a circuit, combine with protons in a cathode chamber, forming hydrogen, which can be burned or converted into electricity.
One thing not mentioned that would make this really sexy to the 'out-side-the-box' set. Cellulosic hydrogen. For energy geeks that would be the ten year old boy equivalent of ninjas fighting robots over stolen magic pirate treasure.
Here is another one: Microbes plus sugar equals hydrogen...
Using the collection's database information, the team is searching for microbes that "eat" biomass sugars (e.g., glucose and xylose from corn stover) and are electrochemically active. That means they can transfer electrons from fuel cell sugars without help from costly chemicals called mediators. The electrons, after traveling a circuit, combine with protons in a cathode chamber, forming hydrogen, which can be burned or converted into electricity.
One thing not mentioned that would make this really sexy to the 'out-side-the-box' set. Cellulosic hydrogen. For energy geeks that would be the ten year old boy equivalent of ninjas fighting robots over stolen magic pirate treasure.
Most Expensive Places to Heat Your Home
Pretty interesting little article in Forbes today on the most expensive places to heat your home. Portland was #12. At first I thought that was pretty high, but then I realized that there aren't really that many cities in the North. NYC, Philly, Boston, Detroit, Chicago, Minneapolis, Seattle, Umm....I'm running out. Well, about 11 others is right. Of course they're not including Sheboygan or other smaller towns...
It's interesting to think about the different factors- climate, length of season, heating fuels used, regional fuel costs, etc. One thing I really talk to clients about a lot is the difference between energy efficiency and energy cost- they're two different things. For instance, many folks perceive that electrical heating is "inefficient". In fact all electrical heating systems (generally) are 100% energy efficient- they convert 100% of the electrical energy into heat energy. By comparison the average gas furnace is 80% efficient. The big difference is energy cost- electricity costs 2x what natural gas does for the same unit of energy. This leads electrical heating (except heat pumps) to cost more to operate than gas systems. Many people assumed that electrical systems were just inefficient. As energy sources becomes more volatile, it will be more and more important to understand these differences.
I was also surprised to see in the article that there wasn't a huge variation in costs between most of the top cities- I would think that Portland would be much lower because of our "benign" climate. Once again, just like with solar energy, we're not so far from the average.
It's also a great sign to see a national magazine getting us thinking about our energy costs, what affects it, and what we're spending it on. This article would not have been written 4 years ago. 30 years ago, yes, but 4 years ago, no. A sign of the times....
It's interesting to think about the different factors- climate, length of season, heating fuels used, regional fuel costs, etc. One thing I really talk to clients about a lot is the difference between energy efficiency and energy cost- they're two different things. For instance, many folks perceive that electrical heating is "inefficient". In fact all electrical heating systems (generally) are 100% energy efficient- they convert 100% of the electrical energy into heat energy. By comparison the average gas furnace is 80% efficient. The big difference is energy cost- electricity costs 2x what natural gas does for the same unit of energy. This leads electrical heating (except heat pumps) to cost more to operate than gas systems. Many people assumed that electrical systems were just inefficient. As energy sources becomes more volatile, it will be more and more important to understand these differences.
I was also surprised to see in the article that there wasn't a huge variation in costs between most of the top cities- I would think that Portland would be much lower because of our "benign" climate. Once again, just like with solar energy, we're not so far from the average.
It's also a great sign to see a national magazine getting us thinking about our energy costs, what affects it, and what we're spending it on. This article would not have been written 4 years ago. 30 years ago, yes, but 4 years ago, no. A sign of the times....
Wednesday, October 24, 2007
Water Implications of Biofuels Production in the United States
From the OEC's Biofuels Listserve (forwarded Message)
----- Original Message -----
From: "Chris Hagerbaumer" Oregon Environmental Council
To: <biofuels4oregon@lists.onenw.org>
Sent: Wednesday, October 24, 2007 10:11 AM
Subject: [biofuels4oregon] Water Implications of Biofuels Production in the
United States
I'm passing along a link to a report recently released by the Earth & Life Studies at the National Academies: http://books.nap.edu/catalog.php?record_id=12039
Water Implications of Biofuels Production in the United States
National interests in greater energy independence, concurrent with favorable market forces, have driven increased production of corn-based ethanol in the United States and research into the next generation of biofuels.
The trend is changing the national agricultural landscape and has raised concerns about potential impacts on the nation's water resources. To help illuminate these issues, the National Research Council held a colloquium on July 12, 2007 in Washington, DC. This report, based in part on discussions at the colloquium, concludes that if projected future increases in use of corn for ethanol production do occur, the increase in harm to water quality could be considerable from the increases in fertilizer use, pesticide use, and soil erosion associated with growing crops such as corn. Water supply problems could also develop, both from the water needed to grow biofuels crops and water used at ethanol processing plants, especially in regions where water supplies are already overdrawn.
The production of "cellulosic ethanol," derived from fibrous material such as wheat straw, native
grasses, and forest trimmings is expected to have less water quality impact but cannot yet be produced on a commerical scale. To move toward a goal of reducing water impacts of biofuels, a policy bridge will likely be needed to encourage growth of new technologies, best agricultural practies, and the development of traditional and cellulosic crops that require less water and fertilizer and are optimized for fuel production.
Vegetable Oil Fuel Cell
Another good catch by Richard Stuebl over at the Cleantech Blog.It had to happen. The hydrogen crowd is crashing the biofuel party. Its good to see as this party is alot more fun anyways. Fewer PhD's and more entrepreneurs makes for a sector that steps hard and pushes envelopes.
Technology Management (a.k.a. TMI) demonstrates first-ever use of vegetable oil in solid oxide fuel cell.
See picture to the right.
This same fuel cell has also ran on diesel, propane, natural gas, and JP8 jet fuel (which is also cross listed as Jet A, No. 1 Diesel, or K1 Kerosene in many parts of the world). Logically I would assume this means their fuel cell can also run unrefined petroleum distillates and I'd even bet unpolished glycerin.
This is another one of those small scale distributive technologies. Or in a nutshell described simply as expensive and small scale. Small scale works though in remote energy production from multiple sources of liquid fuel. Hence distributed, away from large power generation infrastructure.
There has been a real cross over the last year of technologies that were in development during the age of sub-$40 a barrel petroleum. These already promising technologies making the necessary flexibility to include biofuels (the hot energy of today).
Funny how the very technologies that were oh-so sexy when hydrogen was the future pick up the ability to use other fuels the moment the grant money requires something other than hydrogen.
More about the fuel cell technology at FMI's site as well as a good history of their financial support from grants at FMI's news site.
Tuesday, October 23, 2007
Soy Lubricants Turning Heads
Another industry magazine looking at biobased lubes. From Machinery Lubrication (a trade magazine): "Soybean Oil offers Higher Performance, Low Environmental Impact."
Soy and other vegetable oils have a long way to go before they displace mineral oil based products. Of every measure except maybe biodegradability and maybe lubricity as a fuel additive mineral oils far out perform the emerging biobased lubricants.
Remember I'm very pro-biobased product/substitute technology. Regardless, every time I've looked at biobased lubes I have yet to see the A-game I would need to bring the product to market and start developing markets for it.
In particular they always lack the API specification donut as well a warranty. I've also never seen any mention of the ability to pull oil sampling with a traditional lab (not saying it can't be done, I've just never seen it mentioned).
Without the ability to determine the wear and tear an engine is going through, without a warranty to back up an engine going down due to a lubricant failure, and without a promise of adherence to API standards recommended by the Original Equipment Manufacturer these products become a tough sell. By far an away tougher than biodiesel has ever been.
Switch Grass News Done Right
Wired Magazine does Switchgrass this month. They explain the whole potential and pitfall of cellulosic ethanol in three paragraphs shown below:On a blackboard, it looks so simple: Take a plant and extract the cellulose. Add some enzymes and convert the cellulose molecules into sugars. Ferment the sugar into alcohol. Then distill the alcohol into fuel. One, two, three, four — and we're powering our cars with lawn cuttings, wood chips, and prairie grasses instead of Middle East oil.
Unfortunately, passing chemistry class doesn't mean acing economics. Scientists have long known how to turn trees into ethanol, but doing it profitably is another matter. We can run our cars on lawn cuttings today; we just can't do it at a price people are willing to pay.
The problem is cellulose. Found in plant cell walls, it's the most abundant naturally occurring organic molecule on the planet, a potentially limitless source of energy. But it's a tough molecule to break down.
As always with Wired. Its worth the read. As far as a primer on cellulosic ethanol goes you'll be hard pressed to find a source that does it as well.
Monday, October 22, 2007
Modified 1977 Covette with a 6.5L Diesel
I found another diesel Corvette over the weekend. Check it out at http://www.thedieselpage.com/readers/vet.htm.From what I understand, quite a few GM muscle cars with a 300R transmissions can accept either the 6.2 L or 6.5 L engines with little modification. These diesel engines being extremely common and mating directly up on the factory motor mounts of most GM products that came with this standard transmission. From what I'm told the only two real mods required are the addition of a vacuum pump and an alteration to the fuel pump.
Imperium's Utility Scale Contract: Part 2
Further comment and news about Imperium's utility contract to supply what will be the world's first utility scale biodiesel power generation project.
Found at Seattlepi.com on John Cook's Venture Blog.
Updates Provided:
- The power plant will be a 110 megawatt generating station.
- Imperium is working with local groups to determine the best local feedstocks.
- The Hawaiian Electric and the NRDC have also set standards for imported feedstocks (short description HERE; full policy HERE).
- The supplying point from Imperium will be a plant "similar" in size to the Grays Harbor plant.
- This plant is currently in the permitting phase in Kalaeola Harbor on Oahu. (See below)
The Potential of Biodiesel Production Worldwide
From the University of Wisconsin-Madison Nelson Institute for Environmental Studies.
A Global Comparison of National Biodiesel Production Potentials
By: Matt Johns and Tracey Holloway.
What makes it significant? They study a national-level evaluation of potential biodiesel volumes and production cost by country. From what I can tell this is a comparitive advantages study.
See the News Release online HERE. The perspective of the study leans towards identifying the large emerging economies that import petroleum and export raw oils. Seeing an economic development opportunity for a small agricultural dependent economy the opportunity to develop value added fuels for their own economy's needs.
Above is a map showing the annual production of biodiesel worlds wide. Within the study are several maps offering a visual comparison by nation. An interesting snapshot. (Note Russia, I had no idea that Russia produced biodiesel)
A Global Comparison of National Biodiesel Production Potentials
By: Matt Johns and Tracey Holloway.
What makes it significant? They study a national-level evaluation of potential biodiesel volumes and production cost by country. From what I can tell this is a comparitive advantages study.
See the News Release online HERE. The perspective of the study leans towards identifying the large emerging economies that import petroleum and export raw oils. Seeing an economic development opportunity for a small agricultural dependent economy the opportunity to develop value added fuels for their own economy's needs.
Above is a map showing the annual production of biodiesel worlds wide. Within the study are several maps offering a visual comparison by nation. An interesting snapshot. (Note Russia, I had no idea that Russia produced biodiesel)Friday, October 19, 2007
Imperium Signs Utility Scale Biodiesel Deal with a Hawaiian Utility
I was directed to this tidbit by the BiobasedNews....
If you haven't heard of Imperium Renewables they are the proud owner of the world's first 100 million gallon capacity biodiesel plant in Grays Harbor, Washington. Now they can chalk up another distinction. They are also the proud supplier of the world's largest single consumer of biodiesel in the world. The Hawaiian Electric Company.
Story Below:
HONOLULU - Hawaiian Electric Company filed an application Thursday with the Hawaii Public Utilities Commission for approval of a biodiesel supply contract for its new Campbell Industrial Park generating station.
The contract is the result of a competitive bidding process.
The biodiesel will be supplied on an exclusive basis by Imperium Renewables.
The contract will continue through the end of 2011 and provides that Imperium will supply Hawaiian Electric's total fuel requirements for the Campbell generating station, anticipated to be between 5 million and 12 million gallons of biodiesel per year.
I'm impressed. Not only impressed but I'm jealous. Friggin jealous in fact (I've totally been working on trying to get an energy project off the ground for years). I'll have to congratulate Imperium next time I run into them at a Northwest Biofuels Association even.
With what I assume is a five year biodiesel supply contract the only issue remaining is a long term palm contract to go with it. Being that palm production is expanding my guess is that they probably already have such a deal inked. Combine the safety of a contract for palm with a big off-take agreement with a utility, and the upcoming IPO expected to pull over $300 million in cash makes this looks like a home run.
They have cashflow, capacity, likely have feedstock from Palm growers, and now a guaranteed buyer for the fix cost portion of a spanking new Hawaiian plant. Looks good for them.
The only curve ball is the volatility of maintaining that large of quantities of through put. Allot could change very rapidly in relationship to their bid numbers (just a currency revaluation could really put a damper on the competitive price of palm).
As I heard when many first criticized the concept of Imperium's business model. Usually its not a good idea to bet against Martin Tobias.
Salt Water's Energy Potential
A driver here at StarOilco tipped me off to something interesting.
Saltwater as a fuel. The best Google article I found was Make Magazine's blog mention.
A Pennsylvania mad was doing research on desalinating salt water and then discovered that it was releasing hydrogen. As said by Make's Blog: "John Kanzius, a Washington County native, tried to desalinate seawater with a generator he developed to treat cancer, and it caused a flash in the test tube..."
Kudos to Noah for the tip off.
Saltwater as a fuel. The best Google article I found was Make Magazine's blog mention.
A Pennsylvania mad was doing research on desalinating salt water and then discovered that it was releasing hydrogen. As said by Make's Blog: "John Kanzius, a Washington County native, tried to desalinate seawater with a generator he developed to treat cancer, and it caused a flash in the test tube..."
Kudos to Noah for the tip off.
Thursday, October 18, 2007
Behold! The Concept of Cellulosic Tofu
I had a conversation a week ago that popped into memory today.
ICM is a company doing some pretty interesting reasearch around cellulosic and next generation ethanol processes. As their website says, they are "dedicated to sustaining agriculture on innovation."
To this end one of their business development guys, Alan Goodnight, mentioned something profound in passing (I don't know Alan he just gave me his card after the conversation). ICM's research on cellulosic ethanol is focusing on extracting protein as well as ethanol from biomass crops like switchgrass.
He mentioned that agriculture world wide is carbohydrate rich and protein poor. Finding an inexpensive and plentiful protein source is as valuable, if not more valuable, than cellulosic ethanol.
Just a unique mention I hadn't heard before. Something to look for as other emerging cellulosic ethanol companies make their commercial scale push to exist in the post $80 crude barrel world we might be entering.
ICM is a company doing some pretty interesting reasearch around cellulosic and next generation ethanol processes. As their website says, they are "dedicated to sustaining agriculture on innovation."
To this end one of their business development guys, Alan Goodnight, mentioned something profound in passing (I don't know Alan he just gave me his card after the conversation). ICM's research on cellulosic ethanol is focusing on extracting protein as well as ethanol from biomass crops like switchgrass.
He mentioned that agriculture world wide is carbohydrate rich and protein poor. Finding an inexpensive and plentiful protein source is as valuable, if not more valuable, than cellulosic ethanol.
Just a unique mention I hadn't heard before. Something to look for as other emerging cellulosic ethanol companies make their commercial scale push to exist in the post $80 crude barrel world we might be entering.
Following a good LEED
With the recent success of the US Green Build Council's LEED certified building concept that has been taking off landscaping designers are following. Fastcompany covers it here.
With the name the "Sustainable Sites Initiative," it was unveiled last week at the American Society of Landscape Architects Expo as a joint project by that organization, the University of Texas at Austin's Lady Bird Johnson Wildflower Center, and the United States Botanic Garden.
Thinking about it I'm surprised they didn't start the whole thing off. I've complained for years about the lack of strategy we use with city code and landscaping design. (since my family's company had to build useless landscaping and then shortly after got blindsided with storm water regulations for run off).
With the name the "Sustainable Sites Initiative," it was unveiled last week at the American Society of Landscape Architects Expo as a joint project by that organization, the University of Texas at Austin's Lady Bird Johnson Wildflower Center, and the United States Botanic Garden.
Thinking about it I'm surprised they didn't start the whole thing off. I've complained for years about the lack of strategy we use with city code and landscaping design. (since my family's company had to build useless landscaping and then shortly after got blindsided with storm water regulations for run off).
Agricultural products flow chart.
ADM has an interesting "Products and Processes Chart" worth looking at.
One of those fifth grade level examples that's interesting no matter how old you are.
One of those fifth grade level examples that's interesting no matter how old you are.
Shell Oil President John Hofmeister comments about ethanol's future.
Shell Oil's President John Hofmeister commented recently about the future of biofuels as a potential blendstock for Shell Oil's gasoline. See full article at BayArea.com.
The comment was made as part of his recent decision to do a 50-city tour talking "face-to-face" with the public about energy issues.
And I quote John Hofmeister: "[It's] possible that in ten to 20 years there will be large quantities of ethanol from Shell for the market"
This in reference to a partnership Shell Oil has with Iogen researching next generation biofuels.
Interestingly enough its possible that right now there is a large quantity of ethanol available as a blend stock. In fact from what I understand Shell routinely uses it as a blendstock to extend or improve the octane ratings of their inventories.
Just thought I would point it out. Figure he would have as well. I guess you could say the future is now.
The comment was made as part of his recent decision to do a 50-city tour talking "face-to-face" with the public about energy issues.
And I quote John Hofmeister: "[It's] possible that in ten to 20 years there will be large quantities of ethanol from Shell for the market"
This in reference to a partnership Shell Oil has with Iogen researching next generation biofuels.
Interestingly enough its possible that right now there is a large quantity of ethanol available as a blend stock. In fact from what I understand Shell routinely uses it as a blendstock to extend or improve the octane ratings of their inventories.
Just thought I would point it out. Figure he would have as well. I guess you could say the future is now.
Wednesday, October 17, 2007
Turbine Free Windpower
I saw this at Wired Blog Network.From Wired: "Inspired by the famous Tacoma Narrows Bridge, the Windbelt is a tight plastic strip stretched in a frame, joined to magnets at both ends. When the wind blows across the belt, it vibrates (like when you blow a blade of grass to make music) and the magnets move inside wire coils, generating power. This table top version will put out 40 milliwatts and can power an LED. It's cheap and simple, and can generate power from breezes as slow as 10mph, making it ideal for developing nations."
I would file this under moderately scalable, small scale, and simple. Which means its probably not a business in itself. This doesn't mean it isn't a paradigm shifter for some industry or specific device though.
If for anything simply because of what this might be integrated in with. As with must cutting edge energy concepts it isn't the demonstrated technology. Its what it might be paired with and where that might go next.
Fw: [biofuels4oregon] Northwest Canola Report
Northwest Canola Assessment
From: Peter Moulton
Sent: Wednesday, October 17, 2007 8:51 AM
Subject: [biofuels4oregon] Northwest Canola Report
Folks at Central Washington Biodiesel, working under the title of Cascadia Carbon Institute, have just released a very interesting assessment of Northwest canola…
PetroSun Issues Algae-to-Biofuels Update
Read the Press Release at the Biobased News.
The important info from the Press Release:
PetroSun plans to produce 180,000,000 of algal oil (that's right that many zeros).
This production number is for the year starting 2009.
The algae production plants are expected to be completed in 2008 in the proposed states of Alabama, Louisiana and Arizona.
PetroSun plans to sell this crude oil tracking the price of petroleum crude.
PetroSun is notable because the company has a background in Oil and Gas development and made the cross-over move to biofuels production in recent years.
My thoughts on algae:
Its way easier said than done.
Its way easier done than done right for that matter.
The issue being genetic pollution. Algae is nearly impossible to get as a consistent strain. Therefore from what I understand algae's real promise is as a scrubber or grey water cleaner.
My money is on algae technologies that do something (scrub emissions, pollutants, clean industrial grey water, etc....). Algae will be paired with biofuels only as a non-foodgrade biofuel feedstock as a waste stream offtake partner.
The important info from the Press Release:
PetroSun plans to produce 180,000,000 of algal oil (that's right that many zeros).
This production number is for the year starting 2009.
The algae production plants are expected to be completed in 2008 in the proposed states of Alabama, Louisiana and Arizona.
PetroSun plans to sell this crude oil tracking the price of petroleum crude.
PetroSun is notable because the company has a background in Oil and Gas development and made the cross-over move to biofuels production in recent years.
My thoughts on algae:
Its way easier said than done.
Its way easier done than done right for that matter.
The issue being genetic pollution. Algae is nearly impossible to get as a consistent strain. Therefore from what I understand algae's real promise is as a scrubber or grey water cleaner.
My money is on algae technologies that do something (scrub emissions, pollutants, clean industrial grey water, etc....). Algae will be paired with biofuels only as a non-foodgrade biofuel feedstock as a waste stream offtake partner.
Tuesday, October 16, 2007
"Splash and Dash" under fire again. This time from the EU.
US Biofuel Energy Policy under fire.
In particular the practice of biodiesel crossing through US ports taking advantage of the federal blenders tax credit for biodiesel ($1.00 for virgin oil, $.50 for waste vegetable oil sourced biodiesels).
First US producers didn't think it was fair for foreign biodiesel producers to take the credit and flip the product to non US markets. Now EU producers don't think its fair that US firms manufacture the product for export as well.
I agree on both criticisms.
International Herald Tribune (reported by the AP)
The European Biodiesel Board — which represents 80 percent of EU producers — said "massive exports of unfair subsidized U.S. biodiesel" may break trade rules by undercutting European businesses and discouraging new output.
The EBB goes on to state:
"It is estimated that some 700,000 metric tons U.S. methyl ester (biodiesel) have entered the EU since January 2007 compared to only 90,000 tons for the whole 2006, meaning that the 1 million metric tons threshold could be reached before the end of this year." "This represents a sudden and sharp increase in U.S. exports which is only explainable by unfair support measures."
I agree with the complaint coming from the EBB. I disagree with the ultimate analysis though. Uber-expensive petroleum has a great deal to do with it as well. Got to blame the substitutablity of biodiesel with petroleum and the well developed markets of Europe as much as the US tax credits.
In particular the practice of biodiesel crossing through US ports taking advantage of the federal blenders tax credit for biodiesel ($1.00 for virgin oil, $.50 for waste vegetable oil sourced biodiesels).
First US producers didn't think it was fair for foreign biodiesel producers to take the credit and flip the product to non US markets. Now EU producers don't think its fair that US firms manufacture the product for export as well.
I agree on both criticisms.
International Herald Tribune (reported by the AP)
The European Biodiesel Board — which represents 80 percent of EU producers — said "massive exports of unfair subsidized U.S. biodiesel" may break trade rules by undercutting European businesses and discouraging new output.
The EBB goes on to state:
"It is estimated that some 700,000 metric tons U.S. methyl ester (biodiesel) have entered the EU since January 2007 compared to only 90,000 tons for the whole 2006, meaning that the 1 million metric tons threshold could be reached before the end of this year." "This represents a sudden and sharp increase in U.S. exports which is only explainable by unfair support measures."
I agree with the complaint coming from the EBB. I disagree with the ultimate analysis though. Uber-expensive petroleum has a great deal to do with it as well. Got to blame the substitutablity of biodiesel with petroleum and the well developed markets of Europe as much as the US tax credits.
Well Said...
I guess I'm what you'd call a fan of the BiobasedNews.
Why? Well an editorial that popped up today sums up my feelings very well. This seems to happen often with their news service (they are great content filters). Its great to feel like your in good company.
Peter Nelson, BioDimensions in an editorial called "The Big Question Mark":
A few years ago I saw a chart from Royal Dutch Shell that showed projected sources of energy production over the next hundred years. The chart showed a rising percentage in the use of solar, wind, biomass as well as coal, nuclear and/other more traditional sources. However the most interesting element was the top twenty to thirty percent had a big question mark.
The question mark represented the quantity of energy that would be produced over the coming decades from technologies and innovations that have yet to be discovered. I loved this chart because it captured the idea that we so often forget – that the emerging green/renewable revolution is only in its infancy and that there will be amazing and unknown opportunities for biobased products as other markets
grow.
As I have written before, so many of the arguments involving ethanol or other ideas are in so many ways the same as early arguments about the viability of computers when they were still the size of a small house. As efficiencies and new technologies were discovered, the possibilities broadened. For instance, I am constantly pointing out the need to capture the highest value for each plant component, as well as the need to dramatically expand the types of feedstocks available, each with their own unique characteristics.
Its worth the read.
In particular he captures the opportunity in the value added products far beyond just commodity biofuels. Remember, that's where all refining must go to stay competitive in a mature market.
Either a refining operation must own below market feedstocks or above market profit niches to sell into. Otherwise price inversions will do away with a refinery operating at the barest margin. Look to the value added technologies or business models that broaden the possibility of the industry. Those players will be the paradigm shifters.
Why? Well an editorial that popped up today sums up my feelings very well. This seems to happen often with their news service (they are great content filters). Its great to feel like your in good company.
Peter Nelson, BioDimensions in an editorial called "The Big Question Mark":
A few years ago I saw a chart from Royal Dutch Shell that showed projected sources of energy production over the next hundred years. The chart showed a rising percentage in the use of solar, wind, biomass as well as coal, nuclear and/other more traditional sources. However the most interesting element was the top twenty to thirty percent had a big question mark.
The question mark represented the quantity of energy that would be produced over the coming decades from technologies and innovations that have yet to be discovered. I loved this chart because it captured the idea that we so often forget – that the emerging green/renewable revolution is only in its infancy and that there will be amazing and unknown opportunities for biobased products as other markets
grow.
As I have written before, so many of the arguments involving ethanol or other ideas are in so many ways the same as early arguments about the viability of computers when they were still the size of a small house. As efficiencies and new technologies were discovered, the possibilities broadened. For instance, I am constantly pointing out the need to capture the highest value for each plant component, as well as the need to dramatically expand the types of feedstocks available, each with their own unique characteristics.
Its worth the read.
In particular he captures the opportunity in the value added products far beyond just commodity biofuels. Remember, that's where all refining must go to stay competitive in a mature market.
Either a refining operation must own below market feedstocks or above market profit niches to sell into. Otherwise price inversions will do away with a refinery operating at the barest margin. Look to the value added technologies or business models that broaden the possibility of the industry. Those players will be the paradigm shifters.
Glomalin: What likely makes switchgrass so special
The USDA has a great easy to read article which covers the basics of glomalin as it relates to plants. According to the USDA article it turns out that switchgrass has higher glomalin activity which might explain its robust growth and better carbon gobbling ablity over other crops like corn.
I don't know the science at all beyond a basic level but even for a layperson like myself I can see the potential. If we could better understand glomalin's function or influencing factors we might be able to boost the carbon feasting ablities of other crops.
Glomalin is a sugar protein excreted by soil fungi ands serves an additional role as a facilitator of water and nutrient uptake into the roots of plants. I have seen presentations where they talk about plants, fungi, and symbiotic relationships before but this is the first study I've seen where they might influence the amount of biomass to be had by a plant.
Said best by Linda Tokarz who wrote the article at the USDA:
"Glomalin may be partly responsible for the ability of switchgrass to store more soil carbon than corn—and to store it deeper, so it’s less likely to be lost to the atmosphere as carbon dioxide. Thus, glomalin might not only help biofuel crops grow and flourish under adverse conditions like drought, but also close the carbon cycle by storing carbon released as carbon dioxide during the burning of biofuels for energy."
The picture above is a microscopic view of glomalin taken from the USDA article page. This picture and further reading are better explained at the USDA page.
I don't know the science at all beyond a basic level but even for a layperson like myself I can see the potential. If we could better understand glomalin's function or influencing factors we might be able to boost the carbon feasting ablities of other crops.
Glomalin is a sugar protein excreted by soil fungi ands serves an additional role as a facilitator of water and nutrient uptake into the roots of plants. I have seen presentations where they talk about plants, fungi, and symbiotic relationships before but this is the first study I've seen where they might influence the amount of biomass to be had by a plant.
Said best by Linda Tokarz who wrote the article at the USDA:
"Glomalin may be partly responsible for the ability of switchgrass to store more soil carbon than corn—and to store it deeper, so it’s less likely to be lost to the atmosphere as carbon dioxide. Thus, glomalin might not only help biofuel crops grow and flourish under adverse conditions like drought, but also close the carbon cycle by storing carbon released as carbon dioxide during the burning of biofuels for energy."
The picture above is a microscopic view of glomalin taken from the USDA article page. This picture and further reading are better explained at the USDA page.
Dot-Com Comparison
Biobased News has a great editorial comparing the Dot-Com era to the current biofuels boom. An excerpt below:
The dot-com bubble was marked by unrealistic speculation involving faulty business models. The resulting business plans overestimated projections, included wild claims about market share, often did not consider factors such as logistics, and were backed by an impressive list of bios for personnel who passionately believed in the potential for the new companies but many times lacked legitimate experience.
In hindsight it has been apparent that basic business development questions should have been asked such as, “How long has the management team worked together?” Unfortunately these and other crucial questions were often ignored in the wave of excitement. Sound familiar to what is going on now?
My thoughts:
You've probably heard the comparison of the emerging biofuels sector to the dot-com era of the late nineties before. This is not a very original thought and you hear it more and more these days. There are a great many comparisons between the investing era we are in today and the bubble of the late 90's.
There are also some very large difference. In particular biofuels takes a great deal of physical capital at even the outset.
Biofuels being a physical product the actual innovation requires more than just a good idea taken to market. Biofuels creates a few ASTM products with strict quality assurance requirements. These biofuel products must also integrate into a preexisting petroleum sector (which often doesn't willing play nice with the new kids on the block). Combine this with measurable quantities and a market price which combine together to create real cashflow expectations and you've got a much more manageable business than a e-Commerce concept.
In essence the big difference is that with a biofuels business you can call B.S. much earlier than an e-Commerce business. This is further compounded with the fact that biofuel companies require credible real relationships with not only customers but distributors who must make clear decisions of which biofuels companies they will work with. This increasing the opportunities for a less than credible entrant to be handed the moniker "bull-shit" (this being an industry standard petroleum term).
In essence, even with smoke and mirrors, biofuels requires measurable results and distribution relationships. These can be measured at a great distance with little prior industry experience as an investor.
This separates the two sectors greatly. It still doesn't stop the Dot-Com refugees and I.T. tourists from cruising through our conferences though looking for that "killer ap" equivalent in a biofuel technology. Not that I would want the to stop, they make talking about the subject fun just on an enthusiasm level alone.
The dot-com bubble was marked by unrealistic speculation involving faulty business models. The resulting business plans overestimated projections, included wild claims about market share, often did not consider factors such as logistics, and were backed by an impressive list of bios for personnel who passionately believed in the potential for the new companies but many times lacked legitimate experience.
In hindsight it has been apparent that basic business development questions should have been asked such as, “How long has the management team worked together?” Unfortunately these and other crucial questions were often ignored in the wave of excitement. Sound familiar to what is going on now?
My thoughts:
You've probably heard the comparison of the emerging biofuels sector to the dot-com era of the late nineties before. This is not a very original thought and you hear it more and more these days. There are a great many comparisons between the investing era we are in today and the bubble of the late 90's.
There are also some very large difference. In particular biofuels takes a great deal of physical capital at even the outset.
Biofuels being a physical product the actual innovation requires more than just a good idea taken to market. Biofuels creates a few ASTM products with strict quality assurance requirements. These biofuel products must also integrate into a preexisting petroleum sector (which often doesn't willing play nice with the new kids on the block). Combine this with measurable quantities and a market price which combine together to create real cashflow expectations and you've got a much more manageable business than a e-Commerce concept.
In essence the big difference is that with a biofuels business you can call B.S. much earlier than an e-Commerce business. This is further compounded with the fact that biofuel companies require credible real relationships with not only customers but distributors who must make clear decisions of which biofuels companies they will work with. This increasing the opportunities for a less than credible entrant to be handed the moniker "bull-shit" (this being an industry standard petroleum term).
In essence, even with smoke and mirrors, biofuels requires measurable results and distribution relationships. These can be measured at a great distance with little prior industry experience as an investor.
This separates the two sectors greatly. It still doesn't stop the Dot-Com refugees and I.T. tourists from cruising through our conferences though looking for that "killer ap" equivalent in a biofuel technology. Not that I would want the to stop, they make talking about the subject fun just on an enthusiasm level alone.
Monday, October 15, 2007
Here they come... Fuel cost predictions.
"We're in a world of triple digit oil prices for the foreseeable future"
So says Jeffrey Rubin of the Canadian investment bank CIBC.
He goes on to say: "Triple digit prices is not a spike, triple digit oil prices is what is going to be required to maintain, let alone grow, world oil supplies."
So says Jeffrey Rubin of the Canadian investment bank CIBC.
He goes on to say: "Triple digit prices is not a spike, triple digit oil prices is what is going to be required to maintain, let alone grow, world oil supplies."
I've always bet on the opposite side of the market for the last four years. If I make a bet about petroleum markets it consistently goes the opposite way. I am the worst petroleum economist the world has ever seen (I'm glad I saved myself the cost of an econ grad-school).
I was drawn to biofuels (biodiesel in particular) because of the low carbon and domestic aspects. I've always considered it a super-premium product similar to higher end coffee and organic produce. A product that's value distinguished it from a pure commodity market.
I therefore have always focused on avoiding a commodity market and told myself it was for safety's sake. To protect myself and true biofuel supporters from the eventual market inversion.
I am breaking with my tradition. For once I'm going with the obvious trend of upwardly bound prices and tighter supplies (given new information I won't go into here). Something tells me for the first time we might unexpectedly see motor-fuel prices trend downward.
For a long while there I predicted oil would never stay above $40 a barrel for long. For a long while I predicted expanding Asian refinery capacity and oil shale/tar sand production to enter the US pushing prices down.
As you've obviously guessed I've been long for as long as I've been doing biofuels.
Here is the most recent credible prediction of ever more expensive petroleum. I was tipped off by the Cleantech Blog I recently found as well. Worth the bookmark to say the least.
Green Fuels Exchange Launches
Check it out and tell me what you think.
An online exchange for markets catering to the renewable and biofuel marketplace.
I saw it this afternoon in a news update. Originally reported in the online version of the Delaware News Journal sourcing the Des Moines Register - DelawareOnline.
Also please notice the "PRODUCTS" section of the exchange. Looks a little light to me. In particular you would think that glycerin (both polished and dirty types) would be available as a product either at a positive or negative value.
Go Beavs - OSU Develops a Bio-adhesive
From the Science Daily:
Researchers at Oregon State University developed a new, environmentally friendly adhesive made with renewable natural resources. The glue, which replaces current adhesives that release cancer-causing chemicals into the air, will improve the environment and human health, as well as provide new markets for U.S. soybean farmers.
Since the 1940s, adhesive products used to make wood products, such as plywood, particleboard and fiberboard, contained cancer causing-chemicals, such as phenol–formaldehyde and urea–formaldehyde resins. This product, developed by Kaichang Li and colleagues at Oregon State University, provides a high-performance, formaldehyde-free adhesive alternative.
The soy-based adhesive is stronger than, and cost-competitive with, conventional adhesives. Application of this adhesive in U.S. wood products may improve the global competitiveness of U.S wood composite companies, including furniture and kitchen cabinetry industries. In addition, the use of a soy-based adhesive product will enhance the economic benefits to U.S. soybean farmers.
Fw: NWBA - MIT Enterprise Forum Biofuels Event
Surfing the Perfect Storm: Opportunities and Challenges in the Emerging Biofuels Industry
Location : Hyatt Regency Bellevue Hotel,900 Bellevue Way NE , Bellevue , WA
Date & Time : October 17, 2007 - 5:00pm - 8:30pm
Location : Hyatt Regency Bellevue Hotel,
Date & Time : October 17, 2007 - 5:00pm - 8:30pm
This Dinner Program Is Exclusively Sponsored by
Surfing the Perfect Storm
Opportunities and Challenges in the Emerging Biofuels Industry
Join the MIT Enterprise Forum of the Northwest as we take an inside look at the emerging biofuels industry.
The perfect storm in the trillion $ petrofuels energy world--with issues of energy security, peak oil and global warming all converging--has created remarkable opportunities for the emergence of a major new industry: biofuels.
Tremendous amounts of capital have already been invested in the biofuel industry in the last 18 months, in spite of uncertain economics and rapidly evolving regulation. Much of the activity is occurring in
On Wednesday October 17, 2007, join Seattle-based moderator Ross Reynolds of KUOW to learn more about what is enticing local entrepreneurs into a sector that includes bio-feedstocks, processing plant technology, new distribution chains and more.
Nikola H. L. Davidson
Program Director
206-389-8660
Algae:. First biodiesel, then ethanol, now its the silver bullet hope for CO2 sequestration.
The US Department of Energy just put out a release about algae research showing amazing promise. Exciting stuff it turns out as they have mapped a sequence of genes responsible for the conversion of CO2 into sequestered carbon (as well as a host of other potential applications).
"The genome analysis of a tiny green alga has uncovered hundreds of genes that are uniquely associated with carbon dioxide capture and generation of biomass. Among the 15,000-plus genes revealed in the study are those that encode the structure and function of the specialized organelle that houses the photosynthetic apparatus, the chloroplast, which is responsible for converting light to chemical energy. The genome also provides a glimpse back through time to the last common ancestor of plants and animals."
This research is also well discussed in the most recent copy of Science magazine. I took a look at the abstract. To much science for my limited attention span but still enough to spark your imagination.
Shown is an MIT Algae Bioreactor. If you've ever wondered what one looked like, here it is. Pretty much they all look like variations of the same thing. Similar to older solar systems only green. For more about MIT's bioreactor shown and a YouTube interview go to this Sustainable Design Update post.
"The genome analysis of a tiny green alga has uncovered hundreds of genes that are uniquely associated with carbon dioxide capture and generation of biomass. Among the 15,000-plus genes revealed in the study are those that encode the structure and function of the specialized organelle that houses the photosynthetic apparatus, the chloroplast, which is responsible for converting light to chemical energy. The genome also provides a glimpse back through time to the last common ancestor of plants and animals."
This research is also well discussed in the most recent copy of Science magazine. I took a look at the abstract. To much science for my limited attention span but still enough to spark your imagination.
Shown is an MIT Algae Bioreactor. If you've ever wondered what one looked like, here it is. Pretty much they all look like variations of the same thing. Similar to older solar systems only green. For more about MIT's bioreactor shown and a YouTube interview go to this Sustainable Design Update post.
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