VeraSun Energy, one of the US’ largest ethanol producers, has announced its financial results for the three months ended June 30 2008, showing a 499% increase in revenues over Q2 2007, to $1.015 billion (€682 million).

The company also generated earnings of $.15 per diluted share. EBITDA for Q2 2008 increased to $73 million, compared to $33 million for Q2 2007.

During the quarter, VeraSun completed its merger with US BioEnergy effective April 1, adding five facilities and 420 million gallons to operations. The company also completed construction at its Hankinson, North Dakota, Welcome, Minnesota and Hartley, Iowa, biorefineries, with a combined capacity of 330 million gallons a year.

Upon completion of two additional ethanol production facilities in Dyersville, Iowa, and Janesville, Minnesota, the company expects to have a capacity of 1.64 billion gallons of ethanol through 16 production facilities by the end of 2008.

‘Ethanol is playing an increasingly important and strategic role in our country’s fuel supply,’ CEO Donald Endres says. ‘Ethanol continues to trade at a deep discount to petrol providing a significant economic incentive for refiners and petrol marketers to develop new markets.’

The cassava-based ethanol will be sold at Vietnamese petrol stations

PetroVietnam is setting up a new company to manage its biofuel production and distribution.

The new company, PetroVietnam Biofuel Joint Stock, will have an initial capital of about $2.7 million (€1.8 million).

The new company will produce ethanol from cassava. The output will be blended with petrol sold at local petrol pumps to help reduce the country’s fossil fuel dependence.

PetroVietnam General Services Joint Stock (Petrosetco) will hold 51% of the company. PetroVietnam Oil will hold 29%, Binh Son Refining and Petrochemical 15%, and PetroVietnam Finance Joint Stock (PVFC) 5%.

Vietnam aims to produce approximately 250,000 tonnes of ethanol and vegetable oil to meet its petroleum demand by 2015.

Finland-based energy company St1 and independent petroleum company Marquard & Bahls will establish a joint venture to produce bioethanol from waste in Europe.

The final agreement is expected at the beginning of next year. The parties are planning to establish a company to use St1′s Etanolix-technology to produce bioethanol from waste in Germany, Austria and Switzerland.

St1′s Etanolix-technology uses waste as feedstock and does not have an impact on food availability or price. Replacement of fossil fuels with waste-based bioethanol will significantly reduce carbon dioxide emissions and meet the challenges of waste management. 

The first step of the co-operation between St1 and Marquard & Bahls is to make the waste-based biofuel available in Central Europe.

St1 has already signed a letter of intent to establish a joint venture to create Etanolix bioethanol production capacity in Japan.

Marquard & Bahls has been operating in the international energy and oil business for over 60 years.

Basic Energy, formerly Basic Petroleum, is partnering with Metro Pacific Investments Corp (MPIC) for a P6-billion (€90 million) ethanol project in the Philippines.

The two companies are assessing plans for a joint venture company that will engage in the production of ethanol and other alternative fuels.

A due diligence study is now being conducted by MPIC, which would likely take a controlling stake in the joint venture, Basic Energy president and COO Oscar de Venecia Jr, says.

The companies will initially construct two bioethanol plants at a cost of P3 billion each. The total amount would be funded through a combination of debt and equity.

The first plant would be built on a 22-hectare property in Zamboanga and is slated for completion by early 2009. The plant will have a capacity of 150,000 litres of ethanol a day.

Jose Reyes Jr., executive VP and treasurer of Basic Energy, says the country would need at least 600 litres of ethanol a year beginning 2011. The demand would be driven by the mandatory 5% blend of ethanol with petrol by May 2009.

‘We want to get started with our ethanol projects by January. When strong demand starts, we want to be there already,’ Reyes comments.

The ability to convey syngas from where it is produced and combust it inside existing thermal process equipment could lead to dramatic cost and CO2 emissions reductions in a number of industries. The system could be used in multiple industrial applications including pulp mill lime kilns, power boilers, rotary dryers and calciners commonly found in mineral processing, mining, cement and ethanol production industries.

“Nexterra’s direct fire biomass gasification system is now ready for demonstration at commercial scale,” said Jonathan Rhone, Nexterra President and CEO. “Once proven at this scale, we plan a full commercial rollout for industries such as pulp and paper, wood products, mining and others that want to reduce operating costs while lowering their carbon footprint. Up to now, these customers were limited to using either natural gas or fuel oil. Syngas offers a cheaper, carbon-neutral and renewable fuel alternative.”

Nexterra’s first generation gasification systems are close-coupled with heat exchangers to generate hot water, steam or hot air. The new direct fire application enables customers to decouple the process by producing syngas in one location and combusting it elsewhere on a site. The product development program included process simulation of end user equipment, as well as testing of specialized syngas conveying, pressurization and burner equipment at Nexterra’s test facility.

Nexterra’s technological breakthrough makes the switch from fossil fuels to syngas an attractive option for North America’s more than 100 kraft pulp mills and other industrial sites which face record high natural gas prices and, in British Columbia’s case, new carbon taxes.

Installation of a Nexterra direct fire gasification system at an average sized commercial pulp mill lime kiln, for example, has the potential to reduce natural gas consumption by more than 800,000 gigajoules (GJ) per year, the equivalent amount of natural gas needed to heat 5,000 residential homes. In addition, such a system could save a mill several million dollars annually and reduce greenhouse gas emissions by more than 25,000 tonnes per year.

The direct fire testing program was supported by Sustainable Development Technology Canada (SDTC), a not-for-profit foundation created by the Government of Canada, as well as by Canada’s National Research Council/IRAP Program, Natural Resources Canada and Ethanol BC.

Nexterra will present a paper on its direct fire program for lime kilns and boilers at the TAPPI 2008 Engineering, Pulping and Environmental Conference (www.tappi.org) in Portland, OR, on August 27, 2008.

Wednesday, August 13, 2008

VIET NAM – The Vietnam National Oil and Gas Group (PetroVietnam) has announced the formation of a biofuel production and distribution company.

The company will produce ethanol from cassava. Domiciled in Binh Son District, in the central province of Quang Ngai, the PetroVietnam Biofuel Joint Stock Company will have a charter capital of VND45 billion (an estimated US$2.7 million). PetroVietnam General Services Joint Stock Corporation (Petrosetco) will hold 51% of the shares; the newly established PetroVietnam Oil Corporation, 29%; Binh Son Refining and Petrochemical Co Ltd. 15%; and PetroVietnam Finance Joint Stock Corporation (PVFC) 5%.

The project is a part of a biofuel development program that was ratified by the Vietnamese government last year. One aim of that program is to produce 250,000 tonnes of ethanol and vegetable oil by 2015 to meet and replace 1% of the country’s petroleum demand. A modest target, but it is one step Vietnam is taking to reduce dependence on fossil fuels.

A Director of the Institute of Policy and Strategy for Agriculture and Rural Development was quoted as saying that in the future, crude oil and coal would diminish and other traditional energy sources, including nuclear sources, would fail to meet local demand. Planning for the future, Vietnam has now started developing wind, solar and biogas industries at a small scale. It is envisioned that the country could produce biofuels

13 August 2008

China Energy Newswire

Shanghai. August 13. INTERFAX-CHINA – China’s ban on new grain-based biofuel projects has done little to curb interest and research into biofuels, though obstacles such as bottlenecks in supply and sourcing of feedstock remain, industry insiders told Interfax recently.

In March this year, China National Cereals, Oils and Foodstuffs Corp. (COFCO), China’s largest grain trader, put the first non-grain-based ethanol fuel project, fed with cassava, into operation in southern China’s Guangxi Zhuang Autonomous Region.

Meanwhile, another major Chinese fuel ethanol producer, Henan-based Tianguan Group, has converted its corn ethanol production line into an ethanol production base using cassava as feedstock.

The switch to cassava was prompted by the government’s insistence that Chinese biofuel production must not interfere with the country’s production of grains for human or livestock consumption. But even with the switch, Chinese ethanol projects are encountering difficulties as overnight, soaring demand has reduced the availability of raw material supplies while inflation has pushed up feedstock prices.

Feng He, an official with COFCO’s Guangxi operation, told Interfax recently that the project is facing some trouble from rising cassava prices. According to Feng, the sourcing price of dry cassava chip increased from RMB 1,300 ($189.78) per ton last year to RMB 1,700 ($248.18) per ton this year, a climb of 30 percent in just one season.

“At the moment, the company is sourcing all the feedstock for this project from local farmers,” Feng said. “To keep costs down, we need our own cassava plantation, which we are in the process of constructing now.”

Zhang Xiaoyang, chairman of Tianguan Group, told China Business News on July 29 that the company has rented 50,000 hectares of land in China’s southern neighbor, Laos, to plant cassava. The company also plans to build ethanol plants in Laos in the future.

COFCO chose a different tack, staying inside China but is looking to other sources for their fuel. In 2007, the company began negotiations with Huanghua City in Hebei Province, Yangxin county in Shandong Province and Wuyuan county in Inner Mongolia to supply sweet sorghum for ethanol production, though talks have stalled.

Local agriculture officials with Huanghua City and Yangxin county confirmed with Interfax that relations had hit an impasse, but were reluctant to reveal more.

On July 28, China Times cited a researcher for COFCO as saying that as sweet sorghum is harvested only once a year and difficult to store in bulk, long-term, large-scale fuel ethanol production is hard to sustain.

Morover, another unnamed COFCO official told China Times that there is still some dispute over the feasibility of industrializing sweet sorghum-based fuel ethanol.

An agriculture expert who asked to remain anonymous told Interfax that COFCO may be just focusing most of its attention on cassava-based fuel ethanol production, and reducing its effort on other projects.

However, Zhang Hao, deputy director of the agricultural department in Wuyuan county, Inner Mongolia, told Interfax that the lack of specialist equipment was also forming a bottleneck to cooperation.

According to Zhang, the county began working with COFCO in 2007, using COFCO investment and technology supplied by Beijing’s Tsinghua University. The county hosted small-scale feasibility studies into the production of sweet sorghum-based fuel ethanol.

“The study showed that large-scale planting of sweet sorghum is feasible here, and Tsinghua’s technology is reliable,” Zhang said. “However, we do not have sufficient equipment to build a plant on an industrial scale.”

According to Zhang, they are now cooperating with China Guangcai Renewable Energy Investment Co. Ltd., a joint venture invested by capital from the United States, Brazil and Hong Kong. The company is planning to plant 1 million mu (66,666 hectares) of sweet sorghum by 2015.

China is also looking into jatropha as a source of biofuel, though one expert told Interfax that jatropha production, which has many advantages, needs some time before making inroads to supplying China’s demand for biofuels.

Roland Jansen, president of Mother Earth Plantations Pte Ltd., a Singapore-based company focused on cultivating and researching jatropha, forecast that Hainan Island, the southernmost Chinese province, may become one of the largest jatropha nurseries in the world.

In June this year, the National Development and Reform Commission (NDRC) gave the go-ahead for the construction of three bio-diesel projects fed with jatropha -

China National Petroleum Corp.’s project in Sichuan Province, a project run by Sinopec Group in Guizhou Province and CNOOC’s Hainan project. CNPC’s project is designed to produce 50,000 tons of the fuel per year while the other two will have annual production capacities of 60,000 tons. A Hainan agricultural department official told Interfax recently that CNOOC may begin construction on its Hainan project this month.China’s interest in jatropha stems from the fact that it can be planted on hillsides and wasteland, meaning it does not compete with land that could otherwise be used in the production of all-important grains for human consumption.

Jansen, whose company has signed deals to plant 1 million hectares of jatropha in West Timor over the next three years, stressed that work is still very much at the research stage and that jatropha is still a long way from being a commercially viable source of fuel. He noted that the University of Sichuan, in particular, is playing an important role in jatropha research, not just for its application as a biofuel, but for medicinal properties too.

However, even with the backing of the government, biofuels are only part of the solution to constantly growing energy demands, according to Jansen. Biofuels will not replace the millions of barrels of crude oil produced worldwide everyday and in a country as thirsty for fuel as China, supply will always be an issue.

“We cannot satisfy demand,” he said.

14 August 2008

Japan Chemical Week

Japan Biofuels Supply has signed a contract with

Lyondell Chemical of the US to supply Japan Biofuels with bio-ethyl tertiary butyl ether starting 2010. The move is to secure stable supply of bio-ETBE for provision to domestic petroleum companies for the production of biogasoline and to help Japan’s oil industry achieve its target of increasing by fiscal 2010 the domestic use of bio-ETBE to 840,000 kL/y.Under a memorandum of understanding signed July 2, Japan Biofuels is to procure 200,000 kL/y of bioethanol from major Brazilian ethanol production and sales cooperative association

Copersucar for provision to Lyondell to process into bio-ETBE in the US.In a demonstration project for the introduction of biomass fuels backed by the Petroleum Association of Japan, Japan Biofuels imported about 22,000 kL of bio-ETBE purchased on the spot market from Europe, a major consumer of ETBE, and provided the bio-ETBE to

Nippon Oil‘s Negishi refinery for the production of biogasoline.

“This grant supports Flambeau River BioFuels’ goal to be a major contributor in achieving the Federal government’s goal of increasing renewable fuels production and reducing our nation’s dependence on Mideast oil,” said Bob Byrne, President, Flambeau River BioFuels. “With this funding, we will be able to accelerate the retrofitting of this mill from a pure pulp and paper plant to a broader production facility that will produce biofuels within the same facility, thus sharing key infrastructure elements and costs.”

The Flambeau River BioFuels biorefinery will employ two commercially proven technologies to produce clean renewable energy and biofuels. It will gasify biomass resources, such as forest residuals and agricultural wastes, into a high-quality synthesis gas, which will then be catalyzed by the well-established Fischer-Tropsch (F-T) process to generate renewable transportation fuels (sulfur-free biodiesel).

“As you can imagine, we are very pleased that our technology approach has been recognized by the Department of Energy as a viable way to produce biofuel from forest residuals — one of the most abundant renewable resources in the U.S.” said William “Butch” Johnson, whose company Johnson Timber is both a project partner and a supplier to the biorefinery. “Since day one, our project has received strong support from Governor Doyle, Chairman Obey and Senator Kohl and we wish to thank them for all their efforts. Once operational, the biorefinery will serve to validate the technology while creating a compelling new model for the pulp and paper industry that can be proliferated throughout the U.S.”

“A clean energy future depends on combining Wisconsin ingenuity with our state’s resources, and I want to congratulate Flambeau River BioFuels for leading the way,” Governor Jim Doyle said. “Their proposed biorefinery shows us all that we can have an energy future that creates jobs, protects our environment and relies less on Mideast oil and more on Midwest know-how.”

The Flambeau River BioFuels biorefinery will create permanent, high-skilled operating jobs in the region, long-term logging jobs, and short-term, engineering and construction jobs, thus contributing to the economic stimulus of Park Falls, Wisconsin. The biorefinery is expected to be in operation in 2010.

The project team leading this endeavor is comprised of premiere engineers and scientists with demonstrated successes in implementing new technologies. It will also be supported by the expertise of university and government laboratories.

Flambeau River Biofuels received this grant through their partnerships with: ANL Consultants, Auburn University, Brigham Young University, Citigroup Global Markets, CleanTech Partners, Emerging Fuels Technology, Flambeau River Papers, Johnson Timber, National Renewable Energy Lab, Michigan Technological University, NC State University, Oak Ridge National Laboratory, ThermoChem Recovery International, University of Wisconsin, and the USDA Forest Products Laboratory.

“This grant will help meet our government’s goals of creating new jobs, stimulating remote areas, re-positioning traditional industries for a new world era, and, most importantly, producing clean fuels from renewable resources abundantly found in the U.S.,” said Bob Byrne. “We are proud to be a part of this important initiative by taking a leading position in the advancement of bioenergy technologies and the development of cellulosic biofuels.”