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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Wednesday, June 14, 2006

Prairie grain farmers new biomass sheiks - how about savannah sheiks?

In the following article, a Canadian farmer rightly calls himself and his collegues "biomass sheiks": rising oil & gas prices boost biofuels and biogas, which in turn put pressure on grain and biomass prices, making agriculture suddenly look like a much more profitable sector than it used to be.
But if Canada's prairie-farmers are biomass sheiks, then certainly the African village chief who controls huge savannahs and tropical grasslands belongs to the same green 'royal family'.

It's refreshing, but also a bit disconcerting, to hear some of the glowing predictions for primary agriculture in the years ahead. Optimistic predictions in the past have seldom come to fruition.

Why should this time be different? There's no denying that a huge structural change is underway, as ethanol and biodiesel are embraced as partial replacements for petroleum products. It's hoped this burgeoning demand will result in tighter world stocks and, therefore, higher grain prices.

There have often been analysts predicting that the growing demand for food was going to do the same thing. As recently as the mid-1990s, when grain prices were briefl y buoyant, many analysts were questioning who would feed the growing demand in China.

Ending the grain transportation subsidy was supposed to spur more livestock production and secondary processing within Western Canada. It has, and much more of our production is now used domestically, but grain price levels are still largely unsustainable.

In most of the past 10 years, grain prices have been so low that many producers have had to draw on their equity just to stay in business. Growing a wider array of crops and producing for specialized markets have helped, but have been no panacea.

Stocks-to-use ratios for grain are often hitting the rock-bottom levels that caused dramatic price rallies back in the 1970s, but the world never seems to run short and the value of grain has fallen out of sync with the inputs needed to produce it.

It's a little hard to believe the world is on the precipice of a new era, but that's exactly the message from analysts such as Ron Witherspoon.

Based in Regina, Witherspoon is with Interactive Management Group. He has more than 30 of years experience providing consulting services to both international corporations and Prairie farmers. He spoke June 12 to the Saskatchewan Stock Growers Association's annual con n in Estevan.

At a time when more grain farmers than ever are questioning why they're in agriculture, Witherspoon is saying that owning farmland in Saskatchewan is a good thing. He says the future looks bright.

"We are the biomass sheiks," says Witherspoon, referring to our huge land base and production.

He believes high oil prices are here to stay and that increasing production of ethanol will force increases in grain prices.

Witherspoon says there have been no new petroleum refi neries in the U.S.

in the past 30 years and many of the existing ones are in the path of hurricanes; plus, maintaining a steady supply of Arab oil is tenuous at best.

Meanwhile, American ethanol production is booming, consuming billions of bushels of corn each year. Consumption is going to increase by many more billions in the years ahead. Some U.S.

senators are already lobbying for a 25 per cent blend in gasoline.

By comparison, Canada is talking about a renewable fuel standard of fi ve per cent by 2010. Even though Canada is going a lot slower, we'll benefi t from the changes in the American grain market.

Witherspoon claims that nearly a million American farmers have investments in ethanol facilities.

Right now, the profi t margins are huge.

Many progressive farmers on this side of the border have been burned with investments in value-added ventures and livestock enterprises.

While those kinds of enterprises make sense on the landlocked Prairies, margins are tight. Management errors and undercapitalization have exacted a toll.

Another exciting development is biogas. Livestock can be fed the byproducts from ethanol production.

In turn, the manure can be used to generate methane that can be burned for heat and for the production of electricity. This isn't science fi ction.

There are a growing number of working examples across the country, most of which are modeled after designs being used in Europe.

No one can predict with certainty how the future will unfold, but agriculture as an energy source seems destined to drive the kind of structural change that we haven't seen in decades.



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