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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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Friday, August 04, 2006

Stunning news: OPEC is beginning to fear biofuels

Quicknote biofuels potential
Interesting, fascinating and even stunning news for those who have heard of the simple, yet elegant First Law of Petropolitics.
According to Inside Fuels and Vehicles, a report from the Organization of Petroleum Exporting Countries (OPEC) shows that a 'most likely' long-term scenario for its future as a cartel is based on alternative fuels entirely displacing oil by 2050. Apparently, the strategy think tanks of one of the world's most powerful organisations are beginning to take the potential of biofuels extremely serious. At least, and we must stress this, if we can believe 'Inside Fuels and Vehicles', an industry magazine. The claim about the existence of this report containing such a prediction is repeated in Ethanol Producer Magazine.

According to the report, an official with the cartel's long-range planning group predicts that "the value of a barrel of oil in 2050 will be zero." This obviously contradicts all common economic sense, since the scarcer this essential commodity, with its very low demand elasticity, the higher its price should become - unless of course the prediction of biofuels displacing all oil were to be true. But as prices for oil decline, incentives to invest in biofuels decline as well, which would have a stabilizing effect on oil prices.
The official adds: "The trend to alternative fuels will begin to be felt by OPEC around 2020". And most importantly, the report says, a rapid and steep reduction in oil demand would reduce the effectiveness of a potential oil embargo.

Given the huge importance of petroleum in the history of the 20th century and the ever present threat of an Arab or Iranian oil embargo - on which the 'First Law of Petropolitics' is based - this is an absolutely strange and even bizarre statement made by the OPEC. Since, according to the 'First Law', the less oil available or the higher the demand and the scarcer the resource (with consequently more geopolitical tensions), the more likely the possibility of an embargo should be. But again, if the substitution theory holds true, then the strategist is right, and the 'First Law' becomes obsolete.

We are as confused as you may be. And we find the existence of such a report or this dubious admission hard to believe. Why would OPEC play such an open game? It has no interest in predicting or projecting its own decline, and certainly not in such radical terms. OPEC, known for its discreetness and opacity, would never publicly state what the report claims one of its strategist has said, - the organisation is simply too important and each single word or comma that comes out of it, is carefully scrutinized by an army of hyper-sensitive investors, businesses and policy makers. Even such a long-term prediction as the one supposedly made by one of the strategists, would have serious consequences for the long-term investment strategies of other energy players and investors.

Anyway, as long as we don't have any confirmation of this bizarre statement by OPEC, we remain skeptical about it - even if we are only talking about 'scenarios' and 'projections'. This story is certainly to be continued [we are in the process of ordering the report after which we can shed more light on the subject.]
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