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    Spanish engineering and energy company Abengoa says it had suspended bioethanol production at the biggest of its three Spanish plants because it was unprofitable. It cited high grain prices and uncertainty about the national market for ethanol. Earlier this year, the plant, located in Salamanca, ceased production for similar reasons. To Biopact this is yet another indication that biofuel production in the EU/US does not make sense and must be relocated to the Global South, where the biofuel can be produced competitively and sustainably, without relying on food crops. Reuters - September 24, 2007.

    The Midlands Consortium, comprised of the universities of Birmingham, Loughborough and Nottingham, is chosen to host Britain's new Energy Technologies Institute, a £1 billion national organisation which will aim to develop cleaner energies. University of Nottingham - September 21, 2007.

    The EGGER group, one of the leading European manufacturers of chipboard, MDF and OSB boards has begun work on installing a 50MW biomass boiler for its production site in Rion. The new furnace will recycle 60,000 tonnes of offcuts to be used in the new combined heat and power (CHP) station as an ecological fuel. The facility will reduce consumption of natural gas by 75%. IHB Network - September 21, 2007.

    Analysts fear that record oil prices will fuel general inflation in Kenya, particularly hitting the poorest hard. They call for the development of new policies and strategies to cope with sustained high oil prices. Such policies include alternative fuels like biofuels, conservation measures, and more investments in oil and gas exploration. The poor in Kenya are hit hardest by the sharp increase, because they spend most of their budget on fuel and transport. Furthermore, in oil intensive economies like Kenya, high oil prices push up prices for food and most other basic goods. All Africa - September 20, 2007.

    Finland's Metso Power has won an order to supply Kalmar Energi Värme AB with a biomass-fired power boiler for the company’s new combined heat and power plant in Kalmar on the east coast of Sweden. Start-up for the plant is scheduled for the end of 2009. The value of the order is approximately EUR 55 million. The power boiler (90 MWth) will utilize bubbling fluidized bed technology and will burn biomass replacing old district heating boilers and reducing the consumption of oil. The delivery will also include a flue gas condensing system to increase plant's district heat production. Metso Corporation - September 19, 2007.

    Jo-Carroll Energy announced today its plan to build an 80 megawatt, biomass-fueled, renewable energy center in Illinois. The US$ 140 million plant will be fueled by various types of renewable biomass, such as clean waste wood, corn stover and switchgrass. Jo-Carroll Energy - September 18, 2007.

    Beihai Gofar Marine Biological Industry Co Ltd, in China's southern region of Guangxi, plans to build a 100,000 tonne-per-year fuel ethanol plant using cassava as feedstock. The Shanghai-listed company plans to raise about 560 million yuan ($74.5 million) in a share placement to finance the project and boost its cash flow. Reuters - September 18, 2007.

    The oil-dependent island state of Fiji has requested US company Avalor Capital, LLC, to invest in biodiesel and ethanol. The Fiji government has urged the company to move its $250million 'Fiji Biofuels Project' forward at the earliest possible date. Fiji Live - September 18, 2007.

    The Bowen Group, one of Ireland's biggest construction groups has announced a strategic move into the biomass energy sector. It is planning a €25 million investment over the next five years to fund up to 100 projects that will create electricity from biomass. Its ambition is to install up to 135 megawatts of biomass-fuelled heat from local forestry sources, which is equal to 50 million litres or about €25m worth of imported oil. Irish Examiner - September 16, 2007.

    According to Dr Niphon Poapongsakorn, dean of Economics at Thammasat University in Thailand, cassava-based ethanol is competitive when oil is above $40 per barrel. Thailand is the world's largest producer and exporter of cassava for industrial use. Bangkok Post - September 14, 2007.

    German biogas and biodiesel developer BKN BioKraftstoff Nord AG has generated gross proceeds totaling €5.5 million as part of its capital increase from authorized capital. Ad Hoc News - September 13, 2007.

    NewGen Technologies, Inc. announced that it and Titan Global Holdings, Inc. completed a definitive Biofuels Supply Agreement which will become effective upon Titan’s acquisition of Appalachian Oil Company. Given APPCO’s current distribution of over 225 million gallons of fuel products per year, the initial expected ethanol supply to APPCO should exceed 1 million gallons a month. Charlotte dBusinessNews - September 13, 2007.

    Oil prices reach record highs as the U.S. Energy Information Agency releases a report that showed crude oil inventories fell by more than seven million barrels last week. The rise comes despite a decision by the international oil cartel, OPEC, to raise its output quota by 500,000 barrels. Reuters - September 12, 2007.

    OPEC decided today to increase the volume of crude supplied to the market by Member Countries (excluding Angola and Iraq) by 500,000 b/d, effective 1 November 2007. The decision comes after oil reached near record-highs and after Saudi Aramco announced that last year's crude oil production declined by 1.7 percent, while exports declined by 3.1 percent. OPEC - September 11, 2007.

    GreenField Ethanol and Monsanto Canada launch the 'Gro-ethanol' program which invites Ontario's farmers to grow corn seed containing Monsanto traits, specifically for the ethanol market. The corn hybrids eligible for the program include Monsanto traits that produce higher yielding corn for ethanol production. MarketWire - September 11, 2007.

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Tuesday, September 25, 2007

Senegal in possible $2 billion biofuel & oil refinery deal with Energy Allied International

Senegal has been one of the leading forces in West-Africa calling for the development of a biofuels industry aimed at improving the energy security of the region and at boosting its agricultural sector.

Last year president Abdoulaye Wade initiated a 'Green OPEC' of sorts, the PANPP (Pays Africains Non-Producteurs de Pétrole), a coalition of African countries aiming to implement a biofuels strategy in order to overcome the catastrophic reliance on ever more expensive oil. He explained the urgency of the need for a switch to biofuels for non-oil producing African countries. Wade has also established a wider network of allies, amongst them Brazil and India, who are interested in prodiving technological, policy and financial support for the fledgling biofuels industry.

For Senegal, a long list of reasons makes biofuels a major opportunity. Some of the more important ones, as stressed by Wade in several opinion pieces:
  • its agricultural sector, which suffers under false competition from EU/US subsidised farming (e.g. the cotton scandal) can be revived through biofuel crop production
  • green fuels would strengthen energy security and reduce economic losses due to high import bills (poor countries in Africa spend up to between 10 and 15% of their GDP on oil imports; rising prices are truly disastrous for development - more here)
  • a biofuels industry can reduce the push and pull factors that lead to the highly problematic rural exodus and further to (illegal) emigration to Europe (more here about the 'Return to Agriculture' program); Spain, the main recipient of illegal immigrants from Senegal, recently started cooperating with the African country on a concrete project in this context (here)
  • biofuels can reduce poverty and food insecurity, as they promise to bring income and agricultural security to farmers (lack of income is the key driver of food insecurity; crop portfolio diversification strengthens the livelihoods of farmers); around 80% of Senegal's population is employed in agriculture (map)
Besides a strong set of policies and the need for access to biofuel technologies, attracting concrete investments is obviously the biggest requirement to kickstart a biofuel industry in the country. But Senegal has quite a few advantages making it an attractive destination for bioenergy investments: an abundance of natural resources (e.g. it only utilizes 18% of its potential arable land), relatively strong infrastructures, a large workforce, a stable investment climate and government, and a favorable geographical position (close to the EU and the US).

For these reasons, Texas-based consultancy Energy Allied International is helping Senegal draw up plans for a US$2 billion investment in a new oil refinery and biofuel power plant. Speaking to Reuters, CEO Mike Nassar said 'We are at a point where we have enough information right now to demonstrate that a new refinery in Senegal is viable, to produce 60,000 barrels a day of high-end quality products':
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Jet fuel, diesel, butane and gasoline could be sold locally in sub-Saharan Africa and be exported to Europe and the United States, Nassar said in an interview after meeting Senegalese President Abdoulaye Wade.

'The president wants to see more and more investments to Senegal. He believes in the refinery and biofuel,' Nassar said. Senegal has no crude oil production of its own, so the new refinery would import heavy crude from sub-Saharan Africa's top producers Nigeria and Angola, Nassar said.

Senegal's energy ministry announced plans last month for Iran's national oil company to sell Senegal one year's supply of Iranian crude on preferential terms, take a stake in Senegalese state oil refiner SAR and increase SAR's capacity to 3 million tonnes a year from 1.2 million tonnes.

Nassar said the project his consultancy was investigating would not conflict with the Iranian plans. 'This particular (Iranian) project is taking the old refinery and modernising it to be able to produce some different products,' he said. He said there would be limited overlap as the bulk of output from the new refinery would be for export, while SAR produces primarily for the local market.

Nassar said the total cost of the oil refinery and biofuels plant would be nearly $2 billion, but he did not say who would be funding it. Senegal produces ground nuts, sugar cane and jatropha, which have both been suggested as possible sources of biofuel.

Image: Eighty percent of Senegal's population makes a living in agriculture; major crops grown are cotton and groundnuts. Both offer potential for biofuels and bioenergy.

Reuters: US consultancy plans Senegal refinery, biofuel unit - September 25, 2007.

Biopact: Senegal's president explains the urgency of biofuels development in the South - November 02, 2006

Biopact: A closer look at Africa's 'Green Opec' - August 02, 2006

Biopact: Spain and Senegal to cooperate on biofuels as way to curb illegal migration - August 24, 2007

Biopact: Senegal in the spotlight: cooperation with Brazil, EU on bioenergy and migration - October 27, 2006

Biopact: Global South-South exchanges on biofuels growing rapidly - August 28, 2006

Biopact: Senegal and Brazil sign biofuel agreement to make Africa a major supplier - May 17, 2007


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