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    The Colorado Wood Utilization and Marketing Program at Colorado State University received a $65,000 grant from the U.S. Forest Service to expand the use of woody biomass throughout Colorado. The purpose of the U.S. Department of Agriculture grant program is to provide financial assistance to state foresters to accelerate the adoption of woody biomass as an alternative energy source. Colorado State University - October 12, 2007.

    Indian company Naturol Bioenergy Limited announced that it will soon start production from its biodiesel facility at Kakinada, in the state of Andhra Pradesh. The facility has an annual production capacity of 100,000 tons of biodiesel and 10,000 tons of pharmaceutical grade glycerin. The primary feedstock is crude palm oil, but the facility was designed to accomodate a variety of vegetable oil feedstocks. Biofuel Review - October 11, 2007.

    Brazil's state energy company Petrobras says it will ship 9 million liters of ethanol to European clients next month in its first shipment via the northeastern port of Suape. Petrobras buys the biofuel from a pool of sugar cane processing plants in the state of Pernambuco, where the port is also located. Reuters - October 11, 2007.

    Dynamotive Energy Systems Corporation, a leader in biomass-to-biofuel technology, announces that it has completed a $10.5 million equity financing with Quercus Trust, an environmentally oriented fund, and several other private investors. Ardour Capital Inc. of New York served as financial advisor in the transaction. Business Wire - October 10, 2007.

    Cuban livestock farmers are buying distillers dried grains (DDG), the main byproduct of corn based ethanol, from biofuel producers in the U.S. During a trade mission of Iowan officials to Cuba, trade officials there said the communist state will double its purchases of the dried grains this year. DesMoines Register - October 9, 2007.

    Brasil Ecodiesel, the leading Brazilian biodiesel producer company, recorded an increase of 57.7% in sales in the third quarter of the current year, in comparison with the previous three months. Sales volume stood at 53,000 cubic metres from August until September, against 34,000 cubic metres of the biofuel between April and June. The company is also concluding negotiations to export between 1,000 to 2,000 tonnes of glycerine per month to the Asian market. ANBA - October 4, 2007.

    PolyOne Corporation, the US supplier of specialised polymer materials, has opened a new colour concentrates manufacturing plant in Kutno, Poland. Located in central Poland, the new plant will produce colour products in the first instance, although the company says the facility can be expanded to handle other products. In March, the Ohio-based firm launched a range of of liquid colourants for use in bioplastics in biodegradable applications. The concentrates are European food contact compliant and can be used in polylactic acid (PLA) or starch-based blends. Plastics & Rubber Weekly - October 2, 2007.

    A turbo-charged, spray-guided direct-injection engine running on pure ethanol (E100) can achieve very high specific output, and shows “significant potential for aggressive engine downsizing for a dedicated or dual-fuel solution”, according to engineers at Orbital Corporation. GreenCarCongress - October 2, 2007.

    UK-based NiTech Solutions receives £800,000 in private funding to commercialize a cost-saving industrial mixing system, dubbed the Continuous Oscillatory Baffled Reactor (COBR), which can lower costs by 50 per cent and reduce process time by as much as 90 per cent during the manufacture of a range of commodities including chemicals, drugs and biofuels. Scotsman - October 2, 2007.

    A group of Spanish investors is building a new bioethanol plant in the western region of Extremadura that should be producing fuel from maize in 2009. Alcoholes Biocarburantes de Extremadura (Albiex) has already started work on the site near Badajoz and expects to spend €42/$59 million on the plant in the next two years. It will produce 110 million litres a year of bioethanol and 87 million kg of grain byproduct that can be used for animal feed. Europapress - September 28, 2007.

    Portuguese fuel company Prio SA and UK based FCL Biofuels have joined forces to launch the Portuguese consumer biodiesel brand, PrioBio, in the UK. PrioBio is scheduled to be available in the UK from 1st November. By the end of this year (2007), says FCL Biofuel, the partnership’s two biodiesel refineries will have a total capacity of 200,000 tonnes which will is set to grow to 400,000 tonnes by the end of 2010. Biofuel Review - September 27, 2007.

    According to Tarja Halonen, the Finnish president, one third of the value of all of Finland's exports consists of environmentally friendly technologies. Finland has invested in climate and energy technologies, particularly in combined heat and power production from biomass, bioenergy and wind power, the president said at the UN secretary-general's high-level event on climate change. Newroom Finland - September 25, 2007.

    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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Monday, October 15, 2007

Oil prices smash records again - catastrophe for poor countries persists

World oil prices smashed the psychological barrier of $85 per barrel today. The economy crippling catastrophe for poor oil importing developing countries thus persist. Biofuels - with all their drawbacks - or extremely expensive oil? The question is more relevant than ever; the call of African governments to switch to biofuels to prevent what they call a 'pan-African disaster' in the making is more legitimate than ever.

Biopact therefor keeps urging the development, energy, economics and agricultural think tanks of this world to produce more robust analyses showing the effects of record oil prices on the economies and societies of the least developed countries (LDCs). There are few such assessments, and they depict a grim reality, but they are of a qualitative nature only (earlier post). Quantitative data will show whether biofuels can help the poorest societies survive the current oil shocks.

Each percentage-point increase in the price of oil can be felt immediately throughout all social and economic sectors of the poorest countries. These societies - of the 47 poorest nations, 38 are net importers of oil, and 25 are fully dependent on imports (more here) - are energy intensive and spend between 10 and 15% of their GDP on imported petroleum products. OECD countries spend only between 2 and 3% and have the financial and technical tools to protect themselves from oil shocks. LDCs don't. No wonder then that several African governments have started looking at biofuels as their own tool to hedge against the catastrophe. For them, the 'energy security' argument in favor of biofuels does clearly make sense (earlier post in which Senegal's president calls a switch to biofuels an urgent matter to save African economies).

Several developing countries have already called the effects of the current situation 'disastrous' and 'outrageous' as they wreck chances for development: record oil prices push up general inflation, destroy debt relief efforts and fuel unemployment. They especially weaken states' capacities to spend on public goods (education, health care, poverty alleviation - some are already spending twice to thrice as much on oil than on health care), and lead to higher food and fuel prices - two types of products on which the poor spend most of their budget. Moreover, they severely impact production processes for small and medium enterprises, and they dramatically diminish farmers' capacities to produce and market agricultural products. All these effects are known quite well and have been described in qualitative terms. But the need for strong quantitative analyses is now more urgent than ever. Such data will allow for a cost-benefit analysis and indicate whether a switch to less costly biofuels makes sense, under which kind of circumstances.

The disastrous record oil prices are the result of a supply threat caused by heightened tensions between Turkey and Kurdish rebels in the northern region of crude producer Iraq. The powerful OPEC oil exporters' cartel, meanwhile, froze its estimate for world crude demand growth in 2007 despite the record-breaking news. In afternoon trading here on Monday, New York's main futures contract, light sweet crude for delivery in November, spiked to an historic 85.30 dollars per barrel. The contract expires at the close:
:: :: :: :: :: :: :: :: :: :: :: ::

London's Brent North Sea crude for November delivery soared to a fresh all-time high of 81.94 dollars per barrel. "The tensions on the Turkish-Iraqi border have really pushed the price up," said Adrian Bingham-Walker at CMC Markets. "It's a new supply threat and prices have just kept on hitting new highs today. As it's hitting these highs, it's attracting more and more buyers."

Monday's record-breaking run - which beat the previous all-time highs set last month - also came amid concerns over stretched global energy supplies. Traders are fearful of soaring heating fuel demand in the northern hemisphere winter.

Later Monday, Brent crude stood at 81.58 dollars, marking a jump of 1.03 dollars from Friday's close. New York crude showed a hefty gain of 1.20 dollars at 84.89 dollars.

The Turkish government met Monday to prepare a motion seeking parliamentary approval for a military incursion into neighbouring Iraq to crack down on Kurdish rebel bases there. The motion will be sent to parliament "once it is signed by all the ministers," a government official told AFP.

The cabinet is expected to seek a one-year authorisation for a military operation in northern Iraq, where an estimated 3,500 rebels of the separatist Kurdistan Workers' Party (PKK) are based. The Turkish army said at the weekend that it had shelled Iraqi territory after PKK rebels attacked a military outpost with rockets and gunfire from across the border.

Oil market traders "are still worried about possible tension with Turkey and Iraq on the northern borders," explained Sucden analyst Robert Montefusco. "It's being discussed in Turkish parliament at the moment over whether it is legal for them to go and invade.

He added: "There's no lost production at the moment, so it's only perceived that we could lose some production if any of the pipelines are affected in that region from Iraq." "That is the main concern at the moment."

Elsewhere, the Organization of Petroleum Exporting Countries (OPEC) forecast that 2007 world oil demand growth would stand at 1.3 million barrels per day (bpd) or 1.5 percent The estimate, contained in OPEC's monthly report for October, was unchanged from the previous figure given in September.

The Vienna-based cartel added that demand for fuel and heating oil in the fourth quarter to December "is forecast to be strong." World oil demand growth during the period "is estimated to follow typically high seasonal consumption (patterns) due to the expected normal winter in the northern hemisphere," the report added. It put world oil demand growth at 1.8 million bpd for the last three months of 2007.

Image: petrol street vendor in Togo. High oil prices kill chances for development.

Biopact: High oil prices disastrous for developing countries - September 12, 2007

Biopact: India: 'outrageous' oil price damages economy, as $80pb could be new floor price - September 27, 2007

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

Ralf Krüger: Impact of high oil prices on oil-importing countries in Africa [*.pdf], UNECA - Project LINK meeting, Fall 2006, Geneva.

African Development Bank Group: Can Struggling African Economies Survive Escalating Oil Prices?

African Development Bank Group: High Oil Prices and the African Economy [*.doc] - Concept paper prepared for the 2006 African Development Bank Annual Meetings Ouagadougou, Burkina Faso.


Nathan Schock said...

Kinda makes $3.50 per bushel corn seem pretty insignificant, huh?

10:36 PM  
Anonymous said...

It is interesting that a supply threat is seen as the primary cause and no consideration is given to the falling US dollar and the causes for its decline.

1:04 AM  

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