Biofuels

Jim Lane Sorghum Bicolor photo by Matt Lavin As Ceres points towards minimal plantings of its sweet sorghum hybrids in its key market of Brazil for next year, investors ask two questions. Will sweet sorghum realize its vast potential, and when? Just when many observers hoped that Ceres, Inc. (CERE) would dramatically expand hectares planted with its Blade hybrid sweet sorghum, the 2014 planting outlook was released last week and the total hectares crashed from 3000 in 2013 to 1000 in 2014. It’s a far cry...

Jim Lane Obama, in trouble on healthcare, sounds the retreat on renewable fuels; industry groups aghast as EPA targets next-generation, non-food biofuels for biggest cuts; slashes corn ethanol also. Major push-back expected following “complete capitulation to Big Oil”. What are the political, economic drivers? What’s the impact, and how will industry respond? In Washington, the EPA released its 2014 proposed standards and volumes for renewable fuels. The volumes, as widely expected, include substantial reductions from the statutory standards in the original Energy Independence & Security Act. The announced proposed volumes met with united...

Jim Lane What’s up with the cellulosic biofuels leader? Good news, bad news? If you have ever spent any time reading up on ion thrusters a next-gen engine technology that NASA recently employed on the Dawn spacecraft you might chuckle when you think of the plight of poor KiOR (KIOR). The good news about ion thrusters is that they can ultimately achieve speeds of 200,000 miles per hour, ten times that of the Space Shuttle. The bad news is that the Dawn took four days to accelerate from zero to 60 miles per hour. Yep, zero...

by Debra Fiakas CFA Kior's Columbus Facility Last week cellulosic ethanol producer Kior, Inc. (KIOR:  Nasdaq)reported its strongest quarter production and financial results since the company first started commercial operations at its Columbus, Mississippi facility.  Kior turned out 323,841 gallons of ethanol fuel in the three months ending September 2013, bringing total production for the year to 508,975 gallons.  Along with the third quarter report, management did a bit of boasting over record production of 167,087 gallons in the month of October.  That represents a 2.0...

Jim Lane SZYM, AMRS, GEVO check in with Q3 results. What’s heavenly, what’s hellish? In years gone by, it was not too hard to write up a summary of Gevo (GEVO), Solazyme (SZYM) and Amyris (AMRS) all aimed at fuels, all in the development stage, all used synthetic biology in closed fermenters, all had big backers ranging from brand-name equity partners to big-time strategics, all went public in the same 2010-11 IPO window. These days, much more complex. It’s a jungle of production costs, average selling prices, offtake deals, LOIs, and MOUs. Following them...

Jim Lane In New York, in the wake of a $37 million Q1 loss in its sugar unit, Bunge CEO Soren Schroder, who took the reins of the company in June, announced yesterday that the trading giant is commencing what he termed a “thoughtful comprehensive review” for its sugar business, including a potential sale of all the assets. The company, which announced a $137 million overall quarterly loss, after posting a Q4 loss of $599 million in June. The Q4 loss included write-downs and charges of $683 million, including a $327 million write-down in its sugar...

by Debra Fiakas CFA Green Plains Renewable Energy, Inc. (GPRE:  Nasdaq) is one of the few U.S. ethanol producers to turn a consistent profit.  The company is half way through its fifth consecutive profitable year.  Sales in the most recently reported twelve months totaled $3.4 billion, on which the company earned $40.5 million in net income.  During this period Green Plains generated $100.0 million in operating cash flow. Tracing Green Plains profits requires a bit of effort by investors.  The company channels its products through a marketing and distribution division.  Thus while, ethanol production...

by Debra Fiakas CFA The Andersons (ANDE: Nasdaq) is not one of the first companies that comes to mind as an alternative energy company.  However, ANDE has been in the Ethanol Group in our Beach Boys Index for some time.  Ethanol is one of six revenue sources for The Andersons, contributing $743 million to the top line in the year 2012.  That represents about 14% of The Anderson’s total revenue base.  The company produces ethanol in four plants located in the Midwest with a production capacity of 330 million gallons per year. ...

Jim Lane You just can’t beat the financing of renewable fuels for all-out zaniness. Tragicomedy, anyone? Consider the case of BlueFire Renewables (BFRE). Sometimes, the financing of renewable fuels can start to sound a little like an Abbott & Costello routine. The planned BlueFire plant Allow us to summarize. You can finance a liquid renewable fuel as long as the market is solid, especially if you are making solids, and the market for solids is liquid, and your liquidity is solid. Adding solids to...

Jim Lane Businessman leaping photo via BigStock “The first cut is the deepest” goes the old saw no more so than in first commercial, first-of-kind advanced biofuels projects – especially when they are undertaken by newly-public companies under extraordinary scrutiny. In short, the KiOR (KIOR) story. And, as allegations fly, we look at the data on the ground and find that things are not always as they seem. Earlier this year, Phil New, the always interesting CEO of BP Biofuels, gave a rather extraordinary address in which...

KiOR Shows Its Gallons Jim Lane Landmark cellulosic drop-in biofuels producer releases update on early-stage production: is the increasing gallonage enough to silence the critics? Today, we head to the Chapel of Hard Data, and get closer to the music. Nobody walks slower, in public, than at a wedding or a funeral. In the case of KiOR (KIOR), the critics and supporters have been shouting loud as the company makes its slow, public march up the aisle towards steady-state operations. Most observers, sitting in the pews, have been unsure as to whether to be...

Jim Lane One of biofuels’ hottest companies aims to accelerate path to break-even; is a shortfall in gallons produced in Q2 meaningful? In Texas, KiOR (KIOR) reported a Q2 loss of $38.5M, compared to a Q1 loss of $31.3M. on revenues of $239K, up from $71K in Q1. Net loss for the second quarter of 2012 totaled $23.0 million, or $0.22 per share. The biggest news coming out of the quarterly results is that the company is looking at an additional 500 dry ton/day facility, dubbed “Columbus II”, as an intermediate step between now and building its...

Jim Lane They’re known as the three E’s: emissions, energy security and economic development. But how do they contribute to the economics of biofuels? And how do those economics compare to the economics of crude? The financing of biofuels is founded, to put it as simply as possible, upon the economics of substitution. On the one hand, there’s the price of energy currently locked inside biomass; on the other hand, the price of energy currently locked inside crude oil. The monetary rationale for biofuels is a version of vive la difference. To give a simple example, if renewable...

Jim Lane Is your team ready for the summit run? Take our 3-question, 6 point quiz, and compare your route to the established routes that others have pioneered. It’s become an cliché of late that “financing is tough” and that “the US is slowing” while “China is speeding up” on advanced biofuels. It’s also become a cliché that “cellulosic biofuels are slow, the economics are unworkable” and that “the next wav of investment will wait until 2015 or 2016, especially for commercial-scale.” Like all clichés, they have their origin in real experience, but are generally over-broadened to...

Jim Lane A now-complete 142 million gallon green diesel monster project will easily deliver big on renewable energy targets and greenhouse gas emissions reduction. But it also offers a material path to profits for its parents, Valero Energy and Darling International. In Louisiana, Darling International (DAR) announced that Diamond Green Diesel, the joint venture between Valero (VLO) subsidiary Diamond Alternative Energy LLC and Darling International , has reached mechanical completion and the startup process will lead to full production of renewable diesel. Once in full operations, the 9,300 barrel-per-day (142.5 million gallon) plant in Norco,...

by Debra Fiakas CFA Sorghum Bicolor photo by Matt Lavin   The post “Ceres Plants Seeds of Success” featured seed and trait developer Ceres, Inc. (CERE:  Nasdaq).   This agricultural technology company develops seeds and traits for high-energy, low-cost feedstocks  like sorghum.  Ceres is not the only player in the sorghum game. The presence of large agriculture products suppliers like Monsanto Company (MON:  NYSE) and Dow AgroSciences of the Dow Chemical Company (DOW:  NYSE) provide some validation of sorghum demand even if also triggering competitive concerns.  DuPont’s Pioneer HiBred...