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By Robert Rapier on May 26, 2011 with 69 responses

Air Force Says Biomass-Based Jet Fuel is 10 Times the Cost of JP-8

Just over a year ago, I wrote an article called Is Camelina the Next Jatropha? If you recall, a few years ago jatropha was all the rage. It could grow in marginal soil, didn’t need much water, and could provide fuel that didn’t compete with food. Farmers in developing countries were encouraged to forgo cash crops like cotton to grow jatropha, which wouldn’t be ready for harvest for at least three years after planting.

Then reality began to set in. People learned that while jatropha is drought tolerant, it needs ample rainfall to flourish. There were many firsthand reports from farmers that growing and harvesting jatropha was very labor intensive, and the oil yields were much lower than advertised. India warned that their efforts to produce biofuel from jatropha had stalled, and $5 billion in jatropha-related investments was at risk. The jatropha hype — like so many before it — had met up with harsh reality.

But no worries. Camelina was on the horizon. And I watched it start to proceed down the same hyped trail that jatropha had blazed:

Camelina: It could fuel military aircraft

An oilseed that can grow in arid spots could one day supply fuel for commercial and military aircraft, power Navy ships and give livestock an heart-healthy nutrient.

Camelina produces an oil that shows so much promise as an aviation biofuel Agrofuel source that 14 major airlines have an agreement with a Seattle-based company to buy up to 750 million gallons of the fuel.

Moreover, studies conducted by researchers from the U.S. Department of Agriculture and Washington State University have shown camelina can be grown in arid, nonirrigated and marginal soils found in some parts of Eastern Washington.

Researchers have found that the oilseed tolerates cold, needs a minimal amount of water, grows to maturity rapidly, doesn’t require much fertilizer and works well as a rotational crop with wheat.

Sound familiar? When I first started to hear the camelina hype, I thought to myself “Do we ever learn, or is it just embedded in our DNA to hang our energy future on miraculous energy solutions?” I was recently asked a question about our biggest challenge in producing biofuels. I believe the answer to that is in first developing realistic expectations, based on a real understanding of the scale of our energy usage. By maintaining unrealistic expectations, we chase one miracle solution after another, and here is where we end up:

Conaton speaks on AF biomass fuel use at open house

5/23/2011 – JOINT BASE ANDREWS, Md. (AFNS) — Undersecretary of the Air Force Erin Conaton spoke to media about the milestone of the U.S. Air Force Thunderbirds flight demonstration team’s first use of a biomass fuel blend in two of their jets here during the 2011 Joint Service Open House May 20.

The Air Force has a vested interest in the use of biofuels since it’s the largest user of energy in the Department of Defense, the undersecretary said.

According to the USAF Alternative Aviation Fuel Initiative, the military is the largest single consumer of petroleum products in the United States and the Air Force alone uses more than two billion gallons of aviation fuel each year.

Right now, biomass fuel is about 10 times the cost of JP-8, the current military aviation jet fuel in use, Ms. Conaton said.

In these days of constricted budgets, the fuel the Air Force will buy needs to be cost competitive. When the biofuel industry is able to provide the quantity of fuel the Air Force requires at a good price, “we will be ready to buy from them,” the under secretary said.

Kerosene-based jet fuel like JP-8 presently sells for just over $3 per gallon. If Mr. Conaton means literally 10 times the price, then we are looking at $30 a gallon for camelina-based jet fuel. (The blend in the demonstration flight was 50-50 hydrocracked camelina and JP-8, as described in this article). Ironically, this was about the price Solix admitted that it costs them to make biodiesel from algae. Yet you very rarely ever see honest admissions of what some of these biofuels cost; would-be producers simply take today’s price, assume a Moore’s Law-like improvement in technology and in sizing up facilities, and say “We expect to produce fuel for $2 a gallon.” These projections are generally unrealistic, and that keeps our energy policy mired in perpetual delusion.

I do think costs for a lot of these fuels will continue to come down, but an order of magnitude drop in cost is probably unrealistic. Yet there is a very large disconnect between where the economics actually are, and where producers think they will end up. That causes companies to make claims that are all-too-often simply not credible, and when those major cost savings don’t materialize, then it hurts the credibility of the biofuel sector.

One other item of note from the press release was that the fuel needs to be cost-competitive. I don’t know of any bio-based jet fuel that is cost competitive at current oil prices. Maybe a palm-based oil could compete on price head-to-head with petroleum. But most oil-based crops simply can’t compete with even $100 oil. And if that is the metric the military decides they must meet, then the Great Green Fleet that Tom Hicks described in this interview will only materialize after oil prices are much higher than they are today.

  1. By Walt on May 26, 2011 at 8:25 am

    Robert Rapier said:

    Kerosene-based jet fuel like JP-8 presently sells for just over $3 per gallon. If Mr. Conaton means literally 10 times the price, then we are looking at $30 a gallon for camelina-based jet fuel. (The blend in the demonstration flight was 50-50 hydrocracked camelina and JP-8, as described in this article). Ironically, this was about the price Solix admitted that it costs them to make biodiesel from algae. Yet you very rarely ever see honest admissions of what some of these biofuels cost; would-be producers simply take today’s price, assume a Moore’s Law-like improvement in technology and in sizing up facilities, and say “We expect to produce fuel for $2 a gallon.” These projections are generally unrealistic, and that keeps our energy policy mired in perpetual delusion.
    I do think costs for a lot of these fuels will continue to come down, but an order of magnitude drop in cost is probably unrealistic. Yet there is a very large disconnect between where the economics actually are, and where producers think they will end up. That causes companies to make claims that are all-too-often simply not credible, and when those major cost savings don’t materialize, then it hurts the credibility of the biofuel sector.

    One other item of note from the press release was that the fuel needs to be cost-competitive. I don’t know of any bio-based jet fuel that is cost competitive at current oil prices. Maybe a palm-based oil could compete on price head-to-head with petroleum. But most oil-based crops simply can’t compete with even $100 oil. And if that is the metric the military decides they must meet, then the Great Green Fleet that Tom Hicks described in this interview will only materialize after oil prices are much higher than they are today.


     

    We are completing a revised version of our “integrated bio-refinery” DOE grant proposal, and updating some of the cost savings that have been following the biofuels movement.  Biofuels Digest published the top companies in algae and other biofuels so we can see who is the best in class.  Solazyme, OriginOil and others claim to be bringing down the costs.

     

    While we are not finished…I can that all information points to the fact that algae to jet fuel or gasoline is not competitive, and the scales to make these really competitive are enormous.  However, I do know that both the DOD and DOE will be throwing millions (if not billions when they start signing contracts to pay $30 per gallon) at more research and purchasing of these fuels to make Silicon Valley and Wall Street happy.

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  2. By Walt on May 26, 2011 at 8:46 am

    Hawaii facing issues…

    An open letter from dairy farmers on the Big Island of Hawaii shares some solutions for working with radiation problems in milk.

    http://hawaiihealthguide.com/h…..3cd98ee6d8

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  3. By Walt on May 26, 2011 at 8:58 am

    By the way, does anyone know the costs of the marine diesel and jet fuel supplied by Solazyme to the Navy?

     

    Was it less than $5.00 per gallon?

    —————————

    We currently work with Chevron, UOP Honeywell, and additional industry leading refining partners, to produce SoladieselRD® renewable diesel, SoladieselHRF-76® renewable diesel for ships, and Solajet® renewable jet fuel for both military and commercial application testing.

    In 2010, we delivered over 80,000 liters of algal-derived marine
    diesel and jet fuel to the U.S. Navy, constituting the world’s largest
    delivery of 100% microbial-derived, non-ethanol biofuel. Subsequently,
    we were awarded another contract with the U.S. Department of Defense for
    production of up to 550,000 additional liters of naval distillate
    (SoladieselHRF-76® marine fuel).

    http://www.solazyme.com/fuels

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  4. By anonymous on May 26, 2011 at 9:25 am

    The US taxpayer has spent over $2.5 billion dollars on algae research over the last 50 years. To date, nothing has been commercialized by any university. The real question is does the DOE really want to get off of foreign oil or do they want to continue funding more algae research? Accoroding to ASU and other universities “all algae technology hurdles have been met. Going forward its all engineering and scale-up. The DOE just cut $900 billion out of their budget and have now pushed things over to the USDA.

    As long as algae researchers could say for the last 35 years:
    It’s too expensive, cannot be done and we are 5-10 years away they continued to get research grants from the DOE. Heard Congressmen asked for results and their wer no results of anything being commercialized over the last 35 years. Business would not be given 35 years of research with no results. That game is over!

    Today algae production plants are scaling-up using all existing technologies and all private investment.

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  5. By Kit P on May 26, 2011 at 10:25 am

    RR is again trying to explain why we should not try things because of first of a time costs (FOAK). You would think this guy has his roots in the oil/gas industry from Texas and Oklahoma. Last time RR completely mischaracterized an article from a farming community in eastern Washington State.

    Camelina could be a great addition to dryland wheat farming of that region. Developing that is a good investment in out tax dollar.

    “Big Island Dairy Farmers fight radiation with Boron”

    No, Walt Hawaii does not have an issue with radioactive milk.

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  6. By moiety on May 26, 2011 at 10:47 am

    Kit P said:

    RR is again trying to explain why we should not try things because of first of a time costs (FOAK). You would think this guy has his roots in the oil/gas industry from Texas and Oklahoma. Last time RR completely mischaracterized an article from a farming community in eastern Washington State.

    Camelina could be a great addition to dryland wheat farming of that region. Developing that is a good investment in out tax dollar.

    “Big Island Dairy Farmers fight radiation with Boron”

    No, Walt Hawaii does not have an issue with radioactive milk.


     

    This is not the first time for Algae. http://www.nrel.gov/biomass/pd…..nemann.pdf

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  7. By Rufus on May 26, 2011 at 11:44 am

    About all we can do with Diesel/Jet fuel, right now, is keep taking ‘baby steps’ and work on it.

    Palm Oil Is the only oil product that has a decent return/acre at the present, but the environmentalist will not (and, probably, should not) let us convert all of Asia’s rain forests into palm plantations.

    Great Plains Renewable Energy is a “Real” company with 5, i think it is, profitable ethanol refineries in operation. They have installed a small algae operation on the back end of one of their ethanol plants – utilizing the CO2, heat, and nutrient-rich water that are waste-streams from the ethanol refinery. That bears watching, I think.

    Biodiesel is just one of those things that are going to take some time, and work. We’ll know more in a few years.

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  8. By paul-n on May 26, 2011 at 11:49 am

    Algae – the biofuel version of the Stirling engine – a perpetually over hyped also-ran.

     

    At least we have some realism from the military here;

    When the biofuel industry is able to provide the quantity of fuel the Air Force requires at a good price, “we will be ready to buy from them,” the under secretary said.

    I suggest a trading  board is set up, where the military will, for now, buy any amounts of bio-jet – up to a maximum of say 5m gal, for the NYMEX price of jet fuel + $3/gal.  Anyone sales are posted on the trading board for all to see.

    And then just leave  it at that, and see who is prepared to actually sell.  

     

    Good find Moiety, I had seen one of those reports referenced in there before.  Being a former sewage treatment engineer, I have to say the differences between open pond/race STP’s and algae farms are very minimal – just replace the floating aerators with the floating paddle wheels and you are almost done.  As Benemann suggests, in the near term, doing algae farms at open pond stp’s can be a niche solution, though good old effluent irrigation onto the adjacent land, for a normal crops or forest, is probably a cheaper solution.

    A good debunking of the hype over PBR’s though, but everyone in the industry already knows that, it only seems to be “investors”, and those that give out gov’t funding,  that don’t.

     

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  9. By Walt on May 26, 2011 at 11:52 am

     

    This might not be the best place to post this question…but I would appreciate the help.

     

    Does anyone know of an study done on various absorption chillers in processing plants?  I need to find a low cost, effective absorption chiller to compete with mechanical refridgeration.  KinderMorgan has recently acquired the technology I am interested in, but they are never respond to filing out their request forms or phone messages.  This is an opex savings that has to be considered vs. capex.

    http://www.coolingtechnology.c…..fault.html

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  10. By rrapier on May 26, 2011 at 12:57 pm

    Walt said:

    By the way, does anyone know the costs of the marine diesel and jet fuel supplied by Solazyme to the Navy?

     

    Was it less than $5.00 per gallon?


     

    I wrote two articles on it at that time:

    U.S. Navy Pays Big Bucks for Biofuels

    Solazyme CEO Clarifies Costs

    RR

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  11. By rrapier on May 26, 2011 at 1:09 pm

    Kit P said:

    RR is again trying to explain why we should not try things because of first of a time costs (FOAK).


     

    I often worry about your ability to comprehend what you read. Or maybe you don’t actually read it, but just decide to share your words of wisdom anyway. In this case, it has nothing to do with why we should not try new things. My whole job is about trying new things. It has to do with making sure we keep our expectations realistic.

    You would think this guy has his roots in the oil/gas industry from Texas and Oklahoma.

    That’s funny coming from the perpetual coal apologist. You see me writing plenty about getting us off of oil. We see plenty of writings from you telling us how wonderful coal is. So don’t lecture me on bias.

    Last time RR completely mischaracterized an article from a farming community in eastern Washington State.

    What was that? I am just quoting from the article, showing that the hype looks very much like that of jatropha. We have a tendancy to run out of wonderful adjectives to describe these new fuels before they are actually shown to work.

    Camelina could be a great addition to dryland wheat farming of that region. Developing that is a good investment in out tax dollar.

    You can’t say “could be a great addition” and “is a good investment.” Whether it is a good investment remains to be seen, but if we don’t have realistic information going in, it will almost certainly be a total waste of money.

    “Big Island Dairy Farmers fight radiation with Boron”

    No, Walt Hawaii does not have an issue with radioactive milk.

    From Walt’s link:

    Milk from the large dairies in Hamakua and Hawi has shown elevated levels of radiation, from 400 to 2400 times the recognized safe levels.

    No, 400 to 2400 times the recognized safe level doesn’t seem to be an issue to me. I think I will rush out and drink some. You would almost think you had your roots in the nuclear industry to promote such misinformation. You are one of the biggest hypocrites I have ever seen.

    RR

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  12. By klm on May 26, 2011 at 3:25 pm

    you are right, there is no such think like a miracle weed …

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  13. By Kup on May 26, 2011 at 3:49 pm

    As a long time lurker and infrequent poster I wanted to just drop a “thanks” to you Robert for all your articles here (and at Theoildrum) and to also ask a somewhat off the wall question.

    With this article on jatropha and camellina it stirred in my mind a memory of an old book from the college days. In it they talked about the miracle energy potential of hemp (among many other great industrial uses of it). Anyway, the basic pitch of it was that it grew like, well, a weed, it could be grown on marginal soil and both the oil from the seed and the biomass from the stalk could be used to produce energy.

    It sure sounded like the “too good to be true” type of hype from a bunch of pot smoking writers BUT, nonetheless, I was curious if you have ever investigated what exactly the potential (if any) of hemp is for energy purposes. A more science based viewpoint from a person with your background would be appreciated.

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  14. By Wendell Mercantile on May 26, 2011 at 5:53 pm

    …there is a very large disconnect between where the economics actually are, and where producers think they will end up.

    RR~

    There’s a reason for that disconnect that is easy to explain (but apparently difficult for producers to understand):

    It took Mother Nature millions of years and unimaginable amounts of heat and pressure to turn biomass (algae and phyto-planktons) into oil.

    Nature had huge natural advantages turning biomass into oil: Limitless time, free biomass, free heat, and free pressure. Why would any producer ever think they can compete against that when they must pay for everything — and are also trying to accelerate the process and compress millions of years into a few weeks?

    Synthetically-produced biomass fuels likely won’t be cost competitive until the scarcity of naturally-produced biomass oil gives us no other choice.

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  15. By Wendell Mercantile on May 26, 2011 at 6:07 pm

    Palm Oil Is the only oil product that has a decent return/acre at the present, but the environmentalist will not (and, probably, should not) let us convert all of Asia’s rain forests into palm plantations.

    Rufus~

    A few days ago you said that Tunica County was extremely poor. (Sidebar: I know that’s true, but it’s also hard to believe considering the deep, fertile soil with which the Delta has been blessed. Wouldn’t you agree?)

    Back on topic: Have you ever considered introducing oil palm into the Delta? If it could thrive in that fertile soil and hot, humid climate, you might restore the entire Delta to the “hay day” of King Cotton. (How many below freezing days do you guys get in a year?)

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  16. By rrapier on May 26, 2011 at 6:19 pm

    Kup said:

    As a long time lurker and infrequent poster I wanted to just drop a “thanks” to you Robert for all your articles here (and at Theoildrum) and to also ask a somewhat off the wall question.

    With this article on jatropha and camellina it stirred in my mind a memory of an old book from the college days. In it they talked about the miracle energy potential of hemp (among many other great industrial uses of it). Anyway, the basic pitch of it was that it grew like, well, a weed, it could be grown on marginal soil and both the oil from the seed and the biomass from the stalk could be used to produce energy.

    It sure sounded like the “too good to be true” type of hype from a bunch of pot smoking writers BUT, nonetheless, I was curious if you have ever investigated what exactly the potential (if any) of hemp is for energy purposes. A more science based viewpoint from a person with your background would be appreciated.


     

    There is a funny story there. I was in Malaysia last year, and started writing an article on hemp. But Malaysia has the death penalty for drug trafficking, and my hemp research kept triggering warnings, as many web pages don’t distinguish between hemp and pot. So I stopped working on it, and never finished.

    What I have can be summed up like this: Hemp is legal in many countries; countries with aggressive biofuel targets. The fact that it hasn’t taken off is a good indicator that the hype is once more ahead of reality.

    I intend to finish that essay some day.

    RR

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  17. By Kit P on May 26, 2011 at 7:13 pm

    “No, 400 to 2400 times the recognized safe level doesn’t seem to be an issue to me.”

     

    So says a farmer. I think I would have hear if hear of 10CFR20 limits were exceeded. Limits for milk near the damaged reactors were exceeded for a short period of time.

     

    RR maybe you can explain how feeding boron to cow protects from radiation? That is a new one!

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  18. By rrapier on May 26, 2011 at 8:05 pm

    Kit P said:

    “No, 400 to 2400 times the recognized safe level doesn’t seem to be an issue to me.”

     

    So says a farmer. I think I would have hear if hear of 10CFR20 limits were exceeded. Limits for milk near the damaged reactors were exceeded for a short period of time.


     

    I am trying to get to the bottom of the source of that claim. Seems like it should have been all over the news here, so it does seem fishy. But the farmers have the most to lose, so I am trying to find out where they got that information.

    RR maybe you can explain how feeding boron to cow protects from radiation? That is a new one!

    No idea what that is all about, but it wasn’t my claim either.

    RR

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  19. By paul-n on May 26, 2011 at 10:12 pm

    @ Kup,

     

    Hemp has been much discussed as a biomass crop, and it has some good features, but it is not a magic bullet.  Here in Canada there is an established industry in growing industrial hemp, for both grain and fibre (I buy hulled hemp seed hearts and have them in my oatmeal – keeps me going all morning!)

     

    Grown as a broadacre crop, yields of seed range from 0.3 to 1.3 t/ha, with about 30% oil content –  a lower yield than Canola.  You do get a lot of biomass from the stalks, anywhere from 3 to 10t/ha, and these can then be processed for fibre. 

    A summary of the Ontario hemp industry is here

     

    One of the advantages of hemp is that you can grow it without needing herbicides – it is very good at crowding out weeds, but is stil susceptible to some diseases and insect pests.

    The main reason why some people think hemp is the answer is that very high yields can be obtained under very favourable conditions (good soil, warm weather, lots of fertiliser and irrigation, etc), and, of course, hydroponic grow ops get spectacular yields – but this is true of any crop.

    Once you do it in real world conditions, the yields revert to real world yields.  As a biomass crop it is good, but not necessarily a great deal better than others, like grain sorghum, sudan grass, miscanthus, vetiver etc.

    As with algae, those who do grow it, get much greater returns selling it as food and fibre, than they ever would as fuel.

     

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  20. By rrapier on May 26, 2011 at 10:28 pm

    Kit P said:

    “No, 400 to 2400 times the recognized safe level doesn’t seem to be an issue to me.”

     

    So says a farmer. I think I would have hear if hear of 10CFR20 limits were exceeded. Limits for milk near the damaged reactors were exceeded for a short period of time.


     

    I think I have gotten to the bottom of this. There are reports that in fact established safe radiation levels were exceeded in milk levels. For different isotopes, there was something like 400% over the limit, 800%, etc. Some guy added all of these up, and said “The limit was exceeded by 2400%.” Of course it doesn’t work that way. But then the farmers read 400% as 400 times. That’s an error by 2 orders of magnitude, and one that is likely to cost themselves sales. I can tell you that if the limit was exceeded by 400 times, I would never drink milk from here again. I don’t get too worked up about 400%, because I know how much cushion is generally placed on those numbers.

    So the fact is, the safe limits were exceeded in Hawaii for a nuclear incident thousands of miles away, but it wasn’t by nearly the margin suggested by the erroneous report.

    RR

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  21. By mac on May 26, 2011 at 10:36 pm

    Kup.

    There’s a pretty good article on Wiki about hemp,. It’s a relatively long article with pictures, graphs and so on, but quite interesting.

    Hemp is one of the strongest natural fibers known to man and it was used to make garments as far back as 8,000 years ago in Sumeria where pieces of woven hemp have been found.

    Hemp has long been used for rope, twine-age, sail-cloth, canvas bags and even shoes because of its incredible tensile strength

    The early Puritans in America raised hemp and in Kentucky there were large plantations before the Civil War devoted to entirely to raising hemp.. There is even a museum in Kentucky called “The Hemp Museum”

    Hemp makes some of the very best paper and the Chinese perfected the process around 100 B.C., combining hemp fibers with Mulberry to make a superb paper. Not too long ago, there were still one or two specially mills in the U.S. devoted exclusively to manufacturing hemp paper products.

    Incredibly tough stuff. Henry Ford built a “hemp car” that used a sisal, hemp and wheat straw composite body that was so tough you could beat on it with an axe and it wouldn’t dent. (and it was lighter than steel)

    http://www.youtube.com/watch?v…..U&NR=1

    http://en.wikipedia.org/wiki/Hemp

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  22. By Walt on May 26, 2011 at 11:16 pm

    Robert Rapier said:

    Kit P said:

    “No, 400 to 2400 times the recognized safe level doesn’t seem to be an issue to me.”

     

    So says a farmer. I think I would have hear if hear of 10CFR20 limits were exceeded. Limits for milk near the damaged reactors were exceeded for a short period of time.


     

    I think I have gotten to the bottom of this. There are reports that in fact established safe radiation levels were exceeded in milk levels. For different isotopes, there was something like 400% over the limit, 800%, etc. Some guy added all of these up, and said “The limit was exceeded by 2400%.” Of course it doesn’t work that way. But then the farmers read 400% as 400 times. That’s an error by 2 orders of magnitude, and one that is likely to cost themselves sales. I can tell you that if the limit was exceeded by 400 times, I would never drink milk from here again. I don’t get too worked up about 400%, because I know how much cushion is generally placed on those numbers.

    So the fact is, the safe limits were exceeded in Hawaii for a nuclear incident thousands of miles away, but it wasn’t by nearly the margin suggested by the erroneous report.

    RR


     

     

    thanks for the clarification.  I think it remains an issue of concern for many…as it brings articles like this to the much needed front page.

     

    Risk From Spent Nuclear Reactor Fuel Is Greater in U.S. Than in Japan, Study Says

    http://www.nytimes.com/2011/05……html?_r=3

     

    And considering this next article…I wonder if something is in the milk already exceeding the legal limit! :)

    http://www.cnsnews.com/news/ar…..tives-need

     

    I would rather use that money doing something else.  It is a LOT of money…except on wall street.

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  23. By Rufus on May 26, 2011 at 11:46 pm

    Wendell, I don’t have the exact numbers, but it can get damned cold for a couple of months. We get a pretty good snow once, or twice, a year, and an ice storm every now and then.

    I’m almost positive we’re too far north for oil palm. There is One bush that’s indigenous to the general area that has, supposedly, about the same yield, about six hundred gallons/acre, as oil palm. That would be the Chinese Tallow Tree. It’s considered a ‘pest’ species, because once it gets its roots down it’s virtually impossible, short of a ton of dynamite, and gallons of strong poison, to get rid of. The danged things life forever.

    Wendell, no one will put much money at risk, right now, on anything that has to do with biofuels. Biofuels are dead in the water. The politics are insane at the present. The only way “Anyone” will get any money for anything connected to biofuels is to “Rob” the bank. If you can’t get it with a gun, you ain’t gettin’ it.

    The couple of cellulosic deals that are getting done are big companies like Dupont, etc. that are using their own money, or someone who already has a loan guarantee approved. Notice I said, “APPROVED.”

    For all intents, and purposes, if you don’t have the money in your grubby little hand, you need to find something else to do for a couple of years. The Window is Closed. Coburn, and Inhofe Won.

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  24. By Rufus on May 27, 2011 at 12:02 am

    I’m not sure I should have used the word, “indigenous.” Obviously, with a name like “Chinese Tallow Tree” it was imported from China. However, that was, IIRC, back in the 1700′s. It’s been growing wild in the South ever since.

    When I said, Coburn, and Inhofe “won,” I didn’t mean to imply that they managed to pass any legislation; but, they’ve sowed so much uncertainty about the political outcome of the biofuel wars, that no one who likes their money would want to invest any of it in ethanol, or biodiesel at this point.

    The thing is, all of these tax credits are short-term. They have to be rolled over in the next year, or so. For instance, the cellulosic producer tax credit goes away in Dec. 2012. Well, hell, if you started building today, you would quite likely not produce a gallon of ethanol that qualified.

    With the crazy gyrations that gasoline prices are likely to go through in the short-term, and the political risk, it’s just a no-go for the foreseeable future.

    I’m starting to get much more interested in Wind, and Solar. At least, things are happening, there.

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  25. By paul-n on May 27, 2011 at 12:16 am

    Gee Rufus, that Chinese Tallow Tree shouldn’t be considered a pest, it should be considered an opportunity!

    You can thank non other than Benjamin Franklin for introducing it to America!

    Louisiana State University did a study on the biofuel potential of this tree, and I have to say, it sounds encouraging;

    Tallow seeds contain 45-60 percent vegetable oil, about two to three times the amount found in an equivalent weight of soybeans. Commercial plantations in other countries typically contain about 160 trees per acre, trimmed low for hand harvesting. Yields average 12,500 pounds of seeds per acre containing 2,300 pounds of stillingia oil, 2,500 pounds of wax, 1,400 pounds of protein concentrate, 982 pounds of fibrous coat and 4,000 pounds of shell (endocarp). Per acre, these oil yields are 15 times more than soybeans, 10 times more than sunflower or safflower, seven times more than peanuts and five times more than rape seed (canola). Annual commercial production averages about 645 gallons – the equivalent of 15.4 barrels of oil per acre. Some experts cite figures as high as 970 gallons or 23.1 barrels of oil per acre. The light-colored, brittle wood of the tallow tree appears to have limited value as lumber or even firewood, though extracts of bark, leaves and seed are used in traditional and modern Chinese medicine.

    Even if you can only get half that oil yield, at say 300gal/acre, that is still outstanding.  Use the wood in one of Rufus’ cellulosic ethanol plants and the result is even better.

    The tree leaves and immature seeds contain a mild toxin which keeps animals from eating it, it is a great nectar source for bees.

    The tree grows readily on abandoned farmland, from Carolina to California, requires no maintenance, is very hardy and self replicating (some people call this “invasive”).

     

    All in all, ideal characteristics for biofuel – why even bother with algae, camelina, jatropha etc?

     

    [link]      
  26. By Rufus on May 27, 2011 at 12:35 am

    Paul, there was one guy, a prof at LSU, I think it was, probably did the study you’re referencing. He got pretty het up on it, then went off to Thailand (or Cambodia) to work with rice hulls. No one else ever followed up that I’m aware of.

    Oh well, maybe in the next go-round. Whenever that is.

    [link]      
  27. By Walt on May 27, 2011 at 8:55 am

    In May 2011 AE Biofules restarted operations of an ethanol plant in Keyes, California in US.

    The facility was completed and commissioned in November 2008.

    Owners

    The ethanol plant was established by Cilion, a joint venture company
    formed by Western Milling and Khosla Ventures. In March 2010 AE
    Advanced Fuels Keyes (AE Keyes), a wholly-owned subsidiary of AE
    Biofuels, leased the facility to operate it for five years under a
    project management agreement with Cilion.

    Financing

    The Cilion ethanol plant was built at a cost of $130m. AE Keyes
    funded $8m towards retrofitting and renovation of the facility. In
    November 2010, Third Eye Capital funded $4.5m to AE Keyes for repairing
    and retrofitting of the plant. In March 2011, the company funded
    another $3.5m to AE Keyes for restarting and operating the Keyes
    ethanol plant.

    In April 2011, AE Advanced Fuels Keyes received a $1.88m grant from
    the California Energy Commission (CEC) towards the commercialisation of
    the AE Biofuels technology and plant start-up. The CEC grant is in
    line with the State of California’s goals to achieve a Low Carbon Fuel
    Standard (LCFS).

    http://www.chemicals-technolog….._id=WN_Prj

    [link]      
  28. By Kit P on May 27, 2011 at 11:49 am

    Again, no safety limits were exceeded. Because of very good instrumentation, trace amounts were detected.

     

    RR writes:

    “I think I have gotten to the bottom of this. There are reports that in fact established safe radiation levels were exceeded in milk levels.”

    When some thing is impossible, how credible are reports to the contrary. To be fair to RR he is researching something outside his field of training. Interesting thing is that when I did a search I could not any credible reports that support what RR wrote.

    “To date, all of EPA’s sampling and monitoring results have been below levels of public health concern.”

    http://www.epa.gov/radiation/j…..tml#levels

    “While the detections in air, precipitation, and milk were expected, the levels detected have been far below levels of public-health concern.”

    http://www.epa.gov/ocir/hearin…..12_lpj.pdf

    “The largest amounts were found in samples from Alaska on March 19 and 24, 2011, but all of the radiation levels detected during the detailed filter analysis are hundreds of times below levels of concern.”

    “iodine-131 – approximately 1.6 picocuries per liter (piC/L). (An infant would have to consume over 200 gallons of this water at the highest detection level to receive a radiation dose equivalent to a day’s worth of the natural background radiation exposure we experience continuously from natural sources of radioactivity in our environment.)”

    “Experts stress the radiation does not pose a threat to public health.

    Since the EPA covers everyone, that should include Hawaii.  Test done there shows the same results.

     

    “There should be no concern over the safety of the milk. The milk is perfectly safe at these levels,” said Lynn Nakasone, administrator of the Health Department’s Environmental Health Services Division.

    Radiation is measured in units called picocuries. Tests found 18 picocuries per liter of iodine-131 in Big Island milk. That is well below the Food and Drug Administration’s “action level” of 4,700 picocuries per liter. The “action level” is the level at which milk might be pulled from store shelves.

    “From 18 to 4,700, obviously that’s a very very big difference, so there is no risk as far as Iodine is concerned,” Nakasone said.

    The Big Island milk had 43 picocuries per liter of cesium-134 and cesium-137 combined. The FDA “action level” for cesium is 33,000 picocuries per liter.

    “So again we’re looking at very very minute amounts of the two types of isotopes,” Nakasone added.”

    http://www.hawaiinewsnow.com/s…..awaii-milk

    [link]      
  29. By Wendell Mercantile on May 27, 2011 at 12:00 pm

    Biofuels are dead in the water. The politics are insane at the present.

    Rufus~

    Go for it, even without political support*. I have visions of you leading the Delta back to financial prosperity (forget those casinos) on the backs of fuel made from the Chinese tallow tree. Rows and rows of Chinese tallow trees stretching from the backs of the Mississippi River to those bluffs at the edge of the Delta. Talk that guy near you who was planting beans two weeks ago into planting Chinese tallow trees.

    ————–
    *What a terrible comment on our country when something worthwhile becomes impossible without political support, tax credits, and subsidies. Good thing that wasn’t the case 110 years ago when Henry Ford was getting started, or that Mark Zuckerberg was to naive to realize that when he started Facebook.

    [link]      
  30. By paul-n on May 27, 2011 at 1:17 pm

    Agreed Wendell, all Rufus has to do is get a bunch of those seeds and start throwing them out the window as he is driving around in his ethanol fuelled car.

     

    There is actually some suspicion that their spread westwards from the Carolinas has been aided and abetted by beepkeepers, who recognised just how good the tree is for that.

    But really, a tree that is easy to grow, a long lived perennial that needs no fertiliser, virtually nothing can kill, and nothing eats, and produces a drop in biofuel – you don;t get a much better biofuel  system than that!

    Actually, if Rufus won’t want to take this ball and run, maybe we should tell someone in Houston.  There are 163 million chinese tallow trees in the Houston area- they are the most common tree, at 23% of all trees in and around the city.

    Now, at 160 trees/ac, and 600 gal oil, that is 3.75 gal/tree. If we assumed you got  just 2 gal, and only half the trees were harvested, that would amount to – 163 million gallons!  Or, in Texas terms, equivalent to 10,150 barrels of oil per day!  And this for trees that are already there!

    If there is one industry that won’t wait for “political support” to do something , it will be the independents in the Texas oil industry!

     

     

    [link]      
  31. By rrapier on May 27, 2011 at 1:42 pm

    Kit P said:

    Again, no safety limits were exceeded. Because of very good instrumentation, trace amounts were detected.

     

    RR writes:

    “I think I have gotten to the bottom of this. There are reports that in fact established safe radiation levels were exceeded in milk levels.”

    When some thing is impossible, how credible are reports to the contrary. To be fair to RR he is researching something outside his field of training. Interesting thing is that when I did a search I could not any credible reports that support what RR wrote.


     

    Well, from past history your rose-colored glasses probably aren’t all that good for determining what is and is not credible when the topic is safety or regulation of your own industry. I can understand the EPA downplaying the risk to avoid a unnecessary panic, but:

    EPA Halts Heightened Monitoring of Fukushima Fallout

    Radioactive iodine levels in rainwater have been found, and continue to

    be found, significantly exceeding the EPA’s own Maximum Contaminant

    Level (MCL) of 3piC/L for drinking water.  EPA downplays the public

    health risk by noting that the “MCL for iodine-131 was calculated based

    on long-term chronic exposures over the course of a lifetime 70 years.

    The levels seen in rainwater are expected to be relatively short in

    duration.”

    In fact, the EPA’s MCL has been exceeded in the milk samples in Hawaii. Maybe they aren’t still above, but they were. We can debate whether that is a reasonable standard, but you can’t deny (even though you try) that the limits were exceeded. The EPA says “Yeah, but those limits were calculated under certain assumptions.” And that may be fine, but limits were exceeded. There is also a difference of what is considered a risk, and the point at which government agencies get involved to regulate the sale of milk (the “action level”). Here is a link to the actual data set.

    The biggest difference between you and me on this issue is that I seek to explain and clarify, and you seek to deny and downplay. The problem with your approach is that it simply feeds the idea that the government is trying to cover things up: “Don’t worry, everything is fine.” I prefer to get the data out in the open and discuss that.

    There are two questions to be answered here. Is the EPA’s MCL 3piC/L for drinking water? Yes. Has that level been exceeded in milk samples? Yes. We can then discuss why that isn’t necessarily a concern, but it doesn’t help your credibility at all to simply dodge the questions and declare that it impossible.

    RR

    [link]      
  32. By Walt on May 27, 2011 at 3:20 pm

    Well, it is official now…Solazyme can produce fuel (jet?) for under $5.00 per gallon, or what they say is $3.44 per gallon.

     

    Let’s watch the stock today…looks like Silicon Valley does it again the “right” way to raise money.

     

    ————————————

    One of the largest clean tech IPOs of this year is set to get underway, after California biofuel and bioproducts firm Solazyme
    announced yesterday that it was increasing the pricing for its stock
    offer ahead of an anticipated listing on the Nasdaq later today.

    Earlier
    this month, the San Francisco-based firm said it planned to offer 9.98
    million shares of common stock, at a price range of $15 to $17,
    potentially raising up to $184m. But yesterday the company confirmed it
    would be offering 10,975,000 shares of common stock, at a price of
    $18.00 per share, increasing potential returns from the IPO to nearly
    $200m.

    Solazyme will offer 10,375,000 shares through the IPO,
    while other stockholders will offer 600,000 shares. In addition, a
    30-day option to purchase up to an additional 1,646,250 shares of common
    stock will be made available to cover any over-allotments.

    The shares will begin trading on the Nasdaq Global Select Market today under the ticker symbol SZYM.

    http://www.businessgreen.com/b…..iofuel-ipo

    [link]      
  33. By Kit P on May 27, 2011 at 4:51 pm

    Again, no safety limits were exceeded.

    Federal regulations specify various limits. Some of them are absolute some are time dependant. Radiation and radioactive elements are all around us, it is natural. Many places have high level of radiation and radioactive elements that exceed safety limits. Milk has 10 times more radioactivity than normal rainwater because of isotopes of potassium.

    “In healthy animals and people, 40K represents the largest source of radioactivity”

    This means we can not set limits at zero because all food is above zero.

    As it happens, if you work in a potassium mine you may need to be monitored as a radiation worker. The same is true of some NPS who give cave tours. Coal power plants release more radiation than a nuke plant does normally.

    Okay then, nuke plants have small amounts of air and water releases. One of my responsibilities was to minimize these releases. I routinely inhaled low levels of I-131, Xe, & Kr. I would use instruments to find leaks and fix them. An independent group also monitored releases, that was official data provided to the NRC. If I did a good job, the amount of releases were thousands of time below allowed limits.

    Still with me RR? Exposure to people living around the plant is just a hypothetical number that should be less than some model. Since I-131 has an airborne path that is likely to get into the food chain. This is why EPA monitors rainwater. You could have continuous samples of 2.9 piC/L and not exceed limits because that is what 70 years means. Exceed 3piC/L and you need to monitor the food chain.

    “Is the EPA’s MCL 3piC/L for drinking water? Yes.”

    No, drinking water is something else. Drinking water should have zero I-131.

    http://water.epa.gov/drink/con…..ionuclides

    “Has that level been exceeded in milk samples? Yes.”

    So what, that is not the limit for milk.

    “Food and Drug Administration’s “action level” of 4,700 picocuries per liter.”

    Here is a link that show the methodology.

    http://www.fda.gov/downloads/M…..094513.pdf

    “We can then discuss why that isn’t necessarily a concern, but it doesn’t help your credibility at all to simply dodge the questions and declare that it impossible.”

    I do suppose it is possible to if the Japanese have 300 more rectors to meltdown. I am waiting for RR to show his expertise dispersal of radioactive material. RR’s theory of smart I-131. Wait for it, wait for it, now rain on Hawaii.

    [link]      
  34. By Wendell Mercantile on May 27, 2011 at 4:52 pm

    …all Rufus has to do is get a bunch of those seeds and start throwing them out the window as he is driving around in his ethanol fuelled car.

    Rufus would become known as “Rufus tallow tree seed,” and the Walt Disney Studios could do an animated cartoon of him traveling across the Delta, spreading the word about tallow tree seeds — and small local bio-fuel plants.

    Seriously though, the MIssissippi Delta is an area of thick, rich soil, but also has some of the poorest counties in the U.S. What is the deal with that, and why doesn’t Rufus work to turn it around by teaching them to grow feedstock for biofuels?

    [link]      
  35. By rrapier on May 27, 2011 at 5:59 pm

    Walt said:

    Well, it is official now…Solazyme can produce fuel (jet?) for under $5.00 per gallon, or what they say is $3.44 per gallon.

     


     

    I would say with a great deal of confidence that that qualifies as a forward looking statement.

    RR

    [link]      
  36. By Walt on May 27, 2011 at 6:03 pm

    “Solazyme priced an upsized offering of 10.975 million shares (vs 9.975M)
    at $18.00, above the indicated range of $15.00-17.00. Of the shares
    offered, 10.375M are primary or company shares and 600,000 are secondary
    shares being sold by selling shareholders, Jonathan Wolfson (CEO) and
    Harrison Dillon (President). Post offering Mr. Wolfson and Mr. Dillon
    will own a combined percentage of approximately 14.4%. At the midpoint
    of the range the market cap of the company is approximately $1.04
    billion. Proceeds are expected to be used to fund research and
    development activities, working capital, and general corporate purposes.
    Morgan Stanley and Goldman Sachs are leading the offering.”

    http://seekingalpha.com/articl…..urce=yahoo

     

    If the 600,000 shares are sold by the principles it would put $10 million in their pocket.  I was not aware founders could sell stock at the initial public offering…I thought they had to hold shares for at least 12 months.

     

    $1.04 billion market cap.  Definitely cheap if they can make jet fuel at $3.44 per gallon.

    [link]      
  37. By Walt on May 27, 2011 at 6:06 pm

    Looks like it closed at about $20 per share…nice opening for the clean tech sector.

    http://money.cnn.com/quote/quo…..?symb=SZYM

    [link]      
  38. By rrapier on May 27, 2011 at 6:14 pm

    Kit P said:

    “Is the EPA’s MCL 3piC/L for drinking water? Yes.”

    No, drinking water is something else. Drinking water should have zero I-131.

    http://water.epa.gov/drink/con…..ionuclides

    “Has that level been exceeded in milk samples? Yes.”

    So what, that is not the limit for milk.


     

    I don’t think you get that your explanations do nothing to clarify any of this. It is just more assurances that everything is OK, which leads many people to believe things are being covered up. I just finished with a lengthy explanation of the issue, which I think does more to inform people than any of your explanations have. Here goes.

    First, the farmers who published that letter and said they are feeding boron to their livestock mistook 400%-2400% for 400 to 2400 times. There is a huge difference in those numbers.

    Second, where did 400% come from? The EPA says that the applicable Maximum Contaminant Level (MCL) is 3piC/L for drinking water. Milk samples in Hawaii were sampled and had much higher limits than this, leading some people to claim that the limit had been exceeded by 400% (and some guy added up all of the various isotopes that were over 3piC/L to come up with 2400%). But it is important for people to understand that the basis of 3piC/L is based on a lifetime of exposure at that level. Being exposed to 3 or 4 times the MCL on a short term basis is analogous to getting a chest X-ray, while the MCL is analogous to getting two chest X-rays a day for the rest of your life.

    Thus, while the MCL of milk spiked higher than the allowable limit for drinking water (Your comment “so what, that isn’t the limit for milk” cisn’t helpful; there is no separate limit for milk), the actual radiation exposure is quite low.

    RR

    [link]      
  39. By Rufus on May 27, 2011 at 6:33 pm

    I don’t think I have the Millions required for all the court challenges to try and grow a plant with a “pest” designation.

    [link]      
  40. By mac on May 27, 2011 at 8:17 pm

    RR;
    :
    No one disputes the fact that “rapeseed oil” or Canola Oil is just as economically viable as oils derived from Non-THC strains of cannabis seeds in the production of bio-fuels

    In regard to bio-fuel production of cannabis derived seed oils: They are not much more efficient in making bio-fuels than are oils derived from
    rapeseed, already widely grown in Europe.

    While we might dismiss hemp on this account, it has been a tremendously important crop in history, spanning Milennia in its use.

    [link]      
  41. By Walt on May 27, 2011 at 10:51 pm

    Robert Rapier said:

    Walt said:

    Well, it is official now…Solazyme can produce fuel (jet?) for under $5.00 per gallon, or what they say is $3.44 per gallon.

     


     

    I would say with a great deal of confidence that that qualifies as a forward looking statement.

    RR


     

    The more I see the IPO market convert ~$40 million of revenues and ~$20 million in losses into $1 billion dollars in value, the more I cannot believe my eyes.  I definitely agree that the value is in their technology and their partnerships that is not yet seen in the revenues and profits, but there must be something to going public if the two founders can pull out $10+ million in cash at the IPO.  If they got $5 million each it was a nice payday, and add to that the $200 million they raised in cash for projects it definitely gives food for thought on an exit strategy working again.

     

    I did not study the offering documents, but the media and analysts argue they are at $3.44 per gallon.  I’m not sure how they got such an exact number like $3.44 per gallon, but it definitely gets Wall Street excited to sell stock to their clients for their fees with a story to tell.  If this is a forward looking statement, I wonder how forward it is from reality.  Now they are public, I wonder if the next quarter will show their costs of production?

    [link]      
  42. By paul-n on May 27, 2011 at 10:58 pm

    but the media and analysts argue they are at $3.44 per gallon.

    There is one, and only one, way to know if they are “at” $3.44/gal and that is if they are willing to sell a large volume futures contract – date of their choosing – at $3.44.  The only “proof” of price is the price at which stuff is sold – anything else is meaningless.

    of course, the only price they are interested in is the future price of the stock – they hope to make it mainstream enough that pension funds and the like buy in, so they can cash out.  That’s the way it seems to work these days.

    [link]      
  43. By paul-n on May 27, 2011 at 11:08 pm

    I don’t think I have the Millions required for all the court challenges to try and grow a plant with a “pest” designation.

    Well, you don’t have to grow it then, just start harvesting it.  Wait until the seeds are ready then cut the trees and take the seeds and the firewood (I mean, cellulosic feedstock ;-) . – if it is that much of a pest, then people might even pay you to get rid of it.

    If you could sell insurance for a living then I’m sure you could sell that concept. 

    [link]      
  44. By Walt on May 27, 2011 at 11:25 pm

    Paul N said:

    but the media and analysts argue they are at $3.44 per gallon.

    There is one, and only one, way to know if they are “at” $3.44/gal and that is if they are willing to sell a large volume futures contract – date of their choosing – at $3.44.  The only “proof” of price is the price at which stuff is sold – anything else is meaningless.

    of course, the only price they are interested in is the future price of the stock – they hope to make it mainstream enough that pension funds and the like buy in, so they can cash out.  That’s the way it seems to work these days.


     

     

    Here is the prospectus….I see now the difference between the media releases and the prospectus.  In this case I can produce methanol for $.25 per gallon at “larger-scale, built-for-purpose commercial”…etc.  Now I understand the legal wording…we can all be creative in offering cheap fuels into the public marketplace! :)   When they say, “manufacture oils today” is it true their oils do not require any further distillation into Jet Fuel?

     

    Our Production Cost and Selling
    Prices

    The
    production cost profile we
    have already achieved provides attractive margins when utilizing partner
    and contract manufacturing for the nutrition, and skin and personal
    care markets. Based on the technology milestones we have demonstrated,
    we believe that we can profitably
    enter the fuels and chemicals markets when we commence production in
    larger-scale, built-for-purpose commercial manufacturing facilities
    utilizing sugarcane feedstock. For example, our lead microalgae strains
    producing oil for the fuels and
    chemicals markets have achieved key performance metrics that we believe
    would allow us to manufacture oils today at a cost below $1,000 per
    metric ton ($3.44 per gallon or $0.91 per liter) if produced in a
    built-for-purpose commercial plant. This
    cost includes the cost of anticipated financing and facility
    depreciation.”

     

    http://www.sec.gov/Archives/ed…..7/ds1a.htm

    [link]      
  45. By mac on May 28, 2011 at 12:56 am

    Paul N.

    What happened to your comment to Kup about bio-fuels based on hemp oils ?

    It suddenly dis-appeared ?

    [link]      
  46. By paul-n on May 28, 2011 at 1:58 am

    Ha, must be the thought police from the drug enforcement agency!

    Seriously though, it is still there , comment # 20.  If you are viewing this through Rsquared blog, I think you only get the last 15 comments, if you view it through the CER Forums page, you get to see them all, plus the other forum topics we have, and you can even start your own!

    On the topic of hemp, the US government encouraged farmers to grow it in WW2, you just needed this;

     

    And in the 17th and 18th century, farmers were required to grow hemp, you could pay your taxes with hemp!   Different times…

    [link]      
  47. By paul-n on May 28, 2011 at 1:58 am

    [double post]

    [link]      
  48. By rrapier on May 28, 2011 at 2:09 am

    Walt said:

    I definitely agree that the value is in their technology and their partnerships that is not yet seen in the revenues and profits, but there must be something to going public if the two founders can pull out $10+ million in cash at the IPO.  If they got $5 million each it was a nice payday, and add to that the $200 million they raised in cash for projects it definitely gives food for thought on an exit strategy working again.


     

    I know Harrison. I met him a couple of years ago at a conference, and he walked me through what they are doing. It was one algae approach that I thought had a chance of being commercially viable in the short-term. Looks Harrison did quite well for himself in this deal, but I know it’s been a labor of love for a long time.

    I don’t think though that their costs are $3.44. I think that’s what they are projecting they can do at scale. And if they are capable of producing for that price, they will probably own the entire renewable jet fuel market — just for starters.

    May be worth investing some money into them.

    RR

     

    [link]      
  49. By mac on May 28, 2011 at 2:11 am

    Okay, Paul/

    I went through precious posts and somehow missed post 20. Sorry.

    You are fudimentally right concerning hemp oils (I guess it is classed as bio-diesel)

    No argument.

    [link]      
  50. By mac on May 28, 2011 at 5:11 am

    Mild Hybrids offer relief from the pimp. (I mean pump)

    Yes, and start and stop technology is a direct out-growth of hybrid technology.

    And within 5 years, the majority of EU vehicles will be equipped with it,

    My, Oh my, Oh my ,,,,, You can’t actually believe this :drivel can you Mac ?

    Yes, I can, because it is actually happening in the market-place.

    Hide and watch…..the majority of automobiles in the next five years will be equipped with stop/start. technology.

    Look Mac !!!! Ding , dong , Ding dong… Is anybody home upstairs ? You idiot…….

    Mac…..”,please Mac……..come to your senses, You have lost your mind, You “Idiot ” !!!.

    Mac, you fool, do you really mean to tell me that most people will be driving mild hybrids within the next five years ?

    Yup…..

    YUP !!!

    [link]      
  51. By art on May 28, 2011 at 8:11 am

    hi RR,

    Just read about the fuel freedom act, a bill that has passed senate.   a gamechanger for alternative fuels or just political correction to level the playing fields  ???….

    I would like to find out learn why (subsidized corn-) ethanol not aims for feeding the military fuel hunger…

    any prinicipal technical problem with applying ethanol in jetfuelproduction ??

    [link]      
  52. By Walt on May 28, 2011 at 10:00 am

    art said:

    hi RR,

    Just read about the fuel freedom act, a bill that has passed senate.   a gamechanger for alternative fuels or just political correction to level the playing fields  ???….

    I would like to find out learn why (subsidized corn-) ethanol not aims for feeding the military fuel hunger…

    any prinicipal technical problem with applying ethanol in jetfuelproduction ??


     

    Art,

     

    I am not able to find the bill you referenced above.  It would be helpful to me if you had a link.  I found this bill introduced this week.  Is this the one you are referencing?

     

    http://www.biofuelsjournal.com…..09569.html

    http://epw.senate.gov/public/i…..Print=true

    [link]      
  53. By Walt on May 28, 2011 at 10:24 am

    Robert Rapier said:

     

    I know Harrison. I met him a couple of years ago at a conference, and he walked me through what they are doing. It was one algae approach that I thought had a chance of being commercially viable in the short-term. Looks Harrison did quite well for himself in this deal, but I know it’s been a labor of love for a long time.

    I don’t think though that their costs are $3.44. I think that’s what they are projecting they can do at scale. And if they are capable of producing for that price, they will probably own the entire renewable jet fuel market — just for starters.

    May be worth investing some money into them.

    RR

     


     

    I see in their report the following:

     

    —————————————

    Jonathan S. Wolfson—Chief Executive Officer. Mr. Wolfson’s base salary
    effective as of January 1, 2010 was $285,000 per year, which represented
    an approximately 5% increase over his base salary for 2009. As
    described above, Mr. Wolfson received a cash bonus in February 2011 of
    $800,000 to help enable him to repay his loan obligations to the Company
    in acknowledgment of his past contributions to the Company, and to
    reflect his job performance in 2010. Concurrently with the payment of
    the 2010 performance bonus Mr. Wolfson repaid to the Company a loan in
    the amount of approximately $800,000. On June 14, 2010, in recognition
    of his performance for 2009, Mr. Wolfson was granted stock options
    exercisable for an aggregate of 110,000 shares with an exercise price of
    $2.35 per share, which represented 100% of the fair market value of our
    common stock on the date of grant, on the terms and for the purposes
    described above under “—Long-Term Equity Compensation.”

    Harrison F. Dillon—Chief Technology Officer and President. Dr. Dillon’s
    base salary effective as of January 1, 2010 was $285,000 per year, which
    represented an approximately 5% increase over his base salary for 2009.
    As described above, Dr. Dillon received a cash bonus in February 2011
    of $800,000 to help enable him to repay his loan obligations to the
    Company in acknowledgment of his past contributions to the Company, and
    to reflect his job performance in 2010. Concurrently with the payment of
    the 2010 performance bonus Dr. Dillon repaid to the Company a loan in
    the amount of approximately $800,000. On June 14, 2010, in recognition
    of his performance for 2009, Dr. Dillon was granted stock options
    exercisable for an aggregate of 110,000 shares with an exercise price of
    $2.35 per share, which represented 100% of the fair market value of our
    common stock on the date of grant, on the terms and for the purposes
    described above under “—Long-Term Equity Compensation.”

    and:

    Jonathan S. Wolfson—Chief Executive Officer. The board of directors
    increased Mr. Wolfson’s base salary effective as of January 1, 2011 to
    $500,000 per year, which represented an approximately 75% increase over
    his base salary for 2010. The board of directors also increased his
    target bonus to 60% of base salary and granted him stock options
    exercisable for an aggregate of 150,000 shares with an exercise price of
    $8.77 per share, which represented 100% of the fair market value of our
    common stock on the date of grant, on the terms and for the purposes
    described above under “—Long-Term Equity Compensation.”

    Harrison F. Dillon—Chief Technology Officer and President. The board of
    directors increased Dr. Dillon’s base salary effective as of January 1,
    2011 to $400,000 per year, which represented an approximately 40%
    increase over his base salary for 2010. The board of directors also
    granted him stock options exercisable for an aggregate of 100,000 shares
    with an exercise price of $8.77 per share, which represented 100% of
    the fair market value of our common stock on the date of grant, on the
    terms and for the purposes described above under “—Long-Term Equity
    Compensation.”

    ———————————————-

     

    Although I would not say they have been suffering enormously, I would say it is helpful to see what some of the clean tech CEO’s and CTO’s are making to get these technologies off the ground.  Of course, the standard of living in California is higher than most areas of the country, so it is probably a wash if they have expensive living standards.

     

    I think the real key is not the technology…if they require sugar cane to meet those projects…but those who structure the offering.  You can be almost guaranteed the subscription will be exceeded, and a lot of money is going to be made whether the technology works in the future or not.

    “MORGAN STANLEY, GOLDMAN, SACHS & CO.,  JEFFERIES,  PACIFIC CREST SECURITIES, LAZARD CAPITAL MARKETS”

    I sometimes think there is more money to be made in getting a company into the market, and then pulling out cash in 12 months hoping some government or super major will purchase it, and close down the business due to poor return on investment.

     

    If we knew that they could make $3.44 per gallon oil and what scale using what cost of feedstock, I think it would be better.  The more I study this landscape the more I realize this has nothing to do about technology merit, but rather is a basic template of documents.  The markets have this down to a set of documents from seed to IPO, and some will survive, but most will not survive.

     

    The key to those types of salaries and company valuations is the list of the underwriters, PR firms and a handful of top brandname strategic partners.  Again, I think this is the key metric.  Beyond this, the technology value and costs of production will scale over time…but if not…it is not the driver.  It is just an accident along the path to millions and billions of dollars in exit for those in the structured deal.

     

    Even if some of this is accurate, I think those of us who have worked on technology need to just accept this path, and accept the strategy as the only real way to create wealth in the marketplace for founders, shareholders and employees.  The old way to earn it through revenues is really dependant upon how many grants you can get.  As you read their prospectus…most of their revenues came from grants…so I know understand why the VC’s say if you don’t have grant revenues you are not going to get any interest.

     

    Back to the government grant process I suspect…as this is the one of the key drivers to show revenues on the books.

    [link]      
  54. By paul-n on May 28, 2011 at 11:11 am

    Well, At least we know the Solazyme top dogs don’t have to worry about how to pay the rent – they focus, free of unnecessary monetary distractions, on the real business at hand – making investores “believe” they can actually do something.

    we believe that we can profitably enter the fuels and chemicals markets when we commence production in
    larger-scale, built-for-purpose commercial manufacturing facilities utilizing sugarcane feedstock.

    The first boss I ever had – an engineer that made Kit seem like a comedian – said that “believe” is what you do with your religion, a description of “faith”, and has no place in technical writing.  He would only use the word “consider”, because that is what your are supposed to be doing – looking at all the information and considering it in arriving at your conclusion – believe suggests you have your conclusion already and will hold it regardless of information.   Who wants a dam foundation designed by an engineer that starts out their report with “I believe..”

    And utilising sugarcane feedstock?  Hardly seems like something the US has a surplus of?  Maybe this is a prelude to them moving the company to a “sugar cane compatible climate”, like the Caymans?  When then founders have already made all the money they will ever need, without even producing any commercial quantities of product, I am very suspicious.  If they have sold their first born and can only get them back by succeeding, then they have some skin in the game.

    I also think that the government should have a policy of not paying out grants to any company where the CEO, or any employee, gets paid more than the President.  ”we the people” are paying for these guys to produce fuel, not add a wing to the oceanfront mansion.

    [link]      
  55. By Walt on May 28, 2011 at 11:35 am

    Paul N said:

    And utilising sugarcane feedstock?  Hardly seems like something the US has a surplus of?  Maybe this is a prelude to them moving the company to a “sugar cane compatible climate”, like the Caymans?  When then founders have already made all the money they will ever need, without even producing any commercial quantities of product, I am very suspicious.  If they have sold their first born and can only get them back by succeeding, then they have some skin in the game.
    I also think that the government should have a policy of not paying out grants to any company where the CEO, or any employee, gets paid more than the President.  ”we the people” are paying for these guys to produce fuel, not add a wing to the oceanfront mansion.


     

    In the fuels and chemicals markets, we plan to launch a commercial
    facility in 2013 and additional commercial capacity in 2014 and 2015. We
    are currently negotiating with multiple potential feedstock and
    manufacturing partners in the United States and Latin America. For
    example, in December 2010, we signed a non-binding letter of intent with
    Bunge Limited, one of the largest sugarcane processing companies in
    Brazil, to form a joint venture and co-locate oil production at one or
    more of their sugarcane mills, which we believe would provide sufficient
    sugarcane crush to support manufacturing capacity of over 400,000
    metric tons of oil per year. In May 2011, we also signed a joint
    development agreement with Bunge Global Innovation, LLC to solidify and
    extend our relationship with them in Brazil. In addition, we have signed
    a development agreement with Ecopetrol, the largest company in Colombia
    and one of the four major oil companies in Latin America, to evaluate
    manufacturing options based on Colombian sugarcane feedstock.”

    and:

    “Technology proven at scale. We believe that we have produced more
    non-ethanol, microbial-based fuels and oils than any other company in
    the advanced biofuels industry. Since 2007, we have been operating in
    commercially-sized standard industrial fermentation equipment
    (75,000-liter scale) with contract manufacturing partners in
    Pennsylvania and California. From January 2010 through February 2011, we
    produced well over 500,000 liters (455 metric tons) of oil. To satisfy
    the testing and certification requirements of the US Navy, we partnered
    with Honeywell UOP to refine a portion of this oil into over 200,000
    liters (182 metric tons) of military specification marine diesel and jet
    fuel.”

    and:

    “Our Existing Manufacturing Operations:  Since 2007, we have been
    operating in commercially-sized standard industrial fermentation
    equipment (75,000-liter scale) with multiple contract manufacturing
    partners. We believe that we have produced more non-ethanol,
    microbial-based fuels and oils than any other company in the world. From
    January 2010 through February 2011, we produced well over 500,000
    liters (455 metric tons) of oil. To satisfy the testing and
    certification requirements of the US Navy, we partnered with UOP LLC, a
    Honeywell company (Honeywell UOP), to refine a portion of this oil into
    over 200,000 liters (182 metric tons) of military specification marine
    diesel and jet fuel. The Navy then blended our fuel 50/50 with petroleum
    derived fuel, and tested it successfully in unmodified engines,
    including the test performed on our HRF-76 marine diesel in the Riverine
    Command Boat Experimental in November 2010. In December 2009, we were
    awarded an approximately $22 million “Integrated Bio-Refinery” grant
    from the US Department of Energy (DOE) which allows us to develop
    integrated US-based production capabilities for renewable fuels and
    chemicals derived from microalgae. In May 2011, we purchased a
    development and commercial production facility with multiple
    128,000-liter fermenters, and an annual oil production capacity of over
    2,000,000 liters (1,820 metric tons) located in Peoria, Illinois (the
    Peoria Facility). Our integrated biorefinery funded by the DOE grant
    discussed above will be located at the Peoria Facility. Additionally, we
    have completed detailed engineering designs for large commercial plants
    to service our fuels and chemical markets, developed in conjunction
    with Engineering, Procurement and Construction (EPC) firms Jacobs
    Engineering Group Inc. and Burns & McDonnell Engineering Co., Inc.”

     

    We also applied for that grant to grow Algae.  Our denial was $11 million compared to their awarded $22 million.  It would be very interesting how they acually designed an “integrated biorefinery” unless they have the feedstock in Brazil and the plant in Brazil.  The grant required that we integrate the feedstock into the refinery as I recall rather than bring the feedstock from a third-party source.

     

    I think there real success is in their ability to scale up the technology, source their feedstock from Brazil and also to go after HIGH VALUE products:

     

    On page 2 they have a chart which shows they can sell their product for Fuels at $1,000 to $2,300 per MT, Chemicals at $1,800 to $5,000 per MT, Nutriton at $2,500 to $20,000 per MT and Skin & Personal Care at $20,000 to $1 million per MT.

     

    This all makes sense to me and really helps me reconsider our own financial model.  We priced everything out at sales prices of $250.00 per MT and at the same time tried to scale “down” not scale “up” to make it attractive.  I think I was too conservative since both methanol and formalin can be used as intermediary chemicals without any technology risk.  Their plans shows how they use their base oil to make fuels, chemicals, nutriton and skin/personal care products.  This makes sense…and now with those sales price targets it is very possible to make money.

     

    Very interesting document I must admit.  It has opened my own eyes as to everything we have been doing wrong.  Trying to push the importance of the technology is stupid…trying to scale down to the back of a truck is stupid…trying to sell methanol at less than $200 per MT is stupid.  This document clearly shows there is a much better way to show profits…and be guaranteed revenues by the Government Grants.

    [link]      
  56. By Walt on May 28, 2011 at 12:13 pm

    Paul N said:

    And utilising sugarcane feedstock?  Hardly seems like something the US has a surplus of?  Maybe this is a prelude to them moving the company to a “sugar cane compatible climate”, like the Caymans?  When then founders have already made all the money they will ever need, without even producing any commercial quantities of product, I am very suspicious.  If they have sold their first born and can only get them back by succeeding, then they have some skin in the game..


     

    The risks section helps explain the technology limitations and competitors.  It seems if they have a low cost supply of sugar based feedstock, they will be a true leader in the advanced biofuels market.  Sugarcane like corn might be an issue as a food product in the future, but they could argue that they are using food based feedstocks to make food products and not fuels.  I think they are insolated from too much criticism.

     

    —————————–

    “Future government policies may adversely affect the supply of
    sugarcane, corn or cellulosic sugars restricting our ability to use
    these feedstocks to produce our oils, and negatively impact our revenues
    and results of operations.”

    and:

    “We expect to face competition for our oils in the fuels and chemicals
    markets from providers of products based on petroleum, plant oils and
    animal fats and from other companies seeking to provide alternatives to
    these products, many of whom have greater resources and experience than
    we do. If we cannot compete effectively against these companies or
    products we may not be successful in bringing our products to market or
    further growing our business.

    We expect that our oils will compete with petroleum, plant oils and
    animal fats currently used in production of conventional fuel and
    chemical products. Our oils may also compete with materials produced by
    other companies producing advanced biofuels and from producers of other
    renewable oils such as jatropha, camelina, and other algal oils.

    In the transportation fuels market, we expect to compete with
    independent and integrated oil refiners, large oil and gas companies and
    in certain fuels markets, with other companies producing advanced
    biofuels. The refiners compete with us by selling conventional fuel
    products, and some are also pursuing hydrocarbon fuel production using
    non-renewable feedstocks, such as natural gas and coal, as well as
    production using renewable feedstocks, such as vegetable oil and
    biomass. We also expect to compete with companies that are developing
    the capacity to produce diesel and other transportation fuels from
    renewable resources in other ways. These include advanced biofuels
    companies using specific engineered enzymes that they have developed to
    convert cellulosic biomass, which is non-food plant material such as
    wood chips, corn stalks and sugarcane baggase into fermentable sugars
    and ultimately, renewable diesel and other fuels. Biodiesel companies
    convert vegetable oils and animal oils into diesel fuel and some are
    seeking to produce diesel and other transportation fuels using
    thermochemical methods to convert biomass into renewable fuels.

    In the chemical markets, we will compete with the established providers
    of oils currently used in chemical products. Producers of these
    incumbent products include global oil companies, including those selling
    agricultural products such as palm oil, palm kernel oil, castor bean
    oil and sunflower oil, large international chemical companies and other
    companies specializing in specific products or essential oils. We may
    also compete in one or more of these markets with manufacturers of other
    products such as highly refined petrochemicals, synthetic polymers and
    other petroleum-based fluids and lubricants as well as new market
    entrants offering renewable products.

    We believe the primary competitive factors in both the fuels and
    chemicals markets are product price, product performance,
    sustainability, availability of supply and compatibility of products
    with existing infrastructure.

    The oil companies, large chemical companies and well-established
    agricultural products companies with whom we expect to compete are much
    larger than we are, have, in many cases, well-developed distribution
    systems and networks for their products, have valuable historical
    relationships with the potential customers we are seeking to serve and
    have much more extensive sales and marketing programs in place to
    promote their products. Some of our competitors may use their influence
    to impede the development and acceptance of our renewable products. Our
    limited resources relative to many of our competitors may cause us to
    fail to anticipate or respond adequately to new developments and other
    competitive pressures. In the nascent markets for renewable fuels and
    chemicals, it is difficult to predict which, if any, market entrants
    will be successful, and we may lose market share to competitors
    producing new or existing renewable products.”

     

    That is all on this topic.  A fascinating read for sure.

    [link]      
  57. By Kit P on May 28, 2011 at 2:53 pm

    “which I think does more to inform people than any of your explanations have.”

     

    I had no problem finding actuate information for those who want to be well informed. I am just pointing out that that concerns are base on bad information. RR is progressively getting better as he does more research but still he is just misinforming people.

     

    The mistake RR is making is not understand the relative levels of radiation. It is difficult to downplay the tiny amount of radioactivity that reached Hawaii. It only seem like I am down playing exposure because the fear mongers trade on ignorance.

     

    “Being exposed to 3 or 4 times the MCL on a short term basis is analogous to getting a chest X-ray, while the MCL is analogous to getting two chest X-rays a day for the rest of your life. ”

     

    No this is not correct on many levels.

     

    “For example, a hyperthyroid problem such as that experienced by former President George Bush is typically treated with a radioactive iodine drink designed to deliver about 10,000,000 millirems of radioactive iodine to the thyroid. It would coincidentally deliver a dose to the rest of the body of about 20,000 millirems.”

     

    http://web.mit.edu/newsoffice/…..-0105.html

     

    People routinely get very large exposure compared to the safety limit for radiation workers which is 5000 mrem/yr.

     

    “10-Annual increase due to daily use of salt substitute (potassium chloride) or eating a diet heavy in such potassium-rich foods as bananas and Brazil nuts. Potassium is an essential dietary element that is present mostly in the muscles.”

     

    Milk drinkers get more radiation than non milk drinkers.

     

    “2-One chest X-ray (the whole body equivalent). A typical X-ray exposes the chest to a dose equal to 20 millirems at the entrance and 1 milliRem at the exit. Averaging this exposure over the whole body yields a whole body equivalent of about 2 millirems. ”

     

    So two chest x-ray a day would be about a 1,000 mrem a year which exceeds limits for non-radiation workers. The only analogy is other exposure to penetrating radiation.

     

    “12-Coast-to-coast US round trip flight in airplane at 35,000 feet of altitude. ”

     

    Of course there is not safety limit for the number of x-rays of airplane trips. Applying rules for nuke plants would shut down the air line industry. The radioactive contamination of the wings is screaming hot.

     

    Determining limits for ingesting radioactive material is much more complex than penetrating radiation. In my last post I provided the link to the EPA web site. MCL for:

     

    “Radium 226 and Radium 228 (combined) = 5 pCi/L

    Uranium = 30 ug/L”

     

    The first thing RR ignored is that the MCL for uranium is based on toxicity and not activity. Uranium is heavy metal.

     

    The next thing RR ignored is that there is no MCL for rain water. We do not drink rainwater. There is an inconsistency between EPA web sites but the basis of the limit is 4 millirems per year. This is not a 1000 mrem.

     

    If you are going to drink rainwater, you may want to sample for pathogen bacteria.

     

    “there is no separate limit for milk ”

     

    Yes, and I provided the link. The sampling milk for I-131 because it was detected in rainwater for which there is not limit.

     

    The result show that no safety limits were exceeded. My ordinal statement is correct and very accurate. RR over the course of the discussion moved the goal post to ‘being ‘informative’ based on RR opinion.

     

    In any case I am glad that RR final agrees. RR wrote,

     

    “the actual radiation exposure is quite low. ”

     

    Actually very, very, very, very, very, very, very, very, very low. It is hard to down play how low it is.

     

     

    [link]      
  58. By mac on May 28, 2011 at 7:06 pm

    I assume that it is not “illegal: or “against the law” to post humorous comments on R-Squared.

    With that in mind, here is a humorous ad from Nissan

    http://www.youtube.com/watch?v…..E&NR=1

    [link]      
  59. By Walt on May 28, 2011 at 8:34 pm

    http://www.therepublic.com/vie…..l-Ethanol/

    ABERDEEN, S.D. — An ethanol plant in northern South Dakota is selling its product in Brazil.

    Glacial Lakes Energy at Mina said it has shipped about 25 million gallons to Brazil since late March.

    CEO Jim Seurer (SYR) told the American News that sales
    opportunities have opened up in Brazil because of a poor sugar cane
    crop. He said sugar cane is the main ingredient in what is a very
    developed ethanol industry in Brazil.

    The ethanol is shipped by rail to a Texas port and then loaded on a tanker ship.

    ——————————————-

    In the fuels and chemicals markets, we plan to launch a commercial
    facility in 2013 and additional commercial capacity in 2014 and 2015. We
    are currently negotiating with multiple potential feedstock and
    manufacturing partners in the United States and Latin America. For
    example, in December 2010, we signed a non-binding letter of intent with
    Bunge Limited, one of the largest sugarcane processing companies in
    Brazil, to form a joint venture and co-locate oil production at one or
    more of their sugarcane mills, which we believe would provide sufficient
    sugarcane crush to support manufacturing capacity of over 400,000
    metric tons of oil per year. In May 2011, we also signed a joint
    development agreement with Bunge Global Innovation, LLC to solidify and
    extend our relationship with them in Brazil. In addition, we have signed
    a development agreement with Ecopetrol, the largest company in Colombia
    and one of the four major oil companies in Latin America, to evaluate
    manufacturing options based on Colombian sugarcane feedstock.”

    http://www.sec.gov/Archives/ed…..7/ds1a.htm

    ——————————————

    This looks like the perfect storm for Brazil.  They can import Ethanol from America to replace their short position.  The sugarcane be used to make a far higher value algae oil for jet fuel, diesel, chemicals, etc.  The sugar cane is worth much more in Brazil for higher value fuels and chemicals.

     

    I can see how this technology could be a perfect fit for Brazil even in a situation where they are short covering their own ethanol demands.

    [link]      
  60. By mac on May 28, 2011 at 8:34 pm

    Another hilarious ad from Renault:

    http://www.youtube.com/watch?v…..r_embedded

    [link]      
  61. By mac on May 28, 2011 at 9:20 pm

    All of these great, long and dragged out arguments about bio-fuels, synthetic replacements for gasoline, etc., all rest on the assumption that we are are going to forever continue with the internal combustion engine.

    Once you take the ICE out of the picture, many (if not most) of the problems go away.

    [link]      
  62. By mac on May 28, 2011 at 10:32 pm

    Sound familiar? When I first started to hear the camelina hype, I thought to myself “Do we ever learn, or is it just embedded in our DNA to hang our energy future on miraculous energy solutions?”

    As oil depletion rates increase, just exactly what is your alternative ? ‘Other than, “Drill, Baby, Drill:

    [link]      
  63. By rrapier on May 28, 2011 at 11:21 pm

    mac said:

    As oil depletion rates increase, just exactly what is your alternative ? ‘Other than, “Drill, Baby, Drill:


     

    How long have you been posting here now? I have suggested many different alternatives many different times; alternatives that aren’t based on pixie dust. But it is important to keep in mind that all problems don’t have tidy solutions.

    RR

    [link]      
  64. By mac on May 29, 2011 at 12:03 am

    Look Robert,

    I don’t have time to search back through R-Squared archives

    (and neither does any-one else)………………To find out your solutions to the energy crisis. So, please list your theories in descending order of magnitude,

    (as a refresher course, please)

    We might start with GTL or CTL, etc.

    [link]      
  65. By rrapier on May 29, 2011 at 1:01 am

    mac said:

    Look Robert,

    I don’t have time to search back through R-Squared archives

    (and neither does any-one else)………………To find out your solutions to the energy crisis. So, please list your theories in descending order of magnitude,

    (as a refresher course, please)

    We might start with GTL or CTL, etc.


     

    Well, I do cover these themes on a continual basis. So unless you only started posting in the last couple of weeks — and I know it’s been longer than that — I would have thought you would have had a pretty good idea of my positions. Start here:

    http://www.consumerenergyrepor…..gy-issues/

    RR

    [link]      
  66. By Kit P on May 29, 2011 at 10:22 am

    “To find out your solutions to the energy crisis. ”

     

    What crisis? People with energy OCD often label a something as a ‘crisis’ that engineers would call a problem to be worked out in the context of the bigger goal.

     

    When it comes to combat ships and aircraft there is just no substitute for having superior weapons. Whatever it costs, be the best. Therefor combat ships and aircraft are very expensive to buy and maintain. Think of it this way before attacking the US with nuclear weapon your destruction is assured unless you can take out every nuke sub and aircraft carrier. No one can do that and I have not started talking about the air force.

     

    Superior weapons are just paper weights without the best trained soldiers and sailors. Put a few US marines on the line against a massively superior numerical force and they will stand the line. They will not die because that massively superior numerical force knows that a nuke aircraft carrier and the air force will destroy them in 48 hours. Expensive yes, but most of the well trained come home and return that investment to the community.

     

    So when you look at the cost and reliability of sources of fuel for the military it is an important consideration but not a crisis.

    [link]      
  67. By Walt on May 30, 2011 at 10:23 am

    I was looking for Bunge in Brazil as I had not heard of them before…I see they are a major player.  I know all the other names on the list from my work in Russia and other developing markets, but never heard of Bunge.

     

    Top ten global oil and commodities traders

    Key facts and figures about 10 secretive giants that control hundreds of billions of dollars worth of the world’s commodities.

    http://www.telegraph.co.uk/fin…..aders.html

    [link]      
  68. By art on June 1, 2011 at 6:00 pm

     

     

    Hi Walt

     

     

    Walt said:

     

    I am not able to find the bill you referenced above.  It would be helpful to me if you had a link.  I found this bill introduced this week.  Is this the one you are referencing?

     

    http://epw.senate.gov/public/i…..Print=true

     


    >> yes this is the bill, any comments or explainations how to read this kind of bills in terms of effects are welcome, coming from EU i always have hard times to asses  whether a billa in the US.   will it be truely meaningfull or just a political correct statement with no impact…

    europe is always 10 years behind in many ways so i suspect the subsidized agricultural sector wil lobby and turn to ethanol.. if not now then in the future..then this kind of legislation may turn up later on in europe as well..

    [link]      
  69. By Walt on June 1, 2011 at 6:45 pm

    art said:

     Hi Walt

      Walt said:

     

    I am not able to find the bill you referenced above.  It would be helpful to me if you had a link.  I found this bill introduced this week.  Is this the one you are referencing?

     

    http://epw.senate.gov/public/i…..Print=true

     


    >> yes this is the bill, any comments or explainations how to read this kind of bills in terms of effects are welcome, coming from EU i always have hard times to asses  whether a billa in the US.   will it be truely meaningfull or just a political correct statement with no impact…

    europe is always 10 years behind in many ways so i suspect the subsidized agricultural sector wil lobby and turn to ethanol.. if not now then in the future..then this kind of legislation may turn up later on in europe as well..


     

    Hi Art, I think it is pending legislation from what I see, but I agree it will broaden the definition.  I assume it is really the algae lobby behind the push since it looks like methanol will not be part of the solution.  We recently saw here in Silicon Valley a algae oil company go public and make the clean tech world over here all excited.  I suspect with the money that is going into algae companies now, this legislation will pass soon.

     

    Thanks for the source of info!  I would say the EU is slow, but they are definitely leading in the carbon areas and pushing some legislation to get taxes on fuel usage and the carbon footprint of those fuels.  I must say I have more interest in methanol from some major companies in europe, but they keep wondering if the US congress will pass the open fuel standards act.  From overseas, that seems to be the legislation that some possible big fuel players are watching…and it seems it is getting more traction and lobby support (from who I do not know), but let’s see.  Maybe when that passes it will be a game changer here.  On Thursday I am meeting with a local installer of ethanol blend pumps at both private and corporate owned stations that wants to fill me in on “major news”.  So let’s see what he is hearing…it is not the grant money going to stations to install more E-85 pumps.  That I understand was really only for the big box stores who want more money to add the pumps.  The small guys are not going to see any of that money.  Something else might make methanol “possible” in America again.  I hope so.

    [link]      
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