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March 2007

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Business Briefs

Four companies form Anhydro Group

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Columns

View From the Hill

By Bob Dinneen

The Way I See It

By Mike Bryan

Eustermann

Dealing with Risks in Ethanol Plant Development

By Randy Shefman and John Eustermann

Roek

Legal Perspective

By Todd Guerrero and Katherine Roek

Editor's Note

By Tom Bryan

NBB In Sight

By Myron Danzer with contributions from Brad Albin, Matt Schultes and Tim Sullivan

Featured

The Great Plains Synfuels Plant near Beulah, N.D., is an example of an unproven technology that was made possible by a combination of equity and federally guaranteed loans.

Risk & Reward

By Michael Shirek

Technological breakthroughs have led to big efficiency gains in the ethanol industry, but the perceived failure rate of novel processes is a financial risk few lenders are willing to accept without supplementary backing or enticing variables.

Ethanol plant project development is an increasingly complicated process as the price of everything from concrete to heat exchangers has skyrocketed. That inflation is eating into builder profits, and it has some potential ethanol producers taking a hard look at their project's bottom line.

Ethanol plant developers should be able to find ample equity for sound, well-managed projects. Nevertheless, the structures upon which to build equity are still being tweaked.

The investment surge that infiltrated the ethanol industry 18 months ago brought with it an expanded repertoire of chic finance options. As the smoke from that intense period clears, however, it's evident that Midwest farm banks didn't forfeit their power position in U.S. ethanol plant finance.

Can corn production keep up with the demands of the growing ethanol industry? The NCGA?s Richard Tolman believes that growers will plant more corn as long as the price is right.

Pressure Point

By Craig A. Johnson

Will the rising demand for corn drive prices high enough to limit ethanol production? Will crude oil remain in the $50 to $60 per barrel range—or will it go even lower? Will ethanol prices inevitably dip to historical lows as the industry build-out continues? The answers to these critical questions are expected to shape the U.S. ethanol industry's near-term growth.

U.S. ethanol companies clearly have their work cut out for them in the United States. That's not keeping some from setting their sights abroad. EPM talks to some ethanol industry experts about what it takes to expand into foreign countries.

Obtaining the permits necessary to build an ethanol plant may require the equivalent of jumping through hoops, climbing over walls and walking balance beams. For developers, sufficient preparation and the right "trainer" can mean the difference between a run-around and a run-through.

There's a new Congress in town and power has shifted from the Republicans to the Democrats. Although no bills have passed yet, it seems ethanol will continue to enjoy lavish attention from both sides of the political aisle and the White House.

The Volvo Group is preparing for its commercial production launch of diesel-electric hybrid technology for heavy-duty applications-a launch the U.S. Air Force helped fuel.

Vijayendran

The Poly-Refinery Plan

By Nicholas Zeman

The Ohio Soybean Council and the Battelle Memorial Institute are working together in the Buckeye State's capital city to pioneer new uses for soybean oil and glycerin. Researchers tell Biodiesel Magazine that polyol demand, and the ability of the compound to produce coatings, polymers and other materials provides a vast value-added stream for the biodiesel by-product.

Rahkamo

Heeding Hydrogenation

By Susanne Retka Schill

Neste Oil aims to become to biodiesel what Nokia is to mobile phones. The Finnish firm has developed a proprietary process that produces a premium diesel from animal fats or vegetable oils. Just what is NExBTL, and who is Neste Oil?

Minnesota Prairie Line Inc. began using B2 in its locomotives in 2005 and now uses blends up to B10.

Railroad Switch

By Anduin Kirkbride McElroy

Railroad companies have been slow to embrace biodiesel as a fuel for locomotives. Once the U.S. EPA's low-sulfur diesel ruling takes hold in June, however, the industry may be more apt to make the switch.

Similar to the growth pattern of the plant itself, interest in developing jatropha as a feedstock for biodiesel production is growing like a weed. The contracts that have been penned between companies like U.K.-based D1 Oils PLC and farmers in India and Africa are stimulating agricultural communities in some of the poorest nations in the world.

Students at the Engine and Energy Conversion Laboratory load the initial algae culture into the photobioreactor.

Algae on the Edge

By Jerry W. Kram

The National Renewable Energy Laboratory's Aquatic Species Program identified about 300 species of algae that have the potential to produce thousands of gallons of biodiesel per acre. Researchers and entrepreneurs are on the cusp of bringing this promising technology to commercial production.

Contributions

Survey Says: U.S. Drivers Want More Ethanol

By Amy George and Mike Bounama

2006 Review and 2007 Outlook: Equity and Debt Capital Markets Activity

By Thomas Halverson, Christopher Flannery and Eric Pe

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