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April 2008

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Business Briefs

VeraSun, U.S. BioEnergy move corporate offices

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PART 1 Written by Kris Bevill, Hope Deutscher, Timothy Charles Holmseth, Marc Hequet, Jessica Ebert, Bryan Sims, Susanne Retka Schill and Craig A. Johnson

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Back To Reality

By Ron Kotrba and Anduin Kirkbride McElroy

After the gold rush mentality of 2006, ethanol project developers are facing the harsh realities of fluctuating commodity prices, a struggling economy and scarce capital. Some proposed projects are dropping out, but excellent projects are still getting funded.

For most of its history, the ethanol industry was dominated by small plants owned by farmer cooperatives and limited liability companies. These pioneering efforts were boosted by the Farm Credit System, which looked at the industry as part of its mandate to help farmers expand their markets. When the industry began to boom, Wall Street and commercial banks started putting a lot of money into the ethanol industry. But with a looming credit crisis, is it time for the FCS to again take the lead in financing growth in the industry?

PART 2 By Kris Bevill, Hope Deutscher, Timothy Charles Holmseth, Marc Hequet, Jessica Ebert, Bryan Sims, Susanne Retka Schill and Craig A. Johnson

OK, so you've raised $100 million to build your ethanol refinery that was to be an outlet for struggling farmers, a boon to the local economy and a reducer of greenhouse gases. You spent years fundraising. You sold your soul and your proprietary technology to lenders. You paid a fortune for lawyers to get you through the due diligence, permitting and political hurdles. You're finally ready to break ground or you already have. Then, cue the music from "Jaws." Here come the plaintiffs.

The Minnesota Corn Growers Association produced a book about the rise of ethanol production in the state and what's commonly referred to in the industry as the "Minnesota model." The book includes interesting anecdotes and insights into the behind-the-scenes activities that took place during ethanol's early years.

Laslo Marton, left, and fellow researcher, Mihaly Czako, are dwarfed by the Arundo donax canes they are studying for biomass energy and phyto remediation.

The Risk of Biomass Invasion

By Susanne Retka Schill

Arundo donax, commonly known as giant reed, has tremendous potential as a biomass crop. It also illustrates the emerging issues around the potential for unintended weedy invasions.

Taconi holds a culture flask of anaerobic bacteria. She is researching organisms that will ferment glycerin into other valuable chemicals.

Grow It on Glycerin

By Jerry W. Kram

Seventy-five percent of U.S. oranges are grown in Florida. The sunshine state's citrus processing industry produces nearly all of the orange juice consumed in the country, resulting in up to five million tons of citrus waste each year. Options for turning that waste into something useful are limited, so the possibility of using citrus waste as a feedstock for ethanol plants is being closely monitored.

Plastics permeate every facet of modern industrial life, so what can be done with that material after it has served its useful purpose? Alternative energy sources are increasing in popularity but one such potential alternative-plastic-is contentious.

Whether it's going mobile with technology for producing biomass briquettes or aligning with a major mining operation eager to reduce its coal use, two U.S. companies describe their efforts to grow their biomass briquetting businesses.

Seeing the Forest for the Trees

By Timothy Charles Holmseth

Joann (Tink) Birchem is a Minnesota logger and wood pellet manufacturer whose goal is to see wood-pellet furnaces used as the primary source of heat for Minnesota and the Dakotas. With the rising price of fuel she believes it's a matter of economics that will soon be unavoidable.

Cellulosic ethanol plants will have to be located close to feedstock supplies. An extra 50 miles can add more than $6 a ton to feedstock costs.

Managing Woody Biomass

By Jerry W. Kram

The renewable fuels standard will require the production of more than 15 billion gallons of cellulosic ethanol in the coming years requiring millions of tons of biomass. Moving that biomass from the fields and forests will be a logistical challenge. Some companies are gearing up to meet that challenge.

Backed by a solid vision and a wealth of ingenuity and experience in the wood products industry, Forest Concepts LLC is poised to revolutionize the way wood products are manufactured and distributed within the wood-based biomass industry.

Organizing Biomass Farmers

By Susanne Retka Schill

Biomass projects probably won't follow a cookie-cutter approach. The lay of the land, the existing farm structure and transportation system will make each future biomass project unique.

In national forests from Arizona to Montana, thousands of slash piles left by the timber industry could be used to produce cellulosic ethanol. Before that can happen, the language in the Energy Bill must be changed.

Jim Taylor is living his version of an old saw: Every man's trash is his treasure. New York-based Taylor Biomass Energy LLC recycles construction and demolition debris, waste wood and municipal garbage to feed a revolutionary biomass gasification system. His system uses hot circulating sand to heat the feedstock and convert it into a synthesized fuel gas, which powers a high-efficiency turbine or generator.

Nikhil Patel, research scientist at the EERC, works on a bench-scale thermally integrated biomass gasifier.

Is Biomethanol in Biodiesel's Future?

By Anduin Kirkbride McElroy

Biomethanol could offer biodiesel producers the opportunity to be free of fossil fuels. And production cost and timing may be better than previously thought.

Jobe called for the biodiesel industry to set its course by navigating by the light of the stars rather than by the light of passing ships.

Plotting a Safe Landing in CHALLENGING TIMES

By Ron Kotrba, Jerry W. Kram and Susanne Retka Schill

Perseverance, sustainability and alternatives were three broad themes of the 2008 National Biodiesel Conference & Expo in Orlando, Fla., in early February, as the industry adapts to changing market, agricultural and ecological dynamics.

Florida has a bustling biodiesel industry and a number of major companies have made strong commitments to use the renewable fuel. Three of those companies were featured presenters and were recognized for their use and promotion of biodiesel at the National Biodiesel Conference & Expo in Florida. Photos and story by Jerry Kram.

Feedstocks, and better yet, sustainable feedstocks, were hot topics at the National Biodiesel Conference & Expo.

The Fourth Hour

By Ron Kotrba

Select speakers at the National Biodiesel Conference discussed ways to expand market and transport options for U.S. biodiesel while keeping a close eye on quality, all in the attempt to gain acceptance in the mainstream petroleum infrastructure.

University of Arkansas researchers find that using supercritical methanol in the biodiesel production process could alleviate some of the challenges to the cost-competitive production of the fuel.

Tom Davanzo should be angry. In 2007, his burgeoning biodiesel empire slid into an agonizing death spiral, then bankruptcy. Now he's being kicked out of bankruptcy court because he doesn't have any money. He can't even raise exit financing. What happened? To sum it up: feedstock prices gone through the roof, fickle financiers, razor-thin capitalization of projects if you can corral a financing package, brutal construction costs, you name it. Yet Davanzo emerges from the ashes with cautious optimism. "I'm an entrepreneur," he says. "I'll be back."

A new documentary featuring biodiesel recently made waves at the Sundance Film Festival where it received standing ovations after every sold-out screening. Plans are in the works to distribute the film on a national level later this year.

Stabilizing Biodiesel Blends from Multiple Feedstocks

By Emily Schneller and Vincent Gatto

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