Tag Archives: america
Burn The Forests, Save The Planet?
Good news for the American logging industry: Timber is back, with an assist from Europe’s anti-carbon crusade. Across the forests of East Texas and deep in the Florida swamps, trees are in rising demand as “biomass” to help utility companies in Europe meet their targets for so-called “renewable energy.” That basically includes everything except nuclear and fossil fuels—even wood pellets, made from compressed sawdust or trees run through a chipper. Last year, Europe imported more than 1.7 million tons of these pellets from America, for a market that the U.S. International Trade Commission describes as having been “virtually nonexistent” in 2000. Back then, Europeans still hoped they could meet much of their 2020 carbon-cutting and “renewable” goals with wind, solar and other more fashionable fuels. That hope proved unrealistic, even before austerity budgets started shaving subsidies from these perpetually emerging industries. In a 2003 directive, the EU put biomass on a list of fuels to subsidize and exempted it from carbon capping and taxing. Never mind that burning compressed wood—a leading source of “biomass”—usually produces less energy per kilo of CO2 than does coal. The EU’s emissions accounting follows the logic that in the long run we’re all biomass: Forests can regrow and reabsorb CO2, so their combustion is not only renewable but “carbon neutral.” European utilities generating wood-fired electricity have since 2005 been eligible for credits, which they can sell to companies overrunning their CO2 quotas. The only hitch is that land-use and conservation rules in most European countries make it either illegal or prohibitively expensive to clear-cut trees for industrial processing. Solution? Use wood from America. U.S. lumber consumption is still recovering from the housing crash. The Internet has also reduced demand for paper pulp and disrupted the economics of logging. Europe’s anti-carbon regime has reversed these trends by creating a whole new market for timber products. Europeans imported wood waste, scrap and pellets at $140 per metric ton in 2011, the Trade Commission reports, up from $52 in 2001. Producers are still ramping up capacity to meet European demand, which could easily double in the next decade if governments stay the regulatory course. Last week, Maryland-based Enviva, whose clients include German utility giant E.ON , EOAN.XE -0.15% announced that its new 500,000 metric-ton pellet plant near the Roanoke River is in full operation. Supposed conservationists in the Obama Administration have been following Europe’s lead. The Environmental Protection Agency has so far exempted biomass emissions from CO2 tallies, and since 2009 the Department of Agriculture has doled out millions in small loans and grants for wood pellets and other “advanced biofuels.” Some advance. The industrial revolution was fueled by a shift to higher-energy fuels like coal and, later, petroleum. Modern power plants and pellets mean wood can be burned more efficiently than 200 years ago, but it will still take an awful lot of forests to make this great leap backward. Remember when logging was bad for the environment? This Europe-driven wood-pellet boom is another reminder that the obsession with CO2 creates indifference to other environmental considerations. Continue reading
Sugar Seen Dropping Before Brazil’s Ethanol Demand Gains
By Chanyaporn Chanjaroen and Isis Almeida May 30, 2013 Sugar may drop to a low in three to four months before rebounding as millers in top producer Brazil direct more cane to ethanol at the sweetener’s expense, according to RCMA Commodities Asia Ltd. The millers will use 45 percent of their crop for making sugar, estimates Kingsman SA, a unit of McGraw-Hill Financial Inc. ( MHFI )’s Platts. That’s down from a previous forecast of 47.5 percent and from 49.5 percent a year earlier. Brazil said last month it will give producers tax breaks to raise ethanol output, making the biofuel more competitive against gasoline and lifting domestic consumption. Rising demand and lower beet planting in Europe may also support sugar’s recovery, RCMA says. “The question is when does the market bottom, when does it form an end to the cycle?” Jonathan Drake, chief operating officer at RCMA, said in an interview in Singapore last week, referring to sugar. “And probably that’s still in three or four months’ time. In 60 to 90 days’ time, we will see an increase in the hydrous ethanol consumption. The only question is that, is it enough?” Sugar prices fell 14 percent in New York this year and reached a 34-month low on May 23 as supplies are set to outpace demand by a record 10 million metric tons in the 2012-13 season that started in October in most countries, the International Sugar Organization in London estimates. Prices also retreated in the past two years and a third annual decline would mean the longest price slump since 1992. Ethanol sales in Brazil’s center south climbed 24 percent to 920.9 million liters (243 million gallons) in the first half of May, Sao Paulo-based industry group Unica said this week. Ethanol demand will continue to rise as the biofuel has now become more attractive to consumers compared with gasoline, Antonio de Padua Rodrigues, Unica’s technical director, said in a statement e-mailed on May 28. Flex-Fuel Cars The price of hydrous ethanol, the 100 percent biofuel used in Brazil’s flex-fuel cars, may need to fall to about 1,100 reais ($530) a cubic meter without taxes to ensure maximum consumption, Drake said. The biofuel is currently trading at about 1,250 reais a cubic meter (35 cubic feet), Drake said. Maximum consumption of hydrous ethanol will happen when the biofuel’s price is 60 percent of gasoline’s, he added. “If the price is right, Brazil can consume all the sugar surplus in eight months,” Drake said, referring to the price of hydrous ethanol. “If the price is not right, then we still have all this surplus. The big, big thing for the sugar market is to see after a couple of months whether motorists in Brazil have increased the consumption of hydrous ethanol significantly.” Ethanol Prices Hydrous ethanol prices in sugar equivalent are about 17.5 cents a pound, Patricia Luis-Manso, head of agriculture research at Kingsman, said in a separate interview in Singapore on May 27. That represents a premium of 4.5 percent over the raw sugar futures traded on ICE Futures U.S. in New York. “If the premium persists through October, which is the majority of the current season, that would be enough incentive to decrease the sugar mix in favor of hydrous ethanol production,” Luis-Manso said, adding that the company’s current forecast for the amount of cane directed to sugar production could still fall to 42 percent from 45 percent now. Sugar prices will also recover as demand increases by about 3.5 million to 4 million tons a year and production in some sugar-beet producing countries drops, Drake said. In Europe, cold weather delayed plantings, causing output to fall 600,000 tons from a previous forecast to 16.9 million tons, Kingsman estimated on May 24. Production in Russia will be five percent smaller at 4.35 million tons in 2013-14, the researcher said. European Plantings “In Europe, the plantings will be down, production will be a little bit down, partly because of the weather,” Drake said. “North America is the same issue. Even in places like Russia and the Ukraine, plantings will be lower. So beet sugar in general next year will have, it’s too early to know, but maybe several million tons less sugar.” Weather in cane-producing countries may not be as favorable for crop development, according to Drake. Production in India, the world’s second-biggest grower, will fall to 22.2 million tons in 2013-14 on dry weather, Kingsman estimated. That is down from 24.8 million tons now. To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net. Continue reading
First Grant Recipients Named Under DOD Advanced Biofuels Program
Taylor Scott International Continue reading
