I haven't posted as much recently, but not for lack of interesting news items. Here are three bits from the last day or so:
First, Darren Goode reports for Congress Daily (subscription required) that Rep. Dingell thinks that a CAFE compromise can be reached between the House and the Senate and:
Dingell also recommended that EPA -- not the Energy Department -- administer a Senate renewable fuels mandate. He also wrote that "appropriate safeguards" must address the effect ethanol production has had on food production and the environment since corn-based ethanol was a centerpiece of that 2005 mandate.
Second, Grist picked up on an article from Bloomberg News Service claiming that corn ethanol was "2007's worst energy investment." The article is interesting for a verity of reasons. There's no doubt that the corn ethanol market is experiencing a shake out. In the end, I suspect this will be good for the industry just as internet-base business has roared along since the bubble burst of 2002. (I've written about the alternative here.) The article does a so-so job of explaining why the shakeout is happening. Yes capacity is up, ethanol prices are down, and corn prices are higher than they have been recently. But with oil and gasoline prices at or near record highs and the corn crop near expectations and a bumper harvest, why are ethanol prices down and corn prices up? With ethanol prices around $1.86 per gallon before the $0.54 tax credit (the equivalent of about $2.03 per gallon of gasoline after the tax credit) and gasoline spot prices in the $2.46 and $2.65 range, why is ethanol demand down? Infrastructure and oil company intransigence seem like logical explanations, but I haven't seen any good reporting trying to real explain what's up. Instead, like in the Bloomberg article, we get David Pimentel's silliness about negative energy balance recycled.
Third, Mike Millikin of the Green Car Congress and Biopact report that Syntroleum Corp has recently received $12 million in equity investment toward its planned $135 million 75 million gallon per year facility. What I find most interesting about this is that the project will produce biomass derived alternative diesel fuel, so called renewable diesel. In other words, it won't be producing biodiesel, which is made through the FAME process from vegetable and animal lipids. There's interest in some quarters in adding a biodiesel requirement to the RFS currently being debated in Congress. I actually can see the logic behind saying that a certain percentage of the RFS should serve the needs of the diesel (and jet fuel) market--after all trucks, trains and planes need low-carbon fuels too (see this little snippet on Lord Branson's efforts along these lines). However, I would oppose a specific mandate for biodiesel, which this Syntroleum project shows is just one path to serving the diesel market and one that is inherently limited by the quantity and cost of vegetable and animal fat. The interesting challenge if Congress decided to do a "diesel market" percentage is how fast should the requirement grow. Too fast and the requirement is effectively just a biodiesel requirement because there will be limited alternatives for a while now. (Syntroleum's project isn't even planning to come on line until 2010.) Too slow and it won't do much of anything to speed up development.