Panda Ethanol Inc., Dallas, was granted an air permit for its proposed ethanol refinery in Muleshoe, Tex., that is to be fueled by cow manure.
“Unlike other ethanol facilities which burn natural gas to generate the steam used in the ethanol manufacturing process, the Muleshoe facility will be engineered to gasify up to 1 billion lb of cattle manure per year,” said company officials. By doing so, they said, “Panda is both conserving the energy equivalent of 1,000 b/d of oil and helping to address a significant environmental problem for the Texas Panhandle.”
It might also stifle public complaints about the comparative stench of sour gas from some Texas fields.
The proposed refinery is designed to produce 115 million gal/year of ethanol from 38 million bushels of feedstock-grade corn.
Ethanol outlook
The recent spike of crude prices toward $100/bbl “should be positive for ethanol prices and ethanol producer stocks because it suggests attractive discretionary blending economics,” said Eitan Bernstein of Friedman, Billings, Ramsey & Co. Inc., Arlington, Va. Moreover, he said, “We believe a big increase in legislated demand is all but inevitable.”
However, Bernstein reported, “Our updated supply-demand analysis strongly suggests that the abundance of new supply expected to come on line over the next 12 months will increase downward pressure on ethanol prices, producer profits, and valuations.”
US Department of Energy reports indicate US demand for ethanol surged to 7.1 billion gal/year in August from 6.3 billion gal/year in April, with most of the new demand centered in the Midwest. “This makes sense, given that it requires the least transportation and capitalizes on local loyalties, a reminder that the easiest fruit is typically picked first. However, for US demand to rise materially further, ethanol consumption will have to make substantial gains in other regions,” Bernstein said.
He expects the US ethanol market to be “well supplied” next year. “Moreover, with many new plants just starting production and eagerly looking to sell their volumes, we expect petroleum blenders and refiners will have a great deal of leverage in negotiating low prices,” Bernstein said.
Green vs. red line
With some advocates pushing to increase auto mileage to 40 mpg while car manufacturers hustle sales with television ads emphasizing speed and performance, there’s little wonder auto owners are torn between a desire to be environmentally green vs. an urge to put the pedal to the metal.
And then there’s the National Association for Stock Car Auto Racing (NASCAR) in Daytona Beach, Fla.—the largest motorsports organization in the US—which annually sanctions more than 1,500 races at 100 tracks in 39 US states, Canada, and Mexico. Based on television ratings, auto racing is the second-most popular professional sport in the US, behind the National Football League.
It’s fast, exciting, and entertaining, and outstanding drivers like Jimmie Johnson, Jeff Gordon, and Dale Earnhardt Jr. are heroes to millions of fans. No wonder it feeds “the need for speed” among many conventional drivers who choose high performance engines over slower but more environmentally friendly vehicles.
With US refiners under government mandate to remove lead and later to find a substitute for methyl tertiary butyl ether in reformulated and oxygenated gasoline, NASCAR continued using lead additives in race cars up until the Auto Club 500 race in California in February. It earlier announced plans to transition to unleaded fuel in the three main racing divisions it sanctions—the Nextel Cup, Busch, and Craftsman Truck series—but not the annual Daytona 500.
These events feature custom-built race cars that gulp down fuel and average only 2-5 mpg at race speeds. It’s estimated that some 6,000 gal of fuel are used at an average weekend Nextel Cup event. And that’s just on the race track, not including the thousands of fans some of whom drive great distances to attend races. Moreover, NASCAR remains essentially free of the federal regulations of the Environmental Protection Agency, and most of the race cars have no mufflers or catalytic converters or other emission controls.
But privately owned NASCAR has been debating environmental issues with racing partners like Sunoco Inc., the Philadelphia-based refiner that produces the official fuel used in NASCAR races. Although still in the talking phase, NASCAR says it is looking at the development of alternative fuels for racing cars. That, said NASCAR officials, should have “a very small but symbolic impact” on the fuels market.
