Anyone For More Biofuels?

The Future of Biofuels: Bleak!

As the 36th levee along the Mississippi River broke flooding another 1,500 hectares of agricultural land and about one hundred homes, the death toll in the Midwest storms and torrential rains topped 24 souls since early June. About 40,000 people were displaced from their homes mostly in Iowa where 83 of 99 counties were declared disaster areas.

Flooding has caused billions of dollars of crop damage destroying several million hectares of corn and soybeans and pushing corn and livestock prices to new record highs.

[A few damaged] Corn plants stand in a field that was flooded by overflowing waters of the Cedar River in Mount Vernon, Iowa June 16, 2008. More storms dumped crop-drowning rains on parts of the U.S. Midwest on Thursday [June 26], threatening strained levees and slowing recovery from a multibillion-dollar flood disaster in the heart of the world’s biggest grain and food exporter. REUTERS/Frank Polich. Image may be subject to copyright. See FEWW Fair Use Notice!

“On Thursday, Chicago Board of Trade corn for July 2009 delivery set another record high at $8.22 a bushel, more than double the 40-year average for corn prices. Corn is the main feed for meat animals, main source for ethanol fuel, and used in hundreds of other food and industrial products.” Reuters reported.

Unsurprisingly, rising corn and soy prices in addition to other factors have reportedly forced up to fifteen U.S. biofuel plants out of business.

“Corn prices are making the feasibility of ethanol plants every day more and more questionable,” said Alex Moglia, president of Moglia Advisors in suburban Chicago, which helps biofuel companies restructure.
About 12 small to midsize biodiesel and ethanol plants have declared bankruptcy since early 2008 including Renova Energy LLC, a company with a partially built 20 million-gallons-per year ethanol plant in Idaho, which declared bankruptcy last week. Ethanex Energy Inc, another midsize company based in Kansas declared bankruptcy in March, said Moglia. “There will be more to follow.”

VeraSun one of the major players announce earlier that it will delay the opening of three ethanol plants with a total capacity of 330 million gpy (gallons per year) due to soaring corn costs. Poet energy, another major player, scrapped plans for a 70 million gpy Minnesota plant in May.

The outlook was not entirely bad, said Todd Alexander, a partner at Chadbourne & Park LLP in New York specializing in energy finance. Biofuel output from plants that survive the current high feedstock prices should continue to be in demand because the U.S. mandates that require the blending of biofuels into gasoline are set to rise in volume year after year.

Clearly, “the majority of ethanol plants are not as happy as they once were,” said Todd Alexander, a partner at Chadbourne & Park LLP in New York specializing in energy finance.

Despite the U.S. mandates that demand the blending of biofuels into gasoline, which are set to rise in volume year after year, the full effect of high corn prices will only be felt once the distilleries current contracts, agreed on at much lower prices, run out and new, skyrocketing prices take effect.

Related Links:

• Are Extreme Precipitation Events Nature’s Defense Mechanisms?
• What’s a Hydrokong?

Related News Links:

• U.S. biofuel plants go bankrupt on feedstock costs
• Missouri levee breaks (Video)

What’s a Hydrokong?

A Shrinking World Series

Is it a mega-tropical storm system, or an extra-tropical cyclone (ETC), i.e., a non-tropical, large-scale low pressure storm system like a Nor’easter?

“Hydrokong” is a colossal atmospheric phenomenon. It’s an extreme precipitation event which is enhanced by circulation changes that increase and concentrate the distribution of water vapor.

Hydrokong! The Storm System as it appeared over the central United States June 12, 2008 04:15 UTC. The still image is an aviation color enhancement of a satellite image.

Globally, as total precipitation increases, the duration or frequency of precipitation events decreases. However, warmer temperatures and regional variation can significantly affect those offsetting behaviors. For example, reduced total precipitation in one region, the Western United States, can significantly increase the intensity of precipitation in another region, the Midwest. Hydrokongs essentially create two extreme events, droughts in one region and flooding caused by mega-intense precipitation in another. As the global temperatures rise, more hydrokongs should be expected.

Another Hydrokong in the making? A new System as it appeared over the central United States June 27, 2008 04:15 UTC. The still image is an aviation color enhancement of a satellite image.

An aviation color enhancement of a floater [updated periodically] satellite image GEOS Eastern U.S. Imagery, NOAA SSD. For full size image right-click on the image and select “View Image.”

In the words of Brian Pierce, a meteorologist at the National Weather Service, describing the aftermath of flooding last week: “We are seeing a historic hydrological event taking place with unprecedented river levels occurring.”

Are Extreme Precipitation Events Earth’s Natural Defense Mechanisms?

Related Links:

• Nature’s Defense Mechanisms
• www.crh.noaa.gov/ahps2/index.php [Advanced Hydrologic Prediction Service!]
  

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