11/24/09 – Whatever Happened to Those Ethanol Companies?
By Brad Zigler
Sometimes it’s nice to revisit your old hangouts and reminisce. Investors in first-generation corn ethanol producers, however, just wish they could revisit their money.
The three publicly traded refiners we’ve been tracking over the past 18 months are moribund. Two—VeraSun Energy Corp. (Pink Sheets: VSUNQ) and Aventine Renewable Energy Holdings, Inc. (Pink Sheets: AVRNQ)—are bankrupt. The other, Pacific Ethanol, Inc. (Nasdaq: PEIX), is solvent in name only; its four operating subsidiaries have all filed Chapter 11 petitions, while the holding company stares at the prospect of standing before the bankruptcy bench itself. So what happened?
Margins Improving, Revenues Still Falling
It’s ironic that one of the major factors leading to these companies’ woes has improved over the past six months. Since May, the gross dollar yield obtained from the conversion of corn into fuel has risen fourfold, but it’s too little, too late.
That’s because the margins were so thin at the outset. Crushing corn into ethanol yielded only 37 cents a bushel[1] at the beginning of May, when corn was contracted at $4.14 a bushel, leading to a gross margin of just under 9 percent. But the price of ethanol has since risen 28 percent, while corn’s price has fallen six percent, so margins have improved. At last look, the gross yield was $1.88 per bushel, or 48 percent.
Ethanol Vs. Corn
But although margins may be wider now (yet still nowhere near the spreads obtained when these refiners first came online), much of those revenues aren’t being realized, due to production shutdowns or asset sales.
For example, seven of VeraSun’s ethanol plants are now cranking out blending components for Valero Energy Corp. (NYSE: VLO). In a deal that closed this May, the nation’s largest oil refiner swooped in to snatch the ethanol plants from VeraSun’s bankruptcy estate.
Valero’s not the first of the oil majors to embrace biofuels; big oil has been looking at adding integrative ethanol components to its operations for some time. For example, Royal Dutch Shell plc (NYSE: RDS-B) stepped into the biofuels arena back in 2002 with an investment in a Canadian company that brewed ethanol from plant waste. Chevron Corp. (NYSE: CVX) has partnered up with a forest products company to make fuel out of wood waste. Although ethanol currently represents about 9 percent of the nation’s liquid fuel supply, that share is bound to expand in future years, due to federal mandates.
There’s a fair amount of caution exercised in these deals, however, especially for projects devoted to so-called conventional ethanol made from corn. Corn-based fuel is energy inefficient, in part because it corrodes pipelines and therefore must be trucked to be blended with gasoline for motor fuel use. Valero, for its part, believes the former VeraSun facilities can be converted to accommodate the production of newer ethanol blends, including those made from feedstocks other than corn.
The Cellulosic Competition
In essence, first-generation refiners like VeraSun, Aventine and Pacific Ethanol were pitched three strikes: In the rush to meet production commitments in the pre-crash environment, they overpaid for plants and facilities; rising corn costs and sluggish ethanol prices squeezed their margins; and now, they’re being marginalized by newer, more efficient technologies, such as cellulosic ethanol.
An example of the competition is South Dakota-based POET Ethanol Products, the nation’s largest producer of corn-based ethanol, which recently announced that it nearly halved the cost of producing cellulosic ethanol from corncobs. By slashing capital costs and utilizing an improved enzyme mix at its pilot plant, privately held POET says it reduced the per-gallon cost of making ethanol from $4.13 to $2.35.
What’s more, the company now predicts it will be able to compete head-to-head with gasoline in just two years.
Ethanol Refiners: Where Are They Now?
So, what does all this mean for these first-generation ethanol firms? Well, look fast; they’re not likely to be around much longer:
VeraSun Energy Corp. (Pink Sheets: VSUNQ), which last traded at $0.005, recently won approval from the U.S. Bankruptcy Court to liquidate the company under Chapter 11. All 158 million shares of the outstanding common stock will be cancelled, and shareholders will not receive any distribution, property or other securities. Several class action lawsuits have been filed against VeraSun executives, claiming they misrepresented the company’s financial condition to investors.
Pacific Ethanol, Inc. (Nasdaq: PEIX), which last traded at $0.3825, faces delisting from Nasdaq for failing to comply with the marketplace’s $1 bid requirement. Subsidiaries of the Sacramento-based company, which house its four production facilities, filed for bankruptcy protection back in May. A $1.9 million judgment payment, due this month from Pacific, could wipe out what remains of the company’s liquidity.
Even Aventine Renewable Energy Holdings, Inc. (Pink Sheets: AVRNQ) has seen better days. The company, which last traded at $0.47, filed a voluntary Chapter 11 petition for reorganization in April.
Endnote
1. Ethanol refiners may realize yields deviating from those depicted here. For the sake of simplicity, revenue from the sale of co-products, such as distillers’ grains and the receipt of subsidies, are not reflected in these figures. Co-product revenues may constitute 20-25 percent of the cost of delivered corn.
The following information is supplied to support the CFA’s with Nanotech Fuel, Inc. (Certified Fuel Analysts)
The following was submitted by Ray Battista and Debra Kost (standard eeFuel / eeLube Summary Statement)
eeLube® and eeFuel®, our nanotechnology fuel additives, are companion products which simultaneously bring a multitude of benefits to help users save money, reduce fuel consumption and protect the environment:
Fuel Savings – By promoting more complete and powerful combustion, as well as reducing engine friction, they can help your engine extract greater energy output from the same amount of fuel.
Reduced Harmful Emissions – More complete combustion results in less harmful emissions going out the tailpipe. Since eeLube® also acts to cool the combustion temperature, NOx (nitrogen oxide) is also effectively reduced. In fact, eeLube® and eeFuel® are two of the rare liquid nanotechnology additives that can significantly reduce harmful emissions across the board.
Longer Engine Life and Lower Maintenance Costs – By removing harmful deposits and reducing engine friction, eeLube® can extend the useful life of an engine as well as lower maintenance costs. Since eeLube® also helps to keep the engine oil cleaner, the period between oil changes can be safely extended to further save on maintenance costs. eeFuel® cleans combustion chamber deposits, removes piston ring deposits and protects equipment.
Using eeLube® in conjunction with eeFuel® will maximize the effects of each product and together they provide an all round vehicle maintenance program that could greatly improve your vehicles performance, fuel usage, and fuel combustion. This will greatly reduce toxic emissions and extend engine life, which means lower maintenance costs.
______________
Gasoline additive
From Wikipedia, the free encyclopedia
(Redirected from Fuel additive) Jump to: navigation, search
Gasoline additives increase gasoline’s octane rating or act as corrosion inhibitors or lubricants, thus allowing the use of higher compression ratios for greater efficiency and power, however some carry heavy environmental risks. Types of additives include metal deactivators, corrosion inhibitors, oxygenates and antioxidants.
[edit] Additives
- Hybrid compound blends
- Combustion catalyst: an organo-metallic compound which lowers the ignition point of fuel in the combustion chamber reducing the temperature burn from 1200 degrees to 800 degree F
- Burn rate modifier increases the fuel burn time, resulting in an increased fuel efficiency
- Polymerization increases fuel ignition surface area resulting in increased power from ignition
- Stabilizer/Demulsifier/Dispersant: prolongs life of fuel and prevents water contamination
- Corrosion inhibitor prevents corrosion of tank and fuel system
- Catalyst additives prolongs engine life and increases fuel economy
- Detergents clean the engine
- Oxygenates
- Alcohols:
- Methanol (MeOH)
- Ethanol (EtOH)
- Isopropyl alcohol (IPA)
- n-butanol (BuOH)
- Gasoline grade t-butanol (GTBA)
- Ethers:
- Methyl tert-butyl ether (MTBE) Now outlawed in many states for road use.
- Tertiary amyl methyl ether (TAME)
- Tertiary hexyl methyl ether (THEME)
- Ethyl tertiary butyl ether (ETBE)
- Tertiary amyl ethyl ether (TAEE)
- Diisopropyl ether (DIPE)
- Alcohols:
- Antioxidants, stabilizers
- Lead scavengers (for leaded gasoline)
- Tricresyl phosphate (TCP) (also an AW additive and EP additive)
- 1,2-Dibromoethane
- 1,2-Dichloroethane
- Fuel dyes, most common:
- Fuel additives in general
- Ether and other flammable hydrocarbons have been used extensively as starting fluid for many difficult-to-start engines, especially diesel engines
- Nitrous oxide, or simply nitrous, is an oxidizer used in auto racing
- Nitromethane, or “nitro,” is a high-performance racing fuel
- Acetone is a vaporization additive, mainly used with methanol racing fuel to improve vaporisation at start up
- Butyl rubber (as polyisobutylene succinimide, detergent to prevent fouling of diesel fuel injectors)
- Ferox (catalyst additive that increases fuel economy, cleans engine, lowers emission of pollutants, prolongs engine life)
- Oxyhydrogen is used to inject hydrogen and oxygen into engines as a supplemental fuel to improve fuel efficiency
- Ferrous picrate improves combustion, increases fuel mileage
- Silicone is an anti-foaming agent for diesel, but may damage oxygen sensors in gasoline engines
- Tetranitromethane can increase the cetane number of diesel fuel, improving its combustion properties
[edit] External links
- http://www.fbhvc.co.uk/fuel/index.htm – Aftermarket lead replacement additives were scientifically tested and some were approved by the Federation of British Historic Vehicle Clubs at the UK’s Motor Industry Research Association (MIRA) in 1999.
[edit] See also
- For additive metering see metering pumps
- Gasoline pill — claimed to turn water into gasoline
- Oil additive, which describes some similar additives
-
Oil additive
From Wikipedia, the free encyclopedia
Jump to: navigation, searchOil additives are used to improve the base oil (or oil “base stock”) into a better performing lubricant. By utilizing the same base stock, many different oils can be manufactured, each with its own unique properties.
Nearly all motor oils currently being sold have an additive package, whether they are synthetic or petroleum based. Essentially, only API Service SA motor oils have no additives whatsoever, and they are therefore incapable of protecting modern engines.[1] Different additives are used depending on the application, e.g. the oil for a direct-injected diesel engine in a pickup truck (API Service CJ-4) has different additives than the oil used in a small gasoline-powered outboard motor on a boat (2-cycle engine oil).
According to a source in the petroleum industry,
“A lubricant additive package can comprise anywhere from 1% of a finished hydraulic oil to approximately 20% of a typical multi-grade motor oil.”[2]
Contents
[hide]
// <![CDATA[
//[edit] Types of Additives
- Detergent additives, dating back to the early 1930s[3], are used to clean and neutralize oil impurities which would normally cause deposits (or sludge) on vital engine parts.
- Friction modifiers, like molybdenum sulfide[4], are used for increasing fuel economy by reducing friction between moving parts.
- Viscosity modifiers make an oil’s viscosity lower for cold starts. Most multi-grade oils have viscosity modifiers. Some synthetic oils are engineered to meet multi-grade specifications without them.
- Deposit control additives prevent the formation of soft sludge and hard deposits of impurities.
- Corrosion or oxidation or rust inhibiting additives retard the oxidation of metal inside an engine.
- Antioxidant additives retard the decomposition of the stock oil.
- Antiwear additives or wear inhibiting additives cause a film to surround metal parts, helping to keep them separated.
- Pour point depressants improve the oil’s ability to flow at lower temperatures.
- Anti-foam agents inhibit the production of air bubbles and foam in the oil which can cause a loss of lubrication, pitting, and corrosion where entrained air contacts metal surfaces.
- Seal conditioners cause gaskets and seals to swell so that the oil cannot leak by.
- Metal deactivators create a film on metal surfaces to prevent the metal from causing the oil to be oxidized.
- Extreme pressure agents bond to metal surfaces, keeping them from touching even at high pressure.
- Dispersants keep contaminants (e.g. soot) suspended in the oil to prevent them from coagulating.
- Wax crystal modifiers are dewaxing aids that improve the ability of oil filters to separate wax from oil. This type of additive has applications in the refining and transport of oil, but not for lubricant formulation.
- Wear metals from friction are unintentional oil additives, but most large metal particles and impurities are removed in situ using either magnets or oil filters made for this purpose. See tribology, the science that studies how metals wear.
[edit] Additives in the Aftermarket and Controversy
Although motor oil is manufactured with numerous additives, aftermarket oil additives exist, too. A glaring inconsistency of mass-marketed aftermarket oil additives is that they often use additives which are foreign to motor oil. On the other hand, commercial additives are also sold that are designed for extended drain intervals (to replace depleted additives in used oil) or for formulating oils in situ (to make a custom motor oil from base stock). Commercial additives are identical to the additives found in off-the-shelf motor oil, while mass-marketed additives have some of each.
Some mass-market oil additives, notably the ones containing PTFE/Teflon (e.g. Slick 50)[5] and chlorinated paraffins (e.g. Dura Lube)[6], have caused a major backlash by consumers and the U.S. Federal Trade Commission which investigated many mass-marketed engine oil additives in the late 1990s. Although there is no reason to say that all oil additives used in packaged engine oil are good and all aftermarket oil additives are bad, there has been a tendency in the aftermarket industry to make unfounded claims regarding the efficacy of their oil additives. These unsubstantiated claims have caused consumers to be lured into adding a bottle of chemicals to their engines which do not lower emissions, improve wear resistance, lower temperatures, improve efficiency, or extend engine life more than the (much cheaper) oil would have. Many consumers are convinced that aftermarket oil additives work, but many consumers are convinced that they do not work and are in fact detrimental to the engine. The topic is hotly debated on the Internet.
Although PTFE, a solid, was used in some aftermarket oil additives, users alleged that the PTFE clumped together, clogging filters. Certain people in the 1990s have reported that this was corroborated by NASA[7] and U.S. universities.[8] One thing to note, in defense of PTFE, is that if the particles are smaller than what was apparently used in the 1980s and 1990s, then PTFE can be an effective lubricant in suspension.[9] The size of the particle and many other interrelated components of a lubricant make it difficult to make blanket statements about whether PTFE is useful or harmful. Although PTFE has been called “the slickest substance known to man,”[10][11] it would hardly do any good if it remains in the oil filter.
