GLG News by Mr. Philip Corzine, General Manager
GLG News is now G+ Insights
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Will Brazil kill the golden bio-goose?
October 11, 2006
Brazil banks on biodiesel as the next big thing in green energy | www.detnews.com
Brazil's success in developing it's sugarcane based ethanol industry is being held-up around the world as a great example of the right-way for a government to kick-start an industry. Ironically, Brazil's socialist administration has different goals in mind for biodiesel, as they try to use it aid in the easing of Brazil's unequal distribution of income and wealth.
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Little gain from removing ethanol subsidies
October 9, 2006
Removal of U.S. Ethanol Domestic and Trade Distortions: | www.card.iastate.edu
Overview: This study by IA State Univ. modeling the outcome of two scenarios--one removing the import tariffs and the other removing both the import tariff and blender subsidy, found only a small US consumer benefit for both outcomes, but large benefits to accrue to Brazil.
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Big Oil - should they open the door to biofuels?
October 6, 2006
Chevron Increases its Activity in Biofuels Sector | www.solaraccess.com
Chevron appears to be hedging their bets with biofuels...while Exxon and others play a different strategy.
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October 6, 2006
Ethanol stocks growing like weeds, but investors should beware | www.soyatech.com
The interest in investing in biofuel companies is white hot....are we on a bubble or in the midst of a boom?
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Biodiesel vs Ethanol, Apples and oranges
October 6, 2006
Thirst for 'green' fuels propels U.S. soyoil | today.reuters.com
Biodiesel and ethanol are much more compatable than competitive.
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Ratio Predicts Shifts in Acreage
September 26, 2006
Future Increase in Corn Acres Will Vary Across the Corn-Belt | www.farmdoc.uiuc.edu
The ratio of soy to corn prices creates an excellent decision making matrix.
- The historical average ratio of soy-to-corn price is 2.31
- USDA loan rates have created a theoretical ratio of approx. 2.5
- The current ratio is 2.14
- The model described in this article indicates the break-even ratio is approximately 2.4
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How long will subsidies for ethanol last?
September 20, 2006
A Slow Burn for Ethanol: Falling Gas Prices Have Stolen a Little Heat from the Corn-Based Additive | www.soyatech.com
This article does a good job of laying out the realities facing ethanol, one of which is the future of the federal subsidy for ethanol producers.
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Remove US tariffs on ethanol and watch the capital flow
August 30, 2006
Bajaj Hindusthan Plans $500 Million Sugar Investments in Brazil | www.bloomberg.com
This $500M investment in the Brazilian sugar industry is unlikely to have a current affect on the alternative fuels industry, but does show the potential for this type of activity to increase due to:
-Cost of production advantages
-Nearly elastic feedstock supply
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Chinese agriculture needs to evolve to protect drinking water
August 30, 2006
China's Water Resources Become Stretched | online.wsj.com
Given that Chinese agriculture is a likely source of the groundwater pollution in that country, their production systems may need to evolve. Areas of concern might be:
1) Scale
2) Application Technology
3) Training -
Prices, and price relationships for ethanol likely to continue to change
August 21, 2006
ETHANOL SUDDENLY PLENTIFUL; COULD SPUR GASOHOL RESURGENCE | www.opisnet.com
-Ethanol prices will, and already are coming down, due to new production coming online. New plants will mean more competition for existing demand.
-These lower ethanol prices may tend to increase demand even more, as ethanol becomes a cheaper pure-substitute for gasoline at current crude prices.
-The ethanol industry is exhibiting growing pains as it increases in size so much, so fast. The industry will have more S&D hiccups, such as those evidenced by the price run-ups earlier this spring. Although those issues tend to dampen demand, they should ease as the industry solidifies and matures in the next 24 months.
-Ethanol does not mirror fuel prices. From ethanol's perspective, this is a good thing for now, with the current high prices for crude. However, it could just as easily (and probably will at some point) become a bad thing for ethanol, if the price of ethanol's feedstock increases production costs, at the same time that higher production levels reduce profit margins.
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Why Aren't Petroleum Refiners More Excited About Ethanol?
August 11, 2006
Refiners and Ethanol | www.thehj.com
I think that it's impossible for anyone on the outside, to understand why petroleum refiners aren't more aggressively investing in ethanol infrastructure. Following however, are some thoughts, knowledge and tidbits of history and that may, or may not, shed a little more light on this situation.
-Long-term bad blood between big oil and ethanol
-Ethanol is a fundamentally different kind of business
-Concerns over whether current profitability in ethanol will continue
-Difficulties in getting plants built quickly enough -
Corn price volatility a risk factor for new bio-based products
August 9, 2006
US: Corn Plastic to the Rescue | www.corpwatch.org
Two significant questions arise from this article:
1 - Is corn plastic really green?
2 - Is there enough corn for both this new product and ethanol?
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Why can't the US produce ethanol from sugar? Price and Productivity
August 9, 2006
THE ECONOMIC FEASIBILITY OF ETHANOL PRODUCTION | www.usda.gov
Price and Productivity are the main reasons the US can't create sugar-based ethanol on the same scale, and with the same level of efficiency, that Brazil is doing.
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Price rations supplies - How much are you willing to pay?
August 4, 2006
Asia: U.S Has Enough Corn For Fuel, Export Demand | www.cattlenetwork.com
This article attempts to paint a picture of everybody getting everything they want, and this may well be true in the long-run.
However in the short run, expect some high volatility in corn prices over the next two years as the market attempts to ration supplies between the livestock industry, the growing ethanol industry, and foreign buyers.
The question isn't will there be enough--the question is how much will it cost you. -
Ethanol gold rush creates unintended consquences
August 4, 2006
For Good or Ill, Boom in Ethanol Reshapes Economy of Heartland | www.theledger.com
The boom in ethanol production will create unintended consequences such as:
-higher feed costs for livestock, possibly leading to higher food costs
-loss of export markets due to higher prices
-significant changes in crop rotations
-more use of fragile farmlands -
Cargills pledge is environmentally positive and production neutral, as long as it isn't expanded
August 3, 2006
Cargill Stops Brazilian Soybean Buys From Deforested Land | online.wsj.com
Cargill’s pledge to not buy soy produced on illegally deforested lands in the Amazon is a positive public relations move, but:
With a biofuels boom, doesn't worldwide production of commodities needs to increase, not be restricted?
How will this pledge affect Brazil's production potential?
Why is Cargill at the center of this issue? -
Remember the bio part of biofuels
August 3, 2006
A Competitor For Ethanol? | www.forbes.com
- Growing investment in biofuels may yield both opportunities and challenges
- Keep the bio portion of biofuels in mind when assessing changes in this industry -
Imported ethanol on the horizon?
June 6, 2006
Bush, Brazil discuss ethanol importation | southflorida.bizjournals.com
Govenor Jeb Bush's prediction of a 15B gallon ethanol use in the US would seem to require imports.
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EU ag can be comparitively competitive if governments play it smart
June 5, 2006
EU remains bullish on its ag sector | www.businessweek.com
1 - EU ag can compete, with different compensations for ag, or with less restrictions.
2 - Bio Fuels are going to impact every part of agriculture in every country.
3 - Currency exchange rates can change, create or destroy competitive advantages between countries, almost overnight. -
The glass if always half-full (or more) in Brazil
June 5, 2006
President Lula: Brazil Will Be Energy Superpower in 20 Years | www.rigzone.com
Brazil has lots of dreams, but nothing happens fast.
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