By that Jim Lane means that the company's pilot plant in Columbus, Mississippi has started turning out crude oil equivalents from 500 tons per day of wood biomass. It's still pricey - Evans estimates the 2013 cost of the stuff at $5.95/gallon - but more plants are on the drawing board, leading to a blended price of $2.62/gallon in 2015.
The reaction? Analysts at Deutsche Bank lowered their price estimates. The shares are now approaching the level they were at before the announcement was made.
That's not the only good news from the biofuels front. Amyris (AMRS) beat estimates and is now on track to start turning a profit in 2016. But, again, Cowen & Co. is neutral. Renewable Energy Group (REGI), a biodiesel producer which works in the Midwest, saw sales go up 26% and the company nearly broke even, properly accounting for its risk management. In other words it delivered honest numbers. On operations, it turned a small profit.
What's going on? Mainly it's a negative view of the biofuel story by analysts, people who buy the rumor and sell the news. But the news is nearly all good. Unlike clean coal, biofuels are becoming a real industry, an industry with solid growth prospects and proven production methods.
There is plenty of time to get into these names, and you can expect some capital losses here and there, but you want to be here when production ramps up. And it's ramping.