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Tristan R. Brown

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  • Natural Gas And The EPA's 'Open Fuel' Standard [View article]
    I'm not sure that corn prices will be directly impacted simply because most of the existing corn ethanol capacity was grandfathered in under the RFS2 and is thus unlikely to be impacted by the EPA's new rule. Lipids prices (e.g., soybean oil) could be, however, as they can be hydroprocessed to renewable diesel, and that could indirectly put pressure on corn prices.
    Jul 8 11:53 AM | Likes Like |Link to Comment
  • Natural Gas And The EPA's 'Open Fuel' Standard [View article]
    No, I have no disclosures in addition to those listed in the article. And fear and uncertainty? I merely reported the details of the EPA's March rule and even stated that any impact on the natural gas market was likely to be minimal due to its small scope relative to U.S. production. Advanced biofuel companies could benefit from the rule, as stated, but I fail to see how that would cause their prices to drop.
    Jul 8 11:50 AM | Likes Like |Link to Comment
  • Natural Gas And The EPA's 'Open Fuel' Standard [View article]
    Byloe, very few transportation fuels are truly "carbon-neutral" when viewed on a lifecycle basis; the only two that I can think of are fuels produced with CCS systems and pyrolytic biofuels where the co-product char is sequestered. That said, the lifecycle analyses employed by the EPA and mentioned in the article take into account all related GHG emissions resulting from biofuel production, even those such as ILUC emissions that are extremely uncertain. So when the EPA states that a biofuel has a 60% reduction to GHG emissions relative to gasoline, this is an accurate number. Of course, as you point out, even a 60% reduction is not the same as carbon-neutral (or negative) on an absolute basis.
    Jul 8 11:20 AM | Likes Like |Link to Comment
  • Natural Gas And The EPA's 'Open Fuel' Standard [View article]
    Thanks for the comment, Will - I'd point out that the title confusion was intentional, albeit unfortunately ambiguous (as your comment shows). My goal was to show that the EPA's March rule essentially adopts the goal of H.R. 2493 in spirit, if not in language. The EPA, by permitting biofuel pathways deriving up to 50% of their energy requirements from fossil fuels (in the form of natural gas) to qualify as cellulosic biofuels, has in theory made it possible for 50% of the energy content required to meet the RFS2 volumetric mandate to be provided by a non-petroleum fossil fuel. My understanding is that the purpose of H.R. 2493 is to prevent what the bill's authors see as discrimination against non-renewable non-petroleum transportation fuels by the RFS2. Thus, the title was a way of pointing out that the EPA's March 5 rule essentially modified the RFS2 in a way that is in line with the goal of H.R. 2493.

    Again, though, perhaps I should have made that more clear. Apologies for the confusion.
    Jul 7 09:25 PM | Likes Like |Link to Comment
  • No, The Courts Didn't Just Overturn The RFS2 Mandate [View article]
    "it probably reduces the amount of corn the US could give to the world's poor."

    Humans generally don't consume feed corn, which is what is primarily used as feedstock for U.S. ethanol production (and the main reason the U.S. cattle industry is strongly anti-ethanol). And the U.S. certainly isn't in the habit of shipping steaks to the world's poor.
    Furthermore, the U.S. habit in the past of freely distributing its excess grain supplies to the developing world has suppressed agricultural production in those countries for decades, causing far more harm to food supplies there than corn ethanol production has.
    Jan 28 11:25 AM | 2 Likes Like |Link to Comment
  • The Coming Hangover For Corn Ethanol Investors [View article]
    "So far this year" accurately describes the first three days of 2013, does it not?
    Jan 7 09:52 AM | Likes Like |Link to Comment
  • The Coming Hangover For Corn Ethanol Investors [View article]
    An interesting theory, albeit one that ignores many of the fundamentals of the RFS2. First, why would producers of biomass-based diesel try to qualify instead for the less valuable advanced biofuels category? Second, assuming that biomass-based producers did switch to the advanced biofuel category on a large scale, then they would very quickly swamp the RIN market for the latter category, causing values to fall sharply and negating any possible benefit. Finally, the volume of ethanol imported under the advanced biofuel category in 2012 (360 million gallons) is a fraction of biomass-based diesel production (1003 million gallons), so the effect of your theorized switch would be extremely marginal.
    Jan 7 09:51 AM | Likes Like |Link to Comment
  • The Biodiesel Excise Tax Credit Is Good News For Refiners [View article]
    Of course, your thesis rests on the assumption that soy-based biodiesel has a smaller carbon footprint than petroleum-based diesel. That is debatable, to put it mildly.
    Jan 4 04:51 PM | Likes Like |Link to Comment
  • The Coming Hangover For Corn Ethanol Investors [View article]
    That'd make for rather odd timing on the rally, given that the current decline in corn prices began back in late November.
    Jan 4 01:19 PM | Likes Like |Link to Comment
  • The Biodiesel Excise Tax Credit Is Good News For Refiners [View article]
    I would encourage you to read my article on Solazyme here:

    http://seekingalpha.co...
    Jan 4 12:16 PM | Likes Like |Link to Comment
  • The Biodiesel Excise Tax Credit Is Good News For Refiners [View article]
    As a concerned citizen, I consider the biobased diesel provisions in the fiscal cliff legislation to be horrendous policy - they're a step back in that they move the burden of paying for biofuels from refiners and fuel consumers to taxpayers. As an investor, however, I consider it to be a possible investment opportunity. Ultimately visitors to SA are far more interested in the latter than the former, thus the focus of this article (I'm not sure I could even get a pure policy discussion published here).
    Jan 4 12:08 PM | Likes Like |Link to Comment
  • The Biodiesel Excise Tax Credit Is Good News For Refiners [View article]
    Indeed.
    Jan 4 12:05 PM | Likes Like |Link to Comment
  • The Fiscal Cliff Resolution Could Give Solazyme A Boost [View article]
    Thanks for the link. The minimum selling price for algal oil under its heterotrophic closed fermenter baseline scenario is $2.58/l, or $9.77/gal. From what I've seen in other studies, hydroprocessing of this algal oil to renewable diesel would result in a fuel price of roughly $11/gal.
    Jan 3 08:14 PM | Likes Like |Link to Comment
  • The Fiscal Cliff Resolution Could Give Solazyme A Boost [View article]
    I'm no microalgal fuel booster and I certainly don't mean to discredit the work of the NRC, but its finding on the sustainability of microalgae production has absolutely no bearing on the microalgae industry. None. Yes, it was written by scientists who are experts in their respective fields. However, Congress rarely incorporates NRC research into its legislation. As evidence, take the recent decision by Congress to create parity between lignocellulose and microalgae as advanced biofuel feedstocks. If that doesn't demonstrate the political irrelevance of the NRC, I'm not sure anything can.

    This is important because Congress defines "sustainability" for the purposes of biofuels policy, and greenhouse gas emissions is the only factor that matters. NRC or no NRC, the U.S. government just took another big step in the direction of favoring microalgae-based fuels. There's your "handwriting on the government wall."
    Jan 3 03:00 PM | Likes Like |Link to Comment
  • The Fiscal Cliff Resolution Could Give Solazyme A Boost [View article]
    Thanks for the comment. You are correct that Solazyme employs a heterotrophic strain while the cited Davis et al./NREL paper considers an autotrophic strain. Unfortunately, the only techno-economic analysis of heterotrophic microalgae production I've been able to find (see below) is deeply flawed for U.S. consideration due to very optimistic price assumptions based on Columbia rather than the U.S. (for example, supervisor labor costs of $4/hour) and the lack of a comprehensive sensitivity analysis allowing us to adjust the results for U.S. conditions.

    http://bit.ly/ZXJwv6

    Now, if you can direct me to an independent analysis in the peer-reviewed literature that produces a different result on the basis of conservative assumptions, I'd be happy to review. Based on the current state of technology, however, I find it difficult to believe that heterotrophic strains can outperform autotrophic strains given the current high prices of the primary carbon sources.
    Jan 3 02:20 PM | Likes Like |Link to Comment
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