DaveM

Ethanol and Biodiesel: Two Very Different Biofuels

The comment of turning Glycerine into Ethanol is interesting, but Nova's proprietary process, when you look at their patents, actually USES this glycerine to convert the high FFA feedstocks into low FFA feedstock. It is a process more commonly known as Glycerolysis - which was first identified in the 1940's in oil & soap magazine and has several dozen prior art references.... hence the challenges Nova has had recently with USPTO getting their patents past the pending stage.

This has two impacts: First, don't count Glycerine sales as a potential revenue stream... they'll need to use it. Second, don't assume their business has significant barriers to entry. Their patents don't support this and several others are locking up their 'low cost' feedstock because they've read the 60 year old documents and more recent research from NREL and figured out how to duplicate Nova's process (without the cost of patent attorneys, OVHD, etc.).

I like NOVA and their short term opportunity definitely represents an opportunity for a market cap in the range they're trading in... but 4 years from now they're going to be one of many - especially given the new developments in supercritical, solid state catalysts and biological based biodiesel creation (not to mention renewable diesel).

Jatropha Being Developed as a New Biodiesel Source

Jatropha is a great plant - it has been known for a while in the biodiesel industry that it's seeds can be very helpful in the quest to create biodiesel. However, before buying equipment manufacturers who could 'harvest' this plant, we might want to study how it grows. To my knowledge, it is more like a tree, making it difficult to harvest without a huge amount of manual labor. Fine for SE Asia, but not so great for SW USA. Also I've heard that the fruits / seeds ripen at various times, making it difficult to go through the fields once to pick - often requiring sevral trips.

This is a huge opportunity for US biodiesel production, though. If we can solve these issues, it'll have a huge impact on our quest for a fuel that is not a food. Of course, there is inherent value in having uncultivated land in the Southwest, which means we should proceed with caution.