The agreement includes the construction of a plant within 14 months in the province Azua (south) to use oil from native varieties of brush such as jatrofa and higuereta, which haven’t any use so far since the oil they produce is toxic.

The agreement includes the Surfuturo Foundation, which will promote the establishment of plantations in the country’s poorest region, with the guarantee for farmers who raise the crops to be bought by the future plant.

Globasol executive Jose Vicente Galindo said the plant’s maximum production of 100,000 tons per year would require plantations totaling 60,000 hectares.

Attending the signing ceremony were Spain ambassador Diego Bermejo and Asturias region president Vicente Alvarez Areces, who concludes his first official visit to the country today.

 SOURCE: DOMINICAN TODAY

SAO PAULO (Reuters) – Royal Dutch Shell plans to form an ethanol and fuel distribution joint venture worth up to $12 billion with Brazilian sugar and biofuel giant Cosan, becoming the latest global energy company to buy into one of Brazil’s fastest-growing industries.

The deal, announced on Monday, marks Shell’s first foray into ethanol production and follows moves by British oil company BP, which in 2008 took a stake in a big Brazilian biofuel project and unveiled $1 billion in investments.

Cosan shares jumped 12 percent in Sao Paulo, compared with a 1.1 percent gain by the benchmark Bovespa index. Shell shares rose 1.1 percent in London, outperforming a 0.3 percent rise in the Dow Jones European oil and gas index.

“It’s a vote of confidence from an oil major for the Brazilian ethanol industry,” said Jonathan Kingsman, managing director of the Lausanne-based Kingsman SA ethanol and sugar consultancy. “I expect more interest from the oil companies in Brazilian ethanol, both in production and distribution.”

The 50-50 joint venture will be the third-largest fuel distributor in Latin America’s largest country, with almost 4,500 filling stations nationwide. By joining forces, Cosan and Shell will be better positioned to compete with the two top players in the market, state oil giant Petrobras and Ipiranga, a unit of Brazil’s Grupo Ultra.

Cosan first branched out into the fuel distribution business in 2008 when it acquired U.S.-based Exxon Mobil Corp’s Esso chain of service stations for nearly $1 billion. Cosan also agreed in December to buy a local chain of filling stations called Petrosul for an undisclosed sum.

While the deal will not immediately add to Cosan’s existing cane crushing capacity of about 60 million tonnes a year, it will give it a deep-pocketed partner at a time when some of its smaller rivals are vulnerable to takeovers.

The companies hope to more than double ethanol output to up to 5 billion liters a year from about 2 billion now, Shell’s downstream director, Mark Williams, said in London, without giving a time frame. The increase would come from takeovers and organic growth, he added.

The deal is another feather in the cap of Cosan Chairman Rubens Ometto, whose family has been in the sugar business since 1936. On Ometto’s watch, Cosan went on an acquisition spree and expanded into fuel distribution and port terminals.

Ometto hopes to capitalize on Shell’s global clout to make ethanol a widely traded commodity.

“Brazil’s aim is to become an ethanol exporter. Shell has distribution facilities throughout the world that we could use in a much more integrated way,” Ometto said in Sao Paulo.

“This step will be very important to consolidate ethanol as a clean and renewable fuel … and help it become a global commodity.”

Oil companies and major global investors have been searching for partnerships in Brazil’s promising ethanol sector, which is still largely dominated by family companies with complex ownership structures.

Shell has been looking for opportunities in Brazil’s ethanol industry for years. About 90 percent of all new cars in Brazil are flex-fuel, running on any mix of ethanol and gasoline, making the country a huge market for biofuels.

Other foreign companies have also been delving into Brazil. U.S. agribusiness giant Bunge Ltd struck a deal in December to buy sugar and ethanol producer Moema for $452 million, while French commodities company Louis Dreyfus said in October it would take over the Santelisa Vale mill for an undisclosed sum.

COSAN EYES OVERSEAS MARKETS, TECHNOLOGY

The combined entity will have about 40 billion reais ($21.4 billion) in annual sales, Cosan Chief Financial Officer Marcelo Martins said on a conference call with analysts and investors.

For Cosan, the world’s largest sugar and ethanol producer, teaming up with Shell could give it access to a vast overseas distribution network and new technologies in ethanol production, an area where Shell has been investing. Shell’s network may help Cosan export more ethanol as output grows.

“We’ll have a partner with an absolutely huge international presence in fuels sales,” Martins said.

The so-called second-generation in ethanol production has yet to reach commercial scale, but some companies are betting on the use of cellulosic material such as bagasse or cane stalks and grasses to make biofuels, in part to move away from making fuel from foodstuffs.

Cosan, which recently obtained a court injunction to remove its name from a government black list of companies with workers in slave-like conditions, said it had 180 days to discuss the nonbinding memorandum of understanding exclusively with Shell International Petroleum Co Ltd.

As part of the transaction, Cosan will transfer its sugar, ethanol, fuel distribution and energy generation business to the merged entity, with assets valued at $4.93 billion and debt of $2.52 billion.

Shell will contribute its retail fuel and aviation distribution business, valued at up to $3 billion, and inject $1.63 billion into the merged company in up to two years.

Brazilian investment bank BTG Pactual advised Cosan on the transaction, while JPMorgan Chase advised Shell.

Cosan and Shell will have the option of buying each other’s stake in the venture after 10 years, with the price to be determined at the time of purchase.

Earlier on Monday, Cosan released its quarterly earnings for the three months ended December 31. It posted net income of 167.1 million reais, up sharply from 5.2 million reais a year earlier. ($1=1.87 reais)

Reporting by Elzio Barreto and Inae Riveras; additional reporting by Reese Ewing in Sao Paulo and David Brough, Nigel Hunt and Tom Bergin in London; editing by Todd Benson, Dave Zimmerman and John Wallace.

Source:  Reuters

Soybean, one of the most important global sources of protein and oil, is now the first legume species with a published complete draft genome sequence. The sequence and its analysis appear in the January 14 edition of the journal Nature.

The research team comprised 18 institutions, including the U.S. Department of Energy Joint Genome Institute (DOE JGI), the U.S. Department of Agriculture-Agricultural Research Service (USDA-ARS), Purdue University and the University of North Carolina at Charlotte. The DOE, National Science Foundation, USDA and United Soybean Board supported the research.

“The soybean genome’s billion-plus nucleotides afford us a better understanding of the plant’s capacity to turn sunlight, carbon dioxide, nitrogen and water, into concentrated energy, protein, and nutrients for human and animal use,” said Anna Palmisano, DOE Associate Director of Science for Biological and Environmental Research. “This opens the door to crop improvements that are sorely needed for energy production, sustainable human and animal food production, and a healthy environmental balance in agriculture worldwide.”

With the soybean genetic code now determined, the research community has access to a key reference for more than 20,000 legume species and can explore the extraordinary evolutionary innovation of nitrogen-fixing symbiosis that is so critically important to successful agricultural crop rotation strategies.

Jeremy Schmutz, the study’s first author and a DOE JGI scientist at the HudsonAlpha Institute for Biotechnology in Alabama, said that the soybean sequencing was the largest plant project done to date at the DOE Joint Genome Institute. “It also happens to be the largest plant that’s ever been sequenced by the whole genome shotgun strategy—where we break it apart and reassemble it like a huge puzzle,” he said. Of the more than 20 other plant genomes taken on by the DOE JGI, those already sequenced include the black cottonwood (poplar) tree and the grain sorghum, both targeted because of their promise as biomass feedstocks for biofuels production.

“This is a milestone for soybean research and promises to usher in a new era in soybean agronomic improvement,” said co-author Gary Stacey, Director, Center for Sustainable Energy and Associate Director and National Center for Soybean Biotechnology, University of Missouri. “The genome provides a parts list of what it takes to make a soybean plant and, more importantly, helps to identify those genes that are essential for such important agronomic traits as protein and oil content.”

Soybean, one of the most important global sources of protein and oil, is now the first legume species with a published complete draft genome sequence.

From the sequence analysis, Stacey said that he and his colleagues have identified more than 46,000 genes of which 1,110 are involved in lipid metabolism. “These genes and their associated pathways are the building blocks for soybean oil content and represent targets that can be modified to bolster output and lead to the increase of the use of soybean oil for biodiesel production.”

While biodiesel from soybean oil represents a cleaner, renewable alternative to fossil fuels with desirable properties as a liquid transportation fuel, there simply is not enough oil produced by the plant to be a competitive gasoline on a gallons-of-fuel yield per acre. The availability of the soybean genome may provide some key solutions. “We can now zero in on the control points governing carbon flow towards protein and oil,” said Tom Clemente, Professor, Center for Biotechnology, Center for Plant Science Innovation at the University of Nebraska, Lincoln. “With the combination of informatics, biochemistry and genetics we can target the development of a soybean with greater than 40 percent oil content.”

The availability of the soybean genome sequence has accelerated other soybean trait discovery efforts as well. For example, researchers have used the sequence to zero in on a mutation that can be used to select for a line that has lower levels of the sugar stachyose, which will improve the ability of animals and humans to digest soybeans.

In another effort, by comparing the genomes of soybean and corn, a single-base pair mutation was found that causes a reduction in phytate production in soybean. Phytate is the form in which phosphorous is stored in plant tissue. Because phytate is not absorbed by the animals that eat the feed, the unabsorbed phytate passes through the gastrointestinal tract, elevating the amount of phosphorus in the manure. Limiting phytate production in the soybean could reduce a major environmental runoff contaminant from swine and poultry waste.

Of additional importance for soybean farmers is that the genome sequence has provided access to the first resistance gene for the devastating disease Asian Soybean Rust (ASR). In countries where ASR is well established, soybean yield losses due to the disease can be as high as 80 percent.

Provided by DOE/Joint Genome Institute

Source: Physorg

OLD TOWN, Maine (Reuters) – From the outside, the rustic red-brick mill on a bend in Maine’s Penobscot River resembles any other struggling American pulp and paper mill.

But along with its usual business of pulp-making, the century-old mill is doing something unprecedented: Developing technology to produce bio-butanol, a jet fuel, from parts of trees that would otherwise go to waste, one of the world’s first to do so.

Production is still two years away, but the reinvention of Maine’s Old Town Fuel & Fiber mill is already drawing interest as a potential model for a new wave of biofuel companies that could slash dependence on oil, create jobs and reduce the emissions that lead to global warming.

Loggers, a fading way of life in rugged northern United States and Canada, see the mill as a lifeline for their crippled industry. Environmentalists see it as a test of the Obama administration’s push for a big expansion in biofuels.

And chemical and oil companies are waiting to see if the mill can do what none has done before by extracting sugars from wood chips into a biofuel that many regard as more efficient than corn-based ethanol as a possible substitute for gasoline.

“There has been a lot of interested parties in what we are doing here,” said Old Town’s president, Dick Arnold. “There have been several oil companies that have been interested in our extract and production of biofuels. There has been a number of chemical companies that have expressed the same desire.”

Like its once-mighty peers, Old Maine’s mill has suffered in recent years from declining pulp prices and loss of market share to Chinese and Latin American rivals. Georgia-Pacific Llc, the maker of Quilted Northern bathroom tissue, shut it in May 2006, laying off all 400 workers. A group of investors known as Red Shield bought it a few months later.

Red Shield won a $30 million grant from the U.S. Department of Energy to work with the nearby University of Maine on a pilot ethanol production plant, but they ran out of cash and filed for bankruptcy last year, shutting the plant again.

Enter Lynn Tilton, a New York venture capitalist who owns one of the nation’s largest helicopter makers. Tilton’s Patriarch Partners bought the mill in November, invested about $40 million and shifted its focus to cellulosic bio-butanol.

ALTERNATIVE TO ETHANOL

Tilton can use bio-butanol in her own helicopter and aircraft businesses but is eyeing a potentially huge market after Congress decreed that the United States must use 21 billion gallons of “advanced” biofuels such as cellulosic ethanols, bio-butanol and “green gasoline” a year by 2022.

Whether the technology takes off comes down to cost — and to corn. For much of the last decade, federal officials have touted the potential of corn ethanol as the best substitute for gasoline, but critics question that assumption, noting it corrodes pipelines and raises food prices.

Bio-butanol, a relative of ethanol, is less corrosive and easier to mix with gasoline. Unlike ethanol, it can be transported by pipeline. And its energy content is about 30 percent higher than ethanol’s. If regulations allow, it could be pumped into a fuel tank with no changes to a car engine.

Butanol is also sometimes used as a petrochemical in brake fluids, paint thinners and plastics. Its supporters include chemicals maker DuPont Co and oil giant BP Plc, which have formed a joint venture to make bio-butanol.

“It’s really comparable to gasoline,” said Mark Bunger, a biofuels analyst at Lux Research, a Boston consulting firm specializing in emerging technologies. “The issue has been that ethanol is easier to make, it’s just not easier to use. Butanol doesn’t have those same restrictions.

“For a lot of chemical reasons, it’s a good alternative. If you’re a venture capital company and you said you are going to be making ethanol, I would say, ‘Do you have another idea?’. But if they are really focusing on butanol, that is a smart move.”

He cautioned, however, that it remains unclear if bio-butanol can compete on cost with oil or substitutes like ethanol without government subsidies. “A lot more research and technical development is needed to make it cost competitive.”

OBAMA FACTOR

Other companies are trying, such as startups Tetravitae Bioscience in Chicago and Cobalt Biofuels in Mountain View, California. But Old Town is the first to do so with a fully functioning timber mill that already generates cash flow by selling traditional pulp to paper companies.

Bio-butanol will be derived from wood that would have gone to waste in pulp production, or have been left on the forest floor as unusable by loggers.

“I wouldn’t go deep into a hole without the ability to generate cash flow on what we do now,” Tilton said. “That is the beauty of this. We are not building a start up facility to create ethanol where you are out $300 million before you start creating any kind of cash flow.”

Already the plant has put in place a system for extracting sugars from the wood and expect by year end to start construction of a biorefinery to turn it into butanol. She expects the mill will need another $75 million to meet its target of producing butanol in two years.

“Some of that will come from the Department of Energy and some we will invest. And how that return on investment will be garnered will be deeply dependent on government demands, pricing for the product as well as our ability to take this technology and roll it out across other platforms.”

A big factor, she said, is the Obama administration’s push for renewable energy through tax breaks, loan guarantees and millions of dollars in grants, with more support expected in upcoming energy bills.

“If one believed that ultimately this would peter out and green energy would become less of a focus going forward, this would be a very risky investment because truthfully pricing will be dependent on supply and demand. If it is not forced as a mandate, then I think the pricing won’t be there,” she said.

To that end, the mill is on track, said Arnold. Two towering vessels, each 100-feet (30-metres) high, extract sugar from wood chips that will eventually make butanol, while also maintaining the traditional process of extracting fiber from wood to create sheets of dried pulp to sell.

“That $30 million award from the government will help us finance the building of the balance of the biorefinery,” he said. “We believe that in the next two years we will have an operating biorefinery at the mill.”

Initial volumes will be small, about 1.5 million gallons of bio-butanol a year produced from 80 dry tons of wood. “But we believe this technology can be replicated. And there are a lot of assets out there in terms of pulp and paper mills that are suffering that could be used for expansion,” Arnold said.

Jason Szep

(Editing by Cynthia Osterman)

Source: Reuters