Tuesday AM June 3rd, 2008

Nation's largest biodiesel refinery opens for business in Houston…Commerce Department says home building continues its more than two-year slide…International Air Transport Association says airline industry will lose $2.3 billion this year because of oil prices…

The taps at the nation’s largest biodiesel refinery have officially opened on Houston’s ship channel. GreenHunter Energy will produce 105 million gallons of the highest grade B100 biodiesel annually. GreenHunter Energy CEO Gary Evans says the converted refinery will produce biodiesel from multiple feedstocks.


photograph of County Comissioner Sylvia Garcia, Us Congressman Gene Green, Governor Rick Perry, GreenHunter President Gary Evans, Us Congressman Nick Lampson, Mayor Pro-Tem Adrian Garcia

From left to right: County Comissioner Sylvia Garcia, Us Congressman Gene Green, Governor Rick Perry, GreenHunter President Gary Evans, Us Congressman Nick Lampson, Mayor Pro-Tem Adrian Garcia

speaker image, click hear to listen“We can take any kind of feedstock and we can take them interchangeably, which means we can take rapeseed, soy, poultry fats, beef tallow, canola. You name it, we can basically take it here at this facility. So both non-food and food feedstocks, we can take interchangeably. This allows us to really go into the world markets and try to buy the cheapest feedstocks possible and bring them in here in shiploads to make biodiesel.”

Governor Rick Perry recently lobbied the EPA to change its directives mandating biofuels away from corn-based feedstock.

speaker image, click hear to listen“You know, when Washington orders Americans to pilfer our nation’s corn supply to create fuel, I thought it was time to call for EPA to put a stop to that. To let them know that corn isn’t the only renewable fuel source that we have. There are some other ones. I like corn as much as the next guy, but the fact is I’d rather be eating it than using it as a fuel source.”

The GreenHunter Energy biodiesel refinery is in Congressman Nick Lampson’s district.

speaker image, click hear to listen“Well, this is an investment that gives us a great return. The only way we’re going to solve our energy crisis today is through diversity. This is a great example of making that happen.” Ed: “And it has to happen in a way that somebody can make money. I mean, it’s got to be economically feasible.” “Absolutely, it does. And that means that we’re going to have to grow the resources necessary for them to have the feedstocks as we encourage these companies to develop and to take the big gamble. So it’s an entire infrastructure. We need to help them sure that they’re off and running, and not just crawling.”

GreenHunter’s Gary Evans is proud of how the oil waste refinery has been converted to this new use.

speaker image, click hear to listen“It was basically a waste oil chemical refinery that had been limping along for about four or five years. We recognized the existing infrastructure that was already in place—some of the tankage. And so we knew that if we bought this right, we could convert it. So what’s made this facility so successful is that we’re in for less than 50cents a gallon whereas worldwide, if you were to build a biodiesel refinery from scratch it’s a buck-twenty-five to a buck-fifty a gallon. So we’re a solid 50 to 60 percent below the market to build a new facility. Ed: “What does energy have to be priced at for this to be a successful operation?” “Well, we have crude oil today at $125 to $130 a barrel. We start kind of hurting at about $70 a barrel.”

The GreenHunter facility includes 700,000 barrels of storage capacity for feedstock management.

International leaders will convene in Rome today to tackle the problem of skyrocketing food prices and the problem of chronic hunger among the world’s poor. Hundreds of millions of people go hungry due to the failure of agriculture in much of Africa and some parts of Asia and Latin America to ensure enough food for their own. U.N. experts, nonprofit aid groups and economists say it’s a problem the world has to make progress on if it wants any success against chronic hunger. Oxfam researcher Duncan Green says the world is getting better at responding to disasters and preventing starvation but worse at tackling chronic hunger. He says agricultural development “has gotten horrendously neglected.”

The Commerce Department says construction spending fell again in April with home building continuing its more than two-year slide. Weakness was offset somewhat by an increase in non-residential spending activity which climbed to a record level. Construction activity fell by 0.4 percent in April after having been down 0.6 percent in March. Total construction spending has not increased since last September as the building industry continues to be battered by the worst housing slump in decades.

A private trade group says its index of manufacturing activity rose slightly in May, but remained below the benchmark needed to show growth in the sector. The group said on Monday that the index of prices is the highest since April 2004. The reading of 49.6 for the overall index from the Institute for Supply Management beat economists’ expectations of 47.9, according to the consensus estimate of wall street economists surveyed by Thomson Financial/IFR. A reading above 50 shows the manufacturing sector is growing, while a reading below 50 signals contraction. The index has hovered near its lowest level in five years since February.

Fort Worth-based American Airlines launches its first service from the United States to Moscow. The daily flights between Chicago and Moscow opens a new front in its competition with Atlanta-based Delta Air Lines. American has added flights to India and China in recent years. But the move comes as American and other carriers cut U.S. flights in the face of jet fuel prices which have nearly doubled in the past year. Even international travel hasn’t been immune from cuts, with American deciding last week to end new service between New York’s Kennedy Airport and London’s Stansted Airport in July. American is the largest U.S. airline.

A trade group predicts the airline industry will lose $2.3 billion this year because of hikes in oil prices. It’s revising an earlier forecast of a collective industry profit. The loss forecast by the International Air Transport Association, which represents more than 240 airlines around the world, contrasted with the projected profit of $4.5 billion announced in March. It was the second time IATA has lowered its forecast this year. The forecast uses a consensus oil price of $106.50 per barrel of crude, up from the $86 per barrel used in the March forecast.

State officials and bureaucrats are still using a state airplane fleet to shuttle them around the country. That’s even though Texas leaders tried to disband the fleet five years ago to save tax dollars. Officeholders such as Governor Rick Perry use the service to fly to meetings, award ceremonies, funerals–even a neighboring Republican governor’s inauguration. Flyers say they look at cost and efficiency before deciding whether to use the aircraft, which range from $258.75 to $977.50 per flight-hour. But critics question the necessity of the fleet since bills are often footed by taxpayers and commercial airfare may be cheaper. Then-Comptroller Carole Keeton Strayhorn and Perry talked about selling the planes during the 2003 budget crunch. But the Texas Department of Transportation, which oversees the fleet, expects it to log 1,227 more flight hours this two-year budget period than last. The planes are expected to fly a total of 3,350 hours at a cost of $2.3 million this budget cycle.

It’s been nearly a year since explosions at a downtown Dallas gas plant shot flaming debris across busy freeways. Now a newspaper investigation finds dozens of other hazardous sites in Dallas County that pose an even greater risk if disaster strikes. The Dallas Morning News reports that it found residential areas within a quarter-mile of 23 potentially dangerous industrial sites. Those companies are dangerous enough that they have to submit worst-case scenarios to federal regulators. The newspaper analyzed data from more than 900 sites that store hazardous chemicals. It found that thousands of residents are at risk of a toxic disaster because of outdated and haphazard zoning across Dallas County. Several industry officials contacted by the newspaper said they follow the law and operate their facilities safely. Chances of an accident, they said, are remote. City officials vowed action after the blast in July of last year. But ten months later, there is little evidence that any steps have been taken. There has been no official review of hazardous businesses or zoning laws, or even a city council hearing.

The federal government is requesting bids for construction of some of the most hotly contested segments of its border fence. The Army Corps of Engineers posted the sealed request late Friday for a preapproved contractor to build three segments. Based on draft border fence maps, the segments would total about seven miles of fencing west of Brownsville in Cameron County. One of the segments would pass through El Calaboz, home to some of the fence’s staunchest opponents. Among them is Eloisa Tamez, a landowner who fought the project in federal court for months. The federal government has filed condemnation lawsuits against 52 Cameron County landowners in the past month to make way for the fence.

Handleman is selling its North American music distribution business to a Texas company in a move that will eliminate 260 jobs mainly in Michigan and Indiana. The Troy-based company said Monday it has agreed to sell its music inventory and other assets related to its Wal-Mart business to Anderson Merchandisers of Amarillo. Bentonville, Arkansas-based Wal-Mart is Handleman’s biggest U.S. customer. President and CEO Albert Koch says Handleman is leaving the North American market because CD sales have fallen at double-digit rates for several years, both industry-wide and at its customers’ stores. Handleman says most of the 260 jobs to be cut are at company headquarters in Troy and at its distribution facility in Indianapolis.

Union Tank Car has closed its northwestern Indiana factory, shifting production to plants in Texas and Louisiana. The move puts nearly 450 people out of work. The Chicago-based company cited a declining market for railroad tank cars and the cost of operating the older facility in east Chicago. The plant was building about 60 tank cars per week as recently as September, but the company laid off about 100 workers early this year as production dropped to 30 tank cars a week. Friday was the final day of work for the 70 salaried employees and 375 hourly employees.

Delaware’s participation in the nation’s first regional effort to control greenhouse gas emissions through a cap-and-trade system likely will not include one of the state’s biggest polluters. Valero Energy’s oil refinery in Delaware City, Deleware, accounts for more than one-fifth of all carbon dioxide emissions in the state. But environmental officials plan to include an exemption for the refinery in regional greenhouse gas initiative regulations for Delaware. The RGGI is a ten-state effort to reduce emissions of carbon dioxide from power plants in the northeast by ten percent by 2018. Environmentalists believe exempting the refinery from the program is a mistake. But officials argue that the refinery should be exempted because the program is targeted at electrical utilities. Current plans call for Delaware to have its RGGI rules in place by the end of the year. Valero Energy is headquartered in San Antonio.