GPRE Outlines Algae Plans on Q1 CallGPRE Outlines Algae Plans on Q1 Call
April 29, 2011
xecutives of Green Plains Renewable Energy, the vertically-integrated ethanol producer based in Omaha, Nebraska, discussed first quarter 2011 financial results and current developments on their recent earnings conference call.
Todd Becker, President and Chief Executive Officer, announced that for the first quarter, the company generated $812 million of revenues, $7.7 million of net income and $0.20 in diluted earnings per share, extending their string of profitable quarters now to eight. The company sold and produced 172 million gallons of ethanol during the quarter, and is now producing at slightly over 2 million gallons per day, or 740 million gallons on an annual basis. The company intends to process over 300 million bushels of corn to ethanol, or approximately 2% of the U.S. corn crop, in their facilities over the next year.
Highlights of the discussion included updates on GPRE’s recently announced BioProcess Algae joint venture. Following are some comments by Mr. Becker and his answers to some shareholder questions regarding their algae ventures:
“It was our honor and privilege to host the U.S. Secretary of Agriculture, Tom Vilsack at the grand opening of BioProcess Algae Phase II, a couple of weeks ago. The technology represents a true intersection between first-generation technologies and advanced technologies. We are showing the world that not only does carbon have value, but that carbon and other byproducts of an ethanol plant like warm water and heat can create a product that will give us food, feed and energy.
“Our goal initially was to become the farmer of this project – just grow and harvest algae. What we have discovered is that we have moved faster than the downstream markets have. So in our Phase II growing of algae at a commercial scale, we have turned our attention to focus on downstream uses of Algae. In the feed market BioProcess Algae is starting feed trials at Ohio State University next month. This will show the value of high-protein product in the animal feed in the future. In the food market Algae will be used for antioxidants, pigments and protein. We’re starting to develop products for all of these sectors using the Algae grown from these reactors. And our Algae are currently being tested on their abilities to go directly into a refinery to make a bio crude product.
What are your plans for commercialization of algae?
“We are going to break ground in Shenandoah on a 5-acre footprint where we’re going to build vertical and horizontal reactors in a partnership of four companies. When you harvest algae, it is basically 99.9% water and because we’re partnered with water filtration partners that have brought the technology to us, they have started to dewater the algae to get it to a more of a toothpaste-like form. And from that form we’ve been able to distribute that algae to feed, to food and fuel uses, and we’re testing that right now.
“We think we’ve made great progress on the production. When you look at the CO2 footprint, we are taking industrial CO2 out of our stack right now to make the algae. Shenandoah produces 150,000 tons of carbon per year, approximately. And if we could capture all that carbon, we think we’ll be able to make 50,000 tons of biomass and 7 million to 10 million gallons of liquid fuel out of that.
Are you making ethanol directly from the algae?
“Yeah. We’ve been able to, in our labs, use very basic enzyme and chemical applications like we do for ethanol and have taken the algae in that toothpaste form and made ethanol out of it. Algae have starch and carbohydrates, and we could grow varieties for ethanol.
“The bigger use of it, before we build out commercial scale facilities, there will be plenty of opportunities in seed and especially in the nutraceuticals and food applications, long before we’ll need to take it to fuel, but we have to be heading in that direction.
“I think more importantly is that we have worked with major universities in bio-oil extraction and we’ve also had refiners and laboratories see if they could take that bio-oil and use it in crude refineries as well.
Who you might be looking at partnering with to turn the algae into a crude equivalent?
“We haven’t given out any names except to say that our algae is at in a refiner’s laboratory and they are looking at the extraction of that to use on a front end of a refinery. It’s the very early days but it is happening.”
Original transcript courtesy of www.SeekingAlpha.com.