Biodiesel Lone Trans Fuel Success Story of 2015

biodiesel pumpWhile crude oil, heating oil and even the renewable ethanol had price declines in 2015, biodiesel stands alone as the only transportation fuel ending the year on a positive trend. This article from Bloomberg Business says biodiesel prices moved up at least 10 percent in the last month of the year, aided by the announcement that more biodiesel would be blended into the nation’s fuel supply as part of the Renewable Fuel Standard and the reinstatement of the federal $1-a-gallon biodiesel blending tax credit.

“It’s doing well,” Jerrod Kitt, an analyst at Linn Group in Chicago, said by phone Wednesday. “Keep in mind, heating oil has gone in the opposite direction.”

Biodiesel in the Midwest has increased 11 percent this month to $2.80 a gallon, the highest since July 23. During that same period, regular diesel in Chicago plummeted 13 percent to $1.0292 a gallon. Last week, diesel touched 95.54 cents, the cheapest in records going back to 2006, data compiled by Bloomberg show.

Futures for crude oil have dropped 12 percent in December, gasoline 8.7 percent and heating oil 18 percent on the New York Mercantile Exchange. Ethanol is down 7.3 percent on the Chicago Board of Trade.

Biodiesel’s advance has been tempered by the holidays and is likely to accelerate as traders return from vacation, said Eric De Bruin, a broker at StarFuels Inc. in Milwaukee.

The Environmental Protection Agency’s Nov. 30 Renewable Fuels Standard announcement said refiners such as Exxon Mobil Corp., Chevron Corp. and Valero Energy Corp. should have used 1.73 billion gallons of biodiesel this year and must consume 1.9 billion in 2016.

“Prices are going up,” De Bruin said by phone Wednesday. “It’s not the big jump over one day, but it’s very slowly going higher.”

ADM to Develop North Carolina Ethanol Hub

ADMlogoArcher Daniels Midland (ADM) will develop a new ethanol hub in Selma, North Carolina. The company says the project with Kinder Morgan, Inc. and Bailey Feed Mill will be to build a new unit train rail facility and ethanol offloading system.

KMI will invest in and construct the new facilities, which will be located at the Bailey Feed Mill and will have the ability to offload up to 96 railcar-long unit trains in a 24-hour period. KMI will also build a new pipeline, approximately 2.6 miles in length, to connect the unit train offload system to their vast tank farm in Selma, allowing ethanol to be distributed to blending terminals in Selma and the surrounding markets.

“This project will help us improve the efficiency of our ethanol delivery in this market with added unload capacity, quick-turn time on railcars and a pipeline connection to tankage,” said Craig Willis, president of ethanol for ADM. “And by working with KMI and Bailey Feed Mill on this project, we will achieve the benefits in a cost- and capital-efficient manner. ADM has been a long-time supplier in this market, and we are excited to work with KMI and Bailey Feed Mill to bring a more flexible, reliable and efficient solution to customers in the Selma area.”

ADM and KMI anticipate having inter-terminal connections in service as early as the third quarter of 2016, with the remainder of the project expected to be complete by the end of 2016.

“We are pleased to work with ADM and Bailey Feed Mill on this transportation solution for ethanol deliveries,” said David Halphen, vice president of business development for KMI’s Products Pipelines. “This project will reduce the ethanol delivery carbon footprint through a more efficient use of rail capacity and pipeline transportation.”

Iowa Tops 4 Billion Gallons of Ethanol in 2015

Iowa-RFA-logo-new1It’s been a record-breaking year for ethanol production in Iowa. The Iowa Renewable Fuels Association (IRFA) says the state’s 43 ethanol plants produced more than 4 billion gallons during 2015, up slightly from 3.9 billion gallons in 2014. Iowa continues to be the number one ethanol producing state, accounting for more than a quarter of all ethanol produced in the U.S.

“While Iowa took a modest step forward in production this year, we have the corn supplies to really expand ethanol production,” said IRFA Executive Director Monte Shaw. “What we don’t have is access to the market for higher ethanol blends. The USDA blender pump grant program will help move the needle forward in 2016 and we hope the EPA will get the RFS back on track when they propose the RFS levels for 2017. If we can crack the petroleum monopoly on fuel choice, it will benefit consumers, farmers and the environment.”

IRFA credits the increase to efficiency gains and debottlenecking at existing plants, as well as ethanol production from cellulosic feedstocks such as corn stover and corn kernel fiber.

The Andersons’ Michigan Ethanol Plant to Expand

Andersons1Agribusiness The Andersons is expanding its ethanol plant in Michigan. The company says the Albion, Michigan plant’s capacity is being doubled.

“The supply and demand situation in Michigan relative to corn and ethanol is very favorable,” explains CEO Pat Bowe. “Advancements in farm practices and technology continue to increase the size of Michigan’s corn crop and enhance its quality. This added production capacity enables more ethanol to be produced and used in the state.

“This dynamic,” he continues, “combined with the highly efficient operations at the Albion facility, makes it a compelling investment for expansion.”

The facility, built by ICM, Inc. of Colwich, Kansas in 2006, was engineered for future expansion. ICM, Inc. is contracted to build the expansion, which is scheduled to be completed in April 2017. Approximately 10 new full-time production positions will be added when the new capacity becomes operational.

The ethanol plant is co-owned by Marathon Petroleum Corporation.

China Imports Record Amount of US Ethanol

usda-logoU.S. ethanol exports to China hit record numbers this year. And the U.S. Department of Agriculture (USDA) is crediting the rise to its trade mission last year that helped push overall agricultural imports to China to three times what they were just a decade ago.

“Our objective for every trade mission is to create new markets for farm products made in rural America,” said USDA Under Secretary for Farm and Foreign Agricultural Services Michael Scuse, who led the mission. “U.S. ethanol exports to China have jumped from $8 million to more than $86 million since our May 2014 visit. In October, we exported more ethanol to China than in the previous 10 years combined.”

Scuse led the delegation to promote U.S. agriculture, and explore the role that renewable fuels might play in China’s long-term clean energy strategy. The delegation met with gasoline companies, fuel blenders, oil companies, commodity traders, and government officials to promote the benefits of using higher ethanol blends. During October, the U.S. exported 32.5 million gallons of ethanol to China, valued at $57 million, or 46 percent of total U.S. ethanol exports for the month. Previous U.S. exports of ethanol to China averaged less than $3 million annually from 2005 to 2014.

Earlier this year, USDA partnered with 21 states through the Biofuel Infrastructure Partnership (BIP) to nearly double the number of fueling pumps nationwide, expanding the ethanol refueling infrastructure by nearly 5,000 pumps, a $210 million investment that will give consumers access to clean, American-made biofuels, and provide more choices at the pump.

“These are the kind of initiatives that strengthen our rural communities, and open new doors and help our farmers and ranchers capitalize on the tremendous export potential for American agricultural products,” said Scuse.

Just in Time for Christmas, Biodiesel Producers Get Extra Jingle

uscapitolIt might not be just the jingle of sleigh bells that puts a smile on biodiesel producers faces this Christmas season. With Congress passing the tax extenders legislation and the president signing it into law, many producers will enjoy a little extra figurative jingle in their pockets, as the federal $1-a-gallon biodiesel blenders tax credit is made retroactive for 2015 and covers all of 2016.

Business Record reports biodiesel behemoth Renewable Energy Group will see a windfall of $125 million to $135 million from the measure passing. And Canadian biodiesel maker BIOX, with a 16 million gallon per year biodiesel refinery in Ontario, announced it would see increased profits thanks to the credit.

Alan Rickard, CEO of BIOX Corporation said, “This is a significant piece of legislation that will provide much needed industry stability and support. On the retroactive passage of this legislation, BIOX expects a positive impact of approximately US$7 million to be recorded in our Fiscal Q1 results, related to the entire 2015 calendar year. Even greater is the market stability that the proactive passage of this legislation provides. This, combined with the EPA setting the Renewable Volume Obligations for the Renewable Fuel Standard (RFS2) from 2014 through 2017 and Ontario’s Greener Diesel requirement increasing to 3% in 2016, gives us a positive outlook for the biomass based diesel market in North America.”

Enviva Buys Virginia Wood Pellet Plant

envivaEnviva has bought a Virginia wood pellet fuel plant for $131 million. This news release from the company says the Southampton plant will produce more than half a million metric tons per year of the green fuel and brings Enviva’s production capacity to 2.2 million metric tons per year.

“We are excited to announce our first drop-down transaction with our sponsor. The fully-contracted Southampton plant is a world-class facility that fits seamlessly into our core business and will significantly increase our production capacity and the tenor of our contracted cash flows,” said John Keppler, Chairman and Chief Executive Officer. “The acquisition, which is expected to be immediately accretive to the Partnership’s distributable cash flow per unit, provides the opportunity to substantially increase our distribution while still maintaining conservative coverage ratios.”

“Having a strong sponsor is a major advantage during a period of choppy financial markets,” said Mr. Keppler. “Our sponsor’s support ensured that this highly accretive transaction was completed on schedule.”

The conflicts committee of the board of directors of Enviva’s general partner, comprised entirely of independent directors, approved the terms of the transaction. Evercore served as exclusive financial advisor to the conflicts committee on the transaction. Andrews and Kurth, LLP served as legal counsel to the conflicts committee. Vinson & Elkins L.L.P. served as legal counsel to the sponsor’s joint venture.

Waste Fat Biodiesel to Power London Buses

londonbus1About one-third of London’s buses will soon be running on biodiesel made from animal fat waste. This article from the Guardian says two bus operators, Stagecoach and Metroline, will get the green fuel from Argent Energy at a 20 percent biodiesel (B20) blend.

By March next year, almost 3,000 of the capital’s 8,900 buses will be powered by the B20 fuel blend.

It is estimated that buses running on waste-based B20 produce 10 per cent less carbon emissions than a bus using ordinary diesel.

Transport for London (TfL) said it is resulting in a huge reduction in CO2 emissions of 21,000 tonnes each year.

Mike Weston, TfL’s Director of Buses, said: “Our bus fleet is now making a major contribution to improving air quality and bringing down CO2 emissions.

“This improvement, which will reduce CO2 emissions by 21,000 tonnes each year, is being introduced now with no extra spend needed and no long delay for the fitting of new kit.

“It’s just one of a number of measures we are taking to make London’s environment better for everyone.”

Power Generation Fueling Global Biomass Growth

woodpelletsThe global biomass market has been growing and will continue to do so, thanks to power generation. This analysis from P&S Market Research says increased use of biomass pellets in power generation, along with increased government initiatives and stringent environment regulations, are the key drivers promoting the growth of the global biomass pellet market.

The power sector application segment is expected to witness the fastest growth (12.4% CAGR) during 2015 – 2020, in the global market. Based on application, the heat sector segment held the largest market size, with 14,256.0 million tons volume in 2014, and it is expected to reach 27,122.3 million tons by 2020, growing with a CAGR of 8.7% during the period 2015-2020.

The global biomass pellet market was valued at $6,976.3 million in 2014, and it is expected to grow with a CAGR of 11.1% during 2015 – 2020. Europe accounted for the largest share of the global biomass pellet market with 20,000.0 million tons consumed in 2014. The major reasons behind growth of the market in the region were low GHG emission from biomass and increased government initiatives for renewable technologies. The market in Europe is expected to maintain its growth rate, mainly driven by various subsidies and legislation.

In 2014, North America accounted for the second largest share in the global biomass pellet market, in terms of value and volume. The major reason behind growth of the market in the region were increasing demand of biomass pellets in industrial sector, strict environmental regulations, and increasing concern for global warming. Therefore, the high rate of depletion of fossil fuels and increasing demand for the reduction of greenhouse gases are indirectly creating ample opportunities for the growth of the North American market.

The report adds that higher levels of investments in the biomass industry are helping advance the technology, making biomass more competitive against conventional fossil fuels.

ExxonMobil, Wisc. Partner on Biomass-Biofuel Project

exxonmobilOil giant ExxonMobil has partnered with the University of Wisconsin–Madison on a project to turn biomass into biofuel. This article from Lab Manager says the two inked a two-year research agreement.

UW–Madison long has been known for its expertise in biomass conversion, and the project leverages the university’s expertise alongside the resources and technology development of ExxonMobil. George Huber, the Harvey D. Spangler professor of chemical and biological engineering at UW–Madison, is working closely with ExxonMobil scientists to build a stronger understanding of the basic chemical transformations that occur during biomass conversion into diesel and jet fuels.

“The science of biomass conversion is very complicated,” Huber says. “In this project we are doing the long-term fundamental research to understand the chemistry involved in the catalytic process of converting biomass into diesel and jet fuel. Our goal is to generate knowledge about what’s possible, and what’s not possible.”

Researchers have used expensive precious metal catalysts such as platinum for biomass conversion. Huber’s group, however, has been working to develop new catalytic materials that are orders of magnitude cheaper than precious metal catalysts.

“The challenge is to make biomass-derived fuels cost-competitive with petroleum-derived diesel fuels,” says Huber, who also is affiliated with the Wisconsin Energy Institute at UW–Madison.

The project allows extensive collaboration between ExxonMobil scientists and UW–Madison students, who will gain experience collaborating with an industrial partner.

“This agreement continues ExxonMobil’s commitment to partner with top universities and scientists to research and discover next-generation energy solutions,” says Vijay Swarup, vice president of research and development for ExxonMobil Research & Engineering Company. “We are continuously investigating new ideas and technologies and we are looking forward to working with the team at the University of Wisconsin on this project.”

This is the latest in a series of research partnerships ExxonMobil established with some of the leading universities around the world, including MIT, Princeton, Michigan State, Northwestern, Stanford and Iowa State University.