Iowa Leads the Way in Renewable Fuel Growth

According to a new study by Cardo ENTRIX, the “renewable fuels industry has grown spectacularly over the past decade and Iowa has been a major participant and beneficiary.” This is no surprise as Iowa leads the way in biodiesel and ethanol production. To learn about some of the key highlights of the study, I spoke with Brad Albin, VP of Manufacturing for REG Services, LLC and the President of the Iowa Renewable Fuels Association (IRFA) who sponsored the study.

The study was released to help celebrate IRFA’s 10th Anniversary and also coincided with the declaration that June 15 is Iowa Ethanol Day.

A few key highlights:

  • During the past 12 years in Iowa, ethanol production has increased 741% and biodiesel production has increased 1,600%.
  • The portion of Iowa’s agricultural economic output attributable to the renewable fuels industry increased from 4.6% in 2002 to more than 37% in 2011.
  • By 2011, ethanol and biodiesel production accounted for nearly 7% of manufacturing sector output.
  • The total number of jobs in the entire Iowa economy supported by the renewable fuels industry has grown from around 3,500 in 2002 to 79,000 in 2011 an increase of more than 2,000%.

The first conclusion many will jump to is the industry is thriving due to subsidies. This is not the case. Today, neither biodiesel nor ethanol receive any subsidies. Albin explained, “The incentives that the fairly young biodiesel industry have received pale in comparison to what oil companies continue to receive after they have been in business for over 100 years and are making record profits.”

“The biodiesel industry has proven it has the capacity to produce over 1.5 billion gallons per year of renewable fuels from feedstocks grown and produced in America, while reducing hazardous tailpipe emissions, reducing our dependence on foreign oil, creating and needed good paying jobs and returning more value to the economy than any incentive the industry has ever received.”

Albin said he hoped but never anticipated how quickly the industry would grow, and he is looking forward to seeing the industry grow even more over the next decade.

You can learn more about the key highlights of the study by listening to my interview the Brad Albin here: Brad Albin Talks Iowa Economics

Iowa Gov. Brandstad Declares Iowa Ethanol Day

June 15, 2012 was a big day for the renewable fuels industry in Iowa. It was the 34th anniversary of the first gallon of commercial E10 being sold, the 10th Anniversary of the Iowa Renewable Fuels Association (IRFA) and E15 is ready to go in Iowa following a federal EPA announcement that the final regulatory hurdles had been cleared.

I was on hand for the press conference and watched the Iowa Ethanol Day Declaration being signed. “I, Terry E. Brandstad, Governor of the State of Iowa, do hereby proclaim today, June 15, 2012, as Iowa Ethanol Day.”

A side note. When I first began to drive my dad took me to the gas station to teach me how to pump gas and he said, “We use ethanol.” So I used ethanol until I moved to Texas. My first gas station stop in Dallas I couldn’t find the ethanol so I went inside to ask. “We don’t have ethanol,” was the response. I was shocked – I thought all gas had ethanol. We might not be there yet, but we’re on our way.

Prior to signing the declaration, Brandstad spoke about how far ethanol has come in both Iowa and the U.S. He also talked about how oil companies continue to be resistant to blending renewable fuels and will continue to fight against the industry. This holds true for E15, where oil industry barriers remain.

“Not surprisingly, the oil industry has used its fuel distribution monopoly to keep the blendstock for E15 out of Iowa, said Monte Shaw, Executive Director of IRFA. “Some in our industry are attempting to bypass the oil system in order to bring the proper blendstock into Iowa, but it’s too soon to know if that will prove feasible. Clearly, the oil industry isn’t interested in consumer choice or lower cost fuel.”

You can listen to Gov. Brandstad’s remarks along with the reading of the Iowa Ethanol Day Declaration here: Iowa Ethanol Day Declaration

The Future for Corn Stover in Biofuels

The future of using corn stover for advanced biofuels was one of the discussion topics at last week’s Corn Utilization Technology Conference in Indianapolis.

Nathan Mosier with the Department of Agricultural & Biological Engineering at Purdue University, told the conference that the corn refining industry has done a great job of using the corn kernel to create various value-added products. He’s working on similar developments with corn stover “to break it into its constituents in a way that allows us to add value and produce more products that can be sold.”

Mosier says he’s been working with several companies, like Mascoma, that are getting close to commercial applications that would be used to make cellulosic ethanol. “We’re making a lot of advances in being able to launch the very first products, but I think there’s a lot of opportunities for higher value products that may be lower volume, but in the context of a biorefinery where we can use materials like corn stover instead of petroleum to make not only fuels, but specialty chemicals, plastics and polymers.”

Listen to an interview with Nathan Mosier from CUTC here: Interview with Nathan Mosier

2012 CUTC Photo Album

Producers Discuss Life After VEETC at the 2012 FEW

The general session panel was a highlight for many Monday morning at the 28th Annual International Fuel Ethanol Workshop. Tom Bryan, Vice President BBI International, served as the moderator for the group with panelists Mark Marquis, President and General Manager Marquis Energy Inc., Ray Defenbaugh, President and CEO Big River Resources, Randy Doyal, CEO Al-Corn Clean Fuels and Walt Wendland, President and CEO Golden Grain Energy.

Topics varied from the future of RFS and E15 to traits these industry leaders take to continue their success. But the theme for the event centered around how U.S. ethanol producers are achieving profitability without VEETC. These ethanal plant CEOs and general managers shared their early experiences in this new reality and outlined operational and financial strategies for staying not just on line, but in the black.

Listen to the full panel discussion here: FEW Panel Discussion

2012 Fuel Ethanol Workshop Photo Album

Growth Energy Launches Flex Fuel Finder at 2012 FEW

Right after Growth Energy launched a new website featuring a Flex Fuel Finder application, I got to chat with Tom Buis, Growth Energy CEO, and Jeff Broin, Growth Energy Board Member and CEO of POET. They each expressed the positive impact RFS has had on the ethanol industry and the importance of keeping it implemented. Along that line they discussed what tools Growth Energy has put into place to educate the general consumer about E15 and Flex Fuel pumps.

Growth Energy launched a new user-friendly interface for EthanolRetailer.com, a website that seeks to outline the benefits of ethanol and the growing availability of Flex Fuel pumps. The website launch is part of Growth Energy’s new national campaign to increase awareness of E15.

The website is a comprehensive and easy to use resource for current and prospective ethanol retailers across the company, as well as consumers. It also features a Flex Fuel Finder application, which simplifies the process of locating ethanol blend pumps. The application is accessible from both the website and as a smartphone app, making it easier for Americans to locate cheaper, cleaner fuel while on the go.

Listen my interview with Tom Buis and Jeff Broin here: Interview with Growth Energy

2012 Fuel Ethanol Workshop Photo Album

Bob Dinneen Gives Keynote Address at 2012 FEW

During the opening session of the 28th Annual International Fuel Ethanol Workshop, Bob Dinneen, President & CEO, Renewable Fuels Association, addressed producers. Bob highlighted the challenges facing the ethanol industry in the near future and also the importance of maximizing demands. Sporting a “Don’t Mess with the RFS,” button Bob stressed the importance of RFS and what he is doing in Washington, D.C. to keep it in place.

“There are marketplace challenges because margins are tight right now but those are temporary and this is a commodity market selling into a commodity market so that doubles the challenges today. But with the crop that is expected I think most of the people around this room are fairly optimistic that we will get through those.”

“You got to have a button, that’s what makes a campaign, but it also reflects the seriousness with which we take this. RFS has been a tremendous success. When the first Renewable Fuels Standard was enacted in 2005 we were 60% dependent on foreign oil and liquid transportation fuels and today we are 45% dependent. That is a consequence of the growth in ethanol, a result of Renewable Fuels Association and because the people in this room who produce ethanol day in and day out have been successful.”

Listen to my interview with Bob here: Interview with Bob Dinneen

Listen to Bob’s complete keynote address here: Bob Dinneen's Keynote Address

2012 Fuel Ethanol Workshop Photo Album

Vote to Cut Military Biofuels Disappoints Ag Secretary

Secretary of Agriculture Tom Vilsack is “disappointed” in recent Congressional action that would cut the use of biofuels by the military.

hawaii“We are extremely disappointed in that vote because I think it fails to recognize and appreciate the enormous potential of this industry to revitalize the rural economy,” said Vilsack during a conference call today when asked specifically about a vote last week by the Senate Armed Services Committee that would prohibit the military from spending money on alternative fuels. “I certainly hope that as this process continues folks will understand the negative impact such a vote has on rural America and will decide that the Navy, USDA and Department of Energy are on the right track to produce these new fuels.” The House Armed Services committee is considering a similar amendment to the defense spending bill.

Vilsack, pictured here during a visit to Pearl Harbor earlier this year to talk about military use of biofuels, said it is the right policy for the country. “People have got to understand we should not be so overly reliant on others for the supply of fuel,” he said, noting that commercial airlines are also very interested in the development of aviation biofuels.

The secretary indicated that he believes the oil industry is behind the movement in Congress to keep the military from using alternative fuels, just as oil interests are working to get rid of the Renewable Fuel Standard. “Because it is becoming a competitive alternative, and that is a good thing,” he said.

Listen to Vilsack’s comments here: Vilsack press conference questions

Novozymes Nebraska Enzyme Plant Opens

Advanced biofuels took a $200 million step forward on the march toward commercialization Wednesday with the official opening of Novozymes’ enzyme plant in Blair, Nebraska.

The inauguration of Novozymes’ new Blair facility was celebrated with employees, customers, community leaders and government officials, including the governor of Nebraska, Dave Heineman, U.S. Department of Energy Senior Advisor Jason Walsh and Blair Mayor James Realph. The governor and the mayor together ceremonially started the fermentation process at the plant. “The grand opening of Novozymes is important for the ethanol industry and for energy independence,” said Governor Dave Heineman. “Nebraska is one of the top producers of ethanol in America, which makes our state the perfect site for this facility.”

With the 100 new jobs created by the plant opening, Agriculture Secretary Tom Vilsack highlighted the importance of expanding tax credits for investments in clean energy manufacturing for the economy during a conference call today with Novozymes President Adam Monroe. Novozymes leveraged its $200 million private investment in the Blair facility with a 48C manufacturing tax credit from the federal government.

“This program (48C) along with several other tax credits really create the opportunity for a clean energy future with three very important results,” said Vilsack. Those results, he says, include increasing farm income, creating jobs, and reducing reliance on foreign oil.

Monroe says biofuels currently make up 16% of Novozyme’s $2 billion in revenues. “We’ve done a number of research projects funded by DOE and have reduced the cost of the key enzymes needed for advanced biofuels production by 90%,” he said. “Now it’s about getting steel in the ground and moving ahead. We wanted to be ready when this industry commercialized and now we are.”

Listen to comments from Secretary Vilsack and Adam Monroe here: Vilsack/Monroe press conference

GROWMARK Studying E15 Retailer Handbook

As a leader in fuels produced by farmer cooperative members, GROWMARK is studying how to best implement 15% ethanol and upgrading its biodiesel quality program for marketing through the FS Brand system.

There are over 300 locally and independently operated FS FAST STOP and FAST STOP Express locations so GROWMARK Renewable Fuels Product Manager Brigette Harlan says they are carefully researching all the steps that need to be taken to offer E15 to guide them. “We’re working very closely with the Renewable Fuels Association in reviewing their E15 Retailer Handbook,” she explained. “We’re very supportive of this moving forward but we really want to ensure it’s done properly.”

Harlan says they recently updated their Biodiesel Quality Program, which has been in place since 2007. “It includes a specification that we require of all of our suppliers that’s tighter than the ASTM specifications, and also includes storage and handling and appropriate blending guidelines,” she said. “We just want to make sure that we are putting out there the best quality product that we can.”

GROWMARK FS Energy offers full truckloads of pure ethanol, various ethanol blends, pure biodiesel and blends with ultra sulfur diesel. “We try to offer whatever is needed by our customers,” said Harlan.

Listen to or download interview with Brigette Harlan here: GROWMARK Renewable Fuels Product Manager Brigette Harlan

ISU Professor Explains Ethanol/Gas Price Study

The Iowa State University professor who co-authored a new study on ethanol and gasoline prices released this week says the impact of the growing use of the domestically-produced fuel is significant.

hayesThe new analysis from the Center for Agricultural and Rural Development (CARD), an update to a 2009 peer-reviewed paper published in Energy Policy by professors Dermot Hayes of ISU and Xiaodong Du of the University of Wisconsin, found that the growing use of American ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, up from an average impact of $0.89 per gallon in 2010. The study also found the between 2000 and 2011, gasoline prices have been reduced by an average of $0.29 per gallon, thanks to ethanol.

“Those numbers are large,” said Professor Hayes during a conference call on Tuesday during which he explained his hypotheses for the big impact of ethanol. “Think about the world before ethanol occurred. Every time a gasoline refinery would shut down, the price of gasoline would go up 10-20 cents because the U.S. was at its refinery capacity. What ethanol has done is increased refinery capacity.”

Hayes calls ethanol a “magic bullet that can squeeze ten percent more gasoline out of a barrel of crude oil.”

The original study was the result of a dissertation by Professor Du, while the Renewable Fuels Association funded the update.

Listen to Hayes’ explanation of the study here: ISU Professor Dermot Hayes