Arkalon Ethanol Signs Up for Enogen

Arkalon Ethanol, LLC based in Liberal, Kansas has signed an agreement with Syngenta to enogenuse corn that features Enogen trait technology. The ethanol plant will begin to use the trait, replacing its liquid alpha amylase, following the 2014 corn harvest.

“We are excited to announce this agreement with Arkalon Ethanol and we’re confident that Enogen technology is a solution that can add tremendous value to its operation,” said David Witherspoon, head of renewable fuels for Syngenta. “We have collaborated with Arkalon throughout this entire process and this agreement is a true example of our commitment to our customers, and the types of partnerships we want to form within the ethanol industry.”

According to Syngenta, Enogen grain delivers alpha amylase enzyme in the corn kernel, eliminating the need for an ethanol plant to use liquid alpha amylase. The alpha amylase enzyme found in Enogen grain helps an ethanol plant reduce the viscosity of its corn mash. This breakthrough reduction can lead to better levels of solids loading, which directly contributes to increased ethanol yields and throughput, as well as cost savings from reduced natural gas, energy, water and chemical usage.

Arkalon’s sister plant, Bonanza BioEnergy, LLC, is currently wrapping up its first year of contracting with local growers to produce Enogen grain. Syngenta collaborated with Bonanza BioEnergy on a three-month Enogen technology trial that ended in July 2012. A commercial agreement followed in November that same year. Arkalon Ethanol and Bonanza BioEnergy are two of three ethanol plants operated by Conestoga Energy Partners, LLC.

“After seeing the value that Enogen corn can create at our Bonanza plant, we naturally wanted to explore implementing the technology at the Arkalon plant,” said Tom Willis, CEO of Conestoga Energy Partners. “We have full confidence in the technology and in Syngenta as a partner, and we are eager to begin working with our local farmers to supply Enogen grain.” Continue reading

Ethanol Sweet Spots – Part II

Yesterday, DF featured an article on “Must Know Ethanol Trends” that came out of Christianson & Associate’s, PPL (C&A) Biofuels Benchmarking 2012-13 Annual Report. In addition to identifying important trends for the industry, the report also identified some “sweet spots” for the industry.

John-ChristiansonJohn Christianson, partner with C&A, said running a good business is the first thing and being as efficient as possible is important and having good sound prudent risk management is always going to be at the forefront of your business. But going forward, he said there are technology and market issues that will be a factor, or a sweet spot, for the ethanol industry.

“From a technology perspective, we’re seeing plants go further and digging further into the yield component,” said Christianson. “They are looking at difference technologies that will allow them to remove different components of the kernel of corn and allow them to create multiple products on the back-end. As we see this industry evolve, we’re going to see them evolve into a biorefinery industry.”

He cautioned that in order for a plant to make investments, you need a technology that is going to provide a return on investment. Last year was not the year for plants to make investments but Christianson said plants will need to make technology investments if they want to continue to be a long-term viable company.

Any ethanol plant interested in becoming a participant in C&A’s Benchmarking program, or interested in purchasing the The Biofuels Benchmarking 2012-13 Annual Report can contact the Benchmarking team.

Listen to John Christianson discuss ethanol sweet spots in detail here: Ethanol Sweet Spots

Ethanol Production & Crush Margins Improve

According to forecasts published in Biofuelscan, a daily report from Platts that covers the global biofuels industry, U.S. ethanol production data, to be reported on October 23, 2013 by the U.S. Energy Information Administration (EIA), ethanol production for the week ending October 18, 2013 was 861,000 barrels/day (b.d). This number would show an increase of 0.58 percent from last week’s Bentek Energy ethanol production forecast.

Corn futures prices have hovered near three-year lows and rising crush margins – the price difference between a gallon of ethanol and gallon of corn — have combined to boost ethanol production in recent weeks. As a result, ethanol production figure has risen for four of the past five weeks, and it is expected to rise further, given the projections of a bumper U.S. corn crop during the 2013 harvest season.Screen Shot 2013-10-21 at 8.47.48 PM

According to calculations from Kingsman, the sugar analytics unit of Platts, the crush margin will rise to 24.4 cents/gal for the reporting week, up 6.3 cents/gal from the prior week.

Platts began publishing its Bentek Energy and Kingsman forecasts of ethanol production and crush margins, respectively October 4, 2013 to fill a data gap during the temporary shutdown of the U.S. government related to lack of budget appropriations.

“We are pleased to meet a market need for independent estimates of this important government data series,” said Simon Thorne, editorial director of agriculture at Platts. “The advance forecasts are aimed at helping the marketplace better estimate price-sensitive data and assist customers in making better and timelier business decisions.”

The Bentek Energy forecast of U.S. ethanol production utilizes data from approximately the past three years and is calculated on actual consumption figures at ethanol production plants.

“When comparing the Bentek production forecast alongside the actual government production data, our estimate is within an average 0.06% – a very strong correlation since the records began in 2011,” concluded Thorne.

Must Know Ethanol Trends – Part I

The Biofuels Benchmarking 2012-13 Annual Report is out and in addition to identifying past, current and future biofuel trends, the report identifies some emerging trends for the ethanol industry. During an interview with John Christianson, partner with Christianson & Associates, PPLP (C&A), I asked him what trends they have been seeing and he noted five in particular of importance.

Biofuels Benchmarking Report coverChristianson noted that spinning corn oil off the back of the plant has had a big impact on the industry and to date, nearly 75 percent of all ethanol plants are using a corn oil extraction technology. He also noted that 2012 was a very difficult year for the ethanol industry, very tight margins, and with the high feedstock costs, it really squeezed margins for the year. He said that when looking at the Benchmarking report the industry was hovering over break-even and the laggards were losing money and the leader plants were making money.

“In the first two quarters of 2013 we’re seeing a really nice trend where we’re getting upward into the areas where we have some positive grind margins,” said Christianson. “This is due to ethanol net-back prices staying strong in 2013 first two quarters and our feedstock costs dropping off and having better margins.” He anticipates this will continue into 2014.

The last year also saw ethanol yields drop a bit due to the drought-ridden 2012 harvest; however, Christianson said based on forecasts for the 2013 harvest, yield should go back up once the ethanol plants start grinding 2013 harvest corn and the industry should go back on the trend of increasing yield each year.

Other trends include the sophistication of the ethanol industry on their grind margin management, improved risk management practices and improved environmental sustainability. “So enhanced risk management and enhanced production efficiencies going forward are going to allow plants to squeeze out as much profitability as possible,” said Christianson.

Listen to John Christianson discuss current ethanol trends in detail here: Must Know Ethanol Trends

Genscape Invokes NASA for Updated Corn Yield Forecast

Genscape Landviewer Oct 2013 corn forecastAs the federal government and its agencies begin to ramp up from a mandated furlough, Genscape is filling the gap by using NASA satellite data. The company has released an updated October corn yield forecast of 13.3 billion bushels. The company has noted that other analysts, including the U.S. Department of Agriculture (USDA), have wide gaps in their predictions ranging from 13.2 billion bushels of corn produced during the 2013 growing season, to 14.2 billion bushels of corn.

Genscape noted a unique combination of spring floods and flash droughts, coupled with an unusually and long growing season, have conspired to make this year’s annual corn forecast the most difficult on record. However, the company said through its Landviewer technology, is able to simplify the complexity of predicting forecasts.

“Given the unusual circumstances around this year’s growing season, we feel our NASA satellite and big data initiatives are even more important,” said Dr. Steffen Mueller, director of spatial grain analytics at Genscape.  “We are back to our original prediction of 13.3 billion bushels, and we have the hard data to back it up.”

The gap in USDA data has created delays in many modeling efforts. Genscape said its LandViewer model offers next generation data acquisition techniques, integrates NASA satellite imagery, and the industry’s most unified ground-based crop yield verification – called “ground truthing – with extensive analysis by experienced soil/agricultural scientists.

Normally at this time of year, the USDA incorporates Farm Service Agency (FSA) lost acreage data; however, this year that analysis has not available to market participants because of the temporary government shutdown. Genscape said because it is able to incorporate NASA satellite imagery with best-in-the-industry ground truthing data, their latest forecast is the only known model to account for this market intelligence.

ACE Supports EPA’s RVO Efforts

The American Coalition for Ethanol (ACE) sent a letter to the U.S. Environmental Protection Agency (EPA) regarding leaks in the press about the 2014 Renewable Fuel Standard. While the majority of EPA employees were furloughed during the government shut down, EPA Administrator Gina McCarthy, along with several other of her key staff, remained on the job.

ACE Executive Vice President Brian Jennings points out in the letter, “We understand that the oil industry prefers to continue amassing profits in a market where ethanol is artificially ACElogorestricted to just ten percent of gasoline demand even though it is less expensive and cleaner than petroleum. Recall, the oil lobby fought to prevent ethanol from comprising even ten percent of the market when the original RFS was passed by Congress in 2005 and they have rebelled against the necessity to blend more than that since the law was expanded in 2007.

Their state of denial about higher ethanol blends was the reason that the waiver language was one of the final outstanding provisions that oil companies tried to weaken as finishing touches were put on the RFS by Congress. They wanted the opportunity for their cuff-linked attorneys to wordsmith and dodge their way out of compliance when the RFS became a real threat to their continued monopoly on consumer pocketbooks.

Simply put, the ‘blend wall’ is not a justification for triggering the waiver authority under the RFS. To the contrary, the purpose of the RFS is to allow consumer access to cleaner and more affordable alternatives to petroleum. To waive the RFS based on the blend wall rewards oil companies for doing nothing to comply with the inevitability of higher ethanol blends, and would take the teeth out of the most consequential policy enacted by Congress to improve the way we produce and use transportation fuel.

Based on the thoughtful and appropriate steps EPA has taken to date to ensure the RFS is successful, we know the Administration would not want to retreat by creating the kind of dangerous precedent that harms consumers by caving in to oil industry demands.”

Patriot Adds ICM Selective Milling Technology

Patriot Renewable Fuels TeamPatriot Renewable Fuels LLC of Annawan, Illinois has purchased ICM’s patent-pending Selective Milling Technology (SMT). According to ICM, the technology increases ethanol yield, reduces viscosity and increases oil recovery. In addition, with the Patriot Renewable Fuels contract announcement, ICM and its partners have used this technology to increase ethanol yield to surpass more than one billion gallons of annual ethanol production.

“It gives us great pleasure to announce the purchase of our Selective Milling Technology by Patriot Renewable Fuels,” said ICM President Chris Mitchell. “Today we celebrate two milestones – the first which illustrates ICM’s ability to provide our customers with this technology towards increasing the yield of more than one billion gallons of annual ethanol production. The second milestone we celebrate is Patriot’s five year anniversary as an ethanol producer, and as a solid contributor to the economic growth of Annawan and the surrounding region. We’re thrilled to continue delivering this successful yield enhancement solution that can improve our customers’ bottom line and strengthen their communities.”

Patriot Renewable Fuels general manager Rick Vondra added, “Today, we are a 120 MGY producer that draws upon the strength of ICM’s revolutionary platform technology and the ability of SMT to increase our ethanol yields, increase oil recovery yields, and ultimately increase our revenues. With our 200 local/Midwestern investors, we’ll harness that strength and continue to make an impact on agriculture and economic development.”

Ethanol Safety Seminar Planned in Tacoma

Ethanol Safety SeminarThe Renewable Fuels Association (RFA) and the Burlington Northern Santa Fe (BNSF) Railway will co-host a free Ethanol Safety Seminar on October 23 and 24, 2013 at the Tacoma Fire Department Training Center in Tacoma, Washington. Sessions will run from 9 a.m. to 2 p.m. Registration is limited to the first 60 people per session. Lunch will be provided. Certificates of attendance will be awarded to attendees at the completion of the course.

This course was developed to give first responders, hazmat teams, and safety personnel an in-depth look at proper training techniques needed when responding to an ethanol-related emergency. A majority of this training is based on the “Complete Training Guide to Ethanol Emergency Response,” a training package created by the Ethanol Emergency Response Coalition (EERC) that has been distributed throughout the United States and to several countries worldwide.

“These training opportunities allow community responders to become more knowledgeable and better prepared to respond safely and effectively to incidents involving ethanol,” said Patrick Brady, assistant director of hazardous materials at BNSF Railway. “We feel it is important to bring in leaders in the hazmat emergency response field to share the best practices for responding to ethanol incidents with responders in communities that we serve.”

The Ethanol Safety Seminar focuses on numerous important areas of ethanol safety including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels, transportation and transfer of ethanol-blended fuels, storage and dispensing locations, firefighting foam principles and ethanol-blended fuel, health and safety considerations for ethanol-blended fuel emergencies and tank farm and bulk storage fire incidents.

Rep. King Exposes Federal Petroleum Mandate

In a letter sent to U.S. Representative Steve King (R-Iowa), the Iowa Renewable Fuels Association (IRFA) thanked the Congressman for exposing the Federal Petroleum Mandate and reiterating his unwavering support of the federal Renewable Fuel Standard (RFS) during this week’s National Journal forum titled, “Biofuels Mandate: Defend, Reform, or Repeal.” The forum was sponsored by the American Petroleum Institute (API), the national trade association representing the oil industry.

During the forum, Rep. King noted the RFS “is the only thing that gives market access so that corn and other product-based alternative fuels can get into the tank and be sold in competition with petroleum. If we lose (the RFS), then we have a government mandate, a federal mandate for petroleum only in our vehicles.”

In the letter, IRFA Executive Director Monte Shaw wrote, “Your strong defense of the RFS at the National Journal/API event clearly articulated the importance of this policy in achieving market access for non-petroleum fuels, creating fuel competition, and adding value to the agricultural sector. In addition, IRFA would like to thank you for exposing the impact of the Federal Petroleum Mandate in your remarks at the forum.”

National Journal RFS ForumShaw explained that for nearly 40 years federal law has required that any fuel consumers put in their tanks must be approved by the U.S. Environmental Protection Agency (EPA). Unless you own a flexible fuel vehicle, the only EPA-approved fuels are regular unleaded gas, E10, and E15. This means the approved fuels range from 100 percent petroleum to a minimum of 85 percent petroleum. Federal law dictates that if motorists use an unapproved fuel, meaning a fuel containing less than 85 percent petroleum, they are subject to a $25,000 per day fine.

The letter concludes, “IRFA greatly appreciates your efforts to expose the federal petroleum mandate and defend the RFS at the recent National Journal/API forum. As you well know, ethanol is cheaper, cleaner and higher octane than gasoline. As such, the ethanol industry stands ready to compete in a truly free market – a free market the petroleum industry works hard to ensure never exists.”

In addition to Rep. King’s keynote speech, a panel discussion was held featuring:

  • Paul Beckwith, Chief Executive Officer, Butamax Advanced Biofuels
  • Michael Brower, Interim President & Chief Executive Officer, American Council on Renewable Energy (ACORE)
  • Rob Green, Executive Director, National Council of Chain Restaurants
  • Kris Kiser, President & Chief Executive Officer, Outdoor Power Equipment Institute
  • Peter Lehner, Executive Director, Natural Resources Defense Council
  • Damon Wells, Vice President, Government Affairs, National Turkey Federation

Government Shuts Down, Ethanol Rumors Abound

The government is shut down and rumors abound about ethanol and the 2014 Renewable Volume Obligations (RVOs) to be set by the Environmental Protection Agency (EPA) as part of the Renewable Fuels Standard (RFS). 2014 RVOS are anticipated to be announced within the next few weeks. With speculation and misinformation circulating at breakneck speeds, I went to Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), who noted there was no “adult supervision” in Washington, D.C. right now, to give the country a much needed RVO 101 lesson.

“Every year EPA has got to set the Renewable Volume Obligation, or RVO, based on the amount of renewable fuel they believe will be produced in that year,” explained Dinneen. “But there are certain constraints because there is a baseline number for renewable fuel. And for 2014 that baseline number is 14.4 billion gallons. That can’t be changed. That’s set in the statute.”

DinneenRFAThere is great flexibility for the EPA; however, to set the numbers for advanced biofuels, biodiesel and for cellulosic ethanol, continued Dinneen who noted there is flexibility which EPA has used in the past to reduce the volumes if they do not believe there is going to be the production to meet the statutory requirements. For example, said Dinneen, for 2013 the cellulosic ethanol RVO was 1 billion gallons but because the EPA didn’t believe the volumes could be met they reduced it to 6 million gallons because that is how much the EPA estimated would be produced.

However, said Dinneen, in the RVO process the EPA can’t just reset the numbers. “Congress was very clear as to how they might be able to reset the numbers and that is if only an economic hardship was determined. That’s not the process that is going on right now,” Dinneen said. Instead, there is speculation about what the 2014 RVOs might be and misinformation about where EPA is going with the numbers for next year.

The next obvious question should be, have the past and current RVOs caused obligated parties any “economic harm”? “No, not at all,” answered Dinneen. “The argument that is being made is that refiners won’t be able to blend more than 10 percent ethanol in gasoline and it would drive up the price of gasoline and they’ll have to export. The problem is that none of that is happening today. Ethanol continues to drive down the price of gasoline and there most certainly has not been any type of economic harm from this program.”

In fact, while the RFS has been in place, oil companies have still made record profits. Dinneen noted that Exxon just had their most profitable quarter ever and is the most profitable company “in the history of the universe”. In fact, even if they quit whining about the RVOs and invested in the infrastructure for E15 and E85, big oil would still continue to see record profits. Interestingly, Dinneen pointed out that if the RFS goes away, and ethanol disappears and the technological advancements being made in the advanced biofuels arena stop, the only economic harm that will happen is to consumers who have to pay even more for their gas at the pump.

“This is why the RFS was created. Because for too long oil companies have had a stranglehold on our motor transportation fuels,” said Dinneen. “The RFS is about access. The RFS is intended to wrest control of our energy future from the shareholders of Exxon, and Tesoro and the other oil companies that are just upset that they are finally losing a bit of market control. We’ve taken 10 percent of the barrel. We’re on the way to taking a third of the barrel. And the only way that is going to not occur is if EPA rewards their bad behavior. It won’t happen.”

Listen to my interview with Bob Dinneen here: Government Shuts Down, Ethanol Rumors Abound

For more information about the speculation surrounding the 2014 RVOs, click here.