As so many ethanol plants have closed in recent months, invester-owned ethanol start-up One Earth Energy LLC is planning to begin production on June 11, 2009. The 100 million gallon plant is located near Gibson City, Illinois.
One Earth Energy, LLC officially organized as an Illinois based Limited Liability Company in November 2005. By acquiring ethanol mills on the cheap, big oil and other players could undercut firms such as One Earth Energy, which spent $166 million to build a plant for distilling corn into fuel.
“The challenge to compete with those new ownerships is they have a lower cost of production because they have less debt,” said Steve Kelly, president of One Earth Energy. Heavy debt loads and historically high corn prices have been lethal to independent ethanol firms.
According to the Los Angeles Times, before launching One Earth Energy, Steve Kelly worked down the road for the Alliance Grain Co. He estimates that the co-op stored about 3 million bushels of corn when he joined it in 1988. The figure reached almost 30 million bushels in 2005, so Alliance needed an outlet for its corn, and One Earth Energy was born.
“It always made sense to me to have the vertical integration, be part of that consumption chain after it leaves the farmer and the storage point,” said Kelly, noting that Alliance will supply One Earth Energy with corn.
The Clean Energy Coalition (CEC) has announced that it is offering up to $5,000 to install or upgrade an existing pump to dispense E85 in the state of Michigan. This is one of many of the incentives offered in the state.
“The Clean Energy Coalition is dedicated to increasing the number of E85 pumps in Michigan,” said Sean Reed, CEC executive director. “Through a grant from the Michigan Department of Energy, Labor & Economic Growth (DeLEG), we are providing infrastructure incentives for E85.”
In addition to the CEC grant, gas station owners can also apply for federal and state tax credits that significantly reduce the installation and qualified equipment costs. “Stations may be eligible for up to an additional $50,000 to be applied towards installation costs from other state and federal incentives,” said Reed. The federal government is offering a 50 percent tax credit of up to $50,000 and the Michigan Department of Treasury is offering a 30 percent tax credit up to $20,000.
The DeLEG Energy Office is also offering a $1,500 incentive to assist with the cost of designing and installing a highway exit sign that promotes the E85 pump, as well as paying the first year’s annual fee.
In total, the CEC was awarded $145,000 from the DeLEG and $20,000 from the Corn Marketing Program of Michigan (CMPM) to offer station owners the opportunity to sell E85. “I’m excited to work with the CEC to help bolster Michigan’s ethanol industry and increase the number of E85 pumps available to consumers,” said Pollok-Newsom. “Ethanol reduces our country’s need for foreign oil, supports our rural communities, and helps reduce harmful greenhouse gases.”
For more information or to apply for a grant from the CEC, visit www.cec.mi.org.
A Canadian biofuels and green technology company has announced plans to build a second-generation ethanol production facility in Mississippi using wood residue and municipal waste as feedstocks.
Enerkem Inc. of Montreal plans to build the plan in Pontotoc, Mississippi and has contracted with Three Rivers Solid Waste Management Authority to supply approximately 189,000 tons of unsorted municipal solid waste (MSW) per year as feedstock.
The plant is expected to cost $250 million and produce 20 million gallons per year of next-generation ethanol made from wood residues from regional forest and agricultural operations, as well as urban biomass such as municipal solid waste, construction and demolition debris, and treated wood. In addition to the biofuels production facility, the investment includes an upstream municipal solid waste recycling and pre-treatment center.
When the dust finally settled yesterday, oil company Valero came out with the winning bid of $477 million for seven ethanol plants owned by bankrupt producer VeraSun Energy.
According to a release from VeraSun, Valero Renewable Fuels was selected as the successful bidder for assets contained in the “VSE Group”, in addition to ethanol production facilities in Albion, Neb., and Albert City, Iowa, following an auction in Wilmington, Del. The VSE Group consists of production facilities in Aurora, S.D.; Charles City, Fort Dodge and Hartley, Iowa, and Welcome, Minn., and a development site in Reynolds, Ind.
The auction began Monday but ended up continuing into Tuesday because a number of other bidders ended up participating in the process, including Archer Daniels Midland, although they did not acquire any assets.
The secured lenders for nine other VeraSun facilities submitted successful credit bids. The company hopes to close the deals in April. VeraSun had filed to reorganize under Chapter 11 of federal bankruptcy law late in October.
Indiana Senate lawmakers today approved a bill that would allow schools to receive grants to install E85 dispensing units. House Bill 1193 was sponsored by State Senator Ron Alting (shown right).
“Currently, retailers and local governments can receive grants to invest in E85 pumps and fuel tanks,” Alting said. “This legislation would allow school corporations and universities to also receive grants so they can install E85 fuel tanks on campuses.” Alting said since grants became available last year, more than $135,000 has been provided to various retailers.
Along with a Federal income tax credit for E85 infrastructure, Indiana also offers tax breaks and incentives for those who produce and/or use biofuels. Funding for these grants comes from corn check-off funds and has no cost to Indiana taxpayers.
There are currently 116 E85 fueling locations within the state of Indiana.
The Navy Exchange Service Command (NEXCOM), headquarters for the Navy’s worldwide Navy Exchange stores, held a ribbon cutting ceremony today for Hampton Roads’ first E85 pump. The station is located at the Navy Exchange Gas Station, NAS Oceana, Virginia Beach.
Rear Adm. Robert Bianchi, Commander, NEXCOM, and Captain Markham Rich, Commanding Officer, NAS Oceana hosted the ceremony with principal guests and speakers Congressman Glenn Nye, D-VA 2nd District and Bob Dinneen, President and CEO, Renewable Fuels Association.
NEXCOM awarded a public private venture (PPV) contract in April 2008 to Protec Fuels for the infrastructure development and supply of the E85. NEX Oceana is the first location developed under this contract.
With this grand opening, there will be three public access E85 stations in Virginia. The Navy Exchange Oceana facility will be the second public access E85 fuel facility in Virginia operated by the U.S. Navy/NEX.
The Navy is a leader in the use of alternative fuels, including ethanol and biodiesel, and operates the largest fleet of vehicles using alternative fuels in the state of Virginia. This venture will provide the needed access to E85 fuel for the Navy’s fleet of flex-fuel vehicles as well as to the general public.
Many fuel retailers have begun offering blends between 10 percent and 85 percent ethanol for flexible fuel vehicles. The National Ethanol Vehicle Coalition (NEVC) now has available E20, E30 and E40 labels for retailers to use for their blending pumps.
These labels are offered at a member rate and non-member rate. The coalition also offers the mandatory pump labeling for these blends. Besides blend pump labels, the NEVC offers a complete “pump imaging package” for E85 fueling stations. A listing of all items offered for pump labeling can be found by clicking here.
In 2006, Tennesse Governor Phil Bredesen allocated $1.5 million to the Tennessee Department of Transportation (TDOT) to develop a Biofuel Green Island Corridor network along Tennessee’s interstate system and major highways. TDOT has recently opened a solicitation for grant funding to assist in converting or installing fuel storage tanks and equipment to dispense B20 and E85 to the public.
The goal of the Green Island program is to help establish readily available “green island” refueling stations for B20 biodiesel and E85 ethanol no more than 100 miles apart along these corridors. This competitive grant program seeks to identify partner retail stations in areas where reasonably accessible and convenient retail biofuel stations are not in place. A minimum of 20 percent in nonfederal matching funds is required.
A statewide network of biofuel stations will encourage and expand the use of biofuels in Tennessee, which in turn will stimulate rural economic development, increase farm income, reduce vehicle emissions, help protect public health, and reduce dependence on petroleum.
Potential E85 and B20 retailers can view the solicitation by clicking here. Sumission is due by April 17, 2009.
An ethanol plant in Lima, Ohio has been granted a new lease on life with the approved sale of the bankrupt facility to a new owner.
According to a story from the Lima News, the U.S. Bankruptcy Court for the Northern District of Ohio gave final approval this week for the sale of Greater Ohio (GO) Ethanol to Paladin Capital Group. The company reportedly intends to re-open the closed facility and operate it as a working ethanol plant.
Greater Ohio Ethanol began production last July and filed for bankruptcy protection less than five months later.
The economic stimulus package, signed by President Obama, includes an increase in the federal income tax credit for alternative fuel infrastructure. The National Ethanol Vehicle Coalition (NEVC) played a lead role in the inclusion of this incentive and is confident this will lead to a more prominent position of high blends of ethanol in the marketplace.
The American Recovery and Reinvestment Act, or H.R. 1, increases the existing Federal alternative fuel infrastructure tax credit of $30,000 or 30 percent of the incremental cost, to $50,000 or 50 percent of the incremental cost. The NEVC began encouraging the inclusion of this additional tax incentive in November of 2008 by forwarding a letter to the Speaker of the House with nearly ninety industry leader signatures. The original infrastructure development provision was part of the 2005 Energy Policy Act.
More than seven million E85 compatible or flexible fuel vehicles (FFVs) are currently driving on American roads. To date, only 1,958 E85 stations exist to fuel these FFVs. Furthermore, Chrysler, Ford Motor Company and General Motors all have promised to increase their flexible fuel model year availability in a few short years. The additional tax credit will assist those struggling fuel retailers to include this clean burning, alternative fuel to their stations.
According to Bernie Punt, chairman of the NEVC and general manager of Siouxland Energy and Livestock Coop., the increased federal income tax credit should be instrumental in the establishment of new fueling systems across the nation. Punt stated, “The NEVC has been focusing on the lack of E85 fueling infrastructure for the past several years. We lead the effort to establish the tax credit in 2005 and to increase the credit in the stimulus bill. The lack of fueling infrastructure remains the major impediment to using high-level blends of ethanol.”
Also included in the recently signed Stimulus Bill is a grant program providing $300 million to the Department of Energy’s Clean Cities program to implement section 721 of the Energy Policy Act of 2005. The NEVC will be closely monitoring the planned distribution of these funds to encourage DOE to allocate significant portions of the monies to advance E85 fueling systems and educational/marketing efforts.