USDA Announces Support for Advanced Biofuel Plant

An advanced biofuels project in Iowa is being offered support from the federal government for a plant to make fuel from waste material.

fiberightThe U.S. Department of Agriculture has approved a conditional commitment for a $25 million guaranteed loan under the Biorefinery Assistance Program for Fiberight to build a biorefinery in Blairstown, Iowa.

The loan will be used to construct a 55,000 square foot facility that will produce cellulosic ethanol by converting municipal solid waste and other industrial pulps into advanced biofuels, as well as using conventional renewable biofuel derived from seed corn waste. When operational, the facility is expected to produce approximately 3.6 million gallons of cellulosic ethanol per year. The process will use a cellulosic microbe to produce up to 15 percent more ethanol than traditional fermentation technology, and reduce energy inputs in the fermentation and distillation process. Fiberight estimates the project will create 38 jobs and save 16 jobs.

”Advanced Biofuels are going commercial – and the innovation behind turning trash into biofuels demonstrates how our industry can create jobs and solve our nation’s energy needs,” says Adam Monroe, President of Novozymes North America. ”Novozymes is proud to be a partner to this project, supplying the enzymes to turn household and office waste into advanced biofuels. We applaud the federal government for its leadership in helping bring biofuels to market.”

NovozymesBiotech company Novozymes is one of Fiberight’s partners in the project. ”Advanced Biofuels are going commercial – and the innovation behind turning trash into biofuels demonstrates how our industry can create jobs and solve our nation’s energy needs,” says Adam Monroe, President of Novozymes North America.

Under the conditional commitment, Fiberight must meet specified conditions before the loan guarantee can be completed. Other funding comes from the State of Iowa. Fiberight also received a $2.5 million grant from the Iowa Power Fund in 2010. The company will work with the Benton County landfill to supply a portion of the feedstock for the project. The total project cost is estimated at $59.5 million. Fiberight, LLC was incorporated in 2007 for the purpose of converting an existing ethanol facility into a cellulosic ethanol facility in Blairstown.

USDA Launches Clean Energy Website

The U.S. Department of Agriculture this week launched a new energy website to provide quick access to the agency’s energy efficiency and renewable energy data.

The website, usda.gov/energy, provides access to all USDA energy resources, including: agricultural, forestry, economic, and social data. This is done in part through a set of new complementary web-based tools: the USDA Renewable Energy Investment Map, the Renewable Energy Tool and Energy Matrix. These tools focus on USDA’s energy, energy efficiency and renewable energy investments and projects; provide information and data to a broad spectrum of stakeholders; and empower the user with the ability to easily navigate USDA’s energy web resources. In addition, the site provides a link to all USDA state and local offices and energy resource coordinators.

The new website was welcomed by the Ag Energy Coalition (AEC). “USDA’s Energy portal demonstrates the positive impact the Farm Bill energy title and related programs are having on job creation, national security, and the environment,” said Coalition co-director Lloyd Ritter. “The Ag Energy Coalition believes Rural America will be a continuing force for change in the advancement of sustainable energy and renewable chemicals production in the years ahead. With the right policies in place, and requisite funding, the promise of a rural renaissance focused on clean energy solutions will become a reality.”

The Ag Energy Coalition includes a membership of organizations and companies representing a variety of clean, renewable energy and bioproducts stakeholders.

USDA and Airline Companies to Discuss Aviation Biofuels

Agriculture Secretary Tom Vilsack is hosting a media roundtable with aviation business leaders today to discuss the important role of American-produced biofuels in the civilian aircraft and airline industry, and in the military.

Participants in the discussion with Vilsack will include John Tracy with The Boeing Company and Billy Glover of Boeing Commercial Airplanes; Alex Marren with United Continental Holdings and Jim Rekoske, Vice President and General Manager of Renewable Energy & Chemicals for Honeywell.

In January, 2010, Vilsack and Navy Secretary Ray Mabus signed a Memorandum of Understanding (MOU) to encourage development of advanced biofuels to be used in the Great Green Fleet that will demo in 2012. USDA has also signed a Memorandum of Understanding with the Federal Aviation Administration (FAA) to help the commercial airline industry utilize biofuels as jet fuel. USDA has also invested significantly in research projects to advance the aviation biofuels industry.

The roundtable discussion is being held this afternoon at 12:45 central at Boeing Corporate Offices in Chicago.

Vilsack Comments on RFS and Biodiesel Tax Credit

Agriculture Secretary Tom Vilsack supports the Renewable Fuels Standard (RFS2), but thinks strategies to build demand are more important to biofuels than tax credits.

afbf annual hawaiiVilsack made multiple appearances in Hawaii this week, including at the American Farm Bureau Federation (AFBF) annual meeting where he addressed the membership and met with the media and had the opportunity to comment on biofuels policy.

During a press conference at AFBF on Monday, Vilsack said he believes it is important to keep the RFS2 in place for multiple reasons. “One, it provides consumer choice. We know that because we have a healthy biofuels industry that consumers are paying 90 cents to a dollar less for gas,” he said. “It’s a job creator in rural America and an opportunity to increase the bottom line for farmers, ranchers and producers. And it has helped us reduce our reliance on foreign oil, going from 60% imports to 52% in the last couple of years.” Audio from Vilsack on RFS2

A day later at the Pearl Harbor memorial to tout the increasing use of biodiesel by the military, Vilsack was asked about the expiration of the biodiesel tax credit at the end of 2011 and whether it will hurt the industry again as it did in 2010 if Congress fails to renew it. “First and foremost, our approach is to figure out ways to build demand for the product,” Vilsack responded, noting that they can use loan programs to produce more biodiesel while the commitment by the Navy to increase use of biofuel will help increase demand. “So, I don’t think that we need to rely solely on tax credits.” Audio from Vilsack on Biodiesel Tax Credit

Pacific Biodiesel Continues Growth

hawaiiDuring a visit to highlight renewable energy use by the U.S. Navy at Pearl Harbor, Agriculture Secretary Tom Vilsack also spotlighted the Hawaii-based biodiesel producer that supplies much of the fuel used there.

Pacific Biodiesel “is the oldest biodiesel producer and refinery in the country, started in 1996,” said Vilsack during his remarks on Tuesday at the memorial, noting that USDA has provided assistance to help that company grow. “We provided recently a $5 million business and industry loan to Pacific Biodiesel to allow it to continue to expand its capacity.”

hawaiiThat loan, announced in February 2010, is being used to construct a $10 million, 5.5 million gallon per year biodiesel production plant in Kea’au on the Big Island. Pacific Biodiesel vice president and co-founder Kelly King says Big Island Biodiesel will be the companies 13th biodiesel plant. “We’ll be owning and operating five of them, the other ones we built for clients throughout the mainland, from the east coast to the west coast,” she says, with capacity ranging from a half million to six million gallons.

“We started in Maui, where we actually had the first available biodiesel pump for the public,” said King. “Back then, most of our customers were environmental hippies who would come and pay 70 cents a gallon more for fuel and thank us and tell us to keep the change!”

King says Pacific Biodiesel operates on a community-based sustainable model set up locally to benefit local communities. While all the plants can use any type of oil feedstocks, much of them operate on used cooking oil. “It can use the most degraded oils up to the purest oils,” she said. “The degraded oils make the best feedstock because it’s the cheapest!”

King and two of her Pacific Biodiesel team members were excited to be part of the secretary’s appearance at Pearl Harbor and to have him recognize the importance of renewable fuels in the Aloha State.

Listen to an interview with Kelly King here: Pacific Biodiesel VP Kelly King
Photos from Secretary’s visit to Pearl Harbor memorial to promote biofuels

Ag Secretary Highlights Biodiesel at Pearl Harbor

hawaiiWith the Pearl Harbor memorial as a backdrop and a Pacific Biodiesel hat on the podium, Agriculture Secretary Tom Vilsack Tuesday highlighted the use of biodiesel by the U.S. Navy.

Pearl Harbor naval base was the first Hawaii military marine fleet to use biodiesel, replacing the Department of Navy-operated tour boats that shuttled visitors to and from the USS Arizona Memorial with five new boats capable of running on 100% biodiesel.

hawaii“The military in the way they are approaching the future as it relates to energy is reminding us that this country has the capacity not just to think big but also to act big,” said Vilsack. “They understand and appreciate that energy security is important for the future of this country and are dedicated to making sure that the Navy provide a good example to the country on how to go about doing this.”

The secretary noted that the Pearl Harbor navel base is also “utilizing and will continue to expand E85 and B20 opportunities for their vehicle fleet” which consists of roughly 2000 vehicles, 75% of which are capable of using either E85 or B20.

Vilsack noted that much of the biodiesel used at Pearl Harbor purchased by the Navy is produced in Hawaii by Pacific Biodiesel, “which is the oldest biodiesel producer and refinery in the country, started in 1996.”

Listen to Secretary Vilsack’s comments about biofuels at Pearl Harbor: Tom Vilsack at Pearl Harbor memorial

Photos from Secretary’s visit to Pearl Harbor memorial to promote biofuels

USDA to Highlight Biodiesel at Pearl Harbor

hawaiiAgriculture Secretary Tom Vilsack is in Hawaii this week to address the annual meeting of the American Farm Bureau Federation and highlight the Obama Administration’s commitment to renewable energy at the Pearl Harbor memorial center.

Vilsack will be at the World War II Valor in the Pacific National Monument’s Pearl Harbor Visitor Center on Tuesday to talk about how USDA is working with the U.S. Navy to promote the use of renewable fuels in its operations. In April 2009, the Pearl Harbor naval base was the first Hawaii military marine fleet to use biodiesel, replacing U.S. Navy-operated tour boats that shuttled visitors to and from the USS Arizona Memorial with five new boats capable of running on 100% biodiesel. Secretary Vilsack will highlight these efforts as well as other Administration efforts to advance renewable energy as part of the Navy fleet.

EPA Lowers Cellulosic Ethanol Target

Cellulosic ethanol continues to be out of reach for commercial use, according to the latest Renewable Fuels Standard (RFS2) requirements set by the Environmental Protection Agency for 2012.

“EPA has essentially reduced the mandate for cellulosic, recognizing the fact that there aren’t supplies out there to meet it,” said USDA chief economist Joe Glauber.

Back in 2007, Congress set a goal of 500 million gallons of cellulosic ethanol to be produced in 2012, but only a very small fraction of that is now expected to come to fruition with a target of just 8.65 million gallons. “The big question that’s been out there for years is ‘when will cellulosic ethanol become profitable?’ said Glauber. “I don’t think anyone sees that coming anytime soon, although a few of these plants are expected to come on line in the coming year, so we’ll see.”

In order to project cellulosic biofuel production for 2012, EPA tracked the progress of over 100 biofuel production facilities, the methodology of which is clearly outlined in the official 97-page final rule document. Companies that EPA determined were likely to produce significant quantities of cellulosic biofuel in 2012 include (with projected ethanol-equivalent gallons):

KiOR – a Mississippi-based renewable crude oil project (4.8 million)
INEOS Bio of Vero Beach – waste to biofuel (3 million)
Fiberight – a waste-to-biofuel project in Blairstown, IA (2 million)
American Process, KL Energy and ZeaChem for a total of less than a million gallons combined.

EPA noted the importance of setting a cellulosic standard that was realistic, yet still encouraged investment in the technology. “Thus while any standard we set for cellulosic biofuel standard for 2012 will have some uncertainty in terms of actual attainment, our intention is to balance such uncertainty with the objective of promoting growth in the industry.”

EPA has set the “advanced biofuels” target for 2012 at 2 billion gallons, much of that being comprised of imported sugarcane ethanol from Brazil.

Read EPA’s full explanation of the RFS2 requirements justification.

USDA Report Shows No Cropland Growth for Ethanol

The amount of land in the United States devoted to growing crops declined between 2002 and 2007, which indicates that increased ethanol production is not using up more land.

usdaAccording to the report, “Major Uses of Land in the United States 2007,” total cropland was down by 34 million acres in 2007 to its lowest level since 1945. Cropland accounted for 18 percent of the total land area in the country – the third largest land use behind forest (30%) and grassland (27%).

Renewable Fuels Association (RFA) president Bob Dinneen said the new report shows increased ethanol production has not resulted in expansion of total U.S. cropland or a decline in grassland and forest.

“Using real data from the real world, this report from USDA shows yet again that U.S. cropland is not expanding in response to increased ethanol demand,” said RFA President Bob Dinneen. “The report also shows that forest and grassland increased dramatically during a period when ethanol production more than tripled.”

The smallest total use of land in the U.S. is urban at 61 million or three percent. However, while urban land use accounts for the smallest percentage, the USDA report shows that it accounts for the biggest increase in land use, quadrupling between 1945 and 2007, increasing at about twice the rate of population growth over
this period. Urban land use increased almost 2 percent from 2002 to 2007.

“It is ironic that the land use debate has fixated on biofuels, when the actual culprit of land conversion has clearly been urban and suburban sprawl,” Dinneen said. “Subdivisions full of mini-mansions, big box stores, shopping malls, and parking lots are encroaching on productive farmland across the country.”

Read the USDA report here.

Ethanol and the Corn Supply-Demand Picture

According to USDA, global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a smaller crop here in the U.S.

global cornThe latest World Agricultural Supply Demand report estimates the U.S. crop was down 3.5 million tons this year compared to last year, but foreign corn production is expected to be 43.4 million tons higher, with China alone up 7.3 million tons this month based on the recently released government estimates. USDA is now predicting the 2011/12 season-average farm price for corn will be about 30 cents lower than previous estimates at $5.90 to $6.90 per bushel.

On the demand side, corn for food, seed, and industrial use was lowered 5 million bushels and projected corn ending stocks were increased by 5 million bushels to 848 million. Corn for ethanol use remains unchanged at 5 billion bushels, which is slightly lower than last year, despite the fact that ethanol production this year is on pace to possibly be as much as a billion gallons more than 2010.

As we head into 2012, ethanol is like to be the wild card in the corn demand situation with the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year. “That could potentially change how much ethanol is blended into gasoline,” said USDA chief economist Joe Glauber. “There are mandates in terms of overall production that has to be blended into gasoline, the issue is how much gets produced above and beyond the mandates.” However, industry analysts expect ethanol prices are expected to drop 30-40 cents per gallon at the wholesale level after the blenders tax credit expires, which should serve as an incentive to blend as much if not more.

“Domestically, it will depend on the profitability of ethanol price versus gasoline and whether or not it pays to blend above the mandates,” said Glauber.