Ag Secretary on RFS

Cindy Zimmerman

Secretary of Agriculture Ed Schafer has only been on the job officially for about a month but he has been busy making the rounds of farm meetings. During his appearance at the 2008 Commodity Classic on Friday, Schafer expressed great optimism for agriculture – record prices, record farm income, record exports and the blending of energy and agriculture.

Ed SchaferDuring a press conference following his appearance at the general session, Schafer fielded questions from farm media about biofuels and ethanol in particular. Asked if there was any chance that there might be a delay in implementing the new Renewable Fuels Standard because of recent reports claiming that biofuels are bad for the environment, Schafer said no.

“I don’t because no matter what happens it’s not going to have an effect this year,” Schafer said. “We are getting to the point of topping out on ethanol production, not because of production capacity, but because of our ability to deliver it in the current infrastructure.”

“The research dollars are going in to move from ethanol to the cellulosic generation,” Schafer continued. “While we are playing catch up on non-price distorting feedstocks for ethanol, which is going to take some time, we do think we are arriving at the levels this year where we are going to see a leveling off of (commodity) prices.”

Listen to Schafer’s comments here:
[audio:http://www.zimmcomm.biz/commodity-classic/schafer-press-ethanol.mp3]

Domestic Fuel coverage of the 2008 Commodity Classic
is sponsored by: John Deere

Audio, Commodity Classic, corn, Ethanol, News

BMW Planning of Hydrogen Future

John Davis

bmw.jpgWhile some car makers might be betting the future for fuels will be a mix of several different sources, one major European carmaker seems to be happy to put all of its eggs in one basket.

SFGate.com reports BMW told attendees of the Technology, Entertainment, Design (TED) Conference today in Monterey, California that it is going all in with hydrogen:

“Water is the coal of the future,” a big sign in the middle of the room read. It was a reference to the process of extracting the H from H2O, and then using it to power the same internal combustion engines we use today.

Turns out BMW started its hydrogen program back in 1978, and as such, they have a ton of research on the topic. Lots of interesting factoids. For example, BMW believes:

–The world will hit peak oil in 2025, marking the day the world reaches its peak petroleum production, declining thereafter until we run out.

–Technology will allow us to mass-produce hydrogen, without burning fossil fuels to do so, in the next 10 to 15 years.

–The cost of putting a hydrogen gas station on every 40 to 50 miles of U.S. roadwways would cost between $400 billion and $500 billion.

–We will see the beginnings of hydrogen infrastructure, i.e., gas stations, by 2025.

–We will switch over totally between the years 2040 and 2050.

In the meantime, BMW is still developing hybrids to take advantage of other alternative fuels. But long term, look for the company to put more and more into a hydrogen future.

Car Makers, Hydrogen

SD Biodiesel Tax Break Moves to Governor’s Desk

John Davis

sdcapitol.gifThe South Dakota State House and Senate has voted unanimously to approve a bill that would cut state taxes on diesel mixed with biodiesel.

This story in Land Line Magazine says if the governor signs the bill as expected, it could take a little time before the effects kick in:

At the request of Gov. Mike Rounds, the House and Senate unanimously approved a bill that would reduce the fuel tax on diesel that contains at least 5 percent biodiesel by 2 cents per gallon. The fuel tax applied to regular gasoline and diesel now is 22 cents per gallon. The bill – SB148 – would trim the per-gallon tax on biodiesel to 20 cents.

The per-gallon tax on ethanol already is 20 cents.

Rounds said he wants to provide the same incentive for ethanol use to truckers and other consumers of diesel. Offering the discounted tax rate for biodiesel would encourage production of the fuel made mostly from soybeans, he said.

Tax breaks would not start until biodiesel production capacity in the state reaches 20 million gallons annually. The tax break would end once production reached about 40 million gallons annually.

Biodiesel, Government, Legislation

NBB to Truckers: Biodiesel Getting Better

John Davis

worktruckshow.jpgOfficials with the National Biodiesel Board are telling those who depend on their trucks… and the fuel they put in those trucks… for their living that the quality of biodiesel is getting better.

This story posted on Truck News.com says the NBB’s Richard Nelson has addressed those attending this week’s National Truck Equipment Associations’ Work Truck Show in Atlanta, Georgia:

“We tell you the good, the bad and the ugly – I’m not hear to sugar-coat this,” Nelson told delegates during the show’s Hybrid Truck and Alternative Fuels Summit.

Nelson admitted that ensuring the quality of biodiesel remains the biggest challenge facing the expanding industry. Biodiesel demand in the US skyrocketed to 450 million gallons in 2007, nearly doubling from the 250 million gallons consumed the previous year, Nelson pointed out.

“We are expanding, we’re more than a drop in the bucket,” Nelson said. “But we’re not going to replace all the diesel fuel, we don’t have the feedstocks to do that.”

The National Biodiesel Board says the industry aims to produce volumes equal to 5% of on-road diesel fuel used in the US by 2015, which totals 1.85 billion gallons per year. In order to meet that target, Nelson said the industry must overcome two key challenges: fuel quality and feedstock availability.

“Simply put, B20 (or any other blend) will not be a factor if fuel quality can not be met on a consistent basis,” admitted Nelson. The industry has developed a standard called ASTM D 6751-07b which must be met by all producers in order to qualify for US tax credits and to become road-legal. It includes limits for 18 different properties and is feedstock-neutral. The increased emphasis on quality appears to be working, Nelson said.

Nelson also pointed out to attendees that just two years ago, 60 percent of all biodiesel did not meet the standard. Today, only about 10 percent falls short. He urged trucking companies to make sure they use a reputable supplier when using buying biodiesel for their trucks.

Biodiesel

Ethanol is a Classic Hit

Cindy Zimmerman

You can’t turn a corner at the 2008 Commodity Classic trade show without seeing something about ethanol. A record crowd is attending the Classic this year – more than 4450 people and over 140 media are in Nashville and the corn-fed enthusiasm is driven in a large part by the ethanol buzz.

Everybody who is anybody in the ethanol industry is here – the Ethanol Promotion and Information Council, Renewable Fuels Association, American Coalition for Ethanol, National Ethanol Vehicle Coalition, 25 by ’25 and more. Not to mention that ag input dealers from machinery to seed are touting products to help growers produce more corn per acre for both food and fuel.

But its only just begun. Friday will feature Secretary of Agriculture Ed Schafer during the general session followed up by a John Deere Learning Center Session on Starch and Cellulose as Ethanol Feedstocks. And Saturday night everybody will be “Corn Fed” with a concert featuring the lovely and talented Shannon Brown.

Domestic Fuel coverage of the 2008 Commodity Classic
is sponsored by: John Deere

2008 Commodity Classic Photo Album

Commodity Classic, Ethanol, John Deere, News

Introducing Ethanol Retailer Magazine

Chuck Zimmerman

Robert White at National Ethanol ConferenceThe Ethanol Promotion and Information Council is now in the publishing business after announcing the introduction of “Ethanol Retailer” magazine this week. Robert White, Publisher, is pictured (center) during a panel he participated in on E85 during the National Ethanol Conference. I interviewed Robert about the new venture and the panel he was on.

Ethanol Retailer is the only magazine dedicated to reaching over 22,000 independent fuel retailers from their own viewpoint. These retailers are the backbone of the ethanol market, servicing over 6.8 million flex-fuel vehicles.

“We’ve broken new ground with this magazine,” said Robert White, publisher and director of operations for EPIC. “No other single publication addresses the higher blends of ethanol from a fuel retailer standpoint.”

The quarterly magazine addresses ethanol from a business case, and includes the latest ethanol news, facts and resources, fuel retailer success stories, and ethanol government updates.

You can listen to my interview with Robert here: [audio:http://www.zimmcomm.biz/rfa/nec-08-white.mp3]

National Ethanol Conference Photo Album

Audio, EPIC, Ethanol, National Ethanol Conference, News

Wind Power Outpacing Line Capacity

John Davis

powerlines.jpgThe sudden skyrocketing of wind energy production, especially in areas of the Midwest and rural parts of Texas and California, is outdistancing the the capacity for the nation’s high-voltage lines to get that clean electricity into the nation’s cities.

This story from USA Today says the problem could keep some projects from even getting started and states from meeting their renewable energy goals:

Wind power depends on a robust transmission grid. Wind farms are in remote reaches where gusts are strongest, while the greatest power demand is in cities.

Until now, wind developers have piggybacked on existing wires, says analyst Stow Walker of Cambridge Energy Research Associates. But after wind energy soared 45% last year, spare transmission capacity is depleted. Wind power generates more than 1% of U.S. electricity.

Stringing new wires is easier said than done. Wind developers won’t go ahead with projects until transmission lines are in place, and utilities are loath to build the lines until they’re sure the developers won’t back out. Also, the first wind developer in an area is often asked to shoulder much of the $1.5 million-per-mile cost of a high-voltage line.

In Texas, which has about 25% of U.S. wind power, more eye-popping growth in 2008 is expected to push generation past transmission capacity by 65% by year’s end, says Bill Bojorquez, vice president of the Electric Reliability Council of Texas, a power-grid manager.

Some areas are trying to solve the problem by combining assets to put in the transmission lines, because while it only takes 18 months to put in the wind farm, the power line to get the energy to the consumers can take five to 10 years.

Wind

House Approves $18 billion in Taxes on Big Oil to Help Renewables

John Davis

uscapitol.jpgThe U.S House today approved $18 billion in new taxes on the oil companies that will fund incentives for renewable energy.

Bloomberg.com reports that the vote comes as crude oil prices topped $100 a barrel and will send the bill to the Senate, where similar measures have faced stiff opposition in the past:

The $18.1 billion measure, versions of which have been rejected twice by the Senate, would remove a $13.6 billion tax credit from the world’s five biggest public oil companies, and impose a $4.5 billion tax on oil and gas companies operating abroad. Money from the policy changes would promote wind and solar power and offer incentives for energy savings technology.

The 236-182 vote comes a day after the price of oil closed at a record $100.88 and during a week when the Energy Department reported that the price of average retail regular unleaded gasoline climbed almost 9 cents to $3.13 a gallon. The White House again threatened to veto the measure yesterday.

“We have seen no indication that Republican opposition to the oil and natural gas tax hikes have abated, making the offsets the Democrats seek for the renewable programs the albatross on the bill,” said Christine Tezak, an analyst for Stanford Group Co. in a Feb. 22 report.

Last December, a $13 billion energy tax measure fell just one vote short of the 60 needed in the Senate to invoke cloture and allow the bill come to a binding vote. The failure came after President George W. Bush threatened to veto an energy bill with the taxes. Backers hope the higher oil prices will help the measure survive better this time.

Biodiesel, Ethanol, News

Central Florida Buses to Run on Own Biodiesel

John Davis

lynxbus.jpgBuses in Central Florida will soon be running on a blend of their own biodiesel… a first in the country for any bus fleet.

According to this story in the Orlando Sentinel, a $2.5 million state grant is helping Lynx, Central Florida’s bus system, convert all 290 of its buses and four support vehicles to run on biodiesel in 2009:

It also will allow the agency to run a blending station that will serve the diesel fleets of Orange County and Orlando Utilities Commission. That partnership between agencies will be a national first, Lynx officials said.

“It’s what we want to do to do our part in the community,” said Lisa Darnall, chief operating officer for the bus agency.

The blending process, scheduled to start in early 2009, will produce a fuel that is 80 percent petroleum-based diesel and 20 percent from plant-derived oils. As a result, the three agencies will use 1.2 million gallons less of regular diesel annually.

About 800,000 of those diesel gallons would have been burned by Lynx, which operates mainly in Orange, Osceola and Seminole counties with some service to Lake, Volusia and Polk.

Using less petroleum by burning the biodiesel in the tourist area’s buses will help Florida reach Gov. Charlie Crist’s goal of reducing production of greenhouse gases by government groups by 10 percent by 2012, as well as helping the county hit its goal of cutting fossil fuel use by 20 percent by 2010.

Biodiesel

Biofuels Focus at Classic

Cindy Zimmerman

The 2008 Commodity Classic is getting underway here in Nashville at the Opryland.

Farm Bill and biofuels are the main topics of discussion at this meeting of corn, soybean and wheat growers. Today is mainly commodity group delegate meetings and tours for those not involved in the business sessions. Activities really get rolling Thursday afternoon with the opening of the huge trade show.

After Friday’s general session, John Deere will be holding a Learning Center on “Starch and Cellulose as Ethanol Feedstocks.” The session includes “a realistic timetable for cellulosic development and the importance of starch as today’s primary ethanol feedstock.” Should be a popular and interesting session.

There will also be a Learning Center on Wind Energy as Another Cash Crop, sponsored by the National Renewable Energy Laboratory.

Domestic Fuel coverage of the 2008 Commodity Classic
is sponsored by: John Deere

2008 Commodity Classic Photo Album

Commodity Classic, corn, Ethanol, John Deere, News, Wind