Ethanol Keeps Gas Prices Down

Cindy Zimmerman

Rising gas prices have made headlines this year, but those prices could have been much worse if not for ethanol.

RFAThe Renewable Fuels Association sent out a media FYI release drawing attention to that fact, which is backed up by recent news reports. Specifically, RFA cites stories in the Wall Street Journal and the Dallas Morning News.

As a September 21, 2007 story in The Wall Street Journal put it,

Another reason for steady gasoline prices: the use of ethanol as an additive to gasoline is on the rise. While crude prices have soared, ethanol prices have dropped as much as 30% in recent months and are likely to drop more, Eitan Bernstein, an analyst with Friedman, Billings, Ramsey & Co., said in a report yesterday. Ethanol costs more than 60 cents a gallon less than gasoline, and gasoline suppliers can offset some of the rise in crude oil prices by blending their gasoline with small amounts of the cheaper fuel.

Similarly, a story in the September 24, 2007 edition of The Dallas Morning News reported:

Peyton Feltus, president of Randolph Risk Management, thinks gasoline prices might even increase this year.

He said ethanol and bio diesel helped keep fuel prices stable since the summer. Blending ethanol into the fuel supply may have boosted pump prices in the past, but now, ethanol is cheaper than gasoline, and it’s keeping overall prices down.

“You can thank renewables for doing that,” Mr. Feltus said.

Ethanol, News, RFA

Former EU Ag Commissioner on Biofuels

Cindy Zimmerman

Franz FischlerBack in 2003, the European Union instituted some major reforms in its agricultural sector, which are now known as the “Fischler Reforms” after the Commissioner for Agriculture, Rural Development and Fisheries at the time, Franz Fischler.

Among the policies instituted at the time was a very small incentive for farmers to produce crops on set aside land that could be used to make fuel. During an interview with Domestic Fuel at the 51st International Federation of Agricultural Journalists Congress in Japan last week, Dr. Fischler discussed that initiative and what he sees as the future for biofuels in the European Union.

“In my view, in Europe, food production will remain the main purpose of agricultural activities and fuel production will play a minor role, but an increasing role,” Fischler said. “We decided to be very ambitious about what we want to achieve, that is 10 percent of consumption by 2020. But we are also aware of the fact that this is only achievable if we are able to come forward with the second generation biofuels because if we are to do it on the basis of bio-ethanol and bio-diesel we would need almost half of the arable land in the European Union, and this is not going to happen.”

However, the EU is already expecting to import some of their biofuel needs from other countries in an effort to meet their intended goal.

Listen to Fischler’s comments on biofuels here:
[audio:http://www.zimmcomm.biz/ifaj/fischler-biofuels.mp3]

Thanks to Pioneer for sponsoring our trip to Japan Pioneer-HiBred

Audio, Biodiesel, Cellulosic, Ethanol, International

Bio Gasoline Research in Japan

Cindy Zimmerman

Japan BioGasResearchers at Japan’s National Agricultural Research Center are working on developing Bio-Gasoline from plant oils and animal fats.

According to researcher Ken Taniwaki, bio-gasoline has the same properties as petroleum gasoline and can be run in automobile engines without modifications. “This is not bio-ethanol. This actually contains the same components as gasoline,” he says.

Taniwaki says bio-gasoline can be made from waste cooking oil, “mainly from the palm oil, from the Kentucky Fried Chicken.”

Taniwaki explains more in this interview done last week during the 51st Congress of the International Federation of Agricultural Journalists in Japan:
[audio:http://www.zimmcomm.biz/ifaj/japan-bio-gas.mp3]

Thanks to Pioneer for sponsoring our trip to Japan Pioneer-HiBred

Audio, International

Plains, GA Could Be Site for Biodiesel Plant

John Davis

Alterra EnergyIn a town most famous for peanuts and a president, biodiesel could be the next chapter for Plains, Georgia.

This story from WRBL-TV in Columbus, Georgia says Alterra Energy is planning on opening the plant that will create 25 jobs next spring:

Alterra plans to turn a combination of soy oil and chicken fat into Biodiesel fuel. The fuel can be used on any machine that uses diesel fuel. Alterra project manager Jerry Battle says Plains was chosen because of the agriculture and interest in alternative energy sources.

The grand opening is months away, but residents like C.L. Walters say Plains is a test market for future growth opportunities in the small town.

“If this can be a success, then other industries will come to Plains. We’ve got to make this work because everybody else is going to sit back and watch,” Walters said.

Biodiesel

Biodiesel Plant Builders Offer to Renovate Neighborhood

John Davis

The developers of what will be the biggest biodiesel plant in the U.S. have offered to give $5 million to renovate the neighborhood located near the plant.

Smiling Earth EnergySmiling Earth Energy has offered the money to help the Chesapeake, Virginia neighborhood of South Hill, which has been cut off from the rest of the city since Interstate 464 bisected the area in 1987. This story in the Virginian-Pilot says the offer is impressing city leaders still deciding the whether to give the project to build a 320-million-gallon-a-year biodiesel plant the green light:

Smiling Earth promised to limit traffic at the plant to three trucks a day, although it hasn’t conducted a traffic study. The company also promised to set up a citizens advisory committee.

But the offer of as much as $5 million, which came the day of the vote, resonated with council members on a whole new level. Councilwoman Ella Ward called it “exciting.”

The council decided to wait until October to vote on the plan, but Hayes thinks at least five council members support the project. Three members who have voiced support – Hayes, Ward and Councilman Bryan Collins – say their desire to help South Hill residents has influenced them.

Cleaning up the environment and rebuilding neighborhoods… that seems to be the biodiesel way.

Biodiesel

Chrysler Says: Buy Biodiesel!

John Davis

ChryslerChrysler is encouraging its customers to buy its new line of diesel vehicles… and then run those vehicles on renewable biodiesel.

This press release from the National Biodiesel Board says Chrysler says it would be good for farmers and the environment:

“Modern clean diesel offers significant improvements in fuel economy, which also means a reduction in carbon dioxide greenhouse gas emissions,” said Deborah Morrissett, Vice President – Regulatory Affairs for Chrysler.

“When our diesel products are run on clean, renewable biodiesel, the environmental benefits are even greater – at the same time we are reducing our dependence on petroleum and supporting America’s farm economy.”

NBB logoAnd the release goes on to say that Chrysler is offering a special buying incentive for National Biodiesel Board members:

Chrysler is offering a special discount program to NBB members in the United States who purchase or lease a new Chrysler, Jeep and Dodge product – with special emphasis on the company’s new diesel passenger vehicles – Dodge Ram heavy duty pickup and Jeep Grand Cherokee SUV.

Joe Jobe“We are very pleased to see the level of commitment that Chrysler has put into supporting the use of biodiesel,” said Joe Jobe, NBB CEO. “Chrysler’s incentive program is an attractive benefit for our NBB members, and a great opportunity to buy a new vehicle from a company that is working hard to provide consumers with more ‘green vehicle’ options running on renewable fuel.”

Biodiesel

Biodiesel Boat Touring World Before Attempting Record

John Davis

EarthraceThe biodiesel powerboat, the Earthrace, is making stops in 40 cities over 18 months before it makes another run at the world record for circumnavigating the globe.

Right now, the boat is docked in Edinburgh, Scotland where the public can view this amazing machine. The BBC has this story on it:

The current record of 75 days was set by British boat Cable & Wireless in 1998 and the Earthrace skipper Pete Bethune believes they can do it in 65 days.

He said: “The boat is a wave piercer, which means it submarines through waves to make it faster.

“We’ve had five metres of water on top of the windshield while we have been submarining through 12 metre waves and there is hardly a boat in the world that can handle conditions like that.

“In a normal boat on a wave while travelling fast you tend to get airborne before we come crashing down which is not good on the boat or the crew.

You might remember the Earthrace had to abandon a world-record attempt last May, but at the time, the skipper promised they would be back.

Biodiesel

Hydro-Power Luxury for Leno

John Davis

Jay Leno drives a BMW Hydrogen 7, the first hydrogen-powered luxury sedanThe latest addition to Jay Leno’s Burbank, CA car garage is a high-class, hydrogen-powered ride. The Beamer fits well with Leno’s environmentally-conscious garage.

BMW has announced that Jay Leno became the latest person to receive keys to a BMW Hydrogen 7 — the first hydrogen-powered luxury sedan. The Emmy-winning comedian and host of The Tonight Show received his BMW Hydrogen 7 at his famed car garage in Burbank, California, which is fittingly a “green garage” that receives a great deal of its energy from steam power.

“As an avid car enthusiast I’m always interested in the future of automotive technology. With the BMW Hydrogen 7 I can experience all the fun and great features of a performance car, yet know that I’m being environmentally friendly at the same time! I look forward to driving the Hydrogen 7 and learning more about hydrogen as a fuel for our future.”

In his “green garage,” Jay uses giant steam and natural gas engines from the 19th century to effectively reduce his energy needs — transforming his garage into a self-sufficient power station. According to Jay, there is no reason why a garage full of old cars can’t be environmentally responsible, even if it means having to go back more than a century for the technology. Working with expert consultants in a variety of fields to analyze his garage’s energy use and devise alternative energy systems, Jay is committed to upgrading his nearly 20,000-sq.-ft. garage with the latest environmentally friendly shop equipment and products — and driving the BMW Hydrogen 7 is his latest example of this.

Running in hydrogen mode, the BMW Hydrogen 7 essentially emits nothing but water vapor, representing a major step in reducing harmful CO2 emissions. It is not a concept car, but a production model vehicle that has successfully completed the entire Product Development Process. While the BMW Hydrogen 7 is not for sale, it is considered to be a milestone in bringing forward hydrogen as the sustainable fuel for individual transportation.

BMW believes that hydrogen will replace petroleum as the long-term alternative to fossil fuel, and hopes the Hydrogen 7 will play a pioneering role in driving forward the hydrogen technologies that will ensure our mobility in the future. Through a program dubbed the Hydrogen 7 Pioneers Program, BMW is giving industry leaders and prominent figures in entertainment, politics, business and more a BMW Hydrogen 7 for their daily use.
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Energy, Hydrogen

New Ethanol Plant Slated for OK Panhandle

John Davis

A new ethanol plant planned for the Oklahoma panhandle town of Guymon will produce the green fuel… and also help the oil industry.

This story in the Hays (Kansas) Daily News says it’s designed to be a more efficient model:

The plant, to be built by Mainline Fuels LLC and its partner, ICM Inc. of Colwich, Kan., would produce 40 million gallons of ethanol annually, would be operational by spring 2009 and at peak capacity would employ 35 people. It’s the sixth ethanol facility proposed for Oklahoma, but it could be the second to become operational.

The Guymon ethanol plant would have a different business model than the other proposed plants, said Dan Sanders Jr., the co-founder of Mainline Fuels.

“Our advantage is in being a smaller-scale plant and on focusing on wet distillers grain that will be used by cattle in the market,” Sanders said. “Our location to the southern ethanol market is a naturally good fit.”

Mainline Fuels will also sell 135,000 tons of carbon dioxide each year generated by the plant to an Oklahoma oil company that will use the gas in its oil fields to help increase oil production.

Ethanol, News

Expert Predicts Shakeout in Ethanol Industry

John Davis

Change is on the way for the ethanol industry… and it could be quite dramatic. That word comes from a leading biofuels venture capitalist, and this story in the Des Moines Register says it could lead to more plants being owned by fewer and bigger investors:

bioscience.jpgSano Shimoda of BioScience Securities Inc. in Venice, Calif., said at the first Renewable on Parade conference that investors who put their money into ethanol five years ago are smiling now because they profited from a surge in ethanol demand that led to skyrocketing high prices.

Ethanol plants that survive the coming shakeout will have to be low-cost producers that are vertically integrated to take advantage of access to raw materials, Shimoda said.

He said biofuels such as ethanol need to build their future on being market-driven industries that can survive without subsidies or protectionist tariffs.

“Bioethanol will be sustainable only if costs are driven to levels that support market-driven demand without the need for long-term subsidies,” Shimoda said. “All I’m saying is that you have to get costs down. If not, you’re not viable.”

Shimoda predicts squeezed profit margins will lead to a market consolidation, and most single plants won’t survive except for the ones that are low-cost producers. He adds the ethanol production costs must be targeted to compete if oil prices drop to $25 a barrell… that way, when they stay higher, the plants will still be profitable.

Ethanol, News