Midwest Ethanol Iowa Plant Meetings

Cindy Zimmerman October 18, 2006

Public meetings are part of the process of bringing an ethanol plant to any community. Plans must be presented and concerns addressed.

Monona County Ethanol – a Midwest Ethanol Producers company – held two public meetings this week in the area where they plan to build a 100 million gallon per year facility. About 200 people attended the meetings held in Onawa and Blencoe, where the plant will be located. According to Midwest Ethanol CFO Kurt Bravo, the plant will provide 45 – 50 professional, skilled and semi-skilled employment opportunities, with compensation packages averaging $52,000.00 per year including benefits.

The Iowa plant is scheduled to break ground in January of 2007, with production slated for the 1st quarter of 2008. This is the fifth plant for Midwest Ethanol Producers – the other four are located in Nebraska.

Ethanol, Facilities

What Percent Solution?

Cindy Zimmerman October 17, 2006

Back to back speeches by American Petroleum Institute CEO Red Cavaney and venture capitalist Vinod Khosla provided a stark contrast in ideas at the Advancing Renewable Energy Conference last week in St. Louis.

Cavaney discounted claims that the oil industry is “opposed to ethanol and is doing all it can to discourage its use. Nothing could be further from the truth,” he said. However, he noted that they are “concerned that some ethanol proponents are focused exclusively on E-85 fuel. While the industry does not object to E-85 in a free market, so long as it meets standardized technical specifications and is of reliable quality, a national emphasis on increasing ethanol volumes through E-85 can prove unnecessarily expensive and risky. If we are to encourage more long-term use of ethanol, we need to avoid surprising consumers with unanticipated problems.”

Cavaney noted the lack of cars on the road that can use e85, the decreased fuel efficiency, and the expense of installing e85 pumps as reasons why the ethanol industry should be promoting more e10 than e85. “It seems obvious that ethanol is a better value for most consumers as a gasoline additive than as E-85. As long as ethanol can be added to gasoline up to its legal limit of 10 percent by volume as a gasoline additive, it enhances octane, reduces toxics and is a viable approach. This approach creates market pressures preventing ethanol prices from falling below those of gasoline until its possible use as an additive is exhausted. And, with a 140 billion gallon national gasoline pool currently, there is considerable growth opportunity for ethanol.”
Listen to a segment of Cavaney’s remarks: Cavaney (5 min MP3)
(read Cavaney’s full speech)

Coming to the podium after Cavaney, Khosla totally disagreed. “That’s the additive market, that’s what the oil companies would like us to stick with. Just be a blend into gasoline, that’s a 15 billion gallon market at e10,” he said. “I suggest that the real market is much, much larger if we let an e85 future happen.”

Khosla outlined a three mandates to make that “e85 future happen.”
1. Mandate that 70 percent of all new cars made in America be flex-fuel cars to “ensure that the consumer can pick the cheapest fuel that is available.”
2. Mandate that at least ten percent of all U.S. gas stations, either “owned or branded by any of the major suppliers” offer e85.
3. Make the current 51 cent blender’s credit a variable credit to insure against drastic ups or downs in oil prices. “I’m recommending a 25 cent credit at $75 oil and a 75 cent credit for $25 oil.”

Listen to a segment of Khosla’s remarks: Khosla (6 min MP3)

Energy, Ethanol

Feed vs Fuel

Cindy Zimmerman October 17, 2006

One question that continues to be asked in regard to corn ethanol production is how it will affect the global supply of food for both humans and animals. It was a primary topic of discussion at the Advancing Renewable Energy Conference last week in St. Louis.

During a press conference, US Department of Agriculture chief economist Keith Collins was asked to address the concerns of livestock producers. Collins noted that USDA will do everything it can “to ensure that our food, feed and fiber needs in the United States are met.”

He said that some increase in corn prices can be tolerated by livestock producers and whether corn will get too expensive depends on several factors, “the pressure on bringing land into production, the kind of yield increases that we can get in corn over the next few years, and it also depends upon what we can do with our co-product feeds.”

Collins says that while 30 percent of each bushel of corn used to make ethanol comes back out as livestock feed. The problem is utilizing that more effectively by improving the quality and distribution of those co-products. But he admits that there will be competition between livestock feed and ethanol in areas where there is a large concentration of ethanol plants.

Listen to Collins’ full remarks: Collins (2 min MP3)

Ethanol, Government

More Ethanol Plants Underway

Cindy Zimmerman October 17, 2006

According to the Renewable Fuels Association, 45 ethanol biorefineries are now under construction in the United States, with the groundbreakings of Cardinal Ethanol in Indiana and the Broin Companies’ Summit Ethanol in Ohio.

Summit, located in Leipsic, Ohio, is a 60 million gallon plant. Cardinal will have a capacity of 100 million gallons per year in Randolph Couny, Indiana.

“Indiana is quickly becoming one of the most dynamic areas in the nation for ethanol production and use,” said RFA President Bob Dinneen. “It is also fitting that the Indianapolis 500 and all the Indy Racing League races in 2007 will be run on 100 percent ethanol.”

There are currently 106 ethanol biorefineries operating now in the US, with the addition of Pacific Ethanol opening last week in Madera, California.

Ethanol, Facilities

Sound Bites

Cindy Zimmerman October 16, 2006

I have been going over some of the several hours of audio I collected last week at the Advancing Renewable Fuels Conference and picked out quotes from some of the major speakers.

ADM CEO Patricia Woertz
Ethanol derived from corn and vegetable oil based biodiesel are examples of here and now solutions that deserve investment support. We believe that corn ethanol and vegetable oil biodiesel will continue to account for a signficant percentage of biofuels for years to come.

Dupont CEO Charles Holliday:
We’re working with ethanol producers today to be sure we are perfecting the seed inputs that give the absolute best value for the chain and we see significant potential. Just think about it, even a five or ten percent improvement in overall yields for the systems can be a great result for everybody involved in this change.

USDA Economist Keith Collins:
We shall see where yields go in the future. But each 5 bushel increase in yield above the current trend level would be the equivalent of adding around 2.5 million acres to corn plantings, enough to produce that additional one billion gallons of ethanol each year that I spoke about earlier.
America’s undeniable need for energy today and tomorrow offers a great economic opportunity for biofuels. This opportunity makes me a biofuels cheerleader.

Agriculture Secretary Mike Johanns:
We have started down the path towards a very bright future, a future in which we buy our energy by the bushel and not by the barrel.

Senator Jim Talent (R-MO)
Which would you rather gamble on? The productivity and the patriotism of America’s farmers, or the good will of people like Hugo Chavez, in terms of relying on our energy.

American Petroleum Institute CEO Red Cavaney:
In our view, ethanol is here to stay and it’s going to be a very important part of our nation’s gasoline pool. It is absolutely essential that ethanol and the entire biofuels industry become strong, vital and self-sufficient.

Investor Vinod Khosla, Khosla Ventures:
Despite nice words from the American Peteroleum Institute. There is no question that the oil interests have a strong interest in keeping us addicted to oil.

President George W. Bush:
Let me just put it bluntly – we’re too dependent on oil.
I welcome the low gasoline prices. However, it’s not going to dim my enthusiasm for making sure we diversify away from oil.
And then, of course, there’s a national security concern for oil. Why? Well, we get oil from some countries that don’t particularly care for us.

Sound Bites (2 min MP3)

Biodiesel, Energy, Ethanol, Government

Renewables in the News

Cindy Zimmerman October 15, 2006

The Advancing Renewable Fuels Conference in St. Louis last week received very extensive national and even international coverage. Here’s just a sampling of links to stories from reporters who were on the scene:

From the international press, Deutsche Presse-Agentur: Speaking to a meeting on renewable energy in St Louis, Missouri, Bush hailed the savings at the petrol pump for truck drivers, small businesses and average consumers.
And the BBC: US President George W Bush has welcomed falling petrol prices as “good news” but said he did not want the decline to put off work on alternative fuels.

On the national level:
Reuters correspondents Tom Doggett and Lisa Haarlander: President Bush on Thursday said that falling gasoline prices are “good news” for consumers, but said he was worried that lower pump costs would stunt development of alternative energy fuels. The article devoted a sentence to the anti-war heckler and finished off with the USDA report out Thursday that calls for a lower carry-over for corn.

UPI Energy Correspondent Krishnadev Calamur (via Monsters and Critics): Just how far along ethanol is in satisfying U.S. energy needs depends on whom you ask. This piece focuses on the back-to-back comments of ethanol entrepreneur Vinod Khosla and American Petroleum Institute president Red Cavaney.

New York Times correspondent Alexei Barrionuevo: With a tailwind of strong political support behind them, advocates for renewable fuels declared Thursday that ethanol is here to stay and issued a call for greater research and investment to solve the challenges still preventing broader use. This guy used quotes from most of the major speakers.

Associated Press: A century ago, Henry Ford’s Model T was the first flexible-fuel vehicle, running on gas, ethanol or both, and the automaker foretold the future when he said fuel could be gotten from fruit, weeds, sawdust, or anything else that could be fermented.
The story, as told by Archer Daniels Midland’s CEO Patricia Woertz, resonated with her audience at a national renewable energy conference here Wednesday. Lots of comments from various speakers in this article also.

Houston Chronicle Washington Bureau, Julie Mason: President Bush warned on Thursday that while gasoline prices are coming down, America shouldn’t get complacent about energy. This story ends with reaction from the DNC that President Bush’s energy proposals are just a “token” effort.

From the farm media – Jerilyn Johnson with Farm Futures: Bush addressed an estimated crowd of 1,500 people, including many representing the agriculture industry, at the Advancing Renewable Energy Conference Oct. 12 in St. Louis.
Marcia Zarley Taylor of Top Producer on Ag Web: President George Bush reiterated his support for renewable energy Thursday, saying it was appropriate for Americans to change their habits, no matter what price they are paying at the gas pump now.

On a more local level, Steve Kraske of the Kansas City Star: Invoking the image of America’s pioneers, President Bush on Thursday told a conference of energy entrepreneurs that the nation is moving rapidly toward independence from foreign oil.

To some, the story was the protestor, not the president – like KSDK in St. Louis: President Bush continued speaking after a protestor briefly interrupted his speech. Bush went on as a single protester shouted “Soldiers are not renewable,” and “Out of Iraq now!”

Lots, lots more under Google news searches. If you do different key words, you can come up with hundreds of different stories. I searched for “renewable, energy, st. louis,” and “renewable energy conference,” and “bush st. louis energy” and got different stuff every time. Since there were so many reporters for major outlets at the event the stories aren’t all cookie-cutter copies of each other.

Energy, Government

Guest Blogger on Renewable Energy Conference

Cindy Zimmerman October 13, 2006

Here is a contributing blog entry from Beth Calabotta, who is oilseeds-biodiesel technology manager with Monsanto, on this week’s conference in St. Louis.
Besides spending hours in the exhibit hall at the Monsanto booth, Beth had a front row seat for the president’s address and got pretty close when he hit the floor to meet and greet right after his speech.

There were several really exciting things about the recent Advancing Renewable Energy Conference in St. Louis. I have to admit I have never attended a conference of any sort where the President of the United States stopped by to offer words of encouragement. But George W wasn’t the only speaker with an impressive resume on the agenda, there were opportunities to hear two cabinet members, a US senator, CEOs from the agriculture and bioenergy sector, and leading venture capitalists, just to name a few of the many extraordinary speakers.

I spent a fair amount of time in the exhibit hall, where there were an equally impressive group of farmers, scientists, engineers and business people learning more about renewable energy during session breaks. I
couldn’t say enough nice things about the amazing people who attended. The mood was electric, and anyone who spent more than ten minutes in America’s Center was energized and knew that together, the collective group of people who attended the conference and their co-workers will solve what technical barriers remain to help make renewable energy grow and develop as an industry. I talked to a lot of different people from places ranging from the southern tip of Florida to Alaska, and I learned a lot. I can’t believe how much innovation is happening across all sectors – plant biotechnology, plant breeding, agricultural machinery, enzyme development, processing, infrastructure, marketing and distribution of biofuels, government support methods to encourage the use and development of biofuels – the list just goes on and on.

On a more personal note, it was a lot of fun to explain to people who stopped by the Monsanto booth the benefits that molecular breeding and biotechnology can play to help make renewable energy happen. I don’t remember a time in my career when so many diverse people where interested in understanding more about agricultural yields, and it was fun to talk about all the hard work and excellent results people engaged across all sectors of agriculture have delivered and will continue to deliver. Corn yields have roughly doubled every generation, and the people working on livestock productivity have also make great strides. Dr. Fraley, in his talk, told us that this amazing trend will continue. It is possible to develop both food, feed, fiber and fuel on the same acre. To put this in perspective, in 1940, the year before my parents were born, an acre of my grandfather’s farm in Johnson County Iowa produced enough corn to feed 200 chickens.
Today, that same acre produces enough corn to feed over 1200 chickens. It has always felt great to work in agriculture and to help feed people, but if feels even better to know that what we are working on helps to feed, clothe and fuel the next generation.

Thanks for those observations, Beth. I would certainly love to hear from anyone else who attended the conference to provide their thoughts and comments – and pictures, too.

Commentary, Energy, Ethanol, Government

The President Has Left the Building

Cindy Zimmerman October 12, 2006

This was no tough crowd for the president – with the exception of a anti-war protester who started shouting during the speech and had to be escorted out. He said all the right things to make this group of renewable energy entrepreneurs happy.

Here is the president’s full remarks – about 30 minutes worth – I’ll pick out some soundbites later: Bush (30 min MP3)

Thanks again to EPIC for letting us provide this coverage on the spot. The photo taken by my friend farm broadcaster Dave Schumacher of KTRS here in St. Louis.

Audio, Energy, EPIC, Government

President Promotes Renewables

Cindy Zimmerman October 12, 2006

President Bush got a nice round of applause when he just said, “I like the idea of promoting a fuel that relies upon our farmers.”

“I guess we have some farmers here,” he said.

“We’re up to five billion gallons of ethanol,” he adds. “We’re just in the beginning stages of an industry that’s evolving. We want you to succeed. It’s in our interest as a nation for you to succeed.”

“In my judgement, the thing that is keeping ethanol from becoming more widespread is the lack of other feedstocks to make it,” the president said, again to applause advocating the use of tax dollars for research into cellulosic ethanol.

More to come….thanks to the Ethanol Promotion and Information Council.
(This is cool being able to post live while the president is still speaking!)

Energy, EPIC, Ethanol, Government

The Eagle Has Landed

Cindy Zimmerman October 12, 2006

We just received word that the president is on his way to the convention center from the airport, so everyone is taking a quick seventh-inning stretch before they are locked up. The media has a nice mid-row seat, check-in was smooth and easy, now we are just waiting for the main event.

We’ll keep you posted. I will give a few comments during the president’s address and then upload the audio immediately upon the conclusion of his remarks. There is not expected to be any press availability, nor is the president expected to tour the exhibit hall. Just in for remarks and back out again.

Thanks again to EPIC for sponsoring our coverage of this very historic event. As Undersecretary of Agriculture Tom Dorr just said, it’s great to have two government agencies – Energy and Agriculture – working so closely together for something that is so important to our nation.

Energy, EPIC, Government

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