Abengoa Secures Biomass for Cellulosic Plant

Build the plant and the biomass will come. Abengoa has announced that they have signed contracts with several biomass producers farming in and around Hugoton, Kansas, to provide 315,000 tons of cellulosic biomass by the end of 2011. Construction of the biorefinery is scheduled for this summer and expected to be fully operational sometime in 2013. Once in production, the plant will utilize 315,000 tons of biomass each year to produce 25 million gallons of cellulosic ethanol. The plant will also produce 25 megawatts of electricity, enough to power the ethanol conversion process. Once complete, the biorefinery will be Abengoa’s first second-generation facility and seventh bioethanol facility in the U.S., bringing the company’s total U.S. biofuel production to more than 400 million gallons.

Abengoa recognized early in the process that the company would need to ensure a steady stream of biomass in order for the plant to produce the maximum amount of biofuels each year. Therefore, they ensured the necessary amount of feedstocks would be available taking several issues into account.

First, they needed to determine that adequate amounts of biomass were available within an economical transportation distance of the projected facility site. In addition, they needed to make sure that the biomass supply would be available during normal fluctuations of weather and different growing conditions. Second, they needed to ensure that the biomass could be harvested in a sustainable manner over the projected lifetime of the project. Third, they needed to work with the local producers to ensure that the biomass harvest would meet expectations in terms of quantity, quality and cost.

Abengoa will accept the bounty of the first biomass harvest this fall and will continue to accept biomass through the summer and fall of 2012. During the past three years, the company conducted various tests to determine best practices for harvesting the biomass in a sustainable manner that meets or exceeds Natural Resources Conservation Service (NRCS) minimum standards. These are aimed at preventing soil erosion and protecting soil health. Also during the testing phase, the company evaluated the best methods for storage, transportation and harvesting of the biomass.

Sticker Shock at the Pump on Summer Travel Agenda

According to AAA’s fuel-gauge report, this week the national average for one gallon of regular unleaded is $3.79 up from $2.86 last year, a 33 percent price hike. While it is higher in some areas and lower in others, price jumps at the pump are far from over. As the summer driving season nears, a new study estimates that pump prices will be more than 40 percent higher than last summer’s gas prices.

According to the Energy Information Administration (EIA), regular-grade gasoline will average $3.86 across the country from April this September. Last year it averaged $2.76 per gallon throughout the summer driving months. The EIA also said that in some areas, monthly average prices could top the national average by at least 25 cents per gallon. This price trend appears to be accurate considering many cities have seen per gallon pump prices over the $4 mark since March.

The EIA report states, “The continuing economic recovery tends to boost gasoline and diesel fuel consumption, while the effect of higher retail prices tends to dampen it. These counterbalancing forces are expected to be prominent features of the summer driving season.”

Also a concern – if gas prices continue to skyrocket, people will have to tighten the budgets and stop spending. This could spiral the country back into the recession.

So how badly will this hit the pocketbook? The EIA estimates that summer fuel costs will increase approximately $825 from last year’s travel bringing the 2011 family’s fuel bill to $3,360 this year. In addition, the report expects refiner acquisition costs of crude oil to average $112.50 per barrel this summer a 50 percent increase from summer 2010. With respect to wholesale gasoline margins (the difference between the wholesale price of gas and the refiner acquisition cost of crude) are forecast to be 47 percent higher than last year with an average of 53 cents a gallon.

The EIA believes the driving force behind the higher prices of oil and at the pump is the “continuing strength in worldwide liquid fuels consumption.”

Corn Ethanol Policy Forum Held in DC

There have been numerous Senates hearings recently discussing elements of the country’s energy plan. A recent forum on Corn Ethanol Policy took place in the 112th Congress. While the forum was not broadcast, expected to give the opening remarks were Representative Jeff Flake (R-AZ), Representative Joe Crowley (D-NY) and Representative Earl Blumenauer. Flake’s aniti-ethanol amendment was passed in the House as part of the Continuing Resolution and if passes as part of the Senate Resolution, would prohibit government funds to be used to install blender pumps and ethanol storage facilities.

Also expected to speak were some of the organizations who have been outspoken for several years against the ethanol tax credit (VEETC) that actually goes to the blender of record, not to the ethanol industry, as well as the “food and fuel” debate. These groups included the International Food Policy Research Institute, Environmental Working Group and Taxpayers for Common Sense.

The ethanol industry responded to the forum with one voice. The Renewable Fuels Association, Growth Energy, the National Corn Growers Association and American Coalition for Ethanol released a statement. The organizations also noted that according to the Institute for Local Self Reliance, 75 cents of every dollar spent on biofuels re‐circulates through the local economy while 75 cents of every dollar spent on oil exits the local economy and, in most cases, the country.

“Any energy policy forum must include comprehensive and adult conversations about America’s entire energy agenda, including subsidies and other supportive policies for mature and aging technologies like petroleum. Unfortunately, it is unlikely this ‘forum’ will include any of those discussions. Rather, this is yet another example of defenders of the status quo wasting the time of Congress focusing on bogus claims against the ethanol industry instead of finding solutions to the real problems.

“Anyone who has filled a gas tank the last few months has unwittingly witnessed the prime cause of soaring prices for all consumer goods, especially food. The last time corn and food prices rose, the Congressional Budget Office found that factors other than biofuels were responsible for as much as 90 percent of the hike. The World Bank and the government of the United Kingdom have concluded that speculation and energy prices were chief drivers of the 2007-08 spikes in commodity and food prices. How anyone can point fingers at farmers for driving up food prices when they receive less than 12 cents of every food dollar defies common sense.

“Ethanol is the only viable solution we have today to help with our country’s energy security and independence. Today, when it can easily cost over $50 to fill a gas tank, critics would be wise to remember that domestic ethanol actually has helped motorists by lowering gas prices by estimates as high as 40 cents per gallon. To put it in even better perspective, the value of the crude oil displaced by U.S. ethanol amounted to $34 billion in 2010 – money that stayed in the American economy. In the end, that’s the best way to support food and energy security, not through holding make-believe one-sided policy forums.”

Tidewater Biodiesel Gets Green Light on Proposed Plant

A proposed biodiesel plant in Virginia has gotten a boost after a city commission gave it a green light to proceed.

The Virginian-Pilot reports that the Chesapeake city planning commission gave Tidewater Biodiesel a conditional-use permit for a 10-million-gallon-a-year biodiesel plant:

Wednesday night, residents spoke in support of the project, with one opposed to the potential detriment to home values – though she said she supports the project itself.

Susan Bell, a resident of the Forest Cove/Raintree area, helped get word out about a meeting between the public and the company on April 2. She said neighbors who attended the meeting were “very pleased with what they were presented.”

“This won’t be any danger to our community,” she told the Planning Commission. “I do feel confident that we will be in capable hands.”

About four years ago, another biodiesel plant in the area, Smiling Earth Energy LLC in South Norfolk won building approval, but the developer wasn’t able to build the 320 million-gallon-per-year plant, which would have made it the largest in the nation.

Hawaii Home to Another Solar Project

Hawaii is home to another completed solar project. Chevron Energy Solutions, Oceanic Time Warner Cable and Tioga Energy have officially unveiled the 865-kilowatt solar system located at Oceanic’s Mililani Tech Park. With the completion of the project, it marks the state’s largest solar parking canopy project. The project was designed, engineered and constructed by Chevron Energy Solutions, a division of Chevron Corporation. The solar project includes solar photovoltaic panels on two buildings and parking canopies. The project was financed by Tioga Energy who also owns and will now operated the project under a 20-year solar power purchase agreement. The energy produced will be sold back to Oceanic at “predicable rates less than those of the local utility.”

“We are proud of our collaboration with Chevron Energy Solutions and Tioga Energy to help us incorporate sustainability in our business,” said Norman Santos, vice president of operations for Oceanic Time Warner Cable. “This project helps to provide budget predictability for our energy costs and the opportunity to use renewable power.”

Jim Davis, president of Chevron Energy Solutions added, “Oceanic Time Warner Cable is demonstrating how it can be a good business practice for companies to help the State of Hawaii meet its clean energy goals. We are pleased we had the opportunity to work with Oceanic Time Warner Cable and Tioga Energy to make this project a reality.”

Under the Hawaii Clean Energy Initiative, the state has a goal of generating 70 percent of its power from clean energy sources by 2030. This project is estimated to reduce CO2 emissions equal to that of the amount sequestered per year by 225 trees. Following in the footsteps of other corporations integrating renewable energy into their building, Oceanic is seeking LEED Gold certification.

“In offering affordable renewable energy options, Tioga Energy and Chevron Energy Solutions are helping organizations to alleviate budgetary stress while simultaneously meeting their sustainability goals,” concluded Paul Detering, CEO of Tioga Energy. “We commend Oceanic Time Warner Cable for its commitment to sustainable business practices and anticipate a successful relationship for years to come.”

Ethanol Production, Ethanol & DDG Exports Remain Steady

Ethanol production for April remains fairly steady with the Energy Information Administration (EIA) reporting daily ethanol production falling slightly to 898,000 barrels per day (b/d) or 37.7 million gallons per day for the week ending April 8, 2011. The four-week average for ethanol production at the time of the report was 904,000 b/d, with the annualized rate equating to 13.85 billion gallons. Stocks of ethanol have also remained virtually steady ending at 20.5 million barrels.

As part of the ethanol production process, several co-products are produced including distillers grains. For the week ending April 8, ethanol producers consumed 13.62 million bushels of corn daily to produce ethanol and 101,346 metric tons of livestock feed of which 89,484 metric tons were distillers grains (DDGs). Ethanol producers were also supplying 3.88 million pounds of corn oil which can be utilized in the feed or biodiesel markets.

The U.S. ethanol exports and DDG market report was also released and Renewable Fuel Association (RFA) VP of Research and Analysis, Geoff Cooper analyzed the information.

U.S. ethanol exports totaled 59.7 million gallons in February, up 4 percent from January. Exports of undenatured (non-beverage) ethanol increased to 21.8 million gallons in February, nearly double the amount shipped in January. Meanwhile denatured ethanol exports were 37.9 million gallons, down from 45.4 million in January. Because this ethanol is not blended with gasoline prior to exportation, it does not qualify for the Volumetric Ethanol Excise Tax Credit (VEETC), also known as the blender’s credit. Through the first two months of the year, ethanol exports stand at 116.9 million gallons. If the current pace is maintained all year, exports for 2011 could total more than 700 million gallons (compared to 400 million in 2010).

The number one exporter of U.S. denatured ethanol was Canada at nearly 15 million gallons followed by the United Arab Emirates (UAE), United Kingdom, and Brazil. In regards to undenatured ethanol, more than 11 million gallons went to the Netherlands in February. The second- and third-leading destinations for undenatured ethanol were the OPEC nations of UAE and Nigeria.

Distillers grains exports for February totaled 619,744 metric tons, down 13 percent compared to January, but slightly above February 2010 totals. China was the leading importer of U.S. DDGs with 110,976 metric tons. Exports to China were down 14 percent from January and less than half of the amount shipped as recently as October 2010. According to Cooper, erosion of exports to China is likely the result of the nation’s ongoing anti-dumping investigation against U.S. DDGs. Mexico was the second-leading destination, receiving 102,450 metric tons in February. This was less than half of the 223,000 metric tons shipped to Mexico in January. Canada, Spain and Vietnam rounded out the top five.

USDA Tours ICM Cellulosic Ethanol Plant

USDA Administrator Judith Canales tours the ICM R&D Lab. *Photo Credit St. Joseph News Press

USDA Administrator for Rural Business Cooperative Services Judith Canales is on a tour of Kansas and Missouri to promote the Rural Energy for America Program (REAP) along with the development of renewable energy technologies. She was joined by several USDA state directors, and along the tour they stopped in St. Joseph, Missouri to tour ICM’s cellulosic ethanol pilot plant Lifeline Foods. The project received a $25 million federal grant to assist ICM in testing biomass feedstocks including corn fiber, switchgrass and sorghum and ultimately to help transition cellulosic technology from pilot scale to commercial scale.

As reported by the St. Joseph News-Press, the USDA, led by Agriculture Secretary Tom Vilsack, who is expected to be in Iowa this week to tour other advanced biofuel projects, Canales said that her team was visiting the Lifeline Foods campus on behalf of President Obama and Vilsack who are working together to deploy Obama’s plan of fueling the country with domestically produced renewable energy.

She also noted that they are reviewing delivery systems and meeting with key stakeholders to learn about the “new form of ethanol.”

“We are wanting to see the delivery system expand for this purpose,” she told the ICM representatives. “We have been on a campaign to promote the infrastructure development for alternative fuel. We see the answers in the Midwest.”

The Lifeline Foods plant currently produces corn-based ethanol and Canales stressed that corn is not the only answer but one component of a diverse feedstock mix.

Greg Krissek, the director of government affairs for ICM, believes cellulosic ethanol is about five years away. “We’ve built the first span of the bridge with starch-based ethanol,” he said. “The structure of our company is we build for other companies.”

As the next generation technologies evolve, ICM will be there to help the biofuels industry evolve with the new advancements.

“We’ve approached it somewhat cautiously,” said Krissek. “There has to be a comfort level of where this will go. We can’t predict the future totally … Going forward, energy is still a public need. Frankly, our goal is to replace OPEC (Organization of Petroleum Exporting Countries) oil.”

Recovering Biodiesel Plant Faces New Foe: Tax Man

Since we’re rapidly approaching tax deadline day, it seems only appropriate to talk about taxes and biodiesel. A Maryland biodiesel plant recovering from a devastating explosion that killed a worker in 2008 and the struggles the biodiesel industry in general has faced in the past couple of years is now facing a new foe: the tax man.

This story from delmarvanow.com says officials with the Greenlight Biofuels plant in Princess Anne, MD have asked Somerset County Commissioners to waive a portion of a personal property tax bill to help get the facility fully operational by the end of the year:

“We are really trying hard with this plant,” James Kingdon, president of Greenlight Biofuels, said during a meeting Tuesday.

The company owed a $50,000 bill for 2010-11 but was successful in having it reduced by 50 percent in an appeal to the Department of Assessments and Taxation, Kingdon said.

It also owes $58,000 plus $10,000 interest on its 2009-10 tax bill but missed the deadline for an appeal, so company officials are appealing it to the county in hope of an abatement.

In fairness to the commissioners, they’re not sure if the law would even allow them to grant the waiver. County codes say tax credits can be awarded only to manufacturers with 10 or more employees; Greenlight has just seven right now.

Don’t Miss Out On The Process Optimization Seminar

You only have two days left to attend the Process Optimization Seminar at the early bird rate. This year’s event is being held on April 27-29th in Houston, Texas and marks the first year where the seminar will couple classroom style learning with hands on activities executed in a refinery and lab. To learn more about the event, I caught up with Jack Rogers via Skype. He is the Bioenergy Marketing Manager for Novozymes, one of the four industry leading companies that are sponsoring the event. The other sponsors include Phibro Ethanol Performance Group, Fermentis and Fremont Industries, and these groups have teamed up together for the past four seminars as well.

“For the industry, reaching that next level of process optimization is really the key for ongoing success,” said Rogers. “And what we wanted to do for this seminar is put together some leading suppliers for the industry and really offer our knowledge and expertise and have the opportunity to interact with our customers to holistically look at the process and give some techniques, tips and training that will help our customers to optimize their plants and become more profitable.”

In terms of the biofuels industry, Novozymes has been a leader for many years in developing enzymes to help optimize the production process for both first generation and next generation biofuels. Rogers said Novozymes has been able to innovate and bring out a lot of new products that have been able to really advance the process. For example, their most recent enzyme launched last year increases the conversion of the starch. By being more efficient in the conversion of starch to sugars, you see a much more efficient process than what was previously possible. As a result, the plants are getting better yields and at the end of the day, this means better profits.

Rogers notes that not only do you need a great product, but also process support and the understanding of how to apply the product or process. “Understanding how to use it optimally, is really the key to gaining those small extra percents of improvement,” said Rogers. “Even half a percent of improvement can be hundreds of thousands or even millions of dollars in additional profit for a plant.”

This is just one example of the products and technologies that will be discussed and how to integrate them most effectively into your process for higher efficiency and higher profits.

Learn more about the Process Optimization Seminar in my interview with Jack Rogers: Jack Rogers Discusses Process Optimization

Registration is limited and the early bird registration deadline is April 15th. Visit the Process Optimization Seminar website for more information and for online registration.

Study: Algae Could Replace 17% of Oil Imports by 2022

In a new study released by the Department of Energy’s Pacific Northwest National Laboratory (NPPL), algal fuels could replace 17 percent of the United States’ imported oil by 2020. The paper was published in the journal of Water Resources Research but warned that biofuels production, including algal fuels, can require a lot of water so the study cautioned that being smart about where the algae is grown can reduce the water needed. Researchers concluded that water use could be drastically reduced if the algae is grown in the sunniest and most humid climates including the Gulf Coast, the Southeastern Seaboard and the Great Lakes.

“Algae has been a hot topic of biofuel discussions recently, but no one has taken such a detailed look at how much America could make – and how much water and land it would require — until now,” said Mark Wigmosta, lead author and a PNNL hydrologist. “This research provides the groundwork and initial estimates needed to better inform renewable energy decisions.”

The research team’s goal was to provide the first in-depth assessment of algal biofuels potential based on the amount of available land and water. The study also factored in how much water would need to be replaced due to evaporation over 30 years. The research analyzed previously published data to determine how much algae could be grown in outdoor, fresh water ponds when using current technologies. The study did not factor in algae grown in salt water and covered ponds.

When taking into account various factors, the research team determined that 21 billion gallons of algal oil, the amount equal to the advanced biofuels category of the Renewable Fuels Standard (RFS2), could be produced by algae by 2022.

The researchers found that 21 billion gallons of algal oil, equal to the 2022 advanced biofuels goal set out by the Energy Independence and Security Act, can be produced from American-grown algae. This amount equates to 17 percent of the oil that the U.S. imported in 2008 for transportation fuels. To achieve this amount, the researchers estimate that the amount of land needed to produce this number would be approximately the size of the state of South Carolina. They also found that it would take 350 gallons of water per gallon of oil — or a quarter of what the country currently uses for irrigated agriculture — to produce 21 billion gallons of algal biofuel.

The study also concluded that up to 48 percent of the current transportation oil imports could be replaced with algae, but this higher production level would require significantly more water and land. Therefore the authors focused their research on the U.S. regions that would use less water to grow algae. Continue reading