Kansas Congressman Blasts Higher Ethanol Blends

Cindy Zimmerman

A freshman Republican representative from Kansas today blasted higher ethanol blends during a House subcommittee hearing that focused on the Renewable Fuel Standard (RFS).

“Why don’t I hear my constituents screaming for E15 and E85 if it’s such a good thing to lower consumer prices?” Congressman Mike Pompeo asked Renewable Fuels Association president and CEO Bob Dinneen during the hearing. “I’ve only been here 18 months, I’ll concede that, but I don’t hear it.”

Rep. Pompeo’s district of Wichita and surrounding areas encompasses Colwich, where ethanol plant engineering company ICM was founded in 1995 by industry pioneer Dave Vander Griend, who has been an active proponent of higher ethanol blends. It is also home to one of Abengoa Bioenergy’s ethanol plants, which is currently idled due to the market conditions. Abengoa has a total of six ethanol plants in the United States with two cellulosic ethanol facilities being developed, including one in Kansas.

Pompeo also ridiculed the cellulosic ethanol requirement in the RFS. Listen to his five minutes of questioning during the hearing here: Rep. Mike Pompeo

advanced biofuels, Audio, Cellulosic, Ethanol, Ethanol News, Government, RFA

House Hearing on Future of Renewable Fuels Now

John Davis

Just a quick note to let you all know we are listening in on the House Energy and Power Subcommittee Hearing on Renewable Fuels. I’ll have more details later, but I can tell you that there is some differences in opinion between those testifying today.

Jack Gerard, President and Chief Executive Officer of the American Petroleum Institute is making the argument that the Renewable Fuels Standard (RFS) is unrealistic and a threat to consumers. He calls for an overhaul of the RFS.

Meanwhile, Bob Dinneen, President and Chief Executive Officer of the Renewable Fuels Association, strongly argues that the RFS does not need such overhauling. He points out that ethanol is lowering the price of gas to the tune of about $1.09 a gallon, and the the next generation of biofuels is happening today.

I’ll have more details and some audio later on, but we just wanted to update as the hearing is going on. You can listen and watch it here.

*POST UPDATE*
Hearing opening statements from Gerard and Dinneen: Jack Gerard and Bob Dinneen

Audio, Ethanol, Ethanol News, Government, Legislation

Farm Group Opposes Bill that Would Weaken RFS

Cindy Zimmerman

afbfThe American Farm Bureau Federation (AFBF) is opposed to a bill introduced by Congressman Jeff Flake (R-AZ) that they claim would weaken the Renewable Fuel Standard (RFS) by requiring fuel companies to blend only the amount of cellulosic ethanol currently being produced into gasoline.

“Basically any weakening of the RFS is not a good thing for the country going forward. When you look at the ambitious goals that have been set to wean ourselves off foreign sources of oil and create a domestic biofuels industry, that’s a threat when you’re trying to undermine that,” said AFBF energy specialist Andrew Walmsley, noting that pulling back on the requirement will reduce the incentive for investment in advanced biofuels.

Walmsley says investment and increased production of cellulosic biofuels could open up new markets for farmers. “Those producers that may not grow corn and have had the opportunity to benefit from the growth of corn ethanol – the advanced biofuels and cellulosic ethanol is where they can break in. There’s crops that fit into southern rotation for southern growers between peanuts and cotton or you could look at perennials. There’s crops that grow year after year that you plant and have a dedicated source of income.”

advanced biofuels, Cellulosic, Ethanol, Ethanol News, Farm Bureau, Government

RFA Refutes RFS Rumors

Cindy Zimmerman

In an effort to shut down the rumor mill, the Renewable Fuels Association is setting the record straight on the Renewable Fuel Standard (RFS).

RFAThere have been rumors that EPA might attempt to scale back the RFS by 20% due to the deteriorating condition of the U.S. corn crop, but RFA officials say the statutory process relating to RFS waiver provisions make that unlikely to happen.

“In order for EPA to waive RFS requirements, the agency must find that the program is causing economic “harm.” The agency can reach such a finding on its own, or it can be asked to examine the question of “harm” via petition from the public. EPA must provide a public comment period and consult with other relevant agencies before making any final decisions regarding a waiver request,” according to RFA. “In short, EPA cannot waive the overall RFS targets on a whim – there is a well-defined process for waivers.”

The organization notes that ethanol stocks currently stand at about a billion gallons of ethanol in the market, at least enough for the rest of the summer. Despite the fact that production dropped to the lowest of the year last week, the industry remains on pace to easily satisfy this year’s RFS target of 13.2 billion gallons. Year-to-date monthly EIA production data shows annualized ethanol production of 13.9 billion gallons.

RFA President and CEO Bob Dinneen will testify before a House subcommittee hearing this morning to underscore the importance of the RFS and ethanol. The House Energy and Commerce Committee Subcommittee on Energy and Power is holding a hearing on “The American Energy Initiative: A Focus on Alternative Fuels and Vehicles, Both the Challenges and the Opportunities” beginning at 10 am Eastern.

Ethanol, Ethanol News, Government, RFA

KBR to Engineer DuPont’s Iowa Cellulosic Ethanol Plant

John Davis

Oil and construction giant KBR will provide engineering and procurement services for DuPont’s first cellulosic ethanol plant in Nevada, Iowa.

KBR will provide front-end engineering, detailed engineering and procurement services to DuPont’s Industrial Biosciences Group for this first-of-a-kind plant to be constructed in the Midwest United States. The ethanol facility is designed to process 1,300 tons per day of corn stover and produce 27.5 million gallons of ethanol per year. The cellulosic ethanol product will be used as a blending component in gasoline by fuel manufacturers and will enable them to meet U.S. EPA-mandated requirements for ethanol derived from cellulosic sources.

Company officials went on to say this contract solidifies KBR’s more than 20 year partnership with DuPont.

Cellulosic, Ethanol, Ethanol News

Growth Energy Applauds Governors’ Calls for E15

John Davis

Three governors call for their colleagues in the Midwestern Governors Association to support an E15 action plan on the state level. Gov. Terry Brandstad (R-Iowa), Gov. Pat Quinn (D-Ill.) and Gov. Sam Brownback (R-Kan.) sent the letter, coming on the heels of federal approval of E15, to 11 of their fellow Midwestern governors, and that has won the praise of Growth Energy:

“I would like to commend Governors Brandstad, Quinn and Brownback for their unyielding support of the ethanol industry,” stated Tom Buis CEO of Growth Energy. “They understand that the ethanol industry is integral to their state’s economic growth, now and in the future. The ethanol industry already supports more than 500,000 good paying jobs, promoting economic growth and opportunities in rural America. State regulations are the final hurdle for E15, and these governors understand the proactive measures they must take to bring E15 to retailers in their state.”

The governors recognize the importance of diversifying our nation’s transportation fuel and providing consumers a choice at the pump. The governors stress that use of E15 is optional, but note the financial benefits of a home-grown, lower-cost fuel, particularly for consumers who are working to make each dollar count during troubling economic times and high gas prices.

“This letter exemplifies the kind of leadership necessary to bring E15 to the commercial marketplace,” Buis continued. “By calling on their fellow governors to bring all of the stakeholders to the table and establish an E15 action plan, they will be ahead of the curve, ready for the seamless integration of E15.”

The three governors have called for streamlining state regulations and providing short-term infrastructure support to ensure the future of the green fuel.

Ethanol, Ethanol News, Growth Energy

Canadian, US RFAs Praise Joint Clean Energy Plan

John Davis

A plan by the United States and Canada to develop jointly clean energy technologies, including biofuels, garners praise from each country’s leading advocates for the green fuels. The Canadian Renewable Fuels Association (CRFA) and the U.S. Renewable Fuels Association (RFA) sent a letter to leaders commending both governments for the United States – Canada Clean Energy Dialogue Action Plan II released in Rio de Janeiro in June:

“On behalf of the biofuels industry in both the United States and Canada, we commend you for continuing the vital partnership between our nations in developing and deploying clean energy technologies,” wrote CRFA President W. Scott Thurlow and RFA President and CEO Bob Dinneen. “These technologies will be critical in solving the energy and environmental challenges of the future while creating exciting new career opportunities for hundreds of thousands of our citizens.”

The letter went to Canadian Ministers Peter Kent of Environment Canada and Joe Oliver of Natural Resources Canada and their American counterparts Energy Secretary Steven Chu and Environmental Protection Agency Administrator Lisa Jackson. RFA and CRFA went on to point out that no other clean energy technology can match biofuels in reducing dependence on oil, cleaning up the environment, and creating jobs… 100,000 jobs in North America.

Both groups say collaboration between the two governments will only help with better technologies and innovations in biofuels development.

You can read the full text of the letter here.

biofuels, Government, International, RFA

Some Still Optimistic About a Farm Bill

Melissa Sandfort

Our latest ZimmPoll asked the question, ” When do you think Congress will complete a Farm Bill?”

Our poll results: Twenty-two percent were optimistic and said before Sept. 30, 2012; twenty-eight percent were a bit more hesitant but said before the end of this calendar year; and twenty-five percent said both next year and maybe never.

Our new ZimmPoll is now live and asks the question, ” How will Obamacare affect you and your business?” Some of the farm groups are split on the ruling, just as was the Supreme Court. But on a more personal/business level, how will this ruling affect you?

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

ZimmPoll

Study: High Corn Lowers Indirect Land Use for Biofuels

John Davis

A new study seems to add credibility to the arguments that high corn prices, often driven by demand for biofuels, are not increasing the actual indirect land use effects.

This press release from the Iowa Corn Promotion Board says researchers at North Carolina State University and the University of Illinois at Chicago found that as prices for corn go up or down, farmers adjust their per acre yields and that some commonly used models for indirect land use use factors at the low end of the actual range which underestimates real yield performance:

The study assessed two dimensions of this correlation known as yield-price elasticity: first, the extent to which realized yields tend to be influenced by planting-time futures prices; and second, the potential for in-season changes responding to significant price swings. The study found that not only do farmers respond to price from season to season, they also respond to price during the season in order to optimize productivity. “Based on these findings there is no question that price has an effect on yields,” stated Jay Lynch, a farmer from Humboldt, Iowa and board director for the Iowa Corn Growers Association. “And given the factors involved in achieving higher yields, such as investment in new equipment, it is likely that new, higher yields resulting from high prices are sustained even after prices drop.”

The study adds to the growing body of evidence that actual indirect land use effects are lower than current models indicate and assumptions that high corn prices do not positively affect yields and productivity are not supported by research.

“It is a logical conclusion that when economic opportunity through greater efficiency is identified, investment occurs and results in the efficiencies that are targeted,” stated Dr. Barry K. Goodwin, study co-lead and distinguished professor, Departments of Agricultural and Resource Economics and Economics “In row crop production higher prices trigger positive changes to operations such as investments in better equipment and technology, better navigation and information systems, and so forth. The investment and changes triggered by the higher prices accelerate yield growth so that farms produce more per acre to fully capitalize on the market opportunity of higher prices. It’s a logic stream that holds up on the farm as well as other industries.”

Researchers went on to say that the new information should give people a better understanding between the real relationship between biofuels and indirect land usage.

corn, Ethanol, Ethanol News, Indirect Land Use

Solazyme’s First Algae Oil Refinery in Illinois Online

John Davis

More good news for renewable oil maker Solazyme. On the heels of last week’s announcement that the California-based company had partnered with Bunge in Brazil to produce renewable oil from sugarcane, Solazyme has now announced the commissioning of its first fully integrated biorefinery (IBR) in Peoria, Illinois, to produce oil from algae:

Solazyme has been running routine fermentations at commercial scale since 2007 and began running fermentation operations at the Peoria facility in Q4 2011. With the successful production of algal oil from the integrated facility this month, Solazyme has met its start-up goals for the facility on schedule. The IBR was partially funded with a federal grant that Solazyme received from the U.S. Department of Energy (DOE) in December 2009 to demonstrate integrated commercial-scale production of renewable algal-based fuels. The demonstration/ commercial-scale plant will have a nameplate capacity of two million liters of oil annually and will provide an important platform for continued work on feedstock flexibility and scaling of new tailored oils into the marketplace.

Solazyme bought the facility in Peoria in May of last year. Company officials say the plant coming online is a major milestone for Solazyme.

algae