Familiar Face Goes to Work for Protec Fuel

Cindy Zimmerman

A familiar face in the ethanol industry, and a familiar name here on Domestic Fuel, is now working for Florida-based Protec Fuel.

Michelle Kautz has been hired as the company’s Public Relations/Development Director to manage Protec’s marketing and public relations programs along with coordinating sales efforts targeted at fuel distributors and retailers.

Kautz has been working in the ethanol industry for nearly 10 years. She formerly was the Market Development Director at Growth Energy where she was responsible for assisting in the installation of E85 and ethanol blender pumps. Prior, she held the position as the Deputy Director of the National Ethanol Vehicle Coalition (NEVC). She also is a freelance writer for ZimmComm New Media where her blogs can be read right here on Domestic Fuel.

“We are excited to Have Michelle on our team. She will have an immediate positive impact due to her extensive experience in working on E85 programs with distributors and retailers,” noted Todd Garner, CEO for Protec Fuels. “With Michelle at Protec, we can now better serve our existing customers to help them grow their ethanol volumes and also expand our business more quickly through new retailers.”

As a footnote, Growth Energy closed its Jefferson City, Missouri office – which was formally NEVC – as of December 1. NEVC merged with Growth Energy back in June 2009 to form the Market Development arm of the ethanol organization. Phil Lampert, who was also part of the Growth Energy Missouri office and a long-time ethanol industry promoter, says he is “still working on E85 infrastructure as a consultant to several key ethanol marketers and producers.”

E85, Ethanol, Flex Fuel Vehicles, Growth Energy

ZimmPoll Results Are In

Chuck Zimmerman

The results of the first ZimmPoll are in. The question was “How do you think agricultural interests will fare in the new Farm Bill?” We thought we’d give you an easy one to start. The results were pretty well mixed with “Too early to tell” getting the most votes. You can add your comments about the question or the results using the comment feature at the top of the post. Feel free to let us know what you think.

Our first poll had participation from 5 countries including 25 states in the U.S. The top ten states with participants were IL, CA, VA, IN, NJ, TX, KS, MO, NY and SD. Thanks to all of you.


The new poll is now live and the question is, “Do you participate in social media?” Social media consists of Twitter, Facebook, YouTube, Flickr, blogs, podcasts and a whole variety of other services. Let us know by taking the poll and next week we’ll post the results and you can add your comments add feedback at that time. Feel free to suggest questions for our poll anytime too.

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

ZimmPoll

Opinion Piece Defends Palm Oil Biodiesel

John Davis

A decision by Hawaiian Electric Co. (HECO) to build a biodiesel plant that will convert palm oil into biodiesel to be used by the utility to produce electricity has garnered the ire of some environmentalists, who decry the use of palm oil for the green fuel.

But this opinion piece in the Honolulu Star Advertiser defends the plant. Tom Tanton, president of California-based T2 & Associates, an energy technology and economic development firm, points out that the palm oil will come from Malaysia, a country that has committed to conserving 50 percent of its forests … much more than the 10 percent average under United Nations agreements:

Contrary to claims from the German environmental group leading the campaign against the HECO plan, palm oil is the most sustainable biofuel on the planet. More fuel can be produced on a smaller footprint from the oil palm than alternative biofuels such as corn-based ethanol or German rapeseed oil.

Palm oil is a perennial crop that can be converted to biodiesel, while other vegetable crops like soya that can create biodiesel are annual. Palm oil requires less tillage, resulting in much fewer greenhouse gases released into the atmosphere. It also requires considerably fewer energy inputs to grow and maintain.

In a recent statement, HECO correctly stated “biofuels are a part of Hawaii’s clean energy future. Biofuels allow us to switch from ‘black’ to ‘green’ fuel in our existing generators, reducing dependence on and vulnerability to imported oil.”

Of all possible biofuels, palm oil is king for its affordability, efficiency and eco-friendliness. Denying the HECO agreement would hamper wider adoption of sustainable practices worldwide.

The piece goes on to point out that some domestic sources of biodiesel feedstock, such as jatropha, aren’t scalable for a plant like this one. And, right now, Hawaii doesn’t have enough other renewable energy sources, such as wind, solar and geothermal, to be cost-effective. Tanton concludes that this palm-to-biodiesel plant will help the Aloha State meet its energy needs, while providing jobs for an impoverished part of Malaysia.

Biodiesel, Opinion

2010 Pivotal Year for Verenium

Joanna Schroeder

This year was a pivotal for Verenium in many ways both operational and financial as announced by the company today. In particular, on the financial side, the company raised $98.3 million and reduced operating losses through the sale of assets to BP; repurchased $21 million of convertible notes, extinguishing all remaining 8% notes; and are on track to achieve revenue and gross margin targets for 2010.

From an operational perspective, the company highlighted several accomplishments, including, but limited to the following:

  • • Launched Xylathin™, a highly active enzyme designed to significantly improve the economics of fuel ethanol production from cereal grains such as wheat.
  • • Obtained regulatory approval to sell Purifine® PLC in China, which together with existing approvals to sell the enzyme in Argentina, Brazil and the US, covers all major oilseed processing markets.
  • • Extended a successful marketing partnership with Alfa Laval and entered into a new marketing partnership with Desmet Ballestra, both of which leverage global sales forces to market Purifine PLC enzyme for degumming edible oils.
  • • Licensed an enzyme from the Company’s product pipeline to Bunge targeted at creating healthier, higher value edible oil.

“2010 has been a significant year of transition for Verenium as we moved from being biofuels oriented to being focused on building the next leading industrial enzymes company,” said Carlos Riva, Chief Executive Officer at Verenium. “We believe we are now well positioned — both operationally and financially — to execute on our business plan and to achieve our goals.”

In addition, Verenium has also set its financial guidance and corporate goals for 2011 that include achieving revenues between $55-60 million with a product gross margin of $21-24 million. In addition, they have set their R&D budget for $14-14 million and their SG&A between $19-21 million. Other budget items of note including the allocation of $10 million to build a new facility in San Diego, CA during the next two years.

“The guidance we are providing today lays out the solid growth in both revenue and gross margin that we believe we can generate from our commercial portfolio now that we have the ability to make the investments required for its development. Further, we are managing both R&D and SG&A expenses to a level that we believe is more sustainable for the Company moving forward,” said James Levine, Chief Financial Officer at Verenium. “Importantly, taken together, we believe these steps demonstrate our focus on advancing our pipeline products to commercial status and achieving profitability.”

Company Announcement, Ethanol

Book Review – Energy And Climate Wars

Joanna Schroeder

The debate about climate change change is over right? Wrong. At least according to authors Peter C. Glover and Michael J. Economides in their book, “Energy and Climate Wars.” The premise of the book is that politicians (aka Al Gore) green ideologues and media elites (What, me? Oh, I’m not a media elite.) are undermining the truth about energy and the climate and that is, well, to put it simply, is that it is not man made and carbon dioxide is not killing us quickly, or even slowly for that matter. It’s a hoax. A farce. A well orchestrated campaign designed to make a few rich in the new “carbon” or for some “clean/green economy” billionaires.

Now before you start clicking the button to post a comment, these are the views of the authors, not me. With that reminder, let me regale you with the overarching premise of the book. According to the authors, the book was written to give the reader a grasp on “the power politics of energy” or more specifically on the social ideology that increasingly influences and impacts you.

What is real, they say, is the threat on your energy security, but not for the reasons you believe (we’re running out of oil/peak oil, or that alternative energies will substitute for ‘dirty’ hydrocarbons). The REAL threats to your energy security are numerous one being alternative energy. In other words, our lifestyle as we know it (military, cars, homes, gadgets, etc.) is predicated on energy, energy that grew out of the Industrial Revolution. If we scale back on fossil-fuel based energy sources, oil, coal, natural gas, we are going to lose our way of life, our military will suffer, and ultimately, our energy security will be at risk.

The authors write, “Now let’s be clear before we go any further. Nobody is against research into new energy technologies, or demurs from the small-scale, purely supportive value of renewable energy sources from wind power (it may help keep your out-house lit) to solar power (expensive but it might give you hot or tepid bathwater) to geothermal use (maybe, but only in really cold countries). The problem is not the pin-prick, ad hoc uses to which they may be put, but the harnessing of larger projects on a commercially viable basis. On an industrial scale, they amount to nothing more than incredibly uneconomic business propositions that require the constant lifeline of government intervention and tax subsidy. The stark reality is that current technology offers no realistic replacing hydrocarbons for decades to come, if ever.” (All emphasis are those of the authors.)

Energy and Climate Wars reads a little like a Michael Crichton book (scientific thriller) dropped into the the plot of a John Le Carré global spy thriller, mixed with controversy of WikiLeaks adapted for the screen by the producer of the movie Wag the Dog.

If you question the whole global climate change movement, then you should consider reading this book. If you are one who believes that global climate change exists and that these two are the “alarmists” distracting us from the real crisis, you might want to read this book to. Why? It’s always easier to fight your enemies if you have their playbooks. Well, for the rest of you, consider a less controversial read…this one may give the weak of heart a stroke.

book reviews, global warming

DOE Offers Funding for Next Generation Biofuels

Cindy Zimmerman

The U.S. Department of Energy is now accepting applications for up to $30 million in total funding for small-scale process integration projects that support the development of advanced biofuels that will be able to replace gasoline or diesel without requiring special upgrades or changes to the vehicle or fueling infrastructure.

“Developing the next generation of American biofuels will enhance our national energy security, expand the domestic biofuels industry, and produce new clean energy jobs. It will help America’s farmers and create vast new opportunities for wealth creation in rural communities. By investing in innovative approaches and technologies, we can continue to move the biofuels industry forward and grow our economy,” said Energy Secretary Steven Chu in a release from the agency.

The projects will focus on optimizing and integrating process steps that convert biomass into biofuels and bioproducts that will eventually be used to support hydrocarbon fuels and chemicals. These process improvements could include pretreatment methods that alter the biomass to improve the yield of sugars in subsequent process steps, less costly and more efficient enzymes that produce sugars, and fermentation organisms and catalysts that convert the sugars into fuel and chemical intermediates. Successful applicants will demonstrate the research potential to improve the economics and efficiency of their proposed process.

Read more here.

biofuels, Cellulosic, Government

Sen. Grassley Defends Ethanol Tax Credit

Cindy Zimmerman

During his Tuesday morning press call with agriculture reporters, Sen. Chuck Grassley (R-IA) once again defended the tax credit for ethanol being extended in the tax bill poised to be passed by the Senate.

“Extension of both the ethanol credit and tariff have garnered a great deal of attention,” Grassley said. “It’s easy to see that ethanol has proved its worth in gold by displacing millions of gallons of imported oil….There shouldn’t be argument about saving more than 100,000 jobs and reducing our dependence on foreign oil.”

Grassley took issue with those who call the ethanol blenders tax credit a “subsidy,” comparing it to similar tax credits included in the bill. “If you want to call this a subsidy, are you going to call the research and development tax credit for major corporations a subsidy?,” he asked. “I think it’s kind of demagogic to be thinking about ethanol being a subsidy for 30 years, when the research and development tax credit has been around for 30 years. How come you don’t tackle them all instead of just one?” He thinks the only explanation is the campaign against ethanol by groups that have “never liked ethanol – big oil, and friends now from the environment and big food and even some agricultural groups.”

The Iowa senator says he is also pleased with the retroactive extension of the biodiesel tax credit in the bill. The latest word is that a vote on the measure could come this afternoon.

Listen to some of Grassley’s comments here: Chuck Grassley

Biodiesel, Ethanol, Ethanol News, Government

Angry Sparks Turning to Flames Over Ethanol Tax Package

Joanna Schroeder

As the domestic ethanol industry’s confidence climbs that their ethanol tax incentives will see at least one-year extensions, angry sparks are turning into flames from those opposed to the move. One group in particular that has voiced its opposition to the passing of the Volumetric Ethanol Excise Tax Credit (VEETC) as well as the ethanol tariff is the Brazilian Sugarcane Industry Association (UNICA) who had been claiming for years that American ethanol policy is designed to keep American ethanol in and foreign ethanol out.

Here is what we know. For more than 20 years, up until 2001, there was “parity” between the two policies, and then that changed when the tariff was set at 54 cents and VEETC at 53 cents. Today, VEETC is at 45 cents and the tariff remains at 54 cents. What is unclear, is where the VEETC will stand should it receive a one-year extension. There was talk that it would be lowered to 36 cents; yet in the current package it remains at 45 cents. Then this morning rumors began en force that there is a possible Senate amendment that would lower the VEETC to 36 cents.

As Joel Velasco, UNICA’s Chief Representative of North America and the author of the blog “Sweeter Alternative” writes, the proposal to reduce the VEETC to 36 cents would in essence, double the difference between the tax credit and the tariff (i.e., the effective trade barrier benefiting corn ethanol) from nine to 18 cents. He notes that the tariff was originally imposed by President Jimmy Carter “to offset the tax credit so that America does not subsidize foreign producers,” but finishes by arguing, “Now some in Congress are trying to change the rules by making the tariff a true trade barrier rather than a subsidy offset.”

For the past year, UNICA has been arguing that true parity is to let both VEETC and the tariff expire and let the free markets take over (Brazil removed its tariff earlier this year). But with the movement in the Senate actually looking like it might go somewhere, UNICA is no longer sending out sparks – they are throwing flames.

“For 30 years, the United States has been subsidizing corn ethanol and imposing trade barriers on imported ethanol. Over the last three years, UNICA has sought to engage with various stakeholders in the United States in an effort to reform U.S. ethanol policy in a way that reduces trade distortions and would avoid trade conflict, said UNICA President & CEO, Marcos Jank. “However, after being rebuffed twice – first in the Bush Administration’s 2008 Farm Bill and now apparently during the Obama lame duck negotiations – it is clear that the United States is not committed to open and fair trade in clean energy, particularly ethanol.”

Jank continued, “Consequently, UNICA will urge the Brazilian government to initiate dispute settlement proceedings at the World Trade Organization (WTO) as soon as this legislation passes Congress and is signed by President Obama. We will have exhausted all options to resolve our differences through informal dialogue and the U.S. legislative process. It will then be time for the WTO to resolve this matter in accordance with applicable international rights and obligations.”

The world will be watching to see if the flames turn into fire as the 112th Congress begin in January 2011.

Ethanol, UNICA

Investments in G-20 Clean Power Projects Could Top $2.3 Trillion

Joanna Schroeder

Private funds have been difficult to secure in the U.S. for clean energy programs for the past year; however, on a global scale, private investments in G-20 clean power projects could total more than $2.3 trillion by the end of this decade alone. This figure was released as part of a new report from the Pew Charitable Trusts this month: Global Clean Power: A $2.3 Trillion Opportunity. The majority of investments will be made in Asia, led by China and India, as driven by massive energy demand and strong clean energy policies. However, the report continues, by countries adopting such policies, every G-20 member has an opportunity to attract more private funds in clean power projects and compete more effectively for business.

The report examined projected private investment in wind, solar, biomass/energy from waste, small hydro, geothermal and marine energy projects. To predict the levels of private investments into projects, the report modeled three policy scenarios to determine future growth through 2020:

  • * Business-as-usual – no change from current policies: total investment projected to be $1.7 trillion by 2020
  • * Copenhagen – policies to implement the pledges made at the 2009 international climate negotiations in Copenhagen: total investment projected to be $1.8 trillion
  • * Enhanced clean energy – maximized policies designed to stimulate increased investment and capacity additions – total investment projected to be $2.3 trillion

“The message of this report is clear: countries that want to maximize private investments, spur job creation, invigorate manufacturing and seize export opportunities should strengthen their clean energy policies,” said Phyllis Cuttino, director of the Pew Climate and Energy program.

The report found that the clean energy sector continues to be an immense economic opportunity and Asia became the top regional destination for clean power finance in 2010. Within the region, China and India are leading the way (in all energy demand, not just clean energy demand) and by 2020, the report anticipates that 40 percent of global clean power project investments will be made in China, India, Japan, and South Korea.

Michael Liebreich, CEO of Bloomberg New Energy Finance, the company that compiled the underlying data for the report said, “Strong and consistent policies in Asia have helped double private investment over the past two years. Asia is now the leading region for clean energy investment, and its lead is set to extend in the near future unless Europe and the US make a step change in their support for the sector.”

While the U.S. is currently lagging far behind in private investments in clean energy, the report found that they are among those with the most to gain from passing strong clean energy policies. The report cites an example that says the U.S. has the potential to attract $342 billion in clean power project investments over the next 10 years under the Enhanced clean energy scenario.

You can download a copy of Global Clean Power: A $2.3 Trillion Opportunity here.

biomass, Electricity, Energy, Geothermal, Research, Solar, Waste-to-Energy, Wind

Ethanol Tax Incentive Cost Perspective

Cindy Zimmerman

The cost of extending the ethanol blenders tax credit for another year is well worth it, according to the Renewable Fuels Association.

Renewable Fuels Association LogoExtending the Volumetric Ethanol Excise Tax Credit (VEETC) is estimated to cost about $6 billion dollars in 2011 at the current rate in the Senate bill of 45 cents per gallon. The United States spends about $750 million per day on imported oil, or $5.25 billion per week. Which means, extending the VEETC through 2011 would be the equivalent to about one week’s worth of oil imports – eight days, to be precise.

The Senate measure that includes extending the ethanol tax credit was moved along yesterday with a vote of 83 to 15 to formally end the debate and will soon be put to a final vote. RFA president and CEO Bob Dinneen hopes that will be very soon. “The Senate has taken an important step to keep America on the path toward greater energy self-reliance,” said Dinneen. “We encourage the Senate to move as swiftly as possible to pass this measure.”

Despite the cloture vote, the rules allow the Senate to debate the bill until midnight tonight, but the final vote could be held before then or delayed until tomorrow morning. Senator Dianne Feinstein (D-CA) is expected to introduce an amendment to cut the tax credit and the associated tariff to 36 cents, but Senator Chuck Grassley (R-IA) says a vote on the amendment is unlikely.

As for the future, Grassley expects some changes. “We’re all kind of committed to taking a new approach and the phasing out of the tax credits,” he said during his Tuesday morning conference call with reporters.

RFA’s Dinneen says the industry also expects changes in the incentives, but the extension gives them time to adapt. “This one-year extension will provide the industry and lawmakers breathing room to think through responsible reform of ethanol tax policy and all energy tax policy more specifically,” he said.

Ethanol, Ethanol News, Government, RFA