Ethanol and Gasoline Prices

Cindy Zimmerman

Renewable Fuels AssociationThe Renewable Fuels Association (RFA) has a good post on the E-xchange Blog this week about the relationship between ethanol and gasoline prices and the importance of the Volumetric Ethanol Excise Tax Credit, or VEETC.

RFA Vice President for Research Geoff Cooper notes that ethanol prices have strengthened recently and while gas prices have also increased slightly, gasoline prices would be higher were it not for ethanol in the mix. “Despite the fact that the market price for ethanol has been above the price of gasoline in recent weeks, the ethanol blender’s tax credit has kept the effective price of ethanol below the price of gasoline,” Cooper says.

As of last week, Chicago spot prices showed ethanol selling for $0.15 less than the blend-ready gasoline (called Reformulated Blendstock for Oxygenated Blending, or RBOB), when VEETC is accounted for. This differential translates to a gallon of E10 being 1.5 cents/gallon cheaper at the retail level than unleaded gasoline without ethanol.

This simple example demonstrates the importance and effectiveness of the VEETC. In essence, VEETC is enhancing the ability of ethanol producers to manage sharply higher corn prices, while at the same time ensuring ethanol is priced competitively with gasoline and ultimately saving consumers money.

Read Cooper’s analysis here.

Ethanol, Ethanol News, RFA

Algae Biofuels To Reach 61M Gallons by 2020

Joanna Schroeder

According to a new report released by Pike Research, algae biofuels production will reach 61 million gallons per year with a corresponding market value of $1.3 billion by 2020. While barely a drop in the bucket for biofuels, this represents a compound annual growth rate (CAGR) of 72 percent, roughly on par with early development in the biodiesel industry. The study, “Algae-Based Biofuels,” examines the key growth drivers behind the algae-based biofuels market and outlines unresolved supply challenges. The report includes detailed 10-year market forecasts, segmented by world region, along with analysis of market conditions in key countries and profiles of key industry players that are shaping the emerging algae biofuels business.

Early research has given preview to algae’s advantages for fuel production including its ability to yield 2 to 20 times more oil per acre than leading oilseed crops. In addition, it doesn’t utilize non food-based feedstock and can grow on non-arable land and in wastewater, including salt water.

“On paper, algae could displace worldwide petroleum use altogether, however, the industry has yet to produce a drop of oil for commercial production,” said Pike Research President Clint Wheelock. “Although the algae-based biofuels market will grow rapidly once key cost hurdles are overcome, widespread scale-up will be hampered by a number of difficult challenges including access to nutrients, water, and private capital.”

Wheelock added that with the cost of production still a key obstacle to widespread production, many companies are refocusing production efforts on low-volume, high-value co-products to develop revenue streams over the next decade.

The report anticipates that the U.S. will lead the way in early production with nearly 50 percent of algae activity happening in the states. Next in line is the European Union, which is home to about 30 percent of algae activity, but their efforts will will initially hampered by the industry’s focus on university research, and later by insufficient access to water, land and nutrient sources. Over time, the report anticipates that Latin America and Asia Pacific will gain significant market share.

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algae, biofuels, Research

Nothing Scary About Ethanol or Biodiesel

Cindy Zimmerman

A Buffalo, Minnesota fuel station is offering some Halloween treats for flex-fuel vehicle and diesel motorists this weekend.

e85 halloween pumpkinThe Buffalo Holiday station is promoting E85 fuel with an 85 cent per gallon discount and B5 biodiesel with a 10 cent per gallon discount on Saturday, October 30, from 10 a.m. until noon. The purpose of the Halloween weekend promotion is to encourage the use of E85 and biodiesel, which reduces tailpipe emissions, air pollution and related health problems. There will also be in-store specials during the promotion.

E85 is for use in flex fuel vehicles (FFVs) only. While there are more than 225,000 FFVs registered in Minnesota, not every owner is aware they have a choice at the pump, and that their car, van, SUV or truck can run on E85, gasoline, or any combinations of the two fuels. All diesel vehicles can use B5 biodiesel.

Supporters of the promotion include Holiday Companies, the Wright-Hennepin County Corn Growers, the Minnesota Corn Growers Association, the Minnesota Soybean Growers Association, the Clean Air Choice Team and the American Lung Association in Minnesota, which supports the use of E85 and biodiesel fuels as part of an overall strategy to reduce and prevent air pollution. For a complete listing of the 355+ E85 stations in Minnesota, as well as a list of all flex fuel vehicles that can use the ethanol-based fuel, visit www.CleanAirChoice.org.

Biodiesel, Ethanol, Ethanol News

Magnifying Power of the Sun, Lowering Solar Cell Costs

John Davis

A California company has found a way to magnify the power of the sun and could end up cutting the cost of solar panels in half.

HyperSolar, Inc. is developing a breakthrough technology that actually magnifies the power of the sun, getting more energy into a solar cell and getting more energy out.

“The way we’re doing that is by using an inexpensive optical layer. We’re able to concentrate the sun and deliver more sunlight on to a solar cell,” explains Tim Young, the CEO of HyperSolar.

Young goes on to point out that most of the work in making solar more affordable has focused on solar cell efficiency. He says HyperSolar is taking a different approach using microfiber optics that take the cell’s efficiency out of the equation. Young admits it’s a tricky process, but if it works, they’ll be able to reduce the amount of solar cells needed to produce the same amount of electricity.

“Our goal is to reduce the amount of silicon that goes into that solar module (which makes up) 80 to 95 percent of the price of a solar module.” Young says they could end up reducing the cost of a solar array by 40 to 45 percent, bringing the cost of solar down to grid parity and making the power of the sun on par with conventional energy production methods.

Young says the biggest challenges still facing HyperSolar are making sure the materials and process are cheaper than using silicon and producing the magnifying layer able to stand up to the constant rays of the sun.

He says they’re still in the prototype stage and hope to have their product on the market within the next 12 months.

You can hear more of my conversation with Young here: Tim Young, HyperSolar

Audio, Solar

Parking Company to Run Biodiesel Shuttles at Denver Airport

John Davis

Canopy Airport Parking has partnered with Frontier Airlines to offer fliers a chance to ride to and from their green parking facility and the Frontier ticket counters on one of Canopy’s seven biodiesel and hybrid shuttles.

Biodiesel Magazine reports the service will begin in late November:

A 3,000-gallon tank will be installed on-site to refuel the bus fleet, according to Karl Kelman, Canopy’s marketing manager. “We also have buses that run on compressed natural gas and have a gasoline hybrid bus as well,” he said.

In addition to biodiesel being used by Canopy’s shuttle buses, the innovative parking facility is expected to feature other environmentally friendly technologies, including solar power, geothermal and wind power. When the parking facility opens, Kelman said it should be the country’s first to feature energy efficient technologies from renewable sources. “We’re hopeful that at some point there will be other parking facilities like Canopy that integrate similar green features.”

This parking facility is seen as a prototype in environmentally friendly facilities.

Biodiesel

Cosmetics Company Tours North America on Biodiesel

John Davis

A cosmetic company that touts its products as “honestly natural, truly beautiful” is using a pretty beautiful fuel to spread its message.

Organic and natural skin and baby care products company Weleda has been taking a biodiesel-powered truck across North America to promote its cosmetics and to help raise awareness for the Safe Cosmetics Act of 2010:

We’re driving our Biodiesel truck from one side of North America to another to spread our message that what goes on you goes in you, and to spread our message and share our wonderful products.

The next, and the last, stops for the tour will be in the Los Angeles area Nov. 5-7. More information is available on the company’s Honestly
Natural, Truly Beautiful Tour website.

Biodiesel

Sapphire Energy’s 4 Pillars to Success

Joanna Schroeder

Sapphire Energy has four pillars that define the company; yet the over arching pillar that truly drives them is the concept of scale. But before they could begin overcoming that challenge, they first had to decide what kind of company they wanted to be. The answer  – an energy company.

Sapphire is an energy company that just happened to land on algae as their primary feedstock. The company was founded in 2007 out of Scripps Institution of Oceanography at UC San Diego under the research direction of Steve Mayfield, who has since become the director for the San Diego Center for Algae Biotechnology, also housed at UC San Diego.

According to the company’s Vice President of Corporate Affairs, Tim Zenk, whom I met with during my San Diego Algae Tour, Sapphire is a very large operation. They have their research headquarters in San Diego, an engineering team working out of an office in Orange County, CA, a very large demonstration plot in Las Cruces, NM, and they are about to break ground on a very large demonstration facility in Columbus, NM.

“This is a very large lab by algae standards,” said Zenk. “It’s no question its the largest in the world.”

To date, Sapphire has raised more than $200 million from private investors, with three major investments coming from family venture funds. “Three family wealth trusts gives us a lot of flexibility that allows us to pick the right partners and allows us a long runway to develop the technology and commercialize it,” explained Zenk who believes the company will be at full production by 2018.

He noted that standard venture capital isn’t really conducive to energy. “We think of things in 30 year life cycles, not five years,” said Zenk.

Zenk described how Sapphire sees the energy problem. “We really view this as an agricultural problem and we see Sapphire at the intersection between biotechnologies, agriculture and energy. And our view is we need to learn something from the two most scalable businesses in the world and that’s energy and ag. Our view is algae can be cultivated in the same manner as, or in a similar manner, as you do other products that grow in water,” concluded Zenk.

And this leads us to the four pillars of Sapphire, which according to Mike Mendez a Co-Founder of the company and the VP of Technology, they are developing an energy solution that is scalability, is not produced from a food crop, does not use arable land, and does not use fresh water.

You can learn more about Sapphire’s four pillars in my interview excerpt with Mike Mendez. Click here to see photos from my San Diego Algae Tour Photo Album”>San Diego Algae Tour. Sapphire's 4 Pillars to Success

algae, Audio, biofuels

2010 Clean Cities Coordinator of the Year Announced

The U.S. Department of Energy (DOE) has named Kevin Herdler Clean Cities 2010 Coordinator of the Year in recognition of his successes in reducing petroleum use in the St. Louis region. Herdler has led the work of St. Louis Clean Cities (SLCC) since 2001. Under his leadership, SLCC drove down the region’s 2009 petroleum consumption by 3.3 million gallons, reducing greenhouse gas emissions by 28,600 tons. And his efforts are on pace to exceed those numbers in 2010.

SLCC has initiated scores of projects that have replaced petroleum use with use of alternative fuels, laid the groundwork for infrastructure to deliver alternative fuels, and improved the fuel efficiency of vehicle fleets.

Among Herdler’s recent accomplishments, he worked with six school districts to install fuel-fired heaters in more than 600 school buses. The heaters use a very small quantity of fuel to warm up bus engines and heat bus interiors, eliminating the need for drivers to idle their engines before they set off on their routes. Herdler has worked with truckers to install auxiliary power units (APUs), which also cut down on engine idling. Hundreds of St. Louis-based truckers now use APUs to heat their cabs and power appliances, thus chipping away at the 800 million gallons of diesel fuel lost every year in the U.S. to truck idling. Herdler even spurred the replacement of two Mississippi River tugboat engines, resulting in a 40 percent savings in their fuel use.

Herdler’s seemingly limitless energy for reducing petroleum use springs from his days in the U.S. Air Force.

“As a military veteran, I see the impacts of our dependence on foreign oil,” Herdler said. “I like the idea of using American fuel and supporting American jobs. And on top of that, there’s the benefit of cleaner air.”

“Kevin has been with Clean Cities since the beginning, and his heart has always been in this,” national Clean Cities Director Dennis Smith said. “His actions are something to emulate and learn from, and we’re proud of him.”

Smith presented Herdler with the Coordinator of the Year Award on Sept. 21 during a leadership retreat in Rapid City, S.D. DOE selected Herdler from a group of accomplished nominees representing Clean Cities coalitions throughout the nation.

Biodiesel, E85, Ethanol, News

Vilsack Tours Georgia Ethanol Plant

Cindy Zimmerman

vilsackFollowing up on the biofuels initiatives that he announced last week, Agriculture Secretary Tom Vilsack visited First United Ethanol, LLC (FUEL) located in Mitchell County, Georgia on Monday to highlight the importance of ethanol production in all parts of the nation.

“The southeast is poised to really assist us in creating new biorefineries with a wide variety of feedstocks that can be grown in this part of the country,” said Vilsack.

“It’s a very timely visit,” said FUEL CEO Murray Campbell of Vilsack coming so soon after he announced important biofuels initiatives at the National Press Club. “Our business model and the jobs that have been created in southwest Georgia follow along in the outlines of that speech. It’s very important that these biofuel refineries be scattered around the country.”

vilsackFUEL is a 100 million gallon per year corn-based ethanol plant with 860 mostly rural investors from the local Georgia-Florida area. “Most of the ethanol plants in the Midwest are ‘rubber in and rail out’ and we’re sort of ‘rail in and rubber out,'” Campbell says. While most of their corn comes in by rail from the Midwest, they are starting to buy more local corn as farmers in the agricultural area surrounding the plant are starting to put more corn back in their crop rotation with peanuts and cotton.

Vilsack was joined during his visit by Congressman Sanford Bishop (D-GA), who is the representative for the district where FUEL is located. “He and all of our whole delegation from Georgia have supported us all through our creation here,” said Campbell.

Pictured here are Campbell, with Congressman Bishop, Secretary Vilsack and FUEL Chairman Tommy Dollar.

Listen to or download an interview here with Murray Campbell. Murray Campbell Interview

Ethanol, Ethanol News, RFA, USDA

Vilsack Defends Ethanol in WSJ Letter

Cindy Zimmerman

vilsackIn a letter to the editor of the Wall Street Journal published Monday, Agriculture Secretary Tom Vilsack responded to an editorial last week criticizing EPA’s decision to allow higher blends of ethanol in our fuel as politically motivated.

Defending and clarifying the EPA ruling, Vilsack wrote, “The EPA’s decision to allow the increased use of ethanol in some automobiles is scientifically sound and follows a comprehensive review of extensive testing and other available data on E15’s impact on engine durability and emissions. What’s more, it will help ensure that the existing corn ethanol market acts as a successful stepping stone to a national biofuels industry that is creating jobs in every corner of the country using regionally appropriate feedstocks grown by American producers.”

The Secretary also addressed the criticism of subsidies for biofuels, noting that “the petroleum industry receives billions of dollars in tax breaks each year from the federal government.”

Ethanol, Ethanol News, USDA