Biodiesel Incentive Shot Down Again; Dem Calls it “Stunt”

John Davis

The federal $1-a-gallon biodiesel tax credit failed to move forward yet again today, as one of the top Democrats in the U.S. Senate dismissed the effort as a “stunt.”

The Senate defeated Sen. Charles Grassley’s (R-IA, pictured on right) attempt to retroactively revive the credit as part of a small business bill by a vote of 41-58… far short of the 67 votes needed. Meanhwhile, the Des Moines Register reports that Senate Finance Committee, Montana Democrat Max Baucus, called Grassley’s motion and another GOP proposal “as stunts meant to score political points.”

“These motions are the way that folks try to embarrass other people,” he said.

Grassley spokeswoman Beth Pellett Levine said he “has been stonewalled by the Democratic leadership for nearly a year now. There isn’t anybody who would blame him for doing everything possible to pass the noncontroversial biodiesel tax credit.”

The industry is now looking toward having the subsidy included in legislation that would extend a number of tax provisions.

Said Grassley, “I have confidence that eventually the biodiesel tax incentive will be passed, but I hope it’s not too late for the thousands of people across the country who are already out of work because of the lapse.”

The American Soybean Association was critical of the Senate’s action:

“ASA is severely disappointed in the failure of the Senate to extend the biodiesel tax credit,” Joslin said. “At a time when jobs and renewable energy production are cited as top priorities, it is unacceptable that Congress would fail to extend the biodiesel tax credit. The biodiesel tax credit has a direct impact on jobs and it is a homegrown renewable energy source – the first and only advanced biofuel commercially produced in the United States.”

Meanwhile, the National Biodiesel Board said the lack of certainty over whether the subsidy will return is killing the biodiesel industry.

Biodiesel, Government, Legislation

Ethanol Report on Export Exchange

Cindy Zimmerman

This edition of “The Ethanol Report” features comments from Renewable Fuels Association (RA) President and CEO Bob Dinneen and U.S. Grains Council (USGC) CEO and president Tom Dorr about promoting exports of the ethanol co-product distillers dried grains with solubles (DDGS).

usgcThe two organizations are working together on the upcoming “Export Exchange” conference that will focus on increasing U.S. exports of DDGS. “This is going to be an opportunity for two and a half days in which people can get together, meet with buyers, meet with producers, listen to nutritionists, analysts and others explain the value of how to use and how to access these products,” says Dorr.

Ethanol Report PodcastDinneen says exports are critical because the industry has already hit “a feed wall” when it comes to use of DDGS in the domestic livestock industry. “While domestic markets for DDGS continue to expand, quite frankly we’ve grown that market pretty rapidly over the last several years and the opportunity for continued expansion domestically are fewer and farther between.” That’s why RFA believes the conference is a must-attend event for ethanol producers. “Because DDG marketing is so important to the bottom line of an ethanol producer. About 40 percent of your feedstock costs can be recovered in the marketing of DDG,” Dinneen said.

The Export Exchange is being held October 6-8 at the Hyatt Regency McCormick Place Hotel in Chicago, Ill. More information and registration is available on-line here.

Listen to or download the Ethanol Report here: Export Exchange Ethanol Report

Audio, corn, Distillers Grains, Ethanol, Ethanol News, Ethanol Report, Exports, RFA, USGC

Farmers Dealing With VeraSun Payment Letters

Cindy Zimmerman

Hundreds of farmers have been showing up at meetings held around the Corn Belt trying to find out what they should do about letters received saying they owe money for grain delivered two years ago to a bankrupt ethanol company.

VeraSunVeraSun officially filed bankruptcy nearly two years ago. Just a few months prior to filing, the company reported a 500 percent revenue increase over the previous year and they opened their 14th plant just about six weeks before the bankruptcy. But, any farmers who got paid for corn delivery in the 90 days prior to the filing at the end of October 2008 are now being asked nicely to repay that money. If they nicely agree, they can just pay 80 percent by September 30 – if they don’t, they have to pay back the full amount.

The letters went out to an untold number of farmers in South Dakota, Nebraska, Iowa and other states on August 20. The amounts involved vary per farmer, but there are reports of some who were paid as much as $100,000. The initial reaction to the letters was disbelief and shock, but advocacy groups and farm organizations have been working to inform farmers about their rights and what actions they need to take.

According to an explanation by the Iowa State University Center for Agricultural Law and Taxation the letters are based upon a
“preference theory” under federal bankruptcy law. Basically, lawyers for people who were owed money by VeraSun when it declared bankruptcy are going after everyone that VeraSun paid in the 90 days prior to filing because there is a chance they might have gotten “preferential payments” by VeraSun under the theory they may have paid off some people but not others. It is up to the farmers who received payments for grain to prove that they were made “in the ordinary course of business.”

“Our farmers have done no wrong, and yet they must now invest time and treasure fighting off lawyers over a legal transaction made years ago,” says National Corn Growers Association (NCGA) president Darrin Ihnen. “In the end, this is all about taking money from farmers who lost out on previous contracts, making them spend more money and then giving the money to the bankers and others. That is simply not right.”

At meetings this week, farmers have been urged to seek legal counsel and reply to the letters before September 30. Legal counsel for corn grower organizations on the state and national level are collaborating on how best to respond to the letters.

corn, Ethanol, Ethanol News

Renewable Fuels Awareness Month in Nebraska

Cindy Zimmerman

Renewable FuelsNebraska Governor Dave Heineman visited Husker Harvest Days in Grand Island Wednesday to proclaim September as Renewable Fuels Awareness Month in Nebraska.

Joined by representatives of the Nebraska Corn and Soybean Boards, Gov. Heineman said that renewable fuels are a critical component of energy independence and energy security, while providing economic growth and vitality in the state. “Nebraska is one of the leading producers of corn and soybeans in the United States – agricultural commodities used in the production of ethanol and biodiesel, which reduce our dependence upon foreign oil,” he said, adding that ethanol replaced the need for more than 300 barrels of oil last year, while biodiesel displaced the equivalent of 38 million barrels of crude oil.

Renewable FuelsAlso on hand was Olympic gold medalist Curt Tomasevicz, on behalf of the Nebraska Corn Board, who touched on the importance of the quest toward energy independence. “This isn’t just about creating a more robust domestic energy supply. This is about keeping American dollars at home instead of sending billions of dollars overseas for imported oil. This is about American self-reliance and ingenuity. This is about taking charge of our future – and changing that future for the better,” he said.

Pictured is Governor Dave Heineman (second from left) with Alan Tiemann, chairman of the Nebraska Corn Board; Lisa Lunz, chairman of the Nebraska Soybean Board, and gold medalist Curt Tomasevicz.

Biodiesel, corn, Ethanol, Ethanol News, Government, Soybeans

Ethanol Industry E15 Vehicle Study Detailed

Cindy Zimmerman

A new study released this week makes a good case for allowing up to 15 percent ethanol in all vehicles, to avoid having different standards for older cars. The ethanol industry is hoping it will help the Environmental Protection Agency rule favorably on the request to grant a waiver allowing E15 that was requested nearly two years ago.

Renewable Fuels Association“Indications are that the agency is contemplating granting a partial waiver,” said Renewable Fuels Association (RFA) president and CEO Bob Dinneen. “We have concerns about the confusion that might create in the marketplace for consumers and for gasoline marketers themselves.”

RFA called on Ricardo, Inc., an internationally recognized automotive and engineering firm, to study the feasibility of introducing E15 blended fuel in 1994 to 2000 model years. In a Wednesday morning webcast and conference call with media, Ricardo chief gasoline product group engineer Luke Cruff presented the findings of the 90 page study. He explained how and why the study looked at vehicles made by six companies during the 1994-200 period, which currently total almost 63 million or 25% of the light duty vehicles on the road. Cruff says the report came to the overall conclusion that “the adoption of E15 is not going to adversely affect fuel system components in properly engineered vehicles, or cause them to operate in a suboptimal manner as opposed to how they currently operate on E10.”

According to the report, the evaluation of the vehicles involved the study of several technical areas. “Fuel system changes from 1994 to 2000 were analyzed. The introduction of various emission and diagnostic regulation levels during the studied time period was summarized. Emissions certification data from the most common vehicle platforms were collated and evaluated for current emissions outputs relative to the original legislated levels. After treatment systems and vehicle calibrations from the period of interest were analyzed to determine the likelihood of deterioration due to changes in ethanol content. Properties of gasoline / ethanol blends were evaluated relative to fuel system materials commonly used during the study period, and the key degradation mechanisms of these materials were established. Finally, physical fuel system parts were procured and evaluated to identify the deterioration that would be expected for 1994 to 2000 MY parts still in service today.”

Listen to or download the opening statements of Dinneen and Cruff in the player below. Diagrams and photos referenced by Cruff can be found in the report.

RFA Ricardo Press Conference
Audio, Ethanol, Ethanol News, RFA

Biodiesel Focus of Diesel Tech Forum Webinar

John Davis

If you’re reading this before 10 am EST today, there’s still time to get in on the free Diesel Technology Forum that will feature plenty of talk about biodiesel:

Biodiesel usage has grown significantly in recent years and many states are considering legislation or programs to promote renewable fuels as a means of reducing U.S. dependence on fossil fuels. As the first state to implement a biodiesel mandate, Minnesota had its share of problems. Many of these have been overcome, yet additional challenges remain, as evidenced by Massachusetts’ recent decision to postpone its mandate in favor of a voluntary program.

Renewable fuels, including biodiesel, will play an important role in the pursuit of greener transportation solutions. Biodiesel usage can and will continue to grow, however efforts to promote its use can be complicated. Join us for 90 minutes to hear more about state efforts to encourage biodiesel use, the lessons they’ve learned and ideas for consideration from a European perspective.

Biodiesel Magazine says there will be five speakers closely associated with the industry: Shelby Neal of the National Biodiesel Board who will present an overview of state biodiesel policies across the country and on the impact of the RFS2; Dwayne Breger, director of renewable energy for Massachusetts’s department of energy resources, talking about his state’s recent suspension of its biodiesel mandate; Ralph Groschen from the Minnesota Department of Agriculture addressing Minnesota’s biodiesel experience and the state’s recent move to a B5 mandate; Randy Jennings, from the Tennessee Department of Agriculture, talking about programs to promote fuel quality and the importance of policy enforcement; and Dr. Juergen Fischer who will give an overview of the biodiesel quality management system in Germany and its relevance for the U.S.

More information and registration is available here.

Biodiesel, Webinar

Company Studies Grease-to-Biodiesel Feasibility

John Davis

A Missouri company is looking into the feasibility of turning fat, oil and grease (FOG) in urban sewers into clean-burning biodiesel.

Biodiesel magazine reports that H2O’C Engineering’s study is funded by $50,000 from the Missouri Department of Natural Resources:

The study will focus collecting FOG from two Missouri metropolitan areas, Kansas City and St. Louis. “We are looking at what they call the ‘grease-shed,’” [Tom O’Connor, the owner of H2O’C Engineering] said. Similar to a watershed, a grease-shed is essentially the pattern of where FOG originates and how it flows into the sewer system. “We’ve also got a particular eye on waste water treatment facilities,” O’Connor said, which will include quantifying how much FOG is present in the wastewater systems and whether or not it is feasible to convert that material into biodiesel.

“[FOG] is problematic nasty stuff,” O’Connor said. “They have problems with it throughout the sewers, all of the collection pipes. It tends to clog up pipes and pump stations and that sort of thing. Optimally, it wouldn’t be there. It’s a complete nuisance, and we’re going to capitalize on the fact that it is there. When it gets to the water treatment plants, it’s generally skimmed off and landfilled. It’s pretty nasty stuff, but it does have energy content, and with enough cleanup, we think we can make it into on-spec biodiesel.”

However, O’Connor also noted that it’s important not to encourage people to think it is okay to put FOG down the drain. Ideally, the better option would be to capture that material before it ends up in the sewer. “We’re going to look at capturing it whenever and wherever we can,” O’Connor continued. “Optimally that would be more upstream than downstream.”

The study is looking at what restaurants and other FOG producers are doing with their grease, and where it is flowing. The study is to be completed by January 2011.

Biodiesel

Researchers: Develop Biofuels and Advanced Engines

John Davis

The next generation of biofuels must be developed in conjunction with advanced combustion engines, if there is to be long-term success of those biofuels. That word comes from researchers at the Sandia National Laboratories.

The recommendations were made following a Sandia-hosted workshop held in November, Next Generation Biofuels and Advanced Engines for Tomorrow’s Transportation Needs. Participants included researchers at the Department of Energy’s Combustion Research Facility (CRF) and Joint BioEnergy Institute (JBEI), as well as representatives from oil companies, biofuel developers, engine manufacturers, suppliers and experts from the university, regulatory, finance and national laboratory communities.

The full report is now available online at http://www.sandia.gov/news/publications/white-papers/index.html.

The workshop, said Ron Stoltz, manager of Sandia’s Advanced Energy Initiatives, was designed to identify opportunities for co-development of biofuels and engines, an often-overlooked issue.

“The oil companies and the automobile and truck engine companies have engaged in a dialogue and collaboration on fuel and engine issues for almost 100 years,” Stoltz said. “But the same cannot be said for the majority of biofuel start-up companies, especially those that are thinking ‘beyond ethanol’. The report highlights how fragmented the biofuels industry is today and how, by putting serious thought behind some key issues like fuel chemistry linked to engine performance, great strides can be made.”

The workshop was designed to help get a dialog going between researchers and experts from industry, academia and government, with the goal to figure out how to accelerate the transition to biofuels. Those participating did agree that the next generation of biofuels needed to be clean (at or below EPA-designated pollutants criteria); sustainable (with a smaller carbon footprint than the petroleum-based fuels being displaced); and compatible with current and future engine designs, and with current and future distribution infrastructure.

The group also recommended modernizing the testing, specification, and certification of all fuels; plan and integrate the research and development of next-generation biofuels in conjunction with the development of advanced engines; develop specific guidelines, roadmaps, and objectives for co-development of next-generation biofuels and advanced engines; and convene an International Fuels and Engines Summit, sponsored by industry with government and university participation.

biofuels, Research

Ride for Renewables

Joanna Schroeder

This past Sunday, Tom Weis left Boulder, Colorado on a hybrid electric-assist recumbent trike on a 2,500 mile journey that will end in Washington, DC. Coined the Ride for Renewables, Weis is set out to gain support for his plan that calls for a 100% renewable electricity grid for the U.S. by 2020.

Weis believes that 2010 is the year America needs to set the agenda to address climate change and he is so passionate about making change, that he is willing to pedal across the country to build grassroots support for his plan. He writes on his website, “This is about everyday Americans “taking back our power” by demanding a green industrial revolution that will put unemployed Americans back to work, reestablish our role as world economic leader, and help ensure future generations a livable planet.”

Weis will be traveling through Colorado, Kansas, Iowa, Illinois, Indiana, Ohio, Kentucky, West Virginia, Virginia, Maryland and ending in Washington, DC. Along the way, he will highlight local renewable projects, bring attention to old, dirty technologies that need to be replaced and solicit signatures for his petition that he will present to DC legislators. You can follow his journey online at www.climatecrisissolutions.com where he will post photos and videos and he will also be posting to various social media sites.

Electricity, Environment, Promotion, Solar, Wind

Book Review – Food Wars

Joanna Schroeder

This week I read a book about the ongoing discussions regarding the causes of the food crisis. It should come as no surprise that several of the main reasons the globe is in the midst of a food crisis, according to a The Food Wars author Walden Bello, are commodity speculation, biofuels,  increased demand for food in Asia brought on by prosperity, and most influential, the massive ag policy reorientation known as structural adjustment.

In this case, I’m going to focus on Bello’s explanation of how biofuels contributed to rising food costs. Bello states that biofuels have been blamed for the food price increases over the past few years, but continues by saying while they were a contributing factor, they were not the cause of the volatility of food prices.

He writes, “More central as root causes have been structural adjustment, free trade, and policies extracting surplus from agriculture for industrialization, all of which have destroyed or eroded the agricultural sector of many countries. No one factor can be pinpointed as the cause of the global food crisis. It is the confluence of these conditions that has made the contemporary food price crisis so threatening and difficult to solve.”

But despite this concession, he is still not a supporter of biofuels, at least in the context of environmental benefits, and he says, “Indeed agrofuels contribute to global warming and certainly do not provide a solution to climate change.”Read More

biofuels, book reviews, Environment, food and fuel