NEC 2027

Will The Lame Duck Session Create Mad Ducks?

Joanna Schroeder

DomesticFuel reporter Chuck Zimmerman recently had the opportunity to sit down with Growth Energy CEO Tom Buis and get an update on the state of the industry. This week, the lame duck session kicked off and this is a very important session for the biofuels industry as they are facing the expiration of several important tax provisions.

“We’re hoping the lame duck session becomes a productive session. Sometimes they are. Sometimes they aren’t,” said Buis. “Unfortunately, lame ducks create mad ducks and that sometimes prohibits them from working cooperatively together.”

Buis continued, “We’ve seen partisan gridlock in Washington for too long. We have some timely issues that are going to be a big deal to our industry and others that need to be addressed by the end of the year.”

Some of these issues include the potential end of the ethanol tax credit, VEETC, the small producer tax credit, and the ethanol tariff.

“Sometimes in lame ducks when you switch power from one party to the other the incoming party says we’d rather wait until January so we can control how these issues are dealt with,” said Buis. Well, that has consequences if they take that avenue and I’m hoping they don’t.”

Growth Energy would like to have an opportunity to take a bigger, broader look at where the industry is going and Buis feels that with the industry’s support, they are well on their way. But he cautions that for change to happen, you can’t allow the current programs to expire before the new programs are in place.

You can hear more about the state of the ethanol industry in Chuck’s full interview with Tom Buis. Ethanol State of the Industry

Audio, biofuels, Ethanol, Growth Energy

Scoop Up Some Holiday Cash

Joanna Schroeder

Scoop up some extra cash for the holiday season by filling out the DomesticFuel Survey. By participating in our fast, easy quick 5 minute survey, you could win $250 to spend on yourself or to help spread the joy to your friends and family.

Here’s all you need to do. Click on this link to complete the survey that will help the blogging team bring you more stories that are of interest to you. Once you’ve answered all the questions, enter to win $250 in cash. Each month, one winner will be chosen  from all of the survey’s entrants. Non winners will be put into the drawing for the next month so there is no need to fill out the survey multiple times.

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Miscellaneous

Ethanol Report on California LCFS

Cindy Zimmerman

Ethanol Report PodcastThe California Air Resources Board (CARB) has decided to use the latest research on indirect land use change (ILUC) for implementing the state’s Low Carbon Fuels Standard (LCFS), meaning the current ILUC penalty for corn ethanol likely will be cut by at least half by the spring of 2011. The Renewable Fuels Association (RFA) says the resolution is good news for the ethanol industry, but expressed concerns about waiting until after the standard is implemented in January to make the revisions.

RFA Vice President for Research Geoff Cooper talks about the decision and its impact in this edition of “The Ethanol Report.”

Listen to the Ethanol Report here: Ethanol Report on California LCFS

Audio, Ethanol, Ethanol News, Ethanol Report, RFA

EPA Decision on E15 for Later Models Delayed

Cindy Zimmerman

The Environmental Protection Agency says it will now be the end of the year before testing of 15 percent ethanol blended fuel in vehicles older than 2007 model year is complete.

According to a very brief statement issued by the EPA, the Department of Energy has informed EPA that “lab testing of E15 in model year 2001-2006 vehicles will now be completed by the end of December. EPA will make its decision shortly after receiving that data.”

“We’ve been informed by EPA that the decision is being delayed because of the need to retest one particular car that hadn’t been properly maintained and serviced. That particular car failed on all fuels, including E0. The problem was with the testing process, not the fuel,” said Growth Energy CEO Tom Buis. “This also demonstrates just how committed EPA is to the integrity of the testing; they are doing this right. We are confident that ultimately all the tests will show what we’ve said all along, that E15 is a great fuel for American motorists.”

Renewable Fuels Association president Bob Dinneen says while the delay is disappointing, it is understandable. “We encourage EPA to extend such due diligence to testing for all cars and pickups, regardless of age. We believe the fuel testing to date clearly demonstrates the efficacy of E15 as a motor fuel for all light duty vehicles.”

More information on the delay is expected from EPA by the end of the day.

Ethanol, Ethanol News, Government, Growth Energy, RFA

Delay Expected on E15 for Later Model Vehicles

Cindy Zimmerman

Reuters is reporting today that the Environmental Protection Agency is likely to delay a decision on the use of E15 in cars and pickup trucks built from 2001 to 2006 by up to a month.

Using an unidentified source, Reuter’s reporter Tom Doggett said the agency wants to do more testing on the effects of 15 percent ethanol blended gas and may announce today that the decision will be delayed. Last month, EPA made the decision that E15 was safe for use in cars and pickup trucks built in 2007 and later and that a decision on later model vehicles was expected by December.

Ethanol, Ethanol News, Government

California to Update Land Use for Ethanol

Cindy Zimmerman

The California Air Resources Board yesterday agreed to update the land use change and other indirect effects of biofuels production under their Low Carbon Fuels Standard (LCFS).

CA ARBThe board is asking for updates to the land use values for corn ethanol, sugarcane ethanol, and soy biodiesel, and other feedstocks by spring of 2011 to implement the LCFS, which currently penalizes corn ethanol to the extent that it would not be approved for use in the state, while sugarcane ethanol meets the standard.

Joel Velasco with the Brazilian Sugarcane Industry Association (UNICA) says they are pleased that California is reviewing the science of indirect emissions from biofuels production. “As we stated in our comments during the LCFS rulemaking process, ‘the science used in determining these market-mediated, indirect impacts is quite limited and highly uncertain.’ The Board’s decision today to ‘update the land use change and other indirect effects values in the Spring of 2011’ for a variety of biofuel feedstocks, including sugarcane, ensures that as the science evolves, so will the regulations.”

The U.S. ethanol industry has challenged the constitutionality of California’s LCFS and expressed concerns that the state will not be able to serve the needs of motorists without corn ethanol. “We hope to bring some sanity to that debate,” said Renewable Fuels Association (RFA) president Bob Dinneen. “We hope that California makes some changes to the program or there’s a train wreck waiting to occur there because consumers won’t have enough fuel for their vehicles.”

The updates are likely to mean the current ILUC penalty for corn ethanol will be cut by at least half by the spring of 2011, using ILUC modeling from Purdue University. However, California’s LCFS is supposed to be implemented in January 2011, which could complicate and confuse the issue, according to Dinneen. “Why would CARB begin a program on Jan. 1 that is based on ILUC numbers that they now freely admit are wrong and inflated? They have better science and they should use it now—before the 2011 compliance year beings,” said Dinneen.

Growth Energy spokesperson Chris Thorne also commented on the action taken by CARB. “What the Expert Working Group and the CARB staff are showing us with these decisions is that there are grave doubts about the entire scheme of indirect land use change, which penalizes clean fuels in America for the pollution created by foreign producers,” Thorne said.

Ethanol, Ethanol News, Growth Energy, RFA, UNICA

Guardian Energy Invests in Ohio Ethanol Plant

Cindy Zimmerman

RFAGuardian Energy Holdings of Minnesota now has a majority stake in an ethanol production facility located in Lima, Ohio. The 54-million gallon per year plant will operate under the name Guardian Lima, LLC.

The facility originally began operations in 2008 as Greater Ohio Ethanol, but filed for bankruptcy protection later that year due to numerous operational challenges and adverse financial market conditions. The plant has been idle since November, 2008 and was acquired by PEA in March, 2009.

In connection with the recent investment, ICM, Inc. of Colwich, KS has been retained to lead a retrofit and upgrade program for the plant. Construction has already begun at the site and the facility is expected to be operational by the second quarter of 2011. When operational, the plant will consume approximately 19 million bushels per year of corn to produce 54 million gallons per year of fuel grade ethanol and 165,000 tons of dried distillers grain. The company will hire a staff of 31 full time employees and the retrofit project will create up to 60 construction jobs. The facility will be managed by Guardian Energy Holdings, LLC.

Guardian Lima also announced that it has selected Renewable Products Marketing Group (RPMG) as its ethanol and distillers grain marketing partner.

Ethanol, Ethanol News, Facilities, RFA

Book Review – Smart Power

Joanna Schroeder

Tis the season to start thinking about electricity costs. Winter is on the horizon and with the holiday season comes holiday lights and holiday parties. As energy demand rises, how are the utilities going to keep up with demand? An important question as the country looks to reducing greenhouse gas emissions while at the same time needs to find a solution to our growing energy needs. To learn more about these issues, I read Smart Power by Peter Fox-Penner.

I must admit that I don’t know much about the utility industry but I do have fond memories of living in Texas when the state approved deregulation and all the rolling brownouts as a result of that decision. But according to experts, these could be more commonplace if the grid is not improved. Yet what is the best way to do this and who should pay? Most conversations about these issues involve in some capacity a discussion about the smart grid. However the first thing we need to understand is what exactly is the smart grid?

Penner writes, “As the industry shifts its supply sources, builds transmission, and increases its energy efficiency efforts, the technologies at the core of its operations will shift dramatically. Over the next thirty years, the industry will adopt the so-called Smart Grid, and the architecture of the system will shift from one based exclusively on large sources and central control to one with many more smaller sources and decentralized intelligence. The Smart Grid will mark a total transformation of the industry’s operating model–the first major architectural change since alternating current became the dominant system after the Chicago World’s Fair in 1893.”

This shift will cost more than $2 trillion dollars, and the jury is still out on whether the best option is large sources (nuclear, coal with sequestration, natural gas, etc.) or smaller sources that include solar and wind energy or a combination of the two.

In the book, Penner progresses the reader through a history of the grid, explains where we’re at today and where we need to be in the future. He discusses the intricacies of pricing and how energy conservation plays a role for saving consumers money while at the same time making utility companies money. He discusses privacy issues related to the smart grid (that is being developed and monitored in part by third party companies). Penner also addresses issues and challenges and offers solutions. In addition he presents scenarios of what could happen if certain paths are taken.

This is a very complicated issue with dozens of moving parts and while I understand it much better, the book is not for the newcomer. It is best suited for those working directly for utility companies or those working for companies that are providing products and services that will move the country to the smart grid. And because Penner gives very detailed future scenarios including electricity scenarios and detailed charts detailing large scale power generating technologies including costs associated with each technology relating to carbon emissions, I believe it could become a very valuable resource for high-level utility executives.

book reviews, Electricity, Smart Grid, Solar, Wind

OPEC Slams International Biomass Programs

Joanna Schroeder

The Organization of the Petroleum Exporting Countries (OPEC) slammed global biomass programs in its most recent oil report while at the same time raising oil demand forecasts for 2011. The organization was highly critical of global incentives designed to aid companies who are focused on developing biofuels from biomass and reducing the use of fossil-fuel based energy.

In the report, OPEC writes, “Although these government subsidies are helping the biofuel industry, the negative effect on the environment is vast and the programmes place a burden on the public budget.” OPEC cites a statistic that says biofuel tax credits are costing tax payers $500 million each year but they fail to note that global oil subsidies topped more than $312 billion last year.

In particular, OPEC cites concerns of deforestation in places such as Brazil and also environment and land use issues in countries such as South America and Asia, and criticizes the biofuels programs of the Organisation for Economic Co-operation and Development (OECD). Africa has also been highlighted as a country that will be negatively affected by biofuels policy.

In the report, OPEC estimates demand for its oil next year will reach 29.2 million barrels per day (bpd), up 1.4 per cent from the 28.8 million bpd projected for this year. The country cited as having the biggest impact on increased oil use is China. This updated number is 400,000 bpd higher than last month’s forecast. Last month also went down as the highest oil output month so far this year with 29.3 million bpd.

Here in the states, daily ethanol production is nearing 1 million barrels per day (b/d)  with 895,000 b/d produced the week ending November 12, 2010. The Renewable Fuels Association (RFA) reported that the daily production numbers were up 18,000 b/d from the week prior and the 4-week average daily production topped out at 879,000 b/d. Daily ethanol production represented 10 percent of daily average gasoline demand that dropped to 375.89 million gallons per day. In addition, stocks of ethanol are now at 16.7 million barrels.

biofuels, biomass, Ethanol, International, Oil

Registration Open for Commodity Classic

Cindy Zimmerman

Registration is now open for the 16th Annual Commodity Classic in Tampa, March 3-5.

The annual event will be “smooth sailing” for soybean, corn, wheat and sorghum farmers and biofuels will be a big part of the event, as always.

Growers who attend the 2011 Commodity Classic are sure to benefit from the value of attending a trade show with more than 800 booths representing today’s leading agricultural equipment, technology, product and service companies and organizations.

“While enjoying the warm Florida sun, one can learn of new products and methods to increase the profitability of their farm,” said Commodity Classic Co-Chair Charles Cannatella. “As a producer of all the commodities represented at Commodity Classic, I look forward to attending the policy development sessions. A grower can strengthen his industry by helping to set policy.”

Special entertainment at Classic this year is Little River Band and the jam-packed schedule includes educational sessions, technology demonstrations, association banquets, entertainment events and important networking opportunities.

Commodity Classic, conferences, corn, sorghum, Soybeans