Biodiesel Could Be Key to Winning War in Afghanistan

John Davis

I know the name of this blog is Domestic Fuel, but I wanted to point out a story I found that makes the case how biodiesel might just help the U.S. win the war in Afghanistan.

A new white paper from Wayne Arden, an expert in the financial technology field, and John Fox, a former CEO of a biodiesel company, makes the case that if biodiesel was produced in the landlocked country, U.S. and allied forces fighting the Taliban and Al Qaeda would gain certain advantages:

The first insight is that it is very expensive for the military to import fuel into Afghanistan. In October 2009 DOD officials reported to Congress that the average cost of importing fuel into Afghanistan, or the Fully Burdened Cost of Fuel (FBCF), approaches $400 per gallon when all direct and indirect costs are accounted for, and even sometimes exceeds $400. A 2008 Defense Science Board study, “More Fight Less Fuel,” described the FBCF as “several hundred dollars per gallon.”

The second insight is that modern biodiesel production technology is both proven technology and relatively inexpensive. The cost of building a medium-sized plant, even in Afghanistan, is on the order of tens of millions of dollars, not hundreds of millions or more.

The third insight is that a high percentage of U.S. casualties in Afghanistan stem from protecting convoys of fuel, water, and other military supplies. The Army calculated in a 2009 study that one casualty occurs for every 24 fuel resupply convoys in Afghanistan.

In addition, the paper points out that growing feedstocks for biodiesel would give Afghan farmers a cash crop other than opium, which fuels the bad guys’ efforts to kill our good guys. Safflower, which already grows in Afghanistan and is highly drought-resistant, seems like a good possibility. Throw in the fact that biodiesel’s higher ignition temperature makes it safer in a war zone and it’s a better lubricant, it appears the green fuel would be a good fit for our war fighters.

The paper also goes on to point out that a 12 million-gallon-a-year plant in Kandahar would cost as little as $90 million to build and get running. Considering the potential that the military could save $3.7 billion in its first year of operation, the plant would pay for itself in just a month. Now there’s an investment in all of our futures.

You can read more about the project on this website and on the white paper’s authors’ Facebook page, Biodiesel in Afghanistan.

Biodiesel, Government, International

Purdue Develops Mobile Biofuels Processing Method

Cindy Zimmerman

Mobile processing plants might hold the key to harvesting agricultural waste on the farm for biofuels production.

purdueChemical engineers at Purdue University have come up with the concept and developed a new method to process agricultural waste and other biomass into biofuels. The method would utilize various types of biomass, including wood chips, switch grass, corn stover, rice husks, and wheat straw.

The approach would solve one of the major problems in using agricultural waste for biofuels – transporting the biomass to a plant for processing. “It makes more sense to process biomass into liquid fuel with a mobile platform and then take this fuel to a central refinery for further processing before using it in internal combustion engines,” says chemical engineer Rakesh Agrawal.

The new method, called fast-hydropyrolysis-hydrodeoxygenation, works by adding hydrogen into the biomass-processing reactor. The hydrogen for the mobile plants would be derived from natural gas or the biomass itself. However, Agrawal envisions the future use of solar power to produce the hydrogen by splitting water, making the new technology entirely renewable.

The method, which has the shortened moniker of H2Bioil — pronounced H Two Bio Oil — has been studied extensively through modeling, and experiments are under way at Purdue to validate the concept.

Read more here.

biofuels, biomass, Research, University

All Cars Should Run On E100

Joanna Schroeder

Last year, after President Obama gave his speech about increasing the CAFE requirements – in an effort to save 1.8 billion barrels of oil over a 15-year period– a few ethanol advocates took their frustration to the streets and formed the E100 Ethanol Group.

Why? Because as Don Siefkes, Executive Director of the organization points out, “Twenty gallons of gasoline per barrel means 36 billion gallons of gas saved over 15 years or 2.4 billion gallons of gasoline per year. We use 140 billion gallons of gasoline per year so we would save only 1.7 percent of our gasoline usage and it is going to cost $25-$50 billion to achieve this meager savings. We felt it ridiculous to spend so much for so little and decided to form our group and see what we could do.”

Siefkes explained that to make the U.S. independent of imported oil, as well as avoid having to deep water drill, we need to cut our usage of gasoline by 50 percent down to 70 billion gallons per year. The organization has invested time in reaching out and discussing the issues with various ethanol organizations, everyday drivers and retail gasoline stations to encourage them to help make change. So while the ethanol industry focuses on getting the E15 Waiver approved, a short-term fix for a long-term problem, E100 Ethanol Group has decided to focus on E100.

“After 100’s of millions of dollars invested and 17 years of trying to convince consumers to buy E85, only 0.13 percent of the 10 billion gallons of fuel grade ethanol sold in the U.S. in 2009 went into E85,” said Siefkes. The other 99.87 percent went into 10 percent gasoline blends. This is in spite of the fact that we have 8 million E85 capable vehicles on the road and over 2,000 E85 stations. Why is this?”

According to Siefkes, it’s because E85 offers negative value to the consumer who has to fill up more often and sees a fuel economy loss. “There is no evidence that simply putting more E85 vehicles and stations out there is going to correct this problem,” he said.Read More

Ethanol, News

ADM Opens Nebraska Ethanol Plant

Cindy Zimmerman

ADMArcher Daniels Midland Company (ADM) opened a new 300 million gallon per year ethanol plant in Columbus, Nebraska on Friday. The grand opening ceremony featured ADM President Patricia Woertz, U.S. Sen. Ben Nelson of Nebraska, Nebraska Lieutenant Gov. Rick Sheehy and other honored guests.

“We at ADM are proud to harness the power and ingenuity of American agriculture to help address our nation’s energy challenges. We’re honored and privileged to have the city of Columbus, its municipal leaders and its citizens as partners in this effort,” Woertz said in her remarks.

ADM’s total ethanol production capacity will reach 1.8 billion gallons per year once a second corn dry mill in Cedar Rapids, Iowa, opens later in 2010.

In his remarks, Senator Nelson was critical of EPA’s delay in increasing the ethanol blend rate in gasoline from the current 10 percent. In a column this week, Nelson said EPA’s inaction threatens economic growth and energy independence. “It’s unfortunate that delays by the federal Department of Energy and the Environmental Protection Agency are needlessly jeopardizing our made-in-America ethanol industry,” writes Nelson. “It’s very disappointing and will also slow down development of next generation American renewable energy at a time we are striving to be more energy independent.” Nelson noted that EPA should look to Brazil to determine that ethanol blends up to 15 percent are safe, since that country uses blends as high as 25 percent with no damage to vehicle engines.

Read Nelson’s column here.

Ethanol, Ethanol News, Government

GAO Urges Changes to Energy Department Loan Program

Cindy Zimmerman

The Government Accountability Office (GAO) has issued a report urging the Department of Energy (DOE) to make changes to its current loan guarantee program to make it more effective. This program is intended to support “early commercial production and use of new or significantly improved technologies in energy projects that abate emissions of air pollutants or of greenhouse gases” including next generation biofuels like cellulosic ethanol.

The GAO report recommends four steps to be taken by the DOE to improve the program: develop relevant performance goals; revise the process for issuing loan guarantees to treat applicants consistently; develop an administrative appeal process for applicants who believe their applications were rejected in error; and develop a mechanism to systematically obtain and address feedback from program applicants.

The Renewable Fuels Association (RFA), which has been highly critical of the program, supports the GAO’s assessment and recommendations. “Access to capital is a chief hindrance to the commercial deployment of cellulosic ethanol technology,” said RFA President and CEO Bob Dinneen. “DOE has created a loan guarantee program that in theory is helpful, but in practice has proven difficult if not impossible for cellulosic ethanol companies to access. If the goals of the RFS are to be met, the Obama Administration must make sure loan guarantee programs are workable and accessible for qualified companies, regardless of their technology.”

RFA wrote a letter to Secretary of Energy Steven Chu last October raising a number of issues that created unfair and unnecessary challenges for cellulosic ethanol companies. Specifically, the ethanol organization requests that DOE eliminate the requirement that applicants have year-long off-take agreements in place; recognize that applicants, by definition, may not have commercial scale financial data and to consider applications that “employ new or significantly improved technologies compared to commercial technologies in service in the U.S.” as outlined in the law; and review applications that have been declined to determine what fixes can be made to correct perceived deficiencies.

Growth Energy CEO Tom Buis notes that the problems with the DOE loan program contributed to EPA drastically reducing the goals for cellulosic ethanol under the Renewable Fuel Standard from 250 million gallons to less than 20 million gallons. “The single biggest reason for that revision is a lack of financing available to cellulosic ethanol producers, many of which are ready to build plants if funding can be secured. The Energy Department needs to address these issues identified in the GAO report and fix the loan guarantee program,” said Buis.

Cellulosic, Ethanol, Ethanol News, Government, Growth Energy, RFA

New Texas E85 Station

Cindy Zimmerman

MidTex Oil has opened the first E85 station in New Braunfels, Texas, which is located between Austin and San Antonio.

“We are focused on providing our customers with what they want. Whether it is our one-stop shop Pit Stop Food Marts and Fischer’s Market concept stores to make their lives more convenient or giving them an alternative to gasoline derived from imported oil, Midtex is there for our customers,” said Rodney Fischer of Midtex Oil.

The Midtex New Braunfels fueling station is branded Shell and is Midtex Oil’s second E85 station – the first is located in Spring Branch, Texas. Midtex utilized Protec Fuel’s turnkey E85 fuel program for both stations, in partnership with the Renewable Fuels Association (RFA), which included the conversion process to an E85 fueling pump, E85 supply and promotional marketing.

E85, Ethanol, Ethanol News, RFA

NBB Pleased to See EPA’s Biodiesel Requirement

John Davis

Today’s Environmental Protection Agency (EPA) announcement to require the domestic use of 800 million gallons of biodiesel in 2011 is being welcomed by the National Biodiesel Board.

The group says the number, established under the new Renewable Fuels Standard (RFS2), shows that biodiesel is the only widely accepted, commercial scale Advanced Biofuel produced in the U.S. that meets the definition of Biomass-based Diesel and undifferentiated Advanced Biofuels under the RFS2 program:

“We applaud EPA for this announcement and for reaffirming the common-sense notion that we should displace petroleum diesel fuel with Advanced Biofuels like biodiesel. This notice demonstrates to all actors in the fuels marketplace that the volume goals for Biomass-based Diesel provided for by law in the RFS2 program will be met and that 800 million gallons of biodiesel must be used in 2011,” said Manning Feraci, Vice President of Federal Affairs for the National Biodiesel Board.

Under the RFS2 program, the EPA is required to determine and publish the applicable percentage standards for each compliance year prior to November 30 of the previous year. The notice published by EPA today sets in motion the process for EPA to finalize this regulatory rule and implement the RFS2 2011 renewable volume requirements.

“The U.S. biodiesel industry stands ready to provide the Advanced Biofuel that will allow this nation to meet the attainable renewable energy goals established by RFS2, reduce our dependence on petroleum and cut harmful greenhouse gas emissions,” concluded Feraci.

Of course, there’s the issue with the lack of the federal $1-a-gallon biodiesel tax incentive that expired at the end of 2009 and has resulted in massive biodiesel refinery layoffs and endangers the industry as a whole. As my colleague Joanna Schroeder (@jmschroeder) tweeted earlier this evening: “Not enough biodiesel today w/out tax credit – no way to meet #’s.”

Biodiesel, Government

William & Mary Turns Fish Killer Into Biodiesel

John Davis

Virginia’s College of William and Mary is turning algae, which is killing fish in a local lake, into biodiesel.

This article from the Daily Press says the school, working with industry and other universities, is using a flume to remove the algae from Lake Matoaka:

A rectangle-shaped floating dock with its midsection removed, the flume acts as a channel that will trap nitrogen, phosphorous and other nutrients that form oxygen-deprived dead zones in the lake and Chesapeake Bay watershed.

“Think of it as a rain-gutter-type device,” said Karl Kuschner, the university’s research scientist leading the effort. “We’ll be creating a 40-foot long hole in the water.”

Blobs of what looks like green cottage cheese — algae — cover the shore. As the algae dies, it descends to the lake floor consuming oxygen, said Dennis Manos, university vice provost. The dead zones send bass, gar, turtles and other marine life scrambling for safer waters.

“This,” Manos said gesturing toward to the lake, “is occassionally only a day or two away from a fish kill.”

In addition to the oil extracted from the algae, which will be used to research the potential of algae-biodiesel, the process is also able to get about 12 to 16 gallons of dry algae from the lake each month.

algae, Biodiesel

Industry Concerned About Lowering Cellulosic Ethanol Goals

Cindy Zimmerman

A big change in the 2011 proposed targets for the Renewable Fuel Standard (RFS2) set forth by the Environmental Protection Agency (EPA) today lowers the volume for cellulosic ethanol, compared to what is in the Energy Independence and Security Act of 2007 (EISA). The proposed goal for cellulosic biofuels next year under the proposal is now a range of 5 million to 17.1 million. The mandate for this year was already cut from 100 million gallons to 6.5 million in February.

“EPA remains optimistic that the commercial availability of cellulosic biofuel will continue to grow in the years ahead,” the agency said in a release about the proposal, but the ethanol industry is concerned that lowering the goal will lower investor interest in next generation biofuels.

“While this may be prudent for EPA based on market conditions, it does send a chilling effect through the investment community with respect to cellulosic ethanol technologies,” said Matt Hartwig with the Renewable Fuels Association (RFA). “EPA’s estimates underscore the need for Dept. of Energy and USDA to construct loan guarantee programs that work for cellulosic ethanol companies.”

Chris Thorne with Growth Energy says his organization has the same concerns. “Cellulosic ethanol needs much greater investment to become commercially viable. Yet, in the six years that the Department of Energy has been managing the program, it has yet to issue a single loan guarantee to a cellulosic ethanol producer,” he said.

The blend wall is also an issue for the ethanol industry to meet the RFS2 targets under EISA, according to American Coalition for Ethanol (ACE) executive director Brian Jennings. “The scaled-down targets for cellulosic biofuel clearly indicate the E10 blend wall is standing in the way of market certainty for both corn and cellulosic ethanol producers,” said Jennings. “Until the blend wall is dealt with in a meaningful way, it is going to be difficult to secure financing for and move forward with next-generation ethanol projects.”

The lowered target for cellulosic biofuels lowered the overall goal for total renewable fuels next year, from the 8.25 percent set for this year in February by EPA to 7.95 percent of total gasoline sales in
2011 or a total of 13.95 billion gallons.

ACE, Ethanol, Ethanol News, Growth Energy, RFA

EIA Looks at Ethanol Blend Wall

Cindy Zimmerman

EIAThe July 8 Energy Information Administration (EIA) “This Week in Petroleum” report takes a look at the fast approaching ethanol blend wall, predicting ethanol’s share of the gasoline market will reach the 10% saturation point by the beginning of 2011.

During April 2010 an estimated 834,000 bbl/d (12.8 billion gallons per year [BGY]) of fuel ethanol was blended into gasoline, representing an average 9.2 percent of total gasoline product supplied by volume. The July EIA Short-Term Energy Outlook projects that the ethanol share of the gasoline pool could reach 10 percent in the first quarter next year when total gasoline consumption is expected to average about 8.8 million bbl/d (135 BGY).

Renewable Fuels Association LogoThe EIA report concludes, in an understatement, that “the blend wall is an important event moving forward for the ethanol industry.” However, some in the ethanol industry say the blend wall is already here. According to the EIA’s Short-Term Energy Outlook report, ethanol production will average 850,000 barrels per day this year and grow to 880,000 next year. The Renewable Fuels Association (RFA) notes that would amount to an annual total of 13.5 billion gallons in 2011. “That is nearly 1 billion gallons more than called for by the Renewable Fuels Standard’s requirement for “renewable fuel,” and unless EIA knows something more about EPA’s decision-making process on E15, we believe it is unlikely that the industry will produce that volume of ethanol next year,” said RFA’s Matt Hartwig. “Current markets are limited by the arbitrary E10 blending limit enforced by EPA. And while higher level use in the form of E85 and mid-level blends is expanding, it’s not happening fast enough to justify EIA’s 2011 predictions. Further, while the ethanol export market is growing rapidly, it still remains too small to absorb that much excess supply.”

EIA’s report says, “absent a relaxation of the 10 percent limit on ethanol blending in the general gasoline pool, and with still increasing ethanol production capacity, there will likely be downward pressure on ethanol prices as the blend wall is approached.” How low ethanol prices could go, the report adds, will also be determined by the cost of production (i.e., corn prices) and whether the ethanol blender’s tax credit is extended by Congress.

Read EIA’s July 8 This Week in Petroleum report here.

Ethanol, Ethanol News, Government, RFA