Renewal of Biodiesel Tax Incentive Dealt Setback

John Davis

It’s getting to be an all-too-familiar refrain: renewal of the federal $1-a-gallon biodiesel tax credit has hit another roadblock.

This article from Reuters says the measure, contained in a $126 billion tax bill, failed a procedural vote today in the U.S. Senate. But the measure’s sponsor has introduced a new version:

Finance Committee Chairman Max Baucus was expected to offer a less-costly substitute to the bill that would reduce Medicare spending. A Baucus aide did not respond to questions about the possible survival of the biodiesel credit, a popular cause in many farm states…

A spokesman for the National Biodiesel Board, a trade group, said it appeared the biodiesel credit would be retained. “There’s been no objection to it,” said the spokesman.

Biodiesel production may drop to 15 percent of capacity because of loss of the credit, said the trade group.

USDA estimates that just more than 10 percent of all U.S.-grown soybean oil this year will be made into biodiesel … that’s if the biodiesel industry can survive all these delays.

Biodiesel, Legislation

Ethanol Industry Wants to Answer President’s Call

Cindy Zimmerman

In his remarks to the nation Tuesday night about the Gulf of Mexico oil disaster, President Obama noted that “oil is a finite resource” and “the need to end America’s century-long addiction to fossil fuels.”

However, while he talked about wind turbines, solar panels and energy efficiency, the president made no mention of domestic transportation fuel alternatives such as ethanol and biodiesel. In an open letter to President Obama, the Renewable Fuels Association has offered to answer his call for a clean energy future.

“There is no other renewable fuel technology that can match the domestic ethanol industry’s ability to replace oil in American gas tanks,” reads the letter. “Wind, solar, and other renewable energies all must play a critical role. But theirs is to replace those fossil fuels from which we generate power and electricity. America uses precious little oil to generate electricity. Rather, oil is primarily used to create liquid transportation fuels. As such, America’s producers of renewable fuel are uniquely equipped to reduce and ultimately eliminate America’s need for oil in the tank.”

RFA asks the president to give ethanol the ability to answer the call by urging Congress to extend the tax incentives for ethanol, having EPA increase the amount of ethanol allowed in a gallon of gasoline to 15 percent, and expand the infrastructure needed to use higher ethanol blends.

“Throughout its brief history, American ethanol production has always risen to answer the call. Together with American farmers who provide the feedstocks from which we make ethanol, we stand at the ready yet again,” the RFA letter concludes. “Mr. President, when the phone rings American farmers and ethanol producers will be there to answer.”

Ethanol, Ethanol News, RFA

Brazil Refutes Claims of Ethanol Sales to Iran

Cindy Zimmerman

FEW 2010The Brazilian Sugarcane Industry Association (UNICA) is refuting a claim made by Growth Energy co-chairman Gen. Wesley Clark that they have agreed to sell ethanol to Iran. Clark made that statement in an address at the 2010 Fuel Ethanol Workshop this week and in an interview with Domestic Fuel.

In that interview Clark said, “Brazilian ethanol comes with a lot of, let’s call them, external costs – like child labor and environmental problems down there and we don’t need to be contributing to those. But beyond that, I think Brazil just kind of stepped over the line when they agreed to sell to Iran.”

UNICA“Brazilian producers have no interest in exporting ethanol to Iran. Gen. Clark’s suggestion to the contrary is far from reality and rather surprising,” said UNICA’s Joel Velasco in a comment on the post about Clark’s address. “Brazil has never sent a drop of ethanol to Iran and there is nothing to indicate that any Brazilian ethanol will be sent to Iran in the future. History here is a good indicator, as confirmed by government trade statistics.”

Velasco says that UNICA recognizes “the promise of building a global market for renewable fuels. We’ve chosen to focus our efforts on the largest transportation markets like the United States and Europe, which together consume about two-thirds of the world’s gasoline output.”

UNICA is a private, non-governmental group, representing about two-thirds of all ethanol produced in Brazil.

Ethanol, Growth Energy, International

Iowa Ag Secretary Promotes Ethanol and Corn Indy

Cindy Zimmerman

Iowa Secretary of Agriculture Bill Northey got a taste of life in the fast lane yesterday as he was driven through morning rush hour traffic in an Indy Car to promote the 4th annual Iowa Corn Indy 250, sponsored by Pioneer, coming up this weekend.

Northey was given a ride to his office in the two-seater Indy Car after breakfast with representatives from Iowa Speedway and the Iowa Corn Promotion Board. “I definitely got some looks,” Northey said. “It’s a fun chance to tell folks a little about the Iowa Corn Indy 250.”

The Iowa Corn Indy 250 is the only IndyCar race that is run on domestically-produced corn ethanol. The rest of the races in the series are fueled with Brazilian sugarcane ethanol. “Certainly ethanol is huge for the state of Iowa,” said Northey. “Three billion gallons of fuel of ethanol are produced in the state. It helps our corn markets as well as 40 plants out there producing jobs across the state so it’s huge. And so the visibility the Indy 250 gives to ethanol, not only here but around the world by the coverage it gets, encourages people to use ethanol as well.”

Tuesday’s Indy car ride along was just one of a series of events leading up the Iowa Corn Indy 250 at Iowa Speedway on Sunday. On Thursday, the Iowa corn growers and Pioneer will be sponsoring a pump promotion in Des Moines, offering E85 for just 85 cents a gallon and regular E10 for 10 cents off. Several drivers will be signing autographs and pumping ethanol for customers and fans at the event to be held at the Guthrie Street Kum & Go from 5:30-7:30 pm – including now Ryan Hunter-Reay, who will be driving the Team Ethanol car once again, for the first time since 2008. Ryan drove the Team Ethanol car to its one and only victory July 6, 2008 in Watkins Glen, NY so ethanol supporters are hopeful he will do it again in Iowa and make the race even sweeter for the corn ethanol industry.

corn, Ethanol, Ethanol News, Indy Racing

Ethanol Industry Takes Environmental Group to Task

Joanna Schroeder

The ethanol industry has come together to take the Environmental Working Group (EWG) to task over their claims that American ethanol is not a sound strategy. The American Coalition for Ethanol (ACE), Growth Energy, the National Corn Growers Association (NCGA), and the Renewable Fuels Association (RFA) have called EWG out on the table for what they claim is their misleading information about the ethanol tax incentive. A recent International Energy Agency report found that the world spent more than $550 billion in subsidies for fossil fuels in 2008. During the same time frame, the domestic ethanol industry only received $4.5 billion, which the ethanol groups are calling “a bargain by comparison.”

This attack is just one of several that various environmental groups have launched against the industry.

Also misleading, say the ethanol groups, is the discussion of tax incentives without properly attributing increases in economic activity resulting from these incentives. In 2009, U.S. ethanol production employed close to 400,000 people directly or indirectly and added more than $15 billion to federal, state and local government tax revenues while at the same time displacing more than 350 million barrels of imported oil.

“It is disappointing that some in the environmental community continue to have an irrational and unsophisticated notion of how to reduce fossil fuel use,” said Brian Jennings, Executive Vice President of the American Coalition for Ethanol. “Some say the solution is to get rid of corn-based ethanol today, in hopes that some other potentially promising, but not yet commercialized fuel will be available tomorrow. The result would be more pain at the pump and more pollution for the planet. Ethanol is the only commercially available alternative to gasoline today, and removing it from our nation’s fuel supply would mean more oil use – and we ought to learn from the painful and ongoing lesson in the Gulf of Mexico that more oil is simply not a sustainable path.”

Tom Buis, CEO of Growth Energy continued, “It is unfortunate that groups purporting to represent the environment are still criticizing the only alternative fuel — domestic ethanol — that reduces our dependence on foreign oil.”Read More

ACE, Environment, Ethanol, Ethanol News, Growth Energy, NCGA, RFA

Growth Energy and Thorntons Partner on E85 Pumps

Cindy Zimmerman

Growth EnergyGrowth Energy has joined forces with retailer Thorntons Inc. to establish 20 new E85 stations throughout five states. Growth Energy will provide funds to support the installation of new equipment to dispense high level blends of ethanol.

Thorntons has become a part of Growth Energy’s 2010 E85 and Blender Pump Program, where funds are provided to retailers to establish mid and high level blend infrastructure throughout the country. Over 60 new mid and high level blend sites have been provided financial support in 2010.

“It’s exciting to know that Thorntons, one of the largest gasoline retailers, is working to establish such a large network of E85 fueling stations,” said CEO of Growth Energy, Tom Buis. “We are delighted to collaborate with them and commend Thorntons on their leadership of promoting this clean burning, alternative fuel.”

“We are very excited about the expansion of E85 fuel in our stores,” said Matt Thornton, Chief Executive Officer of Thorntons. “We support the use of ethanol, wherever it is economically available.”

E85 pumps are expected to be opened within the next few months at Thorntons Convenience Stores in the following areas – Island Lake, Volo, Lakemoor, Third Lake, and Woodale in Illinois; Terre Haute, Evansville, and Greenwood in Indiana; Lexington, and two in Louisville, KY; Galloway, two in Columbus, Canal Winchester, Hamilton, Cincinnati, and Fairfield, Ohio; and Lebanon, TN.

“We are pleased to partner with Growth Energy on the expansion and promotion, and appreciate their financial support of the expansion of our E85 fuel offerings,” noted Thornton.

Growth Energy continues to encourage fuel retailers which have an interest in establishing mid and high level blend ethanol dispensing facilities to contact our offices to determine eligibility for support.

E85, Ethanol, Growth Energy

Study Shows Biodiesel Value in Off-Road Operations

John Davis

A new study shows that biodiesel performs well in some of the harshest off-road applications.

A couple of weeks ago, I told you how Canadian forest products company FPInnovations had partnered with Natural Resources, Canada’s National Renewable Diesel Demonstration Initiative (NRDDI), to launch a $1.625 million field study to study the potential of biodiesel in off-road machinery in highway construction and forest operations. Now, this Biodiesel Magazine story says early results show that the green fuel will work … good news considering Canada’s B2 mandate is getting ready to kick in:

The issues identified by the NRDDI for investigation include impacts of cold weather and long-term storage on biodiesel; the interaction of biodiesel from various feedstocks with seasonal variations of ultra-low sulfur diesel (ULSD); the impacts on emerging heavy-duty truck engine technology, in particular 2007 and 2010 emission controls; impacts on engine and heating systems components; and how biodiesel works in the existing distribution infrastructure. Incidentally, the term “renewable diesel” was chosen by NRCan to be as inclusive as possible, to allow stakeholders in Canada the opportunity to test fuels they thought were important, says Nancy Johns, senior manager with the office of energy efficiency at NRCan. She confirms, however, that up to this point biodiesel has been the main fuel of interest in the NRDDI studies.

The study found no cold flow, startability or operability issues, even in the harshest of environments. Some testing included blends as high as B100.

Biodiesel

Survey Shows Wide Support for Alt Energy Tax Breaks

John Davis

If Congress is wondering if there’s enough public support for the U.S. Senate to support the $1-a-gallon federal tax incentive (which, could come to a vote this week), a new survey shows Americans do favor these types of tax breaks.

This National Biodiesel Board press release says a new Stanford University poll finds that 84 percent of respondents favor federal tax breaks to encourage alternative energy, including water, wind and solar:

“The research clearly demonstrates Americans are crying out for home grown solutions to develop clean energy sources and end our addiction to oil,” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “The biodiesel tax inventive is a perfect example of the type of investments the federal government should be supporting to cut carbon pollution, lessen our reliance on petroleum and create green jobs.”

Jobe said the biodiesel tax credit, in just five years since its enactment, has resulted in the construction of over 150 renewable refineries in 44 states, 23,000 jobs, and billions of dollars of net tax revenue to the U.S. Treasury, all while displacing billions of gallons of petroleum.

Congress allowed the biodiesel tax credit to lapse on December 31, along with all other expiring tax provisions. As a result of the expiration, much of the industry has just shut down and almost half its employees have been laid off, leaving the industry on the verge of collapse.

Retroactively reinstating the biodiesel tax incentive was incorporated into H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, which passed the House last month and is now under consideration in the Senate.

Jobe says the delay from Congress so far has been “unacceptable.”

Biodiesel, NBB, Solar, Wind

New Alliance to Promote Biodiesel Heating Oil

John Davis

An alliance of heating oil marketers, biodiesel makers and soybean growers could help put more Bioheat … a mix of biodiesel and conventional home heating oil … in homes and could dramatically increase the amount of biodiesel used in this country, especially on the East Coast, while keeping homes in that area warm with green heat.

During a press conference this morning from the Massachusetts Bioheat Conference in Boston, Michael Ferrante, President, Massachusetts Oilheat Council; Joel Thorsrud, United Soybean Board leader and a farmer from North Dakota; and Paul Nazzaro, the National Biodiesel Board’s petroleum liaison, announced their partnership to get all heating oil to have a 5 percent blend of soy biodiesel.

“The United States uses close to 8 billion gallons of heating oil annually. Even if we only have a B5 blend, this could utilize nearly 450 million gallons of biodiesel annually,” says Thorsrud.

Nazzaro says, eventually, they would like to get the blend up to B20. And he doesn’t believe there’ll be any issues getting the soy biodiesel from the Midwest to the East.

“It’s been done for years. At this point, we’re talking rail and truck, and there’s a high level of confidence that that demand could be met throughout the seasons.” Nazzaro adds there are some pipeline problems, especially since the aviation industry does not want ethanol or biodiesel in those lines. But he believes those issues will be resolved.

When asked about criticisms regarding mandating the use of biodiesel in heating oil, Ferrante says his association would endorse Bioheat, regardless of any requirements.

“We will take either a mandate or voluntary approach to embracing biofuels.” He admits that a mandate might not be a good fit in other states, but he thinks heating fuel marketers will embrace the biodiesel-based fuel.

The group also believes that Bioheat will be cost-competitive to the 100 percent petroleum heating oils.

You can hear more of the press conference in the player below.

Audio, Biodiesel

Ethanol Report From FEW

Cindy Zimmerman

Ethanol Report PodcastThis edition of “The Ethanol Report” comes from the 26th annual Fuel Ethanol Workshop in St. Louis where Renewable Fuels Association president and CEO Bob Dinneen gave the keynote address on major issues facing the industry.

FEW 2010In this interview, Dinneen discusses those issues, including increasing the blend rate and renewing ethanol tax incentives, with a message to the industry of the critical need to work together. He also talks about the Global Rebound Effect theory that is being used to challenge EPA on the Renewable Fuels Standard, and he responds to an Environmental Working Group report out this week opposing incentives for ethanol.

Bob was also interviewed live by AgriTalk host Mike Adams, broadcasting live from FEW on Tuesday.

Fuel Ethanol Workshop photo album

You can subscribe to this twice monthly podcast by following this link.

Listen to or download the podcast here:

Audio, Ethanol, Ethanol News, Ethanol Report, FEW, RFA