ACE Looks at Big Issues Facing Ethanol Industry

Cindy Zimmerman

ACE conference Brian JenningsAttendance at the 23rd annual Ethanol Conference and Trade Show this week is considerably smaller than it was when the American Coalition for Ethanol meeting was held here in Kansas City just a few years ago – but the issues facing the industry have never been bigger.

As everyone knows, two major policy-driven challenges face the industry – expiration of the ethanol blenders tax credit (VEETC) and associated tariff on imports at the end of this year, and the need to allow higher blends of ethanol in gasoline to get over the “blend wall” and meet the Renewable Fuels Standard. ACE executive vice president Brian Jennings says the industry realizes that extension of the 45 cent VEETC for another five years is unlikely at this point. “So, members of Congress are looking at alternatives,” Jennings said, including a House Ways and Means Committee plan for a one year extension of VEETC at a reduced level of 36 cents a gallon that would also extend the tariff for a year. “Optimistically, I look at that as our floor and we’ll try to improve upon that as the process moves its way through Congress.” However, he notes that there are only 20 days left on the Congressional calendar starting when the lawmakers return from Labor Day recess until they break for the elections in October – not much time to accomplish much.

As to increasing the blend rate for ethanol in gasoline to 15 percent, Jennings says they are hoping that the EPA will at least approve an interim increase to E12, which the agency can do under current rules without any further testing or special waivers.

Listen to an interview with Brian Jennings here: ACE Conference Brian Jennings

ACE, Audio, Ethanol, Ethanol News

The Economics of Ethanol from Corn Cobs

Cindy Zimmerman

Producing a significant amount of ethanol strictly from corn cobs is possible but would require a specific set of circumstances to be economically feasible, according to a new report from Purdue University researchers.

corn cobsIn the report “The Economics of Harvesting Corn Cobs for Energy,” Matthew Erickson and Wallace Tyner found that factors such as corn yield, farm size, harvesting equipment rental costs and increases in harvest times greatly affected the price per ton, but that government incentives for a possible cob-based advanced biofuel would offset collection costs enough to make it an attractive fuel source. In assessing the economics of cob harvesting the researchers focused on three main factors – the decrease in harvest work rate cob harvesting necessitates, the expense of cob wagon rental and the percentages of cob in residue.

The overall conclusion they made is that corn cobs are more expensive to harvest for energy than originally thought, “maybe too expensive to be used for energy production unless the public is willing to further support development.”

Corn growers say it might be worth the price for the nation that wants to continue lessening its dependence on fossil fuels. “As we explore innovative ways to use corn, our most abundant feedstock, to produce renewable energy, we have to remain flexible and dedicated,” said National Corn Growers Association Ethanol Committee Chair Jon Holzfaster. “Currently, our society places an extremely high priority on developing alternative fuel sources. New cob-based biofuel continues our tradition of working towards the goals of the RFS2, keeping our resources at home and developing new jobs in the U.S.”

Read the entire report here.

biomass, corn, Ethanol, Ethanol News, feedstocks, NCGA

Ethanol Report on the Climate in Washington

Cindy Zimmerman

It’s August in the nation’s capitol and the climate is hazy, hot and humid with a chance of afternoon thundershowers, which Renewable Fuels Association president and CEO Bob Dinneen says kind of describes what is happening on Capitol Hill these days as well – especially the hazy and stormy part.

In this edition of “The Ethanol Report,” Dinneen discusses the situation with regard to the ethanol industry’s priority issues – tax incentives and E15.

Ethanol Report PodcastDespite the few legislative days left on the Congressional calendar, Dinneen says he remains hopeful that the blenders tax credit for ethanol will be extended in some form for some length of time before it expires at the end of the year. However, he remains very frustrated with delays in getting E15 or at least E12 approved in the interim by EPA. “EPA continues to be one of the most dysfunctional agencies in the federal government,” Dinneen says. “One wishes that the agency had been as diligent in studying the blow out preventers that BP was using in the Gulf of Mexico.”

Listen to or download the Ethanol Report podcast here. Ethanol Report on Washington Issues

Subscribe to this twice monthly podcast in iTunes by following this link.

Ethanol, Ethanol News, Ethanol Report, Government, RFA

Northwest Alabama Home of New E85 Station

Cindy Zimmerman

Growth Energy has joined forces with Edwards Oil to offer E85 at a Quik Mart Convenience Store in Florence, Ala.

Jonathan Edwards, President of Edwards Oil said, “We appreciate Growth Energy’s assistance in helping us to fund this infrastructure. Alabama has not seen much investment or sales demand for E85, we are hoping to have a role in changing that.” Edwards Oil Company owns and operates 41 Quik Mart Convenience Stores, 14 of which are located in Northwest Alabama.

“We congratulate and commend Quik Mart Convenience Stores and the people of the Shoals for making the second station possible. E85 has increased dramatically across the state,” said Mark Bentley, Executive Director of the Alabama Clean Fuels Coalition. “In 2006, there were no public stations pumping E85 in the state. Last year, considering both public and private stations, E85 displaced over 700,000 gallons of traditional gasoline in the state of Alabama. There are now 13 public stations making E85 available to the general public.”

Edwards Oil has become part of Growth Energy’s 2010 E85 and Blender Pump Program where funds have been allocated to assist with mid and high level blends of ethanol infrastructure.

E85, Ethanol, Growth Energy

Senators Press EPA and DOE on Ethanol Issues

Cindy Zimmerman

Senator Tom Harkin (D-IA) and a group of bipartisan senators met with EPA Administrator Lisa Jackson and Department of Energy (DOE) Deputy Secretary Daniel Poneman this week to discuss delays in the approval of E15 ethanol blend for vehicles, as well as other key issues related to the ethanol industry.

Harkin says they talked with the officials about the importance of moving to E15, the need to mandate the manufacturing of flexible fuel vehicles and the installation of pumps that provide for high ethanol fuels and loan guarantees for biofuel pipelines. “We all agree that we must reduce our dependence on foreign oil, and that this will require a multi-pronged strategy, including more efficient use of transportation fuels and expanded use of alternatives to petroleum-based fuels,” Harkin said in a statement. “We also recognized that biofuels have already significantly displaced petroleum based fuels in the transportation fuels markets, reducing our reliance on oil imported from overseas. And we all agreed that biofuels have the potential to make much larger contributions.”

Harkin says he was pleased to hear in today’s meeting that DOE is also evaluating E20 in its battery of vehicle tests. “This may well provide the basis for EPA approval of E20 as well as E15 for use in all gasoline-fueled vehicles early next year,” he said. However, Harkin noted that he remains frustrated that testing is not yet complete on E15 and that the deadline has been extended twice. “This process seems so much more difficult that it was when E10 was approved. While I had hoped that E15 would be available by now to consumers, Secretary Jackson and Deputy Secretary Poneman were very helpful in fully explaining the rationale for the protracted timeline, and I am looking forward to hearing EPA’s decision on E15 soon,” said Harkin.

Ethanol, Ethanol News, Government

Cane and Corn Ethanol Updates

Cindy Zimmerman

The sugarcane harvest in Brazil is running ahead of schedule and the U.S. corn crop is progressing well, according to the latest reports.

The cane crush in Brazil so far this year is running about 20 percent ahead of last year, which is not necessarily good news according to the Brazilian Sugarcane Industry Association’s (UNICA). Technical Director Antonio de Padua Rodrigues says the additional crushing observed so far can be attributed to the early start of the current harvest. Drier weather this year compare to last year has increased the harvesting pace, but it also may reduce the biomass potential of the cane yet to be harvested.

About half of the Brazil harvest is going to ethanol and half to sugar. UNICA reports that sugar production totaled 2.50 million tons in the first half of July, 25.75% higher than in 2009 during the same two-week period. Ethanol production also increased by 25.28% over the same period, reaching 1.86 billion liters.

Ethanol exports from Brazil are down this year, but domestic use is strong, according to Rodrigues. “The demand for ethanol fuel is rising, as flex-fuel vehicle sales remain high. Moreover, domestic ethanol consumption for other purposes will set new records during this harvest, mainly because of higher demand for the ethanol as a raw material for chemicals production.”

Meanwhile, here in the U.S., ethanol production was up 14,000 barrels per day in May, according to the Energy Information Administration (EIA), at more than 846,000 barrels. Ethanol demand, as calculated by the Renewable Fuels Association, also reached an all time high at 847,000 b/d in May, up from 713,000 b/d a year ago.

On the import/export side, EIA reports that U.S. ethanol imports were up slightly from April at 1.6 million gallons, but exports were down dramatically – from 40.8 million gallons to just over 17 million. As of May, the U.S. has exported a total of 141.4 million gallons this year, but RFA notes that export figures represent the sum of “Ethyl alcohol and other spirits, denatured, of any strength” and “Undenatured ethyl alcohol of an alcoholic strength by volume of 80 percent vol. or higher.” As such, the figures likely include ethyl alcohol exports for non-fuel industrial purposes, so RFA ethanol demand calculations are for domestic use only, providing a comparison to domestic ethanol production.

The U.S. corn crop continues to look good and some farmers are expecting to start harvest earlier than normal. According to the latest USDA report, 93% of the crop is silking, compare to 86% on average, over 30 percent in the dough stage and 7% dented, both ahead of normal. Despite the heat, the condition of the crop is holding steady at more than 70 percent good to excellent.

Brazil, corn, Ethanol, Ethanol News, International, RFA, UNICA

Brazil Aids Kenya with Sugarcane Ethanol Development

Joanna Schroeder

In past posts, I’ve written (or re-published) about how countries like Brazil are taking a leadership role in global biofuels development. I came across an article recently in the Business Daily that discusses how Brazilian biofuels experts are working with Kenya to boost their biofuels development.

While there are still global concerns about biofuels relationship to food, especially food security, Kenya is moving forward with its increased production of sugarcane for ethanol. Brazilian experts are helping the country improve sugarcane production as well as aiding them in the development of ethanol production facilities strategically located throughout the country.

Back in July, a pact was signed between the two countries that ensures cooperation in the development and promotion of both ethanol and biodiesel. The pact includes the exchange of expertise and training support.

“These joint consultations and efforts will enable Kenya to tap our 85 years of experience and expertise to discover her potential in biofuel production,” a Brazilian foreign affairs ministry official, Mr Luciano Sousa, said in Nairobi after a meeting with Kenyan experts last week.

Today, more than 100 countries have some energy policy that requires the development and use of bioenergy, and according to Brazilian biofuel expert Daniel Machado da Fonseca, Brazil’s biofuels model can be replicated in these countries.

“One of the highlights of this pact is to assist countries map out the biofuel zones to ensure that its commercial production does not pose a threat to food security,” said Machado.

Kenya is not the only country that Brazil has signed a pact with. They are also working with Tanzania, Uganda, Ethiopia, the Sudan, and Mozambique to help them develop their biofuels programs.

biofuels, Brazil, Ethanol, News

Controversial Clean Energy Killer Added to Cali Ballot

Joanna Schroeder

There is a highly controversial provision being added to California’s ballots this November called Prop 23. The proposition, which is backed by several oil companies, is asking for the state to suspend California’s 2006 Global Warming Solutions Act that calls for the reduction of greenhouse gas emissions (GHGs) to 1990 levels by 2020. Supporters of Prop 23 want the suspension to be in place until unemployment drops to 5.5 percent in four consecutive quarters. The state is currently looking at double-digit unemployment numbers of 13.2 percent, one of the worst in the nation.

The supporters of Prop 23, led by Texas refining giants Valero Energy Corp. and Tesoro, Inc., are claiming that this piece of legislation will cost businesses and consumers billions of dollars in higher energy costs over the next decade. Environmental organizations are fighting back arguing that this is an attempt to kill California’s green energy policy.

Yet those who oppose the bill are claiming that the passage of this proposition would jeopardize a half million clean tech jobs, 12,000 companies and billions of dollars of private investment in California. They also contend that the state’s global leadership in clean tech would succumb to nations such as Asia and Europe. To date, more than 250 businesses and organizations have vocally opposed Prop 23.

In a new report, “Going Backward,” released by the Clean Economy Network (CEN), Prop 23 would suspend efforts to increase electricity produced from renewable sources as well as stifle energy efficiency standards for homes and office buildings. The report says that this effort, if passed, would increase healthcare costs due to pollution as well as raise electricity bills by up to a third over the next 12 years.

“Prop 23 should be viewed for what it is: a mechanism for regulatory and investment uncertainty that only benefits its backers – big out-of-state oil companies Valero and Tesoro – while putting the economic health of the rest of California at risk,” said Jeff Anderson, Executive Director of CEN. “Sending jobs and investment overseas is a no-win proposition for all Americans and must be defeated.”

In an environment that has lost most private investors, those who oppose Prop 23 fear that what little money is left will dry up. There is also concern that if California backs off of its current climate change and alternative energy legislation, that it will signal other states to follow suit. The result, they say, would be detrimental to our country’s efforts at creating comprehensive energy and climate policy in the U.S.

biofuels, Electricity, Energy, Environment, politics

Novozymes Joins Sustainability Consortium

Joanna Schroeder

A new global organization called The Sustainability Consortium, has been formed to improve the sustainability of consumer products and Novozymes has become a member. The group membership consists of both government and non-government organizations, businesses, environmental organizations, and academics who will work together to impact future products and supply networks designed to address environmental, social and economic imperatives. Novozymes joins the ranks among several other well-known U.S. companies including Wal-Mart, World Wildlife Fund (WWF), Dell, Disney, and BASF.

“Novozymes is recognized for being among the best in sustainability development and their expertise in bio-innovative products and solutions will be a tremendous value and addition to the efforts of The Sustainability Consortium,” said Dr. Jay Golden, co-director of The Sustainability Consortium.

While Novozymes is best known in the biofuels space for their break-through cellulosic ethanol enzymes, the company actually works in more than 40 industries worldwide. According to the company, they use the power of bioinnovation as a means to help increase product quality and yields while reducing consumption of natural resources including water and energy.

“Society must find new ways to meet the needs of a growing population while reducing our impact on the environment,” said Claus Stig Pedersen, head of sustainability at Novozymes. “In short, we must produce more with less. Our goal in working with The Sustainability Consortium is to help develop the tools, metrics and strategies that will create more sustainable consumer products for the future. Today Novozymes is a supplier and partner to many different consumer product value chains, and this is a unique opportunity to help make them more sustainable.”

For the past 15 years, Novozymes has been developing an expertise in the study of life cycle assessment (LCA) a tool to measure the environmental impacts of products throughout their life span. Their intent is to both share and improve this expertise through their work with The Sustainability Consortium.

Company Announcement, Environment

New Renewable Energy Power Set to Surpass Fossil Fuels

Joanna Schroeder

This month several reports have been released on the global growth of renewable energy. According to two new reports released by the United Nations Environment Programme and the Renewable Energy Policy Network for the 21st Century (REN21), for two consecutive years, the United States and Europe added more power from renewable sources such as wind and solar than from conventional sources such as coal, gas and nuclear.

Horse Hollow Wind Farm, USA, credit: GWEC

As reported in the Renewables 2010 Global Status Report, renewables accounted by 60 percent of new installed capacity in Europe and accounted for 50 percent of new installed capacity in the U.S in 2009. Experts are predicting that within the next two years, the world as a whole will follow-suit and add more capacity to the electrical grid from renewable than non-renewable sources.

However, this week, the U.S. Energy Information Administration released its International Energy Outlook 2010 which anticipates energy growth from 2007 to 2035. The report anticipates that fossil fuels are expected to continue to supply much of the used worldwide and predicts that electricity generation will grow by an average of 3.0 percent per year and the renewable share of the world electricity generation will increase from 18 percent in 2007 to 23 percent in 2035. Generation from natural gas and nuclear power increase 2.1 and 2.0 percent per year, respectively while coal-fired power is expected to increase an average of 2.3 percent. This would make coal the second-fastest growing source for electricity generation worldwide.

The result of continued growth of fossil-fuel based energy, according to the International Energy Outlook 2010 is that world-energy related CO2 emissions are expected to rise from 29.7 billion metric tons in 2007 to 33.8 billion metric tons in 2020 hitting a high of 42.4 billion metric tons on 2035. This is an estimated CO2 emission projection increase of 43 percent over the next 28 years.Read More

biofuels, Electricity, Energy, News