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Book Review – The Economics of Food

Joanna Schroeder

It wasn’t too long ago that the ethanol industry experienced the perfect storm…high energy prices, high corn prices and low ethanol prices. Also during this time food prices rose. Why? While the reality was that high energy prices were a major factor (oil was more than $15o per barrel at its peak), ethanol was blamed over and over again as the major culprit. Today, research papers are still being published saying that ethanol was not the main offender; yet the debate is still active. So this week, I read the book, “The Economics of Food,” by Patrick Westhoff. To disclose Westhoff’s background, he grew up on an Iowa farm, has a Ph.D. in agricultural economics from Iowa State University and currently co-directs the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri.

Westhoff acknowledges very quickly that ethanol did have a role in rising food costs.”Biofuels played an important role in the rise and fall of food prices between 2005-2009, but other factors were also at play. Anything that affects the amount of food produced or consumed in the world will have some impact on food prices.” After explaining what some of those other factors are, he writes, “Thus, a first rule of thumb: Increasing biofuel production raises the price of food.” (Author’s italics.)

Westhoff presents both sides of the “food and fuel” debate in his book and says that in certain arguments, both sides are right (the proponents and opponents). He then stresses that biofuels did not play as large of a role in rising food prices as detractors claim, but he also said that biofuels played a larger role in food prices that biofuels supporters acknowledge. After he lays out the true impact of biofuels and food prices, he then lays out some possible scenarios for the future.Read More

book reviews, corn, food and fuel

EPAC’s 20th Annual Conference Kicks Off

Ethanol Producers and Consumers (EPAC), an educational outreach non-profit organization who supports the production and use of biofuels as a renwable alternative fuel, kicked off their 20th annual conference today in Missoula, MT. “The Biofuel Journey” conference held a number of sessions focusing on ethanol, biodiesel and small grains.

“Twenty years! Who would have thought it?” noted Chairman of the EPAC board, Shirley Ball in her welcome. “Thanks for being here in 2010 to help us celebrate!”

Montana’s Director of Agriculture Ron De Yong presented opening remarks this morning followed by a video greeting from Senator Max Baucus, Senator Jon Tester and Representative Dennis Rehberg. The session that followed, The Journey Begins. . . “The OFEC (Old Fogie Ethanol Coalition) Perspective” included presentations from Shirley Ball, Larry Johnson of LLJ Consulting and Business Development, Dave Hallberg of PRIME BioSolutions, Patsy Reimche of EPAC, and Todd Sneller of the Nebraska Ethanol Board.

Sessions following included speakers on the topics of: Early Years – Early Support – The Industry Grows, Air Quality, Biodiesel, and Small Grains.

The EPAC conference concludes tomorrow with presentations on: Cellulosic Ethanol, DDG’s, Beyond the Blend Wall: E85, Green Jobs and more.

blends, E85, Ethanol, Ethanol News, News

23rd Ethanol Conference Just Around the Corner

Joanna Schroeder

It’s hard to believe that the 23rd Ethanol Conference and Trade Show is just around the corner. This year’s event will be held in Kansas City on August 3-5th and there is a lot of excitement surrounding the conference. To get an update on what attendees will be able to learn during the event, I sat down with Brian Jennings, the Executive Vice President for the American Coalition for Ethanol (ACE).

Jennings told me that they are really going to focus on a lot of the key issues that are so critical to the industry today. He also mentioned that they would also be talking about some of the things they’re doing on blender pumps.

However, on the policy side, Jennings explained that the ethanol tax credit, VETC, is set to expire at the end of this year as is the ethanol tariff if Congress fails to act. There will be sessions dedicated to discussing the benefits of both pieces of policy and they hope to have several current or aspiring legislators on hand to give an update on where they are at.

“There is bi-partisan legislation today in both houses of Congress that would extend both for five years,” said Jennings. “And that’s what we’re working to support and we’re doing that in conjunction with both groups.” Jennings continued to explain that Congress is going to have an opportunity to tackle that in a couple of different ways. In the Senate, Jennings believes, we’ll see this as an energy bill, likely to work its way through in July.

The conference will also feature break-out sessions dedicated to answering some key questions for ethanol producers such as the tailoring rule coming out from the EPA on greenhouse gases as well as learn about some new programs for ethanol producers that were passed as part of the Farm Bill.

They will also spend some time discussing the implications of the gulf spill. “We’re not going to attack the oil companies by doing so, but I think it’s critically important for people to get a good grasp of what the costs associated with our addiction to oil are,” said Jennings. He continued by saying these costs go beyond what consumers pay at the pump and stressed that we do have alternatives to oil today.

Registration is currently open and you can register online here. In addition, you can get more in-depth information about the conference by listening to my full interview with Brian. Brian Jennings Interview

ACE, Audio, Ethanol

Need For Research On Grain Quality and Ethanol Production

Chuck Zimmerman

Leland McKinneyYou may be interested to know how grain quality affects ethanol production and DDGs. If so, then you would interested in Leland McKinney’s presentation at the Corn Utilization and Technology Conference, held recently in Atlanta. I spoke with him to learn about his research on this topic. Leland is Extension State Leader in the Dept. of Grain Science at Kansas State University.

To start with he says that getting information presented a challenge since there’s not a lot of it publicly available. So, without much data to work with he visited personally with industry representatives to find out their thoughts and put together an overview presentation on the subject. He says moisture and how it impacts grinding efficiency and water balance in an ethanol plant were mentioned as well as quality attributes like fermentable starch and test weight. When it comes to the DDGs he says mycotoxins came up frequently as a concern. The bottom line though is that research is needed on how grain quality effects the production of ethanol. Hopefully that will be done before another CUTC!

Leland McKinney Interview
Audio, corn, CUTC, Distillers Grains, Ethanol, Ethanol News

Corn Growers Say Now is Time for Ethanol

Cindy Zimmerman

NCGANo time like Independence Day to renew the call for renewables to increase our energy independence.

This week, with Congress preparing for an Independence Day recess prior to debate on a new energy bill, the National Corn Growers Association (NCGA) is stepping up its campaign to ensure that corn-based ethanol is part of the formula that brings our country to energy security and independence. That includes a new television ad stressing the importance of ethanol that starts airing today on local news programs in Washington and on major cable channels such as Fox, CNN and MSNBC.

“It’s now clear that events both here at home and abroad demand a different solution to our energy needs,” the ad states. “One that protects our national security, safeguards our environment and promotes economic growth. One answer grows in our own backyard. Turning American corn into America’s energy. It’s renewable, efficient, abundant and safe. And it creates American jobs. We feed the world; we can fuel it, too. Ethanol. Now is the time.”

Watch the ad below and read more about the NCGA campaign here.

corn, Ethanol, Ethanol News, NCGA

Senators Call for Increasing Ethanol Blend Rate

Cindy Zimmerman

Midwestern senators are calling on the Obama administration to stop delaying testing that would allow an increase in the blend rate of ethanol in gasoline to 15 percent.

amy klobucharIn a letter to President Obama, U.S. Senator Amy Klobuchar (D-MN) and six other senators expressed concern that the Department of Energy (DOE) has not yet completed testing higher blends of ethanol gasoline, which would allow the Environmental Protection Agency (EPA) to issue a waiver for gasoline with blends of ethanol higher than 10 percent.

“In the wake of the worst oil spill in our nation’s history, we believe our government should operate with a great sense of urgency to utilize more homegrown biofuels,” the senators wrote in the letter. “We urge you to use all available means to ensure that the DOE’s testing is completed as soon as possible so that both consumers and our biofuels industry are not further harmed by this delay.”

In addition to Klobuchar, the letter was signed by Democratic senators from Iowa, South Dakota, Nebraska, Illinois and Indiana.

Ethanol, Ethanol News, Government

Growth Energy Sets Key Ethanol Policy Issues

Joanna Schroeder

There are many key priorities for the ethanol industry right now and so I spent some time with Growth Energy’s CEO, Tom Buis to learn more about the political priorities the association is currently working on. Buis began by explaining that a lot depends on what actions Congress will take on the energy front. He mentioned that our country has recently come off the highest gas prices in 2008 the country has ever witnessed and that Congress has taken no steps to address this problem. “We feel they need to address the fuel issues,” said Buis.

There are many elements involved in addressing fuel issues and here are some of Growth Energy’s top priorities.

  1. 1) Our country needs to mandate flex-fuel vehicles and blender pumps at every gas station across the country.
  2. 2) On the market access side, they want to see an ethanol pipeline built. This will lower transportation costs, lower the industry’s carbon footprint and ultimately help consumers save more money at the pump.
  3. 3) The association would like to see some previous legislation re-visited specifically as part of the 2007 Energy Bill. First, they want to see indirect land use change removed. Second, they would like to see the corn discrimination clause reviewed. This clause states that under no circumstance can corn (or starch-based) ethanol, ever be considered an advanced fuel.
  4. 4) VETC, or the blender’s credit, is set to expire soon and Buis noted that they would like to see this extended for multiple years.
  5. 5) The ethanol tariff is under review. The sets a “fee” on ethanol imported from other countries that offsets the blender’s tax credit. It is designed, explained, Buis, to keep American’s from subsidizing foreign ethanol.

There are several more issues that the association is working on and you can learn about them by listening to the full interview with Tom, who is joined by Steve McNich, the CEO of Western Plains Energy in Oakley, Kansas.

Ethanol, Ethanol News, FEW, Growth Energy

Florida Farm to Fuel Summit Coming Up in August

Cindy Zimmerman

FL Farm to FuelAs the nation’s worst oil spill in history threatens the Gulf Coast’s energy, tourism and fishing industries, Florida is continuing efforts to promote the production of renewable energy from biomass resources in the Sunshine State.

For the fifth year in a row, Florida Agriculture Commissioner Charles Bronson will host the Farm to Fuel Summit, August 11-13 at the Rosen Shingle Creek in Orlando, to bring together hundreds of industry leaders in agriculture, energy, academia and government who want to make Florida a leader in the production of renewable energy.

“Florida has the greatest potential for biomass production in the country, and the technology exists to convert our natural resources to clean, renewable energy,” Bronson said. “This event will bring together all the stakeholders so we can continue working toward the goal of reducing our dependence on foreign oil while at the same time providing another source of income for our farmers.”

Highlights of the summit include more than 40 speakers and 50 exhibitors. Last July, Bronson’s fourth Florida ‘Farm to Fuel’ summit attracted more than 500 participants. Attendees of this year’s summit will hear about various feedstocks and technologies for renewable energy production, challenges relating to project financing, permitting and infrastructure, and state and federal energy policy.

Find out more about the summit, agenda and registration on-line from the Florida Department of Agriculture and Consumer Services.

conferences, Ethanol, feedstocks

Biodiesel Credit Fails to Pass Key Vote

John Davis

Just in case you think that I’m just re-running the same story from all this past winter and spring, honestly, I’m not. But there’s trouble … again … for the $1-a-gallon federal biodiesel tax incentive.

This article from ICIS.com says while the measure, tied to unemployment benefits, failed to garner enough votes by just three that would have ended debate on the bill. But, it might not be completely dead yet:

The vote sends the bill back for reworking despite weeks of lawmakers debating the overall cost of the package.

Biodiesel brokers said the move would result in more gridlock in a biodiesel market already frozen by confusion over price ideas. The industry is currently running at 10% or less of capacity.

“It never seems quite dead,” one biofuels broker said. “Everyone still assumes there is life to this bill, and we’ll be frozen until the next time around.”

Leaders thought they had pared the bill (with the bulk of the cost coming from the unemployment benefits section) down far enough to satisfy fiscal hawks … down to an estimated $33 billion from the original price tag of $190 billion … but the money is still holding it up.

Ironic, isn’t it, that a bill that would help put back to work or preserve the jobs of an estimated 23,000 biodiesel workers is being stopped over arguments over unemployment benefits?

Biodiesel

CleanFUEL USA Adds New Retail Propane Dispenser

Joanna Schroeder

CleanFUEL USA has recently announced that it has added a new propane fuel dispensing product to its infrastructure equipment line. The CFT PRO 2100 is less costly than bottle filling dispensing units and offers several unique features including a stainless steel cabinet, improved hydraulics and an electronic dispensing computer. The new dispenser is currently available and will be integrated into the U.S. propane network that CleanFUEL recently received a grant to spearhead.

The project’s goal is to build the nation’s largest propane network that will include 184 liquid propane refueling stations across the country. The network will be completed in two to four years with the first new stations opening this summer in Phoenix, Arizona and Anaheim, California.

“Developing a better infrastructure for the distribution of alternative fuels is an essential part of the country’s ability to reduce its dependence on gasoline,” said U.S. Congressman John Carter (R-TX). “It helps us both offset the demand for foreign oil and meet rigorous environmental legislation by utilizing cleaner burning transportation fuels that are in surplus, such as propane.”

According to proponents of propane, the fuel is best suited for fleet vehicles and globally powers roughly 13 million cars and trucks. Ford and GM have developed propane engine platforms and CleanFUEL USA has developed a liquid propane injection technology (LPI).

“CleanFUEL is in the process of building the nation’s largest Autogas [propane] refueling network,” said Tucker Perkins, COO of CleanFUEL. “Watching the infrastructure for this pipeline unfold is an amazing achievement for this country, as it will drive down the costs and emissions associated with transporting goods and services among our cities. This new network not only reduces the impact the commercial transportation market has on our environment, but it also helps companies reduce their transportation costs, which ultimately improves their bottom line.”

News, Propane