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State Ag Directors Support Ethanol Tax Incentives

Cindy Zimmerman

Eight state departments of agriculture are asking Congress to extend the ethanol tax incentive set to expire at the end of the year.

northeyIowa Secretary of Agriculture Bill Northey today joined seven of his colleagues in requesting congressional leaders to act quickly to extend the Volumetric Ethanol Excise Tax Credit (VEETC), which expires at the end of the year. Legislation has been introduced in both the Senate and House of Representatives that would extend the current ethanol tax policies to 2015.

“The failure to extend the biodiesel tax credit and the damage that has been done to that industry clearly highlight the need to act in a timely manner to make sure these critical policies are in place by the end of the year,” Northey said.

Northey was joined in sending the letter by Jon Farris, South Dakota Acting Secretary of Agriculture; Robert J. Boggs, Director of the Ohio Department of Agriculture; Doug Goehring, North Dakota Commissioner of Agriculture; Tom Jennings, Director of the Illinois Department of Agriculture; Dr. Jon Hagler, Director of the Missouri Department of Agriculture, Rod Nilsestuen, Wisconsin Secretary of Agriculture; and Greg Ibach, Director of the Nebraska Department of Agriculture.

Ethanol, Ethanol News, Government

Illinois Corn Growers Celebrate New Ethanol Blender Pump

Cindy Zimmerman

leon corzineThe lines were long today at the opening of the first blender pump in southern Illinois, according to Twitter updates from Illinois Corn Growers’ Tricia Braid Terry (agchick) at the scene. The pump in Sullivan is the first of 20 such pumps planned in the state in a pilot program approved by the Illinois Department of Agriculture with funding from the state Department of Commerce and Economic Opportunity, the American Lung Association of the Upper Midwest and the Corn Marketing Board.

Each two-sided pump offers both regular unleaded gas blended with 10 percent ethanol plus a flex-fuel option that dispenses E85, E50, or E30 for E85-capable FFVs by blending regular unleaded gasoline with E85 from a second tank.

Past National Corn Growers Association president Leon Corzine, a grower from Assumption, Illinois, was one of the many who were at the promotion offering discount pricing on ethanol blended fuel and $10.00 E85 coupons for owners of Flex Fuel Vehicles (FFVs).

During the official ribbon cutting ceremony, state officials and corn grower representatives addressed the success story of Illinois corn farmers and the Illinois ethanol industry partnering with petroleum marketers to increase consumer choice.

blends, corn, Ethanol, NCGA

Brazil Ethanol Lobbies DC With Gas Discount

Cindy Zimmerman

UNICAThe Brazilian Sugarcane Industry Association (UNICA) is discounting gasoline by 54 cents per gallon on the Tuesday before Memorial Day at two Capitol Hill gas stations to draw attention to a 54 cents per gallon tariff on imported ethanol.

“The one-day discount will provide Washington area residents with a preview of how Americans across the country could save money at the pump if Congress ends this unfair import tax later this year,” reads the UNICA release on the promotion.

Growth EnergyThe promotion is not sitting well with ethanol organization Growth Energy. “The only thing we should be importing from Brazil is their resolve to become energy independent,” said CEO Tom Buis. “Domestic ethanol is cheaper than imported ethanol, and it is far cheaper than gasoline refined from imported oil. The truth is that we have to end our reliance on foreign energy – period. Domestic ethanol helps create U.S. jobs, and helps the U.S. economy, and strengthens our national security by reducing our dependence on foreign energy.”

The 54 cent per gallon secondary tariff on ethanol is tied to the 45-cent blender’s credit to encourage blenders to use domestically produced ethanol. The secondary tariff on ethanol imports ensures that the tax credit is not given to the ethanol produced in another country. All ethanol blended with gasoline in the U.S. qualifies for the blenders’ credit, no matter the country of origin of the fuel ethanol. To avoid the use of taxpayer dollars to support foreign ethanol production, U.S. ethanol imports from non-Caribbean Basin countries are subject to the secondary tariff.

Ethanol, Growth Energy

Iowa Wind Turbine Plant to Get $2.5 Mil Loan

John Davis

A proposed wind turbine blade plant in Sioux City, Iowa is getting some help from that state’s economic development board.

The Des Moines Register reports that the Iowa Economic Development Board gave TPI Composites approval to build a new blade manufacturing plant, while Sioux City will get a $2.5 million forgivable loan to improve a road running along the proposed 40-acre TPI site:

Arizona-based TPI Composites says the proposed $38.6 million project would employ 500 workers.

The ability of TPI to create the jobs pledged to the state came into question Wednesday, when the company said it was cutting its Newton workforce to 233 workers. The company did not disclose how many workers were getting laid off.

The company said it plans to “rehire and raise the work force to 400 by October and 500 by February.”

State documents show the company has until July 30 to create 504 jobs in Newton. As of June 30, the company told the state it had created 286 jobs in Newton. The state provided $2 million in incentives for the Newton plant, which opened in 2008.

Board member Toby Shine said he believed the company would seek more time to hit its job-creation goals in Newton.

The board is also giving TPI nearly $500,000 in tax credits, and the city and state are considering more than $2.2 million in job-training assistance for workers at the new plant.

Wind

Biodiesel By-Product Could be Made Into More Biodiesel

John Davis

A by-product of biodiesel could end up being another feedstock for more of the green fuel.

This article from Biodiesel Magazine tells how Spain-based Neuron BioIndustrial is turning glycerin, made during the biodiesel brewing process, into an oil called MicroBiOil, which, in turn, is being made into more biodiesel:

Neuron BioIndustrial has selected a specific type of microorganism that metabolizes large quantities of raw glycerin as the sole carbon source. The resulting microbial mass contains more than 50 percent of its dry weight as lipids. These microorganisms are nonpathogenic and are not genetically modified.

The microbial oil can be extracted by common extraction methods due to its similar composition to oils conventionally used for biodiesel production (e.g., soybean, sunflower oils). This oil can be used as new raw material to produce biodiesel as its properties and fatty acid composition is in accordance with European (EN14214) and American (ASTM D6751) standards. It is also possible to carry out a methanolysis with the microbial biomass to directly obtain the mixture of methyl ester.

Thanks to this technology, the productivity of a biodiesel plant can be increased by 2 to 3 percent.

You can read more about the process on the Neuron BioIndustrial Web site.

Biodiesel

City Sewers Could be Next Fields for Biodiesel Stock

John Davis

The next fields for biodiesel feedstocks could be underneath our streets.

Environmental Protection Online reports that new research shows that municipal sludge would be a feedstock that would be nearly cost-competitive with diesel from petroleum:

Author David M. Kargbo, Ph.D., with U.S. Environmental Protection Agency Region 3’s Office of Innovation, Environmental Assessment & Innovation Division, points out that demand for biodiesel has led to the search for cost-effective biodiesel feedstocks. Soybeans, sunflower seeds and other food crops have been used as raw materials but are expensive. Sewage sludge is an attractive alternative feedstock — the United States alone produces about 7 million tons of it each year. To boost biodiesel production, sewage treatment plants could use microorganisms that produce higher amounts of oil, Kargbo said. That step alone could increase biodiesel production to the 10-billion-gallon mark, which is more than triple the nation’s current biodiesel production capacity, the report indicated.

To realize such commercial opportunities, however, stakeholders must overcome the challenges of collecting the sludge, separating biodiesel from other materials, maintaining biodiesel quality, addressing soap formation during production, and meeting regulatory concerns.

The report, appearing in the latest version of the bimonthly journal Energy & Fuels, says biodiesel from sludge “could be very profitable in the long run.”

Biodiesel, Research

Levin, Baucus Put Biodiesel Credit in Unemployment Bill

John Davis

Legislation that would reinstate the federal $1-a-gallon tax credit for biodiesel has been attached to a new bill would extend unemployment benefits.

House Ways and Means Committee Chairman Sander Levin (D-Michigan) and Senate Finance Committee Chairman Max Baucus (D-Montana) introduced the measure today:

The bill would extend for one year (through 2010) the $1.00 per gallon production tax credit for biodiesel and the small agri-biodiesel producer credit of 10 cents per gallon. The bill would also extend for one year (through 2010) the $1.00 per gallon production tax credit for diesel fuel created from biomass. This proposal is estimated to cost $868 million over 10 years.

This Business Week article says the biodiesel industry would like to see the measure passed before the Memorial Day holiday.

“We’ve gone through this game before where it looks like the game is over,” [National Biodiesel Board spokesman Michael] Frohlich said. Producers had anticipated the credit would be extended back in February…

Levin and Baucus said the tax- and-spending package may be put to a vote in the House tomorrow. It would then have to be approved by the Senate before it could be signed into law by President Barack Obama.

We’ll keep watching.

Biodiesel, Government, Legislation

ILUC – One Consideration Too Many in Biofuel Regulation

Joanna Schroeder

In a recent article, “Indirect Land Use: One Consideration Too Many in Biofuel Regulation,” authors David Zilberman, a professor in UC Berkeley’s Department of Agricultural and Resource Economics and assistant researcher Gal Hochman, along with Deepak Rajagopal, argue that indirect land use effects (ILUEs) should not be considered in current California and federal biofuels polices. The authors write, “…we will argue here against an indirect land use in biofuel regulations for the basic reason that its inclusion in LCAs (life cycle analysis) contradicts a basic principle of regulation – namely that individuals are responsible only for actions that they control. The indirect land uses are difficult to compute and vary over time.”

In a nutshell, the authors contend that American farmers, or farmers anywhere for that matter, should not, and cannot be held accountable for the decisions made by others in other countries, such as Brazil. “The differences in the treatment of technical and pecuniary externalities is that producers control their production and hence their pollution. But in a competitive market, they don’t control the prices. This reflects a basic principle: Individuals should be responsible for activities that they control and not for those they don’t. This basic message of accountability suggests that producers of biofuel shouldn’t be held responsible for indirect land-use decisions made by others.”

The authors continue by explaining that there is a related flaw in the use of indirect land use and in how it is applied to regulating biofuels. Basic principles of public economics dictates that all emitters of greenhouse gas emissions are held responsible for their own activities and thus their own emissions. However, ILUE suggests that farmers are responsible for possible emissions by other farmers elsewhere. Therefore, the authors contend, it makes more sense to strive to enact policies that will make countries like Brazil, responsible for their own GHG emissions related to indirect land use.

Ultimately, while the authors acknowledge that there are indirect land use changes inherent in biofuel development, these will be reduced over time as the technologies improve. Yet they caution that the technologies won’t improve, and we won’t move to next generation biofuels if the investment community continues to ignore the industry, in part driven by the flawed theory of indirect land use.

biofuels, Ethanol, Ethanol News, Indirect Land Use

Western Wind & Solar Integration Study Released

Joanna Schroeder

Today, GE Energy has released “The Western Wind & Solar Integration Study,” which was prepared for the National Renewable Energy Laboratory (NREL). The purpose of the report was to investigate the operational impacts and economics of wind, photovoltaics and concentrating solar on the power system operated by the WestConnect group of utilities located mainly in the southwest. The study specifically looked at the benefits and challenges of integrating up to 35 percent wind and solar energy by 2017.

The states involved in WestConnect include Nevada, Arizona, New Mexico, Colorado, and Wyoming and four of these five states currently have Renewable Portfolio Standards (RPS) that require 15-30 percent of the states yearly electricity output to come from renewable energy between 2020-2025.

Among the key findings the study found that:

  1. 1. Fuel and emission costs decrease as more wind and solar are added. Using 35 percent wind/solar will decrease fuel costs by 40 percent and carbon emissions by 25-45 percent by 2017, depending on the price of natural gas. This is the equivalent of removing 22-36 millions cars from the road.
  3. 2. CO2 emissions decrease as more wind and solar are added and the emission reductions are even greater if coal is displaced.

It was also discovered that integrating large amounts of wind and solar into the grid does not require extensive additional infrastructure if key changes are made to current operational practice. In addition, increasing the size of the geographic area over which the wind and solar resources are drawn substantially helps to reduce the variability of the resources as does using wind and solar forecasts. The report also noted, as many key wind and energy experts have been saying, that efficiency upgrades will need to be made as well as additional transmission capabilities will need happen in order to realize the full potential of wind and solar energy.

“If key changes can be made to standard operating procedures, our research shows that large amounts of wind and solar can be incorporated onto the grid without a lot of backup generation,” said Dr. Debra Law, NREL project manager for the study. “When you coordinate the operations between utilities across a large geographical area, you decrease the effect of the variability of wind and solar energy sources, mitigating the predictability of Mother Nature.”

You can download a copy of the report here.

News, Research, Solar, Wind

NY’s Cabrini Terrace Goes Green With Biodiesel

Joanna Schroeder

There are still victories for biodiesel despite the delay in passing the tax incentive. This week, Cabrini Terrace, a 217 unit co-op located in Manhattan, NY is getting a little greener with its switch from traditional heating oil to METRO’s Greenheat. Greenheat is a blend of heating oil and biodiesel, with the biodiesel, in part, made from recycled restaurant grease.

“METRO is very proud to add Cabrini Terrace to our growing list of customers who are switching from traditional heating oil to a biodiesel blend,” said Gene V. Pullo, President of METRO. “Cabrini Terrace should be commended for taking the initiative to help improve the air quality in its community and do its part to reduce our dependency on foreign oil.”

The greener heating oil blend uses B2 and in this situation will reduce CO2 emissions by 53,769 pound each year. In addition, the switch will eliminate 2,400 pounds of sulfur, displace 2,400 gallons of petroleum and reduce sulfur, particulate matter and other air emissions – all this by using 120,000 gallons of Greenheat.

“Switching to METRO’s Greenheat couldn’t have been easier,” said Drew Turner, Chief Superintendent for Cabrini Terrace. “It has actually improved efficiency and requires less maintenance. I can’t think of any reason why every building doesn’t switch to Greenheat today.”

Currently, there are more than 800,000 buildings in New York using a cleaner blend of heating oil.

Biodiesel, News