NEC 2027

Ethanol Groups Challenge California Fuel Standard

Cindy Zimmerman

The nation’s ethanol industry is challenging the constitutionality of the California Low Carbon Fuel Standard (LCFS).

Renewable Fuels Association LogoThe Renewable Fuels Association and Growth Energy filed a complaint on Christmas Eve in the Federal District Court of Fresno charging that the measure violates both the Supremacy Clause and the Commerce Clause of the U.S. Constitution.

Growth Energy“The LCFS erects new regulatory obstacles to ethanol, frustrates the federal Renewable Fuel Standard, and threatens the nationwide market for domestic ethanol,” says a joint statement issued by the two organizations. “Additionally, by closing California’s borders to corn ethanol from other states, the LCFS will change how corn is farmed and ethanol is produced all over the country. The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security.”

The LCFS was adopted by the California Air Resources Board last spring and is due to take effect early next year.

Ethanol, Ethanol News, Growth Energy, RFA

Scandia Proposes 1,000-mw Lake Michigan Wind Farm

John Davis

scandiawindoffshorelogoA Minnesota company is proposing to build a massive wind farm in Lake Michigan, but some of the residents of Michigan, which has some of the highest unemployment rates in the country, still aren’t pleased about the project that would bring green energy and jobs to the economically distressed region.

The Detroit Free Press says that Scandia Wind, a Minnesota firm partnering with a Norwegian wind developer, wants to put up a 1,000-megawatt wind farm just offshore from the communities of Pentwater and Ludington:

Several companies have been sniffing out offshore wind farm possibilities in Michigan, but Scandia was the first to jump in and publicly announce its plans. The turbines would be visible all along the shore, which takes in Silver Lake and Mears state beaches, Little Sable Lighthouse and Pentwater Harbor.

The firm wants to build foundations on the lake bottom, which is owned by the citizens of Michigan, and place 100 to 200 turbines — 5 to 10 megawatts each — on top.

The total size would make the wind farm bigger than any proposed new coal plant in Michigan and nearly as large as the Fermi 2 nuclear plant.

Local residents say the wind turbines would ruin the view off their beaches and hurt tourism. Scandia officials point out that the $3 billion project would put people to work to the tune of at least 2 million man-hours.

Wind

Ethanol Plant to Provide Feedstock for Biodiesel

John Davis

BlueFlintA North Dakota ethanol plant is truly exploring the concept of value-added products. The Blue Flint Ethanol refinery in Underwood, ND, will extract oil from the corn it turns into ethanol to turn that oil into biodiesel.

KXMB-TV is Bismarck reports the oil extracting equipment will be right there at the refinery and is the first of its kind in the state:

General Manager Jeff Zueger says there is about half-pound of oil in a bushel of corn.

“We see it as a postive we are able to move oil into a higher value markets, produce another renewable fuel. When you remove corn oil from the process a gallon of corn oil estentially converts to a gallon of biodiesel. So we are able to get about another 5 percent out of this plant as opposed to just producing ethanol and distillers grain. Now we are producing a product that ultimately ends up as biodiesel.”

The plant is expected to produce 1.5 million gallons of biodiesel annually … enough to pay for the $2 million project within a year.

Biodiesel, Ethanol, Ethanol News, News

Iowa Biodiesel Plant Gets $3.9 Mil State Grant

John Davis

REGlogo2An Iowa biodiesel plant that picked up a $2.5 million federal grant earlier this month (see my post from Dec. 7) has picked up another $3.9 million from the state.

Wallaces Farmer reports that Elevance Renewable Sciences of Bollingbrook, Illinois and the Renewable Energy Group biodiesel plant in Newton received the Iowa Power Fund money to develop a Nobel Prize-winning technology that will expand biodiesel products to include jet fuel and specialty chemicals, such as cosmetics:

Elevance says the technology could be used at other biodiesel plants. Biodiesel manufacturers have struggled for profitability as they are contending against uncertain demand for biodiesel fuel used by the trucking industry.

The new technology will be added to the Central Iowa Renewable Energy biodiesel plant at Newton, which is managed by Renewable Energy Group, headquartered at Ames. The plant employs 28 workers. Elevance and REG say an additional 40 to 50 worker positions would be created in 2010 by adding Elevance’s olefin metathesis technology.

Cargill is one of the investors in this new technology

Elevance is backed by Cargill and the Texas Pacific investment group of Ft. Worth, Texas. “We look forward to completing the contracts, beginning construction of the plant at Newton, and bringing these products to market as quickly as possible,” says K’Lynne Johnson, CEO of Elevance. A company called Materia Inc. of Pasadena, Calif., owns the patents to the olafin metathesis process that won the 2005 Nobel Prize.

Experts say the new technology can be used in other biodiesel plants.

Biodiesel, Government

Valero’s Purchase Renew Energy Challenged

valero2The purchase of Renew Energy by Valero is being challenged. As originally posted, Valero was to purchase the 110 million gallon per year ethanol plant for $72 million. However, ALL Fuels & Energy out of Iowa has filed a motion with the U.S. Bankruptcy Court stating that stated that they were the highest bidder for the plant and they should take ownership.

ALL Fuels & Energy has asked the bankruptcy court to reconsider Valero’s $72 million bid earlier this month when they said they submitted a bid of $77 million. ALL Fuels & Energy explained, “During the auction, at approximately 8:45 p.m., Valero submitted a $72 million cash bid as a ‘conditional’ bid, with an expiration time of 9:15 p.m,” the company explained. “At 9:01 p.m., a $77 million bid by ALL Fuels-Jefferson, LLC was announced, based on a discount formula, as a ‘bid of $72.1 million’. Blair and Bankers’ Bank [the lead creditor for the bankruptcy proceeding] then advised the auction participants that ‘time had run out, the auction closed,’ and announced that the ‘best bid is Valero,’ even though Valero’s bid was $5 million less than the All Fuels- Jefferson, LLC bid,” the company continued. “At 9:06 p.m., the ALL Fuels- Jefferson, LLC attempted to enter a substantially higher bid than its previous $77 million bid. ALL Fuels-Jefferson, LLC was not permitted to enter this bid by Blair and Bankers Bank.”allfuels

The court noted recently, “As the background facts of this case demonstrate, confirmation of Valero’s bid over that of ALL Fuels was in error; the auction was tainted by defects, and therefore it is within the court’s discretion to reconsider the Sale Confirmation Order, signed on Dec. 17, 2009…It would be manifestly unfair to ALL Fuels to allow the confirmation of sale to Valero to stand, when the procedures of the auction were so skewed and tainted.”

Ethanol, Ethanol News, News

Chevron to Install Rhode Island Wind Turbines

John Davis

wind_turbineRhode Island’s governor has selected Chevron Energy Solutions to install and operate six wind turbines on public land in the state.

The Providence (RI) Journal reports that Governor Donald Carcieri made the announcement about the San Francisco-based clean energy company getting the contract at a Narragansett Town Council meeting:

“Chevron is a proven leader in renewable energy and a proven partner with states and municipalities,” the governor said in a statement.

Chevron will work with the state Department of Environmental Management [DEM] and the Town of Narragansett to develop a plan to erect up to six large wind turbines on properties owned by the state or the town. The exact number of turbines and locations will be determined during the talks with the developer…

Energy produced by the proposed turbines would be used at DEM facilities at the Port of Galilee, which use about $100,000 worth of electricity annually, and at state camping grounds and beaches in Narragansett. It would also be used to power the Scarborough Treatment Plant and other Narragansett town facilities.

Chevron will get no state or local funds to put up the turbines.

Wind

Soybean Checkoff, Clean Cities Promote Biodiesel

John Davis

USBA group that promotes the use of soybeans and a program that works to reduce local petroleum consumption are partnering again to promote the use of soy biodiesel next year.

This article from radio station KFGO in Fargo, ND-Moorhead, MN says the United Soybean Board’s soybean checkoff and the U.S. Department of Energy-affiliated (USDOE) Clean Cities’ chapters will develop programs that promote the benefits of soy biodiesel:

“The soybean checkoff continued this program to support the use of soy biodiesel in any diesel motor to show how biodiesel is cleaner burning and better for the environment while supporting U.S. agriculture,” says Geno Lowe, a soybean farmer from Hebron, Md., and soybean checkoff leader. “We expect we’ll see some inventive proposals such as school bus demonstrations to public transportation uses to heavy equipment uses by state or local governments or maybe even a bioheat promotion project.”

Biodiesel promotion and education has proved to be important to U.S. soybean farmers’ bottom lines. A checkoff-funded study found that U.S. soybean farmers received an additional $2.5 billion in net returns over the last four years due to the biodiesel industry’s demand for soybean oil. It shows this demand added up to 25 cents in support for the per-bushel price of soybeans.

USB will provide up to $100,000 for funding soy biodiesel communications programs. The biodiesel reimbursement application process has been opened up, and USB is encouraging Clean Cities chapters to partner with Qualified State Soybean Boards (QSSBs) for this project. Selected participants will be announced in the middle of next month.

Biodiesel, Soybeans

Baucus, Grassley Vow to Extend Biodiesel Tax Incentive

John Davis

Baucus2Biodiesel producers have seen the last chance at renewing the federal biodiesel tax incentives before they expire at the end of the year slip away. But two key lawmakers have vowed the $1-a-gallon tax credit will be renewed, retroactively.

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, and Sen. Charles Grassley (R-IA), Ranking Member of the same committee, say they intend to get the biodiesel tax incentives renewed early next year. The Des Moines (IA) Register has details:

grassley4“These provisions are important to our economy — not only because they help create jobs, but also because they are used to address pressing national concerns,” the senators wrote.

Grassley said taxpayers “need notice that these tax provisions” will be extended next year.

The House recently approved legislation extending the biodiesel subsidy and other expiring tax credits but the Senate took no action on the measures. Republicans objected to including the extensions in a defense bill because it also would have included an estate tax measure to which GOP senators objected, said Grassley.

Some biodiesel producers have said the lapse of the credit could force them to shut down, or at least, make them reduce production.

Biodiesel, Government, Legislation

Hawkeye Energy Files Bankruptcy

hawkeyeUnfortunately, it looks as though another ethanol plant has filed for bankruptcy. Hawkeye Energy currently owns and operates ethanol plants in Iowa Falls and Fairbank, Iowa and has filed for reorganization and Chapter 11 bankruptcy.

Hawkeye Energy Holdings CEO Bruce Rastetter said, “The U.S. biofuels industry is going through a period of historic change and we are taking the necessary steps to position our business units to succeed in a dynamic and sometimes volatile business environment. The ethanol industry was severely affected in 2008 and 2009 by unprecedented volatility in commodity prices and margins. While the market for ethanol has stabilized and financial performance has improved in recent months, it nevertheless became clear that a restructuring of the Renewables unit’s balance sheet would be necessary for the company to compete effectively in the future.”

The Iowa Falls and Fairbank plants, each of which employs about 45 workers, will continue to operate under the current management, said Rastetter. They also will continue to buy corn and will honor forward contracts for purchases of corn from farmers.

Hawkeye said it owes bank debt between $500 million and $1 billion to lenders that took out the loans in 2006 after Hawkeye withdrew a planned initial public stock offering. Against that debt, Hawkeye has about $250 in assets, Rastetter said.

Ethanol, Ethanol News, News