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Biodiesel Makers Worry About Hit During Tax Break Wait

John Davis

USCapitolBiodiesel producers are worried the wait for the renewal … or even worse, the failure of renewal … of a crucial tax credit, set to expire in just more than a month, could be a death knell for the industry.

The Houston Chronicle reports that despite efforts already underway in the U.S. House and Senate to renew the $1 per gallon biodiesel tax credit, lawmakers don’t seem to be moving this measure to the forefront:

Losing the biodiesel tax incentive would be another blow to an industry that has closed many plants this year and slashed jobs amid rising costs of raw materials, weak domestic demand and on-again, off-again backing from the government.

“It would be devastating for the national and the Texas biodiesel industries,” said Jeffrey Trucksess, a consultant to Green Earth Fuels, which is operating a 90-million- gallon-per-year biodiesel plant below capacity at the Houston Ship Channel…

Today, U.S. biodiesel plants have the capacity to produce about 2.5 billion gallons a year of the fuel. Yet more than half of that plant capacity is sitting idle amid uncertainty on several fronts…Read More

Biodiesel, Government, Legislation

Senator Grassley Pushes for E15

grassleyIowa Senator Chuck Grassley, who has always been an ethanol supporter, will push Congress to act if the EPA turns down a waiver request that will increase the amount of ethanol in fuel from 10 to 15 percent. The EPA is expected to grant or deny the request by December 1.

As Oil Price Information Service first reported, “I think Congress has to get involved if they don’t do it [approve blends up to E15] because we’re up against an E10 stone wall and we have to cross that wall or we’re not going to keep the [renewable fuel standard] mandates that are already in the law,” Grassley commented to reporters recently. “And if they don’t do what I think is very reasonable, to go to E15, then I think Congress has to intervene. But do I think Congress would intervene in the next three weeks before Christmas? I doubt it.”

But what would Congress do if E15 was approved, but oil companies wouldn’t sell it until they received liability protection or if more research was done, a local reporter asked Grassley.

“Well, I think I would go to the Congress and try to settle the issue in the Congress. And I would hope that industry would cooperate,” Grassley responded. “There are some oil companies that are very pro-ethanol, like Marathon, as an example. I don’t know what they would do, but considering the traditional ‘Big Oil’ fight against ethanol, I presume that they wouldn’t feel inclined to use what’s not available and not help us get to the mandate. I would hope otherwise, and I would be trying to do everything I could to do the otherwise,” he added.

Ethanol, Ethanol News, News

Farm Bureau Pleased with Climate Bill Delay

Cindy Zimmerman

nafbThe American Farm Bureau Federation (AFBF) is pleased with a decision by Senate leadership last week to delay consideration of climate change legislation until the spring of 2010.

During a recent interview before the delay was announced, AFBF president Bob Stallman said the agricultural organization opposed the climate change bill that was passed by the House, despite provisions included that were beneficial to agriculture. “That bill we believe will downsize American agriculture by at least 20 percent,” he said. “Long term it reduces our ability to produce food.”

Stallman says that AFBF is also opposed to the controversial concept of indirect land use change to determine the lifecycle greenhouse gas emissions of biofuels. “That issue is an attempt by the environmental community to remove the use of corn ethanol from the Renewable Fuel Standard,” Stallman said. “We’re opposed to that. Number one, there is no science, it’s pure speculation. And how you can say that an acre producing corn ethanol here is going to change a specific acre in a specific country is nonsense.”

Listen to an interview with Stallman here.

Audio, biofuels, Ethanol, Farming, Indirect Land Use

Biodiesel Maker Tries New Technology to Score Credit

John Davis

A biodiesel maker is hoping that a new process will help it pry open some tight credit markets the biofuels industry has been facing lately.

This story from the Minneapolis Star Tribune says that BioCat Fuels will use a process from its sister company, Minnesota-based EverCat Fuel, which has patented a process that converts waste fats and oils into biodiesel to build a 6 million-gallon-a-year refinery in Illinois:

BioCat wants to demonstrate that EverCat’s “Mcgyan” technology can economically produce biodiesel from non-edible substances, which the company says eventually will include oily forms of algae and weeds.
Mcgyanprocess
BioCat CEO Ric Larson, 63, is a former community banker who helped EverCat’s owners finance the Isanti plant. Larson said the time is ripe because dozens of soybean-to-fuel oil plants were shuttered in 2008-09, thanks to the combination of heavy debt and soybean prices that went through the roof during the commodity-price boom. Yet demand is growing, partly because of government mandates to increase production of renewable fuels.

“We can use U.S. Small Business Administration [loan guarantees],” Larson said. “It’s tough to find a bank to lend, because there are too many bad biodiesel and ethanol loans on their books. Ironically, the survivors are doing well because corn and soybean prices are down.”

The article goes on to say the Mcgyan process uses a metal-oxide catalyst inside a stainless-steel pressure vessel to refine fuel in a low-energy, continuous-flow process.

Biodiesel

More Sorghum Going to Ethanol

Cindy Zimmerman

Corn may have competition for ethanol use from less expensive sorghum.

sorghum checkoffAccording to a survey by the United Sorghum Checkoff Program (USCP), 29 percent of the grain sorghum grown in the United States this year will be used to produce ethanol – a total of nearly 137 million bushels.

“In the past year, the price differential has greatly benefited the bottom line of ethanol plants using sorghum as a feedstock,” said USCP Board Chairman, Bill Greving. “This means that the use of sorghum by ethanol plants has influenced the increased demand for sorghum in these areas where ethanol plants are co-located with sorghum production.”

According to the survey, ethanol plants in areas where sorghum is grown prefer to use sorghum because of its availability and favorable price differential. It also suggests if grain prices jump like they did during 2007, 2008 and early 2009, demand for sorghum will increase dramatically, which will mean even more sorghum could be used in ethanol blends. Better yet, sorghum for grain-based ethanol production qualifies as an advanced biofuel feedstock.

Ethanol, Ethanol News, feedstocks

Purdue to Test Biofuels for Aircraft

John Davis

U.S. Air Force planes could soon be flying on biofuels, and that fuel will be tested at one of the Midwest’s premier universities.

This press release from Purdue University says the school’s National Test Facility for Fuels and Propulsion is getting a $1.35 million grant from the U.S. Air Force. The facility at will be located at the Niswonger Aviation Technology Building at the Purdue Airport:

davidstanley“The aerospace industry now has an unprecedented interest in developing green aircraft using biofuels,” said David L. Stanley, an associate professor of aeronautical engineering technology at Purdue and principal investigator of the facility. “Testing will be conducted while fuels are being researched for development. This means input will be provided during the development phase, not after the fuel has been developed, which helps to ensure the best results possible.”

The facility, expected to open in late 2010 or early 2011, will test aerospace hardware in engines and aircraft and provide data related to fuel-sustainability and emissions goals and for economic assessments.

“This is a multidisciplinary research approach that begins with growing crops, developing fuels from those crops in the laboratory and then testing those fuels in engines,” said Denver Lopp, a professor of aviation technology and one of two co-principal investigators.

The release goes on to say that while the focus will be jet engines, some of the testing will also be on piston engines.

biofuels, Research

Renew Energy to Learn Fate Soon

renew_energyWisconsin based Renew Energy will either be finding a buyer or closing within just a few weeks. The Jefferson, Wisconsin plant currently produces about 210,000 of ethanol and employs 70. Renew noted that they are striving to sell the plant in hopes that a new buyer will keep the current employees.

According to the Wisconsin Ag Connection, Renew filed for Chapter 11 bankrupcy in February and at that time owned its creditors over $100 and was directly tied to the financial failures of Olsen’s Mill, which has since been forced into receivership. The grain handling company borrowed millions of dollars to help finance the construction and operation of the ethanol plant and wasn’t able to pay back its creditors because of the slowdown in the ethanol industry. Olsen’s also handled all the corn purchasing agreements for Renew Energy.

Renew Energy converted the former Cargill Malt in Jefferson, the largest malting plant in the world.

Ethanol, Ethanol News, News

GPS App Finds 85 Percent Ethanol Stations

Cindy Zimmerman

Want to know where you can buy E85? There’s an app for that now.

garminThe Renewable Fuels Association (RFA) today launched a new application for Garmin GPS units that that maps out the location of E85 (85% ethanol/15% gasoline) for users with flex-fuel vehicles (FFVs).

“The most frustrating thing for many FFV owners is not knowing where they can fill up with higher level ethanol blends, like E85,” said RFA Director of Market Development Robert White. “With this new feature, drivers going to the grocery store or to Grandma’s for Thanksgiving will know the exact location of the nearest E85 pump.”

Using the Garmin navigation system, FFV owners can download station locations and program their device to guide them to upcoming E85 stations. The Garmin application is available for download on ChooseEthanol.com. There, consumers can download individual state data, a combination of states, or national data directly to their computer and then to their Garmin devices. Directions for installing this point of interest (POI) data are now available.

While the program is currently only available for Garmin GPS units, RFA is working to bring this data to other navigation systems and will update station location data quarterly.

E85, Ethanol, Ethanol News, RFA, technology

Next By-product for Biodiesel Plants: Cosmetics

John Davis

elevanceThe next great by-product that could help biodiesel plants stay profitable could be put right on the tip of your shiny nose.

Elevance Renewable Sciences, with backing from Cargill, Dow Corning and the $45 billion Texas Pacific Group investment fund, is working with Iowa-based Renewable Energy Group to put technology in REG’s Newton, Iowa biodiesel plant to use biodiesel and soybean, corn and animal oils processed there to produce polymers, pharmaceuticals and cosmetics. The Des Moines Register reports that Elevance has asked the Iowa Power Fund to help with the money for the $8.1 million demonstration project:

If successful, “this technology may be replicable in large-scale biodiesel facilities in Iowa,” according to the application by Elevance Renewable Sciences of Bolingbrook, Ill…

Negotiations have begun with the Iowa Power Fund for Elevance’s request of $3.8 million. The Iowa Department of Economic Development also will be asked for $800,000, according to a Elevance spokeswoman.

REGlogo2Spokeswoman Alicia Clancy of Renewable Energy Group of Ames said Friday that REG and Elevance “are in discussions” about working together at the Central Iowa Energy biodiesel plant in Newton that REG manages.

“This would be a way to make the biodiesel and biofuels plants more complete bioenergy systems,” Clancy said. She would not divulge more details.

Construction is slated for next summer with the facility ready to process the new by-products in October.

Now keep in mind that REG itself has 12 biodiesel plants in Iowa, Minnesota, Illinois, Texas, Louisiana, Kansas and Canada. If it works at the Newton plant, you can bet they’ll add the idea to their other plants, where feasible. And if it works for them, imagine the others that will want to get on that bandwagon.

Biodiesel

Growth Energy Urges Action in California and Congress

Cindy Zimmerman

Ethanol advocacy group Growth Energy sent letters to the California Air Resources Board and members of Congress today to address issues that could impact the expansion of ethanol.

Growth EnergyIn California, Growth Energy is calling on the Air Resources Board (ARB) to reopen comments on the low-carbon fuel standard (LCFS) in light of undisclosed documents recently uncovered related to the rulemaking process.

Through a public records request, Growth Energy uncovered numerous previously undisclosed documents and comments from ARB consultants that cast doubt on ARB conclusions and others that appeared to influence ARB’s assumptions. Following the discovery, Growth Energy issued a letter to ARB, calling on them to reopen the public comment period and allow comment on all documents received by ARB in connection with the LCFS as mandated by the Administrative Procedure Act (APA). These include documents commenting on detailed environmental analyses of the LCFS developed by other corn ethanol stakeholders, including the Renewable Fuels Association and the New Fuels Alliance.

Meanwhile, on the national level, Growth Energy is asking Congress to fix a tax glitch in the program intended to promote the installation of pumps that dispense higher level ethanol blends. Growth Energy CEO Tom Buis says the Alternative Fuel Vehicle Refueling Property Credit should allow fuel vendors to recapture up to $50,000, or 50 percent, of the total cost of installing alternative fuel dispensing systems but an IRS interpretation is only allowing retailers to take credit for a portion of the new pump, instead of the entire pump.

Legislation was introduced by Reps. Stephanie Herseth-Sandlin, D-S.D., and John Shimkus, R-Ill., to correct the IRS interpretation, but Growth Energy suggests making the technical correction in the 2009 tax extenders package.

Ethanol, Growth Energy