Indirect Land Use Concerns for Ethanol

Cindy Zimmerman

A conference on land use and carbon impacts of corn ethanol held this week in St. Louis offered a broad view of a significant topic as Washington braces to continue debates on climate change legislation and the future of ethanol.

Geoff CooperGeoff Cooper with the Renewable Fuels Association moderated the first panel at the conference sponsored by the National Corn Growers Association. That panel focused on the modeling used to determine land use change and Cooper says the panel participants pointed out how difficult this can be. “It’s a new area of study and certainly new to a regulatory framework,” Cooper said. “Using these models for these purposes involves lots of subjective decisions and judgement calls and when you put that in the context of a regulation, that’s problematic.”

Cooper says it is important to improve the science behind lifecycle analysis. “These models are only as good as the assumptions you are able to put into them,” Cooper said. “In terms of the indirect land use change analysis, we’re just trying to understand how these models work and replicate the results, and that has been a tough thing to do.’

Cooper says the value of the conference was to let corn growers know the impact that these emerging regulations could have on them in the future.

Listen to or download an interview with Geoff Cooper here:

Audio, conferences, corn, Ethanol, Ethanol News, RFA

Ethanol Producers Win IRS Victory

Cindy Zimmerman

Struggling ethanol producers won an important decision by the Internal Revenue Service this week that allows them to retain the current five year depreciation for assets.

RFAFollowing over a year of intense work by the Renewable Fuels Association with the IRS, the agency has issued a Notice of Proposed Revenue Ruling clarifying that it will not seek to impose a change in the cost recovery periods used by most ethanol producers. Historically, most ethanol producers have used cost recovery (or depreciation) periods of five years. About 18 months ago, IRS advised the industry that the cost recovery period should be seven years instead of five years, and that had to be retroactive, and would apply to all tax returns of ethanol producers that were still open for examination by the IRS. The RFA succeeded in persuading the IRS not to make their decision retroactive.

The RFA told the IRS that their the ruling should not apply retroactively since it would result significant costs to producers who, in good faith, relied on the IRS’ previous acceptance of the 5 year depreciation recovery period for such assets. In response to RFA’s position, the IRS has proposed that the depreciation classification would apply to assets placed in service on or after the publication of a final revenue ruling. To prevent such retroactive application, the IRS specifically provided that it “will not require taxpayers to adopt this depreciation classification for tangible assets used in converting biomass to a liquid fuel such as fuel grade ethanol that are placed in service prior to the publication of a final revenue ruling.”

The IRS has invited public comments on the proposed revenue ruling. Comments are due by November 23, 2009. A final revenue ruling will not be issued until the comments have been considered.

Ethanol, Ethanol News, RFA

Soy Biodiesel Powers Tractor Pull

John Davis

TractorpullThe power of soybean-based biodiesel will be on display this Friday and Saturday nights in Jefferson City, Mo., as the Midwest Xtreme Truck and Tractor Pull, a National Tractor Pullers Association Grand National event, comes to town.

The United Soybean Board (USB) and soybean checkoff sponsor the event at the Cole County Fairgrounds as a way to showcase the homegrown, environmentally friendly and renewable biofuel:

USBlogoUSB staff and Missouri Soybean Merchandising Council staff will be on hand educating pull attendees on the benefits of soy biodiesel and will be available for media interviews. Biodiesel has the best energy return of any liquid fuel, along with increased lubricity, high cetane and the highest BTU content of any renewable fuel.

As part of its sponsorship, the soybean checkoff supplies NTPA with biodiesel to fuel pulling sleds and some track-grooming equipment. In addition, all NTPA on-road diesel-powered vehicles run on biodiesel blends during the 82-event tractor-pulling season.

Biodiesel

Schrum: High Taxes Killing German Biodiesel Industry

John Davis

GermanflagIn what should be a cautionary tale to American lawmakers who might want to raise revenues from biodiesel sales, a leader of Germany’s biofuels industry says high taxes on biodiesel in that country are killing the green fuel there.

This article from Forexyard.com quotes Peter Schrum, president of biofuels industry association BBK, saying that Germany’s nearly 5 million tonnes annual biodiesel capacity is only at about 20 percent of that level:

“The industry is still in a disastrous state largely because of increased taxes,” Schrum said. “Sales are dead.”

Germany increased taxes on biodiesel this year under the government’s continuing programme to raise taxes on green fuels to the same level as fossil fuels.

“Unless there is a major change in policy, biodiesel production in Germany will stop,” he said. “The industry will simply close down.”

The rise in fossil oil prices this year had not generated substantial new biodiesel demand at petrol stations as taxes had made the green fuel uncompetitive, he said.

Producers argue that biodiesel needs to be at least five euro cents cheaper than fossil diesel because vehicles consume more of the green fuel. The tax rises mean the price is almost the same in some German regions.

“The B100 (petrol station) market hardly exists for biodiesel,” he said.

The German biofuels industry is now looking to the Sept. 27th German parliamentary elections as a chance to change lawmakers to those who might reconsider the high-taxing actions.

Biodiesel, International

$300 Mil in Stimulus Bucks Stimulates Alternative Fuels

John Davis

CCawarddistributionmapARRANearly $300 million in American Recovery and Reinvestment Act… aka the “Stimulus Bill”… funds are being handed out by the U.S. Department of Energy to replace or change more than 9,000 vehicles so they will burn alternative fuels and/or make them more fuel efficient, as well as establish nearly 550 alternative refueling stations across the U.S..

Energy Secretary Steven Chu made the announcement today about the selection of 25 cost-share projects under the Clean Cities program:

“The Clean Cities program is helping give state and local governments the tools they need to build a greener transportation system that will create new jobs and help to put America on the path to a clean energy future,” said Secretary Chu. “Advancing the number of alternative fuel and advanced technology vehicles on the road will increase our energy security, decrease our dependence on oil, and reduce pollution across the country.”

Under the Recovery Act, the Clean Cities program will fund a range of energy efficient and advanced vehicle technologies, such as hybrids, electric vehicles, plug-in electric hybrids, hydraulic hybrids and compressed natural gas vehicles, helping reduce petroleum consumption across the U.S. In addition, funding will support refueling infrastructure for various alternative fuel vehicles, including biofuels and natural gas. Other efforts under the Clean Cities program include public education and training initiatives to further the program’s goal of reducing the national demand for petroleum.

The projects announced by Secretary Chu will support a combined total of more than 9,000 light, medium and heavy-duty vehicles and establish 542 refueling locations across the country. The vehicles and infrastructure being funded include the use of natural and renewable gas, propane, ethanol, biodiesel, electricity, and hybrid technologies. And with the cost share contributions from the recipients, every federal dollar spent will be matched by nearly two dollars from the project partners.

The move is expected to save 38 million gallons of petroleum per year.

Biodiesel, Electric Vehicles, Ethanol, Ethanol News, Natural Gas

Emerson is Choice for Dynamic Fuels Biodiesel Plant

John Davis

DynamiFuelsA Louisiana biodiesel plant that needs intense heat to turn animal fats and waste materials into the green fuel has chosen a Texas company that specializes in the process control system that uses hydrogen to create the heat needed.

Biodiesel Magazine reports that the 75-million-gallon-a-year Dynamic Fuels renewable diesel plant… a 50-50 joint venture between Tyson Foods Inc. and Syntroleum Corp… currently under construction in Geismar, La. will use automation and process control technology designed by Emerson Process Management of Austin, Texas:

“This is a hydrotreating plant, which involves high temperatures, high pressures and catalytic reactors, in addition to handling hydrogen gas,” said Jeff Bigger, president of Syntroleum. “So process controls are very important.”

Emerson’s PlantWeb digital plant architecture, which will be integrated into the Dynamic Fuels facility, networks an automation system and predictive maintenance software with smart devices installed throughout the operation, including control valves, flow meters and temperature transmitters. But for Emerson this is not unfamiliar territory—the company has worked with Syntroleum since 2000 when they outfitted a pilot syngas plant. “We have a long relationship with them,” Bigger told Biodiesel Magazine. “They have a very robust system, they’re very cost competitive and have a design that can be exported to other locations. That’s one of the things we get with this system—it’s scalable.”

The plant is about half done and projected to start operations in 2010.

Biodiesel

Advanced Technologies to Improve Wind Turbines

John Davis

Getting inspiration from a fish, researchers are looking at making wind turbine blades out of advanced materials that will change shape to make the systems more efficient and longer lasting.

This article from U.S. News & World Report says the blades with changing aerodynamic profiles will best suit whatever the prevailing wind conditions bring:

Beyene“The idea was born from a simple observation of a fish in an aquarium,” said researcher Asfaw Beyene, a mechanical engineer at San Diego State University. “Many flying and swimming animals have superior efficiencies than manmade devices. The primary difference between natural motion and motion of manmade devices is lack of geometric adaptability to varying flow conditions.

“In flying and swimming creatures, the geometries morph to fit to a flow condition,” Beyene added. “In man-made devices, typically the geometry remains rigid in spite of widely varying flow conditions.”

Beyene is leading one team exploring morphing blades for wind turbines. Another team is working at the University of Bristol in England.

“The wind can be very harsh on blades — turbines turn off if the wind gets too much, or else the blades will break fighting the wind,” explained researcher Paul Weaver, an aerospace engineer at the University of Bristol.

“A morphing blade uses the wind to its advantage rather than fighting it, adapting its shape to get greater performance,” Weaver added. “This has the potential to significantly relieve unwanted stresses in the blades, increasing their efficiency and helping to prolong their life.”

Researchers believe that today’s glass and carbon-fiber-reinforced plastic blades can be controlled by an electric signal, and future wind blades made of urethane rubber will be able to flex, bend and twist shape to reach the optimal angles that get as much energy from the wind as possible.

Wind

Texas to Run More Vehicles on Alternatives

John Davis

PerryMore state vehicles in Texas will be running on something other than the non-renewable petroleum the state is known for.

This post on Examiner.com says the new law, effective September 1st, will require at least half of the 27,000-vehicle state fleet will run on alternative fuels 80 percent of the time:

“House Bill 432 addresses the fact that our state is a leader in the research and production of alternative fuels, but we lack the infrastructure to get drivers who would use it to fuel their vehicles”, Governor Perry said at a ceremonial bill signing in Dallas last week. “Since our state already spends money on a fleet, this bill requires it to include vehicles that use alternative fuel. That will drive the creation of a basic distribution infrastructure and take advantage of the fuels we produce in Texas, including natural gas coming from the Barnett Shale”.

Earlier this year, Dallas-based AT&T announced it was working to build up to 40 new compressed natural gas (CNG) fueling stations and retire its fleet of gasoline-powered vehicles and invest up to $565 million in alternative fuel vehicles.

Miscellaneous

Mississippi Firm Opens First of Three Biodiesel Plants

John Davis

MIPCOOfficials at a biodiesel plant in Mississippi have finished the commissioning process for the 8-million-gallon-a-year facility.

This article from Biodiesel Magazine says Mississippi Investment Petroleum Co. LLC (MIPCO) bought the plant from Tri-State Petroleum Products in Houston, Mississippi and retrofitted it to produce the green fuel from poultry fat and waste vegetable oil:

The Houston, Miss. [facility], is actually the second project launched by MIPCO. Ground work had begun at the first project planned at Aberdeen, Miss., Lunsford said, when the Aberdeen mayor requested the project be put on hold while the city applied for a grant to help with road access in the industrial area. “What was supposed to be a 60 day delay turned into 120-days,” [Jon Lunsford, CEO of MIPCO] said. Construction on the 10 MMgy facility is set to begin once final permits are in place, with completion anticipated by the end of the year.

MIPCO is in final negotiations on a third facility, a shuttered biodiesel plant at Nettleton, Miss. Lunsford said the deal should be completed within the month and the plant operational within 60 days after closing. MIPCO hopes to achieve a 24 MMgy capacity at Nettleton, he added.

Biodiesel

E85 Now Offered in Neosho, MO

kum-and-goKum & Go L.C. has recently opened an E85 station in Neosho, Missouri. The company, headquartered in West Des Moines, Iowa, opened the 3,400-square-foot convenience store after only 84 days of construction.

“Kum & Go is please to open our second store in Neosho, and plans to provide the best customer service for everyone who visits us,” said Kyle Krause, president and CEO of Kum & Go, which operates 400 convenience stores in 12 states (Iowa, Arkansas, Colorado, Minnesota, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Wyoming and Wisconsin). “We are eager to offer interstate travelers, businesses and patrons within the Neosho community an additional Kum & Go location for all their convenience store needs.”

Kum & Go is now 50 years old. Since 1997, Kum & Go has been offering E85 fuel. The company has 23 E85 facilities in seven other states – Minnesota, Missouri, North Dakota, South Dakota, Colorado, Nebraska and Oklahoma.

The new site in Neosho is located at Highway 60 & Kodiak Road in Neosho.

Miscellaneous