U.S. Slow to Adopt E15 While Brazil Considers E30

Joanna Schroeder

iowarfa1While the United States government drags its feet on making a decision to offer American motorists the choice to use E15 at the pump, the Brazilian government is contemplating an ethanol blend increase from E25 to E30. Currently the EPA comment period to get feedback on the increase to E12 or E15 is open, and the U.S. ethanol industry is actively lobbying for an extension of the comment period.

Simultaneously, the ethanol industry in Brazil, led by Unica (the Brazilian sugarcane industry), is aggressively pushing their federal government to increase the ethanol blend wall according to a report in the April 7th issue of Biofuels Brazil. Brazilian ethanol producers are facing the same scenarios as producers in the States as they contend with low prices and surplus supply.

The Iowa Renewable Fuels Association (IRFA) sent out a statement today calling for more aggressive action from the U.S. government. “Despite all of the rhetoric, the United States isn’t leading on biofuels issues,” said Monte Shaw, executive director of IRFA.  “As we tip-toe toward E15 and worry about the impact on weed-whackers, Brazil has moved quickly to put in place policies that have freed them from foreign oil.  Maybe the very real price of foreign oil in terms of blood, treasure and environmental degradation should be taken at least as seriously as any hypothetical challenges higher blends pose for small, off-road engines.”

According to Shaw, the foot dragging and arguments against approving E15 blends give many Iowans a sense of deja vu. Thirty years ago, critics of ethanol were calling for more testing of both conventional cars and small engines when considering E10; they are calling for these same tests as today. Ethanol propronents also remain frustrated as they cite the success that Brazil has had not only in achieving oil independence but exporting biofuels as well, and question why the U.S. can’t achieve the same goals.

Ethanol, Government, Legislation

EPA Rulemaking on RFS May Come Soon

Cindy Zimmerman

epaThe notice of proposed rulemaking on the Renewable Fuels Standard may be imminent.

News out of Washington last week was that the Office of Management and Budget has completed the review of the Environmental Protection Agency’s rule, specifically as it relates to indirect land use and greenhouse gas emissions of biofuels compared to gasoline.

RFARenewable Fuels Association president Bob Dinneen says they expect to see the rule from EPA proposed soon. “The agency has been working hard to get the rulemaking done and is under increasing pressure to do so,” said Dinneen. “Some believe that the ethanol industry is reluctant to see this rule hit the streets, that we don’t want to see an open and honest debate about the greenhouse gas issues that are teed up in this rulemaking. Just the opposite is true. We want this rule out there, we want to see all the numbers available for the public.”

Dinneen says they believe a complete evaluation of the science “will demonstrate that ethanol’s impact on indirect land use change is minimal and the significant direct benefits of adding ethanol to gasoline is extraordinary and is a policy that needs to be expanded.”

There are concerns that the recent decision by the California Air Resources Board regarding indirect land use impacts of ethanol will have a bearing on EPA’s rulemaking, but Dinneen believes the agency is looking at a different model for assessing greenhouse gas impacts that will be more favorable for ethanol and other biofuels.

Energy, Environment, Ethanol, Government, RFA

Ethanol Production Increase

Cindy Zimmerman

Ethanol production was up in February compared to the previous month and a year ago.

EIAAccording to the Energy Information Administration (EIA), American ethanol facilities produced 647,000 barrels per day in February. That’s up 25 percent from February 2008 and 17,000 barrels per day more compared to the previous month.

Ethanol demand, as calculated by the Renewable Fuels Association, also increased from last year. February demand was 595,000 barrels per day, up 33,000 barrels from February 2008.

Energy, Ethanol, Government, RFA

Valero Honors Portion of Corn Contracts for Ethanol

Cindy Zimmerman

Corn farmers who had contracts to provide corn for ethanol plants owned by bankrupt VeraSun are being offered a deal by Valero Energy, which purchased some of the company’s assets.

ValeroValero officials say they are offering farmers with forward contracts a bonus of 40 percent of the difference between the cash price for corn and the futures price on the contract. Valero spokesman Bill Day says most suppliers have accepted the deal. We said when we bought those plants we were looking forward to having a good working relationship with local suppliers. This is what we meant by that. It’s good for us, it locks in supply. It’s good for them as well,” said Day. Valero agreed to purchase seven ethanol facilities and have closed the deal on six of them. Four of the plants are in currently operating.

Last week, Valero reported a first-quarter profit increase 18 percent on higher margins for processing crude into gasoline and other petroleum products. CEO Bill Klesse says they expect business conditions to improve in biofuel under the government’s fuel blending requirements. “Acquiring these assets at a time of low ethanol margins enabled us to pay only 30% of replacement cost for some of the industry’s best ethanol plants,” Klesse said.

corn, Ethanol

Deal Inked to Build Destiny’s Alt Energy Park

John Davis

destinyFor some time, we’ve been telling you about Destiny, Florida, a 41,000-acre community founded in 2005 in South Central Florida, designed to one day be America’s first eco-sustainable city with 16,000 green tech jobs, including building solar panels (see our Feb. 27, 2009 Domestic Fuel podcast and April 22 post). The project took another step closer to that goal when Destiny officials signed a deal with Dominion Development Partners to create the Alternative Energy Industrial Park at Destiny, which will attract alternative energy technology companies.

The deal was announced in this press release from Anthony V. Pugliese, III, Managing Partner and CEO of Destiny:

The initial 500-acre phase of the Alternative Energy Industrial Park at Destiny is planned to include a Research and Development Campus housing a Technology Incubator, Distribution Center, and an Academic Village and Training Center. The park is projected to ultimately generate thousands of higher paying “green collar” jobs, Pugliese stated.

Future phases will include energy generation assets to power the city, and may include ethanol and biodiesel processing as well as pyrolysis, gasification and other “waste-to-energy” facilities. The “power island” will deliver surplus green energy to the transmission grid utilizing various “smart-grid” technologies.Read More

Biodiesel, Ethanol, News, Solar

Biodiesel Board Congratulates MN on Requirement

John Davis

nbb-logoMinnesota has upped its biodiesel requirement today from 2 percent to 5 percent, making the state the first in the nation to move to that high of blend of the green fuel.

The state is being recognized by the National Biodiesel Board for its efforts to keep valuable jobs in the U.S., decrease dependence on foreign oil and lessen environmental impacts:

“Increasing biodiesel in our diesel fuel allows us to take advantage of a renewable fuel made in Minnesota, which in addition to being environmentally responsible also adds to our state’s bottom line,” said Ed Hegland, a Minnesota soybean farmer and Chairman of the National Biodiesel Board. “I’m proud to live in a state that is leading energy innovations and taking part in valuable solutions like biodiesel.”

“This standard empowers the citizens of the state to support Minnesota’s economy and use less foreign oil,” said Joe Jobe, National Biodiesel Board CEO.

The NBB says the Minnesota was able to overcome some early concerns about its B2 requirement by making sure there was proper quality control.

Last winter, biodiesel was wrongly accused of causing some buses in Bloomington to not run. The NBB points out that biodiesel can perform well at 20 percent blends, even in the coldest of climates, so the new 5 percent requirement should not be an issue in the chilly Minnesota winters.

Minnesota joins Washington state, Oregon, Pennsylvania, Louisiana, New Mexico and Massachusetts, which have also passed biodiesel requirements.

Biodiesel, NBB

Senate Bill Would Curb Unproven Indirect Land Use Measures

Cindy Zimmerman

U.S. Senator John Thune has introduced a bill designed to strengthen the Renewable Fuels Standard and prevent the Environmental Protection Agency from using inaccurate indirect land use models to discredit the positive environmental impacts of ethanol.

Thune“Following California’s recent decision to use flawed models to estimate ethanol’s environmental impact, I am concerned that the EPA could soon apply similar standards that will handicap renewable fuel relative to regular gasoline,” said Thune. “Congress has asked EPA to apply greenhouse gas emission standards that reflect ethanol’s proven environmental benefits. However, with the EPA’s current decision that is pending at the White House, I am concerned that EPA’s action could have a detrimental impact on our renewable fuel industry and efforts to reduce our dependence on foreign oil.”

Thune’s bill directs the EPA to focus on direct lifecycle greenhouse gas emissions, which would level the playing field between ethanol and regular gasoline and bring more regulatory certainty to the ethanol industry. Additionally, the bill would require EPA to publicize the model for measuring lifecycle greenhouse gas emissions before taking any regulatory action. The bill would also allow individual ethanol producers with a unique production method to apply to the EPA for a lower carbon score which would provide an incentive for ethanol companies to develop innovative ways to produce ethanol.

Ethanol, Government, Indirect Land Use

NRDC Launches Good Vs. Bad Biofuels Campaign

Joanna Schroeder

image_2A new campaign funded by the Natural Resources Defense Council (NRDC) has created controversy in the biofuels industry. The campaign was developed, according to a blog post by Nathanael Greene, “to sharpen the distinction between biofuels done right and biofuels done wrong.” The campaign cites that ethanol plants using coal power is “wrong” as well as biofuels that “pillage” natural resources are done “wrong”. How to do them right? Use crops like switchgrass that use less water and fertilizer.

Sean O’Hanlon, the executive director of the American Biofuels Council (ABC), responded to the campaign by noting that NRDC made an error in that they just made themselves feedstock specific.

However, in an article published by OPIS, Greene clarified the intention of the campaign. “Congress and the country are working now to create a clean energy future and grow green jobs. If biofuels are going to be part of that future, we need to get them right. All biofuels — first generation, advanced, cellulosic, algae, you name it — they all need to be done right and measured against strict performance standards.”

“Today, environmental groups are the ones who are dictating what fuels, methodology and technology the biofuels industry should be developing.” said O’Hanlon. “What the biofuels industry should have been doing from day one is producing its fuel using wind, solar, hydo-electric, and geothermal power.”

O’Hanlon concluded by saying, “In order to produce biofuels sustainably, there are additional issues we are going to face including water use. The industry needs to start preparing for this now.” There are many experts who would agree that water use is going to come under fire in the next few months. Let’s hope the industry gets out ahead of the issue and doesn’t face another crisis similar to food versus fuel.

Cellulosic, Energy, Environment, Ethanol

Book Review – The Party’s Over

Joanna Schroeder

partys-over-cover-vsmI went back in time this week (if you can call five years ago back in time) and read Richard Heinberg’s, “The Party’s Over“.  I was curious to see how the thinking about our addiction to fossil fuels and the need to adopt renewable energy has changed. Well, it really hasn’t.

Like many other authors who wrote books about oil during this time frame, Heinberg talked a lot about America’s (and the world’s) love affair with oil and discussed, at length, when America and the world would succumb to peak oil. Since most people have come to terms with the theory that we’ve already seen peak oil, most authors don’t focus on this issue any longer. From there he focused on the current and future technologies of renewable energy sources.

It’s interesting to note that Heinberg is a follower of population reduction, a concept that is mentioned in several occasions in the book I reviewed last week, “Green Hell”. Heinberg argues that the ideal population level is around two billion people. This would be a reduction of nearly four billion people. Based on the fact that the world has limited resources (he disagrees with the fact that we can keep saving ourselves with technology) he lists five things our leaders should logically and morally be compelled to do.

  1. Adopt the ethic of sustainability in all aspects of thinking.
  2. Institute systematic efforts to improve efficiency in the use of efforts.
  3. Encourage the rapid development and deployment of all varieties of renewable energy.
  4. Systematically discourage (through taxes) the consumption of nonrenewable resources.
  5. Find humane ways to encourage a reduction in human fertility in all countries, so as to reduce the population over time.

The first four in the list are a common theme among authors but where he differs is calling for leaders to reduce the popluation in a humane way. I’m not convinced forced population reduction is humane, period.

Heinberg may have been a little ahead of the energy debate so he published follow-up to this book – “Power Down“. Heinberg powerdown-cover-vsmhas been writing and teaching in sustainability and energy for many years to agree or disagree with him, he is one to watch.

You can buy this book or any book I review here. Also, if there is a book you’d like me to review, contact me at jms@4RCommunications.com.

book reviews

New Iowa Ethanol Plant Begins Production

Cindy Zimmerman

In a time when many plants are shutting down, a new ethanol plant near New Hampton, Iowa has started production.

homeland energyThe Homeland Energy Solutions will produce 100 million gallons of ethanol annually, according to the Iowa Renewable Fuels Association (IRFA), which congratulated the company for its accomplisment this week.

“It’s been a difficult time for the ethanol industry, but Homeland Energy Solutions is proof that we are working through it and finding ways to succeed,” said IRFA Executive Director Monte Shaw. “This locally-owned ethanol refinery will buy Iowa corn and provide good paying jobs in rural Iowa. Homeland Energy Solutions is a welcome addition to Iowa’s growing industry.”

Homeland Energy Solutions Board Chair Steve Eastman said they are excited to start production. “And we are grateful that we missed the commodity boom and bust of 2008 that whiplashed so much of the ethanol industry,” said Eastman. “While margins remain tight, we feel well positioned going forward.”

Fagen, Inc., the Granite Falls, Minnesota design-build contractor, oversaw the construction and incorporated a process design provided by ICM, Inc. of Colwich, Kansas.

Ethanol, Facilities