Administration to Announce RFS Rulemaking

Cindy Zimmerman

The long-awatied notice of proposed rulemaking on the Renewable Fuels Standard will be issued Tuesday morning at 10:00 Eastern time by the Obama administration.

The announcement will be made jointly in a press conference by Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu and Environmental Protection Agency Administrator Lisa Jackson who will discuss President Obama’s commitment to advance biofuels research and commercialization under the rule.

epaEPA is required under the 2007 Energy Bill to consider ‘significant indirect emissions’ when determining greenhouse gas emissions for fuels under the so-called RFS-2 program. The new RFS requires new corn ethanol plants and new cellulosic ethanol plants to produce a fuel that emits fewer life-cycle greenhouse gasses relative to regular gasoline and that indirect land use changes should be figured into that.

However, methods for calculating such ‘indirect land use changes’ – such as from forest or grassland to crops – are not yet adequately developed, and therefore many are arguing they should not be used in calculating the emissions. “Otherwise, we’ll exclude some good biofuels and stifle the investment that is so essential to our national renewable fuels strategy,” says Senator Tom Harkin (D-IA), who was one of a group of senators who asked the EPA not to propose regulations assuming that greater U.S. biofuels use would increase carbon dioxide emissions.

The Renewable Fuels Association has already scheduled a press conference for one hour after the administration’s formal announcement to comment on the proposed rulemaking.

Energy, Environment, Ethanol, Government, RFA

E85 Revenge Verde to Be 100 MPG

revenge_verdePeter Collorafi and Douglas Pelmear have come up with a plan that they say will revolutionize the automotive Industry. Their V-8 engine Revenge Verde will have an expected 400 horsepower, 500 foot lbs of torque and will run on E85. it also will receive 100-miles per gallon of fuel.

The vehicle, produced in Indiana, is expected to be on the streets before the end of 2009. The specifics are “top secret” but the builders know that if they produce an engine that runs on just ethanol, they’ve created an engine that can run at a higher compression ratio, creating more power using less fuel.

Collorafi says, “We’re hoping to put production plants back to work again and producing vehicles. The true winner here is the Americans going back to work putting fuel-efficient engines in production vehicles. That’s our goal.”

E85, News

States Race to Become Leaders in Energy Economy

Joanna Schroeder

It appears that the race is on as many states across the country vie for the winning position of “leader in renewable energy”.  att51d25The latest state to post an entry is Missouri. The state is turning to alternative energy to replace jobs lost due to economic turmoil that includes an auto industry near collapse. Several months ago, President Obama was in Colorado to sign the economic stimulus package and praise the state for its support of alternative energy.

More specifically, Missouri is pitching itself to become a leader in the wind industry due to its proximity to the country’s wind corridor (which is what also make states like Nebraska and South Dakota good candidates for wind energy). Here are other reasons why they cite contention for top spot:

  • • With a workforce of over 3 million people, Missouri’s labor force exceeds the entire populations of 22 states, including neighboring Kansas, Arkansas, Iowa, and Nebraska.
  • • Missouri ranks eighth in the nation for low business costs, including labor.
  • • Missouri higher education is actively engaged in alternative energy and wind power.
  • • According to CNBC’s “American’s Top State for Business, July 2008,” Missouri has the 10th best transportation network in the nation.
  • • Missouri has the 14th highest average U.S. wind speed (10.1 mph), higher than Texas, Ohio, Colorado, and California.

    Interested in learning more about Missouri’s plan to become a leader in wind energy? The Missouri Partnership is hosting a Wind Energy Supply Chain Workshop series. The next session is scheduled for May 12, 2009.

    Miscellaneous, Wind

    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