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USDA Sees No Change in Corn Use for Ethanol

Cindy Zimmerman

USDAThe April World Supply and Demand report out today from USDA lowers ending stocks for corn, but keeps corn use for ethanol the same.

Corn ending stocks were cut by 40 million bushels “as higher expected feed and residual use more than offsets a reduction in food, seed and industrial use.” Food, seed, and industrial use was lowered 10 million bushels but ethanol remained unchanged at 3.7 million bushels.

Money FarmHowever, market analyst Mike Krueger from The Money Farm says that may change next time around. “Ethanol production has been slightly stronger than people expected,” Krueger said during a conference call for the Minneapolis Grain Exchange today. “I think it will depend on how quickly these VeraSun plants get back on line and running. We still have four months or so left in the marketing year for that to happen.”

The lower ending stocks for corn means higher projected prices for the year. USDA is now forecasting the 2008/09 season-average farm price for corn will be $4.00 to $4.40 per bushel, up 10 cents on both ends of the range. This compares with the 2007/08 record of $4.20 per bushel.

corn, Ethanol, USDA

CBO Report Not All Bad for Ethanol

Cindy Zimmerman

A new Congressional Budget Office report shows other factors actually had a bigger impact on food prices last year than ethanol did and that ethanol is reducing greenhouse gas emissions.

CBOMost media reports have focused on the findings in the report, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions,” that from April 2007 to April 2008, the rise in the price of corn resulting from expanded production of ethanol contributed between 0.5 and 0.8 percentage points of the 5.1 percent increase in food prices measured by the consumer price index (CPI).

However, the next sentence in the report summary states that over the same period, “certain other factors—for example, higher energy costs—had a greater effect on food prices than did the use of ethanol as a motor fuel.”

In addition, the report notes that ethanol’s effect on future food price inflation is “uncertain because the forces determining that impact move in opposite directions.”


Federal mandates now in place require additional use of ethanol in the future, which would continue to put upward pressure on prices. In contrast, increases in the supply of corn from cultivating more cropland, increasing crop yields, or improving the technology for making ethanol from corn or other feedstocks (raw materials) would tend to lower food prices.

Regarding the emissions side of the equation, the report states that “in the short run, the production, distribution, and consumption of ethanol will create about 20 percent fewer greenhouse gas emissions than the equivalent processes for gasoline. For 2008, such a finding translates into a reduction of about 14 million metric tons of carbon dioxide and equivalent gases (a standard measure of greenhouse-gas emissions).”

Ethanol, Government

Canadian Bioenergy, ADM Building Biodiesel Plant

John Davis

canadianbioenergyadmA leading biodiesel company north of the border has teamed up with an American agri-business giant to go in to the green fuel business together.

A press release from the Canadian Bioenergy Corporation says it will work with ADM to build and run a 70 million-gallon-a-year biodiesel plant. The joint venture will make biodiesel from canola crushed at ADM’s crushing facility at Lloydminster, Alberta.

Both companies are doing a feasibility study to figure out the best way to start and run the plant.

Biodiesel

Biodiesel Cold Soak Tax Credit Deadline Pushed Back

John Davis

irslogoBiodiesel producers not quite able to pass the newest quality standard… ASTM D 6751, which now includes a Cold Soak Filtration Test (CFST)… will have some extra time when they can still claim the Internal Revenue Service’s dollar-per-gallon tax credit. Those not meeting the new standard were supposed to lose the credit as of April 1st, but that’s been rolled back to October 1st.

Now, the CFST was developed to help cut down on fuel that has a tendency to turn to solid and clog fuel filters. This story from Biodiesel Magazine points out the extension puts the industry in an interesting position:

For producers having trouble passing the test, it is good news for them that they can continue to collect the credit while modifying their process. However, buyers are interested in purchasing B100 that meets the latest version of D 6751, which means purchasing biodiesel that passes the CSFT.

BQ-9000 certified producers and marketers, however, must meet the latest version of D 6751 to remain eligible for their BQ-9000 status.

Also, the invisible allowance of B5 in the diesel fuel specification, ASTM D 975, is predicated upon B100 meeting the latest version of D 6751.

The version of the cold soak method in existence today, which many people in the industry say is flawed, will be replaced later this year by a new, more feedstock-equal test method.

As you might remember from my post earlier this week, the newest ASTM quality standard… with the new Cold Soak Filtration Test… just passed out of the group’s committee of standards review process and received an official number – ASTM D 7501.

Biodiesel

Ethanol Emergency Response Training in MO and IL

transcaerEthanol emergency response training will be offered in eight Missouri and Illinois cities through May 14. This training group is offered by Transporattion Community Awareness and Emergency Response, a partnership of chemical and transportation industries that help communities with hazardous materials transportation and emergency preparedness.

Since ethanol is a prevalent fuel in the Midwest, first responders, including EPA on-scene coordinators, need to be prepared to respond to ethanol releases and fires. Fires involving ethanol or ethanol gasoline mixtures pose different hazards than traditional petroleum-based fires. Ethanol is water soluble and can burn with a flame so clear that it can be difficult to see.

The training will be offered in the cities of Rolla, Springfield, Carrollton, St. Joseph, Jefferson City, Laddonia, and Carthage in Missouri, and Sauget, Ill.

Ten EPA Region 7 on-scene coordinators will assist with the training sessions and the Mobile Command Post will be deployed to most of the training sites. The Missouri Department of Natural Resources and local fire and police departments are also participating. Several railroad companies are providing classroom instruction and hands-on training with railcars, including ethanol tank cars.

Registration details and logistical information about the eight training sessions can be obtained at www.transcaer.com/events.aspx.

Ethanol, News

Book Review – Freedom From Oil

Joanna Schroeder

Just when I thought there was no creative way to present a plan to address America’s energy issues, I read “Freedom From Oil,” books1by David Sandalow. Two words immediately come to mind to sum up the book. Clever. Brilliant. It is no surprise that Sandalow has recently been nominated by President Obama to serve as DOE assistant secretary for Policy and International Affairs. It appears that the president has adopted a few policy considerations from this book.

“Freedom From Oil” begins with a memo from the “President of the United States” to his heads of various departments letting them know that in one month he will be giving a speech on oil dependence. During this speech, the memo states, “I hope to present the nation with a plan for ending our dependence on oil.” The memo continues with a call to action and deliverable materials and the various aspects that will affect this plan. The president ends by asking his team to keep this quote in mind when responding, “Make no small plans, for they have no power to stir the soul.”

From there, the departments then submit memos back to the president who then summarizes the “pros and cons” of each issue. In addition, there are articles of interest included with the memos that highlight people who are working day-to-day to help solve America’s energy issues. For those of you who are fans of the IndyCar Series, one article focuses on its use of 100 percent fuel-grade ethanol.

In the end, a strategic plan is offered and the finale: the president’s national address regarding the country’s dependence on oil. Sandalow presents ideas that many others have written about (because he says all ideas must be considered) and he offers new policies as well. I’ve not read a more balanced presentation of the pros and cons of potential energy policies and solutions. “Freedom From Oil” is a must read.

To buy this book or any book I review, click here.

book reviews

Wine & Shine 2009

Joanna Schroeder

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There are many creative and fun events on the horizon as we approach Earth Day. Those of you in California may want to check out Wine and Shine 2009, a  solar tour and wine tasting that features local wines and three innovative solar energy systems that are helping three featured wineries save hundreds of dollars in energy costs.

The event is Friday, April 24 from 10:00 am – 2:00 pm and features J. Lohr Vineyards & Wines, Eos Estate Winery and Clautiere Vineyard in Paso Robles, CA. Recently, agriculture has been unfairly vilified for its lack of environmental stewardship and the participating wineries will be showcasing both their agricultural environmental initiatives along with their green business practices.

The event is sponsored in part by Conergy, an energy company that designs, manufactures, installs, and finances solar photovoltaic solutions for businesses and homeowners. There has been a significant increase in development and demand for solar energy through the federal economic stimulus package and the California Solar Initiative. These programs combined have the potential to off-set the costs of installing solar energy technologies between 80-90 percent.

For more information about Wine and Shine 2009 or to reserve your spot, email RSVP@wineandshinetour.org.

Agribusiness, Miscellaneous, Solar

Bioenergy Could Provide Benefits for Rural Poor

Cindy Zimmerman

A new international study indicates that small-scale bioenergy plants can play a significant role in rural development for poorer nations.

FAOThe new report, “Small Scale Bioenergy Initiatives: Brief Description and Preliminary Lessons on Livelihood Impacts from Case Studies in Latin America, Asia and Africa,” was published jointly by the United Nation’s Food and Agriculture Organization (FAO) and the UK’s Department for International Development. The study covers 15 different “start-up” bioenergy projects from 12 countries in Latin America, Africa and Asia involving a diverse array of technologies.

“The furious debate around bioenergy has largely concerned liquid fuels used for transport,” said Oliver Dubois, a bioenergy expert in FAO’s Natural Resources Department. “Yet more than 80 percent of bioenergy usage in the world involves other sources, mainly wood, which are used for basic household cooking and heating in poor areas of the world.”

According to FAO, concern over the impact these transportation biofuels will have on the environment, water resources and food security has obscured many of the positive benefits for poor rural people. The study shows a number of significant benefits of using new technologies for biomass-based rural energy, such as the creation of useful by-products such as affordable fertilizer from biogas production, the possibility of simultaneously producing food and fuel through intercropping, and the creation of new financial capital with growth cycles by making use of marginal land.

Energy, International

Illinois Biodiesel Plant Expands Feedstock Choices

John Davis

blackhawkbiofuelsAn Illinois biodiesel plant has made some upgrades and can now use a wider variety of feedstocks.

Hoosier Ag Today reports that the improvements made by Renewable Energy Group to the 45-million-gallon-a-year Blackhawk Biofuels plant in Danville, Ill., will be able to turn more fats and oils, such as used cooking grease, into biodiesel:

“These upgrades enhance local production of clean-burning renewable fuel, support 28 green-collar employees and offer petroleum distributors additional choices for high quality biodiesel,” explained Ron Mapes, chairman of the Blackhawk Biofuels, LLC.

“Upgrades began in September to enhance the plant’s vegetable oil-only process technology with new proprietary pretreatment and production technology,” Mapes added. “Plant startup and vegetable oil-only biodiesel production began in November. These recent upgrades offer cutting-edge technology for producing high quality biodiesel from a variety of oils and high free fatty acid feedstock.”

The $12 million project included the multiple feedstock pretreatment and production upgrades, enhanced laboratory and testing facilities, and improvements for storage and logistics capabilities. The construction project employed 68 full-time workers.

Officials are proud to say that the upgrade and startup were on schedule, cranking out the green fuel made from a high free fatty acid feedstock within just a few days of installation… exceeding all ASTM quality specifications. The addition of the new feedstocks will help keep the facility in the black.

Biodiesel

Biodiesel’s New Cold Soak Method Gets ASTM Number

John Davis

astmlogoThe new Cold Soak Filtration Test method for B100 biodiesel finally has an official number.

This story from Biodiesel Magazine says the ASTM’s Committee of Standards has given the method the an official number – ASTM D 7501, due to be published later this month:

The CSFT method currently in effect was developed as a result of the Minnesota experience in 2005-2006 of statewide filter cloggings shortly after a state B2 mandate was triggered. The CSFT was developed as an attempt to keep contaminated biodiesel – or biodiesel laden with sterol glucosides, mono and di glycerides, metals, soaps, water – out of the marketplace. Those contaminants can react in such a way to cause a “snow-globe” effect wherein precipitates fall out of solution from the fuel at temperatures above the cloud point. However, the precise mechanisms behind how the contaminants react with one another to cause precipitate formation above the cloud point are still largely unknown.

The new method takes into account the changes in states of matter B100 goes through during the chill. If the test sample becomes solid during cool down, it will be given a four-hour warm up time instead of two hours. In addition, samples will be warmed to 25 degrees C, as opposed to just warming on the bench. The article points out that the CFST was designed for soy biodiesel.

Biodiesel