USDA Clarifies Ethanol Plant Loan Comments

Cindy Zimmerman

Comments made to the press last week by Secretary of Agriculture Ed Schafer regarding the possibility of USDA loans to ethanol plants that have been hurt by commodity market speculation this year have caused quite a stir. USDA has been working to get the word out this week to clarify that this is not any kind of a “bail out” for ethanol plants, nor is it a new program that was created to help plants that made bad investments.

World Food Prize Ed SchaferSchafer said the government could provide up to $25 million per company to refinance through a “guaranteed loan-type program for operating capital.” These types of loans are available through the Rural Development’s existing Business and Industry (B&I) Loan Guarantee Program. Under that program, the loan must be secured by a private lending agency – USDA does not make a direct loan.

Regardless, livestock industry groups are up in arms about the possibility of helping ethanol plants in trouble. Eight major livestock organization leaders wrote to the secretary this week protesting what they view as preferential treatment for the ethanol plants. “Many of our producer and processor members also took long positions on corn and soybeans and are paying above-market rates right now,” they wrote. “We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry.”

However, Secretary Schafer said this week that ethanol plants should be treated no differently than other agricultural companies that can take advantage of the existing loan guarantee program.

Ethanol, Government, News

Another Record Year for Wind Power

John Davis

Another nearly 1,400 megawatts (MW) of wind energy has been installed during the last three months, putting the U.S. wind energy industry on a record-setting pace again this year.

The American Wind Energy Association says the latest figure brings this year’s total to 4,204 MW:

With even more reported under construction, the industry is on track to surpass the banner year of 2007, when 5,249 MW were installed, with a total of about 7,500 MW this year (7,500 MW would generate enough electricity to power the equivalent of about 2.2 million homes).

In welcome news for the economy, the industry is also aggressively expanding its manufacturing base in the U.S., creating jobs and fostering investment and growth even in a difficult financial climate. AWEA’s report tallies the opening of eight new wind turbine component manufacturing facilities this year; the expansion of nine facilities; and the announcement of an additional 19 facilities. As a result of recent manufacturing investment, AWEA estimates, the share of domestically made components in wind turbines has risen from about 30% in 2005 to 50% today. The new facilities will create an estimated 9,000 jobs.

“The convenient truth here is that wind power provides a stimulus for our economy, as well as a climate change and energy security solution,” said AWEA Executive Director Randall Swisher. “The market, in spite of all its turmoil, clearly points to wind power as one of the most attractive energy options available today. But if we are to keep this momentum going, the new President and Congress will need to put in place what the majority of the American people support but the country still lacks: a long-term renewable energy policy.”

Texas led the way in the wind energy expansion, adding 693 MW. That gives the state more than 6 gigawatts (GW) of capacity… ranking tops in the nation and fourth worldwide. West Virginia is the state with the fastest wind power capacity growth, tripling its existing capacity with the addition of a 164-MW project and another 100-MW project is scheduled to come online by the end of this year.

Wind

Cal Clean Air Plan Good for Biodiesel, Solar

John Davis

A plan to reduce California’s greenhouse gas emissions is expected to be a boon for biodiesel and solar in the state.

This story from Biodiesel Magazine says the California Air Resources Board has recently unveiled its Proposed Scoping Plan to reduce those emissions to 1990 levels by 2020 and is set to approve the final version in December:

The principle of the plan is to include a variety of strategies to reduce emissions, including a solar initiative and a range of regulations meant to reduce emissions from trucks and ships docked in state ports. The plan also includes a cap-and-trade GHG emissions reduction program which will be linked to the Western Climate Initiative to create a regional market system for carbon emissions.

The plan, which may be implemented as early as 2009, could provide a significant boost for biodiesel demand, particularly for biodiesel produced in-state through the use of sustainable feedstocks. Joe Gershen, vice president of marketing for California’s Tellurian Biodiesel Inc., said state officials are “pretty bullish” on the use of renewable diesel to reduce carbon dioxide emissions. The only “renewable” diesel that is widely available now is biodiesel, so it can be assumed that greater percentage mandates for renewable diesel would equal more demand for biodiesel.

You can read the Proposed Scoping Plan at www.arb.ca.gov.

Biodiesel, Solar

Don’t Let Up Gas on Alternatives to Gas

John Davis

While oil prices have been slashed by more than half since summertime highs of nearly $150 a barrel and gas prices have plummeted as well (hey, I’m not complaining about $2.40/gallon gas I just bought tonight), it’s no reason to let up on the drive to expand alternatives, such as ethanol and biodiesel.

This story in the Chattanooga (TN) Times Free Press says a bipartisan group of 10 U.S. senators put together a compromise energy bill back in August, when $4 a gallon gas ruled and $200 a barrel oil loomed on the horizon. And even though the prices have fallen dramatically, and the group has expanded, they still are pushing for expansion of alternatives and dependence on foreign oil:

Still, members of the self-dubbed “Gang of 10,” which includes Sens. Bob Corker, R-Tenn.; Saxby Chambliss, R-Ga.; and Johnny Isakson, R-Ga.; say their proposal and focus on energy issues is no less important.

“I think energy will be the focus next year,” Sen. Corker said. “At the end of the day, we cannot lose sight of the fact that energy is important to us as an economic and a national security issue.”

The $84 billion Gang of 10 plan, now endorsed by 20 senators — 10 Democrats and 10 Republicans — includes increased offshore oil drilling and expanded tax credits for alternative fuels and technology…

“Electricity prices are going up, and gas prices may go back up,” said Sen. Lamar Alexander, R-Tenn., who has proposed a Manhattan Project-like energy plan. “Many people are as concerned about energy independence from unfriendly countries as they are about the price. Then we add to that the need for clean air.”

Sen. Alexander’s proposal includes developing plug-in hybrid cars whose owners could charge their cars from an electric outlet, saving significantly on fuel costs.

The plan also calls for improving solar energy capabilities, advancing nuclear energy, boosting biofuels, encouraging green buildings and funding nuclear fission research and carbon-capture technology.

The current credit crisis has also helped put the energy debate on the back burner, but members of the Gang of 10 promise they’ll bring it up again when the new Congress convenes in January.

Biodiesel, Ethanol, Government, News

Pilot Switchgrass Ethanol Plant Breaks Ground

Cindy Zimmerman

Genecor Ground Breaking TennesseeA new pilot plant that broke ground in Tennessee last week will be testing the use of switchgrass as a feedstock for cellulosic ethanol.

Genera Energy is a partnership between the University of Tennessee and DuPont Danisco Cellulosic Ethanol LLC, a joint venture formed this year by DuPont and Genencor to commercialize cellulosic ethanol. On hand to celebrate the groundbreaking October 14 with company representatives were Tennessee Governor Phil Bredesen and numerous other state and local officials, as well as local area farmers who will be growing the switchgrass to feed the plant. A John Deere tractor was used for the ceremonial groundbreaking.

Genecor Ground Breaking Gov BredesenEarlier in the day, Governor Bredesen participated in the state’s first-ever Summit on Clean Energy Technology in Knoxville. “When it comes to facing the challenges of the future, Tennessee isn’t just talking the talk about clean energy technology, we’re walking the walk, rolling up our sleeves and getting to work,” said Bredesen. “The bottom line is that this plant and this partnership are going to do a lot of good for Tennessee’s future.”

Besides switchgrass, the pilot plant is also designed to convert corn stover from western Tennessee into ethanol. The biorefinery’s construction and switchgrass production are the first major components of the UT Biofuels Initiative, a farm-to-fuel business plan developed by UT Institute of Agriculture researchers.

Cellulosic, Ethanol

Ethanol Maker Asks For Candidates’ Support

Cindy Zimmerman

The stakeholders of the nation’s largest ethanol producer are asking the presidential candidates to support ethanol.

POETMore than 1,700 POET employees and investors sent an open letter to Senators McCain and Obama urging them to invest in domestic sources of renewable fuels, like ethanol. In the letter, they emphasized the positive impact that ethanol has already made in creating jobs, reducing the nation’s dependence on foreign oil, and helping to reduce greenhouse gas emissions. In addition, they noted that innovations like cellulosic ethanol are just around the corner, making ethanol even cleaner and greener.

“Based on the enormous response to this letter from POET employees and local farmers, it is clear that many Americans will be voting based on their economic and energy interests this year,” said Jeff Broin, CEO of POET. “Ethanol is America’s best renewable fuel, reliable and affordable now and we hope that the next president continues to invest in this homegrown and high-tech energy solution.”

POET has 25 ethanol production facilities in seven states, including several that are still considered “toss ups” in this presidential campaign or are hotly contested, such as Colorado, Indiana, Iowa, Minnesota, Missouri, and Ohio.

The letter notes that the ethanol industry created more than 200,000 new jobs across the country, and in 2007, ethanol production contributed $47.6 billion to the nation’s GDP and generated $4.6 billion in federal tax revenues. Further, in 2007, the production and use of biofuels helped the U.S. avoid an estimated 13 million tons of greenhouse gas emissions.

Ethanol, politics

Wisconsin Gives Away E85

The Wisonsin Corn Growers will be giving away free, $20 gift cards to drivers purchasing E85 ethanol fuel Saturday, Oct. 25 at the United Cooperative Cenex, Poynette and Thursday Oct. 30 at the Tri-Par Qwik Stop, West Bend.

During both events, the first 85 Flex Fuel Vehicle (FFV) owners who purchase 8.5 gallons or more of E85 between 10 a.m. and noon receive a $20 gift card courtesy of the Wisconsin Corn Growers Association. Information on ethanol and its many benefits also is available during these events from representatives of the American Lung Association of Wisconsin and the Wisconsin Corn Promotion Board.

“E85 emits lower levels of carbon and other air pollutants that can cause or exacerbate lung disease,” says Dona Wininsky, director of communications for the American Lung Association of Wisconsin. “For this reason, the fuel has been designated an official Clean Air Choice of the American Lung Association of the Upper Midwest.”

corn, E85, News

Southeast Ethanol Plants Move Forward

Cindy Zimmerman

A Southeast ethanol company has formally announced the locations for four plants to be built around the sunbelt.

East Coast EthanolEast Coast Ethanol intends to construct plants in Northampton Co., NC; Chester Co., SC; Wayne Co., GA; and Jackson Co., FL.

With a nameplate production capacity of 440 million gallons of ethanol per year, the four plants in operation would make ECE will become the sixth largest ethanol producer in the nation and the leading producer of ethanol and its co-products on the East Coast. According to the latest figures released by the Energy Information Administration, the Southeast ethanol market demand is estimated at 2.1 billion gallons per year.

Ethanol, Facilities

Ethanol at the World Food Prize

Cindy Zimmerman

RFA PodcastBiofuels in general and ethanol in particular were part of the discussion at the World Food Prize symposium in Des Moines this year. Despite the food versus fuel controversy that permeated the headlines for 2008, there seemed to be more acceptance of biofuels as being able to co-exist with food production and being part of the overall global agriculture picture.

This Ethanol Report podcast features some of the comments made at the World Food Prize events last week by UK Scientific Advisor Sir Gordon Conway, International Biofuels Commission co-chair Roberto Rodrigues, World Bank president Robert Zoellick, former senators George McGovern and Bob Dole – this year’s World Food Prize recipients, and Secretary of Agriculture Ed Schafer.

You can listen to “The Ethanol Report” on-line here:

Ethanol Report 19

Or you can subscribe to this podcast by following this link.

Audio, food and fuel, RFA

Demand for Distillers Grains

Cindy Zimmerman

Global demand is growing for the ethanol by-product distillers dried grains with solubles (DDGS), which is used for livestock feed – and the US Grains Council is helping to move that product.

US Grains Council Ken HobbieAt the U.S. Grains Council’s International Distillers Grains Conference in Indianapolis earlier this week, attendees heard that Mexico currently holds the title as the number one purchaser of U.S. DDGS, importing 708,000 metric tons in the 2007 calendar year. Canada follows in second place importing 317,580 tons last year. But other countries hold promise for increased imports, including Thailand and Russia.

Grains Council president and CEO Ken Hobbie said at the conference, “DDGS and its value in all types of animal rations shows that US grain producers have the capacity and the capability to produce for both food and fuel.” Hobbie said that if the four million tons of DDGS exported from the US this year were divided equally between all the major livestock food sectors it would produce 331,000 metric tons of chicken, nearly five billion eggs, almost 86,000 metric tons of beef, 1.8 million metric tons of milk and 205,000 metric tons of pork.

Listen to Hobbie’s remarks here, provided to DomesticFuel by Hoosier Ag Today:
[audio:http://www.zimmcomm.biz/ag-group/usg-hobbie.mp3]

Audio, corn, Distillers Grains, Ethanol