Ethanol Plants Could Get USDA Loans

Cindy Zimmerman

World Food Prize Ed SchaferEthanol plants that have been hurt by dramatic fluctuations in commodity prices this year could be eligible for assistance from the US Department of Agriculture.

Secretary of Agriculture Ed Schafer told reporters after an address to the World Food Prize breakfast in Des Moines Friday that “some plants are under pressure because they’ve been speculating on corn.”

Schafer said there are USDA programs that could, for example, help the companies refinance and reduce their interest rates on operating expenses such as corn purchases. USDA’s Rural Development Program can lend up to $25 million to refinance or loan guarantees. “We have several ways we can help with dollars in rural areas,” Schafer said.

Some ethanol companies, most notably VeraSun, speculated on corn prices during the summer and locked in prices when corn was at $7 per bushel and now cash prices are about $3.50 per bushel, causing some significant losses. “There is going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn obligations,” Schafer said.

If USDA allows the ethanol plants to participate in the loan programs, Schafer said there would be “no restrictions or litmus tests” on the size or ownership for companies to qualify.

Ethanol, Government

Soybean Board Building Demand for Biodiesel

Cindy Zimmerman

The United Soybean Board has been actively building demand for biodiesel on behalf of soybean farmers since 1990 and the opportunities continue to grow on a global basis.

World Food Prize Bob Dole John BechererUSB was one of the soybean industry sponsors of the World Food Prize luncheon in Des Moines this week which gave CEO John Becherer, pictured here with one of this year’s WFP winners former Senator Bob Dole, to talk about the role soybeans can play in both feeding and fueling the world.

“The reality is we do have an opportunity and we need to be producing more product so that we can feed more fish, more pork and more poultry,” Becherer said. Since soybeans are 20 percent oil and 80 percent protein, that allows producers to grow a crop that can provide both.

USB’s development of the biodiesel market has the potential also to pave the way for other feedstocks to be used to make biodiesel. “Developing biodiesel directly raised the farm gate value for soybeans and led to the commercialization of biodiesel,” Becherer said. “Other feedstocks such as animal fats were grandfathered in on the biodiesel research and commercialization which has led to expanding opportunities for other feedstocks for biodiesel.”

“I don’t see that stopping,” he continued. “I don’t think that soybean oil ever believed that we would be the be all, end all for producing soybean oil to be converted into biodiesel. As we move forward, I think the opportunities for other feedstocks to play a part in this process are great.”

He adds that alternatives like jatropha hold great promise for improving subsistence farmers in poorer countries.

Listen to an interview with Becherer here:
[audio:http://www.zimmcomm.biz/world-food/wfp-08-becherer-biodiesel.mp3]

You can also download the audio with this link:
John Becherer at World Food Prize (mp3)

See photos of the World Food Prize event here.

Audio, Biodiesel, International

Cal’s Prop 10 Looks to Promote Alt Fuels

John Davis

Voters in California are being asked to approve a $5 billion bond measure that is designed to help spur the growth of alternative fuels in the state.

This story in the Sacramenta Bee outlines some key points in Proposition 10:

WHAT IT WOULD DO

• Authorizes $5 billion in bonds, about $2.9 billion of which would go toward rebates of $2,000 to $50,000 for buyers of alternatively fueled or highly fuel-efficient (at least 45 miles per gallon, highway) vehicles, such as the hybrid Toyota Prius. The largest subsidies would go toward purchase of commercial vehicles and buses powered exclusively by “clean alternative fuels,” effectively, natural gas.

• Authorizes $2.1 billion for research, development and training for companies, local governments and colleges for renewable and alternative energy projects.

• Requires the money to be spent within 10 years, with no more than 1 percent for administering the program.

Proponents, such as billionaire oilman T. Boone Pickens, say the measure will reduce dependence on foreign oil, clean the air and create thousands of clean-energy technology jobs. Opponents argue the bonds will outlive the natural gas-fueled vehicles they are planned to promote.

You can read the text of the proposal here from the California Secretary of State’s office… and make up your own mind.

Flex Fuel Vehicles, Government

Big Oil Helps WA Biodiesel, Ethanol Standards

John Davis

No, that’s not a typo in the headline. This story from the Seattle Post-Intelligencer says some of the world’s biggest oil companies are working to help the state of Washington put its 2 percent biodiesel and ethanol requirements into effect.

Exxon Mobil Corp. plans to open a biodiesel blending terminal in Spokane by late November, the company’s first in the country, said Prem Nair, a spokeswoman for the Irving, Texas-based company. The terminal will begin blending and supplying biodiesel by Dec. 1.

Within weeks, Chevron Corp. will also begin supplying diesel fuel blended with 5 percent biodiesel to marketers and retail outlets in Washington.

The new supply comes as Washington is struggling to meet a mandate to use more biodiesel, a cleaner fuel, and when several biodiesel projects in the state have been canceled or put on hold.

Currently, about 0.6 percent of all diesel sold in the state is biodiesel, the state says.

The article goes on to say that the help from Big Oil will help give a boost to Washington’s 2 percent ethanol and 2 percent biodiesel mandates, about to go into effect at the end of November.

Biodiesel, Ethanol, News

Ethanol, Biodiesel Pipelines Moving Fuel in Southeast

John Davis

One of the problems ethanol and biodiesel have had is how to get their product from areas of production to areas of consumption. Pipelines help conventional, petroleum-based fuels, so it’s only natural that biofuels would need to adopt similar technology.

Kinder Morgan Energy Partners LP has announced successful testing of ethanol through its 16-inch, 195-mile Central Florida Pipeline (CFP) system between Tampa and Orlando, Florida and the beginning of testing of a biodiesel pipeline in the Southeast U.S. This story in the Oil & Gas Journal has details:

It is finalizing mechanical modifications to the pipeline to offer ethanol transportation services to its customers by mid-November and is evaluating batched ethanol transport possibilities for other parts of its pipeline system.

The company says the short length of the pipeline will limit transmix.

CFP has segregated storage for the ethanol at the Orlando end of the pipeline. Total storage capacity is 546,000 bbl, contained in 28 tanks of 8,190 gal. – 80,000 bbl each. Land is available for expansion.

Kinder Morgan has completed more than $60 million in ethanol projects including modifications to tanks, truck racks, and related infrastructure for new or expanded ethanol service in the Southeast US and Pacific Northwest and has approved an additional $27 million for ethanol projects in the Southeast.

The company is also undertaking tests to assess commercial transportation of biodiesel through its pipelines, running blended B-5 biodiesel through a segment of its Plantation Pipe Line system between Collins, Miss. and Spartanburg, SC. The company expects test results by the end of October. It also is evaluating transporting biodiesel on its Portland-Eugene, Ore. line to support Oregon’s forthcoming biodiesel mandate.

Biodiesel, Ethanol, News

Senator Grassley at World Food Prize

Cindy Zimmerman

Republican Senator Chuck Grassley of Iowa paid a visit to the World Food Prize breakfast on Friday morning to introduce the secretary of agriculture and make a few comments of his own about the importance of American agriculture in feeding the world, as well as honor his colleagues from the Senate, George McGovern and Bob Dole, who are this year’s World Food Prize recipients.

World Food Prize Chuck GrassleyHe believes that increasing the use and acceptance of biotech crops is vital. “We’re entering a new generation in agriculture,” Grassley said. “This generation not only encompasses feeding the world, but also fueling vehicles and eventually getting in to treating patients through pharmaceuticals in crops. This offers opportunities for biotechnology growth throughout the world that will continue to feed populations and provide new prospects for our rural communities.”

In a brief interview after the breakfast, Sen. Grassley said that biotechnology gives us an opportunity to have a stronger agriculture allowing for multiple uses of agricultural crops. “Things like the World Food Prize give an opportunity to educate people about biotechnology,” Grassley said. “By expanding agriculture you can provide food, fiber and fuel.”

Grassley said that the incentives for biodiesel included in the financial bailout passed by Congress are critical to development of the industry. “That’s how you get infant industries started,” he said. “The best proof of that is that we would not have an ethanol industry today were it not for the ethanol incentives.”

He got very passionate about the need for incentives in developing any alternative energy. He used the example of developing cellulosic ethanol. “People say we ought to have cellulosic so we’re not using grain, but how do they think we’d ever get a second generation of ethanol from cellulosic if we don’t have the first generation of ethanol, and we wouldn’t have the first generation if we didn’t have the tax incentives and the public policies to encourage an infant industry.”

Asked if he is concerned about Senator McCain’s comments about doing away with ethanol incentives, Grassley said, “Not as long as I’m in Congress. When he’s president of the United States, we’ll still be developing an ethanol industry.”

Listen to an interview with Grassley at the World Food Prize here:
[audio:http://www.zimmcomm.biz/world-food/wfp-08-grassley.mp3]

You can also download the audio with this link:
Chuck Grassley interview (mp3)

See photos of the World Food Prize event here.

Audio, Biodiesel, Ethanol, Government, International

American Farmers Can Help the World Produce Food and Fuel

Cindy Zimmerman

World Food Prize Ed SchaferThe answer to feeding a growing world population lies with building on the success of the American farmer, according to Agriculture Secretary Ed Schafer, who addressed the World Food Prize breakfast Friday morning in Des Moines.

“Our focus should be on sharing our technology, equipment and know-how, processes and procedures to help farmers all over the world boost the productivity of their land,” Schafer said. “Just in the last 15 years, our corn yields have increased from an average of 100 bushels per acre to 150 bushels per acre, a 50 percent increase in yield in 15 years.”

“Gains of this kind have allowed the United States producers to meet the rising demand for food and feed and fuel, while maintaining record level exports and strong food aid donations,” Schafer added.

Listen to Schafer’s address to the World Food Prize here:
[audio:http://www.zimmcomm.biz/world-food/wfp-08-schafer.mp3]

You can also download the audio with this link:
Ed Schafer at World Food Prize (mp3)

See photos of the World Food Prize event here.

Audio, food and fuel

Biodiesel Sustainability

Cindy Zimmerman

Next to productivity, sustainability is the word being used most often at the World Food Prize symposium this week to talk about what is needed in global production of both food and biofuels.

Victoria CarterThe National Biodiesel Board formed a sustainability task force earlier this year, and one of the members of that task force is Victoria Carver with the Iowa Soybean Association. She says they are in the process of developing an advisory committee of experts and will be holding a symposium next month on the issue.

Carver attended many of the sessions at the World Food Prize symposium and was pleased with the overall emphasis on biotech crops, which can help increase production while not increasing land use. However, she did challenge a speaker during one session who said that biofuels were responsible were increasing food prices. “Food prices in real terms have come down dramatically in real terms, adjusted for inflation,” she said. “Do we really want to create a paradigm where farmers actually lose value in their product over time? And it’s especially important here at the World Food Prize because they are addressing issues of agriculture in developing countries which is a great economic opportunity there.”

In addition, Carver noted that biofuels have helped keep energy prices lower than they would be otherwise. “We know in this country that the increase in biofuels that’s been stimulated by the Renewable Fuels Standard has resulted in less of an increase in fuel prices than we would have had without it, by 40 cents a gallon,” she said. “I think it’s important that we think critically about the assumption that biofuels are kind of a culprit.”

Listen to an interview with Victoria here:
[audio:http://www.zimmcomm.biz/world-food/wfp-08-victoria.mp3]

You can also download the audio with this link:
Victoria Carver interview (mp3)

See photos of the World Food Prize event here.

Biodiesel, International

More on Schafer at Farm Foundation

John Davis

As promised, I’ve got some more material for you from Secretary of Agriculture Ed Schafer, who addressed attendees of the Farm Foundation’s Transition to a Bioeconomy: Environmental and Rural Impacts Conference in St. Louis, Mo.

Schafer praised Farm Foundation’s long commitment to promoting the free-form type of discussion and debate we saw at this just-concluded conference of state and federal government officials, academics and representatives of the private industry. He says this is where real solutions to the challenges that face Rural America will be found.

“I’m really pleased that USDA can play a strong part and [be] a strong collaborator in this important work.”

Schafer says we must ask the tough questions, such as how are we going to grow the feedstocks of the future, what are they going to be, where we going to grow them… and how we get those feedstocks into the biofuel supply chain.

“The science that is critical to for the trans to a new bioeconomy also demands a strong partnership as we move forward on the research arena… the federal, the land grant and the private sector research coming together for this important mission.” Schafer adds that as we make the transition, corn ethanol is the bridge to cellulosic ethanol using the infrastructure and industry established by the corn ethanol industry.

Listen to Schafer’s address to the Farm Foundation here: [audio:http://www.zimmcomm.biz/farm-foundation/Schaferaddress.mp3]

Download audio file here.

Farm Foundation, Government

World Bank President on Biofuels

Cindy Zimmerman

World Food Prize Bob ZoellickThe president of the World Bank made an appearance at the World Food Prize symposium Thursday on World Food Day and commented on world production of food and biofuels during a press conference.

Robert Zoellick noted that some biofuels are more efficient than others, like sugarcane ethanol in Brazil, and he believes that “biofuels in the future are going to be a critical component of a larger energy mix.” He also acknowledged the importance of creating the marketing framework which he says is “partly what some of the oilseeds-based and corn-based biofuels are about.”

He urges policy makers in the U.S. to consider some ways to change the structure of tariffs and subsidies for ethanol, such as having some “safety-valves” that would allow for the reduction of subsidies when prices reach certain levels.

Listen to Zoellick’s comments here:
[audio:http://www.zimmcomm.biz/world-food/wfp-08-zoellick-biofuels.mp3]

You can also download the audio with this link: Zoellick on Food and Fuel (mp3)

See photos of the World Food Prize event here.

Audio, Biodiesel, Ethanol, International