Domestic Fuel Industry Reaction

Cindy Zimmerman

Some biofuel organizations were reacting to the president’s State of the Union address even before it was given.RFA

A statement from Renewable Fuels Association president Bob Dinneen was emailed to the media over two hours before the speech.

“Recognizing the potential of our nation’s ethanol industry, President Bush used the unique forum of the State of the Union Address to elevate the significance of ethanol and renewable fuels to our nation’s energy future by calling for 35 billion gallons of alternative fuel use by 2017,” said Dinneen. “With consistent and focused policies, this is an eminently achievable goal. It will stimulate new investment in cellulosic ethanol technologies and drive market opportunities for ethanol beyond existing blend levels. It is a goal that makes sense for America.”

RFA will hold a telephone press conference Wednesday morning to address the president’s remarks with reporters.

NBB

The National Biodiesel Board issued a release immediately following the address.

“We are glad to see that the President’s Twenty in Ten plan includes strong steps toward renewable energy, energy conservation and diversification, and carbon reduction,” said Joe Jobe, CEO of the National Biodiesel Board. “We hope Congress will work with the Administration in a bipartisan way to enact this kind of bold new energy policy for the good of all Americans.”

Biodiesel, Ethanol, Government, News

President Calls For Increasing Alternative Fuel Supply

Cindy Zimmerman

2007As anticipated, President George W. Bush devoted a significant portion of his 2007 State of the Union address Tuesday evening to energy.

“For too long our nation has been dependent on foreign oil,” said President Bush. “It’s in our vital interest to diversify America’s energy supply. The way forward is through technology.”

The audience applauded seven times during the four minutes devoted to energy issues in the president’s address, including once when he mentioned biodiesel and once for ethanol.

“We need to press on with battery research for plug-in and hybrid vehicles and expand the use of clean diesel vehicles and biodiesel fuel. (applause) We must continue investing in new methods of producing ethanol (applause) using everything from wood chips to grasses to agricultural wastes.”

The president called on Congress to reduce gasoline use in the United States by 20 percent in the next decade.

“To reach this goal we must increase the supply of alternative fuels by setting a mandatory fuel standard to require 35 billion gallons of renewable and alternative fuels in 2017 – and that is nearly five times the current target.” That statement was met by a standing ovation led by a jubilant Senator Chuck Grassley from the number one ethanol producing state of Iowa.

Bush noted that achieving these goals will dramatically reduce dependence on foreign oil but not eliminate it, so he also asked that Congress to double the current capacity of the strategic petroleum reserve.

And while he briefly mentioned confronting the “serious challenge of global climate change,” the president did not specifically ask Americans to make lifestyle changes to conserve fuel as news sources anticipated prior to the address.

In the Democratic response to the President’s address, Senator Jim Webb of Virginia began by saying that energy independence was one area where the Democrats agreed with the administration and that they looked forward to working with him on that issue.

Listen to the energy portion of the President’s address: Listen To MP3 President Bush
(4 min MP3)

Audio, Biodiesel, Energy, Ethanol, Government, News

Terror-Free Fill-Up

Cindy Zimmerman

The Terror-Free Oil Initiative is planning to open the nation’s first “terror free” gas station in Omaha.

Terror Free According to the Associated Press and numerous television news reports, the Terror-Free Oil station in west Omaha will sell gas from oil companies that do not do business in the Middle East.

The station is scheduled to open in February and organization officials say more Terror-Free Oil stations are planned.

According to the Terror-Free Oil Initiative website, the Florida-based organization is dedicated to encouraging Americans to buy gasoline originating from countries that do not export or finance terrorism and “are also looking into creating a healthy debate concerning alternate methods of fuel production and consumption.”

News

Corn Growers, Farm Aid Team Up for Renewable Energy Workshops

John Davis

Farm AidThe American Corn Growers Association has received some grants from Farm Aid to put on a series of workshops across the country on producing and using ethanol, biodiesel, and wind energy. The Farm Aid money has been given to the Corn Growers to put on the workshops in more than half a dozen states on a variety of subjects:

* Overview of Bio-Diesel Production, Acceptance and Utilization,
* Overview of Pre-Feasibility Study Guide for Farmer-Owned Ethanol Plants,
* Wind Energy – New Potentials for Rural Communities,
* Overview of Federal Programs Available for Renewable Energy Production, and
* How Renewable Energy Production Can Be an Essential Component to Better Farm Policy.

“Our goal is to ensure we improve our continuing endeavor to communicate, educate and advocate the opportunities, challenges and possibilities for energy production on U.S. family farms,” said ACGA President Keith Bolin. “This will include issues relating to bio-diesel, ethanol, bio-mass, wind and other farm based energy producing possibilities.”

“Farm Aid is proud to support so many creative efforts around the country to expand opportunities for family farmers,” said Farm Aid President Willie Nelson. “We’re all working together to support good food from family farms.”

Stay tuned for dates and locations.

Biodiesel, Ethanol, News, Wind

Analyst Says Grain and Livestock Markets Affected by Biofuels Boom

John Davis

Bill Holbrook, owner of Holbrook Consulting, says grain markets are responding to the rapid growth in the ethanol and biodiesel markets. But what will it mean to longer-term grain and livestock prices? In my interview with him, Holbrook says right now, livestock producers are expecting tighter margins, but long-term feed prices are more likely to be affected by weather and the amount of acres being put into production.

Listen to it here: Listen To MP3 Bill Holbrook
(6:25 min MP3)

Biodiesel, Ethanol

High Crude Oil Prices Boost Alternative Fuels’ Price Competitiveness

John Davis

The Energy Management Institute has released a report that shows alternative fuels are much more cost effective… by nearly 30 percent… than they were just three years ago. The New York-based institute touts itself as higher learning for energy professionals such as oil companies, utilities, and transportation fleets. It found that biodiesel was 29.2% more cost effective than a few years ago while ethanol was 17.4 %. Natural gas (41.4%), electricity (36%), and propane (21.3%) helped alternatives to oil average a 29% cost effectiveness increase.

EMI

“We crunched a lot of data for this one,” said J. Scott Susich, Editor of EMI’s Alternative Fuels Index publication. “It’s not enough to look at prices from three years ago and compare them to recent values. We looked at the relationship between the cost of each fuel and the amount of energy one could buy on a BTU equivalent basis, and compared those values to their gasoline and diesel counterparts in each market. Next we had to look at the trends of those relationships to determine whether the results were atypical or part of a sustained pattern. In each case the data showed a continuing trend toward competitiveness,” Susich continued.

Now, whether alternative fuels can continue their cost-competitive march remains to be seen. EMI’s numbers are based on crude oil prices more than doubling during the time period studied to hit nearly $75 a barrel. Today’s oil prices are seen closer to $53 a barrel.

Biodiesel, Ethanol, News, Propane

More Biofuels Education Needed

Cindy Zimmerman

Despite the tremendous growth in ethanol and biodiesel production over the past year, consumers still lack a basic understanding of biofuels benefits and availability.

That’s the findings of a just-released consumer survey commissioned by Pavilion Technologies and conducted by Harris Interactive.Pav Tech

Despite a surge in production and government support, only a fraction of adult drivers in the United States (5%) currently use biofuels such as an ethanol-blend fuel or biodiesel. Education and availability prove to be stumbling blocks on the road to making ethanol a market staple.

The survey found that not only do drivers lack awareness about biofuels, many are misinformed on the subject. Forty-four percent of drivers agreed that they do not understand the difference between biofuels and conventional gasoline. One in four drivers who do not use a biofuel (25%) indicated that they do not know what it is. The overall survey results suggest that many consumers are not aware that ethanol is cheaper and better for the environment than traditional gasoline and that many cars on the road today can run on ethanol blends without modification.

Other findings of the study:

Fifty-seven percent of drivers are not sure whether biofuels are more, less, or equally as expensive as traditional gasoline or diesel fuel.

Fifty-seven percent of drivers who do not use a biofuel say it is because they do not think their car can run on it.

Nearly half (47%) of drivers who do not use biofuels say they do not know where to buy them.

Of drivers who currently do not use biofuels, the overwhelming majority (95%) indicated that they could be encouraged to make the switch.

A full copy of research findings, images, and ethanol industry resources is available on-line at the Pavilloin Technologies website. Findings will also be revealed in a webcast, available for viewing at the same location on February 1.

According to their website, Pavilion is the leading supplier of control software solutions to the U.S. ethanol industry.

Ethanol, News

Missouri Sees Sharp Increase in Biofuels Investors

John Davis

Another indicator of the viability of ethanol and biodiesel might be the increasing numbers of investors in the alternative fuels. In Missouri, for example, the Secretary of State’s office reports the number of the number of biofuels investments filed with the state increased from just five in 2005 to 15 last year. In this Associated Press story, government requirements are seen as the driving reason for the increase.

Federal clean air requirements have people seeking cleaner-burning additives for fuel such as ethanol and biodiesel. At the same time, ethanol’s main competitor – MTBE – has been phased out because it contaminates water supplies faster than other fuels as it dissolves in water rather than separating like oil.

Plus, states and the federal government have set benchmarks for using more alternative fuels. A federal 2005 energy law, championed by former Sen. Jim Talent, R-Mo., required the United States to use 7.5 billion gallons of renewable fuels such as ethanol and biodiesel by 2012. A Missouri law will require a 10 percent ethanol blend in most gasoline, effective next January, as long as its price doesn’t exceed traditional fuel.

On top of all that, there is a mix of state and federal subsidies for ethanol and biodiesel refineries and state tax credits for farmers who supply the agricultural products that are turned into fuel. This year’s state budget has almost $14 million of biofuels incentives – more than double the amount from two years ago.

While Missouri does have its own burgeoning ethanol and biodiesel industries, most of the companies that sought permission with the Secretary of State’s office to solicit Missouri investors were from out of state.

Biodiesel, Ethanol, Government

Louisville Schools Switch to Biodiesel

John Davis

Another major city is using greener burning biodiesel… this time for the school district’s buses. The Louisville (Kentucky) Courier-Journal reports that the Jefferson County Public School District has switched its entire 1000+ bus fleet to biodiesel.JCPS

Jefferson County uses a blend containing just 2 percent biodiesel but will consider increasing that to a 20 percent mix, which can reduce particulate matter, carbon monoxide, unburned hydrocarbons and sulfur pollution by as much as 21 percent, studies show.

Although a 2 percent blend reduces emissions far less, it adds up in a 97,000-student district that burns 2.5 million gallons of fuel a year and drives 85,000 miles each day, environmental advocates say.

“It’s important because Louisville has struggled with air pollution,” said Elizabeth Robb, an environmental specialist with the Kentucky Division for Air Quality.

Officials also expect it to be better for the kids as diesel fuel emissions have been blamed for increased rates of asthma, lung disease, and cancer.

Biodiesel

Ethanol Offsets Increased Gas Use

Cindy Zimmerman

APIAmerica used more gasoline in 2006, but that increase was entirely offset by ethanol.

According to the American Petroleum Institute’s December 2006 statistics report, gasoline deliveries in 2006 increased a modest 0.8 percent from 2005 to 9.2 million barrels, or 386 million gallons, per day.

The year’s higher volume of gasoline deliveries was, in effect, met entirely by a substantial jump in the blending of ethanol into gasoline. Ethanol use in gasoline rose by more than 1 billion gallons, or nearly 35 percent, to an estimated 5.4 billion gallons in 2006. More than 40 percent of all gasoline consumed in the U.S. now includes ethanol.

That was good news to the Renewable Fuels Association. President Bob Dinneen commented, “The fact ethanol blends are making up for the entire growth in gasoline consumption means our nation is having to import less oil than would otherwise be needed.”

Ethanol, News