Missouri Could Adopt Biodiesel Standard

John Davis

On the heels of President Bush’s call for more alternative fuels such as ethanol and biodiesel, Missouri’s legislature is considering a five percent biodiesel standard at every gas station in the state. The State Senate Agriculture, Conservation, Parks and Natural Resources Committee has heard testimony on a bill that would require all diesel sold in Missouri to have at least five percent biodiesel. Check out this story from the Columbia Missourian:

s“We want to show biodiesel as a legitimate fuel source,” said Sen. Bill Stouffer, R-Marshall, who sponsored the bill.

The committee is set to vote on the bill Tuesday. If approved, the bill would be added to the agenda and debated on the Senate floor. If it’s voted down, a different version of the same bill will be sponsored in the House of Representatives.

Soybean growers are praising the legislation, but petroleum marketers have already lined up in opposition.

Ronald Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association, is fearful truck drivers will not stop in Missouri to fill up because of the proposed standard. They may refuse to buy biodiesel because they don’t trust the reputation of the fuel, he said. Many truckers travel on Interstate 70 between Kansas City and St. Louis, both of which border states that do not have a biodiesel standard.

Missouri already has a 10 percent ethanol standard.

Biodiesel, Government, Legislation

NextGen Fuels Completes Small Biodiesel System

John Davis

NextGen LogoThe parent company for NextGen Fuels, GS Agrifuels, has announced the completion its first 10-million gallon a year biodiesel production system. The system is expected to benefit small-scale operators. This from the company’s press release:

“We believe that there is a robust and mostly untapped domestic and international market for development of small-scale biodiesel production facilities,” said Tom Scozzafava, GS AgriFuels’ president and chief executive officer. “We currently have six NextGen systems built or contracted, representing 50 million gallons per year of production capacity, and we intend to continue selling additional systems into this market.”

The company touts the system as modular and easily up-scaled or down-scaled to fit a plant’s needs. GS Agrifuels is building biodiesel plants in Fulton, New York and Memphis, Tennessee.

Biodiesel

Livestock Industry Concerned About Ethanol Increase

Cindy Zimmerman

Bush at DupontThe goals set out by President Bush Tuesday night to increase alternative fuels nationwide were met with enthusiasm by the ethanol industry, but not so much by the livestock industry which is facing higher prices for feed and increased competition for grain crops.

The president acknowledged those concerns during an appearance at a DuPont facility in Delaware. “There is a constraint, and that is the ethanol use today comes from corn, and we’ve got hog growers and chicken growers that need corn to feed their animals,” Bush said.

RFAOfficials with the Renewable Fuels Association fielded questions about the issue during a telephone press conference with reporters Tuesday morning.

“It goes back to markets and genetics,” said RFA Chairman Ron Miller, CEO of Aventine Renewable Energy. “We’ve seen the market place respond with farmer planting intentions that are at least ten percent higher than they were this time last year and if you talk to farmers here in central Illinois they’ll tell you they may be planting as much as 25 percent more corn.”

With normal yields, that would result in about a 12 billion bushel crop, which Miller says would be sufficient for both the ethanol and livestock markets.

Long term, Miller looks to better varieties to increase yields. “I believe in genetics and if you listen to Monsanto, Pioneer and others, we will probably be producing as much as 300 bushels an acre – double what we are producing now – within 20 years.”

RFA president Bob Dinneen added that if weather conditions cooperate the corn crop could be as high as 14-15 billion bushels, which would most likely lead to corn prices dropping again. He says that the ethanol industry would be very interested in sitting down with the livestock industry to address their concerns.

“Ultimately, a stronger rural economy is going to be beneficial to all of agriculture,” Dinneen said.

Listen to Miller and Dinneen respond to livestock producer concerns: Listen To MP3 RFA Officials
(5 min MP3)

Ethanol, News

Administration Proposes Cellulosic Research Funding

Cindy Zimmerman

The Bush administration wasted no time this week in translating the president’s State of the Union energy words into actions.

Mike Johanns“We will be proposing $1.6 billion in new funding for renewable energy, with a focus on cellulosic energy research and production as part of the administration’s 2007 Farm Bill proposals,” Secretary of Agriculture Mike Johanns announced Tuesday. “We’ve had great success with corn-based ethanol, now we have our sights set higher.”

The funding would support the president’s goal of reducing gasoline usage by 20 percent in the next ten years and will compliment an array of renewable energy-related efforts underway at the U.S. Department of Agriculture.

“It remains a priority across USDA to support the development of biofuels. We will continue to build on current programs and turn the corner on renewable energy,” said Johanns. “With biofuels coming to the forefront, American agriculture faces the greatest opportunity of a generation to lead a future in which we get our energy by the bushel and not by the barrel.”

Cellulosic, Ethanol, Government, News

Ethanol Production Effects on Poultry

Chuck Zimmerman

Poultry & Feed Expo Dr. AhoOne of the first people I ran into here at the International Poultry Expo was Dr. Paul Aho who is a poultry economist. His company is called Poultry Perspective. Dr. Aho is being interviewed here by farm podcaster, Ned Arthur, PoultryCast.

Dr. Aho says that the increase in the cost of corn has had a significant impact on the meat industry and poultry producers in particular. I interviewed him and asked him to explain. I guess the best way to describe how he sees the impact of increased ethanol production on poultry producers is “uncertain” with prices being very “volatile.”

Listen to my interview with Dr. Aho here: Listen To MP3 Dr. Paul Aho Interview (5 min MP3)

Audio, Ethanol

Promoting Alt Fuel in Atlanta

Chuck Zimmerman

Poultry & Feed Expo BoothIt seems like everywhere I go I find 25X’25. No one was home here in this booth at the combined International Poultry Expo and International Feed Expo going on in Atlanta, GA but I got a picture anyway.

I’m here for reasons other than renewable fuel but you can’t escape it. For poultry producers what’s happening in the renewable fuels business has some concerns as you’ll hear in my next post with an economist.

I’ll be here for a couple days so I’m sure I’ll find something more of interest. For example, I know there’s a seminar on the schedule specifically on ethanol. I’m going to try to attend.

Agribusiness

China Stepping up Biofuels Development

John Davis

As China’s economy continues to grow, the country’s consumption of oil grows with it. And with the Chinese recognizing there aren’t unlimited resources of petroleum out there, they seem to be embracing more biofuels… in particular biodiesel. Renewable Energy Access has reprinted a story talking about the development of a new rapeseed, which the Ministry of Agriculture reports, has an record-setting oil content of 54.7%. Officials believe the new seed could produce as much oil for mixing in biodiesel as the equivilant of 1.5 times that of the country’s largest oil field.

In addition, some woody plants… such as the Chinese pistachio… are being seen as having a great potential in biodiesel production. The Chinese pistachio grows in 11 provinces throughout the country.

But the Chinese are having some issues. According to the article, the government is having a tough time tracking the actual number of biodiesel facilities out there.

Behind the enthusiasm in China’s bustling biodiesel development, however, is disorder in both production and marketing, said Wang Zhongying, director of the Energy Research Institute of the Center for Renewable Energy Development in Beijing. “Driven by the potential profits from biodiesel, many private investors just go ahead with production and marketing without any reference to the government,” he said.

As a result, it is not even known how many biodiesel factories exactly exist in China, said Zhu Ming, dean of the Academy of Planning and Design under the Ministry of Agriculture. Also lacking are standards and regulations for the biodiesel industry, according to Professor Tan Tianwei of the Biological Sciences and Technology Department of Beijing University of Chemical Technology.

And there’s debate in the country over the use of land for oil production that could go to Europe as opposed to the same land being used for food production in China. Officials do point out that the Chinese pistachio does not compete for food land.

Biodiesel, International

European Ethanol, Biodiesel Stocks Get Boost from Bush

John Davis

It’s not just American alternative fuels seeing a boost from President Bush’s State of the Union speech last night when he pledged to reduce U.S. gasoline consumption by 20 percent in the next 10 years. Check out this story from Dow Jones posted on CattleNetwork.com:

Michael McNamara, London-based senior equities analyst for Jefferies International, said European stocks are indirectly benefiting from “improved sentiment“ in Bush’s State of the Union address late Tuesday. “The specific mention of ethanol and biodiesel is good news,“ McNamara said.

“But we generally consume ethanol in the market where we produce it, so while this is good for sentiment, it’s more important for E.U. member states to mandate increased biodiesel or ethanol use.“

The U.S. energy proposal calls on Congress to require the use of 35 billion gallons of ethanol and other alternative fuels such as biodiesel by 2017. The ethanol would be in gasoline blends of 10% to 85%.

“It’s not certain what exact measures will be put in place and the financial impact they will have, but the largest market in the world is laying out its desire to reduce gasoline consumption by 20%,“ McNamara said.

“It is clearly a sign that G-8 governments are increasingly getting behind the idea of alternative fuel sources.“ Poul Ruben Andersen, biofuels marketing director for Denmark-based Novozymes A/S (NZYM-B.KO), said the U.S. policy won’t change much in the short term, but in the long term he said he expects it to support the business.

The article goes on to say that Anderson’s company’s stocks earlier today saw a 3% rise, and other European alternative fuels stocks seem to be seeing similar increases.

Might give a few people pause to think more about local domestic fuels investments, such as Blackhawk Fuels, which is having investor meetings this week (see my earlier post).

Biodiesel, Ethanol, Government, International, News

Investors in Blackhawk Fuels in Northern Illinois Meet This Week

John Davis

Blackhawk BiofuelsInvestors in a new, 30-million gallon a year biodiesel plant near Freeport, Illinois are meeting this week. Blackhawk Biofuels LLC will hold investor meetings today at 1 p.m. in Pontiac, Ill. and in Joliet, Ill. at 7:00 tonight. There will also be meetings tomorrow (Jan. 25th) in Dekalb, Ill. at 1 p.m. and Freeport, Ill. at 7 p.m. A couple of more meetings are scheduled for next month (click here for complete schedule and maps).

“After months of planning, we are pleased to begin selling units of our offering,“ stated Ron Mapes, chair of the Blackhawk Biofuels Board of Managers. “We invite everyone interested in a renewable fuels investment to attend an investor information meeting to learn more about biodiesel and our project.”

Total expected project cost for Blackhawk Biofuels is forecast to be $62 million with half coming from local investment and the balance through debt financing. The business plan calls for 30 employees with an expected annual payroll of $1.5 million.

Blackhawk Biofuels is registered to sell units in Illinois, Wisconsin, Iowa, and Indiana.

Biodiesel

More Industry Reaction

Cindy Zimmerman

ACE The ethanol industry could hardly be more pleased with the president’s call for increased use of the fuel in his State of the Union address.

In a news release, the American Coalition for Ethanol praised the president “for setting visionary goals for ethanol in his State of the Union address and the bipartisan leaders in Congress who are working to implement long-term plans for the increased production and use of homegrown renewable fuels.”

“President Bush’s call to increase the use of renewable and alternative fuels, including ethanol, to 35 billion gallons by 2017 sends a very powerful signal that an ambitious yet attainable Renewable Fuels Standard goal is the ideal strategy to strengthen energy security and independence in the U.S.,” said Brian Jennings, ACE Executive Vice President. “An RFS level of 35 billion gallons by 2017 is consistent with ACE’s call for an RFS of 60 billion gallons by 2030, and we are pleased that this and other important aspects of ACE’s legislative plan have already been included in S. 23, the Biofuels Security Act introduced in the 110th Congress by Senators Harkin and Lugar.”

Ethanol, News