Food vs Fuel Commentary

Cindy Zimmerman

This comes from the Aberdeen (SD) News and the columnist is Alan Guebert of Ag Comm in Delavan, Ill.

His conclusion on the food vs fuel issue is this: America will never run out of corn regardless of future domestic or foreign market demand. That bold prediction is not bold at all because price will ration supply.

For proof, look at recent gasoline prices. Despite war, hurricanes, a growing domestic economy and fierce overseas competition for crude oil, the U.S. was never without gasoline because price, the point where supply intersects demand, rationed it.

Sure, we grumbled when gas prices topped $3 a gallon, but we still had fuel because price slowed demand to ensure supply. If it hadn’t, price would have risen until an inevitable market equilibrium was reached.

I know the food vs. fuel doomsayers are going to reply that the problem will be when the price gets too high and poor starving people can’t afford to buy corn to eat (bearing in mind that the corn we produce is generally not used for human consumption). But the whole column is a good read anyway and when it comes to economics prognosticating, it has just as much validity as anything else.

Ethanol

Ethanex Hitches To Star

Cindy Zimmerman

Ethanex Ethanex Energy Inc., has entered into a joint venture with Star Ethanol, LLC for the construction and operation of an ethanol facility located in Franklin County, Illinois.

According to a press release, the facility will incorporate the fractionation technology developed at Ethanex’s SEMO plant (in Cape Girardeau, MO) and will produce 132 million gallons of fuel grade ethanol per year.

The joint venture company will be known as Ethanex Southern Illinois and will be 85% owned by Ethanex Energy and 15% owned by Star Ethanol.

Ethanol

The Cool Factor

Cindy Zimmerman

According to a Chicago Tribune personal finance columnist, ethanol has the “cool factor” when it comes to investments.
Andrew Lackey’s September 17 column talks about some industries and companies that are currently on the “cool” list – including internet traffic services, TiVo and ethanol.
How cool is that?

Ethanol

Hispanic Ag Co-op Considers Ethanol

Cindy Zimmerman

Minority Agriculture Producers, an organization of Hispanic farmers and ranchers in Texas, is holding workshops this month to consider the possibility of getting together to start an ethanol production facility or two, or three.

According to this story from Texas A&M Ag News, cotton farmer Donnie Valdez envisions three large factories in the Rio Grande Valley turning crops into bio-fuels and fuel additives. One factory would use vast quantities of sugarcane to produce ethanol, another would make biodiesel from cottonseed oil and a third would produce ethanol from corn and grains. Texas Coop Ext

Valdez is spearheading the workshops which will be held Sept. 20 and Sept. 25 at the Texas A&M University System Agricultural Research and Extension Center at Weslaco.

A final summit in October will involve U.S. Rep. Ruben Hinojosa (D-Mercedes) to discuss bio-fuels and other concerns of local growers.

The workshops are sponsored by Texas Cooperative Extension and Prairie View A&M University, among others.

Ethanol

OK Ethanol Plant Gets Ok

Cindy Zimmerman

An ethanol plant for Enid, Okla. (see previous post) will become a reality soon now that officials with Oklahoma Sustainable Energy have received initial investments in excess of $5 million.

According to this article in the Enid News, OSE officials will continue their equity drive through Sept. 26 unless the cap of 499 investors or $14 million is reached before then.

Owned by Oklahoma Ethanol LLC, a limited liability company formed as a joint venture between OSE and Chaparral Energy of Oklahoma City, Enid’s ethanol plant will convert 20 million bushels of corn and grain sorghum annually into 55 million gallons per year of fuel-grade ethanol, approximately 200,000 tons of distillers grains and approximately 154,000 tons of carbon dioxide gas.

Ethanol

New Ethanol Plant Planned For WI

Cindy Zimmerman

Third Coast Biofuels, LLC is proposing a 40 to 60 million gallon ethanol plant for Wisconsin Rapids and Mayor Mary Jo Carson is “thrilled,” according to this article from the Wisconsin Technology Network.

Ron Kuehn, a Third Coast representative, explained at an informational city meeting this week that in the best-case scenario, the plant could be built by the spring of 2008.

Ethanol

Third Former ADM Exec Joins Alternative Energy

Cindy Zimmerman

Alternative Energy Kansas City-based Alternative Energy Sources Inc. has announced the appointment of John A. Ward as executive vice president and director of operations.

According to a press release, Ward will be responsible for site selection, permitting, design and engineering of ethanol plants to be built in Iowa, Illinois and other locations. He will oversee the construction process for each plant and develop a management team to supervise day-to-day plant operations and ensure peak performance. In addition, he will evaluate international investment opportunities for AENS in developing alternative and renewable energy supplies.

For the past five years Ward managed all manufacturing and engineering functions of the corn-processing and the bio-products divisions at ADM, the nation’s No. 1 corn-processing and ethanol producer.

Ward joins two other former ADM execs, Mark Beemer, CEO, and Lee Blank, COO who formed the company in June.

Ethanol

Honda Develops “Practical” Biomass Ethanol Process

Cindy Zimmerman

HondaHonda Motors and a Japanese-based research company says they have developed the world’s first practical process for producing ethanol from cellulosic biomass.

According to a news release, Honda and partner Research Institute of Innovative Technology for the Earth, or RITE, the new method allows large volumes of ethanol to be produced from widely available waste wood, leaves and other so-called soft biomass. RITE

Current technology allows fermentation inhibitors, collaterally formed primarily during the process of separating cellulose and hemicellulose from soft-biomass, to interfere with the function of microorganisms that convert sugar into alcohol, leading to extremely low ethanol yield.

The new process uses a microorganism developed by RITE that helps reduce such interference, enabling far more efficient ethanol production.

Car Makers, Cellulosic, Ethanol

Energy Critical for Farm Policy

Cindy Zimmerman

Three former Secretaries of Agricutlure testified before the House Agriculture Committee Thursday on what the most important priorities should be for the 2007 Farm Bill. All three mentioned energy and the role of agriculture in meeting the nation’s demand for it.

Former Secretary John Block, who served five years under the first President Bush, told the committee that “the increasing need for the use of our agricultural industry as a producer of energy is evident to everyone” and that “as much support as possible should be given to this aspect of the farm bill,” including support of renewable fuel research and development.
You can listen to Block’s renewable energy comments here: Listen to MP3 John Block (1 min MP3)

Clayton Yeutter, who also served under Bush, was passionate about the subject.
“The American public in my view is totally fed up with our dependence on crude oil imports from nations that are often unfriendly to the US, unstable, and sometimes downright hostile. And I believe the American public is prepared to pay the price to change that,” he said. He called on the committee to make a “major investment in the whole energy, renewable fuels area in American agricutlure and I believe all of America will thank you if you do that.”
You can listen to Yeutter’s renewable energy comments here: Listen to MP3 Clayton Yeutter (1 min MP3)

Finally, one of President Clinton’s agriculture secretaries, Dan Glickman of Kansas, noted that energy offers “great opportunities” for agriculture to participate in the development of energy for the transportation business. However, he did have a warning about the food versus fuel issue. “When gas tanks begin competing for corn as earnestly as the feed mills upon which our multi-billion dollar animal agriculture system depends, the equation takes on a vastly different perspective.” He said he believes the issue is “manageable, but it’s a complex issue that ought to be at the top of your agenda.”
You can listen to Glickman’s renewable energy comments here:Listen to MP3 Dan Glickman (1 min MP3)

Audio, Energy, Government

More BQ-9000 Accredited Producers

Cindy Zimmerman

cargill Two more prodcers became BQ-9000 this week, according to the National Biodiesel Board.

Although new to biodiesel production in the United States, Cargill took measures while constructing its biodiesel facilities so that it could help ensure it meets the industry standard for quality. Cargill’s Iowa Falls, Iowa, location has produced biodiesel since May. The company reports 37.5 million gallons of capacity. griffin

Griffin Industries of Kentucky, an early producer of biodiesel beginning in the late 1990s, has also achieved BQ-9000 accreditation. “Our ability to further validate the consistent quality of Griffin’s BioG-3000® premium biodiesel is a critical step to maintaining and building consumer confidence,” said Tom Griffin, Senior Vice President for Griffin Industries.

BQ-9000 is a voluntary fuel quality assurance program that includes procedures for fuel storage, handling and management aimed at ensuring biodiesel fuel quality throughout the distribution system. To date, 11 companies are BQ-9000 accredited, with another seven undergoing the process.

Biodiesel