The first Pacific Northwest ethanol plant is scheduled to break ground July 20 in Oregon. Cascade Grain is being constructed by JH Kelly Ethanol of Longview, Washington. According to JH Kelly, the plant will be the largest on the West Coast and one of the 10 largest in the United States. Cascade Grain has been working for more than six years on the 113 million gallon per year plant project which is expected to be complete in 2008. More on the story from the Longview (WA) Daily News.
Fill Up, Feel Good on the Highway
The latest “Fill Up, Feel Good” podcast from the Ethanol Promotion and Information Council is about ethanol hitting the highway.
Ethanol was the official fuel sponsor of the Interstate Highway System 50th Anniversary convoy across America last month and this report features some of the comments that were made about ethanol during the event.
The “Fill up, Feel Good” podcast is available to download by subscription (see our sidebar link) or you can listen to it by clicking here. (4:50 MP3 File)
The Fill Up, Feel Good theme music is “Tribute to Joe Satriani” by Alan Renkl, thanks to the Podsafe Music Network.
ACE Plays Pair of Governors
Kansas and Missouri may be rivals when it comes to college football and basketball, but they are on the same team when it comes to ethanol. That’s why governors of both states will share the stage at the American Coalition for Ethanol (ACE) 19th annual ACE Ethanol Conference & Trade Show August 8-10 in Kansas City, Missouri at the Crown Center. Missouri Governor Matt Blunt and Kansas Governor Kathleen Sebelius will both address the conference on August 9.
Missouri will also be represented at the conference by Senator Jim Talent who will receive ACE’s Legislative Leadership Award for helping champion the 7.5 billion gallon Renewable Fuels Standard in Congress.
More information on the conference is available on-line.
Farm Bureau Calls for More Tanks
The American Farm Bureau Federation is asking Congress to provide incentives for gas station owners to install storage tanks so that alternative fuels will be more available to the public. House and Senate bills H.R. 5346 and S. 2614 would provide those incentives for not only ethanol and biodiesel, but also compressed natural gas or hydrogen.
According to a release, AFBF President Bob Stallman sent a letter to members of Congress last week urging them to pass the bills, saying “The result of this legislation would be increased consumer access to alternative fuels and more use of such fuels as E-85 and biodiesel, which are renewable fuels produced from the crops grown by America’s farmers.”
Ethanol Prices
One question everyone always wants to know is how much does ethanol cost? While some people in the industry can provide lengthy explanations about spot market prices and long term contracts and so forth, the short answer is – it varies from day to day and location to location. Unlike the oil industry, which is largely controlled by OPEC, there is not a cut and dried daily price for ethanol.
That being said, it is interesting to take a look at where prices might be in down the road – which is what the futures market is for. When the Agriculture Department released its report last week on the cost of making ethanol from sugar, USDA chief economist Keith Collins covered that issue as it related to the economic feasibility of sugar-based fuel.
Collins pointed out that in May of 2006, “ethanol sold at a 94 cent premium to gasoline” averaging $3.00 a gallon. “That is an aberration, that is a wide spread and it reflects this transition we’ve been going through as we shift from MTBE as an oxygenate to ethanol, and ethanol has been selling at a premium.”
However, Collins says the futures market believes both ethanol and gas prices will go down within the next six months. “If you go out to January 2007 delivery, gasoline falls to $1.94 (on NYMEX) and ethanol (on CBOT) falls to $2.50, the spread between the two is only 56 cents.” (Collins was quoting futures prices the week ending July 7)
Some media reports have taken that to mean that the ethanol gold rush will come to an end in six months and investors will begin selling out. What it really means is that ethanol prices will come back to more normal levels as production begins to catch up with demand. And, of course, the futures prices do not reflect the energy tax credits and incentives for ethanol at federal and some state levels.
Incidentally, the full USDA report on Ethanol Production from Sugar is now available in PDF form on the USDA website.
East Coast Ethanol
Ethanol might soon become more available on the east coast. Agri-Ethanol Products of Raleigh, NC has announced that it now has financing to build as many as 20 renewable energy facilities from the Gulf states to New York. AEP is already building the first 100 million gallon ethanol plant located on the East Coast near Aurora, NC. According to a news release, at least two new North Carolina ethanol projects, in addition to the Aurora site, are anticipated as a part of the 20 potential facilities. Each of these facilities will produce 108 million gallons per year of undenatured, fuel grade ethanol; 380,000 tons of high protein DDGS and 320,000 tons of CO2, that will be purified and marketed into the food and beverage industries.
It’s a Wrap
The National Biodiesel Board is showcasing colorfully wrapped bean-powered vehicles. This photo is the “Bean Bus” at the U.S. Department of Agriculture’s Beltsville Agricultural Research Center in Maryland. NBB has a number of other photos of vehicle wraps on their website and they want more. If you have a creative way you’ve shown your support of biodiesel, send them a picture and a brief discription. Some of the other organizations that have sent in pictures include the South Dakota, Kentucky, Iowa and Minnesota Soybean Councils.
Great Race for Team Ethanol
Saturday night at Nashville Superspeedway Danica Patrick equaled her best IndyCar® Series finish of fourth and rookie Jeff Simmons posted his top IndyCar Series finish of seventh as Rahal Letterman Racing posted one of its strongest outings of the 2006 IndyCar Series season.
According to a news release from EPIC, Patrick overcame a whirlwind week of media scrutiny with a stellar run matching her best IndyCar Series result. Starting tenth, Patrick moved through the field and ran as high as second en route to posting her top finish of the season. Jeff Simmons started 15th in the No. 17 Team Ethanol Honda/Dallara/Firestone machine but ran his best race of the season and finished seventh. In Simmons topping his career best IndyCar Series finish (tenth) from Kansas, Simmons has posted back-to-back top-ten results.
I Filled Up At the Wrong Pump
Travelling home late last night from a road trip I stopped for gas at an MFA Oil store in Columbia, MO.
It was very late and I was not very attentive I will admit. I looked at the pump on the island I was pulled up to and noticed that higher octane gas containing ethanol was priced the same as regular unleaded. That seemed to be a no-brainer.
However, when I was almost full I looked up and saw this sign for the first time and found out that they have an E-85 pump at a different island. Whoops. It’s 55 cents cheaper per gallon and I’m driving a flex fuel vehicle. Well, that was just par for the course on a day when my flight was an hour and a half late and I got to drive home for 2 hours through driving rain (we needed it here in Missouri though).
It’s nice to be seeing more E-85 pumps though. I’ve just got to be more observant!
Minnesota Study
Don’t think I have been ignoring the University of Minnesota study out this week that has given ethanol some bad press. I have just been playing catch up after being out of the office for a couple of days.
Fact is, the study is actually positive in many ways. For one thing, the report finds that ethanol from corn produces roughly 25 percent more energy than is consumed in growing the corn and producing and delivering the fuel, which refutes some studies that have claimed a net loss.
More importantly, the main point of the study is that ethanol could only replace about 12 percent of the gasoline used in this country, even if we used all of the corn grown to produce ethanol. That is very true. The point is, NObody in the ethanol industry has EVER claimed that ethanol is the end all and be all for the US becoming energy independent. BUT, it can REDUCE our dependence on foreign oil. That is the key – and it is already doing that.
Here is a good story about the Minnesota study that puts it in perspective, from the Lincoln Journal-Star.
Also, it is important to note the positives about biodiesel in the report, but comparing it to ethanol is kind of like comparing apples to oranges. Most passenger vehicles in the US do not run on diesel fuel, but lots of big trucks, buses, and boats do – so that is where biodiesel will help lessen our dependence on foreign oil.
Here’s another good point, direct from the press release from the University. According to Douglas Tiffany, research fellow, department of applied economics and another co-author of the study, ethanol and biodiesel plants are early biorefineries that in the future will be capable of using different kinds of biomass and conversion technologies to produce a variety of biofuels and other products, depending upon market demands.
And .. both ethanol and biodiesel have a long-term value as additives because they oxygenate fossil fuels, which allows them to burn cleaner. Biodiesel also protects engine parts when blended with diesel.
So there are really lots of positives in the report, while many of the media reports have dwelled too much on the negatives.