ACE Plays Pair of Governors

Cindy Zimmerman

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.

Ethanol

Farm Bureau Calls for More Tanks

Cindy Zimmerman

AFBF 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.”

Biodiesel, Ethanol

Ethanol Prices

Cindy Zimmerman

USDA 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.

Ethanol

East Coast Ethanol

Cindy Zimmerman

AEP 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.

Ethanol, Facilities

It’s a Wrap

Cindy Zimmerman

Bean Bus 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.

Biodiesel

Great Race for Team Ethanol

Cindy Zimmerman

Firestone 200 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.

EPIC, Ethanol, Indy Racing

I Filled Up At the Wrong Pump

Chuck Zimmerman

MFA Oil PricesTravelling 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!

Ethanol

Minnesota Study

Cindy Zimmerman

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.

Biodiesel, Ethanol

Biodiesel Rebate

Cindy Zimmerman

Case Stack California-based CaseStack, Inc. is offering truckers a rebate to use biodiesel. According to the National Biodiesel Board, the Green Rebate Program began July 1 and will end two months later on September 1, 2006. CaseStack will give a rebate of 10 cents per gallon on any blend of biodiesel – up to $50.00 for the entirety of the program – per truck driver. Detailed information can be obtained through CaseStack’s Web site, by calling toll free 1-866-567-6644 or by texting the word “green” to 30364.
CaseStack, a logistics company, warehouses and handles shipping for several companies. CaseStack officials estimate that 70 percent of the truckers targeted in this program deliver to Wal-Mart distribution centers.

Biodiesel

Another NE Ethanol Plant

Cindy Zimmerman

RAE Renewable Agricultural Energy, Inc. of Boulder, Colorado and Gothenburg Improvement Company of Nebraska are planning to construct an ethanol plant in Gothenburg. According to a release, they have purchased 275 acres of land in Dawson County, which “has excellent direct rail and highway infrastructure and is an ideal location for serving western ethanol markets.”

With new plants being announced everyday it’s kind of hard to keep track of how many there are, but according to the Nebraska Ethanol Board there are a dozen plants already operating in the state and six more under construction. Another 22, including this one, are listed on the NEB website as being under consideration and a number of them have already announced their plans, bought land or otherwise moved forward with their proposed plants.

Ethanol