Ethanol bills were in the news in a couple of states today.
In Arizona, the Senate passed a bill which classifies E85 as a motor fuel and permits it to be used in Maricopa County. Maricopa County’s poor air quality has led to restrictions on the motor fuels that can be sold. But the Arizona Department of Environmental Quality endorsed the E85 blend. (The Arizona Republic)
In Kansas, Gov. Kathleen Sebelius Wednesday signed a bill encouraging the use of E85 fuel in Kansas. The bill reduces the motor vehicle fuel tax rate on E85 by 7 cents per gallon effective Jan. 1, 2007, for a new rate of 17 cents per gallon. Beginning July 1, 2020, the tax on E85 will drop to 11 cents per gallon, or 7 cents below the tax on most other fuels. (Wichita Business Journal)
MO House Moves Ethanol Bill
After a few amendments passed and a few defeated, the Missouri House of Representatives came to a consensus on an ethanol mandate bill for the state. The measure would require most gasoline sold in Missouri after the end of next year to contain a 10 percent ethanol blend – and here is the fine print – as long as the price to retailers is the same or cheaper than traditional gasoline. According to the Associated Press in the Kansas City Star, the price-dependent opt-out provision is the result of a compromise between agriculture leaders and petroleum marketers, who had argued that an inflexible mandate could lead to higher prices for consumers.
Gator Ethanol Research
This story is appropriate this week in honor of the Florida Gators basketball championship – especially since my husband and I are both UF alumni.
Research at the University of Florida’s Institute of Food and Agricultural Sciences is on the cutting edge of converting biomass to ethanol. IFAS sent out this release last May, prior to the existence of Domestic Fuel, but I recently found it and sent it along to my good friend and ace reporter Mike Rogers. You may have heard his voice on reports for major national radio networks. Anyway, after a week of trying he managed to track down Dr. Lonnie Ingram, IFAS professor of microbiology, who who has developed a biotechnology “bug” that converts biomass and other farm wastes into fuel. His breakthrough technology is basically a genetically engineered E. coli bacteria. The bioconversion technology is being commercialized with assistance from the U.S. Department of Energy (DOE). BC International Corp., based in Dedham, Mass., holds exclusive rights to use and license the UF-engineered bacteria. 
The picture shows Professor Ingram holding a Petri dish containing the new bacterium, while Greg Luli, vice president of research for BC International Corp.’s laboratory at the Sid Martin Biotechnology Center in Alachua, Fla. watches.
Listen to Mike’s interview with Dr. Ingram here: 
Ingram Interview
Go Gators!
Clean Cities Congress
Alternative fuels and advanced transportation technologies will be featured at the Clean Cities Congress and Expo 2006, which will be held May 7-10, in Phoenix, Arizona. The theme of this year’s Congress is “Fueling Economic Solutions” with a focus on cost-savings for alternative fuel fleets. “With oil prices nearing $70 a barrel, fleets are taking a financial hit,” said Will Kleindienst, chairman of the 2006 Congress. “Because of substantial incentives in the energy bill and the new cost competitiveness of alternative fuels, we’re attracting potential customers who never even considered using alternative fuels before.” Registration and other information is available on-line.
Another CHS and US BioEnergy Deal
CHS Inc., one of the nation’s leading energy and grain-based foods companies, and US BioEnergy Corporation, an ethanol production and management company, announced today they have entered into a joint ownership of an ethanol and biodiesel marketing company, according to a news release. CHS, which formed when Cenex and Harvest States Cooperatives merged in 1998, acquired 28 percent ownership in U.S. BioEnergy Corporation in November. (see previous post)
CHS has marketed ethanol-blended fuels for more than 25 years and currently is one of the nation’s largest suppliers of blended fuel products at 500 million gallons annually, distributed through 64 terminals. CHS became a shareholder of US BioEnergy in November of 2005. US BioEnergy currently has two ethanol plants under construction, US Bio Albert City, a 100 million gallons/year (mgy) plant in Iowa and US Bio Woodbury, a 45 mgy plant in Michigan. In addition, US Bio Janesville, a 100 mgy plant in Minnesota and US Bio Hankinson, a 100 mgy plant in North Dakota are under development.
More Terminals Offer Pre-Blended Biodiesel
Petroleum terminals in Texas, New York and Michigan have announced the availability of pre-blended biodiesel within the last month, according to a release from the National Biodiesel Board. Distribution Drive, a wholly owned subsidiary of Earth Biofuels, Inc. and Motiva Enterprises, an oil company headquartered in Houston, Tex., announced Monday that the Motiva Enterprises terminal in Dallas will now offer biodiesel at any blend level. That’s the one that got all the media attention this week, since it’s in “big oil” country. The others that opened with less fan fare were Sprague Energy in Albany, NY and RKA Petroleum Cos. in Romulus, Michigan.
New Team Ethanol Driver Announced
The ethanol legacy will live on with the Indy Racing League (IRL). Rahal Letterman Racing announced today the selection of Jeff Simmons as the driver for the No. 17 Team Ethanol Honda/Panoz/Firestone car. Simmons will replace Paul Dana who died March 26.
“Paul realized the benefits of using ethanol, and he worked hard to get the message out to everyone,” said Ethanol Promotion and Information Council EPIC. Executive Director Tom Slunecka. “We look forward to Jeff promoting the benefits of ethanol just as proudly as Paul did.”
Dana was a tireless promoter of ethanol and the architect of the agreement that switched all IndyCar Series cars to a 10 percent ethanol, 90 percent methanol blend this year. In 2007, the IRL will make the switch to 100 percent fuel-grade ethanol in all IndyCar Series cars. E10 (10 percent ethanol and 90 percent gasoline) is the fuel blend used by drivers all across the country in everything from minivans to lawnmowers. Increasingly, E85 (85 percent ethanol and 15 percent gasoline) is also available in many areas throughout the country.
Simmons, a native of East Granby, Conn., is the winningest driver in IRL Indy Pro Series (IPS) history with seven victories. He has garnered extensive experience in the IPS, having run four seasons and twice finishing as the championship runner-up – in 2003 and 2005.
“I am honored to have the opportunity to promote the message and need for the clean-burning, renewable fuel ethanol and to become a member of Rahal Letterman Racing,” said Simmons, 29. “It is one of the most professional teams I could ever hope to be associated with, and I truly appreciate the faith that Bobby (Rahal) and the Team Ethanol sponsors have placed in me. The fact that I have this opportunity as a result of Paul’s passing is not lost on me, and I want to express my deepest sympathies to his family and friends.”
Listen to Jeff Simmons here: Jeff Simmons Announcement (Courtesy of Gary Truit, Brownfield Network)
Team Ethanol is comprised of the Broin Companies, Fagen Inc., ICM and 25 other companies who have joined together in a voluntary industry-wide coalition that represents over half of the industry. Ethanol is a high-octane, high-performance fuel that is clean burning, renewable and made in America. As a growing component of the U.S. gasoline supply, ethanol delivers improved vehicle performance for all passenger cars and trucks while reducing harmful emissions and improving air quality.
Midwest Grain Sale Going Down (Under)
By a 2 to 1 margin, the shareholders of Midwest Grain Processors last week approved a deal to sell majority ownership in their cooperative to Australian company Global Ethanol. Over 1,000 of the 1,300 members of the co-op in Lakota, IA turned out for the vote on Thursday. Dave Nelson, Midwest Grain Processors’ board chairman, told Agriculture Online “The turnout for the vote was unbelievable. It was better than a Presidential election turnout.” Not to mention more decisive. With 717 votes in favor and only 348 opposed, we probably won’t be hearing calls for a recount. However, those who were opposed to the deal remain opposed to the concept of foreign ownership in domestic fuel production. According to the Des Moines Register, “There wasn’t enough time to digest the information or investigate it thoroughly,” said Lennon Brandt, a farmer from Swea City. “I thought the vote might be close, but when people aren’t informed, they tend to trust the board.”
It’s the first time a foreign company has bought control of an ethanol co-op, but those in the industry believe the growth potential means it’s probably just the beginning.
Team Ethanol Will Go On
The pain is still too fresh for Paul Dana’s friends in the ethanol industry to even start talking about it, but the questions are being asked, and the Wichita Business Journal got some answers from Team Ethanol sponsors ICM and EPIC. 
“Absolutely we’ll be back,” ICM President and CEO Dave Vander Griend says. “It’s a tragic, tragic loss, a very tough one for me personally. But the best thing we can do for Paul’s legacy is to continue on, and we’ll do that.”
Plans for the ethanol racing team are on hold this week out of respect for Dana’s memory, says Tom Slunecka, EPIC executive director.
But keeping Dana’s drive alive to promote ethanol awareness will take center stage later, he says.
“I think we owe it to him to prove his legacy true,” Slunecka says. “We owe it to him to march on in behalf of him, in behalf of the fervor he had for both ethanol and racing. Ethanol was far more than a sponsor to Paul.”
Wait and See
USDA’s Prospective Plantings report out Friday says that farmers will plant five percent less corn acreage this year and seven percent more soybeans than a year ago – mainly because of higher fuel and fertilizer costs. So, what does that mean for ethanol production? Don Roose, an analyst with U.S. Commodities says “This puts the end users on notice like ethanol plants,” according to this article in AgricultureOnline. The Des Moines Register reports that Al Larson, who manages NEW Cooperative’s seed warehouse in Knierim, is skeptical about the report’s findings. “Our yields here the last three years have been just phenomenal,” he said. “I think it might go the other way. Ethanol demand, I think, is going to drive a lot of it. It’s everywhere you look.”
USDA’s estimate was well below what the trade was expecting – almost two million acres less than the low end estimate – so skepticism may be in order. And, as always, yields will largely depend on the weather, which is not predicable in any year. So, we just have to wait and see what really happens this year.