Ethanol Transport Concerns

Cindy Zimmerman

Transportation issues have been added to the growing list of concerns about how demand for ethanol will be able to be met this year. According to a Reuters business wire story, officials with the US Energy Information Administration think there may be a shortage of trucks and rail cars to move ethanol.

“We’ll need to find a whole lot more rail cars that may not be readily available,” EIA analyst Joanne Shore said in an analyst conference call. “There’s also concern about trucks, and the truck drivers needed for moving this are in short supply.”

Ethanol

Mixing Alcohols

Cindy Zimmerman

Power Energy Ecalene A trademarked ethanol cocktail called Ecalene™ may offer the potential to solve some of the issues relating to pure ethanol use. Power Energy Fuels in Colorado claims that Ecalene™ is “Ethanol Plus” because it has higher mixed alcohols which act as a binding agent in fuel blending, has higher octane than ethanol, is its own denaturant, has higher btu’s than ethanol with high octane that will increase mileage and performance – all according to their website. Certainly sounds promising. Power Energy has the patents on the product, they are working with NREL and have two patents on the process. Here’s another link that gives some more info about Ecalene.
I found out about Ecalene™ through a comment from Power Energy president Gene Jackson who wrote asking why I don’t “promote mixed alcohols?” Well, that would be because I didn’t know about it. Now I do – but I would ask you why YOU don’t promote it? The media is eating up anything that has to do with ethanol right now but if you do a news search for Ecalene there’s nothing. Send out a press release, for goodness sake!

Ethanol

Governors Want More E85 Vehicles

Cindy Zimmerman

GEC The Governor’s Ethanol Coalition met this week in Washington, DC and passed a resolution urging major auto makers to make more flex-fuel vehicles that can run on 85 percent ethanol. Thirty-two of the country’s governors are members of the coalition, which was formed in 1992 to promote ethanol use. So far only midwestern governors have chaired the organization, but governors of states like New York, Arizona and Washington are listed as members. Kansas Gov. Kathleen Sebelius is the new chairman of the coalition and she was quoted as saying this week, “There’s a new energy behind our efforts to promote biofuels.”
Here are a couple of links to regional stories about the meeting this week.
Wichita Business Journal
Kansas City InfoZine
KXMC-News North Dakota

Ethanol, Flex Fuel Vehicles, Government

MO Rally for Ethanol Mandate

Cindy Zimmerman

MCGA Rally MCGA Rally 2Here are some pictures from the “Energy Independence Rally” yesterday at the Missouri State Capitol. According to the Missouri Corn Growers Association press releaseOver two hundred farmers and ethanol advocates met at the Missouri State Capitol (Tuesday) to show their support for increased energy independence and the Missouri Renewable Fuel Standard (MoRFS), legislation that would require nearly all the gasoline sold in the state contain 10 percent ethanol. It was a nice crowd and I would say that estimate is just about right. The event started at the Missouri Farm Bureau Building and ended in the halls of the capitol. The large crowd of farmers, ethanol plant members, business officials, community leaders, FFA students and others traveled to Jefferson City, Mo., to meet with lawmakers and push for passage of the statewide ethanol standard.
Once passed, Missouri will join Minnesota, Montana and Hawaii to become the fourth state in the nation to establish a statewide renewable fuel standard. Ethanol legislation is also currently pending in Illinois, Iowa, Nebraska, Wisconsin and most recently, Idaho.
Thanks to Becky Grisham with MCGA for the pictures. I really need to start carrying a camera with me in my car like my husband does!

Ethanol

Down Under Moving Midwest

Cindy Zimmerman

Midwest Grain The sudden interest of private companies wanting to invest in ethanol plants is causing some consternation in the midwest. US ethanol plant development has been largely a grassroots campaign over the past decade financed by farmer-owned cooperatives. Now one of those co-ops is facing the entrepreneur’s dream dilemma – selling out for venture capital. Midwest Grain Processors, a 1,300 farmer co-op in Lakota, IA has a deal worth $100 million in the works with a little-known Australian corporation by the name of Global Ethanol. The big bucks would help the co-op double capacity, but it would cost them 60 percent interest.
The Des Moines Register reports today that Senator Charles Grassley (IA-R) is urging the farmers “not to sell control to a foreign company.” The farmer-owners must vote to approve the deal before it can go through.
When I started researching this story today, I spent about an hour searching for this Global Ethanol company on the web, unsuccessfully. I finally found an article in the Australian Courier-Mail that kind of answered my question, saying “Little is known about Global Ethanol. Director Timothy McMahon yesterday referred questions to fellow director Trevor Bourne, who is in the US.”
I think that’s a little weird that a company calling itself GLOBAL ETHANOL is nowhere to be found on the web and has little known about it. Not very global, if you ask me. I will be interested to see how this deal goes down.

Ethanol

Things Happen for a Reason

Cindy Zimmerman

I went to noon Mass today at the beautiful St. Peter Church across from the Capitol building in Jefferson City, MO. I parked in one of the metered spots in front of the church even though there were temporary No Parking signs set up for a funeral, thinking that it must have been for a morning funeral that just concluded. I was wrong – the funeral Mass started in the upper church right after the regular daily noon service concluded in the lower chapel. I walked out to find my car blocked in by the funeral procession and the service just beginning. So, instead of fretting about it, I decided to go for a walk around downtown and enjoy the glorious weather. As I walked past the Capitol building I noticed a fairly large group gathered around the steps having a rally of some sort – not an unusual sight during the legislative session. Then I noticed the easily-recognizable blue jackets of a few FFA members – and the fact that the crowd was flanked by a couple of vehicles emblazoned with E85 emblems. Hmmmm – I said to myself, being the astute reporter-type that I am – must be some kind of ethanol thing going on here. Surveying the scene, which included a couple hundred farmer-types listening to brief statements from MO corn industry leaders and state lawmakers, I was reminded why my husband always keeps a camera handy. Of course, it would have been nice if I had received a media invite to the event – but we are still trying to convince some people that blogs are media too. Our good friend Becky Grisham with the Missouri Corn Growers Association has assured me that she will send me a picture of the crowd to post. Maybe tomorrow.

Ethanol

Fats and Oils in Demand

Cindy Zimmerman

Oil World An economist who makes his living forecasting the future of oils and oilseeds says that the supply of fats and oils in the world is not enough to keep pace with demand. According to a Bloomberg article, Thomas Mielke of Oil World says that between the increasing demands for both food and fuel, “There is a supply-demand deficit that is slowly worsening and the real impact is still to come.”
Mielke specifically addresses the use of products such as soy oil and palm oil for biodiesel and corn and sugarcane to make ethanol. “We cannot solve energy problems with oils and fats,” Mielke said. “If you look at five-year accumulative demand trends starting 1981, there has been an alarming acceleration in demand for the world’s 17 major oils and fats. There’s going to be more and more competition for new acreage from grains and sugar for oilseeds.”
So, either we have to grow more, use less, or find other sources.

Biodiesel, Ethanol

Duties Call

Cindy Zimmerman

Demand for ethanol is up and it is becoming evident that domestic production will not be able to supply it all. So, the possibility of lifting the current import tariffs on ethanol, particularly from Brazil, is being raised in Washington.
A Reuters article today says “Congress seems unlikely to lift import duties on much-needed ethanol to meet a domestic shortfall in the fuel additive due to opposition from U.S. producers and farmers.”
However, the article also goes on to say that Senator Saxby Chambliss, head of the Senate Agriculture Committee, told Reuters on Tuesday that Congress has no plans to consider tariff cuts this year, but he said such a move was not out of the question. “We’d be foolish not to consider it … if it benefits the energy community, particularly if at the same time it benefits our farmers,” Chambliss said. U.S. Agriculture Secretary Mike Johanns said this week he had not discussed lifting the tariffs on Brazilian ethanol.
Just because the “farm lobby” is against lifting the import duty doesn’t mean it’s not going to happen. The very powerful sugar industry was adamently opposed to the CAFTA-DR and lobbied heavily against its passage by Congress – but it did pass. So, it is possible.
Even though, as the article notes, Brazil is “slapped with a 2.5 percent ad valorem tariff and a second duty of 54 cents per gallon” on its exports of sugarcane-based ethanol to the U.S. – shipments from Brazil are expected to range from 60 million to 70 million gallons this year. Point being, there is nothing actually stopping Brazilian ethanol from coming here, the tariffs are simply designed to offset “the 51 cents per gallon tax credit the United States provides for blending 10 percent ethanol into gasoline” which may or may not be fair, depending on your viewpoint.
The article also quotes Renewable Fuels Association president Bob Dineen on the issue admitting that domestic production will not be able to meet demand, but still opposing the lifting of import tariffs.
Dinneen said supply problems that may result are no reason to lift duties on Brazilian ethanol imports, as the Brazilian government already subsidizes its domestic ethanol producers. “The Brazilians would love to have us subsidize their product (by easing our duties). But I don’t see a serious effort to do that in the Congress,” he said.
That may change and the ethanol industry may have to accept some compromise on the matter. But, like any industry – from cotton to steel – they are going to be protective of their protection and want to hang on to it for as long as possible, which is to be expected.

Ethanol, Government

Takes Fuel to Make Fuel

Cindy Zimmerman

FrontlineThe Ft. Lauderdale Sun-Sentinel ran an article Sunday that originally ran in the N.Y. Times on February 7. It’s headlined “It takes fuel to make fuel” and I am surprised that I haven’t seen it in any other NYT company papers considering the hype over ethanol and the Ames, IA dateline.
The article is all about how turning corn into ethanol requires natural gas and the research that is being done to make ethanol more cost-effective. Two potential solutions are offered to using less natural gas in the production of ethanol – using cow manure or corn stover.
The article talks about work being done at Frontline Bioenergy in Ames, which has as it’s mission statement “…to lead the nation in biomass gasification solutions for energy and products” and the cute little leaf logo you see on this post. It quotes Frontline’s research and development manager John Reardon on their gasification project, “It’s just a step. But our whole economy is based on fossil energy, and we have to make a step somewhere.”
That’s how it will all be done – a step at a time. Our dependence on fossil fuels may be an addiction, but it’s not one we can quit cold turkey. We have to cut down gradually, a step at a time, to wean ourselves like babies. But it can be done.
Thanks to Gary Dikkers for sending me the article.

Ethanol