Delegates to the Iowa Farm Bureau annual meeting this week made some media waves when they rejected language in a resolution that would require an ethanol “mandate” in the state. The delegates reportedly approved “increasing the use of ethanol” in the state, rather than “mandating” it. The policy will not be final until Thursday when delegates meet again, but Radio Iowa quotes Iowa Farm Bureau President Craig Lang as saying, “Our membership said choice is best,” and would rather provide incentives to increase use than require it. The state legislature has failed to pass an ethanol mandate yet, but it is likely to be considered again in the next session. Meanwhile, in the nation’s capitol, Iowa Senator Chuck Grassley is said to be “mystified” by the Farm Bureau action. And Congressman Jim Nussle, who would like to be Governor of Iowa, is in favor of a state mandate to promote American energy – grown in Iowa.
Shroom-driven Ethanol
Shitake mushrooms are tasty delicacies that are known for their smoky, rich flavor – but they also have another attribute that could help increase the efficiency of ethanol refining. Scientists with USDA’s Ag Research Service are studying the Shitake mushroom’s natural ability to dissolve wood into sugar and they have identified and copied the gene in the mushroom that performs that task.
Called Xyn11A, the gene carries the instructions that the mushroom uses to make an enzyme known as xylanase which the researchers believe could speed up the fermenting process at biorefineries.
The full press release on the subject can be read here.
Bio-Willie Headlines 3rd Biodiesel Conference
The National Biodiesel Board is getting in gear for it’s big annual meeting coming up in February at the San Diego Convention Center. The headliner is Bio-Willie Nelson and the program reflects the tremendous growth of the indusry over the past year. Sessions include everything from fuel quality standards, federal and state legislation, and new marketing strategies, to production forecasts of biodiesel. During the conference, Willie Nelson will participate in a live broadcast of the Bill Mack trucking show on XM Radio.
The 2006 National Biodiesel Conference & Expo is scheduled for Feb. 5 – 8. Registration is available on-line by clicking here.
Ethanol Good For Turkeys Too!
Renewable Fuels Association president Bob Dineen has an interesting holiday perspective on turkeys and ethanol. Just another reason for us to be thankful for ethanol!
Speaking of turkeys – Missouri Corn Growers Association CEO Gary Marshall initiated his first annual Big Turkey award this year – and the recipient is Big Oil! In this week’s CornTalk, Gary also gives thanks for corn growers, legislators and others who support the domestic fuel industry.
And They Said It Couldn’t Be Done…
The U.S. ethanol industry has already met – and beat – the requirement for the Renewable Fuel Standard (RFS) set for 2006 this year, according to the Renewable Fuels Association. RFA quotes the September report from the Energy Information Administration that puts ethanol production in September at an average 261,000 barrels per day (b/d), which is almost 11 million gallons. Multiply that by 365 and they come up with an annualized figure of over 4 billion gallons – the goal for the first year of the RFS, which is next year.
“Some people questioned whether the ethanol industry would be able to meet the RFS requirement of 4 billion gallons in 2006,” said RFA President Bob Dinneen. “Well, this announcement by EIA answered those skeptics. On an annualized basis, we’re producing that much ethanol today! With more than a billion gallons of production capacity currently in construction, the U.S. ethanol industry will very soon become the world’s leading producer of renewable fuels.”
So there!
National Biodiesel Board News
The National Biodiesel Board re-elected it’s entire slate of officers for “what promises to be a period of intense growth in production and sales,” according to the organization news release. Darryl Brinkmann, a farmer from Carlyle, IL who has been on the board since 1998, will continue to serve as chairman of the association. Brinkman represents the American Soybean Association on the board. Other officers re-elected are Fred Wellons, Vice Chairman, representing Baker Commodities, a biodiesel supplier based in Los Angeles, CA; Gary Haer, Secretary, representing West Central, a biodiesel supplier based in Ralston, Iowa; Jerry Osterholt, Treasurer, a farmer from Roanoke, Indiana representing the Indiana Soybean Board. Additionally, two other farmers became newly elected board members. Robert Stobaugh, a farmer representing the Arkansas Soybean Promotion Board, and Ed Hegland, a Minnesota farmer representing the state’s Soybean Research & Promotion Council, joined the Governing Board. A soybean farmer from Nebraska, Richard Prascher, retired from the board.
Cargill Ethanol Expansion Plans
I had to look back at recent posts to make sure I had not already done this story, since I have written about so many new plants lately. This one was actually announced November 9, and it’s a significant one because it would be the largest in the country and would make Cargill the second largest ethanol producer in the country. Cargill is planning to build a second plant in Blair, NE that would produce 110 million gallons of ethanol per year. Currently, the largest plant in the country is Aventine Renewable Energy’s plant in Pekin, IL at 100 million – at least two other 100 mmgy plants are in the works, in Texas and Missouri. Aventine is currently the country’s second largest producer, but a far second from leader Archer-Daniels Midland. ADM produced over a billion gallons of ethanol last year at seven plants in the midwest. Cargill’s new plant would raise their total annual U.S. production capacity to 230 million gallons.
CHS Aquisition
The already huge CHS, Inc. got bigger this week as it acquired 28 percent ownership in U.S. BioEnergy Corporation, an ethanol production and marketing firm.
CHS, a diversified energy, grains, and foods company, reported over $221 million in earnings last year and now plans to dive right in to the ethanol production arena, according to John Johnson, CHS president and chief executive officer. “By working with an established company, CHS becomes actively involved in the renewable fuels manufacturing arena more quickly and on a broader basis than it could have on its own.” CHS has sold 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 is the conglomerate formed when Cenex and Harvest States Cooperatives merged in 1998. US BioEnergy is a Brookings, S.D. based company that currently has two ethanol plants under construction, US Bio Albert City, a 100-million gallons/year plant in Iowa and US Bio Superior Corn, a 45-mgy plant near Lake Odessa, Mich. In addition, US Bio Janesville, a 100 mgy plant in Minnesota, is under development and other projects are being considered. In addition, US BioEnergy’s subsidiary UBE, provides ethanol and dried distiller grains marketing and/or management services for 11 operating plants and six currently under construction.
Biodiesel Incentive Stimulates Imports
A Florida-based company is importing biodiesel from Ecuador, but some domestic producers are not very happy about it. EarthFirst Americas, Inc., announced the arrival of the first shipment of almost 268,000 gallons of biodiesel this month, which is believed to be the largest single shipment of biodiesel ever imported into the United States. This first shipment is being sold to diesel distributors and end users throughout Florida. The company is expecting to arrange importation of up to 45 million gallons during 2006, and another 100 million gallons of biodiesel in 2007. They are even holding a press conference tomorrow (Friday, November 18) in Tampa to talk about their plans.
While this is good news for increasing biodiesel demand, it kind of defeats the purpose of DOMESTIC fuels if we’re importing it! That’s the American Soybean Association’s point – especially if they get a tax break that was intended to stimulate domestic production. ASA President Bob Metz says they are “outraged” that the imports will be taking advantage of the new tax incentive for biodiesel sold in the United States. “Importing biodiesel will only subsidize foreign farmers and biodiesel producers with U.S. taxpayer dollars,” said Metz. “The Administration and Congress must act immediately to eliminate loopholes that allow foreign biodiesel from exploiting a key part of our national strategy for reducing our nation’s dependence on foreign sources of energy.” The loophole is an Internal Revenue Service decision to interpret the biodiesel tax incentive passed by Congress to allow biodiesel made from vegetable oils not specifically listed in the statute, including tropical oils such as palm oil, which are not produced in the United States.
You can listen to Bob Metz’ comments about the issue here.
More Corn Going To Ethanol Production
USDA’s latest crop production forecast calls for a U.S. corn crop of 11-billion bushels this year. While that’s seven-percent below 2004, it’s still an increase of two-percent from October and is on track to be the second largest corn crop on record – despite many major production states having drought conditions during a critical point in the growing season this year. This month’s outlook for 2005/06 U.S. corn is for increased production, higher domestic consumption, larger stocks, and lower prices. The good news is that more corn is going into ethanol production, according to Gerald Bange, chairman of USDA’s World Outlook Board. “We’re now looking at an ethanol usage number of 1.575 billion bushels, an increase of 75 million bushels over our previous forecast…that would provide for the production of about another 200 million gallons of ethanol.” Bange says the total ethanol production estimate for 2005 is 4.25 billion gallons. Last year, U.S. ethanol production totaled 3.4 billion gallons from 1.22 billion bushels of corn.