Renewable Fuels Standard For 2006

Cindy Zimmerman

EPA The Environmental Protection Agency is all hyped-up about implementing the Energy Policy Act’s new Renewable Fuels Standard. According to a press release issued by the agency today, the first step of the program is an almost three-percent standard for 2006.

“Under President Bush’s leadership, we are addressing our nation’s growing energy demand in a way that supports our goals for a clean environment and healthy economy,” said EPA Administrator Stephen L. Johnson. “This investment in renewable fuels made from domestic crops will support American agriculture and replace fossil fuels with an increasing amount of cleaner-burning alternatives such as ethanol or biodiesel illustrating that environmental progress and economic development can, in fact, go hand-in-hand.”

The regulation announced today explains how industry will comply with the Energy Policy Act’s default provision requiring that 2.78 percent of the gasoline sold or dispensed to U.S. motorists in 2006 be renewable fuel. The regulation is intended to provide market certainty for smooth implementation of the program in 2006 as EPA expands the program. Many of the act’s other provisions regarding the Renewable Fuel Standard Program for 2007 and beyond will be implemented in subsequent regulations.

The program will significantly increase the volume of renewable fuels blended into motor vehicle fuels. Various renewable fuels can be used to meet the requirements of the program, including ethanol and biodiesel. Under this standard, refineries, blenders, and importers would collectively be responsible for meeting program requirements for 2006, where compliance would be calculated over the entire pool of gasoline sold to consumers.

For more information on the Renewable Fuel Standard Program, the EPA suggests you visit http://www.epa.gov/otaq/renewablefuels/

Government, Legislation

Biodiesel: His Majesty the King’s vision

Cindy Zimmerman

I am not making this headline up. It is straight out of today’s “Thai Day.” Basically, the short version is that the king of Thailand is promoting the use of biodiesel made from palm oil, but I just love the way the story is written for the Thai audience. It reads like a fairy tale …

Sometime in the early 1980s, as Sumet Tantivejkul remembers it, His Majesty the King took his trusted aide aside and said that he wanted him to look into the feasibility of using palm oil as an alternative to diesel as an energy source.

According to Sumet, His Majesty wished to keep his request quiet at the time and asked that the research be conducted discreetly, noting that the need for an alternative fuel would be realized in the decades to come.

Today, more than 20 years later, the need for an alternative to petroleum-based energy is all too apparent and HM the King’s idea of using palm oil as an alternative substitute for diesel is now a reality. As His Majesty declared in his birthday address to the nation, “palm oil seems to be a viable substitute.” He later went on to say that Prime Minister Thaksin Shinawatra “may have seen a royal car that runs on biodiesel, 100 percent of which is produced from palm oil. The exhaust smells good and doesn’t cause cancer.”

In response to His Majesty’s address, the Energy Ministry announced that it would promote biodiesel through tax incentives. HM the King’s interest in biodisesel became more pronounced in 2000, when petroleum prices started to soar. The Thai government responded by launching the country’s first “car-free” day to conserve oil reserves in an effort to raise public awareness of air pollution and energy conservation. But a symbolic day was hardly going to make a difference: what the country needed was a long-term solution to the problem of the earth’s rapidly diminishing oil reserves. As His Majesty realized, one solution lies in biodiesel, a substitute made from organic matter – in Thailand’s case, palm oil.

And they all lived happily ever after….

The picture is of the biodiesel reactor at the Pikul Thong Royal Development Study Center in Narathiwat.

Biodiesel, International

Merry Christmas From ZimmComm

Chuck Zimmerman

Staff of ZimmCommZimmComm, Marketing & Communications is the publisher of DomesticFuel. Our staff wishes you and yours a very merry Christmas.

From l-r are Amy, Cindy, Chuck and CJ the office dog. We promise to bring you a lot of interesting news and information in the coming year. It’s time now to take the weekend off and celebrate why we are so blessed.

Miscellaneous

Latest Ethanol Production Numbers

Cindy Zimmerman

RFA It gets to be monotonous to report that ethanol production is continuing to increase, but it is. The latest figures from the U.S. Energy Information Administration (EIA) show that ethanol production in the U.S. averaged 269,000 barrels per day (b/d) in October, up 8,000 b/d from September. The Renewable Fuels Association reports that demand for ethanol also grew substantially to 278,000 b/d, which is the second highest monthly demand, surpassed only by August demand. RFA President Bob Dinneen says it shows the industry is here to stay. “Now producing well over the first year requirement of the RFS, the ethanol industry is fully prepared to exceed the requirements of this program in the years to come.”

Ethanol, Production

Energy Conference Presentations Available

Cindy Zimmerman

energy conference Papers and presentations given at the recent Energy From Agriculture Conference in St. Louis are available on the Farm Foundation website. The conference was presented by Farm Foundation and USDA’s Office of Energy Policy and New Uses as a follow-up to the 2004 conference, Agriculture as a Consumer and Producer of Energy. USDA’s Office of Rural Development and Natural Resources Conservation Service also helped sponsor the event, so it was quite heavily focused on any USDA programs related to energy. Lots of information here – production, research, marketing, legislation – pretty well covers the waterfront. An executive summary of the conference proceedings will be available early 2006.

Agribusiness, Government

Oh E-Canada!

Cindy Zimmerman

Oh Canada Our neighbors to the north may soon have a national biofuels standard. The two leading politicial parties in Canada are both promising to require that renewable fuels, such as ethanol and biodiesel, make up 5 percent gasoline and diesel fuel by the year 2010. According to a Reuters Canada report, three of the 10 provinces — Ontario, Saskatchewan and Manitoba — already require some renewable fuels but there is not a national standard. The two major party candidates are Liberal Prime Minister Paul Martin and Conservative leader Stephen Harper and the election is just over a month away, January 23.

Biodiesel, Ethanol, International

Wisconsin Moves Toward Ethanol Requirement

Cindy Zimmerman

Wisconsin Wisconsin is poised to become the fourth to enact an ethanol blend requirement for gasoline. The state assembly last week passed a measure that will require all 87-octane gasoline to contain 10 percent ethanol by October 1, 2006. The state senate will vote on the bill after the holidays and if it passes the governor is expected to sign it. The three other states that already have ethanol mandates are Minnesota, Montana and Hawaii. According to the American Coalition for Ethanol, Minnesota’s E10 requirement has been on the books since 1997 and Hawaii’s will go into effect this coming April. Montana’s E10 law is contingent upon having 40 million gallons per year of in-state production capacity. Several other states, such as Missouri, have legislation in the works.

Ethanol, Legislation

Agri-Ethanol Products Plant Annouced In North Carolina

Chuck Zimmerman

Agri-Ethanol Products, LLCNow we’ve got an ethanol plant being built on the east coast. That’s different! We’ve seen so many of them being built in the midwest that it was only a matter of time until we saw them popping up in other areas.

Thanks to Mark Simone at Andrew B.Bellingham Commodity Trade Analysis for the heads up on this announcement.

Dave Brady, managing member of Agri-Ethanol Products, LLC (AEP) today (Dec. 16) announced the location of a $150 million ethanol plant to be located in Beaufort County, near Aurora, North Carolina. Mr. Brady thanked Governor Easley for the assistance that the state of North Carolina provided in making the plant possible. He also expressed his sincere appreciation to Secretary of Commerce, Jim Fain, Secretary of Revenue, Norris Tolson, Senator Marc Basnight, Representative Arthur Williams, Representative Joe Tolson, Larry Shirley and NC Department of Energy, the Northeast Partnership, Tom Thompson and the Beaufort County Economic Development Commission, the Town of Aurora and Roseview Capital.

The plant will produce 114 million gallons of ethanol per year as well as co-products consisting of distillers dried grains with solubles (DDGS) and CO2. This will be the first ethanol plant in North Carolina and the first on the East Coast of the United States. The ethanol production will be delivered in each of two, 57 million gallon per year phases, with the co-products output doubling accordingly. Phase I ground breaking and construction start-up is expected during the first quarter of ’06. Approximately $2 million will be utilized through various grant sources from the State to facilitate rail improvements critical to the operation of the plant.

Ethanol, Production

Flex Fuel Ford F150’s Rolling

Chuck Zimmerman

FordIt’s time to get yourself a Ford Tough F150. Ford has just announced that the first flex fuel trucks are rolling off the production line.

As Ford continues to drive American innovation, a new version of America’s best-selling vehicle is rolling off the line at the Kansas City Assembly Plant. Production of the first Ford F-150 flexible fuel vehicles (FFVs) began this month, continuing the company’s commitment to producing 250,000 FFVs in the coming year. The flexible fuel technology is being built into the 5.4L, V-8 engine model and is available to consumers at no additional cost. FFVs can operate on gasoline or ethanol blends up to E85 – a blend of 85 percent ethanol and 15 percent gasoline.

“We’re pleased to begin production of F-150 FFVs. Flexible fuel vehicles give customers the option of fueling with gasoline or the ethanol,” said Ken Ward, Kansas City Plant manager. “Customers will find that the F-150 FFV offers the same functionality as the gasoline version F-150 – including horsepower and torque.”

Made in America, ethanol is a renewable fuel that supports U.S. jobs and reduces the nation’s dependency on foreign oil. It is produced primarily from corn grown in the Midwest and is generally less expensive than regular unleaded gasoline – saving consumers money at the pump.

As I was checking this story out I came across FordF150.net which has a user forum set up. Here’s a link to a conversation thread on ethanol.

Ethanol, Flex Fuel Vehicles

Yet Another Nebraska Plant

Cindy Zimmerman

Biofuel Solutions Colorado-based Biofuel Solutions and Cargill are together on a deal to build a 110-million-gallon per year ethanol plant in Wood River, NE. The plant is expected to use about 41 million bushels of corn annually from the Cargill elevator adjacent to the plant, and Cargill will also market and distribute the ethanol, in addition to 375,000 tons of dry distiller grains a year for animal feed. Construction on the facility is expected to begin early next year. Biofuels Solutions recently announced plans for a similar plant in Fairmont, MN that would utilize the same type of deal with Cargill. Thanks to Mark Simone of A.B. Bellingham Commodity Trade Analysis, Inc. for passing that story on to us. We appreciate it!

Ethanol, Production