Analysis: Export Market a Bright Spot for US Ethanol

John Davis

Ethanol producers might be fretting about the government’s proposal to lower the amount of the green fuel to be mixed into the Nation’s fuel supply. But this analysis from the University of Illinois points out that those Renewable Fuel Standard (RFS) numbers don’t matter when it comes to ethanol going over the border and to foreign shores, a bright spot for the American industry.

An important point to note is that ethanol or other biofuels produced in the US and exported for consumption overseas do not count toward the blenders’ RFS obligations. The Renewable Identification Numbers (RINs) associated with exported biofuels are retired and no longer eligible for use towards RFS compliance. Thus, exports are not substituted for domestic consumption but rather represent additional demand. Ultimately, exports provide a path around, rather than through, the ethanol blend wall by allowing the domestic industry to produce greater volumes of ethanol than the blend wall limitation implies for domestic use.
ethanolexports
The analysis goes on to look at markets for American ethanol in Brazil, Canada, the European Union, Mexico and other foreign consumers and how it could take up the amount proposed to be lowered in the RFS.

Ethanol, Ethanol News, Exports, International

Biodiesel, Ethanol Educator Wins Ag Teaching Award

John Davis

junco1A high school chemistry teacher is honored, in part, for his work to teach his students about biodiesel. This article from The Grower says Gustavo Junco, an advanced-placement chemistry teacher at West Broward High School in Pembroke Pines in south Florida, taught his class how to power a go-kart with biodiesel made from corn and sunflower seed oil and picked up the 2014 Excellence in Teaching about Agriculture Award.

The award is sponsored by the Florida Agriculture in the Classroom, a Gaineville-based non-profit group that promotes agricultural education to students ranging from kingergarten to high school.

Junco has been teaching agro-eco0logy and advanced-placement chemistry to 10th, 11th and 12th graders at West Broward High for 10 years.

His chemistry students grow sunflowers in the school garden, then extract oil from the seeds that is then converted to biodiesel.

In addition, Junco’s honors chemistry class is turning sugarcane juice into cellulosic ethanol.

He’ll join three other Florida teachers going to the 2014 National Agriculture in the Classroom conference this summer in Hershey, Pa.

Biodiesel, Cellulosic, Ethanol

Iowa AG: EPA Proposal on Ethanol Violates Law

John Davis

tommillerThe proposed lowering of the amount of ethanol to be blended into the country’s fuel supply raises the possibility the U.S. government could face a lawsuit for breaking the law. In this article from Ethanol Producer Magazine, comments from Iowa Attorney General Tom Miller indicates the Environmental Protection Agency’s (EPA) to lower the Renewable Volume Obligations (RVOs) for ethanol violate Congress’ original intent.

Section 211(o)(2)(B) of the Clean Air Act expressly states the RFS mandated volume of renewable fuel to be included in gasoline: The total for 2014 is 18.15 billion gallons. However, section 211(o)(7)(A)(ii) provides a “general waiver” authority under which the EPA may modify these amounts if “there is an inadequate domestic supply.”

Iowa Attorney General Thomas J. Miller submitted comments to the proposal outlining several objections to EPA’s interpretation of the waiver authority, based on the well-known Chevron test used by the courts to assess a federal agency’s interpretation of a statute: 1) If the statute is clear, the court must enforce the law’s unambiguous language; and 2) If the statute is not clear, the agency’s interpretation must be permissible.

Miller argues that the statute unambiguously prohibits EPA from considering the distribution capacity of blended fuel. Under section 211(o)(7)(A)(ii), the term “supply” unambiguously refers to the “quantity of renewable fuel” required under section 211(o)(2). Therefore, in order to reduce the RFS for total renewable fuel, EPA must find that there is an “inadequate domestic supply” of “renewable fuel.”

Miller goes on to say the EPA’s interpretation of what it is allowed to do is not permissible, and he points out that Congress’ intent when passing the RFS was “to move the United States towards greater energy independence and security” and “to increase the production of clean renewable fuels.” The article also points out that Miller is pretty successful when leading multistate litigation.

EPA, Ethanol, Ethanol News

Genscape Brings Integrity to Biodiesel RINs

John Davis

Genscape LogoConfidence in the identification numbers for the government’s Renewable Fuel Standard (RFS) is key to the growth in biodiesel. This article from Biodiesel Magazine says the National Biodiesel Board-backed Genscape RIN (Renewable Identification Number) Integrity Network is helping keep up the confidence that those record-breaking biodiesel production numbers are legit.

Genscape provides U.S. EPA preregistered [quality assurance plans] QAP services and a number of other RIN integrity, RFS and low carbon fuel standard services to more than 40 renewable fuel producers, obligated parties, and midmarketers across three continents.

QAP has translated into increased RIN value for Genscape producers. QAP provides additional value not just for producers with smaller balance sheets or for producers who are new to the industry, but also for larger, well-established producers. In one example, a longstanding biodiesel producer looked to Genscape to provide RIN integrity guidance and proof of RIN assurance to two new buyers. This is an indicator that buyers are starting to rely more on third-party RIN integrity, like QAP, even for larger, more well-established producers.

Using Genscape QAP, producers are making sure they’re getting the best prices for RINs, able to secure longer-term deals, grow their buyer base, and meet the increasing demand for QAP RINs in counterparty agreements.

Biodiesel, NBB, RINS

Solar Investment Paying Better than Subsidies

John Davis

MIL_Solar_Farm_Nellis_AFB_lgDespite critics who have harped on solar energy as not being efficient and economical enough to stand on its own without government subsidies and being too pricey for regular folks, the sun’s power is proving stronger than the shadows of myths being cast about the clean energy source. This blog post from the New York Times says solar is more affordable than ever and can stand on its own without the subsidies.

The average price of a solar panel has declined an estimated 60 percent since the beginning of 2011, and this year the total photovoltaic capacity in the United States is projected to reach 10 gigawatts, the energy equivalent of several nuclear power plants. (By one estimate, photovoltaic costs crossed over to become cheaper than electricity generated by new nuclear plants about four years ago.)

In both Europe and the United States, generous public subsidies including tax breaks and feed-in tariffs requiring utilities to buy back consumer-generated electricity that feeds into the grid have allowed solar photovoltaics to achieve vastly lower unit costs. But these subsidies are dwarfed by historical taxpayer support of both fossil-fuel and nuclear-generated electricity. The International Energy Agency warns that continuing fossil-fuel subsidies contribute significantly to global environmental problems.

The big news is that solar photovoltaics are now cost-effective in many European countries even without public support. A recent article in The Financial Times quotes Jason Channell of Citigroup as saying: “We’re at a point now where demand starts to be driven by cold, hard economics rather than by subsidies, and that is a game changer.”

The post also points out the 143,000 solar workers in the United States in 2013 is a nearly 20 percent increase over employment totals from 2012.

Solar

Offshore Wind Farms Could Cut Hurricane Winds

John Davis

jacobson1Not only do they generate lots of clean energy, but offshore wind farms could help lessen the winds of hurricanes. A new study from Stanford University researcher Mark Z. Jacobson, a professor of civil and environmental engineering at the school, says the data could give shore-based communities another reason to put in the turbines.

The researchers simulated three hurricanes: Sandy and Isaac, which struck New York and New Orleans, respectively, in 2012; and Katrina, which devastated New Orleans in 2005.

“We found that when wind turbines are present, they slow down the outer rotation winds of a hurricane,” Jacobson said. “This feeds back to decrease wave height, which reduces movement of air toward the center of the hurricane, increasing the central pressure, which in turn slows the winds of the entire hurricane and dissipates it faster.”

In the case of Katrina, Jacobson’s model revealed that an array of 78,000 wind turbines off the coast of New Orleans would have significantly weakened the hurricane well before it made landfall.

In the computer model, by the time Hurricane Katrina reached land, its simulated wind speeds had decreased by 36-44 meters per second (between 80 and 98 mph) and the storm surge had decreased by up to 79 percent.

While the researchers admit there is political resistance to putting in large wind turbine farms offshore, the incentive of saving a city billions in damages might give wind energy advocates another tool in their belt in the fight. For example, Hurricane Sandy in the fall of 2012 caused about $82 billion in damage across three states. Big arrays such as the ones proposed would cost between $10 billion and $40 billion per installation.

Wind

Iowa Farmers Oppose RFS Changes

Cindy Zimmerman

iowa-soyA vast majority of Iowa farmers in a recent poll oppose changes to the Renewable Fuel Standard (RFS).

agri-pulseThe Agri-Pulse Farm Opinion Poll, launched last month in partnership with the Iowa Soybean Association, found that 92% of farmers polled oppose the Environmental Protection Agency proposal to lower of the amount of corn-based ethanol and biodiesel required to be blended in the nation’s fuel as part of the RFS.

In addition, almost three out of five farmers responding (58 percent) said that, of several national issues including the Farm Bill, trade, tax codes and immigration, the RFS is most important to the future profitability of their farms.

The poll also found that farmers expect to see weaker financial returns in 2014 and will adjust their expenditures – spending less on fertilizer and equipment but more on crop insurance. The new poll was taken February 23 and included more than 130 Iowa farmers responding to 12 unaided questions.

Biodiesel, Ethanol, Ethanol News, Farming, RFS

Ethanol Advocate Honored by Corn Growers

Cindy Zimmerman

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

The National Corn Growers Association (NCGA) celebrated the long and productive career of an ethanol advocate and industry leader during the recent Commodity Classic.

Jere White is retiring from the Kansas Corn Growers after leading that organization for a quarter of a century and was presented with the Meritorious Service Award from NCGA. He has been a strong supporter of the ethanol industry during that time and his son Robert is Director of Market Development for the Renewable Fuels Association (RFA).

An avid motorcyclist, White had a serious accident in September 2012, and while he has made a remarkable recovery from critical injuries, he recently decided it was time to pass the reins of the association on to someone else.

classic14-greg-jereThe new Kansas Corn CEO, pictured here with Jere, is Greg Krissek – also a long-time ethanol advocate and industry leader. In his career, Greg has served as Assistant Secretary at the Kansas Department of Agriculture; Director of Operations at Kansas Corn and Kansas Grain Sorghum; Director of Government Affairs for ICM Inc. and, most recently was a manager at Kennedy and Coe, LLC. He has also served on many ethanol and agricultural association boards and on seven ethanol plant boards of directors.

2014 Commodity Classic Photos

corn, Ethanol, Ethanol News, NCGA, RFA

Low Profile Biodiesel or Natural Gas Semi to Hit Road

John Davis

walmartsemi1It’s a pretty cool looking design (although I’m not sure how my friends in the trucking industry would take to being inches from the roadway). And what makes it even cooler is the fact that a new concept semi from Walmart would be able to run on alternative fuels, including biodiesel or natural gas. This blog post from the company story says the new truck debuted at Walmart’s Global Sustainability Milestone Meeting.

We’re just beginning formal testing, but this Walmart Advanced Vehicle Experience (WAVE) concept truck will be 20 percent more aerodynamic than our current trucks and have a micro-turbine hybrid powertrain that can run on diesel, natural gas, biodiesel and probably other fuels still to be developed. It may never make it to the road, but it will allow us to test new technologies and new approaches. I share it because it gives you a sense of how sustainability is helping us see things in new ways.

WAVE was just one of the innovations we discussed at our Sustainability Milestone Meeting on Monday. We also talked about new ideas around less photogenic topics like air filters, buttons, and even landfills. By seeing through the lens of sustainability, we are accelerating the pace of innovation across our business.

With about 7,000 vehicles in its truck fleet, let’s hope Walmart keeps riding low with biodiesel and natural gas.

Biodiesel, Natural Gas

Fuel Made from Shopping Bags Fits with Biodiesel

John Davis

plasticdiesel1Fuel made from plastic shopping bags could cut down on the amount of waste going into landfills and be a good fit to mix with biodiesel. This story from the University of Illinois says researchers at the school have found a way to turn the abundant litter into fuel.

The conversion produces significantly more energy than it requires and results in transportation fuels – diesel, for example – that can be blended with existing ultra-low-sulfur diesels and biodiesels. Other products, such as natural gas, naphtha (a solvent), gasoline, waxes and lubricating oils such as engine oil and hydraulic oil also can be obtained from shopping bags.

There are other advantages to the approach, which involves heating the bags in an oxygen-free chamber, a process called pyrolysis, said Brajendra Kumar Sharma, a senior research scientist at the Illinois Sustainable Technology Center who led the research. The ISTC is a division of the Prairie Research Institute at the University of Illinois.

“You can get only 50 to 55 percent fuel from the distillation of petroleum crude oil,” Sharma said. “But since this plastic is made from petroleum in the first place, we can recover almost 80 percent fuel from it through distillation.”

The researchers blended up to 30 percent of the plastic bag-based with regular diesel and had no compatibility problems with biodiesel.

An estimated 100 billion plastic shopping bags are thrown out each year in the U.S. alone. That could make for a pretty hefty feedstock for this fuel.

Biodiesel