ICM Signs Canadian Ethanol Plant

Cindy Zimmerman

ICMlogo1Renewable energy technology company ICM of Colwich, Kansas has signed a Letter of Intent with IGPC Ethanol of Ontario, Canada to be the first Canadian adopter of ICM’s Generation 1.5™ technology.

Adoption of the technology will enable IGPC Ethanol to produce corn fiber cellulosic ethanol. “Through our previous collaboration with ICM, we believed it was important to continue down the path of obtaining their critical platform technologies that are necessary for making a sustained impact on agriculture and economic development within our region,” said IGPC Ethanol CEO Jim Grey.

ICM’s Generation 1.5™ Technology introduces a cellulosic ethanol production capability by adding ICM’s Fiber Separation Technology™ (FST™) building block onto IGPC Ethanol’s current ICM Selective Milling Technology ™ (SMT™) platform. Once the FST™ and SMT™ platforms are in place, the Generation 1.5™ technology can be added. Development of ICM’s Generation 1.5™ technology was funded, in part, by a U.S. Department of Energy BioEnergy Technology Office contract that ICM was awarded through the American Recovery and Reinvestment Act of 2009.

advanced biofuels, Cellulosic, Ethanol, Ethanol News, technology

Legislation Would Extend Biofuels Tax Credits

Cindy Zimmerman

rep-petersLegislation introduced last week in the House would extend expiring tax incentives important to the development of next generation biofuels.

Rep. Scott Peters (D-CA) introduced the “Second Generation Biofuels Extension Act of 2013” (H.R. 3758) which would extend for one year the Second Generation Biofuel Producer Credit and the Special Allowance for Second Generation Biofuel Plant Property. Four fellow Democrats are co-sponsors of the bill, which is strongly supported by the biofuels industry.

Renewable Fuels Association (RFA) president and CEO Bob Dinneen commended Peters for taking a stand and fighting for the future of next generation biofuels. “Rep. Peters clearly understands the need to continue this successful program,” said Dinneen. “Investors need certainty and extending the tax credits for second generation biofuels will boost investment and innovation in cellulosic and advanced biofuels.”

This week RFA sent a letter to the leadership of the House Ways and Means committee and the Senate Finance Committee to request that key expiring biofuel tax incentives be extended. In addition to the two credits in the Peters bill, that would also include the Alternative Fuel Vehicle Refueling Property Credit.

advanced biofuels, Ethanol, Ethanol News, Government, RFA

Soybean Board Offers Winter Biodiesel Storage Tips

John Davis

USBlogoAs the latest winter storm bears down on a large part of the country, the United Soybean Board is offering some cold weather tips for biodiesel. This post on Southeast Farm Press says the cold can cause problems for both biodiesel and No. 2 diesel, so there are some things you need to do in the way of tank maintenance.

Many farmers like to use biodiesel blends of 20 percent or greater during the summer months. While not impossible to use higher blends in the winter, it does require a high degree of fuel management and a vigilant tank-maintenance program.

It is highly recommended the average diesel consumer reduce their biodiesel blend to 5 percent during the winter months.

High water concentration in fuel can lead to water-logged fuel filters. When the temperature of the filter gets below 32 degrees, the water freezes and blocks the flow of fuel through the filter.

Paraffin is a naturally occurring component of diesel fuel. When the temperature of fuel is at or below its cloud point, paraffin material can collect on the bottom of the tank. Wax anti-settling agent (WASA) additives can be used to keep paraffins from collecting at the bottom of the tank where they can cause filter plugging.

USB also recommends that you:

• Check tanks for any water
• Install a dispenser filter to keep keep contaminants from reaching the vehicle tanks
• Use a new dispenser filter, 30 micron or higher to handle the increased viscosity of the fuel
• Check hoses, fill/vapor caps and gaskets for leaks.
• Transition to a lower-percentage biodiesel blend in winter months.
• Use an appropriate additive package and/or use No. 1 diesel to ensure operability.
• Fill your tank after harvest season. Fuel tanks should always be kept as full as possible to reduce fuel degradation from exposure to oxygen.

If you’re still having trouble, you can also call the Diesel Helpline at 800-929-3437.

Biodiesel, Soybeans, USB

Biomass-based Diesel Supply Curves Examined

John Davis

irwinRapid growth in the renewable diesel market has some big implications for biodiesel, especially considering biomass-based diesel supply curves. In the latest of some really well-thought out analyses, University of Illinois Ag Marketing expert Scott Irwin gets into the issue of supply responsiveness from biodiesel to the broader category of biomass-based diesel. He starts out explaining the difference between biodiesel, renewable diesel and biomass-based diesel:

Biodiesel is a transportation fuel made from animal fats and vegetable oils by a process known as “transesterification.” Renewable diesel is also a transportation fuel made primarily from animal fats and vegetable oils, but by entirely different production processes compared to biodiesel. One process is known as “hydrodeoxygenation,” whereby heat, pressure, and a catalyst are used to remove oxygen from the biomass feedstock. Biomass-based diesel is generally defined as any form of biodiesel or renewable diesel.

Setting up those definitions, Irwin explains how to estimate the supply curve for both biodiesel and total biomass-based diesel:
biodieselsupplycurves
The estimated supply curves in Figure 3 are basically the same up to about one billion gallons of annual production but then diverge sharply for volumes above one billion gallons. For example, the estimates imply that a price of $6.80 per gallon is required in order for biodiesel production to reach 2 billion gallons, while a price of only $5.06 per gallon is required for total biomass-based diesel to reach 2 billion gallons. If costs and revenues per unit are approximately the same for biodiesel and renewable diesel, then one would expect the two supply curves to exhibit more of a parallel relationship because biodiesel is the largest component of total biomass-based diesel. In that case, the total biomass-based diesel supply curve would simply represent the horizontal summation at a given price of the biodiesel supply curve and the supply curves for the other three components of the total. The estimation results seem to imply that there are greater economies of scale to renewable diesel production. While this could be the case, an alternative explanation is that new renewable diesel production capacity came on line in 2013 and this skewed the results given the short sample period used to estimate the supply curves (10 months). Unfortunately, we may have to wait for another year in which the tax credit is set to expire in order to expand the sample in a meaningful way.

Irwin concludes that information shows that both domestic and foreign renewable diesel grew rapidly in the past year, and biomass-based diesel production was responsive to market prices, a fact that hasn’t grabbed a lot of attention. He goes on to say that since Renewable Fuel Standard compliance can be met with biodiesel or renewable diesel, this supply curve for total biomass-based diesel plays a key role in setting the market price of RINs.

Biodiesel

Analyst Offers Sobering Ethanol Outlook

Cindy Zimmerman

asta-css-basseAgResource Company president Dan Basse looked at the year in review for grain markets and gave his outlook for the future at the American Seed Trade Association (ASTA) CSS 2013 and Seed Expo last week in Chicago. That included a pretty sobering outlook for corn and ethanol.

First off, Basse said he expects North America to be “energy self-sufficient by 2020” but that is largely due to fracking to reach new deposits of crude oil and natural gas rather than biofuels. “Ethanol, which was deemed to be the savior from Mideast oil, is no longer going to have that spot at the table,” he said, adding that the industry has “reached its zenith.”

Thanks to flat-lining ethanol demand, Basse believes the good times may have come to an end for corn. “A year ago we had corn prices above $7 with flirtations to eight,” he said. “We’re now looking at Chicago markets with corn prices near four. We think the best we can do at least for the next 6-9 months is maybe getting back to something like four and a half.” Basse points out that the United States only needs to produce a corn crop of 13 billion bushels to meet demand. “That’s the big concern for the US farmer down the road,” he said.

Asked about the EPA proposal to lower the 2014 volume obligations for ethanol under the RFS, Basse said he believes the plan has a 70% chance of being approved. “If we don’t raise blend rates and get Big Oil and get Detroit behind us, there’s really no growth in biofuels,” he said. “I want everybody in agriculture to understand that the political wills are not there as they were a few years ago and unfortunately now with shale gas and the new blessings of a different kind of energy, we’re just talking to ourselves in terms of the marketing for biofuels going forward.”

Listen to my interview for the condensed version and his 30 minute presentation for more details:
Interview with Dan Basse, AgResource ASTA CSS presentation by Dan Basse, AgResource

2013 ASTA CSS & Seed Expo Photo Album

Audio, biofuels, corn, Ethanol, Ethanol News

Marshall County Wind Farm Begins Construction

Joanna Schroeder

Laurel MorningMarshall Wind Energy LLC, a wholly-owned subsidiary of RPM Access LLC, has begun construction of its 74 MW wind farm in Marshall County near Beattie, Kansas. The company executed a high voltage transmission interconnection agreement with Westar Energy and Southwest Power Pool in mid-2011. Under the terms of this arrangement, the two companies are coordinating their efforts to pursue all design, engineering and construction activities related to the Westar 115kV Marshall County Wind Farm Switching Station and the Marshall Energy Rock Substation. Energization is scheduled for August 2014 with wind farm commercial operations expected by year end 2014.

A contract has also been signed with Mortenson Construction to provide balance-of-plant design and construction management activities. Marshall Wind has established a local business office in Beattie. An on-site construction management office and equipment have been mobilized to support construction of access roads to wind turbine locations along with substation site grading and foundation work activities that are now underway.

Renewable energy generated by the project will be purchased by multiple entities via long-term contracts. In September, Marshall Wind signed a 20-year power purchase agreement (PPA) for 20 MW with the Missouri Joint Municipal Electric Utility Commission (MJMEUC). The project will qualify for current renewable production tax credits (PTCs). Located within the Southwest Power Pool market region, Marshall Wind in 2014 is ideally positioned to offer for sale under long-term contract(s) the remaining available capacity.

The project is anticipated to create more than 150 jobs during the construction phase and approximately four permanent positions. The wind farm will also benefit the community by strengthening the local economy and providing a steady flow of revenue to Marshall County.

Alternative energy, Electricity, Wind

Tips from Patriot’s Dave Gerhart on Improving Efficiency

Joanna Schroeder

When you want to learn about ethanol, you go to an industry veteran and I did just that when I spoke with Patriot Renewable Fuels Plant Manager Dave Gerhart who began his career in the early 80s at is what is now known as Nebraska-based Chief Ethanol Fuels. At the time, they were the largest dry mill ethanol plant in the United States. Back then corn was less than $2 a bushel so the ethanol plant was something the local community supported to help the local farmer.

Patriot Plant Manager Dave GerhartFrom there, Gerhart changed gears slightly and joined the ICM team where he worked with them on their first 5 design and build ethanol plants. This was in the early 2000s before the major industry boom. Next he began the plant manager at Kaapa Ethanol and today he has brought his 30 years of experience to Patriot to help them grow.

One of Gerhart’s areas of expertise is his ability to identify things in the plant that can be modified to help improve efficiency – a key factor in increasing profitability. I asked him for those that are newbies to the industry, some areas plant managers can’t look at to increase efficiency.

“One you would look at your energy balance and see where you could actually put variable frequency drives rather than an automatic control valve. So that would reduce electricity,” explained Gerhart. “If you can reduce water usage, this helps you out in the energy balance as well. There is different trains of thoughts on fermentation and what you can do there. Sometimes people take the path of least resistance and in doing so they short circuit the energy efficiency they can actually get out of there plant.”

I asked Gerhart what he would really like consumers to know about biofuels. “Hopefully they all realize that ethanol is probably the cleanest thing they can put into your gas tank,” said Gerhart. “Gasoline is not. Alcohol is very safe. It’s homegrown. It’s renewable. It’s not something that we have to go foreign to get.”

I also asked him why consumers needed to care about the Renewable Fuel Standard (RFs). They need to care because ethanol has such an impact on middle America,” said Gerhart. “We’ve done so much to build up the farm incomes and the trucking industry and the fuel distribution. So every plant no matter where it’s at has an economic impact, at a minimum of 70 miles around it.”

Gerhart added, “This needs to stay.”

Listen to my interview with Dave Gerhart here: Tips from Patriot's Dave Gerhart on Improving Efficiency

Check out the Patriot Renewable Fuels photo album.

Audio, biofuels, corn, Ethanol, Patriot Renewable Fuels, RFS

Abundant Corn Harvest Increases Ethanol Production

Joanna Schroeder

According to a recent Today in Energy published by the U.S. Energy Information Administration (EIA), expectations of a record corn harvest in 2013 have helped lower corn prices and improve ethanol production margins. This has also increased ethanol production and supply.

It was just last year that the 2012 corn harvest faced some of the most severe and far-reaching drought since the 1950s. Final productions for the year were 10.8 billion bushel. This fall however, brought a 30 percent increase over 2012, even those much of the U.S. still experienced drought. Many key growing areas, despite the dry weather, had ample rains at just the right time.

Ave Monthly Corn Prices and Margins for EthanolAs the EIA explains the ethanol margin is the difference between the market price of ethanol and its cost of production adjusted by the value of co-products. It is also a measure of the profitability of producing ethanol. Between October 2012 and January 2013, the ethanol margin for producers was close to zero. The recent reduction in corn prices had a major impact on the profitability of ethanol production, because purchased corn is by far the largest cost incurred by ethanol producers. On average, one bushel of corn can be used to produce 2.8 gallons of ethanol.

Between January and November 2013, corn prices fell from about $7.50 per bushel to below $4.50 per bushel. A $3 reduction in the price of a bushel of corn translates into a roughly $1.08 reduction in the cost of ethanol production. While ethanol prices have also declined, ethanol producer margins have risen above $0.50 per gallon in recent months.

As a result, reports EIA, improved margins have incentivized greater levels of ethanol production, with output recovering to pre-drought levels. At the same time, lower prices have made ethanol more economically attractive for refinery blending, and output of ethanol-blended gasoline has risen. Net use of ethanol by refiners and blenders reached an all-time high of 884,000 barrels per day in August 2013.

biofuels, corn, Ethanol

BioEnergy Bytes

Joanna Schroeder

  • BioEnergyBytesDFIowa Senator Mark Jacobs and Sam Clovis who are running for the Congressional seat that is open with Senator Tom Harkin retiring, are both confirmed for the Iowa Renewable Fuels Association’s renewable fuels forum. This free event is open to the public and taking place on Thursday, December 19, 2013 from 2:00 to 4:00 pm CST at the Western Iowa Tech Community College Cherokee Campus Auditorium.
  • Consumers Energy has selected 31 solar powered projects offered by businesses, homeowners and nonprofit groups across Michigan’s Lower Peninsula to supply renewable energy to customers. The suppliers were chosen as part of the company’s Experimental Advanced Renewable Program (EARP). The program provides for the long-term purchase of renewable energy generated by solar energy systems owned by electric customers.
  • Unirac, Inc., a Hilti Group Company and provider of high quality, competitive PV mounting solutions in North America, has been selected by Green Light Plaster City Solar and ZGlobal, Inc. to provide a 1 MW Ground Mount Tracker (GMT) at the United States Gypsum’s (USG) manufacturing facility in Plaster City, CA. The project broke ground late in November and is scheduled to be completed in January 2014.
  • E.ON Climate & Renewables North America (EC&R) has announced it has secured institutional equity financing for approximately $96.2 million and a commitment to fund further capital contributions from JPM Capital Corporation (J.P. Morgan) in exchange for a partial interest in EC&R’s Panther Creek I&II Wind Farm (Panther Creek). Panther Creek is part of a billion-plus-dollar investment EC&R has made in the Big Spring, Texas area since 2006. The projects are located in Howard, Sterling and Glasscock Counties, Texas. Panther Creek’s 172 GE 1.5 megawatt turbines generate enough energy to power approximately 77,000 homes.
Bioenergy Bytes

OSU Spinoff NuScale Goes Nuclear

Joanna Schroeder

Oregon State University (OSU) spinoff NuScale Power has been awarded up to $226 million in funding from the U.S. Department of Energy (DOE). The company is developing a new form of nuclear power and is a spinoff company based on the pioneering research of OSU professor Jose Reyes. Today Reyes has become one of the international leaders in the creation of small “modular” nuclear reactors.

According to NuScale, this technology holds enormous promise for developing nuclear power with small reactors that can minimize investment costs, improve safety, be grouped as needed for power demands and produce energy without greenhouse gas emissions. The technology also provides opportunities for OSU nuclear engineering students who are learning about these newest concepts in nuclear power.

nuscale-vertical“This is a wonderful reflection of the value that OSU faculty can bring to our global economy,” said Rick Spinrad, vice president for research at OSU. “The research conducted by Professor Reyes, colleagues and students at OSU has been a fundamental component of the innovation at NuScale.”

NuScale said it is bringing closer to reality a nuclear concept that could revolutionize nuclear energy. The Obama administration has cited nuclear power as one part of its blueprint to rebuild the American economy while helping to address important environmental issues.

“OSU has made a strong effort to build powerful partnerships between our research enterprise and the private sector,” said OSU President Edward J. Ray. “The DOE support for NuScale is a vote of confidence in the strategy of building these meaningful relationships, and they are only going to pick up speed with our newest initiative, the OSU Advantage.”

News of the NuScale grant award was welcomed by members of Oregon’s Congressional delegation. “Oregon State University deserves a lot of credit for helping to develop a promising new technology that the Energy Department clearly thinks holds a lot of potential,” said Sen. Ron Wyden, chairman of the U.S. Senate Energy and Natural Resources Committee. “Today’s award shows that investing in strong public universities leads to innovative technologies to address critical issues, like the need for low-carbon sources of energy, while creating private sector jobs.”

OSU officials say the development of new technologies such as those launched from NuScale could have significant implications for future energy supplies. “The nation’s investment in the research of small-scale nuclear devices is a significant step toward a diverse and secure energy portfolio,” said Sandra Woods, dean of the College of Engineering at OSU. “Collaborative research is actively continuing between engineers and scientists at Oregon State and NuScale, and we’re proud and grateful for the role Oregon State plays in assisting them in developing cleaner and safer ways to produce energy.

Energy, Nuclear Energy, Research