KiOR Looks to Double Capacity at Cellulosic Facility

John Davis

kior_logo_CMYKCommercial scale cellulosic gasoline and diesel producer KiOR has announced plans to double the capacity of its Columbus, Mississippi facility. Officials expect the project, dubbed Columbus II, will cost approximately $225 million, will break ground within 90 days of raising the money needed and be finished building 18 months later.

Once completed with its latest technology improvements, KiOR expects that the Columbus II project will allow each Columbus facility to achieve greater yields, production capacity and feedstock flexibility than the original design basis for the existing Columbus facility, enabling KiOR to more quickly make progress towards its long-term goal of 92 gallons per bone dry ton of biomass.

Fred Cannon, KiOR’s President and CEO, says this project is an important step in the company’s long-term business plan, as it will make them profitable with lower capital costs and will take advantage of “operational and technological synergies between the two Columbus facilities.” He says it will also help accelerate plans for next year’s groundbreaking of another standard scale commercial production facility in Natchez, Mississippi.

biomass, Cellulosic

Biodiesel Production Responsive to Profitability

John Davis

An analysis shows what might seem obvious, but fills in the gaps of why, that biodiesel production responds positively to profitability. In another quality piece from Scott Irwin with the University of Illinois, he breaks down how staying in the black helps the green fuel.

A more detailed view of production responsiveness is shown in Figure 3. Basically, production in this scenario is “stuck” at the mandate regardless of the level of returns (more technically, shifts in supply and demand curves do not change market quantities over a wide range of outcomes). The flat fitted regression lines for 2010 and 2012 in Figure 3 confirm this observation. One has to be careful to avoid the mistake of arguing that when the tax credit is restored a more normal upward sloping response curve will be observed. If market participants expect the credit to be in place permanently then market prices will adjust but production will remain stuck at the mandate. However, if market participants expect the credit to expire at the end of a calendar year then there is an obvious incentive for blenders to bid up the price of biodiesel in order to increase production and take full advantage of the credit before it expires. This appears to be exactly what happened in 2011 and is currently happening in 2013. In essence, these unique market circumstances provide an opportunity to learn something about the responsiveness of biodiesel production to profitability even though a seemingly binding RFS mandate is in place.
fig3irwin1
Irwin concludes that biodiesel production is quite responsive to profitability, if the right market conditions are present. He says the “next challenge is to determine whether a supply curve based on the estimated relationships in combination with a demand curve can replicate the prices of D4 RINs actually traded in the marketplace.”

Biodiesel

Project LIBERTY Cellulosic Ethanol Plant Update

John Davis

POETplant1A 25 million-gallon-per-year cellulosic ethanol plant is on track to start cranking out the advanced biofuel early next year. Officials with POET-DSM Advanced Biofuel’s Project LIBERTY updated progress on the refinery in Northwest Iowa during the Platts Biofuels and Chemicals conference.

“We had a great summer for construction and have been able to stay on track to start producing cellulosic bio-ethanol early next year,” [Steve Hartig, General Manager – Licensing for POET-DSM] said. “It’s impressive to see this technology coming to life in Emmetsburg.”

[The plant] will be one of the first plants of its kind in the nation. It will use cob bales – made up of corn cobs, leaves, husks and some stalk – to produce 20 million gallons of cellulosic bio-ethanol annually, later ramping up to 25 million gallons.

Hartig said the progress to date includes:

Biomass receiving and grinding building is complete and biomass processing equipment is nearly installed.
Saccharification, fermentation tanks are complete.
Equipment installation and pipe work is ongoing.
Cooling tower construction is underway.
Underground utilities are nearing completion.

About 300 workers are on the site daily, making preparations for the early 2014 start.

The most recent construction photos are available on POET-DSM’s Flickr site.

Cellulosic, Ethanol, Ethanol News, POET

Ethanol to Save World 100 Mil Tons of GHGs in 2013

John Davis

GRFA1The expected 20 billion gallons (85 billion liters) of ethanol production this year will keep 100 million tonnes of green house gas (GHG) emissions out of the environment. That’s the forecast from the Global Renewable Fuels Alliance (GRFA).

“This years forecast shows that even in the face of a difficult global economy, demand for biofuels is growing. This is excellent news but demand and production need to continue to grow to further reduce our reliance on crude oil,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance.

More positive news from this global growth is that ethanol production in all parts of the world, including the Americas, Africa, Asia and Europe are forecasted to increase, with the United States and Brazil continuing to be the largest producers.

“Perhaps the best news of all is that Europe is forecasted to increase ethanol output by over 3% in 2013 as biofuels continue to be in demand and the industry continues to grow in the face of political wrangling and economic hardship,” stated Baker.

Removing 100 million tonnes of GHGs is the equivalent of taking 20 million cars off the road… as many as all the registered cars in Portugal and The Netherlands.

Environment, Ethanol, Ethanol News, International

Rural Areas to REAP Benefits of Energy Projects

John Davis

usda-logoFarmers, ranchers and small businesses in rural areas of 22 states will benefit from projects designed to use renewable energy, as well as conserve power. The U.S. Department of Agriculture (USDA) announced the latest round of grants and loans being made available through the Rural Energy for America Program (REAP).

“REAP continues to help farmers and rural businesses reduce their energy consumption and by doing so, improve the bottom line of their operations,” [Acting Under Secretary for Rural Development Doug] O’Brien said. “This important Farm Bill program and others like it would not be available without a comprehensive Food, Farm and Jobs Bill.”

The dozens of projects across the country approved for the REAP funds include nearly $50,000 for two biodiesel blending and pumping stations in Georgia, more than $31,000 for some E85 and biodiesel blender dispensers in Iowa, almost $60,000 to purchase equipment to make biodiesel in Indiana, and a $41,000 grant to assist with the installation of ground-mounted solar panels at a bed and breakfast in Arizona.

You can see the entire list of projects here.

Government, USDA

New Biodiesel Plant Boon for Canadian Soybeans

John Davis

gfoSoybean farmers north of the border are getting a great boon in the construction of what will be Canada’s largest biodiesel plant producing about 40 million gallons of biodiesel each year. Grain Farmers of Ontario welcomed Great Lakes Biodiesel’s start in Welland, Ontario that uses soybeans as a feedstock.

“This locally produced, renewable, and sustainable fuel is a win for the environment, for jobs and for the provincial economy,” says Henry Van Ankum, Chair, Grain Farmers of Ontario.

Grain Farmers of Ontario and Soy 20/20 have worked together to complete extensive research to encourage the Ontario Government that a made in Ontario biodiesel mandate is good for the provincial economy and good for the environment. Nationally, Canada has a 2% biodiesel mandate, and with the expansion of production in Ontario, Grain Farmers of Ontario hopes to see the implementation of a 2% provincial biodiesel mandate.

Van Ankum believes a mandate will demonstrate a real commitment to biodiesel.

Biodiesel, International, Soybeans

Congressman Makes Case to Colleagues for RFS

John Davis

loebsack1A congressman from Iowa makes the case that the Renewable Fuel Standard (RFS) is working and encourages his fellow lawmakers to support it. In an open letter titled “Dear Colleague: Why the last two months show the RFS is working,” Rep. Dave Loebsack points out that the recent flexibility in the RFS, the government looking into renewable fuel distribution barriers, and oil earnings not taking the bemoaned but not-to-fruition dips because of Renewable Identification Numbers (RINs) show a healthy RFS.

One of the important features of the RFS is that Congress provided significant flexibility to adjust targets based on anticipated production. On August 6, 2013, the EPA did just that, releasing the final 2013 RFS volumes at adjusted levels. The EPA decreased the required cellulosic biofuels amounts, as well as extended the deadline to comply with the 2013 standards by four months. This gives refiners additional time to blend renewable fuel or purchase RINs for 2013 compliance. Additionally, the EPA signaled it would remain flexible as it develops the 2014 RFS levels.

On August 22, 2013, the Federal Trade Commission (FTC) announced that it would look into anti-trust violations for limiting consumer choices at the pump. This comes as opponents of the RFS continue to talk about a hypothetical E10 blend wall that would allegedly create a barrier to using more biofuels in the domestic fuel supply. What’s clear is that these concerns are shortsighted. There are simple ways to eliminate any potential blend wall that include letting consumers dictate what fuel options they have at the pump. This market-based approach means consumers should have the option to put more biofuels into their gas tanks if they want.

And another strong quarter of earnings for the oil companies shows a pretty good Chicken Little impression when Big Oil tried to forecast “staggering” economic consequences of the RFS.

These recent events in regards to the RFS show that the law is working as intended. We must continue to support the RFS to spur continued development of homegrown fuels, lower gas prices, create good jobs, and promote economic development in our communities.

Government, RFS

Solar Group Looks to Head Off US-China Trade War

John Davis

seiaA pending trade dispute between the U.S. and China could hurt solar power in both countries, but an industry group believes it has a plan to head off the problem. This story from Bloomberg says the Washington-based Solar Energy Industries Association has floated a proposal to eliminate tariffs on solar gear, as well as putting together a fund with contributions from China to help U.S. solar equipment makers.

“The problem we have right now is that the trading rules are not working well,” John Smirnow, vice president for [SEIA], said in a phone interview. “Solar has a very complex global supply chain” and relying on the existing system to settle trade disputes isn’t working, he said…

The U.S. Commerce Department a year ago set penalty rates for Chinese producers, including Suntech Power Holdings Co. and Trina Solar Ltd. (TSL), after determining the companies had benefited from government subsidies and had “dumped” their products onto the U.S. market at below the cost of production.

In July, China began imposing duties as high as 57 percent on U.S. polysilicon imports.

The U.S. industry plan would abolish the U.S. duties on solar cells from China, as well as China’s tariffs on U.S.-made polysilicon. Instead, China’s solar-energy companies would establish a fund in the U.S. that American solar-cell manufacturers could draw from to help them “scale-up,” Smirnow said. While the size of the fund would be negotiated based on market estimates, it would probably be in the hundreds of millions of dollars over the next three years, he said.

The plan also calls on Chinese manufacturers to fund a Solar Development Institute, benefiting American solar-energy manufacturers and developing a collaboration between the U.S. and Chinese industries. This plan is similar to a deal with Brazil over cotton.

International, Solar

Oil Cos. Ordered to Up Biodiesel Blend in Indonesia

John Davis

Indonesia flag1Two major foreign oil companies operating in Indonesia are being told to comply with that country’s law and increase the amount of biodiesel in the mix at their filling stations. Biofuels International reports PT Shell Indonesia and PT Total Oil Indonesia must increase to at least a 10 percent biodiesel mix in all diesel sold by this coming January or face sanctions, including business license revocations or suspensions of operations.

‘We will inspect their petrol stations from time to time to ensure the regulation is being followed,’ director general of renewable energy and energy conservation Rida Mulyana was quoted as saying.

The regulation also requires a minimum of 10% biodiesel in diesel fuel mixes used for industrial and commercial purposes and 20% for those used in power plants.

Indonesian officials believe the companies are blending as little as 1 percent biodiesel right now.

Biodiesel, International

Ethanol Group Wants Apology After Big Oil Compares RFS to Cancer

John Davis

api-gerard1Just when you thought it couldn’t get any lower, Big Oil manages to take it to another level… a much lower level. In a story from Reuters, the American Petroleum Institute’s Jack Gerard is quoted as comparing the Renewable Fuel Standard (RFS) to cancer.

While talking about how Congress should address ethanol Renewable Identification Numbers (RINs), Gerard is reported saying, “It’s a little like putting a band aid on cancer. We believe we need to eradicate the cancer and that’s the Renewable Fuel Standard.”

The outrageous comparison drew the ire of Brian Jennings, Executive Vice President for the American Coalition for Ethanol (ACE), who called for an apology:

BrianJennings1“That is an unfortunate analogy coming from the top lobbyist for Big Oil, whose members sell a product that causes cancer. We’ve never suggested ethanol is a cure-all, but the RFS has proven to be a very effective treatment to the damage done to our environment and economy by oil. Cancer is a tragic and deadly disease affecting too many American families, we ask that API and its members apologize for making this offensive comparison.”

There ya’ go, Big Oil. Stay classy.

ACE, Ethanol, Ethanol News, Oil, RFS