Biodiesel Board Asks for Your Letter of RFS Support

John Davis

biodiesellogo1Our friends at the National Biodiesel Board (NBB) are asking for your letter of support of the Renewable Fuels Standard. NBB has launched a letter-writing campaign to the Environmental Protection Agency (EPA) to discourage the agency from cutting the amount of biomass-based diesel in the RFS:

As a supporter of the U.S. biodiesel industry, I want to express my alarm at the draft proposal for 2014 Renewable Fuel Standard (RFS) volumes that has been circulating recently. I want to make clear that, if approved, this proposal would reduce biodiesel production by some 25 percent and deliver a devastating blow to a young and growing industry, as well as to our bipartisan goals for building America’s energy capacity.

lettercampaignNBB has prepared a template to make it easier to submit the letter, and officials say now is the time for biodiesel advocates to step up to the plate:

The EPA’s draft 2014 volume proposal is now undergoing interagency review and won’t be made public until later this year. Our industry has proven it has the capacity to continue its successful growth, but given the attacks on the RFS this year, it is imperative that the biodiesel industry make its voice heard. We have met several times with [Office of Management and Budget] and EPA and are pressing for a volume increase for Biomass-based Diesel.

More information is available on the NBB’s Fueling Action Center website.

Biodiesel, RFS

Crowdfunding Campaign to Connect Schools to Solar

Joanna Schroeder

The Natural Resources Defense Council (NRDC) has launched a unique crowdfunding campaign to support a new initiative to help schools purchase and install rooftop solar systems. The crowdfunding campaign – a first for NRDC – initially seeks to raise $54,000 through the site Indiegogo to help three to five to-be-determined schools move forward with solar rooftop projects. At least one of the locations will be selected by contributors to the campaign, who can vote on the city of their choice.

As part of the campaign, NRDC also is developing an online platform that local schools can use to navigate the pathway to obtain solar power. The site will detail state and local rules regarding solar power installations across America, and connect schools and communities with organizations and experts that can support them each step of the way.

“Our ultimate goal is help every school that wants solar power to get it,” said NRDC renewable energy policy director Nathanael Greene. “If we can hold fundraisers for field trips and sports teams, we can do the same to get our schools on solar. Switching to clean, renewable solar energy helps the environment and the health of our local communities, but also helps schools to cut energy expenses and funnel the savings to other programs.”

The benefits to local schools and students can be substantial. In California, for instance, the Firebaugh-Las Deltas United School District was able to reinstate a music program for 2,300 students after installing solar on its schools, thanks to an estimated $900,000 in energy cost savings. Students also get a first-hand look at how solar energy works, and a real life lesson on why science, technology, engineering and mathematics (STEM) is important.

“Numerous organizations and programs – mainly through utilities – are putting solar panels on schools,” said Jay Orfield, environmental innovation fellow in NRDC’s Center for Market Innovation. “What’s different about our program is that it aims to make solar an option for any school, anywhere, by beginning with local school administrators, parents, teachers, students and communities and giving them the tools to they need to make solar power a reality.

NRDC is partnering with several other organizations on the campaign, including The Solar Foundation, Community Power Network, Bonneville Environmental Foundation (Solar 4R Schools) and Three Birds Foundation.

Alternative energy, Education, Electricity, Solar, Video

Arkalon Ethanol Signs Up for Enogen

Joanna Schroeder

Arkalon Ethanol, LLC based in Liberal, Kansas has signed an agreement with Syngenta to enogenuse corn that features Enogen trait technology. The ethanol plant will begin to use the trait, replacing its liquid alpha amylase, following the 2014 corn harvest.

“We are excited to announce this agreement with Arkalon Ethanol and we’re confident that Enogen technology is a solution that can add tremendous value to its operation,” said David Witherspoon, head of renewable fuels for Syngenta. “We have collaborated with Arkalon throughout this entire process and this agreement is a true example of our commitment to our customers, and the types of partnerships we want to form within the ethanol industry.”

According to Syngenta, Enogen grain delivers alpha amylase enzyme in the corn kernel, eliminating the need for an ethanol plant to use liquid alpha amylase. The alpha amylase enzyme found in Enogen grain helps an ethanol plant reduce the viscosity of its corn mash. This breakthrough reduction can lead to better levels of solids loading, which directly contributes to increased ethanol yields and throughput, as well as cost savings from reduced natural gas, energy, water and chemical usage.

Arkalon’s sister plant, Bonanza BioEnergy, LLC, is currently wrapping up its first year of contracting with local growers to produce Enogen grain. Syngenta collaborated with Bonanza BioEnergy on a three-month Enogen technology trial that ended in July 2012. A commercial agreement followed in November that same year. Arkalon Ethanol and Bonanza BioEnergy are two of three ethanol plants operated by Conestoga Energy Partners, LLC.

“After seeing the value that Enogen corn can create at our Bonanza plant, we naturally wanted to explore implementing the technology at the Arkalon plant,” said Tom Willis, CEO of Conestoga Energy Partners. “We have full confidence in the technology and in Syngenta as a partner, and we are eager to begin working with our local farmers to supply Enogen grain.”Read More

biofuels, corn, Ethanol, Renewable Energy

New Funding to Develop Advanced Biofuels Projects

Joanna Schroeder

Agriculture Secretary Tom Vilsack announced the availability of $181 million to develop commercial-scale biorefineries or retrofit existing facilities with appropriate technology to develop advanced biofuels. The Biorefinery Assistance Program was created through the 2008 Farm Bill and is administered by USDA Rural Development. It provides loan guarantees to viable commercial-scale facilities to develop new and emerging technologies for advanced biofuels.

USDA Rural Development Logo“This financing will expand the number of commercial biorefineries in operation in the U.S. that are producing advanced biofuels from non-food sources,” Vilsack said. “USDA’s Biorefinery Assistance Program is yet another way USDA is helping to carry out the Obama Administration’s ‘all-of-the-above’ energy strategy to develop every possible source of American-made energy. But the benefits go beyond reducing our dependence on foreign oil. These biorefineries are also creating lasting job opportunities in rural America and are boosting the rural economy as well.”

Applications for biorefinery assistance are due by January 30, 2014. More information about how to apply is available in the October 2, 2013 Federal Register announcement or by contacting the USDA Rural Development National Office.

Since the start of the Obama Administration, the USDA Biorefinery Assistance Program has provided approximately $684 million in assistance to support biofuels projects in eight states.

Secretary Vilsack noted that today’s funding announcements are another reminder of the importance of USDA programs such as the Biorefinery Assistance Program for rural America. A comprehensive new Food, Farm and Jobs Bill would further expand the rural economy, Vilsack added, saying that’s just one reason why Congress must get a Food, Farm and Jobs Bill done as soon as possible.

advanced biofuels, Renewable Energy

Ethanol Sweet Spots – Part II

Joanna Schroeder

Yesterday, DF featured an article on “Must Know Ethanol Trends” that came out of Christianson & Associate’s, PPL (C&A) Biofuels Benchmarking 2012-13 Annual Report. In addition to identifying important trends for the industry, the report also identified some “sweet spots” for the industry.

John-ChristiansonJohn Christianson, partner with C&A, said running a good business is the first thing and being as efficient as possible is important and having good sound prudent risk management is always going to be at the forefront of your business. But going forward, he said there are technology and market issues that will be a factor, or a sweet spot, for the ethanol industry.

“From a technology perspective, we’re seeing plants go further and digging further into the yield component,” said Christianson. “They are looking at difference technologies that will allow them to remove different components of the kernel of corn and allow them to create multiple products on the back-end. As we see this industry evolve, we’re going to see them evolve into a biorefinery industry.”

He cautioned that in order for a plant to make investments, you need a technology that is going to provide a return on investment. Last year was not the year for plants to make investments but Christianson said plants will need to make technology investments if they want to continue to be a long-term viable company.

Any ethanol plant interested in becoming a participant in C&A’s Benchmarking program, or interested in purchasing the The Biofuels Benchmarking 2012-13 Annual Report can contact the Benchmarking team.

Listen to John Christianson discuss ethanol sweet spots in detail here: Ethanol Sweet Spots

Audio, biofuels, corn, Ethanol, Research

Ethanol Production & Crush Margins Improve

Joanna Schroeder

According to forecasts published in Biofuelscan, a daily report from Platts that covers the global biofuels industry, U.S. ethanol production data, to be reported on October 23, 2013 by the U.S. Energy Information Administration (EIA), ethanol production for the week ending October 18, 2013 was 861,000 barrels/day (b.d). This number would show an increase of 0.58 percent from last week’s Bentek Energy ethanol production forecast.

Corn futures prices have hovered near three-year lows and rising crush margins – the price difference between a gallon of ethanol and gallon of corn — have combined to boost ethanol production in recent weeks. As a result, ethanol production figure has risen for four of the past five weeks, and it is expected to rise further, given the projections of a bumper U.S. corn crop during the 2013 harvest season.Screen Shot 2013-10-21 at 8.47.48 PM

According to calculations from Kingsman, the sugar analytics unit of Platts, the crush margin will rise to 24.4 cents/gal for the reporting week, up 6.3 cents/gal from the prior week.

Platts began publishing its Bentek Energy and Kingsman forecasts of ethanol production and crush margins, respectively October 4, 2013 to fill a data gap during the temporary shutdown of the U.S. government related to lack of budget appropriations.

“We are pleased to meet a market need for independent estimates of this important government data series,” said Simon Thorne, editorial director of agriculture at Platts. “The advance forecasts are aimed at helping the marketplace better estimate price-sensitive data and assist customers in making better and timelier business decisions.”

The Bentek Energy forecast of U.S. ethanol production utilizes data from approximately the past three years and is calculated on actual consumption figures at ethanol production plants.

“When comparing the Bentek production forecast alongside the actual government production data, our estimate is within an average 0.06% – a very strong correlation since the records began in 2011,” concluded Thorne.

biofuels, corn, Ethanol, Renewable Energy

BioEnergy Bytes

Joanna Schroeder

  • BioEnergyBytesDFDyadic International has announced that it has entered into agreements with all of its outstanding promissory note holders to extend their maturity dates to January 1, 2015. The convertible portion of the debt, representing $6.8 million of the total $8.2 million outstanding principal, may be prepaid by Dyadic at any time in whole or in part, without penalty, after March 31, 2014 with 30 days notice. In all other respects, the terms and conditions of these promissory notes remain unchanged and in full force and effect.
  • The largest tracking solar plant acquired by Southern Company subsidiary Southern Power in partnership with Turner Renewable Energy, the Spectrum Solar Facility, has begun commercial operation. The 30-megawatt (MW) solar photovoltaic (PV) installation utilizes tracking technology that enables greater operating efficiency by optimally directing solar panels to track the sun as it moves across the sky. Both the Spectrum Solar Facility and the partnership’s second-largest tracking solar plant – the 20-MW Apex Solar Facility – are located in Clark County, Nevada.
  • Panasonic Eco Solutions North America (Panasonic Eco Solutions) and Coronal Management, LLC (Coronal) have acquired 16.2 MW of California CREST (California Renewable Energy Small Tariff) projects from Macquarie Capital. The Panasonic Eco Solutions and Coronal platform provides financing for the development and construction of utility scale and distributed generation solar systems to help companies and organizations reduce the complexity of implementing solar installations. The portfolio consists of nine solar projects located in Tulare and Kings Counties in central California, and will provide enough energy to Southern California Edison’s grid to power approximately 14,500 homes annually.
  • U.S. Energy Secretary Dr. Ernest Moniz will deliver the keynote address at the 2013 Platts Global Energy Outlook Forum “Bridging the U.S. Boom: Global Markets Prepare” on Thursday, December 12, 2013 in New York City, New York.
Bioenergy Bytes

Evonik Opens New Biodiesel Catalyst Plant

John Davis

evonikGerman-based Evonik Industries opened a new biodiesel catalyst production plant in Argentina. This company news release says Evonik hopes to take advantage of what it sees as a growing South American market.

“As one of the world’s leading providers of biodiesel-production catalysts, we wish to continue consolidating and expanding our position,” [Patrik Wohlhauser, the member of the Evonik Executive Board responsible for the South America Region] remarked at the plant opening. He then added, “The investment is both a clear acknowledgment of our commitment in South America, as well as part of our strategy, which we hope will allow us to participate in the region’s growth.”

With an annual capacity of over 60,000 metric tons, the new production plant will supply ready-to-use alkoxides for use as catalysts in biodiesel production from renewable raw materials. The new facilities will serve primarily the Argentine and Brazilian markets. Evonik located the plant on the same site as Terminal 6 S.A., which operates a large biodiesel facility.

As Jan Van den Bergh, president of Evonik’s Advanced Intermediates Business Unit, explains, “Our aim in building the plant in Puerto General San Martín in the Rosario Region—in the heart of Argentina’s biodiesel industry—is to supply our South American customers with locally produced, high-quality catalysts.”

Evonik is one of the world leaders in biodiesel catalysts, with facilities in Argentina, Germany, and Mobile, Alabama, in the United States.

Biodiesel, International

Biodiesel Supply Curve Key to RIN Price Structure

John Davis

A new analysis from the University of Illinois shows that the biodiesel supply curve is key to the the price of Renewable Identification Numbers (RINs). Building on earlier work that showed that biodiesel production responds positively to profitability, Scott Irwin presents a new analysis to show the relationship between the biodiesel supply curve and the RIN prices.

The estimated supply curve for biodiesel in Figure 3 has several interesting characteristics. First, the slope of the curve increases as production increases, and in particular, relatively large price changes are required to move production above 2 billion gallons…
biodieselsupplycurve1

Second, the curve can be used to compute the elasticity of supply, which is simply the percent change in production for a one-percent change in price, all else held constant. The elasticity changes at each point along the curve for this functional form, so two examples are provided. At a production level of 1 billion gallons, the elasticity of supply is 8, implying that a 1 percent increase in price prompts an 8 percent increase in production. At a production level of 2 billion gallons, the elasticity of supply drops to 1.5, implying that a 1 percent increase in price results in only a 1.5 percent increase in production. The declining elasticity of supply as production increases makes sense since less and less excess capacity is available. Readers may also recall that much smaller production elasticities were reported in the September 25th post. This simply reflects the fact that a given cents per gallon increase in net returns is a much larger percentage increase relative to net returns as compared to price.

Third, the supply curve will shift if any of the variables held constant (price of soybean oil, natural gas, methanol, and glycerin) is allowed to change. By far the most important of these variables is the price of soybean oil since soybean oil feedstock costs represent over 80 percent of the total variable costs of biodiesel production for the type of plants assumed in this analysis.

The analysis concludes that the biodiesel supply curve declines rapidly as the level of biodiesel production increases, a reflection of capacity limits. And that all plays key roles in setting prices tradable RINs credits.

Biodiesel, RINS

Must Know Ethanol Trends – Part I

Joanna Schroeder

The Biofuels Benchmarking 2012-13 Annual Report is out and in addition to identifying past, current and future biofuel trends, the report identifies some emerging trends for the ethanol industry. During an interview with John Christianson, partner with Christianson & Associates, PPLP (C&A), I asked him what trends they have been seeing and he noted five in particular of importance.

Biofuels Benchmarking Report coverChristianson noted that spinning corn oil off the back of the plant has had a big impact on the industry and to date, nearly 75 percent of all ethanol plants are using a corn oil extraction technology. He also noted that 2012 was a very difficult year for the ethanol industry, very tight margins, and with the high feedstock costs, it really squeezed margins for the year. He said that when looking at the Benchmarking report the industry was hovering over break-even and the laggards were losing money and the leader plants were making money.

“In the first two quarters of 2013 we’re seeing a really nice trend where we’re getting upward into the areas where we have some positive grind margins,” said Christianson. “This is due to ethanol net-back prices staying strong in 2013 first two quarters and our feedstock costs dropping off and having better margins.” He anticipates this will continue into 2014.

The last year also saw ethanol yields drop a bit due to the drought-ridden 2012 harvest; however, Christianson said based on forecasts for the 2013 harvest, yield should go back up once the ethanol plants start grinding 2013 harvest corn and the industry should go back on the trend of increasing yield each year.

Other trends include the sophistication of the ethanol industry on their grind margin management, improved risk management practices and improved environmental sustainability. “So enhanced risk management and enhanced production efficiencies going forward are going to allow plants to squeeze out as much profitability as possible,” said Christianson.

Listen to John Christianson discuss current ethanol trends in detail here: Must Know Ethanol Trends

Audio, biofuels, corn, Ethanol, Research