USDA Report Increases Corn for Ethanol Use

Cindy Zimmerman

usda-logoThe latest World Agricultural Supply and Demand Estimates (WASDE) report from USDA lowers forecast corn production for the U.S. this year but increases corn for ethanol use estimates.

Stressing right up front that because planting is still underway projections are “highly tentative,” the report lowers the projected corn production number due to delayed plantings by 135 million bushels to 14.0 billion with the average yield projected at 156.5 bushels per acre, down 1.5 bushels from last month. “Despite rapid planting progress during mid-May across the Corn Belt, rains and cool temperatures since have delayed the completion of planting in parts of the western Corn Belt and raised the likelihood that seasonally warmer temperatures and drier conditions in late July will adversely affect pollination and kernel set in a larger share of this year’s crop.” As of June 10, USDA reported that 95% of the corn nationwide was planted, just about caught up to the five year average of 98%, and the crop condition is still rated mostly good to excellent despite the weather challenges.

The report increased the estimate for corn used in ethanol production this year by 50 million bushels to 6.35 billion on higher-than-expected May ethanol production as indicated by weekly data reported by the Energy Information Administration. “Those have been, just this past week, up close to 13.6 billion gallons on an annualized basis,” said USDA Chief Economist Joe Glauber. “That’s certainly kept demand stronger than what we were anticipating last month.” Favorable margins for ethanol producers and high prices for Renewable Identification Numbers (RINS) are also expected to moderate any slowdown in production through the end of the marketing year.

Ethanol, Ethanol News, USDA

New Study on Food Prices and the RFS

Cindy Zimmerman

ABF Economics released a new, detailed analysis showing no direct correlation between the Renewable Fuel Standard (RFS) and the overall increase in food prices.

The study, commissioned by the Renewable Fuels Association, specifically examined “the relationship between the RFS and recent changes in consumer food prices. Specifically this includes an examination of the relationship between corn prices and consumer food prices, the factors that affect corn prices, the role of the major industry participants in determining consumer food costs, and the relative importance of components such as agricultural commodities and energy on consumer food prices.”

urbanchuk-cornStudy author John Urbanchuk is managing partner of the recently launched agriculture and biofuels consulting firm ABF Economics. “It’s undeniable that the use of corn to make ethanol has increased as the Renewable Fuel Standard mandate has increased over time,” Urbanchuk said. “However that has had really no significant impact on consumer food prices.”

Urbanchuk says consumer food prices have increased since the RFS was implemented in 2008. “If you take a look at the time period since the implementation (of the RFS) and a comparable period prior to that, what we found is that retail level food prices have actually increased at a slower rate,” he said.

In addition, the report notes that the food processing industry accounts for a larger share of consumer food costs than does production agriculture. Moreover, energy prices play a more significant role in costs for food processors than do the prices for any individual agricultural commodity.

Listen to Urbanchuk explain the report here: John Urbanchuk, ABF Economics
Read the full report here.

Audio, Ethanol, Ethanol News, Food prices, RFA, RFS

Biodiesel Board Taking Renewable Diesel Members

John Davis

nbb-logoIn a reflection of how really closely related the two industries are, the National Biodiesel Board opens up its membership to qualified renewable diesel producers. This NBB news release says the move is expected to unite the advanced biofuels industry in the diesel sector under one tent and creating a stronger and more effective voice for both.

“We are excited to expand our membership to include renewable diesel producers,” said Joe Jobe, CEO of NBB, which traditionally has represented only biodiesel interests. “While produced with different technologies, biodiesel and renewable diesel are close cousins with a lot of shared interests, particularly in policy areas such as the RFS and the blender’s tax incentive. Joining forces puts us in a much stronger position as a coalition to make our voice heard and spread the word that these policies are working and that advanced biofuels are here today.”

Jobe noted that with the change, NBB will represent the entire biomass-based diesel category under the Renewable Fuel Standard…

Representatives of the renewable diesel producers echoed Jobe’s statements.

“We have long been impressed with the work NBB does to represent the biodiesel industry and felt that joining forces was the next logical step,” said Randall C. Stuewe, President and Chairman of the Board of Darling International, Inc. which is a 50% equity owner in Diamond Green Diesel, a Louisiana-based Renewable Diesel plant with annual production capability of over 136 million gallons coming on line shortly. “Many of the same issues face both biodiesel and renewable diesel producers and we’re glad to be speaking with one voice on these issues.”

NBB points out that biodiesel and renewable diesel are both made with renewable resources such as soybean oil, animal fats and recycled cooking oils. The difference comes through the process that turns those materials into fuels, with biodiesel produced through a natural chemical reaction that takes place when alcohol is introduced to oils or fats in the presence of a catalyst and for renewable diesel, hydrogen is added to the oils or fats under high pressure and temperatures, converting it to a hydrocarbon very similar to diesel fuel refined from petroleum crude.

Biodiesel, NBB

Colombians Find Algae with Biodiesel Potential

John Davis

colombiaflag1Researchers in Colombia have found a couple of strains of freshwater algae that could be good for biodiesel. FIS.com reports that the scientists at the National University of Colombia (UNC) believe Scenedesmus ovalternus and Chlorella vulgaris will produce biodiesel with less impact on the environment.

Luis Miguel Serrano Bermudez, Master in Chemical Engineering at the UNC and one of the authors of the study, explains that neither the bioethanol (made from the fermentation of corn or sugar cane) nor the biodiesel (made from palm oil, soybean or other grains) can respond to the global fuel demand with environmental and economic sustainability.

Colombia has a high abundance of water and light, which is essential for farming microalgae.

The two species of microalgae studied had the highest productivity of fats, with a value that is equal to 4.1 times the productivity of the African palm, which is the current raw material used by the domestic industry for biodiesel.

The researchers found that Chlorella vulgaris has a 25 percent higher fat content compared to Scenedesmus ovalternus, making the process that much cheaper.

algae, Biodiesel, biofuels, International, Research

Court Ruling Not Expected to Impact Biodiesel Much

John Davis

scalesofjustice1A recent ruling from a court in California is not expected to have much of an impact on biodiesel. California’s Fifth District Court of Appeal ruled provisionally that Poet LLC’s lawsuit against the California Air Resources Board (CARB) about the state’s low carbon fuel standard (LCFS) program can continue to operate. This article from Biodiesel Magazine says the set aside of CARB’s deferment of formulating mitigation measures for possible NOx increases from biodiesel will be avoided if it’s found that no mitigation measures are needed.

To the extent that violations occurred, it appears the ruling was more about technicalities than anything substantive. Since CARB will have the opportunity to address the violations without interuption to the LCFS program, sources say it should not have much impact on biodiesel. It does, however, appear to prompt CARB to act sooner rather than later on the contentious subject of biodiesel NOx emissions.

While biodiesel significantly reduces nearly all tailpipe emissions such as particulate matter and carbon monoxide compared to petroleum diesel exhaust, early EPA engine dynamometer tests showed a slight increase in NOx emissions from biodiesel. NOx consists of nitric oxide (NO) and nitrogen dioxide (NO2), which, together with volatile organic compounds (VOCs), produce smog and ground-level ozone (O3), compounds that degrade air quality and pose significant health hazards.

Years later, those same early emissions tests that showed slight NOx increases from biodiesel came under scrutiny; the tests are said to be too narrow and they do not represent the breadth of types of diesel engines, duty cycles and test loads operating in the real world. Later studies conducted by U.S. DOE, National Renewable Energy Laboratory, Texas A&M University, the North Carolina Department of Transportation, and the U.S. Navy suggest biodiesel blends such as B20 are NOx neutral.

POET filed the original lawsuit in January 2012 and alleged the environmental impacts of the LCFS were not adequately studied and, therefore, the program should be discontinued. But the court has ruled the regulations are staying in effect this year until corrective action is completed.

Biodiesel, Low Carbon Fuel Standard

Genscape Adds to Biofuels Info with Landviewer Buy

John Davis

Genscape LogoProvider of energy information for commodity and financial markets Genscape has bought LandViewer to expand its technology footprint in the biofuels industry. Genscape says, using NASA satellite data to get daily updates of corn vegetation progress, the LandViewer platform gives corn traders and buyers land use and crop progress information on a sub-regional level so they know where to source grain and how to set the best prices.

“The LandViewer platform opens a lot of doors for Genscape customers to make informed grain management decisions ahead of market movements. When you know the supply of corn you can set better prices, hedge investment risk and stay ahead of the competition,” says Robert Barton, Managing Director of Agriculture and Biofuels at Genscape.

To complement the LandViewer acquisition and to provide additional value to ethanol customers Genscape has also launched a unique QAP specifically for the ethanol industry. The new program offers a way for ethanol plants to create QAP-B RINs desired by Obligated Parties with a minimal impact on plant operations. Using their proven technology, the company can offer a cost-effective method to directly manage RIN generation compliance while eliminating the hassle of onsite auditing.

Also designed for traders, LandViewer uses a combination of historical data, national yield regressions and fundamental crop data to deliver highly accurate projections of crop yields on a national level to inform trading and investment strategies.

The LandViewer technology was developed at the University of Illinois at Chicago Energy Resources Center.

By the way, Genscape is at this week’s Fuel Ethanol Workshop & Expo in St. Louis, Mo., as is our own Joanna. Genscape will be talking about LandViewer and the QAP program for ethanol plants.

Check out the FEW Photo Album.

biofuels, FEW

What Do You Think of The Senate Immigration Bill

Talia Goes

Before we get to our new Zimmpoll let’s look at the results of our latest one which asked the question, “How good was your first cutting of hay?” Many of you felt your hay crop was better than last year. Hopefully this is a good sign for this season.

Our poll results: Thirty-five percent said Better Than Last Year, twenty-five percent said Same as Last Year, twenty-five percent said Worse Than Last Year, and fifteen percent said Other. The “Other” responses claimed it is too wet to cut hay. All this moisture is a cure for the drought but seems to have delayed hay season in parts of the country.

Untitled

Our new ZimmPoll is now live and asks the question, “What is your opinion of Senate immigration bill?” With a Senate vote of 82-15 to allow further debate on legalizing the nation’s 11 million unauthorized immigrants, update the hiring process and make legalization a breeze. President Obama claims it is “the best chance we’ve had in years”. How do you feel? Let us know.

ZimmPoll is sponsored by New Holland Agriculture.

ZimmPoll

Biodiesel Advocates Descend on DC

John Davis

nbb-logoBackers of one of our favorite green fuels, biodiesel, have headed to Capitol Hill. This news release from the National Biodiesel Board says the group of biodiesel producers, distributors and feedstock suppliers representing more than two dozen states, including the delegation from Iowa we previously told you about, are making their case for a strong Renewable Fuel Standard (RFS):

“The petroleum lobby is making a lot of noise about renewable fuels and we’re coming to town to make sure that Congress hears the other side of the story,” said Todd Ellis, vice president of sales and business development at Seattle-based Imperium Renewables. “Despite what you might hear, the RFS is working, and we’re building a new American fuels industry that is creating jobs, producing cleaner fuel, and ultimately helping consumers.”

“We’ll be reminding Congress that biodiesel is an EPA-designated Advanced Biofuel that is here today and that is exceeding its RFS targets, with two consecutive years of 1 billion gallon production,” Ellis added.

During their Hill visits, they also will advocate for a long-term extension of the biodiesel tax incentive, which is slated to expire again at the end of the year.

“No matter how much domestic oil and gas we find through fracking or new drilling, consumers will continue getting hurt by unstable global petroleum markets until we develop alternatives to oil,” said Anne Steckel, NBB’s vice president of federal affairs. “That’s why Congress passed the RFS in the first place with huge bipartisan support, and it’s why we can’t let up on these goals now.”

NBB points out that last year the biodiesel industry supported around 50,000 jobs around the country.

Biodiesel, Government, Legislation, NBB

USDA: $98.6 Mil Available for Advanced Biofuels

John Davis

usda-logoThe USDA is making available up to $98.6 million to support the production of advanced biofuels. This news release from the agency says it will be an opportunity for eligible producers to submit applications and strengthen the rural economy:

“The United States is on the path to a cleaner, more secure energy future,” [Agriculture Secretary Tom] Vilsack said. “By helping producers to support and expand the production of advanced biofuels, USDA is ensuring that Rural America is a key component of President Obama’s ‘all-of-the-above’ energy strategy to reduce the Nation’s reliance on foreign oil.”

The payments are provided through USDA Rural Development’s Bioenergy Program for Advanced Biofuels, commonly referred to as the Advanced Biofuel Payment Program. It was established in the 2008 Farm Bill to support the expansion of advanced biofuel production. Payments are made to eligible producers based on the amount of biofuel produced from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include crop residue; animal, food and yard waste; vegetable oils; and animal fat.

Producers use the payments to offset production costs and in some instances expand their operations. For example, in 2012, Sequential-Pacific Biodiesel, a biodiesel facility based in Salem, Ore., increased its annual production by approximately 1 million gallons, or about 20 percent. Sequential-Pacific primarily uses locally sourced waste vegetable oils in its production of biodiesel. The support USDA Rural Development provided through its Bioenergy Program for Advanced Biofuels helped the company buy equipment that increased the speed of production and pre-treatment of feedstock.

If producers didn’t apply for payments during the October 2012 application window, they may now apply for these payments for third and fourth quarter fiscal year 2013 production as well as for any applicable incremental production. Applications must be in by July 11, 2013. More information is available here on the Federal Register.

Since 2009, more than 275 eligible producers in 44 states have received payments.

advanced biofuels, biofuels, Government, USDA

All the World’s A Stage

Joanna Schroeder

With debate on Capitol Hill on the future of the Renewable Fuel Standard (RFS) and pressure from oil companies to lower cellulosic fuel mandates as part of the legislation, BBI FEW-13-World-Stagerealized that the time was right to feature a panel discussing the progress to commercialization of several major renewable fuels players to bring advanced biofuels to market.

All the World’s a Stage: A Front Row Seat to the Construction and Commissioning of the Industry’s First Cellulosic Facilities panel during the Fuel Ethanol Workshop in St. Louis, Missouri, was moderated by Brooke Coleman, executive director of the Advanced Ethanol Council. Also on the panel (from left to right):

  • Henrik Maimann, CEO New Bio Solutions Section & VP, Dong Energy Power
  • Mark Niederschulte, Chief Operating Officer, INEOS Bio
  • Steve Mirshak, Global Business Director – Cellulosic Ethanol, DuPont Industrial Biosciences
  • Chris Standlee, Executive Vice President, Abengoa Bioenergy
  • Wade Roby, POET-DSM Advanced Biofuels

Each panelist gave an update on their company’s project and from there, an open question and answer dialogue occurred. One of the major themes: how to bring and keep investments in the advanced biofuels sector to ensure commercialization is achieved.

Listen to the full panel discussion here: All the World's A Stage

Visit the 2013 FEW Photo Album.

advanced biofuels, Audio, Cellulosic, Ethanol, FEW