Domestic Fuel

Guess what? President Bush talked about ethanol in his State of the Union address tonight! No kidding!
As expected, energy was part of the president’s speech and his most memorable line was “America is addicted to oil” - a headline that was splashed all over the internet news services as soon as they received their advanced copies of the address, hours before it was actually made. The president devoted less than three minutes of his address to energy, but it was the most highly anticipated by the media and - naturally - those in the domestic fuel industry. The Renewable Fuels Association even sent out a press release with reaction to the yet-to-be-made address at 5:30 pm EST (although they did note it was embargoed until 9:30 EST).
What the president had to say was certainly good news for the ethanol industry, announcing the Advanced Energy Initiative - a 22 percent increase in clean energy research at the Department of Energy. “We must also change how we power our automobiles,” Bush said. “We will also fund additional research in cutting edge methods of producing ethanol, not just from corn, but from wood chips and stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.” After sustained applause the president added, “Breakthroughs on this and other new technologies will help us reach another great goal to replace more than 75 percent of our oil imports from the Middle East by 2025.” Listen to President Bush’s full domestic energy remarks here.

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Here is some audio from ADM’s press conference this morning with Chairman and Chief Executive G. Allen Andreas and Vice President for Corporate Affairs Brian Peterson. All the cuts are a minute or so, but I left them basically unedited for context.
First off, here are Peterson’s prepared remarks about ADM’s biodiesel interests and ethanol business.
The other three cuts are all from Allen Andreas.
First, Andreas talks about his thoughts on prospects for ethanol prices.
Andreas talks about ADM’s biodiesel business in Europe and the potential in the United States.
Finally, Andreas addresses a question about ethanol imports from Brazil and the prospects for the fuel on a global scale.

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Agribusiness giant and biofuels leader Archer Daniels Midland today reported an impressive 17 percent increase in profits for the quarter ending December 31, 2005 - mainly due to lower corn prices and higher ethanol prices. The entire corn processing sector of ADM’s business increased $104 million over the same period in 2004 to well over $236 million in 2005 - up close to 80 percent. The bioproducts portion, which includes ethanol, was up 40 percent to $122 million. Officials said that while the low corn prices from last year’s record crop were the major reason for the higher profits, they are very optimistic about continued strong demand for ethanol as cities convert from MTBE and auto makers promote increased use of E85. ADM officials are also very optimistic about biodiesel, especially in Europe where ADM is a leader in production. “More than 50 percent of the automobiles there are diesel engines, so it’s really a different model from the United States,” said Chairman Allen Andreas. However, he says biodiesel holds great promise for the U.S. as well as the sulfur is removed from the fuel requiring more lubricity. Here is a link to the report presentations and audio from this morning’s press conference on the ADM site. I am in the process of cutting up some of that audio to put up some short sound bites later that refer specifically to the ethanol and biodiesel aspects of ADM’s business.

Progress is being made on the world’s first commercial cellulosic ethanol production plant, according to a company release from SunOpta, Inc. of Ontario, Canada. The wheat straw to ethanol plant is located in Babilafuente (Salamanca), Spain and is a wholly-owned subsidiary of Abengoa S.A., the largest ethanol producer in Europe and the second largest in the world. SunOpta is providing the biomass pretreatment system for the plant, which is based on proprietary and patented technologies and is the only industrially proven continuous system in the world.
Within the last two weeks SunOpta shipped the Pretreatment System for the Abengoa Bioenergy Research and Development pilot plant to be built at the Abengoa corn starch to ethanol plant located at York, Nebraska. This pilot plant is funded by the US Department of Energy and will prove new advances in Biomass Conversion technologies utilizing the Pretreatment System from SunOpta Inc.
SunOpta will present their Pretreatment Technology for the production of cellulosic ethanol at the 28th Symposium on Biotechnology for Fuels and Chemicals, April 30 - May 3, 2006 in Nashville, Tennessee. This will highlight the latest advancements in SunOpta’s Biomass Conversion Technology to produce ethanol from renewable resources such as grasses, wood chips, garbage and energy specific crops.

Expect to hear “W” talking about ethanol tomorrow night. News sources are reporting that alternative energy will be a major theme of the President’s State of the Union speech Tuesday after Bush talked about ethanol in a recent interview with CBS, noting the number of flex-fuel vehicles already on the road that can run on E85. You can watch the 20 minute interview with Bob Schieffer here. Dozens of news outlets are carrying stories previewing the president’s speech, including the Associated Press.
Bush has always been a strong supporter of ethanol, so this is no surprise. And, given the high cost of fuel right now, it’s pretty much a no-brainer that the president is going to address that issue. High energy costs and domestic fuel strategies have already been a major theme in state of the state addresses given by a number of governors around the country this month.

The National Biodiesel Conference kicks off Super Bowl Sunday in San Diego - but if you can’t be there, you can still keep track of everything that goes on right from your computer. The National Biodiesel Board contracted ZimmComm to set up and run the Biodiesel Conference blog at blog.biodieselconference.org, and it will be blogged by the best - my husband and partner Chuck Zimmerman. Coverage of the conference begins in earnest Sunday with the pre-conference sessions and Super Bowl kick-off party, and will continue all the way through the end on February 8th concluding with the big XM Satellite Radio broadcast “Wednesday With Willie” - Nelson, that is - hosted by Bill Mack the Satellite Cowboy. There is already content on the site - including the first podcast with NBB CEO Joe Jobe. There will be a series of podcasts from the meeting available for your listening pleasure. Expect interviews with industry leaders and experts, in addition to news from the meeting and lots of pictures. Chuck is on his way today to Denver where he will be blogging the Cattle Industry Convention for the Cattlemen’s Beef Board (at beefboardmeeting.com), then flying directly from there on to San Diego Saturday. That, in addition to keeping up with our own company blogs. A busy blogging week for ZimmComm and we love it! Hope to do lots more of it.

Nevada is the site for the second coal-powered ethanol plant in the nation. No, not the state of Nevada - the city, located in central Iowa. The 50 million gallon a year plant, which is being built by Lincolnway Ethanol LLC is expected to be opened by April, according to an article in the Times-Republican. Company officials say that using coal is one-third to one-fourth of the energy cost of natural gas. However, its also more complex, expensive and high maintenance compared to natural gas.
The nation’s first Clean Coal Technology ethanol plant opened for business in December. The Corn LP plant, designed by ICM and constructed by Fagen, is also a 50 million gallon per year facility and also located in Iowa, near the town of Goldfield. Read more about Clean Coal Technology on the Coalition for Affordable and Reliable Energy (CARE) website.

The model used in the ethanol study out this week from UC Berkeley has a nice catchy anacronym (of course) EBAMM - which stands for Energy and Resources Group Biofuels Meta Model which is available to the public on the UC Berkeley website, which is the same link provided in our previous post about the study. I like the Science Daily release on the study and some of the quotes from the researchers Dan Kammen and Alex Farrell of the Energy and Resources Group at UC Berkeley. “It is better to use various inputs to grow corn and make ethanol and use that in your cars than it is to use the gasoline and fossil fuels directly,” Kamman said in the release. “The people who are saying ethanol is bad are just plain wrong,” he said. “But it isn’t a huge victory - you wouldn’t go out and rebuild our economy around corn-based ethanol.”
The transition would be worth it, the authors point out, if the ethanol is produced not from corn but from woody, fibrous plants: cellulose.
“Ethanol can be, if it’s made the right way with cellulosic technology, a really good fuel for the United States,” said Farrell, an assistant professor of energy and resources. “At the moment, cellulosic technology is just too expensive. If that changes - and the technology is developing rapidly - then we might see cellulosic technology enter the commercial market within five years.”
Yep - that’s what we’ve been saying here on this blog. Corn is just a start. God bless the farmers for getting this ball rolling, but in the future the fuel will more than likely come from other sources.
The picture, from the release, was taken at Lawrence Berkeley National Laboratory, which became the first ethanol dispensing station in Northern California in July 2004.

The answer to everything in Washington DC is to create more government - so if we want to make ourselves less dependent on foreign oil, all we need is a new government agency. The Democratic leadership in the Senate - Sens. Hillary Rodham Clinton (NY) and Harry Reid (NV) - is proposing a new agency within the Department of Energy to fund innovative energy research and development projects, according to a news release from Hillary’s office. The Clinton/Reid legislation is called the Advanced Research Projects Energy Act, which gives it the requisite catchy anacronym, ARPA-E. It would authorize a total of $9 billion of funding for fiscal years 2007-20011. Clinton held a press conference to talk about the legislation and the Democratic plan for energy independence Friday at Seattle Biodiesel during a fundraising trip through Washington state for herself and Senator Maria Cantwell (D-WA).

The world’s first flex-fuel hybrid vehicle was introduced this week by Ford Motor Company at the Washington Auto Show. The Ford Escape Hybrid E85 is a research vehicle combining two petroleum-saving technologies - hybrid electric power and flexible-fuel capability, according to the company’s news release. Ford officials boast that they have put more than 1.5 million flex-fuel vehicles on America’s roads in the last decade, and our experience with ethanol-fueled vehicles goes all the way back to the days of Henry Ford. The Ford Escape Hybrid E85 research project will aim for breakthroughs that could further expand the appeal of ethanol-capable vehicles.