Domestic Fuel

The Ethanol Promotion and Information Council - or EPIC – is pleased with the success of it’s ethanol awareness campaign conducted last fall in Wichita, KS. (see previous post) EPIC Executive Director Tom Sluneka calls the results of the campaign “outstanding.” “Our partner in Wichita-Hutchinson market was Kwik Shop, and their stores branded ethanol with our E-logo. At that point in time they saw a 42.8 percent increase of sales to branded ethanol over regular fuel. This is a dramatic increase and our partners there were very excited to see those types of results at their stores.” Conversely, ethanol-enriched fuel sales at Kansas Kwik Shops located outside the promotion area accounted for just 22 percent of the total during the same period. This marks nearly a 100 percent increase in ethanol sales between the two sets of stores. Prior to the EPIC promotion efforts, sales of ethanol-enriched fuel inside and outside the promotion area were nearly identical. (full release)
One of the ways EPIC promoted ethanol at the Kwik Shops was to give away their E-logo magnets to motorists who filled up with an ethanol-blend – as you can see in the picture.

February has been declared Ethanol Awareness Month in Hopkinsville and all of Christian County, KY. The mayor of Hopkinsville and the judge-executive of the county made that proclamation this week. According to a news release, as part of Ethanol Awareness Month, MaxFuel Express of Max Arnold & Sons, LLC, in partnership with the Commonwealth Agri-Energy, LLC, will donate a portion of the proceeds from the sales of ethanol-enriched gasoline to the Jennie Stuart Medical Center. Funds donated will be used to send five children to the American Lung Association of Kentucky asthma camp. “We know that offering consumers the option to use ethanol is the right thing to do because it helps reduce air pollution which helps everyone breathe easier,” says Phillip Russo, vice president of Max Arnold & Sons, LLC, based in Hopkinsville, Ky. Forty-four MaxFuel Express stores in the Christian county area sell one or more grades of gasoline with a 10 percent ethanol-enriched fuel.

Here’s some good news out of Detroit on consumer awareness and acceptance of ethanol and flex-fuel vehicles. An on-line survey by research firm Phoenix Marketing International found that 60 percent are extremely or very familiar with the grain-based fuel. When presented with ethanol’s strengths and weaknesses, more than 90 percent of drivers said they would prefer a flex-fuel vehicle (running on both bio- and fossil-fuels) over a strictly gasoline or diesel version.
Consumers also seem to be getting the message about the benefits of ethanol, according to the survey. Consumers perceive renewable resource (42 percent), clean fuel (24 percent) and produced in America (19 percent) as the most important benefits of ethanol-powered vehicles.
Bill Saunders, president of Phoenix Automotive, says that ethanol could ultimately help increase sales for American auto manufacturers.
“Last year’s fuel price run-up and Middle East crises may have not only hurt American drivers’ pocketbooks but also caused them to feel guilty about operating large, gas-only vehicles,” said Saunders. “Ethanol power not only allows owners to enjoy large vehicles, but it can also let them feel good about the domestic agricultural economy, American energy independence and the environment.”
The survey also questioned which auto manaufacturers were seen as extremely or very environmentally sensitive. Sixty percent or more put Honda and Toyota in that category, but 18 percent or less felt the same way about Ford, General Motors and DaimlerChrysler.
The study of more than 2,000 vehicle owners was conducted just last week on-line. Here is the link to the full release.

I had not seen this USA Today survey until yesterday when John Kleiboeker with the Missouri Soybean Association did a nice presentation on biodiesel production at the Missouri Ag Leaders luncheon in Jefferson City, MO. I thought the disparity between different countries on what people thought was a fair price for gas was fascinating. John also pointed out that the actual base price for gas was the same everywhere – the difference is all taxes!

I have been a farm reporter all of my professional broadcasting career, half of that time in Florida and half in the midwest. For the past four years I have been reporting farm news for Florida FROM the Midwest – thanks to the magic of the internet and computers – on the Southeast Agnet radio network. One of the stories I did today was about a meeting that Florida Commissioner of Agriculture Charles Bronson will be holding Thursday afternoon on the state’s potential to create bio-fuels from farm crops. Part of the reason for the meeting is the fact that, in the wake of five major hurricanes hitting the citrus belt in the last two years, the state has decided it is no longer feasible to eradicate citrus canker. The disease is harmless to humans, but causes blemishes on fruit and production declines – which will likely lead to an end to the fresh citrus business in Florida. While most of Florida’s citrus is made into juice, there is a significant amount of fresh fruit grown – and there’s just no market for ugly citrus. SOOOO – there’s alot of talk now about converting those citrus groves into energy crops, and some domestic fuel companies are already jumping on the bandwagon (see previous post).
Here is a link to my Southeast Agnet report with Commissioner Bronson, and stay tuned for more about the industry developing in the Sunshine State.

If you are in a car-buying mood, the new GM 2007 E85 Chevy Tahoe is now available. The new Tahoe is a flex-fuel vehicle capable of running on 85 percent ethanol, which is not really that unique anymore – there are lots of flex-fuel vehicles on the road. What makes it special is that GM has been running an ad campaign in major publications promoting that fact. Advertisements for the 2007 Tahoe ran in the Jan. 4 editions of USA Today and Wall Street Journal stressing the new full-size sport/utility vehicle’s fuel economy, including it’s ability to run on E85. “To my knowledge, this is the first time that any automaker has included a reference to the FFV capability of a vehicle in a national advertisement,” said Ethanol Vehicle Coalition Executive Director Phil Lambert. The ads also direct individuals to the NEVC Web site, www.E85Fuel.com, to locate availability of E85.

USDA is putting its’ money where its’ mouth is when it comes to renewable energy. Over $19 million dollars in grant money is now available for value-added agribusiness ventures, with priority given to biodiesel, ethanol and other renewable energy projects. Ag Secretary Mike Johanns made the announcement of the funding availability at the American Farm Bureau Federation annual meeting this week in Nashville, TN. The Value Added Producer Grant program encourages the development of renewable energy projects and is part of a comprehensive energy strategy announced by Johanns in early December to help agriculture deal with the impact of high energy costs and develop long-term solutions.
USDA has already invested close to $290 million in renewable energy over the past five years, and starting this year the agency is doubling the amount of grant money that can be awarded to a producer to $300,000. The grants may be used for planning activities, such as feasibility studies, marketing and business plans needed to establish a viable value-added marketing opportunity for an agricultural product, or to provide working capital for operating a value-added business venture, marketing value-added agricultural products and for farm-based renewable energy projects. Eligible applicants are independent producers, farmer and rancher cooperatives, agricultural producer groups, and majority-controlled producer-based business ventures.
Interested??? The deadline for applications is March 31, and details can be found in the December 21, 2005 issue of the Federal Register.

We are probably going to be hearing a lot more about producing ethanol from cellulose – that is, the non-food portion of agriculture residue such as cereal straws and corn stover. A major oil company, car manufacturer and biotech firm are going in together on a joint study to assess the economic feasibility of producing cellulose ethanol in Germany. According to a press release, the study is being done by Volkswagen, Shell and Iogen. You probably know who Shell and Volkswagen are – Iogen is a biotechnology firm located in Ottawa, Canada that specializes in cellulose ethanol, and also develops, manufactures and markets enzymes used to modify and improve the processing of natural fibres within the textile, animal feed, and pulp and paper industries.

A joint ethanol-related demonstration project between General Motors, the state of California, Chevron Technology Ventures, and Pacific Ethanol was made public this week at the Los Angeles Auto Show. According to a GM press release, the project is designed “to learn more about consumer awareness and acceptance of E85 as a motor vehicle fuel by demonstrating its use in GM’s flexible-fuel vehicles.”
Here’s some of the details from the release:
GM intends to offer between 50 to 100 of its E85-capable Chevrolet Impala passenger cars and Silverado pickup trucks for consideration in the state’s annual competitive bid process. Flexible-fuel vehicles will be used by the California Department of Transportation (CalTrans) at various operations in Northern California and the state’s Central Valley. Chevron Technology Ventures intends to work with CalTrans to provide E85 fuel and install the necessary refueling pumps in these locations. Pacific Ethanol, a California-based ethanol production and marketing company, intends to provide the ethanol to Chevron Technology Ventures for the project.

“Governor Schwarzenegger strongly supports the development of alternative fuels to improve California ‘s air quality, reduce CO2 emissions, and achieve energy independence,” said Cal/EPA Secretary Alan C. Lloyd. “This demonstration program involving E85 fuel technology insures that California will continue to play a leading role in protecting the environment and public health.”

I’m not a big fan of Al Franken, but he says he’s a big fan of ethanol and biodiesel. At least according to an interview out this week with the liberal comedian and talk show host who just recently moved his show from New York to Minneapolis. Minnesota is Franken’s home state and the Associated Press reporter who interviewed him asked him about running for office in 2008, presumably against Republican Senator Norm Coleman, and Franken said he had not yet decided. Then the reporter asked if he did run if there were any key issues he would want to address:
A. I’m big on alternative fuel … biomass and biodiesel, ethanol and wind. I think we need to be developing more wind power, and we can do that in this region. …
Still, I wouldn’t vote for him … but that’s just me.

U.S. BioGen is moving ahead with it’s plans to build a 100 million gallon capacity ethanol plant in Morgan County, Colorado. Officials announced plans to build the renewable-energy firm’s first ethanol plant in Colorado last summer, but ran into a little snag at the end of the year with the plant’s exact location approval process. That has now been ironed out and plans are moving forward with groundbreaking expected later this year. The firm also plans to build plants in Nevada and Pennsylvania.

With the new year, Kansas Governor Kathleen Sebelius has taken over the leadership of the Governor’s Ethanol Coalition. Sebelius, who is a Democrat, succeeds Republican Tim Pawlenty of Minnesota as chairman of the bipartisan coalition of 32 state governors working to promote and expand ethanol production. Vice chairman of the coalition for 2006 is Nebraska Gov. Dave Heineman, a Republican. Sebelius and Heineman this week wrote letters to the U.S. Secretaries of Agriculture and Energy asking them to participate in a study on how best to expand the nation’s biofuels industry. According to a press release from Sebelius’ office, the Kansas governor said “the coalition will continue to promote expanding ethanol production from a wider range of feedstocks, including cellulose sources, and that they will work with Congress to provide adequate funding for the federal government’s biofuels research, which was included in last year’s energy bill.”

Fresno, California-based Pacific Ethanol is reporting “significant progress” in 2005, according to a press release on its annual stockholders meeting held the last business day of the year. The company, which was established in 2003, has the goal of becoming “the leader in the development, production and marketing of renewable fuels in the Western United States.” Pacific Ethanol currently has plans for five ethanol plants on the west coast and is also working “to identify and develop other renewable fuel technologies such as cellulose-based ethanol production and bio-diesel.” The company is publicly traded on NASDAQ, trading at around 11.00 per share when I checked it. Click on the NASDAQ link for the current company snapshot.

East is meeting midwest when it comes to domestic fuels. First it was North Carolina getting into the ethanol business, now it’s Maryland going biodiesel. Actually, there are already biodiesel refineries operating in Virginia and New York, but it’s safe to say that biofuels production has largely been a midwest phenomenon, since that’s where most of the corn and soybeans are grown. But, as the demand for alternative fuels grows, we are going to see more plants popping up in more populated areas. And those nice incentives for production included in the energy bill don’t hurt either.
There are actually two companies looking into building biodiesel plants in Maryland, which ranks about 18th nationwide in soybean production. One is a corporation called OffWorldWealth. This very diversified company is located in Columbia, MD – which is not known for much except being about halfway between Baltimore and DC – and being the birthplace of our oldest daughter! OWW started in 2001 as a research group exploring possible business opportunities in space. Now OWW is into all kinds of things, including biofuels. Interesting.

Here are links to a couple of good ethanol stories I found today during my usual Google news search.
First, here’s a Ganntt News Service story on how Brazil is far ahead of the United States when it comes to ethanol. Thought it was interesting that both Brazil and the US produce the same amount of ethanol – four billion gallons – but Brazil uses ethanol for 40 percent of its driving fuel, compared to only five percent in the US. Most of Brazil’s ethanol is made from sugarcane.
Closely related to that story is a Reuters News Service report that low ethanol fuel prices in Brazil are driving sales of flex-fuel vehicles. According to the report, The cost of ethanol fuel, which is distilled from sugar cane, is about 60 percent the cost of gasoline at the pump in Brazil. Although the flex-fuel motors can run on any combination of the two fuels, cost-conscious Brazilian motorists tend to fill their tanks with 100 percent ethanol.
And back here at home an Associated Press story out of Wisconsin reports that the rapid increase in ethanol plants being built in this country is creating a boom for companies that manufacture the equipment needed for refineries. With more than 30 plants under construction and at least ten more being expanded, the ethanol plant building business is at an all-time high, which is good news for the companies that make ethanol tanks and such.