Domestic Fuel

Florida’s governor is calling on Latin American countries to increase ethanol production for themselves and the United States. According to this article from the Bradenton Herald, Governor Jeb Bush made his pitch during the Second Annual Miami Latin America Conference, calling the proposal a “win-win for Florida and the region.” Bush says that increasing Florida and the nation’s reliance on other energy sources will help reduce their reliance on Venezuela, which he described as on “a quiet march toward dictatorship.” The United States imported roughly $34 billion in products from Venezuela last year, the vast majority of which were related to petroleum, according to U.S. Department of Commerce statistics. “If we don’t tax oil, maybe we shouldn’t tax ethanol,” the governor said.
I suspect that many in the domestic ethanol industry won’t like hearing this, but it is true. “If you take Brazil, Central America and Colombia, there is a tremendous potential to develop ethanol at a significantly lower price than can be done in the United States,” he said. Now, he is NOT saying that it shouldn’t be developed here in the United States. In fact, the Florida Legislature will probably pass bills this session that provide tax incentives for companies to increase the availability of renewable fuels and increased funding for research into alternative fuels. What he is talking about it working together as a hemisphere to reduce dependence on petroleum. Makes sense, which probably means it will never happen.

The World Energy Monthly Review, which “offers a no-holds-barred perspective, timely information and in-depth analysis on energy issues,” according to the publication’s Business Wire press release, takes a look at using switchgrass to make ethanol in its March issue. Author Brian K. Tully compares switchgrass as an ethanol source to both corn and sugar cane and says “it looks like not only a contender, but a winner.” Per acre, corn yields 330 gallons of ethanol, sugar yields 630 gallons and switchgrass 1,150 gallons. “Purely in terms of a fuel feedstock, one would be hard-pressed to find a tougher, faster-growing native plant that requires such relatively low maintenance,” Tully writes.
However, another article in the same issue says the cost of converting switchgrass to ethanol is three to five times the cost of converting corn, but scientists think that can be lowered.
But wait … what sounds most interesting in this issue is “San Francisco’s collection of a unique fuel source: dog poop.” Well, if we can use cow poop or pig poop – why not dog poo? It stands to reason then that ANY source of poo could be used to make fuel…. the possibilities are endless. So, why are we even thinking of growing anything to make fuel? We could be flushing away millions of gallons every day!

A high-school sophomore from Wisconsin was named the national winner of the 2006 Ag Day Essay Contest this week. The theme this year was “Growing Our Energy: Alternative Fuels From Agriculture” and here is a brief excerpt from Ashley Julka’s winning essay:
“…By using gasoline-containing ethanol, we’re using homegrown products. Not only does this reduce our dependency on foreign oil, but it also helps the American economy. In Wisconsin alone, ethanol production has gone from zero to 250 million gallons in five years.” As the winner, Julka received a $1,000 prize and a roundtrip ticket to Washington, D.C., to be recognized during the March 16 Ag Day Luncheon held at the National Press Club. The contest is sponsored by: DuPont, Case IH, The Council for Agricultural Science & Technology, High Plains Journal, National Association of Farm Broadcasting and National Agri-Marketing Association, in conjunction with the Agriculture Council of America (ACA) which sponsors National Ag Day. Congratulations, Ashley!

Today is St. Patrick’s Day – tomorrow is St. Diesel’s Day. Well, he hasn’t actually been canonized yet – at least not by the Pope, but maybe by the Biodiesel industry. March 18 is the fifth annual National Biodiesel Day, celebrated on the birthday of Rudolf Diesel – inventor of the diesel engine. According to a press release from the National Biodiesel Board, they chose Diesel’s birthday to honor him for his foresight in recognizing the valuable role of vegetable-oil-based fuel. In the late 19th Century, Diesel ran early versions of his engine on peanut oil and paved the path for today’s biodiesel. Biodiesel is now made from soybean oil, as well as other vegetable oils and fats.

I have been meaning to put up a link to this AP story that came out a week or so ago about Brazil’s ethanol economy. It’s a good backgrounder on the history of the industry in Brazil and of particular interest to some critics of the government trying to help the industry grow here in the U.S. is this line – After decades of government intervention and subsidies, the industry here is a thriving free market business, complete with ethanol pumps at every filling station in Latin America’s largest country. Just thought that was interesting.

Add cheese to the list of commodities that could be used to make ethanol. This AP story is about research into “using a cheese-making byproduct to make ethanol.” That would be whey – as in what Little Miss Muffet ate on her tuffet with curds. According to the article, whey can be made into lactose sugar, which can then be made into ethanol. Whey recycling has been used as a protein supplement in low-carb foods for decades, said Mark Bade, operator of the whey recycling process and waste management facility at Wisconsin Dairy State Cheese in Rudolph. The state’s Department of Agriculture, Trade and Consumer Protection is hawking the potential for whey sugar to be refined and used in ethanol. “Ethanol is hot,” the department’s Robin Engel said. Engel says they are thinking Wisconsin could have three refineries that would produce between 4 million and 7 million gallons of ethanol a year. The state is investing some $5 million in alternative energy research.

The chairman of the Senate Agriculture Committee had lots of good things to say about ethanol yesterday at the kickoff luncheon for National Ag Day in Washington D.C. Senator Saxby Chambliss, a Georgia Republican, said that ethanol production holds promise even in areas outside the Corn Belt. “We may not be able to grow the corn in the abundance that folks do in the Midwest, but we’ve got other crops that we can grow,” Chambliss said. “Switchgrass is one that’s being talked about now that’s a real opportunity for us. Sugar cane in Louisiana, sugar cane in South Florida, can be grown in abundance.” Chambliss also promised that alternative energy will be a major focus in the upcoming 2007 Farm Bill. Listen to Chambliss’ remarks about alternative energy here.

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Biodiesel and soybean grower interests were happy to see legislation introduced this week that would extend the biodiesel tax incentive. According to a release from the National Biodiesel Board and the American Soybean Association, the bill was introduced yesterday by Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Max Baucus (D-MT). The Grassley/Baucus bill, S. 2401, extends popular alternative energy tax incentives, such as the biodiesel excise and income tax incentive for biodiesel and biodiesel blends. It also gives a one-year extension until 2010 to a tax credit for the cost of installing pumps that offer a 20 percent blend of biodiesel (B20). Darryl Brinkmann, chairman of NBB and a soybean producer from Carlyle, Ill., said that biodiesel and soybean leaders have already seen the results of the biodiesel tax incentive. Last year, U.S. biodiesel production tripled to 75 million gallons. “Passage of the tax incentive gave the biodiesel industry the confidence to grow as we work to keep up with the skyrocketing demand for biodiesel,” Brinkmann said. “Consumers across the nation have benefited because the biodiesel tax incentive has helped make biodiesel more cost competitive.”

Aventine Renewable Energy recently signed an agreement with its 14th ethanol production plant to market their product. According to a company release, Aventine will market all fuel grade ethanol produced by E3 BioFuels in Mead, Nebraska. Aventine also has agreements with plants in Wisconsin, Illinois, South Dakota, Iowa, Kansas, Minnesota and Texas.

Hankinson, ND is the designated location for a 100 million gallon per year ethanol plant to be built by South Dakota-based US BioEnergy, in partnership with local Gold Energy, LLC. A company press release (soon to be posted on their website), quotes North Dakota Governor John Hoeven saying, “We have put good programs in place and worked diligently with the Gold Energy Board and US BioEnergy to develop this plant in North Dakota. It will have a big impact on Hankinson and southeastern part of our state, both in more revenues for our farmers and good jobs in rural North Dakota.” Here’s a link to a story in the Grand Forks Herald about the plant. Hankinson is in Richland County, in North Dakota’s southeastern corner, about 10 miles north of the South Dakota border. Richland County is North Dakota’s biggest corn producer, with its farmers harvesting 28.5 million bushels last year, or 18 percent of the state’s 2005 crop of 154.8 million bushels. The plant is expected to use 37 million bushels of corn each year.