Domestic Fuel

The dramatic growth in biofuels made from crops is the runaway favorite for the year’s top stories in agriculture.

“Emergence of biofuels as a factor in the farm economy really came out in 2006,” says USDA chief economist Keith Collins in a USDA Radio News report. “As that became realised in the second half of 2006 we saw commodity markets just explode.”

Listen to USDA Report by Gary Crawford. USDA Report (1 min MP3)

Brownfield Network ranked “growing demand during 2006 for crops that are increasingly used as sources of energy and that show promise for other uses” in the “2006 Ag Year in Review.”

According to ag columnist Jack Dillard of the Shreveport Times writes, “For 2006, the two biggest stories and happenings in agriculture were the surge toward ethanol and the drought. Both could continue into next year.”

Agricultural journalist Jim Suber’s column in the Topeka Capitol-Journal puts biofuels in the number one and two spots for top ag stories of the year.

1. The dawning of awareness by the urban public that ethanol exists as a fuel and not just for a bathtub purple passion drink to make you sick on New Year’s Eve. Add other biofuels to the list, and then research sugar and sugar cane and try to sort out that with ethanol and trade tariffs and corn production and corn subsidies and alcohol subsidies. It will take an hour, I promise.

2. The entire biofuels/ethanol complex of thinking along with the skyrocketing dollar influence of commodities funds by investors who wouldn’t know a bushel of peas from a tub of cottonseeds has perhaps built in a new price base for corn and oily crops like soybeans. Maybe.

And from the Twin Cities’ Pioneer Press we read “For American agriculture, 2006 was unquestionably the year of ethanol.”

Indeed it has been.

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The newest scratch ticket lottery game in Kansas is offering an E85 vehicle as a grand prize, according to a release from the Kansas Lottery.

The new Truck & Bucks game was developed by the Lottery, in partnership with the 3i Show and the GMC Division of General Motors. Players will have a chance to win a 2007 GMC Sierra E85 Crew Cab Pickup in a second-chance drawing.

“By offering an E85 vehicle as a grand prize, the Lottery and its partners are helping promote an industry that is increasingly important to Kansas,” said Governor Sebelius. “Demand for ethanol is creating a growing market for Kansas grain.”

Read full release from Kansas Lottery.

The Idaho Legislature will be considering proposals in the coming new year to make ethanol and biodiesel more attractive to distributors in that state.

Here’s the beginning of a very good article from Bonner County Daily Bee reporter Lucy Dukes about the biofuels climate in Coeur d’Alene, Idaho.

COEUR d’ALENE — Cindy James would consider using an ethanol-blended fuel if she could find it regularly at the pump.

“I tell them, you know, as far as I’m concerned I get good gas mileage out of it,” she said.

Read the whole article from the Bonner County Daily Bee.

2007 has been a pretty good year for Archer Daniels Midland Company, with investors looking at gains of over 30 percent thanks in a large part to increased demand for ethanol.

ADM earnings skyrocketed this year, according to an AP report, more than doubling in its fiscal first quarter ended Sept. 30 to easily beat Wall Street estimates.

In the first half of the year, the stock surged close to 90 percent. But investor enthusiasm has waned in recent months, mostly as oil prices continue to cool and drive down spot prices for ethanol. Since the summer driving season ended, the price of crude has declined to the $60/barrel range and shares of Archer-Daniels have shed about 23 percent of their value.

ADM shares traded at $32 Friday on the New York Stock Exchange where the stock has ranged between $24.05 and $46.71 over the past 52 weeks.

Read more.

By the end of the year, Iowa will have produced a record 1.5 billion gallons of ethanol, more than one quarter of all the ethanol produced in the nation this year.

According to the Iowa Renewable Fuels Association, Iowa ethanol plants will produce 36 percent more ethanol than last year’s 1.1 billion gallons.

With 26 biorefinies in operation, Iowa already has more ethanol plants than any other state. Another 16 new ethanol plants are under contruction and five major expansions underway which could more than double the state’s production by next year at this time. More than a dozen new projects are expected to be started in 2007.

Read more from the Associated Press.

The ZimmComm offices have been closed for the holidays. Spent quite a bit of time on the road seeing relatives the last week and it has been wonderful, but we are back in production again, cranking out Domestic Fuel news.

Hope your holidays have been glorious so far!

The friendly folks at the Ethanol Promotion and Information Council would like to wish everyone “Gallons of Good Tidings” for the holiday season and the new year.

EPIC is a nonprofit alliance of ethanol industry leaders who have come together to grow consumer demand for ethanol energy through targeted marketing. Like the rest of the ethanol industry, EPIC has experienced tremendous growth over the last year and is looking at a bright future.

Over 120 ethanol producing companies, industry partners and affiliates are currently members of the alliance and more are joining every day.

EPIC is our original and ongoing sponsor and they’ve made it possible for us to bring you the best and latest news and information on the renewable fuels industry. We at ZimmComm would like to thank them and all of you who have made Domestic Fuel a great resource and so much fun to do. We also wish you a happy holiday season and are going to take a break until next Tuesday before we post again. Posting will be light through January 2 and then it’s pedal to the metal in 2007.

One of two Florida ethanol plants planned by U.S. EnviroFuels is not going to happen now.

The company had run into issues earlier this year in negotiating a lease agreement to construct a 40 million gallon a year plant at Port Manatee. Company officials say because those issues could not be resolved, they are cancelling plans for the plant.

However, they intend to move forward with a similar plant at the Port of Tampa, which would be the first ethanol plant to be built in Florida. The plant is reportedly on track to be completed in 2008.

Read more from the Bradenton Herald and the St. Petersburg Times

Electronics retailer REX Stores Corporation of Dayton, Ohio has invested $14 million in Millennium Ethanol to build an ethanol producing facility in Marion, South Dakota.

Fagen, Inc. of Granite Falls, Minnesota is providing design, engineering, procurement and construction services for the plant. The plant is expected to begin ethanol production in early 2008 and will have a design capacity of 100 million gallons of ethanol and 320,000 tons of dried distillers grains per year. Millennium has reached an agreement with Archer Daniels Midland Company to market the ethanol.

Stuart Rose, REX Stores’ Chairman and Chief Executive Officer, commented, “We are delighted to be moving forward with this investment in the Millennium ethanol production facility. Millennium was organized and is owned by over 900 South Dakota investors, including FREMAR FARMERS COOPERATIVE INC., which includes over 1,700 farmer members. Our participation in Millennium is consistent with our strategy to invest in farmer-owned projects.”

Read more.

Two Canadian companies, SunOpta Inc. and GreenField Ethanol Inc. have signed a joint venture agreement to develop and implement commercial scale processes for the production of cellulosic ethanol from wood chips, including the planned establishment of one or more commercial scale plants employing the new process.

The first plant is planned to produce 10 million gallons of cellulosic ethanol per year, which would be the first commercial scale cellulosic ethanol plant built and operational in the world using wood chips. Greenfield Ethanol and SunOpta are actively involved in selecting a site for the first plant in Ontario or Quebec.

Read more from SunOpta.

Mascoma Corporation of Cambridge, Mass. has received a $14.8 million award from the New York State Department of Agriculture and Markets and the New York State Energy Research and Development Authority to build and operate a biomass-to-ethanol demonstration plant in Rochester, New York.

The project will focus on demonstrating “cellulose to ethanol” technology and industrial processes. International Paper Co., Cornell University, Clarkson University and the Natural Resources Defense Council join Mascoma and Genencor as part of a consortium supporting the project.

The facility is expected to operate using a number of New York State agricultural and/or forest products as biomass, including paper sludge, wood chips, switch grass and corn stover.

Read more.

Broin Companies has announced plans for an ethanol plant near Glenville, Minn.

Glenville is located less than 10 miles southeast of Albert Lea, Minn., which is home to EXOL, a separate Broin managed facility that came on-line in August 1999 and operates at 45 million gallons per year. The new 60 million gallon per year Glenville Ethanol project will consume 21 million bushels of locally grown corn and produce 178,000 tons of premium Dakota Gold Enhanced Nutrition Distillers Products™.

Read release from Broin.

In a press conference on Wednesday, President Bush noted the amazing growth in ethanol this year.

“I’m pleased with the fact that we’ve gone from about a billion gallons of ethanol to over five billion gallons of ethanol in a very short period of time,” Bush said.

According to the Renewable Fuels Association, by the time the year comes to a close, the U.S. will have used more than 5 billion gallons of ethanol. That’s 25 percent more than called for in the Renewable Fuels Standard (RFS) that went into effect at the beginning of the year.

The new Undersecretary of Agriculture for Farm and Foreign Trade mentioned ethanol in his first meeting with reporters on Wednesday. Mark Keenum noted that there are now 110 ethanol refineries on line.

“And we’ve got about 50 or so refineries that are in the process of being constructed,” said Keenum. “When they come on line we’re going to be right at nine billion gallons.”

USDA chief economist Keith Collins said Wednesday that a record two billion bushels of corn was made into ethanol this year. “Many people in the industry are expecting that corn going to ethanol will increase by in the order of a billion bushels in 2007.”

2006 will be remembered as the year ethanol came of age.

The Renewable Fuels Association put together a list of important events for ethanol in 2006:

January 1 – The Renewable Fuels Standard (RFS) takes effect. The program is implemented under the default guidelines as the full program is developed.

January 31 – During the State of the Union Address, President Bush declares, “America is addicted to oil.”

February 20-22 – National Ethanol Conference in Las Vegas, Nevada.

April 25 – President Bush addresses the Renewable Fuels Association and others in the renewable fuels industry at the Renewable Fuels Summit 2006.

May 5 – Gasoline refiners complete voluntary elimination of MTBE from the market.

May 25 – The nation’s 100th ethanol biorefinery opens in Iowa.

May 27 – The Indianapolis 500 runs on a 10 percent ethanol blend, representing the first change in fuel in more than 30 years. In 2007, the entire Indy Racing League, including the Indy 500, will run on 100 percent ethanol.

May 29 – The Renewable Fuels Association rings the opening bell on the NASDAQ stock exchange in New York City.

August 8 – The Renewable Fuels Standard celebrates its one-year anniversary with no fewer than 29 new ethanol biorefineries under construction since the bill was passed.

September 9 – The Environmental Protection Agency (EPA) releases its proposed rule to fully implement the Renewable Fuels Standard.

October 10-12 – For the first time, three cabinet members and the President of the United States speak from the same stage about the importance of renewable fuels in America’s energy future.

November 14 – Big 3 automakers, General Motors, Ford and DaimlerChrysler meet with President Bush and pledge to make half of new vehicles manufactured FFVs by the end of the decade.

December 9 – Mark “The Flying Farmer” Thomas is awarded his sixth IHRA Alcohol Funny Car World Championship running on 100 percent ethanol.

December 10 – Congress extends the tax credit offset on imported ethanol to January 1, 2009.

Expect more in 2007.

The brother of President George W. Bush will finish his term as Florida governor next month and become co-chairman of the new Interamerican Ethanol Commission.

Launching the new commission Monday in Miami, Bush acknowledged that the idea of working with other nations like Brazil to supply ethanol for the United States would probably not be well received by producers in the Midwest, joking that it was “living proof that I’m not running [for president].” The governor is in favor of reducing or eliminating the current tariff on imports of ethanol from Brazil.

Governor Bush wrote an op-ed article on the new venture that was published in the Miami Herald, saying that increased ethanol consumption can strengthen the United States’ relationship with Latin America, serving as a catalyst to remove barriers to free trade within the region. Ethanol can be a powerful catalyst for poor nations to ”grow their own energy” and capitalize on trading partnerships to boost economic opportunity.

Read more from the Miami Herald.