Domestic Fuel

It’s time to register for the 2007 National Biodiesel Conference, scheduled for February 4-7 in sunny San Antonio.

Attendance at the annual conference has doubled every year since it started in 2004 and this year it could top 2,000 – so early registration is highly recommended. Better get hotel reservations early too as rooms in the hotel blocks are moving fast, with some possibly sold out.

According to the National Biodiesel Board, the conference will feature “an impressive slate of world-renowned figures like James Carville and Mary Matalin, and Merle Haggard, who will tie biodiesel into the national and cultural landscape of our times. The event’s offerings don’t stop there: more sessions and a much larger exhibitor list at the expo will make this an educational and networking event not to be missed.”

If you can’t make it, not to worry. Domestic Fuel will be providing regular updates from the event and we will once again be hosting the Biodiesel Conference Blog live, on-site with pictures, audio, video and more.

A prolific fungus found in eastern Russia and termites from Costa Rica are just two of the avenues being explored to get ethanol on the cellulosic superhighway.

A Business Week online article reports on some of the bio-breakthroughs that are promising more efficient ways to make ethanol.

Scientists are scouring China for strains of tall grasses and tinkering with plants’ genes to make better energy crops. They are collecting termites in Costa Rica, hoping to harness the bugs’ ability to digest cellulose. Several groups have studied a fungus discovered during World War II that ate up the Army’s cotton tents. Richard Hamilton, CEO of Thousand Oaks (Calif.)-based Ceres Inc., compares the progress to TV makers’ struggle to perfect flat-panel displays. The first few factories “will be godawful expensive, but we’re early on the learning curve. We’ve only scratched the surface of what a lot of us think is possible,” he says.


Read the whole article.

Business Week reports that the ethanol industry appears poised for another big year in 2007, as companies scramble to take advantage of continuing government subsidies and a growing political desire to reduce the country’s dependence on foreign oil.

But Wall Street investors who went pedal-to-the-metal during ethanol’s midyear IPO frenzy seem to be easing off the accelerator upon warnings of volatile commodity prices and a potential oversupply down the road.

Read full Business Week article.

The latest global supply/demand report from the U.S. Department of Agriculture increases the forecast for corn and soybean prices this year due in part to stronger demand for ethanol and biodiesel.

Average corn prices are now expected to range between $2.90 to $3.30 a bushel, up ten cents from last month’s forecast. USDA Chief Economist Keith Collins said, “We think about 50 percent of the corn crop has been marketed so far this year at an average price of about $2.70 a bushel. As we look for the other 50% to be marketed, we think that could probably average about $3.50 a bushel.”

According to market analyst Brian Hoops of Midwest Market Solutions, this is only the fourth time in history that corn prices have topped the $3.00 mark. “The record year was 1995-96, so we are in some pretty uncharted waters for corn as far as cash price,” Hoops commented during a Minneapolis Grain Exchange conference call with reporters after the report was released Monday morning.

The average price for soybeans was also increased by a dime in the December report, to between $5.70 and $6.50 a bushel.

Listen to report from USDA Radio: USDA Report (1 min MP3)

Podcast: Play in new window | Download (913.8KB)

Solix Biofuels Inc., a startup company based in Boulder, is working with Colorado State University engineers to commercialize technology that can cheaply mass produce oil derived from algae and turn it into biodiesel.

Algae are the fastest growing organisms on the planet, and can produce 100 times more oil per acre than conventional soil-tilled crops that are now being grown for biofuel use – now they just have to create the technology to harness that potential.

Solix officials plan to commercialize the technology over the next two years. After ramping up to widespread production, the company expects to eventually compete commercially with the wholesale price of crude petroleum.

Bryan Willson, director of Colorado State’s Engines and Energy Conversion Laboratory, is pictured inspecting algae colonies. “This process harnesses photosynthesis to turn carbon dioxide and energy captured from the sun into an economical petroleum substitute,” he says.

Solix officials estimate that widespread construction of its photo-bioreactor system could meet the demand for the U.S. consumption of diesel fuel – about 4 million barrels a day – by growing algae on less than 0.5 percent of the U.S. land area, which is otherwise unused land adjacent to power plants and ethanol plants. The plants produce excess carbon dioxide, which is necessary to turn algae into oil. In addition to producing biodiesel, the process would prevent a large portion of the greenhouse gases produced by coal-burning power plants from being expelled directly into the atmosphere.

Lots more from Colorado State – including pictures, audio and video.

Before adjourning Saturday, Congress approved legislation extending the 54-cent-per-gallon tariff on imported ethanol as part of the Omnibus Tax bill.

The tariff was set to expire in October 2007 but will continue to be imposed until January 2009.

The American Coalition for Ethanol praised the action to support domestic ethanol production.

Brian Jennings, ACE Executive Vice President said, “We are extraordinarily grateful for the bipartisan leadership which accomplished the extension of the tariff offset to January 1, 2009. This important action helps pave the way for continued growth and investment in rural communities and clean burning, homegrown, renewable fuel.”

Read AP report.

The Iowa Corn Growers/Corn Promotion Board has released a document addressing concerns about whether they will be able to produce enough corn to meet demand for ethanol.

One of the issues they address is the price of corn, which this year is expected to average about $3 a bushel, the highest it has been since 1995.

The corn growers point out that during the last decade Iowa’s corn farmers have too often had to rely on federal farm programs to break even because corn prices failed to keep pace with either production costs or ordinary inflation (see graph).

Like other Americans, corn farmers should be able to compete in the marketplace, sell their crops for a profit, and earn a living for their families without being faulted for corn prices being “too high.”

Read the document pdf file.

Iowa corn growers say they can meet the demand for both food and fuel.

Grower leaders from the Iowa Corn Promotion Board and Iowa Corn Growers Association held a media teleconference Friday to answer concerns about corn prices and supplies and the increasing demand for corn to make ethanol.

Bob Bowman, ICGA president, who farms in DeWitt, said the current uproar over corn supplies is nothing new: “We’ve seen this debate before, as recently as 1995/96. I’m no economist, but I can tell you that when we see strong demand and good prices, corn farmers respond with higher production.”

Both men agreed that the current healthy demand for corn and strong corn prices are good news for Iowa’s growers and the local economies they support because they give farmers an opportunity to be profitable in the marketplace.

Read more from ICGA.

Read the Associated Press report.

Scientists with the Massachusettes Institute of Technology have engineered yeast that can improve the speed and efficiency of ethanol production.

By manipulating the yeast genome, the researchers have engineered a new strain of yeast that can tolerate elevated levels of both ethanol and glucose, while producing ethanol faster than un-engineered yeast.

The new strain produced 50 percent more ethanol during a 21-hour period than normal yeast.

The work is reported in the Dec. 8 issue of Science.

Read more from MIT.

Corn’s role in cellulosic ethanol appears solid.

According to a story in Illinois Farm Bureau’s FarmWeek, the push to promote “cellulosic” biomass ethanol development generated some early sparring between corn growers and proponents of new “energy crops.”

Corn-based cellulosic potential should grow with efforts to boost per-acre grain yields to meet future energy, feed, and export demand, said Rod Bothast, scientist with Ed­ wards­ ville’s National Corn-to-Ethanol Research Center.

Read full story here.

Senator Byron Dorgan (D-ND) told a recent ethanol summit in his state that with new ethanol plants coming on line at a rapid pace, the use of ethanol needs to grow or we could soon end up producing a surplus of ethanol.

According to a story in the Farm & Ranch Guide by reporter Dale Hildebrant, Dorgan said, “Our future is not in a 90-10 blend. If it’s only a 10 percent ethanol blend we are going to produce more than we need and we are going to run into a problem here. We need to address how do you put a higher blend into these vehicles that Detroit has made and is going to make, so we can consume a substantial amount of additional renewable fuels and displace that which we need to bring in from foreign sources of oil.”

Dorgan also noted that more consumer education is needed showing that using ethanol won’t harm a vehicle’s engine.

But the auto industry has two concerns they need to address: the first is developing engines that burn higher blends of ethanol more efficiently; and then to address the liability issue for those not owning flex-fuel vehicles, but still desire to burn ethanol blends greater than 10 percent. That liability problem is what is preventing some service stations from offering higher blends, but Dorgan said rewriting liability waiver legislation would be difficult to do.

Read more.

Diverse mixtures of native prairie plant species have emerged as a leader in the quest to identify the best source of biomass for producing sustainable, bio-based fuel to replace petroleum.

A new study led by David Tilman, an ecologist at the University of Minnesota, shows that mixtures of native perennial grasses and other flowering plants provide more usable energy per acre than corn grain ethanol or soybean biodiesel and are far better for the environment. The research was supported by the National Science Foundation and the University of Minnesota Initiative for Renewable Energy and the Environment.

“Biofuels made from high-diversity mixtures of prairie plants can reduce global warming by removing carbon dioxide from the atmosphere. Even when grown on infertile soils, they can provide a substantial portion of global energy needs, and leave fertile land for food production,” Tilman said.

The findings are published in the Dec. 8, 2006, issue of the journal Science.

Read more.

Iowa’s newly-elected Secretary of Agriculture says the ethanol industry can help the state regain its dominance in beef production.

According to a story from the Brownfield Network, Bill Northey told members of the Iowa Cattlemen’s Association meeting Thursday that widespread availability of ethanol co-products like dry distillers’ grains could make Iowa the number one beef producing state again like it was just over 30 years ago.

“From an Iowa perspective, we have great opportunities to bring cattle feeding and the cattle industry back to this state in greater numbers,” said Northey. “And part of that is absolutely because of ethanol and renewable energy.”

Northey said investments in Iowa’s value added agriculture industries, including ethanol and biodiesel plants, were creating an entirely new economic climate in rural Iowa. “We’ve had in the last three years $4.4 billion invested in Iowa in ag processing,” Northey said. “These are businesses that will have jobs that’ll process our products that are creating a brand new dynamic in some of these small towns that haven’t seen a new ag job in many, many years and we’re not done yet.”

Read the whole story and listen to Northey’s comments from the Brownfield Network.

Monsanto Company employees are now riding shuttles operating on 20 percent biodiesel.

According to a company release, the three on-campus shuttles that provide employee transportation around the Monsanto campus in St. Louis are now operating on B20 biodiesel fuel.

The new, smaller shuttles will result in a three mile-per-gallon efficiency increase and a 20 percent savings in fuel costs. The cleaner burning biodiesel will provide a 20 percent reduction of unburned hydrocarbon emissions, and a 12 percent reduction in both particulate matter and carbon monoxide emissions.

The picture, provided by Monsanto, shows members of the American Soybean Association who joined Monsanto representatives for the inaguaration of the biodiesel shuttle service.

Read more.

The value of US crop production this year will probably be about $7 billion more than last year, which is good news for farmers and taxpayers.

Crop prices are higher this year due in part to increased demand for corn and soybeans to make ethanol and biodiesel.

USDA Chief Economist Keith Collins says that means the government will be paying out less to farmers.

“As market prices have strengthened in the second half of 2006 for crops, we’ve seen all of the price-based payments that are made to farmers go down,” said Collins. “In 2005, direct government payments to farmers were $24 billion. This year, 2006, we are estimating that they will be about $16.5 billion, an $8 billion decline in one year.”

Much of that is due to lower marketing loan benefits, which are price based.