Domestic Fuel

A word that few people even knew just five years ago when the last farm bill was written is all over the Bush administration’s 2007 farm bill proposals released Wednesday. That word is “cellulosic.”

As announced last week, the proposals include $1.6 billion in new funding for renewable energy research, development and production, targeted for cellulosic ethanol, which will support $2.1 billion in guaranteed loans for cellulosic projects and includes $500 million for a bio-energy and bio-based product research initiative.

In addition, the conservation proposal includes incentives for production of biomass on land in the Conservation Reserve Program. Natural Resources Conservation Service Chief Arlen Lancaster said, “We would prioritize those lands that would be used for growing cellulosic crops like perennial grasses that continue to provide a soil benefit and a wildlife benefit.”

Cellulosic is also a part of the forestry proposal. “We’re proposing to initiate a new $150 million wood-to-energy program as part of the president’s mission to expand the use of renewable and alternative fuels,” said Johanns. “To accelerate development of new technologies to use low-value woody biomass to produce energy. We have an abundance of this around the country.”

In an interview with Secretary Johanns after the announcement, he said the emphasis on moving toward cellulosic ethanol will help address the concerns that have been raised about increased demand for corn. “I think the livestock industry was very concerned that what we would be proposing is promoting more corn-based ethanol. Our proposals are targeted at cellulosic ethanol. We believe this is the next step.”

Listen to the ethanol portion of my interview with Johanns: Johanns Interview (2:45 min MP3)

Details of the administration farm bill proposals can be found at www.usda.gov/farmbill.

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The IndyCar® Series held its first Open Test of the season Wednesday at Daytona International Speedway where for the first time all IndyCar Series cars ran on 100 percent fuel-grade ethanol.

Ethanol Promotion and Information Council Executive Director Tom Slunecka said the IndyCar® drivers he talked to in Daytona are proud to be a part of the change to a fuel that is better for the environment and the economy, as well as being happy with its performance in their cars. Plus, the fumes of the farm-based fuel are less harmful and smell better.

“Methanol is a very gaseous-type smell – makes your eyes water and your throat tighten up. But, today as these engines cranked up for the very first time, the sweet smell of ethanol wafted over the paddock,” Slunecka said. “And all of these drivers and mechanics are so appreciative of the fact that these fumes that they are breathing today are non-toxic and their jobs just got a whole lot healthier.”

Also in Daytona to watch the test was Dan Schwartzkopf, senior vice president of Renova Energy in Torrington, Wyo., the facility which was contracted by EPIC to supply approximately 120,000 gallons of ethanol to the IndyCar Series this season.

“In the conversations that I have had with the crews, everybody seems to like the ethanol. No bad remarks whatsoever. So, I think it’s going to be promising from this point on to see it not only here in Indy but in a number of other motor sports venues,” Schwartzkopf said.

The 17 race IndyCar® Series opens March 24, 2007 with the Homestead-Miami 300.

Listen to an interview with Tom Slunecka from the track in Daytona: Slunecka Interview (4 min MP3)

Last fall, the city of Kalamazoo, Michigan announced it would use biodiesel provided by Western Michigan University… Bronco Biodiesel… to fuel its city buses. Now, the city is renting out a building for the plant… at just $1 a year! According to a WMU press release, the biodiesel plant is expected to produce 100,000 gallons a year. The biodiesel will be made from recycled restaurant grease.

From the Bronco Biodiesel web site:
We are developing a small-scale (100,000 gallons/year) biodiesel production facility in the City of Kalamazoo to prevent the “trapped” BTUs from going down the drain. Our hope is that the facility will serve as a model for how universities and municipalities can work together and convert discarded oil into a clean burning, carbon neutral, transportation fuel.

This story in Biofuel Review says that a report by the energy intelligence agency Emerging Markets Online says biodiesel growth is set to explode over the next 10 years… fueled by a new U.S. commitment to biofuels (remember President Bush’s 20 in 10 proposal – 20% alternative fuels in the next 10 years) and ramped up production in other parts of the world:

“It is possible that Biodiesel could represent as much as 20% of all on-road diesel used in Brazil, Europe, China and India by the year 2020. If governments continue to aggressively pursue targets; enact investor-friendly tax incentives for production and blending; and help to promote research & development in new biodiesel feed stocks such as algae biodiesel, the prospects for biodiesel will be realized faster than anticipated. Biodiesel 2020 finds that each of these variables will be essential to the eventual success of these targets,” author William Thurmond notes.

The report goes on to say that the U.S. is the fastest growing biodiesel market in the world with domestic plants having trouble keeping up with demand.

Truth About Trade & Technology has posted a Wall Street Journal commentary on the tortilla crisis in Mexico. The op-ed piece contends that the “cause of the corn price spike is too much government intervention.”

The sharp increase in Mexican corn prices, which fueled the tortilla price spike, followed big price increases for corn on international markets over the past year. The main cause, according to most commodity analysts, was the U.S. decision to subsidize ethanol made from corn. Growers who previously marketed their harvests to food and livestock companies suddenly have new demand from ethanol producers, who are also armed with a subsidy to make their bids more attractive. The increase in demand from government-subsidized ethanol producers pushed up prices.

Yet the U.S. isn’t the only government that is distorting markets. Mexico’s quota system for corn imports has exacerbated the problem.

Read the whole commentary.

Washington University in St. Louis is playing host to a seminar on the role biofuels will play in a sustainable economics world. Jim McLaren, President and founder of StrathKirn, Inc, a science and biotech business consulting firm in nearby Chesterfield, MO, will conduct the seminar on the “state of biofuels development in the Midwest,” at Simon Hall on the Wash U campus, on Thursday, February 8th from 5-7 pm. Cost is free.

Register by clicking here (look under the Science Frontiers heading).

The House Committee on Science and Technology Energy and Environment Subcommittee this week looked into the country’s readiness to meet the demands of alternative fuels.

The subcommittee heard testimony relating to H.R. 547, the Advanced Fuels Infrastructure Research and Development Act, a bipartisan bill introduced by Committee Chairman Bart Gordon (D-TN), pictured here on the floor of the House. According to a committee release, the bill directs the Department of Energy (DOE) and the National Institute of Standards and Technology (NIST) to initiate a research, development, and demonstration program to make alternative biobased fuels more compatible with present-day infrastructure. H.R. 547 also directs these agencies to develop technologies and methods to provide low-cost, portable, and accurate measurements of sulfur in fuels, and to develop a physical properties database and Standards Reference Materials for alternative fuels.

Among those who testified was Renewable Fuels Association President Bob Dinneen who discussed the technological advancements being made in the ethanol industry and the important role government can play in assisting private industry in developing new technologies and expanding ethanol infrastructure.

“The ethanol industry today is on the cutting edge of technology, pursuing new processes, new energy sources and new feedstocks that will make tomorrow’s ethanol industry unrecognizable from today’s,” said Dinneen. “Ethanol companies are already utilizing cold starch fermentation, corn fractionation, and corn oil extraction. Companies are pursuing more sustainable energy sources, including biomass gasification and methane digesters. And there is not an ethanol company represented by the RFA that does not have a cellulose-to-ethanol research program.”

As farmers start to make planting decisions for the coming year, many with an eye towards increased corn acreage to meet the demand for ethanol, seed companies are promoting varieties that have traits best suited for ethanol production.

Garst Seed Company has announced that 18 of their corn hybrids fall under the company’s ExtraEdgeTM designation, meaning they “exhibit grain characteristics especially suitable for dry grind ethanol production,” according to a company release.

Specific to ethanol production, ExtraEdge DGE hybrids have been tested and characterized using methodology established by the University of Illinois, which many in the industry consider the most accurate test since it mimics the dry grind ethanol process and measures actual ethanol creation.

Garst’s parent company, Syngenta, continues to research ways to increase the production efficiency of the dry grind ethanol process. This includes the development of a unique proprietary corn amylase output trait that expresses higher levels of the enzyme amylase, which can increase the efficiency of ethanol production.

The head of the National Biodiesel Board liked what he heard from last week’s State of the Union speech. CEO Joe Jobe says he was pleased that alternative fuels… in particular, biodiesel… took such a prominent position in President Bush’s annual address to Congress.

“Obviously, we were very excited to hear him lay out his 20 in 10 plan [reducing U.S. gasoline consumption by 20 percent in the next 10 years]. It’s a very bold initiative for renewable energy… alternative energy,” Jobe says.

Jobe went on to say that he was encouraged that in the Democrat response, the new leaders indicated they wanted to work with Bush on energy issues. He added that this plan differed than those in the past in that it was more of a comprehensive energy plan implementing alternative fuels with conservation measures. “There really is no single, silver bullet. It’s going to take more of a silver buckshot approach to resolve our energy issues.”

Finally, Jobe says while speeches are one thing, it will take some working together by government and industry to bring the plan to fruition. “We’re hopeful that for the sake of the country… for the sake of the future of this country… we’re hopeful that our leaders in Washington can come together and do what’s right for the nation.”

Jobe expects Bush’s speech and “20 in 10″ proposal will be a hot topic of conversation at the National Biodiesel Conference & Expo in San Antonio, TX, Feb. 4-7th.

Listen to the interview with Jobe here: Joe Jobe (8 min MP3)

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Fayetteville is switching its 300-vehicle fleet… from garbage trucks to city maintenance pickups… to biodiesel. This article from the Northwest Arkansas Times explains the city will get a two-fold benefit… more freedom from foreign oil and a cleaner burning diesel:

“We’ve always been a very environmentally conscious and responsible community,” said David Bragg, fleet manager for the city.

“It is renewable, ” he said. “ It is produced within the continental United States in its entirety. It burns cleaner. It does not have the noxious smoke commonly associated with diesel engines.”

The city plans to start using the biodiesel when it starts pumping from a new fuel station expected to be finished in April.

Think biodiesel is just for slow-moving tractors? Check out this picture of a motorcycle Greenline Industries will be showcasing at the National Biodiesel Conference & Expo in San Antonio, TX later this week.
Built by Oakland, California-based The Crucible, a non-profit educational collaboration of arts, industry and community, this thing will attempt to break the land-speed record for a diesel-powered motorcycle at the famed Bonneville Salt Flats this coming fall. The record is 105 mph. This thing has already been clocked at 130 mph! This is from a Greenline press release:

“We believe in proving the simple point that diesel fuels are exceptionally efficient in smaller engines, and that biodiesel is the
ultimate form of diesel,” said Ted Lavoie, Greenline’s CEO. “That is why we have sponsored the Earthrace circumnavigation world record attempt, and that is why we are sponsoring The Crucible’s land speed record attempt.”

“We hope to show the world the performance potential of bio-fuels by breaking the existing diesel record and establish records for both biodiesel and SVO at the home of high performance, the Bonneville Salt Flats,” said Michael Sturtz, Die Moto’s rider and The Crucible’s Executive Director.

See it for yourself at the National Biodiesel Conference & Expo February 4th-7th in San Antonio, TX.

The makers of biodiesel in Asia are taking steps to make sure they aren’t burned by the drop in oil prices. Biodiesel production has been pretty profitable for them when oil has pushed above $70 a barrel, but this Reuters story in the Hong Kong-based The Standard gives some advice on how the operations can stay profitable now that oil has dropped… sometimes below $50 a barrel.

“They should hedge the feedstock components on one side, then as crude prices go up, the margin and cost effectiveness of biodiesel tends to look more attractive,” said Tom James, chair professor at the University of Petroleum and Energy Studies in India.

“They then want to hedge against a sudden and sustained drop in crude prices, probably through some derivatives options on crude oil or gas oil or gasoline prices.”

It looks like biodiesel makers in Asia are facing some of the same issues farmers and biodiesel producers in the U.S. are facing… feedstocks prices rising with rising demand. The Asians have had to get away from some of the palm oil usually used for biodiesel. In this earlier post, we talked about how China had developed a rapeseed (canola) that produced a record 54.7% oil output… producing a feedstock hedge for that country.

Once again this year I’ll be the biodiesel blogger at the National Biodiesel Conference which kicks off this weekend in San Antonio. I’ll be posting pictures, interviews and video clips during the conference. To get us started I interviewed National Biodiesel Board CEO, Joe Jobe. Joe gives us an overview of what we can expect.

You can listen to my interview with Joe here: Joe Jobe Conference Overview Interview (7 min MP3)

Remember that all my interviews will be podcast so you can subscribe to them in your favorite podcatching software (I recommend iTunes). You can find out more about how to subscribe here. This will be episode 22 since all the original 21 interviews from last year are still available to you.

We also have a conference blog sponsor this year and want to welcome and thank John Deere. This means you’ll be seeing the following tagline in all my posts:

Domestic Fuel coverage of the National Biodiesel Conference
sponsored by .

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Ethanol power was on display at the recent Big Boy Toy Show in Sioux Fall, SD. From planes to big trucks to race cars, it was all there for both big and little boys (and girls!) to enjoy.

A special attraction for all was Team Ethanol IndyCar® Series driver Jeff Simmons and the show car simulator.
Kids of all shapes and sizes enjoyed playing in the car, as well as getting to meet Jeff who posed for pictures and signed autographs.

Broin Companies and the Ethanol Promotion and Information Council sponsored the Sioux Falls show which was held January 19-21 at the Sioux Falls Convention Center.

Legendary explorer Will Steger kicked off his Global Warming 101 Expedition this past weekend at the St. Paul Winter Carnival.

Team Ethanol IndyCar® Series driver Jeff Simmons was among those on hand to see the expedition off, since the Ethanol Promotion and Information Council is a major Global Warming 101 sponsor. He got a chance to make friends with one of the huskies who will be leading the four month, 1200 mile dogsled expedition across the Canadian Arctic’s Baffin Island.

Steger also introduced his team members, Abby Fenton, Elizabeth Andre, and John Stetson, as well as documentary filmmaker Jerry Stenger and photographer and webmaster Jim Paulson who will accompany him on the expedition. The team is pictured here with two of the expedition dogs, and the banner is being hoisted by EPIC Communications Director Joanna Schroeder and Simmons. Steger is the one in the middle.

This weekend, the expedition will be in Steger’s hometown of Ely, Minnesota for another send-off event at the Mukluk Ball.