Domestic Fuel

State legislatures across the country are considering bills to promote the production and use of alternative fuels such as ethanol and biodiesel. In a story in the Beatrice (NE) Daily Sun, the National Biodiesel Board says 35 states have a total of 135 biodiesel-related bills pending… including one in Nebraska that would pay producers 30 cents for every gallon of biodiesel sold in the state.

State Sen. Cap Dierks’s bill (LB626) could end up shelling out $20 million each year… if Nebraska gets moving on its biodiesel industry. Unlike its commitment to ethanol, the state is not producing much ethanol… yet. There’s a 50-million-gallon-a-year plant being built near Beatrice.

By the way, the NBB says there about 10 states with production incentive legislation like the one proposed by Dierks.

Houston-based energy company Kinder Morgan says it will spend $100 million to expand its biodiesel terminals in Houston, New Orleans, and New York City. According to a press release posted on the Kinder Morgan web site, Green Earth Fuels will build biodiesel production facilities at several Kinder Morgan terminals and already has underway an 86 million gallon facility in Houston expected to open this summer.

“Expanding our facilities to store and transfer biodiesel will benefit producers and help meet the country’s growing demand for additional energy resources,” said KMP Terminals President Jeff Armstrong. Upon completion, these expansions are expected to be immediately accretive to distribution available to KMP unitholders.

The facilities will be integrated into the petroleum infrastructure already in those areas.

KMP is already a major player in the ethanol market handling about 1.5 billion gallons of ethanol… or about 30% of U.S. market… each year.

The U.S. Department of Energy has awarded cellulosic ethanol grants to help with the construction of cellulosic ethanol biorefineries.

The Renewable Fuels Association released the full list of grant recipients.

Abengoa Bioenergy Biomass of Kansas, LLC of Chesterfield, Missouri, up to $76 million for a
proposed plant in Kansas to use 700 tons per day of corn stover, wheat straw, milo stubble, switchgrass, and other feedstocks.

ALICO, Inc. of LaBelle, Florida, up to $33 million for a proposed plant to 770 tons per day of yard, wood, and vegetative wastes and eventually energycane.

BlueFire Ethanol, Inc. of Irvine, California, up to $40 million for a proposed plant in Southern California to use 700 tons per day of sorted green waste and wood waste from landfills.

Broin Companies of Sioux Falls, South Dakota, up to $80 million for a plant in Iowa to use 700 tons per day of agricultural residues including wheat straw, barley straw, corn stover, switchgrass, and rice straw as feedstocks.

Iogen Biorefinery Partners, LLC, of Arlington, Virginia, up to $80 million for a proposed plant in Shelley, Idaho, near Idaho Falls tol use 700 tons per day of agricultural residues including wheat straw, barley straw, corn stover, switchgrass, and rice straw as feedstocks.

Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, up to $76 million for a proposed plant in Soperton (Treutlen County), Georgia to use 1,200 tons per day of wood residues and wood based energy crops.

The United Nations Foundation has released a report outlining a “roadmap for reducing risks from climate change.”

Among the report’s recommendations are “mproving efficiency in the transportation sector through measures such as vehicle efficiency standards, fuel taxes, and registration fees/rebates that favor purchase of efficient and alternative fuel vehicles” and “expanding the use of biofuels through energy portfolio standards and incentives to growers and consumers.”

The final report of the Scientific Expert Group on Climate Change and Sustainable Development was prepared as input for the upcoming meeting of the UN’s Commission on Sustainable Development.

The U.S. Department of Energy has announced the awarding of grants to fund six cellulosic ethanol projects nationwide.

Among them is Broin Companies’ $200 million expansion of a conventional corn dry mill facility in Emmetsburg, Iowa into a bio-refinery that will include production of cellulosic ethanol from corn cobs, according to a Broin release.

Energy Secretary Samual Bodman made the announcement this morning, stating that “Broin will play a critical role in helping to bring cellulosic ethanol to market, and teaching us how we can produce it in a more cost effective manner.”

Jeff Broin, CEO of Broin Companies was with Bodman in Washington when the announcement was made. “Our goal is to bring cellulosic ethanol to commercial viability by the end of the decade in order to reduce global warming, revitalize the rural economy and lessen our country’s dependency on foreign oil,” said Broin. “This partnership with the Department of Energy, along with the collaboration of companies like DuPont and Novozymes and the farmers around Emmetsburg, Iowa, will allow us to achieve significant progress toward these goals.”

Known as Project LIBERTY, the expansion will utilize an existing infrastructure with projected costs for the increased capabilities at just over $200 million dollars. The expansion will take approximately 30 months and is slated to begin as soon as the terms of the agreement with the DOE are finalized.

Project LIBERTY, which stands for Launch of an Integrated Bio-refinery with Eco-sustainable and Renewable Technologies in Y2009, will provide deliverables that include 11 percent more ethanol from a bushel of corn and 27 percent more ethanol from an acre of corn, while consuming 24 percent less water and using 83 percent fewer fossil fuels than what is needed to operate a corn to ethanol plant.

The Arkansas State Legislature’s Senate Committee on Agriculture, Forestry and Economic Development today approved a measure that will provide $20 million in incentives for alternative fuel development. The Pine Bluff (AR) Commercial reports in this story (about halfway down) that House Speaker Benny Petrus’ bill would split the money with $16 million going to companies to develop the fuels and $4 million for weatherization and research:

“I think it’s a step in the right direction,” Petrus said after the vote. “It shows Arkansas is serious about doing this.”

Fulton, Missouri… home of Westminster College, which is home of Winston Churchill’s famous “Iron Curtain” speech… could soon be home to Missouri’s newest biodiesel plant. The city’s council has approved a plan to have a 10-million-gallon-a-year refinery on a parcel of land owned by the city.

The Fulton (MO) Sun reports local businessman Boyd Ware will serve as the facility’s chief investor and general manager:

Ware said the Fulton facility would be able to convert a variety of “feed stocks” – including soybean, peanut and canola oils – into biodiesel. He said animal fats such as cooking grease are another feed stock option, and often can be obtained as waste for little or no cost.

“There’s a market for these that has not been tapped into or utilized,” Ware said.

There are three other biodiesel plants in Missouri with another five in the works.

An Idaho inventor/entrepeneur has come up with an engine that runs on aquanol… a mix of 65% ethanol and 35% water. In addition, a diesel engine modified by Mark Cherry, with Automotive Resources, Inc. of Sandpoint, Idaho can run on a 50-50 mix of diesel and water.

Cherry says it is a precision-timed catalytic glow plug, which he calls a “Smart Plug,” with several international patents pending that makes the unusual mix of fuel and water possible. In fact, he says the engines have more torque and horsepower, they run cooler, have lower emissions, and of course, ethanol and biodiesel are easier to produce and easier on the environment.

Cherry says the vehicles do require a bigger tank to carry the water. “But the lower cost of the fuel per gallon and the better efficiency makes up for the larger tank.”

Cherry recently hit the road with his water and ethanol and diesel powered vehicles and stopped in South Dakota to show off his new technology. He says most people were excited about his invention. “Comments like ‘Wow!’ or ‘This does better than my truck!’ ” Cherry says people were also impressed with the acceleration and the actually pleasant aroma from the exhaust. And he adds, despite some bitterly cold temperatures when he was in South Dakota, there was no danger of the water-ethanol mixture freezing since it has a slush point of 100 degrees below zero.

Cherry says retrofitting current vehicles right now would cost between $2000 and $3000… but he says those costs would go down. “In large volume, that could be cut in half.”

He says all he needs now are some industrial partners to help make it more feasible for the masses.

You can check out the whole interview here: Interview with
Mark Cherry. (10 min MP3)

Podcast: Play in new window | Download (4.6MB)

Top state officials will keynote the Iowa Renewable Fuels Association Summit on Wednesday in Des Moines.

The event will feature the latest news in Iowa’s biodiesel and ethanol industries with a keynote address by Iowa Governor Chet Culver and a special address by Iowa Secretary of Agriculture Bill Northey.

Iowa is the leader in renewable fuels production with 26 ethanol refineries and the capacity to produce over 1.7 billion gallons annually. There are another 21 ethanol refineries under construction or expansion that will add 1.6 billion gallons of annual capacity. In addition, Iowa has 14 biodiesel refineries with a combined annual capacity of over 315 million gallons either in operation or under construction.

The Iowa Renewable Fuels Association was formed in 2002 to represent the state’s ethanol and biodiesel producers.

The state of Florida has announced grants for a number of renewable energy projects using various types of biomass.

Here are just a few of the projects being funded for 2007:

Citrus Energy LLC, “Fuel Ethanol Production from Citrus Waste Biomass” ($2.5 million): Based in Clewiston, the company will construct a four-million-gallon-per-year ethanol bio-refinery to use citrus waste to produce ethanol.

Alico Inc., “Commercial Ethanol Production from Biomass” ($2.5 million): The project will use biomass products to co-produce ethanol and electricity at a savings for consumers.

Losonoco Inc., “Losonoco Mulberry Ethanol” ($2.5 million): Losonoco Inc. will purchase, refurbish, and operate a shuttered fuel ethanol production facility in the City of Mulberry in Polk County.

Florida International University, “Assessment and Development of Pretreatment for Sugarcane Bagasse to Commercialize Cellulosic Ethanol Technology” ($990,532): The university project will determine the technical feasibility of using Florida sugarcane waste as a feedstock for a large-scale ethanol industry in the state.

Through the 2006 Florida Energy Act, the Florida Legislature appropriated $15 million for renewable energy technologies grants to stimulate capital investment in the state and promote and enhance the statewide utilization of renewable energy technologies, including ethanol and bioenergy.

The Montana State Senate today voted to give initial approval to a bill that would require all biodiesel sold in the state contain at least 5% biodiesel.

This AP story in the Great Falls (MT) Tribune says Senate Bill 432 – a measure sponsored Sen. John Brueggeman (R-Polson) – passed 35-15:

Brueggeman said biodiesel fuels can be made from oils derived from Montana’s farm crops. By using these homegrown, renewable energy resources, he said, Montana could help curb the country’s dependency on foreign oil.
“The U.S. has to take steps now,” Brueggeman said, “or else we will be subjugated to the Asian economies.”

The bill does have some exceptions for the railroad and mining industries and if biodiesel becomes more expensive that conventional diesel.

In what might seem like a bit of an ironic twist, oil giant Chevron is getting into the biodiesel business. The California-based company has a 22% share of a 20-million-gallon-a-year biodiesel refinery set to open next month in oil-central Galveston. The Houston Chronicle reports the plant will be one of the largest in the country and marks a change in attitude for at least one major player in the oil industry:

“Over the last couple of years, our company has come to the point of view that there is more global demand for energy coming than we know how to meet the way we’ve always done things,” Rick Zalesky, Chevron’s vice president of biofuels and hydrogen, said during a recent tour of the Galveston plant. “So oil and gas will continue to be the major source, but is that enough? And we’ve concluded no.”

CEO of the National Biodiesel Board, Joe Jobe, says this is a good thing and is a win-win situation for Chevron and the biodiesel industry. Chevron gets a foothold in the growing biodiesel market, and biodiesel makers get the technology and experience of a major refiner.

The Federal Reserve Bank of Chicago’s latest AgLetter reports that ethanol is helping to fuel a surge in agricultural land prices.

According to the report, the 2006 annual increase in farmland values was 9 percent for the Seventh Federal Reserve District, which includes Iowa and parts of Wisconsin, Illinois, Indiana and Michigan.

The area with the biggest rise was northwest Illinois, where prices soared by 17 percent last year. Iowa posted a 13 percent annual increase because of a fourth quarter gain of 7 percent.

Based on 213 survey responses from agricultural bankers, the quarterly rise in the value of “good” agricultural land was 5 percent in the fourth quarter of 2006. Almost 50 percent of the respondents expected farmland values to increase, as well as to remain stable, in the first quarter of 2007.

A day after getting a close-up look at a 100 percent ethanol-powered IndyCar, President Bush checked out the battery-powered options on the White House South Lawn, calling on Congress to fully fund his budget request for alternative sources of energy.

“It’s going to require collaboration between the public sector and the private sector. It’s going to require making sure our smartest scientists understand that this is a national priority. But I firmly believe that the goal I laid out, that Americans will use 20 percent less gasoline over the next 10 years is going to be achieved, and here’s living proof of how we’re going to get there,” he said.

“Americans ought to feel optimistic about our future. We’re going to be driving our cars using all kinds of different fuels other than gasoline, and using batteries that will be able to be recharged in vehicles that don’t have to look like golf carts.”

A University of Florida microbiology professor was among a small group of alternative energy experts who met with President Bush Friday at the White House.

Dr. Lonnie Ingram, director of the Florida Center for Renewable Chemicals and Fuels, has been studying ethanol for more than 20 years and has developed a biotechnology “bug” that converts biomass and other farm wastes into fuel.

According to an article from the Gainesville Sun, Ingram talked to Bush about “Florida’s potential to be a key player in the alternative fuel market.”

“I told him Florida produces more biomass than any state in the country,” Ingram said. “Florida could lead the country.”

After the meeting on Friday, President Bush told reporters that he “met with people that are working to help us develop a fuel industry that will be able to have ethanol derived from produce other than corn. In other words, I’m talking with people on the leading edge of change. And the reason why I’ve asked them to come in to see me is because I want to make sure that the goal I set by reducing gasoline usage by 20 percent over a 10-year period is a realistic goal. I know it’s a necessary goal: it’s necessary for national security purposes; it’s necessary for economic security purposes; and it’s necessary in order to be good stewards of the environment.”

Listen to a previous Domestic Fuel interview with Ingram about his biomass technology research. Ingram Interview

Podcast: Play in new window | Download (2.0MB)