Domestic Fuel

Senator John Thune (R-SD) and Senator Charles Grassley (R-IA) led a bi-partisan group of Senators in writing a letter to the President last week urging him to direct the Environmental Protection Agency to approve higher blends of ethanol in commercial gasoline. The current maximum blend for non-flex fuel vehicles is 10% ethanol.

“The current 10% standard, or blend wall, will soon impact production capacity and could be very harmful to the ethanol industry in South Dakota and across the country,” said Thune. “By increasing the percentage of ethanol in gasoline, we can reduce our dependence on foreign sources of energy and make renewable fuels a key component of our nation’s energy policy.”

Grassley said, “With consideration of a new farm bill as well as a new energy bill well underway, ethanol and renewable fuels are at the forefront of the discussion. And, while we’ve seen a tremendous jump in knowledge, promotion and usage of renewable fuels, there remain very real barriers. In the absence of widespread E85 use at this time, it’s important to ensure a market for today’s ethanol production.”

The Senate version of the 2007 Farm Bill is scheduled for floor debate this week. Senator Thune successfully inserted into the Senate 2007 Farm Bill a study of the E10 blend wall and a “Sense of the Senate” resolution directing the federal government to approve higher blends of ethanol after the successful completion of the appropriate studies.

A plan to build a 75-million-gallon-a-year biodiesel plant has received approval from the Clovis, New Mexico City Commission.

This AP story from television station KOB says the plant will make biodiesel from animal fat:

The agreement is with an Australian company that plans to build a biodiesel plant near the eastern New Mexico community.

The firm expects to begin construction in March on the facility in the park south of Clovis.

Those concerned about the climate, national security, and what could happen economically because of increasing global energy demands will meet with leaders from the energy efficiency industry in a four-day forum in the nation’s capital.

The Energy Efficiency Global Forum and Exposition (EE Global) will take place November 11th-14th at the Washington, DC Convention Center:

EE Global will serve as the premier gathering and showcase for the energy-efficiency industry, attracting industry professionals, academics and policy makers from around the world, not only to exchange the latest technical, commercial and policy information, but to forge partnerships and develop “best practices” policies and strategies for global implementation.

The conference program will consist of plenary and executive dialogue sessions featuring 175 executive-level speakers representing all end-use sectors and regions of the world and addressing energy efficiency, climate and economic issues. And, the exhibition floor will feature over 75 organizations highlighting the latest products and initiatives for creating a sustainable energy future. I encourage you to check out all of the details, including the array of unique networking events which are capped with an exclusive evening gala at the National Air and Space Museum!

You can find out more by clicking on this link for EE Global.

Ft. Leavenworth in Kansas has a vested interest in E85 and flex-fuel vehicles. The Combined Arms Center will soon have to be operating its fleet of more than 200 vehicles on E85. That's in compliance with the executive order President Bush signed in January of this year. John Tirpak, Traffic Manager at Ft. Leavenworth, came to the Ethanol and Promotion Information Council's educational event on E85 in Kansas City to learn how the military facility can fuel up with E85.

You can listen to my interview with John here:

Tirpak_John.mp3

There are a lot of pluses about operating vehicles with a blend of E85 fuel and the Director of Operations with the Ethanol Promotion and Information Council mapped out just as many ways to promote consumer use of the renewable fuel. That’s precisely what today’s educational forum at the Holiday Inn in Overland Park was all about: how to boost the marketing landscape for E85 in the Kansas City area. Robert White says the best strategy basically boils down to getting more flex-fuel vehicles out on the road and getting more E85 in their tanks. For Robert, it’s up to the automakers, local fuel retailers and local auto dealerships to make that happen through a united effort to brand ethanol.

I spoke with Robert about some of the many ideas EPIC shares with the ethanol industry nationwide. You can listen to my interview with Robert here:

Podcast: Play in new window | Download (2.6MB)

E85 “just makes sense” for the Manager of Special Projects at MFA Oil. David Perkins was one of two MFA Oil representatives at today’s educational forum on E85 fuel. The forum was sponsored by the Ethanol Promotion and Information Council. David says MFA Oil is the company responsible for introducing ethanol to the mid-Missouri region when the company invested in a small ethanol plant in Marshal, MO in 1973 and first began selling an E10 blend of ethanol in 1980. MFA offered E85 fuel blends at one of its Missouri filling stations for the first time in November of 2003. The oil company now has 44 retail locations that offer ethanol fuel blends at the pump. E85 sales for MFA amount to more than 3 million gallons per year. For David, just offering a blend of ethanol fuel at the pumps will ultimately help drive E85 sales. David also stressed the importance of ethanol producers, retailers and car dealers working together to promote E85.

David and I discussed the importance of generating a dialogue about ethanol and E85. You can listen to my interview with David here:

Podcast: Play in new window | Download (1.4MB)

Good news if you’re a fuel retailer in Kansas. The state offers a 40 percent tax credit to retailers who invest in E85 fuel. Couple that with the 30 percent tax credit the federal government offers, and fuel retailers in Kansas can take advantage of a 70 percent return on their E85 investments. That’s one of the key points Sue Schulte, the Director of Communications of the Kansas Corn and Grain Sorghum Associations, drove home to attendees at today’s educational forum on E85 fuel. The forum was hosted by the Ethanol Promotion and Information Council to help direct local members of the ethanol industry in Kansas City on how to get online with E85.

Sue clued participants in on where the ethanol industry stands in Kansas, so producers and retailers could get a feel for what the state already has to offer and determine where and how the local industry can grow. Sue says there are 10 dry mill ethanol plants in operation in Kansas. These plants have a capacity to produce over 329 mill gallons of ethanol. Sue says that current Kansas production creates a market for over 116 million bushels of sorghum and corn. She adds that more expansion is on the way, with ethanol plants that are either under construction or nearing construction having projected production capabilities of about 330 more million gallons of ethanol each year. The state’s fuel industry is beginning to respond. Sue says just five filling stations offered ethanol in 2005. Now, there are 24 stations throughout the state that pump the alternative fuel.

I caught up with Sue and asked her about her thoughts on what today’s educational forum on E85 offered local industry members. You can listen to my interview with Sue here:

Podcast: Play in new window | Download (1.5MB)

Missouri can boast 93 E85 filling stations that are either up and running or soon to open. Ethan Taylor, the E85 Coordinator for the Missouri Corn Growers Association says that each E85 filling station pumps about 300 gallons a day. That equates to 27,900 gallons of E85 fuel being sold each day in Missouri, or more than 10 million gallons sold each year. The Show-Me-State certainly has a jump start on the ethanol industry, but there’s obviously room for more growth.

That’s one of the reason’s why the Ethanol Promotion and Information Council sponsored an educational forum in Kansas City today to allow local ethanol industry members, or those interested in becoming involved in the industry, learn more about how they can grow ethanol, and, more specifically, how they can ramp up the production and sale of E85 fuel. During the forum, Ethan stressed that the biggest necessity for industry producers and retailers is to educate consumers on the truth about ethanol. He says much of the public is misinformed about how and when to run their vehicles on E85 fuel blends, how much mileage they’re getting compared to gasoline and how much money they’re spending to get from A to B.

Ethan reminds industry members that virtually any vehicle manufactured since 1980 can use an E10 blend of fuel. He says consumers do need a flex-fuel vehicle in order to use E85 fuel or any other fuel blend greater than 10 percent ethanol. When it comes to energy efficiency, Ethan explains that a gallon of ethanol has an energy content of about 72,000 BTU. When compared to gasoline’s energy content of about 115,000 BTU, that means consumers get about 28 percent less energy from burning E85. Ethan says that equates to about a 10 to 20 percent mileage loss when using E85. But, he says when you factor in the cost of E85 fuel – which typically runs 20 percent lower than the going rate for gasoline – at worst, consumers are spending the same amount of money. At best, they’re saving 10 percent on fuel.

For Ethan, spending the same amount of cash, or less, on a renewable fuel that’s domestically produced, that reduces emissions and that results in cleaner engines is a smart idea.

I spoke with Ethan about the importance of today’s educational forum on E85 and about how the Missouri Corn Growers Association is getting involved in the ethanol industry. You can listen to my interview with Ethan here:

Podcast: Play in new window | Download (1.8MB)

A new report from the Consumer Federation of America (CFA) shows just how much energy costs have skyrocketed in recent years.

According to the report, household energy expenditures (home heating and gasoline) have nearly doubled in just the last five years, and are now 50 percent more than health care expenditures and 23 percent more than spending on food.

CFA also released a new poll revealing deep concern among consumers about the worsening energy situation and strong support for three key policies to begin addressing it, including higher passenger vehicle fuel economy standards, the purchase of renewable energy by electric utilities and increased production of biofuels.

The survey indicates that 84 percent of Americans support those three key policies contained in Congressional energy legislation, and 75 percent still support them even after hearing arguments from opponents of the legislation.

There’s a growing market for E85 fuel blends in Kansas City and the Ethanol Promotion and Information Council wants to make sure local producers, ethanol retailers and flex-fuel vehicle car dealers are equipped with the infrastructure, knowledge and marketing tools they need to sell an E85 product. EPIC is sponsoring two educational forums about the high-grade alternative fuel today at the Holiday Inn and Suites in Overland Park. This morning, industry leaders came together to discuss and learn about promoting what EPIC calls “part of the solution for the future.” The forum is also meeting this afternoon.

The Stanton Wind Energy facility in Martin County, TX is winding down construction and estimates its facility will be fully operationally by early 2008.

Invenergy Wind LLC has announced the successful closing of construction and equity financing for its 120 MW Stanton Wind Energy Center (“Stanton”) in Martin County, Texas. The debt facility was underwritten by lead arranger Dexia Credit Local and co-arranger Natixis. The equity will be provided by GE Energy Financial Services.

Stanton will utilize 80 General Electric 1.5MW SLE wind turbines and construction is being managed by DH Blattner & Sons. Full commercial operation of the wind farm is scheduled for early 2008. The project interconnects with Oncor, the transmission affiliate of TXU, and all power will be sold into the ERCOT market. Energy price risk is hedged through a long-term agreement with Credit Suisse Energy. The wind farm will be owned and operated by Invenergy.

Invenergy acquired the Stanton Wind Energy Facility from Wind Tex Energy, L.P.

The Biodesign Institute at Arizona State University is launching a Renewable Biofuel Research Initiative. Science Foundation Arizona and energy company BP are funding the initiative meant to propel the development of a renewable source of biofuel.

The research effort focuses on using a specially optimized photosynthetic bacterium to produce biodiesel, a sustainable high-energy fuel that can be used in conventional engines.

The renewable technology holds significant promise, with an estimated high biomass-to-fuel yield. Furthermore, because the bacteria are dependent upon carbon dioxide for growth, a more environmentally friendly and potentially carbon neutral energy source is feasible. The small footprint needed for bacterial biofuel production allows the technology to be placed adjacent to power generating stations and the utilization of flue gas as a carbon source.

The Renewable Biofuel Research Initiative is part of a series of Strategic Research Group awards being offered by the Science Foundation Arizona.

The Environmental Protection Agency has issued its guidance to biodiesel producers.

Biodiesel Magazine reports that the document, named “Guidance for Biodiesel Producers and Biodiesel Blenders/Users,” addresses biodiesel quality, harmonization of standards, and enforcement activities.

“EPA also plans to increase enforcement efforts to ensure that biodiesel producers are complying with EPA’s standards, in particular ensuring that all biodiesel meets ASTM D6751,” the agency states. “For biodiesel registered since 2002, any biodiesel that does not meet the version of ASTM D6751 in effect at the time of registration will be considered an unregistered fuel subject to the penalty provisions in 40 CFR 79.8 (civil penalties of up to $32,500 per day per violation). … EPA regulations … also provide authority to EPA inspectors … to enter the premises of any fuel manufacturer, importer, carrier or distributor and make inspections, take samples, obtain information and records, and conduct test to determine compliance…”

The article goes on to say the document also includes some controversy as it states emissions results from its 2002 study, that indicated slightly higher levels of NOx emissions.

To read the full document, click here.

The Iowa Soybean Association is calling on Iowa lawmakers to take an incentives-first approach to biodiesel policy in the upcoming legislative session.

This story on Grainnet.com says they’re suggesting legislators consider some market-driven strategies:

Highlights of this plan include:

“We think this is a balanced, market-driven approach to biodiesel policy,” says Curt Sindergard, ISA president and a soybean farmer near Rolfe, Iowa.

While pushing for the incentives, the association is also rejecting any state mandates for biodiesel use (although federal mandates are OK). Officials admit that they’re getting an early start, but the see some serious issues with feedstock costs.

Georgia Commissioner of Agriculture Tommy Irvin is holding a couple of town hall meetings later this month to listen to comments regarding updating Georgia’s fuel standards for ethanol blends.

A recent article in Florida Today noted that state officials in Georgia and other Southeastern states, including Florida, are moving to alter fuel-quality standards that have discouraged refiners from adding ethanol to gasoline sold in the region.

Agriculture departments typically set the gasoline rules, and most of them in the Southeast — including in Georgia, North Carolina and Tennessee — are taking steps to ease their rules.

“That’s our goal. Give them a quality product, save a few dollars and be patriotic,” said Tommy Irvin, Georgia’s agriculture commissioner.

Georgia’s town hall meetings on the issue are scheduled for November 27 in Atlanta and November 29 in Tifton.