Domestic Fuel

A decision by the Kansas Corporation Commission could stymie some wind energy development plans in that state. Westar Energy Inc., Kansas’ largest electric company, had asked commissioners to allow the company to earn higher profits because Westar had invested in 295 megawatts of generating capacity from wind farms in three counties, enough to light up more than 80,000 homes.

This story from the Kansas City Star says regulators have denied the request, and that could keep Westar from pushing for more wind energy projects:

The Kansas Corporation Commission said that the Topeka-based utility’s plans were prudent and that it would be allowed to recover up to $282 million in construction costs through its rates once the wind power starts flowing next year. But the commission refused to increase the profits Westar can earn as a regulated monopoly.

“We are concerned about the uncertainty introduced by the commission’s decision,” Moore said. “We don’t see the order encouraging the future development of wind energy in Kansas.”

Westar had wanted to get an additional one percent higher return because of the risk involved in the venture. Ironically, the decision comes after last May’s announcement by Gov. Kathleen Sebelius to have wind and other renewable resources account for 10 percent of the state’s generating capacity by 2010 and 20 percent by 2020. In addition, Sebelius’ administration had denied construction permits for two coal-fired plants in southwest Kansas because of the emissions.

So it seems the question for Kansas seems to be: if wind energy is not good enough to give power companies a little more incentive to take that risk, what is?

Among the stories seen as significant to the American Farm Bureau in 2007, renewable energy ranked right up there with the new Farm Bill and issues with migrant workers in the fruit and vegetable crop fields.

And this column from Farm Bureau says ethanol and biodiesel will be in the headlines for years to come:

Energy products including ethanol-blended fuels and biodiesel made from corn, soybeans and other crops continued to make news headlines in 2007. These home-grown fuels have a meaty role to play in increasing America’s energy independence. They got a boost at the end of the year when a new energy bill was signed into law mandating the use of 36 billion gallons of ethanol and biodiesel in the U.S. transportation fuel supply by 2022.

Another big story for ’07 was the record-sized harvests for corn and soybeans… another product of the renewable energy boom.

Houston-based Nova Biosource is opening up its biodiesel plant at Seneca, Illinois for a financial analyst and institutional investor forum as well as a tour of the new facility on Friday, January 25th, 2008. The new facility will be mechanically complete right after the start of the new year and substantially completed this summer.

Check out this drawing of the facility (on the right). This company press release has more details about the company:

Nova Biosource Fuels, Inc. is an energy company that refines and markets ASTM standard biodiesel and related co-products through the deployment of its proprietary, patented process technology, which enables the use of a broader range of lower cost feedstocks. Nova is focused on building and operating a number of Nova-owned biodiesel refineries, with a goal of attaining production capacity of between 180 to 220 million gallons of biodiesel fuel on an annual basis. In particular, it is investing to improve the profitability of its 10 million gallon per year biodiesel refinery in Clinton, Iowa, while also completing the construction of its 60 million gallon per year biodiesel refinery in Seneca, Illinois. Nova’s business strategy for the next three years includes building up to seven biodiesel refineries with production capacities ranging from 20 to 100 million gallons each per year.

You can see more about Nova Biosource at the company web site, NovaEnergyHolding.com.

The Energy Independence and Security Act of 2007 will get the new year underway with a burst of renewable fuels.

The bill, signed by President Bush on December 19, includes an expanded Renewable Fuels Standard that requires significant development of other feedstocks to produce ethanol.

This edition of “Fill up, Feel Good” features comments by President George W. Bush, EPIC president Tom Branhan, and RFA president Bob Dinneen.

The “Fill up, Feel Good” podcast is available to download by subscription (see our sidebar link) or you can listen to it by clicking here (4:30 MP3 File):

epic-podcast-12-31-07.mp3

The Fill Up, Feel Good theme music is “Tribute to Joe Satriani” by Alan Renkl, thanks to the Podsafe Music Network.

“Fill up, Feel Good” is sponsored by the Ethanol Promotion and Information Council.

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

The new year will mark a new requirement for all diesel fuel sold in Brazil: it must contain at least two percent biodiesel.

Brazil is already a world leader in ethanol production, and this article from The Canadian Press says the new requirement will help grow the biodiesel industry in the country as well:

“The great advantage is for the country to have an alternative fuel that helps in the reduction of carbon gas emissions, that reduces pollution,” Mines and Energy Minister Nelson Hubner said at a press conference in Brasilia, the country’s capital.

Fuel distributors said they will be prepared.

Officials say it’s taken some major upgrades to the infrastructure to be able to make this feasible, but it will be ready for the new year.

The National Biodiesel Board says the U.S. is not making near what it could be when it comes to biodiesel.

This story on Wisconsin Ag Connection says high soybean oil prices are keeping America from producing an NBB-projected amount of 1.85 billion gallons a year… but that could soon change:

Soybean oil prices in the mid- to high 40-cent range is one of the biggest contributors to tight margins and biodiesel production cutbacks. Recent passage of the Energy Independence and Security Act of 2007, however, expands the Renewable Fuels Standard (RFS), which will require 500 million gallons of biodiesel to be used or blended in 2009.

In 2007, the United States produced 400 million gallons of biodiesel, or about 22 percent of production capacity. The year before, the industry had a production capacity of 580 million gallons and sold 250 million gallons, or 43 percent of capacity.

NBB officials do point out that many biodiesel plants project a much-higher capacity than what they are currently producing in order to make it easier to expand later on.

International Financier Deutsche Bank (based in Germany, of course) says U.S. wind energy production will grow by 15 percent a year until 2015.

This story in the Wyoming Business Report (Wyoming is one of those places where wind and wind turbines are in great supply) says the American, Indian, and Chinese wind power generation markets have become the three biggest worldwide:

In a research report released earlier this month, Deutsche Bank’s analysts say the wind energy industry is growing more attractive as an investment option. The report indicated that both entry-level investments and takeover activity are evidence of a greater interest being taken by traditional energy companies in wind energy — and a new wave of wind power industry consolidation could be beginning.

Deutsche Bank issued a “buy” rating on General Electric with a new target price of $44. GE Energy is one of the world’s largest wind turbine manufacturers.

Some farmers in Canada are having trouble getting biodiesel to run their farm equipment, so they’re trying to make their own.

According to this story in the Owen Sound (Canada) Sun Times, a group of farmers got a $10,000 grant and they were able to make do-it-yourself biodiesel refineries for about $600 each, which they recently demonstrated in their home county of Bruce County in Ontario.

“Biodiesel is still hard to get at the farm level. This allows us to use our own home oil seed crops to make it . . . (and) still have livestock feed left over,” said project leader John Gillespie, a beef farmer from the Ripley area who heads up Bruce Biodiesel.

The system, which can be put together for about $600, uses four discarded hot water heaters, some piping and a few pumps to produce diesel fuel from oil extracted from soybeans or canola. Some commercially produced chemicals, such as methanol and sodium hydroxide or potassium hydroxide, are needed to remove the glycerine from the oil.

In addition to getting the fuel, the farmers are able to take the leftover meal and feed it to their livestock.

While it’s good to have the big refineries making the biodiesel available to a wide audience, it’s also nice to see folks able to take part in biodiesel on their own.

Oakland, California-based Blue Sky Bio-Fuels, Inc. has sent out its first shipment of biodiesel.

This story from the East Bay Business Times says the biodiesel is going to fuel school buses in the area:

Blue Sky, an 18-month-old Oakland company that manufactures biofuel from waste restaurant kitchen grease, formed a partnership with the city of San Francisco’s Greasecycle program to collect used kitchen oil and convert it into a fuel that burns more cleanly than traditional diesel fuel. Greasecycle was launched in November by San Francisco Mayor Gavin Newsom. Greasecycle is the first citywide program to collect fats, oil and grease, or FOG, and convert them into biofuel for municipal vehicles. The first restaurants that had their FOG picked up gratis by the city were Puccini and Pinetti in Union Square.

Recycled FOG from San Francisco restaurants in the Greasecycle program is estimated to generate 1.5 million gallons of biofuel each year. Fifty-nine restaurants had signed up for the program before its launch.

Blue Sky got its first shipment of waste oil about a month ago. You can read more about the company on its web site, BlueSkyBio-Fuels.com.

History will be made at the 2008 Indianapolis 500 when not one, but two distinctive vehicles will serve as the official pace cars.

Chevrolet and Indianapolis Motor Speedway officials gathered at the Indianapolis Auto Show Thursday to make the announcement.

One of the pace cars is a customized Corvette Z06 E85 concept that runs on E85 ethanol fuel that will be driven during the race’s pace lap by two-time Indianapolis 500 champion Emerson Fittipaldi.

The other official pace car is a black-and-silver commemorative edition that marks the 30th anniversary of the celebrated 1978 pace car – the first Corvette to pace the field at the Indianapolis 500. Chevrolet will produce a total of 500 pace car replicas in both coupe and convertible form, each signed personally by Fittipaldi at the Corvette’s Bowling Green, Ky., assembly plant.

“Although not a production FlexFuel vehicle, the Corvette Z06 E85 concept pace car is a high-performance example of Chevrolet’s gas-friendly to gas-free initiative, demonstrating viable fuel solutions,” said Ed Peper, Chevrolet general manager. “As an ethanol refiner in his native Brazil, Emerson Fittipaldi is the fitting Chevrolet champion to help support GM’s efforts with E85 and celebrate 30 years of the Corvette pacing the Indianapolis 500.”

Missouri is prepared for a law requiring a ten percent ethanol blend to kick in next week.

According to an article in the Kansas City Star, most of the gasoline sold in Missouri already being blended with ethanol.

The law “sent a tremendous signal,” said Gary Marshall, chief executive officer of the Missouri Corn Growers Association, and E-10 now meets about 90 percent of the demand for gasoline in the state.

F. J. Cronenwett, director of wholesale fuels for Robson Oil, which supplies several area gas stations, said that most fuel retailers in Missouri and Kansas were using E-10 because of the lower price and were even using an ethanol blend when they buy premium fuel, which won’t be required under the Missouri law.

“That’s really the way the market works right now,” he said.

Missouri currently has five ethanol plants on-line with a total annual production of 225 million gallons and by the end of 2008 the state should have 275 million gallons of production capacity, which is enough to meet the state’s demand for E-10.

Check out a map of Missouri’s ethanol production from the MCGA here.

In a bit of a surprise over the weekend (sorry, just now catching up from the Christmas holiday), Martin Tobias is out as chairman and CEO of Imperium Renewables… replaced by company co-founder John Plaza as CEO and Nancy Floyd as chairman.

This story on C|Net News Green Tech Blog says tight times for the biodiesel industry might have prompted the change:

Tobias has been the spokesman and public figure for Imperium since its founding. The company has raised more than $200 million dollars and earlier this year christened a 100-million gallon refinery in Washington state. It has plans to build similar sized facilities in Hawaii, Argentina and elsewhere.

Biodiesel, however, is a tough business. The fuel, made from vegetable or meat oils, actually costs more than regular diesel. The federal government gives refiners a $1 to 50 cent per gallon subsidy. Imperium had filed preliminary papers for an IPO, but recent rumors make it sound like the company had to postpone the proposed date for the IPO. No confirmation on that.

The article goes on to point out that some other companies have had to swap out management lately as green fuel companies try to find the right mix of someone from the energy sector who is media-tech savvy. What makes this transition so puzzling is that Tobias seemed to have both.

Tennessee’s Department of Transportation plans to hand out $1 million in grants to help promote biodiesel and ethanol at gas pumps along the interstates in Tennessee.

This story in the Chattanooga (TN) Times Free Press says one of the first Green Island Corridor grants is going to a station in Cleveland in the southeast part of the state:

Tom Robertson, owner of Fuel & Mart USA No. 4 on Lee Highway, said the store will convert a gasoline tank into one suitable for biodiesel within weeks.

“We are hoping to receive additional state dollars,” she said.

Officials believe the grants will make it easier for the small businessmen who run the gas stations to make the infrastructure changes needed. Some estimates say the cost of converting a tank can be $16,000 to $18,000.

More power customers in Alabama soon could be enjoying lower power bills, thanks, in part, to a decision by that state’s public service commission to approve a renewable energy rate decrease.

This story in Birmingham (AL) Press-Register says the decrease will go to customers who support what has been an obscure program to support an Alabama Power Company coal/biomass project in Gadsden with hopes of drawing more attention and more customers to it:

“Hopefully, it will help us rely less on fossil fuels,” said Susan Parker, one of three commission members. “That in turn would lead to better national security, and make us not as dependent on natural gas and other (resources), and helps the environment improve.”

The project in Gadsden mixes coal with a small percentage of switchgrass, usually 5 to 7 percent.

The program allows residential customers to pay for the production of 100 kilowatt-hours of renewable energy each month for $6 — the fee a surcharge on top of the customer’s regular bill. Under changes approved by the PSC on Dec. 4, residential customers will have the option of buying in at $2.25 per 50 kilowatt-hours, starting Jan. 1. Commercial and industrial customers will be included in the program for the first time, and can pay for 100 kwh blocks for $4.50.

The problem has been a lack of knowledge about the program:

“Only one out of 48 knew about program,” said David Bransby, a professor of agronomy and soils at Auburn University and an expert on biopower who conducted focus groups on the program in 2005. “We asked about the advertising flyers. They said ‘We don’t read those. They go into the trash can.’”

Officials believe customers will be less inclined to throw out the idea once they know how much it could save them on their energy bills.

The ethanol industry has come a long way this year and a large part of the renewable fuel’s success is unquestioningly a result of the concentrated efforts of the Ethanol Promotion and Information Council. Looks like all that hard work paid off. Agrimarketing magazine named ethanol the Agrimarketing Product of the Year. EPIC’s Reece Nanfito says the late accomplishments of the ethanol industry are just the beginning.

This edition features comments from Reece Nanfito, the Director of Marketing for EPIC.

The “Fill up, Feel Good” podcast is available to download by subscription (see our sidebar link) or you can listen to it by clicking here (5:30 MP3 File):
epic-podcast-12-17-07.mp3

The Fill Up, Feel Good theme music is “Tribute to Joe Satriani” by Alan Renkl, thanks to the Podsafe Music Network.

“Fill up, Feel Good” is sponsored by the Ethanol Promotion and Information Council.

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