Domestic Fuel

U.S. Senators Sam Brownback (R-KS), Ken Salazar (D-CO) and Joseph Lieberman (I-CT) today introduced the Open Fuel Standard Act.

The legislation would require that half of all new automobiles starting in 2012 be flex-fuel vehicles warranted to operate on gasoline, ethanol, and methanol, or be warranted to operate on biodiesel. The requirement would be increased to 80 percent by 2015.

National Corn Growers Association Vice President of Public Policy Jon Doggett spoke during a press conference Tuesday to introduce the bill. “The Open Fuel Standard Act is an important piece of legislation,” said Doggett. “Flex-fuel vehicles are aptly named because they give consumers a choice. Corn producers are committed to producing more corn on fewer acres using better technology to achieve the goals of the Open Fuel Standard Act.”

Senators Susan Collins (R-ME) and John Thune (R-SD) are also co-sponsoring the bill. Also joining the senators to introduce the bill were representatives from the Set America Free Coalition, National Association of Wheat Growers and the Methanol Institute.

Pictured from left to right are: Sen. Salazar, Sen. Lieberman, Jon Doggett, and Sen. Brownback. (photo from NCGA)

U.S. Environmental Protection Agency Administrator Stephen Johnson announced today that the agency will not meet its July 24 deadline to issue a decision on the renewable fuels standard (RFS) waiver request submitted by Texas Governor Rick Perry.

Johnson said in a statement, “Given the amount of work that remains to sufficiently answer the Texas request for a waiver from the Renewable Fuels Standard (RFS), it is now clear that a final decision on the request will not be completed by July 24. Rather, additional time is needed to allow staff to adequately respond to the public comments and develop a decision document that explains the technical, economic and legal rationale of our decision.”

EPA received over 15,000 comments on the issue and the agency is also required to consult with the Departments of Agriculture and Energy in considering whether to grant or deny the waiver request.

Johnson stated that “the process remains fair and open and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request.”

A final decision is now expected in early August.

Presidential candidates Barack Obama and John McCain spoke to the American Farm Bureau Federation’s Council of Presidents meeting in Washington DC last week by teleconference about various issues of importance to agriculture, including it’s role in America’s energy needs.

McCain heralded his “Lexington Project” to make America energy independent which includes alternative fuels, ethanol, nuclear and offshore drilling. The plan includes calling on automakers “to make a more rapid and complete switch” to flex-fuel vehicles, as well as increase support for second generation ethanol, that would involve eliminating “mandates, subsidies, tariffs and price supports that focus exclusively on corn-based ethanol and prevent the development of market-based solutions which would provide us with better options for our fuel needs.”

Obama stated that his goal would be to phase in a 2 billion gallon cellulosic ethanol renewable fuel standard into the nation’s fuel supply by 2013.

“I am not interested in rolling back the renewable fuel standard. I think it is something that is critically important to supporting the agricultural sector and rural America, and I think that the use of ethanol as a scapegoat for rising fuel prices is misplaced. If we don’t invest in American grown biofuels and advanced technologies, our nation is never going to be energy independent. And that is why I am proud to have been a consistent supporter of biofuels and I will continue to be so in the future.”

VeraSun Energy has announced the startup of its 110 million gallon per year ethanol biorefinery located near Hankinson, N.D. The Hankinson production facility marks the 12th VeraSun biorefinery in operation, increasing the company’s annual operating capacity to 1.2 billion gallons.

Construction on the Hankinson facility began in August of 2006 and was completed in June. The opening of the plant was delayed due to market volatility.

“The decision to begin production at Hankinson is based on a number of factors, including an improved margin environment as well as other business considerations unique to the facility,” VeraSun CEO Don Endres said. “We continue to closely monitor market conditions and make decisions that are in the best interest of our company.”

VeraSun took ownership of the facility through its merger with US BioEnergy, which became final in April.

US biofuels development company Verenium Corporation and Japanese trading company Marubeni Corporation recently announced the opening of a three million-liter-per-year cellulosic ethanol plant in Saraburi, Thailand.

The cellulosic plant in Thailand is co-located with a facility that will produce ethanol from sugar-cane derived sucrose, which is widely abundant in the region. Sugar cane bagasse, the biomass residue from the sugar cane plant, will be the primary source of feedstock for the cellulosic facility, which will be converted into ethanol using Verenium’s process technology.

Marubeni and Tsukishima Kikai Company previously incorporated Verenium’s technology into BioEthanol Japan’s 1.4 million-liter-per-year cellulosic ethanol plant in Osaka, which utilizes construction wood waste as a feedstock.

Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) have introduced legislation aimed at helping to efficiently bring ethanol to communities across America by giving pipeline owners the same tax benefits they receive for moving petroleum products.

The tax code currently states that Publicly Traded Partnerships are supposed to earn 90-percent of income from the exploration, transportation, storage or marketing of depletable natural resources like oil, gas and coal. The Harkin-Lugar bill would change the tax code so that these Publicly Traded Partnerships can earn qualified income from the transport, storage or marketing of any renewable liquid fuel approved by the Environmental Protection Agency.

Harkin says the bill “makes a simple change to the tax code that meets the demands and realities of the 21st century energy marketplace, removing barriers so that biofuels producers in the Midwest and elsewhere will have an efficient, inexpensive way to transport these renewable fuels to the market.” According to Lugar, “Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America’s renewable fuels.”

Cincinnati has received a federal grant to help the city’s mass transit system buy some biodiesel buses.

This story from the Business Courier of Cincinnati quotes Ohio U.S. Sen. George Voinovich in announcing a $776,000 Clean Fuels Grant from the Federal Transit Administration through the U.S. Department of Transportation to the Southwest Ohio Regional Transit Authority (SORTA):

Funds provided by the grant will purchase as many as three biodiesel fuel buses for Cincinnati’s Metro bus system, according to a news release.

“I’m pleased that Cincinnati will be able to improve its transportation services while also supporting environmentally friendly biodiesel technology with this funding,” Voinovich said in the release. “Many people rely upon public transportation, and it is critical that we continue to improve and restore regional system infrastructures in Ohio.”

A beef producer that cranks out 22 million pounds of tallow a week will be turning that waste into another alternative to non-renewable petroleum.

This story from the Sioux City (IA) Journal says Beef Products, Inc., better known as BPI, the world’s largest producer of lean boneless beef, has partnered with Natural Innovative Renewable Energy to build a 60-million-gallon-a-year biodiesel refinery in South Sioux City, Nebraska:

The company hopes to start construction this fall or early next year, said Jim Venner, a Breda, Iowa-based consultant for the biodiesel project. After the startup, production could begin as early as 18 months later, he said.

“We want to be out of front and be a leader in terms of biodiesel, and that’s the opportunity we have here today,” Heineman told an audience of about 100 who gathered under a large tent set up in a field in the industrial park.

Right now, there are three soy-based biodiesel plants in Nebraska. But with high soybean prices, and the fact that Nebraska leads the nation in commercial commercial cattle slaughter… and that produces about a billion pounds of tallow each year… it certainly makes sense to use this resource for biodiesel.

Ethanol Producers and Consumers (EPAC) kicked off their 18th Annual EPAC Conference on July 20 with their Board and Membership Meeting. The event is taking place at the Hilton Garden Inn in Kalispell, Montana and the theme of this year’s conference is “Ethanol: Fuel AND Food”.

“This conference will help to counter the negative news items we hear today regarding ethanol,” noted Shirley Ball, president and executive director of EPAC.

During the board meeting, the following were decided to serve on the the board of directors: Tim Babcock, Gary Schaff, Linda Nielsen, Tom Kryzer, Stan Ozark, Mike Allen, Russ Montgomery, Michelle Kautz, Matt Wilson, Julie Ward, Dan Schwartzkopf and Phil Madson.

Other items discussed included EPAC’s fiscal year budget, grant opportunities, membership, future conferences and more.

An evening reception sponsored by Katzen Interenational, Inc and CHS brought the attendees together.

Race cars in the Land Down Under will be running on 85 percent ethanol next year.

Australian media sources report that V8 Supercars chairman Tony Cochrane announced on Sunday that all cars in the main V8 series and the Fujitsu Development Series will run on E85 made from sugar cane for at least five years starting in 2009.

“We want to be a leader in the area of emissions and renewable resources – we don’t want to be a follower,” Cochrane said. “Our job is educational. We want to show if we can run it in our cars, maybe it’s a consideration for the average motorist.”

Team Ethanol has teamed up with Driver’s Edge, a nonprofit organization that travels the country teaching teens defensive driving techniques for free.

Driver’s Edge was prominently displayed on the No. 17 Team Ethanol car, driven by 2008 Indianapolis 500 Rookie of the Year and 2008 Watkins Glen winner Ryan Hunter-Reay, during Sunday’s IndyCar® Series Honda Indy 200 in Mid-Ohio. Team Ethanol finished 10th in the race, making Hunter-Reay now ninth in this year’s standings.

Reece Nanfito, senior director of marketing for the Ethanol Promotion and Information Council (EPIC), says they teamed up with Driver’s Edge because each year nearly 6,000 teens are killed in car accidents, making car crashes the number one killer of America’s youth. “Through hands-on education, they are teaching young drivers how to safely handle a car, while providing information so they make good renewable fuel choices at the pump,” said Nanfito.

Driver’s Edge president Steven Tepper says being featured on the No. 17 Team Ethanol car is a great opportunity to draw attention to their effort. “Most people have no idea that the number one killer of young Americans ages 16 to 24 is motor vehicle collisions,” said Tepper. “With the proper behind-the-wheel instruction, these are avoidable tragedies, and that’s what Driver’s Edge is all about.”

Driver’s Edge provides a free educational program for young drivers taught by true driving professionals through a unique combination of behind the wheel and classroom experiences. Check driversedge.org to find out where the Drivers Edge National Tour will be the rest of this year

Ethanol makers all over the world are asking the Organization of Petroleum Exporting Countries (OPEC), “Who do you think you’re kidding?”

In a full page ad in the Financial Times, the biofuel industries of Brazil, Canada, Europe and the United States are challenging the oil cartel’s “outrageous, misleading, and unsubstantiated claims about the role of ethanol in world oil markets.” This press release has more details:

“Efforts to obfuscate and mislead the public about biofuels will do nothing to alleviate the energy crisis gripping the world. We realize that biofuels may be reducing your windfall profits. But, perhaps, the time for OPEC to face some competition has finally arrived,” the groups wrote.

“According to the International Energy Agency, ‘biofuels have become a substantial part of faltering non-OPEC supply growth, contributing around 50% of incremental supply in the 2008-2013 period,’” the groups pointed out. “Without the growing production and use of biofuels worldwide, IEA calculates that more than one million barrels per day of new oil production would be required.”

The groups also cited a Merrill Lynch analysis that biofuels are helping keep oil prices 15 percent lower than if they weren’t around and gas prices in the U.S. would be 50 cents a gallon more without ethanol in the picture.
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Dakota Wind Energy has announced South Dakota’s first intrastate public offering, where shares in the community-based wind project are offered to residents of that state.

This press release says Dakota Wind Energy wants to develop more than 750 megawatts of community-owned wind farms throughout South Dakota:

“We want landowners participating in Dakota Wind Energy to have the opportunity to own units in the company,” says Gerry Fisher, a member of the Dakota Wind Energy board of advisors. “An intrastate public offering makes this possible. It also allows us to return a portion of the development proceeds to Dakota Wind Energy members over a long-term period.”
All South Dakota landowners that reside within the project’s footprint may receive ownership units in Dakota Wind Energy. Landowners who grant wind-related rights to Dakota Wind Energy can receive either a traditional cash payment, or units in Dakota Wind Energy through this offering.

“Shared ownership is what makes Dakota Wind Energy different from traditional wind developers,” says Mark Lucas, Vice President of National Wind. “Most other developers do not offer ownership; they only provide turbine lease agreements. In our wind developments, even if landowners do not end up with a wind turbine on their property, they still have the opportunity to own a part of Dakota Wind Energy. More than any other private offering structure, an intrastate public offering allows for the greatest number of local landowners to participate.”

Back in April, Dakota Wind announced it had put up two on-site meteorological towers to measure the wind regime in Marshall County, where part of the community-based wind project will be located.

The Organization for Economic Cooperation and Development (OECD) report on biofuels policies out this week claims that that biofuel production “has a limited impact on reducing greenhouse gases and improving energy security, and has a significant impact on world crop prices.” However, an analysis of the findings indicates the opposite.

According to a review of the report by the Renewable Fuels Association, the “OECD data does not support the conclusions of the report or a call by OECD officials for a moratorium on biofuels.”

For instance, OECD credits ethanol produced from corn starch with a 30% reduction in greenhouse gas
(GHG) emissions if using natural gas, and a 50% reduction in GHG if the facility is powered by biomass.
Based on this finding, a moratorium is not warranted.

In addition, the modeling included in the report suggests that a 28% drop in world oil prices would cause a 12% reduction in world coarse grain prices ($0.75 per bushel in the case of corn today), underscoring the fact that skyrocketing oil prices are the largest driver behind increasing grain prices. By contrast, removing biofuel mandates like the Renewable Fuels Standard (RFS) would reduce coarse grain prices by just 1% ($0.06 per bushel of corn). Even abandoning all biofuels policies would only yield an average coarse grain price reduction of 7% ($0.45 per bushel).

Read the RFA review here.

Dow Chemical Company will work with the National Renewable Energy Laboratory to develop and evaluate a process to convert biomass to ethanol and other chemical building blocks.

The partnership will evaluate a mixed alcohol catalyst from Dow that could hold potential for making cellulosic ethanol more commercially viable. “NREL is interested in reducing the cost of biofuels in support of the nation’s energy goals,” NREL Director Dan Arvizu said. “Dow’s catalyst technology and expertise in catalyst development and testing will be extremely helpful as we evaluate the viability of this approach on a larger scale.”

The joint evaluation program will focus on improving the mixed alcohol catalyst, as well as demonstrating pilot scale performance and the commercial relevance of an integrated facility.