Domestic Fuel

An area in Central Florida already touted as a mecca for biodiesel production could be getting another biodiesel plant.

Back on August 15th, I told you how Groveland, just 30 miles west of Orlando in Lake County, was poised to have three biodiesel plants by the end of 2009. Now, this story in the Orlando Sentinel says yet another refinery wants to move into the area:

Raptor Fabrication & Equipment on State Road 50 asked for $10,000 to pay a consultant who specializes in writing grant applications in the area of renewable-energy technology, company officials said.

Raptor produces biodiesel, which it touts on its Web site as a “clean, renewable and economical substitute for petroleum diesel fuel.”

The article goes on to say that if all the potential biodiesel production comes to fruition, the area could end up rivaling Houston, Texas in terms of biodiesel output.

Gulf Oil, LP has opened the second E85 fueling location in the state of Massachusetts. The facility will be servicing flexible fuel vehicles (FFVs) that travel to and from Logan Airport at 100 Service Road in Boston.

“We are proud to be among the first to open this alternative fueling location, and we look forward to the day when many more choices — from e85, biodiesel and Compressed Natural Gas (CNG) from primarily domestic sources form the foundation of a new energy future,” said Gulf Oil CEO Joseph Petrowski. “We look forward to remaining a market leader in alternate fuel development and are proud that our home of Boston and the Northeast are in the forefront of this transformation.”

The opening of this E85 site is the result of a partnership between Gulf Oil and the station’s operator Energy North and its President Mr. Ken Black who is committed to broaden its fuel options from traditional petroleum to a more varied and secure domestic source of biofuel. The second partnership is between the public and private sectors.

Petrowski went on, “The partnership between the U.S. Department of Energy and the leadership of Massachusetts Representative Delahunt, Governor Deval Patrick, and Energy Secretary Ian Bowles is an important example to the nation of how the public and private sectors can work constructively to solve one of the most important issues of the 21st century: our nation’s energy security.”

A Reuters report from the UK today quotes an economic expert as saying higher food prices this year were driven by speculators, not ethanol.

Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn along with other commodities shows that belief was mistaken. Corn is down about 50 percent from its record high in June, even as the amount of the grain used to produce the renewable fuel in the United States remained the same.

The article quotes Stewart Ramsey, senior economist for Global Insight, a Philadelphia-based company that provides economic, financial, and political analysis and forecasting. “The record high prices were a speculative bubble,” Ramsey says in the article.

Analysts said soaring corn prices were a symptom of big shifts of investment money into corn and other commodities. As big money began shifting out of stocks a few years ago, commodity markets like corn futures began climbing. “There was a speculative bubble in the market and that’s one of the bigget things that came out of the market is just that equity markets weren’t good and for a while the money came into commodities,” Ramsay said.

Over the past two weeks, key energy advisors to the McCain and Obama presidential campaigns have shared their views on ethanol with Agritalk Radio host Mike Adams.

Heather Zichal, the policy director for energy, environment and agriculture for the Obama campaign spoke on behalf of Senator Obama, while Jim Moseley, former Deputy Secretary of the US Department of Agriculture and a member of the McCain-Palin farm and ranch team represented Senator McCain.

The appearances on the syndicated radio program which is heard on 70 stations nationwide were supported by the Renewable Fuels Association in an effort to draw attention to ethanol as an issue in the presidential campaign. RFA president Bob Dinneen said, “Heather and Jim clearly understand the issues and were outstanding representatives for their respective candidates. We thank them both for their participation.”

Full transcripts of each program are available as links below:

Heather Zichal for Senator Obama

Jim Moseley for Senator McCain

Comments made to the press last week by Secretary of Agriculture Ed Schafer regarding the possibility of USDA loans to ethanol plants that have been hurt by commodity market speculation this year have caused quite a stir. USDA has been working to get the word out this week to clarify that this is not any kind of a “bail out” for ethanol plants, nor is it a new program that was created to help plants that made bad investments.

Schafer said the government could provide up to $25 million per company to refinance through a “guaranteed loan-type program for operating capital.” These types of loans are available through the Rural Development’s existing Business and Industry (B&I) Loan Guarantee Program. Under that program, the loan must be secured by a private lending agency – USDA does not make a direct loan.

Regardless, livestock industry groups are up in arms about the possibility of helping ethanol plants in trouble. Eight major livestock organization leaders wrote to the secretary this week protesting what they view as preferential treatment for the ethanol plants. “Many of our producer and processor members also took long positions on corn and soybeans and are paying above-market rates right now,” they wrote. “We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry.”

However, Secretary Schafer said this week that ethanol plants should be treated no differently than other agricultural companies that can take advantage of the existing loan guarantee program.

Another nearly 1,400 megawatts (MW) of wind energy has been installed during the last three months, putting the U.S. wind energy industry on a record-setting pace again this year.

The American Wind Energy Association says the latest figure brings this year’s total to 4,204 MW:

With even more reported under construction, the industry is on track to surpass the banner year of 2007, when 5,249 MW were installed, with a total of about 7,500 MW this year (7,500 MW would generate enough electricity to power the equivalent of about 2.2 million homes).

“The convenient truth here is that wind power provides a stimulus for our economy, as well as a climate change and energy security solution,” said AWEA Executive Director Randall Swisher. “The market, in spite of all its turmoil, clearly points to wind power as one of the most attractive energy options available today. But if we are to keep this momentum going, the new President and Congress will need to put in place what the majority of the American people support but the country still lacks: a long-term renewable energy policy.”

Texas led the way in the wind energy expansion, adding 693 MW. That gives the state more than 6 gigawatts (GW) of capacity… ranking tops in the nation and fourth worldwide. West Virginia is the state with the fastest wind power capacity growth, tripling its existing capacity with the addition of a 164-MW project and another 100-MW project is scheduled to come online by the end of this year.

A plan to reduce California’s greenhouse gas emissions is expected to be a boon for biodiesel and solar in the state.

This story from Biodiesel Magazine says the California Air Resources Board has recently unveiled its Proposed Scoping Plan to reduce those emissions to 1990 levels by 2020 and is set to approve the final version in December:

The principle of the plan is to include a variety of strategies to reduce emissions, including a solar initiative and a range of regulations meant to reduce emissions from trucks and ships docked in state ports. The plan also includes a cap-and-trade GHG emissions reduction program which will be linked to the Western Climate Initiative to create a regional market system for carbon emissions.

The plan, which may be implemented as early as 2009, could provide a significant boost for biodiesel demand, particularly for biodiesel produced in-state through the use of sustainable feedstocks. Joe Gershen, vice president of marketing for California’s Tellurian Biodiesel Inc., said state officials are “pretty bullish” on the use of renewable diesel to reduce carbon dioxide emissions. The only “renewable” diesel that is widely available now is biodiesel, so it can be assumed that greater percentage mandates for renewable diesel would equal more demand for biodiesel.

You can read the Proposed Scoping Plan at www.arb.ca.gov.

While oil prices have been slashed by more than half since summertime highs of nearly $150 a barrel and gas prices have plummeted as well (hey, I’m not complaining about $2.40/gallon gas I just bought tonight), it’s no reason to let up on the drive to expand alternatives, such as ethanol and biodiesel.

This story in the Chattanooga (TN) Times Free Press says a bipartisan group of 10 U.S. senators put together a compromise energy bill back in August, when $4 a gallon gas ruled and $200 a barrel oil loomed on the horizon. And even though the prices have fallen dramatically, and the group has expanded, they still are pushing for expansion of alternatives and dependence on foreign oil:

Still, members of the self-dubbed “Gang of 10,” which includes Sens. Bob Corker, R-Tenn.; Saxby Chambliss, R-Ga.; and Johnny Isakson, R-Ga.; say their proposal and focus on energy issues is no less important.

The $84 billion Gang of 10 plan, now endorsed by 20 senators — 10 Democrats and 10 Republicans — includes increased offshore oil drilling and expanded tax credits for alternative fuels and technology…

“Electricity prices are going up, and gas prices may go back up,” said Sen. Lamar Alexander, R-Tenn., who has proposed a Manhattan Project-like energy plan. “Many people are as concerned about energy independence from unfriendly countries as they are about the price. Then we add to that the need for clean air.”

The plan also calls for improving solar energy capabilities, advancing nuclear energy, boosting biofuels, encouraging green buildings and funding nuclear fission research and carbon-capture technology.

The current credit crisis has also helped put the energy debate on the back burner, but members of the Gang of 10 promise they’ll bring it up again when the new Congress convenes in January.

A new pilot plant that broke ground in Tennessee last week will be testing the use of switchgrass as a feedstock for cellulosic ethanol.

Genera Energy is a partnership between the University of Tennessee and DuPont Danisco Cellulosic Ethanol LLC, a joint venture formed this year by DuPont and Genencor to commercialize cellulosic ethanol. On hand to celebrate the groundbreaking October 14 with company representatives were Tennessee Governor Phil Bredesen and numerous other state and local officials, as well as local area farmers who will be growing the switchgrass to feed the plant. A John Deere tractor was used for the ceremonial groundbreaking.

Earlier in the day, Governor Bredesen participated in the state’s first-ever Summit on Clean Energy Technology in Knoxville. “When it comes to facing the challenges of the future, Tennessee isn’t just talking the talk about clean energy technology, we’re walking the walk, rolling up our sleeves and getting to work,” said Bredesen. “The bottom line is that this plant and this partnership are going to do a lot of good for Tennessee’s future.”

Besides switchgrass, the pilot plant is also designed to convert corn stover from western Tennessee into ethanol. The biorefinery’s construction and switchgrass production are the first major components of the UT Biofuels Initiative, a farm-to-fuel business plan developed by UT Institute of Agriculture researchers.

The stakeholders of the nation’s largest ethanol producer are asking the presidential candidates to support ethanol.

More than 1,700 POET employees and investors sent an open letter to Senators McCain and Obama urging them to invest in domestic sources of renewable fuels, like ethanol. In the letter, they emphasized the positive impact that ethanol has already made in creating jobs, reducing the nation’s dependence on foreign oil, and helping to reduce greenhouse gas emissions. In addition, they noted that innovations like cellulosic ethanol are just around the corner, making ethanol even cleaner and greener.

“Based on the enormous response to this letter from POET employees and local farmers, it is clear that many Americans will be voting based on their economic and energy interests this year,” said Jeff Broin, CEO of POET. “Ethanol is America’s best renewable fuel, reliable and affordable now and we hope that the next president continues to invest in this homegrown and high-tech energy solution.”

POET has 25 ethanol production facilities in seven states, including several that are still considered “toss ups” in this presidential campaign or are hotly contested, such as Colorado, Indiana, Iowa, Minnesota, Missouri, and Ohio.

The letter notes that the ethanol industry created more than 200,000 new jobs across the country, and in 2007, ethanol production contributed $47.6 billion to the nation’s GDP and generated $4.6 billion in federal tax revenues. Further, in 2007, the production and use of biofuels helped the U.S. avoid an estimated 13 million tons of greenhouse gas emissions.

The Wisonsin Corn Growers will be giving away free, $20 gift cards to drivers purchasing E85 ethanol fuel Saturday, Oct. 25 at the United Cooperative Cenex, Poynette and Thursday Oct. 30 at the Tri-Par Qwik Stop, West Bend.

During both events, the first 85 Flex Fuel Vehicle (FFV) owners who purchase 8.5 gallons or more of E85 between 10 a.m. and noon receive a $20 gift card courtesy of the Wisconsin Corn Growers Association. Information on ethanol and its many benefits also is available during these events from representatives of the American Lung Association of Wisconsin and the Wisconsin Corn Promotion Board.

“E85 emits lower levels of carbon and other air pollutants that can cause or exacerbate lung disease,” says Dona Wininsky, director of communications for the American Lung Association of Wisconsin. “For this reason, the fuel has been designated an official Clean Air Choice of the American Lung Association of the Upper Midwest.”

A Southeast ethanol company has formally announced the locations for four plants to be built around the sunbelt.

East Coast Ethanol intends to construct plants in Northampton Co., NC; Chester Co., SC; Wayne Co., GA; and Jackson Co., FL.

With a nameplate production capacity of 440 million gallons of ethanol per year, the four plants in operation would make ECE will become the sixth largest ethanol producer in the nation and the leading producer of ethanol and its co-products on the East Coast. According to the latest figures released by the Energy Information Administration, the Southeast ethanol market demand is estimated at 2.1 billion gallons per year.

Biofuels in general and ethanol in particular were part of the discussion at the World Food Prize symposium in Des Moines this year. Despite the food versus fuel controversy that permeated the headlines for 2008, there seemed to be more acceptance of biofuels as being able to co-exist with food production and being part of the overall global agriculture picture.

This Ethanol Report podcast features some of the comments made at the World Food Prize events last week by UK Scientific Advisor Sir Gordon Conway, International Biofuels Commission co-chair Roberto Rodrigues, World Bank president Robert Zoellick, former senators George McGovern and Bob Dole – this year’s World Food Prize recipients, and Secretary of Agriculture Ed Schafer.

You can listen to “The Ethanol Report” on-line here:
ethanol-report-19.mp3

Or you can subscribe to this podcast by following this link.

Podcast: Play in new window | Download (5.6MB)

Global demand is growing for the ethanol by-product distillers dried grains with solubles (DDGS), which is used for livestock feed – and the US Grains Council is helping to move that product.

At the U.S. Grains Council’s International Distillers Grains Conference in Indianapolis earlier this week, attendees heard that Mexico currently holds the title as the number one purchaser of U.S. DDGS, importing 708,000 metric tons in the 2007 calendar year. Canada follows in second place importing 317,580 tons last year. But other countries hold promise for increased imports, including Thailand and Russia.

Grains Council president and CEO Ken Hobbie said at the conference, “DDGS and its value in all types of animal rations shows that US grain producers have the capacity and the capability to produce for both food and fuel.” Hobbie said that if the four million tons of DDGS exported from the US this year were divided equally between all the major livestock food sectors it would produce 331,000 metric tons of chicken, nearly five billion eggs, almost 86,000 metric tons of beef, 1.8 million metric tons of milk and 205,000 metric tons of pork.

Listen to Hobbie’s remarks here, provided to DomesticFuel by Hoosier Ag Today:
usg-hobbie.mp3

Podcast: Play in new window | Download (5.5MB)

The stock market has been on a roller coaster ride lately… down hundreds of points one day, up hundreds the next.

But in this article from Reuters, Jeffrey Sohl, the director of the Center for Venture Research at the University of New Hampshire and a professor of entrepreneurship at the university’s Whittemore School of Business and Economics, says some alternative fuels might do well despite all the turmoil:

Q: Which sectors appear to be hot right now?

A: We’re picking up on industrial energy — that’s been kind of going up over the last several years, a nice sweet spot for them. Some new green technologies, new ways and new processes to deal with biodiesel. It could be new ways to keep coal emissions down. And some applications where you see solar and stuff like that – new ways to make those applications a little more cost effective.

Might not be time to drop your entire nest egg into those alternative fuel stocks, but it is good to know they seem to be doing all right.