Domestic Fuel

After Minnesota’s Governor Pawlenty’s call to reduce petroleum fuel consumption, more of the state’s fleets are using the clean, alternative fuel — E85. According to the American Lung Association of the Upper Midwest and a new report from the Minnesota SmartFleet Committee, E85 use in the state fleet during the first three quarters of 2008 is 55percent greater than during the same period in 2007.

Since the beginning of this year, 529,000 gallons of E85 were used to fuel the state’s roughly 1,700 flexible fuel vehicles. Last year at this point, only 295,000 gallonsof the locally-produced, largely renewable fuel had been used. “We have increased our E85 use to approximately 12 percent of our total fuelpurchases,” said Tim Morse, chair of the SmartFleet Committee and director of Fleet and Surplus Services, Minnesota Department of Administration. “That’s very good progress toward our goal, but with E85 available at morethan 360 locations statewide, we can do even better.”

“A flexible fuel vehicle running on E85 instead ofgasoline produces significantly less tailpipe emissions than the samevehicle using gasoline,” said Kelly Marczak, director of the American Lung Association of Minnesota’s clean fuels program. “To-date, the state fleet’s use of E85 in 2008 has prevented more than 2100 tons of lifecycle carbondioxide emissions and other harmful pollutants from entering our air simplyby using E85 instead of gasoline.”

There are currently over 350 E85 fueling stations in the state of Minnesota, the most of any state in the nation.

The first school district in the country to run its buses on biodiesel is celebrating 10 years of driving on the green fuel.

This feature from the National Biodiesel Board explains that Medford Township School District in New Jersey first started using biodiesel when Director of Operations and Technology for the Medford Township Board of Education Joe Biluck applied for and received a Department of Energy grant for alternative fuel and filled a bus with what was then a little-known fuel called biodiesel:

“I will admit, I was a little scared that first time,” he said. “But when you see an opportunity or a technology that has a lot of potential, and you’ve done your homework on it, you have to be willing to take a calculated risk for the greater good. Someone has to raise their hand, and why not Medford?”

According to Medford Township Public School System officials, over the past decade the district’s school buses have traveled more than 4 million miles, consumed more than 615,000 gallons of B20, displaced more than 123,000 gallons of diesel fuel, and eliminated 127,000 pounds of hazardous emissions and 428 pounds of particulate matter while reducing the overall cost of fleet operations by $80,000 a year.

The district is being congratulated by the NBB, whose CEO Joe Jobe says that “Medford’s public school district serves as a great example to other schools looking to use biodiesel.”

Jobe goes on to say that the bold move 10 years ago has helped launch a natiowide use of biodiesel in an important and sensitive environment – the air around school children. Approximately 200 school districts nationwide use biodiesel.

The state of Oklahoma is set to host its third annual biofuels conference.

Governor Brad Henry will host GROW: The Oklahoma Biofuels Conference, November 12-13 in Oklahoma City at the Skirvin Hotel conference center. The conference is touted as a chance to appeal to a broad range of attendees including: biofuel producers, marketers and retailers; end users, including public and private fleet managers; research institutions; farmers, ranchers and agribusiness executives; private equity firms, venture capitalists, lenders and financial institutions; government regulators and representatives; entrepreneurs and anyone with an interest in this new and rapidly expanding Oklahoma energy industry:

The 2008 Oklahoma Biofuels Conference will cover topics that include:
• New and proposed initiatives and funding for bioenergy research including
the 2008 Farm Bill
• 2nd generation feedstocks for Oklahoma
• Discussion on food v. fuel debate
• Biorefinery construction – new players, plans and progress
• Biofuel impacts for end users
• Carbon control policies that may offer income potential for producers
• Energy sustainability
• Advances in feedstock conversion technology

For registration and more information, check out the conference web site, www.growok.com, or you can call 1-800-203-5494.

Export opportunities for the livestock feed co-product of ethanol production are increasing as the industry continues to grow. That was the main message to more than 500 who attended the second the U.S. Grains Council’s International Distillers Grains Conference this week in Indianapolis.

“The reason we’re holding this conference is that we are confident the U.S. ethanol industry will continue to grow due to efforts undertaken by the National Corn Growers Association and state producer organizations over the last several years,” said USGC president and CEO Ken Hobbie. “Due to the efforts of U.S. growers to establish the ethanol industry, we made DDGS our top priority in 2006 and since then have seen DDGS exports exceed 2 million metric tons annually.”

Senior Vice President of Informa Economics Scott Richman told the conference that as a result of the growth in the U.S. ethanol industry this year, 22.8 million tons of DDGS were available for global use in 2007/2008 marketing year, nearly a 50 percent increase from the 2006/2007 marketing year. He said the 2008/2009 marketing year, which just began on Oct. 1, will likely experience an additional 50 percent increase in the availability of DDGS, reaching 31.3 million tons.

“There will be a substantial amount of DDGS available for global livestock industries,” said Richman. “The U.S. Grains Council’s efforts promoting U.S. DDGS and opening several new markets across the globe is helping the U.S. ethanol industry in a big way.”

According to Informa, ethanol production this year is expected to total 9.3 billion gallons and projected to reach 11.9 billion gallons in 2009.

The U.S. Department of Energy has awarded a $1.2 million grant to Clemson University in South Carolina to assess the potential of switchgrass and sweet sorghum as feedstocks to produce ethanol in the southeast. The grant also will fund development of a small-scale biofuel processing plant at Clemson University’s Restoration Institute in North Charleston.

The South Carolina Bioenergy Research Collaborative has been formed to demonstrate the economic feasibility of using plants, such as switchgrass, trees and sorghum, to make ethanol. The collaborative includes scientists at Clemson, the Savannah River National Laboratory, South Carolina State University and industry incubator SC Bio, as well as industrial partners who are committed to building a pilot plant in the state.

At the same time, a group of Clemson and USDA-Agriculture Research Service scientists is investigating switchgrass production systems in South Carolina, including soil and crop management, new variety development and measuring environmental impacts.

General Motors and partner Coskata are working together to develop and commercialize second generation ethanol in China.

David S. Chen, vice president of GM China Group, said, “According to the China Automotive Energy Research Center, GM has already begun successfully validating the automotive energy resource potential for sustainable biofuels in China.” Chen said China can produce cellulosic ethanol on marginal lands from wood waste, energy crops such as switchgrass and even garbage, and China is in a good position to benefit from the development of such sustainable biofuels.

Currently, China is the world’s third-largest ethanol producer, behind the U.S. and Brazil, with annual production of around 1 billion gallons. GM is leading the R&D and commercialization of sustainable biofuels worldwide, having produced more than 5 million flex-fuel cars and trucks that run on combinations of ethanol and gasoline. In the United States, GM is committed to making half its annual vehicle production flex-fuel capable by 2012.

According to news10.net out of Sacramento, California, two E85 fueling locations broke ground in the Sacramento area. The stations are owned by Pearson Fuels who own additional alternative fuel stations across the state.

“I’ve built ethanol pumps in San Diego and in a few other cities in California,” said Mike Lewis of Pearson Fuels. “But as it stands right now, the pump we constructed in Concord is the closest to Sacramento and we need to made them more readily available here.”

Pearson Fuels plans to build two E85 pumps in the Sacramento region. The first is planned for the existing Union 76 station in Carmichael at 5103 Fair Oaks Boulevard. The second will be located at the DB&S Shell station in Sacramento, 5551 Martin Luther King Boulevard. Lewis hopes to have both pumps installed by January 2009. “Remember when gas prices were almost $5 a gallon and people were asking what can I do about it besides drive less?” said Lewis. “Now, here’s your answer: buy a tank of ethanol, so we don’t have to depend so much on oil.”

There are now eleven E85 fueling stations in the state of California.

Ethanol plants that have been hurt by dramatic fluctuations in commodity prices this year could be eligible for assistance from the US Department of Agriculture.

Secretary of Agriculture Ed Schafer told reporters after an address to the World Food Prize breakfast in Des Moines Friday that “some plants are under pressure because they’ve been speculating on corn.”

Schafer said there are USDA programs that could, for example, help the companies refinance and reduce their interest rates on operating expenses such as corn purchases. USDA’s Rural Development Program can lend up to $25 million to refinance or loan guarantees. “We have several ways we can help with dollars in rural areas,” Schafer said.

Some ethanol companies, most notably VeraSun, speculated on corn prices during the summer and locked in prices when corn was at $7 per bushel and now cash prices are about $3.50 per bushel, causing some significant losses. “There is going to have to be some credit applied to companies to buy some lower-priced corn to blend with their higher-priced corn obligations,” Schafer said.

If USDA allows the ethanol plants to participate in the loan programs, Schafer said there would be “no restrictions or litmus tests” on the size or ownership for companies to qualify.

The United Soybean Board has been actively building demand for biodiesel on behalf of soybean farmers since 1990 and the opportunities continue to grow on a global basis.

USB was one of the soybean industry sponsors of the World Food Prize luncheon in Des Moines this week which gave CEO John Becherer, pictured here with one of this year’s WFP winners former Senator Bob Dole, to talk about the role soybeans can play in both feeding and fueling the world.

“The reality is we do have an opportunity and we need to be producing more product so that we can feed more fish, more pork and more poultry,” Becherer said. Since soybeans are 20 percent oil and 80 percent protein, that allows producers to grow a crop that can provide both.

USB’s development of the biodiesel market has the potential also to pave the way for other feedstocks to be used to make biodiesel. “Developing biodiesel directly raised the farm gate value for soybeans and led to the commercialization of biodiesel,” Becherer said. “Other feedstocks such as animal fats were grandfathered in on the biodiesel research and commercialization which has led to expanding opportunities for other feedstocks for biodiesel.”

“I don’t see that stopping,” he continued. “I don’t think that soybean oil ever believed that we would be the be all, end all for producing soybean oil to be converted into biodiesel. As we move forward, I think the opportunities for other feedstocks to play a part in this process are great.”

He adds that alternatives like jatropha hold great promise for improving subsistence farmers in poorer countries.

Listen to an interview with Becherer here:
wfp-08-becherer-biodiesel.mp3

You can also download the audio with this link:
John Becherer at World Food Prize (mp3)

See photos of the World Food Prize event here.

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

Voters in California are being asked to approve a $5 billion bond measure that is designed to help spur the growth of alternative fuels in the state.

This story in the Sacramenta Bee outlines some key points in Proposition 10:

WHAT IT WOULD DO

• Requires the money to be spent within 10 years, with no more than 1 percent for administering the program.

Proponents, such as billionaire oilman T. Boone Pickens, say the measure will reduce dependence on foreign oil, clean the air and create thousands of clean-energy technology jobs. Opponents argue the bonds will outlive the natural gas-fueled vehicles they are planned to promote.

You can read the text of the proposal here from the California Secretary of State’s office… and make up your own mind.

No, that’s not a typo in the headline. This story from the Seattle Post-Intelligencer says some of the world’s biggest oil companies are working to help the state of Washington put its 2 percent biodiesel and ethanol requirements into effect.

Exxon Mobil Corp. plans to open a biodiesel blending terminal in Spokane by late November, the company’s first in the country, said Prem Nair, a spokeswoman for the Irving, Texas-based company. The terminal will begin blending and supplying biodiesel by Dec. 1.

Currently, about 0.6 percent of all diesel sold in the state is biodiesel, the state says.

The article goes on to say that the help from Big Oil will help give a boost to Washington’s 2 percent ethanol and 2 percent biodiesel mandates, about to go into effect at the end of November.

One of the problems ethanol and biodiesel have had is how to get their product from areas of production to areas of consumption. Pipelines help conventional, petroleum-based fuels, so it’s only natural that biofuels would need to adopt similar technology.

Kinder Morgan Energy Partners LP has announced successful testing of ethanol through its 16-inch, 195-mile Central Florida Pipeline (CFP) system between Tampa and Orlando, Florida and the beginning of testing of a biodiesel pipeline in the Southeast U.S. This story in the Oil & Gas Journal has details:

It is finalizing mechanical modifications to the pipeline to offer ethanol transportation services to its customers by mid-November and is evaluating batched ethanol transport possibilities for other parts of its pipeline system.

The company is also undertaking tests to assess commercial transportation of biodiesel through its pipelines, running blended B-5 biodiesel through a segment of its Plantation Pipe Line system between Collins, Miss. and Spartanburg, SC. The company expects test results by the end of October. It also is evaluating transporting biodiesel on its Portland-Eugene, Ore. line to support Oregon’s forthcoming biodiesel mandate.

Republican Senator Chuck Grassley of Iowa paid a visit to the World Food Prize breakfast on Friday morning to introduce the secretary of agriculture and make a few comments of his own about the importance of American agriculture in feeding the world, as well as honor his colleagues from the Senate, George McGovern and Bob Dole, who are this year’s World Food Prize recipients.

He believes that increasing the use and acceptance of biotech crops is vital. “We’re entering a new generation in agriculture,” Grassley said. “This generation not only encompasses feeding the world, but also fueling vehicles and eventually getting in to treating patients through pharmaceuticals in crops. This offers opportunities for biotechnology growth throughout the world that will continue to feed populations and provide new prospects for our rural communities.”

In a brief interview after the breakfast, Sen. Grassley said that biotechnology gives us an opportunity to have a stronger agriculture allowing for multiple uses of agricultural crops. “Things like the World Food Prize give an opportunity to educate people about biotechnology,” Grassley said. “By expanding agriculture you can provide food, fiber and fuel.”

Grassley said that the incentives for biodiesel included in the financial bailout passed by Congress are critical to development of the industry. “That’s how you get infant industries started,” he said. “The best proof of that is that we would not have an ethanol industry today were it not for the ethanol incentives.”

He got very passionate about the need for incentives in developing any alternative energy. He used the example of developing cellulosic ethanol. “People say we ought to have cellulosic so we’re not using grain, but how do they think we’d ever get a second generation of ethanol from cellulosic if we don’t have the first generation of ethanol, and we wouldn’t have the first generation if we didn’t have the tax incentives and the public policies to encourage an infant industry.”

Asked if he is concerned about Senator McCain’s comments about doing away with ethanol incentives, Grassley said, “Not as long as I’m in Congress. When he’s president of the United States, we’ll still be developing an ethanol industry.”

Listen to an interview with Grassley at the World Food Prize here:
wfp-08-grassley.mp3

You can also download the audio with this link:
Chuck Grassley interview (mp3)

See photos of the World Food Prize event here.

Podcast: Play in new window | Download (11.1MB)

The answer to feeding a growing world population lies with building on the success of the American farmer, according to Agriculture Secretary Ed Schafer, who addressed the World Food Prize breakfast Friday morning in Des Moines.

“Our focus should be on sharing our technology, equipment and know-how, processes and procedures to help farmers all over the world boost the productivity of their land,” Schafer said. “Just in the last 15 years, our corn yields have increased from an average of 100 bushels per acre to 150 bushels per acre, a 50 percent increase in yield in 15 years.”

“Gains of this kind have allowed the United States producers to meet the rising demand for food and feed and fuel, while maintaining record level exports and strong food aid donations,” Schafer added.

Listen to Schafer’s address to the World Food Prize here:
wfp-08-schafer.mp3

You can also download the audio with this link:
Ed Schafer at World Food Prize (mp3)

See photos of the World Food Prize event here.

Podcast: Play in new window | Download (11.1MB)

Next to productivity, sustainability is the word being used most often at the World Food Prize symposium this week to talk about what is needed in global production of both food and biofuels.

The National Biodiesel Board formed a sustainability task force earlier this year, and one of the members of that task force is Victoria Carver with the Iowa Soybean Association. She says they are in the process of developing an advisory committee of experts and will be holding a symposium next month on the issue.

Carver attended many of the sessions at the World Food Prize symposium and was pleased with the overall emphasis on biotech crops, which can help increase production while not increasing land use. However, she did challenge a speaker during one session who said that biofuels were responsible were increasing food prices. “Food prices in real terms have come down dramatically in real terms, adjusted for inflation,” she said. “Do we really want to create a paradigm where farmers actually lose value in their product over time? And it’s especially important here at the World Food Prize because they are addressing issues of agriculture in developing countries which is a great economic opportunity there.”

In addition, Carver noted that biofuels have helped keep energy prices lower than they would be otherwise. “We know in this country that the increase in biofuels that’s been stimulated by the Renewable Fuels Standard has resulted in less of an increase in fuel prices than we would have had without it, by 40 cents a gallon,” she said. “I think it’s important that we think critically about the assumption that biofuels are kind of a culprit.”

Listen to an interview with Victoria here:
wfp-08-victoria.mp3

You can also download the audio with this link:
Victoria Carver interview (mp3)

See photos of the World Food Prize event here.

Podcast: Play in new window | Download (3.4MB)