Domestic Fuel

Less than one year after the merger of VeraSun Energy and US BioEnergy, seven of the ethanol plants acquired in the merger are scheduled to be sold at auction.

The auction will take place between March 16 and March 31. The merger of the two companies was final on April 1, 2008.

Plants to be auctioned include two in Nebraska, two in Iowa and one each in North Dakota, Minnesota and Michigan – all were originally owned by U.S. BioEnergy. The only former U.S. BioEnergy plant not included in the auction is the Marion, South Dakota facility because it is backed by a different lender, but it is currently idle. In fact, only four of VeraSun’s 17 plants are still producing ethanol at this point.

Potential buyers for the plants are staying confidential, but all eyes are on POET. Last week, POET CEO Jeff Broin said they were “in talks with several companies” when he was asked about future acquisitions. “POET today is considering all its options,” Broin said during the press conference to announce the start-up of their pilot cellulosic facility. “We have been looking at acquisitions of many facilities over the past six months.”

The VeraSun plants are being auctioned as as part of a bankruptcy financing agreement with lender AgStar Financial Services to provide an additional $30 million in debtor-in-possession financing to VeraSun.

The vast majority of city government vehicles in Boulder, Colorado will run on biodiesel or ethanol within the next few years, if city planners have their way.

This story from the Boulder Daily Camera says that the city hopes to raise last year’s goal of 60 percent of new vehicles purchased running on alternatives to 90 percent this year:

Given that the fleet’s average vehicle age is seven years, that means that within just a few years, the overwhelming majority of the vehicles the city owns will either be hybrids or capable of getting by on biodiesel or ethanol.

The city’s fleet includes cars and trucks that are hybrids or vehicles that burn ethanol or biodiesel — a version of diesel that’s generated from organic sources such as vegetable oil.

The article goes on to say that while some critics have tried to knock ethanol, the city officials have analyzed the benefits and found that it’s the best alternative to non-renewable petroleum.

A Virginia-based ethanol plant is offering incentives for regional farmers to produce barley for biofuel.

Osage Bio Energy will award $1,000 to the farmers in each of seven states with the highest barley yield per acre. The top producer of the Barley Bin Builder Yield Contest will receive the grand prize of a GM FlexFuel pickup truck.

“Osage Bio Energy’s barley feedstock approach provides a substantial opportunity for local farmers and viable sources of ethanol in the Southeast and Mid-Atlantic,” said Joel Stone, Chief Operating Officer of Osage Bio Energy. “And GM’s dedication to the flex-fuel vehicle market makes it an ideal partner for the yield contest.”

Farmers in the states of Delaware, Maryland, Virginia, Kentucky, Tennessee, North Carolina and South Carolina are eligible to participate in the competition. Perdue AgriBusiness and the Virginia Farm Bureau Federation are cosponsoring the contest with Osage Bio Energy. To get information out to farmers, Osage Bio Energy is sponsoring a farmer survey on its website, as well as attending grower meetings throughout the region.

Officials in Minnesota say that biodiesel is not to blame for stalling school buses in the bitter, bitter cold of Minneapolis. After temperatures… without the wind chill… dropped to -20 to -30 degrees F, the Bloomington School District had to cancel classes, in part, because a dozen buses wouldn’t start.

The bus company was quick to blame biodiesel, required by the state to be run in the buses. But this story from Minneapolis TV station KSTP says the cold is the real culprit:

State officials say all diesel fuel gels up in cold temperatures.

Bill Walsh with the Minnesota Department of Commerce said, “It really has nothing to do with the biodiesel. It’s a diesel fuel issue in the winter and cold weather.”

Officials add condensation getting into storage tanks or a bad blend of biodiesel could have also contributed to the problems.

An Ohio wind-turbine parts factory was the backdrop today as President-elect Barack Obama made his case to include renewable energy in his economic-stimulus package.

The Wall Street Journal reports Obama made his push at the Cardinal Fastener & Specialty Co. in a Cleveland suburb:

Mr. Obama has pledged to double over three years the amount of U.S. wind, solar and geothermal generating capacity, which is currently around 25,000 megawatts. In a down payment on that effort, House Democrats unveiled an economic-stimulus package Thursday that calls for $20 billion of tax cuts for renewable-energy production and an additional $54 billion of spending to modernize the country’s aging electricity grid, and to make homes, vehicles and buildings more energy efficient. For wind power, the bill would extend by three years a production tax credit currently set to expire at the end of 2009.

“A renewable-energy economy isn’t something pie-in-the-sky, it’s not part of a far-off future,” Mr. Obama said. “It’s happening all across America right now. It’s providing alternatives to foreign oil now. It can create millions of additional jobs and entire new industries if we act right now.”

A recent survey shows that Americans strongly support the stimulus plan. While some skeptics point out that there’s not enough manufacturing capacity to build all the wind turbines needed for Obama’s goal, it seems to me that a boost from the government would change that… and the goal would be met.

In one of his last official acts as Secretary of Agriculture, Ed Schafer announced today that USDA Rural Development has approved the first ever loan guarantee to a commercial-scale cellulosic ethanol plant.

Under the Biorefinery Assistance Program authorized by the 2008 Farm Bill, USDA will provide an $80 million loan to Range Fuels of Soperton, Georgia. When fully operational in 2010, the plant is expected to produce approximately 20 million gallons of cellulosic ethanol per year from wood and dedicated energy crops.

“The investment in this facility – which will make cellulosic ethanol from wood chips – has the potential to significantly advance the timetable for second generation ethanol production in this country,” Schafer said. “I visited the pilot plant last October and was excited to see how well the technology works. The funding announced today helps the Bush administration fulfill its commitment to reduce America’s dependence on foreign oil by developing alternative, renewable energy sources.”

The Biorefinery Assistance Program promotes the development of new and emerging technologies for the production of advanced biofuels – defined as fuels that are not produced from food sources. The program provides loan guarantees to develop, construct and retrofit viable commercial-scale biorefineries producing advanced biofuels. The maximum loan guarantee is $250 million per project.

According to the California Air Resource Board (CARB), a division of the California Environmental Protection Agency, beginning Jan. 1, every 2009 model year and newer car built for sale in California is be required to carry a label that clearly ranks the vehicle’s environmental impact (see example left).

The label will show the simple ranking system that provides consumers practical information that can help them choose the most environmentally friendly vehicle that still meets their transportation needs.

“This label will arm consumers with the information they need to choose a vehicle that saves gas, reduces greenhouse gas emissions and helps fight smog all at once,” said ARB Chairman Mary Nichols. “Consumer choice is an especially powerful tool in our fight against climate change.”

The environmental performance label will have two scores on a scale of 1-10, a Smog Score and a Global Warming Score. The average new car will score five on both scales. The higher the score the more environmentally friendly the car is . The California Air Resources Board also hosts a consumer web site, www.DriveClean.ca.gov, that provides information on the cleanest, most efficient cars on the market.

Less than a week before the inauguration, the American Soybean Association (ASA) has given President-elect Barack Obama a list of its 2009 policy priorities… and biodiesel tops that list.

This press release from the soybean advocacy group has details:

“ASA looks forward to working closely with the Obama Administration to achieve these policy priorities, which not only make sense for soybean farmers, but also benefit our entire country through reduced dependence on foreign oil, job creation, increased U.S. exports and a modernized infrastructure system,” said ASA President Johnny Dodson, a soybean producer from Halls, Tenn.

● Biodiesel: ASA’s top policy priority for 2009 is long-term enactment of the biodiesel tax credit before it expires on December 31, 2009. The biodiesel tax incentive and Bioenergy Program payments make U.S. biodiesel producers more competitive with petroleum-based diesel and with biodiesel imports, which benefit from foreign government subsidies. Biodiesel production reduces U.S. dependence on foreign oil while creating jobs and demand for homegrown renewable soybean oil.

The group is also supporting regulations for biodiesel that pay on all gallons, not just incremental production, under the Bioenergy Program for Advanced Biofuels.

A Des Moines, Iowa-based distributor of biodiesel has won that state’s Secretary of Agriculture award for biodiesel marketing.

This press release from Secretary Bill Northey says Keck Energy is the biodiesel winner of 2009 of the Secretary’s Biodiesel and Ethanol Marketing Awards (see Michelle’s post for the ethanol winner):

Mark Meyer of Keck Energy of Des Moines is the 2009 Secretary’s Biodiesel Marketing Award winner for their efforts to expand the availability of biodiesel and promote it’s usage by their customers. Meyer is President of Keck Energy and has worked to promote biodiesel usage at both the wholesale and retail level.

In particular, Meyer and Keck Energy have been involved on the ground level in preparing for and responding to the issues facing biodiesel and other biofuels.

Iowa is the nation’s leader in biodiesel production with 14 refineries cranking out nearly 318 million gallons of biodiesel each year.

Pennsylvania has produced enough biodiesel so that each gallon of diesel sold in the state will have to have a mix of the green fuel.

According to this National Biodiesel Board press release, Gov. Ed Rendell made the announcement at the Pennsylvania Farm Show that the 2 percent biodiesel mandate will kick in a year from now.

“The major challenge we’ve always had is getting fuel out to the public,” said Ben Wootton, President of the Pennsylvania Biodiesel Producers Group (PABPG) and President of Keystone Biofuels, a biodiesel producer. “We repeatedly hear ‘Where can I buy the fuel?’ This legislation helps ensure that the oil companies’ terminals offer biodiesel product.”

“Pennsylvania is one of only a handful of states that has adopted biodiesel requirement legislation,” said Shelby Neal, National Biodiesel Board Director of State Governmental Affairs. “Pennsylvania is improving its environment, enhancing economic development during a challenging time, and helping the US break its dependence on foreign oil.”

Once the state hits 100 million gallons of biodiesel production, a 5 percent mandate kicks in and progressively ramps up to 20 percent at 400 million gallons.

Florida’s Farm to Fuel initiative is helping to fund the first commercial scale cellulosic ethanol facility in the state.

Verenium Corporation has been awarded a $7 million grant as part of the initiative and will work with Florida agribusiness company Lykes Brothers to build the plant in Highlands county. Lykes will provide the necessary feedstock from approximately 20,000 acres adjacent to the site.

During a press conference in Tallahassee today, Florida Agriculture Commissioner Charles Bronson said, “The message today is that Florida’s agricultural industry can produce fuel crops on a major commercial scale without sacrificing food crops. This is a major step forward for our ‘Farm to Fuel’ program and hopefully will serve as a catalyst for additional investment by companies interested in producing renewable energy in Florida.”

This $25 million program provides matching grants to bio-energy firms for demonstration, commercialization and research and development projects utilizing Florida-grown biomass or crops. Verenium was also awarded an additional incentive package from the State of Florida.

Verenium’s conversion process originated from the landmark technology developed by a team led by Dr. Lonnie Ingram at the University of Florida.

President-elect Obama’s choice for Secretary of Agriculture sailed through his Senate confirmation hearings this week and may be confirmed in time to take office on Inauguration Day.

As expected, former Iowa Governor Tom Vilsack faced no opposition in the Senate and no controversial questioning.

With regard to biofuels in general and ethanol in particular, Vilsack stressed the importance of moving quickly into second generation cellulosic ethanol to address the issue of using food crops to make fuel. Vilsack said when it comes to ethanol, it is important to realize it’s “not just corn, and not just the Midwest can benefit.”

Sen. John Thune (R-SD) questioned Vilsack about the “blend wall” issue and the need to increase the level of ethanol approved for regular vehicles above ten percent. While Vilsack did not directly answer the question, he stressed that “USDA has a very, very important role to play in making sure we provide the research and the focus and direction to meet whatever the requirements are,” and said he has already spoken with the nominee for the Environmental Protection Agency about the biofuels issue and how they will work together on it.

Watch Thune’s questioning of Vilsack here on YouTube:

Iowa Secretary of Agriculture Bill Northey recently announced that Galva Holstein Ag of Galva, Iowa is one of the 2009 winners of the Secretary’s Ethanol Marketing Award. The award was created by the Iowa Department of Agriculture and Land Stewardship to recognize fuel marketers that have gone above and beyond in their efforts to sell renewable fuels.

“Iowa is the leading producer of renewable fuels and it is retailers and distributors, like [Galva Holstein], [who] are a link between that industry and the customers who are using the product,” Northey said. “Galva Holstein Ag has made promoting renewable fuels an important part of their businesses and these awards are an opportunity to recognize them for their efforts.”

Delayne Johnson of Galva Holstein Ag in Galva is that 2009 Secretary’s Ethanol Marketing Award winner for their efforts to promote ethanol and expand the availability of higher ethanol blends. They have been long-term advocates of renewable fuels and this year were the first fuel retailers in Iowa to install an ethanol blender pump, which allows customers with FlexFuel vehicles to select from a number of different ethanol blends. Galva has one of only 9 blender pumps currently operating in the state.

Galva Holstein Ag has aggressively marketed E85 and as a result has seen very strong sales, even though their pumps are located in rural communities. Their promotional efforts have included newspaper articles and advertisements, radio talk shows, company newsletters, direct mail to owners of FlexFuel vehicles, signage and auto dealer/service technician training.

Johnson was nominated by Lucy Norton from the Iowa Renewable Fuels Association

Virginia’s governor is proposing a series of grants and tax credits to help renewable energy sources, such as biodiesel, ethanol, solar and wind energy, grow in his state… and grow the green jobs that come with those sources.

This story from Virginia Business says Gov. Timothy M. Kaine sees the green jobs and renewable energy as a way out of the current economic problems the state is having:

Kaine’s proposals include:

- Sales tax exemption for solar photovoltaic, thermal systems and small wind systems.

Kaine says the package is a proactive move to reduce the use of foreign oil and help the environment.

The nation’s largest meat processor and a renewable fuel company have started construction on a biodiesel plant in Louisiana that will be the nation’s first renewable synthetic fuels plant.

This press release from Tyson Foods and Syntroleum Corp. says the Dynamic Fuels plant in Geismar, Louisiana will produce 75 million gallons of biodiesel a year when it goes to full capacity:

Construction offices are now in place and concrete foundations are being poured for the new facility. The project remains on budget and on schedule for startup in early 2010. Once in operation, the new facility will use Syntroleum’s Bio-Synfining™ Technology to convert animal fats and greases provided by Tyson into ultra-clean renewable diesel and jet fuel.

Jeff Webster, group vice president of Tyson’s Renewable Products Division, said, “We’re pleased with the progress made on this important renewable fuels project. Tyson is committed to revolutionizing the conversion of raw materials and by-products into high-margin initiatives, and the Dynamic Fuels venture is a cornerstone of this corporate strategy.”

The $138 million facility is expected to be finished by the end of this year with full operations by mid-2010.