Domestic Fuel

Temporary tariffs on American biodiesel imposed by the European Union could become more permanent.

In March, the EU, citing what it called unfair subsidies by the U.S. government that help American biodiesel producers, slapped temporary duties on biodiesel coming from this side of the pond. And, according to this story on CNMoney.com, the duties, which typically last five years, could be going up significantly:

The commission is proposing changes to the biodiesel duties: U.S. agriculture giant Archer Daniels Midland (ADM) will face a duty of EUR359 a metric ton of biodiesel, up from the temporary duty announced in March of EUR261/ton, the European official said.

Peter Cremer North America LP and all other companies will have to pay EUR409/ ton, down slightly from the temporary duty of EUR419/ton.

National Biodiesel Board officials have dismissed the Europeans’ complaints about American biodiesel as baseless.

What a rollercoaster couple of years it has been for Seattle-based Imperium Renewables. Back in August, 2007, I was telling you about how Imperium was opening a 100-million-gallon-a-year biodiesel plant in the Pacific Northwest, representing 30 percent of all U.S. biodiesel production. A year later, the company was in trouble, canceling long-term contracts, cutting production and laying off almost all of its workforce. The latest move by the European Union to impose trade protection tariffs against American biodiesel has all but shuttered the once mighty company. But as the man in the Monty Python movie said, “I’m not dead yet!”

This story from the Seattle Times says Imperium could re-start its biodiesel plant next year… IF the government doesn’t de-rail its latest efforts:

[Imperium founder and CEO John Plaza] hopes to resume operations next year, but that depends on what happens in a lengthy federal rule-making process to guide the future of biofuels.

But the final rules are still awaited, and the EPA has launched an extensive review to address a hotly contested issue: how to accurately compare the greenhouse-gas impact of biofuels compared with petroleum fuels.

Maybe they should ask for a federal bailout. Isn’t it funny that an industry that has a product that is popular with the public gets government interference while another one that produces unpopular cars gets all the help it could want? Talk about providing a disincentive for hard work!

InterState Oil Company is now offering E85 at the Pacific Pride station at 917 Cotting Lane in Vacaville, California.

“We want to be environmentally conscious,” said Greg Andrews, vice president of Interstate Oil. “Everyone is concerned about the air. We want to do our part.”

The company has been a family owned and operated business since 1970. It is a leader in promoting the use of alternative fuels in the California and Nevada markets. They offer terminal infrastructure and the ability to handle rail traffic.

Andrews acknowledged that the E85 venture is new for the company, which is curious to see how well the industry will do. “We’ll see what happens,” he said. “We feel there will be a demand and we wanted to align ourselves with what the state is already doing.”

Northeast Biofuels, LP who filed bankrupcy in January of this year, could have a new owner. Sunoco Inc. offered to buy the 100 million-gallon-per-year ethanol plant in Fulton, New York for $8.5 million. Northeast Biofuels officials say Sunoco is interested in fixing up the plant and returning it to operation.

Philadelphia-based Sunoco outbid companies that offered $1 million for the plant. Northeast Biofuels creditors claim they owe about $172 million. Many of the creditors have filed objections to the proposed sale. Now a bankruptcy judge must approve the sale.

The plant achieved “Mechanical Completion” on July 30, 2008 and “Interim Completion” on August 24, 2008. The plant was supposed to have reached “Interim Completion” by December 15, 2007 pursuant to the company’s agreement with its contractor, Lurgi PSI, Inc. The failure to meet construction milestones has led to significant disputes between the company and Lurgi PSI.

The head of a company that is making energy out of algae wants lawmakers to ensure that their type of fuel is part of upcoming Cap and Trade legislation.

The president of Sapphire Energy, Cynthia J. Warner, testified today before the full U.S. Senate Committee on Environment and Public Works to encourage legislators to allow industries that produce carbon dioxide, such as coal-burning electric generators, to collect and transport their CO2 to companies like Sapphire Energy that make industrial waste and greenhouse gases (GHG) into low carbon gasoline, diesel and jet fuels:

“Sapphire Energy believes that the business opportunity presented by climate policy can be transformative as we enter this Green Era,” stated Warner. “By getting ahead of the curve, we can produce a new generation of transportation fuels for the world that are low-carbon, produced right here in the United States, and that generate renewed economic growth and new green-collar jobs.”

“Sapphire’s algae-based fuels emit approximately two-thirds less CO2 than petroleum-based fuels at scale,” Warner explained. “When compared with conventional biofuels, such as corn ethanol and soy biodiesel, Sapphire’s Green Crude has significantly less than half their carbon impact, while delivering far greater energy density than either alternative.”

Warner says re-using the carbon dioxide to grow algae would remove that greenhouse gas from the environment and create a sustainable energy supply. Plus, she points out that over the next few years the algae industry will directly create approximately 11,700 jobs and another 30,000 jobs from indirect sources.

A new National Fuel Efficiency Policy was passed today adding to recent efforts to curb America’s dependence on foreign oil while spurring development in new clean transportation technologies that will help curb greenhouse gas emissions. This new policy, which sets the toughest fuel economy requirements in the country’s history, speeds up, by four years, the fuel economy standards that were passed in 2007 (CAFE).

This new policy will go into effect in 2012 and ramp up through 2016 and will require passenger cars and light trucks to get an overall average of 35.5 miles per gallon (it is currently 23.1 mpg) by 2016 while cars are expected to average 39 mpg (currently 27.5) and trucks will be required to get 30 mpg. 

Speaker Nancy Pelosi issued a public statement today saying, “Today’s announcement builds on Congress’ increase of fuel efficiency standards two years ago, speeds us toward meeting the goal of 35.5 miles per gallon by 2020, and establishes the first-ever national standard for global warming pollution from cars and trucks. These efforts will save consumers money at the pump, strengthen our national security by making America more energy independent, and cut global warming pollution that is causing a climate crisis.”

Pelosi is just one of dozens of organizations publishing statements today applauding the new policy. Bob Dinneen, President of the Renewable Fuels Association, stated, “President Obama has rightly recognized that improving vehicle fuel economy is an important tool in reducing America’s reliance on foreign oil.  Together with the increasing use of renewable  fuels like ethanol, these technologies represent the most immediate and effective solution available to help meet our energy and environmental challenges.”

Dinneen went on to state that today’s policy decision does little to effect ethanol’s role in the fuel market place and concluded with, “Raising fuel economy standards, allowing for ethanol blends in excess of 10 percent, and continuing to invest in next generation renewable fuel technologies are the kind of forward-looking policies that will begin to change America’s foreign oil habit. President Obama’s announcement today, together with his recently reaffirmed commitment to biofuels, are appropriate steps in that direction.”

A cellulosic ethanol biorefinery in Kentucky has been put on hold due to funding concerns.

A little more than a year ago, Alltech of Lexington, KY announced plans for a $70 million plant to be partially funded with state and federal grants. “We’ve basically looked at where ethanol is today and decided to put that project on hold,” says project head Dr. Mark Lyons. “The reason for this was generally in terms of the economic crisis where we all find ourselves. Funding ethanol is not very popular right now with the banks.”

Alltech, which is a very successful international bioscience, animal health and nutrition company, received a $30 million Department of Energy grant for the project and planned to get bank financing for the balance. They had been talking about halting the project altogether, but DOE agreed to allow them to place it on hold.

Listen to an interview with Dr. Lyons conducted by Chuck Zimmerman at this week’s Alltech Symposium in Lexington. alltech-symposium-09-mark.mp3

Podcast: Play in new window | Download (1.4MB)

Officials in St. Paul, Minnesota believe a pilot project to grow algae at the city’s wastewater plant will clean the water before it’s pumped back into the Mississippi River and provide biomass for biofuels.

Biomass Magazine reports the process will also take nitrogen and phosphorus out of the water that can be used to make fertilizer:

A team of researchers from the University of Minnesota partnered with the Metropolitan Council for the project, using centrate—liquid waste separated from the solids—to grow several species of algae that can thrive in wastewater. The project started in 2006 on a much smaller scale, using wastewater in labs, and recently moved to Met Council’s treatment plant.

Using a wastewater plant to grow the algae saves a significant amount in capital and energy, said Rod Larkins, associate director of IREE. “You have to fertilize algae, but in our case, the fertilizer is already there,” he said. “You save significant money by not having to add nutrients to the algae.” The necessary high volume of water and heat are available, also.

The project will use an enclosed photobioreactor that allows the algae to grow in a smaller area. Officials believe they could produce daily 1,000 to 4,000 gallons of oil to turn into biodiesel.

The $1-a-gallon tax credit that biodiesel now enjoys… but is set to expire at the end of this year… could have new life if a new piece of legislation makes it through Congress this year.

According to the Northwest Arkansas News, Sen. Blanche Lincoln (D-Ark.) has introduced legislation that will promote several renewable energy options, including the biodiesel credit:

Lincoln said she introduced legislation to do the following:

Alternative energy sources, such as biomass and biofuels, offer job-creation opportunities for new and expanding small businesses, and she is pushing for incentives to help build a strong alternative-energy industry in the state

The article goes on to say that Lincoln feels these incentives are necessary to sustain the renewable fuels market.

Pacific Ethanol, Inc. announced today that its has filed for Chapter 11 of the U.S Bankruptcy Code. Pacific Ethanol is just one of many ethanol plants that have filed bankruptcy protection over the past 12 months. The Company and its marketing subsidiaries, Kinergy Marketing LLC (“Kinergy”) and Pacific Ag. Products, LLC (“PAP”), have not filed for Chapter 11 bankruptcy protection. 

Pacific Ethanol is expected to continue to manage the Plant Subsidiaries under an Asset Management Agreement and Kinergy and PAP are expected to continue to market and sell the Plant Subsidiaries’ ethanol and feed production under existing Marketing Agreements. Pacific has reached a financing agreement with WestLB AG that will allow them to meet customer needs, but the financing deal still needs approval from the bankruptcy court. 

In a company statement today, Neil Koehler, Pacific Ethanol’s CEO and President said, “We have worked well with our creditors to develop a plan that we believe allows us to continue operations and meet our commitments to our customers and vendors.  We are unwavering in our vision of being a leading producer and marketer of low carbon fuels in the Western United States.  While the market environment for the ethanol industry has been challenging over the last several quarters, we remain confident that a restructured company will grow and prosper as the demand for low carbon fuels increases.” 

Pacific Ethanol’s Chairman of the Board, Bill Jones, added, “We appreciate the support of West LB, Wachovia and the work of our management team. Our objective is to move this process forward as quickly as possible so that we can maintain our focus on serving our fuel and feed markets.”

Valero continues to position itself as a growing player in the ethanol industry through its investment in Qteros (formerly SunEthanol), a Massachusetts based company who owns the Q Microbe(TM) technology which turns biomass into ethanol. The investment was established through its acquisition of certain assets of Verasun Energy. Valero purchased several Verasun Energy plants this past April.

Qteros, has developed a proprietary technology known as “C3″ (Complete Cellulosic Conversion), using the naturally occurring Q Microbe(TM). First discovered in Western Massachusetts by Qteros Founder and Chief Scientist Dr. Susan Leschine, the Q Microbe(TM) has the unique ability to transform virtually any cellulosic material into ethanol in a single step, avoiding the usual two-step process in which expensive enzymes are used to break down the biomass before it can be fermented.

In a company statement released today, Qteros’ CEO Bill Frey said, “Investment from established energy companies like Valero enables us to continue developing and scaling-up our technology. Qteros is moving ahead with our plans to open a pilot plant this year, as we continue preparations to expand to commercial scale production.” Frey was the former head of Dupont’s biofuels division.

In addition to the Valero investment, the company recently received $2 million in U.S. government appropriations towards a pilot plant it plans to open this summer in Springfield, Mass. This is one of several grants they have received from the U.S. Department of Energy. The company has also received funding from Venrock, Battery Ventures, BP, and Soros Fund Management.

Looking to take an eco-friendly vacation? Well, your resort options just got bigger with the announcement that Catalyx Inc., has been contracted to build a 100% Eco-Tourism resort owned by the Ramona Band of the Cahuilla Indian Tribe.

This energy friendly resort will be located in the Anza Valley which is near San Diego, California. It is designed to operate completely off-the-grid by employing several alternative energy technologies to meet all of its energy needs. The site will reuse much of its own waste byproducts, such as sewage, biogas and restaurant food waste, and the completed project is expected to produce 1 megawatt-Hr (1000 KW-hrs) per day of renewable energy, with propane as a back up energy source until the project is complete.

“We want to create a truly natural retreat which mirrors our ancestral heritage of living in harmony with Mother Earth,” said John Gomez, Cultural Director for the Ramona Band.“When finished, this resort will not be a burden on the environment. All energy will be renewable and all waste and wastewater will be recycled.” 

Phase one is expected to be complete in August, 2009 and is being made possible by a joint venture between the Ramona Band, the Department of Energy, the United States Department of Agriculture, and multiple other Federal agencies. Upon completion it will offer visitors a peaceful retreat and an educational experience about the Native American culture, habitat, natural remedies, and care of the environment through the use of green energy and sustainable lifestyle practices. 

Gomez noted, “This resort will be a model for other tribes to generate revenues for themselves in a more appealing manner that is true to their heritage.” 

Catalyx, Inc. will provide multiple renewable energy and water treatment technologies as well as contract with third parties for additional technologies to be used at the resort and throughout the reservation.

The Environmental Protection Agency is allowing another 60 days for comments on the proposal to allow an increase in the amount of ethanol that can be blended into regular gasoline.

The original public comment period was to end on May 21 and will now end on July 20. Growth Energy CEO Tom Buis said, “We are aware of over 10,000 Americans who have already voiced their support for a higher blend of ethanol in our fuel supply and this extension makes it possible for thousands more to participate.”

National Corn Growers Association (NCGA) President Bob Dickey said the extension will give farmers behind on planting more time to get comments submitted. “Because of the importance of this issue to America’s farmers and the pressing need to get our crops in the ground, we asked EPA to extend the time for comments from 30 to 90 days. Our growers need this extra time to be full participants in this important public policy process,” he said.

The current limit on the amount of ethanol that can be blended into a gallon of gasoline is at ten volume percent ethanol (E10) for conventional (non flex-fuel) vehicles. Growth Energy and 54 ethanol manufacturers submitted the E15 waiver application on March 6, and EPA must make a decision by December 1, 2009.

The House Agriculture Committee last week introduced a bill to change provisions in the Renewable Fuel Standard (RFS) that are “limiting the potential for clean, homegrown renewable biofuels to meet our nation’s energy needs.”

The Renewable Fuel Standard Improvement Act (H.R. 2409) was introduced by House Agriculture Committee Chairman Collin Peterson (D-MN) and Ranking Member Frank Lucas (R-OK) along with a bipartisan group of 42 other members of Congress.

“The unreasonable restrictions placed on the biofuels industry in the 2007 Energy Bill were never debated by Congress, and I’ve spent the past two years trying to undo the damage that we’re seeing now that EPA has published the proposed regulations that will make it impossible to meet the RFS,” Peterson said. ““In order to ensure that a clean, homegrown biofuels industry will succeed in the United States, we need to have Federal energy policies are flexible, practical, and innovative.”

Lucas says the most important provision in the bill is the expansion of the acreage eligible to produce biomass feedstock. “This will ease pressure on the current corn production system and it will open the way for more rapid development of next generation ethanol,” he added.

The bill eliminates the requirement that the Environmental Protection Agency consider indirect land use when calculating the greenhouse gas emissions associated with advanced biofuels. Currently, there is no reliable method to predict accurately how biofuel production will affect land use in the United States or internationally.

It also strikes the restrictive definition of renewable biomass included in EISA and replaces it with the definition included in the 2008 Farm Bill. The Farm Bill definition of renewable biomass was developed in consultation with appropriate Federal agencies and other Congressional Committees and was discussed and debated in a transparent manner, unlike the EISA provisions, which were never openly discussed or debated in Congress.

Plans for the fourth Florida Farm to Fuel® Summit are progressing well and organizers expect the event on July 29-31 to be bigger and better than ever.

This year’s summit will once again include leaders from the agricultural, government, academic, technology, and financial communities who will share their progress in reaching the commercial production of biofuels and renewable energy in the Sunshine State. Topics to be addressed will include sustainability, biomass feedstocks, environmental and land use approvals, and agriculture and forestry in a reduced carbon economy.

Registration and more information is available at FloridaFarmtoFuel.com.