Domestic Fuel

Propel Fuels and Enterprise Rent-A-Car will partner to educate on Enterprise’s FFV fleet in Sacramento, Calif. Twelve Sacramento Enterprise locations will participate in the program to begin in a few months.

“We really applaud Enterprise for their commitment to E85 and their commitment to flex fuel vehicles,” said Rob Elam, president of Propel Fuels. “We think that – especially in states like California – that kind of leadership from business is very much appreciated by both the public as well as policy decision makers at the state level.”

The collaboration will include supplying Enterprise’s customers with information on E85 and provide a listing of Propel Fuels’ E85 locations. Propel Fuels recently established five “Clean Fuel Points” or, small modular fuel dispensers, in and around the Sacramento area.

Elam stated, “[The station owners] don’t need to put any money upfront to deploy any sort of infrastructure, they don’t have to manage the fuel procurement, they don’t have to do any of the customer outreach, and they also don’t have to do any of the credit card integration.” He also noted that the Enterprise partnership could expand as more Clean Fuel Points come about in additional areas of the state.

The ethanol industry is unanimous in its praise for the actions announced today by the Obama administration with regard to the future development of biofuels under the Renewable Fuels Standard and the creation of a Biofuels Interagency Working Group.

During a press conference immediately following the announcement, Renewable Fuels Association president Bob Dinneen said, “The president has sent an incredibly important signal today that biofuels are going to be a key component in his strategy to address energy, economic and environmental challenges. This is a positive step forward for the industry.”

Growth Energy CEO Tom Buis says the comprehensive plan announced today will decrease dependence on foreign oil, create American jobs and cut greenhouse gas emissions. “America’s ethanol producers stand ready to help the president, and his working group, meet their ambitious goals,” said Buis.

The American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings said they are grateful to President Obama for outlining how biofuels will continue to play an integral role in our nation’s economic and energy security policy. “Importantly, the President’s directive will ensure that science – not politics – determine the future of biofuels, which will surely disappoint opponents of ethanol whose PR campaign has been designed to destroy public policy support for ethanol,” Jennings said.

All groups were also pleased that EPA committed to further study the controversial theory of indirect land use change before finalizing the greenhouse gas emissions scores for biofuels. Dinneen says “just comparing apples to apples” the direct effects of ethanol production show a better than 60 percent better improvement over petroleum. “Trying to evaluate indirect effects, particularly international indirect effects, is highly dependent on assumptions used and data available and there is a great deal of uncertainty about this,” said Dinneen.

Furthermore, Buis said that indirect land use change as currently proposed doesn’t allow an accurate comparison of fuels because it doesn’t include the indirect effects of other fuels. “To include indirect effects in regulations without even considering the indirect effects of other fuels would unfairly bias those regulations against biofuels,” said Buis.

Jennings said they encourage the Interagency Working Group to require fossil fuels undergo the same lifecycle analysis that has been imposed on biofuels, “an evaluation which will show that future sources of oil are going to have some serious consequences for the environment, while future sources of biofuel are going to be even better and more sustainable than they are already.”

See EPA’s proposed rule for the RFS here.

Three government agencies have been given a presidential directive to aggressively accelerate the investment in and production of biofuels.

The U.S. Departments of Agriculture and Energy, together with the Environmental Protection Agency will make up the the new Biofuels Interagency Working Group. “The president has directed us to create a comprehensive biofuel marketing development program to focus on the infrastructure that will be necessary for this industry to be a permanent part of the American economy and to do it in a sustainable way,” said Agriculture Secretary Tom Vilsack during a conference call this morning with EPA administrator Lisa Jackson and Energy Secretary Steven Chu.

“In the 2007 Energy Independence and Security Act (EISA), Congress recognized the need for a homegrown fuel source,” said Jackson. She said EPA is today publishing a standard that establishes four categories of renewable fuels and is soliciting peer reviewed, scientific feedback to ensure that the best science available is utilized prior to implementation.

Secretary Chu noted that agriculture is one of the nation’s greatest resources for energy. “We have incredible capacity not only to grow the food we need and to have dynamic exports, we can also grow a considerable amount of energy,” said Chu. He announced that $786 million will be invested through the recovery act for the development of advanced biofuels and the expansion of commercial biorefineries. Chu also said they will be creating an Algae Biofuels Consortium for the development of algae biofuels.

The working group is part of the Proposed Regulations for the Renewable Fuels Standard released by EPA today.

Listen to the press conference here:usda-epa-doe.mp3

Podcast: Play in new window | Download (12.8MB)

The White House will form a working group to be chaired by the heads of three government agencies to speed the sustainable development of biofuels.

The action was announced during a press conference this morning with Agriculture Secretary Tom Vilsack, EPA Administrator Lisa Jackson and Energy Secretary Steven Chu, who will head the new Biofuels Interagency Working Group. They pledged to work together to accelerate funding to encourage production of next-generation biofuels from biomass and other non-corn feedstocks.

Biodiesel makers have been extending their feedstocks into the various types of oils, including waste greases and even animal fats. But the problem is converting the free fatty acids in the feedstocks into biodiesel, sometimes a long and costly process. Well, it looks like researchers at Wake Forest University have found a way to do it quicker and cheaper.

This article from PhysOrg.com says the scientists believe they have a formula for a catalyst that will speed up the biodiesel-making process so that the green fuel could provide 5 percent of the nation’s fuel needs:

“If we, as a nation, can do that, that’s enough biodiesel to replace the need for oil from a country such as Iraq,” said Abdessadek Lachgar, a chemistry professor at the university and one of two officials supervising the project along with Marcus Wright, a lab manager and investigator in the biodiesel work…

That’s where the Terrafinity catalyst comes into play. Researchers are developing an inexpensive method for converting the free fatty acids into biodiesel with a yield greater than 98 percent in less than 15 minutes. The catalyst can be produced for 11 cents a gram in the laboratory, although Lachgar said that the per-gram cost will be significantly reduced in a commercial setting.

The project right now costs about $85,000… a small cost when you consider how much it could make for the biodiesel industry and how much it could save us from foreign oil.

A refinery in Louisiana slated to turn chicken fat, along with beef tallow, pork lard and other greases, into high-quality biodiesel and jet fuel by next year.

This story in the Arkansas Democrat Gazette says the Dynamic Fuels LLC refining plant in Geismar, La., a partnership between Tyson Foods and Syntroleum Corp., is on time and on budget:

Bob Ames, who oversees Tyson Foods’ Renewable Energy group, said construction on the Louisiana plant remains on budget.

Jeffrey Bigger, director of the Dynamic Fuels LLC management committee, said in October that the plant is the first such fuel production facility in the United States.

When construction on the Dynamic Fuels plant is done, the refinery will crank out 75 million gallons of biodiesel per year. It will employ 45 people and have an annual payroll of more than $4 million.

Biodiesel production in the United States has dropped sharply, and the green fuel’s biggest advocate warns of the dire consequences of that drop and urges implementation of federal environmental rules that would support biodiesel and other renewables.

The National Biodiesel Board says commercial biodiesel production in the U.S. in March 2009 fell to 30 million gallons… down from 49 million gallons just a year earlier and as low as 2006 levels. In this statement from NBB CEO Joe Jobe, he says that if the trend continues, industry production will only be half of the 700 million-gallon output in 2008… putting the country “at risk of going backwards in energy security” :

“A primary reason for this dramatic downturn is the absence of the federal Renewable Fuels Standard. The RFS would initially require the use of 500 million gallons of bio-massed based diesel, which would substantially stabilize the young biodiesel industry as it struggles to compete on an uneven playing field.

“We are at risk of losing the only domestically produced homegrown fuel for diesel engines. In fact, biodiesel is the only commercially available advanced biofuel, as defined by the federal government, which is currently derived from any fat or plant oil. It is the most diverse fuel on the planet. At last count, 176 plants in the U.S. enabled production of almost 2 billion gallons of homegrown, renewable fuel per year, but many plants sit idle, and at least 20 have gone out of business. This costs jobs and increases America’s dependence on foreign oil at a time when President Obama is calling for economic investment in American renewable energy. Our industry stands ready and waiting to answer that call.

An Energy Information Administration (EIA) report blames the closing of European markets because of punitive tariffs put on American biodiesel by the Europeans earlier this year for part of the reduction in U.S. production.

The long-awatied notice of proposed rulemaking on the Renewable Fuels Standard will be issued Tuesday morning at 10:00 Eastern time by the Obama administration.

The announcement will be made jointly in a press conference by Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu and Environmental Protection Agency Administrator Lisa Jackson who will discuss President Obama’s commitment to advance biofuels research and commercialization under the rule.

EPA is required under the 2007 Energy Bill to consider ‘significant indirect emissions’ when determining greenhouse gas emissions for fuels under the so-called RFS-2 program. The new RFS requires new corn ethanol plants and new cellulosic ethanol plants to produce a fuel that emits fewer life-cycle greenhouse gasses relative to regular gasoline and that indirect land use changes should be figured into that.

However, methods for calculating such ‘indirect land use changes’ – such as from forest or grassland to crops – are not yet adequately developed, and therefore many are arguing they should not be used in calculating the emissions. “Otherwise, we’ll exclude some good biofuels and stifle the investment that is so essential to our national renewable fuels strategy,” says Senator Tom Harkin (D-IA), who was one of a group of senators who asked the EPA not to propose regulations assuming that greater U.S. biofuels use would increase carbon dioxide emissions.

The Renewable Fuels Association has already scheduled a press conference for one hour after the administration’s formal announcement to comment on the proposed rulemaking.

Peter Collorafi and Douglas Pelmear have come up with a plan that they say will revolutionize the automotive Industry. Their V-8 engine Revenge Verde will have an expected 400 horsepower, 500 foot lbs of torque and will run on E85. it also will receive 100-miles per gallon of fuel.

The vehicle, produced in Indiana, is expected to be on the streets before the end of 2009. The specifics are “top secret” but the builders know that if they produce an engine that runs on just ethanol, they’ve created an engine that can run at a higher compression ratio, creating more power using less fuel.

Collorafi says, “We’re hoping to put production plants back to work again and producing vehicles. The true winner here is the Americans going back to work putting fuel-efficient engines in production vehicles. That’s our goal.”

It appears that the race is on as many states across the country vie for the winning position of “leader in renewable energy”.  The latest state to post an entry is Missouri. The state is turning to alternative energy to replace jobs lost due to economic turmoil that includes an auto industry near collapse. Several months ago, President Obama was in Colorado to sign the economic stimulus package and praise the state for its support of alternative energy.

More specifically, Missouri is pitching itself to become a leader in the wind industry due to its proximity to the country’s wind corridor (which is what also make states like Nebraska and South Dakota good candidates for wind energy). Here are other reasons why they cite contention for top spot:

• • With a workforce of over 3 million people, Missouri’s labor force exceeds the entire populations of 22 states, including neighboring Kansas, Arkansas, Iowa, and Nebraska.
• • Missouri ranks eighth in the nation for low business costs, including labor.
• • Missouri higher education is actively engaged in alternative energy and wind power.
• • According to CNBC’s “American’s Top State for Business, July 2008,” Missouri has the 10th best transportation network in the nation.
• • Missouri has the 14th highest average U.S. wind speed (10.1 mph), higher than Texas, Ohio, Colorado, and California.

Interested in learning more about Missouri’s plan to become a leader in wind energy? The Missouri Partnership is hosting a Wind Energy Supply Chain Workshop series. The next session is scheduled for May 12, 2009.

While the United States government drags its feet on making a decision to offer American motorists the choice to use E15 at the pump, the Brazilian government is contemplating an ethanol blend increase from E25 to E30. Currently the EPA comment period to get feedback on the increase to E12 or E15 is open, and the U.S. ethanol industry is actively lobbying for an extension of the comment period.

Simultaneously, the ethanol industry in Brazil, led by Unica (the Brazilian sugarcane industry), is aggressively pushing their federal government to increase the ethanol blend wall according to a report in the April 7th issue of Biofuels Brazil. Brazilian ethanol producers are facing the same scenarios as producers in the States as they contend with low prices and surplus supply.

The Iowa Renewable Fuels Association (IRFA) sent out a statement today calling for more aggressive action from the U.S. government. “Despite all of the rhetoric, the United States isn’t leading on biofuels issues,” said Monte Shaw, executive director of IRFA.  “As we tip-toe toward E15 and worry about the impact on weed-whackers, Brazil has moved quickly to put in place policies that have freed them from foreign oil.  Maybe the very real price of foreign oil in terms of blood, treasure and environmental degradation should be taken at least as seriously as any hypothetical challenges higher blends pose for small, off-road engines.”

According to Shaw, the foot dragging and arguments against approving E15 blends give many Iowans a sense of deja vu. Thirty years ago, critics of ethanol were calling for more testing of both conventional cars and small engines when considering E10; they are calling for these same tests as today. Ethanol propronents also remain frustrated as they cite the success that Brazil has had not only in achieving oil independence but exporting biofuels as well, and question why the U.S. can’t achieve the same goals.

The notice of proposed rulemaking on the Renewable Fuels Standard may be imminent.

News out of Washington last week was that the Office of Management and Budget has completed the review of the Environmental Protection Agency’s rule, specifically as it relates to indirect land use and greenhouse gas emissions of biofuels compared to gasoline.

Renewable Fuels Association president Bob Dinneen says they expect to see the rule from EPA proposed soon. “The agency has been working hard to get the rulemaking done and is under increasing pressure to do so,” said Dinneen. “Some believe that the ethanol industry is reluctant to see this rule hit the streets, that we don’t want to see an open and honest debate about the greenhouse gas issues that are teed up in this rulemaking. Just the opposite is true. We want this rule out there, we want to see all the numbers available for the public.”

Dinneen says they believe a complete evaluation of the science “will demonstrate that ethanol’s impact on indirect land use change is minimal and the significant direct benefits of adding ethanol to gasoline is extraordinary and is a policy that needs to be expanded.”

There are concerns that the recent decision by the California Air Resources Board regarding indirect land use impacts of ethanol will have a bearing on EPA’s rulemaking, but Dinneen believes the agency is looking at a different model for assessing greenhouse gas impacts that will be more favorable for ethanol and other biofuels.

Ethanol production was up in February compared to the previous month and a year ago.

According to the Energy Information Administration (EIA), American ethanol facilities produced 647,000 barrels per day in February. That’s up 25 percent from February 2008 and 17,000 barrels per day more compared to the previous month.

Ethanol demand, as calculated by the Renewable Fuels Association, also increased from last year. February demand was 595,000 barrels per day, up 33,000 barrels from February 2008.

Corn farmers who had contracts to provide corn for ethanol plants owned by bankrupt VeraSun are being offered a deal by Valero Energy, which purchased some of the company’s assets.

Valero officials say they are offering farmers with forward contracts a bonus of 40 percent of the difference between the cash price for corn and the futures price on the contract. Valero spokesman Bill Day says most suppliers have accepted the deal. We said when we bought those plants we were looking forward to having a good working relationship with local suppliers. This is what we meant by that. It’s good for us, it locks in supply. It’s good for them as well,” said Day. Valero agreed to purchase seven ethanol facilities and have closed the deal on six of them. Four of the plants are in currently operating.

Last week, Valero reported a first-quarter profit increase 18 percent on higher margins for processing crude into gasoline and other petroleum products. CEO Bill Klesse says they expect business conditions to improve in biofuel under the government’s fuel blending requirements. “Acquiring these assets at a time of low ethanol margins enabled us to pay only 30% of replacement cost for some of the industry’s best ethanol plants,” Klesse said.

For some time, we’ve been telling you about Destiny, Florida, a 41,000-acre community founded in 2005 in South Central Florida, designed to one day be America’s first eco-sustainable city with 16,000 green tech jobs, including building solar panels (see our Feb. 27, 2009 Domestic Fuel podcast and April 22 post). The project took another step closer to that goal when Destiny officials signed a deal with Dominion Development Partners to create the Alternative Energy Industrial Park at Destiny, which will attract alternative energy technology companies.

The deal was announced in this press release from Anthony V. Pugliese, III, Managing Partner and CEO of Destiny:

The initial 500-acre phase of the Alternative Energy Industrial Park at Destiny is planned to include a Research and Development Campus housing a Technology Incubator, Distribution Center, and an Academic Village and Training Center. The park is projected to ultimately generate thousands of higher paying “green collar” jobs, Pugliese stated.

Future phases will include energy generation assets to power the city, and may include ethanol and biodiesel processing as well as pyrolysis, gasification and other “waste-to-energy” facilities. The “power island” will deliver surplus green energy to the transmission grid utilizing various “smart-grid” technologies.
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