Domestic Fuel

Oregon is the latest state to look to garbage for energy. Waste Management and McMinnville Water & Light will soon use everyday garbage to power thousands of homes. The $10 million plant will be sited next the landfill west of McMinnville. This plant is the first for Yamhill County and is expected to be operational by mid-2010. Once completed, the energy created will be used to power 2,500 homes.

George Duvendack, Riverbend’s district manager said in a company statement, “Our groundbreaking ensures that not even garbage will go to waste. By investing in landfill-gas-to-energy, we are developing clean and renewable energy to power homes and advance sustainability in our community.”

The plant works by collecting methane gas–created from the natural decomposition of waste–from the landfill through a network of underground pipes. From there, the gas will be used to power engines, which will then generate electricity on-site for sale to McMinnville Water & Light. The EPA has endorsed landfill gas an an environmental friendly energy option.

“Landfill gas is an especially smart option for us because it is a resource we already have in the community. That translates to lower costs for customers because there are no transmission fees,” said Paul Elias, general manager of McMinnville Water and Light. “The fact that landfill gas is renewable and reliable is important as well. Wind and solar are renewable, but not as reliable. With gas from Riverbend, we will have a steady and reliable source of clean and low-cost energy for decades to come.”

Waste Management is also developing a similar energy plant at its Columbia Ridge Landfill, located in Arlington, Ore., which is expected to go on-line later this year.

Renewable energy was part of Barack Obama’s speech to the United Nations today, as the American president outlined his vision for the future before the world body.

Obama told delegates that the U.S. has spent $80 billion in clean energy. But the overall efforts of using renewable energy to save the climate are for the entire world:

We will move forward with investments to transform our energy economy, while providing incentives to make clean energy the profitable kind of energy. We will press ahead with deep cuts in emissions to reach the goals that we set for 2020, and eventually 2050. We will continue to promote renewable energy and efficiency, and share new technologies with countries around the world. And we will seize every opportunity for progress to address this threat in a cooperative effort with the entire world.

Another world leader made a more personal appeal for the world to address climate change. President Mohamed Nasheed of Maldives, an Indian Ocean island nation that could simply disappear if rising oceans were not checked, told the U.N. that more than speehes are needed to save his country from a watery fate.

A study commissioned by the National Corn Growers Association finds that proposed regulations by the U.S. Environmental Protection Agency to implement the expanded Renewable Fuel Standard would cost the ethanol industry as much as $420 million a year.

The study found that the up-front cost to the ethanol industry for compliance with the new regulations could total $30 million, with annually recurring compliance costs reaching up to $420 million.

Higher costs for ethanol producers mean increased costs for corn growers, said Steve Ruh, chairman of NCGA’s Ethanol Committee. “Paperwork has a price,” Ruh said. “At a time of economic recession, the last thing any industry needs are new regulations – especially unneeded recurring reporting requirements – that can cost up to a half-billion dollars a year.”

Ruh says the cost of the new regulations at the farm level will mainly be in the form of extra management and recordkeeping time associated with the “renewable biomass” definition. It is also possible that in some geographic areas other costs will be forced down to the farmer level of the supply chain.

The report, “Compliance Costs Associated with the Proposed Rulemaking for RFS2,” was prepared by Informa Economics.

Minnesota Governor Tim Pawlenty supports an increase in the amount of ethanol blended into gasoline to at least 15 percent and is hopeful about the future of next generation biofuels.

The governor who might run for president in 2012 answered several questions about ethanol from reporters after helping celebrate the grand opening of the new Syngenta Seeds headquarters in Minnetonka, MN earlier this week.

On the topic of increasing the allowable ethanol blend to 15 percent, “That’s something we have pushed in Minnesota and there’s some good work that has been done at Minnesota State at Mankato showing you can use 15 percent or more without damaging the engines,” Pawlenty said. “We’ve tried to encourage EPA to look at that and they seem to be unwilling or unable to make a decision so far.”

The governor is proud of the ethanol industry in Minnesota and the work being done by companies like Syngenta Seeds to increase corn yields to meet the demand for food, feed and fuel. “We’re going to have to have technological breakthroughs, yields are going to have to be increased,” he said. “That’s why Syngenta is so important, not just for the economy in general, but for that whole mission.”

Pawlenty also looks forward to breakthroughs that will lead to the large scale commercialization of cellulosic ethanol. “We’re hopeful that we’ll see next generation biofuels in the not too distant future based on cellulosic ethanol,” he said. “So far in terms of being able to deploy it, it’s been somewhat small scale but we’re hoping there will be more breakthroughs on that.”

Gov. Pawlenty has announced he will not seek re-election as governor and after his appearance at the Values Voter Summit over the weekend and preparations to launch a national fundraising committee has fueled more speculation that he is considering a run for president in 2012.

Iowa’s two senators and others from the Midwest are co-sponsoring amendments to legislation that funds the Environmental Protection Agency (EPA) which would address two important issues facing the ethanol industry.

Iowa Senators Tom Harkin (D-IA) and Chuck Grassley (R-IA), along with Ben Nelson (D-NE) introduced an amendment to the Senate Interior-Environment Appropriations bill that would prevent the EPA from going ahead with regulations that would limit the production and use of biofuels required by Congress’ 2007 energy bill. The proposed amendment would prohibit the EPA, for one year, from spending funds to include international indirect land use change emissions in the implementation of the Renewable Fuels Standard (RFS).

In addition, Grassley is working with Senator Nelson on an amendment that would require EPA to approve an increase in ethanol blend levels from 10 percent to 15 percent. “I still believe that the best way for this matter to be resolved is for the EPA to review the science and approve the higher blend,” said Grassley. “But the EPA needs to know that we’re watching the all-too-lengthy deliberating process that they seem to be going through, and of course their lack of action in this area. And it’s time for them, I think, to move forward.”‘

Debate on the appropriations bill began today on the Senate floor but neither amendment was brought to a vote.

The Iowa Renewable Fuels Association (IRFA) has announced the winners of its drawing during IRFA’s participation in the Iowa Corn Fed GameDay promotion prior to the Iowa vs. Iowa State football game on September 12, 2009, in Ames, IA. The winners of $50 of free ethanol ar Becky Jordan of Collins, IA, Lynn Hardin of Jefferson, IA, and Paul Scott of Coon Rapids, IA.

The Iowa Corn Fed GameDay is part of a GameDay partnership that includes the Iowa and Iowa State football, basketball, and wrestling seasons. Consumers can enter the drawing once each month from July 10 through November 21 online at www.iacornfed.com.

This particular event was sponsored by the Iowa Corn Growers Association and held just outside the north entrance of Jack Trice Stadium, was a pregame showcase of the many uses of corn and its importance to Iowa. IRFA was invited to participate in this event to highlight the many benefits of corn-based ethanol and other renewable fuels. IRFA’s display, in addition to including an educational exhibit on the uses and benefits of ethanol and biodiesel, encouraged fans to enter the drawing for $50 of free ethanol gift certificates which may be used for the purchase of ethanol-blended fuel.

IRFA Biofuels Manager Grant Menke stated: “IRFA congratulates the three winners and encourages all Iowans to follow their lead by choosing Iowa-produced renewable fuels at the pump. Together we can boost Iowa’s economy and do our part to reduce dependence on foreign oil.”

Today, PSEG Solar Source announced that it has completed an acquisition from juwi solar inc. of two utility-scale solar projects to be located in Florida and Ohio. PSEG also announced it is developing a solar project in New Jersey. Combined, these three solar projects will have a total capacity of nearly 30 megawatts and are scheduled to be completed by the end of 2010.

juwi solar will provide the engineering, procurement, construction, and initial operation and maintenance for the projects in Florida and Ohio. Specifically, the projects include a 15.0 MW DC (direct current) solar farm on 100 acres in Jacksonville, Florida, and a 12.0 MW DC solar farm on 80 acres in Wyandot, Ohio. In addition, a third project is underway in the Mars Solar Garden, a 2.2 MW DC facility located on 18 acres adjacent to Mars Snackfood’s U.S. headquarters in Western New Jersey.

All three projects utilize thin film panels provided by First Solar and will be ground-mounted. The projects together will include 380,000 solar panels and represent approximately a $100 million investment by PSEG Solar Source.

“PSEG Solar Source is pleased to have established a relationship with juwi solar on these projects,” said Diana Drysdale, who heads PSEG Global’s solar business. “PSEG Solar Source will continue to seek opportunities throughout the U.S. to help address climate change and help states meet their solar and renewable targets.”

Another project of interest is PSEG’s regulated gas and electric utility in New Jersey called PSE&G. This project consists of an 80 MW Solar4All program that involves attaching solar panels to 200,000 utility poles.

This is a reminder that today at 2:00pm Eastern time the Renewable Fuels Association will be hosting another 1 hour online Twitter chat session. It’s FuelChat and you will have the chance to ask questions and interact with others on the subject of ethanol.

There are a number of mechanisms you can use to follow along and participate. We recommend TweetChat. Just go to TweetChat.com, log in with your Twitter account login and then enter the search term, #fuelchat. TweetChat will display a live list of Twitter posts that use the #fuelchat “hashtag” and you can read them, reply to them or enter your own. Another useful mechanism is Twitterfall.

If you’ve never used Twitter and don’t have a free account, you can still go to Search.Twitter.com and search for #fuelchat to see the results. You will need to manually refresh the page to see new ones as they are posted. It’s also a good way to go back and review the session afterward.

Post Update: Today’s FuelChat session has concluded and as a reminder you can see the questions/answers/comments by reviewing all the posts using this link.

A partially completed 110 million gallon per year ethanol plant in Nebraska will go up for auction next month.

Altra Nebraska, LLC began construction of this facility in 2006 and work halted in November of 2007 when additional financing could not be obtained due to economic challenges. The plant was expected to be one of Nebraska’s largest ethanol plants employing over 50 persons and utilizing over 36 million bushels of corn for feedstock. The liquidation of the assets comes as part of the Chapter 11 filing last month.

Maas Companies of Rochester, MN will auction the plant on Wednesday, October 28, 2009 at 10 AM on the site in Carleton, Nebraska. The auction process will offer the plant as an entirety for buyers up to two weeks prior to auction day. Potential buyers are encouraged to explore this option in a timely manner and submit their bids prior to October 13 at 5:00 pm. After this date, the property will be sold at auction in a piecemeal manner. The auction manner of sale will include offering all real estate as one tract and the equipment or equipment lots individually. The auction will offer buyers the option of bidding on-site or live via the internet.

Open houses of the plant for auction are scheduled for September 28 and 29, October 26 and 27, from 10 am to 5 pm. Details of the sale are available at the auction website, maascompanies.com or by contacting the auction company directly at 507-285-1444.

Biodiesel has started moving through the 115-mile Oregon Pipeline.

The Houston (TX) Business Journal reports that Kinder Morgan Energy Partners has shipped the first 100,000 barrels of B2 from Portland to Eugene:

“This new biodiesel shipment capability will help diesel fuel suppliers throughout Oregon meet a state biodiesel mandate that goes into effect on Oct. 1,” said KMP Products Pipeline President Tom Bannigan.

The pipeline is one of only a few in the United States that can regularly transport blended biodiesel — in this case, blended 2 percent (B2) — because it does not transport jet fuel. Though tested, biodiesel has not been approved for commercial aircraft, so Kinder Morgan (NYSE: KMP) and other pipeline companies can’t risk contaminating jet fuel shipments with biodiesel.

The pipeline joins the Southeastern United States’ Plantation Pipeline, which started commercially shipping biodiesel this past June.

The Environmental Protection Agency (EPA) has proposed a rule based on Indirect Land Use Change (ILUC) that would penalize biofuel production such as corn-ethanol. The ethanol industry has banned together to fight this potential ruling, and today Growth Energy urged Congressional support of an amendment authored by Senator Tom Harkin, D-Iowa.

Specifically, the Harkin amendment to the Interior-Environment Appropriations bill, would prohibit the use of funds by the EPA to include international ILUC theories in the implementation of the renewable fuel program. This in hopes to spur a full debate in the Congress on ILUC theory. EPA is forging ahead with the rules even though sound science on the topic is lacking, nor an agreed upon way to even measure ILUC impacts.

“If the EPA goes ahead with this lopsided rule, it will penalize domestic production of biofuels like ethanol. And U.S.-made ethanol is the only existing alternative we have to foreign oil. It creates jobs, enhances our national and economic security, and cuts greenhouses gases. Senator Harkin’s amendment deserves to be passed by the Congress. Senator Harkin’s legislation is rooted in logic and fact – two things that are lacking from the EPA’s proposed rule,” said Tom Buis, Chief Executive Officer of Growth Energy.

According to Growth Energy, ILUC theory has never been debated in the Congress, and it’s not accepted as a consensus of the scientific community. “If we’re going to theorize the indirect land use changes of fuel, the EPA should not single out biofuels – but should include the sources of all transportation fuels, including emissions from coal-fired power plants for plug-in cars, Persian Gulf oil tankers and tar-sand extraction,” said Buis.

While the biodiesel industry’s biggest advocacy group is praising a bill that could make B99 a thing of the past, not all biodiesel makers are glad to see the change.

This article from Biodiesel Magazine says the Biodiesel Tax Incentive Reform and Extension Act, introduced last month by U.S. Sens. Chuck Grassley (R-IA) and Maria Cantwell (D-WA), is being hailed by the National Biodiesel Board as a “common sense” proposal that will bring stability and reliability to the marketplace by extending the tax incentive for five years and will change the excise tax for biodiesel from a blender to a producer credit. But some sources aren’t so happy or optimistic about its effects:

“I don’t understand their wanting to change that,” said one NBB member, who asked not to be named. “I don’t see the sense or the advantage in it.”

Management at Lake Erie Biofuels, a plant with a 45 MMgy capacity in Erie, Pa., agreed. “We sell maybe a couple of truckloads of B100 while B99 makes up almost 90 percent of our total sales,” said Michael Noble, director of operations at LEB. “Changing the excise tax will be better for our customers, but it doesn’t change our position.”

Still, others say converting the credit gets rid of the paperwork for blenders and will encourage sales.

And you thought all the debate in DC was just about health care!

Yesterday, I told you how oilheat industry officials have set out a plan to make more use of biodiesel blended to burn in home furnaces. For those who might be worried about the performance of the green fuel in your home heater, a new study indicates it will do just fine.

This story from Purdue University says researchers have been testing degummed soybean oil and No. 2 fuel oil as an alternative to heating fuel:

Klein Ileleji, an assistant professor of agricultural and biological engineering, tested blends of 20 percent, 50 percent and 100 percent degummed soybean oil – an unrefined and cheaper product to produce than soy methyl esters, commonly known as biodiesel – and found that the 20 percent blend didn’t degrade a home furnace’s parts or heat output. The only issue found with the 20 percent blend was a slight early degradation of the furnace’s seals and gaskets, which manufacturers could fix by switching to a higher quality product. Ileleji’s findings were reported in the recent early online version of the journal Fuel.

“You are going to reduce the sulfur emissions with degummed soybean oil. The things you should be worried about with a biofuel, such as the pour point temperature and heating ability, were not affected,” Ileleji said. “You want to keep the properties of your No. 2 fuel oil, and at 20 percent degummed soybean oil, you would minimally affect those properties.”

Ileleji found that a 20 percent blend worked well in furnaces without any modification to the heater’s design.

The Indiana Soybean Alliance and the Indiana United Soybean Board funded the research.

Pacific Ethanol will be booted from the NASDAQ unless its stock goes up soon.

NASDAQ sent a letter last week notifying Pacific Ethanol that “it does not comply with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Global Market set forth in NASDAQ Listing Rule 5450(a)(1).” The company has been given 180 calendar days, or until March 14, 2010, to regain compliance. The last time the company’s stock was above $1 was November 7, 2008. In the last year, the high for the stock was $2.08, with the low at 20 cents. Shares of Pacific Ethanol closed at 59 cents today, up two cents.

The deadline for getting in your two cents’ worth on the U.S. EPA’s proposed Renewable Fuels Standard (RFS2) is rapidly approaching, as this Friday, Sept. 25th will mark the end of the comment period.

This article in Biodiesel Magazine says the American Soybean Association and the National Biodiesel Board are making a last-minute appeal to their members and biodiesel supporters to get their comments in:

Both organizations have made it easy to access information at their Web sites, providing background information, sample comments, links to the EPA Web site and instructions on emailing comments. The ASA form is available at www.soygrowers.com/policy/RFS2.htm. The NBB’s action center is available at http://biodiesel.org/news/RFS/. The NBB provides an express comment that features a condense message and only requires a name, city, state and email address. “it takes less than 20 seconds to fill out and submit,” the NBB says. The NBB also offers long and short versions of sample comments to make, and provides information for an individual to craft a unique response.

The stakes are high for the biodiesel industry. “As EPA’s proposed rule is written, soy biodiesel would no longer qualify under the specific federal mandate for biomass-based diesel use,” ASA President Johnny Dodson explained. “With the future of the U.S. biodiesel industry at stake, farmers need to get involved right now by voicing their opposition to the proposed rule.” The ASA has reached out to U.S. soybean farmers in their campaign, as have several state soybean associations and corn grower associations as well to comment on the impact on corn ethanol.

The main sticking point the ASA and NBB (and the Renewable Fuels Association, for that matter) have with the proposal is the inclusion of international indirect land use impacts into the calculations of greenhouse gas emissions.

If you haven’t commented yet, better get your thoughts in now.