Domestic Fuel

It looks like soybean-based biodiesel is returning to profitability.

This article from Biodiesel Magazine says the USDA-funded Agricultural Marketing Resource Center model shows that a hypothetical, soy biodiesel plant has reversed a six-month trend of losses and would now be operating in the black.

The overwhelming impact of soybean oil prices, which amount to close to 90 percent of the overall cost of biodiesel production, is shown in the comparison of September’s improving numbers with the poorest month, May 2009. The biodiesel revenue for that month was actually slightly higher than September at $3.10 per gallon. However, soy oil was 38 cents a gallon higher at $2.73 per gallon, natural gas remained the same at 3 cents per gallon and methanol cost was lower in May at 6 cents per gallon. AgMRC’s model plant showed a total breakeven cost per gallon, including variable and fixed costs of $3.32 for that low month of May 2009. The net return over variable costs was 4 cents per gallon in May and the net return over all costs was a negative 22 cents per gallon.

It should be noted that the model indicated negative net returns over all costs for the latter half of 2007 turning to positive in March of 2008 until March of 2009. During that year, biodiesel revenue started at $5.16 per gallon, peaked at $5.51 in June 2008 and dropped to $2.68 per gallon when the net return over all costs dropped into the red. EIA reports the spot diesel price at Chicago a year ago in October, 2008, was $2.85 cents per gallon.

The article adds that this model doesn’t tell the whole soy biodiesel story, admitting that a drop in petroleum prices has pushed regular diesel to prices significantly lower than biodiesel… if the $1 per gallon blenders tax credit is not taken off the price of a gallon of biodiesel. But the report does give hope that some of the pressure on the biodiesel industry is letting up.

You can read the report for yourself here.

One of the nation’s largest farm shows is the Sunbelt Ag Expo in Moultrie, GA. I’ve been attending thanks to the support of Growth Energy and covering the show on our AgWired website. I did find a couple of stories I thought I’d share with you here including this one from the University of Florida exhibit.

One of my stops in their building included the Florida Center for Renewable Chemicals & Fuels. On hand to tell their story and give us an update on their activities was Sheilachu P. Gomez, Assistant Director, pictured here. She says the Center is primarily for the development of the technology to convert biomass to ethanol and organic acids. They have two patents that have been purchased by two companies already (an ethanol patent to Verenium and organic acids patent to Myriant). They have a pilot plant for cellulosic ethanol production to optimize biomass conversion at the campus and have a planned plant to be located in Perry, FL. The last is a partnership with Myriant and Buckeye. In the future Sheila says they’re looking more into the value added products of the production process.

You can listen to my interview with Sheila below:

Feel free to browse my photos from the show: Sunbelt Ag Expo 2009 Photo Album. I will have another story on switchgrass posted soon.

Podcast: Play in new window | Download (3.8MB)

Americans want green energy choices, with the largest motivating factor for those choices being saving some greenbacks. And the top choices for that green-saving energy are solar and wind.

The latest Nielsen Company Energy Trends report shows that 80 percent of the 32,000 respondents polled cited cutting costs as their main motivation for conserving energy:

Overall, the study shows that many consumers have adopted more environmentally friendly habits, while others have not acted as quickly. “The current momentum surrounding green initiatives and reduced energy consumption presents utilities and home improvement companies with a golden opportunity,” says Jonathan Drost, Account Executive, Energy for The Nielsen Company. “When going green is cost effective, such as opting for Energy Star appliances or government incentive programs, customers migrate in that direction. The biggest hurdle for energy companies is educating the consumer on things like Smart Grids, Energy Efficiency programs and Renewable Green Energy.”

Renewable energy sources are at the heart of the emerging green economy, and if consumers have any say, solar would be their carbon neutral source of choice. “I believe solar came out on top as a preference because it is a technology that consumers can identify with,” Drost offers. “Not only can a consumer place solar panels on their home or purchase solar water heaters, but also they see retailers installing solar panels on their roof and hybrid cars with solar roof options. It’s been a media hot topic as well.”

The survey shows that 37 percent of respondents prefer solar power, and 16 percent want wind.

Only 3 percent of those households surveyed say they plan on buying a plug-in hybrid, but about one-fourth say they would purchase one once the technology became more widely used.

Nielsen officials say more consumer education is needed to bring in the next wave of renewable energy “early adopters.”

A Nevada company is looking to turn natural gas and biogas, such as methane from garbage dumps, into a clean form of diesel.

Advanced Refining Concepts, LLC is building a 100,000-gallon-a-day plant 10 miles east of Reno in Northern Nevada that will use a proprietary pollution-free process, called ClearRefining™, that liquefies natural gas and other biogases into a product they call GDiesel™, comparable to No. 1 diesel fuel:

“Beginning construction of this facility is an important milestone for ARC, advancing our goal of making America energy independent by reducing this country’s need for foreign crude oil imports,” said Peter Gunnerman, co-founder of Advanced Refining Concepts. “We expect the GDiesel™ produced at our Peru Heights facility initially will be used for large fleet operators, power producers or as blend stock.”

The facility, which will employ 25 full-time workers, will consist of 10 fully automated ClearRefining™ units, each capable of producing up to 10,000 gallons of GDiesel™ per day. “The location we’ve selected just outside of Reno is ideal for this venture,” said Gunnerman. “The facility has convenient access to natural gas, existing fuel lines and is strategically located near rail and truck lines.”

The plant is scheduled for completion by January 2010.

Verenium Corporation has entered into an agreement to test the effectiveness of technology for the creation of cellulosic ethanol from pulp and paper processing.

The is agreement with Value Prior to Pulping (VPP), an organization created by the Agenda 2020 Technology Alliance, a special project of the American Forest and Paper Association, and CleanTech Partners, Inc. VPP is funded by the U.S. Department of Energy (DOE), the State of Wisconsin and several large forest products companies.

“We are pleased to be partnering with VPP and enthusiastic for the opportunity to explore the potential of our C5 technology to create biofuels from feedstocks sourced from the pulping process,” said Gregory Powers, Executive Vice President of Research and Development of Verenium. “Integrating ethanol production into the pulping process could create an attractive market opportunity for Verenium and the pulping industry. If this project proves successful, Verenium will be well positioned to enable this new source of low-cost biofuels.”

It is estimated that a typical 1500 ton-per-day kraft mill could produce approximately 15 million gallons of ethanol annually. The total potential market opportunity is estimated to be between 1.5 and 2 billion gallons of ethanol per year.

A mix of electrically powered and biodiesel and E85 ethanol fueled vehicles lead the list for the Automotive X Prize.

This story from Consumer Reports says the $10 million prize will go to the team that makes a production-ready car that gets 100 mpg or the energy equivilant AND is sold at a profit for a reasonable price:

“The teams and vehicles represented in this group are the most viable in our competition and we believe that together they are positioned to make a huge impact on the automotive marketplace,” noted X Prize CEO and Chairman Dr. Peter Diamandis.

The finalists represent a diverse group, with teams heralding from 14 states and 10 countries total. The vehicles use a wide range of powertrains, with 16 running on gasoline, 22 battery-sourced electric, six E85, six biodiesel, two diesel, and one natural gas.

The next step for the 43 teams of finalists will be test their vehicles next spring.

Disneyland has picked up California’s highest and most prestigious environmental honor… thanks in part to biodiesel.

This press release posted at Reuters.com says the resort has won the 2009 Governor’s Environmental and Economic Leadership Award (GEELA), recognizing “individuals, organizations and businesses that have demonstrated exceptional leadership for voluntary achievements in conserving California’s resources, protecting and enhancing the environment and building public-private
partnerships.”:

“I applaud the Disneyland Resort for their wonderful commitment to our state’s commerce and environment. They are an inspiration to many and I thank them for their outstanding leadership,” said Governor Schwarzenegger.

“We have been recycling our used kitchen grease for years, but this innovation took recycling to another level,” said Dela Vara. Disneyland Railroad’s five trains had been using a soy-based biodiesel to fuel their steam boilers since April 2007. The cooking oil-based biodiesel continues to reduce emissions by up to 80 percent. Disneyland Resort’s Mark Twain Riverboat also uses the
special cooking oil biodiesel.

More information is available on the GEELA Web site.

A nationwide survey conducted for the National Corn Growers Association finds broad public respect and trust for family farmers and support for corn as food, feed and fuel.

Ninety-five percent of those polled agreed that farmers are trusted messengers on issues such as agriculture, corn products and ethanol – and ethanol itself was supported or strongly supported as a good fuel alternative by 65 percent.

Respondents also spoke out about what they saw as the top benefits of corn-based ethanol. Thirty-four percent mentioned reduced dependence on foreign oil, 19 percent mentioned the creation of new jobs and 16 percent liked it for its environmental benefits.

The survey of 1,000 U.S. voters nationwide was conducted in mid-September by David Binder Research and has a margin of error of 3.1 percent.

Rising feed prices for catfish farms and the rising Chinese market are bad news for those in the South, as more than 320,000 catfish pond acres could be up for grabs. But where one door closes, another opens, as a possible glut of open-air ponds could provide a boon for those looking to raise algae for biodiesel.

To explore the possibilities, the National Algae Association Mid-South Chapter is presenting a workshop on November 18-19, 2009 in Memphis, Tennessee at the Holiday Inn Select Hotel, downtown. This association press release says the key speakers will include Barry Cohen, Director of the National Algae Association; Terri Chiang of Biomass Partners, LLC; and Ron Putt of Auburn University:

The workshop’s focus will be highlighted by a motor coach trip to Saul Fish Farm, a leading aquaculture facility in Des Arc, Arkansas where attendees will go on a walking tour to get a first-hand glimpse of the scope and potential for algal open pond production. Rodney Saul, owner of Saul Fish Farm will describe his procedures for growing algae for aquaculture applications. While at the farm, attendees will hear from additional speakers and interact in open forums on algal growing techniques, harvesting, and extraction methods.

“This event is very timely in light of the strong interest in alternatives to expensive, closed-loop algae production systems, says Tamra Fakhoorian, president of the NAA Mid-South Chapter. She continues, “Given the current availability of hundreds of thousands of existing pond acres in the South and new applicable technologies coming on-line, aquaculture farmers and entrepreneurs alike are taking a good look at the economic feasibility of becoming open pond algae farmers. This workshop will address the opportunities, the challenges and late-breaking solutions for open pond production.”

You can get more information on registration here. Early registration goes on through November 4th.

Last week, we told you new research shows how green biodiesel is. I finally got a chance to catch up with National Biodiesel Board CEO Joe Jobe to talk a little bit about this important study… and what it will mean as the Environmental Protection Agency considers a new Renewable Fuels Standard, RFS-2.

In this edition of the Domestic Fuel Cast, you’ll hear how Jobe believes the information that biodiesel now produces 4.5 units of energy for every unit of energy spent on it will prove to the EPA and skeptics that biodiesel is truly one of the greenest fuels out there. He says the information couldn’t come at a better time and was included with the NBB’s comments about the RFS-2.

Jobe adds that the NBB will be showing off biodiesel’s green, sustainable nature with a Greenfest in the board’s hometown of Jefferson, Missouri at Riverside/Ellis Porter Park this Thursday evening, October 22nd from 4-8. He says Jefferson City boasts several users of biodiesel, including the Missouri Department of Transportation, which uses a blend of 20 percent biodiesel (B20) in all of its diesel vehicles. Plus, the city itself burns B20 in its city buses. Fire trucks, ambulances, and hybrid and flex-fuel vehicles will also be on hand for the JC Greenfest, as well as demonstrations from Linn State Technical College and Lincoln University. They’ll even have live music from national recording artist Emily Richards

To hear more of my conversation with Jobe, listen to the latest DF Cast here: DFCast-10-19-09.mp3

You can also subscribe to the DomesticFuel Cast here.

Iowa-based Renewable Energy Group has inked a contract with Hawaiian Electric Company to supply the utility with 400,000 gallons of biodiesel for the company’s new Campbell Industrial Park Generating Unit.

This press release from REG says the biodiesel maker will produce the green fuel from used cooking oil and waste animal fat for testing on the 110‐megawatt combustion turbine generator:

“We are proud Hawaiian Electric has chosen us as a partner and look forward to helping Hawaii meet the goals of the Hawaii Clean Energy Initiative by providing high‐quality biodiesel which reduces life cycle carbon dioxide values by 78 percent compared to petroleum diesel fuel,” said REG Chairman and CEO Jeff Stroburg. “The state is to be commended for its leadership in creating a
model for other utility companies across the country to follow.”

“Being able to use liquid renewable fuels in our generating units is one of many steps ‐‐ including more electricity from other renewable sources such as solar, wind, biomass and the ocean ‐‐ to meet our goal of providing reliable electric service while reducing Hawaii’s dependence on fossil fuels,” [Robbie Alm, Hawaiian Electric executive vice president] said.

Two years ago, Hawaiian Electric established a policy with the Natural Resources Defense Council to get biodiesel from sustainable palm oil and local feedstocks.

FDC Enterprises, based on Columbus, Ohio, announced today that it has won a U.S. Department of Energy (DOE) grant to develop supply systems to handle and deliver feedstocks for cellulosic biofuels production. The $21 million grant is being shared by five winners.

The government is attempting to help speed up cellulosic biofuels production, or the production of fuel that uses waste products such as switchgrass, woodchips and agricultural residues, rather than food-based products such as corn. However, with new feedstocks come new challenges, one of which is delivery and storage.

According to DOE’s press release, the selected grant winners represented, “the best projects to stimulate the design and demonstration of a comprehensive system to handle the harvesting, collection, preprocessing, transport, and storage of sufficient volumes of sustainably produced feedstock.”

Companies like POET, have also been working with manufactures to develop technologies to pick up corn cobs and stover for the production of cellulosic ethanol.

Fred Circle, President of FDC said in a press statement, “We are excited to be selected and we believe this is a great opportunity for energy and agriculture to be teamed in a way that helps America. We have a great team with unique expertise and we are looking to leverage this grant into a large-scale commercial effort that serves this emerging industry.”

FDC Enterprises is a parntering with the ANTARES Group , a renewable energy consulting and project management company, located in Landover, Maryland. Kevin Comer, Associate Principal at ANTERES commented, “If cellulosic ethanol is to become a meaningful player in the fuels market, we must demonstrate the ability to sustainably grow and harvest dedicated crops for energy. Our approach is to combine the best of agriculture and energy in a way that doesn’t adversely impact food production or land use and still provides a win-win for biofuels producers, farmers, and landowners.”

Many states look to California to set the stage for environmental and energy reform. They passed the first greenhouse gas emissions legislation. They passed the Low Carbon Fuel Standard. But not so fast. They are bankrupt. They still have some of the worst air pollution in the country. They still have “brownouts” when it rains.

Let me give you an example of why California should not set the stage for energy reform. Just today, Biofuels Digest reported that BlueFire Ethanol, a waste -to -energy biofuels company primarily using wood waste, is relocating its second facility from California to Mississippi. Why? A $1 million a year tax hike plus after two years, difficulty getting the permits through. Oh, and did I mention that the DOE threatened to pull its $40 million funding if the project wasn’t sped up?

So BlueFire has sped up. In Fulton, Mississippi.

“We wanted to move quicker, and DOE said we needed to move quicker than we were able to in California,” said BlueFire CEO Arnie Klann in the Digest. “The Economic Development people in Mississippi, and in Itawamba county, welcomed us, and facilitated the project in every way. After going through a 20-month process with our Lancaster facility in California, we expect to be done with permitting by the end of the first quarter, after starting in July, and we have already located an off-take partner for our ethanol, upriver in the Memphis area.

While the plant relocation is great news for Mississippi, it’s sad news for California which will now lose nearly $8.3 million is tax revenue. And let’s face it. This is not the only biofuels project to flee California, nor will it be the last one. If our country is really commited to energy reform then it must not follow the ways of states like Califonia, but follow the lead of states like Mississippi that are welcoming biofuels projects with open arms.

Wind energy has received another gust with the announcement from U.S. Energy Secretary Steven Chu that three universities have been given investments for wind energy research. An Illinois Institute of Technology (IITT) led consortium has been selected for up to $8 million to support the research and development programs that include private industry, state and local governments, and other universities as partners. The other two benefactors are University of Minnesota and University of Maine.

“Illinois Institute of Technology’s consortium is pleased to have been chosen to help advance wind energy for the nation,” said IIT President John Anderson. “The combination of research and academic opportunities at IIT and its academic consortium partners, in conjunction with industry, will help the United States be at the forefront of this technology.”

The wind projects, guided by “20% Wind Energy by 2030 Report,” will focus on the improvement in current land-based and offshore turbine technology and also provide educational opportunities for college and graduate students in the field of wind energy technologies. The three projects selected are in support of President Obama’s focus on creating clean energy and green jobs. The funds are part of the American Recovery and Reinvestment Act.

“Wind power has the potential to provide 20 percent of our electricity and create hundreds of thousands of jobs,” said Secretary Chu. “We need to position the United States as the clear leader in this industry, or watch these high-paying jobs go overseas. The investment we’re making today will help ensure that America has both the talent and the technology we need to compete.”

What’s a loss for some ethanol and biodiesel producers could be a big gain for others looking to expand or get into the green fuel business. A pair of auctions… one in Nebraska and the other in New Jersey… by Maas Companies will offer some brand-new, out-of-the-box ethanol and biodiesel production equipment.

Carelton, Nebraska is the site of the Altra Nebraska LLC ethanol equipment auction, where $220 million worth of equipment capable of producing 110 million gallons a year will be offered for sale on Wednesday, October 28, starting at 10 a.m. On Thursday, November 12, six, 10-million-gallon-a-year biodiesel process trains will be up for sale at the Hampton Inn & Suites – Newark Harrison Riverwalk, 100 Passaic Ave, Harrison, New Jersey, starting at 11 a.m.

Allison Guyton, director of operation for Maas Companies says her company has been doing these types of sales of biodiesel and ethanol equipment since the 1980s.

“It has a tendency to go in cycles depending on how the industry is doing based on transportation costs, commodity prices, and subsidies from the different states,” Guyton says. She says both sets of equipment are still in shrink-wrap, on pallets, and ready to be installed into any operation.

“This is a phenomenal opportunity for an entity to either come in and purchase the euipment and keep it on-site and finish the construction process, or buy new equipment at a fraction of new cost and then transport to their location have it installed there.”

To hear more of my conversation with Guyton, listen here: Guytonintw-edit.mp3

You can see more of the equipment and details about how to bid in-person or online at the Maas Companies Web site.