Domestic Fuel

Producing more energy from cow manure could help reduce greenhouse gas emissions.

At the climate summit in Copenhagen, U.S. Agriculture Secretary Tom Vilsack announced an agreement with U.S. dairy producers to accelerate adoption of innovative manure to energy projects on American dairy farms.

“This historic agreement, the first of its kind, will help us achieve the ambitious goal of drastically reducing greenhouse gas emissions while benefiting dairy farmers,” Vilsack said from Copenhagen. “Use of manure to electricity technology is a win for everyone because it provides an untapped source of income for famers, provides a source of renewable electricity, reduces our dependence on foreign fossil fuels, and provides a wealth of additional environmental benefits.”

Under the agreement, USDA intends to increase the number of anaerobic digesters supported by USDA programs. Beyond promoting the digesters, the agreement will encourage research, and development of new technologies to help dairies reduce greenhouse gas emissions. Anaerobic digester technology is a proven method of converting waste products, such as manure, into electricity. The technology utilizes generators that are fueled by methane captured from the animal manure. Currently, only about 2 percent of U.S. dairies that are candidates for a profitable digester are utilizing the technology. Dairy operations with anaerobic digesters routinely generate enough electricity to power 200 homes.

Fourteen major airlines from the United States, Mexico, Canada and Germany, led by the Air Transport Association (ATA), have agreed to buy up to 750 million gallons of renewable jet fuel and diesel derived from camelina and produced by Seattle-based AltAir Fuels.

This AltAir Fuels press release says the green fuel will be produced from camelina oil obtained from Montana-based Sustainable Oils at a new facility in Anacortes, Washington and would replace about 10 percent of the petroleum fuel consumed annually at Seattle-Tacoma International Airport … enough to reduce the airport’s carbon emissions by about 14 billion pounds over 10 years:

“Today’s announcement reinforces the proactive steps that airlines are taking to stimulate competition in the aviation fuel supply chain, contribute to the creation of green jobs, and promote energy security through economically viable alternatives that also demonstrate environmental benefits,” said Glenn Tilton, ATA board chairman and UAL Corporation and United Airlines chairman, president and CEO. “Our intention as an airline industry is to continue to do our part by supporting the use of alternative fuels. We urge the U.S. government and the investment community also to do their part to further support this critical energy opportunity,” said Tilton.

“We commend the ATA and its member airlines’ commitment to reducing carbon emissions and the leadership role they have taken in the airline industry,” said Tom Todaro, CEO of AltAir. “Our camelina-based fuels will reduce emissions, provide American farmers additional revenue sources, while creating hundreds of new jobs and reducing our dependency on imported oil. We look forward to replicating this model in other parts of the country and the world in the coming years.”

Airlines included in the deal include, American Airlines, Air Canada, Alaska Airlines, Atlas Air, Delta Air Lines, FedEx Express, Hawaiian Airlines, Jet Blue Airways, Lufthansa German Airlines, Mexicana Airlines, Polar Air Cargo, United Airlines, UPS Airlines, and US Airways.

Valero Energy Corp will add three more ethanol plants to their group, bringing their total production to 1.1 billion gallons per year. After these purchases, Valero will own ten ethanol plants.

A $200 million agreement has been settled for two plants now owned by creditors ASA Ethanol Holdings LLC. These plants are located in Linden, Indiana and Bloomingburg, Ohio and were originally owned by VeraSun Energy Corp who are now bankrupt. The third plant is in Jefferson, Wisconsin and will be purchased for $72 million by Renew Energy who also went bankrupt.

“The Linden and Bloomingburg plants have the same high-quality design that we got with our earlier purchase of seven ethanol plants, and they’re also relatively new assets,” said Valero Chairman and Chief Executive Officer Bill Klesse. “The purchase of the plant from Renew gives us additional production capacity. The ethanol plants we bought earlier this year have been very successful for Valero, and we expect these newly purchased plants to build on that success.”

Valero should close on these ethanol plants in early 2010.

Moscow Mills, Missouri is the site of the state’s first ethanol blender pump. Warrenton Oil Company recently unveiled four new pumps at its FastLane station at 240 College Campus Drive. The blender pumps offer E20, E30 and E85 along with gasoline.

“By partnering with Missouri Corn and the Missouri Department of Agriculture, we are offering our consumers more choices at the pump,” said Dave Baker, Warrenton Oil Company vice president of sales. “We look forward to growing this new market that supports a homegrown fuel and Missouri jobs.”

According to the Missouri Corn Growers Association, these blender pumps are part of a pilot program with the Missouri Department of Agriculture Division of Weights and Measures. “This is a great opportunity to utilize a product grown and refined in Missouri,” said Gary Clark, Missouri Corn Merchandising Council senior director of market development. “We are looking forward to the continued expansion of blender pump locations across the state. This will allow Missourians to experience the benefits of mid-level ethanol blends and support a product that is helping reduce our dependence on foreign oil.”

There are currently 114 E85 locations, including this blender pump station, in the state of Missouri.

Canadian-based Wind Works Power Corp. has acquired half interest in six wind energy projects in Ontario with a total capacity of 80 megawatts. This company press release says Wind Works Power will have the option to up those interests to 100 percent:

“With these 6 new projects, we now have a total of 15 wind energy projects in Ontario totaling 190 MW” commented Dr. Ingo Stuckmann, CEO and director of Wind Works. “All 15 projects submitted power contract applications to the OPA, which offers the highest power rate in North America. Power contracts in Ontario will be awarded in the January to March 2010 time frame, and we are now targeting to commence construction on a minimum of 70MW in Ontario in 2011.”

In consideration for the 50% interest in the 6 wind projects, Wind Works will make a one-time cash payment of $300,000 on April 30, 2010, and issue 1,200,000 restricted common shares.

The projects submitted power contract applications under the new Feed-in Tariff program as part of the Ontario Power Authority initial launch period. The Feed-in Tariff (FIT) contract program offers a power contract with a guaranteed rate of C$135.00/MWh over a 20-year term to qualified wind energy projects.

If you’ve been a reader of Domestic Fuel for any amount of time, you know how big of a supporter of biodiesel our friends at New Holland have been.

Their efforts and qualities are being noticed around the world as New Holland’s T7070 Auto Command tractor has been tapped as Tractor of the Year at Agritechnica, the world’s largest show for agricultural machinery and equipment. This article from FarmandDairy.com says the tractor also picked up the “Golden Tractor for Design” award, recognizing design excellence focusing on ease of use and operator comfort:

This pair of awards for the T7070 Auto Command adds to the Tractor of the Year and the “Golden Tractor for Design” for 2008 obtained by the T7060 Power Command at the 2007 Agritechnica, making the T7000 Series the most awarded line of tractors in the 13-year history of this award.

Built in New Holland’s Basildon, U.K.facility, the five models from the T7000 Auto Command Series are powered by a new NEF engine, with between 167 and 225 hp that can run on 100 percent biodiesel, and completely developed by Fiat Powertrain Technologies of Turin, Italy.

Agritechnica, held last month in Germany, attracted more than 350,000 people.

ROUSH is expanding its line of propane fueled vehicles with the addition of a line of E-Series vans. ROUSH will offer fuel conversion solutions for both passenger and cargo van applications. The company selected the E-Series because, “Ford has long held a leadership role in the van segment for more than 30 years and fleet managers are familiar with the ordering process, cost of ownership, and maintenance schedules.” To date, ROUSH offers propane fueled trucks, including F-150, F-250 and the F350. Production on these vehicles is expected to begin in first quarter 2010.

“The response from the fleets to our line of F-150, F-250 and F-350 propane pickups and conversion kits has been outstanding, and their feedback inspired us to develop the complete line of E-Series vans,” said Jack Roush. “Many of the fleet managers we have spoken with utilize a tremendous number of vans in the course of their daily business and were looking for the type of cost and environmental advantages that propane offers as a motor fuel. Their desire is what motivated ROUSH to continue to add to our line of propane vehicles.”

According to the company, the ROUSH propane-fueled E-Series vans will achieve Super Ultra Low Emission Vehicle (SULEV) II emission standards, and on average, a SULEV vehicle is 90 percent cleaner in emissions than the average new model year car or truck. The ROUSH conversion system works on the Ford 5.4L, V-8 engine found in 2009 and newer vans, including the gaseous prep engine offered by the Ford. In addition to emission benefits, various studies demonstrate operational savings for fleets when they convert to propane.

ROUSH is also working on developing a propane kit for the Ford 6.8L, V-10 engine used on the E-450 Cutaway vehicle. This is scheduled to be available in late 2010.

The Renewable Fuels Association (RFA) is concerned about testing of the nation’s gasoline pumps currently underway by Underwriters Laboratory (UL) that is using what the group calls “aggressive ethanol” intended to accelerate any potential issues that may arise with the use of higher ethanol blends.

According to RFA, this “aggressive ethanol” misrepresents the fuel ethanol found in the market today. Many of compounds found in this grade of ethanol, such as gum, sulfates, and pHe, were well outside the range specified by ASTM, the international standards organization for fuels.

RFA Technical Director Kristy Moore has written to UL outlining the association’s concern with this process. “Ultimately, it is clear the ‘aggressive ethanol’ formula required by UL grossly misrepresents modern fuel ethanol and is far worse than even the lowest quality ethanol in commerce today,” she wrote. “It is safe to say ‘aggressive ethanol’ is not representative of any fuel ethanol that is found in the marketplace today. Automobile manufacturers themselves have confirmed that they no longer use ‘aggressive ethanol’ in testing. Rather, they prefer to use ethanol that is representative of the fuel in the marketplace.”

The RFA is urging UL to move forward with its testing using an ethanol formulation that more closely mimics those allowed in the marketplace.

An American energy company with biodiesel and ethanol operations will be buyng some of its green fuel from down under.

The New York Times reports that Valero Energy has signed a five-year deal with Australian biofuel refiner Mission NewEnergy to obtain biodiesel made from jatropha. Valero will also be able to buy a 25 percent stake in Mission:

Mission will supply Valero with up to 60 million gallons of biodiesel per year, starting next year. Under the terms of the agreement, Valero can double that amount and extend the contract by an additional five years. The value of the contract could be as high as $3.5 billion, Mission said in a statement.

Jatropha is a family of oil seed plants that can grow on marginal soil without displacing land used for food supply.

Already the nation’s biggest petroleum refiner, Valero has been steadily increasing its presence in the biofuels market. Earlier this year, Valero obtained seven ethanol refineries from financially strapped VeraSun, and Valero got into the biodiesel business this fall when it started a venture in Louisiana with Darling International Inc. to develop an animal fat biodiesel plant.

California-based algae biodiesel producer OriginOil Inc. has signed a memorandum of understanding with Japan’s Research Institute of Tsukuba Bio-Tech (RITB) to develop algae-to-jet fuel technologies.

This article from Biomass Magazine says the deal comes on the heels of RITB getting money from the Japan Science and Technology Agency to develop algae-to-jet fuel applications:

Headed by Tsukuba University professor emeritus and algae researcher Takaaki Maekawa, RITB recently signed a memorandum of understanding with OriginOil to develop and distribute systems in Japan for aircraft fuel production, algae-to-oil production and other industry applications. RITB was recently approved for two years of research and development funding based on its proposal to the Japan Science and Technology agency. Maekawa’s presentation, available on the RITB Web site, pointed to the volume of carbon emissions from Japans major industrial emitters as well the stability of jet oil prices and future demand potential.

“We salute Japan Science & Technology Agency for its initiative in algae-based jet fuel,” said Riggs Eckelberry, OriginOil CEO. “We are privileged to have been asked by RITB to support Professor Maekawa’s high-priority efforts over the next two years. We look forward to helping make his program a major success.”

Earlier this year, Japan Airlines tested a mix of camelina, algae and jatropha biofuel blended with jet fuel and found it had better fuel efficiency than traditional kerosene used in airliners.

A controversial tax imposed on some Canadians will be reduced at the beginning of the new year, thanks to biodiesel.

Today’s Trucking.com reports that British Columbia’s carbon tax will drop by 5 percent and planned increases will also be lessened because of renewable fuels:

On Jan. 1, 2010 the carbon tax rate on diesel drops from 4.04 cents per litre to 3.84 cents per litre and on gasoline from 3.51 cents per litre to 3.33 cents per litre.

The government determined the annual rate increase when the carbon tax first became effective and it will continue until July 2012. Yearly increases for diesel, adjusted for the renewable fuels, will be: July 1, 2011 –¬ 6.39 cents per litre, instead of 6.73 cents per litre; and July 1, 2012 –¬ 7.67 cents per litre, instead of 8.07 cents per litre.

The tax was expected to cost the trucking industry $20 million. Maybe if we can get a bit more of cleaner burning biodiesel into the mix, they’ll save even more.

The northern most E85 fueling station is now open! The Farmers Union Oil ethanol blender pump at 418 State Avenue SW in Warroad, Minnosota celebrated their opening this week.

The “Christmas Tree discounts” at the station began Wednesday. Motorists who bought eight gallons or more of the ethanol blended fuels received discounts off the price of the live Christmas trees sold at the station: E85 = $8.50 discount; E50 = $5 discount; E30 = $3 discount; E20 = $2 discount; and E10 = $1 discount.

Minnesota now has over 60 blender pumps within the state and about 350 E85 stations. The state touts the most E85 fueling locations of any state throughout the country.

GE has signed a $1.4 billion deal to deliver more than 300 wind turbines for a 845 megawatt wind farm to be built in Oregon.

The Earth2Tech blog says, when built, it would be the largest wind farm in the U.S.:

Independent power producer Caithness Energy will develop the wind farm, called Shepherds Flat, and under three power purchase agreements will provide clean power for utility Southern California Edison (meeting one-tenth of SCE’s state renewable portfolio standard). Caithness Energy says the entire project will cost $2 billion, will create 435 local jobs and is ready to be built now.

The wind industry is pretty much the most mature clean power sector in the U.S. and is being driven in California partly by the state renewable portfolio standard, which says utilities must have 20 percent of their electricity come from clean power by 2010. The American Wind Energy Association (AWEA) said that in the third quarter the U.S. wind energy industry installed 1.6 GW of new power generating capacity, bringing the year-to-date total by the end of the third quarter to 5.8 GW.

Experts are hoping that the tough economy, which hit the wind turbine particularly hard this past year, will turn the corner to free up some of those markets to provide more capital for construction.

The Copenhagen Climate Change Summit, which started this week in Denmark, could be good for biodiesel and ethanol.

Biodiesel Magazine reports that while not everyone agrees exactly on what the political negotiations will bring, an expected deal … if not a full treaty … outlining a carbon pricing or cap-and-trade system that puts a price on carbon will be a boon biofuels:

The combined GHG emissions reduction from global ethanol and biodiesel production of 123.5 million tons represents an average reduction of 57 percent compared to the emissions that would have occurred from the production and use of equal quantities of petroleum fuels, [Global Renewable Fuels Alliance] said. “This is equal to the national GHG emissions of Belgium or Greece, as well as the combined emissions of Monaco, Liechtenstein, Iceland, Latvia, Luxembourg, Slovenia, Estonia, Lithuania and Croatia.”

Because of biofuels companies’ carbon reducing capabilities they might be able to sell credits under a carbon pricing or cap-and-trade system, which of course would boost the economic viability of the biodiesel industry and its counterparts. “This would add to any benefits the biofuels industries would see from increased use and sales,” Baker said.

While it’s not so sure if there will be a concrete agreement, it is expected that most parties will at least agree to keep talking. And everyone is watching to see what the biggest players, the U.S., China and India are going to do.

A crucial tax break for the biodiesel industry has passed the U.S. House but is still a ways from being renewed.

The Hill.com reports that the $1-per-gallon tax credit for biodiesel, set to expire in just a few weeks on Dec. 31, won House approval, 241-181, but the $31 billion package still must make it through the U.S. Senate. The approval comes on the heels of the National Biodiesel Board’s warning that letting the incentive die would be disastrous for an already troubled industry.

The report notes that the industry is already producing far below its capacity, and has been hit hard by volatile commodity prices and weakened fuel demand caused by the economic downturn.

Total sales this year are projected to be 31 percent below 2008 levels, the trade group said. “Elimination of the tax credit will essentially erase all profitability in the biodiesel industry leading to a complete decline in output, expenditures, and jobs,” the report states.

You can read the NBB’s report here.