Domestic Fuel

As first reported by the Milwaukee Business Journal, AT&T began their campaign of being more fuel efficient by unveiling 42 compressed natural gas (CNG) vehicles. The annoucement was made at Discovery World in Milwaukee yesterday.

In March 2009, AT&T announced their plan to invest up to $565 million as part of a long-term strategy to deploy more than 15,000 alternative-fuel vehicles over the next 10 years. AT&T expects to spend an estimated $350 million to purchase about 8,000 CNG vehicles and approximately $215 million to begin replacing its passenger cars with alternative-fuel models.

“This deployment was made possible because of the work of We Energies and area communities to establish about a dozen CNG fueling stations in southeast Wisconsin, as well as strong support from state environmental leaders like Rep. Jon Richards who are encouraging the use of alternative fuel vehicles,” Scott VanderSanden, president of AT&T Wisconsin, said in the release.

AT&T’s investment represents the largest U.S. corporate commitment to CNG vehicles to date.

House Agriculture Committee Chairman Collin Peterson (D-MN) expects the Environmental Protection Agency to approve 15 percent ethanol blends for regular gasoline by August.

According to a story from Hoosier Ag Today, Peterson said in an interview that it is taking a longer time to get approval than he thinks is necessary. “Now, we’re thinking we might get a decision in August. I think we’re going to get a positive decision, everything I can tell,” he said.

Peterson said he discussed the issue with one of the major car companies last week. “They don’t see too many problems with E-15. They do have more problems when you start getting to E-20 and E-25,” he said.

The chairman does expect some pump labeling requirements if EPA approves E-15, including warnings for older vehicles and small engines, but says a favorable decision will be “very significant” for the future of biofuels.

A bill has been introduced in the Senate to extend tax incentives for ethanol set to expire at the end of this year.

Senators Charles Grassley (R-IA) and Kent Conrad (D-ND) introduced the bipartisan GREEN Jobs Act of 2010 that extends through 2015 the Volumetric Ethanol Excise Tax Credit (VEETC), the offsetting tariff on foreign ethanol, the Small Producers Tax Credit, and the Cellulosic Ethanol Producer Tax Credit.

Grassley said the lapse of the separate tax credit for biodiesel, which expired at the end of 2009, has cost 29,000 clean-energy jobs and put 23,000 more at risk. “We can’t risk a repeat performance with ethanol, where 112,000 jobs are at stake.” Of the ethanol tariff, Grassley said, “the United States already provides generous duty-free access to imported ethanol under the Caribbean Basin Initiative, but the CBI cap has never once been fulfilled. In fact, last year, only 25 percent of it was even used by Brazil and other countries.”

“Our country is in serious danger because of skyrocketing energy costs,” said Sen. Conrad. “This growing crisis demands urgent action. We must be committed to coming together in a bipartisan way to lessen our dependence on foreign oil, while aggressively pursuing alternative sources of energy such as biofuels. Extending these tax credits is a step in the right direction.”

The ethanol industry praised the Senate action. “Extending these measures will ensure job growth and economic development across the entire country—all while reducing our dependence on foreign oil and cleaning our skies,” Tom Buis, CEO of Growth Energy, said. “If we let the tariff and VEETC expire, it would drain both hundreds of thousands of jobs and billions of dollars right out of our economy.”

“Tax incentives aiding the expansion of America’s ethanol industry are sound public policies by any economic, environmental or energy measure,” said Renewable Fuels Association President Bob Dinneen. “Domestic ethanol use is lowering the price of gasoline, reducing imports of foreign oil, and helping stabilize and reinvigorate rural economies all across the country.”

“The American people directly benefit from ethanol through the creation of hundreds of thousands of jobs and by saving money on a clean, renewable product at the pump,” said American Coalition for Ethanol Executive Vice President Brian Jennings. “If it is a priority to save these high-skill, high-wage jobs in the U.S. and provide consumers with affordable fuel, it is imperative that these ethanol tax credits are renewed this year, and we are committed to working with Congressional leaders to see that happen.”

The Senate bill mirrors bipartisan legislation that was introduced in the House in March by Reps. Earl Pomeroy, D-N.D., and John Shimkus, R-Ill.

While the debate goes on whether to move forward on the Cape Wind energy project in this country, the Europeans seem poised to leave those efforts in the wind-swept dust.

BusinessWeek.com reports Spain-based Iberdrola SA will build the world’s largest onshore wind-energy project in Romania, a $2-billion project that will produce 1,500 megawatts of capacity … five times bigger than Europe’s largest wind complex and three times bigger than the Massachusetts offshore wind project:

Iberdrola, which became the world’s biggest wind-farm owner by using government incentives and charging above-market electricity rates for clean energy, now operates in 10 markets including the U.S. and U.K. The Romanian mega-park, near its operations in neighboring Hungary, may extend the Spanish company’s lead over second-ranked wind producer FPL Group Inc. of Florida.

“That makes Romania an attractive market,” Young said today in an interview. “Romania has relatively high power prices and flexible energy generation that allows power producers to feed in electricity easily.”

Iberdrola plans to build 50 wind farms in Romania, able to light up almost one million homes.

The decision whether to allow a wind energy project off the coast of Massachusetts to move forward could be seen as an indicator of just how serious the Obama Administration is about green energy efforts.

The Washington Times reports that the U.S. Department of the Interior will decide by April 30th whether the Cape Wind Project, planned for 130 wind turbines off the coast of Cape Cod, gets the green light … a decision that after nine years of work is expected to have major implications for other wind energy projects:

“If it doesn’t get approved, it will have a big impact,” said Mr. [Mark Rodgers, spokesman for Cape Wind developer Energy Management Inc. of Boston].

Cape Wind poses a particular dilemma for the administration. It was bitterly opposed by Mr. Obama’s close friend and political mentor, the late Sen. Edward M. Kennedy, even though backers say the completed project could supply well more than half of the cape’s power needs.

A White House spokesman passed on commenting on the Administration’s position, referring comments to the Interior Department. Hmmmm … I guess the buck doesn’t stop at a certain executive’s desk.

This coming Thursday marks the 40th anniversary of Earth Day, and media giant NBC Universal is taking the whole week to mark the occasion. Part of this sixth green-themed Earth Week by the network includes biodiesel as part of the effort.

This NBC press release has details:

“NBC Universal’s green-themed weeks continue to drive consumer awareness around the environment,” said Beth Colleton, Vice President, Green is Universal. “On the 40th anniversary of Earth Day, we are particularly honored to continue contributing to the green conversation, helping to activate both consumers and employees around this important issue.”

Focusing on green behind the cameras, NBCU is making strides on green production efforts. Industry-leading green production guides for both our television and film production units are available to the entire industry, and crews have put knowledge into action on set. A recent example was on the set of “It’s Complicated,” starring Meryl Streep, Steve Martin and Alec Baldwin. The production used biodiesel generators and vehicles, conducted on-set recycling, donated food daily to a local soup kitchen, and diverted over a ton of potential waste away from a landfill. The film’s DVD, due out on April 27th, uses packaging with 20% less plastic and 100% recycled paper inserts.

More information is available on NBC’s “Green is Universal” Web site.

Five POET ethanol plants have been recognized for chemical transportation safety, receiving the Union Pacific Railroad’s 14th annual Pinnacle Award. The award is given to companies that have no non-accident releases during the year and have successful prevention and corrective plans in place.

“This is Union Pacific’s opportunity to acknowledge and thank our customers for their continuing efforts to eliminate chemical releases from rail cars,” said Diane Duren, POET vice president and general manager – chemicals. “Rail is the safest way to haul the chemicals that Americans use every day, whether it is chlorine for drinking water or fertilizer for our farms that help feed the world.”

POET Biorefining plants in Ashton, Emmetsburg and Jewell, Iowa; Lake Crystal, Minn.; and Hudson, S.D. received the award.

The ethanol tariff debate continues as today, Marcos Jink, President and CEO of the Brazilian Sugarcane Industry Association (UNICA) told World Trade Organization’s Director-General, Pascal Lamy, during a presentation that, “It makes no sense for countries to adopt ambitious policies to reduce greenhouse gas (GHG) emissions, while continuing to apply high tariffs on clean technologies that can be instrumental to achieve goals and allowing fossil fuels to be traded freely.”

This presentation was given as part of Lamy’s visit to Sao Martinho, a sugar, ethanol and bioelectricity plant located in Pradopolis, a town located in the center of Brazil’s sugarcane growing region. The Sao Martinho plant processed 8.1 million tons of sugarcane in the 2009/2010 harvest season, making it the largest among Brazil’s 430 cane processing mills and largest in the world. Earlier this month, this year’s sugarcane harvest began.

“It is essential that WTO member countries reconcile their trade and climate change policies, and that we progress toward the inclusion of ethanol in the list of environmental goods for which import tariffs must be abolished,” said Jank, who argues that ethanol should be recognized as a global energy commodity. He calls for the customs classification for ethanol to be changed to reflect its role as a low-carbon energy solution.

Jank noted that biofuels are not the only clean-technology that may be affected by the move to curb climate change and believes that WTO’s rules may be challenged. He cautioned that without measurable rules based on sound science, the door will be open to creating new trade barriers. He concluded that the greatest risk is the development of implementation mechanisms to prove compliance with sustainability criteria and WTO rules, such as the Directive on Renewable Energy Sources, must be assessed carefully.

Biotech firm Dyadic International announced today an agreement to resolve a class action lawsuit initially filed in October 2007.

The litigation, Miller v. Dyadic International, Inc. et al, pending in the United States District Court for the Southern District of Florida, asserted class action claims under federal securities laws based on allegations of misstatements and omissions by Dyadic and certain of its current and former officers and directors arising out of alleged improprieties at Dyadic’s Asian subsidiaries. The final settlement of this lawsuit is conditioned upon the approval of a Stipulation of Settlement which has been submitted by the parties to the Court. The Stipulation of Settlement provides for payment to the alleged class of $4.8 million in cash to be funded by Dyadic and its insurance carriers. If approved by the Court, the settlement will lead to dismissal of the lawsuit with prejudice.

Dyadic has been involved in developing technology for producing biofuels from agricultural by products such as corn stover and wheat straw.

In this edition of “The Ethanol Report,” Renewable Fuels Association (RFA) Director of Market Development Robert White talks about what RFA is doing to help ethanol scale the rapidly approaching blend wall. He discusses the BYO Ethanol program to get blender pumps installed, encouraging EPA to grant a waiver to allow up to 15 percent ethanol in regular gasoline, and reaching out to consumers to increase consumption of ethanol blends. Robert also talks about how RFA is up for a couple of national awards this week from the National Agri-Marketing Association (NAMA) for their 2009 marketing campaigns.

RFA won regional NAMA awards for their Sturgis Motorcycle Rally t-shirt design, the Flex-Fuel Challenge website, and the BYO Ethanol campaign ad. They will find out Wednesday at the Best of NAMA awards in Kansas City if any of them received national recognition.

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Agriculture Secretary Tom Vilsack is inviting public comment on several proposed rules designed to increase the production of advanced biofuels and the development of biorefineries that were authorized under the 2008 Farm Bill.

“We view these proposed rules as part of the strategy to help meet President Obama’s goal to accelerate the commercial production of advanced biofuels and create a viable alternative fuels industry,” Vilsack said.

The proposed rules affect three renewable energy programs administered by USDA Rural Development – the Biorefinery Assistance Program, Repowering Assistance Payments, and Bioenergy Program for Advanced Biofuels. The programs are designed to establish guaranteed loan regulations to develop and construct commercial-scale biorefineries and to retrofit existing facilities using an eligible technology to develop advanced biofuels; make payments to eligible biorefineries to install new systems that encourage renewable biomass energy use and replace fossil fuels; and establish a payment program for eligible producers of advanced biofuels.

Additional information on the proposed rules and instructions on how the public can offer comments are available in the April 16, 2010 Federal Register.

An advocate for wind energy in the country is calling for a better electrical grid to handle wind energy needs.

The American Wind Energy Association has called for Federal Energy Regulatory Commission (FERC) to update the way the nation’s electric utility system is operated to make it more efficient and better able to accommodate wind and solar power:

“While utility system operators have done an outstanding job of managing the system to ensure reliable electricity supply, many of the rules and procedures they are using were developed a generation or more ago, when our energy mix and the structure of the electric industry were very different and computing and communication technology was far less advanced,” explained Rob Gramlich, AWEA Senior VP for Public Policy.

“These reforms will make the power system operate more efficiently, even in areas where there is not a large amount of wind energy. Consumers’ electric bills will be lowered and they will get more reliable power. Being able to better integrate large amounts of wind and other renewable sources of energy onto the grid is an added bonus.”

The AWEA says many of the ideas for reforms have already been adopted in Europe and could be implemented here.

A key Democrat in the U.S. House of Representatives has set a goal of Congress renewing the $1-a-gallon federal biodiesel tax incentive and sending the measure to Pres. Obama by the end of May.

The Des Moines (IA) Register reports that House Ways and Means Committee Chairman Michigan Democrat Sander Levin made the prediction:

The House and Senate have been at odds over how to pay for the various tax credit extensions that the legislation contains. Levin said the main obstacle is the need to get a filibuster-proof 60-vote margin in the Senate.

“I’m really concerned. There’s a lot of politics involved,” he said.

Industry officials believe biodiesel refineries will be able to ramp up again once they get the subsidy back because there are also mandates out there that will prompt more biodiesel use.

Iowa-based biodiesel maker Renewable Energy Group has bought up the biodiesel assets of Nova Biosource Fuels of Seneca, Illinois.

This Security and Exchange Commission filing says REG will also assume Nova’s debts of about $36.25 million.

Pursuant to the Seneca Asset Purchase Agreement, the Seneca Purchaser agreed to acquire substantially all of the Seneca Sellers’ assets, excluding certain specified assets, used in manufacturing ASTM D6751 quality biodiesel and related co-products out of its production facilities in Seneca, Illinois, including all patents and intellectual property rights to Nova’s process technology, and to assume bank term debt of approximately $36,250,000.

It was about a year ago that Nova filed for Chapter 11 bankruptcy in an attempt to reorganize and stay afloat.

The National Biodiesel Board has renewed its efforts to get Congress to renew the $1-a-gallon federal biodiesel tax incentive that expired at the end of 2009. In this latest move, the NBB has sent a letter to Congressional Leadership urging Congress to take immediate action to retroactively reinstate the incentive and was joined by the Petroleum Marketers Association of America; NATSO; Society of Independent Gas Marketers of America; New England Fuel Institute; American Soybean Association; National Farmers Union; and American Farm Bureau Federation:

“The lapse of the biodiesel tax incentive has harmed the domestic biodiesel industry and placed 23,000 jobs in immediate jeopardy. If extension of this effective incentive continues to languish, we risk losing the significant job creation, energy security and environmental benefits associated with the domestic production and use of biodiesel,” stated Manning Feraci, NBB’s Vice President of Federal Affairs.

NBB officials say the lack of the tax incentive has caused a severe retraction in the domestic production and use of biodiesel.