Domestic Fuel

The National Corn Growers Association (NCGA) is concerned about the company the meat industry is keeping in an “unholy” anti-ethanol alliance with some environmental groups that also have an anti-meat agenda.

The alliance, which kicked off a major campaign last week opposing the proposed increase in the allowable level of ethanol in gasoline to 15 percent, includes the American Meat Institute, along with organizations like the Natural Resources Defense Council and the Environmental Working Group. NCGA CEO Rick Tolman noted in an editorial that “AMI’s “allies” in this fight roundly condemn corn and soybean production as environmentally unfriendly. An NRDC representative, in recent Congressional testimony, suggested that we grow “too much” corn in the United States and we ought to be growing less. NRDC also has promoted eating “grass-fed” over “corn-fed” beef.”

AMI responded to NCGA’s concerns that they remain “committed to our opposition to ethanol subsides and tax credits, a position that is supported by a broad cross-section of producers, processors, consumers and, especially, American taxpayers.”

Not the point, responded Tolman, it’s not about ethanol:

Our concern, and our members’ outrage, is with the choice of allies and the tactics being employed. For example, here is one of their statements: “More corn ethanol is bad for the environment. Producing more corn ethanol could threaten air quality in many communities, destroy millions of acres of forests around the world, and increase emissions of greenhouse gases. In particular, plowing up forests to grow more corn could increase farmland runoff, expanding low-oxygen dead zones that hurt commercial fishermen.”

That statement is really about the radical environmental groups view about corn production. Think of the damage these and other statements make to the image of hard working corn producers. One would think that the members of AMI – companies such as Smithfield, Tyson and Hormel – support corn production. Substitute the phrase “corn-fed beef” instead of “corn ethanol” and you can easily see the danger.

He compares it to the fable about the scorpion and the frog, where the frog agrees to carry the scorpion across the river on his back. Once across the river, the scorpion stings the frog and kills him. As he is dying, the frog says, “But I carried you across the river! Why did you sting me?” The scorpion replies that the frog knew he was a scorpion, and that’s what scorpions do.

NCGA’s message to AMI is, “Rejoin the rest of agriculture and step away from the scorpion.”

Expect to see ethanol advertising saturating the airwaves over the next few months.

Growth Energy and POET both announced major television advertising campaigns this morning that will air on major cable television networks, including Fox News, MSNBC, CNBC, and CNN. The POET campaign includes three ads, each representing a different aspect of ethanol production with a farmer, a scientist and a plant manager reciting free-verse poetry explaining their role in helping solve our nation’s fuel crisis.

Growth Energy, which is co-chaired by POET CEO Jeff Broin, introduced a $2.5 million campaign with six television spots during a live webcast from Washington DC this morning. Co-chairman General Wesley Clark, advisory board member Jim Nussle and CEO Tom Buis joined together for the announcement.

“This is a dramatic step for domestic ethanol, it is a first for our industry,” Buis announced. “Never before has American ethanol developed a sustained TV ad campaign.”

“With this ad campaign, we’re going to make the case for America’s fuel – for ethanol – and it’s a forceful case for ending our addiction to foreign oil,” said Clark. “I think TV is the best way to shape public opinion.”

“American ethanol is engaging the nation in a way that has never been done before,” Nussle added. “America’s ethanol industry hopes to engage the American people in the conversation about America’s energy security.”

The campaign is called “America’s Fuel” and each of the six spots focuses on a particular message about ethanol: Independent, Clean, Renewable, Peace, Sensible and Economic. The spots began airing at 6 a.m. today and will continue for six months.

But “America’s Fuel” will have some competition from “Brazil’s Fuel” as the Brazilian Sugarcane Industry Association (UNICA) also launched a campaign today aimed at explaining the benefits of sugarcane ethanol. UNICA’s campaign includes a new website, SweeterAlternative.com, online, print and radio advertising, new research and a high-profile partnership with the Indy Racing League.

Listen to the opening statements from the Growth Energy press conference in the player below:

Podcast: Play in new window | Download (5.0MB)

Ethanol is getting very close to hitting the blend wall, according to economists with the U.S. Department of Agriculture.

With four months in a row of record ethanol production and stagnant gasoline demand, ethanol stocks are increasing. “Margins have weakened a lot over the last few weeks,” says USDA chief economist Joe Glauber, and indicators are that the blend wall is closing in.

“We’ve seen a sharp drop in ethanol prices,” USDA Outlook Board Gerry Bange adds in a USDA radio report, which he says has cut returns for ethanol producers dramatically.

That means that the future for the industry may very well hinge on the decision EPA has yet to make – moving the allowable blend level for ethanol in gasoline up to 15 percent from the current 10. “Given the fact that gasoline consumption in this country simply is not growing very rapidly and has essentially been flat for some time now, we are getting to the point where we simply have absorbed as much ethanol as we can under the current E10 legislation,” said Bange.

USDA’s latest supply-demand report out Friday left projected 2009-10 corn use for ethanol unchanged at 4.3 million bushels but lowered corn feed and residual use by 100 million bushels lower as March 1 stocks and a record January ethanol production indicate lower-than-expected December-February feed and residual disappearance.

In a commentary on the Natural Resources Defense Council blog, the organization’s Director of Renewable Energy Policy Nathanael Greene criticizes the ethanol industry for what he calls a “highly inflated jobs study” released earlier this week. Greene claims the industry’s jobs numbers are “way off” because they use both inflated jobs multipliers and inflated economic impact, creating what he calls “wonky numbers.”

The author of the study, John Urbanchuk of Entrix, provided a detailed defense of his analysis in a comment on Greene’s post.

Defending the job multiplier, Urbanchuk writes, “Mr. Greene accuses me of using “inflated” jobs multipliers and suggests that “… a multiplier of 6 is aggressive. A multiplier of 3-4 is more realistic …” I used the RIMS II final demand employment multipliers for supplying industries calculated by the U.S. Bureau of Economic Analysis.”

Greene also accuses the ethanol industry of “magically creating thousands of corn growing jobs that would have existed anyway,” which Urbanchuk also defends.

“Our analysis estimates the number of jobs in the corn sector supported by ethanol and at risk if the VEETC is eliminated. The loss of 4 billion gallons of ethanol is the equivalent of 1.5 billion bushels of corn, or about 11% of total corn utilization. Mr. Greene assumes that if corn demand is reduced by lower ethanol production, corn growers will continue to plant and produce the same amount of corn regardless. Supply and demand, Mr. Greene … supply will adjust to lower demand … fewer acres and bushels translates to fewer jobs to plant, treat, harvest, transport corn … not to mention to provide all of the ancillary tasks on the farm. Moreover, during the whole international land use change debate the environmental community said if we weren’t growing corn for ethanol, all that land would “revert to nature.” It now appears that the claim is that if we weren’t growing corn for ethanol, we’d be growing the same amount anyway for some other else. In other words and to parody a famous movie “if you grow it, they will buy it”! You can’t have it both ways.”

Read Greene’s entire post and Urbanchuk’s response here.

Growth Energy is set to unveil an aggressive new television advertising campaign on Monday and is planning “watch parties” and press conferences at different locations around the country to kickoff the new commercials, as well as a live webcast. The $2.5 million national TV advertising campaign is being called a first for the ethanol industry.

Growth Energy leadership, including co-chairman General Wesley Clark, CEO Tom Buis, and advisory board member Jim Nussle will make the announcement at 10:00 am Eastern time Monday from Washington, DC to introduce the six television spots that are set to air on CNN, Fox News, MSNBC and Headline News. “Watch Parties” have already been scheduled in Wisconsin at the State Capitol and in Sacramento, California at The Citizen Hotel.

Find out more on Growth Energy’s newly revamped website.

Shipping giant UPS has added to its fleet of alternative-fueled vehicles with 200 next-generation hybrid electric delivery trucks in eight U.S. cities.

This company press release says the HEVs will be used in Austin, Houston, Philadelphia, Chicago, Washington, D.C., Long Island, Minneapolis and Louisville, and they will add to UPS’ fleet of about 20,000 low-emission and alternative-fuel vehicles already in use:

“We’re proud of this large HEV deployment to major cities in the United States,” said Bob Stoffel, UPS senior vice president of supply chain, strategy, engineering and sustainability. “This technology, where properly used, can yield a 35 percent fuel savings, the equivalent of 100 conventional UPS delivery vehicles.”

The HEVs also use regenerative braking. The energy generated from applying the brakes is captured and returned to the battery as electricity. The combination of clean diesel power and electric power, supplemented by regenerative braking, allows dramatic improvements in fuel savings and emissions reductions.

The trucks will look just like the brown delivery trucks we’re all used to seeing, except they will also have labels identifying them as hybrid electrics. Now, if they’ll just use biodiesel as their TRUE clean diesel source.

On the heels of the U.S. Navy announcing closer cooperation with the USDA in the use of biofuels, an advanced biodiesel production system has been delivered to a Navy installation in California.

This press release from Biodiesel Industries says Naval Base Ventura County has received the first ARIES biodiesel production system … a joint effort by the Navy, Biodiesel Industries and Aerojet to produce a sustainable and reliable form of biodiesel from local resources:

The new system, named ARIES (Automated Real-time, Remote, Integrated Energy System), is a highly automated, transportable biodiesel production unit that can be controlled from a remote location. These features ensure reliable process control and optimal production yields in a sustainable system that can be readily and widely deployed.

Russell Teall, President and Founder of Biodiesel Industries explained, “Creating truly sustainable systems requires a thorough understanding of every aspect of biodieselproduction, from feedstocks to finished products. The Integrated Energy System incorporated into ARIES will eventually allow us to generate our own heat and power,and to feed the surplus into a local micro-grid. These Energy Islands will support the local community with renewable and sustainable fuel, electricity and heat.”

The release goes on to say the beauty of ARIES is its flexibility to use a variety local, non-food feedstocks and its ability to remotely operate hundreds of scalable facilities that can produce as much as 3-10 million gallons a year. In addition, a rugged 100,000 Mini-MPU has been developed for use by the military. And that makes ARIES deployable around the world.

U.S. ethanol production began 2010 on a record pace. The latest report from the Energy Information Administration (EIA) puts January 2010 ethanol production at an average of more than 818,000 barrels per day, compared to 188,000 in January 2009. EIA also reports fuel ethanol imports of 1.4 million gallons in January.

Ethanol demand, as calculated by the Renewable Fuels Association (RFA), also reached an all time high at 784,000 b/d in January, up from 644,000 b/d a year ago.

RFA President Bob Dinneen says the increased production and demand are good news, but continue to point out the need for increasing the blend level of ethanol in gasoline. “American ethanol producers continue to provide increasing supplies of a renewable alternative to imported oil,” said Dinneen. “Due to antiquated regulations, however, American drivers are being prevented access to increased use of ethanol and ethanol blends. The increase seen in ethanol reserves during a time of great economic advantage in ethanol pricing speaks directly to the need for EPA to allow up to 15% ethanol blends for all vehicles, regardless of model year.”

According to Jonathan Coppess, USDA Farm Service Agency Administrator, biomass producers, energy facilities and communities are benefiting from USDA’s Biomass Crop Assistance Program (BCAP). Through April 2, 2010, USDA has approved 4,605 agreements for the delivery of more than 4.18 million tons of biomass and paid eligible biomass owners $165,274,695 in matching payments under BCAP’s first phase. BCAP was established in the 2008 Farm Bill.

“We’ve had dozens of reports from biomass producers, energy facilities and communities that are benefiting from BCAP payments right now, which shows the incredible potential of this innovative program,” said Coppess.

The program authorized USDA’s Farm Service Agency (FSA) to help those producing biomass by providing matching payments for the collection, harvest, storage and transportation of eligible biomass delivered to approved facilities to convert it to biofuels. FSA service centers across the country have issued payments of up to $45 per dry ton for eligible biomass deliveries. Biomass is any organic matter that is available on a renewable or recurring basis including: agricultural commodities, plants, trees, algae, and other animal, vegetative and wood waste materials.

“Congress directed USDA to establish a program to encourage farmers and forest landowners to help develop the biomass supply chain and accelerate energy independence, rural economic development and renewable sources of energy,” said Coppess. “Since we issued initial guidance last June, BCAP has gathered momentum and our efforts to expedite matching payments provided valuable, real-world information and experiences that will inform the crafting of the final regulation, as well as some much-needed economic stimulus in many rural areas.

Once the final rule for the program is approved, it will provide funding for producers of renewable biomass who establish new biomass crops within select geographical areas and will continue to provide matching payments for deliveries of eligible materials. Click here to access charts showing BCAP Collection, Harvest, Storage & Transportation Component and Summary Reports.

Today, Christianson & Associates, PLLP (C&A) has released a new in-depth report that looks into ethanol plant efficiency and financial viability. The Biofuels Benchmarking Annual Report is in its 7th year and analyzed the operational and financial performance of more than 50 ethanol plants along five major “bench” areas: overall ethanol industry analysis, regional ethanol plant analysis, production capacity analysis, plant production efficiency analysis and balance sheet analysis.

Brian Jennings, the Executive Vice President for the American Coalition for Ethanol (ACE) notes that this report is yet more proof that ethanol is a sustainable way for our country to produce fuel.

“This report proves that ethanol producers are getting more efficient every day, indicating that ethanol facilities producing WDGS use only about 19,000 BTU’s of energy to make just one gallon of ethanol. As we continue to point out that ethanol is getting more efficient as oil is getting less sustainable, this is the sort of data that helps reinforce and prove our point,” said Jennings.

C&A has the most robust benchmarking programs available for the ethanol industry. The program enables participants to measure themselves in over 90 financial and operational factors on a quarterly basis and compare their results to others in the industry. Ultimately the program helps plants identify their strengths and weaknesses as a tool to improve their financial outlook.

“Not only is this annual report a valuable tool for ethanol producers, it is also a helpful resource for public and private researchers and analysts who are looking for unbiased, independent data and information to assist them in their own analytical efforts,” said Geoff Cooper, Vice President Research for the Renewable Fuels Association.

The Biofuels Benchmarking Report is available for free to all current Christianson & Associates Biofuels Benchmarking participants. In addition, members of the media, academia and current legislative and executive branch members may also receive a free copy. Current RFA and ACE members will receive the report for a discounted amount of $250.00; all others can purchase the report for $500.00. Click here to order your copy.
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Constellation Energy has finished a deal to buy the 70-megawatt Western Maryland Criterion wind project from Clipper Windpower, Inc.

This Constellation press release says the deal includes purchasing 28 Clipper Liberty 2.5-megawatt wind turbines for the project:

“Maryland’s clean energy goals are among the most ambitious in the nation and we’re committed to working with the state to achieve them by investing in an array of solar, wind, biomass and other sustainable energy projects,” said Kathleen W. Hyle, senior vice president, Constellation Energy, and chief operating officer, Constellation Energy Resources. “The market for clean energy products and services is growing rapidly in Maryland and across competitive energy markets nationwide. Investments in sustainable energy sources improve the environment by reducing carbon emissions, spur much-needed job growth and allow us to broaden our clean energy product offerings for customers.”

The project has entered into a 20-year power purchase agreement with the Old Dominion Electric Cooperative for energy and renewable energy credits produced by the wind facility. Old Dominion is a not-for-profit wholesale power provider serving public electric cooperatives in Maryland, Delaware and Virginia.

The project is expected to be operating commercially by the end of this year.

Federal ag department officials seem to be rooting for renewal of the $1-a-gallon biodiesel tax incentive to finally pass Congress … but no one from USDA is pressuring lawmakers to get the deal done.

During yesterday’s event in Hawaii, where the U.S. Navy and USDA pledged to work together to produce more biofuels for the service’s renewable energy goals, reporters were able to quiz Ag’s Deputy Secretary Kathleen Merrigan if the Obama Administration was pressuring Congress on the incentive’s renewal. But Hoosier Ag Today reports that her answer was less than inspiring for a biodiesel industry going further under every day without the tax break:

“It’s something Tom Vilsack has spoken publicly about, so we are clearly in support of the kind of tax support that the industry needs at this point. But we’re working with Congress on a number of fronts. We were given a wonderful suite of energy programs as a part of the 2008 farm bill. We are working diligently to get those all up and running, notices and rulemakings that we have to do in this innovative space where there’s not a lot of history of work to build upon. So we are working very closely with our colleagues in Congress on a number of fronts.”

Merrigan wouldn’t offer any guesses when Congress might finally reconcile the two different versions of the American Workers, State and Business Relief Act which includes the House bill to extend the credit through the end of 2010.

An Iowa-based maker of biodiesel production equipment has come up with a purification method that makes the handling and removal of purification media easier, safer and more efficient for biodiesel plant operators.

This article from Biodiesel Magazine says Heartland Biodiesel Supply’s patent-pending design got its inspiration from the water treatment industry where ion exchange resin is widely used:

The same column design can be used for Eco2pure or any ion exchange resin—the only difference being the flow direction in the columns. Heartland Biodiesel Supply designates columns to be used for Eco2Pure media as HBD DRY-CLN, and those to be used with ion exchange resins as HBD ION.

Heartland Biodiesel Supply has incorporated its proprietary distribution system into this design, which can extend the life of purification media. Westphal said many system designs on the market result in fractured flow where some of the media in the column do not come into contact with the biodiesel being purified, but Heartland Biodiesel Supply’s new columns create a plug flow that allows the fuel being purified to contact all of the media present in the columns, thereby extending the life of the media at a cost savings.

More information is available on Heartland’s Web site.

The Dogwood Shell station at 1488 Montgomery Highway, in Vestavia Hills, AL will be selling E85 for 85 cents off for 85 minutes: from 2:15 until 3:40 tomorrow, April 8th. This promotion is to celebrate the involvement of the Brazilian Sugarcane Industry Association (UNICA) as the official ethanol provider for the Indy Racing League cars debuting in the Indy Grand Prix of Alabama race at the Barber Motor Sports Park this weekend.

In addition to the ethanol promotion, E85 customers can win one of five $100 fuel cards. The first 20 will receive two tickets to the race.
UNICA renewed its fuel supply agreement with the Indy Racing League for the 2010 season in November of last year. Under the new agreement, the IZOD IndyCar Series will continue to utilize sugarcane ethanol to fuel its race cars, including at its signature event, the Indianapolis 500.

The agreement calls for UNICA to cover the cost of approximately 53,000 gallons of the 100 percent fuel-grade ethanol to be used by in 2010 by the IZOD IndyCar Series as well as the renewable diesel for the fleet of trucks that delivers cars, related gear and fuel for all races. The deal also calls for UNICA’s Sugarcane Ethanol brand to be featured at all Indy events.

Big Oil baffles me. They are running full-scale ad campaigns touting their work in developing alternative energy sources, (you couldn’t miss them if you watched the Winter Olympics) and then they turn around and file a suit against the EPA for the expanded Renewable Fuels Standard. They claim it is “unlawful and unfair.”

Well, today, according to an article in E&E, Canada is leading the charge to create a consortium of oil groups, to be called the Heavy Oil Working Group, as a way to discuss how to reduce the carbon emission of fossil fuels, especially oil from tar sands. The group is meant for both heavy producers of oil and heavy consumers of oil and it is hoped that environmental groups will also join the discussion.

The talks will commence when the nations gather in Washington for the Energy and Climate Partnership of the Americas, an institute suggested by President Obama last April.  It will be at this event that Canada is asking to add the Heavy Oil Working Group to the roster for discussion. They are hoping that the U.S., Mexico, Brazil, Columbia and Venezuela all join as they all have “unconventional” reserves to tap.  For example, North Dakota is mining oil from tar sands and we will be seeing a dramatic increase in offshore drilling since President Obama approved the action last week.

“The world will continue to depend on fossil based fuels for the next few decades, so our biggest challenge in many ways is to make fossil fuels cleaner,” said Marc LePage the Canadian Embassy’s minister for energy and climate change.

Yes, LePage is right, we do need to make fossil fuels cleaner. Big Oil also needs to quit double talking and choose sides – either you are or you aren’t for energy diversity (I vote for you aren’t) and cleaner fuels. In the current energy, environmental and economic situation our country finds itself in, the only way out is to work together, but it appears that what we’re doing now is working apart.