Domestic Fuel

A nasty little beetle is destroying millions of acres of lodgepole pine trees across the western United States and so far, no one has been able to stop it.

But, in the tradition of making lemonade from lemons, the biofuels industry has been working on ways to use the dead trees for energy – and one company is now claiming success.

Cobalt Technologies of California is claiming to be the first to produce biobutanol from beetle-killed lodgepole pine feedstock. To evaluate the fuel’s viability for commercial vehicles, the company has signed a fuel testing partnership with Colorado State University.

“With this breakthrough, we’ve been able to turn a problem into an opportunity,” said Rick Wilson, Ph.D., chief executive officer of Cobalt Technologies. “Harvesting beetle-killed trees could produce low-carbon fuels and chemicals, establish a foundation for a sustainable biorefinery industry and create jobs, particularly in rural areas. If we use only half of the 2.3 million acres currently affected in Colorado alone, we could produce over two billion gallons of biobutanol — enough to blend into all the gasoline used in Colorado for six years.”

“Clearly, this is a significant achievement and a major step forward toward the production of cellulosic biofuels. Converting beetle-killed pine for biofuels is an extremely difficult process,” said Ken Reardon, professor of Chemical and Biological Engineering at Colorado State University. “If Cobalt can convert beetle-killed wood, it’s likely that the company can make biofuel from almost any cellulosic feedstock.”

Cobalt Technologies has partnered with Colorado State University to perform engine testing with a gasoline-butanol blend made with the biobutanol from beetle-killed wood. The fuel testing will be performed at Colorado State University’s renowned Engines and Energy Conversion Laboratory under the auspices of the University’s Sustainable Bioenergy Development Center.

As I write this review, I’m sitting on my deck looking out at dozens of acres of avocado, orange and lemon trees. Yesterday, I helped to plant a vegetable garden – the produce being grown for a local restaurant. The irony is that as I am surrounded by abundance here in America, I’m reading about those in other countries who have less than nothing. “Enough Why the World’s Poorest Starve in an Age of Plenty,” written by journalists Roger Thurow and Scott Kilman, details the struggle of countries, especially Africa, to feed their people.

Agriculture is the lifeblood of the world. As a matter of fact, is it the largest industry in the world. Yet many countries cannot compete with world prices in part due to subsidies in other countries such as America and the European Union as explained by the authors. These subsidies keep commodity prices artificially low, so low that most subsistence farmers in third world countries can’t compete. Traditionally, the answer to this problem has been food aid. Give the enormous surplus grown in places like America, to third world countries.

While food aid is a matter of life or death for millions of people each year, it does not lift the people out of poverty. It does not solve the problem of widespread starvation. The farmers of Africa must have a way to make a living – one that allows them to buy food. According to the authors, more “food” aid needs to be given in the form educating farmers on how to grow more crops with less. Helping them to build irrigation systems, giving them access to affordable hybrid seeds and fertilizers and allowing the commodity markets to work in a way that farmers from around the world can sell competitively sell their food.

The reason that more educational aid is not given, say the authors, is that food aid is a way for American or European farmers to sell their surplus crops. If other countries have enough food, and begin to compete in world markets, then farmers from first world countries will lose money.
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New research indicates that allowing the ethanol tax incentives to expire at the end of this year would mean job losses in 25 states, not just the Midwest.

According to additional research conducted by economist John Urbanchuk, non-traditional ethanol producing states like California, Texas, Georgia, Colorado, and Tennessee would be hit by job losses due to the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC). Urbanchuk’s research finds that while Midwestern states would be hit the hardest, thousands of jobs would be at stake in the West, the South, the Great Plains and the Northeast. The number of jobs lost ranges from as few as 16 in Louisiana, to nearly 30,000 in Illinois.

The state by state breakdown of potential job loss resulting from a failure to extend the VEETC and the offsetting secondary tariff on imported ethanol adds a new layer of analysis to a report Urbanchuk completed in March. In that study, he calculated a loss of 112,000 jobs nationwide and a 38% reduction in U.S ethanol production capacity if these tax incentives were allowed to expire. The report was prepared by Urbanchuk for the Renewable Fuels Association.

Read the report and state breakdown of potential job losses here.

The opening of Colorado’s first ethanol blender pump will be celebrated with a grand opening event from 10 a.m. to noon on Thursday, April 8. E20, E40, and E85 will be offered at the Stratton Equity Coop station at 515 Lincoln Street in Burlington, Colorado.

The blended ethanol fuels at the station will sell 99-cents a gallon to drivers of flexible fuel vehicles. “It says a lot that the first blender pump is opening in Burlington and in the heart of corn country,” said Rick Palkowitsh, who farms near the community. “As a farmer, I am excited we will be the first city in Colorado offering new technology to encourage the use of renewable fuels by motorists. This blender pump will give consumers more choices as to the type of fuel they choose.” Palkowitsh also chairs Colorado Corn’s Market Development Action Team.

This event is being sponsored by Stratton Equity Coop, Little John’s Equipment Company, Growth Energy and Colorado Corn. Currently, there are more than 100 E85 pumps in Colorado.

Iowa is getting to be known as a center for wind energy, including production of the green power and production of the tools needed to generate that power. So, it’s no wonder that the state is the host of a pair of wind energy conferences this week.

KCCI-TV in Des Moines says the gatherings hosted by the Iowa Alliance for Wind Innovation and Novel Development and the Iowa Wind Energy Association have been taking place in Ames:

Many of the experts said they consider Iowa to be a leader in wind energy. They said it’s more than just the growth of wind farms in the state; it’s also the state’s investment in incentives to draw green companies here.

“I mean we’re lucky here in Iowa that we do have some transmission availability and we do have wind availability, but there’s a lot of states that may have wind but not transmission,” said Bob Loyd, the chief operating manager and plant manager at Clipper Windpower in Cedar Rapids.

Some of the challenges that wind energy faces is transmitting the power across state boundaries, which would take a national wind energy policy, and getting more universities to develop renewable energy programs.

New research has shown that biomass can be directly transformed into biodiesel that suits many quality standards, including ASTM D6751 and EN14213 and 14214.

This post from GreenCarCongress.com says Spanish researchers Gemma Vicente and colleagues made the discovery that could open up many more feedstocks for biodiesel … but admit the process needs some work:

Oils from oleaginous microorganisms, such as yeasts, fungi, bacteria, and microalgae, are under investigation as alternatives to plant—and especially food crop—oils as feedstocks for renewable fuels and chemicals. Algae are especially of interest because of their ability to capture CO2 in lipids, but cost-effective, large scale production is still problematic, note Vicente et al. in their paper. Furthermore, not all oleaginous microorganisms have ideal lipid profiles for biodiesel production.

It’ll be interesting to see how long it will take before this technique is available on a commercial basis. Stay tuned.

Leaders from the U.S. Department of Agriculture and the U.S. Navy have kicked off the first of several forums designed to increase biofuels production and meet the Navy’s renewable energy needs.

This USDA press release says the opening of the forum today in Honolulu came as a result of the Memorandum of Understanding (MOU) recently signed by the USDA and the Navy regarding renewable energy:

“As we continue to expand efforts to build a clean energy economy, create new jobs and reduce our dependence on foreign oil, we can use the Navy’s fleet as a catalyst to increase demand for biofuels and spur economic opportunity in rural communities throughout the country,” said Agriculture Deputy Secretary Kathleen Merrigan…

“The Department of the Navy is very energized about the partnership with the Department of Agriculture,” said Navy Assistant Secretary Jackalyne Pfannenstiel. “This collaborative effort will enable us to reduce our petroleum consumption and increase our alternative energy opportunities. The Navy and Marine Corps’ warfighting capability will benefit through a more secure energy future.”

The strategic goal is to reduce this country’s reliance on fossil fuels, especially on the battlefield where transportation costs can make a gallon of gas cost up to $400. The Navy has set several energy targets, featuring biofuels in most of them:

* When awarding contracts, appropriately consider energy efficiency and the energy footprint as additional factors in acquisition decisions.
* By 2012, demonstrate a Green Strike Group composed of nuclear vessels and ships powered by biofuel. By 2016 sail the Strike Group as a Great Green Fleet composed of nuclear ships, surface combatants equipped with hybrid electric alternative power systems running on biofuel, and aircraft running on biofuel.
* By 2015 cut petroleum use in its 50,000 non-tactical vehicle commercial fleet in half, by phasing in hybrid, flex fuel and electric vehicles.
* By 2020, produce at least half of shore based installations’ energy requirements from alternative sources. Also 50 percent of all shore installations will be net zero energy consumers.
* By 2020 half of DON’s total energy consumption for ships, aircraft, tanks, vehicles and shore installations will come from alternative sources.

The Grocery Manufacturers Association (GMA) and fellow ethanol foes have been fairly quiet since food prices began moderating last year, but the coalition has gotten back into action this past week with a new campaign opposing E15.

A scathing editorial in the Washington Times Monday followed directly on the heels of a full-page ad in “The Hill” last week sponsored by GMA, the American Meat Institute, the Snack Food Association, the International Dairy Foods Association, and other groups representing oil companies, environmentalists and boat manufacturers. The editorial attacks “Big Corn” for claiming “that forcing Americans to use this renewable fuel would reduce dependency on Mideast oil and lead to cleaner air. It’s just as likely, however, that they want to get their hands on the $16 billion a year from the 45-cent-per-gallon “blender’s tax credit” – which actually goes to oil companies who blend ethanol with gasoline, not farmers.

The editorial states that increasing the use of ethanol will increase food prices, damage engines and have little or no impact on cutting the pollution in the air. Growth Energy, which filed the petition with EPA last year to increase the blend level for ethanol in gasoline to 15 percent, issued a response to the editorial charging that those conclusions are based on “obsolete information, ethanol myths and scare tactics.”

“First, technological advancements in the agriculture industry have made ethanol production more efficient than ever before. The latest crop forecasts prove that our farmers can produce more than enough grain to satisfy all the demand for food, fuel and feed in this country without increasing prices at the grocery store,” said Growth Energy CEO Tom Buis. “Second, exhaustive data has proven that engine performance and durability do not suffer from higher ethanol blends. According to a newly-released Rochester Institute of Technology study, E20 – a blend of 20-percent ethanol with gasoline – has no measurable impact on vehicle drivability or durability, and lower tailpipe emissions compared to conventional gasoline.

“Lastly, the editorial overlooks the economic and environmental benefits associated with higher blends of ethanol. A national study by the Windmill Group, out of North Dakota, estimated that moving from blends of E10 to E15 would create 136,000 jobs in the United States and help reduce our green house gas emissions. Science proves that grain ethanol is a low-carbon fuel that produces 59 percent fewer green house gas emissions than gasoline.”

The coalition behind the ad in “The Hill” has introduced a website called FollowTheScience.org that claims ethanol is bad for engines, the environment, food prices and even rural communities. One of the sources they offer as proof that ethanol impacts food prices and rural communities is the Congressional Budget Office report released in April 2009 which concluded that ethanol had only a small impact on higher food costs, while high oil prices had the most impact. A recent report from the UK came up with the same conclusion and noted that the biggest driver for higher commodity prices at the time was fuel and fertilizer, which account for over half of the input costs for crop farmers.

Brazil is eliminating its tariff on ethanol imports and wants the United States to do the same, but a recent study shows Brazil has far more to gain in that deal.

The study, prepared by IHS Global Insight, determined that eliminating import tariffs and increasing the tax on domestic ethanol would have severe economic consequences for both American ethanol producers and corn farmers. Dropping the current import tariff on ethanol would create a negative ripple effect, causing corn prices to drop by 30 cents per bushel and eliminating as many as 160,000 full and part-time jobs.

According to the study, if the tariff were allowed to expire at the end of this year, imports would immediately begin to rise until they reach a high of just over 1.6 billion gallons in 2012/13 and 2013/14, and then gradually decline to around 1.4 billion gallons in 2018/19. Currently, imports range between 200 and 600 million gallons per year. The report estimates that domestic ethanol production would drop by more than 600 million gallons in the first year, dragging corn prices down in the process. More importantly, the study shows that eliminating the import tariff would result in foreign ethanol replacing domestically produced ethanol – but not foreign oil.

A significant drop in ethanol production would have a detrimental impact on states where the ethanol industry has been rebounding, like Nebraska. Todd Sneller, administrator of the Nebraska Ethanol Board, said that increased production and plant reopenings confirm the viability of the ethanol industry and its positive impact on the state. “The ethanol industry has created thousands of good-paying jobs in Nebraska,” Sneller said. “Elimination of the ethanol tariff and biofuel incentives would be a misguided policy considering the significant economic impact generated by this domestic industry. The current policies help create jobs, they keep a domestic industry more competitive and they reduce fuel costs for consumers.”

Another study, done by the University of Missouri’s Community Policy Analysis Center, found that Nebraska was one of six states that would see the largest declines in economic activity due to removal of the ethanol import tariff. The others were Iowa, Illinois, Minnesota, Indiana and South Dakota. The decline in economic activity was calculated at $9.2 billion in the first year, $26.4 billion in the second year, and $36.7 billion in the third year.

Today, U.S. Rep. Gabrielle Giffords (D-Ariz) along with Environment Arizona, have released a solar energy report, “Building a Solar Future: Repowering America’s Homes, Businesses and Industry with Solar Energy,” detailing how solar energy can be used to power our homes, businesses, farms, and neighborhoods as well as how solar can play a role in energy security and pollution reduction.

“This report shows the possibilities of solar energy and how solar is an achievable path to our energy security,” said Giffords, who is a member of the House and Science Technology Committee. “We still have work to do before solar energy can make up a large percentage of America’s energy needs, but we are moving in the right direction.”

The report also also identifies obstacles to wider use of solar in the United States and discusses a combination of policies that could allow solar to meet 10 percent of America’s energy needs.

Less than a week ago, Gifford announced the Solar Schools Act, a piece of legislation that would make it more affordable for schools to install solar panels and reduce electricity costs.

You can read the full report by clicking here.

Investors in California’s BlueFire Ethanol should be pleased to see that the company posted a profit in 2009.

The company, which is focused on the production of ethanol and other biofuels from non-food cellulosic wastes, reported 2009 revenue of $4,318,213 – which amounts to a four cent profit per share. According to BlueFire CEO Arnold Klann, “Through BlueFire’s continued progress on developing its two planned cellulosic ethanol plants, BlueFire was able to recoup development costs previously expensed dating back to 2007. Late in 2008, BlueFire sought guidance from the SEC on the correct treatment of these reimbursements. It was determined that these reimbursements should be treated as revenue, as the costs were expensed in prior periods and expenses related to the grant are not directly identifiable due to the composition of the reimbursements. These reimbursements along with sugar sales and consulting fees resulted in a $0.04 per share profit.”

Last year BlueFire began to develop relationships with key industry partners such as Solazyme, which has been testing sugars produced through BlueFire’s patented process, for compatibility with its renewable oil process to produce the bio-oil cost effectively and at scale.

BlueFire is one of four companies awarded funding from the U.S. Department of Energy under the Energy Policy Act of 2005 to construct cellulosic biorefinery production facilities. The two plants in development are located in in Lancaster, CA and Fulton, MS.

It looks like the EPA has been busy approving propane fueled vehicles. Today, CleanFUEL USA has announced that the EPA has certified the industry’s first liquid propane engine built on a General Motors 6.0L chassis. Propane has been gaining momentum as a fuel of choice for fleet vehicles and CleanFUEL’s liquid propane injection systems (LPI) provides a high-performance, fuel efficient alternative to gasoline.

Fleet vehicle owners are making their choices for alternatively powered vehicles. Sales for cars including plug-in hybrid electric, mild hybrid 1, natural gas and propane (also known as Autogas and liquefied petroleum gas/LPG), and fuel cell powered vehicles are expected to increase to 49 percent by 2035, up 36 percent from 2008 based on the Annual Energy Outlook 2010 report released by the U.S Energy Information Administration (EIA). About 13 million cars and trucks worldwide are powered by propane today and they are running on fuel that averages 40-50 percent less than gasoline/diesel per gallon according the CleanFUEL.

CleanFUEL’s advanced propane engine utilizes the patented Icom JTG Technology and System manufactured by Icom North America and offers the same horsepower, torque and performance as gasoline-powered engines. Yet it produces 87 percent less hydrocarbons and 50 percent fewer toxins than gasoline. CleanFUEL’s system performed 25 percent better than comparable gasoline and diesel engines tested against current EPA standards, also reporting zero in particulate matter emissions rate. This makes propane fuel extremely attractive as the EPA and CARB continue to tighten the reign on vehicle emissions.

ROUSH has just gotten word today that the EPA has approved their 2010 E-150, E-250, and E-350 propane fuel conversion system for meeting their Federal emission regulatory requirements. The propane fueled vans became available in December of 2009. Early last month, ROUSH received word that the California Air Resources Board (CARB) had approved the propane fuel conversion system for ROUSH’s F-250 and F-350 trucks and they are currently working with them for approval on their E-series of vehicles.

This decision is important because it now means that the trucks can be sold anywhere in the country with the exception of California and those states which have adopted the CARB certification standards. CARB certification is currently pending, as is EPA approval for other additional model year vans. Production and shipment of conversion systems and of ROUSH-built vehicles can begin immediately.

The EPA certification covers the 2010 model year Ford E-150, E-250, and E-350 cargo vans, wagons, and certain cutaway configurations with a GVWR of up to 10,000 pounds (the Heavy Duty Vehicle 1 classification), utilizing the Ford 5.4L, 2V V-8 engine. Vehicles can be ordered with the conversion performed at the ROUSH vehicle assembly facility in Livonia, Mich., or a conversion system can be ordered and installed by a qualified up fitter on an existing vehicle meeting the appropriate configuration standards.

The purchase of propane-powered vehicles is eligible for a variety of federal, state, and municipal tax credits or rebates. The Qualified Alternative Fuel Motor Vehicle (QAFMV) federal tax credit is available to be applied toward the purchase of vehicles that have been repowered to operate on an alternative fuel. The ROUSH propane powered E-150, E-250, and E-350 is unique as it was calibrated and certified to stricter emissions standards than the EPA mandated for vehicles of its class. That means the QAFMV tax credit can cover 80 percent of the incremental cost to convert certain models, up to an $8,000 cap for qualified buyers.

Less than two weeks ago, Iowa Governor Chet Culver and Rhode Island Governor Donald L. Carcieri released the “Great Expectations” wind energy report as commissioned by the Governors’ Wind Energy Coalition. The two governors met with Obama to share their findings, one of which is strong support for coastal, deep water and offshore wind energy technology, research and investment. The report states, “Congress must approve legislation that will allow for the efficient and timely review of wind projects on federal lands and in offshore coastal regions.” The first offshore wind project under federal consideration: Cape Wind, an offshore project that is set to be developed in Nantucket Sound and the winds are blowing furiously against approval for the project.

Photo Credit: lakewentworth via flickr

Interior Secretary Ken Salazer is set to make a historic decision on the project this month and to help make his decision, has reached out to the Advisory Council on Historic Preservation (ACHP) to provide comments and recommendations that will factor into his decision. The ACHP has recommended that he not approve the project.

ACHP states, “The historic properties affected by the Project are significant, extensive, and closely interrelated. The Project will adversely affect 34 historic properties including 16 historic districts and 12 individually 2 significant historic properties on Cape Cod, Martha’s Vineyard, and Nantucket Island, and six properties of religious and cultural significance to tribes, including Nantucket Sound itself. These districts and standing structures reflect the broad array of properties that represent the rich and unique architectural, social, and cultural history of Cape Cod and the Islands.”

They continue, “Adverse effects on historic properties will be direct and indirect, cannot be avoided, and cannot be satisfactorily mitigated.”

The ACHP findings are raising the debate about offshore wind energy to a fever pitch and putting the Obama administration between a rock and a hard place.
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In a bid to get the United States to eliminate tariffs on imported ethanol, the Brazilian government has announced it will reduce their tax on ethanol imports to zero from the current 20 percent through the end of next year. The Brazilian Chamber of Foreign Trade (CAMEX) announced the temporary reduction Monday and it is expected to go into effect before the end of the week.

The Brazilian Sugarcane Industry Association (UNICA) called the action a major step forward in building a global biofuels marketplace. “UNICA believes that free trade is a two way street and Brazil, as the largest producer of cane ethanol and largest exporter of ethanol in the world, with 60% of the global market, will lead by example and eliminate barriers to renewable, clean fuels. We hope this move will encourage other countries around the world to develop open, free markets for clean, efficient renewable fuels such as ethanol,” said UNICA President & CEO Marcos Jank.

“The question now is whether the U.S., as the world’s number-one ethanol producer, will follow suit,” said UNICA’s Chief Representative for North America, Joel Valasco.

Not if the U.S. ethanol industry has anything to say about it. The Renewable Fuels Association (RFA) reaction to the announcement is that Brazil’s action “undermines its claims for wanting a global trade in ethanol. Vacillating regulations regarding Brazil’s trade policy as well its domestic consumption of ethanol make it impossible for foreign ethanol producers to even consider exporting product into Brazilian markets.” According to RFA, the U.S. tariff on imported ethanol “serves to protect American taxpayers from further subsidizing foreign ethanol industries already benefiting from generous government support in their own countries” and should be continued.

Growth Energy had a similar response to the action. “We would not support reducing the U.S. import tariff, despite whatever Brazil is temporarily doing, because Brazilian ethanol already enjoys generous subsidies from the Brazilian government and to provide them access to additional subsidies from the U.S. government makes no sense,” said Growth Energy CEO Tom Buis. “If we want to import something from Brazil it should be the same resolve to become energy independent. Brazil wisely saw the importance of supporting and incentivizing their domestic ethanol industry and now they are energy exporters while the U.S. continues to rely heavily on foreign oil. The U.S. would do well to follow their example and promote American ethanol producers rather than giving tax breaks to foreign ethanol and increasing our dependence on foreign energy.”