Domestic Fuel

At the helm of Friends of the Earth, a new report was released today highlighting government programs and subsidies that are wasteful to taxpayers, harmful to the environment and bad for consumers. The Green Scissors 2010 report targeted four major areas for budget cuts including energy, agriculture and biofuels, infrastructure, and public lands.

Many of the recommendations of this report come as no surprise to the agricultural and biofuels industry, as over the past two weeks, members of Friends of the Earth surreptitiously called agricultural organizations across the country, questioning them about their methods of production.

According to an industry insider whose company received multiple calls from various people in the employ of Friends of the Earth, the organization was asking questions about ground water quality (ag production, mainly corn and soybeans have been linked to the Gulf of Mexico Dead Zone) and hypoxia; two issues that have made national headlines in recent weeks. It is also no secret that Friends of the Earth has engaged in an active anti-agribusiness and biofuels campaign over the past few years, and the environmental organization has been tied to Big Oil through contribution monies.

It should be known that, Friends of the Earth, along with the Natural Resources Defense Council, the Union of Concerned Scientists, and the Clean Air Task Force are currently engaged in a campaign to end the ethanol tax credit (VEETC) as well as the ethanol tariff. They have specifically attacked Growth Energy’s corn-ethanol advertising campaign in the Beltway.

They write on their website, “Tens of billions of dollars of taxpayer money has already been wasted under the credit [VEETC]. And these funds do little more than to further line the coffers of the oil industry. This coalition is working to prevent an additional 30 billion plus dollars from being lavished on the industry to fulfill a legally mandated requirement to blend an environmentally harmful fuel into another environmentally harmful one.”
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Ethanol hit a home run at the Iowa Cubs game last night in Des Moines.

With the help of Renewable Fuels Association chairman Chris Standlee of Abengoa Bioenergy throwing out the first pitch, the Iowa Cubs beat Oklahoma City RedHawks 8-5 Wednesday night in front of 9,088 fans on Ethanol Night at Principal Park.

The promotional event featured ethanol information and displays, ethanol t-shirts and giveaways. Ethanol industry leaders from Iowa and around the nation attending the event, which was held in conjunction with RFA’s quarterly board meeting being held in Des Moines this week.

Looks like it was lots of fun for everyone – see all the photos here in the RFA Flickr Photo Album from the event.

The University of Tennessee Biofuels Initiative (UTBI) is closely watching how more than 1,000 acres of newly planted varieties of switchgrass will compare to current varieties. This project is part of a U.S. DOE project that was developed to study improved efficiencies in bioenergy production from biomass. The scale of the acreage will allow for assessment of the environmental and economic sustainability of the different varieties. Farmers and researchers should gain useful information on seed stock performance including disease and drought resistance, tolerance to humidity, and other agronomic variables.

The project team is headed by UT researchers Dr. Sam Jackson and Dr. Nicole Labbe who are also working with Ceres and Dupont Danisco Cellulosic Ethanol (DDCE). Farmers from nine east Tennessee counties, along with members of the research team, have planted more than 1,000 acres of switchgrass varieties that have been developed by Ceres. The results will be compared with 1,000 acres of a more traditional variety of switchgrass known as “Alamo”.  These acres have been established on private farms as part of the UTBI farmer incentive program that now totals nearly 6,000 acres.

Once the switchgrass is harvested, it will be turned into cellulosic ethanol at Genera Energy/DDCE’s demonstration-scale biorefinery located in Vonore, Tenn. Genera Energy is hosting a groundbreaking of the facility located in the Tennessee’s Biomass Innovation Park on July 29, 2010.

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A switch engine in Havre, Montana is making the switch to 20 percent biodiesel for a year-long experiment to see how it works on trains in the Treasure State.

On July 17, BNSF Railway celebrated the official start of the project where Montana State University-Northern’s Bio-Energy Center will test biodiesel produced by Earl Fisher Biofuels in one of two BNSF Railway switch engines used at the Havre Depot. The testing will take place during the four seasons of Montana weather from extreme cold to intense heat. During the year long program one switch train will continue to use diesel to act as a control and the other will run on a mix of 20 percent biodiesel, which BNSF requires be made with Montana-grown oil seeds. With BNSF now a steady client, Earl Fisher Biofuels will have year-round demand for biodiesel and for the crops — such as camelina, canola and safflower seeds — that produce it.

Senator Jon Tester (D-MT) was on hand for the kick off event, pictured here between Greg Kegel, dean of MSU-Northern’s College of Technical Sciences (left) and Beau Price of BNSF (right) with a jar of biodiesel. The MSU Northern Bio Energy Center will be the site of the Agricultural Biofuel Summit on October 19-20, facilitated by Ethanol Producers And Consumers (EPAC) made possible through a Growth Through Agriculture grant. EPAC provided the photo and information for this story.

Dresser Wayne, producer of fuel dispensers, has announced that their Reliance® E-Series fuel dispensers for retail and fleet applications received Underwriters Laboratories (UL) certification for dispensing ethanol up to E85. Underwriters Laboratories sets safety standards and conducts compliance-testing on a wide range of products.

The Reliance E-Series dispenser’s UL certification follows the recent UL certification of the Dresser Wayne Ovation® Eco Fuel retail dispenser.

“There are a large number of flex-fuel vehicles in government fleets with renewable fuel requirements, but they often lack the supporting local infrastructure for E85 fueling,” says Scott Negley, director of Alternative Energy Products for Dresser Wayne. “UL certification of our E85 Reliance E-Series dispensers can make it easier for government and business fleet customers to gain approval from local authorities for the installation of E85 fleet-fueling facilities.”

The ethanol industry is expecting that Dresser Wayne and Gilbarco Veeder Root pumps will be UL certified to be used for mid to high level blending soon.

The nation’s major fuel marketing associations are advocating legislation that will help them sell higher blends of renewable fuels, including ethanol and biodiesel greater than E10 or B5.

NACS – the Association for Convenience and Petroleum Retailing, along with NATSO (representing America’s Travel Plazas and Truckstops), Petroleum Marketers Association of America (PMAA), and Society of Independent Gasoline Marketers of America (SIGMA) have joined the Renewable Fuels Association (RFA) in supporting the Renewable Fuels Marketing Act of 2010 (HR 5778), which was introduced yesterday by U.S. Representatives Mike Ross (D-AR) and John Shimkus (R-IL).

According to NACS, “the bill will enable retailers to have existing equipment evaluated and legally approved to sell new renewable fuels and will expedite the approval of new equipment. It also will protect retailers from Clean Air Act violations and liability associated with self-service consumers fueling unapproved engines with higher blends of renewable fuels.”

On the RFA blog, communications director Matt Hartwig said the legislation will help provide for a “seamless transition” to E15, whenever it is approved by EPA, “accelerating the adoption of E15 and the needed expansion of the ethanol market.”

The groups collectively sent a letter to Reps. Ross and Shimkus thanking them for their leadership in introducing the bill.

Ethanol took the spotlight in a Senate Agriculture Committee hearing Wednesday on the Farm Bill’s energy and rural development programs.

Testimony at the hearing came from USDA Undersecretary for Rural Development Dallas Tonsager, Growth Energy Co-chairman General Wesley Clark, National Alliance of Forest Owners president Dave Tenny, and New York dairy producer Eric Zuber. The discussion ranged from increasing the blend rate for ethanol, meeting targets for advanced biofuels, ethanol tax incentives and tariffs, the use of forest biomass for energy production, and methane production from livestock waste.

Tonsager was questioned about the Biorefinery Loan Guarantee Program of the Farm Bill and why only two loan guarantees have been granted in two years. “We’ve had 17 applications for the program, of those 10 had to be rejected because they didn’t have lenders,” said Tonsager, which is a requirement of the project and he blames that on a holding back in the private sector. As to the rest, two have been approved and they are working on others.

When questioned by Senator John Thune (R-SD) about increasing ethanol blend rate to 15 percent and delays by the EPA to made a decision on the matter, Tonsager reiterated USDA’s support of the increase and Secretary Tom Vilsack’s advocacy for it. Tonsager also said that he believes federal forest lands have potential to provide biomass for energy production, supporting the definition of renewable biomass in the Farm Bill, something that Thune advocates. “We thought the Farm Bill struck the balance and would like to see that applied to the RFS,” said Thune.

Gen. Clark’s testimony before the committee on behalf of corn ethanol was passionate and emphatic, with his opening statement running more than twice as long as the five minutes allotted for each witness. “Today we do have a liquid fuel alternative to imported oil, and that alternative is ethanol,” said Clark, stressing that those imports cost $300 billion a year. “It’s $1000 per man, woman and child in America, every year, just so we can fill up our tanks with foreign oil.” Clark called corn-based ethanol an “incredible jewel of innovation” and expressed pride in the fact that it was developed here in the United States.

Listen to or download Clark’s opening testimony here: Wesley Clark Senate Testimony

Clark was questioned about the Growth Energy “Fueling Freedom” proposal announced last week that would phase out the blenders tax credit for ethanol and redirect those dollars toward increasing infrastructure like blender pumps. “It’s a concept, not a rigid proposal, with respect to timing,” Clark said, with regard to whether the idea should be implemented by the end of this year when the tax credit expires. He also said that the proposal should be tied to an energy bill. “If we can’t pass comprehensive energy legislation, we fully support the extension of current tax policies and the extension of the secondary tariff on foreign ethanol,” said Clark, “for five years, at the current rate.”

I had a job interview with the National Biodiesel Board the other day. No, not a job interview for ME, but an interview about a job NBB has to offer.

I sat down with my friend Donnell Rehagen, Chief Operating Officer for the NBB, and he told me about a technical position they have supporting the biodiesel industry with group’s sound science and research elements on a variety of topics.

“We’re looking for somebody with a chemistry or a chemical engineering background to help us manage some of our technical work that continues to go on in our industry.”

The technical programs include interaction with engine manufacturers and ASTM process; the type of work to help keep the biodiesel industry grounded.
While the technical skills are important to support the group, Rehagen stresses that this is a management position that also requires someone to be able to have strong public speaking and communication traits, as well as organizational skills. And he says someone with a biodiesel background wouldn’t hurt.

“That would absolutely be helpful. Not necessary, but that would be helpful to have somebody who’s got a little bit of a background, if not in biodiesel, renewable fuels would be a plus.”

Rehagen admits that while they haven’t given up on the $1-a-gallon federal biodiesel tax incentive, the loss of the credit has hurt the industry, and there could be some very good candidates for this position. He also believes that the long-term future of the biodiesel industry is still pretty bright.

The job would be in Jefferson City, Missouri … just down the street from what I believe is the prettiest state capitol building in all of the country. Picture the U.S. Capitol Building in Washington, D.C. but just a bit smaller … and no nasty traffic and pollution.

Rehagen says while they want to fill the position as soon as possible, they’re not going to rush the process.

“It’s got to be the right person, the right fit. Somebody who has an interest and love for biodiesel, [because] it’s not just a job.”

You can hear or download my conversation with Donnell here: Donnell Rehagen

More information is available at this website.

Leading biodiesel producer and marketer Renewable Energy Group (REG) announced a couple of major acquisitions today that will improve the company’s access to used cooking oil supply for biodiesel production.

The Ames, Iowa company is acquiring Tellurian Biodiesel of California and American BDF, a joint venture owned by Tellurian, Golden State Service Industries and Restaurant Technologies Inc. (RTI) that focused on building small biodiesel plants to convert used cooking oil into biodiesel.

The acquisition connects RTI’s national used cooking oil collection system —with more than 16,000 installations —with REG’s national network of proven, commercial‐scale biodiesel manufacturing facilities in order to produce high performing, clean liquid fuel. “Turning used cooking oil into biodiesel at REG’s network of manufacturing facilities is another good outlet for our customers’ waste products to power a simple, green, and safe solution for fueling our nation’s progress toward clean energy goals,” explained RTI Chief Executive Officer, Jeff Kiesel.

Analysts have long looked to used cooking oil as an excellent low‐carbon feedstock source for the biodiesel industry. “Just by gaining access to this nationwide system of used cooking oil collection depots, REG has the potential, over time, to replace more than a half million barrels of imported crude oil with sustainable, domestically produced biodiesel,” explained REG Vice President, Supply Chain Management, Dave Elsenbast.

Used cooking oil will augment REG’s current national, multi‐feedstock procurement program that supplies the company’s commercial‐scale biodiesel facilities. The REG network has a combined annual production capacity of more than 200 million gallons. Finished biodiesel will be marketed and distributed under Renewable Energy Group’s REG‐9000TM branded biodiesel platform to petroleum distributors and refiners nationwide.

Everyone has an opinion about the veracity of global warming, except, maybe global governments who are pursing economic improvements on the back of climate change. The quest for the reduction of greenhouse gas emissions, and predominately carbon dioxide (CO2) has led to a spurt of new research around the development of more sustainable practices and technologies. But at what cost to the environment? This question is asked and answered in the new book Green Gone Wrong, by Heather Rogers.

This question may on the surface sound like an oxymoron. How can you be developing technologies to reduce CO2, yet hurt the environment at the same time? According to Rogers, this is in fact happening every day, all over the world. Rogers breaks up the offenses into three categories: food, shelter and transportation.

The crux of the food section studies what organic farming really means (or doesn’t mean) and the movement to “beyond organic”. The next section discusses green building and the last section studies transportation, where I will focus. One element that is weaved throughout this section, is the discussions of the validity of carbon offset programs.

Many of the arguments she presents in the section are not new. She writes about biofuels, “As for ecological sustainability, biofuels have been widely discredited. The energy efficiency achieved with ethanol is dubious and a source of much debate. While some researchers say more energy goes into making ethanol than the alt-fuel can supply, others estimate a positive energy balance. A commonly cited figure is that for every gallon of fossil fuel used in production, only 1.3 gallons of corn-based ethanol can be refined. Either way, by now it’s apparent that biofuels pressure both ecosystems and the access to food.”
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U.S. Secretary of Agriculture Tom Vilsack and Ohio Gov. Ted Strickland toured the POET Biorefining plant in Marion, Ohio today and talked ethanol with industry stakeholders.

Vilsack and Strickland took part in a roundtable discussion with representatives from POET, the Ohio Corn Growers Association, Ohio Ethanol Producers Association and the Ohio Department of Agriculture as well as the federal Farm Service Agency and Natural Resources Conservation Service.

During the visit, Vilsack voiced support for increasing the ethanol blend level to 15 percent. “We are working at USDA to develop a roadmap for how to build that [ethanol] nationwide industry,” he said. “We understand it starts with allowing the capacity we have today to maximize its input. That means increasing the blend rate to 15 percent. I have been advocating for that, will continue to advocate for that, and I believe it will happen. Obviously I wish it had had happened now, but I believe it will happen sometime this fall.” Vilsack also stressed the need for increasing blender pumps and getting more flex fuel vehicles on the road.

Yesterday, Vilsack toured Quasar Energy Group in Wooster, Ohio to observe new technologies being utilized to generate larger supplies of biogas derived from cellulosic biomass. USDA, along with the State of Ohio, provided funding to support the development of the new facility.

The funding was used to install an anaerobic digester that processes 25,000 wet tons per year of organic biomass including food wastes from local food producers, crop residuals, grass and manure from livestock operations of the Ohio State University-Agricultural Technical Institute (ATI). Based on its electric generation capacity, this bio-digester can supply roughly one-third of the electricity needs of the Ohio Agricultural Research & Development Center (OARDC) campus.

A study conducted by Iowa State University’s Center for Agricultural and Rural Development (CARD) has determined that the impact of ending the ethanol blenders tax credit and corresponding tariff would be “modest.”

The report, Costs and Benefits to Taxpayers, Consumers, and Producers from U.S. Ethanol Policies, finds that “allowing the blender credit and tariff to expire would neither have the dramatic, adverse effect U.S. ethanol producers claim nor create the export bonanza Brazil would hope for.”

According to the study, U.S. ethanol production would increase to some 14.5 billion gallons by 2014 without the tax credit and import tariff while U.S. imports of Brazilian ethanol would rise modestly to about 740 million gallons—less than 5 percent of the total U.S. ethanol market. They also found that “no more than 300 jobs” would be lost in the ethanol industry as a result of ending the VEETC and tariff, and that ethanol prices would decrease 12 cents a gallon next year and fall 34 cents per gallon by 2014.

Partial funding for the report was provided by a grant from UNICA, the Brazilian Sugarcane Industry Association. In a post on the UNICA blog, Sweeter Alternative, North American Representative Joel Velasco says they backed the study because they “an honest assessment from an impartial expert and thought who better to engage than a world-renowned agricultural economist from the Farm Belt.” The report’s author is CARD director Dr. Bruce A. Babcock, professor of economics at Iowa State University. Velasco writes, “Our only request of Dr. Babcock was that he let the chips fall where they may,” writes Velasco. “We wanted Iowa State University to examine the range of options Congress is actually debating and provide a realistic estimate of what changing policies will mean for U.S. taxpayers, American drivers and ethanol producers in the U.S. and Brazil. We also provided the researchers with requested data on projections of Brazilian sugarcane ethanol production, domestic consumption and potential exports through 2014.”

Read the full study here.

This week, with support of the American Lung Association and other sponsors, three fueling facilities in the state of Minnesota are offering a Frequent Fuel Card in exchange for ethanol fuel discounts. These retail sites include those in Truman, Lyle and Austin, Minnesota.

The NuMart C-Store at 302 North 5th Street in Truman began giving away the fuel cards today. The first 50 flexible fuel vehicles (FFVs) to fill up at the site received the card where after 4 E85 purchases, they will receive a $10 discount off their next purchase of E85.

Freeborn County Coops are also offering the frequent fuel cards to the first 100 FFV owners to fuel up at their facilities at 301 1st St. in Lyle on July 22 and at Hwys 56 and 90 in Austin, MN. A $10 discount will be given on E85, E20, E30 or E40 after a customer’s fourth fuel up.

Also, the participants at each location will be entered into a drawing for a $50 fuel card.

For more information on these events, go to www.CleanAirChoice.org.

A pipeline for ethanol from the Midwest to the East Coast is a viable project, if certain conditions are met, according to a report by the Department of Energy (DOE).

In the report titled “Dedicated Ethanol Pipeline Feasibility Study,” which was required under the Energy Independence and Security Act of 2007, DOE concludes that “in spite of the documented challenges and risks, a profitable, dedicated ethanol pipeline is feasible under certain scenarios. A pipeline would enhance the fuels delivery infrastructure, reduce congestion of rail, truck, and barge transportation, and would reduce greenhouse gas emissions when compared to current delivery methods. The faster product delivery cycles, more reliable delivery schedules, and increased safety will enhance the flexibility to accommodate any significant expansions in ethanol production and demand in the future.”

One of the challenges is that the pipeline, at a projected cost of $4.25 billion, would need to transport 4.1 billion gallons of ethanol each year over its 40-year lifespan to be economically feasible without “major financial incentives.” That volume exceeds projected demand in the target East Coast service area by 1.3 billion gallons.

Senator Tom Harkin (D-IA) and Congressman Leonard Boswell (D-IA) suggest that the pipeline could be developed with federal support in the form of a loan guarantee. “By providing federal loan guarantees for biofuels’ pipelines, we can attract private investment in large infrastructure development projects, create good-paying jobs and further move our nation towards energy independence and security, and all with minimal taxpayer investment,” Harkin says. Boswell, who authored the Renewable Fuel Pipeline Act of 2010, says the pipeline would have significant benefits. “In addition to reducing greenhouse gases emitted during truck and rail transport of biofuels, it would also reduce the overall cost of these renewable fuels to consumers outside of the Midwest,” he said.

Ethanol producer POET and Magellan Midstream Partners, which have formed a partnership to look into building such an ethanol pipeline, were pleased with the government report. “While our project differs from the hypothetical project considered within DOE’s study, we believe the DOE’s conclusions are directionally correct: a large scale pipeline project is feasible under certain conditions and that a federal loan guarantee is necessary to move forward,” reads a joint press release from the companies. “In addition, the DOE confirms that transporting energy via pipelines has multiple benefits such as reducing congested highway and rail systems while reducing green house gas emissions when compared to other modes of transportation.”

The POET/Magellan project is based on a smaller capital cost of $3.55 billion and similar demand.

Motorists driving Flex Fuel Vehicles along Florida’s Treasure Coast now have two more places to fill up with E85 ethanol fuel.

The Renewable Fuels Association (RFA) and Protec Fuel have announced the availability of E85 at Twin Oil Sunoco retail stations in Ft. Pierce and Port St. Lucie.

The Twin Oil fueling stations, each branded as Sunoco, are offering E85 at 2501 Orange Avenue in Ft. Pierce and at 2681 SW Fondura Street (Gatlin Blvd) in Port St. Lucie. The Ft. Pierce E85 site will have 1 E85 dispenser with 2 nozzles, both located under the canopy. Twin Oil will also aim to serve the Florida Department of Transportation hub near this station and the many tourists in the area. The Port St. Lucie E85 station will offer E85 at 2 dispensers (Gilbarco), both under the canopy. This station is located on a busy street offering access to I-95, FL Turnpike and will also support fleets and tourists in addition to the local FFV population. Twin Oil utilized Protec Fuel’s turnkey E85 fuel program for both stations, which included the conversion process to an E85 fueling pump, E85 supply and promotional marketing.

To help locate the two stations, the RFA has developed a fuel locator application for Garmin and TomTom GPS devices, as well as the E85 Fuel Finder iPhone app.