Domestic Fuel

The 10th Annual Federal Fleet Conference kicked off in Phoenix, Arizona this week offering attendees the chance to attend sessions and have the opportunity to visit with exhibition vendors on fleet management and automative procurement.

Over 1,300 participants from all levels of fleet and aviation management within the Federal Government are in attendance. Workshop sessions began on Sunday with a Basic Fleet Class which educated new Federal Fleet management on how to function with the their agency, learn about fleet policies, procedures, mandates, new programs and more. Many workshops followed throughout the week.

The exhibit hall opened on Monday to over 180 companies who can network with other vendors, Federal, State, local government and private sector fleet menagers. Exhibitors included automobile manufacturers, alternative fuel and alternative fuel vehicle promoters and more.

The 2011 FedFleet conference will be held in Orlando, Florida from July 26-28.

Chevrolet has released the technical manual for the Holden-based 2011 Chevrolet Caprice PPV (Police Patrol Vehicle) and it includes an E85 compatible platform.

The new 2011 Caprice will be powered by a 265kW/521Nm 6.0-litre V8 and include Active Fuel Management. General Motors (GM) says its 0-100km/h time of less than 6.0 seconds will make it the police service’s fastest-accelerating and highest-top speed vehicle. This FFV will be included in GM’s extensive line of E85 compatible vehicles available in 2012, but this vehicle will not be offered at the retail level.

In 2010, GM offers as flexible fuel:
Buick Lucerne
Buick Terraza
Cadillac Escalade
Chevrolet Avalanche
Chevrolet Express
Chevrolet HHR
Chevrolet Impala
Chevrolet Malibu
Chevrolet Silverado
Chevrolet Tahoe
GMC Savana
GMC Sierra Pickup
GMC Sierra Denali

Recently, the 2011 Buick Regal was announced to be flexible fuel.

For a complete listing of flexible fuel vehicles, click here.

I have my eye on California. They are leading the way in “green” policies; yet they make it difficult for companies with “green” products to get permits. They are also in the middle of a new Governors campaign and I can’t help but wonder if a new Governor will undo or improve any of the state’s current policies. One in particular that I’m watching is the Low Carbon Fuel Standard (CARB) which is currently under fire by the petroleum industry, trucking industry and corn ethanol industry. Each of these groups has filed a lawsuit against the California Air Resources Board (ARB) over various pieces of the policy.

One organization not filing suit is the Brazilian Sugarcane Industry Association (UNICA). To date, sugarcane ethanol has received the lowest carbon life-cycle rating of all forms of ethanol and seems to have become the ethanol darling among politicians. Recently, President Obama, who is afraid to utter the word “corn” in conjunction with ethanol, touted the benefits of sugarcane ethanol.

UNICA has repeatedly called for these organizations to drop their lawsuits against ARB. In this light, I spoke with Joel Velsco, the Chief Representative of North America for UNICA, and asked him to weigh in on what is happening in California. In terms of the LCFS, he said that they were hoping for a different decision from Judge O’Neil but it wasn’t a surprise – meaning after a review, the lawsuits have not been thrown out.

“California’s LCFS can help break our dependence on fossil fuels, protect us from market price volatility and provide consumers with cleaner and more abundant fuel choices,” said Velsco.
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The high volume of ethanol exports plummeted in May by 58 percent from April’s totals. U.S. producers exported just 17.1 million gallons in May, while they exported 40.8 million gallons in April and 48.3 million gallons in March. Despite the drop, May exports were still above the five-year monthly average. In addition, to date in 2010, the U.S. has exported 25 percent more product than in the entire 2009 calendar year.

Additionally, at 141.4 million gallons, 2010 U.S. exports are still on track for a record year. In 2008, exports totaled 157.8 million gallons and in 2007, they were 150.2 million gallons. Prior to this year, it is believed that the highest export year was in 1995 when 197.5 million gallons of denatured and undenatured ethanol were exported. Since January 2005, the monthly average for total ethanol exports has been 10.2 million gallons.

“Fluctuations in unpredictable ethanol export markets highlight the need for America to focus more attention on increasing its consumption of domestically produced ethanol,” said RFA President Bob Dinneen. “America must stop dragging its feet and move aggressively to open up more domestic markets to ethanol. This starts with a full and complete waiver for the use of E15 by EPA. Bifurcating the market or limiting E15 use by vehicle model year aren’t real solutions. Exports and the use of mid and higher level ethanol blends, such as E30 or E85, are important markets for ethanol, but they cannot expand fast enough to absorb increasing production and use of ethanol as called for by federal law. It is time for the Obama Administration to back up its rhetoric with action and increase the amount of ethanol American consumers can use.”

The past month, the majority of denatured ethanol exports, topping out at 11.2 million gallons and down from 24.9 million gallons in April, went to Canada and the Netherlands. After importing significant quantities in April, Jamaica, the United Kingdom, Singapore, and United Arab Emirates (UAE) imported virtually no U.S. denatured ethanol in May.

Undenatured, non-beverage ethanol exports totaled just 5.9 million gallons in May. Top destinations were the Netherlands, UAE and Mexico. Those three nations accounted for more than 95% of U.S. exports of undenatured, non-beverage product.

Senators Amy Klobuchar (D-MN) and Tim Johnson (D-SD) introduced legislation yesterday that “focuses on developing and deploying safe, reliable domestically grown and produced energy.”

According to the senators, the Securing America’s Future with Energy and Sustainable Technologies Act (SAFEST) establishes strong renewable energy and energy efficiency standards, incentives for developing biofuels and biofuel infrastructure, and targets for the availability of advanced vehicle technologies.

Specifically, the legislation would:

* Establish a strong renewable electricity standard of 25% renewable energy by 2025
* A strong energy efficiency resource standard (1 percent per year)
* A long-term extension of tax credits for ethanol and biodiesel
* New incentives for biofuels infrastructure and deployment
* Targets for the availability of advanced vehicle technologies

Ethanol organization Growth Energy praised the bill, which would provide incentives for blender pumps and pipelines, as well as flex fuel vehicles (FFVs). “Legislation that requires automakers to produce flex fuel vehicles and retailers to install blender pumps would provide more drivers with a choice of mid- and high-level ethanol blends and create thousands of good-paying green collar jobs that can’t be outsourced,” said Growth Energy CEO Tom Buis. He says the legislation also addresses the controversial concept of Indirect Land Use Change and provides equity by allowing all feedstocks that meet the 50 percent Green House Gas reduction requirements to qualify as an advanced biofuel.

Paradise just got greener as ground was broken on the Hawaiian Island of Oahu’s first utility-scale wind energy project today.

This press release from First Wind says the wind energy company has begun construction on its 30 MW Kahuku Wind project on Oahu’s famed North Shore and could provide power for up to 7,700 homes each year:

Hawaii Governor Linda Lingle led the celebration, as she, officials from First Wind, community leaders and others conducted a traditional groundbreaking ceremony using o’o (Hawaiian digging sticks).

Construction of the Kahuku Wind project, which was spurred along by an expected $117 million loan guarantee from the U.S. Department of Energy (DOE), will create immediate economic benefits for Oahu such as employment opportunities during design, engineering and construction including approximately 200 construction jobs. The loan guarantee is expected to close soon.

The project is part of Hawaii’s plan to have 70 percent of the state’s energy come from clean energy by 2030.

Leave it to biodiesel to fix another problem caused by non-renewable petroleum.

This article from Biodiesel Magazine says the same people who produce the green fuel could be formulating methyl esters, the chemical yielded in biodiesel production, into a biobased solvent safe for cleaning up shorelines impacted by the oil:

The process starts with crews spraying the biosolvent from shallow draft boats onto oil-covered marsh vegetation or small beaches normally unreachable by land, said Randall von Wedel, founder and principal biochemist of CytoCulture International, a company that pioneered the method in the 1990s.

“Unlike other clean-up techniques, the beauty of this is that it is a green process that is nonaggressive and won’t do any more damage to the oil-covered marshes and other sensitive habitats,” von Wedel said. “We’re growing concerned that the approach will be to slash and burn, which is incredibly damaging to the environment and will kill wildlife. They don’t need to do that.”

Later, mechanical skimmers can pick up the mixture of dissolved petroleum oil and CytoSol and actually recycle the recovered oil at local refineries. Other clean-up methods end up with the oil being dumped in landfills.

CytoCulture is now awaiting word from BP and the U.S. Coast Guard if they are interested in trying this out. Von Wedel points out that it’s already been successfully used in California.

I know the name of this blog is Domestic Fuel, but I wanted to point out a story I found that makes the case how biodiesel might just help the U.S. win the war in Afghanistan.

A new white paper from Wayne Arden, an expert in the financial technology field, and John Fox, a former CEO of a biodiesel company, makes the case that if biodiesel was produced in the landlocked country, U.S. and allied forces fighting the Taliban and Al Qaeda would gain certain advantages:

The first insight is that it is very expensive for the military to import fuel into Afghanistan. In October 2009 DOD officials reported to Congress that the average cost of importing fuel into Afghanistan, or the Fully Burdened Cost of Fuel (FBCF), approaches $400 per gallon when all direct and indirect costs are accounted for, and even sometimes exceeds $400. A 2008 Defense Science Board study, “More Fight Less Fuel,” described the FBCF as “several hundred dollars per gallon.”

The third insight is that a high percentage of U.S. casualties in Afghanistan stem from protecting convoys of fuel, water, and other military supplies. The Army calculated in a 2009 study that one casualty occurs for every 24 fuel resupply convoys in Afghanistan.

In addition, the paper points out that growing feedstocks for biodiesel would give Afghan farmers a cash crop other than opium, which fuels the bad guys’ efforts to kill our good guys. Safflower, which already grows in Afghanistan and is highly drought-resistant, seems like a good possibility. Throw in the fact that biodiesel’s higher ignition temperature makes it safer in a war zone and it’s a better lubricant, it appears the green fuel would be a good fit for our war fighters.

The paper also goes on to point out that a 12 million-gallon-a-year plant in Kandahar would cost as little as $90 million to build and get running. Considering the potential that the military could save $3.7 billion in its first year of operation, the plant would pay for itself in just a month. Now there’s an investment in all of our futures.

You can read more about the project on this website and on the white paper’s authors’ Facebook page, Biodiesel in Afghanistan.

Mobile processing plants might hold the key to harvesting agricultural waste on the farm for biofuels production.

Chemical engineers at Purdue University have come up with the concept and developed a new method to process agricultural waste and other biomass into biofuels. The method would utilize various types of biomass, including wood chips, switch grass, corn stover, rice husks, and wheat straw.

The approach would solve one of the major problems in using agricultural waste for biofuels – transporting the biomass to a plant for processing. “It makes more sense to process biomass into liquid fuel with a mobile platform and then take this fuel to a central refinery for further processing before using it in internal combustion engines,” says chemical engineer Rakesh Agrawal.

The new method, called fast-hydropyrolysis-hydrodeoxygenation, works by adding hydrogen into the biomass-processing reactor. The hydrogen for the mobile plants would be derived from natural gas or the biomass itself. However, Agrawal envisions the future use of solar power to produce the hydrogen by splitting water, making the new technology entirely renewable.

The method, which has the shortened moniker of H2Bioil — pronounced H Two Bio Oil — has been studied extensively through modeling, and experiments are under way at Purdue to validate the concept.

Read more here.

Last year, after President Obama gave his speech about increasing the CAFE requirements – in an effort to save 1.8 billion barrels of oil over a 15-year period– a few ethanol advocates took their frustration to the streets and formed the E100 Ethanol Group.

Why? Because as Don Siefkes, Executive Director of the organization points out, “Twenty gallons of gasoline per barrel means 36 billion gallons of gas saved over 15 years or 2.4 billion gallons of gasoline per year. We use 140 billion gallons of gasoline per year so we would save only 1.7 percent of our gasoline usage and it is going to cost $25-$50 billion to achieve this meager savings. We felt it ridiculous to spend so much for so little and decided to form our group and see what we could do.”

Siefkes explained that to make the U.S. independent of imported oil, as well as avoid having to deep water drill, we need to cut our usage of gasoline by 50 percent down to 70 billion gallons per year. The organization has invested time in reaching out and discussing the issues with various ethanol organizations, everyday drivers and retail gasoline stations to encourage them to help make change. So while the ethanol industry focuses on getting the E15 Waiver approved, a short-term fix for a long-term problem, E100 Ethanol Group has decided to focus on E100.

“After 100′s of millions of dollars invested and 17 years of trying to convince consumers to buy E85, only 0.13 percent of the 10 billion gallons of fuel grade ethanol sold in the U.S. in 2009 went into E85,” said Siefkes. The other 99.87 percent went into 10 percent gasoline blends. This is in spite of the fact that we have 8 million E85 capable vehicles on the road and over 2,000 E85 stations. Why is this?”

According to Siefkes, it’s because E85 offers negative value to the consumer who has to fill up more often and sees a fuel economy loss. “There is no evidence that simply putting more E85 vehicles and stations out there is going to correct this problem,” he said.
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Archer Daniels Midland Company (ADM) opened a new 300 million gallon per year ethanol plant in Columbus, Nebraska on Friday. The grand opening ceremony featured ADM President Patricia Woertz, U.S. Sen. Ben Nelson of Nebraska, Nebraska Lieutenant Gov. Rick Sheehy and other honored guests.

“We at ADM are proud to harness the power and ingenuity of American agriculture to help address our nation’s energy challenges. We’re honored and privileged to have the city of Columbus, its municipal leaders and its citizens as partners in this effort,” Woertz said in her remarks.

ADM’s total ethanol production capacity will reach 1.8 billion gallons per year once a second corn dry mill in Cedar Rapids, Iowa, opens later in 2010.

In his remarks, Senator Nelson was critical of EPA’s delay in increasing the ethanol blend rate in gasoline from the current 10 percent. In a column this week, Nelson said EPA’s inaction threatens economic growth and energy independence. “It’s unfortunate that delays by the federal Department of Energy and the Environmental Protection Agency are needlessly jeopardizing our made-in-America ethanol industry,” writes Nelson. “It’s very disappointing and will also slow down development of next generation American renewable energy at a time we are striving to be more energy independent.” Nelson noted that EPA should look to Brazil to determine that ethanol blends up to 15 percent are safe, since that country uses blends as high as 25 percent with no damage to vehicle engines.

Read Nelson’s column here.

The Government Accountability Office (GAO) has issued a report urging the Department of Energy (DOE) to make changes to its current loan guarantee program to make it more effective. This program is intended to support “early commercial production and use of new or significantly improved technologies in energy projects that abate emissions of air pollutants or of greenhouse gases” including next generation biofuels like cellulosic ethanol.

The GAO report recommends four steps to be taken by the DOE to improve the program: develop relevant performance goals; revise the process for issuing loan guarantees to treat applicants consistently; develop an administrative appeal process for applicants who believe their applications were rejected in error; and develop a mechanism to systematically obtain and address feedback from program applicants.

The Renewable Fuels Association (RFA), which has been highly critical of the program, supports the GAO’s assessment and recommendations. “Access to capital is a chief hindrance to the commercial deployment of cellulosic ethanol technology,” said RFA President and CEO Bob Dinneen. “DOE has created a loan guarantee program that in theory is helpful, but in practice has proven difficult if not impossible for cellulosic ethanol companies to access. If the goals of the RFS are to be met, the Obama Administration must make sure loan guarantee programs are workable and accessible for qualified companies, regardless of their technology.”

RFA wrote a letter to Secretary of Energy Steven Chu last October raising a number of issues that created unfair and unnecessary challenges for cellulosic ethanol companies. Specifically, the ethanol organization requests that DOE eliminate the requirement that applicants have year-long off-take agreements in place; recognize that applicants, by definition, may not have commercial scale financial data and to consider applications that “employ new or significantly improved technologies compared to commercial technologies in service in the U.S.” as outlined in the law; and review applications that have been declined to determine what fixes can be made to correct perceived deficiencies.

Growth Energy CEO Tom Buis notes that the problems with the DOE loan program contributed to EPA drastically reducing the goals for cellulosic ethanol under the Renewable Fuel Standard from 250 million gallons to less than 20 million gallons. “The single biggest reason for that revision is a lack of financing available to cellulosic ethanol producers, many of which are ready to build plants if funding can be secured. The Energy Department needs to address these issues identified in the GAO report and fix the loan guarantee program,” said Buis.

MidTex Oil has opened the first E85 station in New Braunfels, Texas, which is located between Austin and San Antonio.

“We are focused on providing our customers with what they want. Whether it is our one-stop shop Pit Stop Food Marts and Fischer’s Market concept stores to make their lives more convenient or giving them an alternative to gasoline derived from imported oil, Midtex is there for our customers,” said Rodney Fischer of Midtex Oil.

The Midtex New Braunfels fueling station is branded Shell and is Midtex Oil’s second E85 station – the first is located in Spring Branch, Texas. Midtex utilized Protec Fuel’s turnkey E85 fuel program for both stations, in partnership with the Renewable Fuels Association (RFA), which included the conversion process to an E85 fueling pump, E85 supply and promotional marketing.

Today’s Environmental Protection Agency (EPA) announcement to require the domestic use of 800 million gallons of biodiesel in 2011 is being welcomed by the National Biodiesel Board.

The group says the number, established under the new Renewable Fuels Standard (RFS2), shows that biodiesel is the only widely accepted, commercial scale Advanced Biofuel produced in the U.S. that meets the definition of Biomass-based Diesel and undifferentiated Advanced Biofuels under the RFS2 program:

“We applaud EPA for this announcement and for reaffirming the common-sense notion that we should displace petroleum diesel fuel with Advanced Biofuels like biodiesel. This notice demonstrates to all actors in the fuels marketplace that the volume goals for Biomass-based Diesel provided for by law in the RFS2 program will be met and that 800 million gallons of biodiesel must be used in 2011,” said Manning Feraci, Vice President of Federal Affairs for the National Biodiesel Board.

“The U.S. biodiesel industry stands ready to provide the Advanced Biofuel that will allow this nation to meet the attainable renewable energy goals established by RFS2, reduce our dependence on petroleum and cut harmful greenhouse gas emissions,” concluded Feraci.

Of course, there’s the issue with the lack of the federal $1-a-gallon biodiesel tax incentive that expired at the end of 2009 and has resulted in massive biodiesel refinery layoffs and endangers the industry as a whole. As my colleague Joanna Schroeder (@jmschroeder) tweeted earlier this evening: “Not enough biodiesel today w/out tax credit – no way to meet #’s.”

Virginia’s College of William and Mary is turning algae, which is killing fish in a local lake, into biodiesel.

This article from the Daily Press says the school, working with industry and other universities, is using a flume to remove the algae from Lake Matoaka:

A rectangle-shaped floating dock with its midsection removed, the flume acts as a channel that will trap nitrogen, phosphorous and other nutrients that form oxygen-deprived dead zones in the lake and Chesapeake Bay watershed.

“This,” Manos said gesturing toward to the lake, “is occassionally only a day or two away from a fish kill.”

In addition to the oil extracted from the algae, which will be used to research the potential of algae-biodiesel, the process is also able to get about 12 to 16 gallons of dry algae from the lake each month.