Domestic Fuel

KL Energy Corporation and Brazil-based Petrobras have announced a new joint development agreement to optimize KL Energy’s cellulosic ethanol process technology for the conversion of sugarcane bagasse feedstock to ethanol. As a component of this partnership, Petrobras will invest $11 million to adapt KL Energy’s demonstration facility to use bagasse. The money will also be dedicated to validating the company’s optimized process.

In addition, the technology will be integrated into one of Petrobras’ Brazilian sugarcane mills and is scheduled to go online sometime in 2013. Once the plant is operational, it will produce approximately 15 million liters per year.

Miguel Rossetto, CEO of Petrobras Biocombustivel, said, “Petrobras views cellulosic ethanol as a very promising technology to substantially increase the ethanol output by some 40% without increasing the planted area output and further improve the carbon footprint of its sugarcane mills. This agreement with KLE will considerably accelerate this development effort and we are optimistic about the commercial potential of the optimized technology platform.”

The initial agreement is for the two companies to work together for 18 months and provides a mutually exclusive agreement to jointly develop cellulosic ethanol from bagasse. The agreement also gives Petrobras the option of securing a technology license for the use of KL Energy’s technology within the Petrobras Group.

“Brazil is the global leader in the production of affordable biofuels and biomass, and we believe that bagasse is a perfect feedstock for our process. KLE plans to be at the forefront of the emerging cellulosic ethanol market in Brazil,” said Peter Gross, President and CEO of KL Energy Corporation. “We are very excited about this opportunity and we can think of no better partner for this endeavor than Petrobras, a company globally recognized for its technological competence, social and environmental responsibility and its investments in clean energies.”

This partnership marks yet another American company to partner with a Brazlian-based company with the intention of developing biofuels.

Gas prices have hit an eight-month low and an analysis in the Washington Post today gives part of the credit to ethanol.

The main reason they say gas prices have declined is weak demand due to the economy and continued high unemployment. That comes from an American Petroleum Institute (API) news release last week, which reported gasoline demand for July, as measured by deliveries, was down .03 percent compared to the same time last year. “With unemployment high and July regular gasoline prices more than 20 cents a gallon above those a year ago, consumers likely have been shopping and vacationing less and trimmed their gasoline purchases accordingly,” said API Chief Economist John Felmy.

But, the Washington Post article notes that fuel efficiency improvements and more ethanol have also helped to moderate gas prices. “A steady increase in the biofuels component of U.S. motor fuel is another reason; the four week average for ethanol production ending Aug. 13 was 854,000 barrels a day, up nearly 18 percent from a year ago and now more than 9 percent of the volume of motor fuel, according to the Renewable Fuels Association.”

Gasoline prices have dropped a little more this month, according to the American Automobile Association, which reports this week that average retail price for regular gasoline is less than $2.71 a gallon, now just eight cents higher than a year ago.

The third Process Optimization Seminar, coming up September 1-2 in Kansas City, is sold out.

The interactive seminar focused on increasing ethanol plant process efficiency and profitability is sponsored Fremont Industries, Fermentis, Novozymes and Phibro Ethanol Performance Group. They have already held two successful workshops in Minneapolis last year and Indianapolis earlier this year and they will be announcing more in the near future.

I talked with Tom Slunecka (pictured far left) of Phibro at the recent American Coalition for Ethanol (ACE) conference about the seminars and why they are so popular with ethanol plant operators and managers. “There just can’t be enough education, there’s always things changing and new technologies available,” Slunecka said. “We keep the class sizes very small so about 60 people are invited each time.” Each of the four companies present a hands-on demonstration based education, such as Phibro’s section on antibiotics where they use microscopes to learn how to identify different microbes that might be present in an ethanol plant.

The big reason why the workshops are so popular, Slunecka says, is because ethanol plant margins are razor thin. “So if you can squeeze out a percent, or even a half a percent more alcohol from your same inputs, it will dramatically change your plant,” he said. “We’re talking about hundreds and hundreds of thousands of added revenue that a plant may be missing out on.”

Listen to my interview with Tom here: Tom Slunecka Interview

Just in case you forgot (fat chance of that!), the federal $1-a-gallon biodiesel tax incentive has not been renewed after expiring at the end of 2009. And an estimated 23,000 biodiesel workers (and counting) have been laid off nationwide. The latest victims are workers at a biodiesel plant once touted as the largest in New England.

This Times Argus article says the Swanton, Vermont Biocardel biodiesel refinery has been shuttered because of the lack of the credit … and most likely won’t be coming back:

The state’s economic development authority is now in the process of trying to recover more than a half-million dollars it provided to the facility in low-interest loans, according to officials. State tax credits were also awarded to the company that built the plant, Biocardel, a subsidiary of a Canadian company, although the credits were never used.

“People tried to help us as much as possible,” Daigle said. “It’s sad because I think Vermont as a green state would have supported it very well.”

The plant was to produce eight million gallons of biodiesel a year.

While there’s been lots of talk lately about some of the private investment in algae-biofuels operations, one company official says the feds aren’t doing their part to support the green fuels.

Just recently, Sapphire Energy benefited from $105 million in Department of Energy and Agriculture grants … the largest federal government award for algae ever given. But the Voice of San Diego reports that Tim Zenk, Sapphire’s vice president of corporate affairs, says these grants were really not the rule:

Zenk says recent awards to San Diego researchers are the exception, with government investment in alternative fuels falling woefully short.

[Stephen Mayfield, director of the San Diego Center for Algae Biotechnology research consortium and a co-founder of Sapphire Energy], who has studied the molecular genetics of green algae for about 25 years, concurs that biofuel research has been historically underfunded. Part of the problem is that algae biofuel is tough to classify. Is it a plant, regulated by the U.S. Department of Agriculture? Is it a fuel, regulated by the U.S. Department of Energy? If algae could be used to fuel military vehicles, would it fall under the U.S. Department of Defense’s jurisdiction?

Mayfield goes on to say that biofuels are just part of the bigger picture of solar, wind, algae and even corn to replace petroleum.

The largest global cellulosic biomass harvest in history is underway and already the world is watching. Last week, Project Liberty kicked off their one-year biomass harvest pilot program as an effort to ensure all the correct logistics are in place in time for Project Liberty to go online in early 2012.

During the event, I caught up with Scott Weishaar, who runs POET’s biomass division. He and his team have been working for years on commercializing cellulsoic ethanol using light corn stover and corn cobs and this pilot program represents that last major hurdle for success.

As part of this program, POET Biomass will have a biomass storage building completed in time for harvest that will house up to 23,000 tons of biomass bales at any given time.

Along with progress comes concerns and Weishaar is very cognizant that people have concerns over what impact the removal of biomass will be on the soil. “We know there are concerns. So we want to make sure we understand all the aspects that are associated with that – soil erosion, nutrients, compaction, and storage characteristics,” said Weishaar.

All of these elements are being studied in conjunction with several partners including Idaho National Laboratory, Iowa State University and USDA’s Biomass Program and the goal is to have all major questions answered prior to the cellulosic ethanol plant going online.

“We are working around the logistics surrounding the collection, storage, and handling of the biomass so we’re ready to supply the feedstock in 2012,” said Weishaar.

As the world watches, there are still many who doubt commercial cellulosic ethanol will ever succeed. To that, Weishaar says the “proof is in the pudding” and they are ready to meet the country’s challenges of producing 36 billion gallons of biofuels by 2022 and reducing its dependence on foreign oil.”

Listen to the interview with Scott Weishaar here: Scott Weishaar Talks Biomass

The University of Illinois (U of I) has recently announced that one of their metabolic engineers has taken a major step in helping biofuels production become more efficient and economical. Yong-Su Jin, an assistant professor of microbial genomics as well as a faculty member in the U of I’s Institute for Genomic Biology, has developed a strain of yeast with increased alcohol tolerance. Yeast is used during the biofuel fermentation process to convert sugars from biomass into biofuels.

“At a certain concentration, the biofuels that are being created become toxic to the yeast used in making them. Our goal was to find a gene or genes that reduce this toxic effect,” said Jin.

Jin worked with Saccharomyces cerevisiae, the microbe most often used in making ethanol, to identify four genes (MSN2, DOG1, HAL1, and INO1) that improve tolerance to ethanol and iso-butanol when they are overexpressed.

“We expect these genes will serve as key components of a genetic toolbox for breeding yeast with high ethanol tolerance for efficient ethanol fermentation,” explained Jin.

According to a news release, researchers assessed the overexpressed genes’ contribution to the components that have limited biofuel production by testing them in the presence of high concentrations of glucose (10%), ethanol (5%), and iso-butanol (1%). These were then compared with the performance of a control strain of S. cerevisiae.

The results showed that overexpression of any of the four genes remarkably increased ethanol tolerance. However, the strain in which INO1 was overexpressed elicited the highest ethanol yield and productivity—with increases of more than 70 percent for ethanol volume and more than 340 percent for ethanol tolerance when compared to the control strain.

“Identification of these genes should enable us to produce transportation fuels from biomass more economically and efficiently. It’s a first step in understanding the cellular reaction that currently limits the production process,” Jin concluded.

Three school districts in the Chicago area plan not only to make all the power they need at a new wind farm, but they’ll also net an extra $3 million in the process.

UPI reports that the Keeneyville School District 20, Carpentersville’s Community Unit School District 300 and Prospect Heights School District 23 will be getting all of their energy from a wind farm they plan to build in rural Stark County 140 miles southwest of Chicago. And they’ll have enough extra energy to sell:

The districts’ school boards formed the School Wind Consortium, which is issuing bonds, seeking investors and applying for federal grants to raise $50 million.

The consortium says it hopes to build and begin to operate the wind farm by fall of next year and expects it to bring in $3 million annually for about 30 years.

In 2007, Illinois passed legislation that allowed school districts, community colleges and towns to own and operate their own wind farms, but it’s not practical for too many locations to do so.

Commissioners in Santa Rosa County, California are considering whether to use the county’s name to help back bonds for a proposed biodiesel plant.

Biofuels Digest reports the chairman of the commission wants more information before signing off on the Integrated Energy Partners’ proposed biodiesel facility:

The facility intends to run year-round using camelina and other crops including cotton seed to produce 3 million gallons of biodiesel, 353,000 gallons of cellulosic ethanol, 9 million gallons of kerosene, and propane amounting to 437,000 gallons along with 47.8 MWh of electrical energy annually.

There are also plans to use municipal and other waste products as feedstocks for fuels.

Hawaii is already known as a lush, green, tropical paradise, but one rental car company on the islands is turning that green up a notch.

This article from BNET.com says the Bio-Beetle company in Maui focuses on biodiesel vehicles and looks to expand into electric vehicles one day:

President Shaun Stenshol presides over a 20-car fleet that includes diesel-powered Beetles, Jettas, Golfs and a Jeep Liberty, plus some Toyota Prius hybrids, in the bustling central city of Kahului. The office, which doubles as a cat shelter and the headquarters of the recycling business Stenshol also runs, was busy on a recent weekday – 18 of Bio Beetle’s cars were rented.

Stenshol, who relocated to Maui in 1998 and started his company in 2003 with a single diesel Beetle he found on a used car lot, has applied for a State of Hawaii grant to help him buy electric cars and set up charging stations. EVs, he says, will nicely complement his biodiesel cars, though he worries about the 100-mile range being a challenge.

The article goes on to say that Hawaii has tapped into $4 million in federal stimulus money for people in the state who buy electric vehicles or chargers after August 1st. There’s word that Korean automaker CT&T wants to build a plant on the islands to assemble as many as 10,000 electric vehicles a year.

Grand Forks, North Dakota is now offering flexible fuel vehicle (FFV) owners the choice at the pump. The Valley Dairy station at 2401 S. Columbia Road is offering the ethanol blends of E20, E30, and E85.

According to the American Lung Assn. of North Dakota, a grand opening celebration will be held Aug. 24 and 25 at the Grand Forks facility. A ribbon cutting will take place at 10 a.m. on August 24 and ethanol-blend fuel discounts on August 25 from 11 a.m. until 2 p.m. During the promotion, E85 will be priced at $1.85 a gallon, the price of E30 will be discounted by 30 cents, and the price of E20 will be discounted by 20 cents. There will also be in-store specials throughout the week.

“Only flex fuel vehicles should use E85 or high blend ethanol fuels, because they are specifically designed for them,” said Lisa Thurstin, a manager for the American Lung Association of the Upper Midwest’s Clean Air Choice program. “There are more than 41,000 flex fuel vehicles already on the road in North Dakota, and more models that can use cleaner-burning E85 as well as gasoline are coming out every year. If you are driving one, we hope you will come out to Valley Dairy on Wednesday and try one of these new fuel choices.”

The fuel promotion is being sponsored by Valley Dairy and members of the North Dakota Clean Air Choice Team including the North Dakota Corn Council, North Dakota Renewable Energy Council, North Dakota Department of Commerce, North Dakota Ethanol Council, North Dakota Ethanol Producers Association, General Motors Corporation, U.S. Department of Energy Clean Cities and American Lung Association in North Dakota.

Currently, the state of ND has 67 E85 outlets including 44 ethanol mid-blend pumps.

The 212th E85 station has opened in Illinois.

Russell Oil Company worked with Growth Energy’s 2010 E85 and Blender Pump program to bring E85 fuel to their ROC One Stop in Marion, Ill. “We wanted to provide a quality fuel that is better for the environment, supports our local farmers, as well as help us to increase sales and fuel margins,” said manager Jonathan Russell. “We appreciate the support of Growth Energy, the availability of informational materials, signs and the advice we have been given to promote the sale of E85.”

Growth Energy offers funding to retailers to assist in ethanol blender pump infrastructure. Grants of $2,500 and $5,000 are available to vendors who wish to install new or convert existing equipment for ethanol fueling, in addition to any Federal or state grants or incentives a retailer may be eligible.

Did you know that the Scottish have a $6.2 billion a year whiskey habit? I didn’t until I came across an article in the Guardian about how researchers in Edinburgh Napier University are researching turning whiskey waste into butanol. During the whiskey distillation process, two main waste products are created – pot ale, a liquid, as well as draff, which are the remains of grains used when distilling the alcohol. These are now being turned into biofuel.

Unlike ethanol, researchers are finding that butanol gives 30 percent more power output than ethanol and can be used in conventional vehicles without engine modifications. They also like the fact that no “food” products are used in the creation – only waste and say that the process is more environmentally sustainable than other forms of ethanol production.

The European Union has set a goal that biofuels should account for 10 percent of all fuel sales by 2010 but this regulation has been under fire recently as concerns have continued to surface over using grains for biofuels in addition to land use and soil sustainability issues. In fact, England has actually scaled back on their biofuels goals and other countries are considering following suit unless they determine that other feedstocks will be more sustainable.

Regardless, turning alcohol waste into biofuels is not a new concept – Coors has been doing this in one of their breweries in Colorado for several years. Well, I can’t help but wonder if a new drinking saying will be. “I drink so that I can drive on biofuels.”

Tennessee is becoming a hotbed for switchgrass activity, and one of the newest partnerships is between Alcoa, Inc, the steel giant, and Genera Energy. Alcoa has leased nearly 238 acres of land to a local farmer who is participating in an incentive program with Genera Energy. Genera Energy, along with the University of Tennessee, is  researching and developing technology to bring commercial cellulosic ethanol to market using switchgrass.

The crop was planted in June by farmer Gerald Orr, who planted three varieties of the seed including one standard and two improved varieties to determine which varieties have the highest performance. When the crop is harvested in three years, researchers have estimated that the acres could produce up to 160,000 gallons of ethanol per year.

“Participating in the switchgrass program is giving me the opportunity to put this acreage to use for something that will hopefully have long-lasting benefits,” said Orr. “I look forward to seeing the switchgrass crop continue to grow and prosper.”

Genera’s research is showing that there are some environmental benefits of the feedstock including its ability to sequester between one and two tons of carbon per acre in the soil each year. In addition, it improves soil stability and structure.

“With more than 1,600 acres of property here in Blount County, Alcoa is constantly looking for environmentally-friendly, effective uses of the land,” said Dave Hensley, property manager and interim smelting plant manager. “We are pleased that Mr. Orr is involved in this program and we believe his effort align with the ‘green’ qualities of Alcoa’s products. Recycling aluminum to save energy and offsetting oil consumption with biomass go well together.”

Most recently, Genera opened a bioenergy production plant located in Vonore, Tennessee in late 2009 and it is expected to be operational by the end of this year.

A small patch of safflower near the Salt Lake City International Airport has caught the attention of the U.S. Army as part of the military’s efforts to implement more biodiesel into its operations.

The Salt Lake Tribune says about 20 acres of the prickly leafed crop, planted as part of Salt Lake County’s urban-farming initiative, could be a feedstock for the green fuel:

Jeffrey Ward, deputy engineer for the U.S. Army Installation Management Command, inspected the safflower crop Monday with a National Biodiesel Board representative and a consultant from the environmental engineering and restoration firm Louis Berger Group to determine whether to seed a similar program on military lands.

Officials started with 20 acres, as a test. But ultimately, biofuel production is expected to spread to the entire 200-acre property.

Utah is also home to the FreeWays to Fuel program, which would plant safflower, canola, flax and other biofuel crops along highways. Researchers at Utah State University believe the country could produce a billion gallons of biodiesel a year from the roadside crops.