Domestic Fuel

Some biodiesel plants in North Dakota could be enjoying new operations incentives, if a proposed bill passes that state’s legislature and gains the governor’s signature.

The Forum of Fargo-Moorhead reports the measure, currently before the state legislature’s Energy Development and Transmission Committee, would give up to $1.5 million in incentives annually:

The amount would be determined by multiplying the number of gallons of biodiesel sold by 5 cents.

The second incentive relates to biodiesel plants operating in the state before July 2011 and with a production capacity of more than 1 million gallons.

The plant could receive incentive payments if production is increased by the lesser of 10 million gallons or 50 percent of its production capacity during a 12-month period.

The incentives are similar to what was done with the ethanol industry, said Shane Goettle, the state’s commerce commissioner and chairman of the EmPower North Dakota Commission.

Some lawmakers questioned the wisdom of the legislation that doesn’t take into account market conditions. The committee is expected to discuss the measure more next month.

BlueFire Ethanol Fuels is rebranding itself as BlueFire Renewables “to more clearly illustrate the company’s vast capabilities in renewable energy,” according to the company.

“BlueFire is more than just an ethanol company. We’re happy to at last announce the expansion of our capabilities, and feel that this name captures our spirit for innovation and development of cleaner alternatives to fossil fuels,” says Arnold Klann, CEO of BlueFire Renewables, Inc. “Our goal with this name change is to demonstrate the company’s potential to vertically integrate our technology into other areas of renewable energy and help us avoid the confusion with traditional ethanol producers.”

BlueFire is capable of producing a number of biofuels, including biodiesel, bioJet Fuel and drop-in directs, and has developed relationships with key industry partners, such as Solazyme to produce biofuels from new feedstocks like algae. BlueFire Renewables is also currently in the process of developing two cellulosic ethanol facilities in Lancaster, CA and Fulton, MS.

Thorntons, Inc., a leading, independent gasoline/convenience-chain retailer carrying E85 fuel throughout the Midwest, is teaming up with the Kentucky Corn Growers Association (KyCGA) and the Kentucky Clean Fuels Coalition (KCFC) to give away $17,000 in free E85 fuel at the 2010 Kentucky State Fair.

From August 19 until August 29, flex fuel vehicle owners can visit the Kentucky corn Shack, under the Great Kentucky Cookout Tent, to pick up free E85 fuel gift cards. The first 106 who stop by the shack each day will receive a $5, $20 or $100 promotional card. These cards can be used at any of the 11 Thornton’s E85 fueling facilities in Kentucky and Southern Indiana – including the nine in the state of Kentucky, two of which will be open by the end of August.

“We are very excited about the expansion of E85 fuel in our stores,” said Matt Thornton, Chief Executive Officer of Thorntons. “We support the use of ethanol, wherever it is economically available”.

“Not only are corn farmers feeding the world’s people and livestock, they are producing enough corn for all-American fuel ethanol. While ethanol can be found in 10 percent blends in all of Louisville’s gasoline, KyCGA, Thorntons, and KCFC have partnered to increase awareness about E85, a blend of 85 percent ethanol and 15 percent gasoline,” said Executive Director of KyCGA, Laura Knoth. “This fuel can only be used in Flexible Fuel Vehicles, but there are nearly 100,000 of these vehicles on Kentucky’s highways today, and vehicle manufacturers continue to make more.”

Growth Energy recently partnered with Thorntons to open 20 E85 stations within five states through their 2010 E85 and Blender Pump program. You can find the listing of these stations at www.E85Refueling.com.

There is nothing more American than motorcycles and Sturgis, South Dakota in the summer. There is also nothing more American than ethanol. This year, the Renewable Fuels Association (RFA) roared back into Sturgis for another round of ethanol promotion. Hundreds of thousands of people from all over America descend on Sturgis each summer for the largest motorcycle enthusiast event in the country.

RFA’s Director of Market Development Robert White (pictured here with the Buffalo Chip poster model showing off an ethanol “Fueled with Pride” t-shirt), attended Sturgis to help oversee the ethanol promotion. “The Buffalo Chip once again provided the RFA a perfect setting to educate hundreds of thousands of riders on the benefits of ethanol, not only for their motorcycles, but for their vehicles and small engines at home,” White said. “With an attendance of more than 800,000, I cannot think of a better place to educate that many people at one time.”

The RFA partnered with the Buffalo Chip Campground and the unofficial scribe of Sturgis, the Buffalo Chip Gazette, to promote the use of ethanol blended fuels as a way to combat our increasing dependence on foreign oil. Often mischaracterized as being a problem of engines like those found in motorcycles, the Sturgis rally offered an opportunity to highlight the efficacy of ethanol-blends in all engine types through education and ethanol merchandise.

You can view photos of the event and other RFA events here.

Last year, Powers Energy of America announced that it would build a $254 million waste-to-energy ethanol plant in Schneider, Indiana. According to an article published in the Post-Tribune, the bioethanol plant has received full commitments for funding. In addition to funding this plant, the investors have also now committed to supporting a $75 million solar plant. The solar plant will not be fully completed for five years, but upon completion will produce nearly 100 megawatts of electricity. According to the company, this will be one of the largest solar facilities in the country.

According to company President, Earl Powers, the solar plant could be operational by early next year. However, it will take some time yet for the bioethanol plant to break ground since it has yet to receive the appropriate environmental approvals. Regardless, Power notes that the two projects will provide much needed employment opportunities for the community.

Yesterday, Arizona Rep Gabrielle Giffords attended three solar events to promote solar development in her state. The first event took place at Global Solar, located in Tuscon, where Giffords toured the facility along with Cathy Zoi, Assistant Secretary for Energy Efficiency and Renewable Energy for the U.S. Department of Energy.

From there, the two visited several projects underway on the University of Arizona (UA) campus including the Energy Frontier Research Center, where they received an update on an algae to biofuel project and met with Dr. Roger Angel who has developed a telescope mirror and is currently researching concentrated photovoltaic power for solar electricity production.

The events culminated in a wide-ranging discussion about the future of solar energy held at the university’s student union. Giffords and Zoi were joined during this event by UA President Robert Shelton and UA’s VP for Research, Leslie Tolbert. During the discussion, Shelton called the congresswoman a “passionate advocate” for solar energy and praised her “assertive agenda” for advancing the use of solar through various pieces of legislation.

Giffords noted that Arizona has all the elements needed to become a leader in solar energy including ample sun, large tracts of land and numerous skilled workers.

This was Zoi’s first trip to Tuscon and she left impressed with the solar work underway in the state and stated that she was “completely wowed” with Dr. Angel’s research. She also noted that her day was “a magic moment” in DC for the advancement of renewable energy and concluded that it is “a perfect storm of opportunity”.

Is Texas fully capitalizing on the ethanol fuel revolution? You can find out by attending the new conference, Shaping Texas’ Fuel Ethanol Policy Conference on September 10, 2010 from 8:00 am to 5:00 pm at the Omni Hotel downtown Austin, Texas. The Texas Renewable Energy Industries Association will be bringing decision makers and industry leaders together to help the state develop and strengthen its biofuels programs.

The conference will feature national, state and local leaders from companies such as General Motors, CleanFuel USA, Ceres, Inc., and Abengoa Bioenergy. Several leading biofuels organizations along with government associations will also be on hand including the Renewable Fuels Association, Growth Energy, Texas Dept. of Agriculture, Texas Farm Bureau, Texas Grain Sorghum Producers Board, Corn Producers Association of Texas, and the Clean Fuels Development Coalition.

“This conference offers a clear picture of today’s realities and opportunities in a growing renewable energy sector that some may have written off,” said Russel Smith, Executive Director of the Texas Renewable Energy Industries Association (TREIA). “The nation’s use of ethanol will continue to increase, and Texas has huge production possibilities and more flex fuel vehicles capable of running on E85 than any other state. Our current approach to this important industry may leave money on the table.”

The Texas Renewable Energy Industries Association, organizer of the conference, is the oldest renewable energy trade organization in Texas. Click here to learn more about the event and to register.

A fifth E85 station for Long Island has opened this month, making it the 64th outlet for flex fuel vehicle (FFV) drivers in New York to fill up with 85 percent ethanol.

Bridgehampton Service Station opened the new E85 pump on Montauk Highway in Bridgehampton. “One of the main reasons we decided to install E85 was because we have hundreds of FFV’s in our surrounding cities that can fuel up. We built a station that offers E85 because we recognize the local demand to do things ‘green’,” said station owner Albert McCoy. “An added incentive is that there was funding available to assist with infrastructure.” Since the installation of the E85 pump this summer, Bridgehampton has been pumping 300-400 gallons of E85 fuel daily.

The station was installed with help from Growth Energy’s 2010 E85 and Blender Pump funding program. “We are pleased to partner with Bridgehampton Service Station to provide greater access to high level blends of ethanol for New York drivers,” said Growth Energy CEO Tom Buis. “Increased consumption of ethanol will reduce our dependence on foreign oil, clean our air and help create jobs in Bridgehampton and across the country.”

Recent studies show the significant efficiencies spurred by growth and development in the ethanol industry, according to the National Corn Growers Association (NCGA).

“As we see it, this is just the tip of the iceberg,” said NCGA First Vice President Bart Schott. “Ethanol has proven to be an advantageous green alternative to foreign and ecologically precarious sources of petroleum. These studies illustrate that innovations in agriculture and ethanol production will only further enhance ethanol’s desirability as an energy resource worthy of continued support.”

Some of that research was presented at the recent 2010 Corn Utilization and Technology Conference (CUTC) in Atlanta. Dr. Steffen Mueller, Principal Research Economist for the Energy Resources Center at the University of Illinois at Chicago, did two presentations at the CUTC, both related to the increasing efficiency of ethanol production that continues to improve its carbon footprint under life cycle analysis. For one, Mueller says, the more useful co-products that can result from ethanol production, the better its carbon footprint.

“With corn ethanol you also produce an animal feed product simultaneously, to which you have to assign a co-product credit, meaning you subtract the emissions to produce that feed product from the life cycle of corn ethanol,” Steffen explained in an interview. “Now, we’re also looking at other co-products. For example, a lactate which is a solvent that can substitute for petroleum-based solvents in the marketplace.”

Mueller also presented his findings from a recent study showing how ethanol plants are improving in efficiency. “We did a large survey of corn ethanol plants and assessed the energy consumption and showed that the thermal and electric energy that plants require to turn bushels of corn into corn ethanol has decreased by 30 percent over the last eight years,” he said. (read about that survey here)

Mueller says there is a lot of updated industry data coming together that shows that corn ethanol is becoming more efficient, which should help when it comes to regulations for low carbon emissions on both the national level and in states like California.

Listen to or download an interview Chuck Zimmerman did with Steffen Mueller at CUTC here: Steffen Mueller Interview

As the ethanol industry continues to fight for its subsidies before they expire at the end of the year, and the biodiesel industry has been fighting to survive without the $1 tax credit, the U.S. Senate did not even hesitate to preserve the oil industry’s subsidies. In addition, the Senate has yet to pass any comprehensive energy policy that would ensure our country achieves energy independence goals and reduces its greenhouse gas emissions.

In response to these issues as well as in frustration over the fact the U.S. Senate has not passed any climate change or oil spill response legislation, Oil Change International, a non-profit organization that specializes in campaign to expose the true cost of fossil fuels, has launched a new campaign to “Clean Up the Senate“.  The new campaign details 46 U.S. Republican and Democratic Senators who are “aligned” with the oil industry and portrays them bobbing in a sea of petroleum. You can view information about these senators including political campaign contributions and voting history on key legislation.

“We hope Americans are motivated to clean up the gusher of oil money that is currently covering these Senators,” said Steve Kretzmann, Oil Change Executive Director. “This campaign exposes these Senators and lets people send them a message that it’s time they clean up their act. It’s time for a Separation of Oil and State.”

In addition to the Clean Up the Senate Campaign and its corresponding website, last week Oil Change International also launched an additional website called DirtyEnergyMoney. This site was developed to support the organization’s campaign to end oil and coal company campaign contributions. The site is supported by more than a dozen organizations including Greenpeace, Public Citizen, MoveOn, 350.org and True Majority.

“The United States is paying a heavy price for its dangerous dependence on fossil fuels,” said John Sellers, a Director of Oil Change International.  “The Gulf Coast disaster is but the latest wake-up call. It’s time the Senate moved us forward instead of backwards on energy, to a clean, renewable future that boosts jobs, protects the planet and secures America.”

The U.S. Navy is looking to have half of its total fuel use come renewable energy sources by 2020, while the Marine Corps wants those sources, particularly the biofuels, to come from sources near its bases.

The New York Times reports that Navy Secretary Ray Mabus wants to dramatically cut the Navy and Marine Corps’ dependence on fossil fuels, especially from sources that might not be so friendly:

“We use in the Navy and Marine Corps almost 1 percent of the energy that America uses,” Mr. Mabus said. “If we can get energy from different places and from different sources, you can flip the line from ‘Field of Dreams’ — ‘If the Navy comes, they will build it.’ If we provide the market, then I think you’ll begin to see the infrastructure being built.”

“Within 10 years, the United States Navy will get one half of all its energy needs, both afloat and onshore, from non-fossil fuel sources,” he added. “America and the Navy rely too much on fossil fuels. It makes the military, in this case our Navy and Marine Corps, far too vulnerable to some sort of disruption.”

Part of that conversion to renewable sources started last year when the Navy launched its first electric hybrid ship, the Makin Island (pictured right) and more recently when the Navy conducted tests on an F/A-18, dubbed a “Green Hornet,” earlier this year (see my post from April 26, 2010).

Meanwhile, Maj. Gen. Carl Jensen, the commander of Marine Corps installations on the East Coast from Florida to Virginia, told ENCToday.com that he believes local farmers will be key to those sources of biofuels:

Jensen said he would like to buy locally produced biofuels to help reach the Marines reach their energy targets. The military is already using some biofuels. In fiscal year 2009, Camp Lejeune used 50,034 gallons of biodiesel and Cherry Point used 43,339 gallons.

Jensen said he’s had discussions with the Defense Energy Supply Center, which provides fuel to the military, about buying more biofuels. Encouraging their production could encourage farming and help curb development potentially harmful to the military, he said.

“We would like to make sure that frankly, skyscrapers aren’t built right next to our bases, or underneath our aviation military training routes,” he said. “It just makes sense.”

Last week,USDA announced as part of their August numbers that they believe corn farmers will achieve a record crop again this year. The expectation for harvest is 13.37 billion bushels, a 2 percent increase from the final 2009 harvest numbers.

However, the report, that reports a month behind, did not account for the widespread rain and flooding in the state of Iowa. Just yesterday, state officials announced that there are now 32 counties that have been declared “disasters” and are eligible for financial support from the federal government.

I reached out to the Iowa Corn Growers Association to learn more about how the rains would affect Iowa’s farmers and if they felt there could be a strain on the commodity with the growing use of corn for ethanol.

First, Iowa Corn said that despite the challenges facing Iowa farmers there is still optimism for a strong harvest. “We have farmers across the state who have battled with water this spring and summer to varying degrees. They are relatively optimistic about what the corn crop looks like on a statewide average. We don’t have any specific numbers on the crop, but the last report from WASDE said that Iowa’s corn crop was 65-75% good to excellent.”

The association noted that their farmers are confident that the crops that are doing well will carry the weight for those whose fields are under water. And the USDA has also predicted that they expect the per bushel per acre numbers to break records this year as well. They also stressed our country will produce more than enough corn for all markets, of which ethanol and livestock are the drivers in Iowa.

Iowa corn concluded by reiterating that American farmers can do it all. “We are sad to see so many weather issues affecting farmers across the state but we know that farmers battle weather of some kind or another each year and continue to do what they do best – produce food, fuel, feed, and fiber for the world.”

“The future belongs to those who believe in the beauty of dreams. And this has been a dream for many, many years,” began Iowa Governor Chet Culver during his presentation to kick off the largest global biomass harvesting pilot project in Emmetsburg, Iowa.

Project Liberty, the dream of Jeff Broin, CEO of POET and his company, is less than two years away from becoming the first commercial scale cellulosic ethanol plant using corn stover and corn cobs. This fall, nearly 85 local farmers will be harvesting and storing nearly 60,000 tons of biomass in an effort to refine the harvesting, storage and logistics for converting biomass into ethanol.

Culver noted that many people didn’t believe that this project could happen, but he has been a supporter since he took office in 2007. Now, he is proud to show the world that no where else is this type of project happening so quickly.

“I would like to thank farmers for embracing this opportunity for our country and embracing this opportunity for our state,” said Culver.

Broin added that to date, area farmers have already received $100,000 in incentive payments to establish the new harvest system on their farm. Part of the goal of this pilot project is to ensure that farmers who harvest biomass are able to do so at a profit as well as in a sustainable way. The optimal biomass harvest of any acre of land will vary between 0-25 percent depending on soil health.

I was on hand today along with several hundred local farmers and members of the community as POET unveiled the details of their biomass harvest program. Part of this program will be the completion of a new biomass storage facility in time for the harvest. The 22-acre site will have the capacity to house 23,000 tons of biomass bales at any given time.

Broin concluded, “As biomass harvesting for cellulosic ethanol grows, America’s reliance on foreign oil will wane and be replaced by a new reliance, this time on rural communities with our own borders. The American farmer will provide food, feed and fuel for the country at an unheard of rate.”

You can see pictures from the event today by clicking here.

Renewable energy projects will have a little more time to apply for federal government loan guarantees.

Biomass Magazine reports the U.S. Department of Energy has moved the deadline for the July 2009 energy efficiency, renewable energy and advanced transmission and distribution technologies solicitations six weeks later to October 5th of this year:

The newly-created Round 8, Part I of the application stage is intended to give companies additional time to develop and submit Part I applications to apply for a loan guarantee under Section 1705, provided by the American Recovery and Reinvestment Act.

The Part II application deadline remains Dec. 31. The Aug. 24 application deadline for Round 7 remains the same.

“The Department is committed to bringing as many commercial renewable projects online as possible to help us meet our clean energy goals and generate more jobs,” said energy secretary Steven Chu. “By extending the time applicants can file, we will be able to support additional projects that diversify the country’s clean energy mix and strengthen our economy.”

This comes on the heels of Congress’ decision to cut $1.5 billion from the DOE’s $26.1 billion DOE funding pool for renewable energy projects to cover teacher salaries and Medicaid (see Joanna’s post from August 11). The article also points out that just a year ago, Congress and the Obama Administration raided the renewable energy loan guarantee program to the tune of $2 billion to fund the “Cash for Clunkers” program to help stimulate new auto sales. Senate Majority Leader Harry Reid has promised that Congress will restore the recently cut $1.5 billion from the DOE Loan Guarantee Program.

On the heels of their great story yesterday on the investment in algal-biodiesel players PetroAlgae and Solazyme (not to mention Joanna’s piece on Gevo preparing for a $150 million IPO), our friends over at Biofuels Digest have put together a list of the top 10 most likely next IPOs in the biofuels sector. The list includes many Domestic Fuel regulars, such as Solazyme, REG and Imperium:

The biofuels companies coming forward are early-to-middle stage: their shared goal is expansion capital, and though they are seen by many as a value-add play for agriculture, or as a technology play, these are best understood as above-ground oil fields, and as a proxy for oil exploration. The difference: the risk for these ventures is less in the geology than in the biology. It is not a question of finding and extracting reserves, as much as growing and extracting them.

1. Solazyme. Already secured investment from Keating Capital, which expressly invests in companies within 18 months of an IPO event. Gaining revenues from military contracts. Has a raft of strategic partners that will prove attractive.

2. LS9. If Amyris goes well, LS9 might well follow at a suitable interval. Their demonstration facility in Florida is easily expandable to 11 Mgy, which would supply them with a revenue stream. Also has attractive strategic partners in the likes of Procter & Gamble. Has a magic bug that, like Amyris’, converts sugar to diesel – though based on e.coli rather than yeast and may have a wider range of near-term molecules – and thereby a story in chemicals – that it can produce.

3. Sapphire Energy.If Solazyme goes, and goes well, Sapphire could follow. They have a big capital raise for their vertically integrated company that intends to be an owner-operator of more than 1 billion gallons in capacity by 2025. The company has scant revenue, and is building out its demonstration plant, but when its operations in New Mexicom are complete, there may be reasons to turn to the public markets for more dollars.

4. REG. The Renewable Energy Group wanted to IPO a few years back, but withdrew. Since then, its been consolidating biodiesel assets at “popular prices”, and has a distribution arm. If biodiesel gets its story back with the US mandate taking hold, REG will likely need fresh equity to balance off any increasing debt and fund its expansion. Not for the near-term, but keep an eye out.
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