Domestic Fuel

Ever wonder what would happen if the ethanol subsidy disappeared? Well, today UNICA answers that question in their new video, “All I Need to Know About U.S. Ethanol Subsidies,” that explains to taxpayers how Congress could save them $6 billion per year and help lower prices at the pump. For consumers to reap these savings, all lawmakers have to do is let 30 years of ethanol tax credits and trade protection expire on December 31.

According to UNICA, current U.S. ethanol policies include an interlocking system of subsidies and tariffs that cost taxpayers $6 billion per year for a total of $45 billion since 1980. These subsidies contribute to fluctuating gas prices and make sugarcane ethanol practically unavailable in the U.S., although sugarcane ethanol is favored in some areas such as California because it has a lower carbon intensity than other current forms of ethanol.

The video explains these policies as well as discusses the environmental, economic and energy security benefits of opening up the market to foreign sources of ethanol.

“Americans are increasingly writing and calling Congress to urge that it’s time to allow clean, renewable energy sources like sugarcane ethanol into the U.S.,” said Joel Velasco, UNICA’s Chief Representative in North America. “Their letters and phone calls all echo one thing: they are tired of having their tax dollars used to keep these options out of reach and to support a thriving industry that’s already the world’s largest.”
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As several senators make one last push for a federal Renewable Electricity Standard (RES) to be enacted before the close of the 111th Congress, several states are considering scaling back their current Renewable Energy Portfolios (RPS). At the federal level, groups such as the bipartisan Governors’ Wind Energy Coalition cite an RES as a way to give the country an economic jolt and regain a leadership role in development and manufacturing. At the state level, organizations against the RES support moves to scale back renewable efforts claiming that the economic cost of moving to wind, solar and biomass will in fact cause more economic turmoil, not economic prosperity.

An increase in the debate regarding a federal RES has come from two sources. Last Monday the Governors’ Wind Energy Coalition sent a letter to Senate Democratic and Republican leaders saying, “A strong RES is the most economically-efficient way to advance clean domestic energy and immediately create jobs in renewable energy manufacturing, construction of new projects and associated transmission, and ongoing operation and maintenance of these facilities.”

The letter was addressed by Govs. Chet Culver (D-Iowa) and Don Carcieri (R-RI), who lead the Governors’ Wind Coalition and early this year released a report detailing wind opportunities throughout the country.

The letter continued, “We wish to work with you and with the Administration to help shape federal energy legislation this year. The economic stakes are high for our states, and we see a narrow window of opportunity for Congress to enact a long overdue reworking of federal laws governing renewable energy.”

The letter was followed up by a press conference yesterday held by several bi-partisan senators who introduced a Renewable Electricity Standard (RES) bill.
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Just got a quick note from my friend Tamra Fakhoorian with the National Algae Association letting me know that she will be one of the speakers at the 2010 Energy & Sustainability Conference Sept. 23-25 at the Trabant Center in Newark, Delaware.

Tamra will be presenting on Thursday afternoon during the Carbon Abatement session of the conference with a talk entitled, “Algae for Energy: The Long Road to Fuel Independence.” I’ve talked to Tamra many times before, and I can assure you that it’s a session you won’t want to miss!

She’s pretty busy, too. I know right after she gets done talking at that conference, she’ll be hot-footing down to The Woodlands, Texas (just north of Houston) for the NAA’s national conference at the Sheraton North Houston hotel near George Bush Intercontinental Airport (see my post from Sept. 16 for more details).

It’s an issue we’ve talked about before … plenty of ethanol and biodiesel and vehicles that can burn the green fuels but not enough infrastructure to support those cars’ and trucks’ needs. But a little help from the government is changing that in one of the largest concentrations of privately-owned vehicles … and incidently, one of the largest concentrations of flex-fuel vehicles in the country … California.

Matt Horton is the CEO of Propel Fuels, a California-based company that provides E85 ethanol and biodiesel to existing stations. He says having the types of pumps that can handle those fuels is biggest problem.

“One of the key challenges in the alternative fuels and biofuels market in particular being the lack of infrastructure to provide everyday customers with access to the fuels.”

He says there are plenty of flex-fuel vehicles that can burn E85 ethanol and plenty of diesel vehicles able to use biodiesel. But the infrastructure to provide these biofuels and the public’s awareness that they can use ethanol in their flex-fuel vehicle are lacking. To fix that, Propel has received $11 million in state and federal grants to put in 75 E85 ethanol pumps in California. Anthony Eggert sits on the California Energy Commission (CEC). He says the state’s portion of the money … about four million dollars … comes from California’s Alternative and Renewable Fuels and Vehicle Technology program … also known as AB 118, named for the enabling legislation that created it. He justifies the tax money spent on this program as just a drop in the bucket compared to what consumers have to spend on non-renewable, petroleum-based fuels.

“It’s around $100 million per year for the CEC to invest in a portfolio of non-petroleum fuels to reduce greenhouse gas emissions, lower our petroleum dependency and improving our energy security. In California alone, we spend approximately $150 million per day on gasoline and diesel fuel.” He says the impact on the economy due to volatile fuel prices, as well as environmental issues and the vulnerability to foreign nations that might not always be the friendliest, makes the grant money well spent. Plus, it will pay dividends in the form of new jobs, less foreign oil and more money in consumers’ pockets.

You can listen to the Domestic Fuel Cast here. Domestic Fuel Cast

You can also subscribe to the DomesticFuel Cast here.

Minneapolis-based community wind developer National Wind has brought Peter Mastic on board as President and Chief Development Officer. He will be responsible for project development and finance and will report to company CEO, Leon Steinberg. Mastic will be at the helm of developing the company’s project portfolio, that currently consists of 15 community wind farms delivering over 4,000 megawatts (MW) per year. Prior to joining National Wind, Mastic was the founder and CEO of Third Planet Windpower, LLC.

“We are pleased to have a wind industry executive of such prominence join our team,” Steinberg commented. “Peter is a senior energy executive turned wind developer. He is well versed in renewable energy markets and has been successful in developing large-scale wind projects across the country.”

Mastic is no stranger to wind development. In the past he has managed the development, financing, or commissioning of more than 20 wind projects, that when completed will produce more than five gigawatts (GW) of wind energy across the States. To date, 500 MW are currently operational.

“I am pleased to be joining National Wind at an exciting time in its expansion,” Mastic said. “National Wind is unique in the industry as a utility-scale community-based wind developer, and without question it has major growth potential moving forward.”

A report released by USDA in June on the energy balance of ethanol plants is getting a second look this week, thanks to a post on the USDA blog.

The second look is well deserved, since the report, titled “2008 Energy Balance for the Corn Ethanol Industry,” got less coverage than it deserves when it was first released. The findings of the report are significant because they specifically tackle the much-publicized claims of David Pimental that ethanol production results in a net energy loss. The USDA report updates the energy balance numbers by taking into account current practices used by both corn producers and ethanol processors that have led to increased efficiencies and concludes that “A dry grind ethanol plant that produces and sells dry distiller’s grains and uses conventional fossil fuel power for thermal energy and electricity produces nearly two times more energy in the form of ethanol delivered to customers than it uses for corn, processing, and transportation.”

The report does concede that ethanol production was much less efficient 20-30 years ago, but that it has made tremendous gains, thanks to both increased corn yields and better production methods. “Over all, ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s, to a substantial net energy gain in the present.”

As more plants start using biomass power instead of conventional fossil fuel for production, the energy balance could increase even more significantly, according to the report. “As processors master the logistics of handling bulky biomass, the energy balance ratio could reach 26 BTUs of ethanol per BTU of inputs used.”

Read the report here.

If Republicans take control of Congress in the upcoming November election, we could see a shift back to making renewable energy a priority.

In this Biofuels Digest article, Brent Erickson, executive vice president for the Biotechnology Industry Organization’s (BIO) Industrial and Environmental Section, says he has been disappointed in President Obama’s and Democratic leadership in Congress’ lack of interest in helping support the green energy industry.

[Brent Erickson] We have had two years with Democrats in Congress and the White House, and they pretty much got their way. Obama took on health care and got it gone, and TARP and the stimulus and he’s shot his wad now.

BE: I have been a little bit disappointed in the Obama administration. When he was in the Senate he as very pro-biofuels. He had to choose his priorities, and that is understood, but this administration hasn’t done as much as expected.

Erickson goes on to say that biofuels, ethanol and biodiesel, have enjoyed bipartisan support, mostly from the likes of farm state Congressional members such as Sen. Chuck Grassley (R-Iowa). But he says it’s not a lock that Republican control will make a huge change:

BD: Looking ahead to divided government?

But biofuels have enjoyed pretty good bipartisan support, although the oil companies will have more of a voice if the Republicans take over. Not all oil companies have the same position – some are outright anti-biofuels, some are more pro than others. But the ag lobby is pretty powerful.

Erickson goes on to say that pay-go rules in Congress and a preference for investment tax credits as over production tax credits could change the game as well.

UK-based TMO Renewables has announced that it has entered into a 20-year contract with U.S.-based Fiberight to design and build waste to ethanol plants in the U.S. The contract is estimated to be worth more than $25 million per year. The new plants will combine the TMO Process, which optimizes waste feedstock conversion using a specialty bio-organism, with Fiberight’s fractionation and digestion technology. The two technologies working together are anticipated to improve the conversion of municipal solid waste (MSW) and other types of cellulosic waste into ethanol.

As part of the agreement, the two companies anticipate that they will design and construct 15 plants throughout the U.S. over the next five years. According to TMO, for each plant they will receive an initial, one-off design fee plus recurring annual revenue. The site and funding for the first plant has already been secured and construction is expected to begin in 2011. The next five sites have also been identified with the remaining plant locations yet to be determined.

“This contract is a landmark in the development of TMO’s technology on a commercial scale to produce an economically sustainable source of renewable biofuel,” said Hamish Curran, CEO of TMO. “In adopting the TMO Process Fiberight has proven the ability to use waste stream feedstock, net of all recyclables, for the effective conversion to cellulosic ethanol via a novel, low cost and fully integrated bio-process. Replication of similar waste to ethanol bio-refineries, across all regions of the U.S. and globally, can drive significant green job creation and community economic development. We look forward to working with Fiberight’s pioneering team to drive forward our joint plant development program.”
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BlueFire Renewables, Inc. has signed a 15-year “take-off” contract with Nebraska-based power producer Tenaska Biofuels LLC to sell all of the cellulosic ethanol produced at its Fulton, Mississippi facility to the company. The biorefinery under construction in Fulton will use local green waste and wood waste to produce approximately 19 million gallons of ethanol per year.

“This off-take agreement is a significant step forward for BlueFire. It provides immediate revenue once our plant is on-line. Also, it will move BlueFire closer to a debt financing agreement with the Department of Energy and U.S. Department of Agriculture,” said Arnold Klann, CEO of BlueFire Renewables, Inc. “This is one of the first cellulosic ethanol contracts of its kind in the United States establishing BlueFire as a clear leader in the industry.”

According to a new release from Tenaska, pricing of the 15-year contract follows a market-based formula structured to capture the premium allowed for cellulosic ethanol compared to corn-based ethanol giving BlueFire a credit worthy contract to support financing of the project. However, despite the long-term nature of the contract, BlueFire is not precluded from the upside in the coming years as fuel prices rise.

Dave Neubauer, TBF General Manager and Vice President, said of the partnership, “We look forward to a long-term relationship with BlueFire and to collaborating on off-take agreements for future plants as BlueFire continues to expand and bring valuable biofuels to the markets that need it most.”

Join the American Coalition for Ethanol (ACE) along with the Renewable Fuels Association (RFA) for a FREE Webinar: Ethanol 2011: New Fuels, New Rules on October 20, 2010 at 1:00 pm CST. The webinar will focus on giving the ethanol industry in-depth information on ethanol blending, mid-level ethanol blends and E85. This free webinar is brought to you by the Blend Your Own Ethanol (BYO Ethanol) Campaign.

Attendees will also learn about ethanol infrastructure incentives that are available to help retailers expand their existing infrastructure and bring more choice to consumers at the pump. Today, the Federal tax credit gives station owners a 50 percent tax credit, up to $50,000, for installing E85 infrastructure, but it expires at the end of 2010.

Don’t miss out. The webinar will provide the latest updates on the effort to increase ethanol blends up to 15 percent, and will discuss how blender pumps continue to fit the equation for retailers looking to provide customers a variety of fuel choices. The BYO webinar will also discuss new fuel formulations in detail and help retailers learn more about ethanol marketing for current and future blends. Sign up today to learn what ethanol marketing will look like in the near future. Register for this FREE webinar at www.BYOethanol.com.

The Department of Public Utilities (DPU) of Los Alamos County is receiving the Energy Leadership Award from the New Mexico Association of Engineers (NMAEE) for their commitment to upgrading the grid for solar power. The award honors a person or organization for their demonstrated leadership, innovation and commitment to the smart grid project in New Mexico, a component of the statewide New Mexico Green Grid Initiative (NMGGI).

“The community of Los Alamos is excited to lead this demonstration project, which is designed to prove the viability of utility-scale solar power with smart grid technology. This is the forefront of implementing real-world green technology,” said DPU’s Deputy Utilities Manager for Engineering, James Alarid.

The Los Alamos smart grid project will be implemented by a team that includes DPU along with the New Energy Technology and Development Organization (NEDO) of Japan’s Ministry of Economy, Technology and Industry and the Los Alamos National Labs, which supports the NMGGI led by the State of New Mexico and the Galvin Electricity Initiative in developing its components.

Among the components of the smart grid project at Los Alamos are a 2 megawatt photovoltaic array, 7 megawatt-hour battery storage system, which is enough to power 3,300 homes for 1 hour, and a smart demonstration home that will use green construction techniques and feature smart meters and appliances to effectively demonstrate how smart energy technology can help consumers save energy and money.

Although the project has not received any federal funding, the DPU agreed to move forward with the project with $17 million in financial backing from NEDO along with $10 million to be funded by a Power Purchase Agreement through the DPU.

“The Los Alamos Department of Public Utilities has demonstrated significant leadership and resiliency by agreeing to move forward with this ground-breaking project using a major investment of its own resources,” said Jack McGowan, a consultant for NMGGI, partner with the Galvin Electricity Initiative and a member of NMAEE. “The DPU is taking important steps to ensure that its electricity consumers will be able to make informed decisions about energy consumption in the future, while meeting its carbon-neutral objective.”

The Renewable Fuels Association (RFA) wants some answers from the Department of Energy and Congress about why the Renewable Energy Loan Guarantee Program is not working.

In a post on RFA’s The E-Xchange Blog today, RFA president and CEO Bob Dinneen says the program “has been defined by inaction and obstruction and is largely seen as a complete failure to date in terms of bringing next generation biofuel technologies to the marketplace.” With the funding not being used for the loan program, Congress has seen this as a piggy bank they can break into and raid to pay for other programs.

DOE officials are set to testify this week before a Senate committee and Dinneen proposes a few questions that need to be answered. When do DOE officials anticipate making the necessary changes to the program to make it more accessible to next generation biofuel technologies? How do DOE officials view the loan guarantee program? Is it for power generation technologies only? Or, should it apply to all renewable energy technologies including biofuels, as Congress intended? For members of Congress, assuming DOE gets on track to dispense funds from this critical program, when will you act to restore funding raided for various programs unrelated to renewable energy infrastructure development?

The Senate Energy and Natural Resources Committee is holding the hearing, specifically to examine DOE’s loan guarantee program, at 9:30 Eastern.

The first Progressive Automotive X Prize, a one-year race to design an ultra-efficient car that’s “safe, affordable and desirable”, winner has been announced and it runs on E85.

According to the New York Times, The Very Light Car, built by Virginia company Edison2, won the $5 million first prize with 100 mpg and the lowest carbon footprint of all contestants. Its gasoline engine, which ran on E85, beat out dozens of electric and hybrid cars, vehicles currently thought to be among the most efficient available.

David Friedman, who directs the Clean Vehicle Program at the Union of Concerned Scientists said, “While these [X Prize] vehicles may not be what we’re going to see on the road in the next decade, they really do point to a lot of the ingredients that we need to get to 60 miles per gallon, or more, in the next 15 years.”

The auto industry has targeted a goal for vehicles to receive 60 miles per gallon (mpg), “Just last year automakers supported reaching 35+ mpg by 2016, and before we have even achieved those new heights, the calls have begun to almost double mileage,” said Dave McCurdy, president of the Alliance of Auto Manufacturers. “Clearly we live in a period of extreme political volatility, and some groups are promoting their political wish list prior to the elections,” he said.

For automakers, the question is how to do it. They have offered more efficient gasoline cars in recent years, but some are betting big on electric and plug-in hybrid cars.

Students at North Iowa Area Community College (NIACC) are studying the flexible fuel vehicle (FFV) conversion process. As first reported on KMIT.com, by using FlexFuel U.S.’s system, the students are excited to learn how to lessen dependence on foreign oil imports.

“It’s pretty interesting and it’s easy to install too and it’s not really that hard. The hardest thing is the wiring and even then it’s not that hard,” said student Heath Tulp/

The students at NIACC are putting in a supplemental fuel injection system to a vehicle adding fuel as needed so the car can run smoothly on both gas and E85.

Mitch Sremac who invented the system said he created it “To make it easy enough to install by most technicians and be able to keep the car running and meet emission standards.”

NIACC is the first school to study the new conversion system.

Didion Milling based in Cambria, Wisconsin has successfully worked with Christianson & Associates (C&A) to install Intellago Grain Software at their processing plant. Didion Milling is both a producer of food-grade milling products as well as ethanol. The software will provide Didion with a single, fully integrated grain and financial management tool.

Specific benefits of the grain module, that is an extension of the plant’s Dynamics ERP system, are enhanced financial reporting capabilities, integration of all inventory items into a single, unified inventory system, and a better tool to establish risk management strategies that allow them to lock in margin when available.

“We currently engage in operations that dramatically exceed industry standards.  Our employees have a wealth of knowledge and experience in grain merchandising, grain manufacturing, logistics, ethanol, engineering, and software development,” said Luke Burmeister, Didion CFO. “My core team partnering with C&A has developed a fully automated ERP system from the procurement of corn to the production and traceability of food and fuel to the delivery of  financial statements.”

Didion Milling is a unique facility in that it produces both food for the consumer market and fuel. The majority of ethanol facilities produce dried distillers grains (DDGs) which is sold for animal feed.

Burmeister concluded, “We will continue to diversify our customer base, add product mix, and reduce our overall costs and carbon footprint through a reduction in energy taking us to the next level in our food AND fuel vision. It is all about adding value to the kernel of corn. We intend to leverage our high-quality workforce and extensive process and software development experience working with the leader in the industry in developing and enhancing the most efficient automated software system in the renewable fuels industry.”

Last week, Didion Ethanol hosted a Green Energy Expo to educate consumers about ethanol. Earlier this year, C&A released its annual Biofuels Benchmarking Report, a look at ethanol plants efficiency and financial viability. Tools such as Intellago Grain Software have been designed to help improve a biorefinery’s bottom line.