Domestic Fuel

The biodiesel industry in the U.S. has been struggling lately, but the trading market for renewable identification numbers … the numbers the U.S. Environmental Protection Agency will require to prove compliance with the new Renewable Fuels Standard (RFS2) … is pretty strong.

Biodiesel Magazine reports that RIN prices seem to be filling the void the lapse of the federal $1 per gallon tax credit has created, fueled by the EPA’s recently released targets under RFS2:

In late November the agency released 2011 volume requirements, which consists of nested mandates. According to the release, 1.35 billion gallons of advanced biofuel must be consumed next year. Of that number 800 million gallons must be biomass-based diesel. Since biodiesel is currently the primary commercially-available advanced biofuel, the agency notes it will likely be used to meet the vast majority of the 1.35 billion advanced biofuel mandate.

Although prices began slipping Dec. 9, Gray notes that they could easily remain in the 80 to 90 cent range for the remainder of the year. The good news for biodiesel producers is that the RIN system seems to be working as it was intended to by the EPA. “[RINs] are doing their jobs, they are doing exactly what EPA intended to do; to recognize the subsidy behind the gallon of renewable fuel to try to get favorable blending economics—or something resembling decent blending economics,” Gray said. “RINs are performing well within the mandate RFS2.” The biodiesel market in 2011 is expected to remain tight, which should ensure relatively high prices for 2011 biodiesel RINs as well.

Experts say RIN prices tend to go down in the spring but jump at the end of the year as obligated parties try to get into compliance before the deadline. Also, they say the RINs are functioning as they should, and the biodiesel market is continuing, despite the loss of the federal credit.

A good friend of mine from my Air Force days alerted me to a story about a U.S. Navy ship that was recently recognized for its hybrid technology during some recent energy awards.

Chris Hatch, who now does Congressional and Public Affairs for the Naval Surface Warfare Center Carderock Division in the Philadelphia, PA area, sent me this release explaining how the USS Makin Island (LHD-8) was recognized by Platts Global Energy Awards as a finalist for Engineering Project of the Year during its 12TH annual ceremony for using hybrid technology. The technology saved between $1.4 million and $2 million in fuel costs, compared to others in her class, during her maiden voyage. And over the expected life of the vessel, that could add up to more than a quarter billion dollars… of our tax dollars:

David Mako, a Naval Ship Systems Engineering Station (NAVSSES) senior electrical engineer, is honored by the prestigious nomination, and takes pride in his and other employees‘ contributions to designing the Amphibious Assault Ship with the Auxiliary Propulsion System (APS) responsible for these fuel savings.

Though Mako half-jokingly bristles at the comparison, APS, also known as Hybrid Electric Drive (HED), is akin to technology used in automobiles. LHD-8 uses a gas turbine engine, and the APS‘ two 5,000hp electric motors for propulsion. APS takes electricity generated for shipboard systems like lighting and heat to turn the propeller for speeds of 12 knots and under, thus avoiding using its 35,000hp gas turbine, which is less efficient at slower speeds.

Chris goes on to explain that the slow speed savings is important as amphibious assault ships spend a great deal of time loitering at low speeds to support deployed troops.

This is just the latest effort by the U.S. Navy to get off the petroleum, especially foreign oil, addiction. In October, Joanna told you about a Navy Riverine Command Boat that runs on algae-based biofuel. The Navy also recently launched a new website to chronicle its environmental efforts, including the use of biofuels and renewable energy at greenfleet.dodlive.mil.

A renewal of the ethanol blenders tax credit, reinstatement of biodiesel incentives and help for wind and solar companies have all reportedly made it into the Senate compromise that extends both unemployment benefits and expiring tax cuts.

According to the Renewable Fuels Association, the compromise legislation would extend the current Volumetric Ethanol Excise Tax Credit (VEETC) just through 2011 at the current rate of 45 cents per gallon. Additionally, the package with also extend the offsetting tariff on imported ethanol through 2011. Both policies are set to expire at year’s end.

“Ethanol producers greatly appreciate the determination of those members of Congress who worked tirelessly to continue America’s investment in ethanol production,” said Chuck Woodside, RFA Chairman and CEO of KAAPA Ethanol in Minden, Nebraska. “As a farmer-owned ethanol producer, extending tax incentives for ethanol use is a critical step allowing ethanol to compete with a heavily subsidized oil industry. We are committed to the process of responsible reform of ethanol tax policy, but such a process would have been infinitely more difficult in the absence of the existing tax policy.”

Listen to or download Woodside’s full statement here: Chuck Woodside

Growth Energy CEO Tom Buis says the action means more time for the industry. “An extension of the credit will give the industry certainty, and Congress the opportunity, to move forward with reforms that will remove the infrastructure barriers to the fuels market, such as our Fueling Freedom plan, next year,” Buis said in a statement.

The law will also reinstate the $1 a gallon biodiesel tax credit, retroactively for 2010 and through 2011, according to Sen. Charles Grassley (D-IA). “Our country spends more than $730 million a day on imported petroleum,” Grassley said in a statement. “Letting these items lapse would be a textbook case of penny-wise, pound-foolish legislating.” In addition, Bloomberg reports that a tax-grant program for wind and solar-energy companies will be extended for one year under the deal.

A first test vote on the package has been scheduled for Monday afternoon. Summary of the tax deal can be found here.

Word is that the ethanol tax credit and possibly other renewable energy incentives will be included in the deal being cut on Capitol Hill this week.

Bloomberg has reported that Democratic Senators Ben Nelson (D-NE) and Dianne Feinstein (D-CA) both say the Volumetric Ethanol Excise Tax Credit (VEETC) for blending ethanol with gasoline is part of the package. Feinstein opposes the ethanol tax credit, while Nelson approves. Reuters reports that Rep. James Clyburn (D-SC) said earlier today that the tax credit should be included.

The devil is still in the details, including the length of an extension and amount of the credit, according to Matt Hartwig with the Renewable Fuels Association, who said that lawmakers were reported to be ironing those out and confirmation may yet come by the end of the day.

ZeaChem’s cellulosic biorefinery is within sight. The company has announced two recent milestones in the process for their 250,000 gallons-per-year plant to go online in 2011. First, they secured full construction funding for their facility including a $25 million grant from the U.S. Department of Energy to be used toward the cost of constructing the front and back-end cellulosic process components. Once complete, the biorefinery will convert biomass to fuel (ethanol) and chemicals.

Second, ZeaChem has obtained a guarantee maximum price under the Engineering, Procurement and Construction agreements with engineering firm Burns & McDonnell, for construction of the core facility. The biorefinery will be located in Boardman, Oregon and is currently under construction with foundations already being poured.

“Since 1898 we have built a reputation of making our customers successful with practical technology advancements and predictable costs,” said John Nobles, President, Process & Industrial Group at Burns & McDonnell. “We look forward to helping ZeaChem deploy their technology.”

Jim Imbler, President and CEO of ZeaChem concluded, “ZeaChem has successfully completed the financial milestones to ensure that our biorefinery project can be completed on budget and on schedule. We look forward to beginning cellulosic ethanol production in 2011.”

During COP-16, the ongoing global climate talks taking place in Cancun, Mexico, the American Council on Renewable Energy (ACORE) called for a global agreement on the adoption of a 25 percent renewable energy standard by the year 2025 to be called the Global Renewable Energy Standard (G-RES). In addition, ACORE went further and asked the International Renewable Energy Agency (IRENA) to be designated as the lead agency to support the implementation should an agreement be passed.

“The world seeks leadership and guidance on the best path to a cleaner, safer environment and stable atmospheric ecosystem. But it is clear to most of us that there is no single path – that this is a matter of many paths that together get the world to where it needs to be,” said Michael Eckhart, President of ACORE.

He continued, “We know today that three of the cornerstone paths to climate protection are the adoption of renewable energy, investment in greater energy efficiency, and protection of the rainforests as the Earth’s lungs. It is time to have concerted action on each of those three paths, getting started on what we know will work. I believe we can agree on the adoption of renewable energy here this week at COP-16, and we hereby call on the conference to introduce the measure and test it with a vote. We believe it can pass, and call on other associations and NGOs to encourage their governments to agree.”

ACORE put forward the following draft resolution that they believe most countries can meet while still achieving economic growth and employment.

RESOLVED, that the undersigned nations commit to a Global Renewable Energy Standard (G-RES) in the amount of 25% by the year 2025. That is, that each signatory nation shall hereby be committed to a goal of supplying not less than 25% of its national energy supply from renewable energy sources, herein defined as wind, solar, hydro, ocean, geothermal and biomass sources of electricity, fuels, heat and other end-use forms of energy; and to a process of international collaboration through the International Renewable Energy Agency (IRENA) as the designated lead agency for implementation. The G-RES shall provide for two implementing mechanisms: direct installation of renewable energy systems sufficient to meet the goal, and the sale/purchase of Global Renewable Energy Certificates (G-RECs) between nations.

In the past, other groups have signed a memorandum of understanding on the 25 percent by 2025 goal including ACORE, the Chinese Renewable Energy Society, the Chinese Renewable Energy Industries Association, the European Renewable Energy Council, and the World Council for Renewable Energy (WCRE). In addition, other groups around the world have promoted a “25x2025” goal including the Energy Future Coalition in the U.S.

California is not the only state to take on a “hydrogen highway“. This week, General Motors (GM) and The Gas Company (TGC) have launched an initiative to make hydrogen-powered vehicles and a fueling infrastructure a reality in Hawaii by 2015. Ten companies, agencies and universities have joined the program, called the Hawaii Hydrogen Initiative (H2I) in what participants hope will be become an essential piece of the state’s energy program.

“Hydrogen, used as a fuel, will reduce our dependence on petroleum starting today,” said Jeff Kissel, TGC president and CEO.

According to a press release from GM, they are the “leader in hydrogen fuel cell vehicles” and the “first to field the world’s largest fuel cell demonstration fleet of more than 100 vehicles”. The release also stated that TGC currently produces enough hydrogen to power up to 10,000 fuel cell vehicles with the capacity to produce more. Yet to be determined as part of the program is how to best distribute the hydrogen but the companies are looking at the possibility of using existing natural gas pipelines.

In 2008, the state launched the Hawaii Clean Energy Initiative (HCEI), a partnership with the U.S. DOE with a goal of generating 70 percent or more of Hawaii’s energy through energy efficiency and clean, renewable resources such as solar, wind, wave, biofuels, and geothermal. The goal of H2I is to make hydrogen available to all of Oahu’s 1 million residents by 2015 with the installation of 20-25 hydrogen stations throughout the island.

“In Hawaii, we want to address the proverbial chicken or egg dilemma,” said Charles Freese, executive director of GM Fuel Cell Activities. “There has always been a looming issue over how to ensure that the vehicles and the necessary hydrogen refueling infrastructure are delivered to market at the same time. Our efforts in Hawaii will help us meet that challenge.”

What was not discussed in the release was the cost for Oahu residents to purchase a hydrogen fuel cell vehicle nor what the cost will be to fill up the tank.

Reflecting a trend that started in Utah and has been copied in several other states, an Ohio man wants to see the ditches and medians along the interstates used to grow oilseeds, such as safflower, dwarf sunflower and canola, to make into biodiesel.

This article from the Columbus (OH) Dispatch says Mark Schaff, a member of Etna Township’s economic-development committee, got the idea after reading about a similar program in Utah and the national movement called FreeWays to Fuel:

North Carolina planted crops this summer, and programs are to start next summer in Minnesota, Michigan, Virginia and Tennessee.

“We’ve been planting on sidewalks, in terms of compaction of soil,” Hanks said.

Ohio Department of Transportation officials have raised concerns about safety of those planting and harvesting crops in the ditches and medians, but proponents are quick to point out the oilseeds only would have to be tended to in the spring planting and fall harvesting … much less time than when maintenance crews have to continually mow those areas. Plus, farmers would only collect a share of proceeds generated and already have the equipment, eliminating those costs as well.

In what could end up being a great test of biodiesel in cold weather (and there’s still plenty of detractors who swear against the green fuel in cold climates) Swedish auto maker Volvo will be testing biogas, and eventually biodiesel, in an airport snow sweeper in the Scandanavian country.

This company press release says that, in partnership with Schmidt and Swedavia, Volvo will have two nine-liter engines running on the alternative fuels in the sweeper:

The state-owned company Swedavia aims to make all of its 14 airports in Sweden carbon-neutral in terms of upkeep and maintenance. Daily operations involve the deployment of an extensive fleet of machinery comprising Volvo products featuring customized equipment, including snow removal machines that keep the runways clear of snow.

The test vehicle’s cab unit is the front section of an A25E articulated hauler from Volvo Construction Equipment, equipped with a nine-liter diesel engine converted to gas. In the rear section a similar engine from Volvo Penta is used to power a roller brush and a snow-blower unit that expels the remaining snow at a speed of 130 m/s. While the Volvo Group already has trucks and buses that are powered by biogas, this is the first time that Volvo CE and Volvo Penta are showcasing a product equipped with biogas-powered engines.

If there’s any place that would know snow, it would be Sweden! I’m still trying to get some video or a picture of this snow sweeper in action. I’ll update this post when I find it.

Starting today we’re launching a new feature on all the ZimmComm New Media news websites, including Domestic Fuel. This is a weekly quick-vote style poll which we’re affectionately calling the ZimmPoll.

The ZimmPoll is designed to gauge your opinions on a range of topics, including agriculture and agribusiness, emerging technologies and consumer trends. Look for a new poll each week in the sidebar on Domestic Fuel and on AgWired.com, PrecisionPays.com and WorldDairyDiary.com.

The ZimmPoll is sponsored by Rhea + Kaiser. “Target-audience opinions and insights are key to the success of all of our businesses today,” says Diane Martin, president and CEO of R+K. “We hope ZimmComm readers will benefit from – and have a little fun with – these real-time opinions of their ag industry peers.”

Start now and stay tuned for a new ZimmPoll each week. You’ll see results immediately, and we’ll also publish a weekly results recap where you’ll be able to share additional comments and ask questions about the week’s poll question.

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

Maybe it’s the renewable nature of the fuel. Maybe it’s the fact that the fumes from some of it smells likes french fries. Maybe, my personal favorite, it helps this country get off its foreign oil addiction. Well, whatever your reason for believing in biodiesel, the National Biodiesel Board is inviting you to put your thoughts onto video:

The best of the best clips will be used during the 2011 National Biodiesel Conference & Expo, Feb. 6 – 9 in Phoenix, showcased on the National Biodiesel Board’s web site, Facebook Fan Page, and other communications where biodiesel is at work.

The statements must be submitted in the following format: “I believe in biodiesel because….”

You can check out the National Biodiesel Board’s site and see how some of the NBB’s staffs’ examples to get you started. My personal favorite is my friend Jessica Robinson’s video, where she mentions her best friend’s husband, who is in the Marine Corps serving overseas.

A publication that provides information for users of the ethanol co-product distillers dried grains (DDGS) has been updated.

A new edition of “Feeding Corn Milling Co-Products to Feedlot Cattle,” a popular publication that provides feedlot operators, animal nutritionists and others with the latest research and sound recommendations on feeding corn co-products like distillers grains to cattle, is now available from the Nebraska Corn Board and University of Nebraska-Lincoln.

“Feeding Corn Milling Co-Products to Feedlot Cattle” is a 36-page printed publication that is available free by request to the Nebraska Corn Board. Electronic copies are also available for download at NebraskaCorn.org under the publications section, or at the university’s beef.unl.edu website.

More information here from the Nebraska Corn Board.

As much of the talk on this blog has focused on the renewal of the biodiesel and ethanol tax credits (see Cindy’s post), the leading advocacy group for wind energy in this country is reminding Congress of the danger of not including its green energy in the package to renew tax credits.

This press release from the American Wind Energy Association says tens of thousands of American jobs would be in peril if the 1603 investment tax credit for renewable energy is not part of the tax break renewal package:

“We have people being laid off right now, and we expect to see more without fast action on the tax extenders now being negotiated,” said Denise Bode, CEO of AWEA. “The 1603 tax credit extension would help bring them back as soon as possible.” According to the trade group’s research, there are over 15,000 jobs in the manufacturing pipeline alone. “We are risking those jobs by not sending a clear signal that America remains open for business in wind energy,” Bode said.

The 1603 tax investment credit saved 55,000 jobs in wind energy, as estimated by Lawrence Berkeley National Laboratory. Overall employment has reached 85,000 in the American wind industry, as installed capacity has grown 40 percent in each of the past two years. Wind now generates 20 percent of the electricity in Iowa; and on Oct. 28, high winds pushed wind power to 25 percent of the electrical generation in Texas.

AWEA officials are optimistic the credit will get extended.

The new American Soybean Association (ASA) president is making biodiesel and ethanol his priorities.

And this article from Corn and Soybean Digest says that shouldn’t be too much of a surprise from Alan Kemper, a fifth generation corn, soybean and cattle farmer from Lafayette, Indiana and the first person to hold both the ASA presidency and that of the National Corn Growers Association, a job he held in 1989-1990:

“We were pushing ethanol before it was cool,” he says, “and the need for expanded biofuels use – especially biodiesel– has never been more important than now. It’s essential that we receive a multi-year extension of the $1/gal. federal tax credit for biodiesel. This will be a net win for soybean growers, our country and our government.”

The article goes on to say that Kemper is also pushing free trade agreements to help American soybeans and wants to make sure there is profitability and sustainability in the oilseed market.

A Kansas City investment firm has purchased a bankrupt Nebraska ethanol plant with the goal of getting it back on line by next year.

Spectrum Business Ventures (SBV) bought the assets in Chapter 11 bankruptcy of E3BioFuels in Mead, Nebraska, a patented, closed-loop ethanol production facility that both opened and subsequently shut down in 2007.

According to a company release, SBV secured a super senior position in the facility while financially restructuring it to operate profitably.

“Without SBV’s expertise in deal structuring and negotiations, this deal would not have gotten done. This is a win for the plant, a win for SBV and a win for the industry,” stated Dennis Langley, former Chairman and CEO of E3 Mead.

The Mead plant was the first-ever closed-loop system developed to produce commercial quantities of ethanol using methane gas recaptured from cow manure. The system combines a 25-million-gallon ethanol refinery, beef cattle feedlot, and anaerobic digesters to maximize energy efficiency.