Domestic Fuel

The new year brings talk of new legislation for the ethanol and biodiesel industries.

In this edition of the Domestic Fuel Cast, we talk to some of the leaders of the green fuels’ industries, as well as the head of the nation’s largest farm organization, to get their takes on what should be coming from Washington, D.C. as far as ethanol and biodiesel legislation is involved.

Comments include American Farm Bureau Federation President Bob Stallman explaining why his group wants to shift the public money away from the ethanol blender’s credit towards infrastructure, despite the fact that there are many Farm Bureau members who have ethanol interests. Retired General Wesley Clark, who serves as co-chairman of Growth Energy, a group representing ethanol interests, agrees with Stallman’s assessment of moving more money toward infrastructure. Meanwhile, Renewable Fuels Association president and CEO Bob Dinneen says the real focus needs to be on this nation’s energy policy and welcomes the debate. On the biodiesel side of the house, Chairman of the National Biodiesel Board and vice president of sales and marketing for the nation’s largest biodiesel producer, Renewable Energy Group, Gary Haer, says the green fuel enjoyed a Christmas gift with the renewal of the federal one-dollar-a-gallon biodiesel tax incentive, even though it’s set to expire again at the end of this year. And he says getting that incentive renewed is a big priority for the biodiesel industry in the coming year. Haer also talks about how the biodiesel industry needs to work on its image by making sure people know biodiesel is truly an advanced biofuel, available right now. Those efforts are helped by biodiesel’s partner, the United Soybean Board, whose chairman, Marc Curtis, a soybean grower from Mississippi, points out that biodiesel adds 25 cents to the price for every bushel of beans sold.

It’s an interesting conversation, and I’m sure we’ll hear even more during the biodiesel and ethanol industries respective conferences, both going on in Phoenix, Arizona in February. In the meantime, you can hear what these folks are saying about the legislative year to come in this edition of the Domestic Fuel Cast here. Domestic Fuel Cast

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Lars Herseth, the American Coalition for Ethanol (ACE) Board President, has won the “Excellence in Agriculture Award” from the South Dakota Corn Growers Association & Corn Utilization Council. The award honors an outstanding leader who exemplifies excellence through significant contributions to the agriculture industry.

“On behalf of the American Coalition for Ethanol’s grassroots members across the country, I’d like to congratulate Lars Herseth upon receiving this award,” said Brian Jennings, Executive Vice President of ACE. “Lars is indeed an outstanding leader, dedicated to both agriculture and to ethanol. His contributions have greatly advanced both industries.”

Herseth is a third-generation farmer from Houghton, South Dakota. He became President of ACE in November 2009.

Marquis Energy has signed an agreement with GreenShift Corporation to use their patented corn oil extraction technologies in their 50 million gallon per year ethanol plant in Necedah, Wisconsin. This is GreenShift’s second license with Marquis Energy, the first for their 110 million gallon per year ethanol plant in Hennepin, Illinois.

Tom Marquis, Marquis Energy’s Vice President & Marketing Manager said, “Working with GreenShift’s marketing arm has proven to be a valuable addition to our marketing strategy. Their contacts and understanding of the industry have become integral to the bottom line.”

“We truly appreciate our relationship with Marquis Energy. We have worked together to increase yields and have proven that higher yields are achievable when both parties work together,” concluded David Winsness, GreenShift’s Chief Technology Officer.

In other recent news, GreenShift received a Notice of Allowance for their corn oil extraction processes, for pending patent application number 12/559,136 titled “A Method of Recovering Oil From Thin Stillage.” The following day, the company announced that it also signed a license agreement with Calgren Renewable Fuels, a 57 million gallon per year ethanol plant located in Pixley, California.

Some new buses in the St. Louis metro area will be running on biodiesel.

The St.Louis Post Dispatch reports Madison County Transit, just across the Mississippi River from St. Louis proper, is now using 50 new, biodiesel-burning buses to replace part of its aging fixed-route bus fleet:

They cost about $400,000 each and their purchase was made possible by federal grants and appropriations, including stimulus money, that covered more than 92 percent of the costs.

The new buses replace 30- and 40-foot buses that were purchased new in 1997. All had surpassed their useful life expectancy based on state and federal standards.

The buses are the first of their kind in the region.

The renewal of the federal $1-a-gallon biodiesel tax break is being cited as one of the reasons for the merger of two companies set to produce the green fuel.

Ohio-based Environmental Quality Management, Inc., a provider of environmental services, and Texas biodiesel producer Beacon Energy Holdings, Inc. have announced in this press release a definitive merger agreement, expected to close sometime early next month. The new company will be re-named EQM Technologies & Energy, Inc.:

“The merger of EQM and Beacon is very synergistic. I believe EQM’s financial wherewithal, industry expertise, and core competencies should help unlock the true potential of Beacon’s biodiesel production capacity in this improved market environment for biodiesel,” said Carlos Aguero, Chairman of Beacon.

“I am very pleased with the merger of EQM and Beacon,” commented Walter H. Barandiaran, Chairman of EQM. “This merger is supported by an experienced management team, with a talented group of engineers and sales & marketing personnel, and a solid financial foundation. EQMTE represents an attractive platform with which to continue executing an aggressive acquisition program in several key areas in environmental services, clean tech, and biofuels,” he added.

Company officials say the reinstatement and extension of the biodiesel tax incentive, along with the new Renewable Fuel Standard’s (RFS-2) 800-million-gallon requirement for this year and beyond, make biodiesel much more attractive.

California Ethanol & Power (CE&P) has commissioned a study to better understand the role sugarcane and sweet sorghum may play in producing ethanol and electricity for the state of California. The Economic Impact Analysis report was conducted by Solution Mountain, Inc., and sponsored in part by the Imperial Valley Economic Development Corporation along with the California Association for Local Economic Development. The goal of the report was to ascertain the economic relationship of construction-related activities and ongoing business operations with respect to jobs, gross economic output, capital income and taxes as part of CE&P’s sugarcane and sweet sorghum-to-ethanol and electricity program.

“CE&P will provide substantial economic stimulus and benefits to Imperial County, CA, which has recently shown the highest unemployment rate and lowest economic health rating in the U.S,” said Dave Rubenstein, Chief Operating Officer.

According to the analysis, the estimated benefits, measured through the construction phases and the first year of operation of CE&P’s initial plant are $946 million of gross economic output, $562 million of gross county product, $334 million of total labor income, 8,847 full and part time direct and indirect jobs, capital income of $182 million, and indirect business taxes and fees totaling $46 million, with a projected total five-year impact of more than $2 billion.

CE&P’s business strategy is to own and operate facilities that will convert sugarcane grown year round on 40,000 acres and seasonally gown sweet sorghum on 30,000 acres producing 55 million gallons of ethanol, 40.9 megawatts of electricity, and 880 million cubic feet of bio-methane per year.

Alternative energy technolgies, including biodiesel and ethanol, natural gas, smart grids, solar, and hydro power, will share in $300 million in capital from a new joint venture involving General Electric Co., ConocoPhilips and NRG Energy Inc.

This article from Bloomberg says the investment company, Energy Technology Ventures, will be backing about 30 startups over the next four years:

Collaborating with other major energy companies “enables us to pool our financial resources and technological expertise – - along with our extensive relationships — to provide more than money to emerging energy technology companies,” Kevin Skillern, managing director and leader of venture capital at GE Energy Financial Services, said in the statement.

The joint venture will focus on companies that are developing technology for renewable energy, smart grid, energy efficiency, oil, natural gas, coal, nuclear, emission controls, water and biofuels.

Some of the joint venture’s first investments will be with Alta Devices, a solar photovoltaic cell maker from California; Colorado-based coal-to-methane technology company Ciris Energy Inc.; and non-food biofuels developer CoolPlanetBiofuels from California.

The commercialization of cellulosic biofuels is closer than you think. During the DC Auto Show this week, Novozymes and POET are showcasing their successes in bringing cellulosic ethanol to the commercial market. With recent breakthroughs in enzyme technology and advancements in corn stover and cob collection processes this fuel is closer to reality than people realize.

In a regulatory impact analysis, the Environmental Protection Agency (EPA) has stated that, “corn stover was chosen as the most economical agricultural feedstock to be used to produce ethanol in order to meet the 16 billion gallon Energy Independence and Security Act cellulosic biofuel requirement.”  This is one biofuel component of the total 36 billion gallon renewable fuel requirement by 2022 as laid out in the Renewable Fuels Standard (RFS2).

“A large part of our success to date with corn cobs and stover is the improved efficiency of the enzymes used in the fuel production process and the reduced costs of the enzyme production process,” says Novozymes President Adam Monroe. “In just two years, we have been able to reduce our enzyme cost by 80 percent, while at the same time increase performance 1.8 times. Together with partners like POET, we have developed a renewable fuel that is better for our country, better for our environment and cost competitive to gasoline.”

Despite the major technological advancements, Novozymes stresses that there are still barriers to commercialization that include financing, market access and consumer choice for fuel.

Monroe noted that incentives such as grants and loan guarantees to biofuels projects over the past year that fall under the under the Department of Energy and United States Department of Agriculture are a step in the right direction, and they send a clear signal of support for the industry. He concluded that they are necessary tools for keeping renewable fuels like cellulosic biofuels on the road toward full-scale commercialization. In the meantime, Monroe added, the U.S. must not lose focus on what is truly important: American jobs, domestic energy security and environmental preservation.

SG Biofuels, a bioenergy crop company focusing on Jatropha for biofuels, has officially opened operations in Brazil and has named Brazilian entrepreneur and genomics innovator Fernando Reinach as its senior advisor for the market. Reinach will provide strategic planning, business development and executive management support for SG Biofuels Brasil, LTD, the subsidiary that will be based in Sao Paulo.

“We are privileged to add Fernando and his unique combination of entrepreneurial success and industry-leading expertise in breeding and genomics to our effort in Brazil,” said Kirk Haney, president and chief executive officer. “His guidance will be invaluable as we expand our R&D platform and agricultural development efforts in one of the most promising growth markets for Jatropha.”

Prior to accepting this position, Reinach was general partner of Votorantim Ventures, a venture capital fund of the Votorantim Group, one of Brazil’s largest private conglomerates with revenues of U.S. $8 billion. He also serves as a board member of Amyris. He as also worked for two companies now acquired by Monsanto – CanaVialis and Alellyx, both companies in the sugarcane space.

“SG Biofuels’ breeding and biotechnology platform is the right approach to develop Jatropha as a viable feedstock for biofuels in Brazil,” said Reinach. “By improving yields through genomics and regional adaptation, I believe there is a large opportunity to complement Brazil’s global leadership in sugarcane and ethanol with a successful Jatropha industry.”

SG Biofuels is collaborating with a number of partners to develop Jatropha, including Bunge, Flint Hills Resources and Life Technologies Corporation.

Spanish wind energy company Acciona Energy is building its second wind farm in Oklahoma.

This story from Eco Friend News.com says the Dempsey Ridge Wind Farm located in Roger Mills County, Oklahoma will produce 132 megawatts and will take about a year to build:

The Dempsey Ridge Wind Farm is located just 15 miles west of ACCIONA Energy’s 123-MW Red Hills Wind Farm that was put into service in June 2009. The project will create enough clean energy to power around 46,000 homes in Oklahoma and surrounding states and will avoid the emission of approximately 339,000 metric tons of CO2 per year from conventional power plants.

“Oklahoma is a state that understands energy and has embraced wind as a plentiful and lucrative resource for the future. We are pleased to extend our commitment to this state and this community with the construction of the Dempsey Ridge project. Oklahoma already ranks in the top 10 U.S. states for wind energy potential and this project is another step in the direction of realizing that potential,” said Dan Foley, Chief Development Officer, ACCIONA Energy North America.

The 66 wind turbine farm will be spread out over more than 10,000 acres.

Acciona currently has five wind farms in the U.S., four of them 100 percent owned by the company, including the 180 MW the Tatanka Wind Farm in North and South Dakota; the 11.8 MW Velva Wind Farm, also in North Dakota; the 100.5 MW EcoGrove Wind Farm in Illinois; and now the Red Hills Wind Farm. The company also has a stake in the 74,25 MW Blue Canyon Wind Farm in Oklahoma.

Last month, I told you about how algae-to-biodiesel developer OriginOil, Inc. had decided to go to Australia to test its algae oil extraction process with partner MBD Energy.

Today, I received an update from OriginOil that it has received the first commercial order to deploy its algae oil extraction system in an industrial setting:

MBD Energy (MBD) recently committed to purchase an initial OriginOil extraction unit for piloting at one of Australia’s three largest coal-fired power plants.

The proof of concept phase on a one-hectare site, scheduled for later this year, will use concentrated CO2 emissions to produce oil-rich algae in MBD’s proprietary growth membranes. OriginOil’s unique extraction technology will be used to harvest the algae oil and biomass.

OriginOil CEO Riggs Eckelberry says this system will support the early testing of the company’s technology with intentions to put in a much larger unit capable of processing up to 300 gallons per minute of algae culture for the one-hectare pilot site.

To learn more about OriginOil’s testing in Australia, check out my Domestic Fuel Cast from last month.

The 5th annual Iowa Renewable Fuels (IRFA) Summit was the best ever in many ways, according to IRFA Executive Director Monte Shaw.

“The combination of good weather and great speakers, we had record turnout, the crowd stayed, it was very positive,” said Shaw after the summit concluded on Tuesday in Des Moines. “We clearly had over 700 people here based on the fact that all the chairs were filled and we had standing room at the back of the room.”

Shaw thanked the many sponsors for the event who make it all possible. “This is free and open to the public and you can see a line up of speakers that in other cases you might have to pay several hundred dollars to see, so we’re really blessed with sponsors to make that happen.”

Listen to or download a quick summary interview with Monte here: Monte Shaw interview

And what summit on renewable fuels could be complete without a sermon from the Reverend of Renewable Fuels himself, Bob Dinneen?

The president and CEO of the Renewable Fuels Association served as the “warm-up act” for the undisputed headliner Newt Gingrich at the event. “Newt Gingrich has been a very thoughtful political leader for decades now and I don’t think people appreciate just how intuitively he understands the role that ethanol can play in our energy security, our economic development opportunities and our environmental policy, but he gets it,” Dinneen said in an interview at the IRFA Summit.

Dinneen was impressed with attendance at the 5th annual event. “It’s terrific, it’s not just a large crowd, it’s an energized crowd,” he said. “I think they recognized just how important this year is going to be.” The importance of this year in ethanol policy was key theme of Dinneen’s address.

Here is a link to the transcript of Dinneen’s remarks.

Listen to or download my interview with Bob at the IRFA here: Bob Dinneen interview

IOWA RENEWABLE FUELS SUMMIT PHOTO ALBUM

Former NASCAR champion Rusty Wallace may not be on the track racing himself anymore, but he is still a team owner and racing analyst and he is thrilled that every series in NASCAR will be using a 15 percent blend of ethanol this year.

“When we hit Daytona, get ready,” Wallace said. “Because NASCAR is the number one source of motor sports in the entire world and when NASCAR runs ethanol, it’s going to be on everybody’s radar.”

As the keynote speaker at the Iowa Renewable Fuels (IRFA) Summit on Tuesday, Wallace stressed the power of ethanol, the fuel efficiency, the clean burning of the fuel, and the extensive testing that has been done in the cars with ethanol blends. “All they did was take the E15 and put it into current race engines,” he said. “We have run the blend of ethanol up to 30 percent in our NASCAR engines. It keeps making more power the higher we go.”

Wallace gave a lot of credit for NASCAR’s use of ethanol to Growth Energy, the lead group in the American Ethanol partnership with NASCAR. “These guys have really worked their brains out with NASCAR putting this program together to get E15 on the racetrack,” he said. “Without Growth Energy this wouldn’t have happened.”

Listen to or download Wallace’s address at IRFA here: Rusty Wallace at Iowa RFA Summit

IOWA RENEWABLE FUELS SUMMIT PHOTO ALBUM

There’s a new face on the Nebraska Corn Board staff, and she’ll serve as the board’s ag program manager coordinating ethanol programming.

Kimberly Clark will direct the board’s efforts to increase in-state demand for ethanol, improve and expand the infrastructure of blender pumps and ethanol movement within and outside Nebraska, as well as maintaining a working relationship with ethanol development staff in other corn-producing states, the National Corn Growers Association, ethanol industry groups and Nebraska’s ethanol plants:

“The ethanol industry is critical to Nebraska and Nebraska corn farmers, so having Kimberly on staff to coordinate our ethanol programs is significant,” said Don Hutchens, executive director of the Nebraska Corn Board. “Kimberly’s background and experience will help continue the success we’ve seen with ethanol, and her ability to connect with and educate consumers about ethanol will be a tremendous asset.”

Clark, a native Nebraskan from Leigh, comes to the board from the University of Nebraska-Lincoln, where she served as the research project coordinator in dairy-related research projects.

Former Sen. Rick Santorum of Pennsylvania was never a believer in ethanol, biodiesel and other forms of renewable energy until one devastating day in American history.

“I looked at this issue differently, until 9/11,” the senator said during an address at the Iowa Renewable Fuels (IRFA) Summit in Des Moines on Tuesday. “To me, 9/11 changed the game as we look at energy production in this country.”

Santorum believes that domestic production of renewable liquid fuels in critical to this country’s national security. “Post 9/11, I went from someone who was skeptical at best of developing domestic sources of energy, to being a grand proponent of such things,” he said. “My pledge to you is to work with this industry to create a bigger and bigger place in the market for domestically produced ethanol and biodiesel.”

Santorum, a conservative Republican who served two terms in the U.S. House and two terms in the Senate, is considering a run for president in 2012 – as is former Speaker of the House Newt Gingrich who also spoke at the IRFA event this week.

Listen to or download Santorum’s address at IRFA here: Rick Santorum at Iowa RFA Summit

More photos from the IOWA RENEWABLE FUELS SUMMIT