Domestic Fuel

This year will be the year of bio-based chemicals made from algae … that according to the CEO of OriginOil, algae-to-biofuel maker.

Riggs Eckelberry made the prediction on MoneyTV, an internationally-syndicated weekly business television program.

“2011 is the year of biochemicals made from algae.”

OriginOil on MoneyTV, 6 Jan 2011 from OriginOil on Vimeo.

Eckelberry says some major players in the algae-based biochemical business have received funding, especially in the plastics field. He says utilities will also be a big catalyst behind the growth of algae use.

“A power plant is never going to grow algae. They make power. So, for them, it doesn’t work unless an integrator that comes in and does all the engineering and operation. And those are the key players that are going to come into the market.”

Eckelberry points out all the things that use petroleum, such as plastics and fuels, can be substituted with the renewable oil from algae. Plus, the algae can also be used as a nutritional item.

He adds that his own company will be focusing on the oil extraction from algae process.

The U.S. is at the “blending wall” saturation point for ethanol use according to a new Purdue University study. The cause is lack of infrastructure to meet the federal mandate for renewable fuel use with ethanol, but the country could still meet the standard with significant increases in next-generation biofuels and cellulosic fuels.

Wally Tyner, the James and Lois Ackerman Professor of Agricultural Economics, and co-authors Frank Dooley, a Purdue professor of agricultural economics, and Daniela Viteri, a former Purdue graduate student, used U.S. Department of Energy and Environmental Protection Agency data to determine that without new technology or a significant increase in infrastructure, the country will not be able to consume more ethanol than is being currently produced.

This is not new news to an ethanol industry that has been struggling to overcome the blend wall hurdles for years. In fact, the E15 waiver, allowing conventional vehicles and light duty trucks to use 15 percent ethanol, is just one step, of many, to push the country in the right direction of overcoming the blend wall. Last year RFS required approximately 13 billion gallons of renewable fuel, the amount that Tyner predicts is the threshold for U.S. infrastructure and consumption ability. The RFS number for this year is even higher at 13.95 billion for ethanol.

“You can’t get there with ethanol,” said Tyner, whose findings were published in the December issue of the American Journal of Agricultural Economics.

Some of the “blend wall problems” include lack of flex-fuel vehicles (FFVS) that can use higher blends of ethanol up to E85 as well as not enough stations offering these same higher blends of ethanol. Then once you get the stations, Tyner said there is no way to distribute it. “We would need to install about 2,000 pumps per year through 2022 to do it. “You’re not going to go from 100 per year to 2,000 per year overnight. It’s just not going to happen.”

And then there’s the price issue. Even if the fuel were readily available, E85 would have to be priced right because of the lower mileage. For example, if gasoline were $3 per gallon, E85 would have to be $2.34 per gallon to break even on mileage.

So one way to meet the standards with current limitations are advances in the production of thermo-chemical biofuels, which are created by using heat to chemically alter biomass and create fuels. These fuels are also known as “drop-in fuels” because there is no infrastructure changes needed to blend the fuel, such as is the case with ethanol.

Tyner concluded, “Producing the hydrocarbons directly doesn’t have the infrastructure problems of ethanol, and there is no blend wall because you’re producing gasoline. If that comes on and works, then we get there. There is significant potential to produce drop-in hydrocarbons from cellulosic feedstocks.”

Two, four, six, eight, who do we love to hate? The oil companies!

Despite my story lead, I was not a cheerleader in another life but I couldn’t get that cheer out of my head while I read this week’s book, “Why We Hate The Oil Companies Straight Talk From An Energy Insider,” by John Hofmeister. I recently gave Mr. Hofmeister some ink when he predicted that the country would see $5 per gallon of gas within the next 10 years so I thought, hey, I should read his book. See what’s he’s all about. He is, after all, the former president of Shell Oil Company.

What is Hofmeister all about? Bringing affordable, clean and sustainable energy to all Americans. He writes, “The truth is that affordable energy is essential for American economic growth. It is essential for our national security and position in world leadership. And it is necessary to maintain our quality of life.” He continues by saying affordable energy and environmental sustainability are challenges that require immediate attention.

Who is in charge of leading the way to affordable energy?  The oil and utility companies? Government? American Citizens? The answer is not so black and white as Hofmeister explains. No one believes the oil companies – they are ranked 24 out of 24 in the industry “Who do you trust” poll and the government is ranked at 22. Not swell by any standards. Then we have American citizens who have been fed “information, misinformation and no information” and they are still electing politicians who have spent 40 years not making good energy policy decisions. We Americans have bad voting histories.

So what do we have? Hofmeister says “there is an energy shortage, but there is no shortage of energy.”
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The Brazilian Sugarcane Industry Association (UNICA) announced today that Joel Velasco, the organization’s Washington, DC-based Chief Representative for North America, is leaving the position he has held since 2007, to join Amyris, Inc., as Senior Vice-President, External Relations.

“Joel has provided UNICA with wise counsel, effective strategy and solid results. We wish him well at Amyris and will continue cooperating in the future, as we pursue what will often be common objectives,” said UNICA CEO Marcos Jank. Velasco will remain an informal advisor to UNICA on matters related to U.S. biofuels policy.

“I have been honored to represent such a transformative industry at a particularly pivotal period. I am confident that our international successes over these last three years will yield dividends not only to UNICA member companies but to the communities they serve for years to come. As I embark on a new challenge with Amyris, I look forward to supporting UNICA’s trailblazing work to promote an even more vibrant sugarcane industry in Brazil and beyond,” added Velasco.

Amyris is an integrated renewable products company based in Emeryville, California. Subsidiaries include Amyris Brasil S.A., a majority-owned Brasilian company and Amyris Fuels, LLC, a wholly-owned subsidiary for U.S. fuels distribution capabilities.

With Velasco’s departure, UNICA’s activities in Washington will be carried out by Leticia Phillips and Ana Carolina Lessa. The organization’s international activities will continue to be overseen by UNICA’s Senior Advisor for International Affairs, Geraldine Kutas, based in Brussels.

Three years ago there were virtually no dried distillers grains (DDGS) going to China. Last year there were more than 1.5 million metric tons of DDGS exported to the country and some estimate that the number could be as high as 3 million metric tons at the close of this year.

So, although the U.S. Grains Council (USGC) felt that this was the normal progression in trade in a market that is growing exponentially, it didn’t completely come as a surprise when the China’s Ministry of Commerce has launched an anti-dumping probe into the ethanol co-product DDGS. This according to Rebecca Bratter, the USGC director of trade development during a press call to give an update on the status of the situation, which was brought to you on DomesticFuel when the story first broke.

The case was initiated on December 28, 2010 and will take at least a year before a decision is made. In the meantime, the interested parties were only given 20 days to register their interest in the case.

“We understand the consequences. We know what’s at stake for registering or not registering,” said Bratter during the call. “We know this is just the first step in what will be a long process which will include both an injury investigation and on a separate track, a dumping investigation.”

Bratter continued to say that they would be communicating an industry response back to the Chinese government that could be as soon as today.

“We consider China a very important market, a very strategic market and we place a very high level of importance on our trade relationship with China,” Bratter stressed.

During the investigation, the Chinese government has the authority to impose higher duties on the exports. Today, there is a 5 percent duty on DDGS but this could climb as high as 50 percent or higher, which would have a major negative impact on trade.

During the course of the investigation, Bratter said, “The Grains Council intends to operate as normal in China.”

A New Jersey company has sold its first industrial-scale oil extractor that will help get biodiesel from waste streams.

This article from Biodiesel Magazine says Renewable BioSystems LLC’s (RBL) system will initially be able to turn 500,000 gallons of yellow grease into oil for biodiesel feedstock each year and could be scaled-up to more than 5 million tons of oil annually:

The oil extraction technology supplied by RBL was originally developed in England. “Our company [formed] at the end of 2008,” said RBL CEO Peter Behrle. “My partner and I came from the biodiesel business, where we were continually frustrated by the high cost of feedstocks…We had gone in search of technologies that might provide less expensive feedstocks. We bumped into this technology in England and we licensed it for exclusive sale and manufacture in North America.”

According to Behrle, the quality of oil that comes out of the process depends on the organic material that is introduced into the machine. “We don’t change the quality of the oil,” he said. “We just extract the oil.” For example, an RBL machine that takes in fresh offal would produce a high-quality oil with extremely low free fatty acid (FFA) content. However, if the machine is processing an organic waste material that has been allowed to degrade over a long period of time, the resulting oil will be higher in FFAs. “We’ll always have very low water and very low impurities,” Behrle continued. “The oil will be good in that respect, but the FFAs will all depend on how quickly the material can be processed.”

The machine is scheduled to be installed during the first quarter of this year.

People desperate for the rush of excessive caffeine while drinking alcohol had their shaky nerves calmed when oodles of Four Loko and other alcohol-laden energy drinks were yanked from the shelves. Federal authorities asked manufactures to discontinue producing these drinks citing they were dangerous and calling them an “unsafe food additive” that caused partakers to become “wide-awake drunk.” According to FDA Commissioner Margaret Hamburg many people who consumed the drinks suffered from alcohol poisoning, car accidents and assaults.

Fortunately, the drinks won’t go entirely to waste. The AP has reported that wholesalers from Virginia, North Carolina, Maryland and others operating on the East Coast have begun to ship truckloads of the banned drinks to facilities to convert them into ethanol.

MXI Environmental Services in Virginia in just one of those facilities who is now converting to beverages to fuel. According to the AP article, Brian Potter, vice president of operations at MXI’s facility in Abingdon, Va., said about a couple of hundred truckloads of the drinks would be coming to the plant. Each truck holds 2,000 cases of the 23.5-ounce cans.

“We’re equipped to process four truckloads a day, and we’re at full capacity,” he said. “There are about 30 different products involved, and we’ve only seen a couple of them at this point. It could go on for several months.”

In addition to recycling the drinks into ethanol, MXI is also recycling the aluminum cans and Potter said in about 30 days the cans will be back on the shelf as another beer can. They also recycle the drinks’ water, cardboard packaging and shipping pallets.

Now this is truly an example of the saying “drink the best, burn the rest.”

I’m feeling a bit nostalgic this first week of 2011 for the days of affordable energy prices, environmentalists who still understood change for the greater good and for a biofuels industry that not only got along but were actually friends.

We’re only four days into the new year and some energy economists have declared that $3.00 per gallon gas prices are the new low and only going up – we’ll never see them lower again.

Not only are Gas prices going up but energy prices as well – heating oil costs on the East Coast and natural gas costs in the Midwest. Coal is also getting more expensive.

Yet while we lament about high energy costs, we downright howl over the higher costs of alternative energy and try to push today’s development aside for future progress and cost competitiveness.

Let’s talk about cost parity for a moment. Those opposed to ethanol often cite the cost per gallon is not competitive with gasoline without subsidies unless the price of a gallon of oil reaches a certain point. Hey people – we’re nearing that point and we’ll soon hold steady and never look back.

Several things will happen when the cost of a barrel of oil averages $150 – proof we’ve already seen – America’s energy-based economy begins to collapse. A domestic and global recession ensues. People lose jobs. People lose houses. People can’t afford to pay their energy bills or their food bills.

Yet another thing happens at this point – cost parity. Without subsidies and incentives, and with the advancements in technologies, we suddenly have the ability for domestically produced affordable energy. But we’ll never have this future if we don’t continue to develop alternative energy today.

Yeah, yeah…I know that NO energy source is perfect.
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Southwest Windpower has released the Skystream 600 – their most efficient and small wind turbine product. The Skystream is designed to provide personal wind energy for homeowners and businesses. According to the company, the Skystream 600 produces 74 percent more energy than its predecessor, which makes it the most efficient power grid-connected turbine in its class. On average, it can produce 7,400 kWh of energy per per per household in 12 mph average annual wind speeds. Since the wind does not blow steady, the company says that depending on the wind resource, siting and energy efficiency, a Skystream 600 could provide up to 80 percent of an average home’s energy requirements.

Available in March of this year, the Skystream 600 is currently being featured as part of GE’s “home of the future” exhibit at the Consumer Electronics Show. GE is an investor in Southwest Windpower. Another component of the turbine the company is touting is its interactive Skyview system where users can monitor how much energy the wind turbine is producing from anywhere internet access is available.

“In many applications, Southwest Windpower offers the most economical distributed renewable generation technology,” said Kevin Skillern, managing director of venture capital at GE Energy Financial Services. “Through our investments in the company, GE Energy Financial Services is helping bring this new product to market.”

The company believes that with their new technology, more than 13 million homes in the U.S. could install a wind turbine. The company did not disclose the price of the Skystream 600 in their release or on its website.

Qteros announced today a strategic partnership to accelerate commercialization efforts for industrial-scale cellulosic ethanol production with Praj Industries. The agreement will capitalize on Qteros’ CBP platform and Praj’s research capabilities as well as their technology, process design, engineering and construction expertise. The goal of the partnership is to deliver fully integrated ethanol engineering design packages at a low cost of production using a broad variety of non-food based feedstocks.

“Our partnership with Praj represents a transformational initiative for Qteros,” said John A. McCarthy, Jr., President and Chief Executive Officer of Qteros. “We and Praj share close strategic and philosophical alignment about the worldwide opportunities for large-scale cellulosic ethanol production and believe that commercial success can only be achieved with low-cost, highly scalable solutions made possible through creative and best-in-class partnerships such as that crafted between our two companies.”

McCarthy continued, “Praj and Qteros bring together highly complementary skill sets and core competencies which we expect will catalyze our ability to develop the industry’s low-cost solution – both from an operating and capital perspective – for large-scale cellulosic ethanol production. Achieving our combined objective will then provide the industry with a much-needed accelerant for worldwide growth and will also enable our two companies to establish leadership roles in this rapidly evolving global market. We look forward to making our shared vision with Praj a commercial reality within the next 18-24 months.”

Pramod Chaudhari, Founder and Executive Chairman of Praj Industries and Chairman of Praj Group added, “An optimized and streamlined consolidated bioprocessing platform offers the potential to provide important production cost efficiencies and economic returns to global ethanol producers. Praj has achieved significant milestones in second generation, cellulosic ethanol technology development. We have also evaluated the complete market landscape for cellulosic ethanol conversion technologies and we believe Qteros’ CBP platform offers the most advanced technology solution to enable the lowest cost production of cellulosic ethanol across a broad array of important non-food based feedstocks.

“We believe this partnership will enhance the results of the developmental breakthroughs achieved by Praj Matrix, the Research and Development (R&D) division of Praj, which has worked with virtually all types of cellulosic biomass at its pilot plant. Building on its experience of installing ethanol plants in over 50 countries, Praj will bring an integrated approach to the partnership in the second generation bioethanol space,” concluded Chaudhari.

Also this week, Qteros closed the initial tranche in its Series C financing totaling $22 million. The funds will be used to accelerate the company’s development and commercialization plans.

McCarthy said of the accomplishment, “I’m pleased to have completed this first phase of financing for the Company which represents broad participation from both existing and new investors. As we continue to accelerate our commercial plans, which now include our recently announced strategic partnership with Praj Industries, I would expect to continue discussions with a select group of strategic and financial investors who have expressed strong interest in supporting our efforts.”

NASCAR legend and champion Rusty Wallace will be a keynote speaker during the upcoming 5th Annual Iowa Renewable Fuels Summit on January 25, 2011. During his presentation, he will discuss NASCAR’s move to E15. The Summit is hosted by the Iowa Renewable Fuels Association (IRFA).

“When the 2011 season begins, NASCAR’s three major national touring series will run on E15, a blend of 15 percent ethanol and 85 percent gasoline. This is the same blend that the EPA approved for use in conventional vehicles and light duty trucks manufactured after 2007 back in October 2010. NASCAR officials are already saying that the switch has resulted in an increased horsepower a benefit due to ethanol’s higher octane rating.

“NASCAR is an illustrious model for the future of higher ethanol blends,” Norton said. “The confidence that NASCAR is putting into our American-made fuel sends a strong message to motorists and race fans that E15 is a reliable, high-performance fuel.”

The Summit and trade show, being held from 8:30 a.m. to 5 p.m. at the Polk County Convention Complex in Des Moines, is free and open to the public. Pre-registration is required. Participants can register online at www.IowaRFA.org by January 21st, where they’ll also find additional links and information relating to the Summit, or by calling Lucy Norton at 515-252-6249.

INEOS BioEnergy Center has received a conditional commitment for a $75 million loan guarantee as part of the USDA’s 9003 Biorefinery Assistance Program. The project is a partnership between INEOS Bio and New Planet Energy. The funds will be used for the construction of their plant to be located near Vero Beach, Florida. Once completed, the biorefinery will produce 8 million gallons of advanced biofuel per year along with 6 megawatts of renewable power from biomass including yard, vegetative, wood wastes, and municipal solid waste. Construction at the site for the BioEnergy Center is already underway and is expected to be completed and in production by 2012.

“We are encouraged by the continued confidence and commitment the U.S. Government has shown in assisting with the commercial development of this new bioenergy technology,” said Peter Williams, CEO of INEOS Bio and Chairman of INEOS New Planet BioEnergy. “These programs are providing the funds needed to enable the U.S. to achieve a leading position in the bioenergy sector through projects such as ours. As well as directly assisting construction of the INEOS New Planet BioEnergy commercial plant, the loan guarantee also represents an important step along the road to replication of this exciting new technology through INEOS Bio’s licensing program.”

According to INEOS, the key to their technology lies in their patented anaerobic fermentation step. During this process, naturally occurring bacteria convert gases derived from the biomass into ethanol. Their technology is also able to use multiple feedstocks including construction waste, municipal solid waste, forestry waste, and agricultural waste, while most other similar technologies are feedstock specific.

The American Coalition for Ethanol announced today the dates for its upcoming Washington DC fly-in. In its third year, the 2011 “Biofuels Beltway March” will be held Tuesday, March 29 and Wednesday, March 30. The timing is such to correspond with the 112th Congress that will be in full swing by that time. In fact, the new Congress is being sworn in today and so ACE is calling on its grassroots members throughout the country as well as ethanol supporters to join them for their event.

One ethanol supporters have committed to participating in the event, they will break into teams for visits to Capitol Hill offices, meeting with Members of Congress or their staff about ethanol tax incentives and market access. Other topics will include the E15 waiver, flex-fuel vehicles and blender pumps. Last year, 30 people participated and Jennings hopes to more than double that number for this year.

“Face-to-face meetings between constituents and lawmakers are the single best way to make sure our message is heard, and with the record number of freshman Members of Congress, it is critical that we get their attention early and present them with the facts about ethanol and its proven benefits.  I am looking forward to a very successful event,” Jennings added.

To learn more about the event or to register, visit the “Get Involved” tab at Ethanol.org. Questions may be directed to Shannon Gustafson at 605-334-3381 or sgustafson@ethanol.org. You can also view photos from their fly-ins last year here.

Our latest ZimmPoll asked the question, “What do you think will have the biggest influence on ag in 2011?” Here are the results. Most respondents (40%) think weather patterns will have the biggest influence. Other responses include: general U.S. economy (24%); new Republican leadership in House (13%); farm bill (10%); other (10%) and company consolidation (3%). So if you selected other as an answer or have another choice to answer this please submit it in comments.

The new poll is now live and should be of special interest to Domestic Fuel readers. The question is, “What do you think will happen with biofuels policy this year?” The lame duck session of Congress passed a one year extension of the ethanol and biodiesel tax credits. How do you think this will fare with a new Congress? We look forward to your responses.

Remember, you can submit your questions for us to pose and add your feedback anytime by using the comment feature.

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

The recent renewal of the federal $1-a-gallon biodiesel tax incentive, along with the newly enacted Renewable Fuels Standard (RFS2) that will require 800 million gallons of biodiesel to be used in 2011, make it more important than ever to attend this year’s Biodiesel Conference & Expo, Feb. 6-9, in Phoenix, Arizona.

National Biodiesel Board officials say they’ll have a wide variety of government experts and EPA officials on hand at this year’s conference to explain the changes and what they mean for biodiesel producers and users. NBB CEO Joe Jobe says:

The uncertainty surrounding the biodiesel tax credit and the implementation of the Renewable Fuels Standard-2 made 2010 tough on all of us, to be sure. But we have high hopes that this conference will be the springboard to greater opportunities. In fact, 2011 has the potential to be a banner year for biodiesel production. The RFS2, now that it is fully implemented, will be the driving force behind biodiesel demand in 2011 and beyond. NBB recognizes that this relatively new legislation is still unclear to many in the industry. That’s why we are offering a comprehensive workshop, free with your full registration, which will dive into the “nuts and bolts” of the RFS2, featuring some of the top experts on the issue. This is truly a “can’t miss” event if you plan to be part of the biodiesel industry moving forward.

Don’t forget, the deadline for lodging at the conference is Jan. 10, 2011. More details are available at the conference website.