Domestic Fuel

A delegation of six Kansas ethanol supporters are in Washington D.C. this week for a series of meetings with members of Congress.

Growth Energy CEO Tom Buis welcomed the group’s visit. “Kansas is a crucial, steadfast ally for the American ethanol industry, and we are pleased that so many Kansans have made the trip to Washington to educate their members of Congress about the ways ethanol contributes to the state and our country,” said Buis.

The six member group includes Steve McNinch of Western Plains Energy, Greg Krissek of ICM, Inc., Tom Willis of Conestoga, Mike Erhart and Monte Abell of Prairie Horizon, and Mike Chisalm of Kansas Ethanol. “It’s crucial that our representatives in Washington understand the benefits of ethanol – that it creates badly needed jobs in Kansas, provides an excellent return on taxpayer investment by keeping gas prices down, and contributes to our rural economies,” said Greg Krissek, ICM Director of Governmental Affairs, and a member of the Growth Energy board of directors. “Ethanol is not a ‘someday’ fuel – it’s here today, making our nation and our economy stronger. We can do even more by opening up the fuels market and giving consumers access to more ethanol.”

During their visit, the group will meet with Sens. Jerry Moran (R-KS) and Pat Roberts (R-KS) and Reps. Lynn Jenkins (KS-2), Kevin Yoder (KS-3), Mike Pompeo (KS-4) and Tim Huelskamp (KS-1), to help raise awareness about ethanol and its role in reducing our nation’s dependence on foreign oil, creating jobs, keeping gas prices down and strengthening our economy. The meetings will focus on Growth Energy’s proposal to reform the transportation market by developing the infrastructure to deliver ethanol to consumers. During their visit, the delegation will also attend a Policy Issues briefing conducted by Growth Energy staff and meet with the Democratic and Republican staffs of the House Agriculture Committee.

Ethanol production started the year strong, but demand is much weaker, according to the latest figures.

The first monthly ethanol production data for 2011 shows continuing strong production numbers. According to the Energy Information Administration (EIA), monthly ethanol production for January 2011 was just over 920,000 barrels per day (b/d), or 1.2 billion gallons for the month. That’s up slightly from the previous month, but is over 100,000 b/d more than the January 2010 production of more than 818,000 barrels per day. If that continues at the same pace this year, production would top 14 billion gallons. EIA also reports fuel ethanol imports of 1.4 million gallons in January.

However, ethanol demand in January, as calculated by the Renewable Fuels Association (RFA), showed a dramatic drop.

Stocks for ethanol rose dramatically to more than 868 million gallons, an increase of more than 114 million gallons from the month prior.

As a result of the increase in stocks, total demand for ethanol as calculated by the RFA dropped precipitously to 832,000 b/d. That is down 9% from 918,000 b/d in December 2010. Total demand includes exports, which the EIA is reporting for the first time. According to EIA data, January exports of ethanol were more than 57 million gallons. Excluding exports, domestic demand for ethanol stood at 788,000 b/d.

The Renewable Fuels Association (RFA) has been on a roll lately with a series of timely topical posts on the E-xchange blog.

Who Gets Your Food Dollar? Matt Hartwig writes about the latest report from USDA’s Economic Research Service on the farmers’ share of the food dollar, which is now estimated to be less than 12%. “So, if the farm value of each food dollar is actually decreasing, and corn demand and price are even smaller factors in food price determination than previously thought, what is driving American food bills higher? The simple answer is and has been energy.”

States Take Polar Opposite Stances on Ethanol Use – Hartwig highlights the two very different approaches that legislative bodies in Nebraska and New Hampshire have taken in dealing with America’s dependence on imported oil.

EPA Details Legal Avenues for E15 Sales – RFA president and CEO Bob Dinneen writes about EPA’s guidance for retailers to appropriately sell ethanol blends.

More Psuedo-Science and the Preposterous Claims of Anti-Ethanol Activists – Geoff Cooper takes apart a report “published by the controversial and discredited Journal of American Physicians and Surgeons (which) claims that biofuels expansion is increasing hunger and poverty-related health risks in developing nations.”

One of the country’s busiest biodiesel plants is on track to have a record year.

This article from the Erie (PA) Times-News says Hero BX was part of a recent USDA tour checking out the plant’s success:

Operating 24 hours a day, 365 days a year, the plant on Erie’s lakefront is on track to produce 40 million gallons of biodiesel this year, said Chris Peterson, a vice president for Hero.

A more typical batch of ingredients — 70 percent animal fat, including catfish oil and poultry fat, and 30 percent used cooking oil — reduces the plant’s capacity to about 40 million gallons.

USDA officials say plants such as Hero promote energy self-sufficiency and are good for the rural economy.

Agribusiness giant Archer Daniels Midland is acquiring Prairie Pride’s soybean crushing and biodiesel facility in Deerfield, Mo., a biodiesel plant idled since early 2010. This ADM press release says the company will form a partnership with Prairie Pride on the biodiesel side of the house.

“The acquisition of Prairie Pride’s soybean facility and partnership for the biodiesel business were attractive to us because they are aligned with our growth strategy and fit well within our integrated business model,” said Matthew J. Jansen, president, Global Oilseeds. “We look forward to working with the 1,000 farmers of Prairie Pride to transform soybeans into food, feed and fuel products used by consumers and businesses around the world every day. And we look forward to becoming a part of the Vernon County community.”

Prairie Pride officials say that a long-term relationship with ADM will give their members “the greatest potential to receive returns on their investment without the necessity of infusing more capital into Prairie Pride.”

The biofuels industry is on the move.

Cogent BioFuels, an ethanol marketer based in Chesterfield, Missouri, has announced that Casey Carmondy will be the new director of logistics and business development. Most recently, Carmondy worked with CSX-Agriculture Marketing Group and has nearly 10 years of experience in servicing rail shippers including shipping ethanol.

Marty Lyons, President of Cogent said, “We are delighted to have a person with Casey’s customer focus and experience with the premier Class 1 railroad that personifies excellence in customer service. As we expand the Cogent marketing platform; transportation and logistics are critical components of our core strategy to offer value and reliability to the ethanol producers as their inside sales and logistics team.”

In other news, POET has hired several new biorefinery general managers. The GM’s at each facility will be responsible for supervising professional, technical and support staff at the plant as well as ensure efficient production. The GM will also be tasked with making sure the plant meets all rules and regulations.

Gary Eischied is the new GM at POET Biorefining – Gowrie (Iowa), and before joining POET worked for more than 35 years at Bridgestone Firestone in several management positions. Chris Oehler is the new GM for POET Biorefining – Lake Crystal (Minn.), and before joining the company worked for more than 10 for Del Monte Foods. While in this job he held several positions including plant manager. Ken Osmonson is the new general manager at POET Biorefining – Ashton (Iowa). Prior to joining the POET team, he spent over 26 years in manufacturing and operations management positions in the flexible packaging industry and the U.S. Army.

Osmonson said of his new position, “I am pleased to inherit a fantastic team and an efficient organization at POET Biorefining – Ashton. This type of success is a result of the support that this plant has received since its first grind. I believe that ethanol is the only viable alternative to oil. It is the renewable energy source that can cut our ties to foreign oil if given the chance to compete on a level playing field.”

During the American Chemical Society meeting in Anaheim, California, Agrivida announced that they have developed a technology that provides the biomass with the ability to convert its starch to sugar more effectively without using a traditional enzyme to aid the process. The company uses a proprietary feedstock, low temperature and low cost processing platform to convert nearly 80 percent of the glucose from cellulosic biomass while using a less harsh pretreatment method. This process creates hydrolysate, a mixture of amino acids, which can be fermented by yeast resulting in a higher level of glucose. This leads to increased biofuels production.

The company has created a proprietary intein, or segment of protein, that contains modified enzyme-based traits. These inteins accelerate cell wall degradation following harvest. (In order to break down the lignin found in biomass and convert it to glucose you must break down the cell wall. This has been one of the major challenges in cellulosic ethanol production.) Agrivida’s engineered feedstocks include corn cobs and stover, sugarcane bagasse, sorghum, and swithgrass.

“These achievements represent major milestones for Agrivida’s technology development, and for the overall industry,” said Michael Raab, Ph.D. and president of Agrivida. “Based on this data, we are plotting a course whereby cellulosic biofuels and chemicals can economically compete with those produced by starch or sucrose. This is a significant step towards providing the lowest-cost cellulosic sugars, one that will also afford commercial scale processing of cellulosic feedstocks.”

Prior to this announcement, the company demonstrated that its engineered feedstocks could provide higher hydrolysis rates and yields compared to non-engineered biomass crops. Although the rates found in their experiments provided cost reductions compared to conventional biomass, they discovered that the glucose yield was still relatively low when compared to using a conventional dilute acid. This announcement signals the breakthrough with regards to glucose yield.

The abstract describing the Agrivida data, “Engineering Crop Processing Traits for the Production of Cellulosic Biofuels and Chemicals,” can be viewed here.

April 22, 2011 marks the 41st Earth Day and many are calling for Earth Day to be expanded to include issues surrounding energy independence. Those who lobby for energy independence also lobby for the increased use of renewable energy including wind, solar, geothermal and biofuels. Today, renewable energy company Green Mountain Energy Company, is offering some green tips for Earth Month 2011. Green Mountain Energy not only provides “green” energy for consumers such as wind and solar energy, but also offers carbon offset products.

Earth Month 10 Tips for 2011:

1. 1. Switch to Cleaner Electricity for Your Home. The production of electricity is the leading cause of industrial air pollution.
2. 2. Plant a Tree. A single tree can absorb up to 2,000 pounds of CO2 over its lifetime, while also providing shade and animal habitat.
3. 3. Send e-cards. Go online and send an e-card instead of printed greeting cards to save paper and CO2 emissions associated with mailing and shipping.
4. 4. Use all-natural decoration. Buy colorful fruits and vegetables as centerpieces throughout the home. Then when they ripen, find a new recipe to enjoy them with.
5. 5. Use the real thing. Instead of using paper and plastic dinnerware, use real plates, bowls, and silverware. Not only does it decrease waste, but it looks nicer, too.
6. 6. Seal your house up. Caulking and weather stripping around doors, windows, and other cracks can prevent air leaks and save on your heating and cooling bills.
7. 7. BYOB. Bring your own bags to the grocery store. It takes one 15- to 20-year-old tree to make enough paper for 700 grocery bags.
8. 8. Pay bills online. If every family in the United States viewed and paid bills online, the country would save almost 1 billion pounds of paper and avoid 3.9 billion pounds of GHGs.
9. 9. Practice green gift wrapping. Use old maps or newspaper and reuse gift bags.
10. 10. Live every day like it’s Earth Day. Take a pledge as a household to practice sustainability every day of the year.

Want to make these tips stick? Green Mountain Energy suggests that you engage in the eco-activities as an entire family.

Volvo is preparing to launch its C30 Electric vehicle but it has a unique twist. This car uses bio-ethanol to generate heat in the winter to keep passengers toasty warm. It is unusual in that the heater doesn’t draw power from the battery and thus doesn’t affect the driving range of the electric car (EV). The announcement came in conjunction with Volvo’s successful tests to drive the C30 Electric in extreme cold temperatures up to -20 degrees Celsius. In the past, some electric vehicles have struggled in winter conditions with the stress of cold temperatures significantly lowering the driving range of the EV.

Lennart Stegland, Director of Volvo Cars’ Special Vehicles said of the more than 200 tests they have performed on the EV, “We must ensure that the C30 Electric performs as intended when driving, parking and charging in a variety of conditions, from normal to very cold or hot. Northern Sweden is the perfect place to do sub-zero temperature testing.”

Speaking of climates, the C30 Electric has three climate systems. One system cools or warms the battery pack as necessary, and another climate system uses water to cool the electric motor and power electronics. The final climate system supplies passengers with heating or cooling and this system runs on bio-ethanol. The car’s ethanol tank holds up to 14.5 litres of bio-ethanol. It is also possible to operate the heater and air conditioning using electricity from the batteries. In electric mode an immersion heater warms up the coolant in the climate unit.

“The driver can program and control the climate unit to suit the trip. Ethanol is the default mode that is used when the battery capacity is needed for driving extend mobility to its maximum. However, on shorter distances electricity can be used to power the climate system,” concluded Stegland.

Renewable energy company Agilyx Corporation has secured $22 million in Series B funding. Agilyx believes they are the first company to economically covert difficult recycle waste plastic into synthetic crude oil. The monies will be used to expand operations and accelerate the growth of their technology to market. The funding round was led by Kleiner Perkins Caufield & Byers and major investors included but were not limited to Waste Management, and Total Energy Ventures International, an affiliate of Total S.A., a major oil and gas company.

“This latest investment in Agilyx represents a significant milestone for our company,” said Chris Ulum, chief executive officer of Agilyx Corporation. “With these funds and strategic partners at our side, we are well positioned to help our customers and the communities in which they operate improve the diversion and recovery of waste plastics, and create new local sources of crude oil. By providing this alternative while the world’s insatiable appetite for oil continues, our solution can offset the use of fossil crude oil and create new cleantech jobs in the process.”

The company currently has a fully permitted and patented waste plastic conversion technology that recycles waste plastic into synthetic crude. The process is scalable, versatile and environmentally friendly according to the company. The company is working in conjunction with other companies to help them manage plastic waste streams. Today, Agilyx has an operational facility near Portland, Oregon that is the largest commercial waste plastic to synthetic crude oil facility in the U.S. To date, the company has sold more than 120,000 gallons of its crude oil produced from 1 million pounds of plastic that would otherwise have been incinerated or landfilled.

“Waste Management wants to maximize the value of the materials it manages,” said Tim Cesarek, managing director of Organic Growth at Waste Management. “Agilyx’s technology complements Waste Management’s advancement of thermal chemical conversion technology platforms and provides us with a viable option for processing contaminated and difficult to recycle waste plastics while creating a high value commodity.”

Manoelle Lepoutre, Senior Vice President of Sustainable Development for Total S.A. added, “As a major plastics manufacturer and as an oil refining company, Total is pleased to support the further development of Agilyx, whose technology offers a scalable economic option to recovering waste plastics.”

A new ethanol blender pump opened last week in York, Nebraska thanks to the efforts of the Nebraska Ethanol Board and the Nebraska Corn Board.

“E85 is cleaner than gas, it’s produced here in Nebraska, and more and more cars can use it every year,” said Todd Sneller, Nebraska Ethanol Board Administrator. ”The addition of this new flex fuel dispenser will ensure that consumers will have more choices at the pump to fuel up their flex fuel vehicle,” added Kim Clark, Ag Program Manager with the Nebraska Corn Board. “Consumers will be able to fill up based on price, performance and availability.”

The York E85 / blender pump is the 61st in Nebraska to offer the renewable fuel. The location will have regular gasoline, ethanol fuels, and diesel available 24 hours a day. Over 96,000 Nebraska motorists currently own Flexible Fuel Vehicles, which can run on any blend of ethanol and gasoline, including E85.

A Texas-based company claims its enzymatic process for turning waste grease into clean-burning biodiesel will save money and can be used on existing biodiesel plants.

Biodiesel Experts International LLC of Pearland, near Houston, calls its process “revolutionary” and is offering to provide engineering, onsite supervision, startup, training, enzyme material, and complete plants:

The enzymatic process consist of two (2) different types of enzyme, one for tranesterification and one for esterification. Feed stocks with 0-100 FFA can be processed at an operating temperature of ONLY 85 F and minimal methanol required. There is no caustics required and no soap formation. The byproducts produced are high quality glycerin and water. This enzymatic process can also be used only for FFA reduction with proved results to reduce FFA levels to less than 1 from any level of FFA with an operating temperature of ONLY 85 F. The methanol requirement is less than 15% by weight for FFA reduction.

We checked with the National Biodiesel Board about this outfit and its claims, and while the NBB “does not investigate, evaluate, or recommend biodiesel production techniques or equipment,” it does say the technology could prove to be a promising innovation to make biodiesel production more economical:

“The use of enzymes for biodiesel production is one such innovation that holds promise. In fact, there were two presentations on enzymatic biodiesel production at the National Biodiesel Conference and Expo this year. As with any biodiesel process technology, be it new or old, it is absolutely critical the reaction go completely to the mono-alkyl ester (i.e. biodiesel) and that the resulting product meets or exceeds all the parameters in ASTM D6751.”

Oregon has become the 2nd state in the nation to have a 5 percent biodiesel requirement.

The state joins Minnesota in requiring the B5 mix and gained the praise of the National Biodiesel Board:

“Policymakers in Oregon should be congratulated for displaying national leadership on clean energy issues,” said Shelby Neal, NBB regulatory affairs director. “As a result of the biodiesel policy, Oregon’s citizens will enjoy cleaner air, green jobs, and a higher level of energy independence.”

“Increasing the use of domestically produced, low carbon fuels like biodiesel is a win-win for Oregon,” said Rick Wallace, a senior policy analyst at the Oregon Department of Energy, and the Clean Cities Coordinator of the Columbia-Willamette Clean Cities Coalition. “We’re supporting the local economy while reducing pollution, rather than relying entirely on fossil fuels to power our state.”

The state already had a B2 requirement, along with Washington and Pennsylvania. Connecticut, Louisiana, Massachusetts and New Mexico also have biodiesel mandates that haven’t kicked in yet.

Friends of the Earth (FOE) has named U.S. Secretary of Agriculture Tom Vilsack the 2011 Biofool of the Year, the organization’s award that recognizes “leaders that promote dirty biofuels.”

According to FOE, Vilsack received 2,424 votes of the more than 6,000 cast and they say he definitely deserves the honor. “With Secretary Vilsack at the helm, the USDA has doubled down on its support for corn ethanol and biofuels.” FOE is asking supporters to sign on to a letter they will deliver to Secretary Vilsack later this month, “congratulating him on earning this honor and thanking him for his efforts to promote dirty biofuels at the expense of a comprehensive agriculture policy that would actually help American farmers who grow food!”

The letter reads, in part:
You justify your support for ethanol subsidies because you think ethanol subsidies support farmers. Yet, ethanol subsidies go to refiners, not farmers, and less than 20 percent of America’s ethanol is produced in farmer-owned refineries. The other 80 percent is produced by conglomerates like Archer Daniels Midland and Big Oil companies.

Actually, the ethanol subsidy – the Volumetric Ethanol Excise Tax Credit (VEETC) or blenders credit – goes to fuel blenders, not farmers or refiners. According to the American Coalition for Ethanol (ACE), as of last year, it is true that totally farmer-owned ethanol plants produced about 2.5 billion gallons of ethanol annually, almost 20 percent of the industry’s total capacity. “However, many other U.S. ethanol plants can be considered “locally owned” because local community members are shareholders in the companies,” according to ACE. That would include the world’s largest ethanol producer, POET, which is a privately held company. The 27 POET Biorefineries are owned by various investors, including farmers, most of whom purchased shares in a private offering. POET’s current production capacity stands at about 1.7 billion gallons annually – or about 12-13 percent of current U.S. production. ADM and oil company-backed plants such as Valero produce a significant amount of the nation’s current capacity, but there are many other company-owned or publicly traded ethanol companies, like Pacific Ethanol, that could hardly be classified as “conglomerates.”

Regardless of the facts, Secretary Vilsack is definitely deserving of this honor recognizing his support of ethanol and Domestic Fuel congratulates him.

Ethanol exports from Brazil could drop by as much as 18% this season compared to last year, according to the Brazilian Sugarcane Industry Association (UNICA).

UNICA is expecting a slight increase in ethanol production this year, however. “Ethanol production should reach 25.51 billion liters in the 2011/2012 season, a 0.52% increase compared to the last harvest, when the total reached 25.37 billion liters,” the organization reports. According to UNICA’s Technical Director, Antonio de Padua Rodrigues, increased ethanol production combined with a drop in exports will result in an increase of almost 500 million liters of the biofuel in the domestic supply. “However, this increase in ethanol supply for domestic use is lower than the expected growth in demand, given accelerated sales of flex vehicles,” he said.

Of the 25.51 billion liters of ethanol expected in the new season, 17.21 billion will be hydrous ethanol and 8.30 billion will be anhydrous ethanol. This volume of anhydrous ethanol is sufficient to meet the 25% blend with gasoline, even if a smaller share of the flex fuel fleet uses hydrous ethanol as expected, as consumers that own flex-fuel choose gasoline because of pricing.

The forecast for the 2011/2012 Brazilian sugarcane harvest calls for 568.50 million tons, up 2.11% compared to last year. The country is expecting an overall recovery in agricultural productivity after a lengthy dry spell, but UNICA is projecting that average productivity of the total sugarcane area for the 2011/2012 harvest will decline compared to the previous harvest, due to factors including the aging of cane fields and a reduction in the amount of cane that was not processed in the prior harvest and therefore has been growing for nearly two years.