Domestic Fuel

A coalition of seven agricultural and biofuels organizations sent a letter this week to two members of Congress who have introduced legislation to modify the Renewable Fuels Standard (RFS2), warning that it is unnecessary and could lead to higher prices at the pump.

The organizations were reacting to a bill introduced by Representatives Bob Goodlatte (R-VA) and Jim Costa (D-CA) that would reduce or eliminate the volumes of renewable fuel use required by the Renewable Fuels Standard (RFS) based upon corn stocks-to-use ratios.

The groups point to a recent analysis by economists at the University of Wisconsin and Iowa State University that found growth in ethanol production reduced gasoline prices by an average of $0.25 per gallon, or 16 percent, over the entire decade of 2000-2010. “In 2010, for example, the authors found that the use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon,” the letter stated, adding that the result of an immediate reduction in ethanol output “would be a dramatic increase in U.S. gasoline prices and the resulting increase in U.S. gasoline imports would also cause world gasoline prices to increase in the short run.”

Speaking to concerns over high corn prices, the groups wrote, “Numerous studies have concluded that the RFS is a minor contributor to corn prices. The most recent study, a July 2011 analysis commissioned by the International Centre for Trade and Sustainable Development, found that corn prices would have been exactly the same in 2009/10 if both the RFS and Volumetric Ethanol Excise Tax Credit (VEETC) had not existed.”

The groups are the American Coalition for Ethanol (ACE), the American Farm Bureau Federation (AFBF), Growth Energy, the National Corn Growers Association (NCGA), the National Farmers Union (NFU), the National Sorghum Producers, and the Renewable Fuels Association (RFA).

More analysis on the issue can be found on the RFA E-xchange Blog.

All officers of the Renewable Fuels Association were re-elected to serve another term at the ethanol organization’s annual membership meeting held this week in Washington DC.

Chuck Woodside of KAAPA Ethanol in Minden, Nebraska was re-elected as Chairman of the Board. Also re-elected were Vice Chairman Neill McKinstray, Ethanol Division Vice President and General Manager, The Andersons, Inc.; Treasurer Randall J. Doyal, CEO of Al-Corn Clean Fuel in Claremont, Minnesota; Secretary Walter Wendland, CEO of Golden Grain Energy in Mason City, Iowa; and President Bob Dinneen.

Additionally, the RFA welcomed Bill Brady, CEO of next generation ethanol technology company Mascoma and Chairman of the Advanced Ethanol Council (AEC), to the Board of Directors and Executive Committee of the RFA. The AEC represents a wide range of advanced ethanol technologies utilizing feedstock from grasses and corn stalks to wood waste, municipal solid waste and algae to produce clean, renewable ethanol and works in partnership with RFA.

Corn growers and cattle producers are at odds over new legislation introduced in the House that would change the Renewable Fuels Standard (RFS2).

The bill, sponsored by Reps. Bob Goodlatte (R-VA) and Jim Costa (D-CA), would allow Congress to reduce the RFS requirement for ethanol whenever corn stocks are tight.

Speaking on behalf of the National Cattlemen’s Beef Association (NCBA) during a press conference announcing the legislation, California beef cattle producer Kevin Kester said it would provide relief from tight corn supplies.

“Cattlemen are not opposed to ethanol and we’re not looking for cheap corn. We simply want the federal government to get out of the marketplace and allow the market to work,” Kester said.

Officials with the National Corn Growers Association (NCGA) say the measure would significantly weaken the RFS. “The U.S. ethanol industry is an integral part of job creation and economic opportunity throughout rural America,” NCGA President Garry Niemeyer, an Illinois corn grower, said. “This legislation would put progress made by the ethanol industry in jeopardy and we are asking members of Congress to oppose its passage.”

The RFS came into effect in 2005 and was reauthorized and expanded in 2007 to require the use of 12.6 billion gallons of corn ethanol this year and 13.2 billion gallons in 2012, topping out at 15 billion gallons in 2015.

The Goodlatte-Costa bill would require a reduction in the RFS when the stocks-to-use ratio drops below 10 percent, up to a 50 percent reduction if the ratio falls below 5 percent. Under the current corn supply, the reduction would be 15-25 percent.

The U.S. Department of Agriculture was one of the government agencies that sponsored a report on biofuels released yesterday by the National Research Council, but the secretary of agriculture is critical of the findings.

“I think they’re basing conclusions on old information that’s not as accurate as it once was,” said Agriculture Secretary Tom Vilsack during a press conference on another subject Tuesday afternoon. “I think it’s unfortunate that reports based on, in my view, outdated information are suggesting that we ought to just give up the ghost.”

“We’re not going to give up on this industry,” Vilsack continued. “This industry’s too important to the United States, it’s too important to rural America, it’s too important to our future in terms of national security and it’s too important to the whole innovative culture we’re trying to accelerate in this country.”

Listen to Vilsack’s comments here: Tom Vilsack comments on NAS Report

The green movement rhetoric seems to have ramped up lately. I guess a lot of people are watching too many end of the world movies? Whatever the reason is, it prompted our latest ZimmPoll question, “Do you think the world population will be 10 billion by 2050?” This prediction is being used by all kinds of organizations for all kinds of purposes. But how accurate is it? Here’s what you think. 40% said Exactly or really close; 24% said How can anyone know; 19% said Much more and 17% said Much Less. A lot of people point to a United Nations report for this number. However, they readily admit that no one can know. Here’s an excerpt from the 2004 report that says it pretty clearly. You can find the latest report with revisions here (pdf).

Projections recently issued by the United Nations suggest that world population by 2050 could reach 8.9 billion, but in alternative scenarios could be as high as 10.6 billion or as low as 7.4 billion. What will population trends be like beyond 2050? No one really knows. Any demographic projections, if they go 100, 200, or 300 years into the future, are little more than guesses. Societies change considerably over hundreds of years—as one can readily see if one looks back at where the world was in 1900, or 1800, or 1700. Demographic behaviour over such long time spans, like behaviour in many spheres of life, is largely unpredictable.

Our new ZimmPoll is now live. We’re asking the question, “How do you feel about the corn supply/demand status?” It has been a tough weather year in some areas of the corn belt. After listening to an NPR show yesterday that featured as a guest Bob Dinneen, Renewable Fuels Association, it was obvious there is a lot of worry and misinformation about our corn supply in the public and on the part of activist environmental groups. What do you think? Take our poll and feel free to comment. Thank you.

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

The ethanol industry is challenging a new report from the National Academies of Science that questions the ability of the biofuels industry to meet current goals under the Renewable Fuels Standard (RFS2) and the ability of biofuels to reduce greenhouse gas emissions.

According to the report, production of conventional biofuels and biomass-based diesel fuel will be adequate to meet the requirements of the RFS2, but whether the mandate for cellulosic ethanol can be met is “uncertain.”

“The capacity to meet the renewable fuel mandate for cellulosic biofuels will not be available unless the production process is unexpectedly improved and technologies are scaled up and undergo several commercial-scale demonstrations in the next few years. Additionally, policy uncertainties and high costs of production may deter investors from aggressive deployment, even though the government guarantees a market for cellulosic biofuels up to the level of the consumption mandate, regardless of price.”

Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) agrees that technological innovation and policy uncertainty are major hurdles for meeting the RFS2 goals for advanced biofuels. “The RFS is an aggressive, technology-forcing standard that needs complementary policy to be achieved, in much the same way that oil companies rely on a bevy of tax breaks and subsidies to protect the investments necessary to bring new sources of petroleum fuels online as known oil reserves become increasingly scarce,” said Coleman. “If we enact policies reflective of the goals set forth in the RFS, the advanced biofuels industry will emerge and the RFS targets will be met.”

“You can read this report in a number of ways because the conclusions are based on variables that will undoubtedly change with technological advancements and innovation within the industry,” said Growth Energy CEO Tom Buis. “A continued commitment to the RFS will create the market certainty that is crucial for both first generation and second generation ethanol. But any effort to doubt or dismantle the RFS would block the growth of the industry and ultimately threaten American jobs, our environment and our energy security.”

Also “uncertain” according to the report is the “extent to which using biofuels rather than petroleum will reduce greenhouse gas emissions.” “The idea that the RFS may not be an effective strategy to mitigate greenhouse gas emissions is regrettable given the published science on the subject,” said Coleman. “Even with land use change considerations, advanced biofuels are the lowest carbon fuels being developed in the marketplace; far and away less carbon intensive than electricity, natural gas and even hydrogen fuel cells.”

Crave Brothers is promoting their commitment to the environment and renewable energy on the farm and in the farmstead cheese factory with a newly unveiled logo.

The new Crave Brothers Farmstead Cheese logo features a dairy cow inside a green circle with the words “Produced with Renewable Energy.”

In producing their family of award-winning artisan cheeses, the Crave Brothers use 100% green power, and practice water conservation and recycling. Their commitment is evident in their land management practices and in the way they care for their cows. As a carbon-negative company, they produce more electricity with their bio digester generator than they use for their dairy farm and cheese plant. Crave Brothers Farmstead Cheese goes one step further, too, inviting customers to join them in the quest for sustainability by reusing and recycling the cheese packaging. Customers can find this new logo on their cheese packages later in the year.

Crave Brothers Cheeses are created at a farmstead cheese factory in Waterloo, Wisconsin “where state-of-the-art technology promotes sustainability while maintaining traditional quality.”

More corn stocks than expected showed up in the latest report out from USDA on Friday, which was a pleasant surprise for the ethanol industry.

Despite the fact that corn stocks are reported to be 34% lower than a year ago, it was expected to be much worse, even just a few weeks prior to the Friday Grain Stocks report. Earlier this year, USDA was predicting corn stocks would finish the year at just 675 million bushels, less than a three-week supply. But as of September 1, stocks instead totaled 1.13 billion bushels, with disappearance over the summer months indicated at 600 million less bushels than last year.

The immediate effect of the report was lower prices and a little more breathing room for the industries that rely on corn, like ethanol. “Pushing corn stocks back above one billion bushels is important for the psyche of the market,” said Renewable Fuels Association Vice President Geoff Cooper. “Having more corn available should somewhat ease supply concerns brought on by poor growing conditions this year and provide more of a buffer until farmers complete the harvest of this year’s crop.”

With corn prices higher this summer, livestock producers may have been using more distillers grains (DDGS), the by-product of ethanol production. When the amount of corn used for ethanol feed co-products is combined with feed and residual demand, total feed demand becomes 6.35 billion bushels, or 47 percent of expected use in 2011/12.

A popular syndicated National Public Radio program Tuesday will focus on the perceived decline in political support for America’s ethanol industry and where the industry will go from here.

Renewable Fuels Association President and CEO Bob Dinneen will be featured on The Diane Rehm Show, which is carried live on NPR stations and originates at WAMU 88.5 in Washington, DC. Dinneen will be joined on the program starting at 11:00 am Eastern by veteran Reuters agriculture correspondent Chuck Abbott and the Environmental Working Group’s Sheila Karpf.

Listen to the program live on local public radio affiliates or on the show website TheDianeRehmShow.org by clicking “Listen to WAMU” in the upper right hand corner. The number to call in and ask questions during the show is 800-433-8850.

The Navy has reached a milestone in the quest to gain energy independence with the first unmanned biofueled flight of an MQ-8B Fire Scout at Webster Field in St. Inigoes, Md. The unmanned helicopter was fueled with a combination of JP-5 aviation fuel and plant-based camelina.

The MQ-8B Fire Scout Vertical Take-Off and Landing Tactical Unmanned Aerial Vehicle provides critical situational awareness, intelligence, surveillance, reconnaissance (ISR), and targeting data to the forward deployed warfighter. Fire Scout is designed to operate from all air capable ships and is currently providing ISR support during its first-land based deployment in U.S. Central Command area of responsibility.

Fire Scout is the seventh aircraft to demonstrate the versatility of biofuel through its use in all facets of naval aviation. The completion of aircraft biofuel testing at Pax River is another example of the Navy’s determination in achieving its goal of launching the “Great Green Fleet.”

Watch the YouTube video of the successful biofueled UAV flight here:

Advanced biofuels can be commercialized rapidly for military use, on military timelines, with adequate support and coordination of efforts by the U.S. Departments of Agriculture, Defense and Energy, according to comments submitted by the Biotechnology Industry Organization (BIO) to the Air Force’s Request for Information on the commercial status and market for advanced drop-in biofuels.

“The U.S. military and the nation as a whole face a significant national security threat from U.S. dependence on foreign sources of energy and ongoing price volatility. The military requires access to adequate fuel supplies in strategic locations, and biorefineries producing advanced biofuels from multiple feedstocks represent perhaps the best option for meeting this military need,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section.

Erickson noted that while individual advanced biofuel producers have achieved milestones toward commercial development of a diverse array of feedstock and technology combinations, full commercialization has been limited by the severely constrained market for private capital. “Coordination of efforts by the USDA, DOE and DOD to address the market challenges could significantly accelerate production of the volumes necessary to meet the energy security needs of the U.S. military,” Erickson said. “Some advanced biofuel companies already have worked with the Department of Defense (DOD) or with commercial airlines to test and certify advanced biofuel/petroleum blends, and more are poised to do so.”

The use of anaerobic digesters for livestock operations in the Southwest is the focus of the Renewable Energy Education Field Day webinar planned for later this month.

The webinar will be presented on Wednesday October 26 and will examine technical, environmental and financial factors to consider when installing an anaerobic digester on a livestock operation and specifically the use of digesters with dry manure and the unique environmental issues and climatic conditions of the Southwest.

The virtual Field Day is free of charge and targeted to dairy and beef producers in New Mexico, Arizona, California, Colorado, Kansas, Oklahoma and Texas. Representatives of environmental and agricultural organizations working with livestock producers, as well as staff from state and federal agencies, are also encouraged to participate.

The webinar’s origination site will be the New Mexico Farm and Ranch Heritage Museum, Las Cruces, N.M., where anyone interested in the area is invited to attend live. Five viewing sites have been set up across the Southwest at Lamar Community College, Lamar, Colo.; Otero County Extension Office, Rocky Ford, Colo.; Arizona State University, Polytechnic Campus, Mesa, Ariz.; the U.S. EPA Region 9 Office, San Francisco, Calif.; and the Texas A&M’s AgriLife Research and Extension Center, Amarillo, Texas. Additional sites may be added.

Farm Foundation, NFP is organizing this webinar in collaboration with USDA Rural Development, USDA’s Office of Energy Policy and New Uses, and USDA Natural Resources Conservation Service. There is no charge to participate in this webinar, but registration is required by going to the FarmFoundation.org website. This is the second Renewable Energy Education Field Day presented by Farm Foundation, NFP and USDA agencies. Biomass was the subject of the first Field Day in November 2010.