Domestic Fuel

University researchers from California, Iowa and Chile have found that sugarcane ethanol production creates up to seven times more air pollutants than previously estimated, according to news from the University of Iowa.

The research team used agricultural survey data from Brazil to calculate emissions of air pollutants and greenhouse gases from the entire production, distribution, and lifecycle of sugarcane ethanol from 2000 to 2008.

“As people try to determine how to integrate biofuels into the global economy, Brazilian sugarcane ethanol has often been considered a more environmentally friendly fuel source than U.S. corn ethanol. In fact, the U.S. Environmental Protection Agency considers sugarcane ethanol an ‘advanced biofuel’ with fewer greenhouse gas emissions than conventional biofuels like corn ethanol. These new findings help us refine those estimates and move closer to making more informed comparisons between different fuel sources, and ultimately make better decisions about how to grow and use biofuels,” Spak says.

The study, titled “Increased estimates of air-pollution emissions from Brazilian sugarcane ethanol,” is featured in the Nature Highlights section and published in the Dec. 11 Advance Online Publication of the journal Nature Climate Change.

Representatives of the U.S. biodiesel industry are urging Congress to pass a seamless extension of the biodiesel tax incentive. The $1-per-gallon biodiesel tax credit is slated to expire on Dec. 31. Bipartisan legislation has been introduced in the U.S. House and Senate to extend it for three years. Proponents of the bill testified this week in a hearing on alternative energy tax incentives, held by the Senate Finance Committee’s Subcommittee on energy, natural resources and infrastructure.

“This tax incentive is a job creator and Congress will be putting jobs in jeopardy if it adjourns without passing an extension,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board (NBB).

The tax incentive was allowed to expire in 2010 but was reinstated this year. Since the reinstatement, the biodiesel industry has set a new production record of more than 802 million gallons through October. That is more than double last year’s volume of about 315 million gallons. Increased production supports more than 31,000 jobs this year while generating at least $3 billion in gross domestic product and $628 million in federal, state and local tax revenues, according to a recent economic study conducted by CardnoENTRIX, an international economics consulting firm.

“Stable, long-term federal incentives are necessary for this industry to continue to grow,” Paul Soanes, president and CEO of Texas-based Renewable Biofuels, Inc (RBF) said at the hearing.

Soanes said RBF has increased production at its plant in Port Neches, Texas from 9 million gallons in 2010 to more than 62 million gallons this year, hiring new employees and investing in capital improvements. Similar stories are taking place within the biodiesel industry across the United States.

Alliance AutoGas is now EPA-certified to convert more than 200 vehicle types to propane autogas utilizing the Prins System. The company is a conversion equipment provider and co-founding partner of American Alternative Fuel.

American Alternative Fuel privately funded these EPA certifications to ensure fleet owners and managers nationwide can choose from a wide variety of vehicle makes and models when converting to clean-burning autogas. With more than 200 eligible vehicles, this is the largest privately financed portfolio of autogas vehicle certifications in the United States. New certifications include the latest model years for the popular Ford Crown Victoria and E-series vans and additional certifications for several medium duty GM platforms.

Fleets running on autogas see savings on both fuel and maintenance costs. Autogas is an average of $1.25 per gallon less than gasoline and many Alliance AutoGas fleets report reduced maintenance needs and increased vehicle engine life after shifting to autogas. In addition to the cost-savings benefits of autogas, it is also a clean-burning fuel that is 90 percent domestically produced.

Alliance AutoGas provides both bi-fuel and propane-dedicated conversions using Prins vapor and liquid injection technology. The bi-fuel Prins VSI system gives drivers peace of mind because vehicles automatically switch back to gasoline if the autogas tank runs low when a fueling station cannot be reached.

Starting this week, E85 is now available to flex-fuel vehicle drivers in St. Petersburg, Fla. at Bollinger’s Gas Station. This is the first E85 station in the area.

The station, which specializes in auto repair, partnered with Protec Fuel, to install the E85. Protec, based in Florida, is a turnkey E85 company specializing in station conversions and fuel distribution. Bollinger’s offers three types of fuel including gasoline, diesel and E85. Bollinger’s also offers conversions for gas-engine vehicles to become flex-fuel vehicles.

“It just made sense to offer a product that’s good for the environment and the U.S. economy and at the same time help my environmentally-conscious customers,” said Ted Bollinger, owner.

The Illinois state legislature has approved an extension of the state’s biodiesel blending program. The bill extends the sunset date for the biodiesel state sales tax incentives to Dec. 31, 2018. Any biodiesel blend of more than 10 percent continues to be eligible for fuel tax exemption.

Since the inception of the B11 blending credits in 2004, more biodiesel has been blended in Illinois annually than any other state, says the Renewable Energy Group.

Illinois has more than 1,500 “green collar” jobs in the state, according to data from a recent Illinois biodiesel economic impact study. The biodiesel industry generated $1.5 billion of household income and was responsible for more than $2.6 billion of Illinois gross domestic product between 2004 and 2010.

“REG applauds the Illinois legislature for promoting green collar jobs, Illinois agriculture, rural economic development and sound environmental policy,” said Daniel J. Oh, president of REG.

REG markets biodiesel from its REG Danville (45 mmgy capacity) and REG Seneca (60 mmg capacity) facilities as well as several Chicago-area terminal locations.

Gadgets – 28%, are tops on the Christmas gift list according to our latest ZimmPoll, followed closely by Paying Bills – 25%. Those choices were followed by Clothes, 19%; Other, 14%; Farm Equipment, 9% and Tools, 5%. I find it very interesting that no one chose Food! Wow. Food makes a great gift don’t you think? Maybe we’re all so well fed that our focus has turned to other things? What do you think?

Our new ZimmPoll is now live. We’re asking the question, “Is Ethanol production good for ALL of Agriculture?” There’s a huge amount of on-going rhetoric about this subject and it seems to be a very divisive issue within the ag community. Let’s put it this way, the most heated arguments/debates I’ve heard or participated in this year were on this subject! What do you think?

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

According to USDA, global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a smaller crop here in the U.S.

The latest World Agricultural Supply Demand report estimates the U.S. crop was down 3.5 million tons this year compared to last year, but foreign corn production is expected to be 43.4 million tons higher, with China alone up 7.3 million tons this month based on the recently released government estimates. USDA is now predicting the 2011/12 season-average farm price for corn will be about 30 cents lower than previous estimates at $5.90 to $6.90 per bushel.

On the demand side, corn for food, seed, and industrial use was lowered 5 million bushels and projected corn ending stocks were increased by 5 million bushels to 848 million. Corn for ethanol use remains unchanged at 5 billion bushels, which is slightly lower than last year, despite the fact that ethanol production this year is on pace to possibly be as much as a billion gallons more than 2010.

As we head into 2012, ethanol is like to be the wild card in the corn demand situation with the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year. “That could potentially change how much ethanol is blended into gasoline,” said USDA chief economist Joe Glauber. “There are mandates in terms of overall production that has to be blended into gasoline, the issue is how much gets produced above and beyond the mandates.” However, industry analysts expect ethanol prices are expected to drop 30-40 cents per gallon at the wholesale level after the blenders tax credit expires, which should serve as an incentive to blend as much if not more.

“Domestically, it will depend on the profitability of ethanol price versus gasoline and whether or not it pays to blend above the mandates,” said Glauber.

There’s a hot new craze called the “Ethanol Shuffle” that’s sweeping seaports from Sao Paulo to Los Angeles. No, it’s not a new dance, this shuffle is all about the “confounded realignment of the global ethanol trade.”

Renewable Fuels Association (RFA) Vice President of Research and Analysis Geoff Cooper wrote about the “Ethanol Shuffle” this week on the RFA E-xchange Blog. Basically, it’s about the shuffling of sugarcane ethanol from Brazil to California to meet that state’s Low Carbon Fuels Standard (LCFS) – at the same time, Brazil is importing lower priced corn ethanol from the United States to make up for not only the ethanol it is exporting to California, but the shortfall that country has experienced in ethanol production recently.

So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route.

Cooper explains the sweet irony of it all in this edition of “The Ethanol Report.” Geoff Cooper on the Ethanol Shuffle

ZimmComm New Media is proud to announce the very first (that we know of) Ag Events Calendar.

This slick 10×15 wall calendar includes dates for all the major ag-related and biofuels events in 2012, along with photos each month from the 2011 events that we covered. There’s photos from the National Biodiesel Conference, National Ethanol Conference, Commodity Classic, Iowa Corn Indy 250, American Ethanol NASCAR, Farm Progress Show and much more.

We ordered a limited number of the calendars to give to some of our clients for Christmas, but then discovered that there are lots of other folks out there who would like to get a copy, so we are ordering more and offering them for sale.

For just $20 each plus $2 shipping/handling, you can get your very own 2012 Ag Events calendar here:

Order 2012 ZimmComm Ag Events Calendar.

The Iowa Renewable Fuels Association (IRFA) elected its new 2012 Board of Directors and executive committee during its annual meeting last week.

2012 IRFA Board of Directors include Brad Albin, Renewable Energy Group, who will serve as president; Rick Schwarck, Absolute Energy, vice president; Steve Bleyl, Green Plains Renewable Energy, treasurer and Brian Cahill, Southwest Iowa Renewable Energy, secretary. Monte Shaw, IRFA executive director, is a non-voting member of the board of directors.

Those who were elected to join the IRFA officers on the executive committee for 2012 include Walt Wendland, Golden Grain Energy, who is the IRFA past president; Tom Brooks, Western Dubuque Biodiesel, at-large and Craig Willis, ADM, at-large.

Each producer member has a seat on the board and votes on officers. New officers will serve a one-year term during the 2012 calendar year.

OriginOil has a new research agreement with the Department of Energy’s Idaho National Laboratory (INL) to collaborate on establishing industry standards for algal biomass.

Under the terms of the agreement, OriginOil will provide INL with its Single Step Extraction technology and contribute its knowledge of how to stimulate oil production and pre-treat for consistent extraction of the algae and its co-products. In return, OriginOil expects to benefit from INL’s scientific and engineering expertise and its large Process Demonstration Facility which boasts advanced biofuels processing capabilities and equipment. A primary effort will be to integrate algae with terrestrial biomass sources to achieve large-scale biofuels production.

Under this agreement INL will assist OriginOil by conducting evaluations of processes and technologies that may help find solutions to converting algae into energy feedstocks more efficiently by optimizing and standardizing various formats.

“The U.S. Navy alone plans to achieve 50 percent use of alternative fuels in just eight years, a goal of eight million barrels of biofuels per year that must be blended from non-food fuels like algae,” said Riggs Eckelberry, OriginOil’s CEO. “But to blend, we must standardize, using the latest breakthrough technologies.”

Advanced biofuel producers are calling on Congress to take action now to ensure that tax incentives for cellulosic ethanol continue past 2012.

In a letter to Congressional leaders, the Advanced Ethanol Council (AEC) asked for a multi-year extension of the Cellulosic Biofuels Producer Tax Credit (PTC) and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property, both of which are set to expire December 31, 2012.

AEC Executive Director Brooke Coleman noted in the letter that the incentives “are vital to the ongoing development of the domestic advanced ethanol industry. To ensure stability in the marketplace, and prevent unnecessary job losses, Congress should provide long‐term extensions of these provisions (5+ years).”

As new ethanol biorefineries are beginning construction, the AEC emphasized the importance of consistent federal policy to this kind of multi-billion dollar investment.

The AEC is asking Congress to extend these important tax incentives this year as part of a final tax extenders package as they are set to expire next year. “As Congress considers the extension of a number of tax provisions for the clean energy sector, we would also like to highlight the importance of timing. The mere prospect of the expiration of the PTC and Special Depreciation Allowance for cellulosic biofuels in 2012 will start to affect projects that take 18 months to build, and could drive our industry into a series of ‘fits and starts’ that has dampened investment in other domestic clean energy sectors for decades.”

A number of ethanol supporting organizations recently sent a letter to the chairman and ranking members of the U.S. Senate and House Appropriations Committees urguing them to oppose a proposal by Reps. John Sullivan (R-Okla.) and Gary Peters (D-Mich.) that would delay commercialization of next generation ethanol.

The groups, which includ Growth Energy, the Renewable Fuels Association, the American Coalition for Ethanol and the National Corn Growers Association, oppose a proposal by Sullivan and Peters to include language in the FY12 omnibus appropriations package that would prohibit the U.S. Environmental Protection Agency (EPA) from using any appropriated funds to implement the E15 waiver.

The Sullivan-Peters proposed language — which did not receive a vote during this year’s appropriations process or a hearing in the Energy and Commerce Committee — is aimed at derailing and altering the long-standing process by which new fuel blends are brought into the marketplace. The EPA approved E15 after a more exhaustive study and data collection than any other of the 11 previously-approved fuel waiver petitions.

The letter from the organizations noted that “preventing the EPA from implementing the use of E15 for cars, pickups and SUVs made in model year 2001 and newer, further contributes to our nation’s reliance on foreign oil. Extensive testing has been done on E15 and it has been found to be a safe and effective fuel for use in the vehicles approved in the waiver. There has been no evidence to the contrary that would indicate problems in any vehicle regardless of vintage.”

Further, the EPA’s decision does not make E15 mandatory. Consumers are not required to use E15. Gas stations will not be required to sell E15. And the EPA will require a fuel label that clearly delineates that using E15 in model year 2000 vehicles, small engines and marine engines is illegal.

Lastly, the Sullivan-Peters language would inhibit new and innovative alternatives to fossil fuels. We are looking toward cutting-edge innovation to move to new ethanol feedstocks, like plant wastes, wood chips and switchgrass. The Sullivan-Peters language would solidify the status quo-a 90 percent mandate of our fuel supply from oil and would prevent American-made ethanol from being made available to consumers.

About 20 U.S. soybean farmers are in New York City this week to see the how the Bioheat Industry is gaining momentum. The National Biodiesel Board (NBB) is hosting the group. Bioheat is biodiesel mixed with home heating oil. Starting in October, 2012, all heating oil sold within New York City will contain at least two percent biodiesel.

The group will tour CME Group, the world’s leading and most diverse derivatives marketplace where energy is bought and sold. There they will have an educational session on the Bioheat market and hear from the president of the New York Oil Heating Association and a New York City Councilman.

In addition, the group will see the biodiesel facilities of the New York City Department of Parks & Recreation and the Port Authority of New York and New Jersey. Both use biodiesel blends in their diesel vehicles as does the Department of Sanitation.

Those three agencies use about 11 million gallons of biodiesel blends a year, ranging from 5 to 50 percent biodiesel (B5 – B50), according to Steven Levy of Sprague Energy, a biodiesel supplier in that area. The farmers are also visiting the facilities of Metro Energy, one of the largest petroleum distributors in New York City and the northeast. In 2009 the company sold 10 million gallons of biodiesel to be used as Bioheat in New York City alone. They are building a 110 million gallon biodiesel production facility in Brooklyn.

The biodiesel and Bioheat Industries have been supported by farmer-led groups including NBB, the United Soybean Board and the soybean checkoff.

Pacific Ethanol reports that they have entered
into a “definitive purchase agreement with a group of institutional investors to raise $8.0 million in a private placement transaction.” In addition, the company has signed purchase agreements to acquire an additional 7% interest in the Pacific Ethanol production facilities, according to a company news release.

Of the net proceeds from the financing, $4.6 million will be used for the purchase of the additional 7% ownership interest in New PE Holdco LLC, the owner of the four Pacific Ethanol production facilities with a combined annual production capacity of 200 million gallons. Upon closing, the company’s total ownership interest will increase to 34%. On October 6, 2010, the company paid $23.3 million in cash for its initial 20% ownership interest, and on November 29, 2011, the company purchased an additional 7% ownership interest for $4.5 million.

The company lost those four plants in a bankruptcy case last year.