Domestic Fuel

Since it was the biggest gathering of the year for corn and soybean growers, it’s only natural that Commodity Classic was also a good place to talk about the state of the ethanol and biodiesel industries, especially when you consider the two grains are still the biggest feedstocks for the biofuels.

In this edition, we listen in on the conversation about ethanol and biodiesel at Commodity Classic with Secretary of Agriculture Tom Vilsack; Brian Jennings, the Executive Director of the American Coalition for Ethanol; Robert White with the Renewable Fuels Association; National Corn Growers Association president Darrin Ihnen; and American Soybean Association president Rob Joslin.

They talk about the E15 blend wall, the state of biofuels infrastructure, and the prospect of getting the federal $1-a-gallon biodiesel tax incentive passed through Congress.

It’s an interesting conversation, and you can hear it below.

You can also subscribe to the DomesticFuel Cast here.

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Today, about 1/3 of the sorghum crop goes into ethanol production. An interesting little piece of information I picked up when I spoke with Gerald Simonsen, the Chairman of the National Sorghum Producers during Commodity Classic. Sorghum is a good feedstock for ethanol production for several reasons. First, it uses half the amount of water used in corn production and second, the sugar-based sorghums, like sweet sorghum and energy sorghums produce more ethanol per acre than other starch-based feedstocks.

Simonsen told me that his organization is very focused on the ethanol industry not only from a research, development and marketing standpoint, but also policy. The RFS2 rules were recently announced and Simonsen said that while they were happy to be included, they do have a few issues with some of the things said about sorghum. Therefore, his organization is working with the USDA and EPA to “iron out some of the rough edges and make sure sorghum has a viable future in ethanol.”

Currently, you can produce the same amount of ethanol from a bushel of corn or ethanol. However, Simonsen noted, you can also make sugar-based ethanol out of sweet sorghum and in terms of cellulosic ethanol, energy sorghum and forage sorghum are feedstocks that the US Department of Energy is excited about. These types of feedstocks produce more ethanol from a bushel of sorghum than what we’re seeing today.

“We have a three-way punch. We’ve got the whole ethanol thing surrounded. We just have to bring it together and move forward,” concluded Simonsen.

You can listen to my interview with Gerald below.

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The E15 waiver was a hot topic during Commodity Classic and for good reason: EPA administrator Lisa Jackson, in response to a question asked during a Congressional hearing, said she felt they’d be ready to make a decision late summer. Originally, the EPA was to have ruled on the E15 waiver, that would waive the Clean Air Act to allow up to 15 percent ethanol in motor vehicles, by the beginning of last December. At that time, they deferred to mid-summer – now they are saying possibly by end of summer.

“Though without giving a date, clearly that date has passed and that’s troubling I think, and we’ve got to keep the pressure on,” said Brian Jennings, the Executive Director of the American Coalition for Ethanol (ACE) during an interview with DomesticFuel during Commodity Classic.

According to Jennings, Robert White with the Renewable Fuels Association (RFA), and Secretary of Agriculture Tom Vilsack, the EPA is doing more work on small engines and the effect of ethanol blends on catalytic converters. This despite the large number of research already available.

“But it does seem frustrating to us that they keep looking for some sort of excuse to delay or not to make the decision when we feel the preponderance of evidence, so far, and as it continues to come in, is going to justify this,” continued Jennings.

Both Vilsack and White agree and feel that the E15 waiver will pass – especially since the Renewable Fuels Standard mandates 36 billion gallons of ethanol by 2022 and the E10 blend wall is approximately 14 billion gallons and White notes that there are 22 billions gallons above the blend wall that need to find a home.

“E15 is great, but it’s still a band aid for the real issue and the sticking point is going to come very soon and the problem we’ve been facing for well over a decade is you simply can’t flip a light switch for this infrastructure to be there,” explained White.

You can download (mp3 file) or listen to a Robert’s interview here: WhiteE15.CC10.mp3

You can download (mp3 file) or listen to Brian’s interview here: JenningsE15.CC10.mp3

Agriculture Secretary Tom Vilsack today announced that Fiscal Year 2009 funding is once again available again for three USDA Farm Bill programs to promote increased production of biomass and bioenergy.

Applications for the Biorefinery Assistance Program, which uses loan guarantees to develop, construct, and retrofit commercial-scale biorefineries, must be received by June 1, 2010. Applications are also being accepted for remaining FY 2009 funding under the Repowering Assistance Program, which provides for payments to biorefineries in existence when the Farm Bill was passed to replace the use of fossil fuels in their operations with renewable energy from biomass. Biorefineries interested in obtaining funding must apply by June 15, 2010.

Finally, those biomass producers eligible under the Bioenergy Program for Advanced Biofuels may also apply to receive payment from remaining FY 2009 funds. Applications must be received by May 30, 2010. Under this program, payments are made to eligible producers in rural areas to support and ensure an expanding production of advanced biofuels. Payments are based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch. Eligible examples include biofuels derived from cellulose, crop residue, animal, food and yard waste material, biogas (landfill and sewage waste treatment gas), vegetable oil and animal fat.

At the recent Commodity Classic, Secretary Vilsack noted that the administration is focused on expanding the biofuels industry. “We’re going to make sure that it is a national industry, not just focused in one particular area, one particular region, or one particular feed stock. There are enormous opportunities here in all parts of the country. Enormous opportunities for farmers and ranchers, enormous opportunities for rural America. And, there needs to be a concerted effort in growing and expanding this industry,” Vilsack told the crowd of more than 4,000 meeting in Anaheim, Calif. “That’s part of the strategy of USDA. So, we’re putting resources behind this, and we’re using our rural development resources to help build these refineries. We’re using our energy title of the farm bill to promote payments to farmers for feed stocks, to help build refineries, to retrofit existing refineries, to put people to work in rural communities.”

Listen to or download Vilsack’s speech from Commodity Classic here:

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Each day, cellulosic gets closer to becoming commercially viable in the marketplace. Two weeks ago, a major hurdle was overcome with the announcement that Novozymes’ enzyme Cellic® CTec2, used for cellulosic ethanol production with feedstocks such as corn stover and corn cobs, is now 50 cents per gallon. I had the opportunity to learn more about this breakthrough when I sat down with Thomas Videbaek, Executive President of Novozymes BioBusiness, at Commodity Classic.

Videbaek explained that Cellic is the first commercial product for cellulosic ethanol. With Cellic, you’ll be able to produce cellulosic ethanol using an enzyme cost of about 50 cents per gallon. “With this, we think that the enzyme part of producing cellulosic ethanol has been cracked,” said Videbaek. “Now we need to get out and starting producing it and we’re really, really excited about that.”

Novozymes is a partner with POET’s Project Liberty which will produce ethanol from corn cobs. I asked Videbaek for an update and he believes that with the enzyme breakthrough they will be able to produce cellulosic ethanol for around $2.35 per gallon. However, the expectation is that once Project Liberty is up and running, the cost will be reduced to around $1.90 per gallon. This will be monumental in that it will break the $2.00 per gallon barrier challenge of producing cellulosic ethanol.

This was a massive project for Novozymes who has been working on it for more than five years. “It’s the biggest project we’ve ever carried out,” said Videbaek. There were more than 150 people working on it in the past year alone.

In addition to corn stover and cobs as a feedstock, they are also working with wheat in Europe and have an operational pilot plant in Denmark. In addition, they are working with Brazilian ethanol producers to develop an enzyme to break down the bagasse.

You can learn more about Cellic by listening to my full interview with Thomas below.

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“Some people believe that corn ethanol is an old technology. We believe just the opposite,” said John Caupert, the Director for the National Corn-to-Ethanol Research Center (NCERC) during an interview with me at Commodity Classic. “We feel the corn ethanol industry is still in its infancy and through technological advancements, there’s much more to learn and prove in corn ethanol production.”

In the last two-to-three years, Caupert noted that there has been a major emphasis on technological improvements such as corn fractionation, and aneorbic digestion, things that would incorporate capital upgrades or capital investments in the ethanol plant. In terms of corn ethanol production, a lot of focus has been dedicated to advancements in fermentation ingredients such as enzymes and various strains of yeast.

The NCERC has also played a role in the debate over indirect land use. Caupert explained that they have done a lot of research that focuses on the value of how co-products improve the greenhouse gas footprint of fuel ethanol production.

“I think more often than not, we forget about the fact a corn ethanol plant in addition to producing fuel ethanol, also produces this high value livestock feed called distillers grains,” said Caupert.

They will continue to look at this data and make recommendation about how the co-products should add value to corn ethanol in the indirect land use arena.

Listen below to hear my entire interview with John.

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Ethanol issues were in the spotlight when National Corn Growers Association president Darrin Ihnen of South Dakota took the stage at the Commodity Classic general session on Friday.

Ihnen talked about the importance of using higher blends of ethanol in the fuel supply. “The EPA is studying the issue and everything they’ve indicated to this date looks very promising,” said Ihnen. “They said it will probably be late summer now and we are very hopeful it will come then.” He says that is a top priority for corn growers and “this is a game changer” that will give them an opportunity to use more corn.

Ihnen also talked about the climate change issue and other important issues during an interview with session moderator Mark Mayfield which is available in the player below.

Commodity Classic Photo Album

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During the general session of the 2010 Commodity Classic, American Soybean Association president Rob Joslin, who stressed the importance of getting the biodiesel tax credit back in place.

“We need it now,” Joslin said. “It’s costing U.S. soybean farmers 25 cents for every bushel. On my 500 acres of soybeans, that’s over $6000 a year. Couple that with all the jobs loss, that’s our goal right now.”

Joslin says the tax credit is back in the second jobs bill that is being considered by the Senate right now. “I kinda feel like a bride that goes to the altar that comes away without a ring. We’ve been to the altar 2 or 3 times and we haven’t gotten a ring on our finger yet.”

Rob was interviewed by session moderator Mark Mayfield about this issue and others important to soybean producers – listen to that exchange below.

Commodity Classic Photo Album

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“I’m not troubled by getting it right as long as we get it right. And I think we’re headed in the right direction. I’m anticipating we’ll see some increase in the blend rate,” said Secretary of Agriculture Tom Vilsack during a press conference at Commodity Classic when asked about EPA’s delaying the decision to increase the blend rate to E15.

However, prior to addressing the status of the E15 Waiver, Vilsack began by noting that biofuels are a good way to bring prosperity and economic vitality to all regions across the country. Rural America is disappearing and farmers have been one of the hardest hit groups during this financial crises. He explained that its not just growing the crops that help farmers but also the jobs it creates for residents of rural communities who work in the ethanol plants and other companies that are tied to biofuels production.

Circling back to E15, approving a higher blend is essential to reaching the country’s goal of producing 36 billion gallons of biofuels by 2022. Per the mandates as set by the EPA as part of the Renewable Fuels Standard, nearly 10 percent of all fuel will be blended with E10 in 2010. Without higher blends, including E85, there is no where for the fuel to go.

Yet earlier this week, the EPA announced that it was delaying any decision on increasing the blend level to E15 until the end of the summer. Vilsack commented that the purpose of the delay is due to ongoing testing by the Department of Energy to determine what engines can use the higher blend without ill effects. It has already been established that newer vehicles, and all flex-fuel vehicles can use the higher blend safely, “Which suggests to me that we’re going to see an increase in the blend rate,” said Vilsack. He then noted that it will be important to use rural development resources to make sure the distribution systems create the opportunities for people to use higher blends.

You can see photos from Commodity Classic here.

You can listen to Vilsack’s comments on biofuels here.

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Ethanol related issues top the list of concerns for members of the National Corn Growers Association (NCGA) preparing for their annual policy meeting ti be held this week in Anaheim as part of the 2010 Commodity Classic.

NCGA president Darrin Ihnen, a corn grower from South Dakota, says among those concerns are the use of indirect land use change in making regulations for low carbon fuels and increasing the allowable blend level for ethanol in gasoline to 15 percent. “The other thing that is looming is tax policy when it comes to the ethanol industry – VEET (volumetric ethanol excise tax credit) and the import tariff,” Ihnen said on a visit last week to the Missouri Corn Growers Association annual meeting. “Those will definitely bring a lot of discussion in our resolution sessions and our policy decision making.”

Corn growers are also concerned about the threat posed to animal agriculture in individual states by activist groups, which affects them on two levels. “Number one, the livestock industry is our largest user of corn,” Ihnen says. “The second thing is that we supply a lot of corn to the ethanol industry, which produces DDGs, which comes back to the livestock industry.”

Ihnen sees the animal activist threat as a unifying issue for the agriculture industry, which is sometimes divided when it comes to ethanol. “We can’t be separated when it comes to agriculture,” he said. “We need to work together.”

Listen to or download my interview with Darrin Ihnen here.

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The National Ethanol Vehicle Coalition (NEVC) attended the 2009 Commodity Classic last week in Grapevine, Texas. The group has attended the event for more than ten years promoting E85 and flexible fuel vehicles. This was my tenth Commodity Classic attendance on behalf of the NEVC.

Phil Lampert, my Executive Director, NEVC Membership Director Haley Wansing and I met with many of the state corn grower groups to inform them of our successes and what our outlined plans are for the future. NEVC Vice-Chairman and Ohio Corn Growers Executive Director Dwayne Siekman said, “The Commodity Classic is an important time for policy development for the Ohio Corn Growers Association and we often confer with partnering organizations for background information. Without groups like the NEVC and their knowledge on higher ethanol blends and updates on certification of dispensing equipment, the policy development process may not be complete.”

As part of the NEVC staff, I was pleased to see such an intense interest from every state on ethanol policy. Our group appreciates the support of the National Corn Growers Association and each of our fourteen corn grower state organizations.

The NEVC also sponsored a booth in the Commodity Classic’s exhibition hall. Displayed were two flexible fuel vehicles: a 2009 FFV King Ranch F-150 and a 2008 FFV GM Silverado (provided by CleanFUEL USA). I believe the attendees enjoyed seeing the FFV options that Ford and GM have available for use on their farms.

Wind energy celebrated its biggest year in 2008 with 8,000 megawatts being installed–that’s a lot of wind. I wanted to learn more about the industry so I caught up with Susan Williams Sloan, the Outreach Manager for the American Wind Energy Association (AWEA) last week during Commodity Classic. . 

“2008 really was a banner year for the industry,” said Sloan. She anticipates that 2009 won’t be as big of a year due to the economic situation but does see a bright future going forward citing the provisions in the stimulus package.  

Last year, the industry was growing so rapidly that it could take months to have wind turbines delivered, but this year is different. There is a large inventory of wind turbines available. “The Good News is that there are turbines available for those with projects that are ready to move forward,” said Sloan. 

A big challenge for AWEA is building a transmission grid that can help move move wind power from the windy areas to the load centers where people need more electricity. “We must figure out the political issues surrounding moving wind,” said Sloan, and assured me that  AWEA will work diligently to ensure an effective transmission grid is developed.

Listen to my interview with Susan here get the full update on the wind industry’s efforts. cc-09-joanna-wind-energy.mp3

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As Cindy mentioned in the previous post, biofuels were a big part of the conversation at the recent Commodity Classic in Grapevine, Texas. And during that important meeting of the nation’s grain producers, it only makes sense that one of the country’s biggest commodities recognized the contribution biodiesel has made to the agricultural industry in the U.S.

The American Soybean Association honored immediate past chairman of the National Biodiesel Board Darryl Brinkmann for his lifelong work in furthering biodiesel in this country. This NBB press release says Brinkmann received the ASA Lifetime Achievement – Association Focus Award for his work with biodiesel through NBB, among his other service to ASA:

“It is a real honor to have your colleagues pay tribute to you in that way,” said Brinkmann, who was surprised with the award at ASA’s banquet Friday night at the Commodity Classic in Grapevine, Texas. “Usually getting a new product to market takes longer than it has for biodiesel. During my time serving ASA on NBB’s board, there have been lots of challenges, lots of successes, and lots of fun.” The Commodity Classic is an annual agricultural trade show and convention.

Brinkmann, from Carlyle, Ill., serves on the NBB Executive Committee and Governing Board as the ASA representative. He was NBB chairman from 2004 – 2007. Brinkmann has also served on ASA’s executive committee as vice president.

The award thanks the person for working on behalf of ASA throughout the years. NBB officials point out that while Brinkmann was chair, the first federal biodiesel tax incentive was enacted, along with other critical federal developments.

National commodity organizations representing growers of corn, soybeans, wheat and sorghum gathered together for the first time as one group last week in Grapevine, Texas at the annual Commodity Classic. Corn and soybean growers have been together as one for the past 14 years, wheat joined the group last year, and sorghum made four this year.

Renewable fuels were a major topic of discussion throughout the week-long conference and were addressed during the general session on Friday. Emcee Mark Mayfield (left) talked with each of them – National Sorghum Producers chairman Toby Bostwick, National Association of Wheat Growers president David Cleavinger, National Corn Growers Association president Bob Dickey, and American Soybean Association president Johnny Dodson.

“One of the key issues ASA will be working on in the coming year is the extension of our biodiesel tax incentive,” said Dodson. “Biodiesel has been a win-win for the agriculture community and the average consumer.”

Bob Dickey with NCGA said making sure the Renewable Fuels Standard is implemented and maintained is one of their top legislative priorities for this year and said they will be working with the ethanol industry to increase the blend rate for ethanol. “We are supportive of higher blend rates based on sound science, provided the EPA goes along with it,” he said.

Young people all over the country are encouraged to take the Flex-Fuel Challenge and help pave the way for our nation’s renewable energy future.

The Renewable Fuels Association is kicking off the initiative today at Kansas State University and unveiling a new website, e85challenge.com to get college students engaged in the debate surrounding issues that impact their future: the economy, energy and the environment.

The challenge encourages them to produce a short video, take a photo, or even write a song about creative ideas on renewable energy that will impact future generations. Robert White, Director of Market Development for the Renewable Fuels Association, says the most creative of those entries can win some nice prizes. “Their own peers will decide who wins,” said White. “The overall winner will receive a MacBook Air laptop and each week we will be giving away a portable Passport™ hard drive in a drawing.”

White says they will be promoting the challenge during appearances at the top 15 college campuses nationwide, but anyone can enter on-line.

Listen to an interview with Robert here, conducted by Domestic Fuel reporter Joanna Schroeder at last week’s Commodity Classic: cc-09-joanna-rfa.mp3

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