In a press release today, the American Coalition For Ethanol also outlined several reasons why suspending the tariff on ethanol will do nothing to lower gas prices. They are simply:
Lifting the tariff is unnecessary because significant volumes of ethanol already flow in the U.S. duty-free.under the Caribbean Basin Initiative.
Lifting the tariff forces U.S. taxpayers to support the production of foreign ethanol that is already heavily subsidized in Brazil.
Ethanol supplies are indeed adequate to meet the demand created by the removal of MTBE from the fuel supply.
Lifting the tariff would undermine the growth of the domestic ethanol industry.
President Bush today came out in support of at least a temporary end to the tariff on ethanol imports, putting the “pro-ethanol” president at odds with the ethanol industry and farm-state lawmakers. In an interview with CNBC, Bush said, “I think it makes sense to — when there’s a time of shortage of a product that’s needed, so that the consumers can have a reasonable price, it seems to me to make sense to address those shortages, and dropping a tariff will enable the foreign export of ethanol into our markets, which will particularly help on our coasts. And yeah, I’ve talked to Congress about that.”
However, the ethanol industry contends that there are sufficient supplies of ethanol to meet the demand and that dropping the tariff will have no impact on prices. According to the Renewable Fuels Association:
The Energy Information Administration (EIA) estimates that 130,000 barrels per day (b/d) of ethanol will be needed to replace the volume of MTBE refiners have chosen to remove from the gasoline pool. The most recent EIA report shows that U.S. ethanol production has soared to 302,000 b/d in February.
In addition, there have been reports that Brazil is having trouble meeting its own demand for ethanol. A recent Knight-Ridder article said that Brazilian ethanol producers are struggling to keep up with domestic demand for ethanol, which is projected to grow by 50 percent over the next five years. Yet a 15 percent jump in prices earlier this year sparked a sharp drop in consumption. Even so, suppliers are struggling to plant enough fields of new sugar cane, from which ethanol is produced here, to keep up with the anticipated growth in demand.
California Gov. Arnold Schwarzenegger is directing his state agencies to fight high gas prices by expanding bio-fuels, according to a release from his office. “It is critical that we do everything we can to reduce our dependence on petroleum-based fuels,” said Gov. Schwarzenegger. “Turning waste products into energy is good for the state’s economy, local job creation and our environment. By implementing biomass programs in California, we will help fight critical waste disposal and environmental problems, including the risk of wild fires, air pollution from open field burning, and greenhouse gas emissions from landfills.”
California will produce a minimum of twenty percent of its own biofuels by 2010 and forty percent by 2020, according to targets set by the executive order.
Energy Secretary Samuel Bodman sent ethanol stocks down today with comments that the Bush administration is considering lifting import tariffs on ethanol, but ethanol interests were busy out stating their reasons why the tariffs should remain in place. Senator Charles Grassley (R-IA) and Sen. John Thune (R-SD) issued a joint statement saying that ending the duty is unnecessary and would have negative consequences. “Everyone’s looking for a way to lower gas prices, but lifting the ethanol tariff won’t mean lower prices for consumers. What’s more, it would undermine efforts to make our country more energy independent and reward the oil companies that are already raking in record profits.”
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is warning the public not to start their own home ethanol plants. A notice on the TTB website says “it is illegal to distill alcohol without first obtaining a Federal permit” from the TTB. The notice is in response to “several news items on people distilling ethanol at home to supplement their gasoline needs.” Those wishing to distill alcohol at home are invited to contact TTB to apply for a permit, but I would bet it’s no easy process, since they note there “may also be additional permitting requirements and other restrictions on the state and local level.”
Cellulosic ethanol and biodiesel hit the spot for a company known as Amelot.
According to their website, “Amelot Holdings Inc. is a Natural Resources and Energy Company including Oil, Gas Alternative and Bio-Energy projects.” A press release this week from Kerry Associates says they have entered into joint negotiations with a cellulose ethanol technology company on behalf of Amelot.
An earlier press release from Amelot announced that they have ordered bio-diesel processing equipment to start production at its first facility, to be located in New Hampshire. Amelot expects to produce over 1 million gallons in 2006. “We are extremely excited that this initial purchase has been formalized. This investment will enable us to create a division within the holding company dedicated to the development of alternative fuels and bio-diesel production. Having already established a solid infrastructure allows us to be generating substantial revenue and profits from this facility within the next 90 days,” commented Aziz Hirji, President of Amelot Holdings, Inc.
This graphic appeared in the Columbia (MO) Tribune today, with an article claiming the Missouri Corn Growers Association billboards are continuing to “fuel controversy.” According to the article, the Arab American Institute sent a letter to MCGA asking them to take down eight billboards that show an image of the late King Fahd of Saudi Arabia. MCGA communications director Becky Grisham said they do not plan to remove the billboards until their contract is up later this month, although they are considering a plan to “replace the king with Hugo Chavez, president of Venezuela and an outspoken critic of the United States.”
I bet we could think of other faces that could grace the billboard. Any suggestions? I think it’s a good message and a fair question and it would be great if we could get a national campaign going to put billboards like this up on highways all over the country.
A bill passed this week in the Louisiana House would require a portion of the gasoline sold in the state to include ethanol – but at the same time makes the mandatory sale of alternative fuels optional for some retailers. According to the Shreveport Times, Rep. Mickey Frith, D-Kaplan, a convenience store owner who sells gasoline, got House approval in a 55-44 vote to remove a mandate for wholesalers and retailers to sell the product in Louisiana. He promoted it as protecting small dealers who couldn’t meet the cost demands to change tanks and pumps.
According to an AP story in the Grand Forks Herald, a proposed $350 million ethanol plant and coal-fired steam plant is getting a boost from a local economic development group. The Jamestown-Stutsman Development Corp. is investing $6 million in the effort – a $4 million grant over 3 1/2 years and the purchase of $2 million in Spiritwood Energy LLC stock.
Both the Jamestown City Council and Stutsman County Commission approved the money in special meetings this week. The 100 million gallon a year ethanol plant and steam power plant is planned in Spiritwood, about 10 miles east of Jamestown.
Central States Enterprises, Inc. and GROWMARK, Inc. have joined forces to build a new corn ethanol facility in Blackford County, Indiana. According to a news release, the facility will consume approximately 41 million bushels of corn annually, producing 100 to 110 million gallons of ethanol and 376 thousand tons of distillers dried grains.
Delta-T Corporation of Williamsburg, Va., along with their Alliance Partners of TE Ibberson of Minneapolis, Minn. and TIC – The Industrial Company of Steamboat Springs, Col., have been appointed design-build contractors. Construction is scheduled to begin this summer.
Blue Diamond Ventures Inc. has announced plans to build ethanol and biodiesel facilities in Oklahoma and Belize, according to a company release.
“As nature’s partner, we are committed to addressing the world’s energy shortages by utilizing alternative fuels made from renewable resources,” said Blue Diamond Chairman and CEO John Quincey Moaning, noting the company plans to develop processing technologies and methods to increase yields from feed stocks.
Blue Diamond plans to initially construct a 3.5 million gallon per year (MGY) ethanol facility and a 5 million gallon per year (MGY) bio-diesel facility in Belize. The company anticipates using sugar cane and molasses as the main feed stock for the ethanol. The bio-diesel will be manufactured from vegetable oils such as soy beans, canola and palm and from animal fats processed at Blue Diamond’s facilities.
The company also has an interest in goats, with plans to break ground this year on a million dollar goat processing facility in Belize and aggressively market the world’s most eaten meat throughout the U.S., Central America and the Caribbean. Blue Diamond will utilize 3,000 acres in Belize and 1,200 acres in Oklahoma for a goat ranch, research center and processing facility.
A group of chemical engineers from the University of Missouri has received the 2006 Glycerine Innovation Award from The Soap and Detergent Association and the National Biodiesel Board, according to an NBB release.
Dr. Galen Suppes, an associate professor at the University’s College of Engineering in Columbia, and his research team were honored at the 97th Annual Meeting of the American Oil Chemists’ Society in St. Louis.
The award recognizes outstanding achievement for research into new applications for glycerine with particular emphasis on commercial viability.
The largest ethanol plant in the southeast is planned for Mississippi. According to a release from Bunge North America, they are teaming up with Mississippi-based Ergon Ethanol, Inc. to build an ethanol plant with an annual capacity of at least 60 million gallons. “The state-of-the-art facility will provide a key link between Bunge’s grain handling facilities in Mississippi and Louisiana, and Ergon’s petroleum refining assets.”
According to this website, there is another fuel that can be made from corn – butanol. These folks – Environmental Energy, Inc. – claim to have run cross country last year on 100 percent butanol, getting 24 miles to the gallon with no engine modifications.
Why have we never heard of it? According to the website, production of butanol from corn and other biomass has been stymied by the lack of technology to make it economically viable. The problem has been historically low yields and low concentrations of butanol compared to those of ethanol….EEI’s patent changes everything. We are now able to produce yields of 2.5 gallons of butanol per bushel of corn.
If this has real potential, these guys need a better PR engine to make it work and need to get support from the corn growers.
Thanks to Gary Dikkers for pointing me to the website.
Illinois Corn Growers are a bit ticked about an editorial last week in the Chicago Tribune. Today’s Chicago Tribune has an editorial that contains just about every fallacy and piece of misinformation ever to see print about ethanol. This is nothing new and once again it raises the question; is it editorial ignorance or a hidden agenda driving this apparent vendetta?
IL Corn is probably not very happy with a follow-up editorial in the Trib on Sunday either. ILCG does note, however, that the news reporters at the Trib have been covering ethanol with increasing frequency and with a noticeable effort toward balance and objectivity. This phenomenon of increasingly positive coverage is happening nationwide as the media learns more about the fuel, as car manufacturers give E85 their stamp of approval, and as it becomes more readily available.