U.S. Ethanol Prices & Production Lower Than 2011

According to a 2012 Brief released by the U.S. Energy Information Administration (EIA), U.S. ethanol prices and production are lower compared to 2011. Spot prices for U.S. fuel ethanol were lower throughout most of 2012 compared to 2011. Prices were relatively stable during the first half of 2012, but they rose at mid-year as severe drought and high temperatures reduced corn yields, resulting in higher prices for corn that is used to produce the majority of all U.S. ethanol.

Screen Shot 2013-01-31 at 12.53.22 PMHigher ethanol prices during the second half of 2012 were mainly the result of higher corn prices, which rose 35 percent from mid-June through August due to concerns that the corn crop would be affected by the worst drought in the Midwest since the 1950s, coupled with triple-digit temperatures. During the hot and dry summer of 2012, the U.S. Department of Agriculture reported that 88 percent of the U.S. corn crop was within a drought area.

The 2012-13 U.S. corn crop is expected to be the smallest in six years at nearly 10.8 billion bushels, according to USDA’s January 2013 crop forecast, 13 percent smaller than the 2011-12 crop. USDA indicates that about 4.5 billion bushels, or 42 percent of the harvest, will go to make ethanol. That level is down from just over 5 billion bushels used to make ethanol during the previous crop year.

The brief finds that the combination of lower corn supplies, higher corn prices for ethanol producers, and weaker gasoline demand contributed to U.S. ethanol output falling from an average 900,000 barrels per day (bbl/day) during the first half of 2012 to an average of 815,000 bbl/day during in latter half, about 90,000 bbl/day less than in the second half of 2011.

DOE Announces New SunShot Projects

The Department of Energy (DOE) has awarded seven data-driven projects focused on reducing costs and accelerating solar energy deployment as part of the SunShot Initiative. DOE said the goal of the projects will result in viable methods for dramatically transforming the operations of solar researchers, manufacturers, developers, installers and policymakers, and speed the commercialization and deployment of affordable clean energy.

Print“Through powerful analytical tools developed by our nation’s top universities and national labs, we can gain unparalleled insight into solar deployment that will help lower the cost of solar power and create new businesses and jobs,” said Energy Secretary Steven Chu. “Projects like these will help accelerate technological and financing innovations – making it easier for American families and businesses to access clean, affordable energy.”

The Energy Department will invest about $9 million across the seven projects. These efforts will help scientists, project developers, installers and communities work together to discover previously unexplored ways to improve solar cell efficiency, reduce costs and streamline installation processes.

As part of the investment, DOE will provide $7 million to research teams led by Sandia National Laboratories, the National Renewable Energy Laboratory, Yale University and the University of Texas – Austin, and $2 million across three projects led by the University of North Carolina – Charlotte, Massachusetts Institute of Technology and SRI International.

Find the full list of projects here.

RFA Condems UN Biofuels & Food Security Study

Earlier this month, the U.N. Committee on World Food Security (CFS) has released a draft study on biofuels and food security with a public comment period until January 30, 2013. Yesterday, the Renewable Fuels Association (RFA) submitted comments about the report and its several policy recommendations.

maize harvest Photo: FAO/Giulio NapolitanoThe authors write, “Our report has confirmed the central role of biofuels in provoking high and volatile food prices, and therefore, we point to the fact that there is enough evidence to call in question the use of mandates/targets together with subsidies and tariffs where these artificially stimulate biofuels production. Our Report concludes, however that in the context of persistent high oil prices, biofuels from maize in the US and from sugar-cane in Brazil can be, for different reasons, market competitive. In this situation, we must advance beyond the discussion of mandates and subsidies to include mechanisms for controlling the growth of biofuels markets. The recent EU Directive has moved in this direction, and while the EPA in the US has rejected the suspension of targets, maize/ethanol has almost reached its current allocated share of the biofuels market. Policies should now be directed at ensuring that domestic ceilings are not made innocuous by the emergence of a global biofuels market.”

Geoff Cooper, RFA’s Vice President for Research and Analysis, explained that the draft report “needs substantial revision before it can be submitted for official peer review. Not only does the report fail to discuss potentially positive impacts of biofuels expansion on food security, but it also inappropriately expands the intended scope of the study, blatantly disregards input from the May 2012 consultation, fails to include a comprehensive literature review, and adopts highly questionable assumptions regarding animal feed co-products, crop yields and other factors.”

The RFA comments reflect the association’s belief that “biofuels are providing tangible benefits and positive outcomes for both the world’s farmers and consumers. Biofuels have already proven themselves as agents of economic development, environmental improvement, and social progress in many developed nations. We believe biofuels can bring the same benefits to developing nations without jeopardizing food security. In fact, biofuels have the potential to serve as an important tool in reducing food insecurity. Indeed, we agree with the U.N. Food & Agriculture Organization (FAO) that: ‘…investment in bioenergy could spark much-needed investment in agricultural and transport infrastructure in rural areas and, by creating jobs and boosting household incomes, could alleviate poverty and food [in]security.’”

You can read RFA comments in full here.

IRFA Renewable Fuels Summit Smashing Success

A bit of bad weather couldn’t keep people away from the 7th Annual Iowa Renewable Fuels Association’s (IRFA) Renewable Fuels Summit. The event kicked off with remarks from Executive Director Monte Shaw who said that the renewable fuels industry was ready to fight for the future. The organization, on behalf of its members, said Shaw will fight for the Renewable Fuel Standard (RFS2), as well as consumer access to higher ethanol and biodiesel blends.

“Today I can assure you that the Iowa renewable fuels industry is ready for the fight ahead,” said Shaw during his presentation. “We know that Big Oil has the money, but we have iarfa-13-montethe facts. We are ready to fight for more choices at the pump – cheaper, cleaner, homegrown choices.”

Shaw noted that the national priority is to defend the RFS from attacks by the petroleum industry. “We should start by protecting the federal renewable fuels standard (RFS) from the assault by Big Oil,” continued Shaw. “In the face of the federal petroleum mandate and the massive Big Oil tax subsidies, the RFS is the best tool we have to help open doors for ethanol and biodiesel. The RFS promotes consumer fuel choice at the pump. The RFS brings more marketplace forces into the fuel sector, not less.”

In addition, Shaw called upon Governor Terry Brandstad, who also presented during the morning session, along with the Iowa Legislature, to promote higher biodiesel and ethanol blends. “Iowa does not suck one hydrocarbon out of the ground. We produce renewable fuels. Today, IRFA is calling on the Iowa Legislature and Governor Branstad to include a B10 and E15 tax differential in any legislation changing Iowa fuel taxes,” said Shaw.

Shaw noted that relative to other states, the last five or six years have been good for Iowa and renewable fuels have played a major role. To underscore the point, IRFA released a biodiesel economic study.

“We must fight for our future. So join me in committing to fight for renewable fuels in 2013,” concluded Shaw.

Click here to view Shaw’s entire speech.

Click here to view the IRFA Renewable Fuels Summit Photo Album.

You can listen to my wrap-up interview with Monte here: Renewable Fuels Industry Ready to Fight for Future

Study: Biodiesel Boosts Revenue for Iowa’s Farmers

A new study released today during the 7th Annual Renewable Fuels Summit quantifies how biodiesel production boosts revenue for Iowa’s crop and livestock farmers. The study’s results demonstrate that when Iowa farmers use biodiesel, they not only positively impact Iowa’s economy, they boost their own bottom line. The study was conducted by John Urbanchuk, an economist with Cardno Entrix and was supported by the Iowa Renewable Fuels Association (IRFA), Iowa Soybean Association (ISA), Iowa Corn Growers Association (ICGA), and Iowa Biodiesel Board (IBB).

iarfa-13-urbanchukDuring the unveiling of the study, Urbanchuk said, “Biodiesel producers are part of a manufacturing sector that adds substantial value to agriculture commodities produced in Iowa and makes a significant contribution to Iowa agriculture. Increased biodiesel production raises both soybean and corn prices and boosts revenue for Iowa crop farmers. Since increased crush demand for soybeans also increases production of soybean meal, an increase in biodiesel use and soybean oil demand will reduce soybean meal prices to the benefit of Iowa’s livestock producers.

Seventy-two percent of all biodiesel produced in Iowa was produced from soybean oil in 2012. This increased demand, said Urbanchuk, benefits Iowa’s growers by raising the price of soybeans by more than 8 percent, and increasing the price of corn by more than 5 percent. For example, for a corn and soybean grower with 400 acres, this would equate to a more than 9 percent increase in net profits. In addition, demand also reduces the cost of some feed ingredients, such as soybean meal, by more than 13 percent and distillers grains by 5 percent.

While soybean oil was the leading feedstock last year, the biodiesel industry also used nearly 250 million pounds of animal fats. Taking into account both production costs and revenues, biodiesel production boosts the net income for an Iowa farmer finishing cattle by more than $16 per head. In addition, the study found that the industry also decreases production costs for hogs while increasing revenue leading to a net income for an Iowa hog farmer by more than $4 per head.

When crop and livestock production are combined, the benefits to Iowa’s farmers are even greater. Taking into account both production costs and revenue an Iowa farmer raising crops and cattle would see nearly a 17 percent increase in net income, while an Iowa farmer raising crops and hogs would see nearly a 20 percent increase in net income.

“The bottom line is that biodiesel has a net positive impact on finishing hogs and cattle in Iowa,” added Urbanchuk.

View the IRFA Renewable Fuels Summit Photo Album.

EcoCAR 2: Plugging in to the Future

Year two is underway in the EcoCAR 2: Plugging in to the Future, competition, sponsored by the U.S. Department of Energy (DOE) and General Motors. The program offers students hands-on experience in designing future cars. The competition began in 2011 and during year one, the competition emphasized the use of math-based design tools and simulation techniques in establishing vehicle foundation.

In year two, students will be challenged to reduce the environmental impact of a 2013 Chevrolet Malibu, donated by GM. The teams must do this without compromising performance, safety and consumer acceptability. In years two and three, students will build the vehicle and continue to refine, test and improve vehicle operation.

There are 15 teams competing in the EcoCar 2 challenge and many of them will head to the winter workshop in Austin, Texas on January 23, 2013 where the year two competition schedule will be unveiled.

During the three-year program, General Motors provides production vehicles, vehicle components, seed money, technical mentoring and operational support. DOE and its research and development facility, Argonne National Laboratory, provide competition management, team evaluation and technical and logistical support. By sponsoring Advanced Vehicle Technology Competitions, GM and the DOE are developing the next generation of scientists and engineers.

Rice Solar Energy Project Gets Green Light

SolarReserve has been given the green light from the California Public Utilities Commission (CPUC) to sell power from its 150 megawatt solar project under an amended 25-year power purchase agreement with Pacific Gas and Electric (PG&E). According to the company, the Rice Solar Energy Project will be the first large-scale solar project in the state to include energy storage capabilities.

artist_picture_of_rice solar energy projectLocated in eastern Riverside County, and sited on privately owned and previously disturbed land in the Sonoran Desert, the Rice Solar Energy Project, with eight hours of full power energy storage, should generate more than 450,000 megawatt hours annually of energy – enough to power more than 65,000 homes during peak electricity periods. The solar project will utilize a dry-cooled system to minimize water usage in the desert location resulting in less than 20 percent of the water used per kilowatt of electricity produced by conventional coal or nuclear facilities. Financing activities are underway, and the project is expected to break ground in early of 2014 with commercial operation scheduled for mid-2016.

CPUC Commissioner Ferron said of the project, “In my personal view, projects like the Rice Solar Energy Project will be important to demonstrate that we can firm and shape intermittent renewables with clean technology, not just with fossil technology.”

The hope for the project is that it will be more flexible in terms of being able to support renewable integration to the grid.

“SolarReserve’s market leading technology is a true alternative to conventional generators and can provide firm and reliable electricity as needed by the utility or system operator, day and night,” added SolarReserve CEO Kevin Smith. “This capability will be crucial as California progresses towards its 33 percent renewable target. We are also making tremendous strides in exporting this proven U.S. technology worldwide to markets in Europe, Asia, the Middle East, Africa and Latin America, and our projects in Nevada and California help establish the U.S. as an innovation leader in alternate energy.”

Bioenergy Bytes

Regional Clean Energy Challenge Winners Named

Aerosol Control Technologies (ACT) of Washington University in St. Louis, has won the $10,000 Missouri Clean Energy Student Challenge. The team will compete for more than $300,000 in prizes in the second annual Clean Energy Student Challenge on April 4, 2013 in Chicago. ACT is developing an advanced particulate matter capture system that will significantly improve diesel engine efficiency using electrostatic precipitators.

missouri student clean energy challenge“ACT absolutely exceeded expectations and brought a first-class business plan with cutting-edge technology to the Challenge,” said Joshua Campbell, executive director of the Missouri Energy Initiative who held the Missouri competition. “This was their second year and their success clearly demonstrates what a tremendous learning experience it is. They took what they learned last year and created an application that I think could take them to the national competition.”

Applications to the Missouri Clean Energy Student Challenge were submitted in a range of technology areas from waste-to-energy solutions and biofuels to solar cells and new wind energy innovations. As the Missouri winner, ACT will compete in the 2013 Challenge and will receive mentoring and training to prepare business plan presentations to a judging panel comprised of venture capitalists, corporate investors and business leaders. The winner of the 2013 Student Challenge will compete in the U.S. Department of Energy’s National Clean Energy Business Competition in Washington, D.C. this summer.

“The Student Challenge is truly bringing the best and the brightest students from some of our nation’s most prestigious universities to the forefront of the clean energy world,” added Amy Francetic, executive director of the Clean Energy Trust. “They have taken wonderfully innovative technologies and built viable business plans around them.”

Ethanol Industry Responds to API E15 Study

The American Petroleum Institute (API), released a new E15 study today and representatives of all the major ethanol industry associations issued statements. In addition, the Renewable Fuels Association (RFA) held a media conference to discuss why the study oil-funded study was “flawed” and “misleading”. Ethanol experts Kristy Moore, Vice President for Technical Services for RFA, along with Bob Reynolds, President of Downstream Alternatives, Renewable Fuels, noted that with nearly 100 studies on E15, it is the most tested fuel in the history of the country.

zarco-ethanol blends pumpMoore said she recently called the EPA and asked them how many fuel additive applications they get a year and they get more than 500 that would be nearly identical to the E15 additive applications. This has been the norm, she said, since the fuel additive program began in 1974. It is my contention, she continued, and is well documented, that no fuel additive has been studied in history to such as rigorous degree as E15.

The burning question, said Moore, is why are we talking about a specific CRC fuel system report and what is the significance? She said there were a few observations that they wanted to point out including: the two CRC AVFL 15 test programs confusingly utilized very different fuel sets to evaluate fuel systems and the aggressive test fuel formulation and level of ethanol concentration is highly questionable as relevant to E15.

Reynolds pointed out that this study, along with API’s earlier study, selected components that they knew would be sensitive to higher levels of ethanol so you should expect some of the results the study had.

While in general the study was not supportive of E15, Moore said that there were some data gems buried within the research.

Listen to the full press conference here that includes more in-depth discussion of observations made by Moore and Reynolds: Ethanol Industry Responds to API E15 Study

WSJ Attacks Biofuels, Again

The Wall Street Journal editorial board is attacking biofuels, again. In their opinion piece, “Zero Dark Ethanol,”  they write that advanced biofuels have not made much progress in the past six years and the cellulosic ethanol mandate, that was vacated last week by the U.S. Court of Appeals is “only a fantasy mandate will motivate the industry to make enough of a fantasy fuel.”

aeclogoIn response to the article, the Advanced Ethanol Council (AEC) says the Journal seems to think that motor fuel markets are free and competitive, and that in the absence of government intervention, fuels like cellulosic biofuels would succeed if worthy. Unfortunately, says AEC, 100 years of direct and indirect subsidies to the oil industry, coming at a time when the U.S. taxpayer also built out most of the large scale infrastructure that the oil industry relies on today to move its product, has largely suffocated the free market principles that would otherwise reward innovation.

AEC continues by saying that in order to fix a broken marketplace, Congress decided in 2007 to forceably diversify the motor fuel marketplace with renewable fuels. And much to the dismay of the oil industry and those who carry their water like the Journal’s editorial board, the program is working. The domestic renewable fuels industry has grown exponentially, despite the global recession, in less than 10 years.

The Journal, adds AEC, is also wrong to assert that “nothing has changed” in the cellulosic biofuels industry. AEC cites their recent progress report released last month, where they say the cellulosic biofuels industry is breaking through at commercial scale.

AEC posits that you would think that a newspaper with the ideals espoused by The Wall Street Journal would celebrate the reintroduction of U.S.-branded competition into a broken marketplace. “You would think they would lament the distortive effects of oil subsidies and question why cheaper alternatives to oil cannot seem to break into the marketplace. In that world, the Journal would be calling for the comprehensive energy tax reform we so badly need to ensure that the next generation of motor fuels are produced by Americans instead of China, India or Brazil. What we do not need is more yellow journalism about ethanol from The Wall Street Journal editorial board.”

Chasing Methane Advocates at Iowa Capitol

Chasing Methane TeamDFThere is no age requirement to be an advocate for the environment. During the recent Iowa Wind Energy Day, five young advocates from Chasing Methane, ranging in age from 11 to 13, came to the Iowa Capitol to encourage people to support food waste composting. Why? As Joey Titus, a 7th grader at Southeast Junior High in Iowa City, Iowa said, “Right now the food waste coming from restaurants is going to the landfill which is creating methane and methane is a 25 times more damaging at trapping heat in the atmosphere than carbon dioxide.”

When talking about greenhouse gases (GHG), carbon dioxide typically stands center stage, but as Titus points out, CO2 is not near as damaging as methane – a gas created through the decomposition of materials in a landfill.

Titus along with his club members, Andrew Burgess, a 5th grader at Borlaug Elementary, his brother Daniel Burgess, a 7th grader at Northwest Junior High and Ethan Trepka, also a 7th grader at Northwest Junior High, all in Iowa City, formed the group back in August of 2012. Titus’s Dad is the manager of Carlos O’Kelly’s in town, one of the restaurants, along with Applebee’s that participated in food waste audits.

When the Chasing Methane team looked through the trash of two restaurants, they found that combined, they were generating about 2 tons of waste every week, and 75 percent of that waste could be composted, said Titus.

Chasing Methane Team with IA Gov Terry BranstadTitus said his group would like to see a statewide composting initiative and even a nationwide initiative because right now this methane is going up and affecting the ozone layer, which is causing global warming, and its effecting all the weather we’re having.

They were on the capitol advocating for a bill that would allow the Iowa Department of Natural Resources to perform audits at restaurants to determine if legislating a statewide restaurant composting program would reduce methane in the environment. Iowa Governor Terry Branstad listened to the pitch right before the team headed down to the capitol refuse center to conduct a waste audit. Hopefully the findings will impact state legislators to be a leading state in passing a methane reduction bill.

As Titus aptly pointed out, not only restaurants create food waste – we create food waste at home as well. With only 50 percent of food that is produced is actually being eaten, he encourages consumers to join the composting revolution. You can do this by composting, joining a composting program and even by becoming a member of Chasing Methane. All ages from all cities around the world are invited to join.

Listen to my full interview with Joey Titus here: Chasing Methane Advocates at Iowa Capitol

See the 2013 Iowa Wind Energy Day Photo Album.

Sweetwater Energy Closes Cellulosic Deal

Sweetwater Energy has announced a 15-year commercial agreement with Front Range Energy to produce cellulosic ethanol at Front Range’s current corn ethanol facility located in Weld County, Colorado. Sweetwater will install its process to convert local biomass, such as crop residues, energy crops, and woody biomass, into sugar that will then will converted to ethanol.

FrontRangeEnergyLLC_logo“It’s very exciting to be an early adopter of Sweetwater’s technology and to bridge that gap from grain to cellulosic ethanol,” said Dan Sanders Jr., Vice President of Front Range Energy. “Supplementing our corn with this sugar allows us to displace some of the volatility of the corn market, with the goal of moving a higher and higher percentage of our production to cellulosic. We’ve had great success fermenting Sweetwater’s sugar, and from a business standpoint, we have great confidence in Sweetwater’s management team.”

Sweetwater will place one of its cellulosic facilities near the Front Range site and will deliver enough refined monomeric sugar for Front Range to produce up to 3.6 million gallons of ethanol per year during the initial phase. As the project ramps up, economics will ultimately determine the pace and volume with which Front Range’s corn ethanol facility will migrate to Sweetwater’s cellulosic feedstocks.

Sweetwater Energy Logo“To say we’re enthusiastic about this relationship with Dan and the whole Front Range team is an understatement,” said Arunas Chesonis, Chairman and CEO of Sweetwater. “They’re a progressive team looking to stay ahead of the curve, and that’s a very rewarding mindset to have in a company you’ll be working with for the next 15 years. We’re going to kick this off by replacing about 7 percent of the corn currently processed, and as our partnership grows and we see how well both parties are benefiting from the cellulosic ethanol production, we’ll increase the amount of cellulosic material and really open up the cellulosic markets to Front Range.”

In December 2012, Sweetwater was awarded a patent for the manufacture and deployment of distributed pretreatment units designed for the extraction of sugars from any cellulosic feedstock for the production of ethanol.

Ametis Takes Advantage of EPA Sorghum Pathway

California-based Aemetis is taking advantage of the new EPA approved grain sorghum along with biogas and combined heat/power pathway as part of the Renewable Fuels Standard as an advanced biofuel. The company says this ruling creates a “level playing field” for U.S. ethanol producers by providing the same RIN value that is received by Brazilian sugarcane ethanol producers selling biofuel to the U.S.

Keyes California Ethanol PlantAemetis owns several ethanol plants, one in Keyes, California, that will be able to take immediate advantage of using sorghum as the primary feedstock, said Aemitis Chairman and CEO Eric McAfee. “The high efficiency standards and extra capital investment applied during the retrofit of the facility is now paying off with a rapid transition to the production of Advanced Biofuels at the Keyes plant.”

After an extensive review process, the EPA found that grain sorghum requires significantly less water and less fertilizer than corn, and can grow on land that is not as suitable for growing food crops. Grain sorghum is also drought tolerant due to a waxy covering on its leaves, enabling water to be retained during times of high heat or a lack of water, while still growing to full yield and maturity when rains occur late in the growing season.

According to the company, its 60 mgy capacity Keyes ethanol plant was designed for highly efficient energy use, including natural gas boilers providing steam for process use and powering a steam turbine for process electricity. The existing design and operation of combined heat and power at the biorefinery enables the facility to quickly convert to the use of biogas without permitting delays or equipment installation. In addition, the Aemetis Keyes plant is located about 40 miles from the deep water Pacific port of Stockton, California.

In October of 2012, the company announced that is has imported and successfully processed sorghum from Argentina. The company says its close proximity of the Keyes plant to the Stockton port enables them to import grain sorghum at potentially a significant discount to the price of sorghum produced in the Midwest and delivered to California. However, the company is looking to develop production of grain sorghum in California for 2013 and later harvests.

More Transmission Key Policy Issue for Wind Industry

Wind on the Wires is an organization based in St. Paul, Minnesota launched about a decade ago to focus on wind policy issues and wind transmission line issues. To learn more about some key policy initiatives for 2013, I spoke with Beth Soholt, Executive Director, who was in Des Moines, Iowa during Iowa Wind Energy Day.

Beth SoholtThe big issue for 2013? “Quite simply its more transmission,” explained Soholt. However, she said, this is a long process. First you have to study where transmission needs to go. You need to study how much transmission is needed for what you want to achieve, and then you have to decide where it’s going to be built. You also have to get somebody who is willing to build it, and this includes convincing them it needs to be built. Once that has been achieved, the project must go through a state regulatory process, and it needs to be funded.

“So the planning piece on what to build and where to build it and the cost recovery piece are two of the big barriers,” said Soholt.

The industry, advocates, think tanks and more banter around numbers in the dozens of billions as the cost to build the needed transmission. But Soholt said that transmission is actually a very small percentage of a consumer’s bill – only about 7 percent. The rest of the bill is to pay from getting the energy from the generator to your house, and other kinds of investments.

Even though this is a relatively small piece of the overall pie, this is what the utilities know how to do, said Soholt.The harder piece is having them include investments for large amounts of renewable energy.

“This is where Wind on the Wires comes in and can sit down with them and educate them in various stakeholder settings,” said Soholt.  The organization can put together a package that lots of different kinds of stakeholders can support and they can also address the cost allocation piece, i.e. who should pay? “If we spread out the cost of transmission among a lot of users it becomes a very, very small percentage for everyone,” said Soholt.

While the “road to market” may be a long one, Soholt said utilities need to go ahead and start implementing.

You can learn more about policy issues, the road to market, and next steps for Iowa’s wind energy industry in my full interview with Beth: Key Policy Issue for Wind Industry: More Transmission.

See the 2013 Iowa Wind Energy Day Photo Album.