About John Davis

Domestic Fuel welcomes our newest blogger, John Davis. John is a 20 years+ veteran of traditional news and is getting his first taste of this "new media." We've known John since Chuck hired him to work at the Brownfield Network in January, 2000 after he served an 11 year stint in the U.S. Air Force as a broadcast journalist. John lives in Jefferson City, Missouri with his wife, two sons, two dogs, a cat, a mouse, and a fish! You can read more about him and his thoughts at his own website John C. Davis Online.

Shaw has Ethanol Support for Congress

A candidate for Congress believes his background in ethanol will help him in the upcoming primary and general election. And for Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw, who has served in that role for nearly 10 years and now is running for the 3rd Congressional District seat, that background runs pretty deep.

Growth Energy CEO Tom Buis and Renewable Fuels Association CEO Bob Dinneen both on the side of Monte Shaw for Congress

Growth Energy CEO Tom Buis and Renewable Fuels Association CEO Bob Dinneen both on the side of Monte Shaw for Congress

“This is Iowa. If agriculture does well, Iowa does well,” said Shaw during an interview in Washington DC last week, pointing out how the renewable fuels has helped power the ag industry and the overall economy in the Hawkeye State. “So when people talk about how we need to get the economy going a bit more, we need more jobs, we need more robust economic growth, I have been part of that. And that’s something I want to put to work in Congress.”

Shaw says Big Oil has been fighting the Renewable Fuels Standard (RFS) hard, and Iowans need a representative on the inside in Washington who will fight for the economic interests that alternative energy brings.

“I think it would be good for the industry to have someone like me in the House Republican Caucus. There’s a lot of petroleum folks in there, and sometimes they like to forget all the tax credits and mandates and loan guarantees that petroleum gets, and I’d be happy to go there and point those things out out,” he said.

Shaw is facing five other Republicans in the June 3rd primary, so he is hitting the campaign trail as hard as he can while still working full time for Iowa RFA, with the flexibility granted to him by the association board of directors. If elected to Congress, he feels confident in the many renewable energy leaders back in Iowa who can step up in his place.

“As one of my board members is fond of pointing out to me, the graveyard is full of indispensable men,” he said, laughing.

You can read more about his campaign here.

And you can hear all of Cindy’s interview with Monte here: Interview with Monte Shaw, Iowa Congressional Candidate

Argentina asks WTO to Look into EU Biodiesel Block

areu-flagArgentina has formally asked the World Trade Organization’s (WTO) Dispute Settlement Body (DSB) to look at the European Union’s block of Argentine biodiesel. This article in MercoPress says the South Americans believe the EU’s antidumping measures imposed last November violate the international law.

The release recalls that since 2009 Argentina became the main provider of biodiesel to the EU, with sales of 1.847bn dollars in 2011, which represented 13% of all Argentine exports to the EU.

“The biodiesel sector in Argentina outstands for its sustainability and high level of development, scale and integration along the whole production chain, and is currently one of the most efficient producers globally”, adds the release.

On the other hand, the EU industry is “highly over dimensioned and since 2012 the EU has been involved in different protectionist measures with the purpose of excluding from the European market the Argentine bio-diesel”.

The Argentinians are also making the case that these protectionist barriers harm developing countries.

Farm Foundation Forum to Examine Energy, Ag

farmfoundationlogo3Our friends at Farm Foundation will host another one of their thought-provoking discussions, this time, talking about the energy and agricultural markets and their relationship. Titled, “Geopolitical Uncertainty in Agriculture and Energy Markets,” the April 9 Forum will be held at the National Press Club in Washington, D.C. from 9 a.m. to 11 a.m. EDT.

Current political unrest in numerous locations across the world is having a profound effect across agricultural and energy markets and generating supply chain uncertainties.

The April 9 Farm Foundation® Forum will examine the potential consequences of sudden policy changes, production issues, and unforeseen price fluctuations in a turbulent global marketplace. Panelists for this Forum will include:

Former U.S.Secretary of Agriculture Dan Glickman will moderate the panel.
Vincent Smith, scholar at the American Enterprise Institute and professor at Montana State University.
Gary Blumenthal of World Perspectives, Inc.
Brian Oleson, professor at the University of Manitoba.
Charles Doran, professor at the Johns Hopkins School of Advanced International Studies

There’s no charge for the forum, and you can register to attend here. In addition, a webcast, including audio and slides, is available here.

Synthetic Chromosome Could Help Biodiesel, Ethanol

boekeThe scientific world today is all a-buzz about the world’s first yeast synthetic chromosome, and the discovery could help the biodiesel and ethanol industries. This article from the Christian Science Monitor says researchers have put together man-made DNA into the synthetic version of a chromosome, a development expected to have implications for the green fuels.

“For me, one of most exciting aspects is the fact that we’ve so extensively edited the sequence of natural chromosome and then synthesized the entire thing from scratch,” said study leader Jef Boeke, a synthetic biologist at NYU Langone Medical Center, who was previously at Johns Hopkins University.

Using a technique known as “scrambling,” the scientists can shuffle the yeast genes like a deck of cards. The researchers could make millions and millions of different decks of genetic cards, which could give yeast totally new properties.

For example, researchers could make synthetic strains of yeast to produce rare medicines such as the malarial drug artemisinin, or vaccines like the hepatitis B vaccine. Synthetic yeast could also churn out more efficient biofuels, such as alcohol, butanol or biodiesel, which could enable humanity to transition off of a petroleum economy, Boeke said.

For now, the costs are prohibitive for the biofuels industry, or any industry for that matter, to use. But the scientists are hopeful they’ll be able to get the costs down as the technology improves.

Husky Nozzle Certified Good for Biodiesel

husky-logoA manufacturer of fueling components receives certification that its equipment is ok to use with biodiesel. This article from Biofuels Journal says the Husky Corporation VIII Heavy Duty Diesel Automatic Nozzle, 5812 Safe-T-Brake®, and 4860 swivel is UL certified for use with biodiesel fuel blends.

The Husky VIII nozzle and accessories are popular products among heavy duty diesel customers and have been used in biodiesel applications for some time.

“Husky uses top quality materials in our VIII nozzles, corresponding Safe-T-Breaks, and swivels. As a result, they stand up to the designated UL testing regimen for biodiesel,” said Husky Product Design Engineer Jerry Mahn. “We demonstrated our standard diesel hanging hardware equipment is safe for handling biodiesel fuel blends without any modifications.”

The Husky VIII nozzle features an aluminum body, fluorocarbon seals, dual-poppet design, Delrin-tipped stem, automatic shut-off, and unique Flo-Stop® device. The Husky VIII is the ideal nozzle for truck stops, high volume self-service locations, full-service facilities, and unattended stations.

Some of the funding for the testing came from the National Renewable Energy Lab and the National Biodiesel Board and shows there are no adverse environmental issues associated with using biodiesel.

German Biodiesel Exports Set Record

GermanflagGerman biodiesel sales might be down, but the country’s exports of the green fuel set a record last year. About a week ago, I reported how Germany’s biodiesel sales were down last year, about 300,000 tonnes below the five-year average. But this article in Biodiesel Magazine says Germany exported 480.3 million gallons (just under 1.6 million metric tons) in 2013, a jump of 20 percent from 2012.

The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) notes that, in the same period, biodiesel imports fell from 228.1 million gallons to 168.1 million gallons.

The UFOP states several reasons are responsible for this. The tariffs put on Argentine and Indonesian biodiesel are now showing their effect. Less than only 2.25 million gallons of biodiesel was imported from Indonesia. UFOP also says the export balance “confirmed the competitiveness of the German biodiesel industry and consequently its international marketing expertise.”

The UFOP states that the U.S., with 54 million gallons, is its most important partner outside the EU.

IBB Asks for Iowa Biodiesel Tax Credit Extension

IowaBiodieselBoardLogoWhile we’ve heard a lot about the federal $1-a-gallon biodiesel tax incentive, there’s some state credits that could help producers stay competitive. The Iowa Biodiesel Board has asked lawmakers in Des Moines to extend the .02 per gallon refundable credit for the first 25 million gallons of biodiesel produced in any single plant.

The incentive is set to expire at the end of calendar year 2014, but Senate File 2333 would extend the credit through 2019.

During the Iowa Biodiesel Board’s annual Biodiesel Day on the Hill event today, IBB said the state legislation is necessary to mitigate impact from potential changes to the federal Renewable Fuel Standard, provide some market certainty and keep Iowa competitive with surrounding states.

“Unless changes are made to current federal biodiesel policy, we will likely see significant nationwide consolidation of production capacity,” said Grant Kimberley, executive director of IBB. “The extension of the biodiesel producer incentive will encourage production to remain in Iowa, substantially benefiting Iowa’s economy and biofuels leadership position.”

The Iowans point out that their neighboring states have become more aggressive in their promotion of biodiesel, such as Missouri’s production incentive of $.30 per gallon on the first 15 million gallons produced and Illinois’ exemption from state sales tax on blends of biodiesel higher than 10 percent, and producers in the Hawkeye State need this incentive to stay competitive.

The bill to extend the credit passed out of the state Senate Ways and Means Committee earlier this week.

Biodiesel Tax Credit Impacts for Blenders, Producers

us-capitol-fiscal-cliff-voteIf the biodiesel tax credit is extended, it could change the way producers and blenders value the incentive. This article from Biodiesel Magazine weighs how renewal of the federal $1-a-gallon biodiesel blenders credit could be changed to provide more incentives for producers.

If there is a possibility of the tax credit being reinstated retroactively for 2014, there would be a monetary value placed on the option to apply for and receive the tax credit when reinstated. Since the credit goes to the person blending the biodiesel from B100 to B99.9 by adding 0.1 percent ultra-low sulfur diesel (ULSD), buyers of biodiesel should pay a premium for B100 over B99.9. If there was no hope of the tax credit being reinstated, there would be no price differential between B99.9 and B100, and we can assume that the actual value of the premium for B100 over B99.9 is a function of the probability of reinstatement.

The article goes on to explain how the “Biodiesel Tax Incentive Reform and Extension Act of 2014,” sponsored by Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA), would change the credit to a producer’s credit, and not one for blenders. That could change the calculus in figuring if it would pass as proposed, eliminating some options for the blenders out there.

When Cows Fly: Tallow-to-Biodiesel to Fuel Aviation

leogroupA company operating in the U.K. has just completed its biggest shipment of tallow-to-biodiesel, and the green fuel is set to power aviation. This article from Bdaily Business News says Leo Group has shipped 10,700 tonnes of tallow recycled into about 3 million gallons of biodiesel in four ocean tankers.

The overseas shipments come as the company marks another environmental milestone; the tallow and poultry oils produced at both of these rendering plants are now certified under the International Sustainability & Carbon Certification (ISCC) scheme.

The ISCC seal is used by industry to distinguish between truly sustainable and unsustainable biomass fuels.

Leo Group managing director Danny Sawrij said: “We are delighted that customers around the world are drawing upon our expertise to drive down the world’s carbon footprint.

“Waste is not in the Leo Group’s vocabulary or culture – everything these days has a use and 100% of all by-product materials on our sites are now recycled.”

Biofuels use in Europe is expected to increase over the next few years, especially those fuels produced from non-food sources.

Biofuel Organizations Call for Tax Credits Extensions

US Capitol at dusk photo Joanna SchroederLeaders from several biofuel trade organizations are calling for the extension of some federal advanced biofuel tax credits. The Advanced Ethanol Council, Advanced Biofuels Association, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association have sent a letter to the Senate calling for the restoration of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit.

The letter reads, in part, “The advanced biofuels industry is at a critical stage of development. Despite a difficult financial market, we are now operating commercial plants across the country and continue to make progress on dozens of additional projects in the final stages of development. Advanced biofuel tax credits have allowed the biofuels industry to make great strides in reducing the cost of production and developing first-of-kind technologies to deploy the most innovative fuel in the world.

“As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country. However, the United States’ global competitors are offering tax incentives for advanced biofuels and in fact are attracting construction of new facilities – and associated high skilled jobs. If Congress wants American companies to continue developing these homegrown technologies in the United States, it must extend these credits. Biofuel producers are also competing with incumbent fossil energy industries who continue to enjoy tax incentives on a permanent basis.”

The letter marks the latest effort by biodiesel and ethanol producers and their backers to get better federal government support for their green fuels. Late last year, the Environmental Protection Agency undercut the industries when it proposed drastic reductions in the amount of biodiesel and ethanol to be mixed into the Nation’s fuel supply. In addition, Washington also let these vital federal tax credits expire at the end of the year.

Biodiesel By-Product Could Produce More Feedstock

purthanollogoA by-product of biodiesel production could help grow more feedstock for the green fuel’s production. This article from Biofuels Digest says Purthanol Resources Ltd has produced lipids with yeast or fungi cultivated in fermentors and fed using glycerin, and those lipids could end up being another feedstock for biodiesel production.

Oleaginous yeast and fungi were isolated and tested to produce lipids.

A high lipid content (> 50% w / w biomass) was observed.

So we went from autotrophic production bioreactors to heterotrophic production fermenters.

Another unexpected benefit of this technology is that this production system uses crude glycerol by product of biodiesel production or sweet water by product of Purthanol Resources ethanol production as a carbon source.

The basis of this project is the use of by-product of the biodiesel or ethanol production (glycerol or sweet water) as a feedstock for the growth of yeasts and fungi.

A fully functional plant using this process is expected to be set up within the next year.

Surplus Biodiesel Equipment to be Auctioned Online

maasredwoodfalls1Surplus biodiesel equipment used to produce ASTM-6751-10 quality product from soybean oil and animal fats will be auctioned online. Maas Companies says the equipment comes from a cooperative in Minnesota and used a water wash system and meets Environmental Protection Agency requirements for the Renewable Fuels Standard.

The 3.2 million gallon per year biodiesel equipment package is surplus to the ongoing operations of FUMPA BioFuels (Farmers Union Marketing and Processing Association), a 75 year old farmer owned co-op, located in Redwood Falls, MN. FUMPA BioFuels was Minnesota’s first commercial-scale biodiesel plant, which started producing renewable fuels in 2004. Minnesota was the first state to require the use of biofuels, and FUMPA was the first refinery to meet that mandate. Lurgi PSI Inc, was the designer and builder of the plant. FUMPA BioFuels has received many awards for their innovation in the Midwest biofuels market.

The equipment includes a LURGI 3.2MGY Biodiesel Process Skid, a SOUTHERN HEAT EXCHANGER CORP. methanol recovery column, and a BALTIMORE AIRCOIL-cooling tower unit built in 2010, as well as more support items. The auction will end at 4 p.m. on April 17, and potential buyers can attend an open house on April 2 and April 16 to see the equipment for themselves. Appointments for other showings are also possible.

Virginia Biodiesel Plant Gets Permit Extended

tidewaterbiodiesel1A Virginia biodiesel plant that says it needs a little more time to line up the finances to complete its construction has gotten help from a local city council. This story in the Virginian-Pilot says the Tidewater Biodiesel LLC plant in Deep Creek got a six-month extension on the original permission.

The council initially granted permission for the project in 2011, and the plant was to be completed in 2012. But the company said it had to put its plans on hold because of the economic climate and other complications.

A conditional-use permit allowing the project to go forward was set to expire in May.

In a letter to the city, the company said it has taken longer than expected to line up financing and acquire a 5-acre parcel on Steel Street but is close to finalizing those arrangements. It asked for a six-month extension.

By a unanimous vote, the council extended the permit by a year.

When completed, the refinery will produce 10 million gallons of biodiesel per year from waste vegetable oil.

Expiring Biodiesel Tax Credit Pushed Up Profit

The race to take advantage of the expiring federal biodiesel tax credit helped push up profits for the green fuel. Last week, we told you about the University of Illinois analysis on the profitability of ethanol. Well, the analysts from the school are back, and this time they’ve looked into the factors over the past few years that have helped push up biodiesel profits, and fear of losing the credit seems to help that market.

biodieselprofit1
Figure 1 presents the (pre-tax) estimates of biodiesel profits based on the prices and model assumptions… When returns are in the black the average is $0.35 per gallon compared to -$0.16 per gallon when returns are in the red. The two largest spikes in profitability can be traced to the effects of biofuels policies. The first major spike in 2011 was directly attributable to the race by diesel blenders to take advantage of the blender tax credit that was set to expire at the end of 2011. The second major spike in 2013 was also directly attributable to the race by diesel blenders to take advantage of the blender tax credit that was set to expire at the end of 2013 (the credit has yet to be reinstated for 2014). In addition, obligated parties under the RFS needed to incentivize expanded biodiesel production in order to meet the increased biodiesel mandate for 2013 and build up the stock of biodiesel RINs that could be used to fill the “renewable gap” in future years.

The analysts also show that 2013′s profit margin was a whopping 64.3 percent, the highest of the seven years examined, and 2011′s profit was also an impressive 54.4 percent. Overall for the period of 2007-2013, investors in biodiesel operations saw a 14.7 percent profit, more than twice ethanol’s 5.8 percent return on investment during the same period.

Research Looks Into Water-Free Biodiesel Brewing

waste-vegetable-oil-for-biodieselEfforts to make biodiesel production even more sustainable might get a boost from research into a water-free method of making the green fuel. This story from Biofuels Journal says researchers at the University of Porto in Portugal are looking at a way to eliminate the water normally used water to remove impurities to meet stringent quality standards.

Instead of water, researchers used catalysts to pre-treat and target impurities such as calcium ‘soaps’ in the biodiesel.

The impurities were then removed by absorption into resins or passing through ceramic membranes.

The researchers were able to produce good quality biodiesel from both virgin vegetable oil and, importantly, waste oils used for frying.

The new process could provide significant economic and environmental benefits compared to other more energy intensive water-based production methods.

The researchers believe that finding more water-free or less-water-consuming methods of making biofuels becomes more and more important as more of the world turns to the alternative fuels.