Domestic Fuel

The USDA is seeking applications to provide assistance for ag producers and rural small businesses to complete a variety of energy efficiency and renewable energy projects.

“Renewable energy development presents an enormous economic opportunity for rural America,” said Agriculture Secretary Tom Vilsack. “This funding will assist rural farmers, ranchers and business owners to build renewable energy projects, providing opportunities for new technologies, create green jobs and help America become more energy self-sufficient.”

The Rural Energy for America Program (REAP) is designed to help agricultural producers and rural small businesses reduce energy costs and consumption and help meet the Nation’s critical energy needs. For 2012, USDA has approximately $25.4 million budget authority available to fund REAP activities, which will support at least $12.5 million in grant and approximately $48.5 million in guaranteed loan program level awards.

USDA is accepting the following applications:

• • renewable energy system and energy efficiency improvement grant applications and combination grant and guaranteed loan applications until March 30, 2012;
• • renewable energy system and energy efficiency improvement guaranteed loan only applications on a continuous basis up to June 29, 2012;
• • renewable energy system feasibility study applications through March 30, 2012; and
• • energy audits and renewable energy development assistance applications through February 21, 2012.

More information on how to apply for funding is available in the Jan. 20 Federal Register, pages 2,948 through 2,954.

The U.S. Department of Agriculture was one of the government agencies that sponsored a report on biofuels released yesterday by the National Research Council, but the secretary of agriculture is critical of the findings.

“I think they’re basing conclusions on old information that’s not as accurate as it once was,” said Agriculture Secretary Tom Vilsack during a press conference on another subject Tuesday afternoon. “I think it’s unfortunate that reports based on, in my view, outdated information are suggesting that we ought to just give up the ghost.”

“We’re not going to give up on this industry,” Vilsack continued. “This industry’s too important to the United States, it’s too important to rural America, it’s too important to our future in terms of national security and it’s too important to the whole innovative culture we’re trying to accelerate in this country.”

Listen to Vilsack’s comments here: Tom Vilsack comments on NAS Report

I switched gears this week and spent some time learning about ways the world can feed a burgeoning population. One emerging idea is through a “vertical farm,” an idea that has been promoted by Dr. Dickson Despommier, a former professor of microbiology and public health in environmental sciences at Columbia. He recently authored, “The Vertical Farm Feeding the World in the 21st Century,” which lays out the idea of growing our food vertically in greenhouse skyscrapers, rather than spread out over hundreds of millions of acres of farmland.

This idea has really captured my fancy and got my head spinning around all the ways it could be carried out. But let me take a step back. Today, our food travels on average 1,500 miles from field to table. Crazy. Much of our produce and fruits come from places like Mexico and South America. Wouldn’t it be cool if they could come from your own city?

That is exactly what Despommier is promoting. In the middle of an urban area could be a “vertical farm” that grows produce, fruits and grains and houses things such as fish farms. These future farms would grow our food year round while the excess waste, or biomass could be used to produce bioelectricity and biofuels. In fact, Despommier says that in some cases, a vertical farm could have up to five harvests per year.

He writes that ideally, they would be cheap to build, modular, durable, easily maintained, and safe to operate. A vertical farm would mitigate external influences on crops such as too much rain or drought and disease along with the need for fertilizers, herbicides or pesticides. Vertical farms would provide well-paying jobs and improve economics. He also believes they should be independent of economic subsidies and outside support once they are up and running and they should be profitable.
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DuPont has expanded it’s solar market portfolio with the acquisition of Innovalight, Inc., a company that develops silicon inks and process technologies that increase the efficiency of crystalline silicon solar cells. According to DuPont, Innovalight will broaden and more integrate its efforts in the photovoltaic market.

In 2010, DuPont exceeded revenues of $1 billion from sales into the photovoltaic market and has set a goal of surpassing $2 billion by the end of 2014 based on continued growth supported by new innovations and improved technologies.

“Innovalight has very exciting technology that improves cell efficiency and DuPont can help expedite its adoption,” said David B. Miller, president – DuPont Electronics & Communications. “DuPont and Innovalight share a commitment to innovation in materials that have a common purpose – to make solar energy more efficient and more affordable.”

The company is based in Sunnyvale, Calif and was founded by Conrad Burke. They have developed several silicon ink products that use DuPont’s Solamet photovoltaic metallization pastes to boost the amount of electricity produced from sunlight. The resulting product is known as Emitter solar cells. The company anticipates its Selective Emitter technology could represent 13 percent of crystalline silicon solar cell production by 2013 and increase to 38 percent by 2020.

Burke added, “Innovalight brings in-depth knowledge of solar devices, silicon technology and Selective Emitter technology, and DuPont adds expertise in materials science, manufacturing capabilities and global market access. Our offerings are complementary to one another, and together we will broaden and accelerate our ability to meet customer needs and address today’s energy challenges with our continued innovations.”

This is the second renewable energy company that DuPont has been in partnership this year that it has acquired. Earlier this year, it purchased Danisco.

With the demand for meat rising in countries like China and India, there is a shortage of protein in the marketplace. Therefore, one of the hopeful co-products of algal biofuels is algae meal. PetroAlgae has announced that after completion of a third-party feed trial, its micro-crop meal performs as well as alfalfa in dairy cattle diets. The global market for dairy feed from alfalfa alone is estimated at 400 million metric tons by the United Nations Food and Agriculture Organization.

The study encompassed a continuous 6-week feeding trial of a statistically significant sample of 36 dairy cows living in barns housed at the University of Minnesota. It measured the algae meal against a 17.5 percent protein alfalfa diet and measured nutrient intake, milk yield and composition. With the positive results, PetroAlgae anticipates its micro-crop meal will be highly competitive in the feed market.

The University of Minnesota study is the first to validate PetroAlgae micro-crop meal in the dairy diet against the industry standard. Several key findings included algae meal having higher dairy efficiency values, higher energy values than alfalfa, and algae meal matched the alfalfa diet in milk, milk yield, body score, and body weight.

“The results of this study show that PetroAlgae micro-crop meal is a desirable ingredient for high producing dairy cattle and that it performed comparably to high-protein alfalfa meal,” said Dr. Noah Litherland, who performed the study at the University of Minnesota. “We are encouraged to see this product perform so well against one of the more universally understood products in dairy nutrition.”

Litherland added, “There is also an intriguing opportunity to alter the lipid composition of the meat and milk for added human health benefit.”

According to Purdue University agricultural economist Chris Hurt, grain crops are being “gobbled up” faster than farmers can grow them. This could lead to trouble down the road if production doesn’t catch up. Hurt says there have been two major demands surges on commodities in the past five years. One is the rising use of corn for ethanol production being driven by biofuel mandates and high oil prices. The second is increased soybean purchases by China being driven by the country’s growing income and food demand.

“These greater levels of usage have placed a strain on the agricultural production system, resulting in low inventories that leave little room for any production shortfalls,” Hurt said. “Producers certainly have responded to try to meet those demands, but what we’ve seen is that demand has really outpaced the ability of the world to supply.”

Hurt said wheat stocks are in better shape than corn and soybeans that are near “bare minimums” in the U.S. In the past, he said there was enough for 46-60 days or more but anticipates that this won’t be the case after this fall’s harvest.

“With corn, it looks like we could be down to about a 24-day supply at the end of this marketing year,” said Hurt. “That, of course, means any further threats to the 2011 crop yields would send markets into deeper shortages and higher prices.”
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The U.S. corn ethanol industry is not the only form of ethanol production often under fire. Brazil’s sugarcane industry is also accused of not producing the crop, nor the fuel, in a sustainable manner. As a result, the EU Renewable Energy Directive was created to address concerns including labor and environmental issues. In response, Scientific Certification Systems (SCS) has become an accredited body for the Bonsucro standard for sustainable sugarcane. The standard is supported by leading worldwide companies including Coca Cola, Kraft Foods, and Baccardi.

The Bonsucro certification standard addresses labor and environmental concerns that are often associated with sugarcane production and companies that ask for certified products can be ensured they are more sustainably produced. In addition, the standard includes criteria related to legal compliance, biodiversity and ecosystem impacts, human rights, production and processing, and continuous improvement.

Other companies driving change include the oil industry who is ramping up renewable energy production through the purchase and production of sugarcane ethanol. The Environmental Protection Agency has designated sugarcane ethanol as an advanced biofuel that lowers greenhouse gas reductions by more than 50 percent as compared to gasoline. How a feedstock is produced factors into a fuel’s carbon intensity score (the carbon reduction of the fuel as compared to 100 percent gasoline) and policy such as California’s low carbon fuels standard is driving agricultural production changes.

“Our Bonsucro accreditation fits perfectly with our history as a leading certifier of products with significant environmental and social benefits,” said Dr. Robert J. Hrubes, Senior Vice President of SCS.

Last week leaders from rural communities met with President Obama along with Agriculture Secretary Tom Vilsack, as well as the president’s Domestic Policy Adviser Melody Barnes as part of the White House Rural Champions of Change roundtable. One of the attendees was Eric Rund a farmer from Pesotum, Illinois. He is also the CEO of Green Flame Energy. He was one of 18 people from 16 different states who were invited to share their ideas on how the country can improve the quality of life in rural communities and promote economic growth.

“I was honored to be selected for the Council and have the opportunity to share with national policy makers what biomass production can do for farmers, rural communities, job creation and energy independence,” said Rund. “I invited the President to visit my farm to see first-hand what we’re doing to create change.”

Rund has been an early adopter when it comes to biomass research. He is actively developing biomass markets and has been working with local home owners, community school districts and businesses to educate them on how they can utilize biomass energy produced by local farmers.

The meeting Rund attended was just one in a series of meetings being held in DC this summer as part of the White House Rural Council and the White House Business Council to improve economic conditions and create jobs in rural communities. Champions of Change recognizes Americans who are accomplishing great achievements in their communities to out-innovate, out-educate and out-build the rest of the world.

Homeland Biogas Energy (HB Energy) has announced they have signed an exclusive licensing agreement with Achor Anaerobic LLC to use their “achorlytic” enzyme and digestion-inoculating technology to increase the productivity of its anaerobic digestion projects. HB Energy is a division of Homeland Renewable Energy (HRE), a company focused on producing energy from agricultural waste and they will also work with Achor to license the technology to third parties.

“With the benefit of Achor’s technology and our project design, construction and operating skills, we are well placed to develop our pipeline of new large-scale AD plants, serving our customers in livestock farming and food processing,” said Rupert Fraser, Chief Executive Officer of HRE. “Achor’s technology will enable us to build larger scale anaerobic digestion plants with more competitive economics, so that we can produce truly renewable energy while removing waste problems for farmers and food companies.”

The enzymes increase biogas production from digestible materials including animal and food wastes. The two companies are currently in the process of testing the enzyme at HB Energy’s facility in Wisconsin and preliminary indications are that the improvements are significant. HB Energy uses the ag waste to produce energy including biogas or electricity. To date, they have more than 15 large scale development projects in the works ranging from 3 MW to 20 MW.

Chris Barry, cofounder of Achor and originator of the achorlytic approach to accelerating and enhancing anaerobic digestion, added “Achor Anaerobic is delighted to be working in partnership with HB Energy. The business, engineering and planning base provided by HB Energy provides the perfect platform for the exploitation and expansion of our technology. We aim to make HB Energy the most advanced and profitable AD company in the US and beyond through enabling them to get the very best from the feedstocks available. We will work with them on innovative design and development that will be ‘game-changing’ in the field of anaerobic digestion and bioenergy.”

Cary Street Partners has formed a new Energy & Commodities Investment banking team focused on energy and its related sectors including traditional and alternative energy as well as agriculture services. Joining the new group is Craig Shealy who was formerly the founder of Osage Bio Energy, currently up for sale. Shealy will serve as managing director and group head.

“We are delighted Craig has joined Cary Street Partners and will be leading our Energy and Commodities team,” said Mark Gambill, chairman. “Over the past decade we have experienced a growing demand for investment banking services from our energy clients. Craig’s hire is yet another step in the on-going expansion of Cary Street Partners’ investment banking business. We welcome his deep industry knowledge, extensive client relationships and successful track record. His breadth of experience, including most recently as the founder of Osage Bio Energy, will provide a unique perspective in serving the needs of our energy industry clients.”

Shealy will begin growing the groups’ portfolio in the ethanol, biodiesel and biomass industries and he says there is enormous opportunities for consolidation in the ethanol and biodiesel markets. He also notes that there is growth capital available for innovative and viable development projects and he believes Cary Street Partners will provide an excellent platform to serve companies in the energy and ag sectors.

“I am extremely excited about helping meet clients’ needs for capital and strategic advice as the energy and commodity-based industries continue to grow and entities seek out consolidation and liquidity opportunities,” added Shealy.

University of Minnesota researchers are developing degradable plastics from soybean oil. These bioplastics could become a replacement for those made with petroleum and natural gas. Marc Hillmyer, Distinguished McKnight University Professor of chemistry and Director of the Center for Sustainable Polymers, believes that to wean the country from all things fossil fuels, including chemicals and plastics, alternatives based on renewable resources must be developed.

One of the greatest challenges that must be overcome is the fact that while polylactides (PLA) are degradable polymers that can be used in a variety of products, they tend to soften at higher temperatures. This rules them out for extensive use in food and beverage packing applications. Enter Hillmyer. He and his team have developed new types of polyactide-based materials that could overcome this challenge.

Hillmyer believes this discovery could be used in a wide variety of applications that require high temperature stability and toughness. These include plastic bottles, microwave trays, cell phones and more. Hillmyer believes sustainable polymers are the “materials of tomorrow.”

The plasticizers developed by Hillmyer and his team including Dr. Dharma Kodali, are derived from soy oil. Kodali explained that the new plasticizers are synthesized in their lab and could be a viable replacement for petroleum-derived plasticizers. They are comparable in price and performance but are safer, says Kodali, because they are made from renewable resources and degrade readily if leaked into environment.
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Agriculture gets greener everyday. Lakeside Dairy in Hanford, Cali. has gone solar. The dairy installed a new solar energy system to power its milking barn and other dairy operations. With the system in place, they expect to cut their conventional energy use by 75 percent. The family-owned dairy has 7,000 head of cattle and a custom farming business. I don’t know about you but I’m thinking a California cow is a happy cow!

The 891 kilowatt solar energy system was designed and installed by SPG Solar. It is comprised of 3,240 Suntech solar modules and two Solaron inverters. It is estimated that the system will generate more than 1.7 megawatt hours annually – enough to offset the dairy’s utility power usage by at least 75 percent.

“The recent volatility of milk prices has underscored the importance of hedging our input costs,” said Mike Monteiro, the dairy’s owner. “The solar energy system will help us fix our energy costs and hedge against long term increases in utility power rates.”

The solar system spans four-acres and is robust enough to power Lakeside’s entire dairy operation including an 11,000 square foot milking barn, heifer corral lighting and fans, manure separator equipment and well and irrigation equipment. This is just one effort engaged by the diary operation to become more sustainable. The farm’s manure-handling equipment removes nearly 50 tons of solid manure a day, thus preventing it from going into the lagoon or giving off gases from decomposition.

“Lakeside Dairy continues to show its commitment to solar that positively impacts their operations today, reducing future electricity costs and investing in the community through the creation of green jobs,” said CEO and President of SPG Solar, Chris Robine. “They are laying out a long-term strategy towards the sustainable production and quality of food produced.”

Rabobank provided the construction and term financing for the solar project and will work with Lakeside to help them manage their finances as they pay off the loan. Gianluca Signorelli, Vice President of Renewable Energy Finance for Rabobank added, “By combining the savings from lower utility power bills with federal and state incentives, Rabobank structured the term loan to potentially be cash flow positive throughout the lifetime of the loan. Once the loan is repaid, the solar system is likely to create even larger savings for Lakeside Dairy.”

It’s official. DuPont is now the owner of Danisco. The successful completion of the purchase occurred on May 15, 2011 with the tender offer for all outstanding shares of common stock for Danisco for DKK 700 cash per share. The tender offer expired on May 13, 2011, at 11 p.m. CEST (5 p.m. EDT) and DuPont estimates that at that time, Danisco shareholders had tendered approximately 92.2 percent of outstanding shares to DuPont Denmark Holding ApS. Many of you may be familiar with the DuPont Danisco Cellulosic Ethanol project (DDCE). The DDCE project currently has a 250,000 gallon demonstration plant near Vonore, Tennessee up and operating with the goal of having a commercial scale plant in operation by 2013, most likely in Iowa.

“We are delighted that the tender has been successful and we can move on to the process of integrating Danisco into DuPont,” said DuPont Chair & CEO Ellen Kullman. “Danisco’s attractive specialty food ingredients businesses and Genencor’s leading industrial enzymes complement DuPont’s own Nutrition & Health and Applied BioSciences offerings. This combination will create an industry leader in industrial biosciences and nutrition and health.”

Ellen continued, “These businesses will work together to drive sustainable growth and market-driven innovation by linking agriculture, nutrition and advanced materials through industrial biosciences. In addition, the R&D combination of DuPont, Danisco and Genencor will enable us to further respond to global megatrends and help provide for the food, energy and protection needs of a growing population.”

Danisco Chairman Jorgen Tandrup added, “We are very pleased that a vast majority of Danisco shareholders have accepted DuPont’s offer, and the two companies may now begin to move forward together. DuPont and Danisco share cultures based in exceptional science and research capabilities. Our combined strengths in biosciences and nutrition and health will deliver innovative new offerings for customers worldwide, while helping to grow these businesses in ways that will benefit employees, shareholders and the communities in which we serve. We look forward to this next exciting chapter of discovery and success for the joined companies.”

Recently, Dr. Richard Newell from the Energy Information Administration (EIA) testified during a Senate Ag Committee Hearing to discuss high gas prices and the role agriculture may play in developing energy sources for America. Newell believes that agriculture could have a very prominent role in the country’s energy production over the next 20 years.

“Starting with a high level overview of the linkages with agriculture and energy, EIA estimates that energy use on farms accounts for about 1 percent of total U.S. energy consumption. In addition to direct farm use energy, agriculture is indirectly affected by energy requirements in the fertilizer industry. Agriculture has also current and potential future role as an energy supplier,” said Newell in his testimony. “Ethanol use in motor vehicles as grown from 1.7 billion gallons per year in 2001 to an estimated 13.2 billion gallons per year in 2010. Other important energy supply opportunities for agriculture include biodiesel, energy sources from waste, and the siting of wind farms on farms with attractive wind resources.”

Listen to Dr. Richard Newell’s testimony here: Dr. Richard Newell's Testimony to the Senate Ag Committee

Newell said that the EIA expects continued tightening in world oil markets over the next two years. particular in light of recent events in North Africa and the Middle East, the world’s largest oil producing region. The organization’s forecast, issued in March, projects retail gasoline prices at the pump will average $3.77 per gallon this summer and $3.56 per gallon for the entire year. This is about 77 cents per gallon higher than last year’s level. Highway diesel prices are expected to be nearly $1.00 per gallon higher than in 2010. This month the EIA issued an updated forecast and called for a 40 percent increase in pump prices this summer.

During his testimony, Newell cautioned that there are regional price variations as well as significant uncertainties in these forecasts. He then went on to forecast what role his agency thinks ethanol might play in the coming years.

“While ethanol production has grown nearly eight fold since 2001, EIA expects slow growth in ethanol production over the next two years with forecast production of 13.8 billion gallons in 2011 and 14 billion gallons in 2012, about 9.9 percent of the forecast volume of gasoline sales in those years,” said Newell.

Although the EPA has granted waivers for the use of E15 in vehicles model year 2011 and newer, the EIA expects both slow growth in E15 and also E85 (as explained in detail in his written testimony). In conclusion, the EIA expects biofuels to grow to 24 billion gallons of ethanol equivalent by 2022 and 39 billion gallons in 2035.

Agri-business company Novus International has installed three electric vehicle (EV) charging stations at its St. Charles, Missouri headquarters. The ChargePoint Networked Charging Stations were developed by Coulomb Technologies. Novus installed the charging stations as part of its efforts to become a Platinum LEED Certified building, a green environmental building designation. It is the fourth building in Missouri and one of only 150 in the entire United States to achieve this distinction. The ChargePoint stations will be used for workplace, customer and visitor parking. Sales and installation of the ChargePoint stations was completed by Lilypad EV and MicroGrid Energy via Coulomb’s Midwest/Chicago distributor Carbon Day Automotive.

“Novus International is an eco-conscious corporation that has invested wisely in the future of clean energy,” said Pat Romano, president and CEO at Coulomb. “Workplace charging is important for EV drivers that need a safe and available place to fuel during the day. The ChargePoint Network’s advanced solutions give Novus numerous options for their staff and future green fleet vehicles.”

Novus has installed three Coulomb Technologies Level I and II dual output ChargePoint stations. Two of these stations have been installed in the employee parking lot, covering four parking spaces, and one has been installed on the visitor parking lot, covering two parking spaces. The solar array on the roof of the headquarters facility, part of the original building design, was recently expanded to offset the electrical requirements for the charging stations.

“Novus is taking another step towards making all of our business practices more sustainable and environmentally responsible by installing charging stations for electric cars,” said Thad Simons, President and CEO of Novus. “Currently, there are numerous preferred parking spots for employees who drive low-emitting or fuel efficient vehicles, so these charging stations are a logical next step.”

Coulomb’s ChargePoint Network is open to all drivers of plug-in vehicles and all manufacturers of plug-in vehicle charging stations.