Domestic Fuel

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.

Agribusiness company Monsanto and algae company Sapphire Energy have announced a partnership to “discover” genes that could be applied to agriculture particularly in the areas of yield and stress. As Sapphire works to bring algal fuels to commercial scale, the company is searching for traits that make a particular strain of algae better suited for fuel or other biochemicals. In this partnership, the technology that Sapphire uses with algae will be applied to to help identify genes that might positively affect other traditional crop yields.

“Sapphire’s expertise in algal research offers a novel platform that will allow us to screen and identify promising genes faster,” said Robb Fraley, Monsanto’s chief technology officer. “We face a common goal in looking for ways to improve upon an organism’s ability to achieve greater productivity under optimal and sub-optimal environmental conditions. Together with Sapphire, we can identify genes affecting such traits in algae that might also be applied to corn, cotton, soybeans and other crops.”

Fraley notes that algae is an ideal plant to research because they have a similar photosynthetic process to other plants but are simple and efficient to work with. Algae also can be grown, screened, tested, and selected with high throughput tools, which enables a relatively fast process for researchers.

“Monsanto has always been at the forefront of agricultural technology developments and innovation,” said Jason Pyle, chief executive officer for Sapphire Energy. “Through this collaborative partnership, we’ll focus our leading-edge research agenda on some of the biggest questions facing both agriculture and energy. By leveraging our algae platform and tools to improve crop yield and enhance crop performance, Sapphire will be able to accelerate our ability to produce a renewable crude oil replacement and reduce our country’s dependence on foreign oil.”

Under the agreement, Monsanto will make an equity investment in Sapphire and the two companies will collaborate on algae-based research projects.

GROWMARK, based in Bloomington, Illinois has a long history with selling renewable fuels. The company began marketing ethanol back in the late 1970s. Today, they are a major player in Illinois in selling high quality biodiesel. I had the chance to sit down with Mark Dehner, the company’s marketing manager of refined and renewable fuels during the National Biodiesel Board Conference. Although ethanol is a big part of their business, we focused on how biodiesel has helped to grow their business.

Dehner said that the company sells a performance blend of diesel fuel called Dieselex Gold that helps improve fuel efficiency and protects the fuel while in the hands of GROWMARK’s customers. From there, GROWMARK adds various biodiesel blends to that fuel, whether it be B2, B5, B11, which is typical in Illinois, or B20.

Illinois has been very progressive when it comes to the use of biodiesel. The state has a sales tax motor fuels between 6 1/4 percent up to 7 1/2 percent. However, the state passed a waiver that if you use a blend of biodiesel of B10 or higher, effectively B11, there is no sales tax. This becomes very cost effective for the user.

When factoring in this state incentive, the state biodiesel mandate, along with other state biodiesel mandates, the federal Renewable Fuels Standard (RFS2) and the blenders tax credit, Dehner sees good growth for their business this year and in years to come. Yet he said that to ensure this happens, there still needs to be some consumer education. In his experience, he’s found that when you have a chance to speak one-on-one with a customer or potential customer to address misperceptions and perceived issues about the fuel, you are usually able to clear them up and get them on board with using the fuel. But ultimately, as with any product, the fuel must be handled properly and used correctly.

GROWMARK is a huge supporter of renewable fuels and they believe that when a consumer understands the benefits they will be for the same reasons: its homegrown, its good for the environment; and it reduces our dependence on foreign oil. That’s why the company will continue to sell renewable fuels – because it the right thing to do.

You can listen to my full interview with Mark here: Interview with Mark Dehner

2011 National Biodiesel Conference Photo Album

In what Perdue believes to be one of the largest commercial solar installations on the East Coast, the company has announced they are installing 11,000 solar panels divided between two different facilities. The agribusiness company has entered into a 15-year agreement with Washington Gas Services, Inc. (WGES) to purchase the electricity generated by the solar panels at a set price. WGES will own and operate the system that is expected to generate an average of 3,700 megawatt hours of electricity each year, or approximately enough electricity to power 340 American homes. At peak production, the panels could produce at much as 90 percent of the electrical demand for each facility.

The ground-mounted panels will cover nearly 10 football fields. Nearly half of the solar installation will be located at the Perdue corporate offices in Salisbury, Maryland and the remaining will be located at their feed mill in Bridgeville, Deleware. The panels are being installed by Standard Solar Inc.

“Stewardship is one of our company’s core values, so this is a perfect fit for the way we do business,” said Steve Schwalb, Perdue’s Vice President of Environmental Sustainability. “Using solar power means we’ll have a clean energy source that doesn’t pollute or create greenhouse gases, while lowering Perdue’s energy costs over the life of the project.”

Perdue has also engaged in several other “green” projects. Last year they began renovation their corporate office and hope to obtain LEED certification for environmental leadership from the U.S. Green Building Council. Three years ago, the company began the first to sign a Clean Waters Environmental Initiative with the EPA to aid poultry growers in adopting better pollution prevention practices.

Harry Warren, president of WGES said of the project, “By hosting this project, Perdue is also helping both Maryland and Delaware achieve their statewide solar energy goals. “The Maryland and Delaware Renewable Energy Portfolio Standards Acts call for a growing contribution from solar energy each year through at least 2022, and Perdue’s project will contribute significantly to Maryland’s and Delaware’s total solar power production goals for 2012 and beyond.”

An Iowa City woman received a very welcome early holiday gift – free food and fuel for a year from the  Iowa Corn Growers Association. Katie Ortmann was the winner of the Iowa Corn Fed GameDay GiveAway campaign when her name was called during halftime of the Iowa State versus Iowa men’s basketball game held this past Friday, December 10, 2010 in Iowa City.

The year-long promotion, designed to highlight the many uses of corn and its importance to Iowa, traversed a year of Iowa State versus Iowa sporting events that included football, basketball and wrestling matches. Iowans were able to register to win from August 20th through November 20th and the grand prize was free food and fuel for one year valued at $5,000 in groceries and $2,500 in ethanol from Kum & Go.

Runner-up prizes were also awarded. Marc Foster, also of Iowa City, was randomly selected to win free food and fuel during the Iowa versus Iowa State wrestling meet on Friday, December 3. In addition, Chris Dodel’s name was drawn to win the same prize during the Iowa versus Iowa State women’s basketball game on Thursday, December 9th. He resides in Urbana, Iowa.

“We’ve reached thousands of people with the Iowa Corn Fed GameDay GiveAway promotion,” said Mindy Williamson, director of communications and public relations for the Iowa Corn Promotion Board (ICPB) and the Iowa Corn Growers Association (ICGA). “Ethanol use was just one benefit featured in the program, which included food and feed uses for corn and messages about corn’s importance to Iowa’s economy, environment and energy independence.”

On behalf of ICGA and ICPB, Williamson thanked Kum & Go, Cyclone Sports Properties and Hawkeye Sports Properties for helping to sponsor the Iowa Corn Fed GameDay GiveAway sweepstakes that is part of a four-year contract with both Hawkeye Sports Properties and Cyclone Sports Properties. The promotion includes radio, television, internet, and on-site marketing and highlights the many uses for corn and its importance to Iowa- as everyday is GameDay for Iowa’s farmers.

GoingGreen Silicon Valley has named it’s Top 100 for 2010 and on the list includes renewable biofuel and biochemical company, OPX Biotechnologies (OPXBIO). The list honors the companies that are developing technologies that will ‘change the world’ and ‘disrupt existing markets and entrenched players’. The list is based on five major categories including innovation, market potential, commercialization, stakeholder value, and media buzz.

“It is an honor to be recognized among this impressive group of clean technology industry leaders,” said Charles R. (Chas) Eggert, President and CEO of OPXBIO. “This recognition strengthens our responsibility and commitment to realize the economic and sustainability benefits of our breakthrough first commercial product – renewable BioAcrylic – for consumer and industrial customers.”

According to OPXBIO, they have developed a proprietary technology known as EDGE (Efficiency Directed Genome Engineering) to manufacture renewable bio-based chemicals and fuels that are lower cost, higher return, and more sustainable than existing petro-based products. Of special note, the company has developed a diesel fuel bio-processed from carbon dioxide and hydrogen. The U.S. Department of Energy has awarded OPXBIO $6 million to support this development.

Other notable winners in the GoingGreen Silicon Valley Top 100 include; Amyris, Chemrec, Cobalt Technologies, CoolPlanetBioFuels, Coskata, EdeniQ, Gevo, LS9, Mendel Biotechnologies, Sapphire Energy, Solazyme, Synthetic Genomics, and ZeaChem.

Weston McBride, Greentech Editor at AlwaysOn said of the winners, “The GoingGreen Silicon Valley Top 100 winners have thrived during trying economic conditions through innovation and creativity. It is by their example that the next generation of clean technologies will transform the global economy with more robust systems primed for sustained growth.”

The Ethanol Producers and Consumers (EPAC) is hosting an Agricultural Biofuel Summit on October 19 & 20, 2010 at the MSU Northern Bio Energy Center. The focus of the Summit will be wheat and barley ethanol production using small grains. Discussions will also focus on barely research and development, the Appomattox Barley to Ethanol plant model, biofuels and biodiesel in agricultural business, biodiesel products and warranties, the closed loop system of ethanol production, and more. Additional partners involved in the event include the Montana Department of Agriculture, Bear Paw Development Corporation, Montana Economic Developers Association, and the MSU Northern Bio Energy Center.

Of special interest will be speaker Craig Shealy, President of OSAGE BioEnergy who will present the Appomattox Barley Ethanol Plant model. The plant, which is scheduled to go online in November, will become the first working barley to ethanol plant in the country. Additional speakers include Phil Madson, President of KATZEN International, who served as the construction and service provider for OSAGE.

Also speaking is Bruce Nelson, Farm Service Agency State Executive Director, who will conduct a brief community outreach forum focusing on the 2010 USDA Biofuels Strategic Production Report. The presentation will follow the Biofuel Summit. Nelson chairs USDA’s Montana Food and Agriculture Council.

Individuals including agricultural producers, consumers, biofuel distributors, educators, students, livestock producers, and financing institutions are especially encouraged to attend. The event is open to the public and is free to attend compliments of funds provided by a Growth Through Agriculture Grant from the Montana Department of Agriculture. Registration forms and additional information is available at the EPAC website at www.ethanolmt.org, or by calling 1-406-785-3722.