Domestic Fuel

A big part of any business operation is being able to secure the capital to allow the company to get started and grow properly. Obviously, that’s no different for the biofuels industry, and attendees at the Advanced Biofuels Leadership Conference heard some good news from the financing side of the house.

“I think the overarching message of the panel was a sign of increasing optimism,” says Chris Groobey, a partner in the law firm Wilson Sonsini Goodrich & Rosati, who spoke during a session on debt financing. He says the last year and a half has been a tough time for the biofuels industry, but it’s not because the companies were doing anything wrong. It had more to do with the political and external environments surrounding the industry. And now he’s optimistic things are changing on the government and private financing fronts.

“Now you have folks who have made their companies and projects even better, and now that you have a solidified political environment, you have an opportunity now to do better things legislatively and you have folks in the government and private sector side of the money who are very, very motivated to get this moving. And they see 2013 as the time to do that.”

Chris adds that while there seems to be more Departments of Energy and Defense grants to use, those can be tricky to make sure the money is lined up correctly. Law firms such as his specialize in helping biofuels makers to navigate that maze.

He says while it’s pretty tough to get venture capital money in to the industry right now, there are plenty of opportunities to get debt investors involved, including some pretty big financial institutions that want to be part of this green energy market.

Listen to more of what Chris had to say here: Chris Groobey, Wilson Sonsini Goodrich & Rosati

ZimmComm New Media, LLC has expanded its AgNewsWire.com website to serve as a new agricultural media content service for reporters, companies, organizations and individuals seeking high quality photos and audio from industry events and concerning current issues.

“We generate so much content on our agricultural and renewable energy websites that we decided to create one place for all of it to make it easier for people in the industry to locate and utilize,” said ZimmComm New Media president Chuck Zimmerman. “Last year we covered nearly 70 different industry events, posted more than 1200 audio files and placed nearly 20,000 high resolution photos in Flickr albums. All of that content is available for anyone to download and use free of charge.”

AgNewsWire.com will now have links to all the audio, photos and video that ZimmComm compiles at events, for podcasts, news conferences and more. In addition, AgNewsWire will also continue to be an agricultural news release distribution service as it has been since it was introduced in 2006.

Read the rest of this post…

If you’ve never been to Italy, you might be inclined to believe the whole country is very much the same. But you’d be wrong. From the simmering sea shores of the southern coasts to the towering Alpine peaks of the north, where people are more likely to speak German than Italian, the whole country is a rich tapestry of diverse people, customs and foods. In that tradition, Guido Ghisolfi of the Italian company Beta Renewables told attendees of the Advanced Biofuels Leadership Conference (ABLC) that they, too, needed to be diverse in their thinking of biomass for biofuels.

“It’s quite important that the [refineries] be biomass agnostic – they can take several different types of biomass without changing the hardware,” he says, adding that no matter where you are in the world, biomass is seasonal by definition, and those who want to convert the various types into fuels need to be able to change to stay in business year-round. But he admits that currently there is not one system that converts the divergent forms of biomass, whether it’s corn stover or wheat straw or even what’s left over when you press olives, into biofuels. And the technical solution might be simpler than people think.

“So far, people have not focused on the advantage of having a multi-feedstock plant. I’m pretty sure the new technologies coming up in the next few years will be able to handle many more types of biomass,” especially when the costs drive that need.

Guido says you want to bring technology to the territory so you can use all the various biomass feedstocks that an area might have. He adds that biofuels producers need to be flexible as well … and spend less time complaining.

“Instead of complaining and wailing about the RFS, we have to deliver competitive fuel that people will but because it is cheaper and not because it is green.”

You can hear my conversation with Guido here: Guido Ghisolfi, CEO, Beta Renewables

There’s some real negativity hanging over the biofuels industry these days. And while any industry has risks, it seems that the setbacks loom larger over the renewable energy sector compared to what their competitors in the conventional energy sector face. In his talk before the Advanced Biofuels Leadership Conference, “De-Risking a Risky World,” Fred Cannon, the CEO of cellulosic fuel maker KiOR, told the group that the biggest challenge facing the biofuels industry is perception, and they have to shift their thinking to a perception of success for others to see them as successful (his infectious positive attitude is probably why USDA chief Tom Vilsack singled him out to talk with him one-on-one at the conference).

I caught up with him afterwards, and he told me the way to overcome the negatives hanging over the industry is to highlight the wins out there.

“You build it one success at a time,” Fred says. “Every company that starts producing and putting fuel in American cars, you just build on that momentum. And that mitigates the risks.”

But there’s an old saying that I remember from my days in the Air Force (and we’ll clean it up here for general audiences): one “Oh, shoot!” kills a hundred “attaboys.” Fred says we can’t get overwhelmed by the setbacks and feed more into the negative attitudes sometimes around biofuels, because everything seems to get amplified when you’re talking renewable energy. And he says there’s a good way to overcome all the negativity … outside and within the biofuels industry.

“Put clean, sustainable fuel in American cars,” adding that when KiOR’s Columbus, Mississippi cellulosic fuel plant is fully operational, it will put that clean fuel in 25,000 cars a year. He also urges patience, because it takes time to create a new technology.

“We have so much opportunity: a massive market, RFS2, technologies developing. We just have to get through this perception issue of the industry. And we will … one success at a time.”

Listen to my interview with Fred here: Fred Cannon, CEO, KiOR

How can we tell the Renewable Fuels Standard (RFS) is working? By how nervous it’s making the big oil companies. That was the message attendees at the Advanced Biofuels Leadership Conference near Washington, D.C. heard.

“We are disrupting an existing marketplace,” says Brooke Coleman, Executive Director of the Advanced Ethanol Council. “We are not social media. We are not creating a new search engine. We are not doing something new… we just happen to be doing what other people are doing, better.”

Brooke says that has made some pretty powerful enemies of biofuels, who are spending a lot of money to destroy the biofuel brand … from corn ethanol to biodiesel to cellulosic biofuels. But he’s confident their attempt to change the Clean Air Act, and thus the RFS, will fail, ultimately because of the political allies biofuels have made.

“You’ve got Republicans and Democrats who see this thing [RFS] work, create jobs … just shy of 400,000 … and it’s just hard to change,” adding the political environment is not conducive to wholesale changes to either the Clean Air Act or the RFS.

Brooke says the diverse group that makes up the biofuels coalition is more together than ever, with efforts like Fuels America, a coalition to protect the RFS and the renewable fuels industry, and more collaboration than ever … without getting hung up on differences within the biofuels sector.

“We don’t agree on everything, [but] the trick is not to get so focused on the one or two things we don’t agree on … and focus on what we DO agree on.”

Listen to more of my interview with Brooke here: Brooke Coleman, AEC

Two members of Pres. Obama’s cabinet today have signed their names to an agreement that will extend the administration’s commitment to the production of biofuels for use in airplanes. Secretary of Agriculture Tom Vilsack and Transportation Secretary Ray LaHood have extended by five years the “Farm to Fly” program, an initiative to partner the USDA and Federal Aviation Administration (FAA) to help develop a viable biofuel for the aviation industry.

During remarks at the ceremony at the Advanced Biofuels Leadership Conference (ABLC) near Washington, D.C., Vilsack said this is a real job producer, especially for rural parts of the country.

“By continuing to work together to produce American made ‘drop-in’ aviation fuels from renewable feedstocks, we will create jobs and economic opportunity in rural America, lessen America’s reliance on foreign oil and develop a thriving biofuels industry that will benefit commercial and military enterprises,” Vilsack said. “USDA is pleased to partner with the FAA in our quest to develop alternatives to fossil-based fuel, which is critical to reducing carbon emissions and protecting the environment.”

LaHood pointed out that it’s been the hard work of people in attendance at the ABLC that made this agreement even a possibility.

“Through the use of sustainable alternative jet fuels, we are showing the world that we can come together to solve our greatest environmental challenges,” said LaHood.

During a news conference after the signing, Vilsack said that while there are some that want to derail the renewable fuels industry through the destruction of programs such as the Renewable Fuels Standard (RFS), he remains one of biofuels’ biggest allies.

I asked Vilsack how they overcome objections from automakers who don’t approve of E15 for most cars on the road, and he bristled and remained steadfastly behind the studies that show it would work in model years 2001 and after.

“The testing would suggest that there would not be damage to the engines. And I think if consumers were given the option, consumers would choose [E15] because they want to be supportive of a domestic fuel industry.”

And while there might be some who dispute on how much renewable energy is saving consumers and creating jobs, Vilsack said there are some things that are crystal clear.

“I am positive consumers benefit from this. I am positive that hundreds of thousands of jobs are connected to this industry. And I am positive that it has stabilized farm income,” he said.

Listen to Vilsack and LaHood’s remarks here: Secs. Vilsack and LaHood at ABLC

Hello from the Advanced Biofuels Leadership Conference, just a few miles south of the Nation’s capital at the Gaylord National Resort & Convention Center! A lot has been going on already this morning, but before it all got started, I caught up with Jim Lane, the editor for Biofuels Digest, who is putting on this event.

He told me that today will feature the signing of the “Farm to Fly” agreement between Secretary of Agriculture Tom Vilsack and Transportation Secretary Ray LaHood … an agreement that will extend helping develop viable renewable fuels for the aviation industry.

In addition, there are obviously lots of stakeholders from the biofuels industry, including ethanol and biodiesel makers, as well as the big oil companies which have to blend the green fuel into their non-renewable products and the folks from the finance industry who put the money into so many of these ventures. Jim said it’s important to get a diverse group of interests such as these together in one forum to talk about the way forward.

“You don’t have to reach out too hard [to get them together], because they all want to know each other and network like crazy,” he said. He added that policy, finance, production, research … they all come together in this forum.

If you’re not already here, you should try to make it down to the Advanced Biofuels Leadership Conference, going on today, tomorrow and Wednesday (April 15-17). Hope to see you around!

Listen to my interview with Jim here: Jim Lane, Biofuels Digest

We’ll have more later!

Growth Energy and its members are heading to Capitol Hill today to meet with legislators regarding the benefits of the ethanol industry. In particular, participants will discuss the value of E15, the Renewable Fuel Standard (RFS) and the issues surrounding Renewable Identification Numbers (RINs). This morning, the Growth Energy leadership team, CEO Tom Buis, and Co-Chairmen of the Board General (Ret.) Wesley Clark and Jeff Broin (POET) held a brief press call to discuss their efforts on the hill.

During the call, Jeff Broin explained that the RFS guarantees market access to renewable fuels because the volume of ethanol in the market is controlled by the competition, the oil industry. Today, the 10 percent goal that has been created by all the laws (10 percent of all fuel blended in the U.S. contains ethanol) but the potential is much larger. Broin said the country could be at 30 percent of the fuel by 2022 if we meet the RFS goals.

Broin noted that the oil industry has done everything it can to bar market access for E15 from erecting legal and regulatory challenges to a very expensive PR campaign with misinformation. But for the RFS to be successful, the blend wall must be scaled and this can be done by allowing consumer choice at the pump with E15.

General Clark noted that the RFS is the most successful energy policy the U.S. has seen in 40 years. It’s working. But people, such as the oil industry, food industry and the poultry industry would like consumers to believe this is not the case.

“When you open market access,” said Clark, “the market will sort itself out if given the chance. “But when you’re dealing in the fuels business you’re going against the greatest economic force on the planet, which is the petroleum industry. And they’re doing everything in their power, including working through non-governmental organizations, some governments, warning them,imploring them not to move away from their exclusive reliance on petroleum. It just shouldn’t be.”

“So the RFS is the lead effort in the move to break the monopolistic grip of the petroleum industry on liquid fuels. And we’re right now with the RFS where we’re really getting traction,” Clark concluded.

Listen to the press conference here:Growth Energy Heads to the Hill

Ethanol producers could get a sweet deal on sugar for ethanol if the administration approves the sale of up to 400,000 tons of surplus sugar under the 2008 Farm Bill Farm Bill Feedstock Flexibility Program.

The program allows USDA to buy the surplus sugar and then sell it to ethanol producers at a loss in order to keep prices from going below mandated levels, but it has never been used. With large crops in the United States and Mexico causing sugar futures prices to fall below 21 cents a pound, USDA last week a proposal to the White House budget office to implement the program. “We’re doing it because it’s the law,” said Agriculture Secretary Tom Vilsack on Monday during a meeting of agricultural journalists.

However, Vilsack said it is not yet decided how much, if any of it will be used. “We’ll make that decision following a review of all the circumstances,” he said. “This is an issue where we have a significant oversupply and we have some issues that need to be resolved fairly quickly.” Those issues include storage challenges and minimizing the cost to taxpayers.

Listen to Vilsack comments here: Secretary Vilsack on sugar-to-ethanol

There’s been a lot of talk about the prices for Renewable Identification Numbers … better known as RINs … especially from Big Oil trying to blame RINs for the rise in gasoline prices.

But in this edition of the Domestic Fuel Cast, Ron Lamberty, Senior Vice President with the American Coalition for Ethanol (ACE) and Brian Jennings, Executive Vice President for ACE, explain what RINs are and what they do … as well as dispelling some of the myths that have created what they call RIN-sanity.

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast - Countering RIN-sanity

You can also subscribe to the DomesticFuel Cast here.

View the ACE Biofuels Beltway March 2013 Photo Album.

The American Coalition for Ethanol (ACE) has created an ‘infographic’ promoting the benefits of the Renewable Fuel Standard (RFS). Entitled “An American Success Story,” the new infographic pinpoints how the RFS is accomplishing the goals set by Congress.

“ACE’s infographic is a vivid and effective ‘show and tell’ tool for ethanol advocates to use in proactively promoting the benefits of the RFS,” said Brian Jennings, ACE Executive Vice President. “The RFS costs taxpayers nothing and has spurred technology innovations, efficient feedstock and biofuel production, increased feed availability, and jobs that can’t be outsourced. I encourage all ethanol supporters to use this infographic, share it with their politicians and media members, and help us show how the RFS delivers benefits for everyone.”

The infographic cites data from the U.S. Energy Information Administration and other reliable third parties and shows key ethanol accomplishments since the RFS was enacted, including consumer savings at the pump, helping to reduce oil imports and replacing the need for 462 million barrels of imported oil, how U.S. ethanol production compares to the amount of gasoline that could be produced from the Bakken Oil Shale development or from the proposed Keystone XL Pipeline project, how much pollution is reduced by ethanol, and how E15 fuel is the most tested motor fuel on the market today.

The infographic was also part of the tools used during ACE’s Biofuels Beltway March, which received a good reception.

Learn more about why the RFs is so important and more about the Biofuels Beltway March in my interview with Brian Jennings: An American Success Story

View the ACE Biofuels Beltway March 2013 Photo Album.

According to new analysis conducted by Informa Economics, Inc., ethanol costs significantly less than gasoline at the wholesale level and is reducing pump prices for consumers across the country. The report demonstrates that the Renewable Fuel Standard (RFS) and its associated “RIN” credits, have not been a factor in this spring’s higher retail gasoline prices. A RIN is a Renewable Identification Number that is used to track the use of biofuels by obligated parties.

“A fact-based review of developments in the gasoline, ethanol and RIN markets indicates that the Renewable Fuel Standard in general and RINs in particular have not been a demonstrable factor in the rise in retail gasoline prices that has occurred in early 2013,” the report concluded.

Responding to the independent study’s findings, Renewable Fuels Association (RFA) President and CEO Bob Dinneen said, “Not surprisingly, opponents of the RFS have absurdly suggested RINs are a reason for this spring’s higher gas prices. This report puts that silly notion to rest and clearly confirms that RINs are not having any noticeable impact on gasoline prices. In fact, as the Informa analysis plainly shows, increased ethanol use leads to lower—not higher—prices at the pump for American consumers. The facts and data speak for themselves. Drivers could realize even greater savings at the pump if refiners and blenders would break down their self-inflected blend wall and give up their stubborn resistance to offering E15 and E85.”

The analysis, commissioned by RFA, found RINs are likely contributing no more than $0.004 (four-tenths of one cent) to the retail price of a gallon of gasoline. Meanwhile, ethanol’s wholesale discount to gasoline in 2013 has reduced the pump price for blended gasoline by an average of $0.044 per gallon. Thus, when the net impact of both RIN costs and ethanol’s discount to gasoline are considered, ethanol-blended gasoline is saving consumers an average of $0.04 per gallon based on straight blending economics.

“Considering both the ethanol price advantage and the direct cost of RIN prices, the net benefit to consumers from the usage of ethanol is $0.04 per gallon of gasoline…” the report found. According to the authors, this savings doesn’t take into account either the indirect benefit that ethanol has on gasoline prices by effectively lowering demand for crude oil and clear gasoline or the enhanced octane value of ethanol over gasoline.

High gasoline prices in early 2013 can be explained by several factors unrelated to the RFS, RINs, or ethanol use, the report found. “There is a distinct seasonal pattern to gasoline prices and crack spreads,” the analysis notes, adding that “[t]he increase in gasoline prices and crack spreads during the first quarter of 2013 has been generally consistent with increases experienced in 2011 and 2012, despite the fact that conventional ethanol RIN prices averaged $0.03 during the first quarter of 2011 and $0.02 during the first quarter of 2012.” Citing a Department of Energy analysis, the Informa report also notes that higher gasoline prices have stemmed from planned and unplanned refinery maintenance; the low starting level for gasoline crack spreads going into 2013; preparation for seasonal fuel specification changes; and developments in global product demand.

The report was discussed during a media teleconference call that you can listen to here: rfa-rinteleconference-13.mp3

Yesterday I traveled to Tallahassee, Florida to testify at a hearing of the Florida House of Representatives Regulatory Affairs Committee on HB 4001 which is a bill to repeal the Florida Renewable Fuel Standard. This hearing was actually an extension of one held previously that ran out of time to conclude. You can watch the session here. The portion on HB 4001 starts about 39 minutes in and you can easily fast forward to it.

When you see the bill sponsor, Representative Matt Gaetz, introduce the session you’ll understand my compulsion to attend to try to help clear up the numerous things he said about ethanol that are just plain wrong. These include the now completely dis-credited food vs. fuel debate, that it harms automobile engines, that it is bad for the environment, etc. It’s all out of the play book of large oil companies and large food company interests. I was not alone in opposition to this bill. Some of the others testifying in opposition included Bradley Krohn, President, United States EnviroFuels, LLC and Bobby Likis, Bobby Likis Car Clinic. There were a number of others that you’ll see in the video recording.

Unfortunately, the bill passed by a narrow margin. A companion bill is in the Florida Senate, SB 320. After the session I spoke with both Bradley and Bobby to get their thoughts on the action taken by this committee.

Bradley says his company has been developing a 30 million gallon advanced ethanol plant project which will use sugar cane and sweet sorghum as primary feedstocks. They are very close to construction. He says the House committee got it wrong, buying into a lot of myths about ethanol. This sends a chilling effect to the financial community for investing in advanced biofuel projects in the state of Florida. His company is in the process still of funding their project. He says it sends a message that Florida doesn’t care about economic stimulus and job creation. There was an attempt to pass this bill last year that stalled on the Senate side and he hopes that will happen again this year.

Listen to my interview with Bradley Krohn here: Interview with Bradley Krohn

Bobby Likis also testified and corrected a number of factual errors that were presented to the committee, especially on how ethanol performs in an engine. He was very disappointed by the committee vote in the face of overwhelming evidence that the Florida RFS is working and reducing the cost of gas to Floridians. He says it will make him fight harder to make sure the bill doesn’t pass at the Senate. He says that if it does pass and the price of gas goes up in Florida we should call it a Gaetz Tax!

Listen to my interview with Bobby Likis here: Interview with Bobby Likis

When it comes to alternatives to some of the more conventional sources of oils for biofuels, many companies are looking to go green. And some, such as the folks at Algae.Tec, are looking to green shipping containers to grow a literal green feedstock.

“What we wanted was a significant bulk outcome, in other words fuels and possibly food, producing the algae for cents on the liter, where many of the pond solutions [cost] dollars per liter to make it work,” explains Roger Stroud, the Executive Chairman of the Australia-based company. He says Algae.Tec’s enclosed photo-bioreactor contained in 40-foot shipping containers is a way to produce the green pond scum for those pennies of what it costs in open-air ponds. And they’re looking at producing biodiesel, jet fuels, and even food sources from the algae grown. But Stroud says they are still working on the commercialization process with demonstration projects just south of Sydney, as well as research and development in Atlanta, Georgia. “We’re confident in the outcome.”

So why is Stroud so confident their system will be successful? Well, besides the testing and work they’ve done, he’s Australian, and that means he’s used to having to do big things against sometimes great odds. “Although [Australia] is a large continent, we’ve got [a small population]. So, we tend to be on the outside looking in, where in the U.S., you tend to be on the inside looking out,” and Australians have to look more to the world economy. That’s why Algae.Tec has worked vigorously to network globally. Projects pending in Brazil and Texas, as well as one in New South Wales, point to that global reach. Plus, he’s encouraged by the Americans’ commitment to algae and biofuels. It all comes down to the Australian, and maybe the algae industry’s, way of making the best of the opportunity that comes your way.

“We’re focused on our task, and we believe we can achieve a profitable outcome, given time.”

Listen to Joanna’s interview with Roger here: Interview with Roger Stroud, Algae.Tec

A bill has been introduced in the Florida legislature that would repeal the state’s Renewable Fuel Standard Act.

Currently, the Florida law requires that all gasoline sold or offered for sale by a terminal supplier, importer, blender or wholesaler in Florida contain 9-10 percent ethanol, or other alternative fuel, by volume. Legislation to repeal that requirement was considered by the Florida House Regulatory Affairs Committee on Friday and Pensacola automotive technician and radio host Bobby Likis was there.

However, Likis was only was able to say that he opposed the bill before the hearing had to be ended for lawmakers to go to the floor. “I’ve answered over 100,000 questions live on air, many of which have addressed the ethanol issue with regard to engine damage,” said Likis, host of the syndicated Car Clinic Network. “I strongly oppose the bill.”

Likis, who is a strong advocate for ethanol, says he is prepared to do what he can to prevent the legislation from passing in Florida.

Also testifying against the bill was Patrick Ahlm with Alginol Biofuels, an industrial biotechnology company working towards the production of fuel from algae headquartered in southwest Florida. “We’ve raised $190 million since we were founded in 2006 by Florida residents,” said Ahlm. “Our focus right now is on operating our pilot scale facility in Ft. Myers.”

Alhm said they are looking toward a commercial facility. “Our technology does not require farm land, food crops or fresh water,” he said. “We respect the issues around mandates and traditional ethanol but when we go into the investment community, this sends a very bad signal about continuing to grow in Florida.”

Because the committee ran out of time, the bill sponsored in the Florida House by Rep. Matt Gaetz of Fort Walton Beach will be carried over to the next meeting.

Listen to the ethanol bill portion of Friday’s hearing: Florida hearing