Domestic Fuel

REG is ready to go public.

Renewable Energy Group has announced the pricing of its initial public offering of 7,200,000 shares of common stock at a price to the public of $10.00 per share.

The shares are expected to begin trading on The Nasdaq Global Market on January 19, 2012 under the symbol “REGI.” Of the shares of common stock in the offering, Renewable Energy Group is offering 6,857,140 shares and selling stockholders are offering 342,860 shares. In addition, Renewable Energy Group has granted the underwriters a 30-day option to purchase up to 1,080,000 additional shares of common stock to cover over-allotments, if any.

Additional details available from the REG website.

January 19 is the deadline to pre-register for next week’s 6th Annual Iowa Renewable Fuels Summit in Des Moines, an event that no one in the ethanol and biodiesel industries should miss.

Among the highlights of the summit will be addresses by Governor Terry Branstad, four-star General Paul Kern (U.S. Army, ret.), former Reagan National Security Advisor Robert McFarlane and Executive Director of the Institute for the Analysis of Global Security, Dr. Gal Luft. And that’s just the morning session of the summit.

After lunch, National Biodiesel Board CEO Joe Jobe will outline the national landscape for biodiesel on the heels of a record year of biodiesel production and what to expect in 2012 and beyond. That will be followed by a panel on “Synergies of Livestock and Ethanol” moderated by Iowa Secretary of Agriculture Bill Northey will moderate a panel representing Iowa’s livestock and corn industries that will discuss the dynamics between ethanol and livestock production. Joining Secretary Northey will be Matt Deppe with Iowa Cattlemen’s Association, Craig Floss with Iowa Corn Growers Association and Randy Ives with Gavilon Group LLC. The final event of the day will be a panel discussion on “E15 – the New Consumer Choice” where Ron Lamberty, American Coalition for Ethanol, and Greg Emick, W & H Coop, will share what consumers need to know in preparation for future use of E15 in 2001 and newer vehicles.

It’s all happening on January 24 from 8:30 am to 3:30 pm at the new location of Veterans Memorial/Community Choice Credit Union Convention Center in Des Moines. Registration is free and open to anyone with an interest in renewable fuels. Rooms are still available at the Downtown Des Moines Marriott for the conference.

Hope to see you there!

Americans from the mid-Atlantic to the Northwest will soon be hearing a lot more about the benefits of soy biodiesel.

The United Soybean Board (USB) and soybean checkoff is partnering with nine Clean Cities Coalitions in the 2012 biodiesel and Bioheat® communications program to spread the word about the only commercially available advanced biofuel.

“Clean Cities coalitions are really great organizations,” says Mike Beard, USB director and soybean farmer from Frankfort, Ind. “This program helps them, and it helps us to get the word out about clean, efficient soy biodiesel.”

Clean Cities Coalitions participating in the 2012 reimbursement program include:
• Alabama Clean Fuels Coalition
• Greater Washington Region Clean Cities Coalition
• Iowa Clean Cities
• Kansas City Regional Clean Cities Coalition
• North Dakota Clean Cities
• Triangle Clean Cities Coalition
• Twin Cities Clean Cities Coalition
• Virginia Clean Cities
• Yellowstone-Teton Clean Energy Coalition

Most of the coalitions will also be working with their state soybean checkoff organizations on the promotions. This year, the soybean checkoff committed nearly $200,000 to assist these chapters in communicating the benefits of soy biodiesel and Bioheat through radio public service announcements, outdoor advertising, informational workshops for energy users and distributors, promotional events, and many other activities.

Agriculture Secretary Tom Vilsack supports the Renewable Fuels Standard (RFS2), but thinks strategies to build demand are more important to biofuels than tax credits.

Vilsack made multiple appearances in Hawaii this week, including at the American Farm Bureau Federation (AFBF) annual meeting where he addressed the membership and met with the media and had the opportunity to comment on biofuels policy.

During a press conference at AFBF on Monday, Vilsack said he believes it is important to keep the RFS2 in place for multiple reasons. “One, it provides consumer choice. We know that because we have a healthy biofuels industry that consumers are paying 90 cents to a dollar less for gas,” he said. “It’s a job creator in rural America and an opportunity to increase the bottom line for farmers, ranchers and producers. And it has helped us reduce our reliance on foreign oil, going from 60% imports to 52% in the last couple of years.” Audio from Vilsack on RFS2

A day later at the Pearl Harbor memorial to tout the increasing use of biodiesel by the military, Vilsack was asked about the expiration of the biodiesel tax credit at the end of 2011 and whether it will hurt the industry again as it did in 2010 if Congress fails to renew it. “First and foremost, our approach is to figure out ways to build demand for the product,” Vilsack responded, noting that they can use loan programs to produce more biodiesel while the commitment by the Navy to increase use of biofuel will help increase demand. “So, I don’t think that we need to rely solely on tax credits.” Audio from Vilsack on Biodiesel Tax Credit

During a visit to highlight renewable energy use by the U.S. Navy at Pearl Harbor, Agriculture Secretary Tom Vilsack also spotlighted the Hawaii-based biodiesel producer that supplies much of the fuel used there.

Pacific Biodiesel “is the oldest biodiesel producer and refinery in the country, started in 1996,” said Vilsack during his remarks on Tuesday at the memorial, noting that USDA has provided assistance to help that company grow. “We provided recently a $5 million business and industry loan to Pacific Biodiesel to allow it to continue to expand its capacity.”

That loan, announced in February 2010, is being used to construct a $10 million, 5.5 million gallon per year biodiesel production plant in Kea’au on the Big Island. Pacific Biodiesel vice president and co-founder Kelly King says Big Island Biodiesel will be the companies 13th biodiesel plant. “We’ll be owning and operating five of them, the other ones we built for clients throughout the mainland, from the east coast to the west coast,” she says, with capacity ranging from a half million to six million gallons.

“We started in Maui, where we actually had the first available biodiesel pump for the public,” said King. “Back then, most of our customers were environmental hippies who would come and pay 70 cents a gallon more for fuel and thank us and tell us to keep the change!”

King says Pacific Biodiesel operates on a community-based sustainable model set up locally to benefit local communities. While all the plants can use any type of oil feedstocks, much of them operate on used cooking oil. “It can use the most degraded oils up to the purest oils,” she said. “The degraded oils make the best feedstock because it’s the cheapest!”

King and two of her Pacific Biodiesel team members were excited to be part of the secretary’s appearance at Pearl Harbor and to have him recognize the importance of renewable fuels in the Aloha State.

Listen to an interview with Kelly King here: Pacific Biodiesel VP Kelly King

Photos from Secretary’s visit to Pearl Harbor memorial to promote biofuels

With the Pearl Harbor memorial as a backdrop and a Pacific Biodiesel hat on the podium, Agriculture Secretary Tom Vilsack Tuesday highlighted the use of biodiesel by the U.S. Navy.

Pearl Harbor naval base was the first Hawaii military marine fleet to use biodiesel, replacing the Department of Navy-operated tour boats that shuttled visitors to and from the USS Arizona Memorial with five new boats capable of running on 100% biodiesel.

“The military in the way they are approaching the future as it relates to energy is reminding us that this country has the capacity not just to think big but also to act big,” said Vilsack. “They understand and appreciate that energy security is important for the future of this country and are dedicated to making sure that the Navy provide a good example to the country on how to go about doing this.”

The secretary noted that the Pearl Harbor navel base is also “utilizing and will continue to expand E85 and B20 opportunities for their vehicle fleet” which consists of roughly 2000 vehicles, 75% of which are capable of using either E85 or B20.

Vilsack noted that much of the biodiesel used at Pearl Harbor purchased by the Navy is produced in Hawaii by Pacific Biodiesel, “which is the oldest biodiesel producer and refinery in the country, started in 1996.”

Listen to Secretary Vilsack’s comments about biofuels at Pearl Harbor: Tom Vilsack at Pearl Harbor memorial

Photos from Secretary’s visit to Pearl Harbor memorial to promote biofuels

Biodiesel blends operate trouble-free all winter in cold climates in vehicles, buildings and even homes. All you need to be successful is high-quality fuel and good fuel management, according to the National Biodiesel Board.

The largest municipal user of biodiesel, New York City, uses biodiesel blends in snow removal equipment. The New York City Parks & Recreation Department was the first city agency to pilot biodiesel in 2005 and still uses B20.

The 850-vehicle strong diesel fleet helps to maintain more than 29,000 acres in New York City. The fleet includes more than 40 different types of vehicles and equipment – handling everything from snow removal to landscape and parks maintenance to road construction and waste management.

The New York City Sanitation Department also uses biodiesel blends in vehicles used to fight winter weather, such as salt spreaders and plows.

“We can’t afford for our garbage trucks not to run,” said Supervisor of Mechanics Spiro Kattan. “Our trucks don’t only pick up garbage, they are also equipped with snowplow hitches. We’re a part of the city’s snow emergency plans and the residents of New York City would not be too happy if our vehicles went down during a snow storm.”

Further, JFK International Airport uses B20 to keep runways clear even in the worst of snowstorms.

In addition, New York City enacted a groundbreaking law requiring that all heating oil sold in the city contain at least two percent biodiesel beginning in October 2012. Bioheat® is already keeping many homes and offices warm this winter, including New York City Parks’ buildings.

Agriculture Secretary Tom Vilsack is in Hawaii this week to address the annual meeting of the American Farm Bureau Federation and highlight the Obama Administration’s commitment to renewable energy at the Pearl Harbor memorial center.

Vilsack will be at the World War II Valor in the Pacific National Monument’s Pearl Harbor Visitor Center on Tuesday to talk about how USDA is working with the U.S. Navy to promote the use of renewable fuels in its operations. In April 2009, the Pearl Harbor naval base was the first Hawaii military marine fleet to use biodiesel, replacing U.S. Navy-operated tour boats that shuttled visitors to and from the USS Arizona Memorial with five new boats capable of running on 100% biodiesel. Secretary Vilsack will highlight these efforts as well as other Administration efforts to advance renewable energy as part of the Navy fleet.

The 6th annual Iowa Renewable Fuels Summit on January 24 in Des Moines is free and open to all who want to attend, but they want to know if you are going to be there.

“Registration is required and can be done on-line at iowarfa.org,” said Iowa Renewable Fuels Association Managing Director Lucy Norton. The registration deadline for the event is January 19.

Norton says they are very excited about the event this year, which has a focus on the national security aspect of renewable fuels. “This is an opportunity for people to learn more about the impact that domestic fuels have on our energy security, our economy and the environment and the advantages of using something that we produce here,” she said. “That’s keeping our money at home instead of sending it over to countries that really don’t like us that much.”

Speakers include General Paul J. Kern (U.S. Army Ret.); Former National Security Advisory Robert McFarlane, and Dr. Gal Luft, Institute for Analysis of Global Security. The summit will also feature an update on biodiesel and the plans for implementing E15 for consumer fuel choice.

The summit on January 24 will be held at a new location in the Veterans Memorial/Community Choice Credit Union Convention Center from 8:30 am to 3:30 pm. Registration is easy and fast on-line and there is also more information on program details and hotel availability.

Listen to an interview with Lucy Norton about the summit here: Lucy Norton on Iowa Renewable Fuels Summit

The EPA has published a final rule approving camelina oil as a feedstock under the Renewable Fuel Standard (RFS2).

Today, the National Biodiesel Board (NBB) released the following statement in support of the ruling.

“Biodiesel’s evolving feedstock diversity is one of its greatest strengths, and we’re pleased to see the EPA recognizing camelina as yet another feedstock that meets the agency’s standards as an Advanced Biofuel,” said Anne Steckel, vice president of federal affairs at NBB. “As it has with other biodiesel feedstocks such as animal fats, recycled cooking oil, soybean oil and canola oil, the EPA’s proposal shows that biodiesel produced from camelina oil reduces greenhouse gas emissions by at least 50 percent compared with diesel fuel. This is good news for our industry and will give biodiesel plants another tool in the toolbox as they continue producing record quantities of America’s Advanced Biofuel.”

2010 was a tough year for Iowa’s biodiesel producers, but the industry roared back to life in 2011 and set a new production record.

According to the Iowa Renewable Fuels Association (IRFA), ten of Iowa’s 13 biodiesel plants operated during 2011 and produced a combined 169 million gallons. With plants restarting throughout the year, the rate of biodiesel production in December reached over 250 million gallons (annualized).

Iowa produced 48 million gallons of biodiesel in 2010. The previous record production was 85 million gallons in 2009.

“2011 has been a banner year for Iowa biodiesel,” said IRFA Executive Director Monte Shaw. “The reinstatement of the biodiesel tax credit combined with the renewable fuels standard (RFS) helped demand and Iowa was quick to respond. Yet challenges remain in front of us. Congress will once again allow the biodiesel tax credit to lapse at the end of 2011. With the RFS firmly in place, we do not expect the industry to completely shut down as it did in 2010. But the uncertainty of reinstatement will undoubtedly depress demand. Congress must act quickly in 2012 to extend the tax credit.”

Nearly 108 million gallons of biomass-based diesel were sold during the month of November, continuing a record year of production, according to figures released by the EPA. Biodiesel makes up the vast majority of the EPA’s biomass-based diesel category under the Renewable Fuel Standard program, representing about 95 percent of the volume this year.
In a news release from the National Biodiesel Board, biodiesel production specifically had reached an all-time high 908 million gallons through the end of November. The previous annual record for biodiesel production was 690 million gallons in 2008.

Biodiesel is produced in nearly every state in the country and is on pace to support more than 39,000 U.S. jobs in 2011 while replacing roughly 1 billion gallons of petroleum diesel. Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil and animal fats, it is the first and only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an advanced biofuel. Biodiesel can be used in existing diesel engines and meets strict specifications of ASTM D6751.

GROWMARK and FS Energy have given a whole new meaning to energy efficiency with the wireless Energy Business System (wEBS) which has streamlined their fuel delivery system.

GROWMARK Information Management Solutions director Keith Milburn says wEBS was developed as a fuel billing solution that makes the record keeping process easier by providing instantaneous information such as fuel type, tank sizes, taxes and credits.

Milburn says they developed wEBS when the fuel business started to get more complicated a few years ago. “We no longer just handle gasoline and diesel,” he said. “We have high sulfur, low sulfur, bio or soy diesel, ethanol blends – and all the relevant taxes have made it very complicated given those combination of blends.”

“There’s two components of wEBS,” Milburn says. “There’s the back office or centralized data set and then the hand held on the truck level.” The back office includes not only customer information, but every tank that each delivery truck services. “The system identifies each tank with a bar code that tells who the customer is, what product types, relevant taxes, discounts, and if there have fuel contracted at a certain price,” Milburn explains. So all the delivery driver has to do is pump the fuel and within minutes the transaction is recorded and an email confirmation is sent to the customer.

Milburn says this “evolution in the energy business” was first introduced as a pilot program in January 2010 with two trucks and it has since grown to incorporate about 95 trucks that essentially function as mobile hot spots to communicate information. And he says the system is continuing to evolve with the technology.

Find out more about the wEBS system in this interview with Keith Milburn here: Keith Milburn Interview

Cellulosic ethanol continues to be out of reach for commercial use, according to the latest Renewable Fuels Standard (RFS2) requirements set by the Environmental Protection Agency for 2012.

“EPA has essentially reduced the mandate for cellulosic, recognizing the fact that there aren’t supplies out there to meet it,” said USDA chief economist Joe Glauber.

Back in 2007, Congress set a goal of 500 million gallons of cellulosic ethanol to be produced in 2012, but only a very small fraction of that is now expected to come to fruition with a target of just 8.65 million gallons. “The big question that’s been out there for years is ‘when will cellulosic ethanol become profitable?’ said Glauber. “I don’t think anyone sees that coming anytime soon, although a few of these plants are expected to come on line in the coming year, so we’ll see.”

In order to project cellulosic biofuel production for 2012, EPA tracked the progress of over 100 biofuel production facilities, the methodology of which is clearly outlined in the official 97-page final rule document. Companies that EPA determined were likely to produce significant quantities of cellulosic biofuel in 2012 include (with projected ethanol-equivalent gallons):

KiOR – a Mississippi-based renewable crude oil project (4.8 million)
INEOS Bio of Vero Beach – waste to biofuel (3 million)
Fiberight – a waste-to-biofuel project in Blairstown, IA (2 million)
American Process, KL Energy and ZeaChem for a total of less than a million gallons combined.

EPA noted the importance of setting a cellulosic standard that was realistic, yet still encouraged investment in the technology. “Thus while any standard we set for cellulosic biofuel standard for 2012 will have some uncertainty in terms of actual attainment, our intention is to balance such uncertainty with the objective of promoting growth in the industry.”

EPA has set the “advanced biofuels” target for 2012 at 2 billion gallons, much of that being comprised of imported sugarcane ethanol from Brazil.

Read EPA’s full explanation of the RFS2 requirements justification.

The National Biodiesel Board is pleased with the increase in biomass-based diesel requirements for 2012 under the Renewable Fuel Standard (RFS2) finalized today by the Environmental Protection Agency (EPA).

The 2012 rule raises the Biomass-based Diesel program to 1 billion gallons, up from 800 million gallons this year. According to the latest EPA figures, the biodiesel industry had produced some 908 million gallons through the end of November, exceeding the 2011 requirement with one month of production remaining.

Steckel also urged the administration to issue a final rule for 2013 volumes raising the Biomass-based Diesel requirement to 1.28 billion gallons, as the EPA proposed earlier this year. The EPA on Tuesday postponed finalizing the 2013 volume, saying it needs more time for review.

Biodiesel makes up the vast majority of the Biomass-based Diesel program under the RFS. Because it also qualifies as an advanced biofuel under the program – with greenhouse gas emission reductions of 57 percent to 86 percent – biodiesel is also eligible to help meet general advanced biofuels requirements under the program.