Domestic Fuel

After nearly a month delay, the Environmental Protection Agency (EPA) today released final Renewable Fuel Standard (RFS2) requirements for 2012.

The final 2012 overall volumes and standards are:

Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (8.65 million gallons; 0.006 percent)
Total renewable fuels (15.2 billion gallons; 9.23 percent)

The percentage standards for four fuel categories are required by the Energy Independence and Security Act of 2007 (EISA).

Biodiesel consulting firm Lee Enterprises of Little Rock, Ark., has announced plans for expansion in 2012 into ethanol, biomass, wind, solar and geothermal, and the addition of consultants and strategic partners.

“We are currently the world’s largest biodiesel consulting group, and most of our consultants and strategic partners are already very involved in the other alternative fuels,” said principal owner Wayne Lee.

Lee notes that the group’s current appraiser, environmental expert, QA experts, and grant writers have backgrounds and experience in these areas, and that the group’s larger strategic partners – Stoel Rives (legal), Christianson & Associates (accounting), IMA of Kansas (insurance), FCStone Merchant Services (feedstock financing), and Executive Leadership Solutions (staffing) – already have very significant presences in these other alternative fuels sectors. “Our goal over the past several years has been to put together a top notch team of the best biodiesel experts in the world”, says Lee. “I am quite satisfied that we have accomplished that goal and now address almost every need in the biodiesel sector.”

“I am a firm believer in biodiesel as the best alternative to diesel fuels and I strongly believe in its future” says Lee. “But, the overall solution to the world’s oil dependency rests with all the alternative fuels working together”. As a result, Lee wants his consulting group to be able to provide the same depth of assistance for all kinds of alternative fuels as they currently provide for biodiesel.

Congress has failed to renew the biodiesel tax incentive that will expire at the end of this year and the biodiesel industry is hoping they will turn it around and act quickly in 2012 to save thousands of jobs that have been created thanks to the initiative this year.

“We’re disappointed,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “Jobs and the economy are supposed to be the top priority in Washington, yet Congress has left thousands of workers in limbo heading into the holidays by failing to extend this tax incentive. It’s a missed opportunity, and we are urging Congress to pass an extension immediately next year to limit the economic damage.”

Through the end of October of this year, according to the latest EPA figures, the industry had set a new annual production record of more than 802 million gallons and could triple the 2010 production volume by the end of the year.

Representatives of the U.S. biodiesel industry are urging Congress to pass a seamless extension of the biodiesel tax incentive. The $1-per-gallon biodiesel tax credit is slated to expire on Dec. 31. Bipartisan legislation has been introduced in the U.S. House and Senate to extend it for three years. Proponents of the bill testified this week in a hearing on alternative energy tax incentives, held by the Senate Finance Committee’s Subcommittee on energy, natural resources and infrastructure.

“This tax incentive is a job creator and Congress will be putting jobs in jeopardy if it adjourns without passing an extension,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board (NBB).

The tax incentive was allowed to expire in 2010 but was reinstated this year. Since the reinstatement, the biodiesel industry has set a new production record of more than 802 million gallons through October. That is more than double last year’s volume of about 315 million gallons. Increased production supports more than 31,000 jobs this year while generating at least $3 billion in gross domestic product and $628 million in federal, state and local tax revenues, according to a recent economic study conducted by CardnoENTRIX, an international economics consulting firm.

“Stable, long-term federal incentives are necessary for this industry to continue to grow,” Paul Soanes, president and CEO of Texas-based Renewable Biofuels, Inc (RBF) said at the hearing.

Soanes said RBF has increased production at its plant in Port Neches, Texas from 9 million gallons in 2010 to more than 62 million gallons this year, hiring new employees and investing in capital improvements. Similar stories are taking place within the biodiesel industry across the United States.

The Illinois state legislature has approved an extension of the state’s biodiesel blending program. The bill extends the sunset date for the biodiesel state sales tax incentives to Dec. 31, 2018. Any biodiesel blend of more than 10 percent continues to be eligible for fuel tax exemption.

Since the inception of the B11 blending credits in 2004, more biodiesel has been blended in Illinois annually than any other state, says the Renewable Energy Group.

Illinois has more than 1,500 “green collar” jobs in the state, according to data from a recent Illinois biodiesel economic impact study. The biodiesel industry generated $1.5 billion of household income and was responsible for more than $2.6 billion of Illinois gross domestic product between 2004 and 2010.

“REG applauds the Illinois legislature for promoting green collar jobs, Illinois agriculture, rural economic development and sound environmental policy,” said Daniel J. Oh, president of REG.

REG markets biodiesel from its REG Danville (45 mmgy capacity) and REG Seneca (60 mmg capacity) facilities as well as several Chicago-area terminal locations.

The Iowa Renewable Fuels Association (IRFA) elected its new 2012 Board of Directors and executive committee during its annual meeting last week.

2012 IRFA Board of Directors include Brad Albin, Renewable Energy Group, who will serve as president; Rick Schwarck, Absolute Energy, vice president; Steve Bleyl, Green Plains Renewable Energy, treasurer and Brian Cahill, Southwest Iowa Renewable Energy, secretary. Monte Shaw, IRFA executive director, is a non-voting member of the board of directors.

Those who were elected to join the IRFA officers on the executive committee for 2012 include Walt Wendland, Golden Grain Energy, who is the IRFA past president; Tom Brooks, Western Dubuque Biodiesel, at-large and Craig Willis, ADM, at-large.

Each producer member has a seat on the board and votes on officers. New officers will serve a one-year term during the 2012 calendar year.

About 20 U.S. soybean farmers are in New York City this week to see the how the Bioheat Industry is gaining momentum. The National Biodiesel Board (NBB) is hosting the group. Bioheat is biodiesel mixed with home heating oil. Starting in October, 2012, all heating oil sold within New York City will contain at least two percent biodiesel.

The group will tour CME Group, the world’s leading and most diverse derivatives marketplace where energy is bought and sold. There they will have an educational session on the Bioheat market and hear from the president of the New York Oil Heating Association and a New York City Councilman.

In addition, the group will see the biodiesel facilities of the New York City Department of Parks & Recreation and the Port Authority of New York and New Jersey. Both use biodiesel blends in their diesel vehicles as does the Department of Sanitation.

Those three agencies use about 11 million gallons of biodiesel blends a year, ranging from 5 to 50 percent biodiesel (B5 – B50), according to Steven Levy of Sprague Energy, a biodiesel supplier in that area. The farmers are also visiting the facilities of Metro Energy, one of the largest petroleum distributors in New York City and the northeast. In 2009 the company sold 10 million gallons of biodiesel to be used as Bioheat in New York City alone. They are building a 110 million gallon biodiesel production facility in Brooklyn.

The biodiesel and Bioheat Industries have been supported by farmer-led groups including NBB, the United Soybean Board and the soybean checkoff.

2011 has been a challenging year for getting anything done in Washington DC, including as it relates to both agriculture and energy policy.

“In agriculture, when it comes to energy, we want reliable, economically competitive sources,” says GROWMARK government affairs director Chuck Spencer. “As a country, what we are looking for is energy security and that’s going to come from a mix of both domestic production and allies like Canada.”

When it comes to domestically-produced ethanol, Spencer says the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year provides new opportunities for the industry. “The domestic ethanol industry has been preparing for this moment for some time,” he said. “The energy table is rather large and there’s plenty of chairs at the table, particularly biofuels of all types. We’re going to see our fuel sources continue to diversify and in that diversity is going to come strength.”

Since the GROWMARK system is a cooperative that represents farmers throughout the Midwest and Ontario, Spencer says they are looking forward to the challenge of agriculture being able to supply more of our energy needs. “We’re all looking forward to more corn and soybean acres being planted. Farmers are responding to market signals to meet the demand for food products, renewable products, fiber and proteins for the livestock industry,” he said.

Spencer notes that the Renewable Fuels Standard is the corner stone of domestic renewable fuel policy and it should continue. “Considering that biodiesel is an advanced biofuel and ethanol can certainly become one as well, we have continued promise as far as our ability to produce renewable fuels and what that means to local economies,” he added.

Spencer also discusses what lies ahead in 2012 with the need to come up with a new Farm Bill during an election year with a huge federal deficit.
Listen to my conversation with Chuck Spencer here: Chuck Spencer Interview

Comparing the life cycle analysis of soy products to petroleum products shows clear environmental advantages on the soybean side.

Early last year, the United Soybean Board released the findings of a life cycle analysis report that compared several different soy-based products with the same products made from petroleum sources, including soy biodiesel. The peer-reviewed study was done by Omni Tech International, a consulting firm specializing in renewable and biobased products. The study included a review of soy-based biofuels, plastics, lubricants and coatings.

Omni Tech consultant Jim Pollack says they found out that soybean yields increase 12% in the last ten years, energy to grow soybeans was down 20%, soybean crushing plants were using 45% less energy to make soybean oil. “When the oil was sent over to the biodiesel plants, they were using 35% less energy,” Pollack said. “So, collectively, all of these improvements have resulted in a very favorable life cycle profile for soy biodiesel.”

Pollack was telling that story at the recent National Association of Farm Broadcasting annual meeting. Listen to my interview with him here: Jim Pollack with Omni Tech International

Iowa’s biodiesel leaders are unveiling new radio ads for Iowa State/Iowa men’s basketball games to promote biodiesel to consumers.

“These radio ads are designed to encourage Iowans to learn more about the industry’s starting line-up of performance, quality, support for Iowa agriculture, green-job creation, as well as price and availability,” said Jon Scharingson, Director, Sales and Marketing at Renewable Energy Group® (REG), part of the group coordinating the ads. “Whether you’re a Hawkeye or a Cyclone, we want Iowa diesel engine operators to ask for biodiesel blends from their local petroleum marketer whether it is at the retail pump or for delivery to their business, fleet, or farm.”

In addition to REG, the radio ads are being sponsored by the Iowa Renewable Fuels Association, the Iowa Soybean Association and the Iowa Biodiesel Board to encourage consumers to ask for biodiesel blends from their local fuel retailer, coop or petroleum marketer. The ads are partially funded by the soybean check-off.

According to the Iowa Department of Weight and Measures, a five percent biodiesel blend (B5) has the same performance and quality attributes as straight diesel fuel. “B5 biodiesel blends can perform in any diesel engine in any season,” said Scharingson. “We urge consumers to ask for this home-grown, Iowa-made fuel from any petroleum marketer in Iowa.”

Verenium Corporation is now marketing its successful Purifine® phospholipase C (PLC) enzyme product for use in the pretreatment of oil for biodiesel production. The Purifine® PLC enzyme is designed to improve yields and overall economics of edible oil and biodiesel production.

“Since the initial launch of our Purifine® PLC enzymatic degumming process, we have seen rapid adoption and success within the edible oil market, and are pleased to now offer an enzymatic degumming solution for the production of biodiesel,” said James Levine, President and Chief Executive Officer at Verenium. “When compared to traditional degumming processes, our Purifine® PLC enzyme enables a high yield of oil while at the same time efficiently removing phospholipid impurities. Purifine® PLC can also be applied to replace chemical or crude refining, making for a much ‘greener’ process.”

Verenium began marketing and selling Purifine® PLC in 2008 for processing of edible oils and estimates the addressable global market for Purifine® PLC in production of edible oils and biodiesel to be approximately $350 million annually. The Company expects its first customer applying the enzyme for biodiesel production, engineered and implemented by Alfa Laval, to be fully operational in the first half of 2012.

The largest government purchase of biofuels for military application was announced today.

U.S. Navy Secretary Ray Mabus and U.S. Department of Agriculture Secretary Tom Vilsack jointly announced that the Defense Logistics Agency (DLA) signed a contract to purchase 450,000 gallons of advanced drop-in biofuel.

The biofuel to be purchased is made from a blend of non-food waste (used cooking oil) from the Louisiana-based Dynamic Fuels, LLC, a joint-venture of Tyson Foods, Inc., and Syntroleum Corporation, and algae, produced by Solazyme. The fuel will be used in the U.S. Navy’s demonstration of a Green Strike Group in the summer of 2012 during the Rim of the Pacific Exercise (RIMPAC), the world’s largest international maritime exercise.

“The Navy has always led the nation in transforming the way we use energy, not because it is popular, but because it makes us better war fighters,” stated Secretary Mabus. “This unprecedented fuel purchase demonstrates the Obama Administration’s commitment to seeking energy security and energy independence by diversifying our energy supply.”

The biofuel will be mixed with aviation gas or marine diesel fuel for use in the Green Strike Group demonstration.

Read more from USDA and listen to press conference of the announcement.

By the end of 2011, POET will be producing enough corn oil as feedstock for 12 million gallons of biodiesel per year.

POET has been selling Voilà corn oil for biodiesel and feed markets since January. With its patent-pending technology expanding to a total of six plants, POET has increased its capacity.

POET Biorefining in Hudson, South Dakota, was the first to produce Voilà. Since then, the technology has been installed in five more POET plants, with more on the way in 2012. Plants that are producing corn oil today are POET Biorefining – Emmetsburg, Gowrie, Jewell and Hanlontown in Iowa. POET Biorefining – Laddonia, Mo., will be coming online next week. The six plants’s combined capacity is about 100 million pounds of corn oil per year.

“Voilà has been a very strong part of POET’s business this year, and I’m excited to see more plants getting this technology,” POET founder and CEO Jeff Broin said. “The more we can diversify into new profitable products, the more successful our plants will be.”

Voilà is just another item on POET’s growing list of products created at its plants. In addition to ethanol, POET produced quality products for animal feed including Dakota Gold distillers dried grains. POET also captures carbon dioxide at seven of its plants for sale to beverage producers, and the company last year unveiled Inviz, a zein product used to replace petroleum-based films and coatings.

See more on Voilà from POET in the following video:

The U.S. Department of Agriculture has announced a new pilot program of insurance for camelina beginning with the 2012 crop year.

According to a release from USDA, “Camelina is an oilseed crop with the potential to create new renewable energy markets in the United States, generate rural jobs here at home, and decrease America’s dependence on foreign oil. The new pilot program will be available in selected counties in Montana and North Dakota for the 2012 crop year, with a sales closing date of February 1, 2012.”

Camelina, an oilseed, is a rotation crop for wheat that can be established on marginally productive land. It is an annual, short season plant. Biofuel from camelina is an ideal jet fuel substitute. USDA’s Agricultural Research Service (ARS) scientists have long-term studies underway to examine ways to use camelina as a bioenergy crop for producing jet fuel for the military and the aviation industry. In addition, earlier this year USDA announced two Biomass Crop Assistance Program (BCAP) project areas devoted to developing camelina as biofuel in several states, including Montana. USDA is also part of several partnerships to develop oilseeds and native and perennial grasses as a biofuels.

Find out details of the program from USDA.

Former Genencor head Bob Mayer has been appointed chief executive officer and chairman of the board of directors for Cobalt Technologies, a leading developer of next generation bio n-butanol.

Mayer, who has more than 30 years of experience in the chemicals and biotech sectors, will lead Cobalt as it focuses on developing commercial facilities globally. For the past 30 years, Mayer has honed his biotech expertise holding executive leadership positions at multi-national companies. Most recently he was the CEO of Genencor International, Inc., a leading global industrial enzyme company wholly owned by Danisco A/S.

Cobalt’s bio n-butanol technology converts biomass and non-food waste sugars into bio n-butanol at a cost that is 40-60 percent lower than current petrochemical technology. N-butanol is currently sold into a multi-billion dollar market and Cobalt’s low-cost process enables the use of n-butanol as a chemical feedstock for conversion into a wide variety of chemicals and fuels, greatly expanding the addressable market.