Domestic Fuel

U.S. cellulosic biofuels production totaled about 20,000 gallons last year, way below the 500 million gallons target set by Congress. In a recent addition of “Today in Energy,” the U.S. Energy Information Administration (EIA) looks at the American cellulosic biofuels industry and how production may sharply rise in 2013.

According to the brief, several companies combined to produce about 20,000 gallons of fuels using cellulosic biomass (e.g., wood waste, sugarcane bagasse) from commercial-scale facilities in late 2012. EIA estimates this output could grow to more than 5 million gallons in 2013, as operations ramp up at several plants. By 2015, EPA estimates that another 250 million gallons could be online by 2015.

Although cellulosic biofuels volumes are expected to grow significantly relative to current levels, according to the brief, they will likely remain well below the targets envisioned in the Energy Independence and Security Act of 2007. That law set a target level of 500 million gallons of cellulosic biofuels for 2012 and 1 billion gallons for 2013, growing to 16 billion gallons by 2022.

As many have rightly point out, the path the commercial cellulosic biofuels production has not been straight or smooth. Several biofuel projects, including one from BP Biofuels in Highlands County, Florida, have been canceled before starting major construction. Other projects have experienced delays in their commercialization attempts. According to Today in Energy, several reasons underpin slow growth in the commercialization of biofuels; Difficulties obtaining financing in the aftermath of the debt crisis; Technology scale-up difficulties at start-up companies; and strategic corporate shifts because of increased availability of low-cost natural gas.

The brief concludes that all EIA forecasts and projections have been too optimistic as anticipated large shortfalls are expected to continue.

Camelina, energy cane and renewable gasoline are now added to the list of qualifying feedstocks and fuels approved by the Environmental Protection Agency for use under the Renewable Fuel Standard (RFS).

EPA released its final rule to identify additional fuel pathways that meet the “lifecycle greenhouse gas (GHG) reduction requirements for biomass-based diesel, advanced biofuel, and cellulosic biofuel” under the RFS.

This final rule describes EPA’s evaluation of biofuels produced from camelina oil, which qualify as biomass-based diesel or advanced biofuel, as well as biofuels from energy cane which qualify as cellulosic biofuel. This final rule also qualifies renewable gasoline and renewable gasoline blendstock made from certain qualifying feedstocks as cellulosic biofuel.

The National Biodiesel Board (NBB) is pleased with the addition of camelina oil as a feedstock. “This decision adds to the growing list of biodiesel feedstocks that meet the EPA’s standards for Advanced Biofuel and gives us yet another option for producing sustainable, domestic biodiesel that displaces imported oil,” said Anne Steckel, NBB’s vice president of federal affairs. “This is important for our energy security, for our economy and for addressing climate change, and we thank the EPA for conducting a thorough and fair review.”

Read EPA’s final rule here.

As last week came to a close, U.S. Congressman Jim Sensenbrenner (R-WI) introduced a bill to place what the Renewable Fuels Association (RFA) calls artificial caps on the Environmental Protection Agency’s (EPA) annual cellulosic biofuel projected production numbers. The proposed limits for any given year would be no more than five percent or one million gallons, whichever is greater, of total volume of cellulosic biofuels commercially available for the most recent calendar year.

In response, Bob Dinneen, RFA President and CEO said this is worse than irony. “Now that truly meaningful investment is being made in cellulosic ethanol companies that can be witnessed by the steel in the ground and actual production and introduction of millions of gallons of advanced ethanol into the marketplace, the Congressman wants this nation to turn its back on progress — turn back the clock to days of petroleum domination,” said Dinneen.

“Americans want fuel choice, they want cost savings, and they want American energy independence.  America is noted worldwide for its ingenuity and creativity.  Ethanol, especially the next generation that is now coming to fruition before our eyes, is the epitome of the American spirit.

Rather than encouraging that uniquely American entrepreneurial spirit, Congressman Sensenbrenner would limit the growth in advanced biofuels to no more than five percent per year.  Clearly, far faster growth will occur if the RFS is left to work as designed.  But in any case, I wonder if Congressman Sensenbrenner would agree to a five percent cap on the growth of non-conventional petroleum from fracking in the same spirit he is trying to cap advances in biofuels to five percent.  Why limit the speed of progress toward energy independence from any domestic resource?” concluded Dinneen.

You can never have too much education even if you’ve been working in the ethanol industry for many years – especially since technologies and practices continue to improve. A great tool is the 9th Ethanol Short Course, an ongoing effort to develop, train educate both new and experienced biofuel professionals. The course is sponsored by Lallemand Biofuels & Distilled Spirits and provides participants with in-depth training, conducted by industry experts and incorporates the entire fuel ethanol process. This year’s Ethanol Short Course takes place March 19-21 in Omaha, Nebraska.

Anyone interested in pursuing a practical or more technical understanding of the fuel ethanol production process should attend. Attendees should include plant operators, plant managers, lab technicians, lab managers and maintenance staff.

Topics and discussions will include: grain handling and starch conversion; fermentation technology; water treatment; evaporation and drying; safety; yeasts, enzymes and antimicrobials; chlorine dioxide chemistry; cellulosic ethanol research; DDGs and centrifugation. Click here for the full agenda and click here to register.

It’s ironic that the “Phantom Fuels Reform Act of 2013″ was introduced in the Senate on Thursday at the same time a panel discussion on “Dispelling the Myth of the Phantom Fuel” was going on at the National Ethanol Conference where four different cellulosic biofuels companies talked about how they will be making commercial quantities of the fuel this year.

The legislation, which would have an impact on the Renewable Fuel Standard (RFS), was introduced by Sens. Jeff Flake (R-Ariz.), David Vitter (R-La.) and Michael Crapo (R-Idaho), following the introduction of its House companion yesterday by Reps. Gregg Harper (R-Miss.) and Jim Matheson (D-Utah).

“The legislation wants to make the RFS reflect the marketplace instead of push the marketplace, which is what the oil industry wants because that would short circuit the RFS,” said Brooke Coleman, executive director of the Advanced Ethanol Council.

Listen to an interview with Brooke here: AEC's Brooke Coleman

One company that expects to be producing cellulosic ethanol very soon is INEOS Bio, according to vice president Dan Cummings. “We finished construction on our first facility in Vero Beach, Florida, have commissioned it and now we’re in the final start up phase moving towards making cellulosic bio-ethanol,” said Cummings. “We’re making it out of waste – agricultural, yard waste and vegetative waste.”

Target date to be on line is this quarter, moving toward full production this year with a capacity of eight million gallons. “It’s a first of a kind technology in the world and we look to license and build other plants globally,” Cummings said.

Listen to my interview with Dan here: INEOS Bio VP Dan Cummings

Others on the “Phantom Fuel” panel included Beta Renewables CEO Guido Ghisolfi, Poul Ruben Andersen with Novozymes North America, and Martin Mitchell of Clariant.

Listen to the whole panel here: NEC Phantom Fuel Panel

2013 National Ethanol Conference Photo Album

2013 NEC Golf Tournament Photo Album

Representatives from corn growers, the oil industry, advanced ethanol and the investment community addressed the future of the Renewable Fuel Standard (RFS) during the 18th National Ethanol Conference.

The panel moderated by Geoff Cooper with the Renewable Fuels Association included National Corn Growers Association CEO Rick Tolman, John Reese with Shell Oil Products, Advanced Ethanol Council executive director Brooke Coleman, and Mark McMinimy with Guggenheim Securities.

Listen to the discussion here: NEC Future of RFS panel

NCGA’s Tolman told the audience that the corn growers believe the RFS has been a huge success but he does believe there are implementation challenges going forward and one he noted was the language that restricts corn from being considered an advanced biofuel. “The industry has a petition at EPA right now to see if we can have a pathway approved for corn fiber from the kernel as an advanced biofuel,” said Tolman, and in the future they hope to address the arbitrary restriction on corn starch as an advanced biofuel.

Tolman says the RFS will be a topic of discussion with corn growers at the upcoming Commodity Classic in Orlando later this month.

Listen to an interview with Rick here: NCGA CEO Rick Tolman

2013 National Ethanol Conference Photo Album

2013 NEC Golf Tournament Photo Album

Concerns over hurting the soil quality when harvesting some crop residues for cellulosic biofuels, instead of leaving the residues on the fields to help the soil quality, might be unfounded. U.S. Department of Agriculture (USDA) research says that soil quality would not decline if post-harvest corn cobs were removed from the field.

“Crop residues have many useful functions when left in the field, [including] protecting against water and wind erosion [and] may contain essential nutrients for crop growth that can be recycled back into the soil,” among others says Agricultural Research Service (ARS) soil scientist Brian Wienhold, who conducted the study. But his work compared runoff rates and sediment loss from no-till corn fields where postharvest crop residues were either removed or retained and found no significant difference between fields’ sediment loss rates with and without the cobs. The cobs did slightly delay field runoff.

The study concluded that cobs could be removed from other residue and used for bioenergy feedstock without significantly interfering with the role of crop residues in protecting soils. But Wienhold cautions that you need to make sure you balance taking any residue off the fields with the potential benefits and losses it could cause.

Listen to Wienhold’s comments to USDA here: ARS soil scientist Brian Wienhold

The Environmental Protection Agency (EPA) released its proposed rules for the 2013 Renewable Fuels Standard yesterday. A portion of the proposal focused on dealing with Renewable Identification Number (RIN) fraud. Last year, several individuals were indicted for committing fraud by selling fake biodiesel RINS. The proposal is open for comment until March 19, 2013 and the industry is just now beginning to review and digest what it entails.

“While we are still reviewing the details, this proposal appears to be another positive step toward ensuring that RIN fraud is a thing of the past,” said Anne Steckel, National Biodiesel Board’s vice president of federal affairs. “We want to thank the EPA for working aggressively to address this issue and for proposing constructive solutions that will restore confidence in RIN markets.”

Steckel continued, “This problem was caused by a handful of wrongdoers who took advantage of a good policy for advancing America’s energy security. Two of those people are now facing significant prison time, and that enforcement along with these tightened regulations will go a long way toward preventing anything like this from happening again.”

The organization intends to continue working cooperatively with the EPA and our partners in the petroleum sector in bringing this issue to closure.

While the fraud cases were around biodiesel RINS, the EPA proposed rules addresses fraud across all renewable fuel sectors of the RFS. This includes ethanol RINS and cellulosic RINS. Tom Buis, CEO of Growth Energy said, “We are pleased to see that EPA is moving forward with a voluntary program to address the concerns raised about the integrity of RINS in the RFS program. We look forward to reviewing the proposal and will work with EPA to ensure that the program is successful.”

The Environmental Protection Agency (EPA) has released it proposed rules today for the 2013 Renewable Fuel Standard (RFS) volumetric requirements. Public comment is open until March 19, 2013. The proposal waives the cellulosic biofuel requirement from one billion gallons to 14 million gallons, but retains overall advanced and renewable fuel requirements.

The ethanol industry responded today with statements and Bob Dinneen, the president and CEO of the Renewable Fuels Association said, “The 2013 RFS requirements will be the catalyst that finally compels oil companies to get serious about breaching the so-called blend wall. This year’s RFS requirements will necessitate the use of more E15, E85 and other higher-level blends. Injecting larger volumes of biofuels into the U.S. fuel supply and spurring a more rapid transition to domestically produced renewables is exactly what the RFS was intended to do. The program is working as envisioned by Congress.”

Brian Jennings, Executive Vice President of the American Coalition for Ethanol (ACE) noted that his organization is concerned, as our other ethanol organizations, about the way the advanced biofuel pool serves as a magnet for imports of Brazilian ethanol. “We appreciate EPA providing us the opportunity to elaborate on this concern and look forward to continuing the dialogue on how to ensure Brazilian imports don’t displace domestic ethanol. The RFS is a catalyst for technology innovation and we believe 2013 will deliver key breakthroughs for U.S. grain sorghum based advanced biofuel and cellulosic biofuel. We look forward to providing additional comments during the 45 day comment period,” said Jennings.

Growth Energy CEO Tom Buis said there are a number of issues that should be considered, which could have serious impacts on the U.S. production of biofuels. “The RFS has been a resounding success, helping create jobs in America that cannot be outsourced, revitalizing rural economies across the country in addition to reducing our dependence on foreign oil and providing consumers with a choice and savings at the pump,” he added.

One of the elements of the proposal waives the cellulosic biofuel requirement from one billion gallons to 14 million gallons. Brooke Coleman, executive director of the Advanced Ethanol Council said that the EPA’s is getting to right number on cellulosic biofuels and noted that the industry is just breaking through at commercial scale. ” U.S. EPA worked hard to ensure that the cellulosic biofuels volume standard for 2013 would be tied directly to the commercial production of cellulosic biofuels expected to come online this year. While weaning the United States off of its addiction to foreign oil is not easy, the volume standards proposed today will continue to provide advanced biofuel investors and innovators with a predictable and durable path forward in that effort.”

In conclusion, the industry representatives said they look forward to working together to finalize the targets.

The Wall Street Journal editorial board is attacking biofuels, again. In their opinion piece, “Zero Dark Ethanol,“  they write that advanced biofuels have not made much progress in the past six years and the cellulosic ethanol mandate, that was vacated last week by the U.S. Court of Appeals is “only a fantasy mandate will motivate the industry to make enough of a fantasy fuel.”

In response to the article, the Advanced Ethanol Council (AEC) says the Journal seems to think that motor fuel markets are free and competitive, and that in the absence of government intervention, fuels like cellulosic biofuels would succeed if worthy. Unfortunately, says AEC, 100 years of direct and indirect subsidies to the oil industry, coming at a time when the U.S. taxpayer also built out most of the large scale infrastructure that the oil industry relies on today to move its product, has largely suffocated the free market principles that would otherwise reward innovation.

AEC continues by saying that in order to fix a broken marketplace, Congress decided in 2007 to forceably diversify the motor fuel marketplace with renewable fuels. And much to the dismay of the oil industry and those who carry their water like the Journal’s editorial board, the program is working. The domestic renewable fuels industry has grown exponentially, despite the global recession, in less than 10 years.

The Journal, adds AEC, is also wrong to assert that “nothing has changed” in the cellulosic biofuels industry. AEC cites their recent progress report released last month, where they say the cellulosic biofuels industry is breaking through at commercial scale.

AEC posits that you would think that a newspaper with the ideals espoused by The Wall Street Journal would celebrate the reintroduction of U.S.-branded competition into a broken marketplace. “You would think they would lament the distortive effects of oil subsidies and question why cheaper alternatives to oil cannot seem to break into the marketplace. In that world, the Journal would be calling for the comprehensive energy tax reform we so badly need to ensure that the next generation of motor fuels are produced by Americans instead of China, India or Brazil. What we do not need is more yellow journalism about ethanol from The Wall Street Journal editorial board.”

Sweetwater Energy has announced a 15-year commercial agreement with Front Range Energy to produce cellulosic ethanol at Front Range’s current corn ethanol facility located in Weld County, Colorado. Sweetwater will install its process to convert local biomass, such as crop residues, energy crops, and woody biomass, into sugar that will then will converted to ethanol.

“It’s very exciting to be an early adopter of Sweetwater’s technology and to bridge that gap from grain to cellulosic ethanol,” said Dan Sanders Jr., Vice President of Front Range Energy. “Supplementing our corn with this sugar allows us to displace some of the volatility of the corn market, with the goal of moving a higher and higher percentage of our production to cellulosic. We’ve had great success fermenting Sweetwater’s sugar, and from a business standpoint, we have great confidence in Sweetwater’s management team.”

Sweetwater will place one of its cellulosic facilities near the Front Range site and will deliver enough refined monomeric sugar for Front Range to produce up to 3.6 million gallons of ethanol per year during the initial phase. As the project ramps up, economics will ultimately determine the pace and volume with which Front Range’s corn ethanol facility will migrate to Sweetwater’s cellulosic feedstocks.

“To say we’re enthusiastic about this relationship with Dan and the whole Front Range team is an understatement,” said Arunas Chesonis, Chairman and CEO of Sweetwater. “They’re a progressive team looking to stay ahead of the curve, and that’s a very rewarding mindset to have in a company you’ll be working with for the next 15 years. We’re going to kick this off by replacing about 7 percent of the corn currently processed, and as our partnership grows and we see how well both parties are benefiting from the cellulosic ethanol production, we’ll increase the amount of cellulosic material and really open up the cellulosic markets to Front Range.”

In December 2012, Sweetwater was awarded a patent for the manufacture and deployment of distributed pretreatment units designed for the extraction of sugars from any cellulosic feedstock for the production of ethanol.

The American Petroleum Institute hailed today’s circuit court ruling to “vacate the 2012 cellulosic biofuel standard” as a “decision to end mandate for non-existent biofuels.” Renewable Fuels Association president and CEO Bob Dinneen says it is not.

“The mandate for cellulosic ethanol is not ended by this decision by any way shape or form,” said Dinneen, calling API’s characterization “the height of deception.”

Dinneen explains that the court decision simply means that EPA has to have better justification for cellulosic biofuel target numbers under the Renewable Fuel Standard (RFS). “They couldn’t create an incentive for investment,” he said. “All they can do is make a clear headed decision on what is likely to be produced.”

In this edition of the Ethanol Report, Dinneen talks about how the petroleum industry is very afraid of the potential of cellulosic biofuels to take over a greater percentage of the gasoline market. “They’re not happy about having lost 10% of the barrel,” Dinneen says. “They are apoplectic about the potential of losing even more of it to cellulosic ethanol and other biofuels.”

Listen to or download the Ethanol Report here: Ethanol Report on Cellulosic Court Ruling

Subscribe to “The Ethanol Report” with this link.

There are some mixed messages coming from the D.C. Circuit today as they ruled to vacate the 2012 cellulosic biofuel standard, yet affirmed the 2012 advanced biofuel standard as part of the Renewable Fuel Standard (RFS). The biofuels industry reacted to the decisions and noted that although the court vacated the cellulosic standard, it also rejected API’s argument that EPA was required to follow the U.S. Energy Information Administration’s projections in setting its own. The court also rejected API’s argument that EPA was not entitled to consider information from cellulosic biofuel producers in setting its projection, finding that cellulosic producers were an “almost inevitable source of information” for EPA. According to several biofuel organizations, these were important decisions that give EPA flexibility in setting cellulosic biofuel volumes in the future.

The court vacated the cellulosic biofuel standard because it believed that EPA had impermissibly set the volume with the objective of promoting growth in the industry, rather than simply making an accurate prediction. The biofuels organizations strongly disagree with this characterization — EPA did not determine a reasonably achievable volume and then inflate it, they say. Rather, it set the volume based on the best information available to it at the time. In the end, EPA is free to reinstate the volumes that it had established, as long as the information available at the time would support the agency’s conclusion that those volumes were reasonably achievable. The court’s decision does not now require, or permit, EPA to set volumes based on hindsight.

The D.C. Circuit also affirmed the EPA’s decision not to reduce the advanced biofuel volume, categorically rejecting API’s arguments that EPA must be support its decision not to reduce the applicable volume of advanced biofuels with specific numerical projections.

In a joint statement, the biofuel organizations stated that, “although we disagree with the court’s decision vacating the 2012 cellulosic volumes, today’s decision once again rejects broad-brushed attempts to effectively roll back the federal Renewable Fuel Standard.”

The biofuel organizations include the Advanced Biofuels Association (ABFA), Advanced Ethanol Council (AEC), American Coalition for Ethanol (ACE), Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA). They are reviewing the court’s decision and assessing next steps in the matter.

John Gilroy from Harney Oil Company in Coralville, Iowa and Jim Becthold from Linn Coop Oil Co. in Marion, Iowa have been awarded the 2013 Secretary’s Biodiesel and Ethanol Marketing Awards. Iowa Secretary of Agriculture Bill Northey presented the awards that were created by the Iowa Department of Agriculture and Land Stewardship to recognize fuel marketers that have gone above and beyond in their efforts to promote and sell renewable fuels.

“Both winners have gone to great lengths to make biodiesel and ethanol more available to Iowa drivers and I appreciate the effort and investment they have made to promote these home-grown fuels,” said Northey. “Iowa is fortunate many retailers like Harney Oil Company and Linn Coop Oil Company that make the extra effort to ensure that the fuels we produce in this state are available to customers.”

Becthold, who won the Ethanol Marketing Award, was close to becoming the first retailer in the country to sell E15 last summer, but couldn’t get the fuel. But with perseverance, he didn’t achieve his goal of becoming first to sell the fuel blend in America, but he did become to first retailer in Iowa to sell E15. An avid supporter, he is funding a consumer ethanol marketing campaign and is also promoting the benefits of E15 to other retailers across the country.

Gilroy won the Biodiesel Marketing Award for his efforts to increase availability of biodiesel in the state. His facility has a heated storage tank, allowing the sale of 100 percent biodiesel year round and this past year, he expanded his tank. In 2012, he enabled marketers to sell nearly 12 million gallons of biodiesel to Iowans.

According to an article in Nature, researchers with Michigan State University (MSU) show that marginal lands can serve as prime real estate for meeting alternative energy production goals. By growing mixed-species cellulosic biomass, marginal lands could annually produce up to 5.5 billion gallons of ethanol in the Midwest alone.

“Understanding the environmental impact of widespread biofuel production is a major unanswered question in the U.S. and worldwide,” said Ilya Gelfand, lead author of the paper. “We estimate that using marginal lands for growing cellulosic biomass crops could provide up to 215 gallons of ethanol per acre with substantial greenhouse gas mitigation.” According to Gelfand, this is the first study to provide an estimate for greenhouse gas benefits, and an assessment of the total potential of these lands to produce significant amounts of biomass.

Researchers from MSU, the Pacific Northwest National Laboratory and the University of Maryland used 20 years of data, focused on 10 Midwestern states, from the National Science Foundation (NSF) Kellogg Biological Station (KBS) Long-Term Ecological Research (LTER) site. Kellogg Biological Station is one of 26 such NSF LTER sites in ecosystems around the world from grasslands to deserts, coral reefs to tundra.

“The study underscores the critical role that long-term basic research plays in determining the optimum balance between economic prosperity and environmental sustainability,” said Saran Twombly, program director in NSF’s Division of Environmental Biology. “Long-term basic experiments suggest that wise management of marginal lands, rather than wholesale conversion of valuable agricultural lands, could contribute significantly to a sustainable future.”
Read the rest of this post…