Domestic Fuel

Carolyn Hoagland was recently awarded the Volkswagen Distinguished Scholar for her work in learning about how farmers choose to grow bioenergy crops. Hoagland, an adult student, is an environmental science major at the University of Tennessee at Chattanooga (UTC). She conducted her research while working as an intern at the Oak Ridge National Laboratory. Hoagland found that many aspects of farmers’ choices as well as U.S. farm policy are complex. However, she determined that high quality farm ground is unlikely to be converted to cellulosic energy crops if farmers are concerned about making a profit.

“Most ethanol produced in the U.S. is currently made from corn grain, and the government would like to limit that process and encourage ethanol to be produced instead from non-food crops like switchgrass or hybrid poplar,” said Hoagland. “These poor quality acres can sometimes be profitably converted to switchgrass or other energy crops, but only if a biorefinery is nearby to buy the biomass energy crop.”

The USDA has programs in place to encourage farmers to grow bioenergy crops including the Biomass Crop Assistance Program (BCAP). However, this program is in jeopardy when at the beginning of June, the Senate voted to discontinue any funding for the program in 2012. The bill still needs to go to the House for vote but the industry is confident that it will look much different than the Senate version.

Hoagland presented her research during the Annual Meeting and International Research Conference of Sigma Xi, the Scientific Research Society in Raleigh, North Carolina. She has been studying energy for more than a decade.

“Getting the internship changed my life. In class, it helped me see the big picture. When you’re taking a 300 or 400-level class, it’s hard to put the information into context, but if you’ve completed an internship, when the information is presented, you can understand it UTC had been very welcoming place for adult students,” Hoagland concluded.

DDCE has selected Nevada, Iowa for its cellulosic ethanol biorefinery to be located adjacent to Lincolnway Energy, LLC’s corn-ethanol plant. The company has entered into an agreement to purchase land when completed, where the plant will be sited. The biorefinery will be one of the first commercial scale cellulosic ethanol plants producing fuel from corn stover, corn cobs and leaves, remaining after grain harvesting. Currently, DDCE is producing fuel at its demonstration facility in Vonore, TN and is in the process of scaling up the process to globally license its end-to-end production system.

“We’re producing cellulosic ethanol sustainably and economically today, and the market is ready and interested to deploy large-scale biorefineries,” said Joe Skurla, CEO of DDCE. “We are purchasing the site next to Lincolnway because it will meet the business needs for our project, and provides potential economic and environmental synergies for both facilities.”

This fall, the company plans to collect thousands of tons of stover from Iowa fields with its 2011 Stover Collection Program. This program will help create cost effective harvesting and distribution techniques. DDCE is collaborating with Pioneer Hi-Bred and Iowa State University to establish best practices in harvesting, storage, and transportation, and assure the agronomic and environmental integrity of cornfields.

Genencor has announced its next generation cellulosic ethanol enzyme, Accellerase TRIO. The enzyme will help biofuel producers more cost-effectively produce cellulosic ethanol from a wide-range of renewable feedstocks including switchgrass, wheat straw, corn stover and municipal waste. In essence, this enzyme improves the effectiveness of converting biomass into sugars, one of the critical steps in the production process.

Accellerase TRIO can be thought of as an enzyme cocktail that combines into one product the ability to breakdown the glucan (C6) and xylan (C5) in the biomass feedstock into fermentable sugars. This solution increases ethanol yield per unit of feedstock and also helps to boost total production by lowering viscosity and enabling producers to process more biomass.

I spoke with Dr. Aaron Kelley, Director of Business Development for Genencor, via Skype to learn more about their new product. He noted that there are three main points he wants to drive home about Accellerase TRIO.

“One, we think it is a very significant improvement for the industry and a significant improvement for Genencor over Accellerase DUET, our last Accellerase product. So as we look across the spectrum of biomass feedstocks and pretreatments we’re seeing a two-fold reduction in the amount of enzymes needed to reach the same level of production. That’s very significant for the industry.”

Kelley continued, “We also think Accellerase TRIO is one of the most easy to use and complete products out there in the market today. It really combines all the necessary cellulase and hemi-cellulase activities to get conversion to monomeric sugars and that’s what the yeast and other things need to produce cellulosic ethanol.”

You can listen to my full interview with Aaron Kelley, where he also discusses the recent lowering of the advanced biofuels requirement in the Renewable Fuels Standard, here: Accellerase TRIO Launched

The enzyme has shown significant results across the board in feedstocks ranging from stovers to dedicated energy crops to municipal solid waste. Several companies have already been using the enzyme with great success. However, Kelley notes that while Accellerase is effective among the suite of feedstocks today, in the future, they may look at tailoring the enzyme for specific feedstocks.

The announcement has come on the cusp of the Fuel Ethanol Workshop that will take place in Indianapolis, Indiana beginning on Monday, June 27th. Kelley, who will be at the show, expects a lot of interest in the product from producers.

The site preparation has been completed for BlueFire Renewables’ cellulosic ethanol plant in Fulton, Mississippi. The work was conducted by Century Construction and the site is now ready for the construction of the plant to begin.

“With support from the County of Itawamba and the City of Fulton and excellent work done by Century Construction, the Fulton site is ready for facility construction,” said Arnold Klann, CEO of BlueFire Renewables, Inc. “We are happy to be working with the County and City to bring renewable fuel production into reality and, in the process, create local jobs.”

Klann said his company is working on various financing options including a pending loan guarantee application with the United State Department of Agriculture.

“Itawamba County is very pleased to join BlueFire Renewables in the effort to alleviate our dependence on foreign fuels, preserve our environment and spur our economy, said Greg Deakle, Itawamba County Executive Director. “BlueFire’s first phase of construction has already created 52 jobs in Fulton and, as BlueFire moves into its next phase of construction, will create numerous more.”

When the project is completed, BlueFire will produce 19 million gallons per year of cellulosic ethanol from green and wood wastes collected from the local region.

Back in 2009, Allard Research and Development debuted its small ethanol and biodiesel refineries. This month, they have released the first self-powered modular cellulose ethanol refinery that uses cellulose feedstock grown as part of the system in hydroponic shipping containers. The system can produce 20 gallons per hour and fits into 3,600 square feet and can be attached together to create larger scale systems.

“The ability to grow the cellulose feedstock as part of the system is a game-changer,” said Adam Allard, Founder and Chairman. “Historically, the big limiting factor for people wanting to make their own ethanol fuel has been a lack of abundant feedstock.  Now it comes with the system. This process also provides an answer to an ongoing debate in this industry… it stops the food vs. fuel debate and does not take farmland that could be used to produce food crops.”

The patent pending system integrates an engine generator and distillation system in one. The waste heat from the engine is used for the distillation process and creates enough electricity to also power the entire mini biorefinery. The engine uses the gasified waste from the cellulose process as its fuel. In addition, the water is cleaned and reused in the system. Together, the ethanol is produced in a closed-loop system that minimizes waste and uses all feedstock components.

The company believes that its mini-biorefinery is a good option because it can be sited next to the feed source, needs only a fraction of the costs of a full-scale plant and the fuel can be sold to fuel retailers for use as E85 or any other ethanol fuel blends. The company expects to go into production during the 1st Quarter of 2012 but is currently taking orders.

The ethanol industry is anxious to continue talks about the future of the Volumetric Ethanol Excise Tax Credit (VEETC) and how best to balance the budget while still ensuring the ethanol industry can move forward. Yet while many believe the Senate's defeat of Sen. Coburn's ethanol amendment opens the door for dialogue, others believe today's action does little to move the debate forward.

"Today's debate did little to move the ball forward in encouraging the development of an advanced and cellulosic biofuels industry," said Michael McAdams, president of the Advanced Biofuels Association. "Our nation needs a comprehensive approach that focuses on the future of all biofuels, including advanced drop-in, algae, and cellulosic fuels to deliver as many gallons to back out foreign oil as quickly as possible. In order to best achieve this goal, Congress must consider policies that are technology, feedstock, and product neutral, and provide long term certainty for the markets. We remain committed to working with Congressional leaders and stakeholder groups to find a common sense approach the benefits all biofuels."

While all groups remain committed to working with federal policymakers on a compromise, Bart Schott, a grower from Kulm, North Dakota and the current president of the National Corn Growers Association noted that should Coburn's policy have been passed, the ethanol industry could have seen production reduced by 38 percent. "This would have significantly impacted an industry that provides and supports more than 400,000 U.S. jobs, many in rural America, during a time of economic uncertainty. The loss in ethanol production could have resulted in the shedding of approximately 112,000 of these jobs, in all sectors of the economy," said Schott.

Schott pointed out that while the ethanol industry remains open to change the oil and gas industry has refused to proactively engage in debates about subsidy reform. He continued by reiterating his organization's support of the Ethanol Reform and Deficit Reduction Act that was introduced yesterday by Sens. John Thune and Amy Klobuchar.

Jeff Broin, chairman and CEO, of POET, the country's largest ethanol producer added that the country must transition away from the tax credit and make a short-term investment that will reap long-term rewards. This should be done through the expansion of flex fuel pumps and flex fuel vehicles.

“Over the years as the tax credit has declined, we have been able to improve our efficiency and stay competitive with gasoline. Now it is time for the ethanol industry to take the next step in competing with oil. That can only happen if ethanol is allowed greater access to the fuel market," concluded Broin.

New data shows that responsible harvesting of biomass for ethanol can be part of good soil management efforts for farmland.

Iowa State University has completed analysis on data from the third year of an ongoing study for POET’s “Project LIBERTY” near Emmetsburg, Iowa to monitor how soil health is affected when crop residue is removed. The planned 25 million-gallon-per-year cellulosic ethanol plant will use corn cobs, leaves, husks and some stalk to produce renewable fuel.

According to POET, the latest data shows that “removing about 1 bone-dry ton per acre (which is about 25 percent of the area’s above-ground crop residue) will not cause significant nutrient loss. In fact, corn yields continued to show no yield loss or moderate increases in fields with this rate of biomass removal.”

“Based on this study, we conclude that 1½ to 2 tons/acre of corn stover can safely be harvested” from fields similar to those used in the study, according to the research summary prepared by Dr. Douglas L. Karlen with USDA-Agricultural Research Service and Dr. Stuart Birrell with Iowa State University. Appropriate removal rates will vary depending on how productive the soil is in a specific area.

Project LIBERTY Director Jim Sturdevant said POET is committed to a conservative approach to biomass harvesting. “We’re contracting for fewer tons per acre to ensure good soil management even in years when yields are lower. Also, our farmers have moved away from traditional methods of stover removal: of chopping, raking, baling and leaving the field black,” he said.

Farmers harvesting for POET typically turn off the chopper on their combines and leave windrows behind during grain harvest. Farmers do not rake the biomass before the baler gathers it. Last fall, 85 farmers harvested 56,000 tons of biomass, and they are almost finished delivering it to Project LIBERTY’s 22-acre stackyard.

The University of Florida has received a four-year $5.4 million federal grant to develop methods of producing energy, such as ethanol, from sweet sorghum. The grant is part of a $47 million package funded by the U.S. Department of Agriculture (USDA) and the Department of Energy (DOE) designed to support projects that hopefully help the U.S. reduce its dependence on foreign oil while at the same time reducing greenhouse gas emissions.

The research team will focus on turning sweet sorghum into ethanol as well as explore it a a source of raw materials for biochemicals. Mark McLellan, dean of research with UF’s Institute of Food and Agricultural Sciences, said that sweet sorghum is one of the most promising feedstocks to make biofuel.

According to Wilfred Vermerris, principal investigator and an associate professor with UF’s agronomy department and UF Genetics Institute, the project will also investigate sweet sorghum’s economic potential, sustainability and environmental impacts. As part of the study, the team will develop and evaluate multiple varieties to assess factors such as water needs, ability to grow in Florida soils, heat tolerance, and susceptibility to diseases and insect pests. The researchers will also look for varieties that yield large amounts of fermentable sugars, which can be fermented to produce fuel ethanol.

“Sustainability and environmental impact have been of concern to many people looking at bioenergy production,” said Vermerris. “We don’t want to create more greenhouse gases than we would using petroleum production.”

The team will also produce cellulosic ethanol from the fiber in the plant’s crushed stalks using genetically engineered bacteria developed at UF by Lonnie Ingram, a distinguished professor in the microbiology and cell science department. Ingram is one of the co-principal investigators for the project and will coordinate juice and biomass processing experiments at the UF Ethanol Pilot Plant in Gainesville and the Stan Mayfield Biorefinery in Perry.

Tampa-based firm U.S. EnviroFuels LLC will also participate in the project led by president and CTO Bradley Krohn. He will coordinate economic and life cycle analyses needed to assess the profit potential and environmental impact of the processes. Several of the experiments will take place at the Highlands EnviroFuels commercial-scale biorefinery in Lake Placid, Fla.

The U.S. biofuels industry sent a message to Congress today asking them not to mess with the RFS. Specifically, the industry encouraged lawmakers “to stand firm in the face of calls to waive or repeal the groundbreaking biofuels provisions included in the Energy Independence and Security Act of 2007 (EISA), including the Renewable Fuels Standard (RFS).”

Several biofuel organizations came together to sign the letter including Michael McAdams, president of the Advanced Biofuels Association; the Honorable Jim Greenwood, president and CEO of the Biotechnology Industry Organization; Bob Dinneen, president and CEO of the Renewable Fuels Association; Brooke Coleman, executive director of the Advanced Ethanol Council; and Brian Jennings, executive vice president of the American Coalition for Ethanol.

The letter, delivered to Rep. Fred Upton (R-MI), chairman of the House Committee on Energy and Commerce, was in response to several current proposed bills and amendments that hinder or help the domestic biofuels industry. Also targeted was ranking member Rep. Henry Waxman (D-CA) as well as U.S. Sen. Barbara Boxer (D-CA), chairman of the Senate Committee on Environment and Public Works and its ranking member, U.S. Sen. James Inhofe (R-OK).

The message to Congress remained the same and stressed that the biofuels industry is creating jobs, helping to reduce America’s dependence on foreign oil and is a strong contributor to the nation’s economy, providing $53 billion. A recent report found that additional job creation from advanced biofuels production under the RFS could reach 807,000 by 2022. The letter also stressed that the industry is “committed to ensuring the U.S biofuels policy is implemented in a way that builds upon current technologies and fosters the development of new ones.”

The letter also expressed that “calls to reduce, waive or eliminate the RFS would send a chilling signal to markets at time when dozens of new biofuels technologies are traversing the so-called “Valley of Death” to first commercialization.” More capital investments are needed to bring biofuel technologies to commercialization.

A full copy of the letter can be found here.

It’s official. DuPont is now the owner of Danisco. The successful completion of the purchase occurred on May 15, 2011 with the tender offer for all outstanding shares of common stock for Danisco for DKK 700 cash per share. The tender offer expired on May 13, 2011, at 11 p.m. CEST (5 p.m. EDT) and DuPont estimates that at that time, Danisco shareholders had tendered approximately 92.2 percent of outstanding shares to DuPont Denmark Holding ApS. Many of you may be familiar with the DuPont Danisco Cellulosic Ethanol project (DDCE). The DDCE project currently has a 250,000 gallon demonstration plant near Vonore, Tennessee up and operating with the goal of having a commercial scale plant in operation by 2013, most likely in Iowa.

“We are delighted that the tender has been successful and we can move on to the process of integrating Danisco into DuPont,” said DuPont Chair & CEO Ellen Kullman. “Danisco’s attractive specialty food ingredients businesses and Genencor’s leading industrial enzymes complement DuPont’s own Nutrition & Health and Applied BioSciences offerings. This combination will create an industry leader in industrial biosciences and nutrition and health.”

Ellen continued, “These businesses will work together to drive sustainable growth and market-driven innovation by linking agriculture, nutrition and advanced materials through industrial biosciences. In addition, the R&D combination of DuPont, Danisco and Genencor will enable us to further respond to global megatrends and help provide for the food, energy and protection needs of a growing population.”

Danisco Chairman Jorgen Tandrup added, “We are very pleased that a vast majority of Danisco shareholders have accepted DuPont’s offer, and the two companies may now begin to move forward together. DuPont and Danisco share cultures based in exceptional science and research capabilities. Our combined strengths in biosciences and nutrition and health will deliver innovative new offerings for customers worldwide, while helping to grow these businesses in ways that will benefit employees, shareholders and the communities in which we serve. We look forward to this next exciting chapter of discovery and success for the joined companies.”

Iowa Senator Chuck Grassley along with a bipartisan group of senators, announced a proposed piece of legislation to promote the development of biofuel infrastructure. The Domestic Energy Promotion Act of 2011 would transition the current blender’s credit to a variable tax credit based on the price of oil, improve tax incentives for blender pumps and ethanol refueling infrastructure, and extend crucial tax incentives for advanced and cellulosic ethanol production that are set to expire at the end of the 2012.

In response to the proposed ethanol legislation, Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC) said, “We applaud Senator Grassley’s continued leadership on this issue. The proposal strikes the right balance between providing savings to the taxpayer, developing the infrastructure necessary to incorporate growing volumes of ethanol from all feedstocks, and extending the incentives that are critical to the development of next generation ethanol fuels.”

“The tax incentives for advanced and cellulosic ethanol contained in Senator Grassley’s proposal will help our industry put steel in the ground and create jobs and economic activity that cannot be exported,” continued Coleman. “They are the type of tax incentives already provided for the fossil fuels industry, and extending these incentives helps begin the process of leveling an uneven playing field with gasoline and other petroleum fuels. Most importantly, this proposal establishes a durable and consistent tax framework for our industry, which in turn will facilitate substantial investment in domestically-produced advanced ethanol fuels and allow our sector to reach its full potential.”

To learn more about the Domestic Energy Promotion Act of 2011 and how it may impact the ethanol industry, listen to this week’s Ethanol Report.

A bill was introduced today in the Senate that would modify the current ethanol blender’s tax credit set to expire at the end of this year.

Renewable Fuels Association president and CEO Bob Dinneen says the bipartisan Domestic Energy Promotion Act of 2011 introduced by Sen. Chuck Grassley (R-IA) already has a number of co-sponsors. “Senators Conrad, Johanns, Klobuchar, Franken, Tim Johnson, Senator Harkin and Ben Nelson of Nebraska, so it is a bipartisan bill,” said Dinneen.

The bill modifies the current Volumetric Ethanol Excise Tax Credit (VEETC) by tying the tax incentive to the price of oil. “This proposal would continue to provide a demand driver for ethanol when oil prices are low, while not requiring the taxpayer to subsidize gasoline marketers when the marketplace is already providing an incentive to blend,” Dinneen said.

The bill includes two other provisions that would help increase ethanol infrastructure and investment in next generation technology. “The reform of the existing tax incentive to be a variable incentive, infrastructure tax incentives that will encourage marketers to invest in blender pumps, and cellulosic tax incentives to allow the industry to continue to evolve sets up a policy that we think is fiscally responsible and makes great sense for this nation’s energy and economic future.”

Listen to or download an interview with Dinneen about the bill here: Ethanol Report on Domestic Energy Promotion Act

The Energy Information Administration predicts only very modest production of cellulosic ethanol by the year 2022, but the industry is more optimistic.

Renewable Fuels Association president Bob Dinneen challenged some of the reporting and assumptions the EIA made in the latest energy outlook, which administrator Richard Newell presented at the 4th International Biomass Conference in St. Louis this week. EIA is predicting that in 2022, cellulosic ethanol will contribute only 3.5 billion gallons to the nation’s liquid fuel supply. “We see far greater potential for cellulosic ethanol much sooner than does EIA,” Dinneen said during an industry roundtable when asked to comment on the agency’s forecast.

Dinneen also notes that the way EIA reports data marginalizes the important role that grain ethanol is already playing in the marketplace. “At the end of all the number crunching that EIA does, you’re left with a pretty pessimistic view of what grain ethanol can do for our nation’s fuel supply and energy security,” Dinneen said, pointing out that EIA reports ethanol as being just four percent of the U.S. fuel market, instead of being nearly ten percent of the gasoline market.

EIA predicts ethanol blending in gasoline will increase from 13.1 billion gallons in 2010 (about 9 percent of the gasoline pool) to 17.8 billion gallons in 2020 (about 12 percent of the gasoline pool).

Listen to an interview with Bob at the Biomass Conference here: Bob Dinneen Interview

Renewable Energy Group (REG) executives hosted USDA Ag Secretary Tom Vilsack and EPA Administrator Lisa Jackson as well as leaders from the ethanol industry at their REG Newton biorefinery to discuss the role of advanced biofuels in meeting the President’s energy independence goals. Also on hand for the event were representatives from Green Plains Renewable Energy (GPRE) and POET. Both companies have advanced biofuels projects located in Iowa and are working with REG to develop symbiotic efficiencies and products between the various forms of biofuels. Vilsack and Jackson along with local and regional members of their teams, engaged in both a briefing session highlighting the role biofuels play, including new technological advances in the industry, as well as a biodiesel plant tour.

REG President and COO, Daniel Oh, opened the roundtable discussion: “We applaud Secretary Vilsack and Administrator Jackson for their roles in implementing energy independence and clean air programs focused on enhancing advanced biofuels production and utilization. We appreciate our partners in the ethanol industry, Jeff Broin, CEO of POET, and Todd Becker, President and CEO of Green Plains Renewable Energy for joining us in highlighting the opportunities and challenges in the biodiesel and ethanol industries.”

The biofuel leaders highlighted the importance of continuous process advancement for creating new opportunities. As the group headed to see REG’s 30 million gallon per year biorefinery, Oh said, “Our production facility is proof that next‐generation advanced biofuel is commercially-available today. Our Newton biorefinery is supporting 23 full‐time green collar jobs, regional economic development and Iowa agriculture.

While on the tour, REG showcased the wide variety of raw materials it uses to produce biodiesel and highlighted one of the industry’s more recent feedstocks, inedible corn oil, which is an emerging co-product from the ethanol industry and also an emerging feedstock to create biodiesel. Less than two weeks ago, POET announced it’s new corn oil product, VOILA, and plans to install the technology at all 27 of its plants. REG has been working with corn oil since 2007.

While at REG’s facility, Jackson was impressed with how the biofuel industry has evolved. She noted the industry has not stood still and has continually adapted. She highlighted the biodiesel industry’s recognition that they needed to change and diversify its feedstocks and acknowledged their accomplishments in this arena.

Vilsack agreed and added that the industry has showcased continued success and continued innovation and commended both the agricultural industry and biofuels industry for always stepping up to plate. He concluded that the industry has never let the country down and will rise once again to meet the country’s and the world’s food, fuel and fiber challenges.

Click here to see photos from the USDA/EPA REG biodiesel plant briefing and tour.

Build the plant and the biomass will come. Abengoa has announced that they have signed contracts with several biomass producers farming in and around Hugoton, Kansas, to provide 315,000 tons of cellulosic biomass by the end of 2011. Construction of the biorefinery is scheduled for this summer and expected to be fully operational sometime in 2013. Once in production, the plant will utilize 315,000 tons of biomass each year to produce 25 million gallons of cellulosic ethanol. The plant will also produce 25 megawatts of electricity, enough to power the ethanol conversion process. Once complete, the biorefinery will be Abengoa’s first second-generation facility and seventh bioethanol facility in the U.S., bringing the company’s total U.S. biofuel production to more than 400 million gallons.

Abengoa recognized early in the process that the company would need to ensure a steady stream of biomass in order for the plant to produce the maximum amount of biofuels each year. Therefore, they ensured the necessary amount of feedstocks would be available taking several issues into account.

First, they needed to determine that adequate amounts of biomass were available within an economical transportation distance of the projected facility site. In addition, they needed to make sure that the biomass supply would be available during normal fluctuations of weather and different growing conditions. Second, they needed to ensure that the biomass could be harvested in a sustainable manner over the projected lifetime of the project. Third, they needed to work with the local producers to ensure that the biomass harvest would meet expectations in terms of quantity, quality and cost.

Abengoa will accept the bounty of the first biomass harvest this fall and will continue to accept biomass through the summer and fall of 2012. During the past three years, the company conducted various tests to determine best practices for harvesting the biomass in a sustainable manner that meets or exceeds Natural Resources Conservation Service (NRCS) minimum standards. These are aimed at preventing soil erosion and protecting soil health. Also during the testing phase, the company evaluated the best methods for storage, transportation and harvesting of the biomass.