Domestic Fuel

The Ethanol Committee of the National Corn Growers Association met in Kansas City this past week week to consider the challenges and opportunities facing the industry.

“The market for ethanol has grown exponentially over the past decade, thus utilizing an abundance of corn to meet the already-present need for a renewable, domestic biofuel,” said Chad Willis, a Minnesota corn grower who serves as chairman of the committee. “Now, we face a myriad of challenges and opportunities as those in the industry continue to innovate while some outside of it continue attempts to deny ethanol’s incredible value to our nation.”

“After years of hearing rehashed iterations of the food-and-fuel debate, we found the tour of LifeLIne to be both interesting and inspiring,” Willis said. “Companies such as this demonstrate that, through a mixture of creative thought and hard work, we can find new ways to use corn even more productively and solve an array of societal needs.”

The committee of farmer leaders from around the Corn Belt also had the opportunity to meet the NCGA’s new Director of Biofuel Programs and Business Development Pam Keck, who is a scientist and educator with more than 20 years of experience in the agricultural and biofuels industry, academia and not-for-profit research.

Keck most recently contracted with Monsanto, coordinating an outreach program that brought together schools and scientists. She has previously taught chemistry at Southern Illinois University, Edwardsville and at Lewis and Clark Community College. She has also served as assistant director of workforce development and scientific projects at the National Corn-to-Ethanol Research Center.

Leaders in the ethanol industry got together last week in Indianapolis to discuss the future of the industry in Indiana.

Steve Pittman, Director of the Indiana Ethanol Producers Association and General Manager of POET-Portland, is especially excited about the future of the cellulosic ethanol industry. “We see corn ethanol still stay as the basis of what we do and then we’ll see growth in cellulosic over the next ten years,” Steve said. “We don’t see corn going away. The concept is to reap the corn stover off the same fields we’re harvesting corn off of. We’ll have another opportunity for farmers to sell another product without having to grow another crop.”

Listen to an interview with Pittman here: Steve Pittman interview

Right now, infrastructure is important to expanding consumer choice, according to Rosalind Leeck, Director of Biofuels for Indiana Corn Marketing Council (ICMC). “Our farmers believe that expanding infrastructure to allow consumers more access to ethanol-blended fuel is crucial to the success and growth of the industry,” said Leeck, adding that ICMC is funding a program to encourage fuel retailers to add flex fuel pumps that offer mid-level blends, like E30, in addition to E85 to drivers of Flex Fuel Vehicles. “Through this program, 14 flex fuel pumps will be added to fuel stations across the state over the next several months.”

Listen to an interview with Rosalind Leeck here: Rosalind Leeck interview

Growth Energy CEO Tom Buis agrees that building infrastructure is critical to the increasing consumer choice. Buis told Gary Truitt of the Hoosier Ag Today (HAT) that he is optimistic about the future of ethanol in Indiana and nationwide. “Unlike Big Oil, ethanol is not stuck in the past, we’re focused on moving forward. With the introduction of E15 into the marketplace and increased build out of Flex Fuel pumps, American consumers will finally have choice when they fill up at the pump,” Buis says. “We know we can do more, we know it’s good for America.”

Listen to Truitt’s interview with Buis here: Tom Buis interview

Indiana produces 1.1 billion gallons of ethanol every year in 13 different ethanol plants across the state. Thanks to Gary Truitt of HAT for attending the Indiana ethanol forum and provided the photos and audio interviews.

There is a lot made about tensions between the ethanol and livestock industries but the distillers grains co-product of ethanol production is providing significant benefits for animal producers even as ethanol has helped prop up corn prices.

A great discussion at the 6th Annual Iowa Renewable Fuels Summit featured corn and cattle organizations on the same panel talking about the “Synergies of Livestock and Ethanol.”

Moderator Iowa Agriculture Secretary Bill Northey opened the discussion by noting that sales of crops and livestock have risen as ethanol production has increased from $12 billion in 2002 – 6 billion in crop and 6 billion in livestock – to $24 billion in 2010, and 2011 is expected to be about $30 billion with at least $13 billion of that for livestock. “$13 billion on the livestock side versus $6 billion nine years ago,” Northey said. “Has ethanol been good for livestock agriculture in Iowa? I think very clearly.”

Listen to a brief interview with Secretary Northey here: Iowa Agriculture Secretary Bill Northey

Iowa Cattlemen’s Association Executive Director Matt Deppe says it’s easy to see the benefits that distillers grains (DDGS) have brought to especially cattle feeders. “We look at it as a corn replacement,” Deppe says about DDGS. “It means that they (feedlot operators) have another option that’s cost effective to put into their rations.”

Listen to an interview with Matt Deppe here: Matt Deppe Interview

The livestock industry has traditionally been the most important market for corn, noted Iowa Corn Growers CEO Craig Floss, although use for ethanol has increased significantly in the past decade. “But a third of every one of those bushels that goes into an ethanol plant goes into DDGS,” he said.

The panel also included Randy Ives, director of ethanol services for the commodity management firm Gavilon Group.

Listen to or download the entire panel discussion here: Ethanol and Livestock panel

Photos from 2012 Iowa Renewable Fuels Summit

Reaction to President Obama’s call for an “all-of-the-above energy strategy” in Tuesday’s State of the Union address was met with applause by many renewable energy interests, who at the same time hope his words will be backed with actions.

“We applaud the President’s announcement that he is going to push for homemade, U.S.-energy after 40 years of being addicted to foreign oil,” said Tom Buis, CEO of Growth Energy. “We have to move ahead with American ethanol as part of that solution.”

“The U.S. biodiesel industry is proving that we can accomplish the president’s goals of creating jobs while building a clean-energy economy,” said Anne Steckel with the National Biodiesel Board. “That’s why we’re calling on the Administration to quickly finalize the delayed EPA rule for boosting biodiesel use under the Renewable Fuel Standard in 2013.”

National Corn Growers Association Chairman Bart Schott said they were pleased to hear President Obama’s continued commitment to the nation’s energy independence. “As family corn farmers have risen to the challenge to meet our nation’s energy needs, we are hopeful the direction the President outlined offers similar opportunities for others to expand our energy independence,” he said.

“Working with the President, we can help America become less dependent on foreign oil and a smarter consumer of energy,” Adam Monroe, President of Novozymes North America, said. “Innovations like advanced biofuels can play a major role in the President’s vision but we need steady policies like the Renewable Fuel Standard – and we look forward to working Congress to preserve them.”

American Ethanol is gearing up for the 2012 NASCAR season with a renewed commitment to the sport that spotlights racing on 15% ethanol fuel.

During the NASCAR Preview fan event in Charlotte, N.C. this weekend, American Ethanol announced that it will continue relationships with Richard Childress Racing and RAB Racing for the 2012 season. This is the second year for the racing partnership between NASCAR, Growth Energy and the National Corn Growers Association (NCGA).

“American Ethanol is getting a lot of positive attention because it’s a good fit for NASCAR’s green initiative, and because of the increased horsepower on the track,” said NCGA President Garry Niemeyer.

Austin Dillon, 2011 NASCAR Camping World Truck Series Champion, will drive the No. 3 Chevrolet during the 2012 NASCAR Nationwide Series season with American Ethanol serving as the primary sponsor for six races as well as one race in the NASCAR Sprint Cup Series in 2012.

Dillon, pictured here with team owner (and grandfather) Richard Childress, is looking forward to representing the ethanol industry. “I’m proud to carry the American Ethanol colors in NASCAR,” he said. American Ethanol will also be an associate sponsor for the entire RCR family of drivers.

Kenny Wallace, a driver who has been a strong promoter of corn growers and ethanol over the past year, will drive the No. 09 Toyota Camry in the NASCAR Nationwide Series for RAB Racing. American Ethanol will partner with Wallace for the Sprint Cup Series Daytona 500, as well as five races in the Nationwide Series.

“I’m honored to represent American Ethanol. I not only talk about American Ethanol, I truly believe in it,” Wallace said. “I’ve been to the farms, I’ve met the families, I’ve been to the ethanol plants, and I’ve been in the hallways of the U.S. Senate in Washington, D.C., in support of it.” (Listen to a prior interview with Wallace)

“Through our partnerships with Austin Dillon and Kenny Wallace, we are telling NASCAR and its fans that American Ethanol is committed to the sport,” said Growth Energy CEO Tom Buis. “These drivers are ideal ambassadors for the American Ethanol team and will help tell the story of how American-made ethanol creates jobs, cleans our air and fosters energy independence.”

Representing a wide array of ethanol supporters, from farmers to bio-engineering firms, American Ethanol was established by Growth Energy and NCGA with NASCAR starting with the 2011 racing season, the same year that NASCAR switched its fuel to Sunoco Green E15.

Listen to prior interviews with Childress, Growth Energy and NCGA.

An advanced biofuels project in Iowa is being offered support from the federal government for a plant to make fuel from waste material.

The U.S. Department of Agriculture has approved a conditional commitment for a $25 million guaranteed loan under the Biorefinery Assistance Program for Fiberight to build a biorefinery in Blairstown, Iowa.

The loan will be used to construct a 55,000 square foot facility that will produce cellulosic ethanol by converting municipal solid waste and other industrial pulps into advanced biofuels, as well as using conventional renewable biofuel derived from seed corn waste. When operational, the facility is expected to produce approximately 3.6 million gallons of cellulosic ethanol per year. The process will use a cellulosic microbe to produce up to 15 percent more ethanol than traditional fermentation technology, and reduce energy inputs in the fermentation and distillation process. Fiberight estimates the project will create 38 jobs and save 16 jobs.

”Advanced Biofuels are going commercial – and the innovation behind turning trash into biofuels demonstrates how our industry can create jobs and solve our nation’s energy needs,” says Adam Monroe, President of Novozymes North America. ”Novozymes is proud to be a partner to this project, supplying the enzymes to turn household and office waste into advanced biofuels. We applaud the federal government for its leadership in helping bring biofuels to market.”

Biotech company Novozymes is one of Fiberight’s partners in the project. ”Advanced Biofuels are going commercial – and the innovation behind turning trash into biofuels demonstrates how our industry can create jobs and solve our nation’s energy needs,” says Adam Monroe, President of Novozymes North America.

Under the conditional commitment, Fiberight must meet specified conditions before the loan guarantee can be completed. Other funding comes from the State of Iowa. Fiberight also received a $2.5 million grant from the Iowa Power Fund in 2010. The company will work with the Benton County landfill to supply a portion of the feedstock for the project. The total project cost is estimated at $59.5 million. Fiberight, LLC was incorporated in 2007 for the purpose of converting an existing ethanol facility into a cellulosic ethanol facility in Blairstown.

A Texas corn grower says the “feed versus fuel” debate is based in fallacy.

Texas Corn Producers Board member Wesley Spurlock of Stratford has been speaking to groups across the Midwest explaining how U.S. corn farmers continue to grow a crop abundant enough to meet all growing demands and he has gained attention from industry publications looking to find the truth behind the headlines.

“To put it simply, growth in demand from the ethanol industry has mirrored an increase in productivity that yields larger corn crops,” Spurlock said. “We are still supplying the livestock industry with the corn that they need for feed, but we now have a market that utilizes an increasingly abundant resource to help solve our energy problems also.”

Listen to an interview with Sprulock in the National Corn Growers Association’s podcast series “Off the Cob” discussing how corn farmers are growing a larger crop on the land already in production while decreasing inputs used. During this interview, he also discusses the innovations facilitating increased yield trends, how the Texas drought plays a major role in recent cattle industry shifts, and the amazing story of modern American agriculture.

Corn growers are pleased with the ruling last week by a Federal District Court judge in Fresno, California that the state’s Low Carbon Fuel Standard (LCFS) violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional. The ruling is in response to a suit filed in December 2009 by the Renewable Fuels Association and Growth Energy asserting that the LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states.

“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “Corn farmers are good stewards and advocates for thoughtful, fair strategies that will improve our environment through the advancement of biofuels. We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”

The judge ruled that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct and that the California Air Resources Board (CARB) failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

A significant majority believe that ethanol production is a good thing. In answer to this past week’s ZimmPoll question, “Is Ethanol production good for ALL of Agriculture?” 64% said yes and 36% said no. That still shows a large group who aren’t on board the ethanol bandwagon. If you’re in the “no” group let us know why by posting a comment.

Our new ZimmPoll is now live. We’re asking the question, “What is your Christmas/Holiday entree?” The holidays are almost here and I’ll be you’ve got plans made already. We sure hope you have a happy holiday time with family and friends.

ZimmPoll is sponsored by Rhea+Kaiser, a full-service advertising/public relations agency.

The grain business subsidiary of Green Plains Renewable Energy (GPRE) is acquiring the grain elevator assets of a company in St. Edward, Nebraska.

JW Grain holds 1.9 million bushels of state-licensed grain storage and is located approximately 40 miles from the GPRE’s Central City, Nebraska ethanol production facility.

“We continue to seek out opportunities to expand our agribusiness segment that can bring additional scale to our operations,” stated Todd Becker, President and Chief Executive Officer. “Acquiring facilities to increase our grain storage and merchandising capabilities is an important part of our diversification strategy going forward. Once this acquisition and expansion is completed, Green Plains will have 40 million bushels of grain storage capacity at 15 elevator locations in Iowa, Missouri, Nebraska and Tennessee.”

The acquisition is expected to be completed within 30 days. Green Plains plans to expand the on-site grain storage capacity by up to one million bushels before the 2012 harvest.

The U.S. Grains Council recently held workshops in Guangzhou and Qingdao to promote the ethanol co-product distillers grains (DDGS) in China.

“The day-long sessions were designed to provide an exchange of comprehensive DDGS market information, including discussions and analysis of the value of U.S. DDGS,” said Alvaro Cordero, USGC manager of DDGS.

Cordero says they had 200 to 250 people, including buyers and USGC member companies. “This created a good opportunity for buyers and sellers to make connections,” he said.

The conferences, organized in cooperation with FoodChina Company, included presentations on DDGS use in swine, poultry and dairy rations, in addition to quality control, DDGS supply and demand, and pricing.

The United States continues to export a good volume of DDGS to China, despite an anti-dumping case initiated by the Chinese government last winter. U.S. shipments in the January-to-September period were down 49 percent from the previous year but still totaled almost one million metric tons, making China the number two export market for distillers grains.

According to USDA, global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a smaller crop here in the U.S.

The latest World Agricultural Supply Demand report estimates the U.S. crop was down 3.5 million tons this year compared to last year, but foreign corn production is expected to be 43.4 million tons higher, with China alone up 7.3 million tons this month based on the recently released government estimates. USDA is now predicting the 2011/12 season-average farm price for corn will be about 30 cents lower than previous estimates at $5.90 to $6.90 per bushel.

On the demand side, corn for food, seed, and industrial use was lowered 5 million bushels and projected corn ending stocks were increased by 5 million bushels to 848 million. Corn for ethanol use remains unchanged at 5 billion bushels, which is slightly lower than last year, despite the fact that ethanol production this year is on pace to possibly be as much as a billion gallons more than 2010.

As we head into 2012, ethanol is like to be the wild card in the corn demand situation with the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year. “That could potentially change how much ethanol is blended into gasoline,” said USDA chief economist Joe Glauber. “There are mandates in terms of overall production that has to be blended into gasoline, the issue is how much gets produced above and beyond the mandates.” However, industry analysts expect ethanol prices are expected to drop 30-40 cents per gallon at the wholesale level after the blenders tax credit expires, which should serve as an incentive to blend as much if not more.

“Domestically, it will depend on the profitability of ethanol price versus gasoline and whether or not it pays to blend above the mandates,” said Glauber.

The partnership between NASCAR and ethanol is officially one year old and it has been a great year for racing on the renewable fuel.

It was one year ago last week at the NASCAR Champions Week in Las Vegas that American Ethanol was announced, a partnership that includes Growth Energy and the National Corn Growers Association.

Throughout the 2011 NASCAR season, every race car and truck in the Sprint, Nationwide and Camping World Truck series ran on Sunoco Green E15 as part of the American Ethanol partnership. And every race weekend, NASCAR’s newest special award, the American Ethanol Green Flag Restart Award was given to the participating driver who recorded the fastest average speed on restarts and who finished the race on the lead lap – a reminder of American Ethanol’s dedication to NASCAR’s green initiatives.

At this year’s Champions Week in Las Vegas, Growth Energy CEO Tom Buis gave an overall award to No. 17 driver Matt Kenseth for winning the Green Flag the most times in the 2011 season.

“I appreciate American Ethanol and Growth Energy and Sunoco for making such a great fuel this year,” Kenseth said when he accepted the award. “It worked great, it’s been good for the environment, it’s been good for NASCAR and we appreciated being a part of it.”

According to NASCAR officials and drivers, the E15 fuel blend has met and surpassed expectations – providing increased horsepower with minimal decrease in mileage. In fact, NASCAR’s 2011 Million Mile Report, proved that NASCAR racing vehicles accumulated more than a million miles of practice, qualifying and racing laps on E15 without any problems.

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:

National Corn Growers Association president Garry Niemeyer, a farmer from Illinois, penned an editorial this week in an effort to let those still complaining about the Volumetric Ethanol Excise Tax Credit (VEETC) know that the game is over. Read that commentary below.

Back in August, the Green Scissors Project identified ways the federal government could shave $380 billion from the federal budget over five years. But their $380 billion in proposed cuts included a major error that accounts for more that 10 percent of their suggested cuts – $38.8 billion that they argued the Volumetric Ethanol Excise Tax Credit would otherwise cost between 2012 and 2016. They conveniently ignored the important fact that there will be no VEETC between those years. VEETC expires about a month from now, and corn growers and the ethanol industry have long agreed to let it expire and have since stopped fighting for its renewal.

It’s kind of like when one football team leaves the field and the other team scores a game-winning victory four plays later. Frankly, we left this game last quarter because there are other, smarter ways to support ethanol, especially in today’s deficit-prone political world. That was part of the reason we and the industry asked for a one-year extension in 2010 – to have time to seek alternatives. We won the game and left the field … not the guys who will pound their chests and claim victory in a few weeks.
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