Domestic Fuel

Biofuels had a seat on the plenary panel entitled, “Getting It Right: Responding to Market Forces” at USDA’s 2008 Outlook Forum last week.

Renewable Fuels Association President Bob Dinneen noted that while ethanol is “not a silver bullet” for all of America’s energy, economic and environmental issues, but “biofuels are absolutely a part of addressing each of them to some extent.”

Dinneen talked about how ethanol production has revitalized rural economies and offset the increased gasoline demand over the past few years. “We have stemmed the tide of increased gasoline imports into this country,” he said.

And he talked about cellulosic ethanol. “We recognize that in order to grow our industry we need to move beyond grain,” and Dinneen says it is already happening.

Other panelists were Paul Schickler of DuPont/Pioneer Hi-Bred, C. Larry Pope of Smithfield Foods and Tom Stenzel with United Fresh Produce Association. The entire webcast of the panel is posted on USDA’s website.

There was also a panel on new sources for biofuels, focusing on biodiesel and featuring presentations from the National Biodiesel Board and Agriculture Blue Sun Biodiesel. (The links will take you to their presentations.)

And a panel focusing specifically on sustainability of ethanol with presenters including Dr. Mark Stowers of POET and Rick Tolman of National Corn Growers Association.

And that was just the first day. The second day saw panels on wind, solar, biomass and more. Most presentations are available on USDA’s site.

POET is helping to fund research at Iowa State University into starch for ethanol production in the hopes of finding starches to further improve the efficiency of POET’s patent-pending BPX™ process.

BPX is a raw starch hydrolysis that converts starch to sugar and then ferments to ethanol without the use of heat. It is utilized in 20 of POET’s 22 ethanol production facilities where its benefits include reduced energy costs, increased ethanol yields, increased nutrient quality in the feed co-products and decreased plant emissions.

ISU researcher Dr. Jay-Lin Jane says there are differences between the starches in different lines of corn. “We are trying to identify which lines of corn starches are more easily hydrolyzed by the enzyme and the mechanism of enzyme hydrolysis of uncooked cornstarch,” Jane said.

The best starch needs to break down more easily. Jane has found that starches with certain molecular and granular structures work best. “Some starches are loosely packed in the granule and can be hydrolyzed easily,” said Jane. “While others, especially those with different crystalline structures, will be difficult for the enzyme to hydrolyze,” she said.

LifeLine Foods of St. Joseph, Missouri will join forces with the IndyCar® Series for the 2008 season as the official supplier of the 100 percent fuel-grade ethanol used in all IndyCar Series cars.

LifeLine Foods is a unique company that uses corn to produce food and fuel. One portion of the kernel is processed and marketed to the food industry while the remainder of the corn kernel is used for, among other things, cattle feed and energy needs. Utilizing a bran energy recovery system, total plant energy needs will be reduced by approximately 50 percent. This method insures that the company is getting the most value out of corn, benefiting the agriculture, food and ethanol industries.

LifeLine was contracted by the Ethanol Promotion and Information Council (EPIC) to supply approximately 120,000 gallons of the fuel to the IndyCar Series. With the transition to an ethanol-blend in 2006 and then 100% fuel-grade ethanol in 2007, the IndyCar Series was the first motorsports league to require use of a renewable fuel.

Indiana corn and soybean growers are helping to promote biofuels awareness in their state in a number of ways.

For one, the corn growers have partnered with the Ethanol Promotion and Information Council (EPIC) on a billboard and radio campaign in major Indiana cities aimed at informing consumers that all automakers approve the use of 10 percent ethanol-enriched fuel. The campaign will also urge consumers to ask retailers if they are selling ethanol and make a push for E85 and flex-fuel vehicles.

Indiana Corn and Soybean is also working to gain support for a Biofuels special recognition license plate to be made available through the Indiana Bureau of Motor Vehicles.

The Biofuels license plate will promote both ethanol and soy biodiesel as Indiana-grown renewable fuels helping to move the state forward and will cost drivers between $25 and $40.

According to a Reuters poll done this week
U.S. farmers overwhelmingly said they have benefited from the demand for corn to produce ethanol, with 71 percent of those surveyed saying the renewable fuel has helped boost their bottom line.

The poll also showed that 90 percent of those farmers said they would not reduce their corn plantings this year because of an increased supply of ethanol in the Midwest.

In addition, 54 percent of farmers were interested in growing a biomass crop. They were willing to embrace the crop because it required less management than traditional crops while allowing them to diversify their plantings.

The survey was done at the American Farm Bureau Federation‘s annual meeting in New Orleans, where the 686 farmers sampled were responding voluntarily from about 5,000 in attendance.

Corn and soybean prices have gone to record levels as producers struggle to keep up with food and biofuel demands.

Bloomberg.com says a new U.S. government report prompted traders to push soybean prices to a record of about $13 a bushel while corn prices hit an 11-year high of $4.95 a bushel:

The world soybean harvest will fall 6.5 percent this year, U.S. corn inventories will be 20 percent less than estimated a month ago, and wheat farmers in Kansas and Texas planted less even as the price of the grain doubled, the Department of Agriculture said in separate reports today.

“We can’t grow our way out of this grain-shortage hole,” said Jim Gerlach, president of A/C Trading Inc. in Fowler, Indiana. “We’ll have to price our way out. I’m bullish until further notice. We’ll see ups and downs, but the trend will remain higher.”

What this ultimately means for ethanol and biodiesel producers is a high cost for feedstocks, cutting into already tight margins for biofuels. Ironically, it’s the success of the green fuels that is driving up the cost for what makes them.

Texans in Sherman County can expect a new ethanol refinery. The Texas Commission on Environmental Quality has given Panda Ethanol the okay for an air permit for the company’s plans to build a 115 million gallon-per-year ethanol refinery. Panda says the refinery will be fueled by biomass.

The facility will be designed to annually refine an estimated 38 million bushels of feedstock-grade corn into a clean burning, renewable fuel for the nation’s transportation needs. The biofuel produced by the Sherman plant could displace approximately 2.6 million barrels of foreign oil a year.

Once built, the Sherman refinery should be equal in size to Panda’s Hereford facility, currently nearing completion, which will be the largest biomass-fueled ethanol plant in the United States with one of the lowest carbon footprints of any similar-sized ethanol facility in the nation.

The Illinois Corn Growers made some in-game statements during the Rose Bowl. Too bad the local team didn’t win. This graphic is an example of the messages they used for this promotional opportunity.

The game on the field may not have yielded the desired results that the University of Illinois football program had hoped for on Tuesday, but Illinois did make a significant impact. It was in fact the Illinois Corn Marketing Board (ICMB) that provided a significant “win” for the State of Illinois’ agri-business community, at the prestigious Rose Bowl in Pasadena.

With the University of Illinois making an appearance in the Rose Bowl for the first time since 1984, the ICMB partnered with InStadium, Inc., a sports media and marketing company, to harness the national exposure of the more than 93,000 attendees. All of this was done in an effort to increase the awareness of the uses and implications of ethanol, which is widely regarded as an environmentally friendly fuel alternative.

As part of its campaign to educate consumers and the news media, the National Corn Growers Association (NCGA) has developed a one-page document responding to the top 10 myths about corn production and ethanol production.

The document addresses such myths as:
Ethanol is bad for your car’s engine, ethanol is not energy efficient, corn and ethanol production waste water, increased corn acreage squeezes out other crops or natural open space, and that ethanol is bad for the environment.

The Top Ten Corn and Ethanol Myths publication is available on-line.

I don't think I've had a chance to bring your attention to a series of video interviews I did recently at the National Association of Farm Broadcasting Convention. They have all been featured on Corn Commentary, the blog of the National Corn Growers Association that we created for them and help manage.

In this one I interview NCGA CEO Rick Tolman and University of Missouri ag economist Dr. Ron Plain. They point out that our corn growers have produced to meet demand for both the food and the fuel needs of our corn. It's also interesting to note that higher corn prices haven't really impacted food prices much. In fact, it's really things like transportation costs that have driven food prices up.

As they point out, no one is starving anywhere because of biofuel production. The fact is our corn production has a lot of opportunity to grow due to demand and new technologies and that's good for our farmers, our economy and our country. So that's the word on this "renewable fuel" issue!

Tom Slunecka, former executive director of the Ethanol Promotion and Information Council (EPIC) is the recipient of the Illinois Corn Growers Association’s 2007 Ethanol Innovation Award.

“It is no secret ethanol production is growing at a record pace, but equally important is the significant increase in public use and acceptance of e10 and e85. Part of what is driving this is a new awareness of ethanol from coast to coast that didn’t exist even two years ago. EPIC, under Tom’s able leadership, has played a major role in this ethanol awakening,” said Steve Ruh, president of ICGA of Sugar Grove.

Slunecka served as executive director of EPIC, a non-profit alliance of ethanol industry leaders, from its formation until he recently accepted a position in the ethanol industry with KL Process and Design Group.

ILGA also presented its Ethanol Innovation Award to David M. Christopher, Executive Vice President Finance and Marketing for Gas City, Ltd.

Christopher has been with GasCity since July of 2005 and the company began selling E85 with in a month after he started. Working closely with VeraSun Energy Corp. as an ethanol supplier they began with 10 locations carrying E85. Based on their positive experience this expanded rapidly to 30 stations in suburban Chicago and Northern Indiana.

A Wisconsin entrepreneur says producers don´t have to rely on corn, or even cellulosic waste, to create ethanol. Joe Van Groll, Owner of Grand Meadow Energy, LLC, says he can create ethanol from cheese water waste. Joe says this new method for creating ethanol is a great alternative. He points out that the ethanol industry is the target of negative publicity because critics say the use of corn takes water out of the water table and the food supply and shifts it to the energy market. But, Joe says water
is already a waste byproduct of the cheese making process, with 75 percent or greater water. Joe says using that waste to create ethanol removes that water, purifies it and puts it back into the environment.

Joe also uses canola oil for the production of biodiesel. He says there is no one “silver bullet” for creating renewable fuels. You can read more about Joe´s alternative production of alternative fuels at thenorthwestern.com.

Good news if you’re a fuel retailer in Kansas. The state offers a 40 percent tax credit to retailers who invest in E85 fuel. Couple that with the 30 percent tax credit the federal government offers, and fuel retailers in Kansas can take advantage of a 70 percent return on their E85 investments. That’s one of the key points Sue Schulte, the Director of Communications of the Kansas Corn and Grain Sorghum Associations, drove home to attendees at today’s educational forum on E85 fuel. The forum was hosted by the Ethanol Promotion and Information Council to help direct local members of the ethanol industry in Kansas City on how to get online with E85.

Sue clued participants in on where the ethanol industry stands in Kansas, so producers and retailers could get a feel for what the state already has to offer and determine where and how the local industry can grow. Sue says there are 10 dry mill ethanol plants in operation in Kansas. These plants have a capacity to produce over 329 mill gallons of ethanol. Sue says that current Kansas production creates a market for over 116 million bushels of sorghum and corn. She adds that more expansion is on the way, with ethanol plants that are either under construction or nearing construction having projected production capabilities of about 330 more million gallons of ethanol each year. The state’s fuel industry is beginning to respond. Sue says just five filling stations offered ethanol in 2005. Now, there are 24 stations throughout the state that pump the alternative fuel.

I caught up with Sue and asked her about her thoughts on what today’s educational forum on E85 offered local industry members. You can listen to my interview with Sue here:

Podcast: Play in new window | Download (1.5MB)

Ethanol producer POET is working with several leading agricultural equipment manufactures to refine methods for harvesting, storing and transporting corn cobs for commercial cellulosic ethanol production.

Among them is John Deere, according to public relations manager Barry Nelson, pictured here with POET CEO Jeff Broin. “On behalf of John Deere, we’re very interested in the new technologies that will be involved with the advancement of cellulosic ethanol,” said Nelson. “We’re designing and testing machines that can harvest the crops needed for ethanol production and see potential for expanded markets for our customers as the industry develops this renewable fuel resource.”

POET is harvesting, storing, transporting and performing research on 4,000 acres of corn in South Dakota this fall in order to find the most efficient way for farmers to harvest cobs in large quantities. At a media event this week, some of the equipment was put to the test. In the photo from Poet, a John Deere 9860 STS Combine harvests co-mingled corn grain and cobs and dumps them into a Kinze Auger Wagon on the family farm of Darrin Ihnen near Hurley, S.D.

Jeff Broin says, “We are going to do something that has never been done before: produce cellulosic ethanol from corn cobs on a commercial scale. When our Emmetsburg, Iowa plant is operational in 2011, it will necessitate harvesting, storing and transporting 275,000 acres of corn cobs. The 4,000 acres we’re harvesting this fall represents the first step toward making that massive harvest achievable.”

The Indiana State Museum will have a new exhibit in 2009 titled, “Corn: Powering the World.”

The exhibit will showcase all things corn — demonstrating how this versatile crop feeds and fuels the world’s population. Opening at the Indianapolis museum in August 2009, the exhibit will continue through January 2010 before traveling to other venues nationwide.

Visitors will be able to view archeological artifacts, discover how popcorn pops and calculate how much corn it takes to power an Indy racecar. A modern lab built into the exhibit will allow visitors to experience genetic engineering first-hand.

Barry Dressel, museum president & CEO, made the announcement last week in conjunction with the annual National FFA Convention in Indianapolis.

The exhibit is presented by Dow AgroSciences through the Dow Chemical Company Foundation and Ford Motor Company, with contributing national support from Case IH and National Starch Food Innovation.