Domestic Fuel

The ethanol industry has an unlikely ally in its opposition to the California Low Carbon Fuel Standard that bans the use of corn ethanol in that state. A diverse multi-state coalition that is primarily concerned with the rule’s impact on oil and gas is also opposed.

The Consumer Energy Alliance, a coalition of over 170 energy consumer groups and 300,000 individual members across the United States, is one of the plaintiffs opposing the California LCFS, which was just ruled unconstitutional by a district court judge.

“Not only is an LCFS unconstitutional, but it would also hurt the California economy, farmers, consumers and truckers by raising fuel prices sharply and burdening consumers,” said CEA Executive Vice President Michael Whatley. “And ironically, the policy will have the opposite of its intended effect by creating more greenhouse gases in the long run.”

The CEA’s main concern about the California LCFS is the potential for it to be used to prevent certain sources of petroleum from being converted into fuels such as gasoline, diesel fuel, kerosene and heating oil and that it could adopted nationwide, resulting in lost jobs and declining household revenue.

After the district court judge this week rejected a motion by the state to continue implementing the LCFS despite his ruling that it was unconstitutional, the California Air Resources Board (CARB) decided to appeal to a new court in the 9th Circuit in hopes of a different outcome.

“The decision by CARB to appeal the decision by the District Court is disappointing, but unfortunately not surprising. We look forward to a decision by the Ninth Circuit upholding the District Court and confirming the unconstitutional nature of California’s low carbon fuel standard,” said Whatley, urging CARB to “scrap this faulty program” instead of appealing the decision.

The idea of turning oil into salt may sound like something that should be done in a science lab but Dr. Gal Luft says it’s something that Congress can do with a simple piece of legislation.

Luft, who is executive director of the Institute for Analysis of Global Security, explained his analogy between oil and salt at the 6th Annual Iowa Renewable Fuels Summit in Des Moines on Tuesday.

“Salt used to be the most strategic commodity of all because it was the only way to cure food,” said Luft. “That changed with the invention of canning and refrigeration. Those two simple technologies essentially stripped salt of its strategic status.”

“Just like salt dominated food preservation, oil today dominates transportation,” he continued. “And just like salt’s strategic status was diminished through those simple inventions, oil’s strategic status can be diminished through the technology of flexible fuel vehicles.”

That’s why Luft strongly advocates the simplest solution to diminishing the stranglehold oil has on the transportation industry, and that is requiring all new vehicles sold in the United States to be capable of running on a variety of fuels. “Whether it is ethanol or methanol or butanol, whatever it is, let’s give people choices,” he said, noting that there is just such a bill pending in Congress called the Open Fuel Standard Act.

Luft and co-author Anne Korin wrote a book about the analogy between salt and oil and the importance of fuel choice, called “Turning Oil into Salt”, which was reviewed here on Domestic Fuel in 2009.

Listen to Luft’s address to the 6th annual Iowa Renewable Fuels Summit here: Gal Luft address

Listen to a brief interview with Gal Luft here: Gal Luft interview

Photos from 2012 Iowa Renewable Fuels Summit

In his State of the Union address Tuesday night, President Obama voiced strong support for renewable energy and an end to oil subsidies.

“We have subsidized oil companies for a century. That’s long enough,” the president said. “It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.”

Mentioning natural gas, wind and solar specifically, Obama called for using various types of renewable energy solutions to make the country less dependent on oil alone. “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs,” he said.

The U.S. Department of Agriculture this week launched a new energy website to provide quick access to the agency’s energy efficiency and renewable energy data.

The website, usda.gov/energy, provides access to all USDA energy resources, including: agricultural, forestry, economic, and social data. This is done in part through a set of new complementary web-based tools: the USDA Renewable Energy Investment Map, the Renewable Energy Tool and Energy Matrix. These tools focus on USDA’s energy, energy efficiency and renewable energy investments and projects; provide information and data to a broad spectrum of stakeholders; and empower the user with the ability to easily navigate USDA’s energy web resources. In addition, the site provides a link to all USDA state and local offices and energy resource coordinators.

The new website was welcomed by the Ag Energy Coalition (AEC). “USDA’s Energy portal demonstrates the positive impact the Farm Bill energy title and related programs are having on job creation, national security, and the environment,” said Coalition co-director Lloyd Ritter. “The Ag Energy Coalition believes Rural America will be a continuing force for change in the advancement of sustainable energy and renewable chemicals production in the years ahead. With the right policies in place, and requisite funding, the promise of a rural renaissance focused on clean energy solutions will become a reality.”

The Ag Energy Coalition includes a membership of organizations and companies representing a variety of clean, renewable energy and bioproducts stakeholders.

BBI International and NEAtech have formed a joint venture, called BBI Consulting Services, to offer bioenergy consulting to thousands of companies and organizations worldwide, as well as state and federal departments in the United States.

BBI International originally started as a bioenergy consulting firm in 1995 and has since grown into a media and events company focused on growing the bioenergy industry. Founded in 2009, NEAtech is a technology-based engineering and consulting firm specializing in advanced biofuels, biomass energy, and biotechnology projects. Having already helped hundreds of companies plan and execute successful projects, this new joint venture with NEAtech will reintroduce BBI International’s consulting service to thousands of new businesses worldwide.

Dr. Rafael Nieves and Mark Yancey of NEAtech, two experienced bioenergy consultants, are leading this group. Nieves has worked in the bioenergy sector for more than 28 years. He has extensive experience nationally and internationally managing bioenergy projects in the U.S., Mexico, the Dominican Republic, El Salvador, Puerto Rico, Brazil, Australia, Philippines, Ghana, Armenia, Indonesia and the Ukraine.

Yancey has 35 years of experience in the fields of bioenergy and environmental engineering including extensive experience in project development and economic analysis for first and second generation biofuels facilities. His expertise is in the development of bioenergy projects including development of business strategies and financial, market and technical analyses of projects and renewable energy opportunities.

“We are excited about offering a consulting service to our customers,” said Joe Bryan, president and chief executive officer of BBI International. “This venture is the first step in helping companies associated with BBI International gain valuable insight on their current and future projects.”

“This venture will allow us to combine our expertise with BBI’s knowledge and resources,” said Nieves, CEO of NEAtech.

Natural Power, an international renewable energy consultancy, says their product, WindManager, a wind farm portfolio information system designed to increase profitability of wind farm operations is now available in the United States.

WindManager is a turbine independent system based on latest international standards such as IEC 61400-25 and RDS-PP. The system is scalable from a single wind farm to large multisite wind farms. It captures real-time data, presenting availability, losses and key performance while supplying tools for analysis, effective work processes and fact based decisions. All processes are in place to increase profitability of wind farm operations.

WindManager provides customers with four modules for effective wind farm operations including:

• -Monitoring – Turbines are connected to a central system, all data is stored and visualized in a map view, trends can be monitored and preconfigured reports summarize performance and energy production against targets

• -Analysis – Wind farm personnel can perform stop analysis, loss analysis and understand all downtime issues as they arise

• -Operations Management – Work scheduling, resourcing, and collaboration across teams can be held daily or weekly

• -Expertise – Access to system API, data management tools, and tools for extracting performance data to MatLab allows further research and analysis to be performed in house.

Scott Mackenzie, asset management director at Natural Power says, “WindManager has been successfully operating in the U.K. and Europe for over a year now, so we are very pleased to be extending these services to the U.S. market. This product helps wind farm owners and operators experience a real time view of their assets, with customers benefiting from a range of additional tools from energy forecasting to independent operational site control.”

Natural Power offers WindManager in conjunction with their existing suite of wind farm management tools including WindCentre™, a 24/7 operations control room which uses Natural Power’s Melogale™ data analysis platform, ForeSite™ for wind farm energy forecasting and SeaPlanner™ for offshore GIS, site and data management.

GROWMARK and FS Energy have given a whole new meaning to energy efficiency with the wireless Energy Business System (wEBS) which has streamlined their fuel delivery system.

GROWMARK Information Management Solutions director Keith Milburn says wEBS was developed as a fuel billing solution that makes the record keeping process easier by providing instantaneous information such as fuel type, tank sizes, taxes and credits.

Milburn says they developed wEBS when the fuel business started to get more complicated a few years ago. “We no longer just handle gasoline and diesel,” he said. “We have high sulfur, low sulfur, bio or soy diesel, ethanol blends – and all the relevant taxes have made it very complicated given those combination of blends.”

“There’s two components of wEBS,” Milburn says. “There’s the back office or centralized data set and then the hand held on the truck level.” The back office includes not only customer information, but every tank that each delivery truck services. “The system identifies each tank with a bar code that tells who the customer is, what product types, relevant taxes, discounts, and if there have fuel contracted at a certain price,” Milburn explains. So all the delivery driver has to do is pump the fuel and within minutes the transaction is recorded and an email confirmation is sent to the customer.

Milburn says this “evolution in the energy business” was first introduced as a pilot program in January 2010 with two trucks and it has since grown to incorporate about 95 trucks that essentially function as mobile hot spots to communicate information. And he says the system is continuing to evolve with the technology.

Find out more about the wEBS system in this interview with Keith Milburn here: Keith Milburn Interview

The Iowa Corn Caucus released its report card for presidential candidates today, giving grades for different policy areas related to agriculture, including energy and biofuels, and an overall grade for each candidate.

The highest overall grade went to Newt Gingrich, who scored straight As on every single policy issue. Second in the class was Rick Santorum, who received straight As on energy policies, but faltered under farm programs in the areas of crop insurance and conservation. President Obama received a grade of B, as did Mitt Romney, but the rest of the four major Republican candidates got no more than a C minus. Rick Perry received that grade, while Michelle Bachmann was close behind with a D+ and both Herman Cain and Ron Paul got Ds. Cain in particular failed miserably in the energy policy category and farm programs – getting straight Fs in all those areas. The energy category included three specific areas – Ethanol and Energy Policy Generally; Renewable Fuels Standard; and Ethanol Infrastructure.

“Our purpose wasn’t to endorse any candidate, but instead to give farmers a tool that they could take with them to the caucuses in January,” said Iowa Corn Growers senior policy advisor Amanda Taylor. The survey for candidates was developed in conjunction with the National Corn Growers Association (NCGA) to include ten questions directly related to agricultural issues.

ICGA president Kevin Ross noted that only half of candidates responded to the survey, so the Corn Caucus used other methods to determine the grades. “We tracked interviews, speeches, media quotes and all things related to agriculture, including voting records of candidates who held office,” he said. The candidates who did return the survey were Obama, Cain, Gingrich and Santorum.

Find out more about the Corn Caucus project results from the ICGA website, and listen to a press conference this morning about it here: Iowa Corn Caucus Results

USDA has announced funding for a series of projects to convert biomass to energy through USDA’s Rural Energy for America program (REAP). The announcement this week concludes 2011 biomass project funding assistance for a total of 52 projects with just over $31 million in grant and loan note guarantees through program.

Among the companies receiving funding is NC-CHP Owner I, LLC of Asheville, N.C., which received a $5 million loan for the installation of a combined heat and power system in Montgomery County. The system will generate steam by using a boiler system powered by wood chips and will also generate 5.25 million kWh of electricity per year. Also in Montgomery County, applicant EWP, LLC will receive a $146,000 grant to install equipment at an existing hydroelectric plant so it can be reopened. The project has the potential to generate an estimated 2.8 million kWh per year.

Other projects to be funded include:

Alaska Alaskan Brewing – $448,366 grant for biofuel from waste grain
Iowa Iowa Firewood Products – $24,232 grant for firewood kiln
Mass. CommonWealth Resource – $49,875 grant for biofuel from waste
S.D. Legend Seeds – $17,035 grant for boiler installation
Tenn. Mountain Wood Products – $500,000 grant for Wood Pellet Processing
Utah Washakie Renewable Energy – $496,750 grant for biofuels pretreatment/ products plant

A new study from PV Solar Report and SunRun reports that families in median zip codes make up the majority of California home owners who have installed solar energy. Nearly two-thirds of solar installations in ’09, ’10 and ’11 were completed in homes where the household median income is than $85,000 per year. In addition, the state is seeing a rise in solar projects in lower income zip codes as solar prices continue to drop.

The findings are in line with PV Solar’s Report of the Top 10 Solar Cities that was published in October. Two cities to make the list – Bakersfield, CA and Fresno, CA have average household incomes between $40,000 to $50,000. Only 2-3 percent of solar projects in Cali are in the state’s highest income zip codes.

“In 2007 we invented a way for homeowners to go solar without the high upfront costs so income would not prevent a switch to cleaner and less expensive energy,” said SunRun President and Co-founder Lynn Jurich. “The data from PV Solar Report shows this model is working, and that it’s not just the wealthy driving and benefiting from solar adoption. We are working to educate consumers that solar is finally affordable.”

SunRun owns, maintains and insures and installs solar panels on rooftops. Homeowners pay a fixed, low monthly cost for 20 years. This type of solar project accounted for 59 percent of residential projects in Q3 of 2010.

Solar is not reserved for the wealthy and the trends cited in the report support this according to Stephen Torres who is the founder and managing director of PV Solar Report. “Solar prices are coming down, it’s great for job growth from installing, financing, and servicing solar in local communities, and models like SunRun are helping drive growth because they eliminate large upfront investments,” he concluded.

You can download the report here.

San Diego Gas & Electric (SDG&E) has proposed a General Rate Case (GRC) “network use charge” that would impose new costs on more than 14,000 solar power producers in the utility territory who are exporting solar energy to the grid. In response, the San Diego Solar Coalition has filed for intervenor status with the California Public Utilities Commission (CPUC) that allows local solar firms to dispute the GRC.

The Coalition believes that these proposed new charges are an “attack on solar” and has “vowed” to protect its customers. Solar companies in the territory have combined invested more than $500M in solar electric systems and solar is the fastest growing sector in the city.

“SDG&E’s proposal wipes out 20 years of progressive energy policy in California for the benefit of the utility,” said Daniel Sullivan, a member of the San Diego Solar Coalition. He also said that the GRC proposal, if passed, will kill jobs in a dim economy.

What is interesting is the GRC proposal came following a commitment by California Governor Jerry Brown to generate 12,000 megawatts of clean energy such as solar by 2020. Brown appears to be in line with the American’s desire for more solar. According to a poll conducted in October 2011 by Kelton Research, 89 percent of Americans think it is important for the U.S. to develop and use solar energy.

“Solar power enjoys widespread, bi-partisan support both in the Capitol and among the public. One company should not be able allow to ignore the will of the people,” concluded Sullivan. 

The world is heading for an insecure and inefficient energy future unless there is a “bold change of policy direction” soon, warns a new report from the International Energy Agency (IEA).

The 2011 edition of the World Energy Outlook (WEO), released by IEA last week in London, said there is still time to act, but the window of opportunity is closing. “Growth, prosperity and rising population will inevitably push up energy needs over the coming decades. But we cannot continue to rely on insecure and environmentally unsustainable uses of energy,” said IEA Executive Director Maria van der Hoeven. “Governments need to introduce stronger measures to drive investment in efficient and low-carbon technologies.”

According the report, oil demand will rise 14% between 2010 and 2035, from 87 million barrels per day in 2010 to 99 million in 2035. All net increases in oil demand will come entirely from the transportation sector in emerging economies as economic growth pushes up demand for personal mobility and freight goods.

“This is a deeply disturbing picture that the IEA has painted for the world,” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “Such increases are unsustainable making it imperative that all countries quickly bring real crude oil alternatives to market.”

Baker says that according to the report, an amount equivalent to twice the current total oil production of all OPEC countries in the Middle East must be discovered and brought to market by 2035.
“This is a wakeup call to the world that we need to further promote biofuels to meet this ever growing energy demand,” he said.

The IEA also highlighted the potential for supply disruptions in the Middle East and North African countries as a potential threat to world oil supplies saying that “If, between 2011 and 2015, investment in the MENA region runs one-third lower than the $100 billion per year required…consumers could face a substantial near-term rise in the oil price to $150/barrel.”

One of the benefits of membership in the GROWMARK cooperative system is daily information about the energy markets and recommendations on contracting fuel at different times of the year.

Harry Cooney is manager of customer risk management for GROWMARK Energy and he is constantly keeping an eye on the energy complex, especially gasoline, propane and diesel fuel. He says the primary influences on the energy market lately have been the situation in Europe, the value of the dollar and the stock market.

“In the past six months to a year, there’s been a strong connection between the stock markets and the energy markets,” Cooney said. “When things look bad in Europe, then our stock market tends to fall off and when the stock market falls off the energy markets tend to fall off.” He says world events in the currency and stock markets and whether the economy is strengthening or weakening have more impact on energy markets than public policy decisions, like the blenders tax credit for ethanol and the Renewable Fuels Standard.

In the diesel market, Cooney says we are seeing strong demand and falling stocks. “Diesel stocks have fallen under the five year average for the first time in many months,” he said. “The economy is starting to come around so stocks are coming down and diesel demand is back well over the five year average after just bottoming in July.”

As propane users look ahead to contracting for 2012, Cooney says they are currently making recommendations for summer through winter of next year. “Given the somewhat tight stocks situation and the fact that crude oil tends to want to go up, it makes us want to be a buyer of propane,” he said.

Listen to my interview with Harry Cooney here: Harry Cooney Interview

Outlining his priorities for farm policy this week, Agriculture Secretary Tom Vilsack stressed the need for continued support of renewable fuels in the next farm bill.

“Rural America has done a great job of helping to develop the domestically-produced renewable energy and fuel. That job must continue because when we create those opportunities, we create jobs, we reduce our reliance on foreign energy sources, and we enhance our national security,” Vilsack said during a speech at a John Deere facility in Des Moines on Monday. “USDA has to have the tools to be able to continue to help this biobased and biofuel and renewable energy economy, and we need to make sure that it’s vibrant in all regions of the country. Continuing our investment in renewable energy, biofuel, and biobased products will improve the bottom line for farmers as we find creative ways to use that which they grow.”

The secretary noted that expansion in the biofuel industry has already had an impact. “We’ve gone from importing 60 percent of our oil to 52 percent,” he said. “As a result of our biofuel industries, consumers across America are paying about $0.90, on average, less for gas than they would otherwise pay. So it’s a great opportunity for consumer choice, it’s a job creator, and it improves income opportunities for farmers.”

Specifically, Vilsack wants to see at least the BCAP (Biomass Crop Assistance Program) and the REAP (Rural Energy For America Program) programs continued.

A coalition of nearly 50 trade groups and organizations representing renewable energy, energy efficiency, farm, and forest interests is urging leaders of the House Agriculture and Senate Agriculture Committees to include an energy title in any new Farm Bill legislation. A $23 billion reduction in funding has been proposed to the Joint Select Committee on Deficit Reduction by the committees for USDA programs, but no details have yet been decided.

In a letter to the leadership, the recently formed Agriculture Energy Coalition noted that programs in the Energy Title of the 2008 Farm Bill “have helped finance thousands of diverse renewable energy projects and improved energy efficiency at farms, ranches and businesses across rural America.”

“Agriculture has an indispensible role to play in our nation’s emerging clean energy economy. It is vital that we develop and commercialize a variety of clean, abundant, renewable energy resources and biobased products, and Farm Bill energy programs are crucial to achieving that goal,” said coalition co-director Lloyd Ritter.

Among the members of the coalition are the Renewable Fuels Association and Growth Energy.