Ethanol Frequent Fuel Card Available

This week, with support of the American Lung Association and other sponsors, three fueling facilities in the state of Minnesota are offering a Frequent Fuel Card in exchange for ethanol fuel discounts. These retail sites include those in Truman, Lyle and Austin, Minnesota.

The NuMart C-Store at 302 North 5th Street in Truman began giving away the fuel cards today. The first 50 flexible fuel vehicles (FFVs) to fill up at the site received the card where after 4 E85 purchases, they will receive a $10 discount off their next purchase of E85.

Freeborn County Coops are also offering the frequent fuel cards to the first 100 FFV owners to fuel up at their facilities at 301 1st St. in Lyle on July 22 and at Hwys 56 and 90 in Austin, MN. A $10 discount will be given on E85, E20, E30 or E40 after a customer’s fourth fuel up.

Also, the participants at each location will be entered into a drawing for a $50 fuel card.

For more information on these events, go to www.CleanAirChoice.org.

DOE Finds Ethanol Pipeline Feasible

A pipeline for ethanol from the Midwest to the East Coast is a viable project, if certain conditions are met, according to a report by the Department of Energy (DOE).

In the report titled “Dedicated Ethanol Pipeline Feasibility Study,” which was required under the Energy Independence and Security Act of 2007, DOE concludes that “in spite of the documented challenges and risks, a profitable, dedicated ethanol pipeline is feasible under certain scenarios. A pipeline would enhance the fuels delivery infrastructure, reduce congestion of rail, truck, and barge transportation, and would reduce greenhouse gas emissions when compared to current delivery methods. The faster product delivery cycles, more reliable delivery schedules, and increased safety will enhance the flexibility to accommodate any significant expansions in ethanol production and demand in the future.”

One of the challenges is that the pipeline, at a projected cost of $4.25 billion, would need to transport 4.1 billion gallons of ethanol each year over its 40-year lifespan to be economically feasible without “major financial incentives.” That volume exceeds projected demand in the target East Coast service area by 1.3 billion gallons.

Senator Tom Harkin (D-IA) and Congressman Leonard Boswell (D-IA) suggest that the pipeline could be developed with federal support in the form of a loan guarantee. “By providing federal loan guarantees for biofuels’ pipelines, we can attract private investment in large infrastructure development projects, create good-paying jobs and further move our nation towards energy independence and security, and all with minimal taxpayer investment,” Harkin says. Boswell, who authored the Renewable Fuel Pipeline Act of 2010, says the pipeline would have significant benefits. “In addition to reducing greenhouse gases emitted during truck and rail transport of biofuels, it would also reduce the overall cost of these renewable fuels to consumers outside of the Midwest,” he said.

Ethanol producer POET and Magellan Midstream Partners, which have formed a partnership to look into building such an ethanol pipeline, were pleased with the government report. “While our project differs from the hypothetical project considered within DOE’s study, we believe the DOE’s conclusions are directionally correct: a large scale pipeline project is feasible under certain conditions and that a federal loan guarantee is necessary to move forward,” reads a joint press release from the companies. “In addition, the DOE confirms that transporting energy via pipelines has multiple benefits such as reducing congested highway and rail systems while reducing green house gas emissions when compared to other modes of transportation.”

The POET/Magellan project is based on a smaller capital cost of $3.55 billion and similar demand.

More E85 for Florida

Motorists driving Flex Fuel Vehicles along Florida’s Treasure Coast now have two more places to fill up with E85 ethanol fuel.

The Renewable Fuels Association (RFA) and Protec Fuel have announced the availability of E85 at Twin Oil Sunoco retail stations in Ft. Pierce and Port St. Lucie.

The Twin Oil fueling stations, each branded as Sunoco, are offering E85 at 2501 Orange Avenue in Ft. Pierce and at 2681 SW Fondura Street (Gatlin Blvd) in Port St. Lucie. The Ft. Pierce E85 site will have 1 E85 dispenser with 2 nozzles, both located under the canopy. Twin Oil will also aim to serve the Florida Department of Transportation hub near this station and the many tourists in the area. The Port St. Lucie E85 station will offer E85 at 2 dispensers (Gilbarco), both under the canopy. This station is located on a busy street offering access to I-95, FL Turnpike and will also support fleets and tourists in addition to the local FFV population. Twin Oil utilized Protec Fuel’s turnkey E85 fuel program for both stations, which included the conversion process to an E85 fueling pump, E85 supply and promotional marketing.

To help locate the two stations, the RFA has developed a fuel locator application for Garmin and TomTom GPS devices, as well as the E85 Fuel Finder iPhone app.

Indirect GHGs of Petroleum Worse Than Thought

Environment Magazine has published new research today that finds that the greenhouse gas emissions derived from military use of oil is worse than previously thought. University of Nebraska professors, Adam Liska and Richard Perrin write in the article, Securing Foreign Oil: A Case for Including Military Operations in the Climate Change Impact of Fuels, “we assert that military activity to protect international oil trade is a direct production component for importing foreign oil—as necessary for imports as are pipelines and supertankers—and therefore the greenhouse gas (GHG) emissions from that military activity are relevant to U.S. fuel policies related to climate change.”

Other areas that may be considered tied to military production of GHG emissions are the global protection of oil reserves and Middle Eastern wars.

The authors note that as part of the Energy Independence and Security Act of 2007, specific GHG emission reductions must be met by biofuels including direct life cycle emissions as well as indirect emissions; however, in current legislation, only the direct GHG emissions are accounted for when calculating life cycle emissions of gasoline production. Therefore, the authors wanted to understand how military emissions affect the total amount of GHG emissions of gasoline. What they discovered is that direct spending on military activity and military acquisition of oil results in the release of nearly 289,000 tons of carbon dioxide per billion dollars spent.

To get a handle on the billions of dollars spent just on the Iraq War, the U.S. Congressional Research Service report estimated that the average annual cost of the Iraq War has been $93.5 billion.

Ultimately, the authors conclude, “In order to have a balanced assessment of the climate change impacts of substituting biofuels for gasoline, a comparison of all direct and indirect emissions from both types of fuel is required.”

Several ethanol organizations came out in support of the report today including Growth Energy who reiterated the environmental costs associated with our dependence on foreign oil and the Renewable Fuels Association who heralded the study as “groundbreaking”.

Ethanol Opponents Call for End to Tax Incentives

Seizing on last week’s CBO report and a proposal by Growth Energy to phase out and redirect the blenders tax credit for ethanol (VEETC), several long-time opponents of ethanol renewed their call for an end to all tax incentives for the home-grown fuel.

In a press conference this morning, representatives from the American Meat Institute (AMI), Environmental Working Group (EWG), Grocery Manufacturers Association (GMA), Natural Resources Defense Council (NRDC) and Taxpayers for Common Sense together said that the tax credit should be eliminated at the end of this year when it expires, and the corresponding tariff on imported ethanol should also be ended.

AMI president J. Patrick Boyle claims that the blenders tax credit distorts the corn market and increases the cost of feeding animals. “Thirty years of tax payer support for the corn-based ethanol industry has created a mature industry that now needs to compete fairly in the market place and allow for the next generation of renewable fuels to grow,” said Boyle.

NRDC’s Nathanael Greene called the tax credit a “bribe” for fuel blenders to comply with the Renewable Fuels Standard. “It’s sort of like paying people to obey the speed limit,” Greene said. He also called the VEETC an “environmental problem” that “drives up food prices, encourages agribusiness to pollute our water.”

The groups made it clear that they do not support Growth Energy’s proposal to redirect the tax credit and use it instead to increase blender pumps and flex fuel vehicles, but said that proposal shows the industry recognizes that the tax credit is in jeopardy. Steve Ellis with Taxpayers for Common Sense called Growth Energy’s proposal ironic. “At the same time they talk about a mandate for flex fuel vehicles and for pumps across the country, these are enormous subsidies, and yet they’re talking about a level playing and letting the free market work,” Ellis said. Continue reading

Export Exchange to Focus on Ethanol Co-Product

usgcA partnership between the Renewable Fuels Association and the U.S. Grains Council will help bring producers of the ethanol co-product distillers dried grains with solubles (DDGS) together with interested international buyers to get answers, make connections, and build business.

Export Exchange 2010 will bring together more than 150 international buyers of U.S. DDGS and coarse grains with more than 300 U.S. producers and agribusinesses. The conference will be held on Oct. 6-8, 2010, at the Hyatt Regency McCormick Place Hotel in Chicago, Ill.

Renewable Fuels Association Logo“The opportunity to educate foreign buyers about high quality, U.S.-produced DDGS could not come at a better time,” said RFA President Bob Dinneen. “At current dietary inclusion levels, distillers grains consumption is nearing saturation in the United States. Increasing U.S. exports of distillers grains will be instrumental in helping the industry avoid running into a ‘feed wall.’ Fortunately, markets around the world are rapidly opening, creating demand for approximately 15 to 20 percent of all distillers grains produced today.”

usgc“We are excited to have the Renewable Fuels Association co-sponsor the Export Exchange 2010,” said USGC President and CEO Thomas C. Dorr. “The burgeoning world population is demanding more meat, milk and eggs. U.S. DDGS and coarse grains continue to play an important role in livestock and poultry feed rations globally. We have to educate and connect our buyers and sellers to continue to grow vital markets for the United States.”

The Council is providing sponsorship for the attendance of targeted international trade teams from more than 25 countries. These participants represent nearly 80 percent of the global export market for DDGS and coarse grains. The conference will address critical issues facing U.S. exports and seek to educate and build awareness of U.S. DDGS and coarse grains among international buyers.

Novozymes to Develop Cellulosic Ethanol in Brazil

Novozymes has signed an agreement with a world leader in the sugarcane ethanol market to work on cellulosic ethanol production in Brazil.

NovozymesThe agreement between Dedini and Novozymes is based on developing the commercial potential of cellulosic ethanol in Brazil due to the large availability of bagasse. Brazil is the world’s largest producer of sugarcane, crushing more than 600 million tons per year, from which 27 billion liters (7.1 billion gallons) of ethanol is currently produced.

“Considering the demand for ethanol in Brazil and the amount of bagasse available, there is considerable opportunity for further growth in this market. The partnership with Dedini, the largest engineering player in the sugarcane industry in Brazil, will help us to unlock this potential,” says Novozymes CEO Steen Riisgaard.

Novozymes recently introduced the first commercially viable enzymes for production of cellulosic ethanol that have the ability to break down agricultural waste such as corn stover, wheat straw, wood chips and bagasse, enabling fermentation to ethanol. Dedini, which supplies equipment and complete plants for the sugar-ethanol market, has developed a chemical process with diluted acid and a lignin solvent.

The objective of this partnership is to develop a process using the enzymatic hydrolysis route from sugarcane residues. This would result in the implementation of a demonstration plant, integrated into sugarcane mill refineries.

Ethanol and Ag Groups Fight to Keep Incentives

A proposal by Growth Energy to phase out ethanol tax incentives has brought the fight out in the two older ethanol advocacy organizations, along with several agricultural groups.

Saying that it is too late in the congressional session to switch horses, the American Coalition for Ethanol and the Renewable Fuels Association have pulled rank on the younger Growth Energy group and lined up with powerhouse ag groups American Farm Bureau Federation, National Corn Growers Association (NCGA) and National Sorghum Producers to storm Capitol Hill in favor of renewing the Volumetric Ethanol Excise Tax Credit (VEETC) for another five years.

Hundreds of news stories, blog posts, and tweets have been written since yesterday focusing on the division in the industry and some lawmakers are starting to take sides on the issue. Corn belt loyalists like Sen. Charles Grassley (R-IA) are committed to fighting for a long term extension, but House Ag Committee Chairman Collin Peterson told corn growers in Washington this week that they will be lucky to get a year-long extension. The House Ways and Means Committee is reportedly looking at cutting the tax credit from 45 cents to 36 cents.

NCGA ThuneMembers of the National Corn Growers Association meeting for their annual Corn Congress in the nation’s capitol made the VEETC extension a priority when they talked to their senators and representatives. NCGA President Darrin Ihnen says corn growers believe extension of the VEETC is vital to the industry. “As our board and voting delegates visited with members of Congress this week it was apparent that time is short and extension is in the best interests of the corn industry,” said Ihnen.

Senator John Thune (R-SD) pictured receiving the NCGA President’s Award from Ihnen during the Corn Congress events, had no specific public comments about support or lack thereof for the VEETC extension. “I look forward to continuing to work together on the Renewable Fuel Standard, supporting the move to E15, and other initiatives important to corn producers,” Thune said in a prepared press release. Continue reading

Indirect Land Use Uncertainty

Adam LiskaI conducted a number of interviews with presenters at the recent Corn Utilization and Technology Conference and many of them were about biofuels, especially ethanol. Here’s one I thought you’d be interested in.

The Land Use Conundrum . . . Corn, An Advanced Biofuel? That was the title of one of the sessions that was moderated by Jamey Cline, NCGA. One of his panelists was Adam Liska, University of Nebraska-Lincoln. His remarks were on “Uncertainty in Indirect Land Use Change Emissions from Biofuels.” Adam has focused his work on the life cycle efficiency of producing ethanol.

Adam says that there has been increased agricultural production worldwide due to increased demand and it seems like attributing some of that to increased biofuels production makes sense. However, he says that quantifying the emissions related to agricultural production due to biofuels use is very uncertain because it’s done “as a projection into the future.” The bottom line is we don’t know what will happen in the future. He says “it’s nearly impossible.” He says that there are estimates for corn ethanol but they get smaller and smaller with more research and information. He says that they’ve started to do some research on the indirect effects of gasoline production and figure they’re roughly equivalent to that of ethanol. He also points to the impact of changes in livestock production as a result of higher grain prices and says it may have more impact than land use changes. Seems like there is a huge amount of variability in how you look at the future when it comes to biofuels production and especially corn ethanol.

Adam Liska Interview

CBO Report Fails to Look at the Larger Picture

The Congressional Budget Office (CBO) has released a new report, “Using Biofuels Tax Credits to Achieve Energy and Environmental Policy Goals,” that according to the Renewable Fuels Association (RFA), takes the issue of ethanol tax incentives out of context. The report provides no comparison to other technologies or types of biofuels against the destruction that goes hand in hand with fossil fuel production, cites RFA. The association plans to post a detailed analysis on its blog.

RFA President Bob Dinneen expanded on the issues his organization has taken with the report. “It may seem penny-wise, but would be pound-foolish to dismiss the benefits of current biofuels in light of the havoc wrought by our dependence on fossil fuels,”

“Analyzing American energy policy cannot occur in a vacuum. To effectively address the energy, environmental and economic problems caused by our addiction to oil, we need to take a holistic approach,” continued Dinneen. All comprehensive analyses demonstrate that ethanol provides a real world, cost effective tool to reduce dependence on oil and create domestic jobs. Additionally, as CBO rightly notes, ethanol also reduces carbon emissions compared to gasoline.”

Also missing from the CBO report, says RFA, is the discussion about the continual evolution of ethanol production. Biotechnology Letters recently published a study that demonstrated that ethanol production has reduced water use by 20 percent and overall energy use by 28 percent in less than 12 years. During this same time period, ethanol plants have increased yields and produce valuable co-products.

However, what RFA felt was done correctly in the report was the exclusion by CBO of international indirect land use change (ILUC) and its estimates of CO2 reduction costs. This theory has been highly debated for several years and is under fire due to the scientific inability to prove it’s assertions.

“There is no renewable technology available today that can match ethanol’s ability to reduce oil use and create jobs, all while emitting fewer climate changing gases than gasoline,” said Dinneen. “New biofuel technologies, like cellulosic ethanol, promise to provide even greater benefits. Unfortunately, it appears CBO has chosen to take a narrow, time constrained look at the issue and has failed to
consider the much larger picture.”

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E-85 Fuelfinder iPhone App

The Renewable Fuels Association just announced a new iPhone app – E-85 Fuelfinder (opens iTunes) to help flex-fuel drivers access the latest, most accurately geo-coded E85 stations throughout the United States. Can you say, E85 fuel? There’s an app for that! Hurry to get yours since it won’t be free for long.

This application will also work on the iTouch and iPad. The RFA will sponsor a free download for the first 500 users.

The E85 FuelFinder allows iPhone and iPad users all over the country to map out E85 (85% ethanol, 15% gasoline) stations most accessible to them, no matter their current location or destination. With the database embedded in the iPhone itself, this application is useful, even if the user is in a no-service zone. In addition, users have the ability to add a station as a “favorite” for quick and easy accessibility, view or update the price per gallon of E85 fuel at specific locations, access driving directions through Google maps, and directly contact a specific station via telephone. The cost of the application is $1.99, which you can download here, and is also available on the App Store. Continue reading

BP to Acquire Verenium’s Cellulosic Ethanol Business

BPAs BP struggles to stop the oil gushing out into the Gulf of Mexico, an announcement comes today that the company is making a major investment in cellulosic ethanol, as BP Biofuels North America is acquiring Verenium’s cellulosic biofuels business – which includes facilities in Jennings, LA and San Diego, CA – for $98.3 million.

BP and Verenium have been working together to accelerate the development and commercialization of cellulosic ethanol since August of 2008, in a partnership that has been extended on a month-to-month basis several times this year. Under the agreements, BP was funding Verenium’s cellulosic ethanol program as they continued negotiations for a longer-term collaboration.

Under the new agreement, Verenium will retain its commercial enzyme business, including its biofuels enzymes products, and have the right to develop its own lignocellulosic enzyme program. Verenium will also retain select R&D capabilities, as well as rights to access select biofuels technology developed by BP using the technology it is acquiring from Verenium through this agreement.

VereniumVerenium President and CEO Carlos A. Riva says the agreement “should give both companies the flexibility to pursue the growth opportunities in the respective businesses and achieve goals in the near-term. As a result of this transaction, Verenium will have the resources to grow our commercial enzyme business while maintaining strategic access to the emerging cellulosic ethanol market in a manner that better fits our resources.”

“This acquisition demonstrates BP’s intent to be a leader in the cellulosic biofuels industry in the U.S. and positions us as one of the few global companies with an integrated end-to-end capability, from R&D through commercialization to distribution and blending,” said Philip New, CEO of BP Biofuels. “Our partnership with Verenium has been very fruitful, enabling the companies to develop a leading cellulosic ethanol technology package, driven forward by the skills and expertise of people from both companies. By acquiring Verenium’s cellulosic biofuels technologies, BP Biofuels should be well placed to accelerate the delivery of low cost, low carbon, sustainable biofuels, at scale.”

BP will become the sole investor in Vercipia Biofuels, a 50-50 joint venture formed by BP and Verenium in February 2009, and will independently manage all of Vercipia’s activities going forward. Similarly, Galaxy Biofuels, a 50-50 joint development company owned by BP and Verenium, will be owned 100% by BP. This transaction is expected to close in the third quarter of 2010.

Verenium is hosting a press conference on the agreement this morning.

Biodiesel Willing to Make Up Cellulosic Biofuels Shortfall

While the cellulosic ethanol industry is worried that it won’t be able to meet the U.S. EPA’s proposed advanced biofuels production volumes for the new Renewable Fuels Standard (RFS2), the folks who make biodiesel believe they could pick up any slack.

This article from Biodiesel Magazine points out that biodiesel plants in the U.S. have the ability to produce 2.2 billion gallons of biodiesel, which is considered an advanced biofuiel – enough to make up for any shortfalls other biofuels might have in making the EPA goals:

“The biodiesel industry stands ready, willing and able to produce the wet gallons required to comply with the program,” said Joe Jobe, National Biodiesel Board CEO. “By 2011, much of the uncertainty that has accompanied the start up and transition of the program in 2009 and 2010 will have been eliminated.”

Advanced biofuels will total 1.35 billion gallons and cellulosic biofuels, according to the EPA, will total between 5 million and 17.1 million gallons in 2011. “Based on analysis of market availability, EPA is proposing a 2011 cellulosic volume that is lower than the EISA target,” EPA said.

The EPA believes, however, that it may be appropriate to allow excess advanced biofuels to make up for the shortfall in cellulosic biofuel, including excess biomass-based diesel. “If we were to maintain the advanced biofuel and total renewable fuel volume requirements at the levels specified in the statue, we estimate that 125 million to 144 million ethanol-equivalent gallons of additional advanced biofuels would be needed, depending on the standard we set for cellulosic biofuel.”

“Biodiesel is well-positioned to meet volumes in this category relative to other advanced biofuels, and will likely play a significant role in meeting them,” Jobe said. The markets, he added, will ultimately decide how much biodiesel is used to fulfill the generic category of advanced biofuels.

EPA officials point out that biodiesel’s 800 million gallon volume for 2011 actually counts equivalent to 1.2 billion of ethanol toward the advanced biofuel standard of 1.35 billion gallons.

2011 Chevy Caprice to be FFV

Chevrolet has released the technical manual for the Holden-based 2011 Chevrolet Caprice PPV (Police Patrol Vehicle) and it includes an E85 compatible platform.

The new 2011 Caprice will be powered by a 265kW/521Nm 6.0-litre V8 and include Active Fuel Management. General Motors (GM) says its 0-100km/h time of less than 6.0 seconds will make it the police service’s fastest-accelerating and highest-top speed vehicle. This FFV will be included in GM’s extensive line of E85 compatible vehicles available in 2012, but this vehicle will not be offered at the retail level.

In 2010, GM offers as flexible fuel:
Buick Lucerne
Buick Terraza
Cadillac Escalade
Chevrolet Avalanche
Chevrolet Express
Chevrolet HHR
Chevrolet Impala
Chevrolet Malibu
Chevrolet Silverado
Chevrolet Tahoe
GMC Savana
GMC Sierra Pickup
GMC Sierra Denali

Recently, the 2011 Buick Regal was announced to be flexible fuel.

For a complete listing of flexible fuel vehicles, click here.

Ethanol Exports Down 58% in May

The high volume of ethanol exports plummeted in May by 58 percent from April’s totals. U.S. producers exported just 17.1 million gallons in May, while they exported 40.8 million gallons in April and 48.3 million gallons in March. Despite the drop, May exports were still above the five-year monthly average. In addition, to date in 2010, the U.S. has exported 25 percent more product than in the entire 2009 calendar year.

Additionally, at 141.4 million gallons, 2010 U.S. exports are still on track for a record year. In 2008, exports totaled 157.8 million gallons and in 2007, they were 150.2 million gallons. Prior to this year, it is believed that the highest export year was in 1995 when 197.5 million gallons of denatured and undenatured ethanol were exported. Since January 2005, the monthly average for total ethanol exports has been 10.2 million gallons.

“Fluctuations in unpredictable ethanol export markets highlight the need for America to focus more attention on increasing its consumption of domestically produced ethanol,” said RFA President Bob Dinneen. “America must stop dragging its feet and move aggressively to open up more domestic markets to ethanol. This starts with a full and complete waiver for the use of E15 by EPA. Bifurcating the market or limiting E15 use by vehicle model year aren’t real solutions. Exports and the use of mid and higher level ethanol blends, such as E30 or E85, are important markets for ethanol, but they cannot expand fast enough to absorb increasing production and use of ethanol as called for by federal law. It is time for the Obama Administration to back up its rhetoric with action and increase the amount of ethanol American consumers can use.”

The past month, the majority of denatured ethanol exports, topping out at 11.2 million gallons and down from 24.9 million gallons in April, went to Canada and the Netherlands. After importing significant quantities in April, Jamaica, the United Kingdom, Singapore, and United Arab Emirates (UAE) imported virtually no U.S. denatured ethanol in May.

Undenatured, non-beverage ethanol exports totaled just 5.9 million gallons in May. Top destinations were the Netherlands, UAE and Mexico. Those three nations accounted for more than 95% of U.S. exports of undenatured, non-beverage product.