FTC Approves Valeros Purchase of Ethanol Plants

ftcAccording to Opis, two former VeraSun ethanol plants and one Renew Energy plant were approved by the U.S. Federal Trade Commission (FTC) to be purchased by Valero. This will bring the total production of Valero ethanol to 1.1 billion gallons per year.

“The Hart-Scott-Rodino Act requires under certain circumstances that prospective acquirers of voting securities or assets apply for clearance from regulators,” the FTC explained. “Requests for early termination or clearance are granted when the Federal Trade Commission and the antitrust division of the Department of Justice have determined that they won’t take action during the waiting period.”

“We expect these transactions to close in the early part of this year,” said Valero spokesman Bill Day.

The purchase of the Renew Energy plant is still in question because of a challenge from another group who states they were the highest bidder of the plant at a recent auction. More information on this can be found on a previous post.

Keynote Speaker Announced for Ethanol Conference

Renewable Fuels AssociationThe keynote speaker for next month’s 15th Annual National Ethanol Conference will address the issue of using mid-level ethanol blends from the automobile industry perspective.

The Renewable Fuels Association (RFA) has announced that Thomas G. Stephens, General Motors Vice President for Global Product Operations, will keynote the conference in Orlando on February 15-17.

“The importance of a cooperative and constructive relationship with the auto industry to America’s ethanol producers and marketers cannot be overstated,” said RFA President Bob Dinneen. “Whether it is working on technical issues surrounding mid-level blends or expanding the infrastructure for blender pumps and higher level ethanol blends, having auto companies at the table is critical.”

Registration for the 2010 National Ethanol Conference is available on line.

Cellulosic Ethanol Demo Plant to Open in TN

DuPont Danisco Cellulosic Ethanol (DDCE) and University of Tennessee/Genera Energy will hold a grand opening celebration later this month for one of the nation’s first cellulosic ethanol demo plants, located in Vonore, Tenn.

BredesenAmong the featured speakers at the grand opening on January 29 will be Tennessee Gov. Phil Bredesen, who helped with the groundbreaking for the plant in October 2008.

The facility is expected to begin producing fuel ethanol from both agricultural residue and bioenergy crops prior to the grand opening. The 74,000-square-foot facility has the capacity to produce 250,000 gallons of ethanol from corncobs and switchgrass and is preparing for commercial production by 2012.

Alabama to Hold Alt Fuels Workshop

al_cleanfuelsThe Alabama Clean Fuels Coalition, in cooperation with the Alabama Department of Economic and Community Affaires – Energy Division will be holding an alternative fuels workshop to deliver factual information and outline the incentive opportunities available for propane, compressed natural gas and E85. The workshop will be held in Dothan, Alabama on March 17.

The Dothan Biofuels Workshop will offer insights from industry experts and leaders throughout the biofuels and alternative fuel industry. Hear discussions on timely topics such as: State & National and perspectives on Compressed Natural Gas (CNG), Propane, biodiesel and ethanol; Alabama’s current and potential biofuel feed-stocks; Marketplace experiences from folks producing, selling and using biofuels and alternative fuels; Importance of fuel quality; Potential incentives & financial benefits available; The Facts vs. Myths about alternative fuels and more.

Fleet Managers, City and County Government representatives, Fuel Producers & Distributors, Fuel Retailers, Government Agencies, Colleges/Universities, School District Personnel, Consumers and others interested in becoming informed leaders in the emerging biofuels marketplace in Alabama are welcome to attend the workshop.

To register for the workshop, click here.

Record Ethanol Production in October

According to the latest figures from the Energy Information Administration (EIA), U.S. ethanol production hit a record high in October 2009 of 740,000 barrels per day, up 93,000 barrels from October 2008.

Ethanol demand also reached an all time high in October, according to the Renewable Fuels Association. The organization calculates that demand totaled 767,000 barrels per day in October, an increase of 75,000 barrels over a year earlier.

Bunge to Expand Sugar Business in Brazil

BrazilianSugarcane1There has been quite a bit of activity in Brazil during the last few months of 2009 and it looks like it will continue. Bunge Limited announced today that it will become the 100 percent owner of Usina Moema Participacoes S.A. Moema Par is a holding company that owns one sugarcane mill and has ownership in five others. Together the six mills, known as the Moema Group, have the capacity to crush 15.4 metric tons. This agreement, which is structured as a share exchange worth approximately $896 million, gives Bunge 60 percent effective share of the total capacity.

“This transaction fulfills Bunge’s strategic goal of building a large-scale, fully integrated business in sugar and bioenergy,” stated Alberto Weisser, Chairman and CEO of Bunge Limited. “It adds significant scale to our current milling operations and enables us to vary production among multiple sugar and ethanol products, according to market conditions. The Moema Group cluster is also strategically located near large domestic markets in Brazil and has excellent access to export logistics systems. All of these strengths make it a perfect fit with our global trading and marketing operations.”

The Moema Group cluster is located on the border of São Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil. According to Bunge, the mills benefit from cost savings due to their cluster configuration, and have favorable road and rail access to three of Brazil’s largest export ports (Santos, Paranagua and Vitoria). The mills can produce both raw and crystal sugar, as well as hydrous and anhydrous ethanol. In addition, the mills have co-generation facilities, are self-sustaining in terms of energy requirements and sell excess power to the grid. The majority of the cluster’s sugarcane is harvested mechanically, which is now law in São Paulo.

According to Bunge, they may enter into agreements to secure some of all of the remaining interests in the mills that comprise the Moema Group in the next few weeks.

Cellulosic Ethanol Demo Plant for Georgia

valerorenewables_logoA Valero Energy Corporation subsidiary is joining forces with an Atlanta engineering firm to build a cellulosic ethanol demonstration plant in west central Georgia.

Sonny PerdueGeorgia Governor Sonny Perdue announced that the new plant is a partnership between Diamond Alternative Energy, a wholly-owned subsidiary of Valero Energy Corporation, and American Process, Inc..

“Georgia is striving to be a world leader in biofuels,” said Governor Perdue. “Our plentiful supply of raw materials to manufacture biofuels enables private industry to develop alternative energy technologies and create jobs. By opening their biorefinery plant, Diamond Alternative Energy and API will further cement Georgia’s leadership position in the alternative energy industry.”

The plant is expected to open in the first quarter of 2010.

Tennessee Misses Biofuels Goal

A Tennessee state audit found that the state agencies missed their goal of reducing their use of petroleum products by 20 percent. Legislation enacted in 2007 gave state agencies, universities and community colleges until January 1, 2010 to meet this goal.

tdot“The 20 percent reduction was a challenging goal,” said Alan Jones, manager of the environmental policy office at TDOT. The problem, he noted, is that there aren’t enough E85 and biodiesel stations to serve all the state vehicles. According to TDOT, there are just 33 pumps across the state selling B20 and only 27 pumps provide E85.

About 9 million cars on the roads today are flexible fuel vehicles and nearly 139,000 located in the state of Tennessee. “A lot of those vehicle owners continue to use 100 percent unleaded and in fact, surveys have shown that a lot of those vehicle owners don’t even realize they can use E85,” he said.

The Ethanol Decade

The Renewable Fuels Association (RFA) is calling the decade of the 2000′s “the era when biofuels came of age.” The ethanol advocacy organization reflects on the last ten years:

Renewable Fuels Association LogoAs we prepare to begin a new decade, the Renewable Fuels Association is taking just a moment to look back at the decade that saw ethanol emerge as the leading renewable fuel alternative to our dependence on foreign oil.

No matter what the calendar says, the decade of the 2000 aughts began on September 11, 2001. That tragic day ushered in a new consciousness of America’s vulnerability, to terrorist attack most assuredly, but also to the very high price we pay for our dependence on imported oil. When President Bush announced a few months later that we would break our addiction to oil, Americans knew well why it was necessary – national security was now linked to energy security and the consequence of inaction was now tangible. By decade’s end, concerns about climate change provided additional momentum to the effort to wean the world from oil and develop sustainable, secure alternatives to oil.

Thus it was that the past decade truly was the era when biofuels such as ethanol came of age. From just 1.4 billion gallons of production in 1999, the U.S. ethanol industry last year produced an astonishing 10.6 billion gallons. Ethanol is now, truly, a ubiquitous component of the U.S. motor fuel market, with ethanol blended in more than 80% of every gallon of fuel, and ethanol blends sold virtually coast to coast and border to border.

As ethanol production has increased, so have the industry’s contributions to the American economy. As recently as January, 2000, there were only 54 ethanol plants in the U.S. Nine years later, there were more than 200 plants in 26 states, with even more under construction. Continue reading

Alt Fuels Training Expands to Another College

A group that trains technicians, fleet managers, law enforcement and first responders on how to handle today’s vehicles fueled by biodiesel, ethanol, hydrogen, propane and other renewables has added another college to its list of training sites.

BlueRidgeCCBlueRidgeNow.com reports that Blue Ridge Community College in Weyers Cave, Virginia is the latest member of the National Alternative Fuels Training Consortium (NAFTC), the only nationwide alternative fuel vehicle and advanced technology vehicle training organization in the U.S.:

“Alternative fuel and advanced technology vehicles, such as those powered by biodiesel, ethanol, natural gas, hydrogen, propane, fuel-cell, and hybrid electric systems, are a means for improving air quality and breaking America’s addiction to foreign oil,” said Al Ebron, NAFTC executive director. “NAFTC National Training Centers help promote the adoption of alternative fuel and advanced technology vehicles through a variety of automotive training programs for technicians, fleet managers, public safety and first responder organizations and the public.”

The NAFTC is also the originator and event headquarters of National Alternative Fuel Vehicle Day Odyssey. This biennial event was first held in 2002, again in 2004 and 2006, and most recently on Oct. 3, 2008. Odyssey is the largest nationwide alternative fuel and advanced technology vehicle awareness event.

“Our faculty and staff have worked diligently to bring this leading automotive training to Blue Ridge Community College,” said Blue Ridge President Dr. Molly A. Parkhill. “During the next year, we will develop additional courses and programs in alternative fuels to prepare our students for jobs in this rapidly growing industry.”

The first class will be an Introduction to Alternative Fuel Vehicles, a short course geared for automotive technicians who want to expand their skills in alternative fuels. It begins January 19th.

Ethanol Groups Challenge California Fuel Standard

The nation’s ethanol industry is challenging the constitutionality of the California Low Carbon Fuel Standard (LCFS).

Renewable Fuels Association LogoThe Renewable Fuels Association and Growth Energy filed a complaint on Christmas Eve in the Federal District Court of Fresno charging that the measure violates both the Supremacy Clause and the Commerce Clause of the U.S. Constitution.

Growth Energy“The LCFS erects new regulatory obstacles to ethanol, frustrates the federal Renewable Fuel Standard, and threatens the nationwide market for domestic ethanol,” says a joint statement issued by the two organizations. “Additionally, by closing California’s borders to corn ethanol from other states, the LCFS will change how corn is farmed and ethanol is produced all over the country. The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security.”

The LCFS was adopted by the California Air Resources Board last spring and is due to take effect early next year.

Ethanol Plant to Provide Feedstock for Biodiesel

BlueFlintA North Dakota ethanol plant is truly exploring the concept of value-added products. The Blue Flint Ethanol refinery in Underwood, ND, will extract oil from the corn it turns into ethanol to turn that oil into biodiesel.

KXMB-TV is Bismarck reports the oil extracting equipment will be right there at the refinery and is the first of its kind in the state:

General Manager Jeff Zueger says there is about half-pound of oil in a bushel of corn.

“We see it as a postive we are able to move oil into a higher value markets, produce another renewable fuel. When you remove corn oil from the process a gallon of corn oil estentially converts to a gallon of biodiesel. So we are able to get about another 5 percent out of this plant as opposed to just producing ethanol and distillers grain. Now we are producing a product that ultimately ends up as biodiesel.”

The plant is expected to produce 1.5 million gallons of biodiesel annually … enough to pay for the $2 million project within a year.

Valero’s Purchase Renew Energy Challenged

valero2The purchase of Renew Energy by Valero is being challenged. As originally posted, Valero was to purchase the 110 million gallon per year ethanol plant for $72 million. However, ALL Fuels & Energy out of Iowa has filed a motion with the U.S. Bankruptcy Court stating that stated that they were the highest bidder for the plant and they should take ownership.

ALL Fuels & Energy has asked the bankruptcy court to reconsider Valero’s $72 million bid earlier this month when they said they submitted a bid of $77 million. ALL Fuels & Energy explained, “During the auction, at approximately 8:45 p.m., Valero submitted a $72 million cash bid as a ‘conditional’ bid, with an expiration time of 9:15 p.m,” the company explained. “At 9:01 p.m., a $77 million bid by ALL Fuels-Jefferson, LLC was announced, based on a discount formula, as a ‘bid of $72.1 million’. Blair and Bankers’ Bank [the lead creditor for the bankruptcy proceeding] then advised the auction participants that ‘time had run out, the auction closed,’ and announced that the ‘best bid is Valero,’ even though Valero’s bid was $5 million less than the All Fuels- Jefferson, LLC bid,” the company continued. “At 9:06 p.m., the ALL Fuels- Jefferson, LLC attempted to enter a substantially higher bid than its previous $77 million bid. ALL Fuels-Jefferson, LLC was not permitted to enter this bid by Blair and Bankers Bank.”allfuels

The court noted recently, “As the background facts of this case demonstrate, confirmation of Valero’s bid over that of ALL Fuels was in error; the auction was tainted by defects, and therefore it is within the court’s discretion to reconsider the Sale Confirmation Order, signed on Dec. 17, 2009…It would be manifestly unfair to ALL Fuels to allow the confirmation of sale to Valero to stand, when the procedures of the auction were so skewed and tainted.”

Hawkeye Energy Files Bankruptcy

hawkeyeUnfortunately, it looks as though another ethanol plant has filed for bankruptcy. Hawkeye Energy currently owns and operates ethanol plants in Iowa Falls and Fairbank, Iowa and has filed for reorganization and Chapter 11 bankruptcy.

Hawkeye Energy Holdings CEO Bruce Rastetter said, “The U.S. biofuels industry is going through a period of historic change and we are taking the necessary steps to position our business units to succeed in a dynamic and sometimes volatile business environment. The ethanol industry was severely affected in 2008 and 2009 by unprecedented volatility in commodity prices and margins. While the market for ethanol has stabilized and financial performance has improved in recent months, it nevertheless became clear that a restructuring of the Renewables unit’s balance sheet would be necessary for the company to compete effectively in the future.”

The Iowa Falls and Fairbank plants, each of which employs about 45 workers, will continue to operate under the current management, said Rastetter. They also will continue to buy corn and will honor forward contracts for purchases of corn from farmers.

Hawkeye said it owes bank debt between $500 million and $1 billion to lenders that took out the loans in 2006 after Hawkeye withdrew a planned initial public stock offering. Against that debt, Hawkeye has about $250 in assets, Rastetter said.

Ethanol Report on E85 GPS Application

If Santa is bringing you a new Garmin or TomTom GPS for Christmas, you can use it to find E85 fuel for your Flex Fuel Vehicle (FFV) to get you over the river and through the woods to Grandmother’s house this holiday season.

We’ve already told you about the new applications available from the Renewable Fuels Association (RFA), one for the TomTom and one for the Garmin, both designed to guide FFV owners to E85 stations.

Ethanol Report PodcastIn this holiday edition of “The Ethanol Report,” we hear more details about the apps from RFA Director of Market Development Robert White and what they are working on down the road for other GPS devices and even the iPhone. The available applications can be downloaded now from ChooseEthanol.com.

You can subscribe to this twice monthly podcast by following this link.

Listen to or download the podcast here: