Record Corn Crop for 2009

There may still be corn left standing in the snow, but USDA says the 2009 corn crop was a record setter.

cornIn today’s crop production summary report, USDA projects U.S. corn production at a record 13.2 billion bushels, up from 12.9 billion bushels projected in USDA’s December forecast and 1 percent above the previous record of 13.0 billion bushels set in 2007. The corn yield is estimated at a record 165.2 bushels per acre in 2009, 2.3 bushels higher than the December forecast and 4.9 bushels above the previous record of 160.3 bushels per acre set in 2004.

The Renewable Fuels Association (RFA) says this proves the amazing productivity of the American farmer. “The unparalleled productivity of America’s farmers continues to amaze even the most skeptical of critics,” said RFA president Bob Dinneen. “Despite unfavorable weather conditions from start to finish, farmers produced considerably more corn than the food, feed, and fuel markets are demanding. Such gains in productivity undermine any claims that U.S. biofuel production will require new lands in other nations to come into production. There can be no question that American farmers have both the capability and the can-do attitude to feed the world while simultaneously helping reduce our nation’s reliance on imported oil.”

For calendar year 2009, the U.S. is expected to produce 10.6 billion gallons of ethanol and more than 30 million metric tons of livestock feed from 3.8 billion bushels of corn.

Arizona Biofuels Workshop

pinal_energyPinal Energy, Arizona’s first ethanol production facility, will be holding a biofuels workshop on Tusday, January 12, 2010 to assist station owners in converting stations to install biodiesel and/or E85. The workshop will be held at the Hilton Phoenix Airport.

The agenda includes: Mark Ellery from Caljet; Introduction to Biofuels by Andrea Martincic of Arizona Petroleum Marketers Association (APMA); E85 and Biodiesel Basics by Colleen Crowninshield, Clean Cities; Regulatory Requirements by Duane Yantorno of ADWM; All About Ethanol by John Skelley of Pinal Energy; Arizona’s Biofuel Conversion Program by Mark Ellery of Caljet; and Conversion of Existing Infrastructure by Brent Erikson of Cochise.

Currently, there are 28 E85 fueling facilities in the state of Arizona to fuel the nearly 115,000 flexible fuel vehicles in the United States. This workshop is intended to assist in bringing more stations to fuel the surplus of vehicles.

DMC Green Launches First Alternative Fuel Dealers’ Group

dmc_greenDMC Green, Inc. have organized their first alternative/renewable fuel dealers’ group to support the growing number of DMC Green fuel program dealers now in operation in California. According to their press release, under the DMC Green brand, these dealers currently offer ethanol, biodiesel and electric car charging in addition to their major oil company fuel brands.

Launched at an inaugural kick-off meeting on January 6, 2010 in Sacramento, the DMC Green Dealers’ Group brought together DMC Green’s research support teams to support existing gas station dealer-owners that have purchased the turn-key DMC Green alternative/renewable fuel installation package. The open forum meetings are scheduled to take place 4 times per year.

“DMC has been a very supportive partner and their program has exceeded my expectations”, says Robert Takhar, owner of Robert’s ARCO in Woodland, CA. “Vehicle traffic has definitely increased which increases our fuel sales as well as sales in our AM/PM convenience store.”

The DMC Green Dealer’s Group meetings provide a working discussion round-table where dealers can stay abreast of the rapid growth and regulatory changes in the green fuel market and where dealers can share experiences with their peers. “More importantly, these meetings help us find ways to increase dealer profitability through our research programs.” says Andy McCargar, Director, Market Development for DMC Green.

Brazil May Reduce Level of Ethanol Blends

Ethanol pump at a Petrobras station in Sao Paulo

Ethanol pump at a Petrobras station in Sao Paulo

With a shortfall of sugarcane due to excessive rain, Brazil’s Agriculture Minister Reinhold Stephanes announced that they are considering reducing the amount of mandatory ethanol blended with gasoline. Today, all stations are required to sell gasoline mixed with a minimum of 20-25 percent ethanol. If enacted, the change could take effect as soon as this week but Stephanes has not disclosed what the new percentage will be.

Above average rainfall plagued Brazil over the past few months, slowing down the harvest, and ultimately, some sugarcane was left in the field. Consequently, the region of Sao Paulo, the number one producing state of both sugarcane and ethanol, saw its ethanol production numbers down by 8.3 percent compared to last year. According to UNICA, (Brazilian Sugarcane Industry Association) the region will product 5.86 billions gallons from this harvest.

The rain has also caused ethanol prices to rise at the pump leading to a reduction in hydrated ethanol sales, a trend that began surfacing in June 2009. According to UNICA, this reduction, “is a consequence of higher hydrous ethanol prices at the pump resulting from a combination of weather-related difficulties during the harvest and the approaching inter-harvest period which normally lasts from December to April the following year.”  In addition to Brazil being “energy independent,” the country also boasts the largest fleet of flex-fuel vehicles in the world.

Ethanol Group Critical of Biofuels Policy Paper

Renewable Fuels Association LogoThe Renewable Fuels Association (RFA) is calling the new policy paper by Rice University’s Baker Institute for Public Policy released this week a continuation of “the orchestrated campaign to limit, and ultimately eliminate, the use of biofuels to displace foreign oil.”

The report, which was funded by Chevron Technology Ventures, concludes that “the current U.S. biofuels program that promotes corn-based ethanol is far from environmental sustainability and should be dramatically revamped.” Policy recommendations made by the institute are to revise the Renewable Fuel Standard (RFS) to make it “more achievable,” eliminate the tariff on imported ethanol, get rid of the blender’s tax credit and “avoid defining corn-based ethanol as a ‘low-carbon fuel,’ a move that would be based only on political expediency and not on scientific analysis.”

RFA contends that the Baker Institute researchers used “out-of-date information and questionable assumptions to denigrate Congress, farmers, and ethanol producers for their support of domestically-based renewable fuels.”

“Not surprisingly, this oil industry-sponsored analysis relies on myths, generalities, half-truths to dismiss ethanol while providing no comparison to our increasingly dangerous and costly addiction to oil,” said Renewable Fuels Association Director of Public Affairs Matt Hartwig. “A debate about the appropriate role of biofuels is valid and should occur, but not without proper context and based upon last century’s assumptions.”

Read RFA’s critique of the policy paper here.

Report: Enough Corn, Soybeans for Ethanol, Biodiesel

AgMRC3A new report indicates there will be enough corn and soybeans for ethanol and biodiesel production, as well as the feed, food and export uses those crops are tasked with.

But the evaluation from the Agricultural Marketing Resource Center‘s Robert Wisner, Professor of Economics and Energy Economist, says things could get tight if next year’s crop is hit with bad weather or a natural disaster:

WisnerFor 2009-10, the current corn crop estimate points to adequate corn supplies for feed, food, fuel, and export uses. Carryover stocks on August 31 of next year are expected to be about 1 and one-half weeks above minimum working stocks levels. Our early and very tentative normal-yield projections for 2010-11 show corn carryover stocks declining slightly by August 31, 2011 but still remaining marginally above minimum working stocks levels.

Wisner does note that there’s not a lot of margin for error in case the Corn Belt gets hit with drought or flooding. He says that will keep corn prices volatile should any inclement weather show up.

As far as soybeans and biodiesel, they should be OK, if, once again, the crops turn out as expected:

[T]he availability of soybeans and soybean oil for 2009-10 and 2010-11 is not indicated to be a major constraint on biodiesel production in U.S. if South American crops are near normal. Supplies for the current marketing year are a little tighter than indicated at this time last year because of extreme weather problems in South America last winter and early spring. However, U.S. and EU government policy actions that limit biodiesel demand and create uncertainty about future policies are a constraint on U.S. biodiesel production. That, in turn, makes 2010-11 soybean availability for biofuels and other uses look a little more adequate than anticipated a year ago.

You can read all of Wisner’s report in the January 2010 edition of the Ag MRC’s Renewable Energy Newsletter.

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