The U.S. Environmental Protection Agency (EPA) today announced that it expects to make a final determination in mid-2010 regarding whether to increase the allowable ethanol content in fuel.
The agency responded in a letter sent today to Growth Energy, the association that requested a waiver that would allow for the use of up to 15 percent of ethanol in gasoline. EPA says that while not all tests have been completed, the results of two tests indicate that engines in newer cars likely can handle an ethanol blend higher than the current 10-percent limit. The agency will decide whether to raise the blending limit when more testing data is available. EPA also announced that it has begun the process to craft the labeling requirements that will be necessary if the blending limit is raised.
December 1 is the deadline for the Environmental Protection Agency to issue a decision on the waiver to allow up to 15 percent ethanol in regular gasoline and the industry is anxiously awaiting a positive outcome.
The waiver request was submitted by Growth Energy and an alliance of ethanol producer organizations and companies in early March and by law EPA must take action on it by December 1 and the word from EPA officials last week was that they are committed to making an announcement by the deadline. Growth Energy CEO Tom Buis says they are optimistic. “We think we made the case,” Buis said. “The data we submitted proves there is no impact on engine performance or durability that would prevent the EPA from deciding in favor of E15.”
Matt Hartwig with the Renewable Fuels Association says the decision could go in several directions, three of which his group suggested in comments to the agency. “Obviously one is, yes – E15 is a safe and effective fuel. That’s the one we believe should be their decision,” said Hartwig. “Another option is the E12 pathway, taking that intermediate step while they continue to work on the full E15 waiver.”
He says a third option might be a partial waiver, “Where they say you can use up to E15 blends for on-road vehicle engines, but would put off a complete decision on the waiver with small engines or marine engines until they were comfortable with the data.”
The fate of the ethanol industry hinges on the EPA’s decision, since the so-called “blend wall” has already been reached and without the waiver there will be no way to utilize the production of ethanol required under the Renewable Fuel Standard mandated by the Energy Independence and Security Act of 2007. However, if the EPA denies the waiver, the industry may consider other regulatory or legislative options to overcome the blend wall issue.
Pacific Ethanol has announced that it is preparing to resume production of ethanol at its 60 million gallon per year Magic Valley facility located in Burley, Idaho. The company suspended production in February of this year at the Magic Valley facility due to extended unfavorable market conditions.
In May, the company’s subsidiaries which own four ethanol production facilities, including the Magic Valley plant, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in an effort to restructure.
Since market conditions for ethanol have improved, Pacific Ethanol plans to restart the Magic Valley facility in January 2010, subject to approval by the bankruptcy court, final documentation and a number of other conditions, including rehiring and training staff and restocking corn and other raw materials.
The Iowa Corn Indy 250 presented by Pioneer will return once again to the Iowa Speedway in 2010.
The Iowa Corn Growers Association, the Iowa Corn Promotion Board and Pioneer have renewed their sponsorship for the 4th Annual race, to be held on June 20, 2010. There were concerns that the race started specifically to highlight the United States ethanol industry might be discontinued after Brazil took over sponsorship of the Indy Car Series this year, but Iowa corn growers and Pioneer have agreed to sponsor the race for at least one more year.
“Powering Indy Cars at top speeds is the ultimate in ethanol performance,” said Tim Burrack, a farmer from NE Iowa and Chairman of the Iowa Corn Promotion Board. “Iowa Corn is at the track again this year because the cars are not only running on corn ethanol, but thousands of Iowans hear and see our messages about the power, performance, reliability, and energy independence from homegrown corn ethanol.”
Previous Iowa Corn Indy 250 presented by Pioneer races have set record attendance at the Iowa Speedway with over 40,000 fans packing the stands.
Brazilian Finance Minister Guido Mantega has confirmed that government will extend tax breaks to flexible fuel vehicles (FFVs) and others that are “environmently friendly”. According to Reuters, the Brazilian government will allow and extension on tax breaks given to E85 compatible cars with 1-liter engines until March of 1010 and trucks until June of 2010. Reversely, taxes on traditional gasoline-powered vehicles will rise in December.
“We want the automobile industry in Brazil to consolidate and to bring new environmental technologies to the country” Mantega told reporters at a news conference in Brasilia.
The government will lose an estimated 1.3 billion reais ($751 million) in revenue as a result of the measure. But taking into account potentially higher car sales, saved jobs, and unemployment benefits not paid, the government would come out even, Mantega said.
“If we look at the whole package, we may neutralize this (tax) loss,” Mantega said.
Iowa Senator Chuck Grassley, who has always been an ethanol supporter, will push Congress to act if the EPA turns down a waiver request that will increase the amount of ethanol in fuel from 10 to 15 percent. The EPA is expected to grant or deny the request by December 1.
As Oil Price Information Service first reported, “I think Congress has to get involved if they don’t do it [approve blends up to E15] because we’re up against an E10 stone wall and we have to cross that wall or we’re not going to keep the [renewable fuel standard] mandates that are already in the law,” Grassley commented to reporters recently. “And if they don’t do what I think is very reasonable, to go to E15, then I think Congress has to intervene. But do I think Congress would intervene in the next three weeks before Christmas? I doubt it.”
But what would Congress do if E15 was approved, but oil companies wouldn’t sell it until they received liability protection or if more research was done, a local reporter asked Grassley.
“Well, I think I would go to the Congress and try to settle the issue in the Congress. And I would hope that industry would cooperate,” Grassley responded. “There are some oil companies that are very pro-ethanol, like Marathon, as an example. I don’t know what they would do, but considering the traditional ‘Big Oil’ fight against ethanol, I presume that they wouldn’t feel inclined to use what’s not available and not help us get to the mandate. I would hope otherwise, and I would be trying to do everything I could to do the otherwise,” he added.
Corn may have competition for ethanol use from less expensive sorghum.
According to a survey by the United Sorghum Checkoff Program (USCP), 29 percent of the grain sorghum grown in the United States this year will be used to produce ethanol – a total of nearly 137 million bushels.
“In the past year, the price differential has greatly benefited the bottom line of ethanol plants using sorghum as a feedstock,” said USCP Board Chairman, Bill Greving. “This means that the use of sorghum by ethanol plants has influenced the increased demand for sorghum in these areas where ethanol plants are co-located with sorghum production.”
According to the survey, ethanol plants in areas where sorghum is grown prefer to use sorghum because of its availability and favorable price differential. It also suggests if grain prices jump like they did during 2007, 2008 and early 2009, demand for sorghum will increase dramatically, which will mean even more sorghum could be used in ethanol blends. Better yet, sorghum for grain-based ethanol production qualifies as an advanced biofuel feedstock.
Wisconsin based Renew Energy will either be finding a buyer or closing within just a few weeks. The Jefferson, Wisconsin plant currently produces about 210,000 of ethanol and employs 70. Renew noted that they are striving to sell the plant in hopes that a new buyer will keep the current employees.
According to the Wisconsin Ag Connection, Renew filed for Chapter 11 bankrupcy in February and at that time owned its creditors over $100 and was directly tied to the financial failures of Olsen’s Mill, which has since been forced into receivership. The grain handling company borrowed millions of dollars to help finance the construction and operation of the ethanol plant and wasn’t able to pay back its creditors because of the slowdown in the ethanol industry. Olsen’s also handled all the corn purchasing agreements for Renew Energy.
Renew Energy converted the former Cargill Malt in Jefferson, the largest malting plant in the world.
Want to know where you can buy E85? There’s an app for that now.
The Renewable Fuels Association (RFA) today launched a new application for Garmin GPS units that that maps out the location of E85 (85% ethanol/15% gasoline) for users with flex-fuel vehicles (FFVs).
“The most frustrating thing for many FFV owners is not knowing where they can fill up with higher level ethanol blends, like E85,” said RFA Director of Market Development Robert White. “With this new feature, drivers going to the grocery store or to Grandma’s for Thanksgiving will know the exact location of the nearest E85 pump.”
Using the Garmin navigation system, FFV owners can download station locations and program their device to guide them to upcoming E85 stations. The Garmin application is available for download on ChooseEthanol.com. There, consumers can download individual state data, a combination of states, or national data directly to their computer and then to their Garmin devices. Directions for installing this point of interest (POI) data are now available.
While the program is currently only available for Garmin GPS units, RFA is working to bring this data to other navigation systems and will update station location data quarterly.
A big issue in the current Renewable Fuels Standard … as well as the new RFS2 under consideration by the EPA … is the Renewable Identification Numbers (RINs).
In this edition of the Domestic Fuel Cast, we listen in on the conversation from the recent 2nd Annual RINWorld Summit held in Dallas, TX where the EPA’s John Wienrauch, Office of Transportation and Air Quality (OTAC) and Erv Pickell, Office of Enforcement Compliance Insurance briefed attendees on some issues with RINs and the current RFS and what we could see with the new RFS2.
Some of the current problems include unregistered users generating invalid numbers, duplicates RINs and even some fraud out there. And once a bad RIN is out there, it affects everyone down the line. But for the most part, those issues seem to be honest mistakes. Pickell says the EPA has been more forgiving with those who have self-reported their problems, but tighter controls will have to rein these issues in the future, especially with the new RFS2.
Weihrach says it comes down to the three Rs: registration, record-keeping and reporting.
It’s an important conversation, and you can here more of it here: DFCast-11-20-09.mp3
You can also subscribe to the DomesticFuel Cast here.
Advanta US believes sorghum will become the most versatile feedstock for ethanol production. As a global seed company that has a direction toward research, they have seen a stream of similarities and advantages verses other readily known ethanol production methods such corn, sugar and switchgrass.
According to a press release from Advanta US, “As the world leader in sorghum, including bioenergy sorghums, Advanta is intimately involved in developing the biofuels industry worldwide,” says John Oppelt, Advanta US Manager of Business Development.
“Although the starch-to-ethanol method of ethanol production using corn or grain sorghum has gained the lion’s share of agriculture’s attention to date, the sugar-to-ethanol and cellulosic ethanol methods hold the greatest advantage in conversion and green footprint. Advanta is building upon the advantages of sorghum and currently is marketing hybrids we’ve developed for biofuel and bioenergy conversion around the world. Sorghum is the only crop offering multiple pathways to ethanol.”
Advanta is a global seed company headquartered in India with offices in Argentina, Australia, India, Thailand and the U.S.
Chief Ethanol Fuels is celebrating their 25th anniversary this month in Hastings, Nebraska. An open house will be held on Monday, November 23 at the plant and will include keynote speaker, Senator Ben Nelson.
The site was originally constructed by American Diversified Corporation and then bought by Chief Industries in 1990. It was the first production facility in the state. In the past 25 years, production has increased from 10 million gallons per year to approximately 70 million gallons per year today, thanks to several expansions that began in 1993 and continuous improvements today.
Todd Sneller, administrator of the Nebraska Ethanol Board, said that the Chief Ethanol Fuels plant was Nebraska’s initial stake in the ground in terms of declaring ethanol as a major economic development initiative for the state. “Nebraska has a unique combination of corn, cattle and ethanol,” said Todd Sneller, administrator of the Nebraska Ethanol Board. “Agriculture is the economic engine that drives Nebraska, and ethanol is adding value in very powerful ways that reverberate throughout our state. It is important that we continue to support and develop this industry for the good of Nebraska and for the good of our nation. Chief Ethanol Fuels has been a pioneer and leader in the state’s ethanol industry.”
Sneller added that the outlook for the sustainability of the ethanol industry is good. “Corn producers continue to grow more corn on less land and with less water—and ethanol producers continue to squeeze more ethanol out of a bushel of corn with less energy and less water,” he said. “Efficiency will improve profitability and will continue to position ethanol as a key component in America’s energy and economic future.”
Senator Nelson’s remarks will begin at 1:00 p.m. on November 23 followed by Bob Eihusen, president of Chief Industries and Duane Kristensen, general manager of Chief Ethanol Fuels. Tours of the plant will then follow.
ZeaChem, Inc. has announced that they will work with Hazen Research, Inc. out of Golden, Colorado to construct a new cellulosic biorefinery.
According to their press release, ZeaChem is meeting its deployment milestones and moving forward to advanced biofuels and bio-based chemicals production,” said Jim Imbler, president and chief executive officer of ZeaChem. “We have a dedicated energy feedstock supplier, we have raised necessary capital, we have completed the initial design package and are finalizing the detailed engineering and design package. Initiating construction of this front-end fermentation unit operation demonstrates that ZeaChem is accelerating deployment of its unique hybrid biorefining technology.”
The front-end fermentation unit scales up production of the naturally occurring bacteria, called an acetogen, which ZeaChem uses in its fermentation process. Acetogens are highly robust and, unlike yeast, produce no carbon dioxide (CO2) during the fermentation process, allowing ZeaChem to realize a significant efficiency and yield advantage. ZeaChem has successfully produced acetogens at the lab scale for over 1,000 fermentation trials of sugars as well as hydrolyzate derived from cellulosic biomass. The facility will have capacity to produce 250,000 gallons of biofuel per year.
The 4th Annual Cellulosic Feedstock Summit is being held this week in Washington, DC once again. All the craziness in the nation’s capitol a year ago around election day made them move the summit to Florida last year, but they’re back in the traditional location for the meeting this year.
The focus of the meeting this year is a series of development briefings from key companies in the cellulosic biofuels arena on four main topics – activities, feedstocks, technology and financing. Companies providing briefings include Iogen, Coskata, Novozymes, Qteros, Dupont Danisco, and more.
The Renewable Fuels Association wants former Vice President Al Gore to know that he was right the first time about ethanol and other biofuels. RFA CEO Bob Dinneen has written a letter to Gore challenging the chapter about ethanol in his new book “Our Choice.”
“Given your attention to science and the facts, I am disappointed by the treatment of ethanol and other biofuels in your new book, Our Choice,” Dinneen wrote. “Many of your characterizations of today’s American ethanol industry are out of date or simply wrong. With 10.5 billion gallons produced and sold this year, ethanol is a major factor in America’s motor fuel supply and is helping eliminate the need for increasing environmentally damaging sources of crude oil.”
Listen to or download Dinneen’s comments about Gore’s book and what he hopes to accomplish with this letter to the former Vice President.
Podcast: Play in new window
| Download (2.2MB)