Ethanol Groups Dispute Petroleum Industry Claims

The American Petroleum Institute (API) is using findings of a new report to try and dissuade the Environmental Protection Agency (EPA) from making a decision on the use of increased levels of ethanol in gasoline anytime in the near future.

The Sierra Research report commissioned by the national trade association that represents the oil industry found that “multiple regulatory and legal requirements remain and must be met before higher ethanol blends can be legally marketed for commercial introduction.” The report lists nine different requirements that must be met before the ethanol blend level can be increased from the current 10 to 15 percent. Those requirements include such things as a Clean Air Act waiver; registration of the fuel with EPA; changes to EPA Reformulated Gasoline regulations; and changes to EPA Gasoline Detergent Additive regulations.

Matt Hartwig with the Renewable Fuels Association agrees that those actions need to be taken before the fuel can be marketed, but disagrees that EPA should wait until they are all complete before it can approve the use of increased ethanol blends. “Those things need to be done and we’re already working on them” said Hartwig. “They can attempt to drag their feet until the cows come home but it won’t change the fact that E15 is a safe and effective fuel for vehicle use. Instead of constantly referring to the few challenges that can easily be overcome, it would be far more effective for Big Oil to work with ethanol producers to address them in a timely fashion – that is assuming they truly want to act in the best interests of American consumers.”

Growth Energy CEO Tom Buis says approval by EPA is the first step needed for the process to move forward. “In order for state laws and regulations regarding fuel specifications to be updated, the fuel must first be approved by the EPA,” said Buis. “We are not surprised that the people profiting from the status quo want to keep it that way. We have been dependent on foreign oil for 40 years- sending $300 billion a year overseas to other countries’ economies – and these delays will only perpetuate our addiction. The Growth Energy Green Jobs Waiver was accompanied by a sound body of science that overwhelmingly supports the use of E15 in existing vehicles. In fact, there has been more testing of E15 than there has been of any other fuel additive in the history of the EPA waiver process.”

API says some of the necessary requirements must occur prior to the initial sale of a new transportation fuel but some can be subsequently addressed. The period of time they estimate to be required for the completion of all of the above changes is “on the order of several years.”

Read API’s report here.

New Process for Sorghum Ethanol

A Cincinnati-based advanced biofuel technology company has announced the development of its next generation, sugar-based fuel ethanol process.

According to AdvanceBio LLC, the process is capable of utilizing sugars derived from sugar cane, sweet sorghum, sugar beet and other similar crops as feedstock for the production of fuel ethanol and green power while generating zero liquid waste.

SorghumWhen built in conjunction with the sugar milling operation, plants employing AdvanceBio’s sugar-based ethanol process will have the same, low-greenhouse gas footprint found in Brazil’s existing cane-based fuel ethanol industry. “The facilities will be extremely self-sufficient. In addition to eliminating costs associated with outside sources of fossil fuels, power and process water, our technology eliminates the need for extensive waste treatment processes and the cost of transporting large volumes of liquid vinasse back to the cane fields. These ethanol production facilities will also meet stringent U.S. pollution and occupational safety regulations,” said Dale Monceaux, Principal.

AdvanceBio envisions that producing fuel ethanol by processing cane and sweet sorghum feedstocks will serve to supplement corn as the country transitions to cellulosic ethanol and beyond. Currently, U.S. legislation establishes a Renewable Fuel Standard (RFS) requiring the production of 36 billion gpy of renewable fuels by 2022. Of this total, 15 billion gpy is designated as a cellulosic ethanol requirement.

Read more here.

Ace Ethanol Scores Stimulus Funding

A Wisconsin ethanol plant is receiving nearly $600,000 in stimulus money to help with expansion plans.

jim doyleWisconsin Governor Jim Doyle announced $595,000 in support for Ace Ethanol to expand its operations in Stanley and retain 40 jobs. “My Administration’s top priority continues to be helping Wisconsin businesses create jobs and giving workers the opportunities to get those jobs,” Governor Doyle said in a press release. “I’m proud to support Ace Ethanol in its efforts to produce clean energy that creates good jobs for our residents.”

The funds are part of the federal American Recovery and Reinvestment Act and are being distributed through the Wisconsin State Energy Program. They will be used for the installation of heat exchange equipment to reduce waste heat and make the facility more efficient.

bio allianceAce Ethanol is a founding member of the Wisconsin Bio Industry Alliance (WBIA). “This is great news for Ace Ethanol and Wisconsin’s ethanol industry as a whole,” said Joshua Morby, Executive Director of the WBIA. “The ethanol industry has contributed over a billion dollars to our state economy, and it is vitally important that we keep this industry growing and thriving in our state.”

Completed in June 2002, the Ace facility was the first large-scale ethanol plant in Wisconsin, and currently produces over 40 million gallons of the fuel every year. Ace also produces wet and dry distillers grain with solubles and carbon dioxide as co-products of the ethanol production process.

Ethanol Groups to Participate in TX Future Conference

Because Texas has the most flexible fuel vehicles (FFVs) of any state, a number of industry organizations and companies are getting together to promote ethanol in the Lone Star State next month.

Shaping Texas’ Fuel Ethanol Policy, sponsored by the Texas Renewable Energy Industries Association (TREIA), will be held on September 10 in Austin, Texas. TREIA has been bringing decision makers and industry leaders together in Texas for more than 26 years to build the foundation for developing renewable energy. “This conference offers a clear picture of today’s realities and opportunities in a growing renewable energy sector that some may have written off,” said Russel Smith, Executive Director of TREIA. “The nation’s use of ethanol will continue to increase, and Texas has huge production possibilities and more flex-fuel vehicles capable of running on E85 than any other state. Our current approach to this important industry may leave money on the table.”

Participating in the event are: Growth Energy, the Clean Fuels Development Coalition, the Renewable Fuels Association, ICM, Abengoa Bioenergy and more.

More information on the conference including an agenda can be found online here.

Ethanol Promotion Success at Sturgis

Promotion of ethanol to motorcycle lovers was a bigger success this year than last.

Ethanol Report PodcastThis edition of the “Ethanol Report” with Renewable Fuels Association (RFA) Director of Market Development Robert White takes a look at how their sponsorship at the 70th annual Sturgis Motorcycle Rally went this year.

RFA Sturgis Fueled with Pride 2010This is the second year that RFA partnered with the Legendary Buffalo Chip campgrounds which is the main venue for the huge motorcycle rally that draws hundreds of thousands each year, and this year was even bigger than last year. “We had a much larger than anticipated crowd,” Robert says. “Attendance was less than 500,000 last year and while the final numbers aren’t in, most are suggesting it was above 800,000 this year.”

That gave Robert lots of opportunities to talk with motorcycle owners about using ethanol in their engines, which most of them are doing without even knowing it. “There’s 16 states out there that don’t require labeling at the pump for anything 10 percent and below, so a lot of these guys and gals have been using ethanol for some time and just didn’t know it. So, they are their own case study.”

There was lots of ethanol signage and giveaways at the campground and during the concerts at the venue and RFA also utilized social media for promotions at the event. “I was giving away ethanol t-shirts that were Sturgis 2010 specific on Twitter and Facebook and we had a Facebook Fan Appreciation party where over 100 people showed up and the only way they were invited was through Facebook,” Robert says. Pictures of the event can be found here on RFA’s ethanolpics Flickr photo album.

Listen to Robert tell the story of promoting ethanol at Sturgis in this Ethanol Report podcast. Sturgis Recap Report

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

Export Exchange Focuses on Ethanol By-Product

usgcThe upcoming Export Exchange 2010 is shaping up to be a must-attend event for anyone involved in the production of ethanol who also produces the co-product dried distillers grains with solubles (DDGS), which is becoming a major export commodity from the United States.

The Export Exchange, sponsored by the Renewable Fuels Association (RFA) and the U.S. Grains Council (USGC), features an array of international leaders in ag commerce, including Dr. Bob Thompson with the National Center for Food and Agricultural Policy and Gary Blumenthal, president and CEO of World Perspectives Inc.

Dr. Thompson is scheduled to deliver the keynote address on the first day of the conference to provide perspective and insight on the world supply and demand situation will give attendees a better understanding of the world market. Blumenthal’s remarks during the second day luncheon will focus specifically on the growing global demand for U.S. DDGS. “As long as global population continues to grow, the demand for meat, milk and eggs will increase, and subsequently the demand for livestock and thus for DDGS will climb as well,” Blumenthal says.

Other speakers at the event will include Jim Allwood of Informa Economics, Paul Bingham with IHS Global, RFA president Bob Dinneen and Dr. Erick Erickson with USGC.

More than 170 international buyers of U.S. DDGS and coarse grains are scheduled to attend the event, including representatives from China, Japan, Taiwan, Korea and Vietnam – countries which have a major interest in DDGS. The Export Exchange will be held Oct. 6-8, 2010, at the Hyatt Regency McCormick Place Hotel in Chicago. Registration is available on-line with a $100 discount for registrations received before September 4.

Shell & Cosan Partner on $12 Billon Ethanol Project

Brazil-based Cosan S.A. has announced a partnership with Shell to form a $12 billion joint venture for the production and commercialization of ethanol and power from sugarcane. According to company sources, the venture, which must receive regulatory approval, would create the 3rd largest ethanol producer in the world, manufacturing 440 million gallons of ethanol per year, and result in more than 4,500 global retail stations selling ethanol blends.

“While there is still plenty of integration planning to do before we launch the proposed joint venture, this is an important milestone in our effort to create one of the world’s most competitive sustainable biofuels companies,” said Rubens Ometto Silveira Mello, Cosan’s Chairman of the Board and non-executive Chairman-elect of the proposed joint venture.

As part of this partnership, Shell will contribute its 16 percent equity interest in Silicon Valley-based advanced biofuels company Codexis, Inc. They will also offer up its equity interest in Canadian celluosic company, Iogen Energy.

“The proposed joint venture is set to pool our complementary businesses, enhance our growth prospects in ethanol production globally and support our growth platform for our retail and commercial fuels businesses in Brazil,” said Mark Williams, Shell Downstream Director.  “Over the next 20 years, sustainable biofuels are one of the most realistic commercial solutions to reduce CO2 emissions from transport.”

But what may be most interesting about this venture, is that Shell and Cosan are competitors, both selling ethanol to consumers via retail stations. Could this pave the way for more oil-to-oil industry ventures?

Gators Study Termites for Cellulosic Ethanol

The University of Florida is continuing its research into the use of termite enzymes to help make cellulosic ethanol commercially viable.

As we reported last year, researchers at UF have been working on genetic sequencing to harness the insects’ ability to churn wood into fuel. Now they report that they have isolated two enzymes that termites use to break up lignin, which is the tough nut to crack when it comes to producing ethanol from cellulosic material such as woody biomass. The material is normally exposed to heat and steam or caustic acids and bases to break down the lignin barrier around the sugar molecules, which adds to the cost of the process. However, the enzymes found in termite salivary tissues may be able to accomplish the same task, and at room temperature.

“Once we figure out the best way to integrate this sort of enzyme into the process, it could drop the cost of producing cellulosic ethanol significantly,” said UF entomologist Mike Scharf, who led the research.

The research was a collaboration between UF/IFAS and the biotechnology company Chesapeake-PERL Inc. of Savage, Maryland. The work was funded by the U.S. Department of Energy and The Consortium for Plant Biotechnology Research Inc.

Purdue Study Advocates Variable Ethanol Tax Credit Rate

A new study from Purdue University finds that a variable rate for the ethanol blenders tax credit could cost the government less and provide more security for producers than current fixed rates.

The study, by Purdue agricultural economist Wally Tyner, concludes that a variable rate would insulate producers from risk because as oil and ethanol prices drop, the subsidy for producers would increase. The government would save money because the rate would go down when oil prices are high.

The Volumetric Ethanol Excise Tax Credit (VEETC), which currently pays blenders a fixed rate of 45 cents per gallon of ethanol, will expire at the end of the year. Congress will have to decide whether to create a new fixed rate, implement a variable rate or go with no subsidy at all.

Tyner said his study, which was published in the October issue of the journal Energy Policy, shows that a variable rate would be the most beneficial since it still lowers risk for producers and could entice new cellulosic ethanol production. “We could see ethanol plants close if the subsidy isn’t renewed in some form,” Tyner said.

Under a variable rate, there would be no tax credit for blenders at $90 per barrel of oil. The subsidy would kick in at 17.5 cents per gallon when oil is at $80 and increase 17.5 cents for every $10 decrease in oil prices.

However, Tyner noted that the study’s findings are irrelevant if the Environmental Protection Agency does not increase the amount of ethanol that can be blended with gasoline from 10 percent to 15 percent. He said without that increase, the United States is at the ethanol blend wall, the point at which growth in ethanol production has to stop because the maximum amount possible is being purchased and used by consumers. The EPA is expected to make a decision on the blending limit this fall.

KL Energy & Petrobras Partner on Bagasse Project

KL Energy Corporation and Brazil-based Petrobras have announced a new joint development agreement to optimize KL Energy’s cellulosic ethanol process technology for the conversion of sugarcane bagasse feedstock to ethanol. As a component of this partnership, Petrobras will invest $11 million to adapt KL Energy’s demonstration facility to use bagasse. The money will also be dedicated to validating the company’s optimized process.

In addition, the technology will be integrated into one of Petrobras’ Brazilian sugarcane mills and is scheduled to go online sometime in 2013. Once the plant is operational, it will produce approximately 15 million liters per year.

Miguel Rossetto, CEO of Petrobras Biocombustivel, said, “Petrobras views cellulosic ethanol as a very promising technology to substantially increase the ethanol output by some 40% without increasing the planted area output and further improve the carbon footprint of its sugarcane mills. This agreement with KLE will considerably accelerate this development effort and we are optimistic about the commercial potential of the optimized technology platform.”

The initial agreement is for the two companies to work together for 18 months and provides a mutually exclusive agreement to jointly develop cellulosic ethanol from bagasse. The agreement also gives Petrobras the option of securing a technology license for the use of KL Energy’s technology within the Petrobras Group.

“Brazil is the global leader in the production of affordable biofuels and biomass, and we believe that bagasse is a perfect feedstock for our process. KLE plans to be at the forefront of the emerging cellulosic ethanol market in Brazil,” said Peter Gross, President and CEO of KL Energy Corporation. “We are very excited about this opportunity and we can think of no better partner for this endeavor than Petrobras, a company globally recognized for its technological competence, social and environmental responsibility and its investments in clean energies.”

This partnership marks yet another American company to partner with a Brazlian-based company with the intention of developing biofuels.

Analysis Credits Ethanol With Lower Gas Prices

Gas prices have hit an eight-month low and an analysis in the Washington Post today gives part of the credit to ethanol.

The main reason they say gas prices have declined is weak demand due to the economy and continued high unemployment. That comes from an American Petroleum Institute (API) news release last week, which reported gasoline demand for July, as measured by deliveries, was down .03 percent compared to the same time last year. “With unemployment high and July regular gasoline prices more than 20 cents a gallon above those a year ago, consumers likely have been shopping and vacationing less and trimmed their gasoline purchases accordingly,” said API Chief Economist John Felmy.

But, the Washington Post article notes that fuel efficiency improvements and more ethanol have also helped to moderate gas prices. “A steady increase in the biofuels component of U.S. motor fuel is another reason; the four week average for ethanol production ending Aug. 13 was 854,000 barrels a day, up nearly 18 percent from a year ago and now more than 9 percent of the volume of motor fuel, according to the Renewable Fuels Association.”

Gasoline prices have dropped a little more this month, according to the American Automobile Association, which reports this week that average retail price for regular gasoline is less than $2.71 a gallon, now just eight cents higher than a year ago.

Process Optimization Seminar Sold Out

The third Process Optimization Seminar, coming up September 1-2 in Kansas City, is sold out.

The interactive seminar focused on increasing ethanol plant process efficiency and profitability is sponsored Fremont Industries, Fermentis, Novozymes and Phibro Ethanol Performance Group. They have already held two successful workshops in Minneapolis last year and Indianapolis earlier this year and they will be announcing more in the near future.

I talked with Tom Slunecka (pictured far left) of Phibro at the recent American Coalition for Ethanol (ACE) conference about the seminars and why they are so popular with ethanol plant operators and managers. “There just can’t be enough education, there’s always things changing and new technologies available,” Slunecka said. “We keep the class sizes very small so about 60 people are invited each time.” Each of the four companies present a hands-on demonstration based education, such as Phibro’s section on antibiotics where they use microscopes to learn how to identify different microbes that might be present in an ethanol plant.

The big reason why the workshops are so popular, Slunecka says, is because ethanol plant margins are razor thin. “So if you can squeeze out a percent, or even a half a percent more alcohol from your same inputs, it will dramatically change your plant,” he said. “We’re talking about hundreds and hundreds of thousands of added revenue that a plant may be missing out on.”

Listen to my interview with Tom here: Tom Slunecka Interview

Largest Global Cellulosic Biomass Harvest Underway

The largest global cellulosic biomass harvest in history is underway and already the world is watching. Last week, Project Liberty kicked off their one-year biomass harvest pilot program as an effort to ensure all the correct logistics are in place in time for Project Liberty to go online in early 2012.

During the event, I caught up with Scott Weishaar, who runs POET’s biomass division. He and his team have been working for years on commercializing cellulsoic ethanol using light corn stover and corn cobs and this pilot program represents that last major hurdle for success.

As part of this program, POET Biomass will have a biomass storage building completed in time for harvest that will house up to 23,000 tons of biomass bales at any given time.

Along with progress comes concerns and Weishaar is very cognizant that people have concerns over what impact the removal of biomass will be on the soil. “We know there are concerns. So we want to make sure we understand all the aspects that are associated with that – soil erosion, nutrients, compaction, and storage characteristics,” said Weishaar.

All of these elements are being studied in conjunction with several partners including Idaho National Laboratory, Iowa State University and USDA’s Biomass Program and the goal is to have all major questions answered prior to the cellulosic ethanol plant going online.

“We are working around the logistics surrounding the collection, storage, and handling of the biomass so we’re ready to supply the feedstock in 2012,” said Weishaar.

As the world watches, there are still many who doubt commercial cellulosic ethanol will ever succeed. To that, Weishaar says the “proof is in the pudding” and they are ready to meet the country’s challenges of producing 36 billion gallons of biofuels by 2022 and reducing its dependence on foreign oil.”

Listen to the interview with Scott Weishaar here: Scott Weishaar Talks Biomass

Researcher ID’s Genes to Make Ethanol More Economical

The University of Illinois (U of I) has recently announced that one of their metabolic engineers has taken a major step in helping biofuels production become more efficient and economical. Yong-Su Jin, an assistant professor of microbial genomics as well as a faculty member in the U of I’s Institute for Genomic Biology, has developed a strain of yeast with increased alcohol tolerance. Yeast is used during the biofuel fermentation process to convert sugars from biomass into biofuels.

“At a certain concentration, the biofuels that are being created become toxic to the yeast used in making them. Our goal was to find a gene or genes that reduce this toxic effect,” said Jin.

Jin worked with Saccharomyces cerevisiae, the microbe most often used in making ethanol, to identify four genes (MSN2, DOG1, HAL1, and INO1) that improve tolerance to ethanol and iso-butanol when they are overexpressed.

“We expect these genes will serve as key components of a genetic toolbox for breeding yeast with high ethanol tolerance for efficient ethanol fermentation,” explained Jin.

According to a news release, researchers assessed the overexpressed genes’ contribution to the components that have limited biofuel production by testing them in the presence of high concentrations of glucose (10%), ethanol (5%), and iso-butanol (1%). These were then compared with the performance of a control strain of S. cerevisiae.

The results showed that overexpression of any of the four genes remarkably increased ethanol tolerance. However, the strain in which INO1 was overexpressed elicited the highest ethanol yield and productivity—with increases of more than 70 percent for ethanol volume and more than 340 percent for ethanol tolerance when compared to the control strain.

“Identification of these genes should enable us to produce transportation fuels from biomass more economically and efficiently. It’s a first step in understanding the cellular reaction that currently limits the production process,” Jin concluded.

Commission In Calif. Considers Funds for Biodiesel Plant

Commissioners in Santa Rosa County, California are considering whether to use the county’s name to help back bonds for a proposed biodiesel plant.

Biofuels Digest reports the chairman of the commission wants more information before signing off on the Integrated Energy Partners’ proposed biodiesel facility:

The facility intends to run year-round using camelina and other crops including cotton seed to produce 3 million gallons of biodiesel, 353,000 gallons of cellulosic ethanol, 9 million gallons of kerosene, and propane amounting to 437,000 gallons along with 47.8 MWh of electrical energy annually.

There are also plans to use municipal and other waste products as feedstocks for fuels.