Experts Warn of Ethanol Glut

Some experts are warning that the rapid growth in ethanol production could outpace this country’s ability to use it, possibly causing a glut of the alternative fuel.

This story in the Los Angeles Times says possible distribution issues won’t help the matter:

“It’s going to be a little bit of a bumpy ride, I think, but in the long run we are bullish on renewable fuels,” said (Gordon) Ommen, chairman, president and chief executive of Inver Grove Heights, Minn.-based US BioEnergy.

It’s a view shared by Geoff Cooper, who runs ethanol programs for the National Corn Growers Assn. He said the industry expected what he called a temporary oversupply for several months, though he hesitated to call it a glut.

In fact, some financial analysts are saying a glut of a million gallons a day could begin in the second half of this year and getting worse after that.

“We expect the relentless supply of new ethanol production capacity will lead to a 70% decline in margins by 2009,” wrote Bank of America analyst Eric K. Brown in a report last month.

Researchers at Iowa State University also raised concerns about falling profit margins as corn prices, driven by ethanol, rose from under $3 a bushel last summer to close to $4 a bushel lately. And as the ethanol supply grows, they predict, ethanol prices will drop.

Officials with the Renewable Fuels Association are downplaying the chances of any glut saying railroads should be able to solve much of the distribution problems.

SunOpta Gains Major Cellulosic Ethanol Investor

SunOptaCellulosic ethanol maker SunOpta has received a $30 million investment from international financing firm BlackRock. More details of the plan issuing non-dividend bearing, convertible preferred shares was announced in a company press release:

Murray Burke, President of SunOpta BioProcess Inc. commented, “This financing represents a strong endorsement of our technology and leadership position in cellulosic ethanol. Proceeds will be used to continue development of our leading edge and patented biomass conversion technologies and accelerate efforts to build and operate the world’s first commercial scale facility for the conversion of cellulosic biomass to ethanol.”

Steve Bromley, President and Chief Executive Officer of SunOpta Inc. commented, “We are extremely pleased to have completed this financing and are confident that this positions SunOpta BioProcess Inc. for an exceptionally exciting and prosperous future. SunOpta has been involved in specialized cellulosic biomass solutions for over thirty years, and this represents yet another exciting step in the development of our company.”

First Ethanol Co-product Report Due Soon

USDA NASS logo
The U.S. Department of Agriculture has set June 29th as the date for its first-ever report on how livestock producers are using ethanol co-products for cattle and hog feeds.

This from the USDA’s web site:

The report, entitled Ethanol Co-Products Used for Livestock Feed, will highlight results of a survey conducted by NASS with the support of the Nebraska Corn Board. NASS contacted approximately 9,400 livestock operations in 12 states to determine whether they used ethanol co-products – including distillers grains and corn gluten feed – in their feed rations in 2006. NASS collected information regarding the volume and type of co-products fed, how the co-products were procured and used, and what concerns and barriers may have prevented operations from feeding co-products.

USDA will release the results on Friday, June 29th at 3:00 p.m. You will be able to see those results on the National Ag Statistics Service web site.

US BioEnergy Celebrates Ethanol Plant Ground Breaking

US BioEnergyThis Friday, officials with US BioEnergy including CEO Gordon Ommen, along with Minnesota Governor Tim Pawlenty, Fagen, Inc. CEO Ron Fagen, Minnesota Corn Growers Association Vice President Roger Moore, and local officials will celebrate the groundbreaking of a 100-million-gallon-a-year ethanol plant at Janesville, Minnesota. The ceremony starts at 11:00 a.m.

In a release, US BioEnergy explains the importance of this ethanol plant:

The US must look to a long-term solution to lessen its dependence on foreign oil and decrease gasoline’s negative impact on the environment. Ethanol is a home-grown solution that is better for the environment, while creating jobs within the US. All cars that run on gasoline can safely use gas blended with 10% ethanol. Over the coming years, automotive manufacturers are expected to continue increasing the number of flex-fuel vehicles that will run on 85% ethanol. It’s clean, it’s safe and it’s the future.

Here’s some details of the ceremony:

WHEN: Friday, June 15, 2007
11:00-11:45 Groundbreaking Ceremony

WHERE: Trinity Lutheran School Gymnasium
501 North Main Street
Janesville, MN

DomesticFuel.com plans to get some photos from the event, so check back to see more.

Senate Considering New Ethanol Legislation

The U.S. Senate is considering a bill this week that would continue to promote investment in traditional ethanol production while also pushing investments in research, technology and infrastructure for cellulosic ethanol production.

This article on Grainnet.com says the bill has the backing of the Renewable Fuels Association:

Bob Dinneen“Record-high gas prices, continued unrest in oil-producing regions of the world and the fragility of America’s oil refining complex underscore the necessity of developing renewable alternatives to fossil fuel,” said Renewable Fuels Association President Bob Dinneen.

“This bipartisan bill strikes an appropriate balance to continue the momentum spurred by the 2005 energy bill while providing the necessary incentives to bring next generation ethanol technology to the commercial market.”

Dinneen continued, “This bill is to cellulosic ethanol what the 2005 energy bill was to grain ethanol.

The legislation would have a new renewable fuels standard of 36 billion gallons of renewable fuel each year by 2022, loan guarantees for alternative fuel refineries to include cellulosic ethanol, grants for to build renewable fuel corridors, a study looking at the feasibility of building an ethanol pipeline, and a study on the impacts of using higher than 10 percent ethanol blends.

Ethanol Likely to Pass Goal

Officials with the National Corn Growers Association say the U.S. is on target to reach a 15-billion-gallon-a-year production goal… much earlier than the original 2015 goal.

NCGA Pres. Ken McCauleyIn fact, NCGA President Ken McCauley tells the Kansas City Star that goal could be reached as early as 2011 or 2012:

That reflects the growing confidence within the ethanol industry about its prospects in an era of expensive gasoline. But the association’s view is especially interesting in that additional production of corn, currently the main feedstock for ethanol, is crucial in meeting the rosier projections for ethanol.

McCauley noted the country’s corn farmers were ramping up production.

About 10.5 billion bushels of corn were harvested last year and an estimated 12.5 billon would be produced this year. Improved yields and more acres planted with corn should eventually increase production to 15 billion bushels, with about a third of that used for ethanol. A bushel of corn currently produces roughly 2.8 gallons of ethanol.

“We look at this as a real opportunity for agriculture,” he said.

The article goes on to say that the Renewable Fuels Association pegs current ethanol production at 6.2 billion gallons a year and expects that to double by early 2009.

Energy, Ag Departments Announce $18 mill in Biofuels Grants

Eighteen million dollars in government grants are up for grabs as the U.S. Departments of Agriculture and Energy announce solicitations for biomass research and development.

This press release from USDA’s web site says the money will go to researching and developing biomass-based products, biofuels, bioenergy and related processes:

Samuel Bodman“Making these funds available represents this Administration’s ongoing commitment to promoting clean energy technologies to help diversify our nation’s energy mix in an environmentally sensitive way,” Energy Secretary Samuel Bodman said. “I am hopeful that these projects will play a critical role in furthering our knowledge of how we can cost effectively produce more homegrown, bio-based products to help reduce our reliance on imported sources of energy.”

Sec. Mike Johanns“These grants are one of many steps we are taking to meet the President’s goals of reducing petroleum dependency,” Agriculture Secretary Mike Johanns said from South Dakota, where he was addressing the Western Governor’s Association. “They will fund essential research that not only will lead to the creation of new, sustainable energy sources, but also will create new uses and markets for agricultural products.”

The grants will go to four main areas: the development of technologies to convert cellulosic biomass into intermediaries for biobased fuels getting 45% of the money; product diversification receiving 30% percent) feedstock production, 20%; and analysis for strategic guidance getting 5%.

Each award won’t exceed $1 million. State and federal research agencies, national laboratories, private-sector groups and nonprofit organizations are eligible to submit their grant applications by July 11, 2007.

GAO Says Energy Department Lacks Biofuels Plan

GAO logoCongress’ financial watchdog, the Government Accountability Office, says the U.S. Department of Energy lacks a plan for how to match up increased biofuels production with infrastructure and vehicles to use the green fuels.

Department of EnergyThis highlight report on the GAO web site says that America’s reliance on oil poses significant economic and environmental risks. But ethanol and biodiesel could replace oil for transportation fuels. However, the government doesn’t seem to be ready for the challenge:

DOE has not yet developed a comprehensive approach to coordinate its strategy for expanding biofuels production with the development of biofuel infrastructure and production of vehicles. Such an approach could assist in determining which blend of ethanol—E10, E85, or something in between— would most effectively and efficiently increase the use of the fuel and what infrastructure development or vehicle production is needed to support that blend level. In addition, DOE has not evaluated the performance of biofuel-related tax credits, the largest of which cost the Treasury $2.7billion in 2006. As a result, it is not known if these expenditures produced the desired outcomes or if similar benefits might have been achieved at a lower cost.

The report recommends that the Secretary of Energy collaborate with public and private sector stakeholders to develop a plan that coordinates expected biofuel production with gthe infrastructure to get it into the tanks of the vehicles that will need to be built, and coordinate with the Treasury Department to make sure biofuel tax credits and grants are doing what they afre supposed to do.

POET VP Nominated to I-CARES

Dr. Mark StowersVice President for POET’s Research & Development division, Dr. Mark Stowers, has been tapped to the external advisory committee of the International Center for Advanced Renewable Energy and Sustainability… also known as I-CARES.

According to a POET press release, the Washington University in St. Louis-based I-CARES will encourage and coordinate university-wide and external collaborative research in the areas of renewable energy – including biofuels, CO2 mitigation and coal-related issues:

POET logoI-CARES will foster institutional, regional and international research on the development and production of biofuels from plant and microbial systems and the exploration of sustainable alternative energy and environmental systems and practices. Funding for the project will include a $55 million investment from Washington University.

“I am excited about the opportunity to be part of such a prestigious effort to promote collaborative research in renewable energy and sustainability,” Stowers states.

Stowers has been working with POET since October of 2006 where he is responsible for overseeing scientific and technology advancements for the company including production of cellulosic ethanol.

Team Ethanol Doing Well

Indy 500 Number 17 Team Ethanol car driver Jeff Simmons was a lap leader for five laps at the Texas Motor Speedway this past weekend, a career record for him. He finished sixth in the Bombardier Learjet 550k, behind winner Sam Hornish, Jr., Tony Kanaan, Danica Patrick, Dario Franchitti and Vitor Meira.

Overall, Jeff is doing pretty well this year, 11th in the standings with 140 points and $567,000 plus in earnings. He has been doing a little bit better with every race. We’d like to see him do really well in the next race – the Iowa Corn Indy 250, sponsored by the Iowa Corn Growers, coming up June 24. Race time is 1:00 pm on ABC.

Michigan’s BIG Program Installing Biofuels Pumps

That’s the Biofuels Infrastructure Grant Program that gets federal money to help gas station owners/operators install E-85 and B20 (or higher percentage) pumps to encourage the Earth-friendly fuels.

Gov Jennifer GranholmThe latest was a station the Quick Sav Food Store in Swartz Creek. That station got about $8,400 to put in the new pumps… one of six stations in Michigan that received about $43,400 in grants to help put in the infrastructure that will get ethanol and biodiesel into the hands (or more accurately, into the tanks) of drivers – check out this press release posted on Gov. Jennifer Granholm’s web site.

It’s not a huge amount of money… it’s not a huge amount of fuel affected, but just think if each station across the country was able to offer customers the choice of using biofuels. Most people in the U.S. say they would use more ethanol and biodiesel… if it were more readily available.

For details on the BIG Program, click on this website.

Ethanol Merger in the Works

Countryside Farmer-owned Dakota Ethanol of South Dakota is merging with Countryside Renewable Energy of Iowa.

Under the proposed merger announced this week, Dakota Ethanol owners Lake Area Corn Processors would exchange 100 percent of its ownership for a combination of cash and equity shares in Countryside.

dakotaAccording to a press release, Dakota Ethanol board member Brian Woldt said the company has been successful in the eight years it has been operating.

“But we also know that our members are always looking to move forward,” Woldt said. “We have entered into this process with Countryside to become part of a larger ethanol production organization which we believe will help us to improve profitability, our competitive position and our long-term prospects.”

E85 for East Tennessee

pilotPilot Corporation has opened the first fuel pump in East Tennessee to sell 85 percent ethanol (E85).

pilot openHelping with the grand opening was Alan Jones, manager of Tennessee Department of Transportation’s Environmental Policy Office, who is pictured fueling up a state vehicle with E85 at the Walker Springs Road Pilot location just off of I-40 in Knoxville.

“Pilot is proud to take this first step in bringing E85 fuel to Knoxville and East Tennessee,” said Jimmy Haslam, CEO of Pilot Corporation. “As it is feasible, we will continue to install E85 pumps at other locations in Knoxville and elsewhere. E85 is an important breakthrough alternative fuel source. It’s American made and can help U.S. farmers since ethyl alcohol comes from crops. As production increases, E85 will help ensure that our country has the proper supply of energy in light of continually increasing world-wide demand for gasoline.”

Haslam said that Pilot is grateful to Tenn. Gov. Phil Bredesen and the State of Tennessee for providing funding for alternative fuel resources such as E85. He said that this kind of support will allow fuel distributors like Pilot Corporation to continue to install E85 pumps.

Blogging POET

POET POET is composing a “Rhapsody in Green.”

That’s the clever title of POET’s new blog site, created and maintained by POET Director of Public Relations Nathan Schock. It’s a very nice looking and well done blog.

Nathan says the purpose of the site is to “give you an inside look at the largest dry-mill ethanol producer in the country. An inside look at the company that is developing the next generation of biofuels: cellulosic ethanol.”

Most of all, we intend to introduce you to the people inside POET. They are a talented group of individuals who are constantly innovating in the ethanol industry. As we build plants, speak at conferences, develop technology and produce ethanol, we’ll talk about it here.

Check it out. We’ve also put a link to Rhapsody in the side bar.

Hot Rod on Ethanol

Eggum Hot RodA race car running on ethanol is winning races and setting some records on the drag racing circuit. Stephanie Eggums, the lady behind the wheel of Eggums Racing’s NHRA SC car posted news of her wins on the news section of her MySpace page:

Next was the NDRA MIR event May 19 – 20th, where we had to finish the finals from Atco and the weather forecast was calling for rain both days. After two rounds of qualifying on Saturday, I was in the #1 spot with an 8.06 and facing Jamie Farrer for the Atco final.
Launching with our best 60′ of the season, a 1.30, as well as running our first 7 second pass (7.99 @ 183mph), we took the win and reset the NDRA Pro4 ET & MPH records!

Recently, Cindy e-mailed her to ask about her use of ethanol in her drag racer. Here’s Eggums’ response:

Stephanie EggumCindy,

We started using Ethanol (E98) back in 2005. My car had been burned down while I was racing for a different team (idiot tuner / crew chief who also didn’t put a fire suppression system in my car). After the fire I went back on my own, hired a new crew chief (Jeromie Hicks) and my new engine tuner was and still is Harry Hruska, owner of Precision Turbo.

At the time of the fire the car was running on Methanol and Harry suggested just using Ethanol. We found a place not too far from my home in Elgin, IL to purchase a drum (Pearl City Elevator).
We raced the car in 2005 for the remainder of the season, finishing 2nd in points and a fastest ET of 8.41 @ 178. We made plenty of power and ran all nine races on a single motor, which was pretty unheardof for anyone to do that in any class.

For the 2006 season, we decided to continue running the E98 and after running the entire season, again we finished 2nd in points, but also became the first FWD Honda in the world to run a 7 second pass. We reset the ET & MPH Records for the NHRA Hot Rod class and were the only car to run a 7 second pass in 2006 in Hot Rod. Again, we only used one motor all season long.

Mind you, it’s a combination of an excellent engine tuner, a well built motor and a competant crew chief that sets the car up right so we don’t break parts. All along that was our goal, to run fast, consistant and not break parts. We couldn’t afford to, since the last two years of racing Pro has been paid out of pocket, no sponsors.

So the Ethanol proved to make plenty of power for us, required less maintenance in comparison to Methanol and wasn’t as brutal on the motor.

We were looking forward to this year and starting off winning, however two motors and two months of racing determined the drum of E98 we purchased in February was contaminated. Not only that but it started off as E95, Not E98 and we were not told of the change.
With the new drum of E98 we recently got, we should be back on track for this coming race at Atco, June 9 – 10th.

Check out Eggums on the NHRA web site or on her MySpace page.