Group Wants Same Exemptions for Biodiesel that Oil Gets

BRAGA group that advocates for organizations engaged in biobased chemistries wants the government to give biodiesel the same environmental reporting exemptions that petroleum enjoys. The Biobased and Renewable Products Advocacy Group (BRAG) petitioned the U.S. Environmental Protection Agency (EPA) asking that biodiesel fuel manufacturers be granted the same Chemical Data Reporting (CDR) exemptions that petroleum-based diesel manufacturers already receive.

Specifically, BRAG petitioned EPA to add “biodiesel” as a chemical category for partial exemption for the same reasons as those given for petroleum chemicals already included, which occurred via a rulemaking process based on proposals submitted by the American Petroleum Institute (API). BRAG contends that biodiesel products should be treated similarly to the petroleum products included in the (b)(1) List due to the conditions of manufacture and the properties and uses of the substances.

The second petition, “Petition for Partial Exemption of Biodiesel Products,” was submitted to the CDR Coordinator of EPA’s Office of Chemical Safety and Pollution Prevention (OCSPP). In it, BRAG petitions to add “biodiesel” as a chemical category in the partially exempted chemical list at 40 C.F.R. Section 711.6(b)(2)(iv), referred to as the (b)(2) List. EPA has stated that CDR processing and use information for chemicals on the (b)(2) List is of “low current interest” and has established a petition process to enable stakeholders to add chemicals to the (b)(2) list.

BRAG believes biodiesel belongs on the (b)(1) List but because there is no formal petition process to amend the (b)(1) List, it decided to proceed with the “low current interest” petition process to amend the (b)(2) List as well.

BRAG officials say they just want to level the playing field for biodiesel and petroleum-derived diesel manufacturers, since biodiesel producers are required to spend significant amounts of time and money gathering and providing CDR information to EPA while petroleum-derived producers are not, for chemicals that are very similar, serve the same purpose, and are managed in equivalent ways.

USDA Researchers Advance Advanced Ethanol

usda-logoResearchers for the U.S. Department of Agriculture (USDA) are making advancements on an advanced biofuel, cellulosic ethanol. This article from the USDA says the scientists at the Bioenergy Research Unit in Peoria, Illinois, have recently completed studies on multiple approaches that could help streamline cellulosic ethanol production.

In one study, a team led by ARS chemical engineer Bruce Dien looked at using switchgrass, a perennial grass native to the prairie, for ethanol production. The team concluded that biomass producers could optimize cellulosic ethanol production by planting Kanlow variety—a lowland ecotype—and harvesting at either mid-season or post frost. Results from this study were published in Environmental Technology in 2013.

ARS chemist Michael Bowman led another study of switchgrass xylans, which is challenging to convert to sugars with enzymes because of its complex chemical structure. Bowman determined that structural features of xylan remained the same as the plant matures, even though the amount of xylan changed with maturity. This is good news for biorefiners, because it suggests that they can use the same biomass hydrolyzing enzymes to break down xylans in all switchgrass biomass, no matter when the crop is harvested. Results from this study were published in Metabolites in 2012.

The article also gives progress reports on work with microorganisms needed to ferment xylose—molecules that make up xylans—into ethanol and promising field trials with a yeast strain that grew almost four times faster than other strains that contained XI enzymes and one that could produce ethanol at significantly greater yields than other yeasts engineered to ferment xylose to ethanol.

EIA: Farms Big Energy Users and Producers

Farmers are using… but also making… a lot of energy. A new report from the U.S Energy Information Administration shows that American agriculture used nearly 800 trillion British thermal units (Btu) of energy in 2012, or about as much primary energy as the entire state of Utah. While growing and harvesting the crops and the energy needed to raise livestock are significant expenditures (with crop operations consume much more energy than livestock operations), those same farms are also big contributors to our nation’s fuel supply.

Energy makes up a significant part of operating expenditures for most crops, especially when considering indirect energy expenditures on fertilizer, because the production of fertilizer is extremely energy-intensive, requiring large amounts of natural gas. For some crops like oats, corn, wheat, and barley, energy and fertilizer expenditures combined make up more than half of total operating expenses. The proportion of direct to indirect energy use varies by crop. For example, corn, which is also used as an energy input for ethanol production, has relatively low direct fuel expenditures but has the highest percentage of fertilizer expenditures.
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The energy consumed in livestock operations is almost solely direct energy consumption and is relatively low compared with crop operations, both as a percentage of total operating expenditures and on a total energy basis…

In addition to being major energy consumers, some farms are using renewable resources to produce energy. Wind turbines, methane digesters, and photovoltaics are the most common on-farm renewables. Renewable energy can help to offset the need for purchased energy. In some cases, the renewable energy produced on farms is sold to electric power suppliers, providing additional income for farmers.

The report also says that water and chemicals used in agriculture can be big users of energy resources.

Small Biodiesel Maker Closing Indicative of RFS Problem

yokayo1While the closing of one small biodiesel maker in California might not seem like big news, it’s certainly indicative of the problems facing the industry, big and small producers alike. This story from the Ukiah (CA) Daily Journal says that Yokayo Biofuels, which turned waste cooking oil into biodiesel, has closed.

[Kumar Plocher, Yokayo Biofuels' CEO] says the biggest reason for their closure was due to a lack of government support both at the state and federal levels. He explains that the carbon credit programs, those where petroleum companies are required to buy a certain amount of renewable fuels, allowed his company to bank carbon credits, normally valued high based on demand. This year state and federal value levels were very low: the state’s due to tampering by global companies that flooded the market and at the federal’s due to the Obama administration and the EPA. “Every year the federal government is supposed to raise the requirement of renewable fuel that should be purchased. At the beginning of 2014, they did not do that; they kept it static. They waited until September to announce a tiny increase, and by that time the damage was done and carbon credits were worthless all year. Every mid-term election year, the dollar per gallon subsidy that goes to biofuels has been absent; they wait until after the election.”

Plocher’s complaint is a common one among advanced biofuel makers and their advocates this year. In fact, at the recent National Advanced Biofuels Conference & Expo, Michael McAdams, founder and president of the Advanced Biofuels Association, said the partnership between the federal government and industry has to have clarity and certainty, but that’s not been the case lately.

“What we haven’t had in the last two years is certainty for the people I represent in the advanced and cellulosic sector,” McAdams said.

Similarly, Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA), pointed to the U.S. Department of Agriculture’s estimates that corn prices will hit an eight-year low because of the government’s failure to follow through on the promises made in the Renewable Fuel Standard (RFS).

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments.”

There is a little good news in all of this. Plocher was able to sell Yokayo Biofuels’ biodiesel assets to like-minded Simple Fuels.

California Biodiesel Maker Gets $4 Mil State Grant

communityfuelsA California biodiesel maker is the beneficiary of a $4 million state grant to help the refinery become more efficient and expand its range of feedstocks. This news release from Encinitas-based Community Fuels says the California Energy Commission grant will help put in the new equipment at the company’s Port of Stockton advanced biorefinery and help the state meet its goals of reducing emissions and increasing production and use of renewable fuels within California.

“Community Fuels is currently completing two projects: expanding production capacity and building an advanced biofuel terminal. This new award is for a third, distinct project that is complementary to our current projects. We planned our business to be built in an incremental manner while we validated various technologies and market conditions. This new project will position Community Fuels to serve the future needs of California’s transportation fuel market.” says Lisa Mortenson, Co-Founder and CEO of Community Fuels.

“Grant funding accelerates the pace at which we expand our capabilities. Our team has a strong track record of completing grant-funded projects; each project that we successfully complete helps to build confidence in our business and our long-term growth opportunities.” says William Crooks, Corporate Controller of Community Fuels.

Community Fuels officials added they will use their on-site, BQ9000 laboratory to help in design and commissioning efforts.

Biomass-to-Biofuel Plant Gets USDA Loan Guarantee

coolplanetA Louisiana biomass-to-biofuel operation received a $91 million loan guarantee from the U.S. Department of Agriculture (USDA). This news release from USDA says the agency will back the loan under the Biorefinery Assistance Program to finish building the Cool Planet plant at the Port of Alexandria in Louisiana.

The Cool Planet facilities will produce approximately 8 million to 10 million gallons of reformate per year at full capacity. Often referred to as a “drop-in” fuel, reformate is an ingredient in gasoline and jet fuel that can be added during the regular refinery process. Many biofuels, like ethanol, are fuel additives that are instead blended into a finished product to oxygenate fuel. Reformate enhances the energy content of gasoline, diesel, and jet fuel. Pine chips will be the feedstock source for the Cool Planet facility, but the company can use almost any type of renewable cellulosic material.

Another benefit of Cool Planet’s facility is that it will produce biochar, a bioenergy byproduct that has been noted for its ability to sequester carbon and potentially reduce atmospheric greenhouse gas levels.

Google Ventures, BP, ConocoPhillips, GE, Exelon and NRG Energy are also kicking in on the project, in addition to USDA’s contribution. Cool Planet is putting $50 million in its own equity into the project.

B10 Biodiesel Blend in Minnesota a Success

msga-logo1The first summer of Minnesota running a 10 percent biodiesel (B10) mandate is being called a success. The Minnesota Soybean Growers Association (MSGA) says as the state moves back to a B5 mandate over the winter months, the group is celebrating how well the higher blend made mostly from its soybeans went.

“The implementation of B10 went very well,” said George Goblish, President of the MSGA. “I think we alleviated the concerns of truckers and auto manufacturers.”

Steve Howell, president of MARC-IV Consulting, said Minnesota has proven biodiesel blends can be a high-quality fuel at the retail pump level.

“The stability of the product in Minnesota far exceeded the stability specs, and people in Minnesota can feel good about the fuel they are getting,” he said.

Howell said the high quality of B10 in Minnesota at the pump is because of the quality control measures in place throughout the state.

Officials from the fuel consulting company MEG Corp. say the B10 easily met and exceeded the key quality indicator of oxidative stability, a measure of degradation caused by exposure to oxygen. This means consumers can expect the B10 they buy to be good for at least a year after purchase, allaying fears some automobile groups had that the green fuel would drop in quality by the time it hit fuel tanks.

From now through April 1, 2015, Minnesota goes back to a 5 percent biodiesel blend, with B10 kicking back in after that for the next summer.

Corn Harvest Could Affect Propane Supplies, Prices

A big corn harvest this year could affect the supply and price of propane, a big fuel for drying the crop. This story from the U.S. Energy Information Administration (EIA) says if the weather allows farmers to dry their crops in the field before harvest, there will be plenty of supply, and prices will be stable … unlike last year’s wet harvest time.
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Last year, propane demand in the top five corn-producing states increased in October to levels that rivaled the normal peak demand in January, drawing down propane inventories before the heating season began. Propane inventories in the Midwest were drawn down by 4.1 million barrels (130,000 bbl/d) in October, which was the largest October stock draw since 1985.

As a result, Midwest inventories of propane started the heating season at relatively low levels and remained at the bottom of the five-year range through December. Logistical problems, including the closure for maintenance of the Cochin Pipeline that transported propane from Canada to the Upper Midwest and disruptions of rail transportation, prevented Midwest inventories from being replenished before winter began. With prolonged cold weather in January and February, propane inventories dipped well below the five-year range.

EIA says propane inventories in the Midwest are higher going into this harvest season, and the supplies should be in good shape, despite the fact that the Cochin Pipeline was reversed earlier this year and now moves condensate from the Midwest to Canada. Those supplies going to Canada will be replaced by additional supplies from domestic sources and better rail and storage capacity.

Algae-based Biofuels to Get $25 Mil from Feds

US DOE Energy logoAlgae-based biofuels will be the beneficiaries of a government-backed effort to get the fuels made from microbes down to less than $5 per gasoline gallon equivalent (gge) by 2019. The U.S. Department of Energy announced $25 million to reduce those production costs, hopefully down to an eventual goal of $3 gge by 2030.

The funding announced today will support projects in two topic areas: Topic Area 1 awards (anticipated at 1–3 selections) will range from $5–10 million and focus on the development of algae cultures that, in addition to biofuels, produce valuable bioproducts that increase the overall value of the biomass. Topic Area 2 awards (anticipated at 3–7 selections) will range from $0.5–1 million and will focus on the development of crop protection or carbon dioxide utilization technologies to boost biomass productivity in ways that lead to higher yields of algae.

You can learn more about this funding opportunity here, including signing up for an informational webinar to be held on Wednesday, October 8, 2014.

Administration Offers New Renewable Initiatives

usda-logoAs USDA announced the investment $68 million in 540 new renewable energy and energy efficiency projects nationwide today, the White House offered new administrative actions to advance solar deployment and promote energy efficiency.

Secretary of Agriculture Tom Vilsack made the USDA announcement while in North Carolina to highlight USDA’s investments in rural renewable energy projects being funded through USDA Rural Development’s Rural Energy for America Program (REAP). Vilsack visited Progress Solar in Bunn, N.C., which received a $3.4 million REAP loan guarantee in 2012 for installation of a solar array.

At the same time, President Obama announced new executive actions to further advance the development of solar technologies across the country which includes commitments from a broad coalition of 50 public and private sector partners, including leading industry, community development organizations and housing providers in 28 states. “USDA is proud to play a key role in Obama Administration’s efforts to promote the use of solar technologies,” Vilsack said. “Of the REAP projects funded today, 240 projects are for solar investments of $5.2 million in grants and $55.3 million in loans.”

In North Carolina alone, Vilsack announced $55.3 million in new REAP program loan guarantees and grants for 22 solar energy projects. For example, USDA is awarding a $3 million loan guarantee to Broadway Solar Center, LLC to help finance a 5 megawatt solar array in Columbus County, a $4.9 million loan guarantee for a similar project in Hertford County and a $2.1 million guarantee for a project in Warren County.

Iowa RFA Ad Challenges Biden on RFS

The Iowa Renewable Fuels Association (IRFA) took out a full page ad in today’s Des Moines Register to ask Vice President Joe Biden to set the record straight on reports that he may have intervened to reverse the Obama Administration’s previous support for the Renewable Fuel Standard (RFS).

biden-iowaWith the headline “Say it ain’t so, Joe” the ad questions the vice president about the story out of Philadelphia in May that he urged EPA to lower the RFS after receiving a call from a Pennsylvania congressman on behalf of a refinery owned by the politically connected Carlyle Group. “This report, if true, is deeply troubling. We hope you’ll take the opportunity today to set the record straight. And more importantly, work with us to fix the Administration’s flawed proposal. It’s not too late – but we need your help.”

IRFA and other individuals and organizations involved in Iowa’s renewable fuels industry wrote a letter to the Vice President asking him to clarify the reports and to discuss the issue with Iowans. “Because he has thus far not responded, IRFA is now addressing the issue more publicly with Biden as he visits Iowa today,” said IRFA.

The Vice President delivered remarks in Des Moines today at a kick-off event for the Nuns on the Bus “We the People, We the Voters” bus tour. Not surprisingly, he did not mention renewable fuels during his address.

Senate Committee Considers Energy Tax Reform

The Senate Finance Committee held a hearing today on Reforming America’s Outdated Energy Tax Code, led by chairman Ron Wyden (D-OR).

“It’s past time to replace today’s crazy quilt of more than 40 energy tax incentives with a
modern, technology-neutral approach,” said Wyden at the start of the hearing, adding that the disparity in how the tax code treats energy sources needs to end. “Traditional sources benefit from tax incentives that are permanently baked into law. But clean energy sources are stuck with stop-and-go incentives that have to be renewed every few years.”

The main goal of the hearing is to focus on extending the dozen or so tax incentives for alternative energy sources such as advanced biofuels, wind, and solar.

aeclogo“The title of the hearing is right,” said Advanced Ethanol Council Executive Director Brooke Coleman. “Investors are highly sensitive to protections offered by tax law, and today’s energy tax regime drives investment away from viable petroleum alternatives like cellulosic biofuels because oil tax breaks are richer and permanent. The short term fix is extending recently expired and existing tax incentives for clean energy this year, to buttress against those offered to fossil fuels permanently. But any broader discussion about America emerging as the leading energy innovator in the world starts and ends with the federal tax code. It simply won’t happen without serious energy tax reform.”

Among those testifying at the hearing today was former Sen. Don Nickles (R-OK), now a lobbyist who has represented several energy companies, who spoke against continuing wind energy tax incentives.

EIA: Nat Gas, Biofuel to be More of World Fuel by 2040

Natural gas and biofuels will make up the biggest share of the increase in what are known as “other liquid resources” in the world liquid fuel supply. The U.S. Energy Information Administration’s (EIA) International Energy Outlook for 2014 (IEO2014) says those fuels that include natural gas plant liquids (NGPL), biofuels, coal-to-liquids (CTL), gas-to-liquids (GTL), kerogen (oil shale), and refinery gain, made up just 14 percent of the world’s liquid fuels in 2010. But that number is expected to rise to 17 percent by 2040, driven by higher petroleum prices.
worldotherfuels1
NGPL are the largest component of the other liquids, accounting for 68% of the total in 2010 (Figure 14). The increase in NGPL production is directly correlated to the increase in natural gas production. In contrast, increased production of the remaining other liquids (primarily biofuels, CTL, and GTL) is in response to policies that encourage growth in the expansion of these liquids with available domestic resources, such as coal and crops. In the IEO2014 Reference case, sustained high oil prices make the development of the non-NGPL other liquids more attractive. In addition, biofuels development also relies heavily on country-specific programs or mandates. Combined, the remaining, non-NGPL other liquid fuels grow at more than twice the rate of NGPL over the projection period.

Brazil is expected to put in 500,000 additional barrels of biofuels per day, with another 300,000 additional barrels of biofuels coming from China.

Nat Gas, Solar and Wind Lead Power Capacity Adds

During the first half of this year, natural gas, solar and wind lead all sources when it comes to new utility-scale generating capacity to come online. This report from the Energy Information Administration (EIA) says that 4,350 megawatts (MW) of new utility-scale generating capacity came online, with natural gas making up the lion’s share of those additions but solar and wind made bigger proportional gains compared to the first six months of 2013.
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Utility-scale capacity additions in the first half of 2014 were 40% less than the capacity additions in the same period last year. Natural gas additions were down by about half, while solar additions were up by nearly 70%. Wind additions in the first half of 2014 were more than double the level in the first half of 2013.

Of the states, Florida added the most capacity (1,210 MW), all of it natural gas combined-cycle capacity. California, with the second-largest level of additions, added just under 1,100 MW, of which about 77% was solar and 21% was wind, with the remaining additions from natural gas and other sources. Utah and Texas combined for another 1,000 MW, nearly all of it natural gas combined-cycle capacity with some solar and wind capacity in Texas.

In addition to the large additions by natural gas, solar saw strong year-on-year growth, adding 1,146 MW. Wind basically more than doubled the amount added in the same period last year, putting 675 MW generating capacity online.

Biodiesel Imports Set Record for Year-to-Date

census-logoThe U.S. is importing biodiesel at a record rate for the year so far. This article from Platts cites U.S. Census Bureau data that shows imports reached a 2014 year-to-date record in July of 69,474 metric tonnes, more that twice the previous record set in March. Low palm oil prices seem to be the big driver, although biodiesel imports are far below last year’s overall levels when reinstatement of the $1-a-gallon federal tax credit made it profitable for blenders.

The top origin for US biodiesel imports in July was Indonesia at 24,043 mt, up 60% from the previous month and the highest since December 2013 when 52,350 mt were imported.

Traders attributed the surge in imports from Indonesia to lower palm oil prices.

A couple of producers from Indonesia are already registered with the EPA and would be capable of generating RINs if they ran an approved feedstock. Although palm oil has not been approved as an eligible feedstock to generate RINs under RFS2, grandfathered biodiesel plants — construction of which started prior to December 19, 2007 — can assign RINs with a D6 code to palm oil-based biodiesel if they keep up with the appropriate documentation.

Also, for the first time this year, imports from Argentina were recorded at 18,217 mt. A massive 441,772 mt were imported from Argentina in 2013.

More imports are seen coming from Argentina – a sign traders are pretty confident the blender’s credit will be restored and made retroactive. Political watchers believe that restoration could happen after November’s elections.