Domestic Fuel

Latest figures from the Energy Information Agency show that last week’s ethanol production hit 34.94 million gallons daily for an annual rate of 12.63 billion gallons. And the Renewable Fuels Association (RFA) points out those numbers reflect about 10 percent of the overall daily gasoline demand:

Stocks of ethanol stood at 17.5 million barrels. That is a 1.6% decrease from last week.

Expressed as a percentage of daily gasoline demand, daily ethanol production was 9.92%.

The report goes on to say that more than 12.6 million bushels of corn was used to produce ethanol and nearly 93,000 metric tons of livestock feed, with almost 83,000 tons of that as distillers grains. Plus, the processes produced 4.33 million pounds of corn oil daily, which could feed the biodiesel market.

New information from the U.S. Department of Energy shows biodiesel quality is better than ever.

This news release from DOE’s National Renewable Energy Laboratory (NREL) found that 95% of the samples from 2011-12 met ASTM International fuel quality specifications… a dramatic improvement from just a few years ago:

“The survey showed a major improvement over results from previous years,” NREL Senior Chemist Teresa Alleman said. “In our 2007 survey of B100 biodiesel, less than half of the samples met quality specifications. More stringent quality requirements, along with the voluntary BQ-9000 quality management program, are among the reasons for this marked improvement.”

The report goes on to say that this improvement comes as production of the green fuel also rose dramatically, up from just under 28 million gallons in 2004 to more than 1 billion gallons in 2012.

You can read more of the survey here.

How can we tell the Renewable Fuels Standard (RFS) is working? By how nervous it’s making the big oil companies. That was the message attendees at the Advanced Biofuels Leadership Conference near Washington, D.C. heard.

“We are disrupting an existing marketplace,” says Brooke Coleman, Executive Director of the Advanced Ethanol Council. “We are not social media. We are not creating a new search engine. We are not doing something new… we just happen to be doing what other people are doing, better.”

Brooke says that has made some pretty powerful enemies of biofuels, who are spending a lot of money to destroy the biofuel brand … from corn ethanol to biodiesel to cellulosic biofuels. But he’s confident their attempt to change the Clean Air Act, and thus the RFS, will fail, ultimately because of the political allies biofuels have made.

“You’ve got Republicans and Democrats who see this thing [RFS] work, create jobs … just shy of 400,000 … and it’s just hard to change,” adding the political environment is not conducive to wholesale changes to either the Clean Air Act or the RFS.

Brooke says the diverse group that makes up the biofuels coalition is more together than ever, with efforts like Fuels America, a coalition to protect the RFS and the renewable fuels industry, and more collaboration than ever … without getting hung up on differences within the biofuels sector.

“We don’t agree on everything, [but] the trick is not to get so focused on the one or two things we don’t agree on … and focus on what we DO agree on.”

Listen to more of my interview with Brooke here: Brooke Coleman, AEC

The latest data from the U.S. Energy Information Agency shows alternative fuel use is up. And when it comes to what the groups using fuel at the highest rates, the larger, medium duty vans, are picking to replace non-renewable oil, that choice is biodiesel.

Many fleets meet petroleum reduction requirements by using biodiesel rather than alternative fuels. Changes in biofuel subsidies, specifically replacement fuels like ethanol and biodiesel, affect consumption trends in the marketplace. With the reinstatement of the biodiesel tax credit and the requirements under the Renewable Fuel Standard, consumption of biodiesel grew almost 240% between 2010 and 2011.

The report goes on to say ethanol consumption during the same period remained flat, but the use of electricity in light-duty automobiles increased by 36 percent.

Government numbers show the biodiesel production pace for the year at just under a billion gallons. Biofuels Journal reports the EPA announced February’s production today at 77.6 million gallons of biodiesel:

The numbers show a total of more than 80.4 million gallons of Biomass-based Diesel for February, but that total also includes renewable diesel production.

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel is the first and only EPA-designated Advanced Biofuel that’s produced on a commercial scale across the U.S.

Last year, biodiesel production topped just more than 1 billion gallons and supported more than 60,000 jobs in the U.S.

Want to feel good about Internal Revenue Service this time of year? Well, maybe you won’t be doing the wave for tax collectors, but the IRS is helping out those filing tax credit claims for biodiesel mixtures and alternative fuels sold or used in 2012. Biodiesel Magazine explains that several fuel tax credits, including the cellulosic biofuel producer credit, the biodiesel mixture credit, the alternative fuels credit and the alternative fuel mixtures credit, expired at the end of 2011. But with the passage of the deal on January 2 this year that extended those 2012 credits retroactively, if eligible, you’ll have until July 1 to file for them:

The deadline for filing claims for certain refundable excise tax credit payments had already passed before the [American Taxpayer Relief Act] was enacted. Such claims generally are due by the end of the first quarter following the earliest quarter of the claimant’s income tax year included in the claim. For example, a calendar-year taxpayer’s claim for biodiesel mixtures sold in June and July 2012 ordinarily would have been due by Sept. 30, 2012 (the end of the third quarter, which is the first quarter following the earliest quarter included in the claim). Earlier this year, the IRS released FAQs on its website that explained the procedural requirements for claiming the income tax and excise tax credits in light of ATRA. The FAQs did not extend the filing deadlines for claiming the refundable excise tax credits.

More information is available in IRS issued Notice 2013-26.

Three labs working on advanced, next-generation biofuels will get funding for another five years … of course, if Congress funds it. The U.S. Department of Energy announced the intent to fund the BioEnergy Research Center (BESC) led by Oak Ridge National Laboratory, the Great Lakes Bioenergy Research Center (GLBRC) led by the University of Wisconsin-Madison in partnership with Michigan State University, and the Joint BioEnergy Institute (JBEI) led by Lawrence Berkeley National Laboratory. All three were part of the DOE’s 2007 program to accelerate fundamental research breakthroughs:

“Developing the next generation of American biofuels will enhance our national energy security, expand the domestic biofuels industry, and produce new clean energy jobs. It will help America’s farmers and create vast new opportunities for wealth creation in rural communities,” said Energy Secretary Steven Chu. “By investing in innovative approaches and technologies at our Bioenergy Research Centers, we can continue to move the biofuels industry forward and grow our economy while reducing our reliance on foreign oil.”

In five years of operation, the Centers have produced more than 1,100 peer-reviewed publications and over 400 invention disclosures and/or patent applications. Among the breakthroughs the Centers have achieved are new approaches for engineering non-food crops for biofuel production; reengineering of microbes to produce advanced biofuels such as “green” gasoline, diesel, and jet fuel precursors from biomass; and the development of methods to grow non-food biofuel crops on marginal lands so as not to compete with food production.

Each of the centers is expected to be funded at $25 million per year. The next five years are expected to emphasize work on new methods and discoveries, as well as developing new lines of research.

The Canadian Renewable Fuels Association welcomed this week’s launch of that country’s agriculture policy. The Growing Forward 2 (GF2) policy framework was unveiled this week, and CRFA sees it as good for Canada’s renewable fuels industry and the farmers who grow the feedstocks for biofuels:

Today, CRFA members are producing clean-burning renewable fuels across the country. This success is a testament to our Canadian farmers as well as government initiatives to promote economic growth and prosperity, like the federal Renewable Fuels Regulations, the NextGen for Biofuels Fund, and most recently, GF2.

“Farmers across the country are clear winners with increased production and promotion of domestic renewable fuels” said CRFA President W. Scott Thurlow. “Canada’s renewable fuels sector creates jobs and is helping grow the economy in rural Canada. Now, our members are taking the platform created by ethanol and biodiesel technology and using it to develop fuels, and value-added agricultural and chemical products, from a growing range of biomass. Programs like GF2 will help build-out this innovation so that the economic and business risk management benefits of domestic renewable fuels production will accrue for our farmers today and well into the future.”

GF2 is a five-year, $3 billion dollar investment by federal, provincial and territorial (FPT) governments for government agricultural programs and services.

Federal money to help offset the costs of putting in ethanol blender pumps is being made available. The Renewable Fuels Association (RFA) announced the USDA is now accepting applications for federal Rural Energy For America Program (REAP) funds to help gasoline retailers install blender pumps, the third year that blender pumps have been authorized as part of the REAP program and part of the USDA’s plan to have 10,000 blender pumps installed over the next five years.

“This program provided funding for hundreds of blender pumps the past two years, providing many consumers with the choice and flexibility they deserve to pick the ethanol blends that work for them based on their vehicle, their beliefs, and their budget,” said RFA Director of Market Development Robert White.

“We can continue to break the stranglehold oil has over our nation’s economy and energy future by giving consumers more options at the pump,” said ACE Senior Vice President Ron Lamberty. “The USDA’s announcement together with the efforts of the [Blend Your Own (BYO)] ethanol campaign will go a long way toward making that happen.”

The RFA and ACE are offering free grant writing services to those interested in applying. Applications for the grant program are due on April 30, 2013.

The Environmental Protection Agency is showing it’s serious about holding up the integrity of the Renewable Identification Number (RIN) system for renewable energy credits. The Lubbock (TX) Avalanche-Journal reports Jeffrey David Gunselman, the founder of Lubbock-based Absolute Fuels, got more than 15 years in prison and has to pay nearly $55 million in restitution and a $175,000 fine for his part in selling the RINs without the biodiesel to back it up.

Gunselman, 30, was sentenced to serve concurrent terms of 188 months on each of the 51 wire fraud counts, 120 months on each of 20 money laundering charges and 24 months each on four counts of making false statements under the federal Clean Air Act…

Ivan Vikin, the head of EPA’s criminal enforcement program in Texas, said: “Today’s judicial action demonstrates the consequences for exploiting the Renewable Fuels program in order to steal millions of dollars from customers and taxpayers.”

This follows February’s sentencing of a Maryland man who received 12 1/2 years prison and has been ordered to pay more than $42 million in restitution for selling fake credits to oil companies and commodities brokers.

Previously, the National Biodiesel Board formed a RIN Integrity Task Force that in the words of NBB Chairman Gary Haer, “…will not allow a few bad actors to risk the progress we have made for America’s Advanced Biofuel – biodiesel.”

There’s been a lot of talk about the prices for Renewable Identification Numbers … better known as RINs … especially from Big Oil trying to blame RINs for the rise in gasoline prices.

But in this edition of the Domestic Fuel Cast, Ron Lamberty, Senior Vice President with the American Coalition for Ethanol (ACE) and Brian Jennings, Executive Vice President for ACE, explain what RINs are and what they do … as well as dispelling some of the myths that have created what they call RIN-sanity.

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast - Countering RIN-sanity

You can also subscribe to the DomesticFuel Cast here.

View the ACE Biofuels Beltway March 2013 Photo Album.

Yesterday I traveled to Tallahassee, Florida to testify at a hearing of the Florida House of Representatives Regulatory Affairs Committee on HB 4001 which is a bill to repeal the Florida Renewable Fuel Standard. This hearing was actually an extension of one held previously that ran out of time to conclude. You can watch the session here. The portion on HB 4001 starts about 39 minutes in and you can easily fast forward to it.

When you see the bill sponsor, Representative Matt Gaetz, introduce the session you’ll understand my compulsion to attend to try to help clear up the numerous things he said about ethanol that are just plain wrong. These include the now completely dis-credited food vs. fuel debate, that it harms automobile engines, that it is bad for the environment, etc. It’s all out of the play book of large oil companies and large food company interests. I was not alone in opposition to this bill. Some of the others testifying in opposition included Bradley Krohn, President, United States EnviroFuels, LLC and Bobby Likis, Bobby Likis Car Clinic. There were a number of others that you’ll see in the video recording.

Unfortunately, the bill passed by a narrow margin. A companion bill is in the Florida Senate, SB 320. After the session I spoke with both Bradley and Bobby to get their thoughts on the action taken by this committee.

Bradley says his company has been developing a 30 million gallon advanced ethanol plant project which will use sugar cane and sweet sorghum as primary feedstocks. They are very close to construction. He says the House committee got it wrong, buying into a lot of myths about ethanol. This sends a chilling effect to the financial community for investing in advanced biofuel projects in the state of Florida. His company is in the process still of funding their project. He says it sends a message that Florida doesn’t care about economic stimulus and job creation. There was an attempt to pass this bill last year that stalled on the Senate side and he hopes that will happen again this year.

Listen to my interview with Bradley Krohn here: Interview with Bradley Krohn

Bobby Likis also testified and corrected a number of factual errors that were presented to the committee, especially on how ethanol performs in an engine. He was very disappointed by the committee vote in the face of overwhelming evidence that the Florida RFS is working and reducing the cost of gas to Floridians. He says it will make him fight harder to make sure the bill doesn’t pass at the Senate. He says that if it does pass and the price of gas goes up in Florida we should call it a Gaetz Tax!

Listen to my interview with Bobby Likis here: Interview with Bobby Likis

A bill has been introduced in the Florida legislature that would repeal the state’s Renewable Fuel Standard Act.

Currently, the Florida law requires that all gasoline sold or offered for sale by a terminal supplier, importer, blender or wholesaler in Florida contain 9-10 percent ethanol, or other alternative fuel, by volume. Legislation to repeal that requirement was considered by the Florida House Regulatory Affairs Committee on Friday and Pensacola automotive technician and radio host Bobby Likis was there.

However, Likis was only was able to say that he opposed the bill before the hearing had to be ended for lawmakers to go to the floor. “I’ve answered over 100,000 questions live on air, many of which have addressed the ethanol issue with regard to engine damage,” said Likis, host of the syndicated Car Clinic Network. “I strongly oppose the bill.”

Likis, who is a strong advocate for ethanol, says he is prepared to do what he can to prevent the legislation from passing in Florida.

Also testifying against the bill was Patrick Ahlm with Alginol Biofuels, an industrial biotechnology company working towards the production of fuel from algae headquartered in southwest Florida. “We’ve raised $190 million since we were founded in 2006 by Florida residents,” said Ahlm. “Our focus right now is on operating our pilot scale facility in Ft. Myers.”

Alhm said they are looking toward a commercial facility. “Our technology does not require farm land, food crops or fresh water,” he said. “We respect the issues around mandates and traditional ethanol but when we go into the investment community, this sends a very bad signal about continuing to grow in Florida.”

Because the committee ran out of time, the bill sponsored in the Florida House by Rep. Matt Gaetz of Fort Walton Beach will be carried over to the next meeting.

Listen to the ethanol bill portion of Friday’s hearing: Florida hearing

The U.S. Senate yesterday passed a continuing budget resolution that would keep the federal government operating through the end of the fiscal year on September 30th and keep funding for advanced biofuels testing in the military.

By a vote of 40-59, the Senate rejected an amendment from Sen. Patrick Toomey (R-PA) that would have transferred $60 million in funding for military biofuels testing to increase Defense Department operations and maintenance funding. Toomey said in a press release he was very disappointed in his colleagues who “would rather spend taxpayer dollars on more wasteful biofuel subsidies than support essential maintenance operations for our military.”

Adam Monroe, president of advanced biofuels company Novozymes, praised the Senate for continuing its support of the Navy’s advanced biofuels program. “Every day we import oil, we’re putting our troops, families and country at needless risk. We can reduce that risk with a secure energy supply, including renewable fuels,” said Monroe. Last year, Novozymes opened an advanced manufacturing plant in Blair, Nebraska which specializes in enzymes for both the conventional and advanced biofuel markets.

The Senate spending bill was approved 73-26 and now goes to the House.

Earlier, I told you how a Nevada wind energy project got the green light to proceed from the U.S. Department of the Interior. Add two more renewable energy projects in California, this time solar and both in the state’s Riverside East Solar Energy Zone, also to be put on Bureau of Land Management property:

The McCoy Solar Energy Project, located about 13 miles northwest of Blythe, CA, was proposed by McCoy Solar, LLC (a subsidiary of NextEra Energy Resources, LLC). The 750-megawatt photovoltaic solar facility would be one of the largest solar projects in the world, and encompass about 7,700 acres of BLM-managed lands and 477 acres of private land… When operational, the facility would generate enough clean power for an estimated 225,000 homes in southern California. A 12.5-mile generation transmission line would connect the project to Southern California Edison’s Colorado River Substation.

The Desert Harvest Solar Farm, proposed by EDF Renewable Energy (formerly enXco) on a site six miles north of Desert Center, CA, would encompass about 1,208 acres of BLM-managed lands for the 150-megawatt photovoltaic
facility… When operational, the facility would generate enough electricity to power an estimated 45,000 homes in southern California. The project also includes an on-site substation and 230-kilovolt line to the Red Bluff Substation, which will connect the project to the Southern California Edison regional transmission grid.

BLM officials say both were developed with sensitive native species in mind.