Domestic Fuel

So close … but yet so far. A provision in the U.S. Senate’s jobs bill that would have restored the $1-a-gallon biodiesel blending credit … and preserved about 23,000 jobs on its own … started the day in the employment measure. But it found itself in a position many looking for jobs are familiar with: last hired, first fired.

The Hill reports that the provision, sponsored by Iowa’s Sen. Charles Grassley, a Republican, didn’t make the cut as Senate Majority Leader Harry Reid, a Democrat from Nevada, pared-down the jobs package to omit several energy provisions:

“Clearly, the National Biodiesel Board is disappointed that Senate leadership decided to pull the biodiesel tax incentives from the current jobs bill,” said Michael Frohlich, a spokesman for the trade group. He added that leadership should recognize that “saving 23,000 jobs that are in immediate jeopardy is inextricably linked to a true job-saving and creation agenda.”

Jill Kozeny, a spokeswoman for Grassley, said there is biodiesel production in 44 states overall. “They are losing jobs since the credit expired at the end of the year, and restoring the credit as quickly as possible is essential to saving these renewable energy jobs,” she said.

The bottom line is Grassley will have to go back to work to find another way to get the renewal up for a vote, perhaps attached to another one of the many jobs bills Reid’s office is promising.

There have been three panels discussions on the new RFS-2 at the National Biodiesel Conference and they had to be moved to larger than scheduled rooms to handle all the people who wanted to hear about the new rules. The National Biodiesel Board is working on this issue and will be producing several webinars on the topic in the near future.

In the meantime, to learn more about it, I spoke with Paul Argyropoulos, EPA Senior Policy Advisor, Office of Transportation & Air Quality, who spoke at one of the sessions. I asked him what’s most important for the industry to know now. To start with he says, “We have a final rule which I think provides certainty to the market.” He then provides some additional points of importance specific to the biodiesel industry. I can’t figure out how to summarize them and they’re too long to translate so you’ll have to listen to the interview to hear them. That’s just the way it is with regulations this long and complicated. At this point he encourages you to dig into the regulations and understand what the reporting requirements are. He says they’re willing to work with you and they’re planning to produce some webinars as well. Paul says you can go to their website to get more information.

You can listen to my interview with Paul below.

National Biodiesel Conference Photo Album

Podcast: Play in new window | Download (1.8MB)

Two grants totaling $1.7 million have been approved for studying offshore wind technologies in Michigan.

The Chicago Tribune reports the grants come from the state’s Public Service Commission:

Grand Valley State University’s Michigan Alternative and Renewable Energy Center and the University of Michigan’s Memorial Phoenix Energy Institute are getting $1.3 million for jointly researching offshore wind and ice data on Lake Michigan.

The Superior Watershed Partnership is to receive $350,000 for researching sites’ wind energy potential on Lake Michigan. The organization also will assess public opinion on offshore wind development.

If the last post I had about an offshore wind energy project in Lake Michigan, where Scandia Wind was proposing a 1,000 megawatt Lake Michigan wind farm, is any indication, there should be plenty of discussion about this topic … on this site and elsewhere. Let’s see what people have to say.

As Congress debates (or tries to debate between blizzards) the jobs bill, the measure that would put lots biodiesel workers back on the job seems to be tied to that same bill’s fate.

This post on the Des Moines Register’s blog says Democrats had hoped to get the jobs bill to the floor today, but the 30+ inches of snow over the weekend plowed under that bill … and the renewal of the lapsed federal biodiesel tax subsidy:

Beth Pellett Levine, a spokeswoman for Sen. Charles Grassley, the senior Republican for the Senate Finance Committee, says he “has insisted that the biodiesel tax credit be a part of any discussions” on a jobs bill with the panel’s chairman, Montana Democrat Max Baucus. The $1-a-gallon tax credit for biodiesel “remains a top priority for Senator Grassley to extend the credit at the first available opportunity,” she added. Soybean growers are looking to Grassley to ensure that the biodiesel credit is part of any jobs bill to come out of the senate, according to John Gordley, a lobbyist for the American Soybean Association.

Renewal of the federal biodiesel tax incentive is seen as the last element to put the biodiesel industry back on track. The other two elements were the EPA’s decisions to consider biodiesel low enough in carbon footprint and mandate this year of 1.15 billion gallons of the green fuel.

A 5 percent biodiesel mandate in Iowa is a bit closer to a reality.

This story from the Des Moines Register says the bill that would require all biodiesel sold in the Iowa contain at least 5 percent biodiesel passed a state legislative subcommittee … but not without some fiesty debate:

“The hog producers in this state are being ravaged right now, but we’re not in here mandating eating bacon,” [Republican Erik Helland of Grimes] said.

Biodiesel has lagged behind ethanol in usage because unlike ethanol, it has never had a federal mandate. Truckers and gasoline retailers also have opposed the mandate.

The B5 bill passed the Iowa State Senate last year but didn’t advance in the House. Let’s hope for the best this year.

It’s been a long time in the making, but the Environmental Protection Agency has finally released the new Renewable Fuels Standard … better known as RFS-2.

The standard requires that biofuels will have to reduce greenhouse gas emissions compared to the gasoline and diesel fuels they displace and grow in production from last year’s 11.1 billion gallons to 36 billion by 2022, with 21 billion gallons to come from advanced biofuels. It’s expected to replace more than 328 million barrels of non-renewable petroleum a year and reduce greenhouse gas emissions more than 138 million metric tons annually when fully implemented.

While admitting it might not be perfect, RFS-2 is being welcomed by representatives of the ethanol and biodiesel industries.

In this edition of the Domestic Fuel Cast, we’ll here from EPA Administrator Lisa Jackson, Secretary of Agriculture Tom Vilsack, as well as Tom Buis with Growth Energy, the Renewable Fuels Association’s Matt Hartwig, and the National Biodiesel Board’s Michael Frohlich.

They all have interesting takes on what the new standard will bring in the short and long terms, and you can here what they have to say here:

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Podcast: Play in new window | Download (4.1MB)

Industry reaction to the Environmental Protection Agency announcement today of much-delayed rules for the second phase of the Renewable Fuel Standard has come quickly and is mostly positive.

In this edition of “The Ethanol Report” podcast, Matt Hartwig with the Renewable Fuels Association talks about their reaction and what the rule means for the industry.

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

Listen to or download the podcast here:

Podcast: Play in new window | Download (4.8MB)

A group of federal researchers has figured out how to better extract biodiesel from biomass using a microbe that most of us try to avoid in our food.

The U.S. Department of Energy’s Joint BioEnergy Institute (JBEI) has announced that researchers have engineered a strain of E. coli bacteria that can extract an advanced biodiesel directly from biomass:

“The fact that our microbes can produce a diesel fuel directly from biomass with no additional chemical modifications is exciting and important,” says Jay Keasling, the Chief Executive Officer for JBEI, and a leading scientific authority on synthetic biology. “Given that the costs of recovering biodiesel are nowhere near the costs required to distill ethanol, we believe our results can significantly contribute to the ultimate goal of producing scalable and cost effective advanced biofuels and renewable chemicals.”

“Biosynthesis of microbial fatty acids produces fatty acids bound to a carrier protein, the accumulation of which inhibits the making of additional fatty acids,” Steen says. “Normally E. coli doesn’t waste energy making excess fat, but by cleaving fatty acids from their carrier proteins, we’re able to unlock the natural regulation and make an abundance of fatty acids that can be converted into a number of valuable products. Further, we engineered our E. coli to no longer eat fatty acids or use them for energy.”

The researchers point out that using E. coli to convert biomass into biodiesel will eliminate a food source from the fuel chain.

One of the biggest advocates for renewal of the $1-a-gallon federal biodiesel blender’s tax incentive looks for renewal of the credit sometime next month.

Agriculture.com reports that Iowa Senator Chuck Grassley has been working with the Chairman of the Senate Finance Committee, Max Baucus to get it restored very soon:

“It would be my hope that we would have this to the president by the week we take off for town meeting recesses — president’s holiday,” he told Agriculture.com on Tuesday.

Later, Grassley’s press aide, Beth Levine, said in an e-mail message that “Senator Grassley had a long discussion with Senator Baucus about tax extenders, and in particular about the necessity of extending the biodiesel tax credit.

Fellow Iowan Senator Tom Harkin, a Democrat, blames the delay on the Republicans. However, most Washington observers agree that the Senate was too busy debating the unpopular health care bill to get to the biodiesel tax credit. Harkin thinks it could get done by the end of February, but he’s not sure.

The nation that leads the clean energy economy will be the country that leads the global clean economy and America must be that nation,” said President Obama tonight during his first State of the Union address. “I will not accept second place.”

There were several major focuses of his speech including the support of small businesses, building a stronger financial institution and the creation of new jobs, especially in the clean tech sector. “We need to put more Americans to work building clean energy systems,” said Obama. He also wants to give incentives to consumers who add energy efficiency technologies to their homes, the purchase of these will help to support clean energy industry, he explained.

Obama continued that the House has already passed a bill that will do some of these things, and expressed hope that the Senate would as well. “I want a jobs bill on my desk without delay.”

In anticipation for Obama’s support of clean tech jobs, Renewable Fuels Association (RFA) President, Bob Dinneen sent out a statement saying, “America’s ethanol producers stand with the President, ready to provide good paying jobs and economic opportunity in a cleaner and more sustainable manner. “In just the past 10 years, ethanol production has helped create hundreds of thousands of new jobs for engineers, construction workers, chemists, accountants, maintenance supervisors, and countless others. With new technologies on the precipice of commercialization, this industry is once again poised to bring unparalleled economic opportunity to small, rural communities all across the nation.”

Obama continued, “No area is more ripe for investments than energy…but to create more of these clean energy jobs, we meed more production, more efficiencies and more incentives. He then laid of some of the elements that are needed to create the clean energy industry including continued investments in advanced biofuels. Finally he said, “And yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy profitable energy.”
Read the rest of this post…