Domestic Fuel

Ethanol interests were quick to oppose an amendment offered by Sen. John McCain (R-AZ) today that would prohibit the U.S. Department of Agriculture from funding Flex Fuel pump installations.

“The McCain amendment would smother the only initiative we have to provide consumers the power to choose their fuel, and it gives OPEC the green light to tighten its grip on our economy at the worst possible time,” said Growth Energy CEO Tom Buis. “Flex Fuel pumps inject competition in the marketplace. Congress should stand up for consumer choice and move our country’s energy policy forward, by investing in ethanol infrastructure and next generation biofuels.”

A statement from the Renewable Fuels Association called the McCain amendment “a jobs bill for OPEC nations.”

“By specifically singling out the ethanol molecule for exclusion, this amendment is seeking to kill new technologies using algae, wood waste, garbage and other feedstocks that would produce ethanol in their infancy. America needs jobs and domestic ethanol production is a proven method to create those opportunities. We already know what we get by outsourcing our energy future.”

Sen. McCain offered the same amendment during the ethanol tax debate in June when it was defeated by a vote of 41-59. This amendment was part of the 2012 agriculture appropriations bill, but appeared by the end of the day it would not come up for a vote.

Corn growers and cattle producers are at odds over new legislation introduced in the House that would change the Renewable Fuels Standard (RFS2).

The bill, sponsored by Reps. Bob Goodlatte (R-VA) and Jim Costa (D-CA), would allow Congress to reduce the RFS requirement for ethanol whenever corn stocks are tight.

Speaking on behalf of the National Cattlemen’s Beef Association (NCBA) during a press conference announcing the legislation, California beef cattle producer Kevin Kester said it would provide relief from tight corn supplies.

“Cattlemen are not opposed to ethanol and we’re not looking for cheap corn. We simply want the federal government to get out of the marketplace and allow the market to work,” Kester said.

Officials with the National Corn Growers Association (NCGA) say the measure would significantly weaken the RFS. “The U.S. ethanol industry is an integral part of job creation and economic opportunity throughout rural America,” NCGA President Garry Niemeyer, an Illinois corn grower, said. “This legislation would put progress made by the ethanol industry in jeopardy and we are asking members of Congress to oppose its passage.”

The RFS came into effect in 2005 and was reauthorized and expanded in 2007 to require the use of 12.6 billion gallons of corn ethanol this year and 13.2 billion gallons in 2012, topping out at 15 billion gallons in 2015.

The Goodlatte-Costa bill would require a reduction in the RFS when the stocks-to-use ratio drops below 10 percent, up to a 50 percent reduction if the ratio falls below 5 percent. Under the current corn supply, the reduction would be 15-25 percent.

The ethanol industry is challenging a new report from the National Academies of Science that questions the ability of the biofuels industry to meet current goals under the Renewable Fuels Standard (RFS2) and the ability of biofuels to reduce greenhouse gas emissions.

According to the report, production of conventional biofuels and biomass-based diesel fuel will be adequate to meet the requirements of the RFS2, but whether the mandate for cellulosic ethanol can be met is “uncertain.”

“The capacity to meet the renewable fuel mandate for cellulosic biofuels will not be available unless the production process is unexpectedly improved and technologies are scaled up and undergo several commercial-scale demonstrations in the next few years. Additionally, policy uncertainties and high costs of production may deter investors from aggressive deployment, even though the government guarantees a market for cellulosic biofuels up to the level of the consumption mandate, regardless of price.”

Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) agrees that technological innovation and policy uncertainty are major hurdles for meeting the RFS2 goals for advanced biofuels. “The RFS is an aggressive, technology-forcing standard that needs complementary policy to be achieved, in much the same way that oil companies rely on a bevy of tax breaks and subsidies to protect the investments necessary to bring new sources of petroleum fuels online as known oil reserves become increasingly scarce,” said Coleman. “If we enact policies reflective of the goals set forth in the RFS, the advanced biofuels industry will emerge and the RFS targets will be met.”

“You can read this report in a number of ways because the conclusions are based on variables that will undoubtedly change with technological advancements and innovation within the industry,” said Growth Energy CEO Tom Buis. “A continued commitment to the RFS will create the market certainty that is crucial for both first generation and second generation ethanol. But any effort to doubt or dismantle the RFS would block the growth of the industry and ultimately threaten American jobs, our environment and our energy security.”

Also “uncertain” according to the report is the “extent to which using biofuels rather than petroleum will reduce greenhouse gas emissions.” “The idea that the RFS may not be an effective strategy to mitigate greenhouse gas emissions is regrettable given the published science on the subject,” said Coleman. “Even with land use change considerations, advanced biofuels are the lowest carbon fuels being developed in the marketplace; far and away less carbon intensive than electricity, natural gas and even hydrogen fuel cells.”

The Navy has reached a milestone in the quest to gain energy independence with the first unmanned biofueled flight of an MQ-8B Fire Scout at Webster Field in St. Inigoes, Md. The unmanned helicopter was fueled with a combination of JP-5 aviation fuel and plant-based camelina.

The MQ-8B Fire Scout Vertical Take-Off and Landing Tactical Unmanned Aerial Vehicle provides critical situational awareness, intelligence, surveillance, reconnaissance (ISR), and targeting data to the forward deployed warfighter. Fire Scout is designed to operate from all air capable ships and is currently providing ISR support during its first-land based deployment in U.S. Central Command area of responsibility.

Fire Scout is the seventh aircraft to demonstrate the versatility of biofuel through its use in all facets of naval aviation. The completion of aircraft biofuel testing at Pax River is another example of the Navy’s determination in achieving its goal of launching the “Great Green Fleet.”

Watch the YouTube video of the successful biofueled UAV flight here:

The U.S. Department of Energy has released a brand new report that recognizes the importance of renewable energy for the nation’s future.

The inaugural Quadrennial Technology Review report (DOE-QTR) is billed as “an assessment of the Department’s energy technology research and development portfolios” establishing a framework for energy technology activities and priorities.

“Innovation in energy technology is going to be central to solving our energy challenges,” said John P. Holdren, Director of the White House Office of Science and Technology Policy. “New energy technologies can reduce the cost of energy services to firms and families, improve the productivity of manufacturing, reduce our dependence on foreign oil, increase the reliability and resilience of our energy infrastructure, and reduce the risks from climate change, even as they strengthen and sustain U.S. competitiveness in global markets.”

The DOE-QTR defines six key strategies: increase vehicle efficiency; electrification of the light duty fleet; deploy alternative fuels; increase building and industrial efficiency; modernize the electrical grid; and deploy clean electricity. According to the report, “Reliance on oil is the greatest immediate threat to U.S. economic and national security, and also contributes to the long-term threat of climate change.” The DOE-QTR promotes “out of the box” ideas for improving all types of energy alternatives, including battery and fuel cells, biofuels, solar, and wind, with a strong emphasis on modernization and efficiency.

Read the report here.

Senators Maria Cantwell (D-WA) and Dick Lugar (R-IN) have introduced a bill that would ensure most new vehicles in the United States are capable of running on a range of domestically produced alternative fuels starting in 2015.

By introducing competition among fuels, the Open Fuels Standard (OFS) Act aims to bring about significant reductions in fuel prices paid by U.S. consumers. Transportation fuel choice could also sharply reduce U.S. dependence on foreign oil and reduce the $200 billion “monopoly premium” the Department of Energy calculates U.S. consumers currently pay to OPEC (Organization of the Petroleum Exporting Countries) and other foreign oil producers each year through excessive petroleum prices. Keeping this money within U.S. borders would sharply cut the U.S. trade deficit, safeguard U.S household income, and provide capital and market incentive for investment in new U.S. energy infrastructure.

The Open Fuels Standard Act requires that starting in 2015, 50 percent of new vehicles manufactured or sold in the United States be flex fuel capable – meaning able to run on non-petroleum fuels such as domestically-produced ethanol or methanol or other alcohols in addition to, or instead of, petroleum-based fuels. In 2018, 80 percent of new vehicles would need to be flex fuel capable.

Growth Energy CEO Tom Buis said the legislation would help open the market, so that Americans have access to alternative fuels, like ethanol. “If we are ever going to reduce our dependence on foreign oil and allow consumers a fuel choice, we will need an open market. An open market will drive the investment into cellulosic ethanol and other biofuels,” said Buis.

The Department of Energy has finalized a $105 million loan guarantee to support the development of one of the nation’s first commercial-scale cellulosic ethanol plants.

POETThe loan guarantee and financing allows POET to construct Project LIBERTY, a 25 million-gallon-per-year cellulosic ethanol plant in Emmetsburg, Iowa.

“This project represents a pioneering effort to make broad scale deployment of cellulose ethanol a reality,” said Secretary of Energy Chu making the announcement on Friday. ”Producing the next generation of biofuels can not only reduce America’s oil dependency, it can also create vast new economic opportunities for rural Americans.”

POET estimates the project will fund approximately 200 construction jobs and 40 permanent jobs and generate around $14 million in new revenue to area farmers who will provide the corn crop residue.

The first commercial cellulosic ethanol plants will demonstrate that the 1 billion tons of biomass available in the United States can be a major force in overcoming the country’s reliance on foreign oil, POET CEO Jeff Broin said. “Financing has been a key hurdle to getting the first commercial-scale cellulosic ethanol plant up and running. We’re excited to show the world the tangible results of a decade of work by our researchers and engineers,” said Broin.

Project LIBERTY will be located next to the existing grain ethanol plant, POET Biorefining Emmetsburg, and will share roads, land and other infrastructure. Additionally, the cellulosic plant will produce biogas as a co-product, enough to completely power itself and eliminate the majority of the natural gas required to operate the adjacent grain ethanol plant.

Senators John Thune (R-SD) and Amy Klobuchar were recognized for their support of the ethanol industry today with the “Fueling Growth” award from Growth Energy during the ethanol organization’s second annual Legislative Conference in Washington D.C.

According to Growth Energy, the awards are meant to recognize the leadership of policy makers “in fostering our country’s energy independence, through the production and use of ethanol as a fuel to displace foreign oil.” Senator Thune is pictured here receiving the award from Growth Energy co-chairman Jeff Broin of POET. In the photo below, Sen. Klobuchar poses with members of Growth Energy attending the legislative conference.

“We are grateful for the leadership and wisdom of these leaders,” said Growth Energy CEO Tom Buis. “This award serves as a reminder of our gratitude, and our continuing efforts to make this country’s national security and economic security stronger through a robust and viable alternative, renewable fuels industry. With their votes and actions in Congress, and their leadership within the administration, these individuals demonstrated loyalty and devotion to the cause of American energy independence.”

The two senators jointly sponsored a bi-partisan effort earlier this year that would have generated $2.5 billion in deficit reduction by reforming the ethanol tax credit and investing in renewable fuels infrastructure. Growth Energy also honored Agriculture Secretary Tom Vilsack with a Fueling Growth award.

In a letter to the co-chairs of the Joint Select Committee on Deficit Reduction, the so-called “super committee” assigned to find ways to cut the deficit, the Renewable Fuels Association today urged them to “focus on comprehensive energy tax policy” rather than simply end the ethanol tax credit a week earlier than it is due to expire.

“On behalf of the more than 300 member companies of the Renewable Fuels Association, I write to strongly urge you to ignore calls from various special interests to repeal the current Volumetric Ethanol Excise Tax Credit, or VEETC,” RFA General Counsel Edward Hubbard wrote to Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX). Hubbard noted that while the ethanol industry had proposed ending the VEETC August 1st when it would have saved nearly $2 billion for the remainder of 2011, with a deadline of December 23rd deadline for congressional action for deficit reduction, “barely $100 million would be saved by ending VEETC before its scheduled expiration” on December 31.

Instead, RFA encourages the committee to “take a comprehensive look at all existing energy tax policies and eliminate those ongoing policies that serve only to pad the balance sheets of already profitable and very mature industries.”

If the committee is truly seeking to eliminate wasteful and market-distorting spending, we urge you to begin by rescinding permanent tax subsidies for the oil industry. Several tax loopholes, such as the Section 199 deduction for all oil and gas activity, the deduction for intangible drilling costs, and the depletion allowance for oil and gas wells, are available only to oil and gas companies and further strengthen the monopoly these companies have on the nation’s gasoline market. Removing these and other provisions would save at least $40 billion over the next decade – a pittance compared to the annual profits of oil companies – and significantly contribute to debt reduction efforts while simultaneously helping level the playing field for existing and emerging renewable fuel technologies.

Read the letter here.

With the latest USDA forecast showing tighter grain supplies, the House Agriculture Subcommittee on Livestock, Dairy, and Poultry is holding a hearing Wednesday on the concerns of livestock and poultry producers about feed availability and ethanol is likely to be a target for blame.

In advance of the hearing, officials with Growth Energy have sent a letter to the committee leadership urging them to remember that the ethanol industry produces animal feed in the form of distillers grains (DDGs). “More than one-third of all grain used in the production of ethanol is returned as a nutritious distillers’ grain, which is 25 percent cheaper than corn and can displace a greater amount of corn in feed rations, ultimately saving livestock producers’ input costs,” wrote Growth Energy CEO Tom Buis and president Jim Nussle in the letter to sub committee chairman Rep. Thomas Rooney (R-FL) and ranking member Dennis Cardoza (D-CA).

Growth Energy noted that there are many factors that are contributing to tighter grain supplies and higher prices, but stressed that the productivity of American agriculture is capable of meeting all demands for feed, food and fuel. “Consider this, despite the worst weather conditions in recent history, from cold spring rains to searing summer droughts followed by early autumn floods, our nation’s farmers are expected to deliver a near-record harvest of corn,” they wrote. Corn production this year is now forecast to be 12.5 billion bushels, just slightly more than last year and the third largest crop on record.

Scheduled to testify at the hearing on Wednesday at 1:30 eastern are representatives from the beef, dairy, pork, and poultry industries.

President Obama reaffirmed the importance of domestically produced fuels in his address to Congress on jobs Thursday night.

“If we provide the right incentives, the right support — and if we make sure our trading partners play by the rules — we can be the ones to build everything from fuel-efficient cars to advanced biofuels to semiconductors that we sell all around the world,” the president said. “That’s how America can be number one again.”

The National Biodiesel Board (NBB) was pleased to hear the president utter the words “advanced biofuels” in connection with jobs. “As the only commercial scale Advanced biofuel that’s produced nationwide today, biodiesel is proof that strong domestic energy policy and incentives can create good paying American Jobs,” said NBB VP of Federal Affairs Anne Steckel. “Even in this economy, our industry is experiencing a boom. We’re on pace to produce more biodiesel than ever before. We strongly encourage Congress to follow through with a green jobs package that includes the biodiesel tax incentive that gets people back to work.”

Obama outlined his $450 billion jobs plan including tax cuts, tax credits, infrastructure investments and other measures in his speech Thursday night to Congress, urging lawmakers to pass it immediately to put Americans back to work.

A CNN Money report this week offered some sobering statistics on the true cost of our addiction to oil.

According to the report, about 3,000 of the Army casualties reported in Iraq between 2003 and 2007 were protecting fuel convoys. That is one out of eight killed or wounded during that time period. The report notes, “Among the many incentives pushing the military to use less oil, reducing the number of casualties it takes to protect vulnerable fuel convoys is one of the most important.” The military used 5.5 billion gallons of fuel in 2010, or 3,555 for each active military member. That compares to less than 1,000 gallons for U.S. civilians. The military uses a full 80% of the energy consumed by the federal government.

That’s why initiatives like the one announced this week by the U.S. Departments of the Navy, Energy and Agriculture to develop more aviation and marine biofuels are so important. Thanks to Stephanie Dreyer of Growth Energy for the tip on the CNN Money report. Check out her blog post on “Measuring our oil addiction by more than just Dollars and Cents”, about our nation’s risky dependence on Middle East oil and the dangerous impact it has on the lives of our military.

The U.S. Secretary of Agriculture Tom Vilsack today announced a $75 million loan guarantee for a Florida bioprocessing facility to create fuel from citrus and yard waste.

The guarantee will support construction of the INEOS New Planet BioEnergy facility in Vero Beach, Florida that will produce up to 8 million gallons per year of cellulosic ethanol from citrus fruit, vegetable and yard wastes, and create an estimated 380 new jobs. Vilsack toured the facility last week, meeting construction workers and company and community officials to highlight the importance of helping our nation develop the next generation of biofuels.

“This cutting-edge facility in Florida, and others like it across America, represents the kind of innovation we need to continue to build a competitively-priced, American-made, homegrown biofuels industry that helps to break our dependence on foreign oil and moves our nation toward a clean energy economy,” said Vilsack.

The facility, estimated to be completed by the summer of 2012, will consume an estimated 300 dry tons per day of organic material and, in addition to ethanol, produce enough electricity to run the plant and provide for the power needs of 1,400 homes.

The Obama Administration today announced a partnership between the private sector and the U.S. Departments of Agriculture, Energy and Navy to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation.

President Obama made the announcement during a stop in Iowa, at the same time the three department secretaries held a telephone conference call with the press. Secretary of Agriculture Tom Vilsack, Secretary of Energy Steven Chu, and Secretary of the Navy Ray Mabus announced that they have developed a plan to jointly construct or retrofit several drop-in biofuel plants and refineries.

“America’s long-term national security depends upon a commercially viable domestic biofuels market that will benefit taxpayers while simultaneously giving Sailors and Marines tactical and strategic advantages,” said Navy Secretary Ray Mabus. “Today’s announcement not only leverages our home grown fuel sources to support our national security, but it also helps advance the biofuels market, which ultimately brings down the cost of biofuels for everyone.”

“These pioneer plants will demonstrate advanced technologies to produce infrastructure-compatible, drop-in renewable fuels from America’s abundant biomass resources,” said Energy Secretary Chu. “It will support development of a new, rural-focused industry that will replace imported crude oil with secure, renewable fuels made here in the U.S.”

The joint plan calls for the three Departments to invest a total of up to $510 million with at least a one to one match from private industry in an effort to reduce U.S. reliance on foreign oil and create jobs while positioning American companies and farmers to be global leaders in advanced biofuels production.

Listen to the entire press conference here: Navy, DOE, USDA Press Conference

During his Midwest bus tour this week, President Barack Obama is visiting three of the nation’s top four ethanol producing states, accounting for more than 42 percent of the country’s ethanol production.

The president’s first audience question today in Minnesota, the number four ethanol state, was “How are you going to use renewable energy to create jobs in the future?”

“One, obviously, is biofuels,” Obama responded. “And a lot of folks here are familiar with corn-based ethanol, but the fact of the matter is the technology is moving where we need to start taking advantage of a whole range of biofuels, using refuse, using stuff that we don’t use for food to create energy. And we are seeing incredible progress on that front, but it’s key to make sure that we continue to make the research and that we also use the incredible purchasing power of the federal government to encourage it.”

The president also noted progress in alternative fuels for aviation, as well as wind, solar and the next generation of electric vehicles. Read the entire transcript of his remarks and audience questions here on the White House website.

Renewable Fuels Association (RFA) president and CEO Bob Dinneen posted an open letter to President Obama on the E-xchange Blog, encouraging him to embrace his “record of support for ethanol and other domestic renewable fuels” as he travels through the ethanol producing countryside. “Ethanol production is offering jobs that provide a good wage, good benefits, and the opportunity for rural Americans to stay in rural America or move back home,” wrote Dinneen. “Ethanol and the policies that have helped support it are providing benefits to Americans all across the country. American ethanol production is the most successful, efficient, and cost-effective renewable fuel source the world has ever known.”

After his stop in Minnesota Monday morning, Obama visited a farm in the number one ethanol producing state, Iowa. On Tuesday, the president is scheduled to visit Peosta, Iowa and he will travel to number three state Illinois for two stops in the northwest corner of the state on Wednesday.

By the way – the number two ethanol producing state is Nebraska. No stops are scheduled there.