Biodiesel Producer Certain Uncertainty Will End

christjansenThe manager of a biodiesel refinery from the Nation’s largest biodiesel producer believes the uncertainty in the green fuel’s future will disappear. I caught up with Bryan Christjansen, a general manager for Renewable Energy Group’s Albert Lea, Minn. and Mason City, Iowa plants, shortly after a news conference where several biodiesel producers joined with a group of U.S. senators to decry the uncertainty brought by the government’s proposal to lower the amount of biodiesel to be mixed into the fuel supply and Congress’ failure to renew the $1-a-gallon federal biodiesel tax incentive.

“Some of the things happening here on Capitol Hill, as well as in the White House, are not good for our industry. We are here, and [Congress and the Administration] have helped us get to this point, and we need to continue to grow this industry through what you guys have created already,” he said.

While Bryan said that the current Environmental Protection Agency (EPA) proposal on the Renewable Fuels Standard is hurting the biodiesel industry by causing so much uncertainty, he is certain that will change.

“With this [news] conference and the open comment period with the EPA, I think we’ve voiced our opinion that we need to reduce our dependence on foreign oil, and what better way to do it than by producing biodiesel.”

You can hear my conversation with Bryan here: Bryan Christjansen, REG manager

And you can hear what he and other producers said here: Biodiesel Industry Concerns
And what the U.S. senators attending the news conference said here: Senators Voice Biodiesel Concerns

Iowa Gov Says Biofuels Cure for Climate Change

IA Gov Branstad at Hearing in the Heartland Jan 23 2013As members of a federal task force visit Iowa and say that “climate change is here and now,” that state’s governor says biofuels, which are also here and now, are at least one way to fight the changes in climate. This article in the Waterloo Cedar Falls Courier says this is the third meeting of the White House task force and comes on the heels of the recent Obama Administration’s National Climate Assessment that says climate change could bring disastrous results for agricultural areas, such as Iowa, “including prolonged periods of heat, heavy downpours, and in some regions, floods and droughts.” Branstad makes the case that if the government followed the law on the Renewable Fuels Standard (RFS), many of these issues would be dealt with.

“Climate change is here and now,” said Mike Boots, acting chairman of the White House Council on Environmental Quality.

He ran down a list of some of the effects of climate change being experienced in the Midwest, such as poorer crop yields because of heat and torrential rains that overfill river banks and wash away topsoil.

Iowa Gov. Terry Branstad did not attend the event as he was traveling the state for a series of community tours, Branstad spokesman Jimmy Centers wrote in an e-mail.

“Gov. Branstad believes that as government officials travel to Des Moines they should focus on reducing transportation emissions and our dependence on overseas oil, diversifying our nation’s energy portfolio and supporting the growth of the Midwest economy through a strengthened Renewable Fuel Standard,” Centers wrote.

White House officials say the RFS was not discussed during the symposium. Recently, the U.S. Environmental Protection Agency recommended reducing the amount of ethanol and biodiesel to be mixed into the Nation’s fuel supply. Farm-state governors, such as Branstad, have blasted the agency for that recommendation and hope to get it reversed before it is due to be finalized within about a month.

Biodiesel Producers, Farmers Take to The Hill

goergerBiodiesel producers and farmers who raise the feedstocks for the biodiesel industry took to Capitol Hill this week, joining a group of U.S. Senate Democrats in their calls to end policy uncertainty that is hurting their industry.

“The uncertainty caused by these policy setbacks in Washington, with this proposed retreat on biodiesel volumes under the Renewable Fuels Standard (RFS) and the expiration of the [$1-a-gallon federal biodiesel] tax incentive is threatening to unravel [the good built up by the biodiesel industry],” said Terry Goerger, a third generation farmer from Mantador, North Dakota. He added that this is especially hard on the industry that took cues from Congress and the Obama Administration and took the risk to try to build up biodiesel. “We feel like the EPA (Environmental Protection Agency) and the Administration is pulling the rug out from underneath us.”

christjansenBryan Christjansen, who manages Renewable Energy Group biodiesel plants in Albert Lea, Minn. and Mason City, Iowa, echoed those sentiments, saying his company believes in the long-term future of biodiesel but wonders if Washington does.

“If the Administration chooses to go with a short-sighted EPA proposal, it does not just put domestic fuel into jeopardy, but it also harms the local economies and billions of dollars in investments,” he said.

haasJeff Haas, CEO of General Biodiesel in Seattle, said that while his company, as well as much of the biodiesel industry, wants to invest and grow, not knowing what the EPA or Congress will do next makes the industry feel like it is just floating adrift.

“We’re nearly halfway through the year, and we still don’t know what the RFS volume will be or whether the biodiesel tax incentive will be reinstated,” adding that the industry relies on these policies for direction. “It’s analogous to setting off across the ocean without a compass for six months.”

Haas also said that some of the best and brightest in biodiesel are losing confidence and leaving the industry because of the uncertainty, and the delays are just wins for opponents of renewable energy.

presbyWayne Presby, owner of White Mountain Biodiesel in North Haverhill, N.H., said his company was founded on the Obama Administration’s stated desire to lessen our dependence on foreign oil, reduce greenhouse gases, put more Americans to work, and increase our national security. But now, after investing millions in his plant alone, as well as hiring workers and buying supplies for a fledgling business in a community that desperately needed it, and making a successful biodiesel production facility, they can’t expand and grow that business because of the uncertainty in biodiesel policy.

“The industry is constantly taking two steps forward and two steps back because of the policy uncertainty.”

Listen to what the group had to say here: Biodiesel Industry Concerns

Senate Dems Against Obama on Biodiesel Proposal

nbb-senatorsNormally, they would be considered pretty staunch allies of President Obama. But a group of Democratic U.S. Senators have taken the Administration to task for its handling of the Environmental Protection Agency’s proposal to drastically reduce the amount of biodiesel required to be blended into the Nation’s fuel supply.

“The EPA’s preliminary November rule will be disastrous,” said Illinois Senator Dick Durbin, normally one of the president’s closest allies in the Senate, adding how the proposal is causing grave uncertainty in the biodiesel market. “We need more certainty of growth in this industry that is going to keep creating good paying jobs right here in America and serve the needs of America’s energy future.”

North Dakota Democratic Senator Heidi Heitkamp put the group together and echoed Durbin’s sentiments. She cited a new National Biodiesel Board survey that shows that nearly 80 percent of biodiesel operations have reduced production, nearly 60 percent idled production altogether or shut down a plant this year; two-thirds have reduced or is expecting to reduce their workforce, with 85 percent delaying or cancelling expansion plans. And just about every biodiesel producer surveyed blamed their reductions on the weak RFS and Congress’ inaction to extend the federal biodiesel tax credit.

“If you look at what this industry depends on from the U.S. Congress, it’s certainty, it is some measure of consistency in public policy. And I have to tell you, on that score, we have failed miserably,” Heitkamp said.

Minnesota’s Sen. Al Franken said he has talked to the President and EPA Gina McCarthy about this proposal and reiterated his belief that this is the wrong signal to investors… especially at a time when biodiesel’s sister fuel, cellulosic ethanol, is gaining support.

“This is not the time to tell investors that we’re backing off,” Franken said. Later on, Franken said his disappointment with the current RFS proposal is pretty obvious, while fellow Minnesotan, Sen. Amy Klobuchar said they were all stunned by the lowering of the amount of biodiesel to be blended.

“We knew they might make some changes, but it was fairly drastic when you look at the numbers,” pointing out that ethanol’s numbers are down 1.4 billion gallons below 2014’s target and only 1.28 billion for biodiesel this year… a drastic reduction from 2013’s approximately 1.7 billion gallons produced.

Indiana’s Sen. Joe Donnelly said it wasn’t the right move by EPA, but it could be fixed.

“They just made the wrong call. They have a chance to fix this and get it right. And what we want to do is make sure they have the right information, all the information they need, and if they do, then we’re expecting the right decision,” he said.

Sen. Maria Cantwell from Washington state said one way she believes they can help is to change the federal tax incentive from a blender’s to a producer’s credit.

“We hope this will also produce some more predictability and certainty in the industry.”

Listen to the senators’ opening statements here: Senators Voice Biodiesel Concerns

Rep Conaway Re-Introduces Anti-Biofuel Amendents

Rep. Mike Conaway (R-TX) has reintroduced his anti-biofuels amendments and they have been passed. The amendments have been included in the House version of the FY2015 National Defense Authorization Act. One amendment, H.R. 4435 prohibits the Department of Defense from purchasing biofuels unless the biofuels until certain date requirements are met:

Except as provided in subsection 3 (b), none of the amounts authorized to be appropriated by this Act or otherwise made available for the Department of Defense may be used to purchase or produce biofuels until the earlier of the following dates: ( 1) The elate on which the cost of the biofuel IS equal to the cost of conventional fuels purchased by the Department. (2) The date on which the Budget Control Act of 2011 (Public Law 112-25), and the sequestration in effect by reason of such Act, are no longer in effect. (b) EXCEPTIONS. the limitation under subsection (a) shall not apply to biofuels purchased ( 1) in limited quantities necessary to complete test and certification; or (2) for the biofuel research and development efforts of the Department.

Navy Blue Angels flying on biofuelsRep. Conaway said of the passage of his amendments, “It is foolish to require the military to purchase biofuels that are far more expensive than traditional petroleum products, which is why I offered an amendment that would allow the Department of Defense to only produce and procure biofuels if the cost is equal to conventional fuels or sequestration is replaced with an exemption for research and development.”

He continued, “I also offered an amendment that would prohibit the Department of Defense from developing their own biofuel refineries. Allowing the Pentagon to subsidize and develop its own biofuels industry is an abuse of the Defense Production Act. These amendments are necessary at a time when our military is already facing enormous budget constraints.

“It is not the job of the Department of Defense to develop the biofuel industry,” added Conaway. “As the bill moves forward, I will continue to fight to reverse these efforts to use the Department of Defense to prop up the biofuels industry.”

Truman National Security Project Executive Director Michael Breen responded to the amendments proposed by Rep. Conaway to the House’s version of the National Defense Authorization Act that would constrain the Department of Defense (DoD) from investing in energy security initiatives.

Breen, a former U.S. Army officer and leader of the clean energy campaign, Operation Free, said: “This is Déjà vu all over again. In what has become an annual tradition, Congressman Michael Conaway has proposed amendments that would limit the Pentagon’s use of advanced biofuels, directly affecting the mission capability of our deployed forces. Our military leaders have been crystal clear: developing next generation fuels and using energy smarter are national security imperatives.”

“The military is investing in renewable and energy efficient technologies that are promoting energy security for our troops abroad and here at home,” Breen added. “Congress needs to stop prioritizing politics over national security and listen to our military leaders who have stated over and over again that these investments are crucial for strengthening our national and economic security.”

DOE Announces Offshore Wind Energy Projects

The U.S. Department of Energy has announced funding for three offshore wind demonstrations. The projects will receive up to $47 million each over the next four years to deploy innovative, grid- connected systems in federal and state waters by 2017. The projects are located off the coast of New Jersey, Virginia and Oregon.

twisted jacket formation for offshore wind energyFishermen’s Energy will install five 5-megawatt direct-drive wind turbines approximately three miles off the coast of Atlantic City, New Jersey. This project will utilize an U.S.-developed twisted jacket foundation that is simpler and less expensive to manufacture and install than traditional offshore wind foundations.

Dominion Virginia Power will install two 6-megawatt direct-drive wind turbines 26 miles off the coast of Virginia Beach, utilizing a U.S.-designed twisted jacket foundation. Dominion’s project will demonstrate installation, operation and maintenance methods for wind turbines located far from shore. Additionally, the Dominion project will install and test a hurricane-resilient design.

Principle Power will install five 6-megawatt direct-drive wind turbines approximately 18 miles off the coast of Coos Bay, Oregon. The U.S.-developed WindFloat semi-submersible floating foundation will be installed in water more than 1,000 feet deep, demonstrating a solution for deep water wind turbine projects and lowering costs by simplifying installation and eliminating the need for highly specialized ships.

The Energy Department’s efforts to advance innovative offshore wind technologies support the Obama Administration’s comprehensive National Offshore Wind Strategy to develop a sustainable, world-class offshore wind industry. As part of that strategy, the Energy Department continues to work with partners across the government, including the Department of the Interior, to conduct resource assessments, streamline siting and permitting, and overcome technical and market challenges to installation, operations, and grid connection.

EIA Report: Solar Making Large Gains

eiaThe latest Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA) shows that the growth of solar power will continue to make good gains. EIA Administrator Adam Sieminski made the following comments in the May report:

Renewables:“U.S. solar-electric generation capacity has increased significantly in the last four years. EIA expects continued robust growth in solar electricity generation. EIA currently expects that utility-scale solar capacity will increase by over 50% between 2013 and 2015, with utility-scale solar providing about one half of 1% of total electricity generation in 2015. Growth in customer-sited solar capacity is expected to exceed utility-scale solar growth over this same period. Customer-sited units provide most of the nation’s solar power.”

Meanwhile, underground storage of natural gas supplies remains well below average but is expected to rebound through the summer and fall.

The report has some good news for drivers as well. Record U.S. crude oil inventories are expected to help push down gasoline prices by as much as 20 cents per gallon by September.

EPA Chief Explains RFS Proposal

epa-mccarthyThe administrator of the Environmental Protection Agency explained her agency’s proposal to lower the volume requirements under the Renewable Fuel Standard (RFS) to members of the National Association of Farm Broadcasting meeting in Washington DC this week.

“Let me begin by reiterating that this administration sees renewable fuels as a big part of our way to adapt to climate change,” said Gina McCarthy. “I also know that it helps to provide some certainty in the rural economy and to create jobs.”

McCarthy explained that she went through the “gestation period” of renewable fuels. “It was my job to get the Renewable Fuel Standard originally done,” she said. “We were significantly challenged this year because of the high increase in the numbers in the statute and what we believed an inability to get all of the ethanol into the system and usable” which was why she said they “took a re-look at the numbers.”

She says they know “that re-look was not appreciated” by the agriculture community and others, but that’s why they are considering the comments received on the proposal very carefully. “I think you will see those comments reflected in the final rule,” she concluded.

Listen to McCarthy’s comments here: McCarthy RFS comments to farm broadcasters

Biodiesel, Renewable Diesel Imports Hit Record

The U.S. is importing more biodiesel and renewable diesel than ever before. This report from the Energy Information Agency (EIA) says in 2013, the U.S. imported 525 million gallons of the green fuels, compared to just 61 million gallons in 2012.
biodieselimports2013
The strongest driver of the resurgence in U.S. biomass-based diesel demand was the increasing Renewable Fuel Standard (RFS) target. Both biodiesel and renewable diesel qualify for the biomass-based diesel and advanced biofuel targets, as well as the overall RFS target. The total RFS target increased from 15.20 billion gallons in 2012 to 16.55 billion gallons in 2013. The biomass-based diesel and advanced biofuels targets increased from 1.00 billion gallons to 1.28 billion gallons, and from 2.00 billion gallons to 2.75 billion gallons, respectively. Biomass-based diesel fuels have higher energy content compared with ethanol, and thus generate more Renewable Identification Number (RIN) credits per gallon of fuel produced. In addition, renewable diesel meets the same American Society for Testing and Materials (ASTM) standards as petroleum diesel, and is thus not subject to the blending limits imposed on biodiesel.

The report says that domestic production could only partially offset increased U.S. biodiesel consumption. In addition, during the last four months of 2013, Argentine biodiesel was locked out of Europe in that continuing trade dispute, making the South Americans’ fuel available for U.S. consumption.

Ag Subcommittee Hears Pros and Cons of RFS

glauber1The food versus fuel debate arose once again in front of Congress. At last week’s U.S. House Ag Subcommittee hearing in Washington, D.C., opponents and proponents of the Renewable Fuels Standard presented their arguments on the RFS and its impact on the livestock industry.

One of the biggest opponents of the RFS is the poultry industry. Their members argued that ethanol has forced up feed prices that keeps them from expanding operations and fulfilling consumers’ needs to have a cheaper alternative to beef and pork, calling the RFS “broken beyond repair.” But the chief economist at the U.S. Department of Agriculture, Dr. Joseph Glauber, said while ethanol initially did have an impact much bigger factors forced up the price of feed.

“Certainly, the ramp up [in ethanol production] we saw from 2005 to 2010 had a big impact on corn prices, but we also saw a big increase in energy prices, so it’s not the only thing going on,” he told the committee.

In fact, during that same ramp-up period, petroleum prices shot up to record levels, and RFS proponent, Roger Johnson, President of the National Farmers Union, said the agriculture industry should be united for renewable fuels.

“The World Bank found that crude oil is the number one determinant of global food prices. We should reduce our dependance on oil consumption in order to be more food secure, and biofuel production is an excellent way to do that,” adding that pitting the biofuels industry against the livestock growers is counter-productive.

The bottom line, according to Glauber, is that biofuels are important, and they’re here to stay.

“Corn-based ethanol is a vibrant industry and is competitively priced against gasoline, and producers will continue to produce ethanol from corn as long as profit margins are there. And profit margins have been there.”

2012 Ag Census Includes Renewable Energy

2012-censusThe 2012 Census of Agriculture shows a doubling of on-farm renewable energy production since 2007.

According to the census data released by USDA today, there were 57,299 farms that produced on-farm renewable energy in 2012, more than double the 23,451 in 2007. By far the biggest was solar panels, used on over 36,000 farms. Geoexchange systems and wind turbines each were used on more than 9,000 farms.

For renewable fuels, biodiesel was produced on 4,099 farms and ethanol on 2,397. Small hydro systems were used on about 1300 farms and methane digesters on 537.

The census reveals there are now 3.28 million farmers operating 2.1 million farms on 914.5 million acres of farmland across the United States. Those numbers are all lower than 2007 when the census reported 3.18 million farmers, 2.2 million farms and 922 million acres. The top 5 states for agricultural sales were California ($42.6 billion); Iowa ($30.8 billion); Texas ($25.4 billion); Nebraska ($23.1 billion); and Minnesota ($21.3 billion). Corn and soybean acres topped 50 percent of all harvested acres for the first time.

Census data is available from USDA online and a recording of the webcast release of the census data is here: USDA Releases 2012 Census Data

EPA and USDA Dispute Corn Stover Study

Two federal agencies joined the biofuels industry last week in seriously questioning the results of a University of Nebraska study that claims negative greenhouse gas emissions impacts in using corn stover for ethanol production.

corn_stover03 Photo: USDOE-NRELA statement by U.S. Environmental Protection Agency spokeswoman Liz Purchia about the report noted problems with “hypothetical assumption that 100 percent of corn stover in a field is harvested” which she calls “an extremely unlikely scenario that is inconsistent with recommended agricultural practices. As such, it does not provide useful information relevant to the lifecycle GHG emissions from corn stover ethanol. EPA’s lifecycle analysis assumes up to 50 percent corn stover harvest. EPA selected this assumption based on data in the literature and in consultation with agronomy experts at USDA to reflect current agricultural practices.”

During a forum on climate change right after the study hit the headlines last week, Agriculture Secretary Tom Vilsack also pointed out that it is based on a false premise. “The study started with an assumption about the way corn stover would be removed from the land. The problem with the assumption is no farmer in the country would actually take that much crop residue,” Vilsack said. “It’s not what’s happening on the ground. If you make the wrong assumption, you’re going to come up with the wrong conclusions.”

Work done by Dr. Douglas Karlen with the USDA Agricultural Research Service was cited several times in the UNL study. In response to questions from POET-DSM, which is using corn stover as feedstock at a plant in Iowa, Karlen said the study “makes unrealistic assumptions and uses citations out of context to reinforce the authors’ viewpoint.”

According to Dr. Karlen, the research fails to differentiate between responsible biomass removal and “excessive” biomass removal, projecting a removal rate of approximately 75% across the entire Corn Belt.

“Harvesting 75% of all corn stover produced in the 10 Corn Belt states is unrealistic, far greater than any projections made by the U.S. Department of Energy (DOE) in their projections for developing a sustainable bioenergy industry, and would certainly result in the depletion of soil organic matter.”

Iowa Moves Forward Biodiesel, Ethanol Incentives

While the fate of some national biofuels incentives remain up in the air, Iowa takes the bull by the horns and passes its own incentives for biodiesel and ethanol. The State House has followed the State Senate’s lead and passed SF2344, a measure that provides a incentive to producers $.02 per gallon refundable credit on the first 25 million gallons of biodiesel produced in any single plant and enhances the state’s E15 retailer tax credit to help alleviate extra costs to Iowa retailers who want to offer E15 as a registered fuel during the summer driving season. The bill also updates the Iowa Code to define biobutanol as a legal renewable fuel option for Iowans

The Iowa Biodiesel Board welcomed the news:

IowaBiodieselBoardLogo“Today our legislators have demonstrated foresight in supporting one of the most powerful economic drivers Iowa has – biofuels,” said Grant Kimberley, executive director of the Iowa Biodiesel Board. “Not only does this biodiesel policy benefit Iowa’s economy and a rural renaissance, it also props up our nation’s energy security and environment by encouraging domestic fuel production.”

The Iowa Renewable Fuels Association (IRFA) also welcomed the vote that sends the measure to Governor Terry Branstad for his signature:

IowaRFAlogo“The entire Iowa Legislature should be commended for its commitment to ensuring that Iowa not only continues to lead the way in biofuels production, but also in renewable fuels policy,” stated IRFA Policy Director Grant Menke. “S.F. 2344 will help preserve Iowa biodiesel jobs while also expanding Iowa motorists’ access to cleaner-burning, more locally-produced E15, and I applaud Iowa’s elected leaders for standing united with Iowa’s renewable fuels community.”

Branstad is expected to sign the bill.

Forest Service Seeks Wood Energy Applications

forestserviceIn honor of Earth Day today, the U.S. Forest Service is seeking proposals that expand wood energy use and support responsible forest management. This news release says the service is also offering a Wood Energy Financial App to help business leaders see a positive bottom line for these efforts.

“USDA through the Forest Service is supporting development of wood energy projects that promote sound forest management, expand regional economies, and create new jobs,” said Agriculture Secretary Tom Vilsack. “These efforts, part of the Obama Administration’s ‘all of the above’ energy strategy, create opportunities for wood energy products to enter the marketplace.”

“Building stronger markets for innovative wood products supports sustainable forestry, reduces wildfire risk, and creates energy savings for rural America,” said Forest Service Chief Tom Tidwell.

Under the Forest Service’s Wood-to-Energy Grant program, about $2.8 million will be made available to help successful applicants complete the engineering design work needed to apply for public or private loans for construction and long-term financing of wood energy facilities. Another $1.7 million from the Statewide Wood Energy Team cooperative agreement program will help public-private teams make advancements in wood energy.

The Wood Energy Financial App that allows users to do a simple and quick analysis to see if wood energy is a viable alternative for their community or small business. You can dowmload the app here.

Biodiesel/Hybrid Car Achieves 100 MPG Equivalency

ecoeaglesFlorida students have put together a biodiesel and battery powered hybrid that gets the equivalent of a gas-powered car getting 100 miles to the gallon. This story from NPR station WFSU says the Embry-Riddle University students designed the car as part of the EcoCAR 2 challenge, a program sponsored by GM and the U.S. Department of Energy that has university teams compete to build a car that is both eco-friendly and commercially viable.

The goal is to re-engineer a 2013 Chevy Malibu to use less fuel and cut emissions without sacrificing performance. The Embry-Riddle team call themselves the ‘EcoEagles’. Their spokesman, Calvin Baker, says their vehicle solves the problem with batteries and bio-diesel.

“We have a series plug-in hybrid electric vehicle architecture,” Baker says. “It’s PHEV which means that we have an electric motor in the car, and then also a diesel engine.”

Baker says the batteries alone give their car a 35-45 mile range – plenty for the comings and goings of the average commuter.

“The diesel engine turns on when that range is depleted,” Baker says. “With a full five-gallon tank of biodiesel, and full battery charge the car has a 241 mile range.”

The EcoEagles are showing off the car around Florida, and in June, they’ll compete against other schools around the country in Michigan at the General Motors proving grounds.