Portland Mandates Biodiesel

Portland sealStarting next month, all diesel sold in Portland, Oregon will have to have at least a five percent biodiesel content.

And according to this story on eTrucker.com, the City Council has made the standard even higher for city vehicles:

City-owned diesel vehicles must use fuel with a biodiesel content of more than 20 percent.

The rule also mandates that all gasoline sold in the city must contain at least 10 percent ethanol. City gasoline-powered vehicles that can operate on 85 percent ethanol will be required to do so.

The council argued that the mandate will help Oregon farmers and reduce the city’s annual petroleum fuel consumption while not hurting vehicle owners, as vehicles can run on biofuels without modification.

$8 Million in Energy Grants

DOEUSDAThe U.S. Departments of Agriculture and Energy have jointly selected 11 biobased fuels research projects to receive $8.3 million in funding grants.

According to a USDA release, the projects will include “looking into new ways to develop cordgrass, rice and switchgrass in renewable energy sources.”

Grant recipients include:
* University of Minnesota, $715,000
* South Dakota State University, $420,000
* Mississippi State University, $1,300,000
* University of Georgia, $400,000
* Virginia Polytechnic Institute and State University, $1,200,000
* University of Florida, $750,000
* University of Delaware, $600,000
* USDA-ARS Western Regional Research Center (Albany, CA), $600,000
* USDA-ARS Western Regional Research Center (Albany, CA), $600,000
* USDA-ARS (Cornell University), $700,000
* Oak Ridge National Laboratory, $1,040,000

Details on the bioenergy projects can be found here.

McCain’s Changing Views on Ethanol

Sen. John McCain in IowaRepublican presidential contender Sen. John McCain of Arizona seems to be changing his views on ethanol. This United Press International story explains the switch seems to come down to two words: Iowa caucus.

During the 2000 presidential campaign, Sen. John McCain, R-Ariz., skipped the Iowa caucuses, perhaps sensing that, among other things, his opposition to ethanol subsidies would not go over well in a corn-growing state like Iowa.

Seven years later, he is crisscrossing the country again to win support for his bid to become the Republican presidential nominee, and this time his route includes stops in Iowa.

McCain’s rhetoric about ethanol has changed, which might assuage some Iowans, but he says his opposition to subsidies for ethanol and other agricultural products remains the same.

“We need to increase our use of ethanol and all kinds of alternative fuels,” McCain said at a speech in May.

But McCain stops short of endorsing subsidies… sort of:

Jerry Taylor, an analyst at the libertarian Cato Institute in Washington, says McCain’s newfound interest in ethanol is catering to a special-interest group — Iowa farmers — who might help him win that state’s pivotal caucus.

“The old John McCain opposed ethanol subsidies. The new John McCain will apparently embrace any idea to win the White House,” Taylor wrote on Cato’s weblog.

The article points out that in a speech in Virginia in April McCain said that while he would encourage the growth of ethanol infrastructure, he still won’t sign off on government subsidies.

Plant Materials Key to Bioenergy

NRCSUSDA’s Natural Resources Conservation Service is on the forefront of developing plants that could be used as future energy sources through the NRCS Plant Materials Program. National Program leader for Plant Materials Bob Escheman says that is part of their mission to solve resource concerns.

Bob Escheman“The Plant Material program began back in the middle ‘30s when the Soil Conservation Service was established,” Escheman said. “We are now getting into bioenergy where we are working with universities and other producers.”

One of the plants they are working on developing for energy is switchgrass, which became famous when President Bush mentioned it last year in his State of the Union address.

“We’ve been growing switchgrass since the 1950s and we are trying to find where we can best grow the plant for bioenergy uses,” said Escheman.

One of the main problems of using switchgrass as a biofuel has been the amount of ash which is created after burning it. To solve this problem, the Plant Materials Centers (PMC) at Knox City, Texas and Elsberry, Missouri, along with the USDA Agricultural Research Service and Mississippi State University are cooperating on a study to investigate how the timing of harvesting affects biomass yield and the biofuel-quality of switchgrass.

Niles GlasgowThere are 27 regional NRCS Plant Materials centers nationwide, including one in Brooksville, Florida. State Conservationist Niles Glasgow, who is also chairman of the National Plant Materials Advisory Committee, says bioenergy research is an exciting area for the program.

“One of the big things we have to start looking at is what kind of plants are going to produce the most amount of mass that can be turned into fuel,” said Glasgow.

He notes that Florida Agriculture Commissioner Charles Bronson is very interested in making the Sunshine State a major player in alternative fuels. “And we know that will not be from growing corn, it will be from growing grass” or different types of sugarcane.

Both Escheman and Glasgow believe that the role of the Plant Materials Program in developing sources for alternative fuels is just beginning.

Tyson Defends Using Biodiesel Credit

TysonTyson is defending the use of a biodiesel tax credit by the meat-producing giant and oil giant ConocoPhillips.

A recent IRS ruling that the two companies could take advantage of a $1-a-gallon tax credit brought criticism from the National Biodiesel Board (see my post on April 18th) and the threat of legislative action by a Congressman from Texas (see my May 24th post). Now, in an article on Cattle Network.com, Tyson says they, along with ConocoPhillips, should get to use the credit because it will help spur growth of alternative fuels, such as biodiesel:

“Our initiative is about increasing the supply of renewable fuels and contributing to U.S. energy security efforts,” Tyson spokesman Gary Mickelson told Meatingplace.com. “We believe our alliance qualifies for a federal production tax credit, which will be based on the number of gallons produced. It is not a jobs credit or an investment tax credit.

“It’s true the renewable diesel made from animal fat will be produced and distributed with existing refineries and fuel distribution systems,” Mickelson added. “However, ConocoPhillips has publicly stated it will spend $100 million in capital expenditures to enable it to produce the fuel. Tyson will also make capital improvements in order to begin pre-processing animal fat from some of its North American rendering facilities.”

Rep. Lloyd Doggett (D-Texas) has introduced a bill to repeal the IRS ruling and narrow the tax break’s scope to what Congress had originally intended.

Ethanol Expansion and Education

Amy KOne former and two current Democratic presidential candidates are sponsors or co-sponsors of a bill introduced by Senator Amy Klobuchar (D-MN) intended to expand consumer access to 85 percent ethanol fuel, or E-85. Primary sponsors of the bill with Klobuchar include Barack Obama, (D-IL), Kit Bond (R-MO), George Voinovich (R-OH), and Dick Durbin (D-IL). Senators Ben Nelson (D-NE), Debbie Stabenow (D-MI), Sherrod Brown (D-OH), Hilary Clinton (D-NY), Claire McCaskill (D-MO), and John Kerry (D-MA) are also co-sponsors of the legislation.

According to a release from Klobuchar’s office, the Ethanol Education and Expansion Act of 2007 would work to reduce prices at the pump for consumers by providing grants through the U.S. Department of Agriculture (USDA) to farmer-owned ethanol producers to install additional E-85 pumps at rural gas stations as well as the equipment needed to sell E-85 directly to gas stations.

Sen. Klobuchar will work to include the legislation in the 2007 Farm Bill, which the Senate is expected to take up in the coming months.

Nebraska Gets Biodiesel Tax Credit

With the stroke of a pen, Nebraska biodiesel producers gain a credit for production of the green fuel. Governor Dave Heineman signed the legislation, originally sponsored by State Senator Chris Langemeier of Schuyler, designed to encourage greater investment in biodiesel production. According to this release on the Governor’s web site, a tax credit of up to 30% would be given to those who invest in locally-owned facilities producing B100 biodiesel:

Governor Dave Heineman“There is tremendous potential for Nebraska to expand our presence in the renewable fuels sector by becoming a leading producer of biodiesel,” Gov. Heineman said. “This bill will encourage greater diversity in renewable fuels by providing opportunities for Nebraskans to invest in the development of a biodiesel facility.”

Senator Chris LangemeierSen. Langemeier said, “With the signing of LB 343, coupled with the vast resources available in Nebraska, we will be positioned to become the nation’s leader for biodiesel production.”

Nebraska has only one biodiesel plant… interesting since it is the fifth largest producer of soybeans. But two more facilities are in the works, and if the credit does its job, more will be on the way.

Energy Crop Incentive Bill

John ThuneSen. John Thune (R-SD) has introduced legislation aimed at helping farmers near biorefineries begin growing dedicated energy crops.

According to Thune, the Biofuels Innovation Program Act would offer farmers incentives to grow crops, such as switchgrass and fast-growing trees, for use as cellulosic ethanol feedstocks.

“Cellulosic ethanol, produced from homegrown sources like corn stover, wheat straw, switchgrass and wood chips, has incredible potential to supplement corn-based ethanol. But if cellulosic ethanol is to achieve its potential, it is critical that Congress help this industry overcome initial market barriers” said Thune. “My legislation would spur the construction of biorefineries across the country and provide incentives to farmers in surrounding areas to grow energy dedicated crops that can eventually supply these biorefineries in a cost-effective, environment-friendly way.”

Thune hopes the legislation, which is co-sponsored by Sen. Ben Nelson (D-NE), will be included in the 2007 Farm Bill energy title. Similar legislation has also been introduced in the House.

The bill would fund several USDA feasibility studies to determine the level of interest and likelihood of success for biorefinery constructions. The bill would authorize a cost share and per-acre rental payment for farmers during a contract’s first five years, in order to help the biorefinery get established and build a market. In addition, farmers selling byproducts and residues, such as wheat straw and corn stover, to ethanol plants would be eligible for matching payments of up to $45 per ton.

Indy 500 Reaffirms Ethanol As Trusted Fuel Source

VeraSun CEO gets up to speed on ethanol at Indy 500Amidst the hustle and bustle of race weekend events, I caught up with EPIC board member Don Endres of VeraSun Energy, a producer of fuel grade ethanol. Don said the Indy Racing League’s switch to 100 percent ethanol fuel is history in the making. He said the IRL’s investment in the fuel not only demonstrates to the world that ethanol is a trusted renewable fuel source that promotes a cleaner environment, but that it’s also a high-performance fuel with benefits surpassing those of gasoline.

Don broke down industry projections for the growth of ethanol. He said the fuel currently accounts for just 4 to 5 percent of the fuel stream today. America uses about 142 billions of gasoline annually and that figure is growing by about a percent and a half a year. The Energy Information Administration estimates that by 2050 the demand for gas will reach upwards of 163 billion gallons a year at a 10 percent ethanol blend. That means an annual demand of at least 16.3 billion gallons of ethanol by 2050.

Don said today, the ethanol industry is producing just 6 billion gallons annually and there is another 6 billion gallons of production under construction. He added that car makers are putting a significant number of flex-fuel vehicles into the consumer market, which can burn a higher grade ethanol blend, E85. With an estimated 2 million FFVs added to the market each year on top of the current 6 million already available, Don said the market for ethanol is set to expand well-beyond where it’s at today.

For Don, it’s still rather early in the game. He added that the concentrated push for domestically-produced fuel from America’s politicians not only reaffirm his projections for a vastly growing demand for ethanol, but help drive it.

Assist. Secretary of Renewable Fuels Suits Up

U.S. Assistant Secretary of Energy Efficiency and Renewable Energy Andy KarsnerThe agenda for the Ethanol Summit changed at the last minute and just 24 hours before the event, the U.S. Assistant Secretary for Energy Efficiency and Renewable Energy, Andy Karsner, announced he would attend. Andy said ethanol is a key part of the solution to combating global warming. He said ethanol isn’t the silver bullet, but rather part of the silver buck shot. For Andy, it’ll take a number of committed strategies to establish a more green America. It wasn’t all business for the Assistant Secretary though. Andy strapped on an official Ethanol flame-repellent suit and hopped into the hot seat of a replica Ethanol car.

2007 Indy 500 Photo Album

Big Oil, Big Chicken, and Big Soap Fight Over Tax Credit

Only in Washington, DC would you find the genesis of a headline like that. But this story in The Hill.com says a brouhaha is breaking out in the nation’s capitol over the $1-a-gallon renewable diesel tax credit.

Rep. Lloyd DoggettLobbyists for ConocoPhillips, Tyson, and the Soap and Detergent Association have jumped into the fight over whether oil companies should be able to use the credit. The IRS ruled last month that they should be able to. That prompted Rep. Lloyd Doggett (D-Texas) to introduce a bill to repeal the ruling and narrow the tax break’s scope to what Congress had originally intended.

Tyson got involved because it’s going to provide animal fats to Conoco to produce as much as 175 million gallons of biodiesel… grabbing its share from the credit.

Soap makers are concerned that the cost of animal fat – that they use in making soap – will go up:

In this economic food chain, the soap industry could soon be extinct, according to Dennis Griesing, vice president of government affairs for the Soap and Detergent Association.

“If they start buying up animal fats, it can suck it all up, and we’re dead,” Griesing said.
“We’ve been here forever, and we’re dead.”

Several other livestock producer groups including the National Pork Producers and the National Chicken Council want the more liberal ruling by the IRS.

Interesting how some of the same livestock producers – farmers who have hogs and soybeans – could find themselves on both sides of the issue… making themselves as their own strange political bedfellow.

Colorado Coalition Success

Colorado E85When the Colorado Governor’s E85 Coalition was formed at the end of 2005 there were only ten E85 fueling stations available in the state.

“We’re at 20 now and by the end of the year we expect to have over 50,” says Gerry Harrow, president of the coalition. “So, we’ve had some great success in a very short time.”

HarrowHarrow says with the election of Bill Ritter as governor of the state last year, the coalition’s mission has been expanded beyond E85 and is now known as the Biofuels Coalition.

“He asked us to expand our focus into also putting out biodiesel infrastructure,” said Harrow. “So, we added that just recently, within the last month, to our mission.”

The Biofuels Coalition in Colorado includes representatives from the automobile industry, government, retailers, biofuels producers, petroleum marketers and agriculture. Harrow thinks Colorado’s model can be used in other states.

“Each state has its own unique needs and situation, but some of the things we have done here could help other states,” he said. “One of the things we are doing is working with NREL (the National Renewable Energy Lab) to publish a document that discusses the successes we have had and how we came to those successes and some of the things maybe a coalition would need to do to get started.”

Listen to an interview with Gerry about the coalition and their successes:

Photo Credit: Zach Ornitz/Aspen Daily News

Farm-to-Fuel Investment Act

Amy KAs livestock producers continue to voice concerns about rising feed costs, proposed “transition assistance” for farmers to grow dedicated energy crops was introduced this week in legislation sponsored by Senators Tom Harkin (D-IA) Amy Klobuchar (D-MN) and Kent Conrad (D-SD).

“Farmers are going to be a key part of our nation’s ability to achieve energy independence,” said Klobuchar. “These crops could revolutionize how we look at energy just like ethanol and biodiesel have. Now its time for Congress to act and reward our farmers at home, protect the environment, and pave the way for tomorrow’s energy.”

HarkinHarkin, chairman of the Senate Ag Committee, said in a press release that the Farm-to-Fuel Investment Act “charts a course for initiating the extensive production of biomass feedstocks while continuing to protect wildlife and promote sound soil and water conservation practices.”

The bill would provide three years of transition assistance to farmers who produce dedicated energy crops in an area 50 miles around a biorefinery that will produce fuels like cellulosic ethanol. Incentives are needed for the first few years because it takes about three years for crops like switchgrass to reach their first mature harvest. The three-year period also takes into account the time needed to develop a biorefinery to purchase the crop. After a market has developed and the crops have matured, the transition assistance would phase out.

Conrad
Senator Conrad said he is supporting this legislation “because I believe that North Dakota can help this nation grow its way out of our dependency on foreign energy – whether it’s from cellulosic ethanol or biodiesel. It’s time we turned from the Mid East for our energy and turned instead to the Mid West.”

To participate, farmers would have to agree to adopt conservation practices for soil quality, water quality and wildlife habitat. This legislation also allows for an additional incentive to farmers who produce native perennial energy crops, such as prairie grass mixtures, because of the tremendous conservation benefits those crops provide. Perennial grasses protect soil and water quality, sequester carbon, create wildlife habitat and save farmers money on fuel and fertilizer.

Doggett Moving to Stop Biodiesel Tax Credit Abuse

Cong. Lloyd DoggettCongressman Lloyd Doggett (D-Texas) is expected to introduce soon, possibly on Thursday, a bill that will keep Big Oil from cashing in on the tax credit intended to help biodiesel producers.

This story posted on TheHill.com says the representative wants to reverse an IRS ruling that allows oil companies to claim a $1-a-gallon renewable diesel tax credit by adding animal fat to the traditional refining process.

The National Biodiesel Board, whose members produce biodiesel from soybean and canola oils, opposed the IRS ruling, fearing oil companies would siphon off their own federal support for renewable-fuels production.

Doggett’s news release said the credit was designed to encourage production of “clean-burning, biodegradable diesel fuel
that is fully independent of petroleum products.”

Thune to Hold Wind Summit

Sen. John ThuneU.S. Senator John Thune (R-South Dakota) will hold a wind energy roundtable this coming Monday, May 14th at 1:00 PM (CDT) at the Sheraton Hotel in Sioux Falls.

From his press release:

“South Dakota could and should be a national leader in producing electricity harnessed through our abundant wind supply, but until now, our state has lacked the necessary infrastructure to fully develop this industry. I am looking forward to hearing the discussion about the future of wind energy production and related transmission issues,” said Thune.

As you might remember from my May 3rd post, Thune recently called for a federal tax credit to promote the growth of wind power across the nation.

More details of the conference:

WHEN: 1:00 PM CT, Monday, May 14, 2007
EVENT: Wind Energy Roundtable
WHERE: Fontenelle Room, Sheraton Hotel, Sioux Falls, South Dakota
PANELISTS: Brad Barton, Director of Commercialization, U.S. Department of Energy;
Brian Parsons, Wind Applications Project Manager, National Renewable Energy Laboratory;
Laura McCarten, Co-Executive Director CapX Transmission Initiative, Xcel Energy;
Beth Soholt, Director, Wind on the Wires;
Lloyd Linke, Watertown Operations Manager,
Western Area Power Administration (Western)