Thune Warns of Ethanol Fight

Sen. John ThuneSouth Dakota Senator John Thune says Senate leaders want to pass an energy bill by the Fourth of July… but warned a group of about 100 people this week at the Ethanol Public Policy Summit in Sioux Falls that conflict looms on the horizon.

This story in the Argus (SD) Leader says some powerful opponents are against some key provisions in this year’s bill:

Some lawmakers oppose extending the tariff on foreign ethanol and allowing fuel blends with more ethanol, both of which Thune supports.

Perhaps the greatest risk is that more controversial provisions will sink the overall bill.

Thune said the auto industry is the major opponent to 20 percent ethanol and other blends, which are necessary to ensure market growth.

“They’re kind of clinging to a past in terms of energy and fuels, and the ones that are smart, in my view, are going to start looking toward the future,” he said.

Thune admits some of his fellow Republicans are also some his biggest opponents. But he says this country will have to step it up to bring our renewable energy output up to the 36-billion-gallon-a-year level by 2022.

Doyle Calls for Biofuels Backing

Gov. Jim DoyleWisconsin Governor Jim Doyle is calling on Republicans in his state’s legislature to back his plan to spend $30 million on renewable energy.

TV station WKBT in La Crosse posted this AP story on its web site and said Doyle made the call in front of a biodiesel plant in De Forest:

Doyle is still smarting from Republicans on the budget-writing committee removing his proposal to spend $30 million over the next two years to pay for grants and loans to further develop renewable energy resources.

He says energy policy should not be partisan. But he accuses Republicans of lacking foresight on the issue.

Republicans on the budget committee objected to Doyle’s proposal to take the money out of the state’s recycling fund to pay for it.

Closing the “Splash and Dash” Loophole

Lawmakers on the U.S. Senate’s Finance Committee will take up a bill that’s supposed to close a loophole that has allowed importers to get millions of dollars in biodiesel subsidies designed to help U.S producers but for biodiesel that doesn’t end up helping American drivers.

This article from TheHill.com has more:

Known as “splash and dash,” the loophole allows 100 percent biodiesel made from soybeans and other commodities and imported from a third country, such as Brazil or Malaysia, to be carried to a U.S. port, where a “splash” of petroleum diesel is added. This allows the importer to qualify for tax credits intended to promote the production and use of U.S. biodiesel.

The ship then quickly leaves the U.S. port to “dash” to another port, usually in Europe, where the subsidized biofuel is unloaded and sold. Tax incentives have created a hugely profitable market for biofuels in Europe, so the companies pocketing the U.S. tax breaks are again rewarded in Europe.

Estimates are that the practice is costing U.S. taxpayers $30 million a year… and that’s supposed to get even worse as it becomes more widespread.

The Europeans aren’t too happy about the loophole, either, and they have even lobbied to change the law as well.

The loophole closure is in the Energy Advancement and Investment Act of 2007, which made its debut in the Finance Committee last week.

RFA Praises Proposed Energy Bill

As I reported earlier, there’s a lot of contention over the current energy bill being debated in the U.S. Senate as different factions try to get federal dollars, incentives, and requirements that will help their renewable (and, of course, non-renewable) energy industries.

RFA logoBut one group that is pleased is the Renewable Fuels Association. In a statement e-mailed to DomesticFuel.com, the group’s President Bob Dinneen praises the legislation, especially the Renewable Fuels Standard (RFS) of 36 billion gallons of renewable fuels, the majority of which must be the next generation such as cellulosic ethanol:

RFA President Bob Dinneen“Low carbon renewable fuels like ethanol are providing our nation a way forward to decreasing our dependence on foreign oil, reducing greenhouse gas emissions and creating new jobs and real economic opportunity. The bill Majority Leader Reid has brought to the floor of the Senate strikes the right balance between building on the progress the U.S. ethanol industry has achieved and providing the incentives necessary to realize the full potential of the industry in the future.

“This bill could be to next generation cellulosic ethanol production what the 2005 energy bill was to grain-based ethanol. To achieve the ambitious goals the American people are calling for, it will require the production of ethanol from all available feedstocks, including corn, corn stover, switchgrass, wood chips and other cellulosic materials. This bill strikes the right chord by requiring that 21 billion of the 36 billion gallon requirement be met by cellulosic ethanol production.

“Such an investment in our nation’s energy future promises to spur the creation of new, good paying jobs all across the country as new capital – and more importantly intellectual capital – is invested in renewable fuels production. In 2006 alone, the U.S. ethanol industry supported the creation of 160,000 new jobs while producing just 5 billion gallons of ethanol. At levels seven times that volume, ethanol production offers real economic opportunity fueled by American hard work and ingenuity, that will provide much-needed economic vitality to town and cities all across the country.

“The Renewable Fuels Association and U.S. ethanol industry believe this bill takes the right steps toward a more stable, more sustainable energy future for the generations to come.”

Contentious Energy Bill Stalls in U.S. Senate

The U.S. Senate has hit an impasse over a proposed energy bill that makes larger allowances for alternative energy, in particular, wind power, than previous energy bills.

This AP story from Forbes.com says Democrats had hopes for an early vote on the measure, but Republicans were against many of the measures in the omnibus bill:

The impasse over renewable fuels came as Democrats said they would seek nearly $13.7 billion in tax breaks to promote clean energy, biofuels, more fuel efficient vehicles and conservation.

Sen. Max BaucusThe Senate Finance Committee intends to discuss the tax plan on Tuesday, according to the committee chairman, Sen. Max Baucus, D-Mont. The proposal would extend dozens of tax breaks, such the one for building wind turbines. It also would create incentives such as tax credits for technology to capture carbon dioxide – the leading greenhouse gas – from power plants.

But some senators argued the wind requirement in the bill would not be feasible in their areas:

Senators from the South said utilities in their states could not meet the 15 percent requirement because they lack the wind power and other renewable resources prominent elsewhere, especially the West.

Sen. Pete Domenici“I’m not impressed with wind being the national energy source for America,” said Sen. Pete Domenici, R-N.M., who led the opposition to the renewable fuels standard.

However, Sen. Jeff Bingaman, a New Mexico Democrat, argued southern states could make use of wood and other local resources to produce biofuels.

As you can see, it will most likely be a long, drawn-out fight.

Riders on Udall Bus Tour Give Thoughts

Udall Bus
The other day, I told you about about how the Morris K. Udall Foundation was making its annual cross-country trip promoting environmental and Native American issues and how this year it is doing under biodiesel power (see my post from June 12th).

The Philadelphia Enquirer caught up with the group at one of its first stops after leaving Washington, DC:

The group arrived Tuesday in Philadelphia from Washington and spent the night in a dormitory at Temple University.
Bret Strogen
“Here in Philadelphia, we’re looking at water quality and biofuels,” said Bret Strogen, 25, a Udall scholar from Berwyn and a graduate of the University of Delaware.

(Eli Zigas, a graduate of Grinnell College in Iowa and a spokesman for the group said) the yellow and green bus with blackened windows draws second looks from the curious.
Eli Zigas
“People stare at the big, shiny bus,” Zigas said. “It’s grabbing attention.”

Savanna Ferguson, 23, a graduate of Whitman College, in Walla Walla, Wash., viewed the trip as an adventure.
Savanna Ferguson
“I’m looking forward to spreading our message, writing for the blog and meeting new people and seeing new places,” she said.

You can view the bus trip blog at http://blogs.udall.gov.

Hydrogen-Powered BMW to London Deputy Mayor

BMW Hydrogen 7A BMW Hydrogen 7 car… which, of course, runs on hydrogen with its only exhaust being water… was given to Deputy Mayor of London and London Hydrogen Partnership Chair, Nicky Gavron, to raise awareness to what a great alternative energy source hydrogen is.

This article (and the picture shown above) are from a web site called Fuel Cell Works.com. The story says it’s part of BMW’s initiative to promote the role of hydrogen in the economy. UK business leaders and opinion leaders will get similar vehicles to evaluate their performances:

(BMW’s Head of Government and Industrial Affairs,) John Hollis said: “BMW is a pioneer in the development and use of hydrogen as a fuel source and shares the vision of the Mayor and Deputy Mayor that London should be one of the world centres for Hydrogen. In recognition of the work the Mayor’s Office has done in this field, BMW would like it to be the first public organisation in the country to have the use of a Hydrogen 7 car.”

Deputy London Mayor, Nicky Gavron, said: “I am committed to improving the health and quality of life of Londoners through the use of cleaner technologies such as hydrogen vehicles which reduce harmful emissions into the atmosphere. I am pleased to have this opportunity to try out the BMW Hydrogen 7 car. As the Chair of the London Hydrogen Partnership, I want to encourage the use of hydrogen vehicles that emit only water vapour and no harmful emissions, but I also want to be able to talk with first hand experience about these vehicles. I am pleased that BMW has given me this opportunity.”

The BMW Hydrogen 7 has a 260 hp, 12-cylinder engine under the hood and accelerates from zero to 62mph in 9.5 seconds. The only thing holding this modern muscle car back is the electronic governor that limits it to a 143-mph top speed.

County on Long Island Going to Biodiesel

Suffolk County, New York is switching all of its 439 public works trucks to run on biodiesel. The move comes as neighboring Nassau, switched its 270 trucks to the biofuel as of the first of this year.

According to this story in Newsday, officials unanimously approved the move for the end of next year. The switch comes after both counties did their own pilot projects for the last couple of years:

“The beauty of biodiesel is that it burns cleaner and you can use the same infrastructure,” said sponsor Legis. Daniel Losquadro (R-Shoreham). The only difficulty in switching to the new fuel — made up of low-sulfur diesel fuel and 20 percent soybean or waste vegetable oil — is that it initially acts as a detergent when placed into diesel tanks, creating the need to change filters more frequently at first to prevent clogging.

Losquadro said Suffolk was using about 100,000 gallons a year during the biodiesel pilot project and will increase fuel use to 400,000 gallons when the switch is complete.

A spokeswoman for the National Biodiesel Board says the county joins more than 100 cities switching to biodiesel. San Francisco, California, which switched all of its trucks to biodiesel, and Arlington County, Virginia, which is using it in its truck fleet and school buses, afre the two biggest ones to make the change.

First Ethanol Co-product Report Due Soon

USDA NASS logo
The U.S. Department of Agriculture has set June 29th as the date for its first-ever report on how livestock producers are using ethanol co-products for cattle and hog feeds.

This from the USDA’s web site:

The report, entitled Ethanol Co-Products Used for Livestock Feed, will highlight results of a survey conducted by NASS with the support of the Nebraska Corn Board. NASS contacted approximately 9,400 livestock operations in 12 states to determine whether they used ethanol co-products – including distillers grains and corn gluten feed – in their feed rations in 2006. NASS collected information regarding the volume and type of co-products fed, how the co-products were procured and used, and what concerns and barriers may have prevented operations from feeding co-products.

USDA will release the results on Friday, June 29th at 3:00 p.m. You will be able to see those results on the National Ag Statistics Service web site.

Biodiesel Promotion and Quality Assurance Act Introduced

Sen. Richard DurbinU.S. Senator Richard Durbin (D-IL) is the sponsor of a new measure designed to ensure that a portion of America’s future diesel fuel supply is renewable.

NBB logoIn a release from the National Biodiesel Board (of course, the NBB heartily endorses this bill), the Biodiesel Promotion and Quality Assurance Act would up the amount of biodiesel and “bio-based replacement diesel” that refiners blend into diesel to 1.25 billion gallons by 2012:

“Biodiesel is a fuel that holds great promise in terms of moving our country toward energy independence,” Durbin said. “This bill will create incentives for producers and consumers alike and will allow this important alternative fuel source the chance to become a mainstream alternative to foreign oil.”

Senators Charles Grassley (R-IA), Thomas Carper (D-DE) and Richard Lugar (R-IN) are co-sponsoring the bill. And as mentioned above, the measure has the endorsement of the NBB:

Joe Jobe“This legislation would set a floor for biodiesel demand, which will help ensure that the promising biodiesel industry continues delivering benefits to America,” said Joe Jobe, NBB CEO. “In addition to economic growth and pollution reduction, biodiesel delivers fuel refining capacity, something this nation desperately needs. Having a demand floor in place will help provide needed stability and reduce our dependence on foreign oil, which benefits all Americans.”

If passed, oil refiners would blend 450 million gallons of biodiesel and bio-based replacement diesel starting next year with the 1.25 billion gallon goal by 2012. The biodiesel would also be required to be registered through the Environmental Protection Agency in line with the Clean Air Act, and would have to have an ASTM standard. There would also be a federal inspection program to ensure quality standards set by ASTM.

Ford E85 Escape Hybrids

The first E85 Escape Hybrids are hitting the streets this week, as Ford Motor Company delivered three of 20 new vehicles Wednesday to the Department of Energy, the Renewable Fuels Association (RFA), and the Governors’ Ethanol Coalition.

RFA HybridRFA president Bob Dinneen was all smiles as he climbed into the driver’s seat of the new vehicle which combines hybrid and flex-fuel vehicle (FFV) technology.

“The combination of hybrid and flex-fuel technology in one vehicle enables increased energy independence and reduced carbon emissions like no automobile before,” said Dinneen. “Ford has introduced a vehicle that runs primarily on ethanol created by our nation’s farmers, and then, with its hybrid power train, travels further on every gallon of that renewable fuel. This is an important achievement in the drive towards sustainable, secure energy.”

The experimental Escape features an electric motor that powers the vehicle at low speeds and a gasoline internal combustion capable of running on fuel blends up to 85 percent ethanol kicks in a higher speeds, according to Sue Cischke, Ford’s senior vice president, Sustainability, Environmental and Safety Engineering.

“Although we currently do not have plans to produce the Escape Hybrid E85, the research from this technology could lead to breakthroughs in even more advanced technologies,” said Cischke.

Bond HybridU.S. Senators Kit Bond (R-MO), Carl Levin (D-MI) and Debbie Stabenow (D-MI) joined Ford for a press conference on Capitol Hill to announce the new hybrid and talk about alternative fuels.

“Every gallon of biofuels grown in the Midwest means a gallon of oil we do not need to import from the dangerous Middle East,” said Bond. “We can and should do more to reduce pollution from vehicles. Ford today is showing its leadership in clean and efficient vehicles with a first-ever hybrid SUV that will also run on biofuels.”

(Read more on the Ford E85 Escape Hybrids from Ford, RFA and Senator Bond’s office. Thanks to Matt Hartwig of RFA for the photos.)

Udall Bus Running on Biodiesel

Udall Bus
A B20 blend of biodiesel will be what fuels the Morris K. Udall Foundation’s bus tour this year. The tour that highlights public service, environmental, and Native American issues launched today in Washington, D.C.

Rahall-ScarlettAccording to this National Biodiesel Board news release, members of Congress and federal government agency leaders kicked off the coast-to-coast Udall Legacy Bus Tour near the U.S. Capitol in the first motor coach approved by the University of Vermont’s “Green Coach Certification” program:

NBB logo“We are pleased to see that the Udall Foundation and the federal agencies and equipment manufacturers who are sponsoring the tour recognize biodiesel’s valuable contribution to the environment,” said NBB Chief Executive Officer Joe Jobe. “It is only fitting that the bus tour will feature many National Parks since the Park Service’s fleets were among the first in the nation to use biodiesel. Today, hundreds of fleets, including government, commercial and school buses, use biodiesel to benefit America’s environment, energy security and economy.”

The bus tour winds through the country from now until the beginning of August. Along the way, the biodiesel-powered tour bus will carry 13 Udall scholars from the East Coast to the West, winding more than 8,600 miles, passing through 26 cities, six national parks, and six Native American communities.

You can check it out on the web at www.udall.gov.

Biodiesel, Solar for the Big Apple

Being green isn’t just for areas surrounded by green farm fields. The grey, concrete jungle of New York City will start using solar power and biodiesel to heat city buildings.

Michael BloombergAn AP story posted on MSN’s money web site says the announcement comes as part of Mayor Michael Bloomberg’s environmental plans. He wants the city to reduce the city’s carbon emissions by 30% in the next 23 years. Part of the plan includes replacing city taxis with hybrids and charging a surcharge for anyone who drives into the most congested areas of Manhattan.

The most recent part of the plan includes using biodiesel for heating city buildings by next summer and the solicitation of bids to put solar panels on city-owned buildings.

After tackling city buildings, councilmen are looking at making a biodiesel mandate for private home heating oil starting in 2009.

Energy, Ag Departments Announce $18 mill in Biofuels Grants

Eighteen million dollars in government grants are up for grabs as the U.S. Departments of Agriculture and Energy announce solicitations for biomass research and development.

This press release from USDA’s web site says the money will go to researching and developing biomass-based products, biofuels, bioenergy and related processes:

Samuel Bodman“Making these funds available represents this Administration’s ongoing commitment to promoting clean energy technologies to help diversify our nation’s energy mix in an environmentally sensitive way,” Energy Secretary Samuel Bodman said. “I am hopeful that these projects will play a critical role in furthering our knowledge of how we can cost effectively produce more homegrown, bio-based products to help reduce our reliance on imported sources of energy.”

Sec. Mike Johanns“These grants are one of many steps we are taking to meet the President’s goals of reducing petroleum dependency,” Agriculture Secretary Mike Johanns said from South Dakota, where he was addressing the Western Governor’s Association. “They will fund essential research that not only will lead to the creation of new, sustainable energy sources, but also will create new uses and markets for agricultural products.”

The grants will go to four main areas: the development of technologies to convert cellulosic biomass into intermediaries for biobased fuels getting 45% of the money; product diversification receiving 30% percent) feedstock production, 20%; and analysis for strategic guidance getting 5%.

Each award won’t exceed $1 million. State and federal research agencies, national laboratories, private-sector groups and nonprofit organizations are eligible to submit their grant applications by July 11, 2007.

GAO Says Energy Department Lacks Biofuels Plan

GAO logoCongress’ financial watchdog, the Government Accountability Office, says the U.S. Department of Energy lacks a plan for how to match up increased biofuels production with infrastructure and vehicles to use the green fuels.

Department of EnergyThis highlight report on the GAO web site says that America’s reliance on oil poses significant economic and environmental risks. But ethanol and biodiesel could replace oil for transportation fuels. However, the government doesn’t seem to be ready for the challenge:

DOE has not yet developed a comprehensive approach to coordinate its strategy for expanding biofuels production with the development of biofuel infrastructure and production of vehicles. Such an approach could assist in determining which blend of ethanol—E10, E85, or something in between— would most effectively and efficiently increase the use of the fuel and what infrastructure development or vehicle production is needed to support that blend level. In addition, DOE has not evaluated the performance of biofuel-related tax credits, the largest of which cost the Treasury $2.7billion in 2006. As a result, it is not known if these expenditures produced the desired outcomes or if similar benefits might have been achieved at a lower cost.

The report recommends that the Secretary of Energy collaborate with public and private sector stakeholders to develop a plan that coordinates expected biofuel production with gthe infrastructure to get it into the tanks of the vehicles that will need to be built, and coordinate with the Treasury Department to make sure biofuel tax credits and grants are doing what they afre supposed to do.