Florida E10 Hold Up

Marathon OilDespite the support of Florida’s commissioner of agriculture for biofuels production, despite two recent ethanol history-making races held in the Sunshine State, and despite a new campaign that “Florida Needs Ethanol” - a bureaucratic snag is keeping Marathon Oil from blending and distributing 10 percent ethanol-enhanced fuel in Florida.

According to an article in the St. Petersburg Times, Marathon and the state department of agriculture are “at an impasse.”

Florida’s Department of Agriculture and Consumer Services says it is unwilling to tweak state regulations until it gets scientific data to satisfy a fuel vapor issue, which officials fear could cause vehicles to stall in hot weather.

Marathon wants the state to modify the standard so its fuel would comply. The Houston-based company points to other states where regulations have been modified to suit E10 suppliers. Among them are Arkansas and Louisiana, which have climates similar to Florida’s.

Fueling North Carolina’s Future

NC Capitol The North Carolina General Assembly is considering a sweeping statewide strategic plan to strengthen North Carolina’s future in biofuels development and use.

According to a release from the North Carolina Biotechnology Center:

The 16-page document, “Fueling North Carolina’s Future: North Carolina’s Strategic Plan for Biofuels Leadership,” is the culmination of a seven-month process involving more than 70 leaders from across the state representing industry, agriculture, academia and government.

Significantly, the plan calls for North Carolina to bypass corn for its ethanol feedstock. Though corn is increasingly used in the Midwest, the plan notes that North Carolina can’t efficiently grow enough corn to meet its fuel needs. Instead, it should tap the best of its own agricultural and industrial infrastructure to develop so-called cellulosic ethanol, using enzymes from companies such as Novozymes, in Franklinton, to efficiently break down wood waste, barley, soybeans, sweet potatoes, switchgrass and possibly even crops not yet identified.

Ethanol Demand Drives Planting Intentions

As expected, the USDA Prospective Plantings report out Friday morning showed that farmers expect to make a dramatic shift to corn acreage, and away from cotton and soybeans. The main reason – increased demand and higher prices of crops used for bio-fuels.

According to USDA’s National Agricultural Statistics Service, corn growers intend to plant 90.5 million acres of corn for all purposes in 2007, up 15 percent from 2006 and 11 percent higher than 2005. If realized this would be the highest acreage since 1944. Illinois farmers intend to plant a record high 12.9 million acres of corn this spring, up 1.60 million acres from last year. North Dakota and Minnesota growers also expect to plant record high corn acres, up 910,000 and 600,000 acres, respectively.

Soybean producers intend to plant 67.1 million acres in 2007, down 11 percent from last year. However, area planted to soybeans is expected to increase in the Southeast, with Georgia expecting the largest increase from last year at 95,000 acres.

All cotton plantings for 2007 are expected to total 12.1 million acres, 20 percent below last year. Growers intend to decrease planted area in all States with the largest acreage declines in Arkansas, Georgia, Louisiana, North Carolina, Mississippi, and Texas.

Biodiesel Part of Latest Illinois State Agribusiness Grants

Gov Rod Blagojevich Illinois Governor Rod Blagojevich has given out $240,000 in Opportunity Returns grants including money for a feasibility study to find new uses for a by-product of biodiesel production.

Northern Illinois University in DeKalb received $16,850, to identify and evaluate new uses for glycerin to use as an energy feedstock.

This from a governor’s press release:

“This investment demonstrates Gov. Blagojevich’s commitment to growing the renewable fuels industry,” Agriculture Director Chuck Hartke said. “In addition to the biodiesel project, funds have been awarded to help establish two facilities that will improve our ability to transport distiller’s dried grains, a by-product of the ethanol manufacturing process that can be sold and used as an animal feed.”

These AgriFIRST grants follow Blagojevich’s energy independence plan to replace 50 percent of the state’s current supply of imported oil with renewable, homegrown biofuels like ethanol and biodiesel. He has proposed investing $100 million over the next 5 years to build up to 20 new ethanol plants across Illinois and $25 million to help build five new biodiesel plants.

Special Delivery by Alternative Fuel

Bush-USPSAfter meeting with the CEOs of major automobile manufacturers on Monday, President Bush spent Tuesday taking a look at alternative fuel vehicles used by the U.S. Postal Service, FedEx, UPS, and the Washington Metropolitan Area Transit Authority.

According to a White House fact sheet, the U.S. Postal Service has the “largest alternative fuel vehicle fleet in the world. Almost 13 percent of the 289,000 vehicle fleet are alternative fuel vehicles such as hybrids, biodiesel, compressed natural gas, and hydrogen fuel cell vehicles.”

UPS operates the largest private alternative fuel fleet in its industry, using more than 1,500 compressed natural gas, liquefied natural gas, propane, hydrogen fuel cell, and hybrid vehicles. Fed-Ex and the Washington Metro are using or investing in hybrid-electric diesel trucks and buses.

They note that large fleet operators like these are participating in the Department of Energy’s Clean Cities Program, which works through a network of more than 80 volunteer coalitions to promote alternative fuels and vehicles, fuel blends, fuel economy, hybrid vehicles, and idle reduction.

Meanwhile, an Associated Press report criticized the president for “talking, for two days in a row, about converting switchgrass and wood chips into ethanol,” instead of focusing on the congressional standoffs over Iraq and controversy over the firings of US attorney generals.

Crops for Fuel

During a renewable energy roundtable discussion at Purdue University last week, the question was posed, why are we using food for fuel?

USDA Chief Economist Dr. Keith Collins had the chance to respond to the questioner with an important point.

Purdue Roundtable 1“I first would say that I don’t think about using food for fuel. I think about using crops for fuel. I say that because this use has been an objective of agriculture for a long, long time. Henry Ford built a car out of plastic made from soybeans a long, long time ago. We’ve been trying to utilize agricultural commodities in industrial uses for decades precisely because the productive capacity of American agriculture has been so great. It’s often overwhelmed demand and created lower prices. That’s why we have this elaborate system of price and income support programs at USDA. So it’s not a new thing to use crops for fuel.”

Dr. Collins was one of several panelists on that roundtable. In the photo from Purdue’s Ag Communications, Collins is flanked by two Purdue professors – Dr. Bernie Tao, who’s a professor in agriculture and biological engineering and holds the Indiana Soybean Alliance chair for New Uses of Soybeans, and Dr. Michael Ladisch, distinguished professor of Agriculture and Biological Engineering, and the director of the Laboratory for Renewable Resource Engineering. Both noted that important research is being done now at Purdue and other universities to find new crops that can be used for renewable energy sources.

Read the full transcript of the roundtable, which also included Secretary of Agriculture Mike Johanns, Purdue University President Martin Jischke, Purdue Dean of Agriculture Randy Woodson, Indiana Director of Agriculture Andy Miller, USDA Under Secretary for Rural Development Tom Dorr and Renewable Fuels Association President Bob Dinneen.

Bush and the Big Three

President George W. Bush participated in a demonstration of alternative fuel vehicles on the South Lawn drive of the White House Monday with the CEOs of the three largest auto makers.

The president said he “found it very interesting that by 2012, 50 percent of the automobiles in America will be flex-fuel vehicles. That means that the American consumer will be able to either use gasoline or ethanol, depending upon, obviously, price and convenience.”

Car Makers Rick Wagoner, Chairman and CEO, General Motors Corporation said that flex fuel vehicles offer the best opportunity right now for America to lessen its dependence on foreign oil. “There are millions on the road today. As a group, we’ve agreed to double our production by the year 2010, and then have 50 percent of our production E85-capable by the year 2012.”

According to Alan Mulally, President and CEO, Ford Motor Company, there are more ways to help coming soon. “And the fact that we have ethanol solutions today, hybrids coming along, and plus hydrogen and fuel cells and new battery technology, gives some great options to satisfy our need for flexibility, as well as being good stewards of the environment.”

Tom LaSorda, President and CEO, DaimlerChrysler Corporation said their company has “committed, as well, by 2012, to have 50 percent of our production not only in E85, but biodiesel. This Jeep Grand Cherokee here today is going into production as we speak, being shipped from the factory with B5.”

Secretary of Transportation Mary Peters also met with the group.

UL Closer to E85 Pump Certification

UL Underwriters Laboratories is getting closer to approving fuel pumps for dispensing of 85 percent ethanol.

According to a press release, UL currently expects to finalize research and publish certification requirements by the end of the fourth quarter of 2007 and, immediately thereafter, accept E85 dispensing equipment for investigation to the safety requirements and certification of compliant equipment.

UL has been working since October to establish standards for fuel pumps that dispense higher blends of ethanol such as E-85. Earlier this week, a bi-partisan group of Senators sent a letter to UL CEO Keith Williams requesting that the approval process be completed.

According to Senator John Thune (R-SD), the lack of a U-L Certification has nearly halted the installation of new E-85 pumps and is slowing down ethanol growth.

“For years now, Congress has made ethanol an important part of our nation’s energy policy. As we work to promote E85 and higher grades of ethanol like E20, fuel that contains 20 percent ethanol, it is critical that UL provide the necessary certification for fuel dispensers to deliver alternative fuels at local gas stations. I urge UL to act in a timely manner to certify these pumps and remove this unnecessary barrier to the use of higher blends of ethanol,” said Thune.

Indiana Johanns Adventures

BioTown USAAgriculture Secretary Mike Johanns spent Wednesday in the state of Indiana talking about domestic fuel.

First, the secretary joined Governor Mitch Daniels to break ground for BioTown, USA’s Phase II technology suite. BioTown is the country’s first effort toward creating communities where all energy needs are met through biorenewable resources.

BioTown JohannsAt that event, Johanns also announced the availability of $176.5 million in loan guarantees and $11.4 million in grants to support investments in renewable energy and energy efficiency improvements by agricultural producers and small businesses.

“By promoting energy efficiency and development of energy sources that are farm based and renewable, we’re taking another step toward achieving the President’s goal of reducing America’s gasoline consumption by 20 percent in ten years,” said Johanns. “We hope to dramatically expand renewable energy programs like these, as reflected in our 2007 farm bill proposals.”

Finally, Johanns concluded the day with a renewable energy roundtable discussion at Purdue University in Indiana where he talked about the administration’s 2007 Farm Bill proposals and fielded energy-related questions with a number of other panelists. He also introduced a new web-based tool designed to make energy-related activities from across the Department accessible from a single web page. The Energy Matrix is a comprehensive collection of information on all of USDA’s energy-related programs, research efforts, funding opportunities, and technical assistance.

IndyCar Races up the Hill

DC IndyEthanol was the center of attention outside the US Senate building in Washington DC Wednesday as Senators Richard Lugar and Evan Bayh of Indiana joined with members of the ethanol industry to mark the use of 100 percent fuel grade ethanol in the IndyCar Series starting in Homestead this weekend.

Among those on hand to commemorate the event, organized by the Ethanol Promotion and Information Council and the Renewable Fuels Association, was Team Ethanol IndyCar driver Jeff Simmons who addressed a large crowd of media representatives.

DC IndyEPIC Executive Director Tom Slunecka said several other lawmakers in addition to Sens. Lugar and Bayh attended the event as well, including Sen. Norm Coleman of Minnesota.

“Lawmakers understand that ethanol is bringing a change in this country,” said Slunecka. “Our dependence on foreign oil is being reduced by the use of ethanol and they want to make sure that the momentum continues to grow so they turned out today to help show their support.”

DC IndyEPIC board member Greg Krissek, Director of Government affairs for ethanol design firm ICM Inc, said increasing the use of the plant-based fuel is helping to reduce our country’s dependence on foreign oil, revitalize rural economies and address global environmental concerns.

“We’ve seen that ethanol used as an oxygenate in engines reduces the amount of pollution out the tailpipe,” Krissek explained. “But even more importantly, ethanol is a renewable resource reducing the amount of hydrocarbon fuels that we need to use.”

The first race in the 2007 IndyCar Series takes place March 24 at 8:00 pm ET at the Homestead-Miami Speedway. Read story from the IRL on the Capitol event.

(Photos courtesy of IRL and RFA)

Woody Biomass Grants

USDA The US Department of Agriculture has awarded $6.2 million in grants to more than two dozen small businesses and community groups to develop innovative uses for woody biomass, including renewable energy and new products, from national forests.

The grants will help create markets for small-diameter material and low-valued trees removed from forest restoration activities, such as reducing hazardous fuels, handling insect and diseased conditions, or treating forestlands impacted by catastrophic weather.

The Forest Service, a USDA agency, selected 26 small businesses and community groups as grant recipients. Awarded grants ranged from nearly $125,000 to $250,000. According to requirements, all 26 recipients provided at least 20 percent of the total project cost. Non-federal matching funds ranged from $62,500 to more than $2 million per project, for a total of almost $12 million.

A listing of all grant recipients can be found on USDA’s website.

Ethanol Campaigning

McCain BusAccording to the Washington Post, John McCain had only been in Iowa long enough Thursday to make one ethanol joke – “I have a glass of ethanol every morning for breakfast” — when word went out that he was already leaving.

Turns out that the presidential candidate ended up staying after all, skipping a procedural vote in DC on the Iraq war. On the campaign trail, McCain has apparently decided to try and make up for ignoring Iowa in his race seven years ago when he was vocal in his opposition to ethanol subsidies.

Now the candidate is reportedly supporting ethanol, at least with words, if not actions. According to an article on Seeking Alpha analyzing McCain’s position on ethanol, blogger Konrad Imielinski notes that the candidate maintained a consistent “anti-ethanol demeanor through 2005 as documented by his voting record” which includes voting against the Energy Policy Act of 2005, the Environmental Effects Caused by Ethanol Amendment and the Energy Omnibus Bill.

McCain then changed his position completely in 2006. When giving a speech in Iowa, the same state which he publicly stated his skepticism in 2000, he said “I support ethanol and I think it is vital, a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects.”

HillaryMcCain isn’t the only candidate to have an “ethanol conversion” experience, as the Washington Post calls it.

Sen. Hillary Rodham Clinton (D-N.Y.) experienced one in May of last year. Long opposed to federal support for the corn-based biofuel, she reversed herself and endorsed even bigger ethanol incentives than she previously voted against. Now running for president, Clinton is promoting a $50 billion strategic energy fund, laden with more ethanol perks.

Seeking Alpha’s Imielinski also analyzes Clinton’s ethanol position noting that she voted a total of 17 times against measures promoting ethanol production. Senator Clinton even stated in 2002 that “there is no sound public policy reason for mandating the use of ethanol” but now has shaped herself as a prominent advocate of ethanol.

Iowa Forms State Biodiesel Board, Moves Key Legislation

The Iowa Soybean Association has formed a board to coordinate biodiesel activities in the state, along with activities with the National Biodiesel Board.

Wallaces Farmer reports that the ISA hired Randy Olson to serve as the new Iowa Biodiesel Board’s executive director, as well as a senior marketing manger for the association:

“I’m very excited to join ISA and support our state’s farmers,” says Olson. “I’m looking forward to the opportunity to work with our growing number of biodiesel manufacturers in the state. With this industry’s tremendous growth, it is vital that our producers get the support that they need.”

Meanwhile, the ISA is happy that several keys pieces of legislation for biodiesel survived the March 9th “funnel” at the state legislature. That date is the date that bills must pass out of committee… otherwise they are considered dead. The bills making it through include ones that provide funding for a biodiesel testing laboratory to ensure quality, as well as tax breaks for biodiesel facilities.

Lincoln, Coleman Look to Extend Biodiesel Tax Incentive

Lincoln and NBBSen Norm Coleman
In a bi-partisan move, Sen. Blanche Lincoln, Democrat from Arkansas, and Norm Coleman, Republican from Minnesota, have introduced legislation today to extend the federal biodiesel tax credit. The legislation would extend the federal excise tax credit and income tax credit for biodiesel to 2017. Lincoln originally introduced the credit and got it passed in 2004.

In a press release, the National Biodiesel Board was quick to praise the action:

NBB logo “Senator Lincoln is again blazing trails for biodiesel to boost America’s energy security, economy and the environment, including climate change,” said NBB Chief Executive Officer Joe Jobe who was in Washington, D.C. for the bill’s introduction. “Extending the tax incentive gives confidence for continued biodiesel industry growth.”

The release went on to point out how Lincoln’s original legislation helped the American biodiesel industry go from just 22 plants with a capacity of 157 million gallons of fuel in 2004 to today’s 105 plants able to produce 864 million gallons of biodiesel.

“Our American agricultural producers and domestic companies have demonstrated their commitment to energy independence through the production of renewable fuels like biodiesel,” Sen. Lincoln said. “It’s time for Congress to follow its initial work and make the necessary investment for continued progress and development. I look forward to working with advocates of alternative energy sources like the National Biodiesel Board towards our shared goal of promoting greater production of renewable fuels.”

“Biodiesel is central to our efforts to free America from our dangerous dependence on foreign oil,” Sen. Coleman said. “By passing the long-term extension of the biodiesel tax credit contained in this bill, we can help ensure that production of this critical renewable fuel continues to grow.”

The NBB says the industry adds $24 billion to the U.S. economy between 2005 and 2015 and will create nearly 40,000 jobs in many different sectors. Tax revenues from biodiesel will keep nearly $14 billion in the U.S. that would otherwise be spent on foreign oil… more than paying for the incentives.

Ethanol Pipeline Proposals

Lugar Harkin Senators Tom Harkin (D-IA) and Richard Lugar (R-IN) have introduced legislation that would direct the U.S. Department of Energy to study the feasibility of transporting ethanol by pipeline from the Midwest to the East and West coasts.

The Ethanol Infrastructure Expansion Act of 2007 would look at creating a dedicated pipeline system could enable ethanol producers to deliver their products to states with a growing demand, like California, New York, and Pennsylvania, at a lower cost.

“We must explore every option for reducing our dependence on foreign oil. Overcoming problems in moving ethanol through pipelines, as Brazil has done, is important in developing the full promise of America’s renewable fuels. This legislation will help determine U.S. infrastructure planning and development,” Lugar said in a press release.

Petrobras Meanwhile, Dow Jones reports that Brazil’s state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, is planning to start building an ethanol pipeline from central Brazil to the coast this year.

Chief Executive Sergio Gabrielli said, “The pipeline will serve mainly to transport ethanol for export to Japan.”

Petrobras, Japanese company Mitsui & Co. (MITSY) and the Brazilian builder Camargo Correa in late February had signed a memorandum of understanding to study the construction of an ethanol pipeline network in Brazil.

The pipelines would link ethanol producing areas in Brazil’s central state of Goias via main producing areas in Sao Paulo state to the port of Sao Sebastiao on the Atlantic Ocean.