Domestic Fuel

Rather than add this link to the full speech by Senator McCain to that last post I thought I’d just do another one for you.

Introducing the Senator is Arizona state representative, Jeff Groscost.

The speech is a little long for posting but I think you’ll want to hear what a very influential government leader has to say about the industry. Senator John McCain Speech (22 min MP3)

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President Bush today came out in support of at least a temporary end to the tariff on ethanol imports, putting the “pro-ethanol” president at odds with the ethanol industry and farm-state lawmakers. In an interview with CNBC, Bush said, “I think it makes sense to — when there’s a time of shortage of a product that’s needed, so that the consumers can have a reasonable price, it seems to me to make sense to address those shortages, and dropping a tariff will enable the foreign export of ethanol into our markets, which will particularly help on our coasts. And yeah, I’ve talked to Congress about that.”

However, the ethanol industry contends that there are sufficient supplies of ethanol to meet the demand and that dropping the tariff will have no impact on prices. According to the Renewable Fuels Association:
The Energy Information Administration (EIA) estimates that 130,000 barrels per day (b/d) of ethanol will be needed to replace the volume of MTBE refiners have chosen to remove from the gasoline pool. The most recent EIA report shows that U.S. ethanol production has soared to 302,000 b/d in February.

In addition, there have been reports that Brazil is having trouble meeting its own demand for ethanol. A recent Knight-Ridder article said that Brazilian ethanol producers are struggling to keep up with domestic demand for ethanol, which is projected to grow by 50 percent over the next five years. Yet a 15 percent jump in prices earlier this year sparked a sharp drop in consumption. Even so, suppliers are struggling to plant enough fields of new sugar cane, from which ethanol is produced here, to keep up with the anticipated growth in demand.

California Gov. Arnold Schwarzenegger is directing his state agencies to fight high gas prices by expanding bio-fuels, according to a release from his office. “It is critical that we do everything we can to reduce our dependence on petroleum-based fuels,” said Gov. Schwarzenegger. “Turning waste products into energy is good for the state’s economy, local job creation and our environment. By implementing biomass programs in California, we will help fight critical waste disposal and environmental problems, including the risk of wild fires, air pollution from open field burning, and greenhouse gas emissions from landfills.”
California will produce a minimum of twenty percent of its own biofuels by 2010 and forty percent by 2020, according to targets set by the executive order.

Energy Secretary Samuel Bodman sent ethanol stocks down today with comments that the Bush administration is considering lifting import tariffs on ethanol, but ethanol interests were busy out stating their reasons why the tariffs should remain in place. Senator Charles Grassley (R-IA) and Sen. John Thune (R-SD) issued a joint statement saying that ending the duty is unnecessary and would have negative consequences. “Everyone’s looking for a way to lower gas prices, but lifting the ethanol tariff won’t mean lower prices for consumers. What’s more, it would undermine efforts to make our country more energy independent and reward the oil companies that are already raking in record profits.”

The Alcohol and Tobacco Tax and Trade Bureau (TTB) is warning the public not to start their own home ethanol plants. A notice on the TTB website says “it is illegal to distill alcohol without first obtaining a Federal permit” from the TTB. The notice is in response to “several news items on people distilling ethanol at home to supplement their gasoline needs.” Those wishing to distill alcohol at home are invited to contact TTB to apply for a permit, but I would bet it’s no easy process, since they note there “may also be additional permitting requirements and other restrictions on the state and local level.”

Senator Kent Conrad (D-ND) is pushing a BOLD new energy initiative – BOLD, as in Breaking Our Long-term Dependence. Sen. Conrad introduced the legislation just before the spring recess and he talked about the details during this morning’s Senate Agricutlure Committee hearing on the future of biofuels. The BOLD act calls for “extending biodiesel and ethanol tax credits through 2013. It calls for increasing ethanol use from 4.7 billon gallons in 2007 to 30 billion gallons in 2025. It calls for all vehicles sold in the U.S. by 2017 to include alternative fuel technology such as hybrid electric or flex fuel systems.” Click here for the Senator’s full 5:00 remarks on the BOLD act.

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It would be cheap in our nation’s capitol. I just spent the past two hours and 15 minutes listening to the Senate Agriculture Committee hearing on Biofuels. The first hour was taken up with comments from 13 of the senators in attendance – thanking everyone for holding the meeting, saying how much they looked forward to hearing testimony from the witnesses, and commenting on what was being done to help the biofuels industry in their states. That being done, the actual testimony from the four witnesses took about 20 minutes. The rest of the time, just short of an hour, was questions and answers – mostly questions. It is amazing how long a senator can take to ask a question!
At any rate, the panelists were Renewable Fuels Association president Bob Dinneen, National Biodiesel Board CEO Joe Jobe, CHS Inc. Executive Vice President Jay Debertin and Iowa State University professor Robert C. Brown, Ph.D – and they had some good comments and answers to senators’ questions and concerns. We’ll get some of that up in audio form post haste. Stay tuned.

President Bush announced steps he is taking to address high gas prices during a speech today to the Renewable Fuels Association in Washington. Bush announced the government would “stop making purchases or deposits to the Strategic Petroleum Reserve” for the summer, that EPA would be allowed to waive local fuel requirements regarding the switch from MTBE to ethanol, and called for the formation of a task force on so-called “boutique fuels.” Bush also heavily promoted domestic fuels, both ethanol which he says has “the largest potential for immediate growth,” and biodiesel, which is why he “signed into law the first ever federal tax credit for biodiesel producers.” Bush said, “We owe it to the American people to be aggressive in the use of technology so we can diversify away from the hydrocarbon society.” The National Biodiesel Board was pleased with the president’s comments about biodiesel, which were greeted with applause.

Reducing the risk of wildfires could help increase production of domestic fuels. Agriculture Under Secretary Thomas Dorr today announced nearly $4.2 million in grants to 18 small enterprises to develop innovative uses for woody biomass in national forests as sources of renewable energy and new products. According to a USDA press release, “This grant program helps to reduce the risk of wildfires by removing built-up fuel hazards and improves forest health,” said Dorr while here to announce several Earth Day initiatives by USDA. “In addition, these projects give an economic boost to our rural communities, increasing the nation’s sources of renewable energy.”

Believe it, Mr. Secretary.

The headline was Agriculture Secretary Mike Johanns in Colorado on Earth Day reacting to a reporter’s question about ethanol being responsible for high gas prices.

Johanns response was, “The price of a barrel of oil went over $72 this week – and I rest my case.” Listen to the USDA newsline report here.

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The U.S. Senate Committee on Agriculture, Nutrition and Forestry will be holding a hearing on the “State of the Biofuels Industry” Wednesday, April 26, 2006 at 10:00 am. The witness list includes Renewable Fuels Association president Bob Dinneen, National Biodiesel Board CEO Joe Jobe, CHS Inc. Executive Vice President Jay Debertin and Iowa State University professor Robert C. Brown, Ph.D (read previous post about Brown’s bio oil research).

Higher energy costs were the subject of dueling Earth Day radio addresses by President Bush and the Democratic Party.
Here’s part of the president’s address, promoting the administration’s energy initiative:

…hydrogen fuel cells, one of the exciting new technologies supported by my initiative. These fuel cells have the potential to revolutionize the way we power our cars by giving us vehicles that will emit no pollution and will be more efficient than gas-powered cars.
My Advanced Energy Initiative will also help improve hybrid vehicles — cars and trucks that run partly on electricity and help drivers save gas. We’re funding research into a new generation of plug-in hybrid vehicles that could be recharged in electrical outlets and could allow many drivers to make their daily commute using no gasoline.
By developing these and other new sources of clean renewable energy like ethanol, we will continue growing our economy, reduce energy prices and protect our environment, and make America less dependent on foreign oil.

Meanwhile, Florida Senator Bill Nelson spoke for the Democrats, saying the same thing needs to be done, but claiming the administration’s emphasis is on drilling rather than “the tough policy changes needed to make a real difference.”

More hybrid vehicles, and alternative fuels such as ethanol made from cost-effective crops would make a huge difference — and, relatively quickly.
We have the technology to raise the mileage standard for all passenger vehicles to at least 40 miles per gallon. The president has urged only a modest 2 miles-per-gallon increase for light trucks.
We should produce synthetic fuel from coal, with attention to global warming concerns.
We should set a course of developing an engine that is powered by a new source of energy such as hydrogen, which will also be less polluting.

It wasn’t real easy but I was able to ask llinois Governor, Rod Blagojevich, a quick question after he cut the ribbon prior to the trade show here at BIO 2006.

I asked him about agriculture since I only had one question and in his answer he mentions renewable energy and corn and soybeans.

You can listen to his answer here: Governor Blagojevich (1 min MP3)

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U.S. Secretary of Energy Samuel Bodman made lots of friends in the hydrogen fuel cell business yesterday when he announced plans to award $50 million over the next three years in research grants to advance the technology. AP reports that universities, national laboratories and private companies will compete for the grants starting later this month. They are part of the Bush Administration’s goal of making fuel cells a viable technology by 2020.
While announcing fuel cell research grants in a speech to the Society of Automotive Engineers in Detroit, Bodman also called on automakers to produce more flex fuel vehicles. “It should be our common goal that E85 become a nationwide fueling option,” Bodman said. “In the coming days, I will be asking that we do more to make consumers aware of the flex-fuel option both when they are considering a new car purchase and for existing owners of flex-fuel vehicles.” The Renewable Fuels Association “welcomed the continued, full-throated support of the Bush Administration” for ethanol.

I was searching a cool website by the EPA that categorizes various vehicles by their green factor, or by how efficient and clean burning their emissions are. I noticed that no diesel engines were listed among the vehicles and sent a note to ask why. This is the reply I got from the EPA.

The reason why you are having trouble finding diesel vehicles is that there aren’t very many offered for sale in the U.S. Only one Mercedes Benz model and a couple of Volkswagen models have been certified to comply with EPA’s strict emission standards. Even though they may be fuel efficient, diesel vehicles have inherently higher levels of oxides of nitrogen, a lung irritant, and particulate matter, a likely carcinogen. These pollutants are particularly difficult to control in diesels, and most auto manufacturers have chosen not to produce them for sale in the U.S., since they are unable to comply with EPA’s strict “Tier 2″ emission standards. Car companies are now working on improving the technology needed to control diesel pollution from vehicles, so we will likely be seeing more models in the next few years.

As they mentioned, there are some that meet the standards, and since they are only comparing gasoline versions, there’s no figures for engines burning biodiesel.
So while diesel engines weren’t that green initially, they are getting better and by burning biodiesel, you can vastly improve their environmental impact, and reduce emissions.

JW
www.mocommonsense.com