Domestic Fuel

An integrated food, energy and forest business, CleanStar Mozambique, has gone online. Located in Dondo, the ethanol component of the facility will produce fuel from cassava, sourced from the local communities. The cooking fuel will be sold to residents of Maputo. American-based ICM, who has experience with food and fuel integrated biorefineries, helped to design and construct the plant. Last week, CleanStar held a ribbon cutting ceremony and representatives from ICM joined the biorefinery employees and community for a celebration.

Dave Vander Griend, CEO of ICM, attended to ceremony. “ICM is honored to be among the key partners involved in this historic milestone of launching the world’s first sustainable cooking fuel facility. The extraordinary level of commitment demonstrated by CleanStar Mozambique/CleanStar Ventures, Novozymes, and Bank of America Merrill Lynch made our decision easy when it came to supporting the project.”

The project had strong support because the biorefinery was designed to reduce poverty and environmental degradation and improve the health of families in Africa. Many in the country spend a large percentage of their income on purchasing charcoal to burn for fuel and burning charcoal causes health issues. A portion of the burden will be reduced because the fuel produced from biorefinergy will provide community members with a lower cost fuel.

The facility also provides a new income source for local farmers. The farmers will be able to sustainably grow the crops while the facility will produce fuel in a safe and sustainable method.

“Growing up on a farm, it was taught that wealth comes from the ground, crops are cultivated – nourishment is provided and the promise of agriculture is unleashed through producing more food and a stronger local economy,” continued Vander Griend. “We believe passionately in improving the health, wealth, and environment of the Mozambique people. Through unique collaborations like this, we can come together to improve African agriculture and potentially replicate this model throughout other developing countries in the world,” he concluded.

The Nebraska Corn Board recently hosted some meetings, sponsored by the Blend Your Own (BYO) ethanol campaign, to discuss the roll-out of E15. Nearly 75 people attended the meetings ranging from producers, fuel retailers and petroleum marketers to representatives of the ethanol and agricultural industries. Director of Market Development for the Renewable Fuels Association (RFA), Robert White, offered information on the next steps needed to bring E15 to pumps across the country.

“There is a lot of misinformation about E15 such as requirements for ethanol plants and fuel retailers that is coming from various sources. This meeting was necessary to get the right information to the right people,” said White. “We want to see E15 introduced legally and safely.”

Several requirements were put into place by the EPA before the fuel became legal this year. An E15 label had to be approved. A fuel survey had to be conducted. In addition, the ethanol industry, working with the fuel retail industry, was required to devise a misfueling mitigation plan as well as create a consumer education campaign designed to tell consumers what vehicles could safely use E15. These requirements were discussed as well as data on health effects and incentives available to assist retailers with the installation of E15 pumps.

Curt Friesen, District 3 Director on the Nebraska Corn Board, concluded, “It is crucial that all the necessary steps are taken before offering E15 at the pump. The Nebraska Corn Board is pleased to take a leading role in the introduction of E15 in Nebraska.”

The House Agriculture Subcommittee on Conservation, Energy and Forestry was urged to reauthorize Farm Bill energy programs and provide them with mandatory funding during a hearing on “Formulation of the 2012 Farm Bill: Energy and Forestry Programs” on Friday.

“American agriculture is the key to the successful development and commercialization of clean, abundant, renewable, domestic energy and biobased products in this country, and the ‘core’ Farm Bill energy programs provide American farmers, ranchers and entrepreneurs with the tools they need to make it happen,” testified Ryan Stroschein, co-director of the Agriculture Energy Coalition (AgEC).

“Although relatively new, the Farm Bill energy programs already have had a tremendous positive impact on economic and job growth in rural America, and they can do so much more,” said Stroschein. “USDA estimates that the BCAP and Biorefinery Assistance programs alone have the potential to create more than 700,000 new jobs as a result of increased cellulosic feedstock production and the construction and operation of new biorefineries.”

National Biodiesel Board chairman Gary Haer with the Renewable Energy Group highlighted the biodiesel industry’s growth and diversity, pointing out that more than half of the lawmakers on the panel have at least one biodiesel production plant in their districts.

“NBB estimates that those plants and others like them across the country supported more than 39,000 jobs in all sectors of the U.S. economy in 2011,” Haer testified. “Most of the more than 200 biodiesel production facilities in the U.S. are located in rural areas, and a majority of the feedstock used to produce biodiesel is grown or originates in rural areas.”

Haer specifically called for the committee to continue funding for the Biodiesel Fuel Education Program and the Bioenergy Program for Advanced Biofuels, programs that are critical to raising awareness of biodiesel and stimulating new production. The programs are succeeding, he noted, pointing out that they helped the industry produce a record of nearly 1.1 billion gallons of fuel last year.

The American Petroleum Institute (API) has publicly said that the Environmental Protection Agency (EPA) jumped the gun on giving approval for the use of E15. Jack Gerard, President and CEO of API told reporters that testing by the Coordinating Research Council showed that use of E15 – gasoline with 15 percent ethanol – could harm car and truck engines, potentially affecting millions of cars and trucks.

The ethanol industry was quick to respond and Ron Lamberty, Senior Vice President for the American Coalition for Ethanol said, “The real problem here is that people may read about this project and think that it actually has some connection to the real world. The parameters of the test, the definitions of “pass” and “fail” and even the cars selected were carefully chosen to produce the results the study’s funders wanted.”

Lamberty noted that the Department of Energy (DOE) responded to the API study saying that they deliberately included engines with known durability issues, and one engine failed the API tests while running on gasoline without ethanol. Renewable Fuels President and CEO Bob Dinneen echoed the words of DOE and emphasized the importance – and public desire – to diversify our fuel supply including using higher level ethanol blends.

“How Big Oil can trot out this small, slanted, flawed study as something we should take seriously, while calling EPA’s two and a half years of E15 testing a “rush to judgment” is beyond me,” added Lamberty. “Saying it more often and louder won’t make it the truth. All this latest hit piece proves it that ethanol’s opponents are becoming more desperate to keep ethanol – which could help consumers save more at the pump – completely out of the marketplace.”

Tom Buis, CEO of Growth Energy, noted that E15 is the most tested fuel blend in history and is safe to use in cars and light trucks newer than 2001. “Most concerning of all, is a resistance by groups to end our addiction to foreign oil by refusing the American people the voluntary choice of E15 in a free market. While the large oil companies continue to espouse their support of a free market, they have put roadblocks up at every opportunity to prevent the free choice they claim to champion so dearly,” concluded Buis.

According to a new study released by the Center for Agriculture and Rural Development (CARD), ethanol lowers gas prices in Iowa by at least $1.69 per gallon. This saves the average Iowa family $2,363 per year on gas. What could you use your savings to buy? Fuel, lodging and fun for an Orlando family vacation or 262 movie tickets.

“Bolstering domestic fuel supplies by 10 percent, ethanol reduces demand for high-cost, foreign crude oil,” said Lucy Norton, Managing Director of the Iowa Renewable Fuels Association (IRFA). “With the average wholesale price of gasoline jumping 30 percent in the last year, ethanol is helping take the sting out of price shock at the pump.”

Each year CARD updates its study. When compared to 2011 data, ethanol has reduced the cost of a gallon of gas by an additional 32 cents. In a post from Cindy Zimmerman earlier this week, Dermot Hayes, ISU professor and one of the authors of the study, explained the methodology of the study, commissioned by the Renewable Fuels Association.

“The greatest contributor to pump prices per gallon is the cost of crude oil according to the Energy Information Administration (EIA),” added Norton. “Ethanol adds 10 percent to the fuel supply displacing the heart of the problem – high-priced crude oil. In fact, while ethanol is 10 percent of a gallon of gasoline, it accounts for only 5 percent of the pump price.”

The U.S. Department of Energy (DOE) today challenged test results released by the American Petroleum Institute claiming that 15% ethanol-blended gasoline (E15) can harm vehicle engines.

In a post on the Energy.gov blog, DOE Vehicle Technologies Program Manager Patrick Davis said the study done by the Coordinating Research Council (CRC) failed on a number of counts. “We believe the study is significantly flawed,” said Davis. “The CRC failed to establish a proper control group, a standard component of scientific, data-driven testing and a necessity to determine statistical significance for any results.”

Most importantly, Davis noted that no engines in the study were tested with E10 fuel, “the de facto standard gasoline for all grades, which represents more than 90 percent of gasoline available in the U.S. market.” In addition, “only three out of the eight engines were tested with straight gasoline containing no ethanol (E0), and one of those three failed the CRC’s test.”

Ethanol industry organizations were also quick to point out the flaws in the study and note that E15 has been tested more than any other automotive fuel in history. “The reality is they are completely dismissing the fact that E15 is the most tested fuel to date, with extensive testing done by the Department of Energy and the Environmental Protection Agency, with results showing no significant difference between gasoline without any ethanol and an E15 blend,” said Growth Energy CEO Tom Buis.

Renewable Fuels Association president Bob Dinneen noted that the government has tested E15 “the equivalent of 12 round trips to the Moon” and found no problems with the use of E15 in vehicles made since model year 2001. “This study, and continued efforts aimed at confusing rather than informing consumers, impede this progress and do little to address the nation’s need for clean, renewable fuel that lowers the price at the pump and creates jobs here at home,” said Dinneen.

The Iowa State University professor who co-authored a new study on ethanol and gasoline prices released this week says the impact of the growing use of the domestically-produced fuel is significant.

The new analysis from the Center for Agricultural and Rural Development (CARD), an update to a 2009 peer-reviewed paper published in Energy Policy by professors Dermot Hayes of ISU and Xiaodong Du of the University of Wisconsin, found that the growing use of American ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, up from an average impact of $0.89 per gallon in 2010. The study also found the between 2000 and 2011, gasoline prices have been reduced by an average of $0.29 per gallon, thanks to ethanol.

“Those numbers are large,” said Professor Hayes during a conference call on Tuesday during which he explained his hypotheses for the big impact of ethanol. “Think about the world before ethanol occurred. Every time a gasoline refinery would shut down, the price of gasoline would go up 10-20 cents because the U.S. was at its refinery capacity. What ethanol has done is increased refinery capacity.”

Hayes calls ethanol a “magic bullet that can squeeze ten percent more gasoline out of a barrel of crude oil.”

The original study was the result of a dissertation by Professor Du, while the Renewable Fuels Association funded the update.

Listen to Hayes’ explanation of the study here: ISU Professor Dermot Hayes

An update to a 2009 report from the Center for Agricultural and Rural Development (CARD) on the impact of ethanol on domestic gasoline prices was released today, showing that ethanol reduced wholesale gasoline prices by $1.09 per gallon nationally last year. Renewable Fuels Association President and CEO Bob Dinneen says this peer-reviewed study shows how ethanol is keeping gas prices lower than they might otherwise be.

“The results are significant,” Dinneen said. “It reflects the fact that ethanol is less expensive than gasoline today and is displacing ten percent of liquid transportation fuel today and has a huge impact on the price of crude oil.” The $1.09 per gallon impact is 20 cents more than the previous year.

Dinneen explains that the $1.09 a gallon savings means that ethanol reduced the average American household’s spending on gasoline by more
than $1,200 last year, based on average gasoline consumption data. “Since 2000, ethanol has helped save $39.8 billion annually in excess gasoline costs – or roughly $349 per household per year,” he said.

Since the study is based on just 10% ethanol in the nation’s gasoline supply, Dinneen notes that increasing that under the E15 waiver approved by EPA can only result in more savings. “If you’re going to be adding 50% more of a product that is less expensive than gasoline to the overall blend, you’d be providing consumers an even more significant benefit,” he said. “We believe the economics of ethanol are going to drive E15 into the marketplace this summer.”

Listen to Dinneen talk about the new report in this edition of “The Ethanol Report.” Bob Dinneen Discusses Impact of Ethanol on Gas Prices Report

The Renewable Fuels Association (RFA) will be hosting a webinar focused on ASTM D5798 fuel specification. Kristy Moore, RFA’s VP of Technical Services along with Coleman Jones, Biofuels Implementation Manager of General Motors will lead the event on May 22 at 1:00 pm Central Standard Time.

The webinar is in response to recent changes made by the ASTM D02 committee creating changes to the ASTM D5798 Standard Specification for Ethanol Fuel Blends for Flexible-Fuel Automotive Spark-Ignition Engines. In other words, the “E85″ Specification. While several changes were made the most significant improvement is the allowance of a wider range of ethanol content, specifically 51 to 83% by volume. Some additional modifications were made that will improve the flexibility for fuel blenders while still ensuring optimal performance for drivers of flex-fuel vehicles. These, along with other changes were needed to allow both E85 sales to continue as well as to broaden the use of mid-level ethanol blends.

It is important to understand that neither the definition of E85 nor the capability to blend it have been altered by this update to D5798.

The aforementioned issues will be addressed as well as what these changes mean for E85, alternative fuels, government fleets, and mid-level ethanol blends. The webinar will also address many concerns and questions that have risen in light of how marketers across the country are adopting new practices based on this new specification. For those who would like to participate, you will need to register here: http://bit.ly/JUIG3D.

When Americans for Prosperity (AFP) held a rally in Iowa last week, the Iowa Renewable Fuels Association (IRFA) called on AFP to set the record straight and get the correct facts out when it comes to ethanol and oil policy.

“AFP’s energy policy should come with a whiplash warning,” stated IRFA Executive Director Monte Shaw. “They start by saying the government should not pick ‘winners and losers’ and then turnaround and promote favorable tax subsidies for the oil industry. Whenever a pro-oil group like AFP comes into Iowa spreading inaccurate or out-of-date information, IRFA will be here to set the record straight.”

AFP’s website is replete with numerous inaccurate and out-of-date attacks on ethanol while hypocritically supporting oil industry specific tax subsidies, according to IRFA. Even more telling, at no time has the so-called “free market” group called for an end to the federal petroleum mandate that prevents consumers from choosing the fuel of their choice.

“AFP’s hypocrisy is astounding,” continued Shaw. “On the same page they criticize the now expired ethanol tax credit, AFP argues for the continuation of intangible drilling cost expensing. That tax subsidy can only be claimed by those drilling oil wells and has been around since 1913, the inception of the modern federal tax code. When will oil be ready to stand on its own two feet without a taxpayer crutch?”

Shaw concluded, “At the same time AFP criticizes the federal renewable fuels standard, they remain silent on the federal petroleum mandate, which forces the vast majority of consumers to purchase fuels that contain at least 85% petroleum or face massive federal fines. In reality AFP is working to keep federal energy policy tilted heavily in favor of oil.”

Members of Congress are exchanging dueling fact sheets about corn ethanol and the Renewable Fuel Standard (RFS2).

Congressman Bob Goodlatte (R-VA) sent an email last month to members of the House Commerce, and Agriculture and Energy Committees calling the RFS “a de facto mandate for corn ethanol” and urging members of the House Commerce, and Agriculture and Energy Committees to provide relief from alleged “unintended consequences” of the RFS. The email included a “fact sheet” blaming the RFS and corn ethanol for “wasting taxpayer money and harming consumers,” “driving more people into hunger and poverty domestically and abroad” and failing to make any progress toward energy independence for the nation.

In response, Congressmen John Shimkus (R-IL) and Collin Peterson (D-MN) sent out their own email and their own fact sheet citing the successes of the RFS and disputing claims in the Goodlatte letter.

Noting that the intent of the RFS is to “enhance energy security, reduce consumer fuel prices by diversifying our energy portfolio, create jobs and stimulate economic activity, and improve the environment” the congressmen said that “by any measure, the RFS is achieving these goals and providing tangible benefits to the American public.”

The Shimkus-Peterson fact sheet takes on each claim in the Goodlatte letter, referring to them as “abusrd” and “false and misleading” and “red herrings.” In particular, they dispute the notion that the RFS has done nothing to increase energy independence.

“In 2011, ethanol displaced the need for an amount of gasoline refined from 477 million barrels of crude oil—that’s more oil than the U.S. imported from Saudi Arabia,” they wrote. “Indeed, as a result of the RFS and increased ethanol use, U.S. oil import dependence has fallen below 50% for the first time since 1997. In 2005, the year the first RFS was passed by Congress, U.S. oil import dependence peaked at 60.3%. Subsequently, as ethanol production has ramped up, oil import dependence has fallen steadily and hit 45% in 2011, the lowest since 1994.9 Oil imports from the Persian Gulf have dropped by some 300 million barrels since 2001, while ethanol production has grown by 300 million barrels during that same period.”

National Corn Growers Association president Garry Niemeyer thanked Representatives Shimkus and Peterson for working to disseminate factual, accurate information about corn ethanol. “These distinguished Representatives demonstrated that they understand what corn growers have long known; corn ethanol provides important benefits to our economy, our energy security and to our environment,” he said.

Anglers heading to the 2012 Fishing Opener this weekend in Coon Rapids, Minnesota can catch a deal Friday afternoon on 85% ethanol (E85).

The new Holiday station off Highway 10 near Hanson Blvd. in Coon Rapids is kicking off the weekend by offering E85 for an 85¢ per gallon discount on Friday, May 11 from 3-5 p.m. Those lucky enough to be one of the first 20 flex fuel vehicles in line will get E85 for just $1.85 per gallon.

“The new Holiday station in Coon Rapids is one of many stations in Minnesota that offer their customers a Clean Air Choice at the pump,” said Kelly Marczak, environmental programs director for the American Lung Association in Minnesota. “More than a quarter million Minnesotans have flex fuel vehicles that can use E85, and I encourage them to use this cleaner burning fuel whenever possible.”

E85 is for flex fuel vehicles only, and there is a 20-gallon limit per customer during the promotion. Fishing licenses are available at the station, and there will be other in-store specials during the event which is being sponsored by The Linn Companies, Minnesota Corn Growers Association, the American Lung Association in Minnesota, and the Minnesota Clean Air Choice Team. Installation of the E85 dispensing equipment at the site was supported, in part, by funding from a U.S. Department of Energy program.

For those wanting to use a GPS to locate the Holiday station, the address is 1855 Gateway Drive, Coon Rapids.

The first guess of corn production for the new year in USDA’s May 10 World Agricultural Supply and Demand Estimates report is even higher than many in the industry expected.

“By all accounts, it could be a monster,” says Renewable Fuels Association (RFA) Vice President of Research and Analysis Geoff Cooper who did an analysis of the numbers that came out this morning.

Besides a record projected corn crop for 2012 of 14.8 billion bushels, Cooper says there are a number of interesting points to be made about the report, like the fact that use for ethanol is expected to remain steady, while usage for exports and animal feed are increased. “This report shows the increases in demand would not be coming from ethanol,” Cooper says. “So all this rhetoric we hear about ethanol diverting corn away from the feed market, what we’re seeing in this report is that isn’t the case.”

In addition, Cooper says adding in the use of the ethanol co-product distillers grains for livestock feed, “you end up with the equivalent of almost seven billion bushels of corn and co-products going into feed use and that’s an all time record.”

Listen to Cooper’s analysis of the numbers in this edition of “The Ethanol Report.” Geoff Cooper Analyzes USDA WASDE Report

The first U.S. Department of Agriculture outlook for this year’s corn crop is calling for record yields and record production, while corn use for ethanol is expected to remain the same.

The May 10 World Agricultural Supply and Demand Estimates report projects U.S. feed grain supplies for 2012/13 at a record 416.3 million tons, up 16 percent from 2011/12 at a record 416.3 million tons, with corn production called at a record 14.8 billion bushels, up 2.4 billion from 2011/12.

A projected 5.1-million acre increase in harvested area and higher expected yields, compared with 2011/12, sharply boost production prospects. The 2012/13 corn yield is projected at a record 166.0 bushels per acre, 2.0 bushels above the 1990-2010 trend reflecting the rapid pace of planting and emergence. Despite the lowest expected carry-in in 16 years, corn supplies for 2012/13 are projected at a record 15.7 billion bushels, up 2.2 billion from 2011/12. Total U.S. corn use for 2012/13 is projected up 9 percent from 2011/12 on higher feed and residual disappearance, increased use for sweeteners and starch, and larger exports.

The report kept projected corn use for ethanol unchanged at 5 billion bushels for this year on weak gasoline consumption limiting domestic blending opportunities. In an analysis of the report this morning, the Renewable Fuels Association said, “While still just an estimate, the confidence USDA is displaying in American farmers underscores their unique ability to feed the world and help renewably fuel the nation. There is a lot of growing season left, and these numbers could change by the fall. But, with normal growing conditions it is clear that farmers will continue to meet the bell and provide safe, reliable food and clean, domestic fuel and silence those ‘chicken littles’ that perpetually predict a shortage of corn and catastrophe in the grocery aisle.”

South Dakota could continue to be the home of substandard gas if refiners have their way. If the American Coalition for Ethanol (ACE), a national ethanol organization based in Sioux Falls, South Dakota has its way, it will not become the dumping grounds for low-octane fuel. Historically the state has allowed 85 octane gasoline for sale in the western part of the state but it has been discovered to be “leaking” into other areas. Ironically after a review of state laws and rules by the SD Weights and Measures it was determined that the sale of this gas is illegal.

ACE Executive Vice President Brian Jennings asks that the state follow the letter of the law and resist making 85 octane gasoline available throughout the state.

“We strongly oppose this recommendation to bend the rules so refiners can pad their profits by dumping substandard gasoline into South Dakota,” Jennings said. “Eighty-five octane gasoline is bottom of the barrel fuel that according to vehicle manufacturers will reduce fuel economy and performance, increase harmful tailpipe emissions, and could damage engines.”

The organization has learned that the State would require a label to inform consumers that the 85 octane fuel may not meet engine manufacturer’s minimum standards for vehicle performance. Before any changes take effect, however, the state will open the discussion up for public input. ACE along with other ethanol and corn grower stakeholders plan to submit comments in opposition of the rule change.

“Even though ethanol’s blending octane is 113, the highest and cleanest source of octane on the market, when this low-grade gas is blended with 10 percent ethanol we are very concerned ethanol will be mistakenly blamed for engine performance problems,” continued Jennings. “That is an unacceptable consequence for South Dakota’s ethanol industry and thousands of the state’s residents and farmers who have invested in ethanol production.”