Domestic Fuel

Senator Chuck Grassley (R-IA) is continuing to push for the use of higher ethanol blends in regular car engines.

Last fall, Grassley and several other senators wrote the Environmental Protection Agency requesting testing of blends of ethanol above 10% for non-flexible fuel vehicles. Now Grassley is asking car makers what they are doing in the area of research and testing on higher ethanol blends.

“It is becoming even more important as we see the maximum market demand for E-10 blends quickly approaching,” Grassley told reporters Tuesday. “It is believed that the E-10 market will be saturated by 2012 or 2013 at about 12 or 14 billion gallons a year. That’s about twice what we producer right now. It is critical that timely approvals be made for intermediate blends of ethanol-blended gasoline for non-flexible fuel vehicles.”

Grassley cites a year-long study by the state of Minnesota and the Renewable Fuels Association showing no problems with ethanol blends of up to 20 percent.

“When I was in Brazil in 2006 I saw first hand, non-Flex Fuel vehicles capable on running on blends of 20 percent to 25 percent ethanol,” he said.

Grassley says movement to higher ethanol blends requires cooperation between the public and private sectors.

The latest “Ethanol Report” podcast from the Renewable Fuels Association features comments from four ethanol industry leaders about the future of the ethanol industry and what role the RFA will play in it.

Featured are RFA Vice Chairman Tom Branhan of Glacial Lakes Energy in Watertown, South Dakota; Renewable Fuels Foundation chairman Bill Lee with Chippewa Valley Ethanol in Minnesota; RFA and RFF board member Dan Schwartzkopf with ICM’s LifeLine Foods; and Ryland Utlaut of Mid-Missouri Energy, a board member of RFA and past chairman of the National Corn Growers Association.

You can subscribe to “The Ethanol Report” by following this link.

Or you can listen to it on-line here: ethanol-report-09.mp3

Podcast: Play in new window | Download (2.6MB)

Bakers are blaming ethanol for higher wheat prices and demanding changes in the ethanol policy to “Save Our Wheat,” but their claims are “half-baked,” according to ethanol industry officials.

“The idea ethanol production is the driving factor behind high wheat prices is half-baked,” said Renewable Fuels Association President Bob Dinneen. “American farmers increased their wheat production in 2007 at a time of poor harvests and surging demand around the globe. To single out the American ethanol producer ignores the facts.”

Lynn Schurman, president-elect of the Retail Bakers of America, was one of the “Band of Bakers” who marched on Washington last week urging agriculture officials and members of congress to take action against rising wheat prices that are straining small bakeries.

She is quoted by Minneapolis media as saying, “Right now less acreage is going into wheat because more people are growing corn and providing corn for the ethanol market.”

That statement is patently false. In fact, farmers planted more than 60 million acres of wheat last year, up more than 3 million acres from 2006. According to the year-end crop production report from USDA’s National Agricultural Statistics Service, 2007 saw the highest number of wheat acres planted in the past four years.

The American Bakers Association is calling on Congress and the Bush administration to implement it’s Three Point Plan to “alleviate the commodity crisis,” one point of which is “Elimination of the ethanol import tariff and temporary waiving of ethanol production limits.” (What they actually mean here is waiving the yearly renewable fuel standard requirements for ethanol production.)

However, that action will do nothing to address the two major factors driving the wheat market today, which are the consecutive droughts in Australia, a leading wheat producer and exporter, and growing global demand. A recent article in the New York Times noted, “Now [wheat] prices have more than tripled, partly because of a drought in Australia and bad harvests elsewhere and also because of unslaked global demand for crackers, bread and noodles. In seven of the last eight years, world wheat consumption has outpaced production. Stockpiles are at their lowest point in decades.”

It is true that wheat prices are higher, but it is incorrect to place the blame on ethanol causing farmers to switch from planting wheat to corn.

The Renewable Fuels Association countered attacks from the food processing and petroleum industries this week with fact checks.

Referencing news stories about statements made by officials with Valero Energy and Pilgrim’s Pride, RFA President Bob Dinneen said, “To put the blame for rising commodity, food and energy prices solely at the feet of the American ethanol industry is misleading and diversionary. This kind of overheated, chicken little rhetoric is meant to distort the truth and deliberately misinform the American public.”

In news stories this week, Pilgrim’s Pride Chief Executive Clint Rivers in a statement blamed high feed costs causing plant closings and layoffs on “the U.S. government’s ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders.”

RFA says, “What is not included in Mr. Rivers statement is that a host of factors, ranging from record global demand to poor weather conditions around the globe, are driving commodity prices. Moreover, Mr. Rivers conveniently ignores the processing, packaging, and transportation costs associated with oil prices climbing to record highs near $110 a barrel. In addition, no mention is made of the calculations by Global Development and Environment Institute at Tufts University that estimate the broiler chicken industry specifically was able to save more than $11 billion between 1997-2005 by purchasing corn and feed well below the market cost of production.” (Re: “Feeding at the Trough: Industrial Livestock Firms Saved $35 billion From Low Feed Prices.”)

Citing studies by Argonne National Laboratories and Environmental Defence, RFA also responded to a Reuters story this week in which Valero Energy Chief Executive Bill Kleese made the claim that, “Corn and ethanol production and the resulting high prices will impact the world in a much more acute negative way than greenhouse gas emissions and climate change ever will.”

Fact Check: Compared to gasoline, ethanol is reducing global warming gas emissions by more than 20 percent. As the world continues to irresponsibly deplete its reserves of traditional petroleum, new sources like tar sands in Canada must be developed. The conversion of the tar sands into a usable petroleum products produce 300 percent more greenhouse gases than traditional oil production.

The latest report from the Energy Information Administration (EIA) concludes that ethanol will reduce U.S. petroleum demand by 130,000 barrels per day this year.

According to the EIA’s Short-Term Energy Outlook, “The slowing economy combined with high petroleum prices is expected to constrain growth in U.S. consumption of liquid fuels and other petroleum products to just 40,000 barrels per day (bbl/d) in 2008. After accounting for increased ethanol use, U.S. petroleum consumption falls by 90,000 bbl/d.”

The projected higher costs for crude oil in 2008 are likely to be passed on to all petroleum products. Retail prices for motor gasoline are expected to average $3.21 per gallon or 40 cents above the 2007 price. The monthly average gasoline price is projected to peak near $3.50 per gallon this spring. It is important to note, however, that even if the national average monthly gasoline price peaks near that level, there is a significant possibility that prices during some shorter time period, or in some region or sub-region, will cross the $4 per gallon threshold.

“America’s ethanol industry is living up to its end of the bargain by helping reduce petroleum use and moderate prices for Americans at the pump,” said Renewable Fuels Association President Bob Dinneen. “The nearly 8 billion gallons of ethanol being produced on an annual basis today is a vital component of our nation’s gasoline supply, adding volume and helping to mitigate the price increases that will occur as oil continues its meteoric rise.”

I finally had the chance today to sit down and listen to the entire speech Assistant Energy Secretary Andy Karsner made at the National Ethanol Conference last month. He is quite the orator and he definitely got the crowd all fired up. If you can find 40 minutes to listen to it all, it is well worth the time.

But, here was my favorite part. “It’s a truism to call these things ‘domestic fuel,’” Karsner said, leading into a push for ethanol blends between E10 and E85. “For a long time, we thought that domestic fuel and ethanol meant E85. I love E85, but it is not the exclusive pathway,” and he says its the government’s role to certify mid-level blends to get biofuels into the marketplace “in an uninterrupted and continuous way.”

I just thought it was cool that he called it Domestic Fuel. If we were a radio station we could use that as a promo!

Here’s the sound bite: karsner-cut.mp3

Podcast: Play in new window | Download (530.2KB)

The first large-scale ethanol plant in Texas will hold its grand opening this weekend near Hereford.

Renewable Fuels Association president Bob Dinneen says the opening of plants like White Energy outside of the traditional ethanol producing area of the country is critical to the continued growth of this industry.

“No longer are Midwesterners the only Americans to realize the benefits of renewable fuels,” said Dinneen. “Texas is now moving beyond the petroleum industry towards a more sustainable energy future. Congratulations to White Energy and the people of Texas on beginning production at this new facility and for their commitment to helping set America on a path toward greater energy independence.”

The plant will produce 100 million gallons of ethanol per year and use 36 million bushels of corn and milo per year, almost all of it grown locally.

In addition to this newest plant, White Energy owns and operates two ethanol production plants: a 50-million-gallon plant in Russell, Kansas and a 110-million-gallon plant scheduled to begin operation in 2008 in Plainview, Texas.

It should be no surprise to anyone that the American ethanol industry produced a record amount of fuel ethanol in 2007.

According to year-end figures released by the Energy Information Administration, U.S. ethanol production averaged 423,000 barrels per day, totaling 6.48 billion gallons for the year. That is an increase of 108,000 barrels per day over 2006.

Ethanol demand, as calculated by the Renewable Fuels Association, continued to outpace production. For 2007, ethanol demand averaged 446,000 b/d totaling 6.84 billion gallons of demand for the year. That is an increase of more than 1.5 billion gallons over 2006 demand.

Biofuels had a seat on the plenary panel entitled, “Getting It Right: Responding to Market Forces” at USDA’s 2008 Outlook Forum last week.

Renewable Fuels Association President Bob Dinneen noted that while ethanol is “not a silver bullet” for all of America’s energy, economic and environmental issues, but “biofuels are absolutely a part of addressing each of them to some extent.”

Dinneen talked about how ethanol production has revitalized rural economies and offset the increased gasoline demand over the past few years. “We have stemmed the tide of increased gasoline imports into this country,” he said.

And he talked about cellulosic ethanol. “We recognize that in order to grow our industry we need to move beyond grain,” and Dinneen says it is already happening.

Other panelists were Paul Schickler of DuPont/Pioneer Hi-Bred, C. Larry Pope of Smithfield Foods and Tom Stenzel with United Fresh Produce Association. The entire webcast of the panel is posted on USDA’s website.

There was also a panel on new sources for biofuels, focusing on biodiesel and featuring presentations from the National Biodiesel Board and Agriculture Blue Sun Biodiesel. (The links will take you to their presentations.)

And a panel focusing specifically on sustainability of ethanol with presenters including Dr. Mark Stowers of POET and Rick Tolman of National Corn Growers Association.

And that was just the first day. The second day saw panels on wind, solar, biomass and more. Most presentations are available on USDA’s site.

BioEnergy International was the first to break ground in Pennsylvania and construct an ethanol plant. Pennsylvania will be home to a new Bionol Clearfield biorefinery.

BioEnergy International, LLC announces ground breaking for the Bionol Clearfield LLC, 100 mgpy corn ethanol biorefinery under construction in Clearfield, Pennsylvania.

“Renewable fuels like ethanol offer this nation an immediate opportunity to begin the hard work of mitigating the impacts of climate change, developing greater energy independence and creating jobs and economic opportunity at time when the economy faces significant challenges. The U.S. ethanol industry stands eager to join with Pennsylvanians and the people at BioEnergy International to help meet the energy and environmental challenges this country faces,” said Renewable Fuels Association President Bob Dinneen.

The chairman of the Renewable Fuels Association is excited about the developments in cellulose technology for the future of the ethanol industry.

“And we fully believe that many of these technologies will in fact be proven to be economically viable on a commercial scale,” said Chris Standlee, who is executive vice president of Abengoa Bioenergy in St. Louis.

He says support from the US Department of Energy through research grants is definitely helping to speed the process along. “We are fortunate enough to be the recipient of a grant to prove our cellulose technology on a commercial scale in a facility that we are building in southwestern Kansas,” one of six grant-funded plant that are scheduled to be in operation by 2010.

Standlee says the recent article in Science challenges the ethanol industry to step up its efforts to make sure the public gets the whole truth about ethanol, not just part of the story. “Even the study itself acknowledges the greenhouse gas emissions benefits of the use of ethanol,” he says. It just makes assumptions about land use for biofuels production that “just simply are not true.”

As chairman of the RFA, Standlee is looking forward to the upcoming National Ethanol Conference in Orlando February 25-27, to celebrate success and look forward to the future. “We have record attendance this year as we’ve had virtually every year since the start of the conference,” he said. “We expect somewhere in the neighborhood of 2500 people to be attending the conference. It really is an exciting opportunity.”

More information about the National Ethanol Conference can be found on the RFA website.

Listen to RFA’s “The Ethanol Report” podcast with Chris here, or subscribe to it on “The Ethanol Report” blog.
ethanol-report-07.mp3

Podcast: Play in new window | Download (3.3MB)

Biofuels were put on the defensive once again as the journal Science published new studies that claim biofuels are worse for global warming than fossil fuels.

Renewable Fuels Association President Bob Dinneen issued a statement which said the studies took a simplistic view of land use.

“Understanding the land use changes occurring around the globe is important to developing strategies to combat the advance of climate change. However, like previous studies, those published in Science today fail to put the issue in context. Assigning the blame for rainforest deforestation and grassland conversion to agriculture production solely to the renewable fuels industry ignores key factors that play a greater role. The continued growth of the global population, surging global demand for food from expanding middle classes in China and India, and continued expansion of development and urban sprawl are all factors contributing to the increased demand for arable acres.”

The Washington Post quotes Brent Erickson, executive vice president of the Biotechnology Industry Organization’s industrial and environmental section.

“It makes no sense to continue burning fossil carbon, which is essentially carbon that has already been sequestered for millions of years in the Earth’s crust, and which when burned releases carbon dioxide and also creates a carbon debt that can never be paid back,” he said. “It is much more logical to produce biofuels that recycle carbon, even if a short-term carbon debt is created. Even if it’s 167 years, you’re still better off than burning oil that can never be paid off.”

The studies are making the claim that even alternative feedstocks like switchgrass would lead to increased global warming because more land would be cleared to grow more crops.

The president of the Renewable Fuels Association (RFA) will present testimony Thursday to the Senate Energy and Natural Resource Committee at a hearing on the Energy Independence and Security Act of 2007.

Dinneen’s intends to tell the committee that the American ethanol industry stands ready to do its part to make the law successful.

Putting the importance of developing a renewable fuels industry in the context of reducing greenhouse gas emissions, Dinneen will note, “An analysis conducted for the RFA using the U.S. Department of Energy’s existing GREET model shows that increasing the use of ethanol and other renewable fuels to 36 billion gallons annually by 2022 could reduce greenhouse gas emissions by some 176 million metric tons, equal to removing the annual emissions of more than 27 million cars from the road.”

Moreover, given the downturn America’s economy is experiencing, Dinneen will underscore the important economic engine renewable fuel production can be for the nation. Economic analysis of the impact of increased domestic biofuel production and use as a result of the EISA anticipate the creation of more than 1 million new jobs, the addition of $1.7 trillion to the gross domestic product, and an increase in household incomes of more than $400 million.

2008 could be an even better year than 2007 for the ethanol industry.

That's the outlook of Renewable Fuels Association president Bob Dinneen. In the first "Ethanol Report" podcast for 2008, Dinneen gazes into his crystal ball and sees blue skies and big challenges for the ethanol industry this year.

"I think we will continue to see dramatic growth in ethanol production here at home and abroad as well," said Dinneen. "You're going to see ethanol used in parts of the country where it really has not been used much before."

The challenges are going to come in meeting the targets of the recently passed energy bill, especially in commercializing cellulosic ethanol.

"It's not going to be easy, we're going to be working awfully hard," but he says it will ultimately result in tremendous benefits for rural economies and the nation's consumers.

The presidential elections will be the main focus this year, but Dinneen says ethanol is a bipartisan issue that is supported by all the candidates who are learning more about it as they campaign around the Midwest. "There really is not a single candidate that has failed to express support for increasing the production and use of renewable fuels like ethanol," Dinneen said. "They all get it."

Listen to RFA's "The Ethanol Report" podcast here, or subscribe to it on "The Ethanol Report" blog.
ethanol-report-5.mp3

The Energy Independence and Security Act of 2007 will get the new year underway with a burst of renewable fuels.

The bill, signed by President Bush on December 19, includes an expanded Renewable Fuels Standard that requires significant development of other feedstocks to produce ethanol.

This edition of “Fill up, Feel Good” features comments by President George W. Bush, EPIC president Tom Branhan, and RFA president Bob Dinneen.

The “Fill up, Feel Good” podcast is available to download by subscription (see our sidebar link) or you can listen to it by clicking here (4:30 MP3 File):

The Fill Up, Feel Good theme music is “Tribute to Joe Satriani” by Alan Renkl, thanks to the Podsafe Music Network.

“Fill up, Feel Good” is sponsored by the Ethanol Promotion and Information Council.

Podcast: Play in new window | Download (2.0MB)