Domestic Fuel

Since it was the biggest gathering of the year for corn and soybean growers, it’s only natural that Commodity Classic was also a good place to talk about the state of the ethanol and biodiesel industries, especially when you consider the two grains are still the biggest feedstocks for the biofuels.

In this edition, we listen in on the conversation about ethanol and biodiesel at Commodity Classic with Secretary of Agriculture Tom Vilsack; Brian Jennings, the Executive Director of the American Coalition for Ethanol; Robert White with the Renewable Fuels Association; National Corn Growers Association president Darrin Ihnen; and American Soybean Association president Rob Joslin.

They talk about the E15 blend wall, the state of biofuels infrastructure, and the prospect of getting the federal $1-a-gallon biodiesel tax incentive passed through Congress.

It’s an interesting conversation, and you can hear it below.

You can also subscribe to the DomesticFuel Cast here.

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The world’s largest soybean processing plant will be using a a process from Verenium that will increase soybean oil production.

This company press release says Verenium’s Purifine(R) PLC enzymatic degumming process will be used at the Molinos Rio de la Plata’s San Lorenzo plant in Argentina … Argentina’s leading soybean and sunflower seed processor:

“Molinos’ ability to adopt new innovative technologies is what makes them a global leader in the edible oil market,” said Janet Roemer, Verenium’s Executive Vice President, Specialty Enzymes Business. “Verenium is pleased to be able to work with Molinos to further enhance their operating efficiency through the use of Purifine PLC, which allows for the simultaneous increasing of oil yields and improving the efficacy of meal production without requiring major changes to the existing plant layout.”

“Through Purifine PLC’s innovative enzymatic degumming process, we have seen a significant increase in oil yields and processing margins enabling our facility to more fully reach its potential,” said Luis Palacios, Molinos’ Industrial Manager. “The ability to squeeze extra yield from the same plant without increased chemical usage is critical to our philosophy of minimizing the overall environmental impact of our processes.”

The Molinos San Lorenzo facility is known for its state of the art technologies that maximize oil and meal yields from soybeans.

When it comes to approval of biodiesel in farm machinery, New Holland is outstanding in the field.

In both North America and Europe, New Holland has been a leader in recognizing the importance of biodiesel as a fuel source for agricultural equipment. The company was first to approve the use of biodiesel blends back in 2006 and has since moved to allow biodiesel in all equipment with New Holland manufactured diesel engines, including electronic injection engines with common rail technology.

At the recent National Farm Machinery Show in Louisville, most of the New Holland equipment on display proudly displayed soybean biodiesel signage, and company representatives wore buttons proclaiming their support for the domestically-produced fuel. “New Holland has a strong commitment to not only be a part of biodiesel, but also to be a leader in the industry as far as future fuel usage is concerned,” New Holland regional service manager Phil Cobb said at the farm show. He says it was natural for their company to take the lead. “Mainly because our customers are in the soybean areas and grow soybeans,” said Cobb. “Not only does it support farming, we also use the fuel. It’s important for the ag industry to be on the leading edge.”

Cobb says all New Holland equipment is approved for a minimum of five percent biodiesel, with the large combines approved for 100 percent and many of the tractors approved for up to 20 percent.

Listen to my interview with Phil Cobb from the National Farm Machinery Show here:

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While soybean-based biodiesel has been unfairly knocked at times for not being as environmentally friendly as it should be, a new study shows just how green fuel from the bean really is.

A new peer-reviewed life cycle profile released by the United Soybean Board (USB) documents multiple energy and environmental benefits of U.S. soybean farming and processing, including biodiesel. This press release has details:

“This profile is the first comprehensive life cycle study covering U.S. soybean production through four major biobased products,” said Wynne, Arkansas soybean farmer John Cooper, a USB Director and Member of the USB Domestic Marketing Committee. “U.S. soy already delivers environmental and energy benefits. It’s exciting to see the trends point to even more in the future.”

A key objective was to update life cycle inventory (LCI) databases for soybean production and processing as well as conversion into four key soy-derived feedstocks (methyl soyate, soy lube base stock, soy polyol, and soy resin) used in fuel and industrial products. Its cradle-to-gate scope begins with soybean farming (the cradle) and goes through processing of products (the gate).

Another important aspect of this study is that it’s based on U.S. agricultural data for the 2001-2007. The data the Department of Energy’s U.S. Life Cycle Inventory is based on comes from 1998 to 2001. And it contains soybean crushing information not previously available.

Biodiesel producers aren’t the only ones who are being hit by the loss of the federal $1-a-gallon tax incentive.

This story from Agriculture Online says farmers and consumers are also being hurt:

Ohio Soybean Association president Jeff Wuebker estimates that failure to renew the tax credit, which expired at the end of 2009, will cost him about $12.50 an acre on his soybean crop. That’s the number he comes up with when he multiplies a 50-bushel yield by the 25-cents-a-bushel estimated increase in soybean value from its use as a feedstock for biodiesel fuel.

“If we don’t have something to use this additional oil we have, it could get worse than 25 cents,” said Wuebker, who farms 1,300 crops acres and farrows 1,800 sows with his brother, Alan. Their diversified western Ohio farm also sells wheat, alfalfa hay, straw and feeds about 60 dairy steers.

The loss of the tax credit could also lead to higher fuel costs for all of us, another 25¢ to 35¢ a gallon, according to one Department of Energy estimate, [another Ohio farmer, Rob Joslin, who recently became president of the American Soybean Association] said.

As Joslin puts it, with the Senate not renewing the credit late last year, “we’ve disrupted the supply chain. We’ve set a whole series of dominoes in place that are detrimental to our industry and our country.”

We’ll keep an eye on what the Senate does when it comes back in session. Lot of people hanging in the balance. Let’s hope someone gets the message.

A team of scientists has cracked the code on the soybean genome, and that information could lead to better biodiesel yields from the oilseed.

This article from Physorg.com says the team consists of 18 institutions, including the U.S. Department of Energy Joint Genome Institute (DOE JGI), the U.S. Department of Agriculture-Agricultural Research Service (USDA-ARS), Purdue University and the University of North Carolina at Charlotte. The DOE, National Science Foundation, USDA and United Soybean Board supported the research:

“The soybean genome’s billion-plus nucleotides afford us a better understanding of the plant’s capacity to turn sunlight, carbon dioxide, nitrogen and water, into concentrated energy, protein, and nutrients for human and animal use,” said Anna Palmisano, DOE Associate Director of Science for Biological and Environmental Research. “This opens the door to crop improvements that are sorely needed for energy production, sustainable human and animal food production, and a healthy environmental balance in agriculture worldwide.”

Jeremy Schmutz, the study’s first author and a DOE JGI scientist at the HudsonAlpha Institute for Biotechnology in Alabama, said that the soybean sequencing was the largest plant project done to date at the DOE Joint Genome Institute. “It also happens to be the largest plant that’s ever been sequenced by the whole genome shotgun strategy—where we break it apart and reassemble it like a huge puzzle,” he said. Of the more than 20 other plant genomes taken on by the DOE JGI, those already sequenced include the black cottonwood (poplar) tree and the grain sorghum, both targeted because of their promise as biomass feedstocks for biofuels production.

Soybean farmers will also be glad that the research could end the threat of soybean rust.

It looks like there will be plenty of soybeans for food and fuel use, especially since the non-renewal of the biodiesel tax incentive seems to have put a lot of refineries’ operations on hold.

The latest World Agriculture Supply and Demand Estimate report from the USDA pushes up the 2009 U.S. soybean crop now to an estimated record 3.36 billion bushels, up 42 million bushels from the previous month. Biodiesel Magazine reports that soybean export projections were raised 35 million bushels to a record 1.38 billion led by strong sales and shipments to China and several other markets including Taiwan, Thailand, Egypt, and Canada:

The projected U.S. soybean crush was raised 15 million bushels from the previous month’s report to 1.71 billion reflecting increased soybean meal exports. Soybean ending stocks were projected at 245 million bushels, down 10 million from last month. Despite increased crush, soybean oil production was reduced due to a lower extraction rate. With projected use unchanged, soybean oil stocks were projected at 2.15 billion pounds, down 155 million from last month. The estimate for methyl ester use was unchanged at 2.2 billion pounds for the current 2009/10 marketing year. That compares with 1.9 billion pounds in 2008/09 and 3.24 billion pounds the previous year.

The report goes on to say that U.S. soybean yields averaged an estimated 44 bushels an acre, also a record. Hopefully, this increased size of crop and higher yields will quiet some of the critics who say we can’t have food and fuel.

A new report indicates there will be enough corn and soybeans for ethanol and biodiesel production, as well as the feed, food and export uses those crops are tasked with.

But the evaluation from the Agricultural Marketing Resource Center’s Robert Wisner, Professor of Economics and Energy Economist, says things could get tight if next year’s crop is hit with bad weather or a natural disaster:

For 2009-10, the current corn crop estimate points to adequate corn supplies for feed, food, fuel, and export uses. Carryover stocks on August 31 of next year are expected to be about 1 and one-half weeks above minimum working stocks levels. Our early and very tentative normal-yield projections for 2010-11 show corn carryover stocks declining slightly by August 31, 2011 but still remaining marginally above minimum working stocks levels.

Wisner does note that there’s not a lot of margin for error in case the Corn Belt gets hit with drought or flooding. He says that will keep corn prices volatile should any inclement weather show up.

As far as soybeans and biodiesel, they should be OK, if, once again, the crops turn out as expected:

[T]he availability of soybeans and soybean oil for 2009-10 and 2010-11 is not indicated to be a major constraint on biodiesel production in U.S. if South American crops are near normal. Supplies for the current marketing year are a little tighter than indicated at this time last year because of extreme weather problems in South America last winter and early spring. However, U.S. and EU government policy actions that limit biodiesel demand and create uncertainty about future policies are a constraint on U.S. biodiesel production. That, in turn, makes 2010-11 soybean availability for biofuels and other uses look a little more adequate than anticipated a year ago.

You can read all of Wisner’s report in the January 2010 edition of the Ag MRC’s Renewable Energy Newsletter.

A group that promotes the use of soybeans and a program that works to reduce local petroleum consumption are partnering again to promote the use of soy biodiesel next year.

This article from radio station KFGO in Fargo, ND-Moorhead, MN says the United Soybean Board’s soybean checkoff and the U.S. Department of Energy-affiliated (USDOE) Clean Cities’ chapters will develop programs that promote the benefits of soy biodiesel:

“The soybean checkoff continued this program to support the use of soy biodiesel in any diesel motor to show how biodiesel is cleaner burning and better for the environment while supporting U.S. agriculture,” says Geno Lowe, a soybean farmer from Hebron, Md., and soybean checkoff leader. “We expect we’ll see some inventive proposals such as school bus demonstrations to public transportation uses to heavy equipment uses by state or local governments or maybe even a bioheat promotion project.”

Biodiesel promotion and education has proved to be important to U.S. soybean farmers’ bottom lines. A checkoff-funded study found that U.S. soybean farmers received an additional $2.5 billion in net returns over the last four years due to the biodiesel industry’s demand for soybean oil. It shows this demand added up to 25 cents in support for the per-bushel price of soybeans.

USB will provide up to $100,000 for funding soy biodiesel communications programs. The biodiesel reimbursement application process has been opened up, and USB is encouraging Clean Cities chapters to partner with Qualified State Soybean Boards (QSSBs) for this project. Selected participants will be announced in the middle of next month.

The deadline for getting in your two cents’ worth on the U.S. EPA’s proposed Renewable Fuels Standard (RFS2) is rapidly approaching, as this Friday, Sept. 25th will mark the end of the comment period.

This article in Biodiesel Magazine says the American Soybean Association and the National Biodiesel Board are making a last-minute appeal to their members and biodiesel supporters to get their comments in:

Both organizations have made it easy to access information at their Web sites, providing background information, sample comments, links to the EPA Web site and instructions on emailing comments. The ASA form is available at www.soygrowers.com/policy/RFS2.htm. The NBB’s action center is available at http://biodiesel.org/news/RFS/. The NBB provides an express comment that features a condense message and only requires a name, city, state and email address. “it takes less than 20 seconds to fill out and submit,” the NBB says. The NBB also offers long and short versions of sample comments to make, and provides information for an individual to craft a unique response.

The stakes are high for the biodiesel industry. “As EPA’s proposed rule is written, soy biodiesel would no longer qualify under the specific federal mandate for biomass-based diesel use,” ASA President Johnny Dodson explained. “With the future of the U.S. biodiesel industry at stake, farmers need to get involved right now by voicing their opposition to the proposed rule.” The ASA has reached out to U.S. soybean farmers in their campaign, as have several state soybean associations and corn grower associations as well to comment on the impact on corn ethanol.

The main sticking point the ASA and NBB (and the Renewable Fuels Association, for that matter) have with the proposal is the inclusion of international indirect land use impacts into the calculations of greenhouse gas emissions.

If you haven’t commented yet, better get your thoughts in now.