USDA Rural Development Supports Biofuel Investment

USDA Rural Business-Cooperative Service Administrator Lillian Salerno went on a three-state Midwest tour last week to highlight USDA investments that are helping expand business opportunities in the bio-economy, including biofuels.

usda-salerno“Creating jobs and expanding economic opportunity for rural small businesses are top priorities for the Obama Administration,” said Salerno, who visited companies in Iowa, Nebraska and South Dakota. “The new Farm Bill expands the potential for economic growth in rural America by maintaining momentum for the emerging bio-based industry and the more than 3,000 bio-based companies across the country.”

Salerno’s tour started with a visit to Quad County Corn Processors near Galva, Iowa where they are working on a process to turn corn kernel fibers into cellulosic ethanol and as a result boost the plant’s ethanol production. “It’s a co-op, so all the farmers around there have a vested interest in making this processing unit work,” she said. The company has received nearly $22 million in USDA Rural Development loan guarantees since it opened 13 years ago.

Salerno noted that the United States has the capacity to provide one billion tons of biomass per year by 2030. “This has a possibility of hundreds of thousands of jobs – actually 1.7 million estimated,” she said.

Prospective Plantings Down, But Corn Stocks High

ncga-logo-newThis year’s corn plantings are expected to be down this year, but growers say there will be plenty of stockpiles for all needs, including ethanol. The latest U.S. Department of Agriculture figures show that American farmers expect to plant 3.7 million fewer acres of corn this year, down four percent from 2013. But the National Corn Growers Association says, don’t worry, there are plenty of stocks going into the year, and it would still be the fifth-largest U.S. corn acreage planted.

“In 2013, U.S. farmers produced a record crop abundant enough to meet all needs and provide an ample carry over into 2014,” National Corn Growers Association President Martin Barbre said. “While it is still early in the season and many factors may change the reality on the ground as planting progresses, the public can rest assured that bountiful stockpiles and adequate plantings will ensure our corn security for the year to come.”

NCGA says the plantings will yield 13.37 billion bushels, and corn stocks stand at more than 7 billion bushels, up 30 percent from the same time last year.

IRFA: Strong Plantings Report Calls for Strong RFS

IowaRFAlogoExpected big plantings of corn and soybeans underscore the need for a strong Renewable Fuels Standard (RFS). New estimates from the U.S. Department of Agriculture (USDA) show a possible record amount of soybeans expected to be planted this year and the fifth largest corn acreage to be planted as well. The Iowa Renewable Fuels Association (IRFA) says these factors show why a strong and growing RFS is needed this year.

“The past eight years were prosperous for agriculture because the RFS was allowed to act as a sponge, soaking up additional corn and soybeans when needed,” stated IRFA Executive Director Monte Shaw. “The vast amount of corn and soybeans expected to be planted in 2014 demonstrates the importance of a strong and growing RFS. If the EPA’s proposal to essentially gut the RFS is allowed to become final, we could see huge carryovers, crop prices plummet below the cost of production, and family farms placed in jeopardy.”

Nearly 92 million acres is expected to be dedicated to corn this year and a record 81.5 million acres for soybeans, a six percent increase from last year.

Ag Secretary Takes Time on Ag Day for Ethanol

ace14-dc-vilsackThere are lots of activities for National Agriculture Day going on today in Washington DC, including a big celebration unveiling a statue of Dr. Norman Borlaug in the Capitol, but Agriculture Secretary Tom Vilsack still took time to meet with members of the American Coalition for Ethanol in town this week to visit Congressional offices

“The country needs a robust renewable fuel industry,” said Vilsack. “It provides choice for consumers and less cost gas at the pump. It helps to create hundreds of thousands of jobs which is important for the economy. It stabilizes farm income, it’s better for the environment, and it makes us a safer nation because we’re less reliant on others for our energy and fuel sources. So we need to continue to have a robust commitment to this industry, we need to expand it and grow it.” Brief interview with Secretary Vilsack after ACE visit

The secretary spoke to the more than 80 ethanol industry about what USDA is doing to achieve that goal, including finding creative ways to increase higher ethanol blend pumps, promoting exports of ethanol to Japan, India and China, and continuing to work towards encouraging use of higher blends in this country.

2014 ACE Biofuels Beltway March photo album

Coverage is sponsored in part by Patriot Renewable Fuels

Bulk of Advanced Biofuel Payments Go to Biodiesel

USDA Rural Development LogoThe biggest portion of money recently paid out for the U.S. Department of Agriculture’s Advanced Biofuel Payment Program went to biodiesel operations, indicating that green fuel is the leading advanced biofuel in the U.S. Biodiesel Magazine reports that about $40 million of the $60 million paid out went to biodiesel production. USDA officials say the entire $60 million announced last week shows the the Obama Administration’s commitment to support an “all-of-the-above” energy strategy.

“The Bioenergy Program for Advanced Biofuels is building the foundation for a clean energy economy and protecting our environment while making America less dependent on foreign and fossil fuels and increasing rural economic growth,” said Paco Valentin, USDA Rural Development State Director.

Through this program and others at USDA, the department is working to support the research, investment and infrastructure necessary to build a robust and lasting biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel. More than 300 producers in 47 states have received $279 million in payments since the program’s inception. It has supported the production of more than 4 billion gallons of advanced biofuel and the equivalent of more than 40 billion kilowatt hours of electric energy.

The funding was first established with the 2008 Farm Bill and reauthorized in the recently signed 2014 Farm Bill.

Vilsack Focused on Ways to Help Biofuels

classic14-vilsack1Ag Secretary Tom Vilsack says his discussions with his counterpart at the Environmental Protection Agency don’t focus on the message that biodiesel and ethanol advocates are already pushing: abandoning the current proposal that would cut the amount of biofuels mixed into the Nation’s fuel supply.

“I’m looking for ways to help this industry, regardless of what EPA does,” Vilsack told a group of reporters gathered at Commodity Classic, the annual meeting of corn, soybean, wheat and sorghum growers in San Antonio. While pointing out that he has been a long-time supporter of biofuels, he said it doesn’t make sense to repeat what EPA administrator Gina McCarthy is already hearing in the thousands of comments her agency has received. Vilsack believes a great way forward is marketing ethanol and biodiesel as exports. “Our team has put together a plan to expand trade promotion on biofuels by including biofuels folks on a new trip to China,” as well as planned pitches to India and Japan.

Vilsack added they can also address infrastructure issues to make sure that is not a barrier to getting more biofuels into the system. He sees making sure biodiesel and ethanol are successful as matters of national security importance, environmental concern, and economic interest. He just wants to make sure his Cabinet colleague has all the information he can provide her.

“Bottom line is: we’re going to continue to help this industry as best we can, advocate for it, and trust that EPA at the end of the day makes the right set of decisions.”

Listen to his remarks here: Vilsack Talks RFS at Commodity Classic

2014 Commodity Classic Photos

Mike Haas Receives Eye on Biodiesel Pioneer Award

Mike HaasReceiving an Eye on Biodiesel Pioneer Award for lifetime achievement serving the biodiesel industry at the convention was Mike Haas, of USDA’s Agricultural Research Service.

Haas has been a Lead Scientist and Research Biochemist with the USDA’s Agricultural Research Service since 1981. He has been a huge supporter of the biodiesel industry and currently leads a project investigating the production and quality enhancement of biodiesel, and the chemical modification of lipids to produce bio-based petroleum replacements. Haas and the USDA have been a key supporter of the annual Biodiesel Technical Workshop and currently provides leadership for the NBB’s Next Generation Scientists for Biodiesel program.

You can listen to Mike’s remarks here: Mike Haas Remarks

2014 National Biodiesel Conference Photo Album

Corn Stocks and Ethanol Use Increased

USDA-LogoThe newest supply and demand estimate from the U.S. Department of Agriculture confirms a record corn harvest in 2013 of just under 14 billion bushels and an increased in usage of corn for ethanol.

USDA’s World Agricultural Supply Demand Estimate for January 10 projects corn use for 2013/14 higher with feed and residual use projected up 100 million bushels based on September-November disappearance as indicated by the December 1 stocks estimate. “Corn used to produce ethanol is raised 50 million bushels reflecting continued strong weekly ethanol production, a reduction in expected sorghum use for ethanol, and higher forecast 2014 gasoline consumption in the latest projections from the Energy Information Administration.”

RFA-logo-13
Renewable Fuels Association
(RFA) president and CEO Bob Dinneen says the report’s numbers indicate that now is a bad time to reduce volume requirements under the Renewable Fuel Standard (RFS). “Due to the expected corn surplus, corn prices have already dropped to nearly $4.00/bushel – half the price of corn in late summer 2012, below the price of corn when EISA was signed into law in 2007, and below the farmer’s cost of production,” Dinneen said in a statement, adding that farmers, small businesses and innovation in next generation biofuels would be adversely impacted by lowering the RFS in 2014. “It doesn’t have to be this way, there is still time for the Obama White House and EPA to do the right thing and restore the numbers for ethanol to their statutory levels.”

USDA Increases Corn Use for Ethanol

usda-logoDespite the Environmental Protection Agency proposal to lower corn ethanol volume obligations for 2014 under the Renewable Fuel Standard (RFS), USDA’s December supply/demand report is predicting a 50 million bushel increase in corn use for ethanol next year. Ending stocks are now expected to total 1.792 billion bushels, down 5 percent from last month’s estimate.

The new report also calls for increases in exports, food and seed use but ending stocks will still be more than double a year earlier with this year’s record crop of just under 14 billion bushels. Prices are expected to average $4.40 a bushel in the current year, down significantly from $6.89 last marketing year.

Ethanol By-Product as Biodegradable Kitty Litter

usda-logoResearchers at the U.S. Department of Agriculture (USDA) have found a way to turn a by-product of ethanol production into a biodegradable form of kitty litter. This news release from the Agricultural Research Service (ARS) says USDA plant physiologist Steven Vaughn and his colleagues are using dried distiller’s grains, DDGs, as a starting material for a more environmentally friendly alternative to nonbiodegradable clay-based litters.

In preliminary studies, Vaughn’s group tested “x-DDGs.” These are DDGs that, after being used for ethanol production, are treated with one or more solvents to extract any remaining, potentially useful natural compounds.

The team’s laboratory experiments yielded a suggested formulation composed of the x-DDGs and three other compounds: glycerol, to prevent the litter from forming dust particles when poured or pawed; guar gum, to help the litter clump easily when wet; and a very small amount of copper sulfate, for odor control.

The resulting litter is highly absorbent, forms strong clumps that don’t crumble when scooped from the litter box, and provides significant odor control, according to Vaughn. He’s based at the Agricultural Research Service (ARS) National Center for Agricultural Utilization Research in Peoria, Ill. ARS is USDA’s chief intramural scientific research agency.

This isn’t the first time corn or grains have been looked at to use for environmentally friendly cat litter. But this is the first time DDGs have been thoroughly examined for this purpose.

Vilsack Defends EPA’s Slashing of RFS

vilsackSecretary of Agriculture Tom Vilsack is defending the Obama Administration’s proposal to cut the 2014 Renewable Volume Obligations (RVOs) as part of the Renewable Fuel Standard (RFS) for the amount of renewable fuels to be blended into gasoline and diesel. But some of the people he spoke to, along with several biofuel advocates, are questioning the legality of the cuts. The Environmental Protection Agency has proposed to set the cellulosic biofuel category at 17 million gallons, biomass-based diesel at 1.28 billion gallons, advanced biofuel at 2.20 billion gallons and renewable fuel at 15.21 billion.

In remarks before farm broadcasters during the 70th National Association of Farm Broadcasting Annual Convention in Kansas City, Vilsack said EPA’s unprecedented number of comments in the proposal shows how much the agency wants to work with the biofuels industry to make sure their fuels will work for American consumers.

“What EPA has done is essentially said ‘We are very interested in maintaining this industry, and we need information from the industry as to policies and programs, in addition to the RFS, that would allow this industry to be more sustainable and more profitable,’” Vilsack said, adding that as part of the comment period for this RVO proposal, the industry will get more input on policies.

As far as USDA is concerned, he said his folks will concentrate on parts of the industry they can control, pointing to programs such as Rural Energy for America Program (REAP), which provides funds for infrastructure to make sure those higher blends biofuels can be available.

“I think our challenge is to work with the industry … that they need work to create a distribution system, and that they can’t rely on the petroleum industry [to do it for them].”

When pressed by Michelle Rook of WNAX about the authority that EPA had to set RVOs lower than what the law allows, Vilsack, while pointing out he doesn’t run the EPA, said the law does allow for the waiving of statutorily mandated requirements.

“[EPA] would say the reason they are reducing the numbers is because we are at a point where the amount of fuel being consumed in this country is 130 billion gallons,” and when you figure on the distribution problems he said needed to be worked on that basically limit to a 10 percent ethanol blend, that caps how much the EPA can require. “That’s why the EPA went the extra mile of saying, ‘Hey, we have to figure out how to get more higher blends in the marketplace. Give us your ideas.’”

Vilsack pointed to how USDA is working with the EPA, the military and civilian aviation industries to expand biofuel use in those areas as his agency’s commitment to making sure the RFS and biofuels industries are successful.

You can hear Vilsack’s remarks specifically about the RFS here: Secretary Vilsack Press Conference comments on RFS

And you can hear the entirety of what he had to say to farm broadcasters here: Secretary Vilsack Press Conference

Beetle-Infested Trees to be Turned into Biofuel

usda-logoTrees lost to beetle infestations might not be a total loss; they could be turned into biofuels. The U.S. Department of Agriculture (USDA) awarded nearly $10 million in grants to a consortium of academic, industry and government organizations led by Colorado State University (CSU) to see if insect-killed trees in the Rocky Mountains could be a sustainable feedstock for bioenergy.

“Infestations of pine and spruce bark beetles have impacted over 42 million acres of U.S. forests since 1996, and a changing climate threatens to expand the threat from bark beetle on our forest lands,” said Agriculture Secretary Tom Vilsack. “As we take steps to fight the bark beetle, this innovative research will help take the biomass that results from bark beetle infestation and create clean, renewable energy that holds potential for job creation and promises a cleaner future for America.”

There are many benefits to using beetle-killed wood for renewable fuel production. It requires no cultivation, circumvents food-versus-fuel concerns and likely has a highly favorable carbon balance. However, there are some challenges that have been a barrier to its widespread use. The wood is typically located far from urban industrial centers, often in relatively inaccessible areas with challenging topography, which increases harvest and transportation costs. In addition to technical barriers, environmental impacts, social issues and local policy constraints to using beetle-killed wood and other forest residues remain largely unexplored.

CSU researchers, together with other scientists from universities, government and private industry in the region, created the Bioenergy Alliance Network of the Rockies (BANR) to address these challenges. The project will undertake comprehensive economic, environmental and social/policy assessment, and integrate research results into a web-based, user-friendly decision support system. CSU will collaborate with partners across four states to complete the project. Partners include: University of Idaho, University of Montana, Montana State University and the University of Wyoming, U.S. Forest Service Rocky Mountain Research Station, National Renewable Energy Lab and Cool Planet Energy Systems.

The release goes on to say that they are exploring recent advances in scalable thermochemical conversion technologies to produce advanced liquid biofuel and co-products on-site.

Vilsack also points out that this type of program highlights why a new farm bill is needed.

USDA Says Spring Canola is Good Biodiesel Crop

OLYMPUS DIGITAL CAMERAResearchers at the U.S. Department of Agriculture believe spring canola could be a good crop for biodiesel for producers in the drier parts of the Great Plains. This news release from the Agricultural Research Service says ARS agronomist David Nielsen and others are finding ways to stretch scarce water supplies and increase crop returns in that part of the country.

Nielsen, who works at the ARS Central Great Plains Research Station in Akron, Colo., worked with colleagues to combine existing plant growth computer models and generate spring canola production simulations. Then they ran their results from the combined model with 16 years of regional weather data, four different soil water levels at planting time, and other site-specific information to generate spring canola yield estimates for nine locations in Nebraska, Colorado and Kansas.

Results from their crop simulations suggested the highest yields would be produced in the north-central area near Champion, Neb., and the lowest yields would be produced in the south-central area near Walsh, Colo. When 75 percent of the soil water was available for crop use at planting, the model indicated six of the sites had more than a 70 percent probability of producing a canola seed yield of at least 900 pounds per acre.

The researchers found they could net anywhere from $67 to $189 per acre in returns, depending on plant-available soil water levels. They’ve also developed a simple decision support tool for canola production and economic analysis that can be used by farmers for canola planning.

Surplus US Sugar Sold to Ethanol Makers

usda-logoIn an effort to get rid of surplus sugar and produce green fuel, the US Department of Agriculture has sold a large block of the sweetener to ethanol makers. This article from Ethanol Producer Magazine says the government sold the sugar rather than just forfeiting it under the Feedstock Flexibility Program for Bioenergy Producers.

The program requires the USDA to purchase sugar and sell it as feedstock for bioenergy producers in order to avoid forfeiture of sugar pledged as collateral by processors when securing nonrecourse community loans for them Commodity Credit Corp. Sugar purchased by the CCC under the program is sold on a competitive basis to bioenergy producers. The regulation establishing the program requires that purchasers use the sugar to produce biofuel, including ethanol, butanol or other marketable biofuels as CCD determines.

In this sale, USDA sold a reported 136 thousand tons of refined beet sugar to bioenergy producers through FFP, about a third of the nearly 377,000 tons that was offered by processors. While the government sold the sugar at a pretty steep loss of more than $53 million, that is less than if the USDA had to forfeit the sugar without the proceeds at all.

Rural Areas to REAP Benefits of Energy Projects

usda-logoFarmers, ranchers and small businesses in rural areas of 22 states will benefit from projects designed to use renewable energy, as well as conserve power. The U.S. Department of Agriculture (USDA) announced the latest round of grants and loans being made available through the Rural Energy for America Program (REAP).

“REAP continues to help farmers and rural businesses reduce their energy consumption and by doing so, improve the bottom line of their operations,” [Acting Under Secretary for Rural Development Doug] O’Brien said. “This important Farm Bill program and others like it would not be available without a comprehensive Food, Farm and Jobs Bill.”

The dozens of projects across the country approved for the REAP funds include nearly $50,000 for two biodiesel blending and pumping stations in Georgia, more than $31,000 for some E85 and biodiesel blender dispensers in Iowa, almost $60,000 to purchase equipment to make biodiesel in Indiana, and a $41,000 grant to assist with the installation of ground-mounted solar panels at a bed and breakfast in Arizona.

You can see the entire list of projects here.