Biodiesel Has Place in USDA Biofuels Report

While the ethanol industry has been praising the USDA’s report entitled “Roadmap to Meeting the Biofuels Goals of the Renewable Fuels Standard by 2022,″ there’s plenty in there for biodiesel fans to like as well.

The feds are optimistic that biodiesel will be able to carry its share of the overall 36 billion gallons of biofuels goal:

The U.S biofuels industry is on track to produce 1 billion gallons of biodiesel by 2022. In 2009, the United States already produced 550 million gallons of biodiesel. There are presently 173 plants and nearly as many companies that have invested millions of dollars into the development of biodiesel manufacturing plants and are actively marketing biodiesel. Twenty-nine companies have reported that they have plants currently under construction and are scheduled to be completed within the next 12-18 months. Their combined capacity, if realized, would result in another 427.8 million gallons per year of biodiesel production.

Furthermore, the report recognizes the importance of the soybean industry as being the main feedstock for biodiesel production, especially in the Midwest, and the rise of more non-traditional sources, such as algae and waste cooking greases.

Ethanol Industry Pleased With USDA Biofuels Report

USDA’s “Roadmap to Meeting the Biofuels Goals of the Renewable Fuels Standard by 2022″ released on Wednesday gives all the right directions as far as the ethanol industry is concerned, now they want to see it actually hit the road and make it to the destination.

USDAReleasing the report, Agriculture Secretary Tom Vilsack said, “The current ethanol industry provides a solid foundation to build upon and reach the 36 billion gallon goal. As we prepare to celebrate Independence Day, we must reaffirm our commitment to bring our country closer to complete energy independence and this report provides a roadmap to achieve that goal.”

The report acknowledges the significant role of corn ethanol in meeting future goals, outlines a regional analysis of feedstocks that can be utilized for biofuels production, and stresses the need for more blender pumps and flex fuel vehicles (FFVs). All of the nation’s ethanol industry organizations issued responses that they were pleased with USDA’s report.

Renewable Fuels Association LogoRenewable Fuels Association President Bob Dinneen calls the goals of the RFS ambitious, but achievable. “Secretary Vilsack and USDA have rightfully identified the crucial areas in which the department can help accelerate the growth of the industry and ensure the RFS delivers on the goals provided when Congress passed the legislation,” said Dinneen.

The USDA report says the agency “can immediately offer assistance on infrastructure” such as blender pumps to add to what the ethanol industry is already doing. RFA has joined with the American Coalition for Ethanol (ACE) on the Blend Your Own campaign aimed at installing 5,000 blender pumps in the next three years, and Growth Energy recently began a grant program for retailers to install the pumps.

ACEHowever, the organizations all note that increasing the blend rate for ethanol in gasoline to 15 percent is still a critical step that is needed. “Until the regulations are modernized to allow more than 10 percent biofuels in a gallon of gasoline, petroleum still has a 90 percent mandate at the pump,” said ACE executive vice president Brian Jennings. USDA’s report acknowledges the “blend wall” as one of the challenges in expanding the use of biofuels, but beyond that says only that “EPA is in the process of evaluating whether a decision to blend up to 15 percent ethanol into gasoline is justifiable based on the latest science, its effect on engines, and its effect on air quality.”

Growth EnergyGrowth Energy CEO Tom Buis commended Secretary Vilsack for “looking down the road to help America achieve its energy independence” with a long term plan, but noted that interim measures are needed, such as approval of Growth Energy’s petition with the U.S. Environmental Protection Agency to increase the allowable blend of ethanol in gasoline from 10 percent to 15 percent.

USDA Releasing Report on Biofuels

The USDA is releasing a report on renewable transportation fuels and the role the agency will play in development of those biofuels.

Ag Secretary Tom Vilsack says the report comes as the federal Renewable Fuels Standard (RFS2) gets ready to kick in on July 1st and will require that 36 billion gallons of biofuel per year be in America’s fuel supply by 2022:

“The Obama Administration has made domestic production of renewable energy a national priority because it will create jobs, combat global warming, reduce fossil fuel dependence and lay a strong foundation for a strong 21st Century rural economy, and I am confident that we can meet the threshold of producing 36 billion gallons of biofuel annually by 2022,” Vilsack said. “As we prepare to celebrate Independence Day, we must reaffirm our commitment to bring our country closer to complete energy independence and this report provides a roadmap to achieve that goal.”

Vilsack says the ag department’s role will be to identify numerous biomass feedstocks to be utilized in developing biofuels and to call for the funding of further investments in research and development of feedstocks, sustainable production and management systems, efficient conversion technologies & high-value bioproducts, and decision support and policy analysis tools.

“Our focus at USDA is primarily on how do you build biorefineries in all parts of the country, how do you take advantage of the most efficient and effective feedtsocks that are available in each region of the country, and how do you create enough blender pumps so there’s customer convenience to build greater demand on Detroit and other auto manufacturers to produce the kinds of cars to use more ethanol.” He adds the program needs to go national, on a governmental and private business level, for the biggest impact.

You can read the report at

Ethanol Groups Frustrated Over E15 Delay

Growth EnergyThe ethanol organization that filed the petition with the EPA to increase the ethanol blend rate to 15 percent has gotten very little information about why a decision is being delayed again.

“We’re trying to find out what additional tests have been added in,” said Growth Energy CEO Tom Buis during a press conference today. “The people who filed the waiver should have been notified that they were adding new tests.”

The Environmental Protection Agency sent out the following short statement regarding the delay to selected reporters late Thursday that still has not been posted on the agency’s website:

DOE (Department of Energy) is on track to complete testing designed to determine the impact of higher ethanol blends on vehicles built after 2007 by the end of September. DOE is also testing some vehicles built before 2007 and is also testing tanks and other fuel handling equipment to see how they might be affected by E15. While results from the tests conducted to-date look good, EPA will not make a final decision until DOE completes its current comprehensive testing of the newer vehicles. EPA is taking steps to ensure the appropriate pieces are in place should the results of the complete set of tests be positive. Based on DOE’s schedule, EPA believes it will be able to make a final determination on whether to approve the use of higher ethanol blends this fall.

Buis believes the Department of Energy is causing the delay, not EPA. “Obviously this administration has been very strong supporters of renewable energy,” said Buis. “I would say this is not political, I would say we’re trapped in some bureaucratic maze here and we want to unravel it.”

Download the Growth Energy press conference
or listen here

Renewable Fuels Association LogoRenewable Fuels Association President and CEO Bob Dinneen expressed frustration over the delay. “We think this is EPA being derelict in its duties,” said Dinneen in an audio statement. “They need to expedite this work and make sure consumers have options.”

Worse than the delay, in Dinneen’s opinion, is the indication that EPA is now talking about possibly approving E15 first in 2007 and newer vehicles, and then 2001 and newer. “Now they’re not talking about bifurcating the market, they’re talking about trifurcating the market!” said Dinneen. “This is just idiocy.”

Download Dinneen’s statement
or listen here

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USDA Promises Canola Biodiesel Won’t Be Left Behind

The Ag Department is promising that canola-based biodiesel won’t be left behind as provisions of the 2008 Farm Bill are implemented.

Biofuels Digest says that’s music to the ears of some of the folks from northern states, including Congressman Earl Pomeroy of North Dakota, who personally got the assurance from USDA assurance after the EPA failed to complete an evaluation of canola biodiesel:

This commitment was made during a House Agricultural Committee hearing when Deputy Under Secretary for Rural Development stated that canola based biodiesel plants, such as the one in Velva, North Dakota, will be allowed to0 participate in the program while the EPA concludes its evaluation.

Congressman Pomeroy noted ” “Canola is the feedstock of choice for 10 percent of the biodiesel plants in the United States. It makes no sense to penalize them simply because the EPA hasn’t done its job and finished this evaluation yet. I’m pleased that USDA has committed to making sure our canola biodiesel producers will be given a fair shake.”

USDA Chief Confident of Ethanol Blend Increase

U.S. Secretary of Agriculture Tom Vilsack believes that the Environmental Protection agency will increase the amount of ethanol allowed in regular gasoline above the current ten percent.

“I’m very confident that we’re going to see an increase in the blend rate,” said Vilsack in a telephone press conference from Iowa on Friday.

Vilsack also said that long-term extensions of the ethanol subsidies are needed in order to attract private capital to meet the mandate of 36 billion gallons of ethanol production by 2022. “We need a plan. We need to show that there’s a way to get to 36 billion gallons,” he said. “We want to find out how many refineries we need to build, we need to find out what feedstocks need to be advanced in terms of research and development. We need to figure out how to do things more efficiently with our current systems and how we might be able to incent those efficiencies. We need to figure out a distribution system and how many blender pumps are we gonna need and where are they going to be located and how do we get started doing that.”

The secretary says he has a team working on that plan and hopes to have it ready by the end of summer.

Importance of Biofuels in Rural Revitalization

The expansion of biofuels will play a significant role in the revitalization of rural America, according to U.S. Secretary of Agriculture Tom Vilsack.

“Why not create biofuel refineries and renewable energy plants that create jobs and markets for a product that otherwise might not be valued as much,” said Vilsack during a Rural Summit in Missouri on Thursday. “Why not create opportunities for the bioeconomy to respond to challenges like we have down in the Gulf.”

Vilsack says we need to build both the production and distribution systems for renewable fuels. “We’re working hard to get that long term commitment for the financial support. We want to figure out ways to make sure that we get the credit that is necessary to build these biorefineries and maintain them through tough times. We want to increase research and development in advanced biofuels and feedstocks and figure out how to do things more efficiently,” said Vilsack.

The National Summit, held in Hillsboro, Mo., culminates the Rural Tour Secretary Vilsack led last year to 22 states.

Ethanol Demand a Topic at Clean Energy Forum

Agriculture Secretary Tom Vilsack and other administration officials joined rural stakeholders for a clean energy economy forum at the White House on Wednesday, which was the one year anniversary of President Obama’s Biofuels Directive.

clean energy forum“Renewable energy production is a key to sustainable economic development in rural America,” Vilsack said. “We must rapidly escalate the production of biofuels to meet the 2022 Federal Renewable Fuels standard goal, and much of this biofuel will come from feedstocks produced by America’s farmers and ranchers. This will be an increasing source of income for rural America and it represents an opportunity to increase the number of green jobs available not only to farm families, but to residents of rural communities.”

Two panels moderated by the Secretary consisted of administration, academic and science professionals discussing efforts to help rural America build a clean energy economy that creates jobs, reduces our dependence on foreign oil and enhances our competitive position in the global economy.

USDA Chief Economist Joe Glauber discussed the current situation for ethanol, with production outpacing use. “We are producing a lot of ethanol,” said Glauber. “It doesn’t mean we’re necessarily at the blend wall, but there is a lot of production out there for the supply.”

He noted that ethanol stocks have grown. “In February, stock numbers were close to 800 million gallons. That’s a record, that’s about 25 or so days of inventory,” Glauber said.

While the ethanol industry is hopeful that EPA will grant a waiver to allow up to 15 percent ethanol to be blended in regular gasoline, Glauber is doubtful that will be a quick fix. “I don’t think that a change to E15 will transform the situation overnight,” Glauber said, since he believes the transition at the pump level will take some time. If the EPA only grants a partial waiver for E15 in newer vehicle, Glauber says the transition will be even more complicated. “Then there will have to be E10 available for those older cars and E15 potentially available for younger cars, so it’s not a silver bullet for the constraints that we see ethanol production under right now.”

EPA continues to wait on data from the Department of Energy on vehicle testing before they make a final decision on the waiver request.

USDA Invites Applications for Renewable Energy Funding

USDAUSDA is seeking applications to increase the production and use of renewable energy sources. Funding is available from four USDA Rural Development renewable energy programs authorized by the Food, Conservation, and Energy Act of 2008 (Farm Bill).

“This funding will help spur investments in technologies that will reduce reliance on fossil fuels, conserve natural resources and help build a sustained renewable energy industry in rural America,” says Secretary of Agriculture Tom Vilsack. “Support provided by USDA through these programs will not only benefit the environment, it will create green jobs and help America become more energy self-sufficient.”

Eligible projects include installing renewable energy systems such as wind turbines, solar, geothermal, biomass, anaerobic digesters, hydroelectric, and ocean or hydrogen systems. Funding may also be used to purchase energy-efficient equipment, add insulation, and improve heating and cooling systems. USDA is accepting applications for grants and loan guarantees in the Rural Energy for America Program (REAP) until June 30, 2010.

EPA, USDA Announce Biogas Program

Two federal agencies are teaming up to capture the methane U.S. farms produce and turn that greenhouse gas into fuel.

The U.S. Environmental Protection Agency and Department of Agriculture have a new interagency agreement that will promote the biogas as a renewable energy source, while cutting those gas emissions from livestock operations. This EPA press release says the agreement is an expansion of the AgStar program:

“We want to seize every opportunity to confront climate change and move into the clean economy of the future. This is a smart way to transform what would be a harmful greenhouse pollutant into a source of renewable energy — and make a profit for American farmers,” said EPA Administrator Lisa P. Jackson. “We have the technology and the expertise, all we need now is to act. The AgStar program brings real benefits to our air and creates new opportunities for our farming community.”

“The farms and ranches that dot our countryside can contribute greatly to addressing America’s long-term energy challenges and the partnership we are announcing today will not only help generate renewable energy, but provide new income opportunities for farmers and ranchers,” said Agriculture Secretary Tom Vilsack.

The EPA and USDA believe the $3.9 million their collaboration will provide over the next five years will help farms overcome obstacles preventing them from recovering and using biogas. Right now, there are about 150 on-farm manure digesters across the country that turn methane into biogas. Estimates are that 8,000 farms could put in digesters and recover the equivalent of the greenhouse gases of 6.5 million passenger vehicles a year while producing 1,500 megawatts of energy.

USDA Invites Public Comment on Renewable Energy Programs

Agriculture Secretary Tom Vilsack is inviting public comment on several proposed rules designed to increase the production of advanced biofuels and the development of biorefineries that were authorized under the 2008 Farm Bill.

“We view these proposed rules as part of the strategy to help meet President Obama’s goal to accelerate the commercial production of advanced biofuels and create a viable alternative fuels industry,” Vilsack said.

The proposed rules affect three renewable energy programs administered by USDA Rural Development – the Biorefinery Assistance Program, Repowering Assistance Payments, and Bioenergy Program for Advanced Biofuels. The programs are designed to establish guaranteed loan regulations to develop and construct commercial-scale biorefineries and to retrofit existing facilities using an eligible technology to develop advanced biofuels; make payments to eligible biorefineries to install new systems that encourage renewable biomass energy use and replace fossil fuels; and establish a payment program for eligible producers of advanced biofuels.

Additional information on the proposed rules and instructions on how the public can offer comments are available in the April 16, 2010 Federal Register.

USDA Experts Say Ethanol Blend Wall is Close

Ethanol is getting very close to hitting the blend wall, according to economists with the U.S. Department of Agriculture.

With four months in a row of record ethanol production and stagnant gasoline demand, ethanol stocks are increasing. “Margins have weakened a lot over the last few weeks,” says USDA chief economist Joe Glauber, and indicators are that the blend wall is closing in.

“We’ve seen a sharp drop in ethanol prices,” USDA Outlook Board Gerry Bange adds in a USDA radio report, which he says has cut returns for ethanol producers dramatically.

That means that the future for the industry may very well hinge on the decision EPA has yet to make – moving the allowable blend level for ethanol in gasoline up to 15 percent from the current 10. “Given the fact that gasoline consumption in this country simply is not growing very rapidly and has essentially been flat for some time now, we are getting to the point where we simply have absorbed as much ethanol as we can under the current E10 legislation,” said Bange.

USDA’s latest supply-demand report out Friday left projected 2009-10 corn use for ethanol unchanged at 4.3 million bushels but lowered corn feed and residual use by 100 million bushels lower as March 1 stocks and a record January ethanol production indicate lower-than-expected December-February feed and residual disappearance.

USDA Watching and Waiting on Biodiesel Incentive

Federal ag department officials seem to be rooting for renewal of the $1-a-gallon biodiesel tax incentive to finally pass Congress … but no one from USDA is pressuring lawmakers to get the deal done.

During yesterday’s event in Hawaii, where the U.S. Navy and USDA pledged to work together to produce more biofuels for the service’s renewable energy goals, reporters were able to quiz Ag’s Deputy Secretary Kathleen Merrigan if the Obama Administration was pressuring Congress on the incentive’s renewal. But Hoosier Ag Today reports that her answer was less than inspiring for a biodiesel industry going further under every day without the tax break:

“It’s something Tom Vilsack has spoken publicly about, so we are clearly in support of the kind of tax support that the industry needs at this point. But we’re working with Congress on a number of fronts. We were given a wonderful suite of energy programs as a part of the 2008 farm bill. We are working diligently to get those all up and running, notices and rulemakings that we have to do in this innovative space where there’s not a lot of history of work to build upon. So we are working very closely with our colleagues in Congress on a number of fronts.”

Merrigan wouldn’t offer any guesses when Congress might finally reconcile the two different versions of the American Workers, State and Business Relief Act which includes the House bill to extend the credit through the end of 2010.

Ag Department, Navy Team Up for Biofuels

Leaders from the U.S. Department of Agriculture and the U.S. Navy have kicked off the first of several forums designed to increase biofuels production and meet the Navy’s renewable energy needs.

This USDA press release says the opening of the forum today in Honolulu came as a result of the Memorandum of Understanding (MOU) recently signed by the USDA and the Navy regarding renewable energy:

“As we continue to expand efforts to build a clean energy economy, create new jobs and reduce our dependence on foreign oil, we can use the Navy’s fleet as a catalyst to increase demand for biofuels and spur economic opportunity in rural communities throughout the country,” said Agriculture Deputy Secretary Kathleen Merrigan…

“The Department of the Navy is very energized about the partnership with the Department of Agriculture,” said Navy Assistant Secretary Jackalyne Pfannenstiel. “This collaborative effort will enable us to reduce our petroleum consumption and increase our alternative energy opportunities. The Navy and Marine Corps’ warfighting capability will benefit through a more secure energy future.”

The strategic goal is to reduce this country’s reliance on fossil fuels, especially on the battlefield where transportation costs can make a gallon of gas cost up to $400. The Navy has set several energy targets, featuring biofuels in most of them:

* When awarding contracts, appropriately consider energy efficiency and the energy footprint as additional factors in acquisition decisions.
* By 2012, demonstrate a Green Strike Group composed of nuclear vessels and ships powered by biofuel. By 2016 sail the Strike Group as a Great Green Fleet composed of nuclear ships, surface combatants equipped with hybrid electric alternative power systems running on biofuel, and aircraft running on biofuel.
* By 2015 cut petroleum use in its 50,000 non-tactical vehicle commercial fleet in half, by phasing in hybrid, flex fuel and electric vehicles.
* By 2020, produce at least half of shore based installations’ energy requirements from alternative sources. Also 50 percent of all shore installations will be net zero energy consumers.
* By 2020 half of DON’s total energy consumption for ships, aircraft, tanks, vehicles and shore installations will come from alternative sources.

More Corn Acres for Food and Fuel

More corn acreage is in the forecast for this year, according to the USDA Prospective Plantings report out today, and there is still plenty more in storage.

USDAAccording to the forecast, farmers intend to plant 88.8 million acres of corn in 2010, three percent more than both last year and 2008. Meanwhile, the Grain Stocks report shows corn stocks as of the beginning of this month were up 11 percent compared to last year at 7.69 billion bushels.

Matt Hartwig with the Renewable Fuels Association says the numbers show that farmers are producing plenty of corn for both food and fuel. “Corn in storage at this point in the year is at its highest level since 1987, a year in which an all-time record surplus of corn was recorded,” Hartwig notes. “The amount of corn currently stored on farms (4.6 billion bushels) is larger than the amount of corn that is expected to be processed into ethanol in 2009/10 (4.2 billion bushels).” Hartwig also points out that the total amount of corn in storage right now (7.7 billion bushels) “is larger than the total amounts of corn harvested annually as recently as the early 1990s.”

Early reaction to the prospective plantings report is that corn acreage will likely be higher than forecast. While the report estimates corn acreage will increase by 300,000 or more in Illinois, Kansas, Missouri and Ohio, a decrease of 200,000 acres is forecast for Iowa. However, corn growers in Iowa say they definitely expect to see their acres increase when it’s all said and done. Northeast Iowa farmer Tim Burrack, chairman of the Iowa Corn Promotion Board, says the survey was done a few weeks ago when the weather still looked pretty bleak, but that has turned around dramatically. “In our area, I am amazed at how quickly winter left and spring came,” Burrack said during a telephone press conference Wednesday morning. Field work has been underway since Friday and he says they should be ready to plant as soon as the soil warms up.

In southwest Iowa, grower Kevin Ross says the corn that was left unharvested over winter also probably had an impact on the acreage estimate, but the combines are running now and getting the last of that corn out of the fields so they will be ready to plant. Ross says more corn means more ethanol, which means it is even more important for the EPA to approve E15 blends for gasoline. “With the huge stocks being carried out and this extra increase in acres, plus the bushel per acre increase last year, it’s really critical to the success and livelihood of corn farmers to get this corn crop marketed,” he said. “For me and farmers all across the US, E15 being approved by EPA is really very important and I sure as heck hope they see that it’s a good way to go … we need that market.”

Weather in the corn belt this week is nearly ideal for field preparation and soil warming so farmers are hopeful they will not see the planting delays they have experienced the past two years.