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.

USDA Offers Biomass and Bioenergy Funding

Agriculture Secretary Tom Vilsack today announced that Fiscal Year 2009 funding is once again available again for three USDA Farm Bill programs to promote increased production of biomass and bioenergy.

Applications for the Biorefinery Assistance Program, which uses loan guarantees to develop, construct, and retrofit commercial-scale biorefineries, must be received by June 1, 2010. Applications are also being accepted for remaining FY 2009 funding under the Repowering Assistance Program, which provides for payments to biorefineries in existence when the Farm Bill was passed to replace the use of fossil fuels in their operations with renewable energy from biomass. Biorefineries interested in obtaining funding must apply by June 15, 2010.

Tom VilsackFinally, those biomass producers eligible under the Bioenergy Program for Advanced Biofuels may also apply to receive payment from remaining FY 2009 funds. Applications must be received by May 30, 2010. Under this program, payments are made to eligible producers in rural areas to support and ensure an expanding production of advanced biofuels. Payments are based on the amount of biofuels a recipient produces from renewable biomass, other than corn kernel starch. Eligible examples include biofuels derived from cellulose, crop residue, animal, food and yard waste material, biogas (landfill and sewage waste treatment gas), vegetable oil and animal fat.

At the recent Commodity Classic, Secretary Vilsack noted that the administration is focused on expanding the biofuels industry. “We’re going to make sure that it is a national industry, not just focused in one particular area, one particular region, or one particular feed stock. There are enormous opportunities here in all parts of the country. Enormous opportunities for farmers and ranchers, enormous opportunities for rural America. And, there needs to be a concerted effort in growing and expanding this industry,” Vilsack told the crowd of more than 4,000 meeting in Anaheim, Calif. “That’s part of the strategy of USDA. So, we’re putting resources behind this, and we’re using our rural development resources to help build these refineries. We’re using our energy title of the farm bill to promote payments to farmers for feed stocks, to help build refineries, to retrofit existing refineries, to put people to work in rural communities.”

Listen to or download Vilsack’s speech from Commodity Classic here:

Biofuels and Conservation Achievable with Biomass

Getting energy from the land and practicing good conservation are not mutually exclusive. A federal ag deartment researcher says we can have both through using biomass.

USDA researcher Doug Karlen, who works at the Agricultural Research Service’s National Soil Tilth Lab in Ames, Iowa, told attendees of the recent USDA Outlook Forum that conservation and energy from biomass can be compatible if three things are considered.

“If we utilize multiple feedstock options, multiple conversion platforms and recognize that’s there’s no single solution.”

Karlen also told the group that you have to consider how land conditions vary. In addition, biomass cannot always be seen as just a waste waiting to be made useful. He points out that the trade-off for using biomass from fields for bioenergy is that there is no residue left over to renew the soil with nutrients, as well as losing the habitat for wildlife those crop leftovers provided. Karlen says that’s why it is so important to have a diversity of biomass products within a certain area.

USDA Guarantees Loan for GA Wood Ethanol Plant

Range FuelsA Colorado-based firm with a planned biorefinery located near Soperton, Georgia is the recipient of a loan guaranteed by USDA Rural Development to make cellulosic biofuel from wood chips, according to a USDA announcement. The finalized deal with Range Fuels was first announced last year and represents the first ever loan guarantee by USDA to a commercial-scale cellulosic biofuel plant. This project is expected to provide biorefinery jobs, construction jobs and support the timber industry.

USDA“USDA’s investment in the construction of Range Fuels’ commercial facility, which will produce cellulosic biofuel from non-food biomass, such as wood chips, demonstrates the Obama Administration’s goal to make the United States a leader in renewable energy production and furthers the President’s ongoing efforts to bring jobs to rural communities,” said Under Secretary for Rural Development Dallas Tonsager. “USDA is proud to work with the lender and the private sector to bring economic opportunity to rural areas.”

The $80 million loan, being made by AgSouth Farm Credit to Range Fuels, Inc., is being guaranteed through USDA’s Biorefinery Assistance Program authorized by the Food, Conservation, and Energy Act of 2008 and administered by USDA Rural Development. When fully operational, the plant is expected to produce an estimated 20 million gallons of cellulosic ethanol per year. USDA announced a conditional commitment to provide the loan guarantee for Range Fuels in January, 2009.