Ag Secretary to Make “Major” Biofuels Speech

Later this month, Agriculture Secretary Tom Vilsack will give a “major speech on domestic biofuel production.”

According to USDA, Vilsack will discuss the progress USDA and other federal agencies are making toward achieving the 36 billion gallon biofuel production goal mandated by the Renewable Fuels Standard and new efforts by the Obama administration to bolster the industry and reduce U.S. dependence on foreign oil.

Other topics of the address will include ensuring that infrastructure is in place to ease the production and use of domestically produced renewable transportation fuel, as well as the administration’s strategy to foster renewable energy nationwide.

The address will be made October 21, 9:30 am Eastern, at the National Press Club.

Second Look at USDA Ethanol Energy Balance Report

A report released by USDA in June on the energy balance of ethanol plants is getting a second look this week, thanks to a post on the USDA blog.

The second look is well deserved, since the report, titled “2008 Energy Balance for the Corn Ethanol Industry,” got less coverage than it deserves when it was first released. The findings of the report are significant because they specifically tackle the much-publicized claims of David Pimental that ethanol production results in a net energy loss. The USDA report updates the energy balance numbers by taking into account current practices used by both corn producers and ethanol processors that have led to increased efficiencies and concludes that “A dry grind ethanol plant that produces and sells dry distiller’s grains and uses conventional fossil fuel power for thermal energy and electricity produces nearly two times more energy in the form of ethanol delivered to customers than it uses for corn, processing, and transportation.”

The report does concede that ethanol production was much less efficient 20-30 years ago, but that it has made tremendous gains, thanks to both increased corn yields and better production methods. “Over all, ethanol has made the transition from an energy sink, to a moderate net energy gain in the 1990s, to a substantial net energy gain in the present.”

As more plants start using biomass power instead of conventional fossil fuel for production, the energy balance could increase even more significantly, according to the report. “As processors master the logistics of handling bulky biomass, the energy balance ratio could reach 26 BTUs of ethanol per BTU of inputs used.”

Read the report here.

USDA to Fund Rural Renewable Energy Studies

The USDA is providing funding to look at the feasibility of renewable energy systems for agriculture producers and rural small businesses.

Grants of up to $50,000 each for a total of $3 million will be made available under the Rural Energy for America Program (REAP):

“Renewable energy production represents a promising revenue source for America’s producers while meeting the nation’s need for new sources of renewable energy,” [Agriculture Secretary Tom Vilsack] said. “These grants will help encourage the development of viable renewable energy projects across the nation and help small business owners, farmers, ranchers and agriculture producers conduct feasibility studies that identify renewable energy opportunities.”

Eligible feasibility studies for renewable energy systems include projects that will produce energy from wind, solar, biomass, geothermal, hydro power and hydrogen-based sources. The energy to be produced includes heat, electricity or fuel. For all projects, the system must be located in a rural area, must be technically feasible and must be owned by the applicant. More information is available by visiting http://www.rurdev.usda.gov/BCP_ReapGrants.html.

Deadline for application is October 5, 2010.

Record Corn Crop and More Ethanol Production

Some weather issues over the past month caused USDA to slightly lower the forecast for this year’s corn crop, but it is still expected to be a record at 13.16 billion bushels.

The average yield was lowered due to average 162.5 bushels per acre, down 2.5 bushels from the previous month and 2.2 bushels below last year’s record of 164.7 bushels. Forecasted yields decreased from last month throughout much of the Corn Belt, Tennessee Valley, and Delta. Yields were up from August in the lower portions of the Southeast.

USDA is also forecasting increased ethanol production and lower ending stocks with higher prices for corn. “We have seen increased demand so we boosted our ethanol production for the current year, which means our ending stocks have gone down a bit,” said USDA Chief Economist Joe Glauber. “We’re now looking at ending stocks of corn of 1.1 billion bushels and a season average price of $4.40 a bushel – that’s a big increase.”

USDA added 35 million bushels to the 2009-10 corn used for ethanol for a total of 4.535 billion bushels to reflect the actual production numbers through August. Outlook Board Chairman Gerry Bange says they also increased the estimate for 2010-11 but not as much as some might expect. “What we’re thinking is that with the current rise in corn prices we’ve seen and with the gasoline price coming off we might expect somewhat of a slow down in the rate of increase for ethanol production, so we’re carrying a number at 4.7 billion bushels for 2010-11, which is up nearly four percent,” said Bange. USDA lowered total 2010/11 corn demand by 50 million bushels.

According to Renewable Fuels Association Vice President of Research Geoff Cooper, the changes in this latest USDA report were expected and speculators have been running up the corn prices lately.

“The recent flurry of activity in the corn market is undoubtedly being driven by the resurgence of speculators. Hedge and index funds are descending on the corn market in numbers not seen since the spectacular commodities bubble of 2008,” Cooper wrote in a blog post on the E-Xchange. “The movements of the market become sufficiently more exaggerated when this many speculators are in the game. The highs are higher, the lows are lower, and everything happens faster.” He notes that the Friday prior to the crop report coming out, a record 556,034 corn futures contracts (the equivalent of 2.8 billion bushels of corn!) changed hands, marking the single busiest day in the corn markets since the Chicago Board of Trade began trading grain in 1877.

Ethanol Plant Receives Grant to Use Biomass for Power

An ethanol plant in Iowa has received a nearly $2 million federal grant to use renewable biomass to replace the fossil fuels needed to run the biorefinery.

The USDA announced that the award comes from the Repowering Assistance Program, part of the 2008 Farm Bill:

Lincolnway Energy, LLC, based in Nevada, Iowa, has been selected to receive a $1.9 million payment award. The company produces 55 to 60 million gallons per year of fuel-grade ethanol. The USDA payment will reimburse the firm for costs to modify a boiler to burn wood and other biomass.

USDA’s Repowering Assistance Program was authorized under the 2008 Farm Bill and allows USDA to make payments to eligible biorefineries to encourage the use of renewable biomass as a replacement fuel source for fossil fuels used to provide process heat or power in the operation of these eligible biorefineries. Biorefineries that were in existence when the Bill was enacted, June 18, 2008, are eligible to apply.

More information is available through this USDA website.

Federal Ag & Energy Depts. Team Up for Bioenergy

The U.S. Departments of Agriculture and Energy have teamed up to hand out some research awards to designed to improve and accelerate genetics in plants for bioenergy production.

This USDA release says the announcement from Agriculture Secretary Tom Vilsack and Energy Secretary Steven Chu will make $8.9 million available:

“Cost-effective, sustainable biofuels are crucial to building a clean energy economy,” said Secretary Chu. “By harnessing the power of science and technology, this joint effort between DOE and USDA will help accelerate research in the critical area of plant feedstocks, spurring the creation of the domestic bio-industry while creating jobs and reducing our dependence on foreign oil.”

“Developing a domestic source of renewable energy will create jobs and wealth in rural America, combat global warming, replace our dependence on foreign oil, and build a stronger foundation for the 21st century economy,” Secretary Vilsack said. “This scientific investment will lay the foundation for a source of fuel made from renewable sources.”

The research grants will be awarded under a joint DOE-USDA program focused on fundamental investigations of biomass genomics, with the aim of harnessing lignocellulosic materials–i.e., nonfood plant fiber–for biofuels production. Emphasis is on perennials, including trees and other nonfood plants that can be used as dedicated biofuel crops. Since such crops tend to require less intensive production practices and can grow on somewhat poorer quality land than food crops, they will be a critical element in a strategy of sustainable biofuels production that avoids competition with crops grown for food. Combining DOE’s leadership in genome-scale technologies with USDA’s long experience in crop improvement will help accelerate development of such specialized crops and improve their effectiveness as feedstocks for biofuels production.

The Energy Department will be handing out $6.9 million for seven projects across the country and USDA’s National Institute of Food and Agriculture will give $2 million for two projects in Illinois and Texas.

USDA Proposes Blending Solar and Wind Power

A USDA scientist believes wind and solar power generating systems could be set up to complement each other.

A study by Agricultural Research Service (ARS) agricultural engineer Brian Vick at the agency’s Renewable Energy and Manure Management Research Unit in Bushland, Texas says that by using solar power during doldrum days and wind at night could help offset the two energy sources shortcomings:

Vick discovered that in the Texas Panhandle and West Texas, as well as in northern and southern California, there is almost an exact mismatch between wind power production and peak energy demands over a 24-hour period. In these locations, at the heights of modern wind turbines, winds are lowest at mid-day, when power demands are greatest. In Texas, there is also a seasonal mismatch: The winds are weakest in the summer, when power demands are highest.

But the sun’s rays are most intense at mid-day and in summer months.

Texas is the top state for wind-generated electricity production, with Iowa ranking second and California third. California is the leader in solar-generated electricity production.

The most efficient storage system is one being used in solar thermal power plants, where the sun’s heat is used to heat water or other fluids. The fluids are kept hot long after the sun goes down, ready to be used later to produce steam to generate electricity.

The excess electricity generated by wind in the late night and early morning hours could be pumped into the grid and removed by storage facilities (like pumped-storage hydroelectricity or compressed-air energy storage facilities) to match the utility loading in the daytime.

The article goes on to say that Vick and his colleagues have also been testing wind/biodiesel hybrid systems.

Bioenergy and Ethanol Market News from USDA

USDAProducers, consumers and distributors of bioenergy products can access crucial data through the Bioenergy Market News Reports published by the USDA’s Agricultural Marketing Service.

The Ethanol reports include data for six regions – Iowa, Wisconsin, Minnesota, Nebraska, South Dakota and the Eastern Corn Belt. Each report publishes daily corn bids, daily distiller grain prices and a weekly ethanol price. The Weekly Ethanol Summary combines all ethanol reports into a summary report. Futures prices for CME corn and ethanol, as well as NYMEX natural gas and reformulated gasoline can be found on this report. Graphs depicting prices for Iowa ethanol price, Iowa distiller grain price and the price ratio in Iowa between distiller grain and corn are shown.

The National Weekly Ag Energy Roundup includes prices for commodities that can be used to make energy, such as soybean oil, corn oil, tallow and greases. The prices of ethanol and biodiesel are also reported. Additionally, CME and NYMEX futures prices are reported for ethanol, soybean oil, crude oil, reformulated gasoline and natural gas. Graphs are included to show price relationships for several commodities.

There are three reports that report Ethanol Corn and Products Processing Values (Iowa, Nebraska and Illinois). These reports compare the price that ethanol plants pay for corn in their state to the value the ethanol plant receives from the outputs of ethanol and distiller grains.

To access the reports, visit marketnews.usda.gov.

Biofuels Videos from Obama Administration

The Obama administration and USDA have released a couple of videos highlighting the importance of biofuels to the nation and what the government is doing to get us down the road to advanced renewable fuels.

In a short YouTube video, USDA highlights current production and consumption capacities as well as projections to meet the Renewable Fuels Standard (RFS2) which calls for the use of 36 billion gallons of biofuels by 2022.

The administration has also produced a DVD containing presentations from the Biofuels Interagency Working Group. It includes presentations from representatives of USDA, EPA and DOE, as well as discussion and commentary by key industry leaders from Advanced Biofuels Companies introduced and moderated by Brent Ericksson, Executive Vice President of the Industrial and Environmental Section of the Biotechnology Industry Organization and Michael McAdams, Executive Director, Advanced Biofuels Association. The 99 minute DVD includes five presentations and over 68 slides and it is not cheap. A single copy is $345.00 and a site license is $1,380.00.

Order here.

USDA Report Disputes Land Use Theory

USDAUSDA’s new planted acreage report out Wednesday morning estimates corn acreage planted is two percent higher than last year, but that is down a point from the March report with more acres are going to soybeans. Corn planted area for all purposes in 2010 is estimated at 87.9 million acres, up 2 percent from last year. Acreage is up in Illinois, Kansas, Indiana, Missouri and Ohio; but down significantly in Iowa, Nebraska and South Dakota. Soybean planted area for 2010 is estimated at a record high 78.9 million acres, up 2 percent from last year.

Actually, the total amount of land dedicated to crops in the United States has dropped for the second straight year in 2010, according to the report, which shows total cropland has declined 6 million acres since 2008. The Renewable Fuels Association (RFA) notes that this is further evidence growth in ethanol production is not leading to cropland expansion.

Renewable Fuels Association Logo“The data clearly show that crop acres in the United States continue to trend downward,” said Bob Dinneen, RFA president and CEO. “That’s because new technology and dramatically increasing yields are allowing farmers to produce more crops on less land. Today’s report reinforces the fact that the nation’s farmers simply don’t need to expand cropland to meet global demands for food, feed, fiber, and biofuels.”

While corn acres are up compared to last year, that increase is more than offset by reductions in acreage for other coarse grains and wheat. USDA estimates total 2010 crop acres at 318.9 million, down from 319.3 million in 2009 and 325 million in 2008. For the sake of comparison, RFA noted that total planted acres averaged 327 million during the decade of the 1990s. A record corn crop of at least 13.3 billion bushels is expected in 2010, despite the fact that farmers planted nearly 6 million less acres of corn than in 2007 when the first 13 billion bushel crop was achieved.

RFA also noted that corn plantings were down from last year in many states with high levels of Conservation Reserve Program (CRP) acreage, which challenges the notion that grain ethanol expansion is leading to increased CRP conversion. For instance, corn acres dropped 4% in Texas, the leading CRP state in the nation. Corn acres also fell 7% in South Dakota, 4% in Nebraska, 3% in Iowa, and 1.3% in Minnesota.

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 www.USDA.gov.

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.”