Agriculture Secretary Tom Vilsack today announced 106 projects in 29 states, Guam and Puerto Rico have been selected for funding to make renewable energy and energy efficiency improvements. Money for the projects comes from the USDA Rural Development’s Rural Energy for America Program (REAP), authorized by the 2008 Farm Bill.
“The Obama Administration is helping agricultural producers and rural small business owners across the country reduce their energy costs and consumption,” Vilsack said. “This is part of the President’s ‘all-of-the-above’ energy strategy, which involves expanding support for traditional as well as alternative energy sources. Stable energy costs create an environment for sustainable job growth in rural America.”
The release highlighted projects such as a Washington County, Iowa wind turbine on a farm and an anaerobic digester in Wisconsin that will produce enough power for 420 homes each year. You can see the complete list of projects here.
REAP provides grants and loan guarantees for agricultural producers and rural small businesses to reduce energy consumption and costs, use renewable energy technologies in their operations and conduct feasibility studies for renewable energy projects. USDA has an active portfolio of more than $170 billion in loans and loan guarantees.
Despite a drought that is lowering the corn crop and causing ethanol plant shutdowns, American Coalition for Ethanol Executive Vice President Brian Jennings thinks the organization’s 25th annual conference last week was the most positive ever.
“We’re really encouraged and enthused about how the conference went,” said Jennings. “We know things are tough out there but we ended this conference on the most positive note I think we’ve ever ended a conference.”
Jennings was especially pleased with the strong support from Agriculture Secretary Tom Vilsack for both ethanol and the Renewable Fuel Standard and they agree with Vilsack’s view of keeping the RFS in place despite a lowered corn crop. “We won’t know how many bushels are produced until harvest,” he said. “It is premature for the calls that have been made to waive the RFS.”
Listen to my wrap-up interview with Brian Jennings here: ACE EVP Brian Jennings
2012 ACE Conference Photo Album
During the conference, three new board members were elected.
- Paul Enstad, Board of Governors Chairman for Granite Falls Energy, LLC, a 60 million-gallon-per-year (MGY) ethanol producer in Granite Falls, MN
- Doug Punke, CEO of Renewable Products Marketing Group (RPMG), an ethanol marketing company in Shakopee, MN
- John Christenson has joined the ACE board representing Christianson and Associates
In addition, four board members were re-elected.
- Ron Alverson, Wentworth, South Dakota, representing Dakota Ethanol
- David Gillen, White Lake, South Dakota, representing South Dakota Corn Utilization Council
- Wallie Hardie, Fairmount, North Dakota, representing North Dakota Corn Growers Association
- Brian Wilcox, Columbus, Nebraska, representing Nebraska Public Power District
Renewable Fuels Association Vice President of Research and Analysis Geoff Cooper put together an analysis of today’s USDA crop supply report on the RFA E-xchange Blog to put the report into perspective from both a historical context as well as a global production context, answering calls from some international voices to end global biofuel production.
“As expected, this morning’s supply-demand estimates from USDA showed a big reduction in the size of the 2012 corn crop and average yield. Today’s report estimates average yield at 123.4 bushels per acre (bpa), down nearly 23 bpa from USDA’s July estimate and the lowest yield since 1995. Harvested acres are pegged at 87.4 million, meaning a crop of 10.78 billion bushels (bbu) is expected. This is down more than 2 billion bushels from USDA’s July estimate and would be the smallest crop since 2006. Today’s USDA numbers were slightly worse than expected by analysts; on average, they had expected a crop of 10.97 bbu on a yield of 126.2 bpa. While this year’s harvest will be considerably smaller than initially expected, it is remarkable that farmers are still expected to produce the eighth-largest corn crop on record despite experiencing the worst drought in 50 years and the hottest month of July in recorded history.”
Listen to an interview with Cooper here: RFA's Geoff Cooper on USDA crop forecast
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Agriculture Secretary Tom Vilsack demonstrated his strong commitment to the ethanol industry and the Renewable Fuel Standard (RFS) by spending over an hour at the American Coalition for Ethanol (ACE) conference on Friday morning.
“This is an industry that is worth supporting,” he told the crowd of about 250 ethanol industry leaders. “Which is why the president is supporting the Renewable Fuel Standard, and it’s why I’m supporting the Renewable Fuel Standard.”
In light of the lowered crop forecast for corn due to the drought, Vilsack noted that the RFS has built-in flexibilities and the market is responding as it should. “The market responds, the market reacts, the market pays attention, and we’re already seeing that,” he said.
Vilsack stressed the need for the industry to defend itself in the face of attacks by critics.
Listen to Vilsack’s remarks here: Secy Vilsack at ACE
2012 ACE Conference Photo Album
The drought is certainly taking its toll on row crops, and that could be trouble for the nation’s biodiesel and ethanol makers. The latest USDA crop report out this morning shows that the corn harvest this year will be down 13 percent from last year’s numbers, with soybeans expected to be 12 percent lower than 2011.
Corn production is forecast at 10.8 billion bushels, down 13 percent from 2011 and the lowest production since 2006. Based on conditions as of August 1, yields are expected to average 123.4 bushels per acre, down 23.8 bushels from 2011. If realized, this will be the lowest average yield since 1995. Area harvested for grain is forecast at 87.4 million acres, down 2 percent from the June forecast but up 4 percent from 2011.
Soybean production is forecast at 2.69 billion bushels, down 12 percent from last year. Based on August 1 conditions, yields are expected to average 36.1 bushels per acre, down 5.4 bushels from last year. If realized, the average yield will be the lowest since 2003. Area for harvest is forecast at 74.6 million acres, down 1 percent from June but up 1 percent from 2011.
During the last Domestic Fuel Cast, we talked about the U.S. Senate’s work on the renewable energy provisions of the Farm Bill. In this edition, we follow the debate over to the House, where not much funding in the energy title of the bill moved out of the Agriculture Committee.
Listen to what some key lawmakers, as well as leaders from the renewable energy sector, farm groups, and government officials had to say as the discussion spilled over into another House committee considering changes to the Renewable Fuel Standard (RFS).
You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast
You can also subscribe to the DomesticFuel Cast here.
The U.S. Departments of Agriculture (USDA) and Energy Wednesday announced a $41 million investment in 13 projects designed to drive more efficient biofuels production and feedstock improvements.
“If we want to develop affordable alternatives for oil and gasoline that will help reduce our dependence on foreign oil, we need investments like these projects to spur innovation in bioenergy,” said Agriculture Secretary Tom Vilsack. “By producing energy more efficiently and sustainably, we can create rural jobs, boost rural economies and help U.S. farmers, ranchers and foresters prosper.”
Five projects will be funded through the joint Biomass Research and Development Initiative (BRDI) to develop economically and environmentally sustainable sources of renewable biomass and increase the availability of renewable fuels and biobased products. Those projects include $4.25 million for the Quad County Corn Cooperative in Galva, Iowa to retrofit an existing corn starch ethanol plant to add value to its byproducts, which will be marketed to the non-ruminant feed markets and to the biodiesel industry.
Agricultural Research Service’s National Center for Agricultural Utilization Research in Peoria, Illinois will receive $7 million for a project to optimize rapeseed/canola, mustard and camelina oilseed crops for oil quality and yield using recombinant inbred lines. The oils will be hydrotreated to produce diesel and jet fuel.
A $6 million project at the University of Hawaii will optimize the production of grasses in Hawaii, including napier grass, energycane, sugarcane and sweet sorghum. Harvest and preprocessing will be optimized to be compatible with the biochemical conversion to jet fuel and diesel.
More information on the projects funded can be found here from USDA.
U.S. Secretary of Agriculture Tom Vilsack traveled back to Iowa today, praising biodiesel in his home state for driving and revitalizing rural America’s economy. In remarks during a meeting with Iowa biodiesel and farm industry representatives at the Soy Energy biodiesel production facility in Mason City, the USDA chief pointed to the green fuel as a demonstration of farmers bouncing back, according to this Iowa Biodiesel Board news release.
“This is the resilient face of agriculture we see here today,” Vilsack said, flanked by Soy Energy plant workers. “Biodiesel plants like this one are getting America back in the business of manufacturing. They are creating jobs and revitalizing the rural economy.”
The Iowa Biodiesel Board thanked the Secretary for his remarks and for his steadfast support of biodiesel.
“Iowa’s leadership in renewable energy production shows what we as a nation are capable of in building energy security and green jobs, and we’re equipped to do even more,” said Randy Olson, executive director of the Iowa Biodiesel Board.
Those meeting with Vilsack pressed for more gallons of biodiesel under the Renewable Fuel Standard-2 (RFS-2). The EPA wants to go from 1 billion gallons this year to 1.28 billion gallons in 2013, what the Iowa biodiesel industry sees as a modest increase from last year’s record nearly 1.1 billion gallons of production.
The Iowa Biodiesel Board points out that Soy Energy, LLC is a “multi-feedstock” plant, capable of producing biodiesel from many different fats and vegetable oils, including corn oil left over from ethanol production.
Biofuels are playing a significant role in the biggest maritime exercise in the world. About 450,000 gallons of biofuels made from non-food stocks have been used to fuel the ships and aircraft, known as the “Great Green Fleet,” taking part in the U.S. Navy’s and allied nation’s Rim of the Pacific Exercise (RIMPAC).
“Yesterday, off the coast of Hawaii, was a great day for the Navy and a great day for America. It marked some serious steps to take us on the road toward energy security and energy independence,” says Secretary of the Navy Ray Mabus. He notes advanced biofuels were seamlessly integrated into the operations, which included typical fighter jet flying and refuelings and ship-to-ship underway refuelings. “Absolutely no modifications were required or made to any of the engines that were burning biofuels.”
Secretary of Agriculture Tom Vilsack echoes those sentiments in this demonstration of U.S. military might and leadership. “It’s not just leadership to make us more secure from a national security or energy security standpoint. It’s also leadership for economic opportunities in rural areas.” Vilsack adds this use of American-made biofuels plays right into the bio-based economy, providing 400,000 jobs in the U.S., expected to go even higher when the full Renewable Fuels Standard is met.
Deputy Assistant to the President for Energy and Climate Change Heather Zichal adds that this use of biofuels demonstrates to the world that the U.S. Navy is leading the way. “[The Navy] is sending a clear message that we cannot keep doing what we have done in the past. We cannot be timid about embracing new forms of energy, like biofuels, that have the potential to strengthen our energy security and reduce the military’s dependence on oil.”
Listen to the full press conference here: Press Conference on use of biofuels during RIMPAC
Agriculture Secretary Tom Vilsack held a sobering press briefing Wednesday after meeting with President Obama about the impact of the nation’s drought on agricultural production.
Vilsack says the drought is “most serious situation we’ve had in 25 years” with 61% of the land mass of the United States is currently characterized as being impacted. About one third of the counties in the United States are now designated as secretarial disaster areas and that is expected to grow higher. “This obviously will have an impact on the yields,” he said.
When asked if the drought impact on corn should prompt action by the Environmental Protection Agency to roll back the use of corn for ethanol under the Renewable Fuel Standard, Vilsack said, “There is no need to go to the EPA at this time based on the quantity of ethanol that is in storage.”
The latest Energy Information Administration data from last week showed another drop in ethanol production from the previous week bringing the average weekly rate down to 841,000 barrels per day for an annualized rate of 12.89 billion gallons. Stocks of ethanol now stand at 19.6 million barrels or about 824 million gallons.
As expected, the USDA World Agricultural Supply and Demand Estimate report out this morning did lower corn yields as a result of the hot and dry conditions throughout much of the growing region this summer.
The projected U.S. corn yield was lowered 20 bushels per acre to 146 bushels reflecting the rapid decline in crop conditions since early June and based on that and reduced harvested area based on the June 29 Acreage report, WASDE reduced corn production prospects by 1.8 billion bushels from last month. “Persistent and extreme June dryness across the central and eastern Corn Belt and extreme late June and early July heat from the central Plains to the Ohio River Valley have substantially lowered yield prospects across most of the major growing regions,” the report says.
Reduced supplies and higher prices are expected to sharply lower 2012/13 corn usage with the biggest reduction for feed and residual disappearance, projected down 650 million bushels. Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol. Exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments. A 52-million-bushel increase in beginning stocks and a 15-million-bushel increase in imports offset only a small portion of the expected reduction in this year’s crop. Ending stocks for 2012/13 are projected at 1.2 billion bushels, down 698 million from last month’s projection. The season average 2012/13 farm price for corn is projected at $5.40 to $6.40 per bushel, up sharply from $4.20 to $5.00 per bushel in June.
The Obama administration today announced new investments in the biofuels industry as part of the Defense Production Act (DPA).
The U.S. Department of Agriculture (USDA), Navy and Department of Energy jointly announced $30 million in federal funding to match private investments in commercial-scale advanced drop-in biofuels. The Energy Department is also announcing a total of $32 million in new investments for earlier stage research that will continue to drive technological breakthroughs and additional cost reductions in the industry.
“This is an important next step in the President’s direction to Navy, Agriculture and Energy to work together to support the commercialization of ready-to-use, drop-in, advanced biofuel substitutes for diesel fuel and jet fuel,” said U.S. Secretary of the Navy Ray Mabus. “This funding opportunity will enhance our national security and support the creation and commercial-viability of a defense-critical industry – domestic biofuels.”
Mabus explained that the DPA is an authority specifically designed to support defense-critical domestic industries, which includes energy. “Every time the price of oil goes up $1 a barrel, it costs the Navy an additional $30 million in fuel costs,” he added. “We don’t want to trade readiness for fuel. Diversity of supply is one of the keys to energy independence and energy security.”
“This is a matter of national security, energy security and also good for rural America,” said Agriculture Secretary Tom Vilsack. “It opens up great promise for the development of non-food feedstocks as a potential cash crop for farmers throughout the United States. The refineries that will be converting this biomass into fuel will likely be located in rural areas, helping to create jobs.”
The Funding Opportunity Announcement (FOA) made possible through the DPA, will be carried out in two-phases, with government and industry sharing in the cost. In Phase 1, applicants will submit a design package and comprehensive business plan for a commercial-scale biorefinery, identify and secure project sites and take additional required steps spelled out in the announcement. Awardees selected to continue into Phase 2 will submit additional information for the construction or retrofit of a biorefinery.
Listen to a portion of this morning’s press announcement with Mabus and Vilsack:
Administration Press Conference
The USDA and General Electric are a couple of the key collaborators on a biofuels for jets program at GE Aviation’s Cincinnati-area facilities. During remarks at an event today, Secretary of Agriculture Tom Vilsack highlighted the work, along with the Ohio Aerospace Institute, air carriers and producer groups, to develop a Midwest-regional strategy to provide renewable-jet fuel in Ohio:
“We have an incredible opportunity to create thousands of new jobs and drive economic development in rural communities across America by developing innovative ways to use agricultural products to help reduce our reliance on foreign oil,” said Vilsack. “USDA’s collaboration with General Electric Aviation will bring together multiple sectors of Ohio’s economy, including agricultural producers, to foster new innovations in the field of renewable fuels while bolstering new economic opportunities in the Midwest. USDA is proud to work alongside private and public institutions to support the research, creation and distribution of next generation energy solutions.”
USDA is also working with the Ohio Soybean Council by awarding the group a Value Added Producer Grant for a pilot project through Ohio State University’s Bioproducts Innovation Center to refine bio-jet fuel from soybean oil, as well as the Farm Service Agency working with producers in northeastern Ohio and northwestern Pennsylvania through the agency’s Biomass Crop Assistance Program (BCAP). Other efforts include working with the Department of Energy (DOE), Department of the Navy and the Federal Aviation Administration for renewable fuels.
GE Aviation expects to buy up to 5 million gallons of renewable-jet fuel beginning in 2015.
Agriculture Secretary Tom Vilsack today announced that USDA has selected for funding 450 projects focused on helping agricultural producers and rural small businesses reduce energy consumption and costs; use renewable energy technologies in their operation; and/or conduct feasibility studies for renewable energy projects. Funding is made available through the Rural Energy for America Program (REAP) under the 2008 Farm Bill.
Vilsack says the REAP program has helped fund over 6,000 projects over the last three years. “Over 4300 energy efficiency projects, over 1000 solar energy projects, 325 wind projects, 52 anaerobic digesters, 24 biofuel and biodiesel projects, 162 geothermal projects and 22 hybrid projects,” said the secretary.
The REAP funding announced today includes projects that incorporate solar, wind, biomass, geothermal and hydropower, as well as biodiesel and ethanol. There are a couple of projects that will fund blender pumps that might help get sales of 15% ethanol moving now that EPA has given final approval to allow that fuel in the marketplace. Blender pump grants were awarded in Georgia and Missouri.
An additional 9,000 acres in New York and North Carolina, and the expansion of an area in Arkansas, is being set aside as part of the Biomass Crop Assistance Program (BCAP) project. USDA announced $9.6 million will be spent to fund this latest effort to use more non-food crops for the production of biofuels, such as biodiesel and ethanol:
“Increasing the production of renewable, home-grown fuels is vital to reducing our country’s reliance on foreign oil, while creating good-paying jobs and diversifying the agriculture economy,” said [Agriculture Secretary Tom] Vilsack. “These projects are the foundation for an even stronger energy future in rural America. Because most energy crops are perennial and take time to mature before harvest, BCAP is designed so that sufficient quantities of feedstock will be available to meet future demand. Most importantly: these crops can grow where other crops cannot, providing farmers with new opportunities to diversify into more markets.”
In North Carolina, 4,000 acres is being put into Freedom® Giant Miscanthus and switch grass to support Chemtex International Inc.’s Project Alpha, a cellulosic biorefinery expected to produce 20 million gallons of ethanol and sustainable chemicals. Upstate New York will be seeing up to 3,500 acres in fast growing shrub willow to generate more than 100 megawatts of electricity for ReEnergy Holdings LLC. Finally, BCAP Project Area 2 in northeast Arkansas is expanding its enrollment up to nearly 8,000 acres of Giant Miscanthus, sponsored Missouri-based MFA Oil Biomass.
Under BCAP, producers get reimbursed up to 75 percent of what it costs to establish these perennial energy crops, plus five years of maintenance payments for herbaceous crops and up to 11 years for woody crops.
USDA officials point out that this program helps the Renewable Fuels Standard, which calls for 20 billion gallons more in just 10 years of non-corn based biofuels.