New Biodiesel Plant Opens in Houston

greenearthfuels.jpgGreen Earth Biofuels has held the official grand opening of its new 90-million-gallon-a-year biodiesel plant near Houston, Texas.

This story on Grainnet.com says the ceremony attracted company officials and Texas Governor Rick Perry:

Greg Bafalis, Green Earth Fuels president and chief executive officer, remarked, “As the nation’s newest leader in helping energy companies integrate renewable, environmentally clean, and high-value biodiesel into existing distillate product offerings, we are delighted to officially open this facility-one of the nation’s largest biodiesel production plants.”

“Green Earth Fuels is unique to the industry in its dedication to supporting a national biodiesel infrastructure that is safe, sustainable, progressive, and commercially viable-all critical components to widespread adoption of alternative fuel sources,” remarked Governor Perry.

“I am pleased to support the maturing biodiesel industry and this state-of-the-art facility, particularly as biofuels play a progressively critical role in protecting America’s agricultural economy and national energy security.”

Green Earth has already been producing biodiesel at the facility… about 10 million gallons of the green fuel so far meeting tough guidelines. The article goes on to say there are expansion plans for the company to open up three more refineries along the Texas gulf coast.

Biodiesel Producers Facing Tighter Margins

Despite increased demand for biodiesel, makers of the green fuel are having a tougher time making a profit.

This article from Reuters says sales of American biodiesel tripled last year to about 250 million gallons and will go even higher next year. But the success has been a double-edged sword:

[T]he sales jumps have had the side effect of helping to spike prices for soyoil, the main U.S. biodiesel feedstock, to nearly 33-year highs. Plants that make biodiesel are running well below capacity because of rising costs.

“As a general rule, margins for making biodiesel are pretty tight now,” Jenna Higgins, a spokeswoman for the (National Biodiesel Board), said in an interview.

Higgins said some producers were making negative margins, but that the soyoil boom could be followed by a bust cycle that could help profits in the future.

The article goes on to say that biodiesel’s link to petroleum (that helps plant and harvest the feedstock soybeans and the energy used to get the product to market) and its record-high prices are not helping the situation. But officials are optimistic that a new pipeline system that can handle biodiesel will be built and more affordable feedstocks will be found.

Ski Resorts Running on Biodiesel

aspensnow1.jpgThe Colorado ski resorts of Aspen and Vail are known for their great snow and trendy ways, and biodiesel producers are hoping they’ll continue a green trend one of then has been practicing… using biodiesel.

Aspen has been using biodiesel in its snowcats for a while, and the web site The Vail Trail is asking if its resorts, which are already using wind energy credits to offset electricity use, will do the same:

vailsnow.jpg“You’d love to see them do it,” said Matt Scherr of the Eagle Valley Alliance for Sustainability.

“They’ve already shown they’re spending money to do the right thing,” he said.
In 2006, 250 million gallons of biodiesel were sold in the United States, the National Biodiesel Board estimates, and the use of the fuel is nothing new to mountain towns.

Aspen Skiing Company’s four mountains have been using a kind of biodiesel, B20, in its snowcats for at least five years, said Jeff Hanle, spokesman for Aspen Skiing Company.

“We’re concerned about the future of the industry and the future of the planet,” Hanle said.

Unlike Vail Resorts’ last leader, Adam Aron, who was “just a business man,” Vail Resorts is making good decisions for the environment under Chief Executive Officer Rob Katz, Scherr said.

“I like the way they’re going now,” Scherr said. “They’re doing a lot more than they did before.”

Vail Resorts could use biodiesel, but it would have to be good for business, he said.
“They have the opportunity to be community leaders and pay that price for the community,” he said.

If Val gets on board with biodiesel, it would have to be voluntary. There are no limits on emissions of ski area vehicles in the White River National Forest.

Fuel Up with E85 For $1.85 in Missouri

MO Corn Growers AssociationConsumers have the chance to fuel up on E85 for $1.85. The ZX snack shop in Kirkwood, Missouri is hosting a grand opening for its first E85 fuel pump. The celebration will begin Thursday, at 8:30 a.m. and will continue until 4:00 p.m at 10921 Manchester Rd.

General Motors and the MO Corn Growers Association will be displaying “Live Green Go Yellow” wrapped GM Flex Fuel Vehicles. This station opening marks a first of its kind in the state as it is located within 2 miles of an Enterprise Rent-A-Car branch. Enterprise will be fueling their fleet of Flex Fuel rental cars with E85 at this location from now on. Enterprise will be announcing that the local Kirkwood branch is the first E85/FlexFuel branch in the St. Louis area. Please see the attached releases from Enterprise. Representatives from ZX Snack Shop, JD Street Oil Co., Enterprise Rent-A-Car, St. Louis Clean Cities, General Motors, and the Missouri Corn Growers Association will be on hand to answer questions and help customers fuel their FFVs.

Halfway There

EPIC MapThe Ethanol Promotion and Information Council’s state labeling program has reached the halfway point with the recent additions of New York and Tennessee.

EPIC’s goal at the beginning of the year was to have the branding program approved in at least half of the states by the end of this year and they may just exceed that goal.

“The branding program is literally going state by state and the consistency is the ‘e’ logo, or the brand, and the variation of the label just depends on state rules and regs,” said EPIC Acting Executive Director Robert White.

After the labels are approved by the states with the right size and shape requirements, getting retailers to put them on their pumps becomes a grassroots effort.

The approved labels incorporate the “e” brand to mark pumps that dispense ten percent ethanol fuel.

The map indicates all the states that have approved the pump label.

ACORE President Expects Big Gains

acore.jpgThe president of the American Council on Renewable Energy believes the recent growth in renewable energy markets is just the beginning of sustained growth that will increase the renewable energy business by 10 times.

This ACORE press release says President Michael Eckhart made the remarks at a clean tech conference in Seattle:

eckhart.jpg“The growth of renewable energy means jobs and economic growth in every Congressional district,” said Mr. Eckhart November 8 at the Cleantech Investing on the Pacific Northwest conference hosted by the Stoel Rives law firm and Nth Power venture capital firm. “And members of Congress are beginning to see it. The major job creators in Germany in the past three years have been the wind and solar industries. We can have those jobs, too.”

The global renewable energy industry is receiving third-party capital investment of approximately $100 billion in 2007, according to New Energy Finance. The level of venture capital funding has increased more than tenfold since the year 2000, according to Clean Edge. Eckhart said the current boom in investment and financing is as a trend, not a bubble.

Eckhart went on to tell conference attendees that President George W. Bush and Congress are key to setting the environmental rules and incentives for change.

Renewable Fuels and National Security

RFAThe Renewable Fuels Association (RFA) is sponsoring a lunch and panel discussion Wednesday in Washington DC on the importance of renewable fuels like ethanol in our nation’s comprehensive national security strategy.

The event will feature a keynote address by former Director of Central Intelligence R. James Woolsey as well as a panel discussion on the consequences of our nation’s increasing dependence on foreign oil and the role renewable fuels like ethanol must play in breaking that dependence.

The event is being hosted by the Reserve Officers Association.

Student Fees to Pay for Green Fuel

Students at Minnesota State University in Moorhead, Minnesota have been paying “green fees” that will help build a wind power generator for the school’s science center.

This story in the Dickinson Press has more:

minnstatesustain1.jpgThe 39.5-kilowatt wind turbine will generate enough energy to run the building, plus 20 additional kilowatts per month that could be sold back, said Pete Sand, co-chairman of the Sustainable Campus Committee that distributes green fee money.

The goal of the wind turbine is to help reduce the amount of electricity produced from coal fire, which releases carbon dioxide gases, Sand said.

“It’s the right thing to do and somebody’s got to start doing it,” he said.

The turbine could be up by next fall.

US BioEnergy Earnings Up

US BioenergyUS BioEnergy Corporation reports higher third-quarter earnings on rising output and lower corn costs.

According to the company, net income in the third quarter was $11.1 million, or 15 cents per share, compared with $8.3 million, or 12 cents per share, in the second quarter.

The company went public last December.

Gordon Ommen, US BioEnergy’s CEO says, “It was the first full quarter of production at our Ord, Nebraska plant and we now have four plants in operation and four additional plants under construction. Additionally, we successfully closed the acquisition of US Bio Marion, LLC (formerly Millennium Ethanol, LLC) during the third quarter, which positions us to bring our total production capacity to 750 million gallons per year (mgy) by the end of 2008.”

The company is in the process of building a transportation system that will allow it to move ethanol more efficiently from its facilities.

“This positions US BioEnergy to become one of the largest volume shippers of ethanol in the U.S. by the end of 2008, adding transportation efficiency to our growing list of competitive advantages,” Ommen said.

The Vicious Cycle of Irony

Increased demand for biodiesel has meant an increased demand for biodiesel plants… which has increased demand for feedstocks such as soybeans… which has pushed up the price for soybeans… which has hurt the operation of the biodiesel plants. That’s irony, right?

Some biodiesel plants are starting to feel the negative effects of the surge that brought them to life in the first place. This story in the Janesville (WI) Gazette says construction of a $42 million biodiesel plant in Wisconsin has stopped:

npp-logo.jpgThe rising cost of soybean byproducts forced North Prairie Productions to temporarily suspend construction on its biodiesel plant in Evansville, President Mike Robinson said.

npp-construction1.jpg“We always knew there’d be times when markets are good and markets are bad,” he said. “You’re most vulnerable as a company when you start, and you don’t want to start when times are bad. We just wanted make sure that we are secure when we enter the market.”

Company officials point to a 20 percent rise in soybean oil prices since last August as the main reason for the stop in construction.

Meanwhile, according to this story on the NewsOK.com web site, a biodiesel plant in Northeastern Oklahoma has gone bankrupt because of the high cost its feedstock:

Green Country’s largest unsecured creditor was agricultural giant Cargill Inc., which is owed more than $128,000 for soy oil.

The biodiesel plant began operations in an industrial park in Chelsea in 2005. The business was formed by David Allen and his partner, Scott Williams. Allen bought out his partner for $25,000 in September 2006.

That brings the number of Oklahoma biodiesel plants down to just one, the Earth Biofuels plant near Durant. But two more are still in the works for Tulsa and Guymon. Let’s hope they can stay afloat through this latest storm.

Tyson, Syntroleum Biodiesel to Keep Air Force Flying

syntyson.pngTyson and Tulsa, Oklahoma-based Syntroleum have formed a company called Dynamic Fuels that will make jet fuel out of animal fat.

This article on the cleantech.com web site says the two will turn 2.3 billion pounds of animal fat into 75 million gallons of biodiesel a year:

Tyson announced that it would build the first biodiesel plant under its venture with Tulsa, Okla.’s Syntroleum (Nasdaq: SYNM) on a site in Louisiana, citing the area’s proximity to feedstocks, transportation, and the Barksdale Air Force Base, which has three squadrons of B-52 bombers.

“The B-52 has been the first Air Force jet that has been certified for synthetic fuels,” said Jeff Webster, Sr. VP of renewable products at Tyson, in a conference call.

“We’ve met all of the standards that have been set in the preliminary testing for synthetic fuels, and we’ve contracted with the Air Force for our next set of fuels for further testing.”

Construction on the biodiesel plant will start next year with production expected in 2010.

Biofuel Makers Want Changes to Farm Credit Rules

Leaders in Iowa’s renewable energy field are asking Congressional leaders to change federal law so Farm Credit would be allowed to make loans to build ethanol and biodiesel plants that do not have a majority of farmer-stockholders as owners.

harkin.jpgThis story in Wallaces Farmer says they’ve sent a letter to both of Iowa’s U.S. Senators, Chuck Grassley and Tom Harkin, and to other senators asking for support of the change to Farm Credit’s lending authority because of the problems expanding the renewable fuels industry and maintaining its profitability. The new farm bill, currently under debate, has an amendment with the change:grassley.jpg

The current economic climate is challenging, to say the least,” says Sam Cogdill, president of Amaizing Energy LLC, an ethanol plant at Denison in western Iowa. He is one of eight people representing ethanol and biodiesel plants across the state who signed the letter.

“We understand the struggles of expanding the ethanol and biodiesel industry and trying to keep it profitable in changing economic times,” he adds. “Rising input costs and other factors are creating increasingly smaller margins for ethanol and biodiesel producers.”

But bankers are balking at the idea:

The Farm Credit System was created under a federal charter years ago and operates as a cooperative. “As a government-sponsored lender, they have certain advantages we don’t have,” says Jim Schipper, president of American State Bank at Osceola and current chairman of the Iowa Bankers Association.

The Farm Credit System has preferential tax treatment and access to funding at interest rates a commercial bank is not eligible to get. “That’s fine as long as Farm Credit lenders are within their mission–providing credit to farmers,” says Schipper. “But this expanded horizons idea goes way beyond that. If they want to finance enterprises that are not farmer-owned projects, then they should have to discontinue their federal support.”

Schipper goes on to point out that guys such as Bill Gates, who owns one-fourth of Pacific Ethanol, would be eligible for the Farm Credit loans if the change happens.

EU, NBB Face Off over Tax Credit

eu-flag.gifLobbyists for the European Union and the National Biodiesel Board have been working Congress hard over the issue of tax credits.

This article from The Hill.com says EU officials say the tax credit just allows American biodiesel to be dumped in Europe while the NBB argues the incentives are needed to support the alternative fuel:

At issue are increased U.S. exports of biodiesel to Europe, which EU officials argue are displacing European crops that would otherwise be converted into biodiesehttp://domesticfuel.com/wp-admin/upload.php?style=inline&tab=upload&action=&ID=&post_id=-1194925751&paged
Uploadl in European countries. EU Trade Commissioner Peter Mandelson raised the issue with Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) and U.S. Trade Representative Susan Schwab during his visit last week, according to an EU official.

One of Mandelson’s arguments is that the current policy cheats U.S. taxpayers, whom the EU argues are subsidizing biodiesel exports to Europe. EU officials say these subsidies do nothing to lower U.S. dependence on foreign oil — one of the initial justifications for providing the U.S. industry with tax credits — since the biodiesel is just sent to Europe.

nbb-logo.jpgThe NBB, however, argues that the rise in U.S. exports simply reflects the higher demand for biodiesel in the EU, where policymakers are trying to increase the percentage of biodiesel as a proportion of total diesel fuel use to 10 percent. That would be huge in Europe, where about 50 percent of the passenger-car fuel used for transportation comes from diesel.

Denying the tax credit to biodiesel that is exported would close the free flow of trade, according to the NBB, endangering a U.S. industry that has made tremendous strides in recent years. NBB CEO Joe Jobe argues this would create a “serious disincentive” for the U.S. industry.

European biodiesel producers say much of the biodiesel sent to Europe is made entirely from U.S. crops, and U.S. producers add a splash of petroleum to to qualify for the tax biodiesel blending tax credit.

The NBB is fighting a similar measure that is allowing biodiesel producers from Indonesia and Malaysia ship biodiesel to a U.S. port for a “splash” of petroleum, at which point the blenders’ tax credit is pocketed and the finished product dashes off to Europe. The Europeans aren’t happy about this practice, either, but see the American biodiesel as a bigger threat.

Good News in WSJ Article

A Wall Street Journal article on water use for ethanol production points out that the industry is taking steps to address the concerns.

RFAEthanol producers say they are prepared for the challenges as the business expands and are ready to adapt quickly. Producers, plant designers and water engineers are all teaming up to try to reduce water consumption, says Matt Hartwig, a spokesman for the Renewable Fuels Association, a Washington, D.C.-based group that represents ethanol producers.

Producers as small as newcomer US BioEnergy of St. Paul, Minn., and as big as Archer-Daniels-Midland Co. of Decatur, Ill., have discussed measures to reduce their impact.

The article points out that advancements in engineering and new technology are being developed to reduce water usage.

Significant technical innovations are required to reduce the amounts of water that ethanol plants consume. One ethanol plant designer, Delta T Corp., based in Williamsburg, Va., says it has created a system that will reduce consumption to just one-and-a-half gallons of water per gallon of ethanol, down from four gallons of water.

To further reduce the plants’ impact on drinkable water, engineers also can route more low-quality water — even waste water — to functions where high purity is unnecessary. In the past two years, demand for engineers experienced in this kind of work has skyrocketed in the ethanol industry.

And the WSJ report notes that even without increased ethanol production, the nation still needs to get fuel somehow.

Canadian oil reserves, seen as a possible source of conventional fuel for the U.S., produce a thick grade of oil that requires just as much — if not more — water for refining than ethanol does, says Mr. Hartwig.

“The water from that [refining] process is so toxic that it has to be put into holding ponds so large they can be seen from space — and it takes 200 years to separate,” he says.

Chrysler Gives Grant to Alt. Energy Company

chrysler.jpgChrysler has handed out a $150,000 grant to alternative energy incubator company NextEnergy.

nextenergy.jpgThis story on the Detroit News web site says the two Detroit-based companies are collaborating on several projects, including the National Biodiesel Energy Lab, which is developing standards for biodiesel used in vehicles:

“This grant is an extension of Chrysler’s commitment to being a good neighbor,” said Frank Fountain, Chrysler LLC senior vice president for external affairs and public policy. “It’s a priority for Chrysler to increase the use of alternative fuels by investing in research into biodiesel technology.”

NextEnergy’s research into biodiesel is of high interest to Chrysler. Ross Good, Chrysler senior manger for energy and substance, said the automaker aims to recommend a 20 percent blend of biodiesel for all its diesel vehicles, but can’t make that recommendation until a national standard for the fuel is established.

Chrysler was the first automaker to partner with NextEnergy several years ago, said Jim Croce, CEO of NextEnergy.

“With The Chrysler Foundation’s grant,” he said, “we have been able to complete a testing platform that helps check out the viability of new bio and synthetic fuels as they progress from concept to use in vehicles and power generators.”