Domestic Fuel

U.S. biodiesel production officially topped one billion gallons in 2011, according to final year-end numbers released by the Environmental Protection Agency today.

The total volume of nearly 1.1 billion gallons is by far a record for the industry and easily exceeded the 800 million gallon target required under the EPA’s Renewable Fuel Standard (RFS). The previous record for biodiesel production was about 690 million gallons in 2008.

National Biodiesel Board (NBB) vice president of federal affairs Anne Steckel says the milestone demonstrates that the biodiesel tax incentive and the Renewable Fuel Standard are working just as Congress intended. “Now is not the time to be second-guessing the RFS or eliminating the biodiesel tax incentive,” said Steckel. “We’re proving that the policies work, that American innovation and competitiveness can pull us away from our dangerous dependence on imported fuel. Just as President Obama said in his State of the Union this week, we need to stay the course to continue creating jobs and building America’s energy capacity.”

The biodiesel industry’s success in 2011 comes after Congress reinstated the fuel’s $1-per-gallon tax credit in December 2010 and as the EPA’s RFS program for biodiesel completed its first full year of implementation. Without those policies in place in 2010, production dropped dramatically as dozens of plants shuttered and thousands of people lost jobs.

There is a lot made about tensions between the ethanol and livestock industries but the distillers grains co-product of ethanol production is providing significant benefits for animal producers even as ethanol has helped prop up corn prices.

A great discussion at the 6th Annual Iowa Renewable Fuels Summit featured corn and cattle organizations on the same panel talking about the “Synergies of Livestock and Ethanol.”

Moderator Iowa Agriculture Secretary Bill Northey opened the discussion by noting that sales of crops and livestock have risen as ethanol production has increased from $12 billion in 2002 – 6 billion in crop and 6 billion in livestock – to $24 billion in 2010, and 2011 is expected to be about $30 billion with at least $13 billion of that for livestock. “$13 billion on the livestock side versus $6 billion nine years ago,” Northey said. “Has ethanol been good for livestock agriculture in Iowa? I think very clearly.”

Listen to a brief interview with Secretary Northey here: Iowa Agriculture Secretary Bill Northey

Iowa Cattlemen’s Association Executive Director Matt Deppe says it’s easy to see the benefits that distillers grains (DDGS) have brought to especially cattle feeders. “We look at it as a corn replacement,” Deppe says about DDGS. “It means that they (feedlot operators) have another option that’s cost effective to put into their rations.”

Listen to an interview with Matt Deppe here: Matt Deppe Interview

The livestock industry has traditionally been the most important market for corn, noted Iowa Corn Growers CEO Craig Floss, although use for ethanol has increased significantly in the past decade. “But a third of every one of those bushels that goes into an ethanol plant goes into DDGS,” he said.

The panel also included Randy Ives, director of ethanol services for the commodity management firm Gavilon Group.

Listen to or download the entire panel discussion here: Ethanol and Livestock panel

Photos from 2012 Iowa Renewable Fuels Summit

In the State of the Union Address and other appearances this week, President Obama is endorsing a proposal that would extend the advanced energy manufacturing tax credit.

The Security in Energy and Manufacturing (SEAM) Act, authored by U.S. Sen. Sherrod Brown (D-OH), is a job-creating clean energy tax cut, which has delivered nearly $125 million to seven Ohio manufacturers to help create clean energy jobs, provides investment tax credits of 30 percent for facilities that manufacture energy equipment. Currently, 70 percent of clean energy components are manufactured outside of the United States.

“We can’t trade a dependence on foreign oil for a dependence on foreign-made sources of energy,” Brown said. “It’s unacceptable that 70 percent of clean energy components are made outside of the U.S. Extending the Advanced Energy Manufacturing Tax Credit will help more American manufacturers create jobs through the production of cutting-edge energy technologies.”

The initial tax credit, which was included in the Recovery Act, supported seven Ohio projects and dozens more eligible projects applied for funding but were denied due to a lack of funds. The Department of Energy (DOE) states that the program was more than three times oversubscribed. Nationwide, DOE deemed 418 projects eligible, which amounts to $5.8 billion in unfunded eligible applications. These manufacturers are waiting in the pipeline, and would be ready to break ground soon after they receive funding.

To be eligible for the tax credit, manufacturers must produce solar, wind, and geothermal energy equipment; fuel cells, microturbines, and batteries; electric cars; electric grids; energy conservation technologies; and equipment that captures and sequesters carbon dioxide or reduces greenhouse gas emissions. The SEAM Act is also cosponsored by Senators Debbie Stabenow (D-MI), Maria Cantwell (D-WA), and Bob Casey (D-PA).

Advanced Biofuels USA has released low cost and cost-efficient policies the group feels should be included in the Farm Bill which will be under consideration in 2012.

“We have identified two specific problem areas,” said executive director, Joanne Ivancic. “First, the challenges of bringing small, non-contiguous marginal acreage to productivity via an energy crop market; and, second, funding promising conversion and production technologies wallowing the in the financing valley of death.”

Read the Advanced Biofuels USA proposed policies in their entirety.

As Congress resumes work for 2012, the American Coalition for Ethanol (ACE) is urging its grassroots members and all ethanol supporters to attend the “Biofuels Beltway March” in Washington, DC. ACE’s fly-in for Capitol Hill visits will be held Tues., March 27 and Wed., March 28, headquartered at the Washington Court Hotel.

“Historic opponents to ethanol are again ramping up their misinformation game in an attempt to discredit the significant benefits seen as a result of the Renewable Fuels Standard (RFS) and it is imperative for our industry to proactively convey to Members of Congress that the RFS is successfully displacing foreign oil imports, creating American jobs, and reducing toxic pollution from gasoline,” said Brian Jennings, Executive Vice President of ACE.

Participants will break into teams for visits to Capitol Hill offices, meeting with Members of Congress or their staff about the RFS, ethanol infrastructure such as blender pumps and flex-fuel vehicles (FFVs), and educating Congress and federal agencies about the clean-octane benefits of ethanol. Sixty ethanol advocates met with more than 160 congressional offices during last year’s fly-in, and ACE is hoping for even greater attendance this year.

“Face-to-face meetings between constituents and lawmakers are the best way to make sure our consumer fuel choice message is heard,” said Jennings. “We encourage grassroots ethanol supporters to sign up for this fly-in and help explain that the RFS is accomplishing its purpose and will be the driver to help commercialize the next-generation of biofuels.”

Register with ACE for the event or get more information.

The 6th Annual Iowa Renewable Fuels Summit this week was another great one, according to Iowa Renewable Fuels Association president Brad Albin, who is VP of manufacturing for Renewable Energy Group (REG).

There were over 500 people at the conference on Tuesday in Des Moines and Albin says that’s a far cry from when he first started in the biodiesel industry. “I’ve personally been involved in biodiesel since 1996, helped build the first multi-feedstock biodiesel plant,” he said. “There was probably ten of us in a room at one time. And since then, we’ve seen some hard times but this year (2011) has been a strong year for us and now we need to just keep the strong going forward.”

Listen to my interview with IRFA president Brad Albin of REG here: Brad Albin interview

Photos from 2012 Iowa Renewable Fuels Summit

As the Global Forum for Food and Agriculture draws to a close in Berlin, the Global Renewable Fuels Alliance (GRFA) has challenged new United Nation’s Food and Agricultural Organization (FAO) Director General Jose Graziano Da Silva on his critique of biofuels and their alleged impact on commodity prices.

“Mr. Da Silva has failed to recognize that the rising price of energy is the primary driver in the rising cost of all commodities including corn and sugar,” said GRFA spokesperson, Bliss Baker.

Many international organizations have back tracked on their criticism of biofuels based on research which has found biofuels to have played a very minor role in the escalation of food prices globally. In fact, David Hallam, the FAO’s own Deputy Director has said that “unexpected oil price spikes could further exacerbate an already precarious situation in food markets.”

“Mr. Da Silva would do well to listen to the International Energy Agency’s dire warnings about our energy security future when commenting on biofuels,” said Baker. “The IEA concluded that biofuels could provide 27 percent of total transport fuel by 2050 and avoid around 2.1 gigatonnes of CO2 emissions per year when produced sustainably without jeopardizing food security,” said Baker.

The GRFA has repeatedly called for an increase in the use of biofuels to help reduce the world’s crippling reliance on crude oil.

“I would urge the new FAO Director General to focus on the real cause of high food prices – the rising cost of energy,” added Baker.

Blender pumps give consumers flexibility and choice of ethanol blends when they are fueling up. Now, the USDA is accepting applications for REAP funds that can be used by retailers who want to install more blender pumps.

This is the second year that blender pumps have been authorized as part of the REAP program. Agriculture Secretary Tom Vilsack announced in 2011 that USDA had plans to install 10,000 blender pumps over the next five years.

That announcement and this year’s opening of the application process is welcome news to the Blend Your Own (BYO) Ethanol campaign, a joint educational effort by the American Coalition for Ethanol (ACE) and the Renewable Fuels Association (RFA). The campaign will again offer free grant writing services to those interested in applying.

“This program provided funding for more than 250 blender pumps last year, providing many consumers with the choice and flexibility they deserve to pick the ethanol blends that work for them based on their vehicle, their beliefs, and their budget,” said RFA Director of Market Development Robert White. “Through the BYO Ethanol Campaign, we have the ability to assist retailers in applying for these funds and help USDA and the Obama Administration achieve the renewable fuel goals they have put forward. With E15 fuel registration due any day, these blender pumps will help spread this new blend across the country.”

“We can break the stranglehold oil has over our nation’s economy and energy future by giving consumers the option to choose clean American fuels that are not petroleum,” said ACE Senior Vice President Ron Lamberty. “In just five years, growing ethanol use has helped us reduce our reliance on foreign oil by more than 10% – to a point where imports are less than half of total demand. We can continue that move toward greater energy independence by getting more ethanol in front of more consumers.”

This program is designed to help spur rural development. This program offers funding for grants, and loan guarantees, but certain restrictions will apply on the size of the local communities and the businesses applying for the funds. Applications for this program are due on March 30, 2012.

The U.S. Department of Agriculture has approved a conditional commitment of $232.5 million to build a cellulosic ethanol plant in Boardman, Oregon.

The commitment was made to ZeaChem Boardman Biorefinery, LLC (ZBB) through the Biorefinery Assistance Program. ZBB plans to operate a 25 million gallon per year biorefinery to be constructed on an industrial site in northeast Oregon, along the Columbia River.

“In his State of the Union address, President Obama outlined his vision for a new era for American energy—an economy fueled by homegrown and alternative energy sources that will be designed and produced by American workers,” said Agriculture Secretary Tom Vilsack. “This project and others like it will help to establish a domestic advanced biofuels industry that will create jobs here at home and open new markets in the Pacific Northwest and across America.”

The biorefinery will use high-yield cellulosic fermentation technology to produce advanced biofuels. The feedstock will consist of approximately 30 percent agricultural residue, such as wheat straw and corn stover, and 70 percent woody biomass from a local hybrid poplar farm. An existing 250,000-gallon per year cellulosic integrated demonstration plant at the site is currently generating operational data that will provide information needed for the commercial scale project, which will be located on an adjacent site. An estimated 51 percent or more of the biorefinery’s output will be advanced biofuel, and the remainder will be high-value biobased chemicals, such as acetic acid and ethyl acetate.

“This is a very exciting and innovative project and we are very pleased to see ZeaChem moving into the commercial stages of cellulosic ethanol production,” said Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC). “The advanced and cellulosic ethanol industry is breaking through in a challenging financial climate, which speaks to the evolution of the technology and the value proposition offered by the most innovative liquid fuel and chemical producers in the world.”

The CEO of the National Biodiesel Board (NBB) told attendees at the 6th Annual Iowa Renewable Fuels Summit in Des Moines on Tuesday that the Renewable Fuels Standard (RFS2) is the number one priority for the industry in 2012.

“We have an immediate challenge before us,” NBB CEO Joe Jobe said of the postponed decision regarding 2013 volumes for biomass-based diesel under the RFS2. “The EPA recommended that we raise those volumes from the statutory minimum of a billion gallons to 1.28 billion gallons.” The Office of Management and Budget has to approve that recommendation and Jobe says that decision will be made within the next 45-60 days.

“We need to establish a precedent whereby we can have conservative, modest growth in the biomass-based diesel category,” Jobe said. He called on the biodiesel industry to make its collective voice heard on the issue. “We ask that you participate in our effort to send letters to the White House, to the OMB, to the administration and to members of Congress,” said Jobe, noting that more details about the effort will be coming soon.

Listen to part of Jobe’s address to the 6th annual Iowa Renewable Fuels Summit here: Joe Jobe comments

Photos from 2012 Iowa Renewable Fuels Summit

For the second year in a row, Iowa high school students have been rewarded for their creative videos promoting renewable fuels.

At the 6th Annual Iowa Renewable Fuels Summit in Des Moines on Tuesday, Ames High School senior Sam Ennis was declared the first place winner of the 2nd Annual “Fuel the Future” video contest for Iowa high school students. For his highly creative, entertaining and informative music video entitled “I Got You Ethanol” Ennis was awarded the $1,000 grand prize by the Iowa Renewable Fuels Association. Ennis is pictured here with Andy Anderson of the law firm Faegre Baker Daniels LLP, which sponsored the contest.

Second place and $600 was awarded to Clay Central Everly Community School tenth grade students Gabby Huss, Rebecca White and Blair Montgomery for their video entry called “Ethanol for the Economy.” Third place and $400 went to eleventh graders Cassandra Davis, Haley Jewell, Lauralin Berkley, Cody Corchado, and Meredith Brister of Pleasant Valley High School in the Quad Cities for “Dear 25 Year Old Me.”

All the videos can be seen on IRFA’s YouTube channel. Watch “I Got You Ethanol” below and listen to the song here: I Got You Ethanol

Photos from 2012 Iowa Renewable Fuels Summit

Reaction to President Obama’s call for an “all-of-the-above energy strategy” in Tuesday’s State of the Union address was met with applause by many renewable energy interests, who at the same time hope his words will be backed with actions.

“We applaud the President’s announcement that he is going to push for homemade, U.S.-energy after 40 years of being addicted to foreign oil,” said Tom Buis, CEO of Growth Energy. “We have to move ahead with American ethanol as part of that solution.”

“The U.S. biodiesel industry is proving that we can accomplish the president’s goals of creating jobs while building a clean-energy economy,” said Anne Steckel with the National Biodiesel Board. “That’s why we’re calling on the Administration to quickly finalize the delayed EPA rule for boosting biodiesel use under the Renewable Fuel Standard in 2013.”

National Corn Growers Association Chairman Bart Schott said they were pleased to hear President Obama’s continued commitment to the nation’s energy independence. “As family corn farmers have risen to the challenge to meet our nation’s energy needs, we are hopeful the direction the President outlined offers similar opportunities for others to expand our energy independence,” he said.

“Working with the President, we can help America become less dependent on foreign oil and a smarter consumer of energy,” Adam Monroe, President of Novozymes North America, said. “Innovations like advanced biofuels can play a major role in the President’s vision but we need steady policies like the Renewable Fuel Standard – and we look forward to working Congress to preserve them.”

President Obama put a face on the wind energy industry during his State of the Union address on Tuesday. It was the face of Bryan Ritterby who “found work at Energetx, a wind turbine manufacturer in Michigan” after being laid off from a job making furniture and is “proud to be working in the industry of the future.”

However, the American Wind Energy Association (AWEA) warns that layoffs could be in the future without the continuation of tax credits for the industry.

“Wind energy is one of the few sources of agreement in a divided Washington. But with an expiration of wind’s key federal incentive, the Production Tax Credit (PTC), looming at the end of the year, these good manufacturing jobs are in peril,” said AWEA CEO Denise Bode in a statement after word got out that Ritterby would be highlighted in the speech. She noted that “with uncertainty over the PTC, layoffs have already begun and studies have forecast they will increase with each month we near expiration.”

Bipartisan legislation recently introduced by Representatives Dave Reichert (R, WA-08) and Earl Blumenauer (D, OR-03) seeks to grant a four-year extension to the existing Production Tax Credit (PTC) for wind energy. According to AWEA, the legislation recently received the endorsement of a broad, coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A four-year PTC extension also has the support of the bipartisan Governors’ Wind Energy Coalition comprised of 23 Republican and Democratic Governors from across the U.S.

The ethanol industry has an unlikely ally in its opposition to the California Low Carbon Fuel Standard that bans the use of corn ethanol in that state. A diverse multi-state coalition that is primarily concerned with the rule’s impact on oil and gas is also opposed.

The Consumer Energy Alliance, a coalition of over 170 energy consumer groups and 300,000 individual members across the United States, is one of the plaintiffs opposing the California LCFS, which was just ruled unconstitutional by a district court judge.

“Not only is an LCFS unconstitutional, but it would also hurt the California economy, farmers, consumers and truckers by raising fuel prices sharply and burdening consumers,” said CEA Executive Vice President Michael Whatley. “And ironically, the policy will have the opposite of its intended effect by creating more greenhouse gases in the long run.”

The CEA’s main concern about the California LCFS is the potential for it to be used to prevent certain sources of petroleum from being converted into fuels such as gasoline, diesel fuel, kerosene and heating oil and that it could adopted nationwide, resulting in lost jobs and declining household revenue.

After the district court judge this week rejected a motion by the state to continue implementing the LCFS despite his ruling that it was unconstitutional, the California Air Resources Board (CARB) decided to appeal to a new court in the 9th Circuit in hopes of a different outcome.

“The decision by CARB to appeal the decision by the District Court is disappointing, but unfortunately not surprising. We look forward to a decision by the Ninth Circuit upholding the District Court and confirming the unconstitutional nature of California’s low carbon fuel standard,” said Whatley, urging CARB to “scrap this faulty program” instead of appealing the decision.

The idea of turning oil into salt may sound like something that should be done in a science lab but Dr. Gal Luft says it’s something that Congress can do with a simple piece of legislation.

Luft, who is executive director of the Institute for Analysis of Global Security, explained his analogy between oil and salt at the 6th Annual Iowa Renewable Fuels Summit in Des Moines on Tuesday.

“Salt used to be the most strategic commodity of all because it was the only way to cure food,” said Luft. “That changed with the invention of canning and refrigeration. Those two simple technologies essentially stripped salt of its strategic status.”

“Just like salt dominated food preservation, oil today dominates transportation,” he continued. “And just like salt’s strategic status was diminished through those simple inventions, oil’s strategic status can be diminished through the technology of flexible fuel vehicles.”

That’s why Luft strongly advocates the simplest solution to diminishing the stranglehold oil has on the transportation industry, and that is requiring all new vehicles sold in the United States to be capable of running on a variety of fuels. “Whether it is ethanol or methanol or butanol, whatever it is, let’s give people choices,” he said, noting that there is just such a bill pending in Congress called the Open Fuel Standard Act.

Luft and co-author Anne Korin wrote a book about the analogy between salt and oil and the importance of fuel choice, called “Turning Oil into Salt”, which was reviewed here on Domestic Fuel in 2009.

Listen to Luft’s address to the 6th annual Iowa Renewable Fuels Summit here: Gal Luft address

Listen to a brief interview with Gal Luft here: Gal Luft interview

Photos from 2012 Iowa Renewable Fuels Summit