October Ethanol Production Up, Stocks and Imports Down

October ethanol production was up from September numbers but slightly below the high set in August. Imports for the month of October were down and with consumption hitting a new high, stocks fell from it's high point set last month.

Ethanol Production Numbers in Gallons
	Production	Imports	Stocks	Consumption
October 2008	842,016,000	25,830,000	638,064,000	901,530,000
September 2008	806,274,000	103,572,000	671,748,000	863,142,000
August 2008	842,478,000	81,102,000	625,044,000	852,348,000
July 2008	799,764,000	57,120,000	553,812,000	819,840,000
June 2008	736,848,000	65,982,000	516,768,000	791,910,000
May 2008	778,806,000	36,372,000	505,848,000	793,968,000
April 2008	708,456,000	60,942,000	484,638,000	763,182,000
March 2008	730,674,000	15,456,000	478,422,000	707,238,000
February 2008	631,050,000	20,286,000	439,530,000	660,114,000
January 2008	664,356,000	20,790,000	448,308,000	679,308,000
December 2007	636,762,000	8,904,000	442,470,000	674,352,000
November 2007	602,592,000	16,506,000	471,156,000	628,800,000

Source: - Energy Information Administration

Grocery Manufacturers Association: Trust Us On Ethanol Facts

I have been on the Grocery Manufacturers Association (GMA) website hunting a quote I saw sometime back and happened across a document titled 'Food to Fuel Fact Sheet'. While glancing through it I noticed this section.

Food-to-fuel policies have little impact on gasoline prices. Because ethanol displaces a small fraction of the US gasoline supply and a tiny fraction of global crude supplies, changes to food-to-fuel mandates and subsidies would have little or no impact on gasoline prices. Overall, ethanol production in 2007 displaced less than 4 percent of the nation’s gasoline supplies in 2007, when relative energy values are considered. In fact, one study found that the ethanol tax credit and the ethanol mandate will increase gasoline consumption by more than 600 million gallons by 2015.

The last line is what caught my attention since I have never seen this study or even a summary of it anywhere. So I followed the reference to this article in the Chronicle Online by Cornell University. In the article it explains just how they think the ethanol tax credit and the ethanol mandate will increase gasoline consumption.

Now introduce a tax credit alongside the mandate: Because the ethanol price premium, due to the mandate, exceeds the tax credit, there is no incentive for blenders to bid up the price of ethanol as before. And market prices of ethanol cannot decline due to the mandate. Instead, blenders will offer a lower total fuel price -- ethanol plus gasoline -- to consumers to take advantage of the tax credit offered to them by the government. The lower price increases gasoline consumption and thus increases the market price of gasoline and oil.

So on one hand they are saying that ethanol doesn't reduce the price of gasoline. On the other they are saying that ethanol will increase the consumption of gasoline by reducing the price. My guess is that I was supposed to just trust the information they were providing as well reasoned fact without checking the reference materials and thus uncovering their attempt at deception.

POET plant begins $2 million expansion project

POET issued a press release yesterday saying that their Laddonia, Mo. plant is undergoing a $2 million dollar expansion which will allow it to produce an additional five million gallons of ethanol. According to the press release the expansion is already underway and is expected to be completed in April 2009.

I mention this development as a reminder that although the news lately has given the impression that the ethanol industry is on it's last leg there are still companies within the industry that see a bright outlook ahead and are investing in more capacity.

Source : POET Press Release

September Biodiesel Numbers Down

September biodiesel production number were down slightly to 64,134,000 gallons from 66,696,000 gallons in August. Part of the difference can be explained by the fact that September has 30 days whereas August has 31, but not all of it. Even adding another days worth of production would bring the total about 400,000 gallons short of the August number.

September 2008 - 64,134,000 gallons
August 2008 - 66,696,000 gallons
July 2008 - 67,410,000 gallons
June 2008 - 63,378,000 gallons
May 2008 - 52,500,000 gallons
April 2008 - 52,836,000 gallons
March 2008 - 49,056,000 gallons
February 2008 - 43,260,000 gallons
January 2008 - 50,736,000 gallons

2007 - 489,804,000 gallons

Source : EIA : Biodiesel Overview

Is Ethanol Off The Hook For Rising Food Prices?

There have been several articles over the last few days that articulate the disconnect between the rhetoric waged by the anti-ethanol campaign in blaming food prices increases on ethanol production and the fact that food prices have remained high despite the recent fall in commodity prices. Here is a sampling of those articles.

Investigation: Inside the ethanol subsidies controversy

Fact vs. Fiction on Food vs. Fuel

It is nice to see that the food versus fuel issue is dying down somewhat but as one article points out the battle being waged against ethanol isn't over just changing terms.

There are signs that the GMA and Food Before Fuel lobby are changing tack a little in attacking ethanol. There also seems to be a slight de-emphasising of the price-rise issue to instead concentrate on ethanol's supposedly detrimental affect on the environment.

But as all the articles point out the campaign has created an atmosphere in which food companies can increase their profits and after all that is what trade organizations such as the GMA are supposed to do.

Distillers Grain Research Update

The Beef Checkoff recently funded a body of research related to the beef quality and safety implications of feeding ethanol co-products to beef cattle. The research consisted of six studies and a summary of the conclusions is available below.

Ethanol Co-Product Research Executive Summary (PDF)

Canadian Ethanol Production Reaches 1 Billion Liters Per Year

The Canadian Renewable Fuels Association announced yesterday that with the official opening of the 150 million liter per year Integrated Grain Processors Co-operative (IGPC) ethanol plant that Canada's ethanol production capacity exceeded the 1 billion liters per year mark.

"Today marks a milestone day in the production of renewable fuels in Canada. With IGPC's new plant, Canada now produces over a billion liters of ethanol a year," said Gordon Quaiattini, President of the Canadian Renewable Fuels Association. "The farmers that own IGPC should be proud of this significant accomplishment. This new plant will help reduce harmful greenhouse gases, grow new jobs in rural Ontario, and help hard-pressed consumers with more choice at the pump. We are growing beyond oil with renewable fuels made-in-Canada."

Chevron funds jatropha study in California

The University of California, Davis is conducting research on the oil plant jatropha to determine if the plant can be grown successfully and profitably in Southern California to produce biodiesel.

Jatropha seeds from India grown in a UC Davis greenhouse were transplanted this spring into an acre parcel at the University of California Desert Research and Extension Center (DREC) in Holtville, Calif. The trial is funded by Chevron.

Jatropha is a tropical, drought tolerant, perennial plant grown as a tree or shrub up to 13 feet in height. The fruit has three kidney-bean sized seeds which contain about 50 percent oil.

"I think jatropha would be ideal for this area," said Sham Goyal, University of California (UC), Davis agronomist, and a member of the university's jatropha research team. "A realistic estimate is an acre of jatropha could produce from 500 to 600 gallons of biodiesel per acre per year. If you're paying US$5 per gallon for diesel, that's about US$2,500 per acre of gross return."

Source : WesternFarmPress

Military Trash To Energy Refinery Successful

In March I wrote about a military project to solve two problems that every military faces, supplying fuel to remote bases and disposing of trash. The solution was to develop a refinery that could convert the trash to fuel to power a generator.

The tactical garbage-to-energy refinery (TGER, pronounced tiger) was developed jointly by RDECOM, Defense Life Sciences LLC of McLean, Va., and a team of Purdue University researchers.

The TGER uses thermal gasification to convert paper, plastic and Styrofoam garbage into syngas and a fermentation process to convert food and beverage waste to ethanol. The combined fuel is them fed to a 60 kilowatt generator. The unit is capable of processing about a ton of trash per day.

To test the unit in under actual conditions the TGER unit was sent to Camp Victory in Baghdad, Iraq in May.

Prototype deployment, which ended Aug. 10, has generated positive results so far. “Despite some mechanical problems, TGER has demonstrated excellent waste processing throughput and a very high level of net power efficiency,” Warner says.

Not only does this technology help to solve the problems of what to do with the trash the military generates and to lessen the need for fuel shipments to remote bases but the technology could be used to convert trash to energy in civilian applications. It will be interesting to see how this develops.

Source : Biomass Magazine

OPEC President Calls For Production Cut

OPEC President Chakib Khelil is calling for a production cut much larger than 1 million barrels per day to stabilize oil prices.

"Even a million barrels is not enough, it should be much more for the stability of markets," he said, adding that the $75 a barrel price target set by Saudi Arabia's King Abdullah was a "fair price."

These remarks come ahead of a scheduled meeting of OPEC members on Wednesday.

Source : The Times of India

Two Iowa Ethanol Plants Getting Wind Power

The Iowa Lakes Electric Cooperative (ILEC) is installing wind turbines at two wind farms located near ethanol plants.

ILEC, which serves customers in the counties of Buena Vista, Cherokee, Clay, Dickinson, Emmet, Kossuth, Palo Alto and Pocahontas, is building two separate wind farms near the 110 million-gallon Global Ethanol plant at Lakota and the 50 million-gallon Green Plains Renewable Energy ethanol plant near Superior.

Each site will include seven General Electric 1.5-megawatt turbines, which will be installed starting in early 2009. The two wind farms will produce approximately 71 million kilowatt hours of wind-generated electricity each year, which is the equivalent of serving almost 3,700 of ILEC’s member-owners’ farms and residential homes for one year.

The reason behind placing the wind turbines near ethanol is that the electric distribution infrastructure is already in place at those locations.

Locating both wind projects next to an existing ethanol plant that the cooperative currently serves takes advantage of the existing substation infrastructure without adding to transmission level connection, which can be extremely expensive.

The foundations are already in place and the cooperative hopes to have the wind turbines operating by the third quarter of 2009.

UAE Building Regions First Biodiesel Plant

The United Arab Emirates is building the first biodiesel plant in the GCC (Gulf Cooperative Council) region.

The first UAE-based biodiesel plant in the GCC region will produce 3 million gallons annually of environmentally-friendlier diesel to power vehicles, drastically reducing greenhouse gas emission due to its less toxic content, by next year.

I try to keep an eye on events like this since the UAE is an OPEC member country. And although 3 million gallons of biodiesel per year may not seem like a large quantity it is when you consider that the UAE only has a population of around 4.5 million people.

Source : Gulfnews

Did The IRL Snub American Ethanol Producers?

The Indy Racing League (IRL) announced on November 18, 2008 that the official ethanol supplier would be the Brazilian trade promotion agency APEX-Brasil. The move from an American fuel supplier to a Brazilian based supplier has caused quite a stir especially among ethanol supporters and corn growers.

I have waited to comment on this situation to give it a little time to let the facts come out. I thought that maybe Brazil wanted the deal more and simply out bid domestic producers but that doesn't appear to be the case.

The first hint that the IRL was on defensive about their decision was when they attempted to spin their justifications behind the decision in a recent press release.

"The ethanol producers recently notified the IndyCar Series that it would not be renewing the agreement for 2009 and beyond and EPIC is ceasing operation. No one from any other part of the American-based ethanol community stepped forward with a substantial proposal. Soon after, the IndyCar Series and APEX-Brasil reached a preliminary agreement. As part of that agreement, we plan on starting our 2009 season with American-produced ethanol.

The Ethanol Promotion and Information Council (EPIC) had been the fuel supplier up to this point. The part about EPIC ceasing operation is what caught my attention since it was announced that EPIC and Growth Energy, another ethanol industry group would be merging.

It was revealed in an article last week that there are American ethanol producers that are interested in sponsoring the series.

Several American ethanol producers outside the EPIC umbrella came forward to offer their services as a supplier during last week’s meetings, Angstadt said. But IRL officials think it’s too late to change course, plus motorsports marketers said independent American suppliers would have difficulty matching APEX-Brasil’s resources to feed money and promotional muscle into the series.

I know this is all happening after the deal with Brazil was made so too little too late righ?. Well, I don't know. According to the Desmoines Register, bids from American ethanol groups were not sought out.

Angstadt said he didn't specifically seek American ethanol groups as potential sponsors to counter the Brazilian bid.

Just looking at it from the outside it appears that the IRL snapped at a deal with Brazil before they fully explored the interest of the American ethanol industry to sponsor the series. Only time will tell how this decision will effect their business.

Biodiesel Stations Grow Reaching 1131

The number of biodiesel refueling locations across the country has grown since the middle of October by 113 locations to reach a total of 1131.

December 1, 2008 - 1131
October 11, 2008 - 1018

Please note that this number includes all biodiesel blend levels. For a complete list or to find locations nearest to you please visit the National Biodiesel Board.

Number Of E85 Pumps Continues To Grow

The number of E85 stations continues to grow reaching 1868 stations through the end of October. For the month 31 new locations were added.

December 1, 2008 - 1868
November 1, 2008 - 1837
October 1, 2008 - 1782
September 1, 2008 - 1743
August 1, 2008 - 1663
July 1, 2008 - 1627
June 1, 2008 - 1579
May 1, 2008 - 1560
April 1, 2008 - 1521
March 1, 2008 - 1501
February 1, 2008 - 1475
November 9, 2007 - 1378
May 7, 2007 - 1200

The current number plus the locations of all E85 stations can be found at the National Ethanol Vehicle Coalition.