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.

August Biodiesel Production Down Slightly

August biodiesel production totaled 66,696,000 gallons, down from 67,410,000 gallons in July.

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

September Ethanol Production Down Slightly

September ethanol production dipped slightly from the prior months totals. Imports, stocks and consumption all rose.

Ethanol Production Numbers in Gallons
	Production	Imports	Stocks	Consumption
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
October 2007	588,756,000	41,916,000	480,858,000	635,124,000

Source: - Energy Information Administration

Poet in buyout talks with other ethanol producers

POET LLC, the nations largest ethanol producer said in an AP article that it was in buyout talks with a number of ethanol companies.

"We just feel there is a lot of promise in the future of the ethanol industry," said Jeff Broin, chief executive of privately held Poet.

He offered no specific timetable and mentioned no company names.

As I mentioned in my last post, VeraSun announced in a press release that it had an indication of interest for purchasing it's assets. As far as I know these two events are separate.

Broin did say in the article that they were looking at entire ethanol companies and plants that were in favorable locations and had the right amenities.

Source : Cleveland.com

VeraSun Receives Indication Of Interest Of Purchase Of Assets

VeraSun announced in a press release that it had received indication from an interested buyer.

VeraSun Energy Corporation (VSUNQ), one of the nation’s largest ethanol producers, today announced that it recently received a non-binding unsolicited indication of interest with respect to the purchase of substantially all of its assets. The Company intends to pursue this indication of interest to its conclusion and evaluate other proposals it may receive in accordance with its obligations as a debtor in possession under chapter 11 of the Bankruptcy Code. The indication of interest received by the Company is subject to significant conditions, and there can be no assurance that it will result in the consummation of a transaction, that the Company will receive any other offers or indications of interest, that the Company will be able to complete any alternative transaction or that any transaction or transactions would generate proceeds sufficient to satisfy the claims of all of the Company’s stakeholders.

Due to confidentiality considerations, the identity of the third party and the terms of its indication of interest were not disclosed.

The company says that it plans to explore this and any other potential proposals.

Source : VeraSun Press Release

Renewable Fuel Standard Increased for 2009

The EPA recently announced the renewable fuels requirement for 2009.

The 2009 renewable fuel standard (RFS) will be 10.21 percent to ensure that at least 11.1 billion gallons of renewable fuels be blended into transportation gasoline.

The Energy Independence and Security Act of 2007 (EISA) established the annual overall renewable fuel volume targets, reaching a level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard by November 30 for the following year. Based on the standard, each refiner, importer and non-oxygenate blender of gasoline determines the minimum volume of renewable fuel that it must ensure is used in motor vehicle fuel. The 2008 standard was 7.76 percent, equating to roughly 9 billion gallons.

Source : EPA

This has caused some confusion though as some sources are saying that it requires 11.1 billion gallons of ethanol to be blended into the fuel supply next year. This isn't correct, the amount ethanol is set at 10.5 billion gallons, biodiesel is set at 500,000 gallons and 100,000 gallons must come from advanced biofuels for a total of 11.1 billion gallons.

Oil Closes Below $50 Per Barrel

According to the New York Times, oil closed below $50 per barrel on Thursday. The last time oil closed below $50 dollars was in May 2005.

The article also says that some analysts are predicting that oil come go as low as #30 to $40 per barrel.

While this is good news for consumers at the pump, it poses some risks that oil companies will not invest the necessary amounts into developing new resources which could lead to higher oil prices once the economy starts to rebound.

For me it shows how just a small percentage decrease in oil demand can cause a large decline in prices. As the article notes domestic oil consumption is expected to fall by about 1.1 million barrels of oil per day this year, about a 5.4% decline. Most sources attribute the decline to the failing economy but without the contribution of 647,000 barrels per day of ethanol production I don't think we would be seeing as sharp of a decline in oil prices as we have.

That is not to say that ethanol alone can solve our energy problems, but it does show how a combination of biofuels, conservation, and new technologies (imagine a fleet of hybrids powered by E85 or biodiesel) can have a large effect on the price of oil.

Kinder Morgan Ready For Ethanol Shipments

Kinder Morgan says that it is ready to take customer orders for shipments through their Central Florida Pipeline.

Emily Thompson said she expects the pipeline to start moving ethanol this week as scheduled, although an exact date was not confirmed. The 16-inch pipeline runs between Tampa and Orlando, Fla.

Source : The OilSpot News

Is The Ethanol Industry On It's Deathbed?

Over the last couple of weeks there have been a large number of articles in the news about the troubles facing the ethanol industry. Many point to the recent bankruptcy filing by VeraSun as proof that ethanol industry is on it's last leg.

While there are several ethanol producers that have filed for bankruptcy lately, VeraSun, the nations second largest ethanol producer was by far the largest.

But there are signs that the situation is not as bad as it looks. Both POET and ADM has made statements recently that they may be considering buying assets from some of the ailing producers.

Another company that recently filed for bankruptcy, Greater Ohio Ethanol, has been actively trying to find buyers for the assets the company holds. According to an article published yesterday there are interested buyers out there.

The company is aggressively marketing its assets, it said in court filings Friday. A two-page summary of what's available was given to 200 interested potential bidders, and nine of them have asked for additional confidential business information.

If the situation was as dire as some have suggested I doubt there would be this kind of interest in buying their assets.

Report Concludes Specualtion A Major Contributor To Higher Food Prices

A new report from the Institute for Agriculture and Trade Policy has concluded that excessive speculation is a major reason for the rapid rise in commodity prices.

The IATP report, “Commodities Market Speculation: the Risk to Food Security and Agriculture”, concludes that U.S. government deregulatory steps opened the door for large financial services speculators to make huge “bets” that destabilized the structure of agriculture commodity markets. According to the United Nations, global food prices rose an estimated 85 percent between April 2007 and April 2008. Prices rose for wheat (60 percent), corn (30 percent) and soybeans (40 percent) beyond what could be explained by supply, demand and other fundamental factors, the report found.

This puts in doubt the report from the World Bank earlier in the year that said that biofuels were responsible for 75% of the global rise in food prices. In their report they concluded that biofuels pushed food prices up in part through encouraging speculation. But the fact that commodity prices have come down by about 50% while biofuels production continues to climb shows that to be a false assumption.

Report : Commodities Market Speculation: the Risk to Food Security and Agriculture

Wind Energy Doesn't Save Anything On Carbon Emissions?

A few days back I noticed an article on the fight being waged by a group of residents to stop a wind energy project from being developed in their area. One of the comments got me thinking.

Lorrie Gillis, the group's spokesperson, said members are also questioning the economic feasibility of turbines, which "don't save anything on carbon emissions," nor have they lead to the closure of any coal burning generating plants.

Saying that a technology doesn't save anything on carbon emissions seems to be the modern equivalent to the Salem witch trials. Anyone that is opposed to a certain technology makes that claim. The claim has been made against ethanol and biodiesel and now wind. I bet that if I were to look around I could find someone making the same claims about every form of alternative energy.

Source : Manvers Wind Concerns

Ethanol's Water Consumption

The Christian Science Monitor published a story today about water consumption and made some remarks about ethanol and biodiesel which aren't true.

Not surprisingly, while gasoline consumes water at 0.15 gallons per mile, biofuels like ethanol slurp an average of 28 gallons per mile. Biodiesel from soybeans comes in at 8 gallons per mile. Electric cars and plug-in hybrids compare favorably with conventional fossil fuels, consuming a bit more than 0.2 gallons of water per mile. The most watertight combo: electric vehicles recharged through renewable sources of electricity. The study appeared in the Nov. 1 issue of Environmental Science and Technology.

As the quote notes, their information is taken from a recent study. The study looked at irrigated and non-irrigated biofuels. The numbers they quote are for irrigated biofuels.

If ethanol is processed from corn grain in irrigated fields, then water consumption is 1.3−62 gal H2O/mile (average of 28 gal H2O/mile) and withdrawal is 6.9−110 gal H2O/mile (average of 36 gal H2O/mile). Ethanol processed from corn grain from nonirrigated fields results in water consumption and withdrawal intensities of 0.15−0.35 gal H2O/mile and 0.33−0.56 gal H2O/mile, respectively.

Their quoted amount of water consumption for biodiesel is also the number for soy from irrigated fields.

Biodiesel derived from irrigated soybean fields has water consumption of 0.6−24 gal H2O/mile (average of 8 gal H2O/mile) and withdrawal of 1.1−26 gal H2O/mile (average of 10 gal H2O/mile). If the soy fields are not irrigated, then just as with ethanol, the consumption and withdrawal are 2 orders of magnitude less at 0.01−0.02 gal H2O/mile and 0.03−0.12 gal H2O/mile, respectively.

The problem with using the irrigated number is that less than 15% of all corn grown in this country is irrigated. So while a small percentage of the ethanol produced in this country may indeed consume the amount of water they say, the vast majority uses a much smaller amount.

I don't have any numbers on how much of the soy crop is irrigated but I think it is safe to say that not all of it is so assigning the higher irrigated number to all biodiesel would also be less than truthful.

I would have expected better from this organization.

Source : Water Intensity of Transportation

Fighting Terror With Alternative Energy

Shimon Peres, President of Israel, spoke about fighting terror by developing alternative energy at a celebration of his 85th birthday in August.

In a meeting with representatives of the students' village in the town of Dimona on Thursday, Peres said "today we face the problem of terror and Iran. The problem itself is like a swamp with mosquitoes. It's preferable to dry out the swamp than try to kill every single mosquito.

"When the price of oil rises, the terrorist organizations feel better; this feeling needs to be brought back down. The way to bring Iran, Venezuela and even Russia in some respects down is to lower the price of oil. Attacking oil fields is foolish. We can attack with energy, meaning create alternative energy".

Source : Y Net News

E85 Stations Top 1800

October was another good month for the spread of E85 with 55 new refueling locations being added. The total number of stations now stands at 1837.

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.

August Ethanol Production, Imports and Stocks Up

August ethanol production ended higher with 842,478,000 gallons produced, up from 799,764,000 gallons produced in July.



Ethanol imports were up with 81,102,000 gallons imported in August versus 57,120,000 gallons in July.



August ethanol stocks ended higher at 625,044,000 gallons compared to 553,812,000 gallons in July.

Ethanol Production Numbers in Gallons
	Production	Imports	Stocks	Consumption
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
October 2007	588,756,000	41,916,000	480,858,000	635,124,000

Source: - Energy Information Administration

Iowa State Studies Effects Of Ethanol Subsidies

Iowa State Researchers have been studying the effects of ethanol subsidies on the the welfare of producers and consumers as well as as on the fuel market. They looked at the effects of the 51 cent ethanol blenders credit, the 54 cent ethanol import tariff and the ethanol mandate. After adding all the pluses and minuses they concluded the overall results of the ethanol policy have been positive.

Ethanol production in 2007 provided a benefit to corn, ethanol producers, gasoline/fuel consumers, and taxpayers. It reduced welfare for grain consumers and gasoline refiners. The overall net welfare gain is approximately $2.65 billion.

This came as somewhat of a surprise since subsidies generally create market distortions but in this case they concluded that it reduced market distortions that already existed as a result of farm subsidies.

Government support policies coupled with high energy prices stimulated a rapid increase in ethanol production and associated welfare transfers in multiple markets. We find that the net welfare change of the U.S. ethanol subsidy is positive. This result is counterintuitive because the first fundamental theorem of welfare economics would suggest the market-distorting ethanol subsidy could not be welfare enhancing. The markets for agricultural commodities, however, were not competitive prior to large-scale ethanol production because there was already significant intervention in the form of farm subsidies. Our results show that subsidizing U.S. ethanol production actually does improve aggregate welfare, a result that is robust with respect to a reasonable range of alternative parameter values. By reducing the distortion from farm payments in agricultural commodity markets, the ethanol subsidy—even though market distorting itself—reduces net distortion.

Source : Ethanol: A Welfare-Increasing Market Distortion?

July Biodiesel Production Reaches New High

July biodiesel production hit a new high with 67 million gallons produced.

July 2008 - 67,000,000 gallons
June 2008 - 63,000,000 gallons
May 2008 - 52,000,000 gallons
April 2008 - 53,000,000 gallons
March 2008 - 49,000,000 gallons
February 2008 - 43,000,000 gallons
January 2008 - 51,000,000 gallons

2007 - 490,000,000 gallons

Source : EIA : Biodiesel Overview

Ethanol no longer seen as big driver of food price

Reuters has an interesting article on ethanol and food prices in light of recent declines in corn prices.

Heavy demand for corn from ethanol makers was seen as a key driver of corn futures to record highs in June, but since then the sharp decline of corn along with other commodities shows that belief was mistaken.

Instead they say that commodity prices were pushed up primarily by speculation.

Analysts said soaring corn prices were a symptom of big shifts of investment money into corn and other commodities. As big money began shifting out of stocks a few years ago, commodity markets like corn futures began climbing.

"There was a speculative bubble in the market and that's one of the bigget things that came out of the market is just that equity markets weren't good and for a while the money came into commodities," Ramsay said.

Given the fact that corn prices are falling even while ethanol production is continuing to increase, all the signs suggest that ethanol wasn't the main driver for the high prices seen during the summer. This article is the first that I have seen that points this out.

Source : Reuter

School District Celebrates 10 Years Of Biodiesel Use

The Medford, NJ school district celebrated 10 years of using biodiesel in it's school bus fleet. According to the release the Medford school district was the first school district to start using biodiesel. Now it is estimated that approximately 200 school districts use biodiesel.

According to Medford Township Public School System officials, over the past decade the district’s school buses have traveled more than 4 million miles, consumed more than 615,000 gallons of B20, displaced more than 123,000 gallons of diesel fuel, and eliminated 127,000 pounds of hazardous emissions and 428 pounds of particulate matter while reducing the overall cost of fleet operations by $80,000 a year.

My hat goes off to them for their willingness to pioneer the early use of biodiesel.

Source : National Biodiesel Board

Iowa E85 Sales Accelerating

The Iowa Renewable Fuels Association has announced that according to the Iowa Department of Revenue statistics E85 sales for the first half of 2008 totaled 3.5 million gallons. That compares with 3.4 million gallons of E85 sold in all of 2007 and 2 million gallons in 2006.

Since the first of the year, Iowa has added 20 new E85 refueling locations that have helped to accelerate the growth in sales. E85 sales in the first quarter of 2008 totaled 1.3 million gallons. Sales in the second quarter jumped to 2.2 million gallons.

Source : Ethanol Producer Magazine

Kinder Morgan Says Ethanol Pipeline Test Successful

Kinder Morgan reports that ethanol test runs through it's 106 mile Central Florida pipeline stretching from Tampa to Orlando have been completed successfully.

The project to convert this existing 16 inch gasoline pipeline to carry ethanol began in March 2008 and cost 3.5 million to complete.

Kinder Morgan says that client shipments of ethanol will begin in mid-November.

Source : Houston Business Journal

June Biodiesel Production Hits New High

Biodiesel production reached an all time high in June with 63 million gallons of biodiesel produced.

June 2008 - 63,000,000 gallons
May 2008 - 52,000,000 gallons
April 2008 - 53,000,000 gallons
March 2008 - 49,000,000 gallons
February 2008 - 43,000,000 gallons
January 2008 - 51,000,000 gallons

2007 - 490,000,000 gallons

Source : EIA : Biodiesel Overview

Biodiesel Refueling Locations Total 1018

For some time I have posted the number of E85 stations at the first of every month. In doing so it has given me the opportunity to see how the growth in locations has progressed over time.

Now I would like to start doing the same thing with biodiesel locations. Things are a little more complicated for biodiesel though. After looking around quite a bit the list maintained by the National Biodiesel Board (NBB) seems to be the most accurate. I base this on the knowledge that one distributer in my area recently decreased the number of locations offering biodiesel from three to one. The list maintained by the NBB was the only one that reflected that change. The NBB publishes the list but doesn't note the total anywhere that I am aware of. So to get a total I loaded the list in a text editor and counted the lines. Since each entry covers three lines the math for figuring out the number of total locations was easy enough.

So with that said, I have the starting point and will update the number periodically to see how the list grows.

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.

Ethanol Blender Pumps Total 84

The American Coalition for Ethanol's blog Ethanol. Right. Now. is reporting that the number of ethanol blender pumps across the country have reached a total of 84. Blender pumps allow drivers of flex fuel vehicles to choose from several different levels of ethanol concentration such as E20, E30, E50 as well as E85.

After compiling the list of blender pump locations, they plotted the locations on a map which can be seen at:

Blender Pump Locations Map

Source : Ethanol. Right. Now

DOE Reports Intermediate Ethanol Blend Test Results

Since August 2007, the Department of Energy (DOE) has been testing intermediate ethanol blends, primarily E15 and E20 in conventional vehicles and smaller off-road engines to determine possible impacts on durability, drivability, and emissions. The tests were conducted on 13 popular late-model vehicles and 28 small non-road engines, including lawn equipment and generators.

Vehicle results include the following when E15 and E20 were compared with traditional gasoline:

• Tailpipe emissions were similar;
  
• Under normal operations, catalyst temperatures in the 13 cars were largely unchanged;
  
• When tested under full-throttle conditions, about half of the cars exhibited slightly increased catalyst temperatures with E15 and E20, compared to traditional gasoline; and,
  
• Based on informal observations during testing, drivability was unchanged.
  

Small non-road engine results include the following when E15 and E20 were compared with traditional gasoline:

• As ethanol content increased:
  
  • Regulated emissions remained largely unchanged,
    
  • Engine and exhaust temperatures increased;
    
• Engine performance was inconsistent, even with traditional gasoline;
  
• Commercial engines, as well as more sophisticated residential engines, exhibited no particular sensitivity to ethanol from a durability perspective; and,
  
• The effect of E15 and E20 on the durability of smaller, less expensive residential engines (e.g., line trimmers) was not clear given that a number of these engines failed regardless of fuel type.
  

Source: DOE Press Release

Ethanol Production Rising, Corn Prices Falling

The University Of Illinois Extension had an interesting post the other day.

In the past 90 days Dec corn has dropped over $3 and Nov beans have dropped over $6.50 per bu. and marketing specialist Mike Woolverton at Kansas State says supply and demand fundamentals had almost nothing to do with it. He says it was all a function of the financial markets, because of the housing bubble and the subprime mortgage issues.

The financial companies which assumed the risk in those troubled areas also ran hedge funds and index funds, and Woolverton says when they were unable to liquidate mortgage assets, they had to get cash by offsetting futures and options contracts at large losses. That took billions of dollars out of the commodity market, reducing grain prices.

December corn futures closed the day at $4.24 per bushel on CBOT.

The thing that strikes me about this is that ethanol production is still rising while corn prices are going down in a rather dramatic fashion. And while the critics of ethanol would have us all to believe that ethanol was the sole cause for high corn prices and high food prices this seems to show that speculation was a large part of the problem.

But regardless of the reasons for falling corn prices, since we have been told that egg, milk, beef and chicken prices among others were rising because of high corn prices, shouldn't we be seeing these prices come back down?

USDA Studying New Sugarcane Varieties For Ethanol Production

The USDA's Agricultural Research Service (ARS) has been researching new sugarcane varieties that produce higher levels of sugar and fiber for ethanol production.

Agricultural Research Service (ARS) scientists, in cooperation with the Louisiana Agricultural Experiment Station (LAES) and the American Sugar Cane League, USA (ASCL), have already released three new varieties of "energy sugarcane." They're called that because of their high stalk contents of sugar and fiber, which could eventually serve as complementary ethanol feedstocks.

This particular research is geared towards crops that can be grown for energy production in southern Louisiana but the researchers are also working on cold tolerant sugarcane varieties that can be grown farther north.

Source : Agricultural Research Service

Number Of E85 Stations Continues to Climb

For the month of September, 39 new E85 refueling locations were added bringing the total to 1782 heading into October.

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.

July Ethanol Production Hits New High

July Ethanol production moved sharply higher ending the month with 799,764,000 gallons of total production. This marks the first month that daily production topped 600,000 barrels per day with 614,000 barrels per day produced.

July 2008 - 799,764,000 gallons
June 2008 - 736,848,000 gallons
May 2008 - 778,806,000 gallons
April 2008 - 708,456,000 gallons
March 2008 - 730,674,000 gallons
February 2008 - 631,050,000 gallons
January 2008 - 664,356,000 gallons
December 2007 - 636,762,000 gallons
November 2007 - 602,592,000 gallons
October 2007 - 588,756,000 gallons

January 2007 - 488,082,000 gallons

Source: - Energy Information Administration

Caterpillar Approves Use Of B20 Biodiesel For Compact and Mid-Range Industrial Engines

Caterpillar today approved the use of B20 biodiesel -20% dilution of biodiesel with standard diesel - across its range of compact and mid-range engines including the C0.5 through C2.2 Tier 4 Interim (11-66 hp), the C4.4, C4.4 ACERT® and C6.6 ACERT® (72-275 hp) Tier 3/Stage IIIA compliant engines. Caterpillar believes the growth of biodiesel as a fuel source and the move to higher percentage blends makes approval of this fuel source a strategic market advantage for OEMs and end users.

Addition of these engines to the B20 approved product line follows successful testing of higher percentage blended fuels in a number of installations. Results of those tests indicate trouble-free operation. Biodiesel used in B20 blends must meet the most current version of ASTM D6751 or EN14214. The final B20 blend should meet the minimum requirements of the upcoming ASTM specification for B5-B20 blends.

“This announcement further confirms Cat’s commitment to its industrial customers by bringing the broadest range of biodiesel compatible engines to market.” said Cat industrial engine marketing manager Mike Reinhart. “These engines join the previously B30 approved C7 ACERT® through C32 ACERT® and our 3400 and 3500 series. Cat industrial engines provide customers who want the flexibility to utilize a wide variety of fuels the confidence to use them in numerous industrial applications,” Reinhart added. “Biodiesel that meets industry quality standards can be good for the environment and for our customers.”

PetroSun To Build Algae Farm Pilot Plant In China

PetroSun has entered into an agreement with a Shanghai Firm to construct and operate a commercial scale algae farm pilot facility in China.

PetroSun, Inc. announced today that the Company has executed an agreement with Shanghai Jun Ya Yan Technology Development Co., Ltd. to establish a commercial scale algae farm system pilot facility within the People's Republic of China. The planned algae farm complex will produce algae biomass for conversion to biodiesel, ethanol and other commercial products.

The terms of the agreement include a forty million dollar ($40,000,000US) sole funding commitment from Shanghai Jun Ya Yan Technology Development for the construction and equipping of the initial algae farm system. The profits from the venture will be allocated on a 50/50 basis between the parties. PetroSun China has been granted the license from PetroSun, Inc. for the algae-to-biofuel technology and will manage the operations in China.

Source : PetroSun Press Release

Ethanol Production More Energy Efficient Than Previously Thought

University of Nebraska at Lincoln researcher Kenneth Cassman concluded in a upcoming study that ethanol production has become more energy efficient.

“Recent research conducted at the University of Nebraska clearly shows that estimates for the energy balance of corn-based ethanol are much more favorable – in fact two to three times more favorable, than previous estimates,” Cassman said. “That's because most of the published values for energy efficiency of corn-ethanol are ‘backward looking’ in the sense they evaluated older technologies with regard to energy use in corn production, the biorefinery, and co-product utilization.”

The study also addresses how much petroleum is needed to produce a given quantuty of ethanol.

Using dated information simply doesn’t work in a world where the technology and efficiency of corn and ethanol production are rapidly improving over the years,” he said. “Moreover, if the goal is to reduce dependence on imported oil, we estimate that 13 gallons of ethanol are produced for every gallon of petroleum used in the production lifecycle for corn ethanol.”

The study has been submitted to be published in the Journal of Industrial Ecology.

Source : Clean Air Choice

Tyson Foods Executive Blames Ethanol For Rising Food Prices

Richard Greubel, president of Tyson Foods’ international division, blamed ethanol for pushing up food prices in a recent news article.

The rising price of foods in local supermarkets is a direct result of Congress’ increased mandate for U. S. ethanol production, a Tyson Foods Inc. executive told University of Arkansas at Fort Smith students Monday.

He claims that ethanol production has caused corn prices to rise which will push up meat prices. And while it is true that corn prices have gone up in part because of ethanol production, any direct link is much harder to find.

It is also true that retail prices for chicken has gone up. According to the USDA Economic Research Service (ERS) the retail broiler composite has gone up from $1.674 per pound in August 2007 to $1.741 in August 2008. But the numbers that are most telling are the wholesale prices for the same time periods. The wholesale broiler composite went from $.814 per pound in August 2007 to $.719 in August 2008.

In other words producers at the lower end of the chicken supply chain are receiving less money in August of this year compared to last while at the retail level prices are higher. So the increased cost at the retail level that we were lead to believe was to cover rising feed costs isn't being passed down to the people actually buying the corn.

Note: According to this article the same thing appears to be happening in the pork industry as well.

Retail pork price in August were up 1.9 percent from July and up 2.9 percent from August of 2007. For January-August retail pork price were up 1.3 percent from a year earlier. Only the marketers benefited from the higher retail prices. The processor-retailer margin was up 1.8 percent and the packers' margin was up 8.6 percent from 12 months earlier. The producer’s average price for January-August was down 1.2 percent from 2007.

The American Coalition for Ethanol Goes Blogging

The American Coalition for Ethanol (ACE) is the grassroots voice of the U.S. ethanol industry. As part of their effort to provide information on ethanol, they have started a new blog titled 'Ethanol. Right. Now.' It is now part of my daily reading list and I encourage everyone to give them a look.

Ethanol. Right. Now.

ISU Researchers Using Biodiesel To Recycle Plastic

There is an article in the news today about research that conducted at Iowa State University to improve the efficiency of internal combustion engines. With some 250 million registered vehicles in this country it is much needed research. But the part that really caught my attention was the research being conducted using biodiesel to recycle plastics.

One interesting project being researched in the lab is the recycling of some waste plastics by dissolving them in biodiesel fuel. Kong and his team are checking to see if biodiesel fuel can be used to eliminate waste plastics by mixing the plastic into the fuel. The team is studying the performance of engines burning biodiesel with plastic mixed in.

Source : Daily Tech

DOE To Invest In Six Innovative Biofuels Projects

The Department of Energy (DOE) recently announced that it was investing up to $4.4 million in six advanced biofuels projects. Combined with the minimum university cost share of 20 percent, more than $5.7 million is slated for investment in these six projects.

These projects represent an investment in clean energy technologies that will help expand the current biofuels R&D efforts and help meet growing energy demand while reducing greenhouse gas emissions and dependence on foreign oil. These will also expand the geographic diversity and breadth of partners working on advanced biofuels development across the country and strengthen DOE collaboration with universities, encouraging the innovation necessary to diversify our nation’s energy sources.

The following six projects were competitively selected for negotiation of awards:

University of Toledo: The University of Toledo (Toledo, Ohio) will address development of cost-effective biocatalysts capable of increasing product yield in the biological conversion of lignocellulosic biomass. The project will use a novel enzyme pellet scheme for efficient fermentation of both five-carbon and six-carbon sugars. The proposed approach provides the potential of simultaneous conversion of cellulose to sugar and fermentation to ethanol with native yeasts for the first time. The University of Toledo will undertake research tasks to evaluate the implementation of the technology in several modes of operation.

Steven’s Institute of Technology: Steven’s Institute of Technology’s New Jersey Center (Hoboken, N. J.) for MicroChemical Systems with BASF Catalysts LLC is planning to evaluate and demonstrate a novel microchannel reactor to reform pyrolysis oil to synthesis gas (syngas). The project intends to use the novel reactor and precisely controlled operating conditions to produce a high yield of syngas at a reduced energy and temperature, while additionally extending the life of the chosen catalyst.

Montana State University: Montana State University (Bozeman, Mont.) will partner with Utah State University to evaluate the oil content of algae cultures available to the universities and identify populations that naturally have higher rates of oil production. In this project, they will test the oil producing microalgae in existing open ponds for growth characteristics and oil production and determine the optimal algae type and most efficient biorefinery design.

University of Georgia: University of Georgia (Athens, Ga.) plans to develop novel approaches to supply nutrients to oil-producing algal systems resulting in cost-effective algae-biofuel production systems. The project will take advantage of the abundance of litter from the poultry industry as a source of low cost nutrients, and develop a nutrient delivery system to grow algae sustainably. Additionally, this project aims to develop process methods for the harvesting of algae from open ponds and subsequent processing to biofuels and other value added products from algae.

University of Maine: The University of Maine (Orono, Maine) in conjunction with several industry and academic partners is planning to determine the optimal yield and productivity of high potential bacteria at moderate to high temperatures. The University of Maine intends to use regionally available feedstocks, i.e., pre-pulping extracts and seaweed sludge, to model alternative conversion and fermentation pathways of these feedstocks into intermediates and alcohols, respectively.

Georgia Tech Research Corporation: Georgia Tech Research Corporation (Atlanta, Ga.) plans to evaluate and model the reaction kinetics in two experimental gasifiers using forest residues under different processing conditions. This project will evaluate the impact specific conditions, pressure and temperature, on the carbon gasification rate and formation of contaminates. The resulting models will maximize synthesis gas yield from an optimized gasifier.

Source : Department of Energy

OPEC To Lower Oil Production

Just when gasoline prices were getting back to a more livable range, OPEC announced today that they would reduce production.

Since the market is over-supplied, the Conference agreed to abide by September 2007 production allocations (adjusted to include new Members Angola and Ecuador and excluding Indonesia and Iraq), totalling 28.8 mb/d, levels with which Member Countries committed to strictly comply.

That is a reduction of about 520,000 barrels per day.

Source : OPEC

Ethanol's Use In Boats

There have been quite a few articles in the news lately about ethanol's use in boats. Most of the articles go through all the potential problems that some boats owners could have using ethanol and give the impression that anyone with a boat should be wary of ethanol blended fuel.

I must admit that although my parents had a couple of boats during the time I growing up, I got my fill of boats a long time ago. I haven't had any real experience with boats in many years, so I haven't really had any first hand experience to contribute on this issue.

But there was a piece of information in an article today that I thought was pretty interesting.

While this organization recognizes that older boats may "experience significant difficulties with E10 ethanol," it says these difficulties "affect less than 1 percent of the 13 million registered boat owners in this country."

You can decide for yourself whether or not all the hype that issue has received is fair for an issue that won't effect 99% of boaters.

Source : Does ethanol-based gas demand a boat upgrade?

Republican Platform Calls For End To Ethanol Mandates

Part of the formal work accomplished at the Republican National Convention last week was the formation of the party platform. The platform, which spells out what the party stands for and hopes to accomplish, included a call for the ending of ethanol mandates.

The U.S. government should end mandates for ethanol and let the free market work.

Being a republican myself, adopting this measure as part of the party platform is very disappointing to me. There is no such thing as a free market when it comes to our existing fuel infrastructure. Oil companies often limit independent store owners from purchasing fuel from any other sources through supplier contracts. So unless oil companies are forced to blend ethanol into the fuel supply there will be very few outlets available to sell it. For the free market to work consumers have to have a choice and I don't think that the oil industry is voluntarily going to give it to us.

E85 Stations Top 1700

In the last month 80 new E85 stations have been added to the list bringing the current total to 1743.

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.

U.S. Takes Lead In Wind Electricty Generation

U.S. now leads world in wind energy generation but delay in extending federal tax credit places 2009 project pipeline on hold, discourages manufacturing investment

U.S. wind farms now generate more electricity than any other nation in the world and are on track to expand by over 45% this year, but the expiration of the federal production tax credit (PTC) less than five months from now threatens this spectacular progress, the American Wind Energy Association (AWEA) said today in its second quarter market report.

“The U.S. is now the world’s largest wind energy producer, with wind development sparking job creation and economic opportunity in a troubled economy,” said AWEA Executive Director Randall Swisher. “But the current figures hide a dire reality: the pipeline of investment for 2009 has been on hold for months, with escalating risks and costs for the industry, because of the uncertainty about the production tax credit. At a time when unemployment is at a 4-year high and the economy needs every stimulus it can get, a rapid extension of the credit should be on any economic priority list for Congress.”

The U.S. is now the world leader in wind electricity generation. While Germany still has more generating capacity installed (about 23,000 megawatts), the U.S. is producing more electricity from wind because of its much stronger winds.

Total U.S. installed wind power capacity now stands at 19,549 megawatts (MW). The industry installed 1,194 MW in the second quarter, down from 1,532 MW during the first. This brings the year’s new capacity to 2,725 MW, more than was installed in any year except 2007. More is under construction for completion either by the end of this year or the beginning of next year, depending on when the PTC is extended. Uncertainty regarding the PTC is causing a rush to complete projects by the end of the year, with increased risks and costs for the industry and eventually for customers. Under the best-case scenario for the industry, Congress will move quickly in September to extend the credit and the pressure will be eased for immediate project completion while reopening the pipeline for 2009. Under that scenario, AWEA projects at least 7,500 MW of new capacity to be added in 2008.

AWEA also reports a strong increase in domestic investment in wind turbine and wind turbine component manufacturing facilities over the past year and a half. At least 41 facilities have been announced, opened, or expanded over that period of time. These facilities will create over 9,000 jobs when they are at full capacity. Uncertainty about the PTC threatens that level of investment as well.

“It’s clear that wind power is not only a major technology with which to fight climate change, but also one of the most promising and dynamic economic engines we have today,” said Swisher. “The nation needs an ambitious plan to promote the deployment of wind and other renewable energy technologies—and the urgent first step it must take is to rapidly extend the expiring renewable energy credits, which are the primary incentive that the nation provides for these technologies today.”

Free “Food, Feed and Fuel” Bumper Stickers

To help spread the word that corn growers are working hard to meet all needs, the National Corn Growers Association is offering free bumper stickers while supplies last. The bright yellow stickers send a clear message that all market demands are important.

For a sticker, email NCGA at corninfo@ncga.com.

Long Term Biodiesel Study Results To Date Positive

In an earlier post, I wrote about a long term biodiesel study that was underway called the Two Million Mile Haul. The Two Million Mile Haul is being conducted by Decker Truck Lines and the National Biodiesel Board along with other sponsors and is meant to demonstrate the effectiveness of B20 biodiesel for the over the road trucking industry.

The study is nearing completion with about 400,000 miles left. Results to date were released last week and showed positive results.

Data collected from each truck's electronic data recorder this summer shows fuel efficiency for the B20 blend comparable to that of petroleum diesel.

“In recent months, we have learned that driver variability makes more difference in fuel efficiency than biodiesel utilization does,” said Don Heck, coordinator of biotechnology and biofuels programs at Iowa Central Community College in Fort Dodge, Iowa, where Two Million Mile Haul test data are analyzed.

In addition to fuel efficiency data, the Two Million Mile Haul aims to demonstrate operability of a B20 blend year-round in cold weather situations. “Although both the petroleum and B20 groups experienced some fuel filter plugging in zero-degree Fahrenheit weather, the B20 trucks did not experience any considerable challenges because test partners implemented proper handling and storage measures,” said Grant Kimberley, Iowa Soybean Association director of market development. “If B20 can work for a fleet in the upper Midwest December through February, it can run in any fleet across the nation year-round.”

These findings mimic fuel efficiency test results released during the summer by the National Renewable Energy Lab and the National Biodiesel Board, showing comparable mileage between B20 and ULSD.

Source : Bulk Transporter

Distillers Grains Increase Healthful Fatty Acids In Milk

A research project underway at South Dakota State University has the potential to make milk healthier by feeding the cows distillers grains left over from ethanol production.

Researcher Rosemary Nyoka of Zimbabwe is finding that supplementing the diets of grazing dairy cows with dried distillers grains or fishmeal could increase the level of healthful fatty acids in milk and milk products such as cheese.

“With this potential to improve the healthful fatty acids, we are finding additional uses for distillers grains,” Nyoka said. “We are also trying to improve profitability for dairy farmers. We are hoping they will be able to sell these products at a premium.”

Nyoka is working on her Ph.D. in dairy science and is also a government dairy officer in Zimbabwe. The research is aimed at applications to benefit farmers in her country but have the potential to make milk healthy for all of us.

Nyoka is monitoring healthful fatty acids called conjugated linoleic acids, or CLAs.

“These CLAs are known now to have anti-carcinogenic properties, as well as anti-arthritis and anti-obesity properties. They’ve also been known to improve bone formation,” Nyoka said. “In general, in an average American diet we are eating maybe 1 gram per day of these fatty acids, while the effective levels known so far are like 3.5 grams of the fatty acids. So we see that in general, people are not getting enough.”

CLAs are found mainly in products from ruminant animals such as milk and meat. Milk typically contains between 0.3 grams and 0.6 grams of CLAs per 100 grams of fat, Nyoka said. But on her trial diets, Nyoka’s SDSU cows produced milk with total CLAs ranging from 2.5 to 5 grams.

Source : South Dakota State University

June Ethanol Production Lower

Ethanol production for June ended lower at 736,848,000 gallons compared to 778,806,000 gallons in May.

Hysteria over flooding in the midwest sent corn prices to record highs during June which hurt ethanol producer profits and delayed the opening of some plants. Better weather and favorable crop reports have since caused corn prices to slide from almost $8.00 per bushel reached in June to the current price of under $6.00 per bushel.

June 2008 - 736,848,000 gallons
May 2008 - 778,806,000 gallons
April 2008 - 708,456,000 gallons
March 2008 - 730,674,000 gallons
February 2008 - 631,050,000 gallons
January 2008 - 664,356,000 gallons
December 2007 - 636,762,000 gallons
November 2007 - 602,592,000 gallons
October 2007 - 588,756,000 gallons

January 2007 - 488,082,000 gallons

Source: - Energy Information Administration

Minnesota Gasoline Sales Down, E85 Sales Up

The American Lung Association of Minnesota issued a press release saying that gasoline sales were down in July while E85 sales were up compared to the same period last year.

In an interesting snapshot of Minnesotans' changing driving habits, retail sales of gasoline in July 2008 showed a ten percent decline compared to sales in July 2007. According to figures for the Minnesota Department of Commerce, motorists bought 211,982,582 gallons of gasoline in July, compared to 233,081,981 gallons last July. As gasoline sales declined, the amount of ethanol-based E85 sold during the same period increased by 16 percent. To-date, E85 sales are approximately 16% greater in 2008 than they were at this time last year. Monthly sales of cleaner-burning E85 are averaging roughly 2 - 2.5 million gallons a month. E85 is designed for flex fuel vehicles (FFVs) that can use either E85 or gasoline; there are an estimated 200,000 flex fuel vehicles in Minnesota.

Minnesota has long been a leader in ethanol use and has the most E85 refueling locations of any state in the country.

What Happened To The Food Crisis?

Back in February I made a post about one of the many articles from that time that were accused ethanol of leading to the global food crisis. Here is how one article from that time summed things up.

AMERICANS, WHO mainly can afford it, are paying more for food these days, but as a new U.N. report reminds us, there are poor people around the world who can't afford the rising prices.

They are going hungry, are rioting in some countries — are even resorting to eating mud cookies in Haiti — and maybe you are wondering why.

Ethanol, that's why.

But the situation seems to be easing. As an article in Bloomberg noted yesterday, the food crisis seems to be ending due to higher agricultural production.

A worldwide food crisis that sent prices of wheat, rice and corn to records and sparked riots from Haiti to Ivory Coast may be over after farmers boosted plantings, a top official in India's food ministry said.

The article also notes that food prices have begun to fall.

Rice has tumbled 29 percent from its record, while wheat and corn have dropped 35 percent and 26 percent from their peaks.

So the food crisis seems to be going away and commodity prices have fallen. All at a time when ethanol production continues to climb.

I guess we can have food and fuel too.

Ethanol Boosts Convience Stores Business

There is an interesting article in the news today about how a convenience store in Kansas increased their traffic with ethanol.

By offering four blends of ethanol fuel, the Colwich-based TJ Convenience store has doubled its traffic, reported The Wichita Eagle.

With results like that, it makes me wonder why every store isn't offering ethanol blends.

Source : Convenience Store News

USDA Study Shows Sweet Potatoes Ethanol Potential

According to a report by the USDA Agriculture Research Service, sweet potatoes provide more carbohydrate for fuel ethanol production as field corn in Maryland and Alabama, the two states tests were run in.

In experiments, sweet potatoes grown in Maryland and Alabama yielded two to three times as much carbohydrate for fuel ethanol production as field corn grown in those states, Agricultural Research Service (ARS) scientists report. The same was true of tropical cassava in Alabama.

The results seem pretty promising especially once you consider that both sweet potatoes and cassava require less fertilizer and pesticides than corn does.

For the sweet potatoes, carbohydrate production was 4,692 tons an acre in Alabama and 6,353 tons an acre in Maryland. Carbohydrate production for cassava in Alabama was 4,940 tons an acre, compared to 1,434 tons an acre in Maryland. For corn, carbohydrate production was 1,692 tons an acre in Alabama and 2,760 tons an acre in Maryland.

There are some downsides to both sweet potatoes and cassava but as the report states the results are positive enough to warrant further study.

The disadvantages to cassava and sweet potato are higher start-up costs, particularly because of increased labor at planting and harvesting times. If economical harvesting and processing techniques could be developed, the data suggests that sweet potato in Maryland and sweet potato and cassava in Alabama have greater potential than corn as ethanol sources.

Further studies are needed to get data on inputs of fertilizer, water, pesticides and estimates of energy efficiency. Overall, the data indicate it would be worthwhile to start pilot programs to study growing cassava and sweet potato for ethanol, especially on marginal lands.

Source : USDA

Proof That Ethanol Is Causing Economic Pain

That's right. An article in the news today provides proof that ethanol is causing economic pain.... to Asian oil refiners.

According to the article oil refiners in Asia are facing the prospect of a glut of gasoline on the market due to the fact that new refinery capacity is coming online at a time when U.S. demand is weakening. All this adds up to tough times ahead for refiners.

Refineries in Asia face falling gasoline prices and growing losses in producing the fuel, as the prospect of a sustained global supply glut looms over the industry in the next few years.

After more than five years of robust profits, the value of gasoline against benchmark Brent crude has slid into discounts last month, and more losses are expected due to additional output capacity in Asia and the Middle East as U.S. demand falls.

And part of the reason for falling U.S. demand is the expansion of ethanol production.

The lower consumption will be worsened by increased ethanol blending, set to bring U.S. gasoline deficit to 772,000 bpd in 2010, down almost a third versus 2007, Purvin & Gertz data show.

"U.S. gasoline demand growth will significantly affect the decision making among Asian refiners as that's the natural home for exports. They will have to very closely watch what is happening to the ethanol situation," Mukherji said.

Source : Daily News and Analysis

POET To Produce Cellulosic Ethanol By Years End

POET, the nations largest ethanol producer announced today that it's cellulosic ethanol pilot facility will be operational by the end of the year. The facility will be located in Scotland, SD and will be capable of producing 20,000 gallons of ethanol per year from corn fiber and corn cobs.

"Our expanded research effort has led to several significant strides in the development of cellulosic ethanol technology at the lab scale in recent months," said Jeff Broin, CEO of POET. "Construction of this pilot facility will allow our company to take the next step toward the commercialization of cellulosic ethanol."

Construction is expected to begin on Project Liberty, their commercial scale cellulosic ethanol plant in 2009 with production beginning in 2011.

Source : POET

Oil Imports Make Up 80% Of The Trade Deficit For June 2008

The Census Bureau released data on the trade deficit for the month of June yesterday. For the month of June the trade deficit was $56.8 billion with oil imports accounting for $45.207 billion of that.

For the month of June we imported 382.7 million barrels of oil, 31.5 million barrels less than in June 2007. But because of higher oil prices we spent nearly $20 billion more than in June 2007 when we spent $26.723 billion on imported oil.

I wonder how long we as a country can continue to export so much of our national wealth and still hold the hope for our children to enjoy a better standard of living than we did.

Source : Hoosier Ag Today

Pilgrim's Pride To Idle Two Chicken Processing Plants

Pilgrim's Pride announced yesterday plans to idle two of their chicken processing facilities. A chicken processing plant in Clinton, Ark. and a further-processing facility in Bossier City, La. are slated to be closed eliminating approximately 600 jobs. The stated reason for the closures was an oversupply of chicken and high feed costs.

An oversupply of chicken on the market has been cited by the company before but this press release contains some additional information just how badly this oversupply is hurting chicken prices.

The company attributed today's announcement to the continued imbalance in supply and demand in the U.S. chicken industry, which has led to market prices for breast meat that are unusually weak for the peak summer grilling season. Market pricing for breast meat is currently at $1.33 per pound, well below the prior five-year average for August of approximately $1.63 per pound, and significantly below the average price of more than $1.80 just four years ago.

And of course they had to take a shot at ethanol for pushing up corn prices but ethanol has nothing to do with management decisions by Pilgrims Pride and other chicken producers that has created this oversupply of chicken.

Source : Pilgrim's Pride

USDA Releases Corn Production Forecast

The USDA is forecasting this years corn crop to be the second largest on record, down just 6% from last years record sized crop.

Corn production is forecast at 12.3 billion bushels, down 6 percent from last year but 17 percent above 2006. Based on conditions as of August 1, yields are expected to average 155.0 bushels per acre, up 3.9 bushels from last year. If realized, this yield would be the second highest on record, behind 2004. Production would be the second highest on record, behind last year when producers harvested the most acres of corn for grain since 1933.

This years soybean crop is forecast to be 15% larger than last years crop.

Soybean production is forecast at 2.97 billion bushels, up 15 percent from last year but down 7 percent from the record high production of 2006. If realized, this will be the fourth largest production on record.

Wheat production is also forecast higher than last year. Winter wheat is expected to be up 24% over last year, Duram wheat up 21% and Other Winter wheat up 5%.

Source : USDA NASS

EPA Denies Texas RFS Waiver Request

The EPA today denied the request made by Texas Governor Rick Perry for a waiver of the Renewable Fuels Standard.

EPA is denying Texas’ waiver request because the evidence in this case does not support a determination that implementation of the RFS mandate during the time period at issue (September 1, 2008 through August 31, 2009) would severely harm the economy of a State, region, or the United States.

The EPA has a page setup that provides background information on this issue and further explanation of their decision.

EPA Decision on Texas Request for Waiver of Portion of Renewable Fuel Standard (RFS)

Ethanol And Small Engines

There has been a rash of articles in the news the last few days about the effects of ethanol blended fuels on small engines, such as lawn mowers, string trimmers, chainsaws, and such. Most every article quotes some local service technician saying that repairs of these types of equipment have gone up and it is all because of ethanol.

As I have pointed out in earlier posts, I own a lawn care company and can assure that what the news articles are claiming goes against my own experience. For the last two years I have used nothing but E10 in all of my gasoline powered equipment and haven't had the first problem related to fuel. Even the fuel stored over the winter ran ok at the start of the year.

Further the only study that I could find that dealt with this issue concluded that ethanol blends are safe in small engines.

This test represents over 1300 hours of operation accumulated on test units representing 7 manufacturers and 6 use applications. Though the scope of the test did not allow the scientific precision that would be incorporated in more comprehensive testing, it does indicate that the average consumer would not experience equipment failures which result in loss of use or unusual repairs.

Of course, everyone should read the owners manual for their equipment and follow the manufacturers recommendations. But knowing that well over half the gasoline sold in this country contains some level of ethanol, it would be crazy for equipment manufacturers to sell equipment here that couldn't use ethanol blended fuels.

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Note : As of 12/21/2010, site no longer seems to be available.

Study To Determine The Effects Of Ethanol On Classic Cars

Kettering University has initiated a study to determine the effects of ethanol blended fuels on the fuel systems and engine components of classic automobiles. The study will be conducted by Dr. Craig Hoff and Dr. Greg Davis, both professors of Mechanical Engineering and Dr. Chuck White of Kettering's Industrial and Manufacturing Engineering Department.

The study is being funded by Hagerty Insurance Agency.

Hagerty insures more than 600,000 collector cars and a number of vintage boats, and they have funded a $50,000 study with Kettering’s Advanced Engine Research laboratory (AERL) to explore the effects of bio-fuels on older engines.

“We serve the hobby in many ways, so we felt it was important to ascertain the impact of ethanol-blended fuel on collector cars and boats,” Hagerty CEO McKeel Hagerty was quoted as saying in the on-line edition of AutoWeek.

There have always been rumors of failures in older vehicles run on ethanol blended fuels. Hopefully this study will provide a clearer picture of the areas of concern and identify measures that owners of older cars can take to avoid problems.

Source : Kettering University

New Process Could Improve Ethanol Yields

OptiSwitch Technology has developed a new process that could improve ethanol yields by 5 percent or more. The new process uses technology similar to an electroporation system used in the medical field to poke holes in cells allowing medicines to work better.

Navapanich says the new technology the company has developed is high power silicon switches that can handle 100,000 amps and volts to perform the process on a large scale. “In this case, we have built a machine that will poke holes in the corn kernels, causing permanent or temporary damage to the cell walls, increasing permeability and allowing the starch to come out and be more accessible to the enzymes,” he said. “We took the mash that would normally go to an ethanol plant and ran it through our system. Low and behold, we got more fermentable sugars out of it.”

This technology also has possible uses in the biodiesel industry as a way to extract oil from algae.

Navapanic said OptiSwitch Technology has been working with Arizona State University to perform experiments running algae through the same electroporation process as it did corn. “In one case, it showed that once we treated the algae, all the lipids came out by themselves,” he said. “Usually after the treatment we go back to see how many remain by viewing the algae underneath a microscope—but in this instance, there wasn’t any left. That means it all came out. It’s another area that looks very promising.”

Source : Ethanol Producer Magazine