Archive for March, 2010

Flex Factor

Minnesota is a national leader when it comes to the flex fuel E-85, offering more fill-up locations than any other state in the U.S.

(By David Richards, Austin Daily Herald, Published Saturday, March 20, 2010)

Dan Erickson wouldn’t have it any other way. Every time the Alden farmer puts gas in his wife’s 2007 GMC Yukon, he makes sure he does so with E-85 fuel.

His reasons?

“For one, it’s produced locally,” he says. “Two, it’s cleaner for the environment and three, it’s cheaper. Since I’ve owned (the Yukon), I’ve never put in anything but.”

Erickson is a corn farmer who sells his crop at the Poet co-op in Glenville. As one of hundreds of members/owners of the co-op, Erickson delivers his corn to the facility, which in turn makes it into Ethanol, which is then either blended on site with gasoline to make E-85 or sold to other wholesalers who blend it themselves.

The fuel, which basically blends 85 percent Ethanol and 15 percent gasoline, has skyrocketed in popularity over the past decade in the United States and especially here in Minnesota.

“Minnesota leads the country with 355 E-85 stations,” says Kelly Marczak, director of clean fuel and vehicle technologies for the American Lung Association of Minnesota.

In the U.S., there are roughly 2,200 E-85 retailers, and Minnesota has been a leader in the development and use of the fuel for more than a decade.

In 1998, the Twin Cities was selected by the U.S. Department of Energy as one of the three pilot markets for E-85 to build the fueling infrastructure and customer market. A coalition of partners called the Minnesota E-85 Team came together to accomplish this goal.

And accomplish it they did.

When the project began, there were only seven E-85 stations in the state.

Flash forward to 2010, where there are now more than 50 times that.

“The American Lung Association in Minnesota recognizes E-85 as a Clean Air Choice motorists can make today to reduce their impact on the environment and lung health,” Marczak says. “…E-85 and intermediate ethanol blends provide a home grown, renewable choice that provides local jobs and supports Minnesota families.”

Our Take:
It’s definitely worth it to go to the Austin Daily Herald web site and read the whole article about E85 and flex fuel vehicles.

When a news story actually articulates all the benefits of ethanol, and especially higher ethanol blends, we wonder why anyone can persist in believing anything other than the fact that ethanol makes a great choice and deserves a large place among the solutions America chooses for its energy future: renewable, cleaner burning than fossil fuels, home grown—so that it contributes far more to our economy than imported oil, while at the same time it does not fill the coffers of nations that do not act in our interest.

We appreciate this news coverage that tells about the win-win we achieve with farm-based energy.

Growth Energy Now Offering Blender Pump Financial Support

Growth Energy’s Market Development team is now offering funding to retailers to assist in ethanol blender pump infrastructure. Grants of $2,500 and $5,000 are now available on a first come, first serve basis to vendors who wish to install new or convert existing equipment for ethanol fueling. These grants are in addition to any Federal or state grants or incentives a retailer may be eligible.

“There are over 8 million flexible fuel vehicles across the country with more being produced in each model year. Unfortunately, of the 161,000 gasoline stations in the U.S. only 2,200 offer E85 where FFVs may fuel up with a high level blend of domestic, renewable fuel such at 85% ethanol . . . another 133 offer mid-level blends,” said Growth Energy Market Development VP, Phil Lampert. “Growth Energy is pleased to offer this assistance to retailers across the nation and we hope that they avail themselves of this unique opportunity.”

Growth Energy can also offer pump imaging and technical assistance along with the grants. You can find the two page outline of the Infrastructure Development Program by clicking here. To apply for the funding, click here. For questions regarding the program, please contact the Market Development office at (573) 635-8445.

Our Take:
Minnesota leads the country with more than 350 E85 locations, but there are nearly 3,000 stations in our state. That means we can make more progress in assuring the higher ethanol blends are available to any driver that wants to use them. And there are probably drivers who haven’t even thought about higher blend ethanol, but they would try E30 or E50 if the price is right and a blender pump suddenly shows up at the corner gas station.

That means the next step is in our hands. Next time you are fueling up, make sure your local station owner knows about Growth Energy’s offer. In addition, have them check with American Lung Association of the Upper Midwest—the point organization in distributing state and federal grant moneys that are available for ethanol infrastructure.

MCGA board member, ethanol industry veteran Dale Tolifson joins ACE Board

Written by Jonathan Eisenthal

Dale Tolifson, a director of Minnesota Corn Growers Association, accepted the role of MCGA liaison to American Coalition for Ethanol (ACE) in early March. He replaces grower leader Jerry Demmer in that role.

Tolifson, 65, farms in Benson, Minnesota and is an ethanol industry veteran—he served as board chairman for Chippewa Valley Ethanol Cooperative, a farmer-owned ethanol company in Benson, for the first 13 years of its operation and retains a position as vice chairman of its board of directors.

“It’s going to be exciting working with ACE,” said Tolifson. “I am very familiar with what is happening in renewable energy, and with (Washington-based advocacy group) Growth Energy, so I hope I bring some useful tools to the table when ACE meets—there are so many issues out there that it’s really going to take a team effort to accomplish what needs to get done.”

American Coalition for Ethanol is a Brookings, South Dakota-based grassroots ethanol industry advocacy group. It’s most recent victory for ethanol was an ethanol blender pump cost share program just signed into law by South Dakota Governor Mike Rounds. It will set aside $1 million dollars of anticipated stimulus funds from the federal government to be used to offer partial funding to station owners that install pumps that will blend ethanol and gasoline in various amounts between E10 and E85, according to the choice of the motorist. The law allows up to $10,000 per installation.

ACE has 1,500 members nationwide that build a broad base of grassroots support for renewable energy. The group draws not only from ethanol producers, but also farmers and the folks that supply farmers’ needs, ethanol industry suppliers, and members of the public who are cheering on the farm-based energy movement. One of the early and ongoing supporters of ACE saw that ethanol would be a win-win for farm communities and themselves, by increasing their base of industrial customers—rural electric cooperatives.

ACE is also one of the key organizations pushing for a U.S. EPA waiver to allow the blending of 15 percent ethanol as a conventional gasoline blend.

Tolifson and his wife Sandra produce corn and soybeans, and they farm in partnership with Dale’s brother Keith. They have a strong orientation towards value-added agriculture as a natural part of the business of farming—Dale and Keith raised cattle for many years and remain active in renewable energy. Dale has also been involved with Swift County Corn and Soybean Growers Association and has augmented his farm operation revenue by working as a seed dealer.

“We can make the ethanol that America needs—we corn farmers,” said Tolifson. “One thing ethanol industry critics talk about is Indirect Land Use—with further study I believe this will be shown to not be nearly as much of a problem as stated. These ILUC studies don’t give us enough credit for the food that remains after the ethanol is made. We have studies that talk about DDGS as a high protein animal feed. The protein is the essential element for feeding cattle, so in some ways it is a superior product to the original corn. Certainly it works very well as a component of the feed, alongside the corn and soybean meal.

“I think one of our top agenda items for the ethanol industry is a need to look at expanding markets—we should pursue exports to Europe and other locations, and think about what the future holds for us.”

Farmers tell their story: National Ag Day Rally at Minnesota Capitol rotunda

Written by Jonathan Eisenthal

Farmers from across Minnesota stood up last Tuesday to tell their story. To celebrate National Ag Week, Minnesota Farm Bureau held a rally at the state capital and invited representatives of farm commodity groups, youth organizations, educational institutions and also lawmakers at work in these chambers whose laws and provisions have such a major impact on the livelihood of farmers.

It was a scene being played out across the nation’s farm states, in which the small minority of agricultural producers (1.5 percent of the total population) stood up to let the public know that farmers are proud of their role as producers of the food, fiber and energy the people of the world depend upon.

“We have a great story to tell,” said Tim Dritz, who farms in Lincoln County and serves as vice president of Minnesota Corn Growers Association. “We must tell our story whenever and wherever we can.”

One part of the story is corn production in Minnesota. Dritz noted that last year, Minnesota producers brought in 1.24 billion bushels of corn. This compares to a typical harvest of 360 million bushels in the time when his father ran the farm.

“We’ve increased our production nearly four times what it was then, but we’ve only increased our acreage by 23 percent,” said Dritz. He remarked that value-added agricultural enterprises like ethanol production have made a tremendous difference in the ability of farmers to make ends meet. “We need to make sure that an even greater percentage of our farm products have value added to them before they leave our state’s borders.”

Kevin Paap, president of Minnesota Farm Bureau Federation said that one of the main aims of the day—an ongoing mission for every farm organization—is to help the public see the human faces behind the farms that produce their necessities.

Farm Bureau handed out stickers to those at the rally that said “I met a farmer today.” The organization also handed out A Pocket Guide to Food & Farm Facts, which covers the question of why agriculture matters: for one, 98 percent of America’s farms are owned by families, individuals or family corporations—only two percent are owned by non-family corporations. The guide also covers farmer participation in conservation programs. For instance, through the Conservation Reserve Program farmers have planted 4.55 million trees since 1986. Another fact—today’s American farmer produces food and fiber for 155 people. In 1940, farmers produced the necessities for 19 people.

One of the highlights of the event was the recognition of the three people who will receive the Siehl prize for agriculture from the University of Minnesota College of Food, Agriculture and Natural Resources Sciences (CFANS). Sander “Sandy” Ludeman, a farmer in Tracy, Minnesota, was recognized for his pioneering work to establish a national soybean checkoff fund.  Don Helgeson received the award to recognize his phenomenal work starting out with a family chicken hatchery and building it into the largest integrated chicken production company in the upper Midwest, Gold N’ Plump Chicken. And Ron Phillips, a Regents professor at the University of Minnesota who was honored for his pioneering work in plant genetics. Philips was the first scientist to generate a living corn plant from cell tissue in a laboratory.

Representatives from six different local FFA chapters as well as state leaders of Minnesota 4H spoke at the rally to share their enthusiasm for agriculture—as a scientifically grounded business, as a field of lifelong learning and endeavor and as a way of life.

There was no shortage of lawmakers in attendance, including farmer lawmakers Senator Steve Dille of Dassel and Paul Torkelson of Nelson Township in Brown County. Rep. Doug Magnus, who represents the southwest corner of the state, invited farmers to actively participate in the legislative process.

Magnus said, “Please join us in meeting the challenges and putting together plans for the future.”

Rep. Al Juhnke of Willmar, chairman of the Agriculture and Veterans Affairs Finance Committee said, “We need to tell our story. We farmers aren’t bad environmentalists, we take care of our animals, the farm is our business and it is also where our families live…Ag, Timber and Mining shored up the economy of this state in ways that most people don’t understand…biofuels is a great Minnesota success story which has made our state the envy of every state in the union, and we are not going to back off of biofuels one iota. It is a $7 to $8 billion dollar business in the state of Minnesota.”

Ethanol set to bite into crude sales

(A report by Tamsin Carlisl published March 10, in The National, a newspaper published in United Arab Emirates.)

Rising U.S. consumption of ethanol will help flatten demand for petroleum-based fuels in the coming months, OPEC predicts. In its latest monthly oil market report issued yesterday, just a week before OPEC ministers meet in Vienna, the organization’s secretariat pointed to an eight-fold increase in U.S. ethanol consumption since 2000. “With the continued rise in U.S. [petrol] stocks and surging ethanol volumes in the [petrol] pool, as well as ample idle refinery capacity, any seasonal upwards movement in the [petrol] market is likely to be limited,” the OPEC report said.

…OPEC also said the projected demand for its crude was “still much less” than the group’s production. The oversupply amounted to about 1.5 million barrels per day (bpd), it estimated. Adding only a portion of that surplus to commercial inventories within the Organization for Economic Co-operation and Development (OECD) would swell oil stockpiles, “adding to the already inflated levels of more than 90 million barrels above the five-year average”.

Our Take:
For our critics who wonder about the value of encouraging domestic ethanol production with tax incentives: try a summer without gasoline price spikes. That will be worth billions to U.S. consumers. Makes that vacation trip up north, or driving to New England or California sound pretty good after all.

By Jonathan Eisenthal

New law may spur more ethanol blender pumps in S.D.

Gov. Mike Rounds signed House Bill 1192 into law, paving the way for more ethanol blender pumps in South Dakota.

The measure will set aside $1 million of stimulus funding, which will provide $10,000 grants to gas stations to offset the cost of installing an ethanol blender pump. The pumps mix unleaded gasoline with higher blends of ethanol such as E30 (30 percent ethanol) and E50 (50 percent ethanol).

“I applaud the bill’s prime sponsors Rep. Mitch Fargen and Sen. Dave Knudson, as well as Governor Rounds and the legislators who passed this law for supporting clean and renewable ethanol,” said South Dakota Farmers Union President Doug Sombke. “South Dakota Farmers Union has worked hard over the years to help educate gas station owners and the public about blender pumps, and we fully supported this effort.”

Gas stations are able to access more than one grant. They will be awarded $10,000 for each blender pump they’re willing to install.

Posted by The Argus Leader on Friday, March 12, at

Our Take:
Go South Dakota! We’d like to see Minnesota, North Dakota, Iowa, Illinois, Indiana, Nebraska, Missouri and Kansas pursue similar legislation. That would be a good start. And how about putting federal stimulus money into something that will really stoke up the engine of the U.S. economy.

By Jonathan Eisenthal

U.S. biofuels hurt if 2010 tax break expires-report

(from a Reuters news agency article by Charles Abbott)

* Biofuel output would fall 10 pct without tax breaks

* Corn, soybean price would drop 15 cts per bushel

* Ethanol tax credit, import tariff expire in 2010

* Biofuel trade groups seek long-term extension

U.S. fuel ethanol and biodiesel production would be cut by 10 percent if Congress allows biofuel tax credits to expire this year, a University of Missouri think tank said on Tuesday.

Corn and soybean prices would fall by 15 cents a bushel, estimated the Food and Agricultural Policy Research Institute (FAPRI). One-third of the corn crop is used to make fuel ethanol and about 11 percent of U.S. soybean oil is used for biodiesel.

Fuel ethanol producers such as Archer Daniels Midland Co (ADM.N), POET and Valero Renewable Fuels (VLO.N) — the three largest distillers — would be affected too.

The ethanol tax credit of 45 cents a gallon and a tariff of 54 cents a gallon on ethanol imports are scheduled to expire at the end of this year. The $1-a-gallon biodiesel tax credit died at the start of the year but would be revived for 2010 in a bill pending in the Senate.

Without the tax breaks, said FAPRI, ethanol and biodiesel production will track the usage levels mandated by a 2007 energy law. It guarantees annual use of 15 billion gallons of corn-based ethanol beginning in 2015 and 1 billion gallons of biodiesel starting in 2012.

FAPRI said ethanol production would fall by 1.5 billion gallons a year lower, a 10 percent drop, without the tax breaks. Imports also would surge.

Biodiesel production would run roughly 10 percent lower without the tax breaks, or about 100 million gallons a year in 2012 to 2014, said FAPRI.

Our Take:
Aside from making ethanol and distillers grains, the number one job of America’s ethanol industry will be to push hard for a renewal of tax credits for both ethanol and biodiesel and the import tariff. The ethanol industry still has to fight for every gallon of marketshare, and fight hard when it comes to butting heads with Big Oil.

One of the chief criticisms of these programs is how much they cost the taxpayer—and shouldn’t a worthwhile industry stand on its own two feet. The answer is that when it comes to the oil industry, ethanol is battling a monopoly with 100 years of profit, capitalization and tax breaks that have cemented its place as our sole source of transportation energy for so many decades.

Let’s just take a quick look at the math, too. At 0.45 cents per gallon incentive, the 2009 production of 10.75 billion gallons (source: ethanolRFA.org) cost us $4.8 billion dollars. A recent report from the United Nation’s International Energy Agency estimated annual subsidies paid for oil globally would reach $500 billion. Since America consumes a quarter of the world’s oil, let’s estimate that U.S. oil companies reap a benefit of $125 billion annually. We are paying more for dirtier (Canada Tar Sands) and environmentally riskier (deep offshore drilling) energy supplies. When corn ethanol reaches its highest production level of 15 billion gallons by 2015, that will be $6.75 billion – doesn’t that investment make at least as much sense as paying 15-times that for fossil fuel? After all, the fossil fuel supply is only ten times what the ethanol supply is.

Everyone who benefits from U.S. farm-based energy production has a stake in this fight. A loss of $0.15 cents a bushel on corn, based on the 2009 crop, would be a loss of nearly two billion dollars of farm income. Even wind and solar industries should give a consideration to joining the ethanol alliance in this fight—A) these budding industries could use tax incentives to help them get to a permanent foothold, and B) the farmers who depend on ethanol do not forget their friends.

We think the Reuter’s report jumps the gun on imports, but not by that much. Imports won’t surge this year, regardless of what happens to the tariff, because the rise in the world price for sugar has caused Brazil to shift its cane feedstock into sugar production, away from ethanol—they dropped their standard gasoline blend down from 25 percent ethanol to 20 percent in order to forestall a crisis. Still, without the 54-cent tariff, it’s only a matter of time before Brazil can undercut domestic producers and cause significant damage to the industry.

So, friends of ethanol, now’s the time to contact lawmakers and remind them how important ethanol is to you, to farmers, to rural communities, and to the energy and economic security and of the nation, as well as the preservation/restoration of clean air in American cities.