Archive for September, 2010

DOE delivers E15 test results on 2007-present model vehicles

Written by Jonathan Eisenthal

The Environmental Protection Agency will receive today a copy of the Department of Energy’s  tests conducted as part of its consideration of a waiver that would allow blend levels to rise to 15 percent ethanol in regular gasoline.

The tests involved rigorous operation of 19 different vehicle models, which were attached to dynamometers and driven by wire 1,000 miles per day over the course of several months, idled only for routine maintenance.

“The science will undeniably support the use of this higher blend,” said MCGA president-elect Greg Schwarz. “And though the process has been slow, we urge government to take swift action now, finish the other battery of tests and clear all vehicles for using 15 percent ethanol. This is the right move to inject energy into our economy and add jobs, and it is the right move to enhance our energy security by getting us that much closer to freedom from foreign oil.”

The DOE is also conducting a second battery of tests of vehicles built between 2001 and 2006, and expects to issue the results of those by the end of November.

The results of these tests will be available at this web location:
http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EPA-HQ-OAR-2009-0211

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Cellulosic ethanol production shows promise

(Written by By Kerri Ebert, published by Midwest Producer)
 
MANHATTAN, Kan. – Renewable fuel goals established by the Energy Independence and Security Act of 2007 (EISA) will not be met by corn ethanol alone. That’s why provisions in EISA contain target production amounts for cellulosic ethanol and other types of biofuels.

Kansas State University agricultural economist David Lambert has been developing economic models focusing on how development of the cellulosic ethanol industry could help meet EISA targets of 16 billion gallons of cellulosic ethanol production by 2022 and how cellulosic production might affect corn and other crop producers.

Lambert uses modeling because there currently are no cellulosic ethanol plants operating in the Midwest. His modeling indicates there may be a merit to using crop residues (i.e. straw, corn stover, and corn cobs) for energy production, but there is also a need for further research.

Raw materials for cellulosic ethanol are plentiful in the Midwestern states where supplies of herbaceous and woody feedstocks as well as supplies of corn are greatest. Lambert sees potential for the development cellulosic ethanol production throughout the Midwest – in close proximity to production acres – but cautions gathering and delivering cellulosic fuel stocks will add costs, so producers must be careful to figure their breakeven point to determine if there is profit potential in their cellulosic feedstocks.
 
Because of its bulk collecting, storing, and transporting cellulosic feedstock to refineries will add expense. Yield, cost of harvesting, distance to the refinery, and pay price are factors that must be considered by producers. Lambert said best estimates indicate a ton of harvested crop residue will produce approximately 60-90 gallons of ethanol. That means a 100 million gallon per year ethanol plant will require delivery of between 1.1 and 1.7 million tons of feedstock annually.

His models, based on harvest of 33 percent of available residue, indicate winter wheat could yield approximately 1.9 tons of residue per acre; sorghum, 2.1 tons per acre, and corn, 5.7 tons per acre. Using a variety of scenarios modeled by Lambert using his data and data from other researchers that look at estimated herbaceous crop residue (HCR) yields, transportation costs, and alternative uses for HCR, he sees a hypothetical breakeven price of $1.22 per gallon of ethanol to be sufficient for development of a local ethanol production facility.
 
Lambert points out that since there are no cellulosic ethanol production facilities online, researchers can only estimate results.

Our Take:
There are things to like and things causing concern in the Lambert analysis. The glaring concern is that there are no commercial scale cellulosic ethanol plants, and no track record of actual production. However, in the space of about 12 years, from 1995 to 2007, we went from a small handful of dry grind ethanol plants to the full fledged boom that has brought us to the current capacity around 13 billion gallons a year. Where there is a will there is a way.

Lambert seems to be considering only stand alone cellulose ethanol plants, whereas the experts we are hearing from and the first actual cellulosic production under construction now is coming out of established grain ethanol operations that are building on front-end, or parallel processing. These existing plants will be in the best position to invest in the new process and weather the volatility that is bound to come with it. We urge public officials to make sure that any support programs of cellulosic ethanol do not hinder the adoption of the technology by existing grain ethanol companies.

Finally, we still have to urge public officials, on an ongoing basis, to reevaluate the mix of grain ethanol and cellulosic ethanol called for in EISA. To meet 36 billion gallons of biofuel production in the next 12 years, perhaps EISA needs to be reset, and allow 30 billion gallons of grain ethanol. We can still have an EISA that calls for 16 billion gallons of cellulose on top of that, but perhaps we need to give them more time to reach that goal. One study has found that eventually we could have 90 billion gallons of biofuel–most of it from cellulose process, replacing more than half of our oil consumption for transportation, and this could be done without major displacement of the supply for any consumers who need grain for feed, food or manufacturing.

What we like about the Lambert analysis is that he doesn’t leave the farmer out of the equation. He figures out how much biomass farmers can produce and sketches where the break-even point is going to be, though that will vary, perhaps from farmer to farmer. We also need to see in the real world what the right amount of biomass to take off the fields will be–leaving enough organic matter to regenerate soil fertility, while also offering enough feedstock for cellulose ethanol plants.

MCGA elects Greg Schwarz president for 2010-2011

Written by Jonathan Eisenthal

At its September meeting, Minnesota Corn Growers Association board of directors elected Greg Schwarz the new president of the 6,000-member farmer organization, which has headquarters in Shakopee.

Schwarz, of LeSueur, Minnesota, has served for three years on the MCGA board and most recently filled the post of secretary. He is also president of Scott-LeSueur County Corn and Soybean Growers Association. He will succeed current president DeVonna Zeug on October 1.

Both Zeug and Schwarz joined the Governor’s Trade Mission to China, which spent twelve days, from September 10 through 22, meeting with business and agricultural leaders in Shanghai, Beijing and in rural China.

Schwarz, 44, is a 1988 graduate of the University of Minnesota with a degree in animal science and agricultural economics, believes that diversification is the necessary foundation for prosperity in agriculture, and his operation speaks to that–he produces corn and soybeans, turkeys and is a founding member of the local ethanol plant, Heartland Corn Products in Winthrop.

Since Heartland came online in 1995, it has grown from 10 million gallons per year production up to 100 million gallons. But Schwarz has also produced turkeys for the past eight years. It has been one of Schwarz’ key issues since joining the MCGA board of director, to encourage the various segments of agriculture to work together in order to achieve common goals.

“One of the first things I wanted to push when first got on the MCGA board was the need to work better with other organizations, other parts of agriculture,” said Schwarz. “I think we’re improving on that front. But we still have a ways to go. We in commodities don’t have nearly as much public support and political support as we used to, so we can’t let issues divide us and keep us from finding that common ground.

“It’s going to be more important than ever to work together especially when we come up against things that effect us all, like the farm bill, or how HSUS portrays animal welfare, water quality, federal dust regulations…there are any number of issues, and we have more of an impact when we work together.”

Like Zeug and a number of MCGA grower leaders, Schwarz is a graduate of the Minnesota Agricultural and Rural Leadership program, based at Southwest State University in Marshall. The two year series of seminars brings together leaders from across the spectrum of ag and rural life in order to gain knowledge and sharpen skills that will make them more effective in their roles directing organizations.

“MARL really develops the skills necessary to be an effective leader,” said Schwarz. “It is perfect for leaders in an organization like corn growers or any other commodity group in Minnesota. As far as skills, the number one skill you work on is listening, number two is how to work with a diverse group of people. We saw people from a broad spectrum of the Minnesota economy, and gained a new appreciation of how everything fits together. It teaches you to always look at the other side of the issue. There is always more to the story.”

 

OPEC’s Anniversary – Breaking a 50 Year Old Grip on Oil Dependence

Washington – Commenting on the anniversary of the formation of OPEC, Renewable Fuels Association President Bob Dinneen issued this statement:

“The world oil cartel, known as the Organization of Petroleum Exporting Countries (OPEC) was founded 50 years ago on Tuesday. While there may be cause for celebration in the capitals of Saudi Arabia, Iran, Venezuela and other member countries, here in the U.S. it is time to thank America’s renewable fuels industry for staunching the flow of OPEC oil. OPEC’s hostility to America’s ethanol industry is clear. Ethanol displaces OPEC oil. In 2008, the International Energy Agency stated, “biofuels have become a substantial part of faltering non-OPEC supply growth, contributing around 50% of incremental supply in the 2008-2013 period.” This is precisely why OPEC Secretary General Abdalla El Badri issued a stern warning to western countries against developing biofuels. Biofuels threaten OPEC’s oil dominance. Without the growing production and use of biofuels in the U.S. and around the world, IEA calculates that more than one million barrels per day of new oil production would be required. Thanks to forward thinking U.S. policy promoting the production and use of biofuels, the U.S. can celebrate 50 years of OPEC not by cutting cake, but cutting even more oil imports.”

Our Take:
Minnesota’s billion gallons of ethanol production each year, all by itself, costs OPEC billions in lost revenue–though our oil in Minnesota comes mostly from Canada, American ethanol production has a direct effect on the world price of oil. Without ethanol, the spot price of gasoline would soar, the price per barrel of oil would climb steadily and remain elevated.

All that money OPEC doesn’t get means less money for people who tell us that they hate America and want to kill us. Not only should we take our OPEC-funded enemies at their word, but we should take away as much of that funding as possible.

And the flip side of not spending on foreign energy is that dollars are staying in America–not only creating jobs directly in the ethanol industry, but diffusing through the entire domestic economy, and putting more money in the average American’s wallet.

Ethanol opponents want to get rid of the tax credits that encourage gasoline blenders and retailers from using ethanol in gasoline, but the most cursory look at the accounting shows that ethanol sales, and the economic activity generated by ethanol production add billions of dollars more to the federal treasury than are paid out in incentives. The incentives merely prime the pump, and what flows is a stronger US economy, less dependent on foreign energy, with an improved balance of trade, and more secure because it is not filling the coffers of our enemies quite so much.

Let’s not take the next 50 years to completely shut off OPEC from the American energy picture.

Yes, the US has a plan to get to 36 BBGY biofuels by 2022

By Jonathan Eisenthal

With the USDA as the principal driver behind the federal government’s Biofuels Interagency Working Group, the federal government has developed a plan to get to 36 billion gallons per year of biofuels in the US transportation vehicle fuel market. In addition to US Ag Secretary Tom Vilsack, US Secretary of Energy and the director of US Environmental Protection Agency are also prominent members of the Biofuels Interagency Working Group, or BIWG.

Corn ethanol is expected to produce 12 billion gallons (BBGY) this year, and has a total capacity exceeding 13 BBGY. This grain-based fuel is expected to reach its mandate of 15 BBGY in the next few years, leaving 21 billion gallons per year capacity yet to be built.

These new gallons will be comprised of what the Renewable Fuels Standard II calls advanced biofuels.

RFS II calls for the development of 16BBGY advanced cellulosic biofuels capacity, where the baseline requirement to be considered an advanced fuel is 60 percent reduction in greenhouse gases, compared to gasoline.

One question is how much of the required cellulose-based ethanol will be produced by today’s grain ethanol plants, retrofitted with front end, or parallel processing facilities that can render the cellulose of corn kernels, corn cobs, corn stover or other cellulosic materials into ethanol fuel.

The BIWG biofuels roadmap, issued in June, estimates that 5.5 billion gallons per year can come various agricultural sources, naming in particular corn stover and bagasse (the cellulose remains of processed sugar cane).

“We applaud the USDA and other members of this working group, but we emphasize that in all this planning, our government should not forget the farmer,” said Jerry Ploehn, chairman of the Minnesota Corn Research & Promotion Council. “We need to make sure that the cellulose ethanol industry develops a sound economic model that offers the appropriate price to motivate our agricultural producers to collect and transport cellulose to these fuel plants. Let’s not forget that farmer-owned energy production, known as the Minnesota Model, gives the most bang for the buck in renewable energy production–we feel this will continue to be true for cellulose ethanol, just as it has been for corn starch-based ethanol.”

According to the BIWG biofuels development roadmap, switchgrass and other dedicated energy crops would produce 7.9 BBGY. ARS estimates that a conservative total supply of energy crop feedstock could deliver enough raw material to make 13.4 billion gallons of fuel a year. The roadmap assumes soy biodiesel and corn oil-based biodiesel or ethanol would comprise another 1.34 BBGY of the total 21 BBGY of advanced fuels. The other major sources of advanced biofuels would be 2.6 BBGY from municipal solid waste and another 2.2 BBGY from imported advanced biofuels. Though algae shows promise, the BIWG allows for only modest development over the next decade, calling for 100 million gallons (MMGY) by 2022.

About 43 percent of the anticipated growth in biofuels is expected to arise in the region the USDA biofuels roadmap refers to as “Central Eastern”–essentially the midwest, with the addition of Pennsylvania and Virginia.

USDA “assumes biomass may be grown on defined agriculture cropland,” and under this assumption it will take 27 million acres to grow enough biomass to produce the feed stock for 13.4 BBGY of advanced biofuels, according to USDA Agriculture Research Service. RFS II does not allow advanced biofuels feedstocks to be gathered from rangeland or land cleared after Dec. 19, 2007–it may be drawn from the 309 million acres of actively harvested cropland, from the roughly 35 million acres of pastureland and various other categories that make up the 406.4 million acres of defined US cropland.

The needed 27 million acres constitutes about 6.5 percent of the inventory of 404 million acres of US cropland. Interestingly, this is similar to the acreage required to produce the 15 BBGY of grain-based ethanol fuel.

Among the assumptions underpinning the report is a capital cost of $8 per gallon of production capacity for advanced cellulosic biofuels, though the report notes that the first plants may be more expensive. USDA-ARS offers its best guess that 40 million-gallon-per-year will be the typical size of this first generation of cellulose biofuel refineries. At an average cost of $320 million per palnt, it will take approximately $83 billion to build the 263 plants, at 40 MMGY, needed to reach the RGS II goal.

To read the full BIWG biofuels development roadmap report go to:

http://www.growthenergy.org/images/reports/USDA_Biofuels_Report_6232010.pdf

MN Farmers Take Ethanol Discussion to Washington

ST. PAUL, Minn. – Ethanol is one of several important issues that the Minnesota Farmers Union is hoping to take up with lawmakers in Washington this week. Many would like to see the blender tax credit extended and the ethanol blend rate increased from 10 to 15 percent. The blender tax credits, which are given to oil companies as an incentive to blend ethanol with gasoline, are set to expire this year. Critics of the extension say oil companies have been subsidized long enough.

Doug Peterson, president of the Minnesota Farmers Union, says the tax credit is an investment that protects jobs, and is a step towards decreasing dependence on foreign oil.

“I think Americans, given the choice, would choose a fuel that creates U.S. jobs, reduces carbon emissions and helps strengthen our nation’s security. That’s what this ethanol piece is really all about.”

Peterson says the next step to expanding ethanol use involves investing in an infrastructure of blender pumps at gas stations nationwide.

Richard Eichstadt of Poet Biorefining in Preston says the ethanol issue is ultimately about market access. He says creating a marketplace with greater access would allow ethanol to compete head-to-head with gasoline.

“Right now, the petroleum industry has a monopoly. We simply would like access so that the consumer, that the public, can choose to go up to 15 percent ethanol, and that would be a consumer choice.”

Concerns over the move to E-15, as the 15 percent ethanol blend is called, include whether the fuel would require special “flex-fuel” vehicles to use it satisfactorily. A joint study by Minnesota State University-Mankato and the University of North Dakota tested one flex-fuel and three standard models of automobiles, and showed them all to tolerate blends of up to E-30, or 30 percent ethanol to 70 percent gasoline.

According to the Minnesota Department of Agriculture, corn is the leading crop produced in Minnesota. The state’s 21 ethanol plants are expected to produce over one billion gallons of ethanol this year, almost doubling the annual production from 2006.

Minnesota Department of Agriculture statistics on ethanol are at bit.ly/aDwzVU

Sharon Rolenc, Public News Service – MN

http://www.publicnewsservice.org/index.php?/content/article/15954-1

Our Take:
We are thankful for the work of Minnesota Farmers Union to boost ethanol on these two important fronts–extending the blender’s tax credit and increasing the allowable blend level to 15 percent ethanol.

It’s good to see farm groups working together–in this day and age when so few raise the food, feed, fiber and energy that fuels this country, it takes every agricultural producer, and every commodity group–laying aside our differences and focusing on the common ground–to bring a message that can be heard in Washington.

We believe a larger vision of agriculture and keeping the independent family farmer in business is something farmers of every crop and producers of every animal product can agree on. We need healthy livestock industries, healthy crop production, competitive systems of export and healthy farm-based energy in order to keep families on the farm and keep the vitality in our rural communities.

WASDE projects largest corn crop in history

Two things have been at work this growing season to assure that farmers bring in the largest corn crop in US history–13.16 billion bushels according to the latest estimate of the World Agricultural Outlook Board (USDA): across the 18 major corn producing states, weather has been favorable for a bountiful crop, and crop science companies and corn producers continue to develop the most productive combination of seed and crop production methodology that’s ever been seen.

The September 12 report actually drops the expected production and yield slightly from the previous month’s estimate: “Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record.  The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels.  The largest reductions in forecast yields are for the eastern Corn Belt, which account for more than half of the reduction in total output.”

At national average yield (and Minnesota will likely exceed the national average) production of corn in Minnesota would be well over 1.1 billion bushels this year. About half of the crop will be exported to overseas markets for use as animal feed, another fifth is fed to animals in Minnesota to produce dairy products, eggs, poultry, swine and beef. Minnesota is among the highest producers of turkeys and hogs in the nation, thanks to abundant corn for feed. And about a third of the crop is processed by Minnesota’s 21 ethanol plants into fuel that does not cost American lives, nor does it form a two-inch layer of oil sludge at the bottom of the Gulf of Mexico (as scientists report finding in this week’s news).

Both DeVonna Zeug and Greg Schwarz, the president and president-elect of Minnesota Corn Growers Association, are traveling in China as part of a Minnesota state trade delegation. As the world population escalates to 9 billion by midcentury, China may become the world’s largest economy, and demand for animal protein will drive an incredible demand for grain for feed. According to the US Grains Council, US-produced corn is preferred by many livestock producers around the globe for its unquestioned superior quality to corn produced anywhere else.

Jerry Ploehn, a farmer in Alpha, Minnesota (Jackson County) and chairman of Minnesota Corn Research & Promotion Council commented on the prospect of a bin-busting harvest.

“What we have seen over the past decade is an unprecedented advance in crop science that has brought us a bigger, higher yield crop, which producers like myself bring forth in more bushels per acre, with less chemical inputs per bushel than has been possible over the course of the whole 20th century,” said Ploehn. “In corn, what we have is a plant that can bring forth 564 kernels for every one kernel planted as seed–and that ratio, already miraculous, will continue to rise as the major crop science companies introduce drought tolerant/high water-efficiency corn, as well as varieties that bear up well under heat stress. With our hungry planet–hungry for both protein and renewable, clean-burning energy–these developments couldn’t come at a better time. Farmers across the globe will be able to raise corn for food, feed, fiber and energy on fewer acres, with much greater yield and input efficiency

The WAOB report notes that the European Union will import a larger amount of US corn this year, to replace tons of wheat lost to drought in Russia.