Is corn still “king” in the world of biofuels?

Written by Jonathan Eisenthal

A panel of experts at the Fuel Ethanol Workshop, reviewing all that is happening with cellulose ethanol, advanced biofuels and advances in the production of grain-based ethanol agreed that corn will remain “king” when it comes to ethanol production in America.

“The process of making corn into ethanol created this party,” said John Caupert, who said that in spite of his role as director of the National Corn-To-Ethanol Research Center in Edwardsville, Illinois, he felt that this judgment is sound and unbiased. He said. “Corn ethanol will always be three legs of the four-legged stool–it sets the pathway for growth of cellulose and other advanced fuels.”

The experts noted that the 15 billion gallon per year requirement for biofuels set by the Renewable Fuels Standard II is an artificial one that may be unique in all the world of manufactured goods and products. The panel took place at the 2012 Fuel Ethanol Workshop at the Minneapolis Convention Center in the beginning of June, organized by BBI International, a biofuels analysis firm and publisher of Ethanol Producers Magazine. Minnesota Corn Growers Association is a major supporter of the event.

The panel highlighted ethanol’s benefits and some of its unique challenges.

“What other product has a strict limit to how much can be produced?” asked Pete Moss, marketing vice president of Cereal Process Technologies. “As we produce more and more corn and yet the limit of 15 billion gallons remain, the price of corn will fall and that’s a problem.”

Of course, the RFS standard is not a limit, but in effect it can act as one in the other way that ethanol is unique–it has a single customer, and that customer’s main business concern is producing a competing product. That is, oil companies–when they use ethanol they use less of their own product, gasoline.

“Another problem comes with attempts to go beyond corn, and to use xyz crop as a feedstock,” said Moss. “It’s not just an economic question, but a regulatory. The producers of this new version of ethanol would have to go through the EPA process to approve the use of the new feedstock.”

In contrast, corn for ethanol is a very efficient, well-proved process, according to Rich Chmielewski, Biofuels Marketing Manager for Siemens Industry, Inc.

While the political question of increasing the floor for grain ethanol use becomes a matter for debate, ethanol plants can pursue another option to keep growing. Co-products like corn oil and de-oiled protein feed products will become the norm at dry grind ethanol plants in the future he predicted.

“Diversification of corn ethanol facilities–colocating biorefineries–that will be a pathway to profitability,” said Chmielewski.

Caupert said one of the co-products that ethanol plants will benefit from, once the technology matures, is cellulose ethanol.

“The corn kernel fiber is ‘the forgotten’ source of cellulose for ethanol, already travelling to the 200-plus plants producing biofuels in the US,” said Caupert.

 

Fly the Earth-Friendly Skies

(“United marks nation’s first biofuel-powered commercial flight” by Jon Hilkevitch, Chicago Tribune, November 8, 2011)

Continental Airlines Flight 1403 made history when it landed at O’Hare International Airport on Monday, becoming the first revenue passenger trip in the U.S. powered by biofuel.

The Boeing 737-800, which was painted in the new environmental “eco-skies” livery of United Airlines and flown by Continental pilots, burned a “green jet fuel” derived partially from genetically modified algae that feeds off plant waste and produces oil.

In completing the Continental flight from Houston, parent company United Continental Holdings Inc. thus won by a scant two days the competition to launch the first biofuel-powered air service in the U.S.

On Wednesday, Alaska Airlines is scheduled to begin 75-passenger flights along with its sister airline, Horizon Air, that will take place over the next few weeks using a biofuel blend made from recycled cooking oil. Alaska Airlines officials said the 20 percent biofuel blend its planes will use will reduce carbon dioxide emissions by 10 percent.

More U.S. airlines are expected to join the effort to fly more cleanly — and eventually more economically — than the use of traditional, petroleum-based Jet-A fuel allows, based on a crude oil price of $100 a barrel or higher, experts said.

(Full article at http://www.chicagotribune.com/business/ct-biz-1108-united-airlines-biofuel-plane-20111108,0,1786646.story)

Our Take:
How about that? Turns out B40—40 percent biodiesel– is a ‘drop-in’ fuel for jetliners. We think applications for renewable biofuels await around every corner. Without the politics of EPA’s fuel approval process, and without all the smoke the oil industry blows, we think E30 would be considered a drop-in fuel in today’s conventional car engines (no, don’t try this just yet—you’ll void your warrantee), but Detroit’s commitment to making every other car that comes off its assembly lines a flex-fuel vehicle pretty much accomplishes the same goal.

The big thinkers are telling us that solar is going to happen to the electric generation industry in America. It’s working in Germany, where they have 75 percent acceptance of a system to pay a premium on electric power that promotes renewable development.

Along with our new awareness of solar power, we hope everyone will recognize biofuels—from grains and plant matter alike—represent the most efficient method for putting solar energy into the gas tanks of our vehicles.

Together with plug-in electric vehicles, we could really clear the air, put a lot of people to work, and stop sending our hard earned dollars to OPEC.

Biofuels producers, environmentalists explore common ground at “Innovation in Midwest Biofuels” conference

Written by Jonathan Eisenthal

Representatives of the Midwest biofuels industry and environmental groups met for a two day forum in mid-September, organized by Great Plains Institute, a Twin Cities-based non-profit group that takes a solution-oriented approach to climate and energy challenges, focusing in particular on policy, technology and infrastructure.

“The area where we found agreement is in improving the carbon intensity of existing fuel plants,” said Brendan Jordan, a key organizer of the event for Great Plains Institute (GPI). Jordan serves as director of bioenergy and transportation programs for GPI. Jordan said, “Many in the biofuels industry are already doing this as a cost-saving measure. Improving the existing fleet does not ask environmentalists to agree to new (grain biofuel) capacity, so environmentalists are more comfortable with that. Economists are trying to quantify the costs and benefits of these investments that reduce the carbon footprint. The question raised by people on all sides of the issue is ‘why isn’t more of this happening, what incentives, policies could be put in place to incentivize this even more?”

The Union of Concerned Scientists, who have argued against the need for the Volumetric Ethanol Excise Tax Credit (VEETC) brought forward a proposal for a carbon reduction tax credit that would be based on the amount that carbon use/emissions are reduced.

Biofuels industry representatives were receptive to the idea, and impressed with the conciliatory effort, according to Gary Herwick, a transportation fuels expert representing Minnesota Corn Growers Association at the conference. However, such incentives would likely have to be more substantial to offset the front end capital expense of carbon reduction technologies like biomass gasifiers.

Meeting the goals of the Renewable Fuel Standard regulation known as “RFS2” would reduce carbon emissions attributed to transportation fuels by about 7%, according to Herwick, president of Transportation Fuels Consulting, of Milford, Michigan.  He has more than 40 years experience in the auto industry including 5 years of consulting in vehicle emissions, transportation fuel quality and alternative fuels.

“This meeting was an opportunity to look at the potential to reach a ten percent reduction in greenhouse gas emissions from fuels and to encourage further innovation in the biofuels industry,” said Herwick.

One important message from the meeting was the need for better tools to assess the entire lifecycle of all fuel types, to assure that they consistently and fairly compare the real carbon intensity of the fuel. Presenters offered evidence that efficiencies achieved not only in the ethanol production process itself but in the increasing efficiency of crop production, have resulted in lower carbon intensity.

“It stands out that the biofuel industry, not necessarily motivated by regulations, but by economics, has made great strides forward in energy efficiency which positively impact carbon emissions,” said Herwick. “The GREET model, Argonne National Laboratory’s gold standard tool for evaluation of the biofuels lifecycle, developed a standard number for dry grind ethanol production of 36,000 BTUs of energy input per gallon of ethanol. That number is ranging around 26,000 BTUs today, and some plants are achieving substantially lower energy inputs than that.”

The state of California, which has put in place its own Low Carbon Fuels Standard, has accepted the petitions of a score or more of Midwestern corn ethanol plants who proved to the state authorities that their carbon score is lower than the standard rating for gasoline of approximately 95 grams of carbon per megajoule of energy. This process has allowed these ethanol plants to qualify to sell product into the California transportation fuels market–the largest single market for ten percent ethanol blends in the country.

Herwick and Jordan agreed that the dialogue begun at this conference was encouraging and they are both hopeful that continuing discussions among these groups can produce both understanding and influence public policy in mutually beneficial ways.

In a process completely distinct from the biofuels innovation conference, Jordan has worked as a consultant through GPI for the past two years to explore the concept of a Midwest Low Carbon Fuels Standard. Though MGA has decided not to continue the development of its own LCFS, the information developed through the process continues to inform all these stakeholders in the quest to achieve ten percent carbon reduction while enhancing the economic position of farm-based energy.

Energy forecasts show stark alternatives: If it’s not biofuel, it’s going to be oil from tar sands

(from an article by Ayesha Rascoe, “World oil use seen up 27 percent by 2035”)

The U.S. government last week said global oil consumption is likely grow by more than a quarter over the next quarter century, though proposed rules requiring automakers to improve fuel efficiency in the United States were not factored into the forecast.

World oil demand is expected to climb to 112.2 million barrels per day in 2035, the U.S. Energy Information Administration said in its annual international energy outlook. That would be up 27 percent from 88.20 million bpd in 2011 and is an increase of 1.4 percent over last year’s EIA forecast.

“Most of the growth in liquids use is in the transportation sector, where, in the absence of significant technological advances, liquids continue to provide much of the energy consumed,” the EIA said.

The EIA’s projections were based on current government policies and do not include any proposed or potential regulations, including the recently announced U.S. fuel economy standards that would force automakers’ fleets to average 54.5 miles per gallon by 2025.

…Global petroleum consumption could rise 26.9 million barrels per day (bpd) between 2008, the baseline year for the EIA’s forecasts, and 2035. The increase in conventional oil production would meet less than half of this growth at 11.5 million bpd.

OPEC producers are expected to increase spare capacity to maintain their 40 percent share of the world’s liquid fuel production over the next 24 years.

…EIA forecasts production of unconventional sources of liquid fuels, such as biofuels and oil sands, to rise to 13.1 million bpd in 2035 from 3.9 million bpd in 2008.

World oil markets will likely be very tight in the coming decades as the world grapples with rising demand from developing nations, said Howard Gruenspecht, the EIA’s acting administrator.

“Very few producers have the incentive to intentionally build spare capacity, so we’re going to be operating in world where the type of spare capacity we had seen … we’re unlikely to see again,” Gruenspecht said at an event unveiling EIA’s forecast. “There will be a lot of volatility.”

…While fossil fuels will likely remain dominant, renewable energy is projected to be the fastest growing energy segment.

Growing at a pace of 2.8 percent a year, renewable energy could make up 15 percent of total energy use by 2035, up from 10 percent in 2008. (Reporting by Ayesha Rascoe; editing by Alden Bentley and Bob Burgdorfer)

http://af.reuters.com/article/energyOilNews/idAFS1E78I0DZ20110919?pageNumber=1&virtualBrandChannel=0

Our Take:

The salient fact here is that, with OPEC countries expected to hold on to their 40 percent of the market, that will allow unconventional fuels space to grow by more than 9 million barrels per day.

It is up to us to decide how much of that will be renewable energy. EIA predicts 15 percent of the market will be renewable 25 years from now, but better energy policies could make that an even bigger number.

Building on the strong base of grain-derive biofuels, biomass-based fuels could win a lot of that market space, if they receive the kind of research and financial support needed.

The question is, do we want to put carbon-neutral, American-made biofuel into our vehicles, or pay the Canadians and Venezuelans to ravage the environment to extract the dirtiest, most carbon-intense form of petroleum?

 

Biofuels: Next big fight is keeping RFS II, E15 has a way to go to reach marketplace

Written by Jonathan Eisenthal

Though the ethanol tax credit remained in place, ethanol opponents counted the House of Representatives’ vote to end VEETC as a win and, with VEETC scheduled to end at the end of this year, those same ethanol opponents are setting their sights on a challenge to the Renewable Fuels Standard II and the minimum required use of biofuels that it sets.

That was Brian Jennings’ take on the current environment for biofules policy in Washington. Jennings, executive vice president of American Coalition for Ethanol, was joined in a panel discussion on biofuels by John Fuher, director of government affairs for Growth Energy; and Geoff Cooper, vice president for research for Renewable Fuels Association.

The three panelists spoke for an hour at the Minnesota Aggricultural Leadership Conference, a two-day gathering in Brainerd, Minnesota, organized by Minnesota Corn Growers Association.

“Our industry has to draw line in sand,” said Jennings. “Our industry has to be ready for this fight on RFS II. Cellulose targets have not been met. Congress and EPA continue to reduce targets for cellulose. There are already legislative attempts to open RFS. Another option–states can ask for waivers if there isn’t enough feedstock. Gov. Perry of Texas has applied for a waiver. We need to be ready for that fight. The good news is that that’s a fact finding mission. EPA looks at facts regarding what’s going on.”

Geoff Cooper added, “The bar was set very high. Any waiver request has to show conclusively high economic harm across the whole economy, not just two cents a pound on bacon.”

The panelists agreed that the super committee that has been charged with reducing the deficit will likely have an impact on renewable fuels policy going forward, but considering the timing–that their proposal is due Nov. 23–they find it highly unlikely that they will attempt to prematurely end VEETC with only a month to go before it runs out. In the process of looking for trillions in cuts, four weeks worth of tax credits on ethanol would offer scant savings.

Fuher said that Growth Energy would focus its lobbying efforts on getting funding and policy support for flexible fuel infrastructure–namely blender pumps that can offer the consumer a range of ethanol blends from E10 up to E30 and E50 all the way through E85. Jennings mentioned that the Thune-Klobuchar effort, though it did not make it into the debt limit raise and spending package passed by Congress, could possibly make it through Congress during the next session. This plan would create a three-year program offering cost sharing to fueling station owners who install blender pumps.

RFA feels E15 is the best bet for the nearest term means to successfully increase ethanol’s share of the transportation energy market.

Cooper sketched the stage that the E15 approval process has reached: “We have lots of technical work to do yet. Job one will be finishing the fuel registration process. We have health effects testing, and the literature review on all existing research on emission of E15 have been done. RFA led the effort to get tests done in conjunction with Growth Energy. We submitted our results (to EPA) in February. We expect to hear the results on E15 in next few months. One of the final legal hurdles we need to jump–state regulatory efforts will be needed, state by state. Some states have quirky regulations that don’t allow anything higher than E10.”

Cooper counseled patience and restraint when it comes to problems in RFSII. With opponents lining up to try to scuttle the biofuels requirements altogether, Cooper said it’s wisest to leave the existing law alone.

“Ethanol cannot qualify as advanced biofuel under RFS II and we don’t think that’s fair,” said Cooper. “However, I think if we ask Congress to go into EISA we are asking for trouble. Reopening RFS to deal with one definition would be risking too much for a relatively small gain.”

Cooper said RFA leaders envision E15 under growing a gradual process of market penetration, beginning in the Midwest, where most ethanol is produced. He noted that the states within PADD2–the federal government’s Petroleum Administration Defense District covering the Midwest–drivers consume 40 billion gallons of gasoline. If just a fifth of those gallons went from E10 to E15, that would represent a sales volume increase of 500 million gallons.

 

It’s not Either/Or, it’s CORN and CELLULOSE (when it finally gets here, whenever that actually happens)

(“Corn’s biofuel role in question” — Article by: JIM SPENCER, Star Tribune)

WASHINGTON – The biofuel company Gevo is about to break ground in the southwest corner of Minnesota on a system that will make it the first in the country to commercially produce a gasoline additive called isobutanol.

Gevo believes isobutanol could become an important alternative to regular gasoline. It burns more powerfully and efficiently than ethanol and runs just fine in existing automobile engines.

The plant in Luverne appears to be everything the Obama administration wants to reduce America’s dependence on fossil fuels and foreign oil — except for one thing.

The plant will use corn to produce isobutanol.

So the federal government refuses to provide loan guaranties to support the innovation.

Attempts to dethrone King Corn in the renewable fuels market are more frequent and forceful than they used to be. Corn ethanol no longer qualifies as an innovative technology that garners broad federal subsidies. When the administration recently announced its plans to increase the market share of renewable fuels, it trumpeted “breaking ground on at least four commercial-scale cellulosic or advanced biorefineries over the next two years.”

Those priorities matter in Minnesota, which helped develop the corn ethanol industry and now produces 1 billion gallons a year at 21 corn ethanol plants. Many of them are owned by farmer cooperatives. The state won’t get one of the new biorefineries, although some of its farmers may participate in one in northern Iowa….

At a Senate Energy Committee hearing last week, some speakers questioned the bill sponsored by Minnesota’s two senators, Al Franken and Amy Klobuchar, as well as Iowa Sen. Tom Harkin.

The bill requires automakers to build flex-fuel engines and mandates installation of ethanol pumps in service stations nationwide. Critics call the bill an over commitment to corn.

On the day of the hearing, the New York Times published a story that said using corn and other crops for ethanol causes hunger and higher food prices. The day before the hearing, environmental activists of the Environmental Working Group circulated a position paper that claimed corn ethanol cost more to produce than it saved in fossil fuel use.

“That’s just not true,” Franken said in an interview. “The yields go up and up. We’re meeting the need for feed.”

Our Take:
Call us old fashioned, but when the reporter can’t get the name of his source right– Kerry Nixon–we think it reveals a general lack of knowledge and carelessness with facts.

That the writer refers to “King Corn” without it being a quote or placing the phrase in quotes means this piece is an op-ed, not an unbiased news article. Corn is grown on 16 percent of US farms. It’s true that’s more than any other crop. But kings are crowned–this crop has won the votes of farmers, who like the rest of us, vote with their checkbooks and want to grow a crop that is versatile, has a history of success and can make them money. Corn’s profitability is a direct result not of any government program, but the fact that livestock, energy and export markets are filled with consumers who have succeeded by using corn as an ingredient in what they produce.

Yes, Secretary Chu has made no secret of his dislike of ethanol–a 14 billion gallon per year industry–while he favors drop-in fuels that can replace gasoline without need of engine modification. The number of gallons of drop-in fuel being produced from cellulose? Zero.

Hmmm. Does Chu want to have an impact on American energy this decade? We hope drop in fuels come along. They can go in the underground tanks that currently store gasoline, and ethanol can continue to go in ethanol tanks, and that way we’ll have a fighting chance of replacing all our foreign-sourced energy when it really matters–that is in the nearest possible term. Why care about replacing foreign oil? We watch the price on the gas pumps rise toward $4 for regular unleaded and we wonder if anyone doesn’t get the fact that until we replace foreign oil, we are not in control of our energy security–our energy destiny. Energy is the number one issue in maintaining America’s economic strength.

Even Gevo is betting on corn though that means Chu shuts the purse strings against them.

The Renewable Fuels Standard calls for 36 billion gallons of annual renewable fuel use by 2022–to get there we will need every ounce of the 15 billion gallons of corn ethanol stipulated by the law. Cellulose ethanol will be built on top of a strong and abiding foundation of corn-based fuel. To get to 16 billion gallons of cellulose ethanol production between now and then will mean that many, perhaps all existing corn ethanol plants will add a front-end component to brew ethanol from plant cellulose.

Canadian company Iogen and Danish company Inbicon both have ethanol production based on wheat straw, pumping out a million-plus gallons per year at their largest facilities. Nothing exists yet on the scale of today’s smallest dry grind corn ethanol plants. If they want to catch the American cellulose ethanol wave, Iogen, Inbicon, Gevo and others will need to roll out scaled-up versions quickly (Inbicon plans to break ground on an American plant sometime in the next 12 months). They will also require investor groups to purchase the license for this technology and build these projects. Many of these investors will be folks who know the ethanol industry that exists today. In fact, we believe these folks, today’s corn ethanol producers, will have an edge over neophytes who try to jump into the renewable energy business with no previous experience.

Environmental Working Group’s assertion that ethanol costs more to produce than the fossil fuels it replaces is unadulterated nonsense. Their paper goes against research studies by Argonne National Laboratory and the USDA, among others, that find a positive energy balance in ethanol production. Other studies find a phenomenal, positive economic impact from corn-based ethanol. It’s spring, and EWG is fundraising among people who know they love the earth, but who don’t know how much better corn ethanol is than the alternatives EWG’s anti-ethanol policy would push on us (Canadian tar sands oil, for instance).

New York Times thinks corn ethanol is making food more expensive and causing hunger. So they want farmers to grow crops that aren’t food to make into energy? Or they want to take away a key incentive that keeps food production at the highest possible level–yes, it’s a bit counterintuitive but the price strength that comes from all the different markets for corn, including ethanol, assures that farmers and agribusinesses will apply every possible resource to keep achieving higher and higher yields. Take away any element of the demand picture and in short order, farmers will be growing less.

Authorities usually granted unquestioned acceptance by the New York Times–the UN and the World Bank–thoroughly studied the commodity price shock of 2008-2009 and found corn and ethanol had very little to do with food price increases and that biofuels could not be blamed for creating hunger. That the Times continues to saw away at this tune illustrates the fact that even the purveyors of “all the news that’s fit to print” suffer from “fact resistance,” the effect documented by University of Michigan political scientist Brendan Nyhan.

(read more about Fact Resistance at http://articles.boston.com/2010-07-11/bostonglobe/29324096_1_facts-misinformation-beliefs)

When the Times is interested in making something that isn’t just fit to be fertilizer, they should talk to some farmers, and really listen to people who make food that really feeds the world. It’s what we do every day.

Senate energy committee explores biofuel infrastructure expansion

(published by Ethanol Producer magazine, written by Kris Bevill)

The Senate energy committee held a two-hour hearing April 7 to discuss proposed legislation to expand the domestic biofuels market, but expanded its scope through testimony and committee member questions to cover nearly every major issue related to biofuels production and market expansion.

Committee Chairman Jeff Bingaman, D-N.M., expressed cautious optimism for biofuels expansion during his opening statement. While domestically produced biofuels “are the best near-term option for replacing oil,” he is concerned that infrastructure built to support biofuels will become obsolete when drop-in fuels such as algae-based biocrude or biobutanol are ready for the market.

Sen. Tom Harkin, D-Iowa, testified in support of the Biofuels Market Expansion Act of 2011, a bill he co-sponsored that would mandate flex-fuel vehicle production, require one half of all U.S. gas stations to install at least one blender pump by 2020 and offer a federal loan guarantee for a biofuels pipeline. He reminded committee members that ethanol is a viable fuel replacement now, whereas drop-in fuels will not be commercially ready for perhaps 20 years. “By all means, we should continue apace with the development of drop-in fuels, but this is not an either-or proposition,” he said. “Until drop-in fuels are commercially viable, we should continue to support ethanol.”Senate energy committee explores biofuel infrastructure expansion.

See the full article at ethanolproducer.com/articles/7646/senate-energy-committee-explores-biofuel-infrastructure-expansion

Our Take:
Ethanol is an excellent customer of the railroads, but the question of how well the rail companies treat ethanol is a key element in the quest for biofuels pipelines to the East and West Coast.

It may be a bit of a shaggy dog, but some say that in the back rooms, the rail companies cut deals with the oil companies who supply their diesel–in exchange for cut rate fuel for their engines, these rail companies, it is rumored, willfully delay the arrival of rolling stock for ethanol pick ups, or delay their arrival at fuel terminals, as a discouragement to discretionary blending of ethanol.

This may or may not be happening, but it is prudent not to let the fox guard the hen house. Giving the ethanol industry direct control of the transportation of its product will make the ethanol marketplace more efficient, and the main beneficiary will be the customer. The ethanol supply at retail sites will be more plentiful and cheaper.

As to the other aspects of Harkin’s proposal, it must be said that the oil rich areas of the world are in political freefall. Consequently, the price of oil has skyrocketed, and the pump price of gasoline approaches $4. Some experts say it could hit $5 at the height of the driving season (Memorial Day Weekend). The fact is, that without the changes Harkin proposes, American drivers live with a 90-percent gasoline mandate. Implementing universal blender pump technology and flex fuel equipment (as Brazil has done) will put the choice of fuel in the hands of the consumer. The fuel system modification for flexible fuel vehicles would cost about $100 per auto. Though blender pumps are a capital intensive proposition, the fact that they would sell all blends of ethanol would make them more immediately profitable for the station owners than stand alone E85 dispensers.

Cellulose-based ethanol waits in the wings. In order to win financing and bank underwritten debt, in order to build their plants and start producing their advanced biofuel, they need to show they have a market. Simply put, cellulose ethanol will not have a market until blender pumps and flex fuel engines make E15 and higher intermediate blends a choice available to a much broader segment of American drivers. Blender pump installation will not prevent development of drop-in fuels. The drop in fuels can go right into the underground storage tanks that currently hold gasoline to feed into the blender pumps.

The answer for America’s energy future is not either/or, but rather, it is all of the above. If we pursue all these solutions, we will rid ourselves more quickly of the shackles of our foreign energy addiction.

What Biofuels need: Infrastructure and brand-name recognition

(An opinion piece posted by Chris DeMorro, and published by web site Gas 2.0)

The other day I searched for E85 ethanol fueling stations in my home state of Connecticut. Turns out there are just two such public stations in all of New England. Even biodiesel stations are still sparse. Why?

In a piece last week in GigaOM, Boonsri Dickinson talked about how the biofuel businesses remains very small nationwide. There’s just a single biofuel station in San Francisco, DogPatch Biofuels. Across the whole of the U.S., there are just over 1,500 biodiesel stations, and 2,500 stations that serve E85 ethanol. Compare that to the over 130,000 gas-only stations in the U.S., and there is obviously a huge discrepancy there. While biofuel businesses do manage to turn a profit despite small scale (the San Francisco station sells just about 600 gallons of biodiesel a day) they often have to turn to selling other stuff, like chicken seed, to make more money. A big reason biofuel stations don’t draw big business is that biofuels are missing two components; infrastructure, and trust.

There is no “name-brand” biofuel business in the U.S., no trusted source of high-quality fuels. Now I’m not saying the start-up entrepreneur working out of a warehouse making biodiesel doesn’t know what he is doing. But when it comes to fueling up an investment that can cost tens of thousands of dollars, people are hesitant to put just any ol’ fuel into their car.

Beyond that, biofuel companies don’t have the infrastructure of deep pockets of Big Oil, but they’ve got the advantage of being able to farm their fuel from local sources as opposed to shipping it halfway across the country (or the world). Even so though, the people interested in fueling up with ethanol or biodiesel are still few and far between, and many of these people have learned how to use their vehicles minimally, if at all. Biofuels have a high hill to climb, and they may forever remain a niche market.

At least to me though, it remains a better alternative to petroleum.

Our Take:
This is an interesting point–what would it be like to have recognizable ethanol brands or biodiesel brands? Before its demise, VeraSun was toying with the vertically integrated model pioneered by the Big Oil companies–owning or having strategic partnerships with fuel retailers and offering a branded fuel. We think such a thing will eventually be a necessity, but the infrastructure piece is the much bigger, much more pressing concern–under two percent of the nation’s fueling sites offer E85.

We know there would be a consumer response if/when the government requires auto manufacturers, domestic and foreign, to make flexible fuel systems standard in all vehicles sold in America. At a cost of about $100 per vehicle for this flexible fuel equipment, this is not going to break anyone’s bank. And to go along with that, let’s have a serious federal commitment to increase E85 and biodiesel infrastructure through cost-sharing and other incentive structures. When the competition pumps their product out of the ground and sells it for multiples of what it cost to do so, the risk of marketing alternatives to oil is too great for the renewable industry to capitalize on its own. Once the infrastructure is in place, and flexible fuel vehicles are in the show room, ethanol will be in a place where a brand name could capture the imagination and the loyalty of America’s drivers.

After all, NASCAR just joined Indy as the next big race organization moving to ethanol blended fuel. A brand name could really exploit that, and sure enough, Sunoco–the supplier of racing fuel to NASCAR, plans to market its branded E15–the fuel blend that used by America’s favorite racers in NASCAR races starting in 2011.

 

Green and great for the fuel tank: NASCAR switches to E15

Written by Jonathan Eisenthal

National Association for Stock Car Auto Racing (NASCAR) will use E15 fuel in its three racing tours in 2011, the organization announced October 16. E15 is a new fuel blend that has just won approval from the Environmental Protection Agency for use in all light duty gasoline engine cars manufactured in 2007 or later. Ethanol advocates expect EPA to approve E15 for all vehicles produced after 2000–a November announcement is anticipated.

The blend is 15 percent ethanol and 85 percent gasoline transportation fuel.

“Indy Racing has been using 100 percent ethanol for several years and now NASCAR joins the renewable energy revolution with the blend that is soon to be approved for the majority of American cars–once again proving that higher ethanol blends are not only good for cleaner air and energy independence, but these are also high performance fuels,” said Greg Schwarz, a farmer in Le Sueur, Minnesota and president of Minnesota Corn Growers Association.

E15 may be the most tested vehicle fuel in the history of transportation. Among the many venues that have put E15 to the test, Minnesota Center for Automotive Research (MnCAR) has taken part in rigorous testing of both E15 and E20 on a variety of conventional engine gasoline cars and small engines. MnCAR’s testing has found no performance or emissions problems in either blend level. This research will provide the foundation for Minnesota’s move to E20 statewide, in most gasoline, in 2013. It’s usability in small engines will be a reassuring for many operators, especially farmers, who utilize a whole range of small engines connected to food and livestock production.

NASCAR has developed a partnership with Sunoco, which will produce the E15 at a Pennsylvania facility and provide it to all NASCAR teams free of charge, as it does with the racing league’s fuel needs currently.

NASCAR began what it calls its Green Innovation program in 2008 Up to now the program has promoted recycling and has funded tree plantings, but this is the first step that actually has to do with the operation of its racing vehicles.

“With Sunoco Green E15, we are leading by example, showing that this renewable fuel — which reduces greenhouse gas emissions — works in the most demanding racing environment in the world,” said Dr. Mike Lynch, managing director for Green Innovation for NASCAR. “NASCAR and Sunoco look forward to highlighting the efforts of the whole racing community to transition to Sunoco Green E15 in time for the Daytona 500 — from its manufacture all the way to the race track.”

NASA boss investigated for possible conflict of interest on biofuel project

Charlie Bolden asked Marathon Oil for its opinion on Project OMEGA — but he has financial interest in Marathon, which has a competing project

While millions of barrels of spilled oil choke the Gulf of Mexico, NASA is working on an ocean-based biofuels venture that could revolutionize clean-energy production at sea and treat wastewater at the same time.

The scientist running the $10 million experiment, called Project OMEGA, uses words such as groundbreaking and exciting to describe his baby. But there’s a hitch.

NASA Administrator Charlie Bolden doesn’t believe in OMEGA — and has sought to slow it down.

The reason: He was advised against it by Marathon Oil — the Texas-based company on whose board Bolden sat until he was named NASA administrator last year. The former astronaut and Marine Corps general also still holds as much as $1 million worth of Marathon stock.

So far, the project is proceeding without any signs of obvious interference, according to scientists and officials. But Bolden’s decision to vet OMEGA with a company in which he has a significant financial interest — and that also has invested in a competing biofuels proposal — has prompted an investigation by the NASA inspector general.

For the full story, including a very interesting illustrated primer on this algae-to-biofuel based technology, go to
http://www.orlandosentinel.com/news/space/os-nasa-administrator-scandal-20100620,0,4126603.story

Our Take:
Whether it is NASA administrators owning oil stock while they make decisions on alternative fuel projects, or public officials like Mary Nichols, the director of California’s Air Resource Board, who impact such public policies as low carbon fuel standards while owning significant capital in the oil industry—this shows what is wrong with the current model of energy production and distribution in the U.S.—it is owned by megawealthy multi-national corporations with no incentive to see “beyond petroleum,” as BP used to claim in its public relations materials. The number of interested parties involved in government and the resulting cozy arrangements that arise do not serve America’s public interest. Big Oil is a dinosaur, and one that’s size by its very nature taints energy policy. The oil companies have very little incentive to act in the best interest of local communities or the environment.
Farmer-owned energy, specifically ethanol and biodiesel production offer the groundbreaking model for locally-owned energy. A farmer-owned ethanol plant represents a major capital investment in a specific locality, an investment that may be the sole capital investment of its company, and in any case will not be easily packed up and moved overseas. As a major employer and fixture in its community, a farmer-owned ethanol plant has a huge stake in being a good neighbor, and assuring that the local environment and residential neighbors are safeguarded.
Now that gooey tar balls are reaching the white sands of the Florida panhandle and gulf coast, we have to say we think BP doesn’t have the same incentive to be a good neighbor or they never would have undertaken the risky venture that has led to the environmental disaster that has dominated the news for two months now.
We hope leaders at every level have the vision and the will to clean house and sever ties between Big Oil and those who shape energy policy. And we hope NASA starts by handing Holden a pink slip.