Archive for the ‘Renewable Fuels’ Category

“E15 increases consumer choice”

By MCGA Agvocate Kevin Welter

July 18, 2008, for many of you this day does not have any significance. For me, this is a day that changed my life as I had previously known it. July 18th was the day I passed my driver’s test. I remember that day like it was yesterday. Holding the keys in my hand for the first time was the greatest feeling in the world, even if the keys were to an ’89 Chevy Cavalier. Looking back on that day I gained many of freedoms and expenses. The greatest expense was gas, which made me very interested in gas mileage.

In high school, I had the opportunity to be one of four students at my high school to help start the Supermilage Challenge at Stewartville. For those of you that are not familiar with the competition, a group of high school students build a one person vehicle from scratch to achieve the highest gas mileage. The first year we competed in the stock class where your vehicle runs on unleaded gasoline. Three of the four team members grew up in a farming background, which lead to our interest in renewable fuels such as ethanol and biodiesel. The next two years we decided to compete in the E-85 class. Before officially switching classes, we did a lot of research on ethanol and the benefits it has not only for the environment, but also for the saving in consumers wallets. Many researchers agree that ethanol provides about thirty to sixty percent more energy than what is required to make a gallon of ethanol, meaning ethanol has a positive net energy. Compared to gasoline, ethanol reduces CO2 emissions.

One thing we had found from our experiences and research is that all engines can run on a blend of ethanol and gasoline. The tricky part is getting the correct blend for your engine. All passenger vehicles are approved to run up to a blend of 10% ethanol or E10. Over the past few years there has been a lot of research and tests conducted to find out which blend will perform well in vehicles currently on the road. The results of the research and tests caused the recent approval of the EPA for E15 in passenger vehicles 2001 and newer. In January 2011 about 60% of the vehicles driven in the US are 2001 and newer. With more than half of the vehicle on the road with the ability to run this blend of fuel you would think we would see an E15 option at every gas station. The issue is there are laws and regulations in 36 states that inhibit the sale of E15. These laws may take a while to be updated to include the demand for E15.

As a consumer, I hope in the future that more tests are conducted to check the performance of high blends of ethanol. In the future, I feel like there will be many different blend options available for consumers. The approval of E15 is a step in the right direction for consumer choice and for the growth of the domestic renewable energy industry. I currently drive a vehicle manufactured in 2006. Next time I fill up at a gas station with an E15 option, I will be choosing this higher blend of renewable energy.

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Minnesota: the bioeconomy’s “Get it Done, Make it Happen State”

What is in the water up in Minnesota? Partnership seems to have become part of a new hybrid DNA, the Digest discovers in its special report on the state’s progress in biobased fuels, chemicals and materials.

There seems to be some confusion at the state level as to exactly what Minnesota’s nickname is – official publications refer to “the North Star State” while the US Mint put “Land of 10,000 Lakes” on the back of the Minnesota commemorative quarter. Since alternatives seem to be generally acceptable, we propose the “Get it Done State” for your consideration.

You see, other states can match Minnesota for its wealth of agricultural and forest resources (though ample they are), or its foundational base in agriculture and energy (via giants like Cargill, CHS and EcoLab) and for its highly-trained workforce (though more skilled they rarely come). But for per-acre yields of moxie and gumption, it would be hard to find a match.

Get it Done, Make it Happen

Leadership seems to be available as a low-cost residue up there, we’ve not yet exactly figured out how or why. Want to push through the transformative Farm Bill through the 2008 House Agriculture Committee? Minnesota’s Collin Peterson took the reins. Help push through the Algae Biomass Organization from great idea to great organization? Minnesota’s Mary Rosenthal, Tom Byrne, and Todd Taylor have been amongst the drivers. Innovative leaders in first-gen fuels like Brain Kletscher at Highwater Ethanol and Steve Christensen at Granite Falls Energy. Academic leaders such as Brendan Jordan, Director of Bioenergy at the Great Plains Institute, and legendary UMinn chemical engineer Lanny Schmidt; innovative venture capitalists like First Green’s Doug Cameron and Tom Erickson; perceptive analysts like Piper Jaffray’s Mike Cox and Mike Ritzenthaler; Luca Zullo, whose VerdeNero consultancy was on the of the first to focus on opportunities in green-black technologies. Just to name a small handful.

See the rest of the article at:

http://www.biofuelsdigest.com/bdigest/2012/08/27/minnesota-the-bioeconomys-get-it-done-make-it-happen-state/

Our Take:
Minnesota’s step-ahead position in the development of renewable energy started with our corn farmers, who believed that we could source our transportation energy in the Midwest instead of the Mideast.

This article is a great tally of all the impressive vanguard efforts rolling out here in Minnesota.

The one miss is to take as accurate recent newspaper reporting on the state of the Minnesota’s corn ethanol industry. Yes, the industry has hit a speed bump with the narrowed margin, but there is unsuspected strength in the farmer-owned LLC ethanol companies (which are not under obligation to publicly report their financials). These companies benefit from not only good timing but also a conservative ethic that favored reducing debt load over increasing profit sharing. Volatility in all energy markets will continue, but these companies will be able to weather the storms.

And the imminent birth of advanced biofuels and biorefinery products will take place among these farmer-based companies as much as any other participants in renewable energy production today.

Yes, Minnesota is a center for innovation. But don’t count the farmers out—they are right in the center of that pioneering spirit.

Growers make the case for passing a new farm bill, and keeping RFS

Written by Jonathan Eisenthal

NCGA Corn Congress, held in Washington DC in July each year, is always an occasion for Minnesota growers to meet legislators and continue the conversation about what will help midwestern farmers keep the American system of raising food the envy of the world: an overwhelmingly safe supply of food available in every region at reasonable prices.

The two political issues that will impact U.S. food production the most in 2012 are a successful conclusion to the drive to pass a Farm Bill, and one of the chief agenda items for corn growers and ethanol producers–keeping the Renewable Fuels Standard intact, and allowing its built-in mechanisms to deal with issues of grain supply.

The 17 Minnesota growers met with the entire Minnesota delegate to Congress, as well as many members of the House Agriculture Committee.

“We told congress members we need to keep the RFS intact, let it work, it’s got provisions designed to handle scenarios like this,” said John Mages, a corn producer in Belgrade, Minnesota, and president of Minnesota Corn Growers Association. “RFS demands that so much ethanol be used each year. It’s important to remember that, at the beginning of the year, there was a lot of ethanol in surplus, also there is a credit called RINs (Renewable Identification Numbers) that the fuel blenders can use in the place of actual ethanol. Between those things we may be able to meet all the market demand. It’s important also to wait and see exactly how much corn we produce before the government resorts to drastic changes. One message we’ve been bringing to lawmakers is that once there’s a cut back on the mandate, it will be very hard to get back what’s been given it up. So we want to keep it going.”

Among those new to the process of visiting congress people in Washington and carrying the farmer message, were MCGA director Les Anderson and Anna Bellin, MCGA’s new policy director.

“Our message was straightforward,” said Bellin. “We want to get it done. Don’t mess with the RFS, because the market is working. It is easy to blame ethanol for the problems being caused by the drought, but we should be careful not to take apart energy policy that’s just beginning to deliver energy independence–let’s see what the actual corn production is.”

The grower leaders found the lawmakers receptive and supportive of the idea of getting a farm bill passed this year. The Senate has passed a version and now it is up to the House of Representatives.

The whole thing gets tied up in election year politics,” said Bellin. “Members of the ag committee were generally supportive of getting it done, but it comes down to being a leadership decision. A large part of the farm bill is nutrition program spending and that’s getting all tied up in debates about budget cutting.”

Whatever else gets done regarding farm policy, it appears likely that some kind of disaster program for livestock producers will pass, either as part of a regular farm bill, or failing that, as a stand alone extension.

But the farm program is an essential element — without it, farmers cannot plan for the coming crop year.

“Without a farm bill in place I don’t know a single banker that would make a loan to a farmer,” said Lori Feltis, a producer in Stewartville and a representative to the Minnesota Corn Research & Promotion Council.

However, success will require an eye to timing.

“It was our effort during our Washington visit to put as much pressure on the House to get it done as we could,” Bellin said. “Congressman Collin Peterson has been extremely supportive of getting it done. He is doing whatever he can to get it across the finish line and we really appreciate it. It’s our intent to keep the pressure on, but there’s also a delicate balance–while we are trying to get it done as quickly as possible, we also want to make sure the votes are there when it comes to a vote.”

Waiting for MPR to get it right: corn ethanol represents food AND fuel

(MPR News featured an investments feature on renewable fuels by Tony D’Altorio)

Biofuel certainly seems like an up and coming global growth industry. The International Energy Agency sees worldwide consumption increasing from an annual 55 million tons of oil equivalent to 750 million in 2050. Right now, biofuel makes up a mere two percent of the transportation fuel market. But analysts expect it to increase to 27 percent in four decades. Here in the U.S., however, the issue is controversial. Rising corn prices have renewed debate over ethanol, a corn-based fuel for vehicles. The argument comes down to a matter of food vs. fuel. After all, the U.S. uses 40 percent of its corn crop to create ethanol every year. That demand is one of the factors driving up corn prices around the world. Fortunately, there is a viable alternative in cellulosic ethanol. Cellulosic ethanol, a second-generation ethanol, is derived from agricultural waste.

Our Take:
It must have something to do with MPR’s sense of journalistic integrity that they either never bother to talk to, or don’t believe grain ethanol producers when they tell the world that they make food as well as fuel. We will keep patiently repeating this in the hopes that someday, it will be understood.

When ethanol plants utilize corn, they utilize the starch that makes up about a third of the volume of the kernel of corn. After processing that kernel to get the starch, what is left are the protein and oil components of the kernel. This material is refined into a high quality animal feed–the original sole use of about 99 percent of all field corn. This product, called distillers grains, amounts to a third of the original volume of the corn kernel. But the fact that it is now protein and oil without starch makes distillers grains superior in some aspects to raw corn. It produces more mass per pound of feed when fed to beef cattle and causes less incidence of acidosis (upset stomach). Factoring in these aspects, experts say distillers grains represent fully half of the original feed value of raw corn. It is like putting a cow on a low-carb, high protein diet.

So it might be more accurate to say that ethanol takes 20 percent of the potential feed value of the US corn crop. But this way of looking at the corn market doesn’t capture another essential point of information. Market analysts have fully incorporated ethanol demand into calculations for expected consumption (called “disappearance” in the USDA commodity reports). That’s why all the analysis of the 2008 commodity price spikes found that biofuels played a limited role, perhaps ten percent of the overall increase in agricultural commodity prices. Far more significant was the role that oil plays in setting floor for the price of all commodities. 

We agree with the MPR finance reporter saying that cellulose ethanol represents an interesting investment opportunity, because of what many analysts foresee–cellulose ethanol will be a fast growing segment of the energy market in the next 40 years, but we’ll stop short of making a positive recommendation, one way or another.

However, this is not an either/or proposition. Grain-based ethanol is here to stay and should provide 10 percent or more of America’s transportation energy needs. Cellulose, if it achieves the hoped for (and expected) breakthroughs in technology and commercial viability, could potentially supply an even greater portion of the energy needed to power our vehicles. Clean sources of electricity may eventually allow plug-in vehicle technology to meet another portion of transportation energy without spewing the greenhouse gases associated with coal-fired electric generation, or, frankly, the troubling aspects of nuclear power generation. The point is, selecting one type of fuel to replace the all-or-nothing hold oil has had over our transportation energy needs is to continue to employ a flawed approach to energy. We need a spectrum of renewable energy choices, based on what can be produced that makes our country energy-self-reliant. And it’s a bonus if we are the first out of the gate, developing these technologies in ways that can be exported to other nations, for the profit of American companies and American workers.