Evolutional Fuels

Union of Concerned Scientists: Stronger RFS Could Save US Consumers $113 Billion

Thu, 18 Feb 2010 12:00:00 GMT

A federal renewable energy standard of 25 percent by 2025 combined with an energy efficiency standard of 10 percent by 2020 could save US electricity consumers $113 billion by 2030, the Union of Concerned Scientists (USC) said recently in a new analysis. The two standards also would boost renewable energy generation by 23 percent, the group said. UCS used energy forecasting models, cost and performance assumptions from the Energy Information Administration (EIA) in analyzing a climate change and energy bill that passed the House in June. The analysis included tougher renewable and energy efficiency standards that were contained in the House bill. Using the EIA energy forecasting model and its cost and performance assumptions, UCS analyzed costs and benefits of the House bill with a stronger (25 percent by 2025) national renewable electricity standard and a separate energy efficiency resource standard requiring utilities to reduce consumer and business electricity use by 10 percent by 2020.%26nbsp;

Compared with EIA%26#8217;s August 2009 analysis of the current House bill, USC concludes that a strengthened bill would provide the following benefits by 2030:

Reduce ratepayers' utility costs by a cumulative $113 billion. Households would save $51 billion, commercial businesses would save $42 billion, and industrial customers would save $20 billion compared with the current House bill. Increased renewable energy use would encourage competition and diversify the energy mix, leading to more stable energy prices and lower electricity and natural gas prices. Gains in efficiency would reduce energy use, which would save ratepayers even more.
Reduce carbon allowance prices for polluters by more than 4 percent. Stronger standards for efficiency and renewable energy would help low-cost technologies overcome key market barriers so they can play a larger role in reducing emissions than would be possible with carbon allowances alone. Once deployed, efficiency and renewable energy would help lower carbon prices.
Reduce gross domestic product by less than one-tenth of 1 percent. The EIA analysis of the current House bill showed that a national climate and energy policy would have a minimal effect on the overall US economy. UCS found that a stronger bill would have a comparable effect.
Increase renewable electricity generation (excluding hydropower) by 23 percent.
Increase efficiency and reduce total electricity sales by 6 percent.
Avoid the need to build additional electricity capacity equivalent to nearly 50 new nuclear reactors.

The House-passed bill has a combined national renewable and efficiency standard of 20 percent by 2020. A Senate bill, S. 1462, carries a 15 percent by 2021 renewable and efficiency standard. That bill cleared the Senate Energy and Natural Resources Committee but has yet to come to a floor vote.

US Biotechnology Sector Paints Positive Outlook for Advanced Biofuels

Tue, 16 Feb 2010 12:00:00 GMT

A new report from the US biotechnology sector paints a positive outlook for the US advanced biofuels industry. A recent study, commissioned by the Biotechnology Industry Organization (BIO), concluded that the Renewable Fuel Standard (RFS) levels for advanced biofuels production will drive the creation of a major new industry, creating a foundation for future technology development and commercial growth. BIO analyzed the economic impact of increasing US advanced biofuel production to 21 billion gallons per year by 2022 and found the following:%26nbsp;

Direct job creation from advanced biofuels production could reach 29,000 by 2012, rising to 94,000 by 2016 and 190,000 by 2022. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022.

%26nbsp;

Investments in advanced biofuels processing plants alone would reach $3.2 billion in 2012, rising to $8.5 billion in 2016, and $12.2 billion by 2022. Cumulative investment in new processing facilities between 2009 and 2022 would total more than $95 billion.

%26nbsp;

Direct economic output from the advanced biofuels industry, including capital investment, research and development, technology royalties, processing operations, feedstock production and biofuels distribution, is estimated to rise to $5.5 billion in 2012, reaching $17.4 billion in 2016, and $37 billion by 2022.

%26nbsp;

Taking into consideration the indirect and induced economic effects resulting from direct expenditures in advanced biofuels production, the total economic output effect for the US economy is estimated to be $20.2 billion in 2012, $64.2 billion in 2016, and $148.7 billion in 2022.

%26nbsp;

Advanced biofuels production under the RFS scenario could reduce US petroleum imports by approximately $5.5 billion in 2012, $23 billion in 2016, and nearly $70 billion by 2022. The cumulative total of avoided petroleum imports over the period 2010%26#8211;2022 would exceed $350 billion.

E15 Research Continues; EPA Decision on Policy Move Expected This Summer

Thu, 11 Feb 2010 12:00:00 GMT

The Environmental Protection Agency (EPA) originally had been expected to rule by Dec 1, 2009, on a request to raise the allowed level of ethanol in fuels to be burned in all cars from 10 percent to 15 percent (E15). However, the EPA, which has indicated that E15 is safe for newer cars, has delayed the ruling until at least May 2010 to conduct further tests on how the blends affect engines of older cars. Proponents and opponents of the possible increase have weighed in with comments. In January, a coalition of automakers and oil companies submitted a letter to the EPA asking to further delay a decision to conduct more tests. Some sources signal that the EPA could approve E15 for newer cars later this year.%26nbsp;

The following is a brief summary of what Informa knows on this matter:

The decision is delayed until around May 2010, meaning sometime in the May-July period.
The reason for delay is to complete several ongoing researches on impact of E15 on various engines.
The EPA is reviewing various labels for gasoline pumps if the decision is made to increase the allowable blend rate percentage.
Several groups have written the EPA urging a go-slow approach.
If the EPA were to announce an increase, litigation is expected and, thus, implementation date is murky, but this is why the EPA wants more research %26#8211; to back up any percentage increase decision.
Should the EPA deny the petition request, another request likely would be made taking into consideration the EPA's reasons for any denial.
While some farm-state lawmakers have indicated that they may legislate a higher percentage level should the EPA not okay the industry request, Informa does not see such legislation getting through Congress and being signed into law.

Some Details of Initial Draft of Senate Jobs Bill; Biodiesel Tax Incentive Included

Wed, 10 Feb 2010 12:00:00 GMT

Due to the heavy snowfall this week, the Senate will not likely act on its jobs bill this week ahead of the week-long Presidents Day recess. Senate Majority Leader Harry Reid (D-Nev.) on Feb. 9 said that the heavy snowfall was impeding his efforts to bring up the jobs bill. But details have surfaced regarding the initial draft of what Senate Democratic leaders have in mind regarding its jobs measure, including some riders on the must-have legislation. For example, the bill would include a one-year extension of biodiesel tax incentives. Reid did not detail what would be in the package, but did say it would include an extension of the highway trust fund but would not include a provision dealing with the estate tax.%26nbsp;

The jobs bill likely will total around $80 billion and will target efforts to combat unemployment without including spending measures that would prevent Republicans from supporting it. The key item will be a package of tax incentives to encourage businesses to hire, but it also may include an extension of tax policies that expired last year and several economic stimulus initiatives set to expire at month's end. While estate tax reform language is not reportedly in the Senate measure, Republicans have agreed to call up estate tax legislation (HR 4154) some time soon.

EPA Confirms Carbon Savings of Brazilian Cane Ethanol

Tue, 09 Feb 2010 12:00:00 GMT

In its announcement that finalized the regulations for the implementation of the renewable fuel standard (RFS2), the EPA said that it was designating sugar cane ethanol as an advanced biofuel that lowers greenhouse gas (GHG) emissions by more than 50 percent. The EPA said that ethanol made from sugar cane is a low carbon renewable fuel, which can contribute significantly to the reduction of GHG emissions. %26nbsp;

EPA affirmed that sugar cane ethanol meets the %26#8220;other advanced%26#8221; category in the RFS2, although with a GHG reduction level that exceeds the requirement for all categories, too. Specifically, the EPA%26#8217;s calculations showed that sugar cane ethanol from Brazil can reduce GHG emissions compared to gasoline by 61 percent, using a 30-year payback for indirect land use change emissions. %26#8220;EPA%26#8217;s decision underscores the many environmental benefits of sugar cane ethanol and reaffirms how this low carbon, advanced renewable fuel can help the world mitigate climate change while diversifying America%26#8217;s energy resources,%26#8221; said Joel Velasco, chief representative in Washington for the Brazilian Sugarcane Industry Association (UNICA).%26nbsp;

Many point to sugar cane ethanol as a good option for diversifying US energy supplies, increasing healthy competition among biofuel manufacturers and improving America%26#8217;s energy security. They point to Brazil, which has replaced more than one-half of its fuel needs with sugar cane ethanol—making gasoline the alternative fuel in that country and ethanol the standard.

Biodiesel Production Tax Incentive Extension Likely Part of Senate Jobs Bill

Mon, 08 Feb 2010 12:00:00 GMT

An extension to the expired biodiesel production tax incentive likely will be part of a jobs package being negotiated by Democratic and Republican leaders. Recall that the biodiesel tax incentive expired Dec. 31. The $1-per-gallon tax incentive is designed to make biodiesel price competitive with conventional diesel fuel and is structured as an excise tax credit that allows the value of the incentive to be recognized immediately in the market price of the biodiesel. Expiration of the tax incentive caused some production to cease and has placed the 23,000 jobs that are currently supported by the domestic biodiesel industry in jeopardy. Some companies already have laid off employees, and this situation is certain to worsen the longer the tax incentive is allowed to lapse, according to the American Soybean Association.%26nbsp;

Finance Chairman Max Baucus (D-Mont.) is still negotiating the details of tax provisions, but said he is close to getting a deal that would have %26#8220;meaningful%26#8221; Republican support. Most importantly, the development that this is a must-pass bill is attracting more potential unrelated legislation.%26nbsp;

An agreement on a process to consider estate tax legislation at some point is still in the unclear category, according to Informa's Congressional contacts. Democratic leaders want to avoid a floor fight on the issue and have not yet agreed to a time-certain to consider the measure, as sought by Republicans. Republicans want assurances that House-passed estate tax legislation will be brought up soon in the Senate and that tax provisions aimed at stimulating the economy will be kept separate from spending initiatives being pushed by Democratic leaders.%26nbsp;

The jobs package certainly will include several three-month program renewals, including the extension of the biodiesel production tax incentive, the unemployment benefits and health insurance subsidies for laid-off workers expiring Feb. 28. Another provision would avoid scheduled cuts in the fees Medicare pays physicians. Other programs expiring on Feb. 28 include Small Business Administration loan guarantees, the national flood insurance program and supplemental nutrition assistance program (SNAP), formerly known as food stamps. An extension of surface transportation financing is another possible rider. Also in the mix are extensions of economic stimulus initiatives that give small businesses liberalized expensing rules and provide state and local governments with assistance through a tax credit bond program.

Paying for the package remains under discussion. The House passed an extenders package last year, but its offsets (including a tax hike on venture capitalists) remain controversial. One provision that likely will be included is a curb on paper producers%26#8217; ability to claim a tax credit for making %26#8220;black liquor,%26#8221; a wood byproduct, according to congressional contacts.%26nbsp;

Senate Majority Leader Harry Reid (D-Nev.) said he would like an initial Senate vote on a jobs package Feb. 8 (likely a procedural vote) and Senate passage before the Presidents Day recess starting Feb. 12.

USDA Details Rules for Biomass Subsidy

Fri, 05 Feb 2010 12:00:00 GMT

USDA is set to publish in the Feb. 8 Federal Register a proposed rule that would provide details of a financial assistance program to promote development of biomass fuel crops by farmers and forest owners. (Publication of the proposed rule will open a 60-day comment period.)%26nbsp;

The proposal, from USDA's Commodity Credit Corporation, specifies the requirements for eligible crops, participants and biomass conversion facilities to be part of the Biomass Crop Assistance Program (BCAP). BCAP is designed to ensure a sufficiently large base of new, non-food, non-feed biomass crops is established in anticipation of future demand for renewable energy consumption. BCAP is intended to reduce the financial risk for farmers, ranchers and forest landowners by providing incentive payments to those who invest in the production, harvest, storage and transportation of new first-generation energy crops that displace hydrocarbon-based materials now used for heat, power and vehicle fuel. %26nbsp;

BCAP is authorized to fund two main types of activities. First, it provides funding for agriculture and forest land owners and operators to receive matching payments for eligible biomass materials sold to qualified biomass conversion facilities for the production of heat, power, bio-based products or advanced biofuels. The payment rate is intended to assist producers with the cost of collection, harvest, storage and transportation of the biomass to the facility, for up to two years. This is the part of the program covered by President Obama's Presidential Directive to accelerate the investment in and production of biofuels.%26nbsp;

Additionally, BCAP will provide funding for producers of eligible renewable crops within a select geographical area to receive payments up to 75 percent of the cost of establishing the crop and annual payments for up to 15 years for crop production. Other proposed notable goals of BCAP include improvements in forest health by removing uneconomical forest thinning, reducing the risk of disease, invasive species and forest fires and providing new options for improving air quality by avoiding open-air burning of scrap biomass. %26nbsp;

USDA's Farm Service Agency issued the first payment in August 2009. Early program beneficiaries to date include a Vermont school that will replace 100 percent of its fossil fuel consumption with biomass, a start-up pellet company that uses locally grown agriculture residues from Iowa farms and a rural electric cooperative that displaces fossil fuels with woodchips to generate low-cost electricity in northeastern Georgia. %26nbsp;

A copy of the proposed rule is available online at www.fsa.usda.gov/bcap. Comments on the proposed rule are invited and may be submitted to: e-mail: cepdmail@wdc.usda.gov; fax: 202-720-4619; mail: Director, CEPD, USDA/FSA/CEPD/Stop 0513, 1400 Independence Ave., SW, Washington, D.C. 20250-0513. Comments also are accepted via the federal e-rulemaking portal at: http://www.regulations.gov; follow the online instructions for submitting comments.

EPA Issues Final RFS2 Rule

Thu, 04 Feb 2010 12:00:00 GMT

The Environmental Protection Agency (EPA) released its final rules on Renewable Fuels Standard (RFS2), with the following major features:%26nbsp;

Effective date for the regulation is July 1, 2010, with the percentage standards for 2010 applying to all gasoline and diesel produced or imported in 2010.

%26nbsp;

A total renewable fuel standard for 2010 of 12.95 billion gallons was established by the Energy Independence and Security Act (EISA). This standard was set by the EPA as a fraction of a refiner's or importer's gasoline and diesel volume. The final 2010 standards are as follows:

%26nbsp;

%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; STANDARDS FOR 2010

%26nbsp; Fuel Category	Percent of Fuel Required to be Renewable	Volume of Renewable Fuel (in billion gallons)
Callulosic Biofuel	0.004	0.0065
Biomass-Based Diesel	1.10*	1.15*
Total Advanced Biofuel	0.61	0.95
Renewable Fuel	8.25	12.95

%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; * Combined 2009/2010 Biomass-Based Diesel Volumes Applied in 2010.%26nbsp;

For 2010 and thereafter the RFS program generally covers all transportation fuel. This now includes gasoline and diesel fuel intended for use in highway vehicles and engines, and nonroad, locomotive and marine engines. These provisions continue to apply to refiners, blenders, and importers of transportation fuel (with limited flexibilities for small refiners through the end of 2010), and their percentage standards apply to the total amount of gasoline and diesel they produce for such use.%26nbsp;

Mandatory lifecycle greenhouse gas (GHG) reduction thresholds for the various renewable fuel categories were established in the Energy Independence and Security Act (EISA). As a result, a significant aspect of the RFS2 program is the requirement that the lifecycle greenhouse gas (GHG) emissions of a qualifying renewable fuel must be less than the lifecycle GHG emissions of the 2005 baseline average gasoline or diesel fuel that it replaces. Four different levels of reductions are required for the four different renewable fuel standards. These lifecycle performance improvement thresholds are listed in the table below:

%26nbsp;

LIFECYCLE GHG THRESHOLDS SPECIFIED IN EISA (%REDUTION FROM 2005 BASELINE)

Renewable fuel^*	20%
Advanced biofuel	50%
Biomass-based diesel	50%
Cellulosic biofuel	60%

* The 20% criterion generally applies to renewable fuel fromnew facilities that commenced construction after Dec. 19, 2007.%26nbsp;

Based on the Agency%26#8217;s current modeling of specific fuel pathways, which incorporated comments received through the third-party peer review process, and data and information from new studies and public comments, EPA has determined that:

Ethanol produced from corn starch at a new (or expanded capacity from an existing) natural gas-fired facility using advanced efficient technologies, that we expect will be most typical of new production facilities, complies with the 20% GHG emission reduction threshold;
Biobutanol from corn starch complies with the 20% GHG threshold;
Ethanol produced from sugarcane complies with the applicable 50% GHG reduction threshold for the advanced fuel category;
Biodiesel from soy oil and renewable diesel from waste oils, fats, and greases complies with the 50% GHG threshold for the biomass-based diesel category;
Diesel produced from algal oils complies with the 50% GHG threshold for the biomass-based diesel category; and
Cellulosic ethanol and cellulosic diesel (based on currently modeled pathways) comply with the 60% GHG reduction threshold applicable to cellulosic biofuels.

%26nbsp;

The baseline volume of corn-based ethanol plants that were under construction prior to Dec. 19, 2007, are covered by a grandfathering provision that exempts them from the lifecycle GHG requirement. For ethanol facilities which commenced construction after that date and which use natural gas, biofuels or a combination thereof, such facilities will be "deemed compliant%26#8221; with the 20% GHG threshold. The exemption for such facilities is conditioned on construction being commenced on or before Dec. 31, 2009, and is specific only to facilities which produce ethanol only. The exemption would continue indefinitely, provided the facility continues to use natural gas and/or biofuel. While ethanol made in any new coal-fired factories would not qualify, the grandfathering provision of the final rule allows existing coal-fired plants under construction before Dec. 19, 2007, to continue to produce ethanol that will be considered a renewable fuel for purposes of the standard.%26nbsp;

The new rule also allows production of soybean biodiesel to go toward meeting the renewables mandate. However, as with corn, soy fuels can meet the clean-fuel qualification only if they are produced using extremely energy-efficient methods and cleaner-burning fuels such as natural gas, rather than coal.%26nbsp;

The EPA stated that it is committed to further reassessing its lifecycle GHG analysis, assessments and determinations. %26nbsp;

EPA revised the 2010 RFS2 carve-out requirement for cellulosic biofuel. The RFS2 proposal called for 100 million gallons of cellulosic biofuel in 2010, but current assessments are that 2010 projected production levels will be much lower than that. Therefore, in aligning the mandate with current production realities, the EPA revised the 2010 cellulosic biofuel carve-out standard to 6.5 million ethanol-equivalent gallons. "While this volume is significantly less than that set forth in EISA for 2010, a number of companies and projects appear to be poised to expand production over the next several years," the EPA announced. "Since the cellulosic standard is lower than the level otherwise required by EISA, we also will make cellulosic credits available to obligated parties for end-of-year compliance, should they need them, at a price of $1.56 per gallon (gallon-RIN). In addition, while we have lowered the cellulosic standard below the level otherwise required in the Act, we have maintained the advanced biofuel and total renewable standards as that set in EISA for 2010. We are continuing to assess the growth of the cellulosic biofuel industry and intend to issue a notice of proposed rulemaking [NPRM] each spring and a final rule by Nov. 30 of each year to set the renewable fuel standards for each ensuing year," EPA added. EPA said it is confident the volume of cellulosic fuel will increase in coming years.

%26nbsp;

Most of the new renewables mandate (21 billion of the 36 billion gallons) must be met by advanced and cellulosic biofuels, made from crops such as switchgrass, which have life cycle ratings of 60 percent lower emissions than gasoline.

Kansas Operations

Tue, 02 Feb 2010 12:00:00 GMT

As of this week Evolution Fuels has retail fuel operations under the %26#8220;Evolution Fuels%26#8221; brand.%26nbsp; I am please that we have a strategic partner, J%26amp;J Developments, who is helping to expedite our strategic plan of rolling out renewable fuel stations in the southwestern and southeastern United States, which for us, now includes the state of Kansas.

We look forward to adding additional Evolution Fuels stations in Kansas, and other states in the very near future.

%26nbsp;

EPA Sends Renewable Fuel Standard (RFS2) Draft Final Rule to White House

Mon, 11 Jan 2010 12:00:00 GMT

The Environmental Protection Agency (EPA) recently sent to the White House Office of Management and Budget (OMB) for review a final rule regarding the Renewable Fuel Standard. %26nbsp;

The Energy Independence and Security Act (PL 110-140), enacted in 2007, requires the nation%26#8217;s motor fuel supply to include more ethanol and other biofuels each year, reaching 36 billion gallons by 2022. Of that amount, 21 billion gallons must be ethanol produced from biomass or other advanced biofuels. There are two broad categories of biofuels under the standard: conventional and advanced. Conventional biofuel is essentially corn based ethanol. Advanced biofuel is either cellulosic biofuel, or ethanol made from biomass; biomass-based diesel; or a third category, called undifferentiated advanced biofuel. Undifferentiated advanced biofuel can be either cellulosic biofuel, biomass-based diesel or some other type of advanced biofuel that meets the greenhouse gas (GHG) criteria. %26nbsp;

For 2010, the law requires 12.95 billion gallons of renewable fuels, with 100 million gallons from cellulose (see table below for details). Many observers have noted there may not be enough cellulosic ethanol to meet the 2010 mandate and believe the EPA will delay the mandate of 100 million gallons to 2011 or 2012. According to the Renewable Fuels Association (RFA), corn based ethanol installed capacity is around 13.1 billion gallons per year, with about 1.2 billion gallons of capacity idled. Expansion projects signal an additional 1.4 billion gallons of supply on the way.%26nbsp;

RENEWABLE FUELS STANDARD (in billion gallons)

Calendar Year	Total RFS	Corn Eligible	Advanced Biofuels	Cellulosic	Biodiesel
2008	9.00	9.00	0.00	0.00	0.00
2009	11.10	10.50	0.60	0.00	0.50
2010	12.95	12.00	0.95	0.1	0.65
2011	13.95	12.60	1.35	0.25	0.80
2012	15.20	13.20	2.00	0.50	1.00
2013	16.55	13.80	2.75	1.00	%26nbsp;
2014	18.15	14.40	3.75	1.75	%26nbsp;
2015	20.50	15.00	5.50	3.00	%26nbsp;
2016	22.25	15.00	7.25	4.25	%26nbsp;
2017	24.00	15.00	9.00	5.50	%26nbsp;
2018	26.00	15.00	11.00	7.00	%26nbsp;
2019	28.00	15.00	13.00	8.50	%26nbsp;
2020	30.00	15.00	15.00	10.50	%26nbsp;
2021	33.00	15.00	18.00	13.50	%26nbsp;
2022	36.00	15.00	21.00	16.00	%26nbsp;

%26nbsp;

The law requires EPA to analyze direct and indirect emissions and mandates that renewables produce 20 percent fewer greenhouse gas emissions than gasoline, as measured over the fuel%26#8217;s entire life cycle from production to use. The law exempts ethanol produced in facilities built or under construction before Dec. 19, 2007, meaning much of the ethanol produced now would not be held to that standard for emissions. Margo Oge, director of the EPA Office of Transportation and Air Quality, said previously that this exemption applies to about 15 billion gallons of ethanol production capacity, equal to the maximum amount of ethanol that can meet the renewable fuels standard in 2022.%26nbsp;

EPA included an analysis in its proposed rule saying the use of corn to produce ethanol in the US would lead to a reduction in corn exports that would encourage farmers in countries like Brazil to destroy tropical rainforests to open more land to food production. This would increase emissions, according to the analysis. The ethanol industry countered that corn exports have increased despite rising ethanol production. Ethanol industry representatives said the science underlying the analysis is deficient and unreliable. House Ag Committee Chairman Collin Peterson (D-Minn.) inserted provisions into the House-passed climate-change bill (HR 2454) that would prevent EPA from analyzing international indirect land-use changes resulting from ethanol production.%26nbsp;

Ethanol Groups Challenge California Standard

Fri, 08 Jan 2010 12:00:00 GMT

A coalition of ethanol producers has challenged California%26#8217;s Low Carbon Fuel Standard (LCFS), which is intended to achieve a 10 percent reduction in greenhouse gas emissions from motor vehicles by 2020. The coalition says that the measure violates the Constitution and jeopardizes the nationwide market for ethanol.%26nbsp;

The Renewable Fuels Association and Growth Energy filed a complaint in Federal District Court in Fresno, Calif. The LCFS calculates emissions through the fuel%26#8217;s full life cycle. Under the standard, corn-based ethanol receives a poor emissions score because of measurements based on corn farming as a food supply. Ethanol producers have complained that California's rule would unfairly discriminate against corn-based ethanol, because the measure would take into account land-use changes that are said to occur abroad when land in the US is converted from growing corn for food to growing corn for fuel.

Salazar: US Headed for Revolution for Renewable Energy

Fri, 18 Dec 2009 12:00:00 GMT

The United States is headed for a %26#8220;revolution%26#8221; for renewable energy, and cutting-edge carbon capture and storage technology will be among the main priorities of climate change policy going forward, Interior Secretary Ken Salazar said on Dec. 10. Salazar, who spoke at a briefing during the 15th Conference of the Parties to the UN Framework Convention on Climate Change summit, also reiterated that confronting climate change is a key plank of President Obama%26#8217;s plans, and he said the government is studying ways to help vulnerable parts of the country adapt to climate change. Salazar listed an emphasis on renewable energy, carbon capture and storage technology, and adaptation as the three key parts of the country%26#8217;s strategy to confront climate change. %26nbsp;

The comments by Salazar reinforce the fact that renewable fuel technology is a high priority for the Obama Administration. It also reinforces the Evolution Fuels perspective that the production of renewable fuels is a viable alternative over the long term, with the US ultimately needing more domestically produced renewable fuels to steer the country away from its dependence on foreign oil.

New Report Shows Significant Reduction in GHGs from Biofuels

Thu, 17 Dec 2009 12:00:00 GMT

A new study shows that world biofuels production in 2009 has reduced greenhouse gas emissions by 123.5 million tonnes. The figure represents an average reduction of 57 percent compared with the emissions that would have occurred from the production and use of equal quantities of petroleum fuels. The report was prepared by (S%26amp;T)%26#178; Consultants Inc.%26nbsp;

The report also claims that worldwide biofuels produced in 2009 are displacing 1.15 million barrels of crude oil per day, which creates around 215 million tonnes of GHG emissions annually. In addition, worldwide production of approximately 19 billion gallons reduces GHG emissions by 87.6 million tonnes.%26nbsp;

Forecasted global production of biodiesel of approximately 4 billion gallons would reduce GHG emissions by 35.9 million tonnes. In total, the combined worldwide production numbers of ethanol and biodiesel are estimated to reduce GHG emissions by 123.5 million tonnes, according to the report.

EIA Forecasts Shift in Energy Mix Toward Renewable Fuels

Tue, 15 Dec 2009 12:00:00 GMT

In its long-term outlook released on Dec. 14, the Department of Energy's Energy Information Administration (EIA) forecast that US energy consumption will increase 14 percent by 2035. At the same time, the US will become less reliant on oil and other fossil fuels to meet its energy needs. The EIA forecast that, over the next 25 years, the fossil fuel share of US energy demand will fall from the current 84 percent to 78 percent. Ethanol is expected to account for 17 percent of US gasoline consumption by 2035. The EIA also forecast that there will be greater vehicle fuel efficiency and an increase in biofuels that will reduce net oil imports from a peak of 60 percent in 2005-2006 to 45 percent in 2035, with fuel consumption growing from 19 million barrels per day in 2008 to 22 million barrels per day in 2035, with almost all of that increase from biofuels. The EIA also said that the US will rely more on solar, wind and other renewable energy sources to meet its energy needs. Renewables share of electricity generation will show the biggest percentage growth (from 9 percent in 2008 to 17 percent in 2035, based on renewable incentives in more than half the states). This will come as policies will stress energy efficiency and alternative fuels at the same time that energy prices are higher. Altogether, the EIA sees this as combining to shift the energy mix toward renewable fuels.

Harkin, National Biodiesel Board Voice Support for Biodiesel Tax Credit Extension

Tue, 15 Dec 2009 12:00:00 GMT

Sen. Tom Harkin (D-Iowa) and the National Biodiesel Board (NBB) separately have expressed support for an extension of the current biodiesel tax credit. Harkin asked the bipartisan leadership of the Senate Finance Committee to craft an extension of the credit as soon as possible. %26#8220;An extension that isn't enacted until sometime in the spring of 2010, even if it is retroactive to Jan. 1, 2010, will be far less effective in supporting the continued production of biodiesel by many of these plants because of their urgent need for continuity of this tax credit,%26#8221; Harkin said in a letter to Chairman Max Baucus (D-Mont.) and the committee's ranking member Sen. Charles Grassley (R-Iowa).%26nbsp;

Meanwhile, NBB, the industry's trade association, released a study dated Dec. 3 that underscored the adverse consequences of a lapsed credit. According to the study, without the tax credit, the price of biodiesel would be insufficient to provide a positive return over variable costs and the biodiesel industry could be expected to collapse. The NBB study concludes that this would have several notable adverse economic impacts including:

A loss of jobs and income;
Increased demand for petroleum diesel and a degradation of energy security;
Lower demand for soybean oil and soybeans for crushing leading to lower soybean prices and a negative impact on farm income;
Stranded investment as biodiesel capacity is idled; and
Lost tax revenue for states and local governments.

%26#8220;Biodiesel production is consistent with an energy policy that values the creation of green jobs and the displacement of petroleum with domestically produced, low carbon fuel,%26#8221; Manning Feraci, NBB's vice president of federal affairs, said in a news release. %26#8220;Action by Congress to extend the incentive before the end of the year is absolutely necessary if we as a nation are to continue realizing the benefits of domestic biodiesel production.%26#8221;%26nbsp;

NBB previously had supported companion legislation (HR 4070, S 1589) that would have provided a five-year extension of a restructured biodiesel tax credit. The credit would have shifted from a %26#8220;blender%26#8221; credit given for blending biodiesel with petroleum diesel fuel to a production credit. NBB also said it will continue to push for a multi-year extension of a production-based biodiesel tax credit in the future.%26nbsp;

The House on Dec. 9 approved the Tax Extenders Act of 2009 (HR 4213), including a one-year extension, through Dec. 31, 2010, of the biodiesel tax incentive. An aide to Sen. Baucus said the chairman is focused on finishing the extenders bill this year after the Senate ends work on the health care overhaul. While some say Congress could delay resolution of the extenders issue, given that most of the provisions can be extended retroactively, any delay certainly would negatively impact biodiesel facilities and investments.

DOE Announces National Laboratory Funding for Clean, Efficient Energy Research

Thu, 10 Dec 2009 12:00:00 GMT

The Department of Energy recently announced $104.7 million in funding from the American Recovery and Reinvestment Act for eight new projects to establish critical research and testing facilities at seven Department of Energy National Laboratories. The projects will support the development and improvement of clean energy and efficiency technologies of strategic national interest. Specifically, the funding will go toward reducing the production cost of carbon fiber manufacturing, to help in reducing the weight of vehicles; improved efficiency and lower costs for car batteries; and net-zero energy building technologies. This effort will leverage the combined intellectual and technical resources of the DOE National Laboratories to support technologies that will help transform the economy and create jobs, while decreasing carbon emissions.%26nbsp;

Projects announced have been selected in three areas:

Carbon Fiber Manufacturing and Processing Technologies: Carbon fiber is a light-weight, high-strength material that has the potential to revolutionize the automobile and wind industries. Low-cost carbon fiber is critical to reducing the weight of vehicles and thereby raising their fuel efficiency, while maintaining the strength and safety found in steel autobodies.
Advanced Battery Prototype Fabrication and Testing Facilities: Energy storage technologies, especially batteries and electric drive components, are critical in enabling technologies for developing advanced, fuel-efficient vehicles and meeting the Administration%26#8217;s goal of putting 1 million Plug-In Electric Vehicles on the road by 2015.
Development of Integrated Building Systems: Buildings account for 40 percent of carbon emissions in the United States. Net-zero energy buildings %26#8211; those that generate as much energy as they use on an annual basis through high efficiency and on-site renewable energy generation %26#8211; are a key way to address and reduce these emissions. New laboratory facilities will develop the technologies and design approaches that enable net-zero energy buildings (N-ZEB) at low incremental cost.

%26nbsp;

Laboratories selected for funding include:

Oak Ridge National Laboratory (Oak Ridge, Tenn.) will receive $34.7 million for carbon fiber manufacturing and processing to construct the Carbon Fiber Technology Center. The center will investigate novel manufacturing processes and alternative feedstocks in order to lower the cost of carbon fiber from the current $10 to $20 per pound to under $5 per pound. Oak Ridge also will receive $20.2 million to develop an Integrated Net-Zero Energy Buildings Research Laboratory that includes a commercial building field research platform.
Lawrence Berkeley National Laboratory (Berkeley, Calif.) will receive $15.9 million to build and operate a National User Facility for Net-Zero Energy Buildings Research that will contain a series of coordinated integration test beds that address key technical challenges for net-zero energy buildings.
National Energy Technology Laboratory (Morgantown, W.Va.) will receive $13.9 million to construct a 35,000-square-foot Performance Verification Laboratory to perform nearly 17,000 verifications tests per year on a broad range of residential and commercial appliances.
Argonne National Laboratory (Argonne, Ill.) will receive $8.8 million to construct three battery research and development facilities: a Battery Prototype Cell Fabrication Facility, a Materials Production Scale-Up Facility, and a Post-Test Analysis Facility.
Idaho National Laboratory (Idaho Falls, Idaho) will receive $5 million to establish a High Energy Battery Test Facility. The High Energy Battery Test Facility will possess capabilities that will enable development of low cost batteries that meet real world performance requirements.
Sandia National Laboratories (Albuquerque, N.M.) will receive $4.2 million to modify and enhance its Battery Abuse Testing Laboratory. Abusive testing includes such conditions as over charging, over discharge, short circuits, fire and external heat exposure. The improved battery abuse testing facilities will possess capabilities critical for developing low cost batteries that meet real world performance requirements.
National Renewable Energy Laboratory (Golden, Colo.) will receive $2 million to establish a Battery Thermal and Life Test Facility. The Battery Thermal and Life Test Facility will enable researchers to develop lower cost, more robust battery thermal management systems and battery designs.

House Approves One-Year Extension of Biodiesel Tax Incentive

Thu, 10 Dec 2009 12:00:00 GMT

The House on Dec. 9 approved the Tax Extenders Act of 2009 (HR 4213), including a one-year extension, through Dec. 31, 2010, of the biodiesel tax incentive. However, the bill faces an uncertain outlook in the Senate. Representatives passed the extenders bill by a vote of 241-185, largely along party lines.%26nbsp;

The biodiesel tax incentive currently is set to expire on Dec. 31, 2009, and proponents of the extension say production will cease if the tax incentive is not extended. %26#8220;Uncertainty relating to federal policy that is vital to the industry%26#8217;s survival is sending inconsistent signals to the marketplace and undermining investor confidence in the industry,%26#8221; according to the American Soybean Association. ASA members soon will visit Washington to press the Senate into taking similar action. %26nbsp;

The White House supported the overall bill and said the extension of the tax credit for biodiesel and renewable diesel would provide "clean energy companies with the certainty they need to make critical investments in the nation's energy future." The bill would provide around $31 billion in tax breaks through one-year extensions of more than 40 provisions that are scheduled to expire at the end of the year.%26nbsp;

An aide to Senate Finance Committee Chairman Max Baucus (D-Mont.) said the chairman is focused on finishing the extenders bill this year after the Senate ends work on the health care overhaul. While some say Congress could delay resolution of the extenders issue, given that most of the provisions can be extended retroactively, any delay would negatively impact biodiesel facilities and investments.

DOE, USDA ANNOUNCE $600+ MILLION INVESTMENT IN ADVANCED BIOREFINERY PROJECTS

Tue, 08 Dec 2009 12:00:00 GMT

Nineteen integrated biorefinery projects will receive up to $564 million from the American Recovery and Reinvestment Act (ARRA) to accelerate the construction and operation of pilot, demonstration and commercial scale facilities. Collectively, these projects will be matched with more than $700 million in private and non-Federal cost-share funds, for total project investments of almost $1.3 billion. USDA and the DOE announced the projects (in 15 states) that will validate refining technologies and help lay the foundation for full commercial-scale development of a biomass industry in the US. The projects selected will produce advanced biofuels, biopower and bioproducts using biomass feedstocks on a pilot, demonstration and full commercial scale. The projects selected are part of the ongoing effort to reduce US dependence on foreign oil, spur the creation of the domestic bio-industry and provide new jobs in many rural areas of the country. The biofuels and bioproducts produced through these projects will displace petroleum and accelerate the industry's ability to achieve production targets mandated by the federal Renewable Fuel Standard. These investments will help close the gap between the production from the small number of biorefineries currently in operation and the aggressive Renewable Fuel Standard goals for cellulosic and advanced biofuels.

The following are the pilot-scale projects awarded:

Algenol Biofuels Inc. $25 million to make ethanol directly from carbon dioxide and seawater using algae; the Freeport, Texas, facility will have the capacity to produce 100,000 gallons of fuel-grade ethanol per year.
American Process Inc. $18 million to produce fuel and potassium acetate using processed wood generated by a hardboard manufacturing facility; the pilot plant in Alpena, Mich., will have the capacity to produce up to 890,000 gallons of ethanol and 690,000 gallons of potassium acetate per year, starting in 2011.
Amyris Biotechnologies, Inc. $25 million to produce a diesel substitute through the fermentation of sweet sorghum. The Emeryville, Calif., plant also will have the capacity to produce lubricants, polymers and other petro-chemical substitutes.
Archer Daniels Midland. $24.8 million to use acid to break down biomass, which can be converted to liquid fuels or energy; the Decatur, Ill., facility will produce ethanol and ethyl acrylate and also will recover minerals and salts from the biomass that then can be returned to the soil.
ClearFuels Technology Inc. $23 million to produce renewable diesel and jet fuel from woody biomass by integrating ClearFuels' and Rentech's conversion technologies; the Commerce City, Colo., facility also will evaluate the conversion of bagasse and biomass mixtures to fuels.
Elevance Renewable Sciences. $2.5 million to complete a preliminary engineering design for a future facility producing jet fuel, renewable diesel substitutes and high-value chemicals from plant oils and poultry fat, in Newton, Iowa.
Gas Technology Institute. $2.5 million to complete a preliminary engineering design for a novel process to produce green gasoline and diesel from woody biomass, agricultural residues and algae, in Des Plaines, Ill.
Haldor Topsoe, Inc. $25 million to convert wood and green gasoline by fully integrating/optimizing a multi-step gasification process; the pilot plant in Des Plaines, Ill., will have the capacity to process 21 metric tons of feedstock per day.
ICM, Inc. $25 million to modify an existing corn-ethanol facility in St. Joseph, Mo., to produce cellulosic ethanol from switchgrass and energy sorghum using biochemical conversion processes.
Logos Technologies. $20.4 million to convert switchgrass and woody biomass into ethanol using a biochemical conversion process, in Visalia, Calif.
Renewable Energy Institute International. $19.98 million to produce high-quality green diesel from agriculture and forest residues using advanced pyrolysis and steam reforming; the pilot plant in Toledo, Ohio, will have the capacity to process 25 dry tons of feedstock per day.
Solazyme, Inc. $21.77 million to validate the projected economics of a commercial-scale biorefinery producing multiple advanced biofuels; the project in Riverside, Penn., will produce algae oil that can be converted to oil-based fuels.
UOP LLC. $25 million to integrate existing technology from Ensyn and UOP to produce green gasoline, diesel and jet fuel from agricultural residue, woody biomass, dedicated energy crops and algae, in Kapolei, Hawaii.
ZeaChem Inc. $25 million to use purpose-grown hybrid poplar trees to produce fuel-grade ethanol using hybrid technology; additional feedstocks such as agricultural residues and energy crops also will be evaluated in the pilot project, in Boardman, Ore.

The following are the demonstration-scale projects awarded:

BioEnergy International LLC. $50 million to biologically produce succinic acid from sorghum; the process being developed in Lake Providence, La., displaces petroleum-based feedstocks and uses less energy per ton of succinic acid produced than its petroleum counterpart.
Enerkem Corp. $50 million for project that will be sited an existing landfill in Pontotoc, Miss., and use feedstocks such as woody biomass and biomass removed from municipal solid waste to produce ethanol and other green chemicals through gasification and catalytic processes.
INEOS New Planet BioEnergy, LLC. $50 million to produce ethanol and electricity from wood and vegetative residues and construction and demolition materials; the facility in Vero Beach, Fla., will combine biomass gasification and fermentation and will have the capacity to produce 8 million gallons of ethanol and 2 megawatts of electricity per year by the end of 2011.
Sapphire Energy, Inc. $50 million to cultivate algae in ponds that ultimately will be converted into green fuels, such as jet fuel and diesel, using the Dynamic Fuels refining process, in%26nbsp; Columbus, New Mexico.

The following is increased funding to an existing biorefinery project:

Bluefire LLC. $81 million to construct a facility that produces ethanol fuel from woody biomass, mill residue and sorted municipal solid waste; the Fulton, Miss., facility will have the capacity to produce 19 million gallons of ethanol per year.

Legislation Would Expand Definition of Cellulosic Biofuel to Include Algae-Based Biofuel

Mon, 07 Dec 2009 12:00:00 GMT

Legislation introduced sponsored by Rep. Harry Teague (D-N.M.) would make algae-based biofuels eligible for the same tax incentives available for cellulosic biofuels producers. HR 4168 would expand the $1.01-per-gallon cellulosic biofuels income tax credit that currently is given to any liquid fuel produced from any lignocellulosic or hemicellulosic matter available on a renewable fuels basis and meets EPA requirements and make it available to cover algae-based biofuels. (The cellulosic biofuels tax credit was included in the 2008 farm bill and expires on Dec. 31, 2012.) H.R. 4168 also would extend the capital investment tax incentive for cellulosic biofuel property to include equipment used to produce algae-based biofuels. The provision, included in an October 2008 economic bailout package, allows taxpayers to immediately write-off 50 percent of the cost of facilities that produce cellulosic biofuel facilities if such facilities are placed in service before Jan. 1, 2013.%26nbsp;

The House bill is endorsed by the Biotechnology Industry Organization, the Algal Biomass Organization, the Southwestern Biofuels Association, Sapphire Energy and Algenol Biofuels. The House bill is co-sponsored by Reps. Brian Bilbray (R-Calif.), David Dreir (R- Calif.), Raul Grijalva (D-Ariz.), Ben Lujan (D-N.M.) and Jay Inslee (D-Wash.). Its companion in the Senate is S. 1250 introduced in June by Sen. Bill Nelson (D-Fla.).

EPA Provides Funding for Cleaner US School Bus Fleet, Includes Use of Cleaner-Burning Fuels

Fri, 04 Dec 2009 12:00:00 GMT

The federal stimulus package approved this year earmarked roughly $6 million to the cause of cleaning up the nation's aging fleet of school buses. Researchers have linked diesel exhaust from older buses with asthma, heart disease and cancer, and studies have found that pollution inside the buses can be worse than levels found outside on the street. To help cut down on this pollution, the EPA has established goals to fuel them with cleaner-burning fuels, eliminate unnecessary idling, update buses with better emission controls, and to replace the oldest buses in the fleet with new, cleaner models.

%26nbsp;

Overall, the stimulus allotted the National Clean Diesel Campaign (NCDC) a total of $300 million. Of that, the National Clean Diesel Funding Assistance Program received $156 million to fund competitive grants across the nation. The stimulus package also included $20 million for the National Clean Diesel Emerging Technology Program grants and $30 million for the SmartWay Clean Diesel Finance Program grants.

%26nbsp;

Some of the school bus upgrade programs include:

%26#183;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; School buses in St. Louis, Mo., are being retrofitted with crankcase ventilation filters to capture diesel emissions and keep pollution out of passenger cabins.

%26#183;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; In South Dakota and Mississippi, older buses are being replaced with cleaner models, while others are being fitted with new heaters to reduce toxic emissions and conserve fuel.

%26#183;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; In Michigan, eight neighboring districts are receiving two hybrid electric buses and 10 new buses that meet 2010 emission standards, while another 41 buses are being retrofitted with particulate filters and closed crankcase controls.

%26#183;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; In San Diego, all but 7 of the 519 buses serving the city's unified school district have been retrofitted with advanced diesel particulate filtration.

%26#183;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp;%26nbsp; The National School Transportation Association received $2.4 million over the summer to replace 98 older buses in Wisconsin and install 26 new heaters on buses in four districts Minnesota.