Why popcorn prices are going up.

Popcorn price are on the rise at movie theaters around the country. According to several articles that I have seen over the last month and another one today, the rise in popcorn prices is due to the demand that ethanol has put on the corn crop. As one article put it.

As a consequence of booming demand for alternative fuels, farmers are replanting acres of popcorn with more profitable crops that go into ethanol and other biofuels.

This has, in their opinion, caused prices to go up dramatically.

Prices went up about 40 cents this winter at the Saginaw 8 and Quad complex in Kochville Township, putting the popular medium tub at $4.50, said Shift Manager Josh R. LaFond.

That is about a 10% increase and it is because the price of popcorn from suppliers has gone up.

At the Hemlock-based Lloyd C. Zastrow Wholesale Popcorn and Supplies, which supplies the Court Theatre in Saginaw, the cost of a 50-pound bag rose to $16 from $15, said Joyce Zastrow, a Michigan Farmers Hall of Famer with her husband, Lloyd, since 2006.

At $16 for a 50 pound bag, that equates to 31 cents per pound. There would have to be a lot of popcorn in a medium tub for it to go up by 40 cents just based on the cost of popcorn.

Another article offers some additional insight.

But if audiences worry that movie snacks are too expensive, they need to know that those $5 buckets of popcorn are what keeps the average national admission price around $7.

"If we didn't charge as much for concessions as we did, the tickets to the movies would cost $20," said Mike Campbell, chairman and chief executive of Regal Entertainment Group, the nation's largest theater chain with 6,300 screens.

Concession sales are a theater's lifeblood, accounting for as much as 45 percent of profits at the nation's largest chains. Popcorn offers one of the biggest returns on investment for exhibitors, because the unpopped kernels used to make a bucket of popcorn cost just a few pennies.

So although the cost of popcorn has gone up, the amount of popcorn in a $4.50 tub would still only be a very small percentage of the final price. In this way, theaters are using the money gained from high profit items to cover other costs of operations.

That would also mean that as these other costs of operation, such as labor, electricity bills, etc. rises, the amount of profit from high profit items such as popcorn would need to rise as well. And that has nothing to do with ethanol.

Update : 5/28/08

A recent article in Advertising Age added a unique perspective on this situation.

And the price of the paper pulp to produce popcorn tubs has jumped 40% in the past 36 months, making the tub more expensive than the corn inside it.

Bad Wheat Ideas

The Retail Bakers of America (RBA) have urged congress to help with wheat prices.

A group of the nation's flour millers and bakers came to Washington, D.C., during the second week of March to seek some relief to the problem of high wheat prices and relatively short supply.

Their suggestions were to curb wheat exports until domestic needs were fulfilled and to allow land in the Conservation Reserve Program to be released without penalty.

Cutting back on exports would indeed lower wheat prices. Since half the wheat that is produced in this country is exported it would essentially cut demand in half. That would serve to lower wheat prices in the short term.

But faced with less demand and lower prices, farmers would simply switch to other crops that offered higher returns. So although prices may come down in the short term, in the long term it would lead to lower production and even higher prices.

This years winter wheat crop is larger than last years by over 1.6 million acres. Farmers are already responding to increased wheat prices by increasing production.

This years spring wheat crop has not been planted yet. The RBA better hope that the mere threat of limiting exports isn't enough to scare prospective wheat farmers into switching to other crops

Mixing Dry Materials With Wet Ethanol Byproducts Increases Storage Life

Wet byproducts from ethanol production are tricky to store for later use as cattle feed because of their high moisture content and threat of spoilage, but mixing them with drier, bulkier feeds improves storability, according to University of Nebraska-Lincoln research.

UNL animal scientists have just completed research that devised formulas for mixing several widely available dry forages with wet distillers grains. Their findings could help feedlot managers and cow-calf producers purchase wet distillers grains during the summer when their plentiful supply can mean lower prices and safely store them for use later in the season, or for winter feeding.

The relatively short shelf life of wet distillers grains has been a key obstacle to their use as feed in some situations, said Galen Erickson, a UNL beef nutritionist. Feedlots need to have the material delivered frequently and use it within a few days to avoid spoilage; for smaller operations, that's not economically feasible. Cow-calf operators, meantime, have greatest use for the feed during the winter, but that's when supplies tend to be lower than during the summer.

Full Article
Study Main Page

Small scale biodiesel could fuel your truck and feed your cows

Billings, Mont. - Advocates for sustainable, small-scale biodiesel released a study today to provide ranchers with nutritional information about using oilseed meal byproducts from biodiesel production from crops in the Northern Great Plains.

In the study, Biodiesel Benefits for Cattle Producers: Feeding Byproducts of Biodiesel Production, Dr. Greg Lardy, Associate Professor of Animal Science, North Dakota State University, reviewed data regarding the nutritional value of biodiesel byproducts as feedstuffs for cattle on ranches in the Northern Great Plains. Lardy prepared the report for the Western Organization of Resource Councils. The study did not examine the economic feasibility of biodiesel production.

Lardy found use of oilseed meal byproducts in beef cattle operations would be relatively easy.

“Oilseed meals can be used as a feedstuff in a wide variety of beef cattle nutrition applications,” Lardy said. “They are best suited for use as protein supplements in wintering diets for beef cows or in growing and finishing diets for beef calves.” In the study, he analyzed the compatibility of incorporating oilseed meals generated as a byproduct of small scale biodiesel extrusion processors into the nutritional strategy of a 300 cow ranch.

According to the report, potential oilseed crops in the region for biodiesel production include soybeans, sunflowers, safflower, mustard, camelina, and canola. Camelina, sunflower, and canola have the greatest oil content.

Montana rancher Jeanne Charter, representing WORC and the Northern Plains Resource Council, said farm-scale and community-scale providers could manufacture biodiesel and supply a good nutritional supplement to ranch and pasture fed cattle during the fall and winter seasons, when grasses are dormant and of lower nutritional value.

“We see potential for the ranching industry in cooperation with area growers to become more energy self sufficient while adding value to our beef before shipping it out of state,” Charter said.

Charter feeds safflower oil meal to her cattle on her ranch near Shepherd, Mont.

Gene Wirtz, a North Dakota wheat grower representing the Dakota Resource Council, noted that small scale biodiesel producers need to find markets for oilseed meal byproducts.

“This kind of technology brings farmers and ranchers together,” Wirtz said. “Farmers can grow it. Ranchers can feed it. They can jointly manufacture, process, and use the fuels.”

The Biodiesel Benefits report is available here. Print copies are available from WORC, 406-252-9672.

WORC is a network of conservation and family agriculture organizations in Colorado, Idaho, Montana, North Dakota, Oregon, South Dakota, and Wyoming.

Members of Dakota Resource Council use grassroots actions to influence public opinion and shape public policy to protect agriculture, natural resources, livelihoods and community well-being.

Northern Plains Resource Council is a grassroots conservation and family agriculture group that organizes citizens to protect Montana's water quality, family farms and ranches, and our unique way of life.

New Study: No Link Between DDGs and E. Coli

A new study produced by Kansas State University and funded by the Kansas Beef Council and the National Cattlemen's Beef Association has found no correlation between feeding distillers dried grains (DDGs) and E. Coli.

Unlike our previous studies, we found no evidence to indicate that dietary inclusion of distiller’s grains or corn processing methods have a significant effect on the prevalence E. coli O157 or Salmonella in cattle feces.

Since these are the same researchers that released this study just a few months ago that brought this whole issue to the forefront, it is nice to see these new results. And although I don't think that this study is going to end the debate, it does show that there is good reason to doubt the original findings and to hold off passing judgment until a larger, more thorough study can be completed.

Biofuels Keeping Gasoline Prices Lower

Francisco Blanch, a commodity specialist for Merrill Lynch, today told The Wall Street Journal that as a result of increased biofuels output, oil and gasoline prices today are about 15 percent lower than they would be otherwise. According to the story, without biofuels, oil prices today would likely be around $115 a barrel instead of around $102. Instead of an average U.S. gasoline price of $3.25 a gallon, without biofuels, the average would likely be more than $3.70 a gallon.

According to the story, global production of biofuels is rising annually by the equivalent of about 300,000 barrels of oil a day. However, the growing global demand for oil last year rose by about 900,000 barrels a day. Fatih Birol, the chief economist of the International Energy Agency, told the Journal that biofuels are playing “a critical role” in helping meet the world’s demand for energy. He said that without biofuels, “it would be much more difficult to balance global oil markets.”

Source : IFB Ethanol Blog

Ethanol and Fuel Mileage

There is an article in the news that talks about ethanol's effect on fuel mileage.

Because ethanol does not combust as hot as gasoline, it takes more ethanol to create the same amount of energy, according to Earl Baker, AAA Auto Repair. “You can get anywhere from one to four miles less per gallon with an ethanol blended fuel.”

While it is true that ethanol contains less energy than gasoline, to lose 4 miles per gallon the vehicle would have to be getting over 100 miles per gallon on pure gasoline.

According to a NorthWest Cable News analysis, a car that averages 30 miles per gallon would spend $11.66 on a 100 mile trip if gas costs $3.50 a gallon. The same trip using the ethanol, or E10 blend, could cost up to $13.46. Over an average driving year, about 12,000 miles, a motorist could pay up to $215 more for using E10 gasoline when compared to regular fuel.

From checking the math, the comparison is against a vehicle getting 26 miles per gallon on E10, suggesting a loss of over 13% in fuel efficiency. Like I said, ethanol contains less energy than gasoline, but for a 10% blend of ethanol to cause a 13% loss in fuel mileage, ethanol would have to have negative energy. And I am pretty sure that outside of the realm of Star Trek that isn't possible.

I think that it is safe to say that the American Petroleum Institute (API) is no fan of ethanol and that when they publish material relating to ethanol you can normally expect it to be the most negative information available. In their ethanol backgrounder here is what they have to say about ethanol's fuel economy.

Fuel Economy: The heating value of neat ethanol is two thirds of that for typical gasoline. For gasoline blends containing 10% by volume ethanol, the heating value is about 3.4 percent lower than for a typical gasoline. (1) This difference in heat content is reflected in a small loss in fuel economy performance for vehicles operated on gasoline-ethanol blends. Based on measurements made by the Auto/Oil Air Quality Improvement Research Program, the fuel economy loss for a fleet of model year 1989 vehicles operated on gasoline containing 10% by volume ethanol was 2.6% (33). Recent data published by the Coordinating Research Council on a fleet of 12 California-certified model year 2001-2003 cars and light trucks suggests that the fuel economy penalty for 10% by volume ethanol blend is on the order 1.4%. (27)

So, if we use the number the API suggests of a 2.6% loss that would mean that a vehicle that would normally get 30 miles per gallon with gasoline would get about 29.25 miles per gallon with E10. A loss of about .75 miles per gallon.

Factor in the savings from using ethanol blended fuels and the cost per mile should be about the same for both fuels.

Researchers in Brazil turn glycerin into propane

Researchers in Brazil have developed a method to turn glycerin, the coproduct of biodiesel production, into green propane.

"Green propane" already exists -- the raw material of many plastic products -- and its patent belongs to a partnership between the governmental enterprise Nova Petroquimica and the Federal University of Rio de Janeiro (UFRJ), which is opening the way for replacing the petroleum derivatives used in the plastics industry.

"We have glycerin available in sufficient quantities" to develop this "sustainable path", Pedro Bóscolo, technology manager of the company, told Tierramérica.

With process in place they are looking at the steps to prove it's commercial viability.

With the product patented, its current phase is to develop a pilot plant at UFRJ, followed by a slightly larger plant at Nova Petroquimica, before launching large-scale production in 2013.

Just as the ethanol industry relies on the sale of coproducts to make the overall production economical, biodiesel production has relied on the sale of glycerin to make biodiesel profitable. But as biodiesel production has increased so has the supply of glycerin, pushing down prices and straining the economics of the industry.

That is why there is a big push by the biodiesel industry to create a product that adds value to glycerin. And if this process proves successful it could help to shore up the economics of the industry and lower biodiesel prices for consumers.

PetroSun Issues Algae-to-Biofuels Corporate Updates

SCOTTSDALE, AZ--(Marketwire - March 24, 2008) - PetroSun, Inc announced today the following corporate updates.

The Rio Hondo, Texas algae farm will commence operations on April 1, 2008 as PetroSun's initial commercial algae-to-biofuels facility. The current algae farm consists of 1,100 acres of saltwater ponds that the Company projects will produce a minimum of 4.4 million gallons of algal oil and 110 million pounds of biomass on an annual basis. The Company has dedicated 20 acres of ponds for a proposed algae derived JP8 jet fuel research and development program.

The Rio Hondo algae farm will be expanded in the future to provide the feedstock required by present or proposed company owned or joint ventured biodiesel and ethanol refineries. The Company plans to construct or acquire additional plants in the Gulf Coast region that are reachable via barge up the Mississippi River and its tributaries including the Red River. The previously announced Bridgeport, Alabama refinery will receive algal oil feedstock from this distribution program.

"Our business model has been focused on proving the commercial feasibility of the firms' algae-to-biofuels technology during the past eighteen months," stated Gordon LeBlanc, Jr., CEO of PetroSun. "Whether we have arrived at this point in time by a superior technological approach, sheer luck or a redneck can-do attitude, the fact remains that microalgae can outperform the current feedstocks utilized for conversion to biodiesel and ethanol, yet do not impact the consumable food markets or fresh water resources."

About PetroSun

PetroSun's operations include oil and gas exploration, development and production and algae-to-algal oil alternative fuels production. The oil and gas division is focused on the exploration of the Holbrook Basin of Arizona, the San Juan Basin of New Mexico and Australian based prospects. The Company will continue the development of oil and gas reserves in Louisiana. The alternative fuels division has entered the commercial stage of its algae-to-biofuels production technology. The Company plans to establish algae farms and algal oil extraction plants in Alabama, Arizona, Louisiana, Mexico, Brazil and Australia during 2008. The algal oil product will be marketed as feedstock to existing biodiesel refiners and planned company owned refineries. PetroSun is headquartered in Scottsdale, Arizona with field offices in Shreveport, Louisiana and Rio Hondo, Texas. For more information about PetroSun visit the company's website at www.petrosuninc.com.

Except historical matter contained herein, matters discussed in this news release are forward-looking statements and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect assumptions and involve risks and uncertainties, which may affect the Company's business and prospects and cause actual results to differ materially from these forward-looking statements.

Ethanol Saves Us All Money At The Pumps

Today the American Coalition for Ethanol (ACE) released a press release detailing how ethanol's use is saving motorists at the pump.

“The growing availability of ethanol across the United States is reducing the cost of gasoline by up to nine cents a gallon,” said Brian Jennings, Executive Vice President of ACE. “While gas prices are still causing pain at the pump, ethanol is alleviating some of the pressure of hundred-dollar oil. Without ethanol, gas prices would likely be even higher.”

According to recent price reports by Axxis Petroleum and the Oil Price Information Service, ethanol for blending is selling for as much as 10 to 35 cents lower than gasoline, depending on the market. Factoring in the blender’s tax credit, this means that the wholesale cost of E10 is between 6 and 9 cents less per gallon than gasoline.

“The price of gasoline isn’t rising as quickly as the price of diesel, partly due to the fact that there’s an alternative to gasoline – ethanol – that’s adding more than 2 million gallons a day to our nation’s fuel supply,” noted Ron Lamberty, ACE’s Vice President / Market Development.

While I agree with the press release, I would like to expand just a bit on how ethanol is benefiting motorists beyond the effects of ethanol's lower price.

Because of the fact that no new refineries have been built in this country since the 1970s and the fact that since that time the oil industry has consolidated and closed quite a few smaller refineries, we now have what is commonly referred to as "limited refinery capacity". In other words we don't have enough refinery capacity to meet the countries needs for refined petroleum products. And because of this we import gasoline from foreign sources to help meet demands. This tightness of supply and the additional costs associated with having to import gasoline causes increased prices at the pump.

By adding to the fuel supply, ethanol production in effect adds to the nation's refinery capacity and limits the amount of finished gasoline that has to be imported. And that saves us all money at the pump whether the gasoline we are buying contains ethanol or not.

Farmers set record straight on food costs

Next time someone jumps on farmers for getting rich while families get stuck buying $3.75 gallons of milk, tell them corn growers make about 16 cents (4 percent of the purchase price) for that gallon.

Then tell them labor and energy costs higher up the production chain account for nearly 60 percent ($2.18) of that price. The rest comes from a combination of other costs, like marketing and stocking at the store, equipment depreciation and plastics at the plant, not to mention a skyrocketing international demand for food and energy as East Asian countries develop sophisticated free-market economies.

Then tell them input costs for farmers, in some instances, are growing as fast or faster than its trading price, which happens to be at a near record high of $5.07 per bushel, though adjusted for inflation, it's not as high as it was in the late 1970s.

The complex interplay of market forces on the price of home-grown commodities, and the relatively small take for the average farmer, is a picture the Lee County Farm Bureau tried to paint, as it served up 50-cent meals at its Farmer's Cost Breakfast on Saturday morning at the Loveland Building in Dixon.

Full Article

Local E85 sales rising

There is an interesting story in the news this morning.

Sales of E85 fuel have steadily increased at both Longmont gas stations that are selling the alternative fuel.

No real big surprise here since E85 is quite a bit cheaper than regular gasoline at the moment. According to the Energy Information Agency (EIA) the national average for a gallon of unleaded regular was $3.284 on 3/17/08 while the Ethanol Promotion and Information Council (EPIC) is reporting the weekly average for E85 at $2.57 per gallon. And I am sure that as the price of gas gets higher sales will continue to rise.

But the part that I found most interesting is the percentage of E85 sales.

Sales of E85 now make up about 10 percent of the store’s total fuel sales, excluding diesel, Shellhorse said. That’s up from the first month, when E85 sales made up about 1 1/2 percent.

Since Flex Fueled Vehicles only make up about 3% of the total light duty vehicles on the road, simply converting existing customers to E85 should only net about 3% of sales. To reach 10% of sales, E85 must be drawing new customers to the station. Bet the competition hates that.

Iowa State researchers developing system to efficiently convert biomass to ethanol

AMES, Iowa -- Iowa State University researchers are developing an integrated system of thermochemical and catalytic technologies to efficiently produce ethanol from plant biomass.

The U.S. Department of Agriculture and the U.S. Department of Energy recently announced they'll support the research with a two-year grant of up to $944,899. The departments are awarding $18.4 million over three years to 21 universities and companies for biomass research, development and demonstration projects.

"These grants help fund the innovative research needed to develop technologies and systems that lead to the production of bio-based products and biofuels," said Ed Schafer, the U.S. secretary of agriculture.

"Increasing supplies of renewable energy and using more energy efficient technologies must continue to play an indispensable role in reducing greenhouse gas emissions and meeting the rapidly growing demand for energy," said Samuel Bodman, the U.S. secretary of energy.

Victor Lin, a professor of chemistry and director of the Center for Catalysis, will lead the Iowa State project. The project also includes Robert C. Brown, the Iowa Farm Bureau Director of the Bioeconomy Institute; George Kraus, the director of the Institute for Physical Research and Technology; Marek Pruski, a scientist for the Department of Energy's Ames Laboratory located at Iowa State; and Justinus Satrio, a project manager at the Center for Sustainable Environmental Technologies .

They're working to develop a biomass-to-ethanol system that would work like this: Plant biomass such as corn stalks and switchgrass would be broken down by fast pyrolysis, a process that uses heat at 900 degrees Fahrenheit in the absence of oxygen to convert biomass into a bio-oil. The bio-oil would be gasified with steam and/or oxygen at 1,100 to 1,500 degrees Fahrenheit to produce a synthesis gas, a mixture of carbon monoxide, hydrogen, carbon dioxide and short-chain hydrocarbon gases. The hydrogen and carbon monoxide in the synthesis gas would be reacted with a nanotechnology-based catalyst to produce ethanol fuel.

Lin said researchers have looked at catalysts to produce ethanol from synthesis gas for years. But there were some problems with the old chemistry and research progress has slowed since the early 1990s. The chemistry didn't produce the selective reactions necessary for efficient production. There were also issues with controlling those reactions.

But now, "With the emphasis on biomass and biorenewables, I think there will be a renaissance of this research and technology," Lin said.

His idea for a new kind of catalyst is based on solid nanospheres just 250 billionths of a meter in diameter that have honeycomb channels running through them. Lin said those channels can be loaded with a metallic catalyst and other species that can promote higher reactivity and product selectivity. The new technology, because of the nanoporous structure and the unique spatial arrangement of the catalytic components, solves some of the selectivity and control problems of the old chemistry.

Lin has already worked on the synthesis gas-to-ethanol catalyst for a year and has filed a patent application.

Satrio, of Iowa State's Center for Sustainable Environmental Technologies, called the research collaboration "a very exciting project. This is on the cutting edge of this technology."

The center's focus will be to develop a system that efficiently and economically produces clean synthesis gas that's ready to be reacted with Lin's catalyst. Center researchers will use the two thermochemical technologies (fast pyrolysis and gasification) with the goal of developing a complete conversion system that makes economic sense for the future.

Transporting biomass to fuel production plants isn't easy or cheap because of the bulk and quantities involved. The Department of Energy has estimated a biorefinery would need at least 2,000 tons of biomass per day. A year's supply would cover 100 acres with 25 feet of biomass.

The Iowa State idea calls for biomass to be transported to small, local fast pyrolysis plants that would convert the plant fiber into liquid bio-oil, Satrio said. The bio-oil would be much easier to transport to bigger, regional facilities where it could be efficiently gasified at high pressure and catalytically converted into ethanol.

The departments of agriculture and energy said the 21 research projects won grants because they can advance President George Bush's Advanced Energy Initiative. The initiative's goals are to change the way the country powers its cars, homes and businesses by increasing energy efficiency and diversifying energy sources. Funding for the projects will be provided through the departments' Biomass Research and Development Initiative.

Contacts:

Victor Lin, Chemistry and Center for Catalysis, (515) 294-3135, vsylin@iastate.edu

Robert C. Brown, Bioeconomy Institute, (515) 294-7934, rcbrown@iastate.edu

Justinus Satrio, Center for Sustainable Environmental Technologies, (515) 294-3951, jasatrio@iastate.edu

Mike Krapfl, News Service, (515) 294-4917, mkrapfl@iastate.edu

E85 For $1.85 In Newton, Iowa

With gas prices near record highs, owners of flex-fuel vehicles in Newton, Iowa will be lining up for E85 for $1.85 a gallon from 2-5 p.m. on Monday, March 24 at the Prairie Gas station. Located at 4300 S. 22nd Avenue, just off busy Interstate Highway I-80 in Newton, Iowa, the E85 promotion at Prairie Gas is one of the first of many station events and biofuel promotions expected in the upper Midwest this season.

“As gasoline and oil prices rise, so does interest in alternative fuels like E85,” said Jessica Zopf, program manager for the Iowa Clean Air Choice Team. “While many people are attracted by the price, other drivers are committed to using a less polluting, largely renewable fuel that’s made in the United States.”

The event was sponsored by the Iowa Clean Air Choice Team: General Motors, Iowa Farm Bureau, Iowa Renewable Fuels Association, Kum & Go, Iowa Corn Promotion Board, Petroleum Marketers & Convenience Stores of Iowa, Iowa Soybean Association, National Ethanol Vehicle Coalition, Iowa Biodiesel Board and American Lung Association of Iowa.

Thanks to Robert Moffitt of the American Lung Association of Minnesota for the tip.

Should We Let The Market Decide On Ethanol?

Having spent quite a bit of time debating the various issues surrounding ethanol on forums and reading many articles on ethanol, I can tell you that 'let the market decide' is a phrase that gets thrown around pretty often.

The argument is that the government should end the ethanol import tariff, blenders credit and mandates, and the free market would decide whether or not ethanol is worthy. It implies that consumers would be given a choice and ultimately the ability to decide the fate of ethanol.

The problem with this line of thinking is that so many of the stations are controlled by the oil companies, either through direct ownership or through supply agreements that limit independent stations from buying fuels from other sources. So if the oil companies weren't willing to provide ethanol to consumers, there would be no choice.

To carry the thought a little farther, have we ever had a choice as to what was in our fuel before? Did we have any choice whether lead or MTBE was in our gasoline? No, the oil companies decided to use them, and consumers had no choice.

I am all for consumer choices and from my perspective ethanol and biodiesel are the only to options that allow choice. Between home and work, I pass by 12 gas stations and only two of them sell an ethanol blend of gasoline. Two stations isn't a lot but it allows me a choice where as little as three years ago I had none at all.

Don't be fooled by this argument. It is not about consumer choices, it is about giving oil companies a choice of whether or not to use ethanol. And I think we know which way they would choose.

Celebrate National Agriculture Day

National Agriculture Day is the one day every year set aside to honor America's farmer for providing us with an abundant and affordable supply of food, fiber and most recently fuel.

National Ag Day falls on the first day of spring every year and today marks the 35th annual celebration. It is fitting that the day of year that most symbolizes hope and renewal is the day we honor the men and women that provide not only us but the world with agricultural goods.

National Ag Day website

Marathon to offer ethanol blended gasoline only at 16 Midwest terminals

Marathon Oil Corporation today announced that the Company will convert to 100 percent ethanol blended fuel (E-10 gasohol) at 16 of its Midwest terminals beginning May 1, 2008. Unblended gasoline products will no longer be available at the following terminals; Indianapolis (86th Street) and Muncie, Ind.; Louisville (Algonquin), Ky.; Detroit (Refinery Rack), Romulus, Niles (South), Bay City, Flint, Lansing and Jackson, Mich.; Brecksville, Lima, Oregon, Lebanon and Cincinnati, Ohio; and Milwaukee(Granville), Wis.

"Marathon is proud to announce that it will convert to 100 percent ethanol blended gasoline at these terminals," said Mary Ellen Peters, Marathon's senior vice president, Marketing. "Ethanol blended fuels help us meet the changing needs of our customers. It also supports our nation's renewable fuels goals, which were recently increased by the Energy Independence and Security Act of 2007 to nine billion gallons of renewable fuel in 2008 and 36.0 billion gallons by 2022."

Press Release

Food versus Fuel or Food and Fuel?

Variations of this quote can be seen everywhere.

Filling the 25-gallon tank of an SUV with pure ethanol requires over 450 pounds of corn -- which contains enough calories to feed one person for a year. - Full Article

It is an emotional plea that is meant to suggest that ethanol is taking food out of peoples mouths. But there is more to story than what the quote suggests.

The conversion of corn to ethanol creates co-products, in the case of dry mill ethanol plants the co-product is dry distillers grains (DDG), which like corn is used as feed.

From about 10 kg of corn feedstock, about 3.3 kg of DDG can be harvested that has 27% protein (Stanton, 1999).

So the amount of distillers grains that would be left after ethanol production from the 450 pounds of corn would be 150 pounds. At 27% protein content that would mean that the remaining distillers grains would contain 40.5 pounds of protein.

40.5 pounds of protein converts into 18,370 grams of protein. Since the average daily requirement for protein is .8 grams per kilogram of bodyweight, this is enough protein to satisfy the daily requirements of a 138 pound person for a year.

As you can see the situation isn't the either/or scenario that it is made out to be. Producing ethanol doesn't destroy the feed value of corn, instead it allows us to make fuel and a co-product with it's own feed value. In other words, it allows us to produce food and fuel.

Wind turbines spinning at ethanol plant

Since most of what I post on this blog are items that I find interesting, I am somewhat surprised to be doing another post on the same company mentioned in a post just three days ago. The company I am talking about is Corn Plus, located in Winnebago, Minnesota. Corn Plus was mentioned in a post on Friday since they are participating in trial of a new microwave drying system that holds the promise of lowering the energy needed for drying distillers grains.

For a long time I have been interested in any process that promises to lower the amount of energy needed to produce ethanol or uses forms of energy other than fossil fuels in the production of ethanol. And as part of that interest, a while back I compiled a list of ethanol plants that were using alternative forms of energy. Well, Corn Plus popped up on that list as well.

Corn Plus uses a couple of different technologies to lower their energy costs. They installed a fluidized bed reactor which allows them to burn biomass and reduces the amount of natural gas needed to run the plant. They also installed two 2.1 megawatt wind turbines to offset a portion of their electricity needs.

And that brings me to the point of this post. Today I ran across a news article that reports that after working through some initial electrical bugs, their wind turbines are spinning and producing electricity.

The efforts that Corn Plus is putting into lowering it's fossil fuel needs is a good example of efforts taking place across the ethanol industry to improve the efficiency of the process. And those efforts are lowering the energy costs and the amount of fossil fuels needed to produce ethanol and making a clean fuel even cleaner.

GreenFuel lands big deal for algae fuel plant

There is some news out today of another algae to biofuels deal.

GreenFuel Technologies has reached an agreement to build an algae-to-fuel plant in Europe, which could be worth as much as $92 million, according to a report.

This seems to be information that is slipping out ahead of any official announcement.

This project which will grow algae using GreenFuel's algae bioreactor system fed CO2 emissions from a power plant.

And with PetroSun announcing recently that it will start operations in Texas on April 1, 2008 of their 1100 acre open pond facility, we should have an idea pretty soon how both of these new technologies is going to work out.

Researcher working on corn varieties that need less nitrogen

Jonathan Lynch a professor of plant nutrition in Penn State's College of Agricultural Sciences has worked with colleagues around the world to develop soybean plants with better root systems that produce better yields in low phosphorus soils. Now he is using the knowledge gained from working soybean root system to develop corn varieties that are more efficient at taking up nitrogen fertilizer.

A different but related problem has recently motivated Lynch to turn his attention to the roots of corn grown in the United States and their ability to take up another vital nutrient -- nitrogen. "This is a new direction for us," he said. "We are taking what we learned about root traits that improve phosphorus acquisition from the soil and applying it to developing corn varieties that are more efficient in taking up nitrogen."

And since corn is a part of so many things that we eat, the implications of this research could be enormous.

"Corn is the single biggest crop grown in this country, and the major cost for corn farmers in the United States is buying nitrogen fertilizer," Lynch said. "Only about half of the nitrogen fertilizer applied to corn is used by the crop; the rest is wasted. If we could improve the efficiency of the corn crop by 20 percent -- that would be huge.

Developing corn varieties that more efficiently use nitrogen would mean that less fertilizer would need to be applied to reach the same yields. And since most nitrogen fertilizer comes from natural gas, the amount of energy needed to produce a corn crop would be lower. The cost of corn production and the possibility of fertilizer runoff would also be reduced.

2007 Petroleum Consumption

First let's look at domestic oil production.

2007 - 1,862,440,000 barrels
2006 - 1,862,259,000 barrels
2005 - 1,890,106,000 barrels
2004 - 1,983,302,000 barrels
2003 - 2,073,453,000 barrels
2002 - 2,097,124,000 barrels

The good news here is that domestic production actually went up for the first time in quite a few years.

Next let's look at petroleum imports.

2007 - 4,905,234,000 barrels
2006 - 5,003,082,000 barrels
2005 - 5,005,541,000 barrels
2004 - 4,811,104,000 barrels
2003 - 4,476,501,000 barrels
2002 - 4,208,538,000 barrels

We also will need to look at exports for each year as well.

2007 - 510,549,000 barrels
2006 - 480,561,000 barrels
2005 - 425,190,000 barrels
2004 - 383,636,000 barrels
2003 - 374,710,000 barrels
2002 - 359,077,000 barrels

Now to get an idea of just how much petroleum was used in each year, we need to add together domestic production and imports and subtract exports.

2007 - 6,257,125,000 barrels
2006 - 6,384,780,000 barrels
2005 - 6,470,457,000 barrels
2004 - 6,410,770,000 barrels
2003 - 6,175,244,000 barrels
2002 - 5,945,585,000 barrels

For the second year in a row the amount of petroleum consumed in this country went down. And although I am sure that there are many factors that caused the decrease, at least part of the credit should go to ethanol for lowering the amount of gasoline consumed.

The 11-month rise of 50,000 barrels a day in U.S. gasoline demand (more than half the size of a 98,000 barrels a day rise a year ago) appears to be made up entirely of higher ethanol - rather than petroleum - content in the fuel.

Ron Planting, manager of information and analysis at the American Petroleum Institute, the Washington, D.C.-based trade group, said the volume of ethanol blended into gasoline supplied to the market was up, while the volume of petroleum in the fuel was down in 2007.

Sources

Crude Oil Production
U.S. Imports by Country of Origin
Exports

Cellencor testing microwave drying for ethanol plants

New energy-saving technology being commercially-tested for ethanol plants

Cellencor’s microwave drying system is on-site at Corn Plus facility for eight days

CEDAR RAPIDS, Iowa – March 13, 2008 – Ethanol plants could significantly reduce their energy costs while at the same time increase the value of their byproducts with an exciting new technology that will begin commercial testing today in Winnebago, Minnesota. An innovative microwave drying process developed by Cellencor Corporation is being field-tested for the first time at Corn Plus, one of the largest ethanol facilities in the State of Minnesota.

A pilot system has been installed on site at Corn Plus that will operate for eight days to determine how well the Cellencor-patented technology works in conjunction with an actual ethanol plant. Interstate Power and Light Company (IPL), an Alliant Energy company, began meeting with Cellencor representatives about seven months ago and have helped the start-up firm make connections to other business partners and to Corn Plus so that they could test their cutting-edge technology.

“We are very excited about the potential of Cellencor’s microwave drying system and the dollar savings and new profit streams it could bring to ethanol plants across the country,” said Doug Litwiller, Alliant Energy Project Manager. “This technology may not only replace more expensive natural gas-fired drying processes but it could also greatly enhance the market value of an ethanol plant’s byproduct.”

The Cellencor industrial microwave drying line has been shown to be more efficient and reliable than traditional energy-intensive natural gas-fired distillers wet grain dryers in tests at Iowa State University’s BECON Facility. The experiment process line at the university also provided research on Cellencor’s enzyme-enhancemental process of an ethanol plant’s co-product – dried grains with solubles. The technology adds enzymes prior to low temperature drying, which improves the nutritional value of the co-product by ten to twenty percent. This provides higher quality feed for cattle, swine or poultry which can be sold for a higher price than what current ethanol plants receive for their co-product.

While research and testing of the technology is ongoing, initial results have been very positive. Estimates are that ethanol facilities could realize up to 20 percent or more in operating cost savings by utilizing the Cellencor industrial microwave drying process and the enzyme-enhanced dried grains with solubles. The simple payback on installing the system should be in the two to five year range but partners are hopeful that the commercial testing at Corn Plus will yield more data.

“We applaud Corn Plus for agreeing to test this process at their plant in Winnebago and we are hoping for strong results,” added Litwiller. “Corn Plus was the first in the United States to utilize a one-of-a-kind fluidized bed reactor technology at an ethanol plant and now they are helping us research another ground-breaking process.”

The basic goal of Cellencor’s microwave drying technology is to improve the bottom line for ethanol plants by significantly reducing drying energy cost, providing significant water recovery, having more reliable drying equipment and outputting higher-value animal feed. After the testing at Corn Plus, the company will refine the design of its microwave drying process and move ahead with feed trials.

About Alliant Energy

Alliant Energy is an energy-services provider with subsidiaries serving approximately 1 million electric and 400,000 natural gas customers. Providing its customers in the Midwest with regulated electric and natural gas service is the company’s primary focus. Interstate Power and Light, the company's Iowa utility subsidiary, serves approximately 530,000 electric and 235,000 natural gas customers. Alliant Energy, headquartered in Madison, Wis., is a Fortune 1000 company traded on the New York Stock Exchange under the symbol LNT. For more information, visit the company’s Web site at www.alliantenergy.com.

About Cellencor Corporation

Cellencor Corporation is a new company whose mission is to reshape the economics of the global renewable energy industry. Transformative technology will be offered to ethanol and other cellulosic energy providers that will enhance the value of ethanol production co-products; significantly reduce process energy consumption; and, dramatically reduce an ethanol plant’s carbon footprint. The company’s initial focus will be working with corn-based ethanol producers, however, the processes and technologies can be effectively used with other biomass feedstock. Cellencor Corporation will also partner with key suppliers to the renewable energy business in order to offer complete solutions that make economic, scientific, and environmental sense.

POET Launches New Website For Project Liberty

POET recently launched a new website to provide information and keep people updated on their cellulosic ethanol project called Project Liberty. Project Liberty consists of expanding an existing corn ethanol plant in Emmetsburg, Iowa to be able to process cellulosic material into ethanol. Once completed the plant will be able to produce 125 million gallons of ethanol per year, with about 25 million gallons of that being made from the corn cobs and other corn fiber.

Project Liberty Website

Valero CEO Speaks Out Against Ethanol

Valero CEO Bill Kless spoke out against ethanol at a National Petrochemical and Refiners Association conference in San Diego.

(Reuters) - Using corn to produce ethanol will make food so expensive in poor countries that it will cause more misery than global warming, the chief of the biggest U.S. refining company claimed this week.

"Corn and ethanol production and the resulting high prices will impact the world in a much more acute negative way than greenhouse gas emissions and climate change ever will," Valero Energy Corp Chief Executive Bill Klesse said on Tuesday at a refining conference in San Diego.

Many economics have noted that rising energy prices can have a larger impact on retail food prices than rising commodity prices. The report published by the Federal Reserve earlier this week outlines the extent to which energy prices effect food prices.

Historically, food prices have surged during times of higher crude oil prices. Moreover, research shows that energy prices are quickly passed through to higher retail food prices, with retail prices rising 0.52 percent in the short-term for every 1 percent rise in energy prices (Reed et al.). As a result, a 10 percent gain in energy prices could contribute 5.2 percent to retail food prices.

Given the recent pace of crude oil price increases and the fact that energy costs play into rising food costs, the attempt to shift blame away from the oil companies and on to ethanol is understandable.

But I don't think that is really what this is all about. Yeah if you read the article he is mad that the oil companies have been getting a lot of negative attention lately, but I think the real issue here is that ethanol is cutting into their profits and lowering gasoline demand. Valero's stock price has dropped by about a third since July 2007 and they are considering selling off about a third of their North American refineries.

In other words, ethanol lowered gasoline consumption in 2007, and according to the EIA petroleum consumption is expected to drop by 90,000 barrels per day in 2008, and the petroleum industry doesn't like it. And they are coming out swinging.

Pilgrim's Pride To Close Chicken Facility. Ethanol to Blame?

When I first looked through the news items today I saw this article.

DOW JONES NEWSWIRES - Pilgrim's Pride Corp. (PPC) said it will cut 1,100 jobs from closing a complex and six of its 13 distribution centers as the world's largest chicken processor struggles with the continued surge in feed costs. The company, which blamed corn-based ethanol production for the feed-cost increase, said the retrenchment is "part of a plan to curtail losses amid record-high costs for corn, soybean meal and other feed ingredients and an oversupply of chicken" in the U.S.

Notice the part about an oversupply of chicken.

Well, I thought that maybe I could find a better article to quote since this article was just the highlights of todays top stories. The next article I read didn't mention anything about an oversupply of chicken. Plenty of blame for ethanol and feed costs but not a word about any kind of oversupply situation.

So I did a search on Google News for "Pilgrim's Pride" and 138 articles came up. Next I did a search for "Pilgrim's Pride oversupply" and only 10 articles came up. So the majority of articles didn't mention anything about the oversupply. And they were all dealing with the same information since all this came from a company press release.

They say that there are two sides to every story. The problem is that today the majority of the press is only interested in telling the parts of the story that represent the situation the way that they want it to be perceived.

Researchers Isolate Hydrogen Producing Bacteria

A Team of researchers in the Indian Institute of Technology, Kharagpur has claimed of making a significant breakthrough in isolating a hydrogen-producing bacterial strain that produces 40 per cent more hydrogen than other bacterial strains.

The development is considered to be significant in the production of hydrogen gas, an efficient and clean fuel.

According to Prof Debatrata Das, who is heading the research team, Enterobacter cloacae can produce about 3.85 moles of hydrogen from one mole of the substrate, which is very close to the theoretical limit of 4 moles of hydrogen during anaerobic fermentation.

Full Article

The researchers have also used sewage as a substrate and have gotten similar results. This could be pretty important because it could mean the ability to produce fuel while at the same time disposing of a waste stream.

Ethanol's Economic Contribution

There are plenty of studies that have looked at the benefits of ethanol production on the U.S. economy. But those are just numbers and lack any kind of personal perspective.

Over the last year or so I have bookmarked several news stories that go beyond the numbers and tell the story of the people and industries that are benefiting from ethanol.

These days, the smell of money is the slightly acrid scent of fermenting corn that occasionally wafts over town.

Here in Iowa, and across a growing swath of the U.S. Midwest, making ethanol has meant a second chance for a rural economy that lives and breathes corn.

"This town was dying a slow death," said Craig Brownlee, a third-generation corn farmer from Emmitsburg, located northwest of Des Moines. "We weren't making any money and we were living off crop subsidies. Now, people are spending money like they haven't in a long time. There's a buzz around town."

Ethanol helps a small town bloom

North Dakota's booming ethanol industry is providing feed that cattle find tasty and ranchers find affordable - so far.

"The byproduct was a pretty good buy last year, but I'm not sure where they're going to price it this year," said Shawn Arndorfer, who owns a cattle feedlot near Hettinger and manages a second one near Scranton. "There's enough demand for the byproduct that I think it will probably push prices up a little bit."

The byproduct of corn ethanol production - called distillers grains - can replace some of the grain corn and protein supplements in a cow's diet. "Typically it's cheaper than the same amount of corn (and) soybean meal, whatever protein source you're using," said Greg Lardy, a beef cattle specialist with the North Dakota State University Extension Service.

"In Nebraska, South Dakota and Iowa, where they've got huge amounts of byproduct being produced, (cattle) numbers are really going up," he said.

Ethanol byproduct aiding North Dakota ranchers

The ethanol boom is helping more than farmers; it's also benefiting the nation's railroads. More than 75 percent of the ethanol produced in the U.S. is shipped by rail. In Minnesota, the state's dozen or so shortline railroads have struggled in recent years. Now ethanol is bringing them new life.

Small railroads see big ethanol future

The demand for storage space to accommodate what promises to be a plentiful corn crop is paying off for the companies that manufacture cylindrical grain bins.

Not since the early 1980s has Elevator Services & Storage Inc., in Beaverdam, Ohio, experienced such a strong demand for storage bins and grain handling equipment, said Walter Paxson, a sales manager for the company.

“This is mainly because of the ethanol boom and the additional corn production we are having,” Mr. Paxson said. His Allen County firm is nearing completion on a 425,000-square-foot silo addition to the elevator in Custar, Ohio, in Wood County.

Big corn crop a boon for silo makers

Expanding ethanol production in the US midwest is bumping up against constraints on barge capacity, an ageing fleet, and a waiting list for new units, a barge operator said on Wednesday.

"There is tremendous demand right now," Dave O'Loughlin, vice president of liquid sales at shipping firm Ingram Barge, told the National Ethanol Conference in Orlando.

US midwest ethanol bumps against barge capacity

Ethanol production provides economic benefits that are far wider reaching than just employment in ethanol plants or farmers benefiting from higher corn prices. Ethanol is providing benefits and jobs in supporting industries across the country. At a time when the national economy seem to be slowing, these benefits should not be ignored.

What is Driving Food Price Inflation?

The Federal Reserve Bank of Kansas City released a report today on the factors driving food price inflation. The report noted that commodity prices driven by expanding biofuels usage have had an effect on certain items but that the marketing cost (the difference between the farm value and consumer spending for food at grocery stores and restaurants) has lead the biggest part of the increase. It notes that marketing costs have risen from 59% of the retail food dollar in 1950 to 80% today. Recent increases in marketing costs have been lead higher by increasing labor and energy costs.

The report also notes that farm commodities accounted for 19% of the retail food dollar in 2005, down from 41% in the 1970s.

Full Report (PDF)

PetroSun To Begin Operations At Algae-to-Biofuels Farm

PetroSun, Inc announced today that it would begin operations at it's 1,100 acre algae to biofuels farm near Harlingen, Texas on April 1, 2008.

The algae farm complex consists of 1,831 acres and contains 94 five acre ponds and 63 ten acres ponds for a total of 1,100 acres of pond area. All are salt water open ponds. The company will extract the oil on site and transport the oil to biodiesel refineries via barge, rail, or truck. The remaining residual biomass will be converted to ethanol or other products.

Aerial View

Full Press Release

Weak dollar, higher demand raise food prices

Area agricultural leaders say that a weakening U.S. dollar and more mouths to feed around the world – not ethanol plants – are largely responsible for the increased prices consumers are paying for food products.

"When you find yourself paying more money for a box of corn flakes at the grocery store, only a few pennies of that increase came from the price of corn," said former Illinois Farm Bureau President Ron Warfield of Gibson City.

Warfield said the price of an 18 oz. box of corn flakes rose from $2.28 a year ago to $3.39 this year. He said 1.6 cents of that increase was caused by higher commodity prices.

Full Article

2007 Gasoline Consumption

The Energy Information Administration (EIA) recently released the final numbers for 2007 gasoline consumption.

Finished Motor Gasoline

2007 - 3,389,269,000 barrels x 42 = 142,349,298,000 gallons
2006 - 3,377,174,000 barrels x 42 = 141,841,308,000 gallons
2005 - 3,343,131,000 barrels x 42 = 140,411,502,000 gallons
2004 - 3,332,579,000 barrels x 42 = 139,968,318,000 gallons
2003 - 3,261,237,000 barrels x 42 = 136,971,954,000 gallons
2002 - 3,229,459,000 barrels x 42 = 135,637,278,000 gallons

As you can see the numbers have steadily risen each year. That is normal since every year a few more drivers hit the roads because of population growth. But the number that the EIA provides for Finished Motor Gasoline contains the amount of gasoline used plus the amount of ethanol used. To find out just the portion of this number that is actual gasoline the amount of ethanol needs to be subtracted.

Ethanol Used : Domestic Production + Imports

2007 - 6,960,240,000 gallons
2006 - 5,615,484,000 gallons
2005 - 4,040,190,000 gallons
2004 - 3,551,142,000 gallons
2003 - 2,816,688,000 gallons
2002 - 2,153,004,000 gallons

Gasoline Used : Finished Motor Gasoline - Ethanol

2007 - 135,389,058,000 gallons
2006 - 136,225,824,000 gallons
2005 - 136,371,312,000 gallons
2004 - 136,417,176,000 gallons
2003 - 134,155,266,000 gallons
2002 - 133,484,274,000 gallons

So as you can see the amount of gasoline used went down last year after three years of remaining basically steady. Had it not been for ethanol production increasing at the rate that it has over the last few years, these numbers would have steadily increased just as the numbers for Finished Motor Gasoline have.

Source : Energy Information Administration

Update : 2010 Gasoline Consumption

Florida Funds Sweet Sorghum to Ethanol

Renergie, Inc. was recently chosen to receive $1.5 million in funding from the Florida's Renewable Energy Technologies Grant Program.

The recipient will design and construct Florida’s first sweet sorghum mechanical harvesting system and sweet sorghum-to-ethanol plant. Once in operation, the plant will be capable of producing five million gallons of ethanol annually.

The project will lead to the development, construction and operation of a commercially viable large-scale decentralized network of sweet sorghum-to-ethanol production plants.

Sweet sorghum’s water requirement is one-third that of sugarcane, is resistant to drought and can be grown in marginal soils, ranging from heavy clay to light sand. Sweet sorghum takes approximately four months to reach maturity, allowing for harvesting twice a year.

Grant Announcement

Most ethanol production has been centered around the midwestern states since that is where the most corn is grown. Sweet sorghum is a plant that is better suited for southern climates and could become the feedstock of choice for ethanol production throughout the southern region of the country.

Since most sweet sorghum is grown to produce sorghum syrup, it might also be possible for plants to be built that could produce either syrup or ethanol depending on market conditions. That would give producers added flexibility and could help to ensure that oversupply doesn't happen for either product.

Renewables 2007 Global Status Report

The Renewables 2007 Global Status Report provides an integrated perspective on the global renewable energy situation. It gives testimony of the undeterred growth of electricity, heat, and fuel production capacities from renewable energy sources, including solar PV, wind power, solar hot water/heating, biofuels, hydropower, and geothermal.

The report is the product of an international team of over 140 researchers and contributors from both developed and developing countries, drawing upon wide-ranging information and expertise across technologies, markets, and countries. Sections include: Global Market Overview, Investment Flows, Industry Trends, Policy Landscape, and Rural (Off-Grid) Renewable Energy. The policy section provides overviews of: policy targets for renewable energy, power generation promotion policies, solar hot water/heating policies, biofuels policies, municipal policies, and green power purchasing and renewable electricity certificates.

The Renewables 2007 Global Status Report is published by REN21 in collaboration with the Worldwatch Institute and was compiled and written by Worldwatch Senior Fellow Eric Martinot. The report is 51 pages long and contains 24 illustrative figures and tables as well as extensive endnote documentation. By design, the report does not provide analysis, discuss current issues, or forecast the future.

Some of the highlights of the report include.

• Renewable electricity generation capacity reached an estimated 240 gigawatts (GW) worldwide in 2007, an increase of 50 percent over 2004.
  
• Renewable energy generated as much electric power worldwide in 2006 as one-quarter of the world’s nuclear power plants, not counting large hydropower. (And more than nuclear counting large hydropower.)
  
• Wind Power grew by 28% in 2007.
  
• The fastest growing energy technology in the world is grid-connected solar photovoltaics (PV), with 50 percent annual increases in cumulative installed capacity in both 2006 and 2007, to an estimated 7.7 GW. This translates into 1.5 million homes with rooftop solar PV feeding into the grid worldwide.
  
• Developing countries as a group have more than 40 percent of existing renewable power capacity, more than 70 percent of existing solar hot water capacity, and 45 percent of biofuels production.
  
• Production of biofuels (ethanol and biodiesel) exceeded an estimated 53 billion liters in 2007, up 43 percent from 2005. Ethanol production in 2007 represented about 4 percent of the 1,300 billion liters of gasoline consumed globally. Annual biodiesel production increased by more than 50 percent in 2006.
  

Executive Summary
Full Report (PDF)

Researchers Determine Cost of Producing Switchgrass For Ethanol

Following up on a recent net energy study, researchers from the Agricultural Research Service (ARS) and University of Nebraska-Lincoln (UNL) looked into the cost to produce switchgrass for ethanol production.

According to Perrin and Vogel, this study is the most comprehensive one completed to date assessing the economic costs of producing switchgrass biomass on commercial fields. The team contracted with 10 farmers in Nebraska, North Dakota and South Dakota to commercially grow switchgrass for five years, starting in 2000 and 2001. Throughout the study, the farmers recorded all costs for producing switchgrass biomass, from seed and fertilizer expenses to equipment and labor costs. Total baled biomass yields were recorded for each farm.

On average, switchgrass production costs were $60 per ton. Two farmers with previous experience growing switchgrass were able to limit production costs to $39 a ton. They were among a group of five farmers whose production costs were $50 or less per ton. That's something farmers elsewhere could probably achieve as they, too, gain production experience with switchgrass, the researchers suggest. Based on the $50-per-ton figure, and assuming a conversion efficiency of 80 to 90 gallons per ton, the farmgate production cost of cellulosic ethanol from switchgrass would be about $0.55 to $0.62 per gallon.

Full Article

Just for comparison, at the current price of around $5.50 per bushel for corn, the feedstock cost would be around $1.95 per gallon.

To most gasoline not worth paying extra

Last week a national gas price website ran a poll on how much users will be willing to pay extra for gasoline that didn't contain ethanol. The question asks was...

How much extra per gallon would you pay for a station selling 100% pure gas vs a station with only a 10% ethanol (E10) mix?

Of the 18,910 people that responded 68% said they wouldn't pay anything extra for 100% gasoline over E10. Granted this is an informal poll but since only members can vote in these polls it shows pretty well how the members of the site feel.

This also goes along with the example set in Iowa. In Iowa the standard 87 octane grade of gasoline doesn't contain ethanol. All ethanol is restricted to the mid grade or premium grade gasoline. So the choices the customers make can easily be measured. Those that want 100% gasoline can choose it by restricting purchases to the 87 octane grade. And since the mid grade which contains ethanol is normally cheaper than the 87 octane 100% gasoline grade it shows whether or not consumers are willing to pay extra for 100% gasoline.

The Iowa Renewable Fuels Association announced that Iowans chose E10 (10-percent ethanol, 90-percent gasoline) nearly 74 percent of the time in 2007.

Neither one of these examples was done with any kind of scientific precision but it does give a pretty good indication as to how the general public views the value of the two fuels.

E20 Passes Compatability and Performance Tests

Increasing the amount of renewable ethanol blended into gasoline from10 percent to 20 percent does not present problems for current vehicles or fuel dispensing equipment and provides similar power and performance, according to a new study released Wednesday by the State of Minnesota.

Using 40 pairs of vehicles commonly found on American roads, a yearlong research effort found that increasing ethanol blends from 10 percent (E10) to 20 percent (E20) in a gallon of gasoline provided an effective fuel across a range of tests focusing on drivability and materials compatibility.

"Using homegrown renewable fuel is an important part of Americanizing our energy future and unhooking our country from foreign sources of oil,” Governor Tim Pawlenty said. “This study shows that we can safely increase the amount of ethanol blended with gasoline for use in today’s vehicles. We’re proud that Minnesotais helping lead the nation to a cleaner, more secure energy future and we’re hopeful that other states will continue to join with us in this effort.”

The State of Minnesota conducted the study as part of the process to meet a state law that requires ethanol comprise 20 percent of all gasoline sold in the state beginning in 2013. Governor Pawlenty signed legislation that included this requirement in 2005. Minnesota and its partners will soon apply to the EPA for a waiver to federal rules that will allow E20 to be used in all of the state's gasoline.

Press Release
Study Executive Summary

2007 Ethanol Production Number Released

The Energy Information Agency (EIA) just released the final 2007 ethanol production number. Ethanol production for the December 2007 totaled 636,762,000 gallons up from 602,592,000 gallons in November. The total for the year ended up at 6,485,472,000 gallons up from 4,855,368,000 in 2006.

EIA Monthly Oxygenate Report

The Ethanol Excuse Goes International

Ethanol has become the one size fits all excuse for any food price increase in this country. Over the past year it has been blamed for high wheat prices, egg prices, beer prices, and even hay prices. In the case of eggs, corn prices are a small fraction of the overall increase. In the rest of the cases the claims made simply were not correct.

Now it seems as if food manufacturers in other countries are lining up to blame increased prices on ethanol as well, as this article from Australia illustrates.

IT'S bad news for Australians but good news for global warming: the price of baked beans has risen.

Heinz Australia said it has had to put up the price of its baked beans by 5percent because many bean farmers in the United States are switching to corn production to meet the huge demand for ethanol.

Australians eat 116million cans of baked beans a year. The beans are recognised as a healthy source of fibre. Heinz gets all its navy beans - the bean used in baked beans - from the US and Canada and bean prices there rose by 29percent last year.

Bean plantings have fallen by almost half as US farmers cash in on corn prices which have jumped 200percent thanks to the US Government subsidising ethanol as a petrol substitute.

A look back at crop records show that navy beans did go down last year but not by 50%.

Navy Beans Planted Acres

2007 - 221,800 acres
2006 - 280,700 acres
2005 - 236,400 acres
2004 - 185,100 acres
2003 - 158,200 acres

So as you can see last years crop was down compared to the 2006 and 2005, but still a healthy amount planted. And certainly not the 50% loss in acreage suggested by the article. Actual production shows things as being a little closer since the 2007 yield was higher than the 2006 yield.

Navy Bean Production

2007 - 3,771,000 Cwt
2006 - 4,353,000 Cwt
2005 - 3,995,000 Cwt

Looking at it this way suggests that if production was the only factor effecting price then 2007 and 2005 should be about the same.

But was it because of ethanol that navy bean acres went down in 2007? It looks more like it was because of navy bean prices going into the 2007 planting season.

The report also highlights that the U.S. aggregate grower price for all dry beans averaged 13% above a year earlier during September 2006 to January 2007. With the exception of navy beans, the grower price for every major dry bean class is averaging above a year earlier.

Soft prices leading into the 2007 planting season suggests that there was an overproduction in 2006 and that acreage was going to be lost to some other crop anyway.

Sources:

December 2007 Crop Summary
December 2006 Crop Summary
December 2005 Crop Summary

E85 Stations Top 1500

On the first of last month I posted the number of E85 stations across the country was 1475. At the time I thought it would be nice to post the number of stations at the first of every month so that we can all see how the progression is going. This month the total stands at 1501. Here are the numbers I have collected from different posts in the past.

March 1, 2008 - 1501
February 1, 2008 - 1475
November 9, 2007 - 1378
May 7, 2007 - 1200

The current number plus the locations of all E85 stations can be found at the National Ethanol Vehicle Coalition.

Researcher Clarifies Study Results

David Tilman, one of the researchers involved in the one of the recent land use studies published in Science Magazine, clarified the results of the study.

Tilman, who is currently on sabbatical from the University, said he feels the study is misunderstood by others in the industry.

"The goal of our paper was to point out if we do certain things, that those things would give us fuels that didn't have very much environmental benefit," he said.

Tilman said the paper didn't say the problems were happening now, but instead that they could happen in the future.

Full Article

The question I have is why was this misunderstanding allowed to go on for over two weeks and after countless articles were published giving the impression that it is something that is happening right now.

ASA considers trade challenge to biodiesel export tax

If differences can't be resolved through the Doha Round negotiations for a new World Trade Organization agreement, the American Soybean Association is considering a legal challenge against Argentina's export tax system, which the U.S. producer group considers an unfair subsidy for that nation's biodiesel exports.

The Argentine export tax system favors biodiesel with lower export taxes for the fuel than for exports of raw soybeans, ASA's president, John Hoffman of Waterloo, Iowa, told Agriculture Online.

"Right now there's a huge advantage for crushers down there to export biodiesel," Hoffman said. It amounts to $1.11 per gallon of biodiesel. Hoffman said it's so profitable, that soybean crushers in Argentina are importing soybeans from Brazil and Paraguay.

The worst part about this is because of the fact that there is no import tariff on biodiesel it leads to a unique situation of our government subsidizing biodiesel heading to Europe.

On the way, tankers of biodiesel stop by U.S. Gulf Coast ports, where as little as one percent petroleum diesel is blended in. That qualifies a load of biodiesel for the $1 dollar a gallon biodiesel tax credit intended for U.S. producers, said ASA spokesman Bob Callanan. That so-called "splash and dash" adds another $1 in subsidies, paid by U.S. taxpayers, for South American biofuel bound for Europe.

The ASA has been leading the efforts to get this tax loophole closed.

Full Article

This also raises the question that if the tariff on ethanol were abolished as some have requested, would the same issue occur with foreign produced ethanol?