Living in the heart of midwest farm country I can vouch for the statement that much of the uncultivated land sets idle every year because farmers are paid not to grow crops. Hence my statement above on profitable crops. Why invest time and money to grow something that does not pay as good as the subsidy to grow nothing.
Soybean oil is a byproduct of soybean meal production, but it's still has enough demand to be worth more for other industries than it is for biofuel production. It currently can't be grown cheap enough to justify it's primary use as a fuel feedstock.
Same goes for corn, the yields sucks compared to cane but it pays better for the farmer. So as a farmer you get paid not to grow as much, this keeps the price high on you do grow making it somewhat profitable.
Now if we said 60% of our ethanol must be produced from U.S. grown cane or sawgrass feedstock, the price of corn would fall and farmers would have a market and reason to grow a much better yielding crop on all that unused land. Same could be said for biodiesel feedstocks.
The USA is merely a leach if we export nothing other than political babble to countries like Brazil, and import everything from them.
Certainly water is an issue in some parts of the country. Although, the big thing might be just moving the water from where it is... to where it is needed. And, that will take more energy... I have no doubt we will need to be working on building up a variety of energy sources over the next few years.
Some oilseed crops like Jatropha can grow with varying amounts of water, or mixes of rain and drought. Unfortunately, it is a bit susceptible to cold, and certainly grows better with good water.
House bill grandfathers biodiesel into RFS, orders study of indirect land use
By Susanne Retka Schill
Posted June 29, 2009
The U.S. House of Representatives passed climate change legislation with language that would improve the Renewable Fuels Standard implementation for biodiesel.
The American Clean Energy and Security Act of 2009, also known as the Waxman-Markey bill, passed by a narrow margin of 219 to 212 in the House on Friday, June 26. Among the provisions of a deal struck among the House leadership, biodiesel gets grandfathered in to the1 billion carve-out for biomass-based diesel without a greenhouse gas (GHG) reduction target, similar to the grandfather provision for ethanol. Biodiesel production from all plants in production or under construction in December, 2007, when the 2007 Energy Bill was enacted, is grandfathered into the RFS at 1 billion gallons or the EPA-set volume, whichever is higher.
The bill’s language also delays the use of international indirect land use change impacts in determining a fuel’s GHG emission profile for the RFS for several years while an independent scientific assessment is done. Six months after enactment, the bill says the USDA and EPA would jointly institute a three-year National Academy of Sciences study to determine whether or not it is scientifically valid to incorporate indirect international emissions. Upon completion, the Secretary of Agriculture and the EPA administrator would jointly determine whether to include indirect emissions in the GHG reduction targets for the RFS program, subject to public notice and comment. Congress would have one year to act on the joint USDA/EPA determination. The earliest an international indirect land use assessment for GHG emissions could be incorporated would be six years from enactment.
The House compromise was negotiated by Rep. Collin Peterson, chairman of the House agriculture committee, Henry Waxman, chairman of the House energy and commerce committee and Speaker of the House Nancy Pelosi to garner the support needed to pass the Climate Change bill. The American Clean Energy and Security Act would establish a federal carbon cap-and-trade program and a Renewable Portfolio Standard setting a 15 percent target for renewable energy content in electrical production by 2020.
Peterson had announced earlier that he was reluctant to support the climate change legislation unless Congress addressed the inclusion of indirect land use impacts in the Renewable Fuels Standard. EPA’s proposed rule to implement the RFS gave soy biodiesel a devastatingly low GHG reduction score due to the incorporation of international indirect land use change impacts. The indirect land use penalty to biofuels has sparked widespread protest from industry and the scientific community that the science behind the modeling is far too full of errors to be the basis of policy.
“The NBB is very pleased with the hard work of Chairman Peterson for biodiesel,” Frohlich said. “We hope the deal being reported will move through swiftly so we can have the RFS in place to provide a framework for our producers to get up to speed again.”
While the House language is a positive development for the biodiesel industry, it is uncertain when the Senate will begin its work on energy and climate change since it is expected to complete work on health care reform first.
General Biodiesel purchases Seattle biodiesel refinery
30 June 2009
General Biodiesel Seattle has completed its acquisition of Imperium Renewables’ Seattle Biodiesel facility in Washington, US.
General Biodiesel is converting the Seattle-based commercial biodiesel refinery to produce biodiesel from waste oils such as recycled cooking oil and animal fat, which the company collects from restaurants and food stores around the region.
The acquisition of the plant enables General Biodiesel to deliver a locally produced renewable fuel source that will measurably reduce total carbon emissions in Washington and reduce the dependency on foreign oil.
To complement the acquisition of the plant, General Biodiesel also closed on an equity financing arranged by Seattle-based merchant bank, Swiftsure.
Biodiesel Board Rallies Troops in RFS-2 Fight
Posted by John Davis – July 1st, 2009
In a move to fight a proposed change that would basically shut out soy-based biodiesel… the bulk of the nation’s biodiesel production… from the Renewable Fuels Standard, the National Biodiesel Board has launched a Web site to give people the tools to make comments on the Environmental Protection Agency’s proposal.
The RFS2 Action Center
gives those who want to stop the change examples of comments, where and how to send the comments, and this letter from NBB CEO Joe Jobe himself:
Dear Biodiesel Stakeholder:
Today the National Biodiesel Board is launching our grassroots response to the Environmental Protection Agency’s (EPA) proposed rule on the Renewable Fuel Standard (RFS-2). We are calling on you and all supporters of clean, renewable energy to join us in urging the EPA to implement a workable RFS-2 program…
The methodology employed by the EPA to determine biodiesel’s GHG emission profile under the RFS-2 program is based on questionable inputs and dubious assumptions about international land use changes that assign future carbon emissions to U.S. biodiesel resulting from hypothetical land clearing on other continents that have nothing to do with U.S. biodiesel production or use…
We need as many biodiesel supporters as possible to submit consistent comments. (update: the deadline for public comments has been extended to September 25)…
The future of the nation’s energy policy and biodiesel’s role in it is now at a critical point. Please join us in this landmark effort to help lead the nation forward toward a more sustainable, renewable, and prosperous future.
Joe Jobe, CEO
National Biodiesel Board
Now all large commercial boidiesel producers using virgin Soy oil feedstock will have to install a new 10,000 gallon deep fryer. They can fill it with virgin oil, heat to 350F and toss in a basket of fries. Once the fries are cooked, remove the basket, drain the oil and call it WVO.
I think I'll submit that comment for their "grassroots response" to the EPA. I'm calling it splash and dash version 2.0
Montana biodiesel plant producing fuel from locally grown seed
While big plants seem to have difficulty, local biodiesel production seems to be doing quite well.
EPA Official Wrong on Ethanol and Biodiesel Yields
Posted by Cindy Zimmerman – July 2nd, 2009
A YouTube video of EPA official Margo Oge testifying before a House panel in May reveals her providing radically incorrect information about the amount of corn and soybeans it takes to make biofuels. http://www.youtube.com/watch?v=S2rATiamvcs
The blunder occurred when Rep. Aaron Schock (R-IL) asked Ms. Oge, who is responsible for regulating all emissions within the United States, about the indirect land use issue. “It’s my understanding that the EPA’s Renewable Fuels Standard 2 methodology assumes that for every acre of soybean crop that is used to produce biofuel, an equal acre of ground is used in the Brazilian rainforest to replace that acreage, is that correct?” asked Schock.
“Obviously we know that it takes about 64 acres for a gallon of soy biodiesel,” she begins, and then corrects herself, even more incorrectly. “It’s actually the opposite. It takes 64 acres for corn ethanol and over 400 acres for a gallon of biodiesel.”
Actually, one acre of soybeans makes 64 gallons of biodiesel and one acre of corn makes over 400 gallons of ethanol. This may have been just a simple mistake - or maybe she really doesn’t know - but it is now possible that members of the U.S. House Small Business Committee believe that it takes a huge amount of corn and soybeans to produce biofuels because that is what she told them.
Suspicious fire burns Burbank biodiesel plant
By Paula Horton, Herald staff writer
Burbank A suspicious fire, possibly caused by fireworks, heavily damaged a Burbank biodiesel manufacturing plant early Saturday, officials said.
About 30,000 gallons of vegetable oil spilled when a three-alarm fire broke out.
The oil was contained to the plant and no contaminants reached the Snake River, said Dan Partridge, spokesman for the state Department of Ecology.
Ramon M. Benavides, vice president of business development for Gen-X Energy Group, said fire officials told him the blaze started outside the plant and may have been caused by fireworks.
Walla Walla Fire District 5 crews responded at 3:15 a.m. to the fire at the biodiesel plant at the Port of Walla Walla’s Burbank Industrial Facility.
When firefighters arrived, flames were visible and vegetable oil was leaking inside the building, said volunteer firefighter Tera Waters.
Crews from the Kennewick and Pasco fire departments and Franklin Fire District 3 were called to help fight the blaze.
It took about 30 minutes to contain the flames, Waters said. Firefighters were on scene for about six hours.
No one was working when the fire started and there were no injuries to crews. The cause of the fire is under investigation.
An Ecology spill response team was called to ensure no oil had made its way to the Snake River, Partridge said.
The plant has a system of floor drains that were able to catch and contain most of the vegetable oil, he said.
“At this time, we don’t know of any of the oil that got to the river,” Partridge said. “We are working with the company on a cleanup plan. They will not be liable for any fines or anything like that because none of the oil got into the river.”
— Paula Horton: 582-1556; firstname.lastname@example.org
Biodiesel Plant in Burbank Planning to Relocate after Fire
BURBANK, Wash. - Gen X Energies administration is planning to demolish the current biodiesel producing facility and move to a site in Moses lake after a fire destroys it Saturday.
The fire came just hours after the company reached a major achievement.
Gen X Energy Group had just received the gold standard for biodiesel production practices in the U.S. on Friday, and the fire occurred on Saturday. Reaching what they call BQ 9000 status means Gen X is now able to produce a high quality of biodiesel fuel and sell it to the top distributors like Conoco and Shell.
"They require biodiesel, not only to meet the requirements of what they call the Federal ASTM standard, they also require the producer to be a BQ 9000 complier producer. It's a major win to get one of those accreditations," said Gen X Energies Spokesman Ramon Benavides.
Gen X is one of only 30 producers in the country that have this accreditation. It's something that has taken Gen X Energies two years to achieve.
But after the fire this weekend, production has stopped and red tape now lines the perimeter of the facility.
The only work being done now on the site is by the National Response Corporation for environmental services. They're testing the sewer system and storm drains for higher than normal PH levels after chemicals were breached during a fire that may have started by fireworks.
There was concern that chemicals may have leaked in to the Snake River but NCR workers proved the river was safe from any contamination.
Hopes of producing and selling the fuel are temporarily put on hold, until the prototype and design to make the fuel is rebuilt.
Meanwhile, the focus now is to find those responsible for starting the fire.
"We've got the Mid-Columbia Regional arson task force looking at this. We have the Walla Walla County Sheriffs offices looking at this. And they are on the road to make sure that they can find a responsible party," said Benavides.
Cameras surround the building as well as the entrance to the business park. Every license plate is recorded as cars come into the industrial park. The Walla Walla County Sheriffs Office is reviewing the security tapes.
EU nations slap duties on US biodiesel
BRUSSELS (AFP) — European Union nations decided Tuesday to impose anti-dumping duties on US biodiesel imports, which are suspected to be heavily subsidised, an EU diplomat said Tuesday.
The proposal, by the European Commission, was adopted by the 27-country bloc's finance ministers at a meeting in Brussels, the diplomat said, on condition of anonymity.
The duties, to come into force by July 12, range from 23 euros (32 dollars) to 41 euros per 100 kilogrammes (160 pounds) and would last for up to five years.
The stakes are high as biodiesel represents around 80 percent of the total production in Europe of biofuels, which have become an important pillar of the EU's efforts to fight global warming.
US biodiesel accounts for most of this fuel imported into the EU.
The commission launched an anti-dumping and anti-subsidy probe into US biofuels in June 2008 after industry lobby the European Biodiesel Board (EBB) complained the EU market was being flooded with heavily subsidised US imports.
While both the United States and the EU support the use of biofuels, the group claims that US biodiesel is being sold at below US producers' costs thanks to generous subsidies.
It estimated in January that US exports of a particular biodiesel blend known as B99 had surged by 40 percent in 2008 compared to 2007, which it said was threatening the viability of European producers.
"For more than two years, US biodiesel has been sold in the European market at a substantial discount, at an even lower price than the vegetable oil raw materials purchased by the EU industry for producing biodiesel," the EBB said Tuesday.
"Without the definitive measures adopted today, the unfair US exports would have jeopardised the viability of the EU biodiesel industry and its future investments," it said in a statement.
The decision to slap duties on US exports comes amid tense transatlantic trade relations which have been frayed recently by disputes on issues such as restrictions on US poultry and a European ban on US hormone-treated beef.
EU nations aim to increase the amount of renewable energy they use by 10 percent by 2020, compared to 1990 levels, in an effort to help limit the increase in global temperatures to two degrees Celsius.
Biofuels are part of the equation, but above all so-called second generation biofuels which do not come from the food chain but are derived from sources such as waste, biomass, algae or grain crops cultivated on poor-quality farm land.
City using biodiesel in effort to save money
Program a partnership with United Way
By Will Brown • July 9, 2009
That city vehicle stopped next to you at the traffic light may be fueled by recycled cooking oil.
A city of Tallahassee pilot program converts old cooking oil to biodiesel in an attempt to save money and find alternative usages for cooking oils. The Alternative Fuel Program has been discussed since 2006, but was created in earnest last year prior to the spike in gas and diesel prices.
Of the 2,000 pieces of equipment in the city's fleet — and that includes fire trucks, lawnmowers, forklifts and many others things — more than a quarter use biodiesel fuel, said Buddy Driggers, the city's parts and fuel supervisor.
No additional staff has been hired and city employees produce the fuel in addition to other responsibilities.
"Generally we do about 200 gallons a day," Driggers said about production. "We're able to do our biodiesel program with our existing staff, but they have other things to manage."
Currently there are a handful of sites in the county where residents can drop off old cooking oil. The recycling centers at 2600 Municipal Way and at 400 Dupree St. collect old oils, as well as the solid waste removal sites in Fort Braden, Woodville and on Miccosukee Road. Also the public high schools in Leon County have collection containers.
Most participants are restaurants, but the city anticipates more residents getting involved once they know about the program.
The program is a partnership between the city and the United Way of the Big Bend. Essentially, restaurants donate old oil to the United Way and the city purchases that oil from the nonprofit for approximately 50 cents per gallon, which equates to a total expenditure of $3,000 on fuel this calendar year.
Restaurants that participate receive a tax deduction for their donation, said Ken Armstrong, president of the United Way of the Big Bend.
It would be conjecture to state how many cities in Florida have a program similar to Tallahassee and Panama City. Part of the problem is that efforts to create biodiesel in Florida are "extremely fragmented" said Dana Jones, executive director of the Florida Biofuels Association.
On July 29 members of the public and private sector are expected to meet in Orlando to discuss the obstacles facing the biofuels industry and work toward developing a strategic plan for biodiesel creation in the state.
For the restaurateurs, participation also has its benefits, said Jamshaid Mohyuddin, owner of the Dairy Queen on North Monroe Street and one of nearly a dozen participants. After a city representative approached him last year about donating his old vegetable oil, he eagerly jumped on board.
"Why not?" Mohyuddin asked about the 100 gallons his store donates each week. "The money goes to a good cause and someone is not getting rich out of it. It's good for us the city keeps it clean. … We have to clean out this oil — we do it every five days — so we have to waste it anyway."
Driggers said the city is focusing on commercial customers for the moment, but eventually this program may be expanded to incorporate residents as well.
"We've managed to move our staff around and a lot of people have switched responsibilities," Driggers said. "People enjoy a challenge and I think this is a challenge when you think about the process."
Soy supplies up, biodiesel use down
By Susanne Retka Schill
Posted July 13, 2009
USDA projected the U.S.soybean supplies higher and prices slightly down in its July 10 World Agricultural Supply and Demand Estimates report. Global oilseed production was projected to hit a record for 2009-’2010. USDA dropped its projections for soybean oil used for methyl esters in the U.S. to 2,000 million pounds compared to 2,200 million pounds projected in the previous month’s report. That compares with USDA’s estimates of 1,650 million pounds used for biodiesel in the 2008-’09 marketing year and 2,345 million pounds in 2007-’08.
U.S. oilseed ending stocks for 2009-’10 were projected at 8 million tons, up 1.1 million from last month. Higher soybean stocks accounted for most of the increase. Oilseed production was projected at 96.3 million tons, up 1.8 million tons, with increased soybean production accounting for most of the change. Soybean production was projected at 3.26 billion bushels, up 65 million due to increased harvested area. Harvested area estimated in the June 30 acreage report was 1.5 million acres above the June projection. The soybean yield was projected at 42.6 bushels per acre, unchanged from last month. Increased exports and crush partly offset increased supplies, leaving projected 2009-’10 ending stocks at 250 million bushels, up 40 million from last month.
Prices for soybeans and soybean products were all reduced this month. The U.S. season-average soybean price for 2009-’10 was projected at $8.30 to $10.30 per bushel, down 70 cents on both ends of the range. Soybean meal prices were projected at $255 to $315 per short ton, down 20 dollars on both ends. Soybean oil prices were projected at 31 to 35 cents per pound, down 2 cents on both ends of the range.
Global oilseed production for 2009-’10 was increased 2 million tons to a record 423.4 million tons. Foreign production was projected up 0.2 million tons to 327.1 million tons. Soybean production was projected at a record 243.7 million tons, up 2.1 million due mostly to higher production in the United States. Production was also raised for Canada based on higher harvested area reported by Statistics Canada. Increased sunflowerseed production for Ukraine and the United States was partly offset by a reduction for EU-27. Rapeseed production was increased for Canada as higher harvested area was only partly offset by reduced yields. Other changes include reduced rapeseed production for Ukraine and EU-27.
U.S. soybean exports for 2008-’09 were projected at 1.26 billion bushels, up 10 million from last month reflecting continued strong shipments and sales. In addition, higher projections for soybean meal exports and domestic soybean meal use resulted in a 5-million bushel increase in soybean crush to 1.655 billion bushels. Despite the increase, domestic soybean meal use for 2008-’09 was projected down 8 percent from 2007-’08 due to reduced meat production and increased supplies of alternative protein sources.
Increased soybean exports and crush were offset mainly by reduced residual use, leaving ending stocks for 2008-’09 unchanged at 110 million bushels.
For corn, the July 10 WASDE report projected 2009-‘10 production at 12.3 billion bushels, up 355 million from last month as higher estimated area from the June 30 acreage report boosted production prospects. Corn supplies were projected at 14.1 million bushels, up 335 million bushels from 2008-‘09. The 2009/10 marketing-year average farm price for corn was projected at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. Ending stocks for 2008-‘09 were raised 170 million bushels as lower domestic use more than offsets an increase in expected exports.
Food, seed, and industrial use was lowered 120 million bushels with reductions projected for use in ethanol, sweeteners, and starch. The decline in corn prices boosted ethanol producer margins; however, reduced production of gasoline blends with ethanol in May and June, based on the most recent weekly data, indicate lower-than-expected ethanol corn use. Feed and residual use was lowered 100 million bushels as indicated by the June 1 stocks. Exports were raised 50 million bushels based on recent increases in shipments and the high level of outstanding sales for the 2008-‘09 marketing year. The marketing-year average price was projected at $3.95 to $4.15 per bushel, down 15 cents on both ends of the range reflecting sharply lower summer price prospects.
Maybe we should try a 'Bucks for Beans' program to help get the price back up.
The price for yellow grease has retreated to 22 cents per pound from a peak of 29 a few weeks ago. This and the lower cost for soybeans and the derivitives is a bit of good news for biodiesel producers that aren't their own supplier of raw materials and have to buy their oil.
News and Views www.dailypaul.com
Tragedy, markets give biodiesdel industry the blues
Associated Press Writer
Tuesday, July 14, 2009
NEW PLYMOUTH, Idaho (AP) — The railroad siding at Blue Sky Biodiesel hasn't seen an oil train for six months. A dozen 25,000 gallon storage silos in this 104-year-old Payette River farming town sit empty.
Owner Rob Black began his $4 million facility in 2005 amid high hopes: Prices for the soybean and canola oil to produce fuel for diesel vehicles were low and diesel prices were rising. French fry plants nearby promised a steady supply of used grease.
Meanwhile, everyone from country singer Willie Nelson, with a biodiesel-burning tour bus, to rock festival Lollapalooza, which ran its amps off biodiesel, was singing the fuel's praises.
Despite the green hype, a complicated brew of factors have forced Black and at least a third of America's biodiesel refiners to cease operation. Commodity prices skyrocketed, diesel fell. The credit crisis turned off the cash spigot. Concerns arose about biofuels' impact on South American forests. And the European Union has played a role, too, enacting tariffs in March aimed at stopping U.S. subsidized biofuel exports.
Black, whose plant was delayed four months in 2006 by an explosion that killed his 25-year-old son, Blaise, is unflinching when asked what went wrong.
"Don't you mean, 'Why was I so stupid?' " he told The Associated Press.
The numbers say it all: Last week, the price of West Coast canola-based biodiesel was about $3.42 per gallon, before taxes; conventional diesel went for under $2. Even with a $1 per gallon federal credit for blenders, biodiesel costs 20 percent more.
Charley Jones, president of Idaho's 40-outlet Stinker Stores service station chain that contracted with Blue Sky, had hoped to be blending up to 3 million gallons of biodiesel annually into the conventional diesel he sells. He does just a fraction of that — with biodiesel from the Midwest.
"I originally counted on Blue Sky being successful," Jones said. "But the economics went south on them."
Misery loves company.
In Hoquiam, Wash., Imperium Renewables Inc. has shuttered its $88 million plant. Two Tennessee biodiesel plants that opened in 2007 laid off most of their workers in May.
And a Delaware plant that, like many others, was erected with federal and state subsidies as the promise of biodiesel was still promising, was sold at auction in January for $1.35 million — well shy of the $10 million invested.
Of some 176 U.S. biodiesel refiners, more than 60 have been shuttered, the National Biodiesel Board estimates.
Production this year could fall to half 2008 levels of 690 million gallons.
"There's a volatility in commodity markets, and with the current economic crisis, there's a severe crunch on lack of capital," said Michael Frohlich, spokesman for the Jefferson City, Mo.-based industry group. "And the biggest problem we have right now is the holding pattern with the renewable fuels standard."
In 2007, Congress required 1 billion gallons of biodiesel be used as part of the nation's transportation fuels mix by 2012, raising optimism it was to be a hot commodity. But lawmakers also required biofuels achieve specific greenhouse gas reductions, compared to the gasoline and diesel being displaced.
In May, the Environmental Protection Agency dropped a bombshell: Biodiesel made from virgin soybean oil wouldn't qualify toward reaching the 2012 renewable fuels standard of 1 billion gallons, according to a draft rule. That's because as the United States refines more soybean oil into biodiesel, EPA regulators predict countries like Brazil will plow up their own carbon-reducing forests and grasslands to produce soy for food or fuel to take up the slack.
Not surprisingly, biodiesel companies argue such calculations are based on flawed science.
"It's ironic we have policy makers talking about how we should clean and green, but yet, when it comes to supporting those ideals economically, there's a complete failure," said Imperium Chief Executive Officer John Plaza, who has laid off 90 of his 120 workers in western Washington.
At least 12 U.S. senators, including Tom Harkin, D-Iowa, and Chuck Grassley, R-Iowa, argue the EPA provisions will "stifle the investment that is so essential to our national renewable fuels strategy."
Environmental groups are wary, saying politicians wading into science makes for bad policy — even if the goal is to boost domestic fuel production and cut dependence on foreign oil.
"There's a scientific integrity principle," said Jeremy Martin, a senior scientist at the Union of Concerned Scientists in Washington, D.C. "The answer is not just to jump in and do a legislative override, just because it's inconvenient."
After packed EPA hearings this week in Washington, D.C., it remains unclear just when a final EPA rule will be released — and what it will look like. The agency's top brass now is discussing alternatives, including reducing greenhouse gas reduction requirements and letting producers mix soy oil with used animal fats to meet the standard.
Not all U.S. refiners are singing the biodiesel blues.
In Salem, Ore., SeQuential Pacific Biodiesel, which can produce 5.8 million gallons annually, is back at two-thirds capacity after closing earlier this year for lack of buyers. Manager Tyson Keever said a raft of local advantages, including state income tax credits and a biodiesel fuel mandate eventually due to rise to 5 percent, are crucial.
And Keever relies on famously green Portland for both his raw materials — restaurant grease — and for his market: In addition to 35 pumps where SeQuential biodiesel blends are sold, Portland has had its own 5 percent biodiesel mandate since 2007. Celebrities are on SeQuential's side, too: Singer Jack Johnson is an investor.
"If we were trading straight off the commodity pricing, it's a very difficult environment to be in today," Keever said.
Other states may talk bullish on biodiesel, but action is scarce.
For instance, Washington state set a goal of having biofuels make up at least 20 percent of its fuel use in state vehicles and ferries, but such fuel accounts for only about a tenth of that. Its law has no penalties for noncompliance.
And back in Idaho, where Blue Sky owner Rob Black is trying to unload his idled refinery at a loss, the 2009 Legislature made it even tougher for the biodiesel industry by repealing a 25-cent-per-gallon tax exemption — to raise more money for road repairs.
"It looked like a deal we could handle," Black remembers. "Then, we had the explosion, and by the time we got it rebuilt, in the fall of 2006, it was about a break-even proposition. Then, feedstocks tripled, and diesel didn't go high enough. That's pretty much what cooked us."
On the Net:
National Biodiesel Board: http://www.biodiesel.org/
SeQuential Biofuels: http://www.sqbiofuels.com/
Imperium Renewables Inc.: www.imperiumrenewables.com
Union of Concerned Scientists: http://www.ucsusa.org/
Environmental Protection Agency's renewable fuels standard fact sheet: http://www.epa.gov/otaq/renewablefuels/420f09023.pdf
American Soybean Association's reaction to draft EPA rules: http://www.soygrowers.com/policy/indirect.pdf
Exxon Sinks $600 M Into Algae-based Biofuels in Major Strategy-Shift
By KATIE HOWELL of Greenwire
Published: July 14, 2009
Oil giant Exxon Mobil Corp. is making a major jump into renewable energy with a $600 million investment in algae-based biofuels.
Exxon is joining a biotech company, Synthetic Genomics Inc., to research and develop next-generation biofuels produced from sunlight, water and waste carbon dioxide by photosynthetic pond scum.
"The world faces a significant challenge to supply the energy required for economic development and improved standards of living while managing greenhouse gas emissions and the risks of climate change," said Emil Jacobs, vice president of research and development at Exxon Mobil Research and Engineering Co. "It's going to take integrated solutions and the development of all commercially viable energy sources, improved energy efficiency and effective steps to curb emissions. It is also going to include the development of new technology."
Exxon Mobil's collaboration with Synthetic Genomics will last five to six years, Jacobs said, and will involve the creation of a new test facility in San Diego to study algae-growing methods and oil extraction techniques. After that, he said the company could invest billions of dollars more to scale up the technology and bring it to commercial production.
"We're not claiming to know all the answers," said Craig Venter, founder and CEO of Synthetic Genomics, which has so far done early work on algae strains. "There are different approaches to what is truly economically scalable, so we're testing things and giving a new reality to the timelines and expectations of what it takes to have a global impact on fuel supply."
Jacobs and Venter are mum about the specific technology the collaborative effort would employ. They said the team would investigate all options, including growing organisms in open ponds and in closed photobioreactors.
They added that they were likewise uncertain what end-product fuels would result from the collaboration. Other startup companies have announced that they were producing both synthetic crude and biodiesel using photosynthetic algae (Greenwire, April 28).
"As far as products to expect from this program, our intent is to make hydrocarbons that look a lot like today's transportation fuels," Jacobs said. "We want to produce hydrocarbons that look like today's refinery products, that can go into a refinery to be processed along with other petroleum streams and then used in the transportation fleet or even jet fuel. And we think we've got a good chance of doing that."
Exxon Mobil launched the partnership after years of being publicly opposed to investing in renewable energy. Privately, though, Jacobs said the company has been investigating the sector for years.
"It's fair to say that we looked at all the biofuels options," Jacobs said. "Algae ended up on top."
Others in the algae-biofuels industry say Exxon Mobil's investment validates the sector.
"A couple years ago, the petroleum institute said there's only a couple of years left for oil, and now they're really finally acting on that," said Riggs Eckelberry, president and CEO of OriginOil Inc. "Algae is the feedstock to overtake petroleum. It's the real alternative to petroleum."
Environmentalists were more cautious in their appraisal of the Exxon Mobil-Synthetic Genomics plan.
"They've never done anything like this before -- invested real money in the renewables sector," said Kert Davies, research director at Greenpeace. "We've always said [the oil industry] has to be part of the climate change solution. We can't solve anything without companies like Exxon helping."
He added, "I'm guarding my optimism."
Exxon Mobil's timing is noteworthy, Davies said, because of the ongoing energy and climate legislative fight.
"It's interesting timing as the oil companies are struggling to find a place at the table," Davies said.
Renewable fuels standard
While Exxon Mobil's investment marks a sea change in activity in the sector, significant challenges remain in place to achieve wide-scale commercial development.
Next-wave biofuels that could reduce carbon emissions and displace oil imports are politically popular but have not moved into commercial production as fast as supporters would have hoped. Biofuels overall got a boost through a 2007 law that expands the national renewable fuels standard, or RFS, to reach 36 billion gallons by 2022.
But Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) said the RFS expansion is too restrictive and could freeze out emerging technologies -- including algae-based biofuels. He is calling for changes that would make it more "technology- and feedstock-neutral" to accommodate fuels that could ultimately prove superior in several respects.
"Algae-based fuels are the most obvious example, which, despite having characteristics superior to any renewable fuels in commercial production today, have no home in the RFS," Bingaman said in a column about the standards published in the Politico newspaper.
Senior reporter Ben Geman contributed.
Reposted this under algae.
My 2 cents: It was inevitable that once the research went from federally funded to smaller private companies and especially universities, that the big boys would come along and scoop up enough of the patents to control the algae industry once all the research was complete.
It's coming. It's almost here...This message has been edited. Last edited by: clean and green,
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First East Tenn. biodiesel production facility opens
By ANN KEIL
6 News Reporter
KNOXVILLE (WATE) -- Fryer grease from 30 Knoxville area restaurants will soon be used in the area's first biodiesel production facility. The ribbon cutting ceremony was Wednesday.
The facility is small, but effective according to the Southern Alliance for Clean Energy (SACE), the local non-profit that partnered with the University of Tennessee to make the facility possible.
"It's a win-win. It cleans up the environment by cleaning up the waste. Then, it also cleans up the environment by providing renewable fuels," says SACE Director Dr. Stephen Smith.
"It basically displaces petroleum so every gallon we produce here is one less gallon we're buying from the Middle East. It also helps improve the air quality," Smith explains.
He calls biodiesel one of the fuels of the future that can be produced locally. That fuel will soon go to UT and local governments to help power their vehicles.
The grease will need to flow through a series of trucks and tanks built using almost $500,000.
"We also see it as an economic development tool for the state, rural areas especially. There are lots of opportunities here for biofuels, and we feel like Tennessee is well positioned to be the leader in the nation," says UT project coordinator Sam Jackson.
The facility might also supply biodiesel to community businesses in the future, but in the meantime it will be used as a hands-on research center for UT students.
More localized facilities like this one, using local resources and supplying local markets will likely be much more successful then mega projects designed to feed an export market while relying on US taxpayer funded subsidies.
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