Coskata Swings For Biofuel Fences With $100 Million IPO

http://seekingalpha.com/article/314865-coskata-swings-for-biofuel-fences-with-100-million-ipo

December 19, 2011

By Derek Mead


Another hot biofuel IPO has been announced: Coskata has filed with the SEC to raise up to $100 million, following Fulcrum's $115 million filing in September. The Warrenville, Illinois-based Coskata is the latest entrant in the race to produce cellulosic ethanol at industrial levels. According to its filing, Coskata's business plan focuses on utilizing low-cost feedstocks, like woody biomass and municipal waste, using a hybrid biothermal process to break down cellulose that Coskata claims produces extremely high yields.

Central to Coskata's potential is the company's technology platform. So far we've mostly seen biofuel companies trying to crack cellulose with either biochemical or thermochemical processes. As referenced in Coskata's S-1, research firm Sandia has projected biochemical and thermochemical conversion to be 55 and 74 gallons of ethanol per bone-dry ton of feedstock, respectively.

Coskata says it has hand-picked the best parts of both processes to develop its own platform, including developing its own microbes, which is expected to reduce the operating costs incurred from licensing biocatalysts from other firms. The firm predicts the platform will lead to yields of 100 gallons per ton of softwood, a number that's backed up by Sandia's estimates. That's an impressive claim, albeit as yet untested at a commercial level.

The company has tested its platform at its Pennsylvania demo facility for over 15,000 hours of ethanol production using wood waste, sorted municipal waste and natural gas as feedstock. Coskata plans on building its first commercial facility in Alabama, with a first-phase production goal of 16 million gallons per year (MGY), eventually ramping to 78 MGY upon addition of new production lines.

At 78 MGY, Coskata projects an unsubsidized cash operation cost of under $1.50 per gallon, assuming both a feedstock cost of $64 per ton (which is reasonable) and the company's high projected yield (which is yet to be seen). In comparison, Fulcrum said in its S-1 that it was shooting for ethanol under $1.30 a gallon at a lower 70-gallon-per-ton yield. Of course, until we see either company successful scaling up, we won't know whether or not either set of numbers means much. The market price for ethanol was around $2.71 a gallon as of December 9.

With that in mind, let's look at Coskata's financials:

• Since its inception in 2006, Coskata has produced only $134,000 in net revenue, all of which came in 2010. Coskata has produced no revenue in 2011, according to its unaudited report.
• Coskata's net loss in 2010 was $28.7 million, and the firm lost $23.3 million (unaudited) through the first nine months of 2011.
• As of September 30, 2011, the company had an accumulated deficit of $88.2 million.
• Through September 2011, the company had raised a total of $120.9 million in paid-in capital, along with $280,000 in common and series A, B, C and D stock sales.
• Coskata has $18.9 million in cash, and total capitalization stands at $33.1 million.

The numbers don't look particularly stellar for Coskata, especially considering that in the five years since its inception it hasn't been able to capitalize on even niche markets -- like other biofuel aspirants have -- to build any meaningful revenue. The company acknowledges as such in its S-1, writing: “We are a development-stage company with a limited operating history.”

Additionally, the firm's risk factors are substantial. Like just about everyone in the biofuel sector, Coskata is vulnerable to volatile feedstock and oil prices, and has to sort out the construction of its commercial facility, as well. But the bigger issue for Coskata lies in its technology platform. The firm's hybrid solution does offer a promise of high yields, but being a proprietary platform, it is as yet untested at the commercial scale, and the company lacks experience in pulling this feat off with other platforms. Coskata also needs to find some sort of commercialization or research partnership with a larger firm to help secure financing and smooth the bumpy road to commercialization.

In the end, Coskata presents a bit of a quandary. The upside is that the firm is shooting for the current holy grail of biofuel production: a high-yield platform utilizing low-cost (and sometimes free) feedstock that isn't corn.

On the other hand, in just about every facet of operations, Coskata is untested at the commercial scale.

Jefferson County biomass plant to turn wood and tires into electricity

http://chronicle.augusta.com/news/2011-11-28/jefferson-county-biomass-plant-turn-wood-and-tires-electricity

Biomass plant would burn wood, tires in Wadley

By Rob Pavey, Staff Writer

Monday, Nov. 28, 2011

 

 A $70 million biomass plant that burns wood products and shredded tires to make electricity could bring about 25 jobs to Wadley, Ga.

 

“We plan to have it online by the end of 2013 but we’re shooting for summer of 2013,” said Rick Cashatt, CEO of North Star Renewable Energy, the Clayton, Ga., company proposing the project.

The company is working with Jefferson County officials to acquire 25 acres for the plant, which will require permits from Georgia’s Environmental Protection Division and has also raised questions among residents concerned about “tire derived fuels.”

According to the company, the plant would burn about 133,500 tons per year of forest products and about 38,500 tons per year of shredded tires to create about 24 megawatts of power.

“They were saying they could only do it if the state would accept the 20 percent tires as part of the mix of biomass,” said Geary Davis, a local resident who has joined environmental groups in questioning the project. “There are also concerns about ash, the source of the tires, air pollution and also the proximity of the plant to the Ogeechee River.”

Cashatt said pollution concerns over the use of tire derived fuel are unfounded.

“People think of tires being burned in a field somewhere and belching black smoke, but this is a controlled burn inside a boiler,” he said, adding that the tire fuel will be made elsewhere and brought to Jefferson County for use in the biomass plant.

Using tire fuel also makes the biomass mix burn hotter – and therefore cleaner – by eliminating incomplete combustion from using pure forest products that have a high moisture content, he said.

“This is a good environmental benefit a lot of people don’t realize,” he said.

The plant’s application for permits remains under review, said Eric Cornwell, stationary source permitting manager in the Georgia’s Environmental Protection Division’s Air Protection Branch.

State officials typically regulate particulate matter, sulfur dioxide, nitrogen oxides and other materials, he said, adding that the application also stipulates tire materials would be brought in as fuel and not shredded onsite.

Cornwell said there are about 10 biomass fuel power plants already permitted to operate in Georgia, but only one of them – a facility in Rabun Gap that burns exclusively wood products — is actually in operation.

Cashatt, whose company was also involved in developing the Rabun project with some investors from Virginia, said North Star examined 17 Georgia sites for potential biomass projects several years ago.

The list was later reduced to just five sites, and later to just three, including the one in Jefferson County.

“The 2008 recession stopped a lot of projects dead in their tracks,” he said. “Everyone had hoped this industry would really take off.”

One of the partners in the Wadley project is the U.S. Endowment for Forestry and Communities, a non-profit group based in Greenville, S.C., that works to promote forestry related jobs in rural areas, he said.

Sundrop Fuels Announces $450 Million Biofuels Refinery in Alexandria Area

http://www.louisianaeconomicdevelopment.com/led-news/news-releases/sundrop-fuels-announces-$450-million-biofuels-refinery-in-alexandria-area.aspx

11/22/2011

 ALEXANDRIA, La. -- Today, Gov. Bobby Jindal and Sundrop Fuels Inc. CEO Wayne Simmons announced that Sundrop Fuels will build a $450 million biofuels refinery that will bring 150 new direct jobs averaging about $58,000, plus benefits, to Central Louisiana and result in an estimated 1,150 indirect jobs in the region.

Gov. Jindal said, "When I ran for Governor, I told you that it was for one main reason -- I was tired of seeing friends and family move away from Louisiana to pursue their dreams in other states because they couldn't find opportunities here at home. Four years later, and a big reason that we are here today with you, is that our state's economy is not just growing: We are competing and winning in the national and global economy.

"Louisiana's innovation in the energy industry has always been part of our state's economy and our heritage. Today, I am proud to announce that we are here to again build on our state's legacy in the energy industry, while also continuing our winning streak of job creation projects. I'm proud to announce that Sundrop Fuels will invest $450 million in a new biofuels refinery that will take wood waste from the forests here in Central Louisiana and turn that biomass into gasoline. The project will also result in a total of more than 1,300 new jobs in the Central Louisiana region. We are turning our economy around and making Louisiana the best place in the world to pursue a rewarding career."

The biofuels plant will salvage wood waste from renewable forests in Central Louisiana and adjacent regions and use that biomass as a feedstock. Sundrop Fuels also will extract hydrogen from abundant supplies of Louisiana natural gas, combining the hydrogen in a proprietary reactor with carbon extracted from wood waste. The result -- up to 50 million gallons of fuel a year -- will represent the world's first renewable green gasoline that's immediately adaptable to existing pumps, pipelines, engines and transportation infrastructure. By 2020, Sundrop Fuels expects to produce more than 1 billion gallons of renewable fuel annually through its process (including but not limited to its Louisiana facility), meeting nearly 10 percent of the federal government's stated goal for renewable fuels refined from cellulosic material and other alternatives to crude oil.

Colorado-based Sundrop Fuels will create 130 manufacturing jobs and 20 research and development jobs in Louisiana, with construction of the facility beginning in 2012, hiring beginning in 2013 and full commercial operation starting in 2014. Pay at the biofuels facility will average more than $58,000 a year, plus benefits. Because of the refinery's broad use of suppliers and support industries, Louisiana Economic Development estimates nearly eight indirect jobs will be created by the project for every direct Sundrop Fuels job.

LED's Lead Development Group identified and began actively cultivating Sundrop Fuels in early 2011, and the Alexandria area emerged as a promising location because of its access to major electrical and natural gas supplies and because of the abundance of wood byproducts the region boasts. The state's targeted incentives for workforce training and research and development helped Louisiana win the project over several other states in the South and Southwest.

"Sundrop Fuels' first facility will provide America with millions of gallons of renewable gasoline and establish our transformative gasification technology while supporting Louisiana's natural gas and sustainable forestry industries," said Simmons, the Sundrop Fuels CEO. "Our decision to locate in Rapides Parish underscores Louisiana's commitment to the advanced biofuels industry, and we look forward to our partnership in helping meet the nations growing energy needs."

Oklahoma City-based Chesapeake Energy Corp., which holds the leading position for natural gas reserves in the Haynesville Shale in Louisiana, has provided major investment backing for Sundrop Fuels. Other investors include a pair of major venture capital firms, Oak Investment Partners and Kleiner Perkins Caufield & Byers.

To secure the project, LED offered Sundrop Fuels performance-based grants for building and financing costs ($14 million over 10 years), as well as $4.5 million to reimburse relocation costs of research and development operations and key employees. Sundrop Fuels also will receive assistance from LED FastStart™, ranked by Business Facilities magazine as the nation's No. 1 workforce development program. And the company is expected to utilize Louisiana's Quality Jobs, Industrial Tax Exemption and Research & Development Tax Credit programs. Sundrop Fuels also will apply for a private activity bond allocation of $330 million or greater, which will help the State utilize capacity that otherwise would have gone unused; the private activity bond allocation will enable the company to reduce its project financing costs.

"This project is a terrific win for Louisiana in terms of traditional measures of jobs and capital investment, and it also will help position our state as a leader in developing alternative fuels," said LED Secretary Stephen Moret. "Sundrop Fuels will employ a technology that produces green fuels, without subsidies, that can successfully compete with conventional gasoline refined from crude oil."
The Central Louisiana Economic Development Alliance played a key role in helping Sundrop Fuels locate and acquire the proposed refinery site eight miles northwest of Alexandria at the junction of Rapides Station Road and Interstate 49, where the company will build on approximately 1,200 acres and have space available for future expansion.

"CLEDA is committed to creating more jobs, wealth and opportunity for Central Louisiana," said Jim Clinton, CLEDA's president and CEO. "The decision that Sundrop Fuels has made to locate here is a big step in beginning to fulfill that commitment. Sundrop Fuels' presence here will create more than 1,000 direct and indirect jobs, increase employment and average wage rates, and help build a more technologically competitive workforce and economy for the region. We are honored by Sundrop Fuels' decision, and are deeply appreciative of all of our local and state partners for the commitments they have made to make this announcement possible."

About Sundrop Fuels

Sundrop Fuels Inc. is a gasification-based, drop-in, advanced biofuels company based in Longmont, Colo. Backing for Sundrop Fuels comes from its strategic partner, Chesapeake Energy Corp., and from two of the world's premier venture capital firms, Oak Investment Partners and Kleiner Perkins Caufield & Byers. Sundrop Fuels plans to build and operate large-scale biorefineries, with each generating more than 200 million gallons of drop-in, transportation biofuels annually. For more information, visit www.sundropfuels.com

Southeast is a Hotbed of Biomass Activity

http://biomassmagazine.com/articles/5895/southeast-is-a-hotbed-of-biomass-activity

By Rona Johnson | October 27, 2011

 

If you haven’t done so already, you will want to register for the Southeast Biomass Conference & Trade Show. The event will bring information and solution seekers together with biomass buyers, sellers, developers, producers, processors, transporters, researchers and anyone with a stake in the industry.

The event, which will be held Nov. 1-3 in Atlanta, will kick off with a presentation by Jill Stuckey, director for the Center of Innovation for Energy (COI-Energy), Georgia Environmental Finance Authority. The center was established by Gov. Sonny Perdue in 2008 and its mission is to expand the use of renewable energy and alternative fuels in Georgia.

The center provides clients with access to research at universities and connects them with funding opportunities through incentives, matching grants, low-interest loans and access to potential investors through angel investor networks and venture capitalists groups.

Clearly Georgia is doing something right because renewable energy projects there are on the rise.
The first project that comes to mind is the 750,000-ton-per-year pellet plant in Waycross, Ga. The $150 million project is the result of a collaboration between German-based RWE Innogy and Sweden-based BioMass Capital Management. The pellets produced there are being shipped to RWE’s biomass power facilities in Europe.

Georgia will also be home to a new $170 million biomass power plant in LaGrange. The plant, which will produce 50 megawatts of power, is being built by North Carolina-based Rollcast Energy Inc.
Most recently, Green Energy Farms Alliance, which is made up of miscanthus developer New Energy Farms and renewable energy project developer Global Green Engineered Fuels LLC, is building a wood fuel manufacturing and distribution plant near Atlanta and a wood and miscanthus biomass pellet plant in southwest Georgia. The plan is to ship industrial-grade pellets to biomass power plants in Europe (for more information, go to http://www.biomassmagazine.com/articles/5883/new-biomass-alliance-focuses-on-wood-miscanthus-pellets).

For anyone interested in pellet production, the Southeast Biomass Conference & Trade Show will feature a general session titled “Producer’s Perspectives: A Manufacturer’s Roundtable on the Southeast’s Growing Pellet Industry” that will be moderated by Seth Ginther, executive director of the U.S. Industrial Pellet Association, who will be joined by John Bradley, vice president of business development for Folghum Fibres Inc.; Sam Kang, managing director of Georgia Biomass; Michael Williams, director, strategy and planning for The Westervelt Co.; and Peter Najera, vice president of operations for Enviva.

Conference panel discussions will also address biomass supply and demand, converting and cofiring coal-fired plants with biomass, cellulosic and drop-in biofuels and many other topics.

If you are developing or planning a biomass project, you won’t want to miss the general session titled “Southeastern Biomass Power Producer’s Roundtable.” This is the final general session on Nov. 3 and consists of biomass power project developers. The session will be moderated by Tim Portz, BBI International’s program director, and will feature Joshua Levine, director of project development for American Renewables LLC, which is building one of the largest biomass power plants in the U.S., a 100-megawatt facility in Gainesville, Fla.; Marvin Burchfield, vice president of Decker Energy, which is building a 42-megawatt power plant in Plainfield, Conn.; and Raine Cotton, CEO of Southeast Renewable Energy, which is developing three 15-megawatt biomass power plants in South Carolina. American Renewables is also developing a project in White Springs, Fla., and Decker Energy has one in Fitzgerald, Ga.

For more information about the conference, visit the website at www.biomassconference.com/southeast.

See you in Atlanta.

Joint Venture Plans to Build Largest Biomass Plant in Georgia

 http://www.energyboom.com/biofuels/joint-venture-plans-build-largest-biomass-plant-georgia

By Shannon Roxborough on August 31, 2011

Beasley Forest Products LLC, the largest hardwood sawmill in the U.S., and specialty contractor Land Care Services LLC, have formed a joint venture, Green Power Solutions, to construct what will be Georgia's largest biomass facility in the city of Dublin, after receiving approval from the state's Public Service Commission.

The planned power plant, capable of processing over one million tons of tree bark, wood chips and related biological waste annually, will produce 56 megawatts of electricity and provide steam power for an existing paper mill. The facility is scheduled for completion in October 2012.

Company officials say the project will create around 150 temporary construction jobs during the building stage and 55 permanent positions once operational while supporting some 200 full-time workers in the forestry and logging sectors.

The venture is also currently putting the final touches on a 20-year power purchase agreement with Georgia Power, a subsidiary of Southern Company, one of the nation's largest electric utilities.
Biomass, though heavily supported in traditional timber states like Washington, Oregon and Maine, still faces serious regulatory hurdles that impede its ability to compete with renewable energy sources like solar and wind.

A widely used form of heating in much of Europe, wood is the most popular form of biomass. Supporters consider it a cost competitive, low-carbon and high-energy alternative to coal, but industry growth on this side of the Atlantic has been hampered by concerns that using wood-derived biomass contributes to deforestation and greenhouse gas emissions.

Stock issues for firm seeking funds for Georgia biomass plant

http://www.brighterenergy.org/26069/news/bioenergy/stock-issues-for-firm-seeking-funds-for-georgia-biomass-plant/

 

August 22, 2011

 

Vega Biofuels, Inc., has reassured shareholders regarding difficulties with the trading of its stock.

The company planning a plant in Georgia to manufacture biomass fuel for power generation said a few of its shareholders were having problems trading stock through securities firm Penson.

Chairman and CEO Michael K Molen said shareholders had also had probems trading through Alpine Securities.

Molen said his company was working to resolve the issues.

Norcross-based Vega Biofuels is currently seeking permanent financing for a manufacturing facility in Georgia that will produce biomass fuel for power plants from local timber waste.

The company’s chairman and CEO told investors last week that while interim funding for the project’s design phase is in place, Vegas Biofuels is now in discussions with other funding sources for the main project capital.

Vega Biofuels is preparing to build a manufacturing plant to produce “biocoal” – a biomass fuel made from timber waste that could be used as an alternative to coal in coal-fired power plants.

The biocoal fuel is produced by a process called “torrefaction”, a kind of pyrolysis in which biomass is heated in an oxygen-free environment. Resulting material then compressed into briquettes.

A lease has been signed for the new plant to be built in Cordele, Crisp County, where a new inland port is being built.

“It’s a wonderful facility located in the perfect area, right in the middle of the timber rich Georgia Bioenergy Corridor,” said Molen.

Louisiana-based engineering services firm Hunt, Guillot & Associates has been hired to provide engineering and design for the plant, and will also recruit permanent staff for the site.

Vega Biofuels has also signed up local timber market experts The Timber Group to source timber waste for the new facility.

The False Promise of Biofuels

http://www.scientificamerican.com/article.cfm?id=the-false-promise-of-biofuels

The breakthroughs needed to replace oil with plant-based fuels are proving difficult to achieve

By David Biello | August 10, 2011 |

Range fuels was a risky but tantalizing bet. The high-tech start-up, begun by former Apple executive Mitch Mandich, attracted millions of dollars in private money plus commitments for up to $156 million in grants and loans from the U.S. government. The plan was to build a large biofuels plant in Soperton, Ga. Each day the facility would convert 1,000 tons of wood chips and waste from Georgia’s vast pulp and paper industry into 274,000 gallons of ethanol. “We selected Range Fuels as one of our partners in this effort,” said Samuel Bodman, then secretary of energy, at the groundbreaking ceremony in November 2007, “because we really believe that they are the cream of the crop.”



That crop has spoiled in the ground. Earlier this year Range Fuels closed its newly built biorefinery without selling a drop of ethanol. Turning biomass into a commercially viable, combustible liquid is tougher than anticipated, the company has found. As expensive equipment sits idle, the firm is searching for more funding to try to solve the problem.

Reading Between the Tree Rows

http://www.biomassmagazine.com/articles/5696/reading-between-the-tree-rows

Are we headed for a pine pulpwood shortage in the U.S. South?

 

By Dean McCraw | July 28, 2011

• 

• 
  
  

When my oldest daughter graduated from college in 2005, she moved to Atlanta to begin work with the largest subprime lender in the Southern U.S. After completing a six-month training program, she was transferred to their Orlando office.

In February of 2007, while in Orlando for a business meeting, my daughter and I went out to dinner. During small talk conversation, I asked her what she had worked on that day. She said she had worked on a $850,000 mortgage for a single lady and a second note that would cover her down payment. I asked her how much money this lady made, to which she replied, “We don’t verify income.” With a shocked look on my face, I informed her that her business was going to “crash and burn.”

It was no surprise when later that year, she called me in tears early one morning as her office had just been shut down, putting her out of work. Within a month of her office closure, the entire company closed and filed for bankruptcy putting more than 1,200 people out of work.

I tell this story not to illustrate any ability on my part to predict the future but to illustrate an ability to grasp the obvious.

The Issue

What I am concerned about is the low level to which tree planting has dropped in the U.S. South. From the table of tree planting acres (see table on page 45) you can see that planting acres last winter were at the lowest level since 1969. If this trend continues, we may face shortages of pine pulpwood in the future.

According to the folks at the Auburn University Nursery Co-op, these acres are an average of 97 percent pine. Most planting acreage of pine as hardwood is naturally regenerated unless it is old bottomland agricultural sites, which accounts for almost all of the hardwood planting.

There has been some questioning of these acreage numbers. Each state has a different system for collecting their planting acreage numbers. I contributed to these numbers for several years and I can attest that some states do a good job of collecting data but I am not sure how others get their numbers.

Another indicator of this decline, however, can be found in seedling production numbers. In 2001, the largest seedling producer in the nation at that time, International Paper, said in its annual report that it shipped 425 million seedlings that year. In 2010, this same nursery group, now part of ArborGen Inc., reported that it shipped 218 million seedlings. This is a decline of 49 percent in seedlings shipped, which corresponds to the decline in planting acreage.

Also supporting these numbers is my personal experience. In 2000, in my former position, I was responsible for the production and planting of 45 million seedlings. That same company will plant 18 million seedlings this year, a decline of 60 percent.

There have also been a number of nursery closures across the South. While an exact number is difficult to determine, it has been estimated that at least 20 seedling nurseries have closed in the past 10 years. In addition, many of the nurseries in operation today have curtailed production over the past 10 years.

Where Did This Begin?

We hear a lot about unintended consequences and our current situation has its origin in this as well. In the late ’80s our federal government executed one of the largest Conservation Reserve Programs ever attempted. This led to the largest amount of planting acreage ever carried out in the U.S. South. In 1988, more than 2.5 million acres were planted. This was more than double what was planted just one decade earlier in 1978. In total, the CRP added an estimated 3 million acres of additional pine plantations.

During this period and on into the ’90s, pine pulpwood shortages, especially during periods of wet weather, were not uncommon and overcutting of pine timber growing stock was common.

In January of 1995, as the timber sales forester for the second-largest timberland owner in Georgia, we sold a tract of pine pulpwood just outside of Waycross for more than $35 per ton. Adjusted for inflation, this price would now be more than $50 per ton, or more than $100 per dry ton on the stump. Delivered price in today’s dollars would easily be more than $140 a dry ton. How many energy operations could pay this level of prices for their delivered feedstocks?

The increase in planting acreage helped to push pulpwood prices to new lows starting in the late ’90s as these stands had to be thinned to continue CRP payments. There were cases of landowners in Georgia having to pay loggers to thin their CRP stands. This glut of pulpwood also coincided with major changes in timberland ownership as many integrated forest products companies disposed of their timberlands.

Today many of these stands remain, as their high levels of small sawtimber make them difficult to sell in a market depressed by the downturn in housing.

The Current State of Affairs

At present, there are strong markets for pulpwood in many markets across the South. With the decrease in clean chips from sawmills due to the reduced operating hours, many pulp/paper mills are relying on roundwood to make up the shortage. To be able to supply this level of roundwood in a market with minimal need for sawtimber, many timberland owners have used thinning as their main form of harvest. This approach is creating larger inventories of sawtimber that are being carried forward for harvesting later and further reducing the demand for seedlings.

Planting densities have continued to decrease across the South. Most timberland investment management organizations (TIMOs) and real estate investment trusts (REITs) have decreased their seedlings planted per acre, with some reducing them to less than 300 seedlings per acre. They are also planting control mass pollinated and somatic embryogenesis (SE) seedlings. These high-priced seedlings are being grown strictly for the sawtimber market.

While our government has maintained a CRP program in recent years, the program has changed its focus from timber production to ecosystem restoration. This has resulted in a planting regime that promotes planting longleaf at no more than 500 stems per acre.

Accuracy of Forest Service FIA data

New energy startups have relied on U.S. Forest Service Forest Inventory & Analysis data for site placement. Having reliable data on forest inventories and removals is important in light of the major capital investments in these facilities.

John Morris, vice president of Foley Timber and Land Co., has examined FIA data in his recent report “Florida’s Pine Plantation Resource, Short of Sustainability.” Morris examined the pine resource in Florida by looking at both the plantation and natural pine stands.

He found that FIA data is not giving a current picture of removals from plantations. The FIA data uses an average of removals over a survey period of 12 years. Using this average FIA shows removals for 2007 of 14.9 million tons but a private source that tracks mill usage shows 2007 removals of 17.1 million tons. This is a difference of 2.8 million tons.

He also found a discrepancy in the removals from plantations versus natural stands. FIA estimates that 55 percent of pine removals in 2007 were from plantations, again using the 12-year average. However, an analysis of current removals from the Master Logger survey shows that 2007 removals from pine plantations were actually 90 percent of removals.

Based on his analysis, Morris estimates that Florida plantations were overharvested in 2007 by 3.8 million tons. He further forecast that this number would increase in the future as regeneration acreage continues to decline. Adding increased usage from bioenergy and biofuels operations “will further negate sustainability.”

What Might the Future Hold?

If the solid wood markets do not recover soon and planting acreage continues its decline, what will be the result? There are a number of possible scenarios.

There would be a continued decline in sawtimber pricing while pulpwood pricing increases. In spot markets recently, we have seen pine pulpwood prices near those of small sawtimber and in one case exceeding it. This is especially prevalent during periods of wet ground conditions.

The specifications that differentiate pulpwood from small sawtimber will probably change with the smallest of this sawtimber moving into pulpwood. We are already seeing this occur in some areas.

The volumes of forest residue will increase, as we all know that larger trees have larger limbs and tops. In addition, the current push to low planting densities will increase the amount of residue hardwood that invades these pine stands. These are both pluses for users of forest residue.

With the continued glut of sawtimber on the market, many in the forest products industry believe that we may see increased sales of timberlands by the TIMOs and REITs in an effort to prop up returns within these organizations. This could lead to further fragmentation of forestland ownership in the South.

Additional dangers to forest plantation acreage may be in our current commodity pricing. With corn and cotton at all time highs, we may see acreage revert from timberland back to farmland.

It is possible that we have seen the bottom of the pulp/paper mill closures in the South. In addition, almost all the new development in the energy markets is occurring in the pulpwood area. There have been no new developments in the solid wood markets.

What Can Pine Pulpwood Users Do?

All of the evidence points to a coming shortage of pine pulpwood. Users can wait until pricing and availability become a problem, or they can start to work on minimizing the impact. There are a number of approaches a user can implement to overcome this impending problem.

The first and most important thing a new user of pine pulpwood can do is to assure that their due diligence is exhaustively complete on their potential feedstocks. Looking at more than one source of inventory numbers should be a necessity. If one is going to spend hundreds of millions of dollars constructing an energy facility, then having a good understanding of the feedstocks now and in the future should be a requirement for construction and financing.

One of the more dramatic approaches would be the purchase of timberland. Just as the integrated forest products companies owned timberland, energy facilities could do the same. The advantages of this approach are the ability to harvest whenever needed and stands can be planted and managed to maximize pulpwood production. However, a company would face the same tax implication that contributed to the sale of timberland by these integrated forest products companies.

A less costly approach would be to work with the major holders of timberland. Private landowners hold 71 percent of the timberland in the South, so working with these owners to supply feedstocks is key. In the ’80s and ’90s, many of the forest products companies had landowner assistance programs. These programs had many different forms but most included the right of first refusal on all timber sold by the landowner. These programs offered seedlings and planting assistance at no- or reduced-cost to the landowner.

Providing seedlings to landowners has another benefit. Seedlings can be selected that maximize fiber production. Most tree improvement programs have focused on selecting trees for the production of sawtimber. Attempting to identify seedlings that maximize fiber production should be an objective of all pulpwood users.

The Biomass Crop Assistance Program may be an aid in this. One would need an understanding of the species and management regimes that will work. However, future funding of this program is a real question.

Energy grasses may be needed to fill the gaps that are sure to occur. These can give full productivity in as little as three years. Eucalyptus and fast-growing hardwoods may also work to fill the gap but they take a longer time, a minimum of seven years to begin harvest. Eucalyptus can only be used in the Deep South, usually defined as south of Interstate 10.

If the landowner’s objective were growing sawtimber, then promoting an intercropping approach would be beneficial. An example of this would be the planting of high-end seedlings such as mass control pollinated or SE on 20-foot rows and then planting between these rows with good quality open pollinated seedlings. This would give the landowner a harvestable crop of pulpwood in 10 to 14 years while still producing the sawtimber at a future time.

Conclusion

While we hear many economic development people referring to areas of the South as the Saudi Arabia of pine trees, this is not necessary the case. This future shortage will affect all users of pine pulpwood, the existing pulp/paper industry and the new energy start-ups. However, the pulp/paper industry can afford to pay more for feedstocks than the energy industry.

All is not lost, however. Users of pine pulpwood can become proactive and begin to plan for the feedstock market changes. If not, they face increased cost or possibly shortages of pine pulpwood.

The bright side is that forest residue users will see an increase in available feedstocks.

Author: Dean McCraw
President, McCraw Energy LLC
mailto:dean.mccraw@mccrawenergy.com.

DeKalb citizens suing over biomass gasification plant

http://www.ajc.com/news/dekalb/dekalb-citizens-suing-over-1032763.html

 Thursday, July 21, 2011

By April Hunt

The Atlanta Journal-Constitution 

A group of DeKalb County citizens have filed a lawsuit against the county over its recent approval of a $60 million biomass gasification plant in south DeKalb.

Citizens for a Healthy and Safe Environment, or CHASE, filed the suit in DeKalb Superior Court to appeal the county’s approval of a special land use permit to Green Energy Partners. The facility plans to turn wood chips into energy to sell to Georgia Power Co.
More than 100 residents objected to building the plant near Lithonia over fears of the emissions. Green Energy is waiting for a state air quality permit before beginning construction later this year.

Sound of progress

http://www.tidewaternews.com/2011/07/15/sound-of-progress/

Published 10:52pm Friday, July 15, 2011

Editor’s Note: This is the fourth in a six-part series that focuses on the growing wood pellet industry in northeastern North Carolina and southeastern Virginia.

By Cal Bryant/Staff Writer

cal.bryant@roanoke-chowannewsherald.com

AHOSKIE, N.C.—The sound of progress can be heard here at the intersection of U.S. 13 and N.C. 561.
Work crews are busy on a $52 million investment by Enviva Biomass, a Richmond-based firm constructing a wood pellet mill at the site of the old Georgia-Pacific plant.

Once up and running later this year, Enviva will add 60-plus new jobs. Meanwhile, the ripple effect will result in an upswing in other lines of work, namely logging operations and trucking firms. The end result will prove to be a big shot in the arm financially for an area blessed with a highly skilled labor force but a lack of overall job opportunities.

“We’ve been extremely pleased with the quality of the workforce here and we’ve tapped into that talent pool,” said Enviva’s Glenn Gray who is overseeing construction of the Ahoskie mill. “It was very unfortunate that IP (International Paper) closed its operation in Franklin, Va., last year and we’ve just recently learned of Georgia-Pacific’s decision to close its plant over in Skippers, Va. However, we find ourselves in a position to offer jobs to those individuals.”

Gray was also appreciative of the assistance in finding and training workers offered by Roanoke-Chowan Community College.

“We’ve worked with them in putting together a list of candidates that may be added to our workforce,” he said. “They’ve also assisted us in the training of our operators and technicians. Having a community college in an area we locate is a blessing. They are the support mechanism we and other businesses need.”
Gray said the construction process in Ahoskie is right on schedule.

“I think we’ve set some sort of record here because we’ve only lost three days to rain,” he noted. “Normally when we begin the construction process at a new mill, it can be as dry as the Sahara Desert before we get there and then the monsoon season sets in just as soon as we dig the first hole.”

According to Enviva’s schedule, the Ahoskie mill will be operational by the fourth quarter of this year.
“About three to four weeks after we start-up, we’ll be running seven days a week,” Gray stated. “Just like the start up of any new operation, it will take a short period of time before reaching maximum output. We expect that to occur early in 2012.”

Gray said the Ahoskie mill will employ 61 to 62 workers. Those jobs will entail logistics control, mobile equipment operators (front end loaders, knuckle boom loaders) and operators for the chipping machinery, hammer mill, dryers and pellet mill. There’s also the need for a maintenance staff, those trained in mechanical and electrical work.

The average wage will be $17.60 per hour. Enviva offers health care and 401(k) benefits.
The mill, which was originally scheduled to produce 330,000 short tons of wood pellets per year, will now ramp up to an annual output of 350,000 metric tons.

“The demand for solid renewable fuels like wood pellets is taking off, and Enviva’s manufacturing footprint is growing with it,” said Enviva Chairman and CEO John Keppler. “Our plans for expansion in the region, in addition to an increased capacity at Ahoskie, will ensure a compelling, stable source of economic growth to the landowners, loggers and haulers who have been hit hard in this region over the past several years.”

Gray said the manufacturing process is basically reducing a log to chip, then further lowering the product size at a hammer mill before it heads to the pellet mill, where the wood is forced inside a die that produces the final product.

“The wood gets to a very fine state before it becomes a pellet,” Gray said. “The size of the pellet hinges on what the customer has ordered. The customer also specifies the moisture content and gravity of the pellet. It’s our job to meet those specifications to the letter. What you have in the end are what we pride ourselves in — producing a high quality wood pellet.”

Once completed, the pellets are trucked in bulk to Enviva’s newly acquired deep water port in Chesapeake, bound for overseas shipment to the company’s growing European client base.

Enviva is currently developing sites for two additional wood pellet manufacturing plants in the mid-Atlantic region, each of which could be operational by late 2012, and another site in either Mississippi or Alabama that could become operational in early 2013.

Additionally, Wood Fuel Developers of Chester has plans for two wood pellet mills (one in Greensville County and the other in Sussex County. Franklin Pellets, a newly formed partnership between Multifuels and CMI, is eyeing the possibility of opening a wood pellet shop within a portion of the now closed International Paper Mill in Franklin.

Rentech gets final approval for 55-MW biomass project in Florida

http://www.utilityproducts.com/news/2011/07/1456569462/rentech-gets-final-approval-for-55-mw-biomass-project-in-florida.html

(ADP Renewable Energy Track) - Jul 14, 2011 - US clean energy company Rentech Inc (AMEX:RTK) said Wednesday it had obtained final air permit from the Florida Department of Environmental Protection for its 55-MW Port St Joe biomass-to-power project.

The facility, located in northwestern Florida, will use Rentech-SilvaGas biomass gasifier to produce clean electricity from 930 dry tonnes of woody biomass a day. Local utility Progress Energy will buy most of the electricity output under a long-term power purchase agreement.

Rentech has already signed a term sheet for the project's engineering, procurement and construction (EPC) with US White Construction.

Overheated assembly caused Georgia Biomass explosion

http://jacksonville.com/news/georgia/2011-07-13/story/overheated-assembly-caused-georgia-biomass-explosion

Wood pellet production scheduled to resume at factory near Waycross.

Posted: July 13, 2011 - 12:00am | Updated: July 13, 2011 - 1:43am

By Teresa Stepzinskijacksonville.com

July 13, 2011 - 12:00am

 

Wood pellet production should resume today at Georgia Biomass, which was crippled by a dust explosion last month. The plant is near Waycross.

"We're ramping up now ... starting the equipment and getting it all ready to go," plant manager Ken Ciarletta said about noon Tuesday.

No one was injured in the early morning explosion June 20, which damaged some of the processing equipment at the plant that employs about 80 people.

An investigation revealed that an overheated roller/bearing assembly in a pelletizer sparked the blast at the factory, Ciarletta said.

No employees were laid off while production was shut down at the plant, he said.

As equipment was repaired and modifications made to prevent a recurrence, employees went through training and worked in other areas of the plant, he said.

He wouldn't reveal the cost of the damage, saying it was proprietary information. Ciarletta did say "the capital damage was comparatively low and has been repaired."

Georgia Biomass is a subsidiary of RWE Innogy of Germany, one of the top five electricity and gas companies in Europe. An estimated $175 million investment, the plant is in the Waycross-Ware County Industrial Park about five miles west of Waycross off U.S. 82 and U.S. 1.

The plant began operating May 12. Using yellow pine timber from throughout Southeast Georgia, its goal is to produce about 750,000 tons of wood pellets annually. Wood pellets are used as fuel - a cleaner-burning substitute for coal - primarily in Europe.

teresa.stepzinski@jacksonville.com, (912) 264-0405

Read more at Jacksonville.com: http://jacksonville.com/news/georgia/2011-07-13/story/overheated-assembly-caused-georgia-biomass-explosion#ixzz1SUriku2t

Overheated assembly caused Georgia Biomass explosion

http://chronicle.augusta.com/news/business/2011-07-13/overheated-assembly-caused-georgia-biomass-explosion

Morris News Service

Wednesday, July 13, 2011 6:01 AM

 

WAYCROSS, Ga. -- Wood pellet production should resume today at Georgia Biomass, which was crippled by a dust explosion last month.

"We're ramping up now ... starting the equipment and getting it all ready to go," plant manager Ken Ciarletta said about noon Tuesday.

No one was injured in the early morning explosion June 20, which damaged some of the processing equipment at the plant that employs about 80 people.

An investigation revealed that an overheated roller/bearing assembly in a pelletizer sparked the blast at the factory, Ciarletta said.

No employees were laid off while production was shut down at the plant, he said.

As equipment was repaired and modifications made to prevent a recurrence, employees went through training and worked in other areas of the plant, he said.

He wouldn't reveal the cost of the damage, saying it was proprietary information. Ciarletta did say "the capital damage was comparatively low and has been repaired."

Georgia Biomass is a subsidiary of RWE Innogy of Germany, one of the top five electricity and gas companies in Europe. An estimated $175 million investment, the plant is in the Waycross-Ware County Industrial Park about five miles west of Waycross off U.S. 82 and U.S. 1.

The plant began operating May 12. Using yellow pine timber from throughout Southeast Georgia, its goal is to produce about 750,000 tons of wood pellets annually. Wood pellets are used as fuel - a cleaner-burning substitute for coal - primarily in Europe.
 

Wood pellet market 'explodes' in US

http://www.bioenergy-news.com/index.php?/Industry-News?item_id=3815

12 July 2011

The wood pellet market is booming in the US, Europe and Asia

Wood pellet manufactures across the US are increasing capacity as the global market for this renewable energy source expands.

Between 2008 and 2010 exports from the US to Europe rose from 85,000 tonnes to over 600,000 tonnes a year.

Speaking about the US wood pellet market Peter O'Keefe, a partner in Franklin Pellets, said: 'It's exploding.'

Franklin Pellets, based in Franklin, Virginia, US, is considering converting part of the International Papermill into a pellet plant.

And O'Keefe predicts that the southeast of the US will continue expanding. 'We're excited about the potential of the US market and believe in the long run it is moving our way,' he says.

Europe's demand for wood pellets can be largely attributed to the nation's 2020 renewable energy targets. In 2010 Europe consumed around 11 million tonnes of wood pellets. This is expected to reach 50-100 million tonnes throughout the coming years.

'The infrastructure for coal doesn't have to be changed dramatically for pellets because they're almost like ground-up coal,' O'Keefe explains. 'That's why it is attractive to use to co-fire with coal.'

Demand for wood pellets in Asia is also on the rise. However, imports from the US are limited, according to Stan Elliot of Bear Mountain Forest Products, a manufacturer of forest-based products, located in Portland, Oregon, US. Instead, Canada, British Columbia in particular, is supplying this demand due to low transportation costs and better shipping facilities than the US.

But while the US ramps up production capacity and its exports continue to rise, domestic demand looks to remain fairly low, for the near future at least. As John Belcher, owner of Belcher Enterprises, explains: 'I wouldn't say [the market] is good at all in this area. Up north where they use more heat it's more beneficial.'

Image source: Franklin Pellets

Florida PSC Approves New Waste-to-Energy Plant

http://biomassmagazine.com/articles/5636/florida-psc-approves-new-waste-to-energy-plant

By Anna Austin

July 1, 2011

The Florida Public Service Commission has approved construction of a $600 million waste-to-energy plant that will be co-located with the Palm Beach County Solid Waste Authority's existing 63-megawatt (MW) facility.

The old facility, which opened in 1989 and will remain operating, has a daily capacity of about 3,000 tons of municipal solid waste (MSW). The new plant will also combust up to 3,000 tons of MSW per day, adding between 70 and 80 MW of electrical capacity to the site, or enough electricity to power about 21,000 homes.

Florida Power & Light Co. will buy the electricity under a power purchase agreement that was approved by the FPSC after the commissioners slightly amended the agreement to increase cost benefits for customers.

In making the determination of whether to approve the plant, the commission said it considered the need for electric system reliability and integrity, the need for adequate electricity at a reasonable cost, and whether the proposed unit was the most cost-effective alternative available. It also considered whether other renewable energy sources or conservation measures were available to FPL that might mitigate the need for the proposed plant.

Commissioner Eduardo Balbis said the expansion will not only stimulate the economy, but also benefit the SWA and FPL customers.

FPL anticipates receiving power from the expanded facility in 2015, and it will increase the utility’s renewable portfolio by 38 percent.

The parties estimate that approximately 400 jobs will be created during plant construction and 70 jobs will be needed for plant operations.

The jobless recovery, biofuels, eency-weency balance sheets, and you

http://biofuelsdigest.com/bdigest/2011/06/30/the-jobless-recovery-biofuels-eency-weency-balance-sheets-and-you/

By Jim Lane

June 30, 2011

In Washington, President Obama launched the Advanced Manufacturing Partnership – ho-hum, you say, and I think I hear you yawning.

But get a cup of coffee, and read on. This item is important.

Why is the President focused on innovation and competitiveness? It means jobs, but of a special kind. High technology workers on average earn 50 to 100% more than the average of workers in all other fields, according to the President’s Council of Advisors on Science and Technology.

But more than than – he’s addressing the “jobless recovery” that has been experienced in the US in the aftermath of the 2007-09 global financial crisis. Leaders are worried about it. There are only so many McDonald’s and Wal-Mart jobs that the community can add, if the value-add manufacturing base is not in place. “Invent here, make elsewhere” is a failed industrial policy, according to a PCAST report, “Ensuring Leadership in Advanced Manufacturing,” released this week, and downloadable here.

But what about you? If you are building, thinking of building, or helping someone to build – one of those 600 new, advanced biofuels facilities that will be required to meet the 2022 Renewable Fuel Standard – this means spurring investment in…you.

Government can’t get anything done, I hear you say. Well, they sure as shootin’ aren’t going to get this done alone. You have some shoveling to do, too. Let’s look at that.

Advanced Manufacturing, Advanced Biofuels and You

If there another industry proposing to build 600 high-tech manufacturing sites in the US over the next 11 years, we’d sure like to know about it. And no one is trying to build more capacity off eency-weency balance sheets than the US biorefinery industry.

So, you have more at stake, and more to gain, from this initiative, than any other single US industry.

So, let’s get behind it.

The Victory Plant

Our goal: to launch a collaborative industry dialogue, and a Biofuels Council of Advisors on Science and Technology, that will set companion goals for advanced manufacturing in biofuels in April 2012, at the Advanced Biofuels Leadership Conference, to dramatically reduce the investment, timelines, and risk for building advanced bioenergy projects – both in the US and around the globe.

The biofuels industry should set a goal of cutting in half, by 2022, the time necessary to plan, finance, build, and commission an advanced bioenergy plant, from 36 months to 18 months.

Let’s call it The Victory Plant. Low-cost, low-risk, high-speed manufacturing will spur stakeholders to meet the Renewable Fuel Standard targets, and reduce the capital and operational cost of these projects.

That’s victory over a jobless recovery, victory over energy dependence, victory over carbon, and victory over a failed dialogue on food-vs-fuel that can be resolved by advanced biofuels.

We can’t disagree our way out of these problems. Or complain, scold, shame, or squat our way out.

But we can hire and manufacture our way forward. Let’s do that.

In the Second World War, 20 million victory gardens were planted, according to the USDA. By 1945, half of the US fruit and vegetables harvest (as much as 10 million tons) came from home and community plots was estimated to be 9-10 million tons. In the early 1941, the average Liberty Ship was built in 230 days. By 1943, the average dropped to 42 days, and three ships were completed each day.

The Digest will add speakers, content, and collaborative discussion on Advanced Manufacturing Leadership and Innovation at the Advanced Biofuels Markets conference (we will be announcing complete details on the full program next week), and companion talks at the Biofuels Canada conference October 3-4 in Calgary.

I’ll be delighted to hear from you (contact me here) – industry leaders at the verge of scale-up, government, or academia — if you would like to take a leading role in shaping this effort.

More on AMP

The AMP will provide the platform for similar breakthroughs in the next decade, by building a roadmap for advanced manufacturing technologies, speeding ideas from the drawing board to the manufacturing floor, scaling-up first-of-a-kind technologies, and developing the infrastructure and shared facilities to allow small and mid-sized manufacturers to innovate and compete.

The initiative is based on a report titled “Ensuring Leadership in Advanced Manufacturing” from the President’s Council of Advisors on Science and Technology (PCAST), which you can download here.

Of the 36 stakeholders that lent time to the report’s development, you see six investors in advanced bio-based projects: Proctor & Gamble, Boeing, Lockheed, DARPA, Synthetic Genomics, and Blue Marble Energy.

Some AMP highlights

The Departments of Defense, Homeland Security, Energy, Agriculture, Commerce and other agencies will coordinate a government-wide effort to leverage their existing funds and future budgets, with an initial goal of $300 million, to co-invest with industry in innovative technologies that will jumpstart domestic manufacturing capability. Initial investments include small high-powered batteries, advanced composites, metal fabrication, bio-manufacturing, and alternative energy, among others.

A Materials Genome Initiative, would invest more than $100M in research, training and infrastructure to deploy advanced materials at twice the speed than is possible today, at a fraction of the cost.

Plus:

DARPA will explore new approaches that have potential to dramatically reduce – by up to a factor of 5 – the time required to design, build, and test manufactured goods while enabling entrepreneurs to meet Defense Department needs.

MIT, Carnegie Mellon, Georgia Tech, Stanford, Berkeley, and Michigan will form a multi-university effort to share best practices relating to advanced manufacturing and its linkage to innovation. The universities, industry and government agencies will define research opportunities and identify key technology priorities.

Commerce Department will develop an advanced manufacturing technology consortium, starting with $12 million in FY12, to identify public private partnerships to tackle common technological barriers to the development of new products.

The PCAST report that spurred all of this

PCAST called for:

Incentives for clean energy manufacturing innovation and investment, including the expansion  of the Clean Energy Manufacturing Tax Credit from $2.3 billion to $5 billion, with the goal of incentivizing $11.7 billion in private sector investment in clean energy manufacturing projects, firms, and jobs. The current tax credit program has been oversubscribed, and has had proven successful in leveraging private sector investment and creating jobs.

Creation of a public private partnership program to support platform technologies that will support innovation in manufacturing. The budget calls for $12 million in 2012 to fund these partnerships via the Advanced Manufacturing Technology Consortia (AMTech) program, and for $75 million to be dedicated to PPPs via the Technology Innovation Program (TIP), in particular for technologies that could improve manufacturing processes.

Allocation to NIST laboratories of $760 million to support development of measurements and technological advances in areas including nano manufacturing, network security, and bio manufacturing, with increases of $120 million directly for advanced manufacturing.

Allocation to DOE of $500 million to support energy related advanced manufacturing technologies, such as flexible electronics and ultra light, ultra durable automotive materials.

New E15 label gets like, not love, from ethanol industry

http://biofuelsdigest.com/bdigest/2011/06/29/new-e15-label-gets-like-not-love-from-ethanol-industry/

By Jim Lane

June 29, 2011

In Washington, the EPAissued fuel pump labeling and other requirements for gasoline blends containing more than 10 and up to 15 percent ethanol, known as E15.  These requirements will help ensure that E15 is properly labeled and used once it enters the market.   
The new orange and black label must appear on fuel pumps that dispense E15. This label will help inform consumers about which vehicles can use E15.

This label will also warn consumers against using E15 in vehicles older than model year 2001, motorcycles, watercraft, and gasoline-powered equipment such as lawnmowers and chainsaws.

Over the past year, EPA issued two partial waivers under the Clean Air Act that in sum allow E15 to be sold for use in model year 2001 and newer cars and light trucks.  EPA based its waiver decisions on testing and analysis showing that these vehicles could continue to meet emission standards if operated on E15.

Industry reaction:

Brian Jennings, Executive Vice President of the American Coalition for Ethanol

“EPA’s final label is more informative than their initial label which seemed inflammatory.  We remain concerned EPA feels it must say E15 may damage some motor vehicles without the evidence to prove that, however.  ACE will continue working aggressively to make E15 workable, “Jennings said.

Ron Lamberty, the Vice President of Market Development for the American Coalition for Ethanol:

“This is an improvement over the proposed label, and we appreciate the fact that some of the changes recommended by our industry were adopted. It is unfortunate that the “may cause damage” language was used in the absence of any proof that it might.  We’ve been concerned that the strategy of E15’s opponents to provide anecdotal “spook stories” instead of science, might be successful, and we will need to overcome this to make E15 workable.”

Growth Energy CEO Tom Buis

“We appreciate EPA finally releasing this rule in response to Growth Energy’s E15 petition. This is another step in the process to get E15 into the marketplace later this year, which will create U.S. jobs, improve the environment and strengthen national security by displacing foreign oil.”

EPA Cuts Cellulosic Ethanol Requirement in Fuel for 2012

http://www.wisconsinagconnection.com/story-national.php?Id=1366&yr=2011

June 28, 2011

An energy law passed in 2007 mandated that the U.S. was to use 500 million gallons of cellulosic ethanol in fuel by 2012. But the Environmental Protection Agency says the fuel hasn't been made in significant enough quantities to meet that goal and the EPA is now proposing a cut back on the goal. 

Cellulosic ethanol comes from non-food crops and the EPA had expected the use of this sort of ethanol produced from plants like switchgrass, waste products, and woody pulp to increase significantly. The problem is that the mass production of cellulosic ethanol hasn't happened the way the EPA envisioned. 

The EPA wants to cut the goal back to no more than 12.9 million gallons of the cellulosic ethanol in fuel next year and based on market availability of the fuel that number could be far less. The Detroit News reports that this is the third year in a row that estimates for cellulosic ethanol use have been slashed. Previously the target for 2012 and 2011 for cellulosic ethanol use were 100 million gallons each year, which was cut to 6.5 million gallons for each year.

To reach the future goals for cellulosic ethanol production, the government is looking to help companies break ground on new refineries to produce cellulosic ethanol. 

The U.S. Senate recently voted to repeal the subsidy on ethanol of $0.45 cents per gallon.

South Carolina, Australian partners to develop algae-biodiesel

http://www.biodieselmagazine.com/articles/7879/south-carolina-australian-partners-to-develop-algae-biodiesel

By Luke Geiver

June 28, 2011

In South Carolina and Queensland, Australia, researchers are hoping to push the boundaries of biofuels research. Through a memorandum of understanding, South Carolina-based Clemson University has partnered with the University of Queensland to further develop biofuels research, technology transfer, training and the eventual commercialization process for the research. The partnership happened in part, because of Peter D. Beattie, a special advisor for economic policy and development for Clemson. Beattie was formerly the premier of the state of Queensland. In a statement on the partnership, Beattie said that “this partnership…puts both universities at the forefront of future energy research.”

The scope of the research will range from cellulosic ethanol optimization to algae-based biodiesel production. The first area of research the universities will work on will be with switchgrass and sweet sorghum. Through the partnership, “Clemson will provide comprehensive access to information developed for conversion of sugar cane bagasse to ethanol.” The second area of research will involve the development of a pilot-scale sugar cane-to-ethanol process in Queensland. And, the last area of research will include work in cellulosic monomer conversion to biodiesel technology. Through the partnership, the two universities will work on a process to convert algae into biodiesel used for military, mining, industrial and personal transportation, according to the statement.

Clemson has already established a bench-scale process to convert switchgrass and sweet sorghum to ethanol, and has also looked into coastal loblolly pine. The bench-scale work was done in conjunction with Savannah River National Laboratory.

In addition to development of processes potentially used for biofuels production, Clemson’s vice president for economic development pointed out another positive aspect of the partnership. The two universities “understand the importance of collaboration, both within an academic setting and in a corporate environment,” John Kelly, vice president for economic development said. “This exchange of information and ideas, coupled with a joint approach to external funding opportunities will be of enormous benefit to both states.” Kelly added that from an economic development standpoint, the partnership will bring rich rewards.

In addition to the research efforts, both schools will seek out funding from private and federal sources to help build the pilot-plants. “The development of clean fuels for the future is one of the most urgent challenges facing society due to the need to address climate change and secure fuel supplies,” said Paul Greenfield, vice chancellor of the University of Queensland.

Feinstein: Senators close to ethanol deal

http://thehill.com/blogs/e2-wire/677-e2-wire/168811-feinstein-says-ethanol-deal-with-klobuchar-thune-in-place

By Ben Geman

June 28, 2011

A trio of senators is nearing agreement on a plan to end a major ethanol tax credit and import tariff while extending incentives for next-wave biofuels.

Sen. Dianne Feinstein (D-Calif.) said Tuesday that she had reached an agreement with Sens. Amy Klobuchar (D-Minn.) and John Thune (R-S.D.), although the lawmakers say there is not yet a final deal.

“There are discussions, and Sens. Klobuchar, Thune and I have come to an agreement,” Feinstein told reporters in the Capitol Tuesday, although shortly after she noted “I think there will be agreement to this, and then we will then proceed to announce what it is.”

Feinstein said she would like the agreement, which she said would help reduce the deficit, to be part of legislation to raise the debt ceiling, citing the absence of a tax bill to serve as an obvious vehicle.

According to Feinstein — who along with Sen. Tom Coburn (R-Okla.) has led the charge to kill ethanol subsidies — the planned deal would quickly end the ethanol blenders’ credit, which is worth an estimated $6 billion annually, and the tariff.

“The [volumetric ethanol excise tax credit] is gone, the tariffs are gone, as of July 1,” she said, while noting the deal would extend incentives including credits for producing next-wave cellulosic ethanol.

Klobuchar cautioned that a final agreement is not in place. “We are still in the proposed-agreement stage,” she said, noting that negotiations continue. 

An aide to Thune also said that discussions continue. “All sides continue to talk but nothing has been finalized,” said Kyle Downey, Thune’s communications director.

The Minnesota and South Dakota senators oppose plans to simply kill ethanol subsidies without including other industry assistance, and have been negotiating with Feinstein to reach a compromise.

Klobuchar said she is meeting with Thune and Feinstein later Tuesday to review a proposed agreement. She confirmed there would be “longer-term cellulosic tax credits” but said she didn't have an exact date. 

Klobuchar said the money saved by killing the blender’s credit midyear — currently slated to expire at year’s end — would help pay for deficit reduction, funding for cellulosic ethanol credits and ethanol infrastructure at service stations.

“This is a way to use the existing $2.4 billion that is still out there for the rest of the year, to use a big chunk of it for the debt and then the remaining money for the cellulosic tax credit and the blender pumps,” she told reporters.

The potential agreement between the lawmakers comes roughly two weeks after the Senate voted 73-27 for a Feinstein-Coburn proposal to kill the blenders’ credit and import tariff. 

Thune and Klobuchar, who are allies of ethanol producers, opposed that plan and instead floated an alternative that would kill the ethanol credit but maintain a smaller and “variable” blender’s credit for three years when oil prices are below certain levels.



The proposal they circulated this month would steer some savings from ending the credit to deficit reduction while also extending credits for cellulosic ethanol production and small ethanol producers and installing alternative fuel pumps.

Feinstein said the deal with Thune and Klobuchar would be spelled out in a letter that the three are preparing to send to President Obama, Vice President Biden and Senate Majority Leader Harry Reid (D-Nev.).

Feinstein acknowledged Tuesday that her amendment, despite the overwhelming June 16 vote, didn’t have a clear path to become law because it was attached to a wider economic development bill that was subsequently derailed.

“We won a tremendous victory in eliminating the subsidies,” Feinstein said. “But it is on a bill that was taken down and therefore isn’t going to go anywhere.”

While the blenders’ credit is slated to expire at the end of the year, Feinstein — noting that she’s looking toward the debt ceiling — stressed the importance of finding a vehicle for eliminating it well before that to realize savings.

Feinstein said Coburn isn’t signing onto the new agreement but did not provide details as to why. She said she spoke with Coburn Tuesday morning and that he indicated that “he couldn’t support it.”