Petroleum Industry: Relax Biofuel Requirements

http://wallstcheatsheet.com/stocks/petroleum-industry-relax-biofuel-requirements.html/?a=viewall

By Curtis Tate 

August 14, 2013

 Weekly petroleum imports averaged 7.9 million barrels per day over the last week, up negligibly almost by 3,000 barrels per day. Refinery inputs lagged a bit over the last week as well, according to the Energy Information Agency’s weekly  petroleum report, as they were down by 282,000 barrels per day to 15.6 million. Over the last 4 week period, crude oil imports have maintained their 8.0 million barrel per day average, which is the same as last week’s average, up only slightly from the week before that.

8.0 million barrels per day for the last 4 weeks represents 838,000 barrels per day less than the U.S. was importing last year over the same time period. Refineries operated at 89.4 percent capacity.

The petroleum industry is now making itself more publicly opposed to biofuels, or at least regulations making the substances more competitive than would otherwise be the case. The industry has asked President Obama to curb the amount of ethanol they are required to mix in to transportation fuels for the upcoming year, citing concerns of fuel prices and warning of dire consequences to the U.S. economy. Automakers have also made the case that car engines are lacking the design capacity to run on so much biofuel currently.

On the other side, biofuel groups are portraying the petroleum industry as only profit motivated, warning of ruining a chance to make their products more competitive. Tom Buis, chief executive of corn ethanol group Growth Energy, released a statement condemning the industry which is behaving “with one goal in mind — to eliminate any competition from clean, green biofuels in the liquid transportation fuels marketplace.” 

Biofuel groups are perhaps feeling the pressure as their role in alleviating America’s dependency may be reduced as production has been gaining domestically. Here’s a look at U.S. oil field production broke down by region and shown for the country as a whole.

Petroleum groups ask EPA for relief from biofuel mandate

http://thehill.com/blogs/e2-wire/e2-wire/316927-petroleum-groups-ask-epa-for-relief-from-biofuel-mandate

By Zack Colman - 08/13/13 06:07 PM ET

The petroleum industry formally asked the Obama administration on Tuesday to lower the amount of corn-based ethanol refiners must blend into transportation fuel in 2014.

Failing to adjust the Renewable Fuel Standard’s blending targets could result in “severe harm to the U.S. economy” resulting from higher gasoline prices, the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) said in comments regarding a request for a waiver from the rule.

The groups' claim of economic damage relied on an API-commissioned NERA Economic Consulting study that said leaving the fuel mandate intact could raise diesel costs 300 percent and gasoline costs 30 percent in 2015.

The request from the oil trade organizations comes as the Environmental Protection Agency is showing it might bend on the fuel mandate.

Created in 2005 and expanded two years later, the rule calls for blending 36 billion gallons of biofuel into traditional transportation fuel by 2022. It’s at the center of an intense lobbying and political fight that’s drawing attention on Capitol Hill.

The EPA acknowledged last week that refiners could approach the “blend wall” in meeting the federal biofuel-blending mandate’s accelerating targets. It said it would consider tinkering with the requirements for next year to accommodate those concerns.

 

 That term refers to the point at which the oil industry says refiners would need to produce gasoline with higher ethanol concentrations than the market-standard 10 percent mix. 

 

In their formal waiver request, the groups asked the EPA to lower the Renewable Fuel Standard’s blending requirements to below 10 percent of gasoline to avoid the blend wall.

Honoring the waiver would eliminate 3.35 billion of the 18.15 billion gallons of corn-based ethanol called for in 2014, providing “short-term relief” from the rule, said Bob Greco, API downstream group director, in a statement.

The petroleum industry and automakers have warned fuel blends with a 15 percent ethanol concentration, known as E15, could damage car engines. They also say tankers and gas stations don’t have the infrastructure to support the fuel.

The biofuel industry has rejected those claims. It contends that E15 is safe, noting that the EPA has approved E15 for use in cars made in 2001 or later.

Biofuel groups pushed back against the waiver request, saying that it was designed to protect the profits of oil producers and refiners.

“The actions by API and AFPM are designed with one goal in mind — to eliminate any competition from clean, green biofuels in the liquid transportation fuels marketplace,” Tom Buis, chief executive of corn ethanol group Growth Energy, said in a Tuesday statement.

The EPA has so far rejected all previous Renewable Fuel Standard waiver requests, which have centered on the corn-based ethanol that dominates the biofuel market.

Last year, poultry and meat producers failed to secure a waiver when they argued the mandate was pushing corn prices upward and harming their businesses. And several state governors also unsuccessfully lobbied the EPA for relief on those grounds.

The waiver requests are just one example of how the mandate has come under fire in Washington, D.C.

The House Energy and Commerce Committee has pledged to overhaul the rule, saying that the mandate’s goals are unrealistic.

Corn-based ethanol has kept pace with original projections, but many next-generation biofuels have fallen well short of the marks Congress laid out when it expanded the mandate 2007.

Many lawmakers also say the intent of the law — to wean the U.S. off foreign fuels and drive down greenhouse gas emissions — can be accomplished with domestically produced natural gas and oil discovered since the rule was last updated.

But biofuel groups contend next-generation biofuels are just starting to come online in commercial quantities. They say changing the mandate would threaten economic development in rural communities that have come to depend on the biofuel industry.

— This story was updated at 2:56 p.m. on Aug. 14.

Biofuels Digest’s 10-Minute Guide to Obama’s New Energy Policy

http://www.biofuelsdigest.com/bdigest/2013/03/18/biofuels-digests-10-minute-guide-to-the-obama-administrations-new-energy-policy/

Jim Lane | March 18, 2013 

 

Major push from Obama on energy. 

 

From DOE: “Liquid fuels demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”

 

What’s up? What is an Energy Security Trust, anyway? The Digest’s 10-Minute Guide tells all.

 

In an address at the Argonne National Laboratories on Friday, President Obama said:

“You see, after years of talking about it, we’re finally poised to take control of our energy future.  We produce more oil than we have in 15 years.  We import less oil than we have in 20 years…But the only way we’re going to break this cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good.  That’s why, in my State of the Union Address, I called on Congress to set up an Energy Security Trust to fund research into new technologies that will help us reach that goal.

“I’m proposing that we take some of our oil and gas revenues from public lands and put it towards research that will benefit the public, so that we can support American ingenuity without adding a dime to our deficit…devising new ways to fuel our cars and trucks with new sources of clean energy – like advanced biofuels and natural gas – so drivers can one day go coast-to-coast without using a drop of oil.

“And in the meantime, let’s keep moving forward on an all-of-the-above energy strategy.  A strategy where we produce more oil and gas here at home, but also more biofuels and fuel-efficient vehicles; more solar power and wind power. We can do this.”

A companion study released the the Department of Energy was, in its way, more ambitious and more specific: “TEF does not project that all liquid fuels will be eliminated from the future transportation sector, but rather that demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”

The Energy Security Trust. Is it a new idea? 

No. In his 2013 State of the Union address, President Obama called on Congress to create an Energy Security Trust Fund, which would free American families and business from painful spikes in gas prices. The President’s plan builds on an idea that has bipartisan support from experts including retired admirals and generals and leading CEOs, and it focuses on one goal: shifting America’s cars and trucks off oil entirely.

 

How does it work?

Over 10 years, the Energy Security Trust will provide $2 billion for critical, cutting-edge research focused on developing cost-effective transportation alternatives. The investments will support research into a range of technologies – things like advanced vehicles that run on electricity, homegrown biofuels, and domestically produced natural gas. It will also help fund a small number of real-world experiments that try different transportation techniques in cities and towns around the country using advanced vehicles at scale.

 

Does it involve new taxes?

No. The funding will be provided by revenues from federal oil and gas development, and will not add any additional costs to the federal budget.

 

President Obama’s complete remarks are where?

They’re here.

 

Does the White House’s have a short take on the Energy Security Trust?

Yep. Here you are.

 

What is the Transport Energy Futures (TEF) study?

It’s a new study from the U.S. Department of Energy, the National Renewable Energy Laboratory, and Argonne National Laboratory that finds the United States has the potential to reduce petroleum use and greenhouse gas (GHG) emissions in the transportation sector by more than 80% by 2050 – and proposes pathways towards that goal.

 

What is the strategy?

• Stopping Growth in Transportation Sector Energy Use
• Using More Biofuels
• Expanding Electric and Hydrogen Technologies

 

What’s the overall 15-point Obama Energy Strategy, again?

1. Challenges Americans to double renewable electricity generation again by 2020.
2. Directs the Interior Department to make energy project permitting more robust.
3. Commits to safer production and cleaner electricity from natural gas.
4. Supports a responsible nuclear waste strategy.
5. Sets a goal to cut net oil imports in half by the end of the decade.
6. Commits to partnering with the private sector to adopt natural gas and other alternative fuels in the Nation’s trucking fleet.
7. Establishes a new goal to double American energy productivity by 2030.
8. Challenges States to Cut Energy Waste and Support Energy Efficiency and Modernize the Grid.
9. Commits to build on the success of existing partnerships with the public and private sector to use energy wisely.
10. Calls for sustained investments in technologies that promote maximum productivity of energy use and reduce waste.
11. Leads efforts through the Clean Energy Ministerial and other fora to promote energy efficiency and the development and deployment of clean energy.
12. Works through the G20 and other fora toward the global phase out of inefficient fossil fuel subsidies.
13. Promotes safe and responsible oil and natural gas development.
14. Updates our international capabilities to strengthen energy security.
15. Supports American nuclear exports.

 

Where’s the Fact Sheet on that?

Right here.

 

Why the transport sector, specifically?

The transportation sector accounts for 71% of total U.S. petroleum consumption and 33% of U.S. total carbon emissions.

 

What are the 9 Interconnected reports that make up the overall TEF study?

1. Deployment pathways issues including the development of, transition to, and challenges of advanced technology
2. Non-cost barriers to advanced vehicles such as range anxiety, refueling availability, technology reliability, and consumer familiarity.
3. Opportunities to improve non-light-duty vehicle efficiency for medium- and heavy-duty trucks, off-road vehicles and equipment, aircraft, marine vessels, and railways
4. Opportunities for switching modes of transporting freight, such as moving freight from trucks to rail and ships.
5. Infrastructure expansion required for deployment of low-GHG fuels, including electricity, biofuels, hydrogen, and natural gas
6. Balance of biomass resource demand and supply, including allocations for various transportation fuels, electric generation, and other applications.
7. Opportunities to save energy and abate GHG emissions through community development and built environment strategies
8. Trip reduction through mass transit, tele-working, tele-shopping, carpooling, and improvement of vehicle performance through efficient driving
9. Freight demand patterns, including trends in operational needs and projections of future use levels.

 

How much biofuels use does the TEF study anticipate?

Up to 100 percent of fuel needs, if the US hits its 2050 fuel efficiency, hydrogen fuel, and electrification goals as well. Even at the EIA baseline projected fuel demand in 2050, biofuels could supply as much as 50 percent of the jet fuel market, and 30 percent of the gasoline and diesel markets if EERE biofuel technology goals are met. Getting to the point where biomass could provide 100 percent of vehicle liquid fuels requires reducing the need for fuel through the efficiency and demand management measures described above, including deployment of electricity or hydrogen fuel alternatives.

 

Will this require an avalanche of infrastructure?

Some. “While new fuel types require new infrastructure, the share of infrastructure cost within total fuel costs is very small (1.5-3 percent), and these costs can be made up for in fuel cost savings of more efficient advanced vehicles.”

 

Where can I start to dig deeper into the overall plan and the TEF study?

You can start here at the TEF home page.

 

Who was responsible for TEF?

TEF is a collaboration between EERE, the National Renewable Energy Laboratory (NREL), and Argonne National Laboratory (ANL). The project benefitted from the input provided by a steering committee that included some of the nation’s foremost experts on transportation energy from the Environmental Protection Agency (EPA), the U.S. Department of Transportation (DOT), academic researchers, and industry associations.

 

What is NEPA and what is happening there?

NEPA is the National Environmental Policy Act of 1970, a product of the Nixon Administration.

 

Er, Nixon? What’s new there?

The President’s strategy includes requiring federal agencies, under NEPA’s authority, to include climate change impact in reviewing proposed projects. For example — leases to drill for coal, or export coal to China, or construct oil pipelines like the Keystone XL pipeline, could be reviewed not only for air pollution and water fouling, but for overall greenhouse gas impact.

 

Are the changes in NEPA reviews ho-hum, or a big deal?

Big deal. Brendan Cummings, senior counsel for the Center for Biological Diversity told Bloomberg that the result will be “a major shakeup in how agencies conduct NEPA” reviews.

 

Does the President have this authority under NEPA?

Generally, yes. NEPA grants a right of Federal review of proposed projects for environmental impact — and climate change certainly falls broadly within that category. The devil is going to be in the details — after all, how much specific contribution to a problem like climate change be attributed to a single project?

 

Is a NEPA review capable of derailing a project?

No. A NEPA review is, at the end of the day, aimed at producing a thorough vetting process, rather than a specific outcome. Projects go through NEPA reviews — there is a robust commentary opportunity — but regulators, in the end, make decisions on permits. NEPA does establish a forum for introducing or reviewing data that will be used in a regulator’s decision — or, in lawsuits that may be filed to reverse a ruling.

 

Overall, is there going to be opposition from the right on the Energy Security Trust?

Forbes’ Houston-based energy columnist Christopher Helman writes: “This is a terrible idea — and a backdoor to the imposition of a nationwide carbon tax — that congress should not allow to pass.

“There is absolutely no reason why we need a dedicated Energy Security Trust to fund the national labs, or to fund any kind of alternative energy research. If congress wants to fund research it can pass a bill to fund research…Isn’t congressional appropriation how the federal government is supposed to pay for such stuff?

“Then consider that the Department of Energy has in recent years built up an insanely terrible record of wasting taxpayer money by directing funds to private companies, many of which have simply gone belly up (but not before paying lavish bonuses to executives).

 

Why is there opposition from the left?

Here’s some flavor. “This approach will only encourage more dirty energy production…[and] doesn’t create any additional cost for using fossil fuels, thus creating no incentive for firms to divert resources into safer, cleaner and more renewable sources of energy,” Tyson Slocum, director of Public Citizen’s energy program, told bizjournals.com.
 

Construction on Clinton biofuel refinery could start as early as fall

http://www.fayobserver.com/articles/2013/03/18/1243607?sac=fo.business

Published: 07:22 AM, Mon Mar 18, 2013

By John Ramsey
Staff writer

Construction on a $170 million refinery in Clinton to convert 20 million tons of grass into fuel each year could start as early as this fall.

Chemtex, an international company with offices in Wilmington, plans to build the refinery on 166 acres in Sampson County. The plant would mirror one already built in Italy. If construction begins as planned, the plant could open in 2015.

Yet hurdles remain.

"We're working very hard to try to make it a reality," said Dennis Leong, an executive vice president at Chemtex. "I'm very confident that in 2015, this plant will be open somewhere, and I should say we're still very hopeful and it's our intention to open in North Carolina. It's really making sure it's a project that's welcome in the state."

It will take at least 20,000 acres of energy crops such as miscanthus and switchgrass to feed the refinery. Chemtex has developed its own technology to extract the energy from green plants and soft woods.

The plan is to sign up farmers near the plant to grow materials on land they aren't already using to grow food.

Chemtex estimates the facility will help create more than 300 jobs in the region while helping the nation reduce its dependence on foreign oil. And that could be just the beginning. Chemtex documents say North Carolina has enough available land to support as many as 15 refineries, which could mean 5,000 new jobs and a $2 billion boost to the state's economy.

The N.C. Biofuels Center has identified 100,000 acres of spray fields in Sampson, Duplin and Wayne counties that could potentially be used for biocrops. But state environmental workers are still studying how to plant the crops in spray fields in a way that complies with waste regulations.

The ethanol produced at the plant could be sold to fuel blenders and end up in cars' gasoline tanks.

Staff writer John Ramsey can be reached at ramseyj@fayobserver.com or 486-3574.

Cellulosic Ethanol ‘to Be Cost Competitive by 2016′

http://www.environmentalleader.com/2013/03/12/cellulosic-ethanol-to-be-cost-competitive-by-2016/

March 12, 2013

Cellulosic ethanol is on track be cost competitive with corn-based ethanol by 2016, a development that could drive the fuel’s production, according to an industry survey conducted by Bloomberg New Energy Finance.

The survey focused on 11 major players in the cellulosic ethanol industry, all of which use a technique known as enzymatic hydrolysis to break down and convert the complex sugars in non-food crop matter, and a fermentation stage to turn the material into ethanol, BNEF said.

Cellulosic ethanol cost 94 cents a liter to produce in 2012, about 40 percent more than ethanol made from corn, BNEF said. That price gap will close by 2016, surveyed cellulosic ethanol producers predicted.

Project capital expenditures, feedstock and enzymes used in the production process are still the largest costs of running a cellulosic ethanol plant, the respondents said in the survey. But technology has pushed operating costs lower. For example, enzyme costs for a liter of cellulosic ethanol dropped 72 percent between 2008 and 2012 due to technological improvements, BNEF said.

Cellulosic ethanol producers will shift their focus from technology enhancements to logistical planning over the next five to 10 years in an effort to rein in capital costs, suggesting the industry is maturing, said BNEF’s lead biofuel analyst Harry Boyle.

Globally, there are 14 enzymatic hydrolysis pilots, nine demonstration-stage projects and 10 semi-commercial scale plants either announced, commissioned or due online shortly, according to the survey. Five of the semi-commercial plants are in the US and more are expected to open in Brazil in the near future, BNEF said. A semi-commercial facility with a capacity of 90 million liters per year requires an initial capital outlay of about $290 million.

By 2016, when second- and third-generation plants with capacities between 90m and 125m liters will be commissioned, initial capital costs per installed liter are expected to fall from $3 to $2 due to economies of scale and a reduction in over-engineering, BNEF said.

Meanwhile, some corn-based ethanol producers are struggling to maintain profits.

Some simple corn-based ethanol plants, which can only produce ethanol and distillers grains from corn, have temporarily shut down as production costs have exceeded revenue, according to a report released by the US Energy Information Agency. As of January 2013, the number of idled plants had grown to at least 20.

Profit margins at plants that can recover other products, such as corn oil, have been 15 cents to 20 cents per gallon higher than plants without that capability, the EIA said. Margins at plants without corn oil recovery have been negative (see graph), forcing plant shutdowns in Nebraska, Illinois and Minnesota.

Ethanol industry credits new technology for cellulosic breakthrough, less reliance on corn

http://www.startribune.com/nation/189153701.html?page=all&prepage=2&c=y#continue

Article by: DAVID PITT , Associated Press
Updated: January 31, 2013 - 2:17 AM

DES MOINES, Iowa - After decades of talk, the ethanol industry is building multimillion dollar refineries in several states that will use corn plant residue, wood scraps and even garbage to produce the fuel additive.

The breakthrough comes at a key time for the industry, after the drought heightened criticism about the vast amount of corn used to brew up ethanol rather than be transformed into animal feed or other foods. The corn crop already was smaller than expected because of drought last year, and livestock groups were especially critical of how 40 percent of the crop being diverted toward ethanol caused corn prices to soar.

The new cellulosic ethanol technology could quiet that criticism while also making use of material largely seen as worthless.

Experts said it hasn't been easy.

"You're fighting against millions, perhaps hundreds of millions of years of evolution and that's sort of the secular equivalent of going against the word of God," said C. Ford Runge, a University of Minnesota professor of applied economics and law.

Making ethanol from corn is relatively simple, as kernels are cracked and fermented. But to produce ethanol from the woody and fibrous parts of plants, scientists had to figure out a way to break lignin — the tough fibers that plants have developed through evolution to make stems, trees and corn stalks stiff — from the cellulose. They must then extract the plant's sugars and convert them into ethanol.

Efforts to make that leap have made for a punch line in the industry since the 1980s. Cellulosic ethanol, everyone would say, is just a few years away.

But high oil prices eventually drove companies to spend more on research and development. The government jumped in too. The 2008 farm bill provided $1 billion in financial incentives to encourage cellulosic development.

"You cannot underestimate the impact on the world of $80- or $90- or even $100-a-barrel oil," said Monte Shaw, executive director of trade group Iowa Renewable Fuels Association.

Oil futures first reached $100 a barrel in January 2008, marking a quadrupling of price in five years since 2003. Oil trades now at around $95 a barrel.

The push for more ethanol production comes amid federal requirements that the petroleum industry mix 36 billion gallons of the additive into the nation's fuel supply by 2022.

The Environmental Protection Agency has required that 16 billion gallons of that ethanol be cellulosic, providing another incentive for companies to pursue cellulosic research. Only about 25,000 gallons of cellulosic ethanol were produced last year, but 10 million gallons are expected in 2013.

"Suddenly technological development started to occur," said Adam Monroe, president of Novozymes North America, which makes enzymes used in cellulosic production.

Scientists found enzymes that more efficiently break down the plant material and better yeast strains to convert sugars to alcohol, clearing the way for cellulosic production.

About 70 cellulosic projects are under way, reflecting billions of dollars of private investment.

In Iowa, the nation's leading corn producer, two cellulosic plants are under construction that will use corn plant leaves, stalks and cobs known as corn stover.

Near Nevada, a small Iowa farming community about 40 miles north of Des Moines, DuPont is building a $200 million factory that when completed in 2014 will be the nation's largest cellulosic ethanol plant, capable of making 30 million gallons a year.

Scientists said it's a major step forward.

"We had lab experiments. That's all we had five years ago," said Jan Koninckx, a chemical engineer and DuPont's global business director for biofuels.

The DuPont plant will work with 500 local farmers to collect more than 375,000 tons of corn stover annually.

In northwest Iowa, two companies are teaming up to build another corn stover plant producing 25 million gallons of ethanol annually. Sioux Falls, S.D.-based ethanol-maker POET and Royal DSM, a biotechnology company based in the Netherlands, are building the $250 million plant in Emmetsburg.

Other cellulosic plants are under construction in Kansas, Michigan and Mississippi. Plants in Georgia and Nevada will convert garbage into ethanol in commercial-size plants. One in Florida will convert yard waste and other plant material from a nearby landfill to the fuel additive.

Other projects are testing the feasibility of making ethanol from fast-growing trees and various grasses.

If cellulosic production can ease the demand for corn, the change will be welcomed by livestock producers who have been infuriated by rising feed costs.

"The bottom line is it's all about the competition for corn," said J.D. Alexander, a cattle feeder and corn producer from Pilger, Neb., who is president of the National Cattlemen's Beef Association.

The ethanol industry said millions of gallons of cellulosic ethanol should begin flowing this year and rapidly increase over the next few years.

Wade Robey, a board member at POET-DSM Advanced Biofuels, said the companies are confident the new plants will be profitable.

"We feel very strongly this is a good business to be in and a good investment for our companies," he said.

Some companies, including DuPont and Abengoa, acknowledged they are already looking at sites for more cellulosic plants.

USDA funds MSU biofuel study

http://www.clarionledger.com/article/20121222/BIZ/312220019/USDA-funds-MSU-biofuel-study?gcheck=1&nclick_check=1

10:16 PM, Dec 21, 2012  

 A team of Mississippi State University agricultural economists recently received U.S. Department of Agriculture funding to study policies impacting biofuel supply chains.

Keith Coble is the principal investigator for a project to develop a model to assess how state or federal policies might affect the development of the Southeastern biofuels industry. Coble will work with fellow MSU agricultural economists Daniel Petrolia and J. Corey Miller. Their work will evaluate the effects of risk, incentives and environmental policy on economic sustainability.

All three researchers are affiliated with MSU’s Sustainable Energy Research Center, which researches and develops environmentally and economically sustainable energy technologies that promote the growth of sustainable energy industries in Mississippi and the Southeast, according to an MSU news release.

The USDA’s National Institute of Food and Agriculture awarded the $273,120 grant through its Agriculture and Food Research Initiative.

USDA Grants Support Sustainable Bioenergy Production

http://www.nifa.usda.gov/newsroom/news/2012news/12141_afri_bioenergy.html

Media Contact: Jennifer Martin, (202) 720-8188

LANSING, Mich., Dec. 14, 2012—Agriculture Secretary Tom Vilsack today announced $10 million in research grants to spur production of bioenergy and biobased products that will lead to the development of sustainable regional systems and help create jobs. Vilsack highlighted the announcement today with a visit to Michigan State University, a grant awardee. The Secretary also pointed to a recent study released by Iowa State University (ISU), and funded by the U.S. Department of Agriculture, which finds that while the use of biobased products in automobile manufacturing is increasing, there are still many parts in the top-selling automobiles manufactured in the United States that may be replaced with biobased materials. 

“USDA and President Obama are committed to producing clean energy right here at home, to not only break our dependence on foreign oil, but also boost rural economies,” said Vilsack. “These projects will give us the scientific information needed to support biofuel production and create co-products that will enhance the overall value of a biobased economy. Today, with a strong and diversified U.S. agricultural sector, the American automobile industry has a greater incentive for expanding use of biobased products while supporting good-paying jobs here in the United States.”

USDA’s National Institute of Food and Agriculture (NIFA) awarded the grants through the Agriculture and Food Research Initiative (AFRI). AFRI’s sustainable bioenergy challenge area targets the development of regional systems for the sustainable production of bioenergy and biobased products that: contribute significantly to reducing dependence on foreign oil; have net positive social, environmental, and rural economic impacts; and are compatible with existing agricultural systems.

The long-term goal for the research projects, which were selected through a highly competitive process, is to implement sustainable regional systems that materially deliver liquid transportation biofuels to help meet the Energy Independence and Security Act goal of 36 billion gallons per year of biofuels by 2022. The programs focus on the many environmental, social and economic benefits and trade-offs associated with decisions and policies regarding the where, when, and how of national and regional biofuels development. Projects were awarded in four areas: 1) policy options for and impacts on regional biofuels production systems, 2) impacts of regional bioenergy feedstock production systems on wildlife and pollinators, 3) socioeconomic impacts of biofuels on rural communities, and 4) environmental implications of direct and indirect land use change.

Fiscal year 2012 awards include:

• University of Arizona, Tucson, Ariz., $36,000
• Arizona State University, Tempe, Ariz., $350,000
• University of Georgia, Athens, Ga., $345,689
• University of Florida, Gainesville, Fla., $496,996
• University of Florida, Gainesville, Fla.,  $497,851
• Boise State University, Boise, Idaho, $493,210
• University of Idaho, Moscow, Idaho, $499,009
• University of Idaho, Moscow, Idaho, $350,000
• Michigan State University, Lansing, Mich., $349,695
• University of Minnesota, St. Paul, Minn., $498,786
• University of Minnesota, St. Paul, Minn., $349,996
• Mississippi State University, Mississippi State, Miss., $273,120
• University of Missouri, Columbia, Mo., $499,447
• Lincoln University, Jefferson City, Mo., $94,258
• Montclair State University, Upper Montclair, N.J., $349,963
• Duke University, Durham, N.C., $349,084
• University of Oklahoma, Norman, Okla., $466,534
• Oregon State University, Corvallis, Ore., $349,624
• Temple University, Philadelphia, Pa., $149,977
• Pennsylvania State University, University Park, Pa., $348,959
• Clemson University, Clemson, S.C., $50,000
• University of Tennessee, Knoxville, Tenn., $350,000
• Texas A&M University, College Station, Texas, $255,972
• Texas AgriLife Extension, College Station, Texas, $499,619
• Washington State University, Pullman, Wash., $349,993
• West Virginia University, Morgantown, W.V., $349,952
• University of Wisconsin, Madison, Wis., $496,109
• University of Wisconsin, Madison, Wis., $345,327
• USDA Agricultural Research Service, Peoria, Ill., $500,000

AFRI is NIFA’s flagship competitive grant program and was established under the 2008 Farm Bill. AFRI supports work in six priority areas: plant health and production and plant products; animal health and production and animal products; food safety, nutrition and health; renewable energy, natural resources and environment; agriculture systems and technology; and agriculture economics and rural communities.

Each award was made through a competitive selection process. An external peer review panel reviewed all proposals and made award decisions based on scientific merit to the best and brightest scientists across the nation.

The ISU report, Biobased Automobile Parts Investigation, shows that “the history of biobased automobile parts begins early in the development of automobiles themselves. During the 1930s, automobile pioneer Henry Ford began developing soy-based automobile parts.” The report goes on to highlight how a variety of U.S. automobile manufacturers are showing a greater commitment to exploring biobased options, and provides a variety of resources for policymakers and other decision-makers interested in exploring the issue. 

Creating new markets for the nation's agricultural products through biobased manufacturing is one of the many steps the Obama Administration has taken over the past four years to strengthen the rural economy. Since August 2011, the White House Rural Council has supported a broad spectrum of rural initiatives including a Presidential Memorandum to create jobs in rural America through biobased and sustainable product procurement; a $350 million commitment in SBA funding to rural small businesses over the next 5 years; launching a series of conferences to connect investors with rural start-ups; creating capital marketing teams to pitch federal funding opportunities to private investors interested in making rural connections; and making job search information available at 2,800 local USDA offices nationwide.

Wood pellet production

http://www.newbernsj.com/opinion/letters/wood-pellet-production-1.58508

By Several

Published: Sunday, December 2, 2012 at 20:52 PM.

Local, state and regional leaders have been diligently working for the past several months to develop, on a major scale, wood pellet production to be exported from the eastern parts of North Carolina to at first the United Kingdom and eventually other parts of Europe.

These wood pellets would be used at first to produce electricity for British consumers. The impact to North Carolina from this production would be significant. The renewable wood fiber, or biomass as the Europeans refer to it, would come from the forests of North Carolina’s tidal plains. The production would involve North Carolinian loggers, truckers as well as wood pellet producing factories. The product would travel on North Carolinian rails to be exported from the North Carolina ports at both Morehead City and Wilmington. The demand for the product will continue as the need for clean energy will always be present. While the production of wood pellets will not cure all of our economic woes, it will nevertheless have a great positive economic impact to our region.

The wood pellets themselves are small and resemble poultry or rabbit feed. The wood pellets are formed out of macerated wood fiber that is heated and compressed into small cylindrical pellets. The pellets themselves typically require no artificial or added binders as it uses the natural lignin. Lignin is the natural glue that holds the cellulose in a tree together and is present in the wood already. It reconstitutes itself in the manufacturing process to hold the fiber material together in pellet form. The resulting pellets are desiccated and burn very cleanly creating very little ash. These pellets are easily transportable in rail cars, trucks and ships and can use automated machines for loading and discharging. Moreover, at the furnaces, augers and other types of stokers feed the fuel into the combustion chamber itself via programmed devices to burn the product most efficiently. The pellets can be burnt directly by the end user as is common in homes with small fire stoves used for heat. In addition, these pellets can be used on a large scale at electrical power generation stations where they are most often pulverized for best combustion to create steam to drive turbines that produce electricity.

Several industrial nations and the European community adopted measures in the 1997 Kyoto Protocols to reduce emissions as well as carbon footprint. Wood pellets used as fuel are considered carbon neutral, burn cleanly and are a renewable source of energy. The British are interested in having the wood pellets produced in Eastern North Carolina as it would be close to ports and not require much energy to transport as the wood fiber material should be collected no more than 80 miles from the ports. Moreover, as per the Kyoto Protocols, the potential clients are satisfied that the renewable wood fiber that makes up the bio-fuel could be collected without a detrimental impact to the environment. Dr. Clay Altizer of North Carolina Forest Service assured an audience at a recent October Wood Pellet information meeting at Morehead City that there is more than enough renewable wood material growing in privately held lands to more than meet the demand for the product. He reviewed charts of possible demand for the wood fiber that showed that the growth rate exceeded the potential harvest rate. The project’s main advocate Thomas W. “Tom” Bradshaw, the executive director of the N.C. State Ports Authority, explained at the same hearing that our state has two ports with existing rail connections that are capable of berthing ships for this product. Thus our state is in an advantageous position to profit from this opportunity.

Dr. Altizer went on to explain that much of the wood fiber that can be used to produce the pellets can be collected from the slash cutting of wooded lots that is now generally left to decay in the field. Dr. Altizer estimates that for approximately every ton of pellets produced requires two tons of cut green wood. Moreover, trees not well suited for cut lumber products or paper pulp can be readily turned into pellets thus maximizing the wood fiber yield from the cut lots. The wood material would be collected from the lots and transported via truck to local facilities that would produce the pellets. The pellets in turn would be discharged into covered hoppers and transported via rail to one of the two designated ports. The ports would store the fuel in large silos awaiting transfer to outbound ships.

The scale of the wood pellet undertaking is sizable. To meet the increased demand, additional wood pellet plants will have to be constructed. Port improvements and dredging will have to be made to facilitate docking of ships, storage of the material and automated loading of ships of this product. A fleet of approximately 75 covered rail cars will have to be procured to move the material from the plants located in the forests to the ports. Tom Bradshaw estimates anywhere from 8,500 to 17,500 of loaded 91 metric ton rail cars per year would make their way to the ports. He estimates five to six wood pellet trains a week averaging about a third to about half mile long to make it to the port at Morehead. Presently, according to the June 2012 Maritime Study, only three trains a week make it to Morehead via the North Carolina Railroad trackage through New Bern. North Carolina’s Eastern Region President John Chaffee welcomes the prospects of the plan’s potential positive economic impact. He is also monitoring the impact that the three-fold increase of rail traffic to downtown New Bern will have and supports a rail bypass concept around New Bern as well as proposed changes to rail routes around Morehead’s downtown.

The wood pellet proposal would have a positive impact to employment within the region. Bradshaw’s presentation estimated that upwards of 588 direct and indirect jobs could be realized if this plan comes to fruition. While the ports and the pellet facilities would not contribute a direct increase in great numbers of employment, there will be a large positive regional impact nonetheless when the entire operation is considered. Each rail car would require more than three truck loads of raw material. Tens of thousands of tons of slash cuttings and other renewable wood fiber material would have to be collected and loaded by loggers. Thus more loggers, equipment and trucks from all parts of the region would be needed. The increase in truck fleets and truck mileage would result in more business for fueling stations and demand for truck-part suppliers and service providers such as tires and general truck repair and maintenance. The added rail cars would require maintenance. New trains would require crews as well as motive power. Local rail carriers should expect increased profits for their services. There would certainly be more sales of heavy equipment to sustain the pellet production. All of these added profits and wages would trickle down the economy resulting in more patronage of local restaurants and merchants. The increased employment in the forested areas would also positively impact those areas housing markets. Chaffee also stated improved farm/forest income is important in preserving rural landscapes that are most compatible with the training missions of our military installations – preserving undeveloped lands under the flight paths of military aircraft.

N.C. State Board of Transportation Member Hugh Overholt from New Bern has opined that now is the time to execute plans and quit studying proposals. Director Bradshaw adopted this wood pellet concept from the Maritime Study and has assembled the necessary pieces to execute that solution. Our neighbors in Carteret recently adopted a resolution that states “The Town of Morehead City supports the efforts of the North Carolina State Ports Authority to maintain and expand a dynamic port and its efforts to increase the positive economic benefits for eastern North Carolina and its efforts to do so in an environmentally sustainable fashion.” Moreover, the North Carolina State Ports Authority has recently approved a $5 million appropriation for the design of the Morehead City facility which they want to see operational by January 2014. Now is the time to take heed of the same advice George Washington gave to Virginia Governor Benjamin Harrison, “A people... who are possessed of the spirit of commerce, who see and who will pursue their advantages may achieve almost anything.” I believe that it is likely that these combined forces will make this project a reality and a boon for all of us within our state, our region and our county.

Don Black, Hugh Overholt, John Chaffee, the N.C. Department of Forestry and the staff of Tom Bradshaw

Managing Woody Biomass: The Past Century in Review

http://biomassmagazine.com/articles/8349/managing-woody-biomass-the-past-century-in-review

Foresters and timberland managers have stabilized woody biomass in the U.S. for the last century, meeting consumer demand without exhausting supply.

 

By Joshua Kane Harrell | November 20, 2012

• 
  Source: USDA Forest Service, Forest Inventory Analysis Program

At the turn of the 20th century, U.S. President Theodore Roosevelt warned Congress, with subsequent hyperbole appearing in New York Times headlines, that “a timber famine is inevitable.” Gifford Pinchot, the first chief of the U.S. Forest Service, echoed the sentiment by proclaiming, “In 20 years, the timber supply in the United States on government reserves and private holdings, at the present rate of cutting, will be exhausted.”  The timber famine or scarcity never happened, despite the increased consumer demand placed on our nation’s timber resources through the Roaring Twenties, post-World War II boom and other high-growth periods.

The complete opposite of timber scarcity has occurred over the past century. To exemplify the purest definition of sustainability, the amount of forestland in the U.S. has remained stable around 750 million acres from 1907 to 2007.  Additionally, over the past two decades, forestland has increased by 20 million acres.  As of 2006, the volume of annual net growth exceeded the volume of annual removals by 38 percent. The U.S. is growing more timber volume than it is harvesting, by a fairly wide margin.

If a timber famine occurred, stumpage prices—the amount paid for standing timber— would have reflected the inherent scarcity. According to the revealing economic study by Johnson and Libecap, the annualized rate of change in stumpage prices during the perceived timber famine era remained a constant 6 percent.  Supply and demand stayed in relative balance, never approaching a supply shortage that could be termed a “famine.”

Why has the timber resource remained abundant in the face of growing demand?  Simply put, markets existed that created demand. A major factor aiding in the expansion of forestland is the presence of deep, well-established markets for wood products. A nation of consumers required wood for prosperity, thereby fostering development of private sector innovation in the form of technological improvements in milling and tree-felling technology, advances in silviculture, tree-seedling genetics and tree-farming practices, and the conversion of degraded agricultural lands to timberland plantations aided by federal government programs. In the wake of appreciating timber commodity prices, the consumer side of the equation responded with advances in wood conservation measures (e.g., utility pole treatment) and product substitution.

Burgeoning Biomass Markets

Differentiating from the aforementioned traditional timber markets, the woody biomass market, defined as supply for energy demand, emerged vigorously over the past decade.  Ironically, wood has been used as a source of fuel in the U.S. since the Colonial Era. Seen through the prism of contributing to cellulosic ethanol, heat generation and electrical power generation, the growth of this emerging market has largely been precipitated by government subsidies, legislative initiatives/mandates, increasing oil prices, negative pressure on utilization of food resources and environmental solutions for alternative energy sources. The pressures for the woody biomass market
to flourish present a dichotomy of optimism and pause for concern over the actual market formation.
Forisk Consulting LLC estimates there are a total of 452 announced or operating woody biomass projects in the U.S. with a projected operating capacity of 124.8 million green tons of wood annually by 2022. Of the projects that actually pass the Forisk screening criteria of successful project financing, proven technology, permitting, supply agreements, etc., Forisk projects that only 77 million green tons of wood annually will be needed, a decrease of 38 percent from the total capacity of all 452 projects. As a data point, the forest products industry currently consumes more than 500 million green tons of wood annually.

Anecdotally, Forest Investment Associates has directly met with dozens of potential biomass participants who have expressed interest in securing biomass supply to support potential bioenergy projects. While FIA has had the opportunity to fully evaluate the potential for adding value to timberlands through working with some of these participants, the exercises were largely in vain. Substantiating the screening process conducted by Forisk, most of these potential biomass participants are no longer in existence for a myriad of reasons.

Stalled Biomass Markets

What has hampered the development of the woody biomass market?  There is no doubt the financial crisis of 2008-’09 took a toll. Largely, project financing, technological capability and environmental resistance have squeezed out potential market participants. In the first instance, a number of enterprises tried to put the cart before the horse by attempting to secure long-term biomass feedstock supply agreements, in order to secure debt financing, in order to build a biomass-using facility.  It seems cliché, but FIA is a firm adherent of the “Field of Dreams” mantra, “Build it and they will come,” i.e., if new bioenergy facilities that consume biomass are developed, forest landowners will respond to meet the new demand by growing more wood.   

In technological capabilities, FIA's interest in the market was piqued in 2006 by an announcement of the Range Fuels’ cellulosic ethanol facility in Soperton, Ga. At full production, the facility was projected to consume 1.6 million green tons of woody biomass feedstock, in an economically depressed area that could have benefited greatly from the related jobs. Sadly, the commercial-scale feasibility of the two-step, thermochemical conversion process was lacking, at least in profitability. With cautious optimism, FIA turns to KiOR Inc. as it prepares for the start-up of the newly constructed cellulosic biofuel blend stock facility in Columbus, Miss. While liquid fuel production from biomass has struggled, pellet production is a proven, long-established technology that provides a reliable market in certain locales, albeit dependent upon European policy models.

Much of the interest in woody biomass as an alternative fuel feedstock originated from the idea of American energy independence and environmental opposition to fossil fuel sources. Ironically, the same environmental community has condemned the use of woody biomass, petitioning for an equal carbon emissions footprint as coal. In the same vein, the final U.S. EPA Tailoring Rule announced in 2010 treated the regulation of greenhouse gas emissions from biomass-sourced and fossil fuel-sourced electricity in an identical fashion. The EPA has deferred the permitting requirements until 2014 in order to gather more data, in the meantime injecting a fair amount of uncertainty into the market.

Despite the setbacks in the woody biomass market, one thing has remained constant: the continual and sustainable management of the timber (and woody biomass) resource.

Biomass Keeps Growing

As an open free-market participant, foresters are poised to participate in supplying the emerging demand. In order to generate the highest returns for our clients, timberlands are managed for the highest and best product, which is presently sawtimber.

 If the net present value shifts such that a pulpwood or energy rotation provides a better proposition, management strategies will be adapted, as demonstrated in competitive pulpwood markets in the Southeast. Once upon a time, the southern forest products industrial landowners planted 1,000 to 1,200 trees per acre for the primary purpose of supplying feedstock for their pulp facilities. The mantra was, “plant them thick, cut them quick.” Since then, the sawtimber market has grown in the South, and the forest industry as a whole has practiced more intensive silviculture coupled with advanced gains in genetics. The optimum economic sawtimber rotation is satisfied by planting 500 to 600 trees per acre (with current mortality around plus or minus 5 percent in first year).  This planting density allows for a first thinning between ages 13 and 16 to remove pulpwood and a small amount of chip-n-saw.  The increased residual spacing allows for sawtimber growth optimization over the next 10 years or so, until final harvest.

In order to stay diversified in timberland management options, research and operational endeavors have been deployed to couple the pulpwood regime with the sawtimber regime in the form of so-called flex plantations. This method provides for the interplanting of lower-value and higher-value genetic seedling stock. Whatever direction the traditionally deep timber markets or emerging biomass markets may take, land managers and foresters will be poised to provide forest products to both markets in order to meet demand.

Author: Joshua Kane Harrell, Certified Forester
Regional Investment Forester, Forest Investment Associates
jharrell@forestinvest.com
404-261-9575

Forest Sustainability Activists Welcome COP11 Recommendation on Biofuels

http://www.justmeans.com/Forest-Sustainability-Activists-Welcome-COP11-Recommendation-on-Biofuels/56576.html

 Antonio Pasolini
Oct 26, 2012 9:18 AM EDT

 Biofuels and their impact on biodiversity was on the table during the recent Conference of the Parties of the Biodiversity Convention (COP11), which took place in Hyderabad in India between October 08-19. One of the outcomes of the meeting was a recommendation regarding their production, which was met with cautious approval by a leading forest preservation organization.

The Global Forest Coalition (GFC) said in a statement that it welcomed the recommendation on biofuels. The text said subsidy policies and incentives should be reviewed and, in some cases, reversed, especially when they cause harm to biodiversity.

The Conference also adopted a decision on incentive measures in general. It stressed that there should be no delay on policy action when candidates for elimination, phase out or reform are already known. It encouraged parties to take appropriate action in such cases, taking into account national socio-economic conditions.

"These recommendations by the world's leading intergovernmental body in the field of biodiversity are very timely now that the European Commission just this week launched proposals for a review of EU biofuel policies," said Dr. Rachel Smolker of Biofuelwatch, the European focal point to the Global Forest Coalition.

The recommendations on biofuels and other issues are weaker than the organization expected, said Simone Lovera, GFC's executive, but she admitted that they show that governments are genuinely concerned about the impacts of the so-called bioeconomy, and associated new technologies like synthetic biology, and that many southern governments, in particular, insist on a strict precautionary approach to avoid the potentially devastating risks of with these new and unproven technologies.

Elsewhere, Helena Paul of Econexus, added that the "EC proposals are only a first step towards recognizing that all incentive measures that promote biofuel production should be abolished in clear evidence of their devastating direct and indirect impacts on biodiversity, and on the indigenous peoples, local communities and women. We hope these recommendations of the Parties to the Biodiversity Convention will encourage the EU to abolish support for large-scale industrial bioenergy altogether, and that they will not allow threats of legal action from the biofuel industry to deter them."

BP Cancels Florida Ethanol Plant, Extends Renewable Exit

http://www.businessweek.com/news/2012-10-25/bp-cancels-plans-to-build-florida-cellulosic-ethanol-plant

By Christopher Martin and Mario Parker on October 25, 2012

 BP Plc (BP/), Europe’s second-biggest oil producer, is abandoning a cellulosic ethanol project in the U.S., its second move in a year to scale back in renewable energy. 

The company canceled plans to build a $300 million cellulosic ethanol plant in Highlands County, Florida, to focus on “more attractive” projects, according to a statement on its website today.

BP doesn’t plan to build any commercial cellulosic ethanol facilities on its own, and will now focus its U.S. biofuel efforts on research and development and licensing its technology, Matt Hartwig, a spokesman, said today in an interview. The company decided in December to wind down its solar business, which had become unprofitable after prices plunged.

“Ethanol is not something a lot of people are interested in investing money in,” Mark Schultz, an analyst at Northstar Commodity Investment Co. in Minneapolis, said in an interview today.

“Corn-based ethanol hasn’t been profitable for about a year,” he said. BP is “seeing that this isn’t the right street to go down anymore.”

Cellulosic ethanol is a renewable fuel produced from inedible feedstocks such as waste and switchgrass. U.S. government mandates require that refiners blend 36 billion gallons (136 billion liters) of biofuels into their products annually by 2022. The Environmental Protection Agency has had to slash the targets for cellulosic ethanol because it isn’t yet commercially available.

Verenium Venture 

BP announced plans in 2008 to build the plant, which would have produced 36 million gallons of fuel a year. It formed a venture with biofuels company Verenium Corp. (VRNM) in 2009 to jointly build the plant in south-central Florida and each invested $22.5 million in the project. BP bought Verenium’s biofuels business for $98.3 million in September 2010.

“We believe it is in the best interest of our shareholders to redeploy the considerable capital required to build this facility,” Geoff Morrell, a BP spokesman, said in the statement.

BP continues to work with other renewable-fuel developers including its Butamax Advanced Biofuels LLC joint venture with DuPont Co., Hartwig said. It will continue to operate a cellulosic ethanol pilot plant in Louisiana and a research facility in San Diego, he said.

BP last year began exiting the global solar-energy industry after 40 years. Competition from Chinese manufacturers created a glut of panels, helping drive down prices 48 percent last year.

Royal Dutch Shell Plc (RDSA) is Europe’s biggest crude producer.

To contact the reporters on this story: Christopher Martin in New York at cmartin11@bloomberg.net; Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Vilsack: Strengthening homegrown energy

http://www.cattlenetwork.com/cattle-news/Vilsack-Strengthening-homegrown-energy-174966171.html?ref=171

Agriculture Secretary Tom Vilsack   |   Updated: October 19, 2012 


As the drought continues today, USDA and other Federal agencies are doing all we can to help farmers, ranchers and communities who have been impacted.

Unfortunately, our tools are limited. Due to inaction by Congress, many parts of the 2008 Farm Bill expired October 1, and other aspects of the law will expire in the coming months.

This brings tremendous uncertainty for rural families – particularly livestock producers who have lost access to disaster programs, and dairy producers who no longer have access to dairy support programs.

The lack of a Food, Farm and Jobs Bill also limits USDA from continuing our record investments in homegrown American energy. Since 2009 USDA has worked hard to ensure that rural America plays a key role in our nation’s energy strategy.

For example, we’ve invested in more than 330 bioenergy projects, strengthening biofuels production across America. Ethanol alone supports nearly 400,000 American jobs, while reducing the price of gas by more than one dollar per gallon for American families.

We’ve helped grow America’s capacity for creating advanced biofuels from non-food, non-feed sources. Since 2009 USDA has invested in historic efforts to create nine new, advanced biofuels refineries. Meanwhile, we have added new income sources for farmers – providing incentives to grow advanced feedstocks on nearly 60,000 acres.

Finally, USDA has undertaken groundbreaking research that’s necessary to expand our homegrown energy capacity.

Last year we established five research centers across America to enhance research and coordination in the development of new biofuels technologies. Just last week, USDA announced a sixth such effort, providing support for researchers across the northeast United States to undertake additional biofuels research.

USDA has invested more than $320 million to accelerate research into the new technologies associated with advanced biofuels. And in partnership with the U.S. Navy and the Department of Energy, we are making an historic investment of more than $510 million to develop advanced biofuels for military ships and aircraft. In fact, just recently, ships and aircraft of the Navy’s “Great Green Fleet” conducted operations off the coast of Hawaii using advanced marine and aviation biofuels.

We’re proud of where we stand today. In 2011 America imported about 45 percent of our oil from foreign countries – down from more than 60 percent in 2005. Our nation’s growing biofuels industry played a key role in that progress.

But there’s much left to be done. I know that given the tools to succeed, USDA can continue to bring down gas prices for families. We can further strengthen America’s energy security. And we can support more good jobs in our small towns and rural communities.

Sundrop Fuels plans to hire locally as much as possible for Alexandria-area plant

http://www.englandairpark.org/articles/2012/01/sundrop-fuels-plans-hire-locally-much-possible-alexandria-area-plant

Date: (?) 2012

Story Courtesy of The Town Talk
Written by Jeff Matthews

Officials from Sundrop Fuels Inc. as well as local and state government and business leaders agree wholeheartedly on this -- they would love to fill as many of the 150 jobs as possible at the company's planned biofuels plant near Alexandria with Louisiana natives.

"I'm tired of seeing our bright young people come home twice a year -- at Thanksgiving and Christmas -- before going back to Atlanta or Denver," Gov. Bobby Jindal said in a familiar refrain. "These are the kind of good-paying jobs that will keep Louisianians at home."

"We would be happy to find some good Louisiana graduates wasting time in Houston or Dallas who want to come back," said Sundrop Fuels Chief Executive Officer Wayne Simmons.

Sundrop Fuels announced in November it will build its first production facility off Interstate 49 in the Rapides Station area, north of Alexandria. The company is banking its future on the plant and its unique conversion process that turns biomass and natural gas into ready-to-use transportation fuel.

The plant is expected to employ approximately 150 people, with an average yearly salary of $58,000 a year. Economic development professionals have predicted it will create more than 1,000 other indirect jobs.

Sundrop is expected to break ground on the facility early this year.

"We're excited about the early impact, which is the construction impact," said Jim Clinton, president of Central Louisiana Economic Development Alliance. "We should do very well with that. You're talking about a $450 million project that local companies will be involved in. So just at the first cut, it's a really big hit up front. Then, of course, we're very pleased with the 150 jobs, and all the indirect jobs."

Simmons said hiring at the top level will start first, so those employees can work with the engineering and design team. From there, he said, it will be "a gradual ramp-up" to filling all the jobs.

"So if we hire at the senior level around mid-year, the end of the year would be the next tier," Simmons said. "The largest part of the hiring would be in 2013 with an eye to being completely staffed by early 2014."

Simmons said he expects the large part of the plant's work force to be from the area and the state.
"A couple of people will move down," he said. "But it's largely going to be indigenous."

"We shouldn't have any problems filling those jobs," Clinton said.

Simmons said about 90 of the facilities jobs will be operator jobs, with the rest broken down fairly evenly among engineering and supervisory/management.

"One of the challenges is this plant has a lot of different unit operators," he said. "It's a complex plant."

Simmons said a lot of training will be required. The state will be heavily involved through its FastStart workers training program.

Clinton welcomes the challenge of training workers for the plant.

He's particularly enthused about getting local educational entities involved and improving their capabilities to train skilled workers in the future. State education officials gave the go-ahead last year for Central Louisiana Technical College to expand into more of a full-service community and technical college to meet such challenges.

"Every time you do one of these things, you're building capacity for the next one," Clinton said.
Clinton, long a proponent of raising the knowledge base of the area work force, is also pleased at the large percentage of highly skilled jobs the plant will provide.

"These are significant jobs," Clinton said. "Engineering, chemical, technical-intensive jobs. That's a good thing. That's what you want in your work force."

Ethanol industry supports more than 1,000 jobs in Ga.

http://www.ethanolproducer.com/articles/9194/ethanol-industry-supports-more-than-1-000-jobs-in-ga

By Erin Voegele | October 09, 2012

 

The 2012 Georgia Life Sciences Industry Analysis was released at Georgia Bio’s annual Georgia Life Sciences Summit in October. The analysis, titled “Shaping Infinity,” shows that one out of every 40 jobs in Georgia is tied to the life sciences industry, which includes the biofuel sector. The report, which was produced by the University of Georgia’s Selig Center for Economic Growth, found that the number of workers employed in Georgia’s life sciences industry increased by 1.5 percent from 2007-’10, while statewide employment dropped by 7.9 percent during the same period. Wages paid by companies in this sector also increased at a faster rate than wages paid by other companies within the state. The relative wage increases were 4.4 percent and 4.2 percent.

“The analysis shows that sustained efforts to grow and foster the development of Georgia’s life sciences provided their worth during the Great Recession and during the sub-par economic recovery that has persisted in its wake,” said the authors in the report. “Recent developments indicate that the prospects for Georgia’s life sciences cluster are improving.”

The report defines the life sciences industry as including biotechnology, medical devices, pharmaceuticals, diagnostics, as well as the agricultural, biofuels and bioenergy sectors. The report identified a total of eight biofuel companies active within Georgia. The report notes that six of these companies have been in business for 10 years or less. The vast majority, seven of the eight companies employ between one and 10 workers, while one employs a staff of 51 to 100.

Under the category of agricultural life sciences, ethanol production was found to support 206 direct jobs within Georgia, with a total employment impact of 1,026 jobs. The total impact of ethanol production on state gross domestic product (GDP) is estimated to be $105.32 million, with a total labor income impact of $63.90 million.

Biofuel companies included in the survey include Agri Biofuels Inc., Algae Bioenergy Solutions, Bio-Plus Inc., Brettech Alternative Fuel Inc., C2 Biofuels Inc., First United Ethanol, Freedom Pines Biorefinery/LanzaTech, Georgia Alternative Fuels LLC, Georgia Biomass/RWE Innology, Middle Georgia Biofuels Inc., and Peat Fuel Company.

Sluggish economy hampers Louisiana timber industry

http://www.thetowntalk.com/apps/pbcs.dll/article?AID=2012210040327&adjusted=1

10:32 AM, Oct 4, 2012

MARKSVILLE -- The buzz at the Louisiana Forestry Association Convention was mostly about -- no surprise -- the economy.

"Housing starts really drive a lot of this industry and they are down considerably," said LFA Executive Director Buck Vandersteen. "It is scary when you think we have the lowest interest rates for a 30-year mortgage since World War II, yet we don't have a big boom in the housing market."

The sluggish demand has been particularly hard on the state's logging industry.

Louisiana has lost about half its loggers since the downturn, Vandersteen said. Those who remain are "trying to keep their heads above water."

It will take time to recruit and train a new work force, Vandersteen said, meaning if demand were to shoot up quickly, it could cause problems in the supply chain.

The good news, Vandersteen said, is landowners still are planting timber. Louisiana's forest land is growing, he said, and the forests are producing 30 percent more wood than what is being harvested or dying.

"It all depends on the family landowner," Vandersteen said. "Most of them are small operations -- the average is about 40 acres. They're the ones who start the whole chain in what is a multi-billion dollar industry in Louisiana. It all starts with the mom and pop landowner."

Those landowners are looking for new markets, and there is some excitement about the potential for wood products in renewable energy.

Wood is being used as a component in manufacturing synthetic gas -- including at a pilot plant being developed in the Alexandria area by Sundrop Fuels, which will convert woody biomass and natural gas into "green gasoline" that can be used in vehicles.

Wood pellets are being burned as an energy source, particularly in Europe.

"This is not a dying industry," Vandersteen said. "With renewable fuels, we don't know where that's going to take us. It will be exciting to see what potential markets open up."

Vandersteen stressed that the industry is not turning its back on its traditional bread and butter, especially the construction industry. He is hopeful building will ramp up in the near future, though that will depend on the mindset of Americans.

"It's the economic uncertainty," Vandersteen said. "When people start feeling good about the economy, they're more likely to buy homes, buy furniture. Right now, people don't know where the economy is going. People need to know what our taxes going to be, what is health care going to be, do I invest in a business, do I go out of business? Once all that is cleared up, then we can move forward."

The LFA convention is being held Tuesday through today at Paragon Casino Resort. Speakers are covering topics such as new lumber standards for building and water rights issues.

On Wednesday, William "Bubba" Rasberry from Shreveport was recognized as the state's Outstanding Tree Farmer while Jeffrey Martinez was recognized as Outstanding Logger.

SOCMA: US keen to tap into gas supply

http://www.icis.com/Articles/2012/10/01/9599041/socma-us-keen-to-tap-into-gas-supply.html

27 September 2012 10:53  [Source: ICB]

Some political leaders and many in manufacturing outside the chemical industry do not fully appreciate the huge potential of shale gas as a game changer for the US economy, according to an executive from the country's second largest natural gas producer, Chesapeake Energy Corporation.

"From the beginning of 2013 we'll start to see those dollars rolling in" Bill WinceVice president of business development, Chesapeake

According to Chesapeake, US gas resources are so vast that production could be doubled from current levels. However, this will only happen if gas prices return to levels that make gas drilling viable - somewhere in the $4-6/MMBtu range, substantially higher than the levels seen today.

At these prices, natural gas and natural gas liquids (NGLs) would still be a very attractive resource for the chemical industry and other industrial sectors, Chesapeake says.

Bill Wince, vice president of business development for Chesapeake, points out that the petrochemical industry uses natural gas for process energy and NGLs like ethane and propane as a feedstock. With such a comprehensive use of natural gas for its operations, the chemical industry benefits significantly from increased resource availability and ­modest prices.

He believes the chemical manufacturers that are adding NGL cracking capacity in the US have a great opportunity to capture value through exports.

"Though there are no restrictions on exporting raw NGLs, those who can process raw NGLs in the US have excellent opportunities to market their products in higher priced global markets," he adds.

Smaller and specialty chemical manufacturers will also have much more attractive input costs thanks to shale gas. "Our message is that you'll have a real advantage in the US and you need to be looking at ways to take ­advantage of that for domestic markets and for export."

The figures speak for themselves: following years of decline, industrial demand for gas has grown each year for the past three years as prices have fallen. "Those who can switch to gas have done so. But some of the fundamental shifts take time because they require new investments," says Wince.

Lower natural gas prices have generated significant new demand opportunities in the US, he says. The most immediate demand response has been in the power sector, as low gas prices have allowed gas-fired generation to displace coal.

Mothballed fertiliser plants have been brought back on stream, and methanol facilities have been debottlenecked. Over the longer term, he says, capacity additions from ammonia producers for fertilisers and urea, as well as methanol producers, will add significant new baseload industrial demand.

Wince says: "You begin to see some major projects under construction, so from a construction perspective the early-movers will have an advantage. From the beginning of 2013 we'll start to see those dollars rolling in."

Gas will also see increasing use in transportation: "People believe there has been a fundamental change in the relationship between petroleum prices and natural gas prices," he says. Truck engine manufacturers like Cummins and Westport are developing engines to burn liquefied natural gas (LNG), as are locomotive builders such as Caterpillar and GE.

VOLATILITY DECLINES

Investors like to make long-term decisions based on predictable conditions and, according to Wince, price volatility for natural gas and NGLs is already decreasing thanks to all the investment in infrastructure and increased supply.

He says: "In the past, price spikes were often weather-driven. We would ramp up rigs in response, but this would involve going out and finding the gas. Today, we've found the gas and future drilling will be driven by ­pricing signals - that has effectively dampened volatility."

In the past a lot of natural gas supply was offshore so it was subject to hurricane ­interruptions. Tight and shale gas is all onshore so the impact is much less pronounced. "Katrina was a huge event for pricing; we think shale insulates the US from that volatility," says Wince.

There has been a huge amount of investment in gas exploration and production in the US over the past few years, enabling producers to deliver gas in a much more flexible and reliable way, thereby cutting volatility.

"Our prices have traded down slowly over 3-4 years. But we had a very hot summer and difficult winters before this last one. These would have caused price spiking in the past but we had virtually none," he says.

Wince adds: "You can make investment decisions based on a presumption of lower volatility in gas markets. Investors should be confident that the long-term equilibrium price will be favourable versus alternative fuels and absolute prices ought to be more stable than in the past."

UNSUSTAINABLE PRICES

However, Chesapeake sounds a note of caution over current pricing. It believes a price of $4-6/MMBtu may be viable for producers and consumers in the intermediate term. With prices currently tanking below $3/MMBtu and below $4/MMBtu for the whole of this year, the number of gas rigs has fallen from 1,400 to 452 between 2008 and 2012.

Chesapeake is not planning to increase its number of gas rigs until it gets the right price signals. It has significantly curtailed capital expenditure investment in dry gas shale plays. Its budget has been adjusted so it spends more on oil and NGL exploration ­instead.

"We don't think the US can survive on incremental gas production from wet gas plays alone, whose higher value liquids make ­drilling economic at lower gas prices. Most dry gas plays don't become economic until prices are above $4/MMBtu. A lot of gas can be found at $6 and less, so $5 is a good midpoint," says Wince.

Chesapeake believes natural gas prices will self-correct in the long run and make exploration and production viable again. A record inventory of natural gas in storage in the US is now being worked off via coal-to-gas ­switching in the power sector, and that will continue through the end of this year, it says. Having bounced back from historic lows, they expect prices to increase late this year or early in 2013.

On the NGL side, Wince adds: "A lot of ethane crackers had gone into maintenance in the first half of 2012. Supply has been growing but part of the NGL price falls have been due to plant turnarounds this year. Nevertheless, supply growth will outpace demand until new crackers come online in the second half of this decade, so prices may remain ­modest."

Wince is confident that the $4-6/MMBtu natural gas price attractive to chemical producers can be sustained. He expects producers will return to dry gas plays in force when prices incentivise new drillings.

"The nominal price might increase because of inflation but adjusted should stay favourable versus all other fuel sources well beyond the next decade.

"Some in government and industry still don't recognise what an incredible resource we have and how we should leverage it. There are so many opportunities to underpin new jobs and real economic growth," says Wince.

As an independent oil and gas producer, Chesapeake is investing in research to boost the use of natural gas rather than conventional petroleum-based fuels in cars and heavy vehicles. It is also trying to encourage utilities to increase gas usage.

The company has also taken a 50% stake in biofuels group Sundrop Fuels, which uses natural gas and biomass to create transportation fuels. Wince adds: "The shale gas revolution is expanding to include more than just shale gas. Technology is being used in older oil and gas zones, which we call non-conventional or tight zones."

The new zones have become extremely important over the last 2-3 years, he says. "We've seen shale and associated drilling begin to focus away from typical dry gas zones and rig counts are now increasing in areas like Eagleford and the wet gas portion of Marcellus. The economics for wet gas, oil and condensate drilling have become better as we've adapted drilling techniques used to develop the dry gas plays."

By: Will Beacham
+44 20 8652 3214

Moret: Louisiana continues to outperform South and U.S.

http://www.thetowntalk.com/article/20120926/OPINION/209260317

12:19 PM, Sep 26, 2012

Written by Stephen Moret 

Over the last four years, despite facing a deep national economic downturn and harmful policies of the Obama administration that have constrained our growth, Louisiana has significantly outperformed the South and U.S.

Only six states in our country have more jobs today than in January 2008. Louisiana and Texas are the only two such states in the South. In fact, Louisiana's job growth has been second fastest in the South since 2008, and third fastest over the last 12 months.



Per-capita personal income in Louisiana has increased by more than $2,700 over the last four years, improving our national ranking to its highest level in more than 80 years.


According to the U.S. Census, for more than 20 consecutive years, more people moved out of Louisiana than moved in, but for the past four years in a row, more people moved into Louisiana than moved out. People are voting with their feet and moving here because Louisiana has experienced job growth while most other states have experienced job losses.



Two significant contributors to Louisiana's relative economic performance have been our state's dramatic business climate improvements, as well as our aggressive business retention, expansion and recruitment efforts.


Since 2008, Louisiana has improved to its highest-ever position on every major national ranking of state business climates, and we have secured projects that are creating more than 51,500 new jobs and more than $12.6 billion in new capital investment.


We've helped secure a variety of economic development wins right here in Central Louisiana. For example, Sundrop Fuels plans to break ground by early 2013 on a $450 million biofuels refinery, which will result in 150 direct jobs with average salaries of about $58,000, plus benefits, as well as approximately 1,150 indirect jobs.


JELD-WEN, with state assistance for workforce recruitment and training, will open a $120 million facility that will create at least 75 new, direct jobs. Sutherland Global Services is creating 600 new jobs at its new business process outsourcing center. With state assistance, P&G recently completed a $100 million expansion, creating more than 100 new jobs.