Moving Ethanol Demand Beyond Being Just a Blending Component

Posted on July 27, 2008. Filed under: Blender's Tax Credit, Field-to-Pump, Hydrous Ethanol | Tags: , , , , |

 

Florida Company Committed to Moving Ethanol Demand Beyond Being Just a Blending Component in Gasoline to a Truer Fuel Alternative in the Form of Renergie E85

 

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Renergie E85, Produced Solely from Sweet Sorghum Juice and Priced at 20 Percent Less Per Gallon than Regular Gasoline, Will Benefit Consumers, Farmers and Gas Station Owners

 

 

 

Gainesville, FL (April 25, 2008) – At the pump, the price of a gallon of gasoline increases almost on a daily basis.  The price of corn is expected to rise as high as $7.50 a bushel by summer.  While alleging an oversupply of corn ethanol, U.S. oil companies still import thousands of barrels of ethanol from foreign sources every month. Cargill imports ethanol from its dehydration facility in El Salvador.  Can ethanol provide any relief at the pump to the U.S. driving public?  Renergie believes that ethanol can significantly lower the pump price if it is produced from a non-corn feedstock and marketed directly by the producer as E85.  Ethanol must compete against, rather than be an inexpensive blending component in, gasoline.

 

Renergie produces ethanol solely from sweet sorghum juice. The controversial “food vs. fuel” debate does not apply to Renergie’s operations.  Sweet sorghum has been called a “camel among crops,” owing to its wide adaptability, its marked resistance to drought and saline-alkaline soils, and tolerance to high temperature and waterlogging.  It can grow in marginal soils, ranging from heavy clay to light sand.  Sweet sorghum requires one-half of the water and only one-quarter the amount of nitrogen used to grow corn.  The energy requirement for converting sweet sorghum juice into ethanol is less than half of that required to convert corn into ethanol.  The Renergie variety of sweet sorghum yields between 500 to 800 gallons of ethanol per acre.  In 2007, China and India produced 1.3 billion gallons of ethanol from sweet sorghum juice.  The Renergie project is the first time that ethanol is produced solely from sweet sorghum juice in the U.S.

 

Cost of Feedstock

Renergie will not fall victim to rising feedstock costs.  Renergie ensures that there is a link between the compensation paid to Renergie’s feedstock producers and ethanol market conditions.  Farmers will receive a lease payment for their acreage and a royalty payment based on a percentage of Renergie’s gross sales of ethanol.  The Renergie ethanol project will mark the first time that Louisiana and Florida farmers will share in the profits realized from the sale of value-added products made from their crops. 

 

Decentralized Network of Smaller Plants and Commitment to Rural Economic Development

Renergie was formed on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita.  Each ethanol plant has a production capacity of five (5) million gallons per year (5 MGY) of fuel-grade ethanol.  Renergie intends to replicate its Louisiana decentralized network of ethanol plants in Florida.  Upon completion of the initial network of twenty ethanol plants, Renergie will have a total combined annual production capacity of one-hundred (100) million gallons. 

 

Smaller is better.  The distributed nature of a network of small 5 MGY plants reduces Renergie’s feedstock supply risk, does not burden local water supplies and provides broad-based economic development.  In Louisiana, Renergie is headquartered in the small city of Kaplan (population of less than 5,000).  Renergie has agreed to donate two cents of every gallon of ethanol it sells to the City of Kaplan.  Renergie firmly believes that the success of the ethanol industry requires a long-term commitment to rural economic development.

 

Infrastructure Development

Renergie’s “field-to-pump” strategy is to produce ethanol locally and market ethanol locally. There is not an oversupply of ethanol.  The major obstacle to widespread ethanol usage continues to be the lack of fueling infrastructure.  Only 1,413, of the nearly 180,000 retail gasoline stations in the United States, offer E85.  The day of building 100 MGY corn-to-ethanol plants in the Midwest corn belt, for the sale of E10 to consumers on the U.S. East Coast and West Coast, is over!  Renergie is focusing its efforts on locally growing ethanol demand beyond the 10% blend market.  Initially, Renergie will directly market E85, a blend of 85 percent ethanol and 15 percent gasoline for use in FFVs, to local fuel retailers under the brand Renergie E85.  Renergie’s unique strategy is to blend fuel-grade ethanol with gasoline at the gas station pump.  Currently, ethanol providers blend E10 and E85 at their blending terminal and transport the already blended product to retail gas stations.  Once state approval is received, Renergie’s variable blending pumps will be able to offer the consumer a choice of E10, E20, E30 and E85.  Via use of the Blender’s Tax Credit, Renergie will be able to ensure that gas station owners are adequately compensated for each gallon of fuel-grade ethanol that is sold via Renergie’s variable blending pumps at their gas stations.

 

 

 

About Renergie

Renergie was formed by Ms. Meaghan M. Donovan on March 22, 2006 for the purpose of raising capital to develop, construct, own and operate a network of ten ethanol plants in the parishes of the State of Louisiana which were devastated by hurricanes Katrina and Rita.  Each ethanol plant will have a production capacity of five million gallons per year (5 MGY) of fuel-grade ethanol.  Renergie’s “field-to-pump” strategy is to produce non-corn ethanol locally and directly market non-corn ethanol locally. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida Department of Environmental Protection’s Renewable Energy Technologies Grants Program.  Renergie received $1,500,483 (partial funding) in grant money to design and build Florida’s first ethanol plant capable of producing fuel-grade ethanol solely from sweet sorghum juice. On  April 2, 2008, Enterprise Florida, Inc., the state’s economic development organization, selected Renergie as one of Florida’s most innovative technology companies in the alternative energy sector.  On January 20, 2009, Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000. By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is renewable, more economical, cleaner, and more efficient than unleaded gasoline.  Moreover, the Renergie project will mark the first time that Louisiana farmers will share in the profits realized from the sale of value-added products made from their crops.

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    Renergie created “field-to-pump," a unique strategy to locally produce and market advanced biofuel (“non-corn fuel ethanol”) via a network of small advanced biofuel manufacturing facilities. The purpose of “field-to-pump” is to maximize rural development and job creation while minimizing feedstock supply risk and the burden on local water supplies.

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