Archive for March, 2009

Ethanol Investors Try to Derail California’s Carbon-Emissions Proposal

Posted on March 27, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , |

Ethanol investors try to derail California’s carbon-emissions proposal

Schwarzenegger, ethanol, carbon emissions, California
Justin Sullivan / Getty Images
Gov. Arnold Schwarzenegger sits next to an ethanol-powered vehicle after signing an order establishing the world’s first low-carbon standard for transportation fuels in California in January.
A group of ethanol investors met with Gov. Schwarzenegger in an effort to derail the proposal, which they say would cripple the nation’s biofuels industry.
By Margot Roosevelt
March 27, 2009
Ethanol investors met with Gov. Arnold Schwarzenegger this week in an effort to derail California’s far-reaching proposal to slash carbon emissions from transportation fuels.

The meeting, the latest volley in a national campaign against the regulation, was attended by Silicon Valley mogul Vinod Khosla and former Secretary of State Bill Jones, chairman of the board of Sacramento-based Pacific Ethanol Inc. One participant, New Fuels Alliance lobbyist Brooke Coleman, said the proposal is based on “completely speculative” scientific models and would cripple the nation’s biofuels industry.

Environmentalists are alarmed by the mounting attack on the state Air Resources Board, which will hold a hearing on the rule in Sacramento today. “There is an all-out war by corn ethanol interests, and they are using scare tactics to get others on board,” said Patricia Monahan, a vehicles expert at the Union of Concerned Scientists.

The rule would be the first in the nation to restrict planet-heating greenhouse gases from fuel. It is an essential component of the state’s landmark global warming law, which would slash the state’s carbon dioxide emissions by 15% over the next 11 years. President Obama has called for a national low-carbon fuel standard.

The Washington-based Truman National Security Project sent Schwarzenegger a letter this week from 66 retired military and intelligence officers — including former National Security Advisor Robert McFarlane — saying that the California standard would give oil “an unfair advantage. . . . It is a matter of national security.”

However, at least one signer had second thoughts. Vice Admiral Dennis V. McGinn sent out a news release saying that “upon more careful research,” he found the letter “missed the mark” and that the California standard should be adopted immediately as a national model.

Former Gen. Wesley Clark, co-chairman of the biofuels association Growth Energy, is also leading a charge against the proposal, saying that the rule’s “indirect land use” provision unfairly counts the global impact of growing corn for fuel by factoring in the displacement of forests that would be razed to grow replacement crops.

Mary D. Nichols, chairwoman of the Air Resources Board, said the California proposal would boost the use of biofuels, “including just about everything but imported corn.” The rule is aimed at spurring investment in cellulosic low-carbon fuels made from switch grass and other non-food plants.

Nichols said that Pacific Ethanol’s Jones, a Republican, “has been unceasing in his efforts to engage the governor,” but the governor’s staff has “been completely hands off.”

However, Blake Simmons, an official with the Emeryville-based Joint BioEnergy Institute, said the governor “was open-minded” during the meeting. Schwarzenegger spokesman Aaron McLear would not comment.

The Air Resources Board is scheduled to vote on the regulation next month.

margot.roosevelt@latimes.com

 

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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Farmers Want Obama to Make Carbon a Cash Crop Under Climate Law

Posted on March 26, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , , |

Farmers Want Obama to Make Carbon a Cash Crop Under Climate Law

By Lorraine Woellert and Alan Bjerga

 

March 26 (Bloomberg) — Rex Woollen grows corn and soybeans. In 2007, the Wilcox, Nebraska, farmer started cultivating a new commodity: carbon.

 

By not tilling his 800 acres, Woollen by some estimates keeps 470 tons of carbon per year in the ground and out of the atmosphere. Because of that, Woollen gets carbon credits he can sell on the Chicago Climate Exchange. At first, neighboring farmers were skeptical.

 

“They called me a tree-hugger,” Woollen said. “Then I showed them my first check.”

 

Woollen gets about $3,000 a year from the climate exchange’s carbon-trading pilot program. While it isn’t much, to Woollen it hints at bigger potential profit as Congress considers mandatory, nationwide greenhouse-gas limits.

 

President Barack Obama and Democratic leaders in Congress back a “cap-and-trade” system to ease global warming by making companies obtain government-issued pollution permits. As allowable emissions drop over time, companies would have to reduce pollution or buy extra allowances. Businesses adopting clean-energy methods like wind or solar power could sell permits for a profit.

 

Some farm-state lawmakers and agriculture groups want to let farmers like Woollen create a separate source of carbon allowances. Farmers who use eco-friendly farming techniques or plant trees would earn so-called offsets to sell alongside government permits on carbon markets.

 

Rural Votes Crucial

Agricultural offsets may be crucial to attracting enough votes from rural lawmakers to pass climate-change legislation, said Representative Stephanie Herseth Sandlin, a South Dakota Democrat. “We have to insist that agriculture has a seat at the table,” she said.

 

Republican congressional leaders have likened Obama’s cap- and-trade proposal to a tax increase on energy, and the plan may pit coal-producing states against other areas. Farm organizations are also divided.

 

The American Farm Bureau Federation, the biggest farm group, has opposed cap-and-trade plans, saying they would raise fuel and fertilizer costs. The National Farmers Union likes the idea and is lobbying for a slice of the carbon market.

 

In ideal circumstances, farms have the potential to capture one-third of the carbon pollution now produced by the U.S., said Rattan Lal, director of Ohio State University’s Carbon Management and Sequestration Center. Obama has said that by 2050 he wants to cut emissions by 80 percent from 1990 levels.

 

‘New Income Source’

Agriculture Secretary Tom Vilsack has called carbon “a new income source” that could “change the old ways of supporting farms.”

 

At this point, Climate Exchange Plc’s Chicago Climate Exchange runs a pilot program that lets farmers supply credits for sale to companies, such as Ford Motor Co. and American Electric Power Co., which have agreed to voluntary emissions limits. Its sibling Chicago Climate Futures Exchange last November began trading futures that can be used if a mandatory cap-and-trade law is enacted.

 

The North Dakota Farmers Union is the climate exchange’s biggest aggregator of farm-related carbon credits, with 3,900 participating farmers who will get about $9 million this year, Farmers Union President Robert Carlson said.

 

U.S. greenhouse-gas trading would skyrocket if Congress adopts a program like the European Union cap-and-trade system, which started trading carbon permits in 2005. The Chicago climate and futures exchanges together handled credits for 28.8 million metric tons in February, compared with a record 447 million metric tons at London’s European Climate Exchange Ltd.

 

Higher Costs

While farm-state votes may make or break a cap-and-trade bill, proponents face questions about whether agricultural offsets reliably cut greenhouse gases, and whether carbon’s price will rise enough to justify farmers’ costs.

 

By leaving land undisturbed, no-till farming keeps decaying organic matter in the soil so that carbon produced by decomposition isn’t released into the atmosphere. It also requires less machinery use, cutting fuel consumption.

 

No-till farmers may get lower yields along with lower expenses, so fuel costs and commodity prices influence tillage decisions. Agriculture Department research in 2007 said no-till corn farmers could save $83 per acre, enough to make up for crop yields that fell by 23 bushels per acre.

 

Farm Bureau President Bob Stallman said a cap-and-trade system, on balance, would probably hurt farmers by raising their costs. He would prefer greater government support for ethanol, which burns more cleanly than gasoline.

 

Defeat the Purpose

Some environmentalists, including the Sierra Club, say offsets may let companies buy their way out of pollution caps. Allowing offsets in a cap-and-trade system also requires some way to verify that farm practices genuinely cut emissions.

 

“If companies are buying offsets that aren’t real, we’re really defeating the purpose of climate-change legislation,” said Craig Cox, Midwest vice president for the Environmental Working Group.

 

Dow Chemical Co. and General Electric Co. are among companies that have backed the idea of offsets to help companies comply with carbon caps while working to curb emissions.

 

“You need offsets as a bridge,” said Graeme Martin, manager of business development for environmental products at Royal Dutch Shell Plc’s Shell Energy North America.

 

Jumping into the carbon market wasn’t much of a gamble for Woollen, he said. A self-described “true believer” in the dangers of climate change, Woollen, 61, already was practicing no-till farming when the carbon exchange opened. With no new equipment to buy, he said selling carbon credits was an easy decision.

 

Wes Niederman, 49, was also a no-till farmer when he joined the exchange three years ago. A North Dakota Farmers Union board member, he made about $1,500 last year from carbon credits.

 

“I’m getting that for doing nothing out of the ordinary,” Niederman said.

 

To contact the reporters on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net; Alan Bjerga in Washington at abjerga@bloomberg.net.

 

 

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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Why the Ethanol Import Tariff Should be Repealed

Posted on March 24, 2009. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , , , , , , |

Why the Ethanol Import Tariff Should be Repealed

__________________

 

Repeal Would Enable Ethanol Demand to Move Beyond Being Just a Blending Component

in Gasoline to a Truer Transportation Fuel Alternative

 

 

Gainesville, FL (August 3, 2008) – The question is whether the 54 cents per gallon tariff the United States places on imported ethanol should be eliminated when:

(a) U.S. farm acreage is being diverted from the production of food crops to energy crops and record high corn prices are impacting the agriculture, food and beverage industries;

(b) American families and businesses are paying record high prices for fuel;

(c) U.S. oil companies are using ethanol merely as a blending component in gasoline rather than a true alternative transportation fuel;

(d) The renewable fuels standard (“RFS”) requires that gasoline sold in the United States contains a renewable fuel, such as ethanol, and the expanded RFS specifically requires the use of an increasing amount of “advanced biofuels” – biofuels produced from feedstocks other than corn; and

(e) U.S. oil companies, due to a loophole in the Caribbean Basin Initiative, are currently allowed to import thousands of barrels of ethanol every month without having to pay the 54 cents per gallon tariff.

 

The Ethanol Import Tariff of 1980
Since 1978, in order to stimulate an increase in U.S. ethanol production and consumption, producers of ethanol-blended gasoline have received a subsidy, or tax credit. This incentive, known as the Blender’s Tax Credit, is currently valued at 51 cents per gallon of pure ethanol used in blending.

 

Ethanol imported into the United States is subject to two customs duties: an ad valorem tariff rate of 2.5 percent and a secondary tariff of 54 cents per gallon. The Ethanol Import Tariff of 1980 imposed the 54 cents per gallon tariff on imported ethanol. A key motivation for the establishment of the tariff on imported ethanol was to offset the Blender’s Tax Credit incentive for ethanol-blended gasoline. Unless imports enter the United States duty-free, the tariff effectively negates the incentive for those imports.

 

Food Prices

Corn is used as the feedstock for approximately 98% of the ethanol produced in the United States. Brazil uses sugarcane as a feedstock, while China is focusing on using cassava and sweet potatoes as feedstocks for ethanol production. USDA estimates that 3.2 billion bushels of corn (or 24% of the 2007 corn crop) will be used to produce ethanol during the September 2007 to August 2008 corn marketing year.  In January, 2002, the price for a bushel of corn was $1.98. In July, 2008, the price for a bushel of corn was $5.61.

                                                                      

Corn is a significant ingredient for meat, dairy, and egg production. However, while increased ethanol production is partially responsible for the increase in corn prices, the real factors driving up retail food prices are: rising demand for processed foods and meat in emerging markets such as China and India; droughts and adverse weather around the world; commodity market speculation; export restrictions by many exporting countries to reduce domestic food price inflation; the declining value of the dollar; and skyrocketing oil prices.

Record high prices for diesel fuel, gasoline, natural gas, and other forms of energy affect costs throughout the food production and marketing chain. Higher energy prices increase producers’ expenditures for fertilizer and fuel, driving up farm production costs and reducing the incentive for farmers to expand production in the face of record high prices. Higher energy prices also increase food processing, marketing, and retailing costs. In 2005, the most recent year for which data are available, direct energy costs and transportation costs accounted for roughly 8 percent of retail food costs. These higher costs, especially if maintained over a long period, tend to be passed on to consumers in the form of higher retail prices.

 

Increased demand for farm commodities could outstrip existing production capabilities, straining food supplies and boosting prices. Moreover, population growth and rising incomes are altering global food consumption patterns and boosting the demand for food, further supporting higher prices. Demand for bio-fuels, especially in the United States, has led to a decline in corn inventories, despite a record corn crop. This increase in U.S. corn acres limited the production of other crops.

 

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

 

 

Fuel Prices

Gasoline is one of the major fuels consumed in the United States and the main product refined from crude oil. Consumption in 2007 was about 142 billion gallons, an average of about 390 million gallons per day and the equivalent of about 61% of all the energy used for transportation, 44% of all petroleum consumption, and 17% of total U.S. energy consumption.

 

In January, 2002, the price of oil was US$18.68 per barrel. As of the date of this article, the price of oil is US$125.10 per barrel. In January, 2002, the average U.S. retail price for a gallon of regular grade gasoline was US$1.11. As of the date of this article, the price for a gallon of regular grade gasoline is US$3.96.

 

The price of crude oil is set through the interaction of world demand and supply. The following factors are driving up crude oil and gasoline prices: (a) increased world demand for crude oil as witnessed by the sharp increase in imported crude oil by China and India; (b) instability in oil-producing regions, including Iraq and Nigeria’s delta region; (c) limited U.S. refinery capacity to supply gasoline; (d) a decline in the value of the dollar compared to other currencies has increased the dollar price of oil on futures markets; (e) the continuing possibility of a supply disruption from natural disasters like Hurricanes Katrina and Rita in 2005; (f) speculators, who have entered the commodity markets in large numbers looking for ways to increase their monetary investments rather than to trade in oil and oil products, are causing an unacceptable upward pressure on prices; and (g) governments in developing countries are subsidizing energy, blunting the incentive to conserve by keeping prices low. China is expected to spend about $40 billion this year in subsidies. Venezuela and Egypt are forecast to spend more than 5 percent of their total economic output on subsidies this year.  As a result, while demand for oil in the developed world is expected to fall about 1 percent this year, consumption in emerging and developing countries is forecast to rise 3 percent, according to estimates by I.M.F. economists.

 

World demand for crude oil grew by 1.3% in 2007 to 86.0 mbd.  It is forecast to grow by 1.5% to 87.3 mbd in 2008. World supply was 87.3 mbd in March 2008, leaving relatively little excess supply to draw on if the market were disrupted by natural or political disasters. When excess supply on the market is low, prices tend to rise and become more volatile.

 

Higher prices for crude oil tend to translate directly into higher prices for gasoline. Currently, crude oil accounts for about 72% of the cost of gasoline. Refining, distributing, and marketing account for about 16% of the cost of gasoline, and taxes account for about 13%. However, until recently crude oil’s share of the cost of gasoline has been more typically in the range of 45% to 55%. In May 2007, for example, with gasoline at $3.15 per gallon, crude oil contributed 46% of the cost; refining, distributing and marketing 41%; and taxes 13%.

 

On July 31, 2008, Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion, the biggest quarterly profit ever by any U.S. corporation.On August 1, 2008, Chevron reported record oil prices drove second-quarter earnings up 11 percent to $5.98 billion, its highest-ever profit.

 

Imported petroleum does not pay a tariff, yet clean, renewable ethanol from our own hemisphere is assessed a 54 cent-per-gallon tariff.

 

Lack of Ethanol Infrastructure

RU.S. oil companies are using ethanol merely as a blending component in gasoline (in the form of E10) rather than a true alternative transportation fuel. There is not an oversupply of ethanol. The major obstacle to widespread ethanol usage continues to be the lack of fueling infrastructure. Only 1,528 of the nearly 180,000 (or 8/10 of 1%) retail gasoline stations in the United States offer E85. These E85 fueling stations are located primarily in the Midwest.

 

While alleging an oversupply of corn ethanol, U.S. oil companies still import thousands of barrels of ethanol from foreign sources every month without having to pay the 54 cents per gallon import tariff. Can ethanol provide any relief at the pump to the U.S. driving public?  Renergie, Inc. 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’s “field-to-pump” strategy is to produce ethanol locally and market ethanol locally. 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.  A recent study, cosponsored by the U.S. Department of Energy and the American Coalition for Ethanol, found E20 and E30 ethanol blends outperform unleaded gasoline in fuel economy tests for certain autos. Via capturing 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.

 

Renergie will further grow ethanol demand beyond the 10% blend market by being the first company to test hydrous ethanol blends in the U.S. As provided for in Act No. 382, the use of hydrous ethanol blends of E10, E20, E30, and E85 in motor vehicles specifically selected by Renergie for test purposes will be permitted on a trial basis in Louisiana until January 1, 2012.  The hydrous blends will be tested for blend optimization with respect to fuel consumption and engine emissions. Preliminary tests conducted in Europe have proven that the use of hydrous ethanol, which eliminates the need for the hydrous-to-anhydrous dehydration processing step, results in an energy savings of between ten percent and forty-five percent during processing, a four percent product volume increase, higher mileage per gallon, a cleaner engine interior, and a reduction in greenhouse gas emissions.

 

Imported ethanol is especially important for coastal states since almost all domestic ethanol is produced in the Midwest and is costly to transport because it cannot be moved through a pipeline. Elimination of the ethanol import tariff would provide the U.S. with sufficient ethanol to: (a) move ethanol demand beyond being just a blending component in gasoline to a truer transportation fuel alternative; and (b) create the required fueling infrastructure. 

 

Renewable Fuels Standard (“RFS”)

The Energy Policy Act of 2005 established the Renewable Fuels Standard (“RFS”) which directs that gasoline sold in the U.S. contain specified minimum volumes of renewable fuel.  The Energy Independence and Security Act of 2007 (“H.R. 6”), which became law on December 19, 2007, sets a new RFS that starts at 9.0 billion gallons of renewable fuel in 2008 and rises to 36 billion gallons by 2022.  Of the latter total, 21 billion gallons of renewable fuel in U.S. transportation fuel is required to be obtained from advanced biofuels. The term “advanced biofuel” means renewable fuel, other than ethanol derived from corn.  Brazil uses sugarcane as a feedstock for its ethanol production.

 

The CBI Loophole

U.S. oil companies, due to a loophole in the Caribbean Basin Initiative (“CBI”), are currently allowed to import thousands of barrels of ethanol every month without having to pay the 54 cents per gallon tariff.

 

The CBI was established in 1983 to promote a stable political and economic climate in the Caribbean region. The CBI allows the imports of most products, including ethanol, duty-free. While many of these products are produced in CBI countries, ethanol entering the United States under the CBI is generally produced elsewhere and reprocessed in CBI countries for export to the United States. The U.S.-Central America Free Trade Agreement (CAFTA) would maintain this duty-free treatment and set specific allocations for imports from Costa Rica and El Salvador.

 

Duty-free treatment of CBI ethanol has raised concerns, especially as the market for ethanol has the potential for dramatic expansion under P.L. 109-58 and P.L. 110-140. In the United States, fuel ethanol is largely domestically produced. A value-added product of agricultural commodities, mainly corn, it is used primarily as a gasoline additive. To promote its use, ethanol-blended gasoline is granted a significant tax incentive. However, this incentive does not recognize point of origin, and there is a duty on most imported fuel ethanol to offset the exemption. But a limited amount of ethanol may be imported under the CBI duty-free, even if most of the steps in the production process were completed in other countries. This duty-free import of ethanol has raised concerns, especially as U.S. demand for ethanol has been growing. Further, duty-free imports from these countries, especially Costa Rica and El Salvador, have played a role in the development of the U.S.-Central America Free Trade Agreement (CAFTA).

 

The main steps to ethanol production in the U.S. are as follows:

a. The feedstock (e.g., corn) is processed to separate fermentable sugars.

b. Yeast is added to ferment the sugars.

c. The resulting alcohol is distilled.

d. Finally, the distilled alcohol is dehydrated to remove any remaining water.

 

This final step – dehydration – is at the heart of the issue over ethanol imports from the CBI, as discussed below.

 

According to the United States International Trade Commission, the majority of all fuel ethanol imports to the United States came through CBI countries between 1999 and 2003.  In 2004, imports from Brazil to the United States grew dramatically, but in 2005, CBI imports again represented more than half of all U.S. ethanol imports. With an increase in ethanol demand in 2006 due to voluntary elimination of MTBE – a competitor for ethanol in gasoline blending –  imports grew dramatically, roughly quadrupling imports in any previous year. Most of this increase was in direct imports from Brazil. Historically, imports have played a relatively small role in the U.S. ethanol market. Total ethanol consumption in 2005 was approximately 3.9 billion gallons, whereas imports totaled 135 million gallons, or about 4%. Imports from the CBI totaled approximately 2.6%. In 2006, total imports represented roughly 13% of the 5.0 billion gallons consumed in 2006; ethanol from CBI countries represented roughly 3.4%. In 2007, total imports represented roughly 6% of U.S. consumption (6.8 billion gallons); ethanol from CBI countries represented roughly 3.6%.

 

As part of the initiative, duty-free status is granted to a large array of products from beneficiary countries, including fuel ethanol under certain conditions. If produced from at least 50% local feedstocks (e.g., ethanol produced from sugarcane grown in the CBI beneficiary countries), ethanol may be imported duty-free. If the local feedstock content is lower, limitations apply on the quantity of duty-free ethanol. Nevertheless, up to 7% of the U.S. market may be supplied duty-free by CBI ethanol containing no local feedstock. In this case, hydrous (“wet”) ethanol produced in other countries, historically Brazil or European countries, can be shipped to a dehydration plant in a CBI country for reprocessing. After the ethanol is dehydrated, it is imported duty-free into the United States. Currently, imports of dehydrated ethanol under the CBI are far below the 7% cap (approximately 3% in 2006). For 2006, the cap was about 270 million gallons, whereas about 170 million gallons were imported under the CBI in that year.

 

Dehydration plants are currently operating in Jamaica, Costa Rica, El Salvador, Trinidad and Tobago, and the U.S. Virgin Islands.  Jamaica and Costa Rica were the two largest exporters of fuel ethanol to the United States from 1999 to 2003. Despite criticisms in the U.S., new dehydration facilities began production in Trinidad and Tobago in 2005 and the U.S. Virgin Islands in 2007.

 

If there is such an over-abundant domestic supply of ethanol in the U.S., why are U.S. oil companies purchasing ethanol from foreign sources? As domestic ethanol consumption continues to grow, so will the volume of imported duty-free ethanol under this CBI loophole.

 

Conclusion

As discussed above, the Ethanol Import Tariff should be repealed for the following reasons:

(a) Record prices for gasoline are increasing the costs of producing, transporting, and processing food products.  Research shows that energy prices are quickly passed through to higher retail food prices, with retail prices rising 0.52 percent in the short-term for every 1 percent rise in energy prices. As a result, a 10 percent gain in energy prices could contribute 5.2 percent to retail food prices.

 

(b) Imported petroleum does not pay a tariff, yet clean, renewable ethanol from our own hemisphere is assessed a 54 cent-per-gallon tariff.

 

(c) Elimination of the ethanol import tariff would provide the U.S. with sufficient ethanol to move ethanol demand beyond being just a blending component in gasoline to a truer fuel alternative and create the required fueling infrastructure. 

 

(d) The Energy Independence and Security Act of 2007 sets a new RFS that starts at 9.0 billion gallons of renewable fuel in 2008 and rises to 36 billion gallons by 2022.  Of the latter total, 21 billion gallons of renewable fuel in U.S. transportation fuel is required to be obtained from renewable fuel, other than ethanol derived from corn.

 

(e) U.S. oil companies, due to a loophole in the CBI, are currently allowed to import thousands of barrels of ethanol every month without having to pay the 54 cents per gallon tariff.

 

At a time of record high gas prices, repeal of the 54 cents per gallon import tariff on foreign ethanol would create market competition by allowing U.S. blenders to purchase cheaper ethanol from foreign sources, which could help lower gas prices, increase the supply of ethanol to coastal markets, and ease the economic strain that is impacting the agriculture, food and beverage industries.

 

U.S. oil companies, corn farmers and fertilizer producers are benefiting from the 54 cents per gallon import tariff on foreign ethanol at the expense of the average American consumer.At a time when our own government’s Federal Reserve Chairman is saying food inflation and fuel costs are contributing to our dangerous economic condition, working toward eliminating this barrier to free market competition is more needed than ever.

About Renergie

Renergie was formed by Ms. Meaghan M. Donovan and Mr. Michael J. 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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Bipartisan Senate Bill Seeks Lower Tariffs on Ethanol Imports

Posted on March 23, 2009. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , , , , |

Bipartisan Senate bill seeks lower tariffs on ethanol imports

The New York Times

By BEN GEMAN, Greenwire

March 18, 2009

 

A bipartisan group of senators is seeking to lower U.S. tariffs on ethanol imports to achieve “parity” with the blender’s credit, which was reduced in last year’s farm bill.

 

The farm bill knocked the blender’s credit from 51 cents per gallon to 45 cents per gallon. A new Senate measure (pdf) is aimed at knocking down the 54-cent-per-gallon import tariff and the 2.5 percent ad valorem tariff to achieve “parity” with the lowered blender’s tax credit.

 

Sen. Dianne Feinstein (D-Calif.), one of the sponsors, said in a statement that the higher import tariff creates a barrier for sugarcane-based ethanol from Brazil, and hence gives gasoline imports a “competitive advantage.”

 

“I believe this makes no sense — particularly given our nation’s continued addiction to oil imported from the Middle East and other hot spots, as well as the volatility of global markets for the fuels we put in our cars,” she said.

 

The bill was introduced yesterday by Sens. Dianne Feinstein (D-Calif.), Judd Gregg (R-N.H.), Jeff Bingaman (D-N.M.), Susan Collins (R-Maine), Maria Cantwell (D-Wash.) and Mel Martinez (R-Fla.).

 

Collins and some other backers cast the bill in environmental terms. She noted in a prepared statement that the import tariff “creates a trade barrier to ethanol produced from sources like sugarcane, which is less greenhouse gas intensive than ethanol produced from corn.”

 

The backers also said the bill, by making ethanol imports cheaper for U.S. refiners, would in turn help lower prices at the gasoline pump.

 

EPA asked to stand put on ‘indirect’ land-use changes

Meanwhile, environmental groups are urging EPA not to retreat from its plans to weigh greenhouse gas emissions from “indirect” land-use changes linked to increased biofuels production.

 

At issue are upcoming EPA rules to implement the expanded renewable fuel standard, which under a 2007 law reaches 36 billion gallons of ethanol and other biofuels in the U.S. fuel supply by 2022. The 2007 law requires that biofuels have sharply lower levels of lifecycle greenhouse gas emissions than conventional fuels.

 

Ten environmental groups sent a letter to EPA administrator Lisa Jackson saying the rule should include measurement of emissions from indirect land-use changes — such as new land clearing in response to use of existing cropland for fuel feedstocks — linked to production of various types of biofuels.

 

Some biofuels industry officials and lawmakers have been pushing EPA not to make these calculations in the upcoming rule, arguing that the science is not advanced enough yet (E&ENews PM, March 16).

 

But the environmentalists’ letter to EPA says this would mean assigning a “zero value” to indirect land-use change, which they say would be a harmful decision. “A zero value is equivalent to assuming that land is limitless, and that agriculture can expand infinitely without any secondary damage. This flies in the face of common sense and is not a reasonable response to technical uncertainties in the analysis,” states the letter from the Wilderness Society, the Natural Resources Defense Council, Defenders of Wildlife and other groups.

 

“A zero value for indirect land use would send the wrong signal to the market, and would encourage ventures that increase global warming pollution and will fail once the lifecycle accounting accurately and completely addresses the impact of land use changes,” it adds.

 

For more news on energy and the environment, visit www.greenwire.com

 

 

 

 

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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Business Leaders Call for Linking Water, Energy and Climate in Global Talks

Posted on March 19, 2009. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , , , , |

Business Leaders Call for Linking Water, Energy and Climate in Global Talks

Green Car Congress

19 March 2009

 

Water
Log scale plot of illustrative water consumption by energy-related activity. In the examples cited in the report, biomass for biofuels has the largest and widest ranging footprint: from 24,000 m3 per 1,000 GJ in the Netherlands to 143,000 m3 per 1,000 GJ in Zimbabwe. Data: WBCSD (2009). Click to enlarge.

Business leaders from some of the world’s biggest companies called for water, energy and climate change issues to be linked in global negotiations, such as the international climate talks due to culminate in Copenhagen in December.

The business leaders were speaking at the launch of a report by the World Business Council for Sustainable Development (WBCSD) at the 5th World Water Forum in Istanbul. The report, Water, Energy and Climate Change: A contribution from the business community says water, energy and climate change are inextricably linked. The World Water Forum is expected to produce a ministerial statement calling for proactive policies on water issues.

Water is everybody’s business. It is used to generate energy, and energy is used to provide water. Climate change will affect the use and availability of both. It is important that we get the policies right. The World Water Forum in Istanbul has done a lot to focus attention on water, energy and climate change. But there is still a significant gap in addressing all three together at a global level. We must link them in the climate negotiations to have any real hope of finding a solution.

—Björn Stigson, president of the WBCSD

 

The paper outlines a number of key rationales for linking water, energy and climate change issues, including:

  • Water and energy are inextricably linked. Both are essential to every aspect of life. Water is used to generate energy; energy is used to provide water. Both water and energy are used to produce crops; crops can in turn be used to generate energy through biofuels.As one example, estimates of energy requirements for pumping freshwater range from 540 kWh per million gallons from a depth of 35 meters (equivalent to 0.51 GJ per 1,000 m3 of pumped water), to 2,000 kWh per million gallons from 120 meters (equivalent to about 2 GJ per 1,000 m3 of pumped water. These energy needs will increase in the areas where groundwater levels are decreasing.
  • Global energy and water demand are increasing. In an increasing spiral, demand for more energy will drive demand for more water; demand for more water will drive demand for more energy.
  • Both water use and energy use impact and depend on ecosystems. Industrial, agricultural and domestic water and energy uses can have adverse impacts on ecosystems, including loss of habitat, pollution and changes in biological processes (such as fish spawning). Such ecosystem impacts also affect the amount of water or energy supplies available. Water, energy and ecological footprints cannot be addressed in isolation.
  • Climate change will affect availability and use of both water and energy. Climate change acts as an amplifier of the already intense competition over water and energy resources. Impacts from climate change on both regional and global hydrological systems will increase, bringing higher levels of uncertainty and risk, with some regions more impacted than others. Climate change mitigation and adaptation need to be considered together.

Resolving growing issues surrounding water and energy priorities will require better and integrated policy frameworks and political engagement to address them satisfactorily for all stakeholders within and across watersheds, according to the report.

The paper lists five important policy recommendations from business to climate negotiators and policy-makers:

  • Provide reliable climate change risk data, models and analysis tools.
  • Integrate water and energy efficiency in measurement tools and policy.
  • Bring water issues into the mainstream, and ensure that water authorities and institutions have staff trained to deliver common management practices, education and awareness raising.
  • Integrate and value ecosystem services (the benefits that nature provides to society, such as water and forest products) into cross-border decision-making.
  • Encourage best practice through innovation, appropriate solutions and community engagement. It also includes 25 case studies showing how business is already linking water, energy and climate across their operations.

The WBCSD has updated its Global Water Tool with more recent water datasets, due to its successful uptake since its launch in August 2007. The Global Water Tool is a free tool enabling companies and organizations to map their water use and assess risks relative to their global operations and supply chains. The tool, which was developed by CH2M HILL and an advisory board of 22 WBCSD member companies, aims to help corporations better manage their water use.

The WBCSD’s Water Project brings together more than 60 companies from mining and metals, oil and gas, consumer products, food and beverages, infrastructure services and equipment sectors. The broad representation reflects the knowledge that all businesses will face water challenges in the years ahead.

Resources

 

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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New Legislation Would Require Half of US New LDVs in 2012 to be Alcohol Flex-Fuel, 80% by 2015

Posted on March 19, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , |

New Legislation Would Require Half of US New LDVs in 2012 to be Alcohol Flex-Fuel, 80% by 2015

Green Car Congress

18 March 2009

 

A bipartisan group of US legislators, led by Congressman Eliot Engel (D-NY-17), have introduced legislation that would require half of all light-duty vehicles (LDVs) made or sold in America by 2012, and 80% by 2015, to be “fuel choice-enabling” vehicles. These fuel choice-enabling vehicles are defined as flexible fuel vehicles capable of running on gasoline and on up to 85% alcohol-gasoline blends such as E85 or M85, as well as diesel vehicles warranted by its manufacturer to operate on biodiesel.

The legislation would allow exemptions for manufacturers under certain conditions, including if the application of the fuel-choice enabling technology to plug-in hybrid electric vehicles (PHEVs) caused such vehicles to fail to meet state air quality requirements.

Mid-range ethanol blends
In addition to encouraging the implementation of a more widespread E85 fueling infrastructure, the high percentage of flex-fuel cars in the new vehicle fleet would also make it simpler to move to support for mid-range ethanol blends, an expansion that is being proposed to the EPA as well as in Congress. By definition, the flex-fuel vehicles can handle any blend level up to 85%.
For example, Coleman Jones, Biofuels Implementation Manager at GM, notes that GM will not try to respond to the potential introduction of mid-range ethanol blends—especially in the absence of the requisite durability testing—by developing a range of systems.
We only have two hardware sets and two software sets (E10 and E85). We should have 100% flex fuel vehicles—if you do, you sort of answer the issue of ethanol blends, “ Jones says.
As far as older and non-flex fuel vehicles are concerned, the warranty terms are clear, Jones notes. No mid-level blend support.

The Open Fuel Standards Act (H.R. 1476) is co-sponsored by Representatives Roscoe Bartlett (R-MD-6), Bob Inglis (R-SC-4), Steve Israel (D-NY-2), and Allyson Schwartz (D-PA-13).

At Congressional hearings in December, Ford, General Motors and Chrysler committed to making 50% of their new cars flex fuel vehicles by 2012.

The distribution system necessary for alcohol fuels will develop if a substantial amount of US vehicles are equipped for using them, suggested Congressman Bartlett, noting that the establishment of such a vehicle fleet and distribution system would provide a large market that would mobilize private resources to substantially advance the technology and expand the production of alcohol fuels, both in the United States and abroad.

Separately, Bartlett spoke at the US Department of Energy’s Biomass 2009 conference, warning against widespread unrealistic expectations and unsustainable mandates by Congress for biofuels under the Renewable Fuels Standard (RFS) expanded in the 2007 Energy Independence and Security Act (EISA).

Congressman Bartlett said that conservation and energy efficiency are among five steps of an achievable strategy to a sustainable energy future. The others are to diversify and transition from fossil-fuels to alternative and renewable energy sources; to increase the proportion of domestic energy sources; and to reduce negative environmental impacts of energy production and consumption.

 

 

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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Auditor Questions Verenium’s Ability to Continue

Posted on March 17, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , , |

Auditor Questions Verenium’s Ability to Continue
By DIRK LAMMERS
Associated Press
March 17, 2009

An outside auditor for Verenium Corp. said in a filing Monday that the advanced biofuels company may have to “curtail or cease operations” if it cannot raise additional capital.

Verenium shares fell 5 cents, or 12.8 percent, to 34 cents in morning trading Tuesday. The stock has traded between 25 cents and $4.13 during the past year, and is off nearly 56 percent since January.

Cambridge, Mass.-based Verenium and oil giant BP PLC plan to build a $300 million biorefinery in Highlands County, Fla., capable of producing 36 million gallons a year from sugarcane and other cellulosic plant waste.

Verenium, in an Ernst & Young audit opinion included in a year-end report filed with the Securities and Exchange Commission on Monday, said its operating plan and existing working capital deficit raises doubt about its ability to continue.

“We continue to experience losses from operations, and we may not be able to fund our operations and continue as a going concern,” Verenium said in the filing.

The company said it will need additional capital to fund operations, including about $300 million to complete its commercial cellulosic ethanol plant with BP.

Verenium said it believes it will be able raise additional cash through corporate partnerships and collaborations, federal and state grants and loan guarantees. It also will consider seeking additional project financing, including nonrecourse debt, product sales, selling or financing assets, and, if necessary and available, the sale of equity or debt securities.

“We will need additional capital in the future,” the company said. “If additional capital is not available, we may have to curtail or cease operations.”

If the company is unable to secure additional financing, options include: reducing capital expenditures, scaling back development of new enzyme products, scaling back efforts to commercialize cellulosic ethanol, significantly reducing its work force, selling some or all of its assets and seeking to license products and technologies that it would otherwise seek to commercialize itself.

On Feb. 27, Verenium shares lost two-thirds of their value as the company reached a conversion price reset on some senior convertible notes it warned could result in a material reduction of its cash resources.

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Report Finds Water Stress Rapidly Becoming Key Strategic Risk to Commerce; Impending Water/Energy Collision

Posted on March 17, 2009. Filed under: Field-to-Pump | Tags: , , , , , |

Report Finds Water Stress Rapidly Becoming Key Strategic Risk to Commerce; Impending Water/Energy Collision

 

by Jack Rosebro

Green Car Congress

17 March 2009

Dhi
Water consumption or withdrawals per unit of energy produced, by energy type, in the United States. Source: DHI Group. Click to enlarge.

A Pacific Institute report commissioned by Ceres, whose Investor Network on Climate Risk advises investors with more than US$7 trillion in assets, concludes that impacts of declining water quality and availability will be “far-reaching” for business and industry in the developed as well as the developing world, and that companies which address water stress as a key strategic risk will be better positioned to adjust to negative effects such as reduced water allotments, rising water costs, community opposition, and increased public scrutiny of corporate water practices.

Among the increasing challenges is that while the sourcing, processing, and delivery of clean water is becoming more energy-intensive, the extraction and refining of fossil fuels and their substitutes is trending towards increasing water requirements per unit of fuel produced as energy companies work with progressively lower grade resources.

Processes such as oil extraction from sources such as tar sands and deep-water offshore oil wells, as well as the expansion of first-generation biofuels such as corn-based ethanol are setting the stage for a “water/energy collision” of resource management policies. “With increasing frequency,” write the Pacific Institute researchers, “we value energy production over water production.

Citing a study by Danish water consultancy DHI Group as well as one from the University of Texas (earlier link), the researchers point out that the water footprint of renewable energy sources varies widely, and is particularly intense for first-generation biofuels made from sugar, starch, vegetable oils, animal fats, or other food-source feedstocks, rather than non-food sources such as cellulose.

Climate change. The report “Water Scarcity and Climate Change: Growing Risks for Businesses and Investors” notes that drought conditions are currently causing water shortages in Australia, Asia, Africa, and the United States, and that drought patterns are in many cases mirroring previously predicted effects of climate change. While climate change is projected to increase precipitation in some areas, it is also likely to destabilize freshwater supply in other areas by compressing precipitation and snowmelt into shorter and more intense periods, overwhelming existing catchment infrastructure and creating longer periods of drought.

The percentage of the world’s population living in water-stressed regions—currently one out of every three—is expected to double to two of every three by 2025 as declining water supplies are further stressed by increased water demand for irrigation, hydration, and industrial cooling in warming regions. Although desalination has the potential to reduce freshwater demand in relatively affluent coastal urban areas by providing an alternative source for drinking water, it remains the most expensive demand-management option due to its energy-intensive processes, and is particularly vulnerable to rising energy prices.

Last year, a special report by the Intergovernmental Panel on Climate Change (IPCC) forecast that the effects of rising temperatures would lead to “changes in all components of the [global] freshwater system” in the 21st century. The IPCC’s Fourth Assessment Report, released in 2007, had also forecast that “climate change will challenge the traditional assumption that past hydrological experience provides a good guide to future conditions.

However, the authors of the Ceres report note that “businesses and investors are largely unaware of water-related risks or how climate change will likely exacerbate them.” Industries which face the greatest risks include the agriculture, beverage, electronics, energy, apparel, pharmaceutical, forest products, and mining sectors.

Sectoral Water Risks

Ceres
20th century world water withdrawals by sector, in cubic kilometers. Source: UNESCO. Click to enlarge.

Apparel. Cotton production, which requires 25 cubic meters of water for every 250 grams of finished product—the approximate weight of a T-shirt—is both water-intensive and highly vulnerable to risk. Cotton is typically grown in arid regions converted to farmland; in Uzbekistan, for example, which is one of the world’s largest exporters of cotton, the extraction of water from rivers that supply the Aral Sea is a key contributor to its deterioration and desertification. Wastewater from cotton production degrades local water supplies, but many countries which export cotton have relatively weak wastewater regulations

Electronics. Semiconductor wafer production is extremely water-intensive: in 2007, Intel and Texas Instruments used a total of 11 billion gallons of ultra-pure water (UPW), which requires significant amounts of energy to purify. Eleven of the world’s fourteen largest semiconductor factories are located in Pacific Rim regions which are already water-stressed.

Food Production. The largest and fastest-growing use of water is embedded in modern food production. Although livestock production requires many times the amount of water per calorie of plant-based food production, agricultural water requirements have also intensified as a result of the conversion over the past century of many naturally arid regions, such as California’s San Joaquin Valley, Texas, and parts of Egypt and Pakistan, to high-volume farming regions.

Drought is expected to become more common in many of these areas, as well as higher surface temperatures, which dry out soils, evaporate snowmelt, and require accelerated water inflows. Beverage manufacturers also face direct competition with local communities for affordable drinking water, and bottled water sales are beginning to decline in some developed countries because of environmental concerns.

Biotechnology. Chemicals and microorganisms in biotech wastewater present a particular threat to local ecosystems. Synthetic chemicals are typically developed for persistence, and do not readily break down in nature when discharged by pharmaceutical manufacturers.

Forestry. Pulp and paper manufacturing is the third largest consumer of water as well as fossil-based energy in the United States. While the sector is at particular risk from climate change, forests are also key components of watersheds, influencing water availability, transport, and quality.

Metals and Mining. The mining sector is restricted by the location of ore, and water must be imported to support mining operations. Development of new sites may also face local opposition; Canadian mining company Barrick Gold, for example, plans to mine gold from beneath glaciers in Chile; Andean farming communities which rely on the glaciers for their water supply oppose the project.

Electric Power. The electric power industry accounts for more than a third of all freshwater withdrawals in the United States, with nuclear power plants requiring about 40% more water per kilowatt-hour produced than fossil-fuel power plants. Declining levels and/or warmer temperatures of cooling water supplies during periods of extreme heat and/or drought have triggered nuclear plant shutdowns in the US and Europe in the past five years. Hydropower-based generation is also at risk, particularly in the Western United States, due to drought.

The Ceres report poses five primary questions as discussion points for exploring the level of risk that a company’s water policy might pose to its own long-term economic health:

  • Does the company know and measure its water footprint, including wastewater discharges, and understand the relationship between its energy and water use?
  • Has the company assessed business risks associated with its water footprint, including both direct and indirect risks (e.g. supply chain), and developed contingency plans for potential future risks such as those associated with climate change?
  • Is the company engaged with key stakeholders, including consultation and collaboration with affected communities, government entities, and NGOs?
  • Has the company integrated ongoing assessments of water risk into its business planning, governance, and risk management structures?
  • Does the company disclose and communicate its water performance and associated risks, using comprehensible and broadly accepted metrics?

The report concludes by pointing out several cross-sectoral trends in water risk for businesses:

  • Typically, water risk is embedded more in the value chain, especially of raw material production, than in operations or assembly of final product. This risk is rarely reflected in corporate sustainability reports or security filings.
  • Industries that require large amounts of water withdrawals, ultra-pure water, or both face increased risk of competing directly with local populations for water access. Fallout ranges from reputational damage to shutdown or relocation of facilities.
  • Wastewater discharges for industries with large gray water footprints are an increasing problem as developing countries adopt environmental regulations.
  • Fragmented information about corporate water risk as well as underlying supply conditions often make it extremely difficult for investors to assess the true magnitude of the risk.
  • As water supply declines, the quality of available water also typically declines, requiring more treatment and increasing the amount of energy embedded in the delivery of adequate water supplies.

Resources

 

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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IEA Cuts Demand Forecast, Non-OPEC Supply Growth on Recession

Posted on March 13, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , |

IEA Cuts Demand Forecast, Non-OPEC Supply Growth on Recession

by Alexander Kwiatkowski

 

 

March 13, 2009 (Bloomberg) — The International Energy Agency cut its 2009 oil demand forecast for a seventh month as the global slump saps consumption. Non-OPEC supply growth has stopped as investment drops and faults close fields, it said.

 

The Paris-based adviser to 28 nations reduced its 2009 oil demand forecast by 270,000 barrels a day to 84.4 million barrels a day. That represents a decline in demand of 1.25 million barrels a day, or 1.5 percent, from 2008.

 

“The demand collapse has been staggering, based on the whirlwind nature of the slump in the global economy,” the IEA said in its monthly oil report today. “The obvious flip-side to this is that lower prices also lead to a supply response.”

 

The Organization of Petroleum Exporting Countries will meet in Vienna on March 15 to review production quotas as the economic crisis keeps oil below $50 a barrel. Efforts to increase prices by cutting output further pose a risk to economic recovery, the IEA’s executive director Nobuo Tanaka said last month.

 

While the worldwide recession crimps demand, a lack of available credit to fund investment in new projects and ongoing production problems in Azerbaijan are reducing supply from outside OPEC, the IEA said.

 

The IEA trimmed its forecast for supplies from outside the producer group next year by 360,000 barrels a day to 50.6 million barrels a day. Non-OPEC supply is now projected to be unchanged from last year.

 

North America

The revision is the agency’s seventh consecutive reduction of its 2009 crude demand estimate and is driven by declines in North America, Asia and the former Soviet Union, it said.

 

The IEA cut demand expectations in the North America by 160,000 barrels a day to 23.51 million barrels a day, implying a contraction of 780,000 barrels a day, or 3.2 percent. The estimate for oil consumption this year among developing nations was lowered by 190,000 barrels a day to 38.5 million a day.

 

OPEC, which supplies about 40 percent of the world’s oil, is still in the process of implementing reductions agreed last year totaling 4.2 million barrels a day. Algeria said this week the group should agree to new curbs in Vienna, while members such as Qatar and Nigeria said there is no need for further action.

 

The group’s 12 members pumped 28 million barrels a day of crude in February, 1.1 million barrels a day less than in January, the IEA said. Saudi Arabia, OPEC’s biggest producer, cut by 150,000 barrels a day last month to 7.95 million barrels a day, according to the agency.

The 11 OPEC nations bound by production quotas pumped 25.7 million barrels a day last month, the IEA said, compared with their official Jan. 1 limit of 24.845 million a day. That implies the group is complying with 80 percent of its production targets, the IEA said.

 

For Related News and Information:

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

 

 

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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IEA’s Report on 1st- to 2nd-Generation Biofuel Technologies

Posted on March 9, 2009. Filed under: Advanced Biofuel, Field-to-Pump | Tags: , , , , |

IEA’s Report on 1st- to 2nd-Generation Biofuel Technologies

by Ralph E. H. Sims & Michael Taylor (International Energy Agency)
RenewableEnergyWorld.com
March 9, 2009

The current debate over biofuels produced from food crops has pinned a lot of hope on “2nd-generation biofuels” produced from crop and forest residues and from non-food energy crops. This IEA report, produced jointly with IEA Bioenergy, examines the current state-of-the-art and the challenges for 2nd-generation biofuel technologies. It evaluates their costs and considers policies to support their development and deployment.

It is increasingly understood that 1st-generation biofuels produced primarily from food crops are limited in their ability to achieve targets for oil-product substitution, climate change mitigation and economic growth. Their sustainable production is under review, as is the possibility of creating undue competition for land and water used for food and fiber production. A possible exception that appears to meet many of the acceptable criteria is ethanol produced from sugar cane.

The cumulative impacts of these concerns have increased the interest in developing biofuels produced from non-food biomass. These “2nd-generation biofuels” could avoid many of the concerns facing 1st-generation biofuels and potentially offer greater cost reduction potential in the longer term.

Our recent IEA report looks at the technical challenges facing 2nd-generation biofuels, evaluates their costs and examines related current policies to support their development and deployment. The potential for production of more advanced biofuels is also discussed. Policy recommendations are given as to how these constraints to commercial deployment might best be overcome in the future.

While most analyses continue to indicate that 1st-generation biofuels show a net benefit in terms of GHG emissions reduction and energy balance, they also have several drawbacks. Current concerns for many, but not all, of the 1st-generation biofuels are that they:

  • contribute to higher food prices due to competition with food crops;

  • are an expensive option for energy security taking into account total production costs excluding government grants and subsidies;

  • provide only limited GHG reduction benefits (with the exception of sugarcane ethanol, Fig. 1) and at relatively high costs in terms of $/tonne of carbon dioxide ($/t CO2) avoided;

  • do not meet their claimed environmental benefits because the biomass feedstock may not always be produced sustainably;

  • are accelerating deforestation (with other potentially indirect land use effects also to be accounted for);

  • potentially have a negative impact on biodiversity; and

  • compete for scarce water resources in some regions.

 

Figure 1. Well-to-wheel emission changes for a range of 1st- and 2nd-generation biofuels (excluding land use change) compared with gasoline or mineral diesel. Source: OECD, 2008 based on IEA and UNEP analysis of 60 published life-cycle analysis studies giving either ranges (shown by the bars) or specific data (shown by the dots).

Additional uncertainty has also recently been raised about GHG savings if indirect land use change is taken into account.

Second Generation Biofuels

Many of the problems associated with 1st-generation biofuels can be addressed by the production of biofuels manufactured from agricultural and forest residues and from non-food crop feedstocks. Where the ligno-cellulosic feedstock is to be produced from specialist energy crops grown on arable land, several concerns remain over competing land use, although energy yields (in terms of GJ/ha) are likely to be higher than if crops grown for 1st-generation biofuels (and co-products) are produced on the same land. In addition poorer quality land could possibly be utilized.

Given the current investments being made to gain improvements in technology, some expectations have arisen that, in the near future, these biofuels will reach full commercialization. This would allow much greater volumes to be produced at the same time as avoiding many of the drawbacks of 1st-generation biofuels. However, from this IEA analysis, it is expected that, at least in the near to medium-term, the biofuel industry will grow only at a steady rate and encompass both 1st- and 2nd-generation technologies that meet agreed environmental, sustainability and economic policy goals.

The transition to an integrated 1st- and 2nd generation biofuel landscape is therefore most likely to encompass the next one to two decades, as the infrastructure and experiences gained from deploying and using 1st-generation biofuels is transferred to support and guide 2nd-generation biofuel development.

Conversion Routes

The production of biofuels from ligno-cellulosic feedstocks can be achieved through two very different processing routes both currently at the demonstration phase.

  • Biochemical — in which enzymes and other micro-organisms are used to convert cellulose and hemicellulose components of the feedstocks to sugars prior to their fermentation to produce ethanol;

  • Thermo-chemical — where pyrolysis/gasification technologies produce a synthesis gas (CO + H2) from which a wide range of long carbon chain biofuels, such as synthetic diesel or aviation fuel, can be reformed.

These are not the only 2nd generation biofuels pathways, and several variations and alternatives are under evaluation in research laboratories and pilot-plants including dimethyl ether, methanol or synthetic natural gas. However, at this stage these alternatives do not represent the main thrust of RD&D investment.

Based on the announced plans of companies developing 2nd-generation biofuel facilities, the first fully commercial-scale operations could possibly be seen as early as 2012 if demonstrations prove successful. However given the complexity of the technical and economic challenges involved, in reality, the first commercial plants are unlikely to be widely deployed before 2020.

Preferred Technology Route

There is currently no clear commercial or technical advantage between the two pathways, even after many years of RD&D and the development of near-commercial demonstrations. Both sets of technologies remain unproven at the fully commercial scale, are under continual development and evaluation, and have significant technical and environmental barriers yet to be overcome.

For the biochemical route, much remains to be done in terms of improving feedstock characteristics; reducing the costs by perfecting pretreatment; improving the efficacy of enzymes and lowering their production costs; and improving overall process integration. The potential advantage of the biochemical route is that cost reductions have proved reasonably successful to date, so it could possibly provide cheaper biofuels than via the thermo-chemical route.

Conversely, as a broad generalization, there are less technical hurdles to the thermo-chemical route since much of the technology is already proven. One problem concerns securing a large enough quantity of feedstock for a reasonable delivered cost at the plant gate in order to meet the large commercial-scale required to become economically viable (Table 1). Also perfecting the gasification of biomass reliably and at reasonable cost has yet to be achieved, although good progress is being made.

Table 1 shows the typical scale of operation for various 2nd-generation biofuel plants using energy crop-based ligno-cellulosic feedstocks.

Type of plant

Plant capacity ranges, and assumed annual hours of operation.

Biomass fuel required. (oven dry tonnes / year)

Truck vehicle movements for delivery to the plant.

Land area required to produce the biomass. (% of total land within a given radius).

Small pilot

15,000-25,000 l/yr 2000 hr

40-60

3 – 5 / yr

1 – 3% within
1 km radius

Demonstration

40,000-500,000 l/yr 3000 hr

100-1200

10 – 140 / yr

5 – 10% within
2 km radius

Pre-commercial

1-4 M l/yr
4000 hr

2,000-10,000

25 – 100 / month

1 – 3% within
10 km radius

Commercial

25-50 M l/yr

5000 hr

60,000-120,000

10 – 20 / day

5 – 10% within
20 km radius

Large commercial

150-250 M l/yr
7000 hr

350,000-600,000

100 – 200 / day and night

1-2% within
100 km radius

Note: The land area requirement would be reduced where crop and forest residue feedstocks are available.

One key difference between the biochemical and thermo-chemical routes is that the lignin component is a residue of the enzymatic hydrolysis process and hence can be used for heat and power generation. In the BTL process it is converted into synthesis gas along with the cellulose and hemicellulose biomass components. Both processes can potentially convert 1 dry tonne of biomass (~20 GJ/t) to around 6.5 GJ/t of energy carrier in the form of biofuels giving an overall biomass to biofuel conversion efficiency of around 35%. Although this efficiency appears relatively low, overall efficiencies of the process can be improved when surplus heat, power and co-product generation are included in the total system.

Although both routes have similar potential yields in energy terms, different yields, in terms of liters per tonne of feedstock, occur in practice. Typically enzyme hydrolysis could be expected to produce up to 300 l ethanol / dry tonne of biomass whereas the BTL route could yield up to 200 l of synthetic diesel per tonne but with a higher energy density by volume.

A second major difference is that biochemical routes produce ethanol whereas the thermo-chemical routes can also be used to produce a range of longer-chain hydrocarbons from the synthesis gas. These include biofuels better suited for aviation and marine purposes. Only time will tell which conversion route will be preferred, but whereas there may be alternative drives becoming available for light vehicles in future (including hybrids, electric plug-ins and fuel cells), such alternatives for airplanes, boats and heavy trucks are less likely and liquid fuels will continue to dominate.

Production Costs

The full biofuel production costs associated with both pathways remain uncertain and are treated with a high degree of commercial propriety. Comparisons between the biochemical and thermo-chemical routes have proven to be very contentious within the industry, with the lack of any real published cost data being a major issue for the industry.

The commercial-scale production costs of 2nd-generation biofuels have been estimated by the IEA to be in the range of US $0.80 – 1.00/liter of gasoline equivalent (lge) [US $3.02-$3.79 per gallon] for ethanol and at least US $1.00/liter [$3.79 per gallon] of diesel equivalent for synthetic diesel. This range broadly relates to gasoline or diesel wholesale prices (measured in USD /lge) when the crude oil price is between US $100-130 /bbl (Fig. 2). The present widely fluctuating oil and gas prices therefore make investment in 2nd-generation biofuels at current production costs a high risk venture.

 

Figure 2. Production cost ranges for 2nd-generation biofuels in 2006 (USD / liter gasoline equivalent) compared with wholesale petroleum fuel prices correlated with the crude oil price over a 16-month period, and 2030 projections assuming significant investment in RDD&D.

If commercialization succeeds and rapid deployment occurs world-wide beyond 2020, then costs could decline to between US $0.55 and 0.60/lge [US $2.08 – $2.27 per gallon] for both ethanol and synthetic diesel by 2030. Ethanol would then be competitive at around US $70/bbl (2008 dollars) and synthetic diesel and aviation fuel at around US $80/bbl.

Implications for Policies

Promotion of 2nd-generation biofuels can help provide solutions to multiple issues including energy security and diversification, rural economic development, GHG mitigation and help reduce other environmental impacts (at least relative to those from the use of other transport fuels). Policies designed to support the promotion of 2nd-generation biofuels must be carefully developed if they are to avoid unwanted consequences and potentially delay commercialization.

One related view is that the relatively high cost of support currently offered for many 1st-generation biofuels is an impediment to the development of 2nd-generation biofuels, as the goals of some current policies that support the industry (with grants and subsidies for example) are not always in alignment with policies that foster innovation.

This report leans more towards the position that advances in technology will enable 2nd-generation biofuels to build on the infrastructure and markets established by 1st-generation biofuels but will provide a cheaper and more sustainable alternative. This assumes that future policy support will be carefully designed in order to foster the transition from 1st- to 2nd- generation and take into account the specificities of 1st- and 2nd- generation biofuels, the production of sustainable feedstocks, and other related policy goals being considered.

Key points are that:

  • policies to support 1st- or 2nd-generation biofuels should be part of a comprehensive strategy to reduce CO2 emissions;

  • enhanced RD&D investment in 2nd-generation biofuels is needed;

  • accelerating the demonstration of commercial-scale 2nd generation biofuels in different regions is required;

  • deployment policies for 2nd-generation biofuels are either blending targets or tax credits; and

  • environmental performance and certification schemes need to be developed.

Conclusions

The key messages arising from the study are:

  • technical barriers remain for 2nd-generation biofuel production;

  • production costs are uncertain and vary with the feedstock available, but are currently thought to be around US $0.80 – 1.00/liter [US $3.02-$3.79 per gallon] of gasoline equivalent;

  • there is no clear candidate for “best technology pathway” between the competing biochemical and thermo-chemical routes;

  • the development and monitoring of several large-scale demonstration projects is essential to provide accurate comparative data;

  • even at high oil prices, 2nd-generation biofuels will probably not become fully commercial nor enter the market for several years to come without significant additional government support;

  • considerably more investment in RD&D is needed to ensure that future production of the various biomass feedstocks can be undertaken sustainably and that the preferred conversion technologies are identified and proven; and

  • once proven, there will be a steady transition from 1st- to 2nd-generation biofuels (with the exception of sugarcane ethanol that will continue to be produced sustainably in several countries).

Policies designed to reward environmental performance and sustainability of biofuels, as well as to encourage provision of a more abundant and geographically extensive feedstock supply, could see 2nd-generation products begin to eclipse 1st-generation alternatives in the medium to longer-term.

Acknowledgements

With support from the Italian Ministry for the Environment, Land and Sea, the IEA was able to provide this contribution to the program of work of the Global Bioenergy Partnership, initiated by the G8 countries at the 2005 Summit at Gleneagles and with its Secretariat based in Rome at the Food and Agriculture Organisation of the United Nations.

The full 124 page report is available on the IEA website as a free publication download.

This article was written in collaboration with Jack Saddler and Warren Mabee (IEA Bioenergy).

Ralph Sims is Professor of Sustainable Energy at Massey University, New Zealand where he began his research career producing biodiesel from animal fats in the early 1970s. He is currently based at the Renewable Energy Unit of the International Energy Agency, Paris. He was the Coordinating Lead Author of the “Energy Supply” chapter of the IPCC 4th Assessment Report and is a Companion of the Royal Society. His many publications on energy and climate change mitigation include the book “The Brilliance of Bioenergy – in Business and in Practice.”

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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