Introduction to the Renergie Weblog

Posted on November 28, 2009. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , , , , , |

Company Milestones
(1) Renergie drafted the legislation (“HB 1270”) for the creation of an advanced biofuel industry development initiative in Louisiana. On June 21, 2008, Louisiana Governor Bobby Jindal signed into law the Advanced Biofuel Industry Development Initiative (“Act 382”). Act 382, the most comprehensive and far-reaching state legislation in the U.S. enacted to develop a statewide advanced biofuel industry, is based upon the “Field-to-Pump” strategy. Louisiana is the first state to enact alternative transportation fuel legislation that moves fuel ethanol beyond being just a blending component in gasoline by including a mandatory variable blending pump pilot program and hydrous ethanol pilot program;

(2) On December 20, 2008, Renergie submitted a testing exemption application to the U.S. Environmental Protection Agency (“EPA”) for the purpose of testing hydrous E10, E20, E30 & E85 ethanol blends in non-flex-fuel vehicles and flex-fuel vehicles in Louisiana. On-site blending pumps, in lieu of splash blending, are used for this test. On February 4, 2009, the U.S. EPA granted Renergie a tampering waiver for the purpose of testing hydrous E10, E20, E30 & E85 ethanol blends in non-flex-fuel vehicles in Louisiana. On February 24, 2009, the U.S. EPA granted Renergie a first-of-its-kind RVP waiver for the purpose of testing hydrous E10, E20, E30 & E85 ethanol blends in non-flex-fuel vehicles and flex-fuel vehicles in Louisiana; and

(3) On October 18, 2007, Renergie submitted a grant application to the Florida Department of Environmental Protection (“DEP”), pursuant to the Renewable Energy Technologies Grant Program, for the purpose of funding the comprehensive development of a sweet sorghum-to-ethanol industry in Florida. On February 26, 2008, Renergie was one of 8 recipients, selected from 139 grant applicants, to share $12.5 million from the Florida DEP’s Renewable Energy Technologies Grants Program. Renergie received $1,500,483 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, the Florida Energy & Climate Commission amended RET Grant Agreement S0386 to increase Renergie’s funding from $1,500,483 to $2,500,000.

As a means of introduction for first-time visitors, the following is a list of the currently most popular articles and links on the Renergie weblog.

https://renergie.wordpress.com/2010/07/12/bps-strategy-to-limit-liability-in-regard-to-its-gulf-oil-gusher/
BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher

https://renergie.wordpress.com/2010/05/25/bp-is-not-the-only-responsible-party/
BP is Not the Only Responsible Party

http://donovanlawgroup.wordpress.com/2010/05/09/bp-oil-spill-of-april-2010-why-class-action-lawsuits-may-not-be-in-the-best-interests-of-potential-plaintiffs/
BP Oil Spill of April, 2010: Why Class Action Lawsuits May Not be in the Best Interests of Potential Plaintiffs

http://donovanlawgroup.wordpress.com/2010/04/05/regional-greenhouse-gas-cap-and-trade-programs-may-be-the-solution/
Regional Greenhouse Gas Cap-and-Trade Programs May be the Solution

http://donovanlawgroup.wordpress.com/2010/03/22/the-u-n-approval-process-for-carbon-offsets/
The U.N. Approval Process for Carbon Offsets

http://donovanlawgroup.wordpress.com/2010/03/03/the-role-of-offsets-in-climate-change-legislation/
The Role of Offsets in Climate Change Legislation

http://www.greencarcongress.com/2009/12/perspective-why-carbon-emissions-should-not-have-been-the-focus-of-the-un-climate-change-summit-and-.html#more
Why Carbon Emissions Should Not Have Been the Focus of the U.N. Climate Change Summit and Why the 15th Conference of the Parties Should Have Focused on Technology Transfer

http://www.legis.state.la.us/billdata/streamdocument.asp?did=503204
Act 382

http://fieldtopump.wordpress.com/2009/09/05/our-nations-need-to-transition-to-hydrous-ethanol-as-the-primary-renewable-transportation-fuel/
Our Nation’s Need to Transition to Hydrous Ethanol as the Primary Renewable Transportation Fuel

http://fieldtopump.wordpress.com/2009/04/14/the-renergie-field-to-pump-strategy/
The Renergie “Field-to-Pump” Strategy

http://fieldtopump.wordpress.com/2009/09/05/floridas-port-to-pump-advanced-biofuel-initiative/
Florida’s “Port-to-Pump” Advanced Biofuel Initiative

http://blenderstaxcredit.wordpress.com/2009/09/05/independent-ethanol-producers-in-florida-have-the-legal-right-to-receive-blenders-tax-credit/
Independent Ethanol Producers in Florida Have the Legal Right to Receive Blender’s Tax Credit

https://renergie.wordpress.com/2009/03/24/why-the-ethanol-import-tariff-should-be-repealed-2/
Why the Ethanol Import Tariff Should be Repealed

https://renergie.wordpress.com/2009/09/05/independent-u-s-ethanol-producers-will-not-survive-as-price-takers/
Independent U.S. Ethanol Producers Will Not Survive as Price Takers

http://fieldtopump.wordpress.com/2009/04/17/louisiana-enacts-the-most-comprehensive-advanced-biofuel-legislation-in-the-nation/
Louisiana Enacts the Most Comprehensive Advanced Biofuel Legislation in the Nation

http://blenderstaxcredit.wordpress.com/2009/04/20/why-big-oil-should-not-be-allowed-to-monopolize-the-blender%E2%80%99s-tax-credit/
Why Big Oil Should Not be Allowed to Monopolize the Blender’s Tax Credit

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Brazil’s Ethanol Industry

Posted on January 8, 2009. Filed under: Field-to-Pump, Hydrous Ethanol | Tags: , , , , , , |

The following article appeared on the CattleNetwork.com website on January 8, 2009.

Brazil’s Ethanol Industry

 

The energy crisis of the 1970s brought about high gas prices and limited supplies that generated an intense interest in renewable fuels and weaning ourselves from foreign sources of oil. However, when gas prices plummeted in the 1980s, renewable fuels and energy independence were quickly forgotten.

 

The story evolved differently in Brazil. After investing heavily in renewable fuels in the 1970s, Brazil kept the program alive during the 1980s. This has given Brazil a head start in the current situation. With its robust ethanol program, Brazil has developed an extensive ethanol industry. In this article we will discuss the structure and growth potential of Brazil’s ethanol industry. In future articles we will discuss Brazil’s domestic usage and exports.

 

Brazilian Ethanol Production

 

Brazil is the world’s number two ethanol producer and the leading ethanol exporter, using sugarcane as its feedstock. Ethanol production has expanded in recent years as shown in Table 1.

 

Table 1. Brazilian Ethanol Production

Three types of production facilities exist in Brazil:

 

Sugar mills (producing only sugar) – The sugarcane is washed, chopped, shredded and crushed between rollers. The juice (grapa) contains 10 – 15% sucrose. The remaining material (by-product) is called bagasse.

 

Mills with distillery plants (sugar and ethanol production), and  Independent distilleries (only ethanol production).

 

U.S. and Brazilian Ethanol Comparison

 

 

The United States and Brazil are the two largest ethanol producers in the world as shown in Table 2. Together they account for almost 90 percent of world production.

 

Table 2. World Fuel Ethanol Production (2007)

The feedstock for Brazilian ethanol is sugarcane. In the U.S. the feedstock is corn. Below is a comparison of Brazil’s sugarcane-ethanol industry and the U.S. corn-ethanol industry.

 

Labor and Environmental Impact

 

Traditionally, sugarcane fields have been burned just before harvest to remove leaves and fertilize the fields with ash. The smoke, which is blown into nearby towns, turns the sky gray and makes the air hazardous. However, a recent law bans the burning of sugarcane fields.

 

Sugarcane production requires hand labor at harvest. This creates a large group of migrant workers who can only find work a couple of months a year during sugarcane harvest. A skilled harvester can cut 1,000 pounds of sugarcane in an hour. Machines are replacing human labor for harvesting cane.

 

Energy Balance

 

The energy content of sugarcane is divided into three equal parts. One-third of the energy is in the sucrose and is converted to ethanol. One-third of the energy is in the sugarcane tops and leaves which are left in the field. The remaining third is bagasse which is fibrous material that is left over after pressing the sugarcane.

 

Bagasse is burned to provide an energy source for the ethanol facility. Bagasse burning co-generates electricity which is used in the plant and also sold to the energy grid. However, only 12 percent of sugar-ethanol mills currently sell electricity to the grid. The cost to connect to the grid is very expensive. In addition, many mills are not located close to the grid.

 

Since sugarcane is replanted only once every six years and harvested with hand labor, it requires less energy for production than corn.

Table 3. Comparison of Brazil and the U. S. Ethanol Industries

 

Future Expansion

 

Brazil has a natural advantage in ethanol production. It has a vast unused or little-used land area that can be converted to agricultural production. In addition, its tropical climate is well suited for sugarcane production.

 

The Sugarcane Technological Center (CTC) is the leading research center for sugarcane and ethanol in Brazil. It is responsible for over 80 percent of the research and development activities in this area. Brazil has made substantial investments in research to improve sugarcane varieties in recent decades. The research has produced varieties more resistant to drought and pests, along with higher yields and higher sugar content. During the last 30 years, sugarcane yields have increased three-fold.

 

Dedini Corporation is Brazil’s largest builder of ethanol plants. They are developing a process that can convert the cellulose from bagasse, tops and leaves into sucrose for ethanol production. This technology has the potential to almost double the ethanol production from an acre of sugarcane.

 

According to Brazilian sources, sugarcane planted acreage (all uses) is expected to increase to over 25 million acres by 2012/13. The number of sugar ethanol plants are expected to increase from 325 (2006/07) to 410 (2012/13). Ethanol production is expected to reach ten billion gallons. This compares to the current production of 7 billion gallons (Table 1).

 

Table 4. Agricultural Land in Brazil (2007)

Source :Don Hofstrand, co-director AgMRC, Iowa State University Extension, 641-423-0844, dhof@iastate.edu

 

 

 

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Corn-to-Ethanol Industry is No Longer a Sure Bet

Posted on November 17, 2008. Filed under: Advanced Biofuel, Hydrous Ethanol | Tags: , , , , , |

The following article appeared in November 16, 2008 issue of The Indianapolis Star.

November 16, 2008
 
 
 

 

Indiana’s ethanol industry is no longer a sure bet

Indiana producers say the industry is no longer a sure bet

By John Russell
john.russell@indystar.com

Bankruptcy. Red ink. Painful shakeout.

Those terms, normally associated with old-line manufacturing, now are popping up to describe what was seen just three years ago as a sure bet for Indiana: high-tech ethanol plants.

Ethanol producers across the Midwest are being squeezed by falling prices, tight credit, overbuilding and the volatile market for corn. As a result, many have seen their profits shrink and their stock prices fall. Several have slid into bankruptcy and have scrapped deals and projects.

The latest setback came Friday, when Aventine Renewable Energy Holdings, struggling to conserve cash, said it would slow construction of a plant in Mount Vernon, Ind., near the Ohio River, and delay the opening for about nine months. The plant, designed to produce 220 million gallons of ethanol a year, had been scheduled to open early next year.

“The margins in the ethanol business today are not very good. They are near break-even,” said company spokesman Les Nelson. “We need to make sure we have liquidity in our business.”

The company also said it would suspend construction at a plant in Aurora, Neb., for about six months.

The abrupt reversal raises the question of whether the ethanol industry, once seen as a major force in Indiana’s agriculture economy, is just going through a temporary market slump or embarking on a severe downturn.

It also puts a new wrinkle in the national discussion over alternative energy, which took center stage this summer when the price of gasoline soared to more than $4 a gallon.

Now with gas prices less than $2 a gallon, demand for ethanol has fallen. That’s even though ethanol pumps have sprouted up across Indiana, from zero three years ago to 116 now.

Some observers expect a consolidation to sweep the sector, with smaller and weaker players dropping out.

“There’s a little bit of a shakeout going on, but that’s to be expected,” said Mark Walters, director of biofuels programs for the Indiana Corn Marketing Council, which represents farmers across the state. “What it means is the industry is maturing. The euphoria is over.”

A tough road

It’s a far cry from 2005, when a gold-rush mentality gripped the industry, prompted by a federal mandate to mix ethanol into the gasoline supply to provide cleaner-burning fuel. The government offered subsidies and tax breaks to ethanol producers.

Indiana wanted to jump into the game. At the time, the state had just one ethanol plant, built in the 1980s, and wanted to compete with Iowa, Illinois and other Midwestern states that were far ahead.

The state offered $16 million in tax incentives to try to kick-start the ethanol industry here. Companies and investors scrambled to raise money to build multimillion-dollar ethanol plants across the Midwest. More than 40 plants were envisioned for Indiana alone.

Today, 11 plants are operating in the state, along with several biodiesel plants to make soybean-based fuel. More than 20 others never made it off the drawing board.

Some experts say the industry is suffering from a frenzy of overbuilding, a sudden downturn in the markets and a weak economy that is clobbering many sectors.

“I think there certainly was excessive optimism,” said Chris Hurt, an agricultural economist at Purdue University. “There was a lot of talk and a lot of interest. But the vast majority of those projects did not go ahead.”

Nationally, fewer than 10 percent of ethanol plants have shut down, according to the Renewable Fuels Association, a trade group. But several companies have suspended construction of new plants.

Now that a downturn is gripping the country, global demand for oil is falling and the price of gasoline likely will stay below $3 a gallon, said Wally Tyner, an energy economist at Purdue University. That likely will tamp down demand for ethanol.

“I think it’s going to be really difficult to make money in ethanol in the next year,” he said.

Several ethanol companies have taken big hits. VeraSun Energy, Sioux Falls, S.D., which owns an ethanol plant in Linden, Ind., lost tens of millions of dollars, in part by betting wrong on the price of corn, a major raw ingredient for ethanol. Last month, VeraSun filed for Chapter 11 bankruptcy protection.

The company has tripped before. Last year, VeraSun suspended plans to build a plant in Reynolds — a small farm town north of Lafayette also known as BioTown USA — because of a steep drop in ethanol prices.

That means the one town in America that was supposed to be a model for renewable energy is still waiting for an ethanol plant. And now that the industry is slowing, it could be awhile before more plants spring up.

Just ask ethanol companies and the investors that sank billions of dollars into them.

In Ohio, an ethanol maker filed for bankruptcy protection last month, blaming a miscalculation in water use. In Kansas, another company slid into bankruptcy in March and canceled plans to buy three Nebraska plants after failing to line up financing. In Illinois, a company declared bankruptcy after construction costs skyrocketed from $40 million to $130 million.

“The industry is going through a very challenging time,” said Ken Klemme, acting director of Indiana’s Department of Agriculture. “Companies that have the best management, the best operations and the best technology are just modestly profitable. Companies with problems are not going to be profitable during this phase.”

Weathering the storm

Indiana farmers count heavily on ethanol producers as customers for their grain. The Hoosier state’s ethanol plants consume more than 300 million bushels of corn a year, or about one-third of Indiana’s crop.

Some wonder if the industry has overbuilt. Nationally, ethanol output has nearly tripled, from 3.4 billion gallons a year in 2004 to 9.5 billion gallons this year. Some expect capacity to grow to 13 billion gallons by next year.

Some economists say the outlook for ethanol makers depends heavily on the price of corn. The price of corn has been volatile this year, rising to about $8 a bushel after the Midwestern floods that damaged thousands of acres of fields. But recently it started to fall again.

Several ethanol producers in Indiana say they are weathering the storm. Poet, a South Dakota ethanol producer that runs about two dozen plants, including three in Indiana, said its facilities are running at capacity and are expected to make money this year. Cardinal Ethanol, an Indiana company financed by a group of private investors, opened its first plant two weeks ago in Randolph and said it expects to make money this year.

“Obviously, we don’t have the debt all paid down, but when you’re looking at the day-to-day numbers, it does indicate we have (profit) margins after expenses,” General Manager Jeff Painter said.

Indiana still trumpets its role in the industry. The state’s Web site boasts that “Indiana’s biofuels industry has grown to national prominence in just one year,” with new ethanol and biodiesel plants, providing more than 600 jobs here.

“In total, these new facilities will put at least $29.5 million into local farmer pockets and invest more than $1.47 billion in capital expenses,” it continued.

Since offering tax incentives in 2005, Indiana has certified $7.5 million worth of those credits, which carried performance requirements for job creation and capital investment. In mid-2006, the state scrapped tax incentives for ethanol makers, deciding the market had enough momentum on its own.

“We made the determination that incentives weren’t really driving the growth,” said Chad Sweeney, vice president and general counsel of the Indiana Economic Development Corp.

Today, most gasoline sold in the country contains about 10 percent ethanol. Hundreds of stations across the Midwest offer blends of 85 percent ethanol for flex-fuel cars.

But whether ethanol regains its promise remains open for question. President-elect Barack Obama, who comes from the corn-growing state of Illinois, is a strong supporter of ethanol.

As a senator, he supported subsidies for ethanol and other forms of alternative energy and championed earmarks for research projects on ethanol. He wants to nearly double the federal guaranteed market from the current standard of 36 billion gallons a year by 2022, to 60 billion gallons by that year.

Yet energy policy is always a hot topic of debate. And as the ethanol industry is discovering, markets are unpredictable and sometimes unforgiving, with lots of uncertainty thrown in.

“Lately, the news has mostly been negative,” said Tyner of Purdue. “I think it will take some time before everything comes back into balance.”

Additional Facts

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Economy Shifts, and the Ethanol Industry Reels

Posted on November 5, 2008. Filed under: Field-to-Pump, Hydrous Ethanol | Tags: , , , , |

The following article appeared on November 5, 2008 in The New York Times.

Economy Shifts, and the Ethanol Industry Reels

 

 

As producers of ethanol navigate a triple whammy of falling prices for their product, credit woes and volatile costs for the corn from which ethanol is made, an economic version of “Survivor” is playing out in the industry.

Last week, VeraSun, one of the nation’s largest ethanol producers, announced that it had filed for bankruptcy protection after its bets on the price of corn turned out to be wrong — and costly.

Several other small producers have filed for bankruptcy this year, and construction plans for several Midwestern ethanol plants have been postponed or shelved. Shares in the handful of publicly owned ethanol companies have mostly been slumping all year. Aventine Renewable Energy and Pacific Ethanol, for instance, have both lost more than 80 percent of their value since the beginning of the year.

While producers pin their hopes on rising government mandates for the use of ethanol, analysts who follow the industry voice concerns that more companies could go under. They expect a wave of consolidation to sweep the ethanol business once the credit crisis eases.

Ian Horowitz, an analyst with Soleil Securities, said that he was particularly worried about BioFuel Energy, an ethanol maker. The company, based in Denver, is low on cash and has had problems similar to VeraSun’s, losing $46 million when commodity-price hedges turned out badly.

“Like the airlines, sometimes one goes in, the others run to go in, too,” said Mr. Horowitz, speaking of bankruptcy protection.

BioFuel Energy’s shares have fallen to 57 cents, from a high of $7.75 in January. The company did not respond to requests for comment.

Archer Daniels Midland, the agribusiness giant that is one of the largest ethanol producers, reported higher overall profits on Tuesday — but recorded a sharp drop in operating profit for its corn processing unit, which includes ethanol production. The company, which also announced a new $370 million investment in Brazilian ethanol made from sugar cane, is far more diversified than its smaller competitors who are focused on ethanol.

Nowadays, gasoline sold at many stations nationwide includes about 10 percent ethanol, with a few stations in the Midwest selling an 85 percent ethanol blend. Many politicians have embraced ethanol as a way to court farmers and because it is produced domestically. Most research suggests that corn ethanol offers modest benefits in lowering emissions of climate-altering greenhouse gases, though production of ethanol has contributed to rising food prices.

The federal government began mandating the use of ethanol in a 2005 energy bill, setting off a building boom in ethanol plants. A 2007 energy bill substantially raised the quotas, which will require 10.5 billion gallons of ethanol next year and 12 billion gallons in 2010.

Energized by strong government support and a profitable year in 2006, the industry redoubled its building spree. High gasoline prices also encouraged refiners to use more of the cheaper ethanol over the past year. In August, nearly 50 percent more ethanol was produced than a year earlier, and many more plants were on the drawing boards.

But then ethanol companies got a rude shock: corn prices hit record highs this summer after the Midwestern floods. That made ethanol more expensive to produce. Fearing that prices would go even higher, some producers — including VeraSun, BioFuel Energy and Glacial Lakes Energy, a South Dakota farmers cooperative — entered into contracts intended to protect them if corn prices rose.

“We were hearing $8, $9, $10” a bushel, said Jim Seurer, the interim chief executive of Glacial Lakes. “We sought protection from that.”

But after the fields dried and it became clear the nation would have a good corn harvest, the market turned again. Companies that had locked in around $7 and above were stuck watching corn fall to $4 a bushel.

In a statement last month, Mr. Seurer’s company reported “significant margin and hedging losses due to the sharp downturn in the price of corn.”

Fewer than 10 of the country’s ethanol plants have stopped operating, according to Matt Hartwig, a spokesman for the Renewable Fuels Association, an industry group. But construction times have slowed and some plants in the planning stage have been halted.

Falling ethanol prices have compounded the squeeze on producers. These roughly track gasoline prices, and are down by nearly 40 percent since June, despite a recent uptick.

On top of all that came the credit freeze, which hurt companies that needed operating loans. With companies’ share prices falling, it became difficult to raise investment capital, too. VeraSun, for example, sought to issue 20 million shares to raise money, but that failed and it was forced to file for bankruptcy protection.

A few months ago Glacial Lakes, the South Dakota cooperative, failed in its efforts to obtain financing from a group of banks, including some Wall Street lenders, Mr. Seurer said. It is asking its members — many of them farmers — for $11.3 million more to cover operational costs.

Ethanol “has been hit much harder than most other industries,” said Kevin Calabrese, an analyst at Argus Research, citing the volatility in corn and natural gas prices, the two main inputs for making ethanol.

The credit crisis will also prevent consolidation that otherwise would be expected in a hobbled industry, experts say.

“The industry should be consolidated — I think everybody believes that,” said Mr. Horowitz of Soleil. “But who is going to finance anything right now, let alone a very low-margin business that doesn’t look like it’s going to get better in the near term?”

Some are more optimistic, in part because of lower corn prices.

“The future of the industry looks very bright,” said Ronald H. Miller, president and chief executive of Aventine, citing the rising federal quotas for producing ethanol.

But he characterized the current environment as “choppy.” Aventine lost about $30 million earlier this year on certain securities, and recently delayed construction on a Nebraska plant to stretch its cash.

VeraSun, whose 14 operational plants account for 13 percent of the nation’s ethanol production capacity, announced on Tuesday that it was indefinitely delaying construction of a new plant in Minnesota, its second plant in that state to be delayed. VeraSun hopes to emerge from bankruptcy as an intact company, but it is possible the company will be sold off in pieces.

 

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.  By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is more economical, cleaner, renewable, 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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The Rise and Fall of Corn-based Ethanol

Posted on October 24, 2008. Filed under: Blender's Tax Credit, Field-to-Pump | Tags: , , , , |

The following article appeared in the October 21, 2008 edition of The Financial Times.

 

Biofuels: From hope to husk

By Kevin Allison and Stephanie Kirchgaessner

Published: October 21 2008 20:18 | Last updated: October 21 2008 20:18

It was an American dream that has failed to become a reality. For much of the last decade, enthusiasts from President George W. Bush down have touted corn-based ethanol as something approaching a superfuel, a home-grown alternative to foreign oil that would help cut smog and bring hope to struggling farmers.

It has not worked out that way. Instead, the ethanol industry has undergone a great boom and bust in which a Financial Times analysis has found investors as savvy as Bill Gates, Microsoft’s founder, have collectively lost billions of dollars.

Despite the billions more in taxpayers’ dollars that was spent to subsidize it, ethanol now eats up nearly one-quarter of the US corn crop without so far fulfilling the hopes held for its beneficial effect either on the environment or US dependence on foreign energy.

It may have helped keep gasoline prices lower in the world’s wealthiest nation, but a growing band of influential critics say it has also contributed to higher food prices in the world’s poorest countries. So far, the only sure beneficiaries from the ethanol promise have been the investors clever enough to get into the industry early and the corn farmers who have enjoyed a lucrative new market for their grain.

In short, the story of ethanol is a cautionary tale of the unintended and costly consequences that can arise when the interests of politicians and influential industries collide.

Today, ethanol is a $32.5bn (£19.1bn, €24.6bn) a year business in the US. But for nearly three decades it was an obscure cottage industry run by farmers trying to scratch out a living in the corn belt in the country’s Midwest. Americans had been making bourbon, a drinkable form of ethanol, from corn for centuries. But ethanol got its start as a fuel around the time of the 1970s Arab oil embargo, when a handful of early adherents started to argue that it could lower dependence on energy imports as well as help farmers.

Among these pioneers was a gangly, soft-spoken Minnesotan named Jeff Broin. In 1983, Mr. Broin and his father set up an ethanol still on their farm, hoping to sell corn-based fuel to the few companies then operating that had begun blending ethanol into gasoline. Three years later, the Broins bought a disused ethanol plant in nearby South Dakota and went into commercial production. The younger Mr. Broin, then just 22, could scarcely have imagined that the family company, known today as Poet, would become an ethanol powerhouse.

“We were simply trying to add value to grain,” he says. “If someone had suggested that we would become the largest producer of ethanol in the world, we probably would have laughed at them.”

Farmers such as the Broins had powerful allies in Washington. Chief among them was a coalition of 20 Democratic and Republican “corn state” senators including Tom Daschle, the former Democratic majority leader, and Chuck Grassley, a Republican senator from Iowa. But the ethanol boosters had a powerful adversary in big oil companies, which saw ethanol as a potential rival and argued that government support would be just another farm-state giveaway.

This argument resonated in the national capital during the 1980s and 1990s. President George H.W. Bush, for example, disparagingly referred to ethanol as “Daschle gas”.

But the president’s son thought differently. Mr. Grassley remembers taking the younger Mr. Bush on a tour of Iowa’s cornfields during his first presidential campaign in 2000. “I was one-on-one with him with a couple of other people in a van and I spent two days talking to him about ethanol,” says Mr. Grassley. Mr. Bush appeared to be impressed, Mr. Grassley recalls. “He said, ‘It’s this simple. We’ve only got so much petroleum and we’ve got to have renewables. It’s got to be ethanol.’”

Not long after Mr. Bush took office in 2001, the September 11 terrorist attacks gave grim weight to the ethanol lobby’s arguments. “Isn’t it more sensible to spend $140 a barrel for ethanol than it is to ship $140 over to Arabia and let their Wahabis be trained to kill you and me?” asks Mr Grassley.

The economics of ethanol were also shifting as rising oil prices made ethanol and other alternative fuels more attractive. On Wall Street, clever investors began to take notice. In May 2003, Morgan Stanley Capital Partners, the private equity arm of the US investment bank, bought Aventine Renewable Energy, an ethanol producer with plants in Illinois and Indiana, for $75m. It paid itself nearly twice that in dividends only seven months later.

In 2004, lawmakers on Capitol Hill passed a law giving refiners an incentive to blend ethanol with gasoline by letting them claim a 51 cent per gallon tax benefit on each gallon of ethanol they used. By the following year, the politicians were under pressure to go even further. The price of a gallon of petrol had jumped over the $3 mark. Global warming worries were adding weight to the ethanol industry’s claims that the fuel was an important source of renewable energy. Legislators began work on a law for a renewable fuel standard that would require gasoline producers to blend billions of gallons of ethanol into petrol each year.

Barack Obama, as a freshman Democratic senator from Illinois, a leading corn-producing state, was a big supporter. “If a terrorist hijacked a plane in Kuwait and crashed it into an oil complex in Saudi Arabia, it could take enough oil off the market and cause more economic damage in the United States than if a dirty nuclear weapon exploded in downtown Manhattan,” he said in a Senate speech. “Instead of continuing to link our energy policy to foreign fields of oil, it should be linked to farm fields of corn.”

Not everyone agreed. New York’s Senator Chuck Schumer called the proposal a “boondoggle” and said: “There is no sound public policy reason for mandating the use of ethanol – other than the political might of the ethanol lobby.” Big users of corn, such as meat processor Tyson Foods, worried it would lead to higher corn prices.

But ethanol supporters found an important, if unexpected, ally: their old rivals in the US oil industry. That was largely due to a fuel additive known as methyl tert-butyl ether (MTBE), which helped petrol burn more fully and thus lower smog emissions. Oil refiners had been using the additive for years, especially since clean air requirements were enacted in the 1990s.

By the early 2000s, however, MTBE had become a liability after scientists discovered that it lingered in ground water and polluted aquifers. California and other states banned it, leaving the oil industry searching for a substitute that would allow it to comply with environmental regulations and avoid billions of dollars in MTBE-related liabilities. Ethanol fitted the bill. “We saw ethanol as a viable product – it was a product that we knew,” says Al Mannato, fuels issues manager at the American Petroleum Institute, the oil industry’s leading lobby group.

The support of the API “significantly changed the political calculation on Capitol Hill”, says Bob Dinneen, president of the Renewable Fuels Association, the ethanol industry grouping.

This was a turning point. That summer, Congress passed, and Mr. Bush signed, the Energy Policy Act of 2005, which required refiners to blend 7.5bn gallons of biofuels into gasoline by 2012. Congress and the president created a multi-billion dollar market for corn-based ethanol virtually overnight. “Wall Street loved it,” says Kevin Book, an analyst at Friedman, Billings, Ramsey & Co, an investment bank. “Suddenly, wingtips were covered in corn dust in every state.”

Speculators poured into the industry. In November 2005, an investment company owned by Microsoft’s Mr. Gates struck a deal to pay $84m for a 27 per cent stake in Pacific Ethanol, a California group whose shares had begun trading on the Nasdaq stock market that year but had yet to produce a single drop of fuel.

Not long afterwards, two New York hedge funds – Greenlight Capital, headed by David Einhorn, and Third Point, managed by Daniel Loeb – invested nearly $75m in BioFuel Energy, a Colorado ethanol producer. Thomas Edelman, a Wall Street banker and oil and gas executive, chipped in $8.75m and was appointed chairman.

Ethanol futures prices shot up almost fourfold in the 12 months after the energy bill was signed. Meanwhile, the price of corn required to make a gallon of ethanol continued to languish thanks to surplus stores of the grain. The result was a bonanza for ethanol producers. Ethanol companies whose plants were up and running in time to catch this wave made fat profits for themselves and their investors.

In 1999, there were 50 ethanol plants in the US. By January 2007, there were 110, with 76 more under construction. Most early ethanol plants probably paid for themselves within one or two years, according to Ray Goldberg, a professor of agribusiness at Harvard Business School.

Ethanol’s potential as an oil alternative had also begun to take hold in the popular imagination. Advertisements appeared on billboards alongside highways in Missouri showed a Missouri farmer standing next to a cornfield. Opposite him was a picture of the late King Fahd, the former ruler of Saudi Arabia, dressed in traditional Arab robes. Between the two men, in large block letters, was a question: “Who would you rather buy your gas from?”

The growing cost of ethanol production to US taxpayers went largely unnoticed, amid a hype that was reminiscent of the dotcom boom of a few years earlier. As several big ethanol producers announced plans to go public, ordinary investors, largely shut out from ethanol’s early years, jumped at the chance to buy into the industry.

In May 2006, Thomas H. Lee Partners, a Boston private equity group, bought an 80 per cent stake in Hawkeye Renewables in a deal that valued the company at $1bn. THL almost immediately announced plans for an initial public offering. Morgan Stanley Capital Partners, which had been spun out of its parent bank and renamed Metalmark, reaped a tenfold return on its 2003 investment in Aventine Renewable Energy when Aventine became one of several biofuel producers to float on the New York Stock Exchange in June. The biggest star was VeraSun of South Dakota, whose shares immediately jumped 34 per cent on their debut.

But the excitement proved to be short-lived. Investors had ignored some glaring warning signs. Few recognized it at the time, but the previous year’s boom had also set the stage for a shift in the economics of the industry that would prove disastrous for those who came late to the game. In the same month as VeraSun’s IPO, ethanol futures prices fell sharply, reversing the historical correlation between the price of ethanol and the price of a gallon of gasoline. By September, ethanol that had sold for $4 a gallon in June was trading at $1.75, according to DTN, a commodities research group.

The problem was one of oversupply. Dozens of ethanol plants had come online trying to capitalize on the boom, creating a glut that pushed down prices. Corn prices, meanwhile, were rising sharply, driven by increased demand for the crop for use in ethanol production and the rising cost of oil. In the space of just three months, ethanol had moved from boom to bust.

Some of the world’s best-known investors were burnt. When Mr. Gates’ investment fund started disposing of its shares in Pacific Ethanol this April, it sold them at a steep loss. Deals such as the one Thomas H. Lee did with Iowa’s Hawkeye Renewables in 2006, which valued Hawkeye’s two ethanol plants at $1bn, began to look less wise. Some analysts say the plants could have been built for closer to $400m. When Colorado’s BioFuel Energy finally went public in June 2007, it was forced to cut its offer price twice in one week. It eventually raised $101m after expenses in a combined public offering and private placement.

Even Mr. Dinneen, the face of the ethanol industry in Washington, admits that, in hindsight, ethanol investors were suffering from “overblown exuberance”. “There was a period of growth in the industry, and the economics were uncharacteristically favorable,” he says. “People invested thinking every year was going to be like 2006, when history would tell you that was an anomaly. Clearly there was a lot of Wall Street money coming in – and I think it was with unrealistic expectations.”

If ethanol were any other industry, it might be on its last legs today. But the dream of turning cornfields into car fuel refuses to die.

The Financial Times Limited 2008

 

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.  By blending fuel-grade ethanol with gasoline at the gas station pump, Renergie will offer the consumer a fuel that is more economical, cleaner, renewable, 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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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

 

_________

 

 

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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Advanced Biofuel Bill Signed into Law

Posted on July 27, 2008. Filed under: Field-to-Pump, Hydrous Ethanol | Tags: , , , , , |

Louisiana Enacts the Most Comprehensive Advanced Biofuel Legislation in the Nation

__________________

 

Advanced Biofuel Industry Development Initiative Benefits Consumers,

Farmers and Gas Station Owners with Localized “Field-to-Pump” Strategy

 

Baton Rouge, LA (July 26, 2008) – Governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, the most comprehensive and far-reaching state legislation in the nation enacted to develop a statewide advanced biofuel industry.  Louisiana is the first state to enact alternative transportation fuel legislation that includes a variable blending pump pilot program and a hydrous ethanol pilot program.

 

Field-to-Pump Strategy

The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of the following comprehensive “field-to-pump” strategy developed by Renergie, Inc.:

(1) Feedstock Other Than Corn

(a) derived solely from Louisiana harvested crops;

(b) capable of an annual yield of at least 600 gallons of ethanol per acre;

(c) requiring no more than one-half of the water required to grow corn;

(d) tolerant to high temperature and waterlogging;

(e) resistant to drought and saline-alkaline soils;

(f) capable of being grown in marginal soils, ranging from heavy clay to light sand;

(g) requiring no more than one-third of the nitrogen required to grow corn, thereby reducing the risk of contamination of the waters of the state; and

(h) requiring no more than one-half of the energy necessary to convert corn into ethanol.

(2) Decentralized Network of Small Advanced Biofuel Manufacturing Facilities

Smaller is better.  The distributed nature of a small advanced biofuel manufacturing facility network reduces feedstock supply risk, does not burden local water supplies and provides for broader based economic development.  Each advanced biofuel manufacturing facility operating in Louisiana will produce no less than 5 million gallons of advanced biofuel per year and no more than 15 million gallons of advanced biofuel per year.

(3) Market Expansion

Advanced biofuel supply and demand shall be expanded beyond the 10% blend market by blending fuel-grade anhydrous ethanol with gasoline at the gas station pump.  Variable blending pumps, directly installed and operated at local gas stations by a qualified small advanced biofuel manufacturing facility, shall offer the consumer a less expensive substitute for unleaded gasoline in the form of E10, E20, E30 and E85. 

 

 

Pilot Programs

(1) Advanced Biofuel Variable Blending Pumps – The blending of fuels with advanced biofuel percentages between 10 percent and 85 percent will be permitted on a trial basis until January 1, 2012. During this period the Louisiana Department of Agriculture and Forestry Division of Weights & Measures will monitor the equipment used to dispense the ethanol blends to ascertain that the equipment is suitable and capable of producing an accurate measurement.

(2) Hydrous Ethanol – The use of hydrous ethanol blends of E10, E20, E30 and E85 in motor vehicles specifically selected for test purposes will be permitted on a trial basis until January 1, 2012.  During this period the Louisiana Department of Agriculture and Forestry Division of Weights & Measures will monitor the performance of the motor vehicles. 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.

HB 1270, entitled “The Advanced Biofuel Industry Development Initiative,” was co-authored by 27 members of the Legislature.  The original bill was drafted by Renergie, Inc.   Representative Jonathan W. Perry (R – District 47), with the support of Senator Nick Gautreaux (D – District 26), was the primary author of the bill.  Reflecting on the signing of HB1270 into law, Brian J. Donovan, CEO of Renergie, Inc. said, “I am pleased that the legislature and governor of the great State of Louisiana have chosen to lead the nation in moving ethanol beyond being just a blending component in gasoline to a fuel that is more economical, cleaner, renewable, and more efficient than unleaded gasoline.  The two pilot programs, providing for an advanced biofuel variable blending pump trial and a hydrous ethanol trial, established by the State of Louisiana should be adopted by each and every state in our country.”

 

 

State Agencies Must Purchase or Lease Vehicles That Use Alternative Fuels

Louisiana’s Advanced Biofuel Industry Development Initiative further states, “The commissioner of administration shall not purchase or lease any motor vehicle for use by any state agency unless that vehicle is capable of and equipped for using an alternative fuel that results in lower emissions of oxides of nitrogen, volatile organic compounds, carbon monoxide, or particulates or any combination thereof that meet or exceed federal Clean Air Act standards.”

 

 

Advanced Biofuel Price Preference for State Agencies

Louisiana’s Advanced Biofuel Industry Development Initiative provides that a governmental body, state educational institution, or instrumentality of the state that performs essential governmental functions on a statewide or local basis is entitled to purchase E20, E30 or E85 advanced biofuel at a price equal to fifteen percent (15%) less per gallon than the price of unleaded gasoline for use in any motor vehicle. 

 

 

Economic Benefits

The development of an advanced biofuel industry will help rebuild the local and regional economies devastated as a result of hurricanes Katrina and Rita by providing:

(1) increased value to the feedstock crops which will benefit local farmers and provide more revenue to the local community;

(2) increased investments in plants and equipment which will stimulate the local economy by providing construction jobs initially and the chance for full-time employment after the plant is completed;

(3) secondary employment as associated industries develop due to plant co-products becoming available at a competitive price; and

(4) increased local and state revenues collected from plant operations will stimulate local and state tax revenues and provide funds for improvements to the community and to the region.

“Representative Perry and Senator Gautreaux have worked tirelessly to craft comprehensive advanced biofuel legislation which will maximize rural development, benefit consumers, farmers and gas station owners while also protecting the environment and reducing the burden on local water supplies,” said Donovan.  “Representative Perry, Senator Gautreaux, and Dr. Strain, Commissioner of the Louisiana Department of Agriculture and Forestry, should be praised for their leadership on this issue.”

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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    About

    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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