Thursday, June 21, 2012

Yet Another Indication of Ethanol Plants Struggling to Make a Profit

Here's yet another article on the ethanol plant struggles.  Most are no longer profitable and are searching for ways to diversify in hopes of returning to profitability.  The poor economy, consumers driving less due to both the economy and high gas prices, plus loss of the ethanol $0.45/gallon tax subsidy are wreaking havoc on the ethanol industry.  Then, Congress is more and more leaning to reign in the out of control EPA on this issue.  


Here's the article: 

UPDATE 1-Struggling ethanol makers diversify to corn oil

Thu Jun 21, 2012 5:32pm GMT

* Pacific Ethanol adds corn oil to ethanol business
* US ethanol producers make 4.69 mln lbs of corn oil daily
* Diversification needed to offset weak ethanol margins
By Carey Gillam
June 21 (Reuters) - Pacific Ethanol Inc on Thursday said it was launching a corn oil business, the latest U.S. ethanol maker to move to diversify its revenue stream in an industry where margins have been depressed as costly corn supplies dwindle.
California-based Pacific Ethanol said it was installing corn oil separation technology at one plant and planned to do so at its three other plants by the first quarter of 2013. The company said its corn oil business should start generating revenue in the first quarter of 2013.
(Read full article here:  https://news.google.com/news/story?ncl=d4MdFIx2pbgvWRMUf8mD1TKLZkOoM&hl=en&ned=us


"Pete" Landry..........comments welcome at way2gopete@yahoo.com

Wednesday, June 20, 2012

Ethanol Industry in Trouble

Hello readers.........here's yet another article showing that the ethanol industry is in trouble.  Several plants have shutdown and many others are operating in the "red".  Their greatest concern is that the US Congress are finally beginning to have lingering thoughts on the EPA's mandates on ethanol gasoline.  All I can say, "it's about time".  When even Al Gore said it was a mistake to start this business, you know it's not what it was cooked up to be.

Here's the article:

Oil lobby biggest threat to U.S. ethanol: RFA leader                                                      By Christine Stebbins
CHICAGO | Wed Jun 20, 2012 4:57pm EDT
(Reuters) - The biggest threat to U.S. ethanol makers, now struggling with negative profit margins, is not high corn prices but possible changes to the renewable fuel policy by Washington legislators, the top ethanol industry executive said on Wednesday.
"This year is tough. Our biggest challenge though is more about Capitol Hill and threats to policy than the markets and threats to profitability," Bob Dinneen, chief executive of the Renewable Fuels Association, told Reuters on-line grain forum.
The 2007 U.S. energy policy's renewable fuels standard (RFS), mandates annual production of 15 billion gallons of ethanol by 2015 for energy independence. By 2022, RFS calls for 36 billion gallons of renewable fuels, including cellulosic biofuels.
U.S. ethanol production in 2011 was 13.9 billion gallons of which more than a billion gallons was exported.
Dinneen said he was pleased by Friday's approval by the Environmental Protection Agency (EPA) to allow the sale of fuel containing 15 percent ethanol, up from the current 10 percent for vehicles 2001 and newer. But said the oil industry clearly sees ethanol as unwelcomed competition.
"I'm seeing a far more aggressive oil lobby going after the RFS in every forum possible," said Dinneen, citing a lawsuit against EPA over cellulosic numbers and the introduction of anti-RFS amendments to the Farm Bill.
"That speaks volumes as to the lengths oil is prepared to go to undermine this important policy. I do not believe they will be successful," Dinneen added.
NEGATIVE ETHANOL MARGINS, E15 HOPES
Ethanol markers have been hurt this spring by tight grain supplies, which has pushed up the cost of corn, an ethanol feedstock. The soft economy has also weakened demand for gasoline, which is blended with ethanol. Profit margins are running anywhere from 25 to 35 cents per gallon in the red, trade sources say.
"This is most definitely a challenging market, and some plants that might not be as well positioned in the market as others may well look at closing for a bit until this bumper crop comes in. It's really no different than the oil industry that sees production capacity change with the market," he said.
In the past week two Nebraska plants, Nedak Ethanol in Atkinson and Valero Energy (VLO.N) in Albion, temporarily shut down. Both cited high corn prices and negative margins. In April, Archer Daniels Midland (ADM.N) permanently closed its Walhalla, North Dakota plant for similar reasons.
The announcements raised painful reminders of 2008 when the financial markets crash sent ethanol profits plummeting and many producers filed for bankruptcy including VeraSun Energy.
"In my mind, 2008 was a different year. Operating capital was more difficult to secure, if not impossible. Gasoline prices were relatively higher," Dinneen said. "But it was an equally challenging year, just different issues."
"I sure don't see a rash of permanent closures. There may be more consolidation coming to the industry," he added.
But Dinneen remains "bullish" on ethanol as demand for the product stays strong, including exports, which Dinneen said should at least match the record 1.1 billion gallons sold in 2011.
Dinneen also expects the sale of E15 to give the industry a boost, with Iowa, Illinois and Kansas to be among the first states to offer the blend.
A shortage of ethanol pumps at rural filling stations and a push back from retailers who fear lawsuits if car engines fail make adoption of E15 an uphill climb, ethanol makers say.
"The E15 market will grow slowly of course, limited by blendstock availability and the constraints EPA has placed on the product," Dinneen said. "Certainly by September when volatility regulations are removed, E15 should begin to grow more rapidly."
(Reporting by Christine Stebbins; Editing by Bob Burgdorfer)


"Pete" Landry........comments welcome at way2gopete@yahoo.com

Tuesday, June 19, 2012

HAVE A GREAT WEDNESDAY READERS! BACK TO BLOG

Hello readers.........the blog software which we're using for this blog page was updated by the software company that publishes it.  I have been having problems ever since to post.  My "computer guhru" son figured out the problem today and I can now post again.

Here's another article I ran across recently about the increasingly louder and louder debate over the issue of corn for food and fuel.  The ethanol industry is now consuming nearly 50% of the corn grown in the Country to put into fuel. This has caused the cost of food from corn products to skyrocket in price over the last 4-5 years or so.  There are now many US Congressmen who are questioning whether the EPA needs to be "reigned in" on the ethanol  mandates.  Here's the article:


Ethanol: Growing Food, Feed, Fiber, and Fuel?

Evidence Growing That Using Corn to Help Fill Gas Tanks Might Not Be the Best Use of Crops, Tech, and Scarce Taxpayer Dollars

Excerpted from the book Food Fight. To learn more about the Farm Bill and purchase a copy of Food Fight please visitwww.foodfight2012.org

Most analysts agree that we are rapidly approaching “peak oil,” the point when the volume of global oil production begins to decline. In response, Farm Bill programs have promoted a shift to liquid “biofuels” and “biomass” energy derived from farms. The Renewable Fuels Standard of the Energy Independence and Security Act of 2007, for instance, boosted the country’s ethanol production by mandating that up to 36 billion gallons be blended into gasoline by 2022.1 But taxpayers have been investing in this industry for decades via corn subsidies, import tariffs, tax credits for every gallon of ethanol blended with gasoline, loan guarantees, construction cost-shares, and gas pump upgrades. For politicians and lobbyists, ethanol became a sacred cow, untouchable, because of the belief that these public investments would 1) support farmers, 2) reduce dependence on foreign oil (currently about 60 percent of U.S. oil consumption), 3) cut greenhouse gas emissions, and 4) strengthen national defense.
The high costs of these policies—$17 billion between 2005 and 2009 alone—are now being viewed in a more critical light.

The Mounting Case Against Corn
Ethanol
By early 2011, drums were finally beating inside the nation’s capital for a repeal of ethanol subsidies and tax breaks that were sucking up $7 billion per year or more from American taxpayers. Some Iowa counties were reportedly receiving up to $26,800 per rural household in ethanol subsidies, despite evidence that using corn to help fill gas tanks might not be the best use of crops, technology, and scarce taxpayer dollars.
First is the simple energy in, energy out equation. In other words, the amount of power you actually get out of ethanol for what’s required to grow and refine it. Recent analyses reveal that when all of the “well to wheel” inputs of growing, fertilizing, irrigating, harvesting, drying, and processing are tallied, at least two-thirds of a gallon of oil are needed to produce a gallon of ethanol (roughly a 33 percent “net energy balance”).
The bulk of energy used to make ethanol currently comes from coal- or natural gas-fired power plants. Which makes you wonder, how renewable can the fuel be if you need nonrenewable energy to produce it?
Depending on which life cycle assessment you read (there are dozens to ponder), the shift from hydrocarbon- to carbohydrate-based fuels could either ease particulate emissions and global warming significantly or actually make things far worse. In 2005, Dan Kaman of the University of California at Berkeley’s Energy and Resources Group reported a 10 to 15 percent per mile reduction in greenhouse gas emissions from corn-based ethanol. On the same campus, Tad Patzak argued that in its present form, ethanol produces 50 percent more carbon dioxide and sulfur emissions (along with lung and eye irritants) than fossil fuels. According to Michael Bomford of Kentucky State University, the differences between studies almost entirely depend upon how researchers assess the value of the byproduct livestock feed (the “leftovers” from milling plants into ethanol, called dried distiller grains and solubles or DDGS, are often fed to livestock).

The Case for Conservation
Even the most ardent proponents admit that, at best, biofuels can only ever be a part of a diversified energy future. There is simply not enough french fry grease to satisfy the world’s diesel addiction, and only so much arable land. Already about 30 million acres or 36 percent of the U.S. corn crop (the equivalent of all the cropland in Iowa and then some) is dedicated to ethanol corn—but the output is displacing a mere 8 percent of gas.
The same amount of gasoline could have been displaced simply by increasing fleet-wide fuel economy just 1.1 miles per gallon. (And that would have saved American taxpayers nearly $20 billion between 2005 and 2011 alone.)
Clearly, increasing fuel efficiency and cultivating a public consciousness around conservation is a more effective way to reduce gasoline use than corn ethanol. Some other common sense ways that the Environmental Working Group reports could improve gas mileage without a costly ethanol industry include common sense car maintenance (regular oil changes, proper tire inflation, and filter replacements), better all-around driving habits that avoid excessive speeding and acceleration, and higher industry standards for fuel efficiency.
If helping small farmers diversify their economic portfolios was another goal of federal policy makers, ethanol has failed to deliver. What began as a movement of farmer-owned and -operated small-scale plants has given way to facilities dominated by global giants like Archer Daniels Midland, Broin, and ICM, Inc.


Ethanol’s Stewardship Legacy?
Food prices are on the rise around the globe. Land values throughout the Corn Belt are skyrocketing. And the grim reality is sinking in that even if the entire U.S. corn crop were distilled into liquid fuel, it would still supply less than 20 percent of domestic demand. Conservationists worry about the vulnerability of transforming every potentially productive acre—including land set aside for conservation and protected grasslands and parklands—into some form of biofuel monoculture.
Any benefits of the ethanol boom—increased farm revenue, significant reductions in subsidy payments, lower greenhouse gas emissions, and a more diversified fuel supply— come with a potentially unaffordable environmental price tag. As the demand for fuel corn pushes farmers to intensify their land use, soil and water quality are starting to suffer.
Some optimists hope that farming standards can prevent the worst damage. In 2011, European countries agreed upon standards for sustainable cultivating and harvesting of biofuel crops. Similar efforts have stalled, however, in the United States, where there is still no consensus on what constitutes “sustainable” farming practices. There are also legitimate concerns that over-harvesting “crop residues” like wheat straw, corn stalks, etc., eventually will impoverish the soil. Sir Albert Howard, the early-20th-century pioneer of the organic and sustainable farming movements, called this “The Law of Return,” where “what comes from the soil must return to the soil.” Organic matter must be added back into soil for it to stay productive. In addition, harvesting cellulose from lands now set aside to protect wildlife could have devastating consequences to biodiversity and reverse decades of gains made by Farm Bill conservation programs.
Before we continue to subsidize biofuels, we must ask ourselves:
• How much further will federal mandates for biofuel production drive idled lands into production?
• Will parks, forests, and other public lands become vulnerable to energy exploitation and food production?
• How will bio-refineries manage the challenges of seasonality, storage, and transport of crops?
• What are the long-term consequences of “super weeds” now resistant to herbicides used in genetically engineered crops?
• Will food and energy shortages feed on one another?
• Can subsidies be structured to protect farmers during price falls, and to protect taxpayers from huge payouts to biofuels producers that no longer need them?
Perhaps a long-term benefit will emerge from all this, once ethanol ceases to be a way for huge corporations to profitably dump excess corn, and a more logical energy order arises. A sensible biofuel movement could evolve, embracing a diversification of fuel and nonfuel crops on landscapes that include crop rotations, streamside protection, the maintenance of healthy soils, and abundant wildlife habitat and wild areas.


"Pete" Landry.........comments welcome at way2gopete@yahoo.com

Wednesday, April 18, 2012

HAVE A GREAT THURSDAY READERS!


For all you LSU baseball fans, the Tigers are now ranked #1 in one poll and 4th in the two other polls. They lead the SEC West and are tied with Kentucky, who leads the East division with the same Conference record as LSU. And, the HUGE weekend for LSU starts this Friday, when they play Kentucky in Lexington on Friday, Saturday and Sunday. If the Tigers can win 2 of the 3 games, they should solidify their ranking. They are "on fire" at the mid point in the SEC season. If they can continue to play like they are playing now, they should have a good shot at getting back to Omaha!

Back to ethanol issues. Here's an interesting article I picked up recently on a company that wants to make ethanol from garbage...........yes, from trash. I wish them well as this could take some pressure off corn prices if it is successful and catches on.
======================

Powers Energy garbage-to-ethanol plant takes a few steps forward

By Carrie Napoleon Post-Tribune correspondent March 29, 2012 4:06PM

LOWELL Plans for the proposed $330 million Powers Energy trash-to-ethanol plant in Schneider appear to be gaining some momentum.

Powers Energy and the landowner are expected to reach a deal on a purchase agreement in about a week. Powers is also in negotiations with a major oil company that has an interest in purchasing all the ethanol produced at the site, as well as becoming an equity partner in the project, a project representative said.

Members of the Council of Northwestern Indiana Towns and Smaller Cities were updated on progress with the project Thursday at the Lowell Town Hall during their regular meeting. Schneider Town Council President Richard Ludlow and Ed Cleveland, a representative from the local construction conglomerate partner in the project, provided details on the latest activities surrounding the trash-to-ethanol plant first proposed in 2008.

“We are very excited about the fact that a major oil company wants to buy the ethanol and wants to be an equity partner,” Cleveland said.

Equity had been an issue with funding in the past. Two prior attempts to establish funding fell through in part because the building was to be owned by the Lake County Solid Waste Management District and outside factors on the economy including the economic troubles in Greece in Italy and the tsunami in Japan.

Since then a new contract has been established giving ownership of the facility to Powers, which allows the company to use it as equity in funding attempts. That has helped to move a third funding attempt forward.

That new contract means Powers will need to obtain new commitments from municipalities that want to take advantage of the $17.50 a ton tipping rate when the plant comes online.

Cleveland said the company is also in the process of responding to a breach of contract suit by the Lake County Solid Waste Management District. Powers has until April 2 to respond to the filing and Cleveland said project organizers are hopeful they will be granted an extension.

Ludlow said the Schneider Town Council is taking the necessary steps to keep the project moving forward short of agreeing to any type of tax abatement. Ludlow said Powers has not sought any tax abatements and will be taxed at full rate on the project.

He said the Schneider Town Council Monday approved the rezoning of the land where the project is expected to be built from agricultural to industrial. Town officials also signed the tipping commitment letter and forwarded that to Powers. About half of the Lake County communities have resubmitted the commitment letters, he said.


"Pete" Landry...........comments welcome at...............way2gopete@yahoo.com

Friday, April 13, 2012

HAVE A GREAT FRIDAY READERS!


The chemical manufacturing industry has been manufacturing ethanol from other than corn fermentation for many years. Yet, there are laws on the books that prevent them for manufacturing ethanol as an additive for ethanol gasoline.........how stupid! Guess they're afraid that would run the ethanol manufacturing plants in the midwest out of business? Use of ethanol manufactured by the chemical industry as a fuel additive could go a long way in reducing the high price of corn, and also all food products made from corn.....ie, bread, cereal, all meat products that use corn as a feedstock, etc. Read this article for more:

How A Dumb Law Blocks A Great Way To Fuel America

Christopher Helman - Forbes

4/03/2012 @ 3:38PM |24,863 views

This year American motorists will burn through 14 billion gallons of ethanol, the end product of 5 billion bushels of corn—a third of the U.S. crop—grown on 33 million acres of farmland. It arguably cuts pollution coming out of U.S. tailpipes, but at a huge cost. Since 2005, when Congress required that ethanol be added to your gas tank, U.S. corn prices have tripled.

(Read the entire article here:

http://www.forbes.com/sites/christopherhelman/2012/04/03/ethanol-minus-the-corn-it-could-fuel-america-if-it-werent-illegal/)


"Pete" Landry...........comments welcome .........at.............way2gopete@yahoo.com


Friday, April 6, 2012

HAPPY EASTER READERS!


Wishing you and yours a very HAPPY AND PEACEFUL EASTER!


Just when we think things couldn't possibly get any worse with ethanol gasoline, the ethanol gas lovers are already talking about pushing to go from E-15 (not yet in stations) to E-20!
Read this article:


Gasoline could go from 10% ethanol up to 20%

Updated 3/5/2008 11:13 AM

By James R. Healey, USA TODAY

WASHINGTON — Key backers of ethanol fuel are starting a push to double the amount of ethanol commonly blended with gasoline to 20%. The move would boost the market for grain alcohol, while skirting problems and controversy surrounding E85, an 85% ethanol fuel.

Blending ethanol — alcohol typically now made from corn — into gasoline is a way to cut petroleum use. A 10% ethanol blend, called E10, now is standard at many gasoline pumps across the USA. It can be used by virtually all gasoline vehicles, which is not true of the E85 being promoted as a fuel of the future.

(Read full article here: http://www.usatoday.com/money/autos/environment/2008-03-04-e20-ethanol-fuel_N.htm)

Studies by the University of Minnesota and Minnesota State University at Mankato suggest that ordinary vehicles could burn a mix of 20% ethanol, called E20, as routinely and harmlessly as they now burn E10. Minnesota Gov. Tim Pawlenty is to announce the study results at a conference here today.

"We see E20 not exactly as bypassing E85, but supplementing it," says Gene Hugoson, Minnesota agriculture commissioner.

A separate study, commissioned by the Renewable Fuels Association and not yet finished, will assess the environmental impact of doubling the alcohol.

Minnesota law requires 20% of fuel used be ethanol within a few years, making the matter more urgent there than elsewhere. The mandate could be satisfied if enough motorists burn E85 to raise the average to 20% — or if E20 replaces E10 as the state's standard fuel.

Hitting the state's goal, as well as boosting U.S. ethanol use as much as the industry hopes, "will take awhile" relying on E85, Hugoson says. E85 availability remains limited mainly to the Midwest. It is potentially corrosive, making it hard to ship in pipelines and requiring special fuel system parts in vehicles. E85 also has far less energy than gasoline, so it takes more to go the same distance.

For E20 to become a legal fuel, however, it would need U.S. Environmental Protection Agency approval.

Automakers also have doubts that it is as benign as E10. They are running trials, but they say they do not have enough data on how risky E20 is to components and whether it would change emissions in unwanted ways.

"Our vehicles are able to handle E10, but to move to E20 there are technical issues. It's not that simple," says Ford Motor (F) spokeswoman Kristen Kinley.

General Motors (GM) spokesman Alan Adler says that in E20 tests in Australia, "40% of the vehicles sustained (catalytic converter) damage, which allowed essentially unchecked tailpipe emissions."

"We believe there's not data sufficient to prove that all vehicles will function OK with E20," says Reg Modlin, director of environmental affairs for Chrysler. "It's not a legal fuel, and it would void the warranty."


"Pete" Landry..........comments welcome at .............way2gopete@yahoo.com

Tuesday, April 3, 2012

HAVE A GREAT WEDNESDAY READERS!


EPA continues to push it's 15% ethanol gas or "E15" agenda. It announced yesterday that is is now accepting registration applications from companies who choose to sell E15. This is despite several lawsuits from the Automobile Manufacturers Associations (domestic and foreign), the small engine power association and the Marine Manufacturers Association.

What all consumers should know, and probably DON'T know, is that despite the EPA's 15% ethanol gasoline approval announcement in January, 2011, claiming it was safe to use in all 2001 and newer passenger cars and light trucks, nearly ALL owners manuals for 2001 and newer vehicles warn owners "not to use gasoline with greater than 10% ethanol, or engine damage could occur and the vehicles warranty will be voided". Did you bother to check your owners manual? I have a 2008 Mercury Sable and a 2009 Ford F-150. They both warn against using gas with greater than 10% ethanol.

Even retailers are now balking at selling E15. Read the article titled "Retailers want liability protection before considering E15" on my website's "Current Ethanol News" page. The biggest fear with 15% is the "misfueling" issue, that is, putting this gas into equipment it is NOT designed for, causing damage to the engine. Since the price of E15 will likely be about 10 cents/gallon cheaper than 10% ethanol gas, it will be tempting to consumers to use in lawnmowers and small garden tools, marine engines and older vehicles. The results could be catastrophic and be very costly. This is what I tried to warn the Louisiana Legislators in 2009 and 2010 when I testified before the Agriculture Committee in 2009 and the Commerce Committee in 2010. They didn't seem interested......typical politicians. I may again try to convince them to pass a law to cap ethanol gas in Louisiana at 10%. At least one other State has such a law currently.

Here's the EPA announcement on registering to sell E15:

EPA Approves First Applications for Registration of Ethanol to Make E15

EPA to Allow 15 Percent Renewable Fuel in Gasoline**

Agency approves first applications for registration of ethanol to make E15

WASHINGTON-–April 2, 2012: The U.S. Environmental Protection Agency (EPA) approved the first applications for registration of ethanol for use in making gasoline that contains up to 15 percent ethanol -- known as E15. Ethanol is a renewable fuel that can be mixed with gasoline. For over 30 years ethanol has been blended into gasoline, but the law limited it to 10 percent by volume for use in gasoline-fueled vehicles. Registration of ethanol to make E15 is a significant step toward its production, sale, and use in model year 2001 and newer gasoline-fueled cars and light trucks.

To enable widespread use of E15, the Obama Administration has set a goal to help fueling station owners install 10,000 blender pumps over the next 5 years. In addition, both through the Recovery Act and the 2008 Farm Bill, the U.S. Department of Energy (DOE) and U.S. Department of Agriculture have provided grants, loans and loan guarantees to spur American ingenuity on the next generation of biofuels.

Today's action follows an extensive technical review required by law. Registration is a prerequisite to introducing E15 into the marketplace. Before it can be sold, manufactures must first take additional measures to help ensure retail stations and other gasoline distributors understand and implement labeling rules and other E15-related requirements. EPA is not requiring the use or sale of E15.

Ethanol is considered a renewable fuel because it is generally produced from plant products or wastes and not from fossil fuels. Ethanol is blended with gasoline for use in most areas across the country. After extensive vehicle testing by DOE and other organizations, EPA issued two partial waivers raising the allowable ethanol volume to 15 percent for use in model year 2001 and newer cars and light trucks.

E15 is not permitted for use in motor vehicles built prior to 2001 model year and in off-road vehicles and equipment such as boats and lawn and garden equipment. Gas pumps dispensing E15 will be clearly labeled so consumers can make the right choice.

"Pete" Landry.........comments welcome at .............way2gopete@yahoo.com