Midwest govs seek to bolster alternative energy
February 23, 2009 By Ken Thomas
WASHINGTON Midwestern governors urged the Obama administration Monday to reduce barriers to developing alternative fuels and wind energy, key pieces of economic development in their home states. Iowa Gov. Chet Culver, a Democrat, and Republican Govs. John Hoeven of North Dakota, Mike Rounds of South Dakota and Tim Pawlenty of Minnesota want the administration to take several steps to make ethanol blends more available and promote wind energy. "We will pay a price in the future if we don't have that strategic plan, that vision and that sustained effort behind developing domestic renewable energy," Hoeven said in a news conference surrounding meetings of the National Governors Association. Touting the benefits of alternative fuels, the governors pressed the Environmental Protection Agency to approve a waiver allowing a higher percentage of ethanol of 13 percent to be blended into gasoline. The U.S. currently allows gasoline to contain 10 percent ethanol. Auto manufacturers are ramping up their production of so-called "flex-fuel" vehicles that can run on ethanol blends of up to 85 percent ethanol. But they warn that ethanol blends beyond 10 percent can corrode fuel lines and damage hoses, seals and the fuel pump in cars not equipped to run on ethanol. It can impede the car's performance and lead to poor gas mileage. Culver said the EPA would "take a very serious look" at the waiver and he was optimistic they would allow the waiver to promote biofuels. The governors said it would help the U.S. meet a renewable fuels standard that will require 36 billion gallons of biofuels to be blended into gasoline by 2022 and benefit rural economies instead of increasing dependence upon foreign oil. "You're going to find that people are going to catch on the fact that they'd much rather being doing business with a business partner located in North America and it's a much more secure source of fuel," Rounds said. To promote wind energy, the governors want utilities to be required to provide a minimum of 20 percent of their electricity from renewable sources such as wind and solar. They also urged efforts to increase construction of transmission capacity and provide longterm tax credits on the production of wind energy. "Wind energy production is one of the most promising forms of renewable energy that we have in our country," Pawlenty said. http://www.businessweek.com/ap/financialnews/D96HMB580.htm

Modern Ethanol Plant Has Negligible Impact on Land Use, New Scientific Study Finds
CHICAGO, Feb. 24 /PRNewswire/ -- A new study announced today on ethanol land use impact found that a modern ethanol plant does not meaningfully change farmland use, neither the amount of land farmed nor the mix of crops planted (e.g., corn, soybeans). Commissioned by the Illinois Corn Growers (ICGA), the study's findings contest an unproven theory that increased production of corn ethanol results in the conversion of unused farmland into corn production and an increase in the percentage of corn acres planted by farmers. "This is the most thorough and far-reaching study on land use impact done to date," stated Rod Weinzierl, executive director of the ICGA. "It demonstrates that the often cited link between new ethanol plants and the conversion of non agricultural land to corn is highly questionable. Corn ethanol is not a central driver in the conversion of non corn farmland to corn production." The study was conducted by Dr. Steffen Mueller from the Energy Resources Center at the University of Illinois at Chicago utilizing a modern ethanol plant in Rochelle, Illinois, (approximately 75 miles northwest of Chicago) as its test subject. The study looked at relevant farming data - including satellite imagery and farmer surveys - one year prior to the plant opening through to two years after. "Our objective was to take a bottom-up approach to data collection and analysis, and thereby arrive at a fully considered assessment on the potential impact of ethanol production on farmland use," commented Dr. Mueller. "We examined each acre of farmland within a 40 mile radius of the test site - prior to and after the launch of an ethanol plant - and found that neither intensification nor extensification occurred. Farmers had land available to convert (extensification) for corn production and did not. And, ethanol plant grain demand was quickly met by incremental production improvements and so increased percentages of corn acres (intensification) cannot be explained by the new ethanol plant. The results of this study on one modern ethanol plant are sufficiently dramatic to indicate that the science of ethanol and land use is far from being set." The study's findings are in conflict with the current federal and state governmental draft standards that utilize older and less thorough science. "With California a recognized national leader in renewable fuel policy, the risk that state's draft renewable fuel standards being prematurely approved is that ethanol will be branded a brown fuel nationally," stated Rod Weinzierl. "This threatens to marginalize the use of ethanol in the U.S. fuel mix and would have far reaching, non beneficial environmental and financial impact. California will be worsening, not improving, our nation's carbon footprint at a time when we have the green fuel supply to do otherwise." The study found that a new ethanol plant requiring 20.45 million bushels of corn annually for fuel production utilizes the yield from 104,284 acres, which is less than 7% of the acres from the "draw area." However, during the study period, more than 260,000 acres were converted from mostly soybeans to corn indicating that other factors contributed to corn intensification (an increase in percentage of corn acres grown). "During the early phase of plant startup it's possible that corn acres are intensified as a result of perceived plant market demand," Dave Loos, Technical Director of ICGA, noted. "This quickly levels off and other factors such as export demand and grain economics drive on farm planting decisions. Once an ethanol plant has been in operation for two years, its supply requirements are a marginal factor in local farmers' planting strategy. Annual production increases quickly exceeded the total new demand from the plant." The study found that while land such as grass and pasture was available for farmers within the ethanol plant draw area to convert to and increase planted corn acres by as much as 21%, less than three tenths of a percent increase actually took place, which is not a meaningful amount. "As we continue to improve the agricultural productivity and processing efficiencies of corn-based ethanol, it is important that the body of scientific work developing around corn's role as a part of our national renewable fuels strategy keep pace with these advancements," added Dr. Martha Schlicher, vice president of Illinois River Energy. "This study is an accurate reflection of the ability of the advancements in corn productivity to absorb incremental ethanol capacity when plants are appropriately added in the right locations at the right time. While it is very important to clearly understand all of the direct and indirect environmental costs and benefits of renewable fuel use, it is equally critical that we accurately account for current and future technological advancements that reaffirm the environmental benefits of corn ethanol. It is unfortunate that we continue to increase gasoline imports while idling existing available corn based ethanol supply that measures in the billions of gallons." http://www.globalrenewable.com/IRE_Land_Use_Study_1211.pdf

UNL Research: Corn Ethanol Emits 51 Percent Less Greenhouse Gas Than Gasoline
January 22, 2009
LINCOLN, Neb. -- Corn ethanol directly emits an average of 51 percent less greenhouse gas than gasoline, as much as three times the reduction reported in earlier research, thanks to recent improvements in efficiency throughout the production process, University of Nebraska-Lincoln research shows. A Journal of Industrial Ecology article (available online here) outlines the research, conducted by an interdisciplinary team of UNL researchers, which evaluated dry-mill ethanol plants that use natural gas. Such plants account for nearly 90 percent of current production capacity. This research is the first to quantify the impact of recent improvements throughout the corn-ethanol production process, including crop production, biorefinery operations and co-product use, said Ken Cassman, UNL agronomist who was part of the research team. Previous studies, which found ethanol to have a much smaller edge over gasoline in GHG emissions, relied on estimates based on corn production, ethanol plant performance and co-product use as they were seven years ago. "Critics claim that corn ethanol has only a small net energy yield and little potential for direct reductions in GHG emissions compared to use of gasoline," Cassman said. "This is the first peer-reviewed study to document that these claims are not correct." More recently built -- and more efficient -- plants now represent about 60 percent of total ethanol production and will account for 75 percent by the end of 2009, Cassman added. These newer biorefineries have increased energy efficiency and reduced GHG emissions through the use of improved technologies. Also, many are located near cattle feeding or dairy operations, which allows efficient use of the co-product distillers grains as cattle feed. For example, the distillers grains don't have to be dried to facilitate long-distance travel; drying uses up to 30 percent of total energy use in the ethanol plant. Also contributing to corn ethanol's GHG performance are improvements in how the crop is grown, including improved crop and soil management, and better hybrids that help farmers achieve a steady increase in corn yields without having to increase fertilizer or energy inputs. The result of these improvements: The ethanol industry currently is producing a fuel that is 48 to 59 percent lower in direct-effect lifecycle greenhouse gas emissions than gasoline. That's two to three times the reduction reported in earlier studies that did not take into account recent advances in corn-ethanol production. The net energy ratio, which averaged 1.2 to 1 in earlier studies, is 1.5-1.8 to 1 in the recent research, Cassman said. That means that for every unit of energy it takes to make ethanol, 1.5 to 1.8 units of energy are produced as ethanol. Even more striking is the corn ethanol's potential to replace oil. This new study estimates that 10-19 gallons of ethanol are produced for every gallon of petroleum used in the entire corn-ethanol production life cycle. The range in the ethanol-oil replacement value, as well as the ranges measured for net energy efficiency and GHG emissions reduction, are due to differences in crop management practices and ethanol plant performance. The findings are key to corn ethanol's long-term viability, Cassman said, because the industry has been justified, in part, by the assumption that GHG emissions would be reduced as ethanol replaces petroleum-derived gasoline. The research is a component of a regional, multi-university research initiative known as NC506, to assess the economic and environmental sustainability of the rapidly expanding Midwestern corn ethanol industry. This project is funded by the U.S. Department of Agriculture and the North Central Bioeconomy Consortium. Other sources of funding include the Western Governors Association, Environmental Defense, and the Agricultural Research Division at UNL, and the Nebraska Center for Energy Sciences Research. Researchers used the UNL-developed Biofuel Energy Systems Simulator, or BESS, to make their calculations. This software is available for download at http://www.bess.unl.edu. BESS analyzes energy yield and efficiency, greenhouse gas emissions and resource requirements for individual biofuel production systems. This "seed-to-fuel" tool quantifies lifecycle carbon savings and environmental impact of individual biofuel systems. It factors in energy use and greenhouse gases from crop production, ethanol conversion, co-product use, and transportation. The study did not take into account indirect land use change, because there is not yet a scientific consensus about how to estimate the magnitude of these effects as a component of the greenhouse gas intensity of biofuels. http://www.cattlenetwork.com/Content.asp?ContentID=284922

EPA mandates increased ethanol use
January 9, 2009 Cole Gustafson, Prairie Business Magazine
The Enivornmental Protection Agency has announced a higher national blend rate for ethanol of 10.21 percent in 2009. This raises many questions for ethanol producers, corn growers, the livestock industry and automobile owners. The previous ethanol blend rate of 7.76 percent was established by the Energy Independence and Security Act of 2007. Since it is an average national blend rate and some areas have minimal ethanol consumption, the Midwest needs to blend higher levels of ethanol in gasoline to meet the goal. The EPA was under pressure from the ethanol industry to increase the blend rate to avoid hitting a “blend wall.” With the rapid growth of the industry, more ethanol is being produced than consumers are purchasing with the existing 7.76 percent blend rate. Nationally, the U.S. consumes about 140 billion gallons of gasoline a year. In the next few years, the ethanol industry’s capacity is expected to exceed 14 billion gallons. A blend rate higher than 10 percent is needed unless more consumers begin purchasing higher blends of ethanol, such as E85 (fuel containing 85 percent ethanol). Next year, ethanol consumption will increase, while petroleum demand will fall. The EPA has resisted a blend rate higher than 10 percent because of existing auto warranties. Auto manufacturers only warrant their vehicles if 10 percent or less ethanol is used unless it is flex-fuel equipped. Now that the EPA is going beyond 10 percent, livestock producers expect the EPA to continue increasing the blend rate and argue that devoting increasing portions of crop base to biofuel production leaves lower quantities of livestock feed available. Ethanol producers will have to adjust production levels to meet the new blend rate. Ethanol prices, along with most petroleum products, have dropped considerably since midsummer, which has had a chilling effect on the industry and planned ethanol plants. New ethanol plants are increasing total ethanol supplies. But risk and margin management will still be key underlying contributors to overall plant and industry health. Gustafson is a professor and biofuels economist in North Dakota State University’s Department of Agribusiness and Applied Economics. He is also co-director of NDSU’s Bioenergy and Product Innovation Center. http://www.prairiebizmag.com/articles/index.cfm?id=9564§ion=News

Corn Prices May Enter Decade-Long Slump, Agency Says
January 7, 2009 Bloomberg.com: U.S.
Jan. 7 (Bloomberg) -- Corn prices that reached a record $7.9925 a bushel last year are headed for a decade-long slump below $4 as production in the U.S., the world’s top grower, catches up with demand, according to congressional analysts. The average cash price will bottom out at $3.65 in the 2012-2013 marketing year, then rise no higher than $3.94 through 2019, the analysts from the Congressional Budget Office said in a document used as part of a government-wide estimate of federal spending over the next decade. Corn futures closed today at $4.165 a bushel on the Chicago Board of Trade. Wheat and soybean prices paid to farmers will also stagnate, according to the nonpartisan CBO. The average cotton price will rise from 40 cents a pound this year to more than 60 cents by 2011, the CBO said. The report doesn’t estimate high or low prices for the year, only averages. Corn prices are expected to stay low even as total use rises 18 percent to 14.719 billion bushels by the end of the next decade. The analysts forecast production jumping 23 percent to 14.738 billion bushels, as a 15 percent gain in yields absorbs rising demand for the grain for exports and as a source of ethanol. Corn is the biggest U.S. crop, valued at a $52.1 billion in 2007. http://www.bloomberg.com/apps/news?pid=20601103&sid=aDgLNXDbgg.4&refer=us

White House Fact Sheet: Energy Independence and Security Act of 2007
December 19, 2007
http://www.whitehouse.gov/news/releases/2007/12/20071219-1.html