In the News

Des Moines Register

April 21, 2014

By Donnelle Eller

Experts on Monday criticized a new University of Nebraska-Lincoln study, saying it used “worst-case” assumptions to determine that cellulosic ethanol creates more carbon emissions than gasoline.

The report from Adam Liska, an associate professor at Nebraska, says crop residue used to make cellulosic ethanol creates 7 percent more greenhouse gas emissions in the short-run than gasoline emissions and are “above the 60 percent reduction in greenhouse gas emissions” required by the federal government.

Tom Vilsack, the U.S. secretary of agriculture, said the study makes “certain assumptions about farming operations” that “aren’t a reality. It’s not what’s happening on the ground.

“If you make the wrong assumption, you’re going to come up with the wrong conclusions,” said Iowa’s former governor, who was in Des Moines on Monday. “It’s unfortunate.”

The U.S. Department of Energy provided a $500,000 grant over three years for the study, published Sunday in a peer-reviewed journal, Nature Climate Change. The research attempts to quantify, over 12 Corn Belt states, how much carbon is lost to the atmosphere when the stalks, leaves and cobs that make up residue are removed and used to make biofuel, instead of left to naturally replenish the soil with carbon.

The university said the study “casts doubt on whether corn residue can be used to meet federal mandates to ramp up ethanol production and reduce greenhouse gas emissions.” The federal government has provided more than $1 billion in funding to support what it believes is greener cellulosic ethanol development.

In November, the U.S. Environmental Protection Agency proposed pulling back how much renewable fuels — including corn-based and cellulosic ethanol and biodiesel — must be used in the U.S. fuel supply. EPA has reduced the target for the cellulosic industry five times, given the industry’s difficulty in meeting the volumes.

Jennifer Dunn, an environmental team leader at the Argonne National Laboratory, said the study looked at “extreme levels of corn stover removal — up to 100 percent.”

A study from Dunn and others in 2012 found that biofuels made with corn residue were 95 percent better than gasoline in greenhouse gas emissions. That study assumed some of the corn stover harvested would be used to create energy and replace power produced from coal.

“The general consensus has been that we would manage corn stover removal to avoid adverse impacts to soil health, including a decline in soil organic carbon,” Dunn said.

Dunn said several plants are creating energy to power their own cellulosic plants, a fact not factored into the Nebraska study. That includes Poet-DSM, which is building a $250 million cellulosic plant in Emmetsburg.

Another Iowa plant, DuPont Nevada, says its $225 million facility has the potential to reduce greenhouse emissions by more than 100 percent. It’s under construction west of the Story County town.

“The companies behind these plants have really striven to emphasize the sustainability of their feedstock, including the soil carbon aspect. It’s why there is only a certain level of stover that can be removed from the field.

“Everyone knows that if you take the whole thing off, it’s going to cause problems,” she said. “That’s not even debated. ... Nobody wants to damage their soil health.”

Dunn and others say farmers look at soil carbon on a “sub-field level” to determine how much stover can be sustainably removed.

Liska said in an email that his study looked at stover removal at 25 percent, 50 percent and 75-100 percent, and the rate of carbon emissions was constant. “It is likely that no matter what level of residue is removed, the carbon intensity stays the same,” he said.

Douglas Karlen, a research soil scientist with USDA’s Agriculture Research Service, said the amount of stover removal used in the model isn’t physically possible. “If you could take off 75 percent of the corn stover, I’m not sure where you would put it,” he said.

Karlen said Iowa farmers would take off 1 to 1.5 tons per acre of stover from their fields. The study model would remove 2.68 tons per acre.

“You’d be stacked up with corn bales that are miles long,” said Karlen, who has worked with both Poet and DuPont in Iowa, among other companies, on ensuring sustainable amounts of stover are removed. “The machinery can’t take off 75 percent of the material, even with a vacuum system.”

Read the original story here : Experts Say Ethanol Study Used Bad Model

Star Tribune

By David Shaffer

CHS Inc., the nation’s largest farmer-owned cooperative, is getting back into the ethanol-making business, hoping that the third time is the charm.

The co-op based in Inver Grove Heights said Wednesday that it will purchase a large ethanol plant in Rochelle, Ill., and is looking to acquire other plants and globally expand sales of the biofuel and its byproduct animal feed called dried distillers grains.

“We are really looking at this as a first ethanol plant,” said Mark Palmquist, who is chief operating officer of CHS’ ag business. “We would be looking at other purchases. This is really a start of a strategy.”

CHS, which had $44.5 billion in revenue in fiscal 2013, has long marketed ethanol and traded distillers grains as part of its vast global commodities business. CHS also owns two petroleum refineries, blends ethanol with gasoline and sells fuel at 1,400 Cenex-brand stations across the country.

The co-op has twice entered — and exited — the business of making ethanol from corn.

In the 1980s, CHS and Archer Daniels Midland Co. owned a small, first-generation ethanol plant in North Dakota, but CHS sold its stake in 1991. Fifteen years later, in 2006, CHS acquired 24 percent of US BioEnergy, which then owned four ethanol plants. But CHS had to write off $74 million of that investment after US BioEnergy merged with VeraSun and the combined company filed for bankruptcy in 2008.

Palmquist said CHS learned a lesson from its passive investment in US BioEnergy, whose business was not integrated with the Minnesota co-op’s commodities-­trading strengths.

“We are a leading trader in DDGs, we are a leading trader in ethanol,” Palmquist said in an interview. “We look at it and say, ‘This time around this [ethanol plant] is something that should be part of our portfolio of operating companies.’ That is why we are taking it on as the full owner of the plant.”

Larry Johnson, a Cologne, Minn., ethanol industry consultant, said CHS’ re-entry into the ethanol business is a sign of the co-op’s confidence in the biofuel industry.

“It shows they have got a high level of optimism in agriculture, ethanol and themselves,” he said. “I think it is a good move.”

CHS didn’t disclose the terms of the acquisition of Illinois River Energy, but said the purchase is a cash deal that is expected to close in June. Palmquist said CHS plans to retain the approximately 60 employees of the plant 80 miles west of Chicago.

The plant was built as a smaller ethanol refinery in 2006, and after a major expansion now produces 133 million gallons of ethanol, along with corn oil and distillers grains.

Sinav Ltd., based in London, has owned the plant since 2012. Sinav is a unit of London-based Harwood Capital and Siem Industries Inc., a diverse company with shipping and oil services segments based in the Cayman Islands. The Illinois operation was Sinav’s only ethanol plant.

Richard Ruebe, CEO of Illinois River Energy, said Sinav put the plant up for sale in January and had multiple bidders. He said CHS has marketed the plant’s ethanol since 2006.

“We have had a strong relationship with them through the highs and lows,” Ruebe said in an interview. “They have been a good business partner.”

Palmquist said the Illinois plant is well run and in a good location for corn and transportation. He wouldn’t say whether CHS has other pending deals for ethanol plants, but said the company’s strategy aims to export ethanol and distillers grains.

“It is becoming more global,” he said of the ethanol business, “and that fits our structure.

Read the original story here : Minnesota Ag Coop CHS Agrees To Buy Ethanol Plant In Illinois

Brainerd Dispatch

May 13, 2014

By Ashwin Raman

A recent opinion piece titled, “Pipelines: Safest Way To Transport, Oil, Gas” by Rolf Westgard which was published in the Brainerd Dispatch on May 1, 2014, contained several inaccurate and misleading statements.

In the piece, Westgard said “there is little difference in emissions from the tar sands oil versus conventional oil” and added “CO2 emissions are the same regardless of the crude source.”

In actuality, lifecycle greenhouse gas emissions, which calculates emissions from the production state to the consumption stage, for crude oil differs in accordance to its source.

The State Department’s report for the Keystone XL Project released in January clearly states that on a lifecycle analysis, Western Canadian Sedimentary Basin crude oil (which will flow through the proposed pipeline) emits 17 percent more greenhouse gases than the average barrel of crude oil refined in the United States.

It said 0.24 million metric tons of CO2 will be emitted per year during the construction period of the Keystone XL project and, once operational, it would emit 1.44 million metric tons of CO2 per year.

Westgard also mentioned the Ogallala aquifer, which is below specific parts of the proposed pipeline, and said that a bigger threat to the aquifer is the farming of corn in those areas for biofuel production, adding it takes 500 gallons of water to produce corn for a gallon of ethanol in Nebraska and Kansas.

A study by Argonne National Laboratory, which is a nonprofit research laboratory operated by the University of Chicago for the Department of Energy, points to a lower amount of water used to produce corn in those states.

In a 2011 study, it said 239 gallons of water is needed to produce corn for a gallon of ethanol in states like Nebraska and Kansas, where rainfall isn’t as much as in states like Minnesota (for illustrative purposes, only 17 to 25 gallons of water is used to produce corn for a gallon of ethanol in Minnesota).

This water usage includes groundwater, surface water, rain water and water that’s reused. It is imperative to note that water usage for corn production is the same irrespective of whether it is used for ethanol or animal feed (which still comprises the bulk of corn production nationwide).

Additionally, during the ethanol production process, only a third of the biomass in a corn kernel goes to ethanol. Another third becomes CO2 which is used for dry ice and bottled drinks while the remaining third is used to produce dried distillers grain, which is a high-protein animal feed.

As such, Argonne said, the amount of water used to produce corn specifically for ethanol in the Great Plains is actually 160 gallons.

It should be pointed out that actual ethanol production, according to the same 2011 Argonne study, only requires 2.7 gallons of water for a gallon of ethanol. In Minnesota, some producers are using only 2 gallons of water.

In another Argonne study released in 2012, it said ethanol reduces greenhouse gas emissions by an average of 44 percent. Using the laboratory’s Greenhouse Gases, Regulated Emissions and Energy Use In Transportation (GREET) model, the Renewable Fuels Association concluded that ethanol reduced 38 million metric tons of greenhouse gases in 2013, which was the equivalent of removing eight million cars from the road.

In contrast, the State Department’s Keystone XL report said the annual 1.44 million metric tons of CO2 emissions from the pipeline is the equivalent to greenhouse gas emissions from 300,000 passenger vehicles a year.

Read the original story here : Pipeline Will Increase CO2; Ethanol Is A Cleaner Option

Bloomberg

April 16, 2014

By Mario Parker

Ethanol declined in Chicago for a fourth day following a government report that production last week climbed to the highest level since December.

Futures fell 4.1 percent after the U.S. Energy Information Administration said output increased 4.8 percent to 939,000 barrels a day, the steepest gain since Sept. 27.

“The trade is really keying on the production number; it was big,” said Mike Blackford, a consultant at INTL FCStone in Des Moines, Iowa.

Denatured ethanol for May delivery fell 9.3 cents to settle at $2.172 a gallon on the Chicago Board of Trade, the lowest since Feb. 24. Prices have gained 14 percent this year.

Gasoline for May delivery slid 0.16 cent to $3.0405 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.

Ethanol’s discount to the motor fuel expanded 9.14 cents to 86.85 cents.

Stockpiles slumped 2.8 percent to 16 million barrels, the first weekly decline since March 14, according to the EIA, the Energy Department’s statistical arm.

Corn for May delivery sank 6.25 cents, or 1.2 percent, to $4.975 a bushel in Chicago.

In cash market trading, ethanol fell 35.5 cents to $2.345 a gallon in Chicago, 32 cents to $2.85 on the West Coast and 5 cents to $2.45 on the Gulf Coast, data compiled by Bloomberg show. In New York, the biofuel climbed 2.5 cents to $2.475 a gallon.

Corn-based ethanol Renewable Identification Numbers for 2014, used by the government and refiners to track consumption targets, were at 42 cents, while 2013 RINs were at 44 cents, data compiled by Bloomberg show.

Read the original story here : Ethanol Drops As Production Climbs To Highest Since December

Renewable Fuels Association

WASHINGTON — A new study published in Nature Climate Change that argues biofuels from corn residue (stover) may be worse for the climate than gasoline is deeply flawed and contradictory to current science. It shows a complete lack of understanding of current farming practices.

Commenting on the study, Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), said, “The study’s methodology is fundamentally flawed and its conclusions are highly suspect. The results are based on sweeping generalizations, questionable assumptions, and an opaque methodology. The authors offer no robust explanation for why their findings contradict other recent, highly regarded research. Ultimately, this paper should be seen for what it truly is – a modeling exercise of a hypothetical scenario that bears no resemblance to the real world.”

Dinneen goes on to highlight several key areas of contention with the Liska et al study. “Stover removal rates are currently in the 10-25% range, which well documented research demonstrates is sufficient to replenish soil. But this study assumes 60-70% stover removal, a level that nobody believes is sustainable.”

“This study lacks sophistication and contradicts without explanation a larger highly–regarded, credible body of science. Other recent studies have examined the carbon impacts of using corn residue for bioenergy. For instance, an analysis conducted by the University of Illinois and Argonne National Laboratory showed 30% residue removal resulted in no additional direct or indirect carbon emissions. Furthermore, it showed certain levels of corn stover can be removed without decreasing SOC. Initial results from research at South Dakota State University showed that SOC levels remained constant from 2008-2012 in a harvest system with relatively high residue removal rates.”

Dinneen concluded, “Last week there was a study suggesting the carbon impact of fracking may be 1,000 times greater than previously thought. Curiously, that report was largely ignored by the media. Folks need to stop manufacturing scenarios to make biofuels look bad, and begin focusing on the true carbon menace – oil.”

More detailed information on RFA’s points of contention with this study can be found here.

Read the original story here : RFA: New Stover Study Is Deeply Flawed

April 24, 2014

The Ascheman Uni-Mart in Appleton is the latest station to join DENCO II's E85 discount campaign.

With Ascheman Uni-Mart on-board, there are currently a total of 12 stations participating in DENCO II's campaign to offer E85 at $1 cheaper than regular unleaded gasoline.

Ascheman Uni-Mart joins the Hancock Co-op as the latest stations to join the campaign and both stations are expected to begin offering E85 at a $1 discount to regular gasoline by the end of this week.

The E85 campaign earlier this month and is expected to run throughout the summer months. The other participating stations are the Morris Food Shop, Morris Co-op Association, Jerry's U-Save Conoco (Morris), the Tri-County Co-op Association stations in Chokio and Wheaton and Cenex stations in Alexandria, Donnelly, Glenwood, Graceville and Starbuck.

The stations that have already begun offering E85 at $1 less per gallon than regular fuel are the three participating stations in Morris, the Tri-County Co-op Association stations in Chokio and Wheaton and the Cenex in Graceville and Alexandria. The other remaining stations are expected to begin offering the discounted price for E85 soon.

In fact, on April 18, the three stations in Morris were offering E85 at a $1.11 discount to regular gasoline.

Denco II is supplying the aforementioned stations with discounted E85 in April and throughout the summer. Denco II invested over $100,000 in 2011 in upgrading its ethanol load-out system to offer E85 and higher level blends directly to retailers.

Updates on the campaign will be regularly posted at Minnesota Bio-Fuels Association's Facebook and Twitter pages. To find these stations, go to MBA's E85 and Blender Pump map here

April 24, 2014

A new footprint study by Fuels America finds that the renewable fuels industry contributes $11.7 billion to Minnesota's economy annually.

The study, which was prepared by John Dunham & Associates, Inc of New York for Fuels America, includes direct and induced economic output from the renewable energy industry as well as economic contributions from the industry's suppliers.

The renewable energy industry, as defined by the study, includes conventional and cellulosic ethanol, biodiesel and advanced biofuels.

According to the study, the renewable energy industry annually supports 48,506 jobs, generates $3 billion in wages and contributes $708.2 million and $401.9 million in federal and state taxes respectively.

The study also examines the economic contribution and job creation from the industry in individual congressional districts within the state. Congressional district 7, which encompasses most of western Minnesota, has the most number of jobs related to the renewable energy industry.

The Fuels America study can be found here.

Environment & Energy Daily

April 30, 2014

By Amanda Peterka

A trio of House Democrats said they met with senior White House officials yesterday to express concerns over U.S. EPA's proposal for this year's renewable fuel targets.

The lawmakers, all three from Midwestern states and on the House Agriculture Committee, said the agency's proposal to slash the targets for both conventional ethanol and advanced biofuels would hurt Midwestern economies and undermine national energy security goals.

"The EPA's proposed rule would do nothing but undercut a growing American energy industry and further our reliance on foreign oil," Reps. Tim Walz and Rick Nolan of Minnesota and Cheri Bustos of Illinois said in a statement after the meeting. "Biofuels allow us to take control of our energy future, promote industry innovation and create thousands of jobs in the Midwest and across the country."

In November, EPA proposed to require that refiners blend or purchase credits for 15.21 billion gallons of renewable fuels this year, a 16 percent cut compared to the level set by the 2007 statute that created the current renewable fuel standard. The proposal would set this year's targets below last year's actual production of both conventional ethanol and advanced biofuels.

The three lawmakers have previously met with EPA Administrator Gina McCarthy on the proposal and are among a larger group of Midwestern representatives who have pressed the agency to increase the numbers (E&E Daily, Jan. 16).

Ethanol and advanced biofuel producers have also slammed the agency's targets. On the other hand, EPA's proposal has failed to quell calls by opponents in the oil and livestock industries for Congress to repeal the renewable fuel standard.

The agency is expected to issue a final rule in June. McCarthy has said publicly that EPA may have gotten the numbers wrong, but it's unclear whether or how much the agency will change the proposed targets.

EPA says that it's trying to put the renewable fuel standard on a "manageable trajectory." The agency based the proposal on the limit to the amount of ethanol that can be blended into gasoline, which is known as the blend wall, and on a slower-than-expected ramp-up in advanced biofuels.

Read the original story here : House Democrats Meet With White House On RFS Targets