Ethanol Consolidation Appears to be Beginning

It was only a matter of time given the tight or non-existent margins in the ethanol industry. Much of the initial capital came into ethanol companies because of favorable tax incentives. Now we will see consolidation.

I suspect that we are only beginning the first wave of consolidation. It will be driven by the most efficient current producers. The second wave will see the major oil companies entry.

First signs of consolidation in ethanol industry

The Cost of Greening California

Someone else is finally seeing the big picture of renewables. California is "broke" already. Now, they will ask their taxpayers to make the "Green Moguls" wealthier.

California study shows high cost of renewable power

Ethanol Subsidy Market Distortions

Iowa State takes a different look at the impact of ethanol.

Ethanol: A Welfare-Increasing Market Distortion?

Xiaodong Du, Dermot J. Hayes, Mindy L. BakerOctober 2008 [08-WP 480]

This study estimates the welfare changes for consumers and producers resulting from ethanol production and related support polices in 2007. The results suggest a positive welfare gain from the support policies; this is possible because ethanol subsidies effectively replaced a market distortion that had a larger deadweight loss. Previous farm subsidies created overproduction, which then depressed market prices and increased the cost of maintaining target-price supports. Ethanol polices resulted in additional ethanol production, but because this additional ethanol was sold in price elastic energy markets, the price depressing impact of the government supports was less than before. This resulted in lower government spending and a net welfare gain of $2.65 billion for given market parameters. The results are...(complete news release and link to study here).

Ethanol Secrets of the Bovine

This one is common sense. Cattle have been utilizing roughage since they were created.

Secret for efficient ethanol in cows' stomachs?
Professor: Enzyme that helps digestion could be the key
(complete article here)

Yams for Ethanol

I prefer mine with butter and brown sugar....

Sweet Potato Out-Yields Corn in Ethanol Production

StudyBy Don Comis
August 20 , 2008

In experiments, sweet potatoes grown in Maryland and Alabama yielded two to three times as much carbohydrate for fuel ethanol production as field corn grown in those states, Agricultural Research Service (ARS) scientists report. The same was true of tropical cassava in Alabama.

The sweet potato carbohydrate yields...(complete article here).

Ethanol Battle Not Over

Livestock producers are suffering from high feed prices. Soon, we will likely see a reduction in numbers in our livestock herd which will translate ultimately to higher protein prices for consumers.

This issue is not just domestic in nature. U.S. corn prices have an impact on the world market. Most other countries that use our corn do so for human consumption. In places like Africa, the effect of high U.S. corn prices is a contributor to famine conditions.


Ethanol battle unlikely to fade

Livestock, food industries discuss intensifying push to change law

By BRETT CLANTON
Copyright 2008 Houston Chronicle
Aug. 8, 2008, 10:08PM

Efforts to cut or freeze U.S. corn ethanol requirements are unlikely to end with the federal government's denial Thursday of Texas Gov. Rick Perry's plea to waive half of this year's mandate.

Livestock and food industry groups that backed the request already are talking about increased lobbying efforts in Washington to change the law.

Legislation under discussion in the Senate could...(complete article here).

Ethanol Making Money -- Barely

Demand is closely tied to the infrastructure to handle it.

U.S. ethanol makers profit slightly for a month

NEW YORK (Reuters) - Average margins for making U.S. ethanol avoided sinking into losses for the last four weeks, but were only narrowly profitable as supply bested demand, analysts said.

U.S. distillers were making about 15 to 25 cents per gallon for the week ending Thursday, about the same as last week, despite...(complete article here).

EPA Blows The Call on This One

The corn grower's lobby wins another one.

EPA rejects Texas request to cut ethanol waiver

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency said on Thursday it denied a request by Texas to cut the federal ethanol mandate requiring 9 billion gallons of ethanol and other renewable fuels to be blended into gasoline this year.

The EPA said...(complete article here).

EU Bio-fuels Reaction and Food Price Impact

The European backlash to bio-fuels appears to be much greater than in the U.S. It may be due to the way foods are prepared there as opposed to U.S. methods. In the U.S., the volume of pre-pared foods is extremely high relative to most of the world. The high level of preparation places a greater percentage of the cost of those foods in the pre-preparation than in the food itself. Therefore a change in the cost of the basic commodity would have a smaller relative impact on the overall price. In the lesser developed world such as Africa, the impact is extremely high.

ENVIRONMENT: EU Backs Away From Agrofuels

By Julio Godoy
PARIS, Jul 28 (IPS) - EU ministers for energy and the environment have revised their targets for renewable energy in the face of abundant new evidence that increased production of agrofuels is partly responsible for the worldwide increase of food prices.

The EU has had a declared objective of...(complete article here).

Ethanol Backlash Building?

There are myriad arguments against ethanol. Some are legitimate and some are uninformed. Whatever the basis, many people are resisting the inclusion of ethanol in their fuel tanks. I believe that the RFS mandates are misguided although well-intended. Although difficult, it is time to change course away from corn-based ethanol.

In Gas-Powered World, Ethanol Stirs Complaints

By KATE GALBRAITH
Published: July 26, 2008

OKLAHOMA CITY — “Why Do You Put Alcohol in Your Tank?” demands a large sign outside one gas station here, which reassures drivers that it sells only “100% Gas.”

“No Corn in Our Gas,” advertises another station nearby.

Along the highways of this sprawling prairie city, and in other pockets of the country, a mutiny is growing against energy policies that...(complete article here).

Food vs. Fuel: The Battle Rages

The food versus fuel fight continues....

New U.S. group defends ethanol in food vs fuel fight

By Lisa Shumaker

CHICAGO (Reuters) - A new group is adding its voice to the debate on using crops to produce alternative fuels such as ethanol amid rising food prices and shortages in some countries.

The Alliance for Abundant Food and Energy in Washington D.C. was created by...(complete article here).

Notice who has joined this alliance. ADM -- one of the largest grain companies in the world. Dupont -- maker of farm chemicals. Deere & Co. -- who have experienced a boom in their farm equipment business since the advent of RFS and corn-based ethanol. Monsanto -- the GM seed giant. They really aren't interested in the cost of food -- just their bottom line.

RFS Standards Review

RFS is under pressure due to the unintended consequences of corn-based ethanol production. Let's hope the House subcommittee does something about it.


Subcommittee Reviews Renewable Fuel Standard Implementation

WASHINGTON - Today, the House Agriculture Subcommittee on Conservation, Credit, Energy, and Research held a hearing to review the Renewable Fuel Standard (RFS) implementation and agriculture producer eligibility. Congressman Tim Holden of Pennsylvania is Chairman of the Subcommittee.

"As our economy diversifies its energy supply, it is critical we take advantage of all potential sources of renewable biomass," Holden said. "Unfortunately, the...(complete news release here).

New Bio-fuels Technology and Venture Capital

It takes a lot of capital to gear up for a new industry on a scale that will make a dent in our energy needs. The risks are high and the benefits unknown. Without significant government subsidies it is unlikely that many of the current ventures would be attempted.

Gassing Up With Garbage

By MATTHEW L. WALD
Published: July 24, 2008

After years of false starts, a new industry selling motor fuel made from waste is getting a big push in the United States, with the first commercial sales possible within months.

Many companies have announced plans to build plants that would take in material like wood chips, garbage or crop waste and turn out motor fuels.

About...(complete article here).

EPA Ruling on Waiver Delayed

This one is complex. I'm not surprised at the delay. I submitted one of the 15,000 comments that they received. I believe that EPA should grant the waiver.

E.P.A. Delays Ruling on Ethanol

The Environmental Protection Agency said on Tuesday that it would not meet a July 24 deadline for ruling on a request that the government reduce the federal mandate on how much ethanol must be blended into gasoline this year.

“Rather, additional time is needed to allow...(complete article here).

Precision Technology for Sugar Cane Production

New sugar cane research could be important to the ethanol industry.

Application of precision agriculture technologies to sugarcane

H.P. “Sonny” Viator, Richard Johnson and Maurice Wolcott

LSU AgCenter research has demonstrated that conventional, whole-field soil-sampling schemes and field-averaged yields do not satisfactorily describe the variations of yield and soil attributes present in several sugarcane fields. Over a three-year period, the...(complete article here).

Another Advantage of Switchgrass

I find it interesting that researchers find that native plants play key roles in ecosystems. Somehow, to me that just seems to be common sense. The complex interactions of plants and animals that we call ecosystems evolved to their peak state for a reason -- everything fit together. Each species has/had its proper role or niche in the environment. Together they all work in the particular environment to which they evolved.

Human or other invasive activity typically disrupts that "fit" at some point or another. It would be great if we could learn enough about such complex systems that we could utilize those interactions to our benefit rather than disrupt them to the point that problems occur. I am by no means a preservationist. I am not one who says that nature would be better off without humans. I am saying that I believe that we could learn a lot from natural systems if we could unlock the various interactions that occur. Maybe the best term is to "integrate" into the system rather than to disrupt it with our activity. That will require radically new thinking in the way that we do things.

Switchgrass May Mean Better Soil

By Don Comis
July 17, 2008

Soils with native grasses such as switchgrass have higher levels of a key soil component called glomalin than soils planted to non-native grasses, according to a study by the Agricultural Research Service at two locations in Mandan, N.D.

Kristine Nichols, a microbiologist with the ARS Northern Great Plains Research Laboratory in Mandan, conducted the study. Glomalin is a...(complete article here).

Maybe Switchgrass for cellulosic ethanol production would be a good rotation crop on stressed lands. Perhaps we could reclaim some marginal lands through its use.

Re-thinking OECD Bio-fuels.

Countries are re-thinking biofuel policies -- and well they should. Unintended consequences of existing policies have created havoc. It is time to change course -- especially concerning corn-based ethanol.

Biofuel policies in OECD countries costly and ineffective, says report

16/07/2008 - Government support of biofuel production in OECD countries is costly, has a limited impact on reducing greenhouse gases and improving energy security, and has a significant impact on world crop prices, according to a new study of policies to promote greater production and use of biofuel in OECD countries.

OECD’s Economic Assessment of Biofuel Support Policies says biofuels are currently highly dependent on public funding to be viable. In the US, Canada and the European Union government support for the supply and use of biofuels is expected to rise to around USD 25 billion per year by 2015 from about USD 11 billion in 2006. The report estimates that biofuel support costs...(complete article here).

Switchgrass and Corn Stover for Cellulosic Ethanol

This article discusses some of the economic comparisons between corn stover and switchgrass for cellulosic ethanol production.

Economist: Take 'stalk' in corn stover as state's ethanol future

WEST LAFAYETTE, Ind. - Cellulosic ethanol made from corn stover and switchgrass could be the next big thing in liquefied energy. The biggest of the big - at least in Corn Belt states like Indiana - would likely be corn stover, a Purdue University study finds.

Corn stover is plentiful in Indiana because...(complete article here).

CRP Land May Be Opened to Production

I understand the reasons behind the pressure. However, there is a need to balance all of the different interests and to achieve a solution that can be beneficial to all. My suggestion would be that in order to be removed from the CRP program early, the landowner must work with his local wildlife biologist in order to develop a comprehensive management plan for the land in question.

It might be possible to preserve the most sensitive areas in CRP -- such as waterways, hillsides, buffer zones, etc. and still free up significant acreage for agricultural production. Just thinking.....

USDA Rule Change May Lead To Crops on Conserved Land


By Joel Achenbach
Washington Post Staff Writer
Friday, July 11, 2008; Page A02

Under pressure from farmers, livestock producers and soaring food prices, the U.S. Department of Agriculture is weighing a policy change that could lead to the plowing of millions of acres of land that had been set aside for conservation.

At issue is the Conservation...(complete article here).

Potential Use for Ethanol Coproduct

I'm not sure how I feel about this. Cattle feeders are struggling with high feed prices and DDGs are part of their answer. If there is increased demand for DDGs as a fertilizer, it further pressures feed prices.

ARS and Seed Company Examine Commercial Potential of Ethanol Coproduct

By Jan Suszkiw
July 10, 2008

Studies by Agricultural Research Service (ARS) scientists have shown that dried distiller's grains (DDGs)—coproducts of corn ethanol production—have potential as an organic fertilizer and for weed control. But some ethanol producers are adopting new corn-grinding methods that may affect the DDGs' usefulness.

To further study DDGs, ARS plant...(complete article here).