Jatoil calls on Australia to back jatropha
July 7, 2008
In Australia, the highly-anticipated Garnault climate change report was released, outlining urgent steps required to meet climate change targets. The report prompted the Australian jatropha developer Jatoil to call on the Australian government to permit large-scale cultivation of jatropha in Australia. The plant has been considered an invasive species and its import and cultivation have not been encouraged. Jatoil has partnered with GreenEnergy Biofuels to develop jatropha farms in Vietnam, and has marketing agreements in place with Norway’s Perennial Bioenergy and with biodiesel refiner Imperium Renewables.
Jatropha background
• Integrated Biodiesel Industries said that it has acquired a 10 percent stake in Ireland’s South Cone Agriculture, a developer of jatropha plantations. South Cone said that it would use the funds from the investment to develop plantations in Angola, Brazil and Argentina, and will initialize harvesting later this year it its first plantations. IBI, which will have a total production capacity of 135,000 tonnes by the end of 2008 from its plants in Argentina, said that it sought to develop alternative feedstocks to soy oil.
• In Zambia, the Omnia group will invest $3 million in jatropha research, saying that the imperative to develop alternative fuels is stronger in landlocked Zambia than neighboring South Africa, and said that the company hopes to understand as much as possible about rh nutrients required by jatropha so that it can develop and sell better fertilizers if cultivation of jatropha continues to increase in Southern Africa.
• In Malawi, the government said that the country is on track to commence biodiesel production in 2009 from several jatropha projects underway throughout the country. The government also said that the Department of Science and Technology and Lilongwe Technical College are developing engine modifications that will allow conversion of cars to E100 sugarcane ethanol, with initial tests scheduled to be complete by mid-2009.
• The Chinese and Italian governments have initiated a feasibility study for jatropha biodiesel at Sichuan University. The project received $650,000 in support from Italy. The project is the third signed by Italy and China, promising cooperation in biofuels research since mid-April. The others covered industrial waste oil-based biodiesel in Hubei Province, and thin-film solar cells in Shanghai.
• In England, De-Ord Fuel opened a new 100,000 GPY biodiesel facility in Mansfield that will use jatropha and waste vegetable oil as feedstocks. The company will distribute fuel to bus and truck fleets. The $550,000 project is one of the first of a wave of micro-facilities that will utilize sustainable feedstocks in Europe.
• Recently D1 Oils officially announced that it would close its rapeseed oil biodiesel plant in Teesside and lay off 40 workers until it could sell the plant. The company said that it would close plants in Middlesbrough and Merseyside that are unable to compete with US imports and concentrate on development of its 500,000 acres of jatropha in Africa and India. The jatropha is planted in partnership with BP, and will begin yielding jatropha oil later this year with full scale production by 2011
• In Myanmar, “Biofuel by Decree: Unmasking Burma’s bio-energy fiasco,” was released by the Ethnic Community Development Forum, detailing the use of forced labor and land confiscation to plant 8 million acres with jatropha to provide a solution to Myanmar’s fuel crisis. The report, based on government documents, media reports, and 131 interviews conducted in Myanmar between November 2006 and April 2008. The report said that individuals “have been fined, beaten, and arrested for not participating.” The plan has been plagued with mismanagement by the army soldiers supervising the work. “The soldiers carry guns. They don’t know anything about agriculture,” said a farmer in the report.
• The first national jatropha crops were ready for harvest this month, with up to 7 million acres planted by small farmers, after a national directive in 2006 that all farmers with more than 1 acre of land had to plant a minimum of 200 jatropha seeds to establish a hedge around their landholdings. The ruling junta developed the plan in light of soaring oil import costs, and the biggest anti-junta protests since the 1980s which erupted last year over cuts in diesel subsidies
• In California, Allegro Biodiesel has commenced processing of jatropha oil into biodiesel on a test basis.
• China’s largest state oil company, Sinopec, said it will invest $5 billion in jatropha and palm plantations in Indonesia.
• In the United Arab Emirates, the Crown Prince of Abu Dhabi announced an $15 billion investment project in renewables, managed by Masdar. Masdar’s major initiative in bio-fuels is focused on jatropha and other arid climate crops.
Wisconsin warns that blending ethanol with unreformulated gasoline increases emissions
July 4, 2008
The Wisconsin Department of Natural Resources said that the blending of ethanol with unreformulated gasoline will cause an increase in nitrous oxide emissions and ground-level ozone smog. Reformulated gasoline has a lower evaporation point, and was traditionally used in Wisconsin until the passage of the Energy Independence and Security Act in December massively increased the ethanol blending activity in the state.
Ethanol blending background: E20/E30
In Washington, the American Coalition on Ethanol presented findings on research showing that cars running on E20 and E30 blends achieved better mileage than cars running 100 percent conventional gasoline. Scientists at General Motors, whose cars were involved in the test, were unable to explain how the ethanol blend, which contained 6 to 11 percent less BTUs, could get better mileage. In the tests, a Chevrolet Impala flex-fuel vehicle running E20 achieved 15 percent better mileage than when running 100 percent gasoline. Tests were also conducted on Toyota vehicles.
The president of the Renewable Fuels Association, Bob Dineen, recently said that the RFA and the state of Minnesota have engaged in a test program for higher blends of ethanol than E10. The study looks at materials compatibility, drivability and emissions. Dineen said that although the full test data is not in, he hasn’t seen any show-stoppers that would prevent conversion to E20. An unrelated Department of Energy study is looking at durability and the impact of E20 or higher on small conventional engines. Dineen said he is hopeful that an application could be made next year to the EPA for permission to use higher level ethanol blends.
E20 efforts are on the rise on many fronts. USDA Under Secretary for Rural Development Tom Dorr, speaking at the NAFB’s Trade Talk event, told the Brownfield Network “Everybody that wants to invest has to have assurance that we can get past this E10 blend wall. The Department of Energy … and EPA are aggressively pursuing how to get to …. E15 or and E20.”
South Dakota Senator John Thune met earlier this year with the director of President Bush’s economic council to push for an E20 mandate to increase demand for ethanol. Thune said that lack of support from automakers was unimportant compared to the importance of reducing US dependence on foreign oil.
In Michigan, automakers have responded to news of Minnesota’s testing of E20. They stated flatly that the fuel does not have EPA approval and is illegal. A General Motors spokesman told USA Today that in a GM test of E20 in Australia, “40% of the vehicles sustained (catalytic converter) damage, which allowed essentially unchecked tailpipe emissions.” Chrysler added that use of E20 would void the manufacturers’ warranty.
A new study by the University of Minnesota and Minnesota State University suggest that US cars could burn E20 without flex-fuel engines. Gene Hugoson, Minnesota agriculture commissioner told USA Today “We see E20 not exactly as bypassing E85, but supplementing it.” Ethanol proponents have targeted E20 as an alternative to E85, which has been dogged by controversy and low sales.
Iowa Senator Chuck Grassley recently called on President Bush to direct the Environmental Protection Agency to approve E15, E20, E30 blends. Grassley said that with E85 not gaining acceptance, the US had to find other ways to ensure a market for higher blends of ethanol.
The Kansas Department of Agriculture has launched a project to offer flex-fuel vehicle owners a choice of E10, E20, E30, E50 and E85 at selected service stations, and will study the fuel efficiency.
Texas governor call for ethanol waiver more closely tied to payback for $100,000 political donation
July 3, 2008
In Texas, it was previously reported in Biofuels Digest that a $100,000 donation by Pilgrim’s Pride co-founder Bo Pilgrim to the Republican National Governors Conference, chaired by Governor Rick Perry of Texas, was closely followed by Governor Perry’s request for an ethanol waiver.
An in-depth article in the Houston Chronicle said that Governor Perry proceeded with the waiver request after Texas A&M researchers had presented a report concluding that a waiver would not relieve pressure on corn prices. The article added that Governor Perry wrote to 22 other Republican governors asking them to join him in calling for a waiver, but received no support. The Chronicle said that Bo Pilgrim met with Governor Perry on March 25 for the first time regarding the ethanol waiver, made the $100,000 donation on March 31st, and Governor Perry called for the waiver on April 25th.The original report of the donation was made by the Dallas News.
RFS background
In Washington, the EPA received a total of 15,000 comments on the proposed waiver of the Renewable Fuel Standard. The agency said that, following the waiver request by Governor Rick Perry of Texas, said that many of the responses came from a website set up by the Grocery Manufacturers Association. Governor Perry said that he was not aware that any issue had ever prompted so many responses in an EPA comments period.
Meanwhile, Sen. Pete Domenici of New Mexico, predicted that the request would be denied because Governor Perry had overstated the impact of ethanol on food prices.
The EPA comments period in the Renewable Fuel Standard waiver consideration process ended last month. Just before the end of the comments period, the Balanced Food and Fuel coalition (American Meat Institute, National Chicken Council, National Cattlemen’s Beef Association, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers) submitted a paper commissioned from FarmEcon, and Kraft Foods submitted a paper it commissioned from Keith Collins (former chief economist of the USDA), supporting the call for the waiver by highlighting a high impact on corn prices and negligible impact on fuel prices from corn ethanol. The foodbeforefuel.org website funded by the Grocery Manufacturers Association has a link to both studies and is promoting them via press releases.
The Midwest Governors Association announced that they have written Environmental Protection Agency Administrator Stephen Johnson requesting that the EPA continue the Renewable Fuel Standard in its existing form and decline to issue waivers of ethanol blending requirements. The governors of Texas and Connecticut have issued requests for waivers in recent weeks. The EPA is responding to those requests by July.
In Washington, US Agriculture Secretary Ed Schafer kicked off a response to recent attacks on biofuels, saying that fuel diversity is central to US security and added “The change in the Renewable Fuels Standard, the change in the (ethanol) tariff or duty, isn’t going to effect food prices. We need to focus on things that will actually have an effect, instead of a short-term political solution we need to look long-term, because we have a long-term problem here.
Also in Washington, the EPA is accepting comments in June on the requests by the Governor of Texas to waive the Renewable Fuel Standard. More information on the request and how to comment is here. The EPA is required to respond by July 25, according to the 2007 Energy Independence and Security Act.
Texas Governor Rick Perry requested a 50 per cent waiver from the federal renewable fuel standard as a response to rapidly rising food prices. “We appreciate the good intentions behind the push for renewable fuels,” Perry said in a statement. “In fact, we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill. There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done.”
“Ultimately, food prices are reaching high levels, so we’re looking at this as an option for reducing that burden,” said Allison Castle, a spokeswoman for Gov. Perry, told cattlenetwork.com. State have sought temporary waivers from EPA mandates in the past, but this is one of the first permanent waivers, and may cause ethanol quotas for other states to increase.
The Renewable Fuel Standard, and state biofuels mandates, have come under increasing scrutiny since the passage of the Energy Security and Independence Act over food price concerns.
Indian government set to release national renewable energy policy
July 2, 2008
In India, local observers say that the central government will release its long-awaited renewable energy policy by next week. Indian industry executives have been clamoring for a central board to coordinate policies related to feedstocks, production and R&D, but it is unclear if the new set of policies will include the measure.
India background report
The Planning Commission Expert Group said in its special report on biofuels that India will not be able to meet its 10 percent blending mandate scheduled for October, nor will it be able to meet the current five percent mandate this year. It blamed the 2006 decision by several Indian states to restrict the shipment of molasses, and the ban on production of ethanol directly from sugar. The five percent mandate took effect late last year with the exception of Jammu & Kashmir, some northeastern states and island possessions. Vehicle makers have expressed reservations about the increased mandate, saying that older cars would not be able to use the fuel.
While the E5 shortfall is unexpected, the central government had indicated earlier in June that it is unlikely to meet its October 2008 goal for moving to an E10 ethanol mandate, citing a 20-25 percent drop in sugar production expected for the 20087-09 season. Observers also suggested that India’s strong stand against US corn ethanol influenced the government’s position on increasing the ethanol mandate.
Meanwhile, the Society of Indian Automobile Manufacturers is conducting a study to determine how many of India’s 101 million existing vehicles will be able to handle the switch the E10 from E5 planned for October.
Petroleum and Natural Gas Minister Murli Deora said that the national government would raise the required ethanol content in gasoline from 5 percent to 10 percent in October
Meanwhile, Indian Finance Minister P Chidambaram, speaking at a conference in Singapore, called the policies of developed nations converting food into fuel “outrageous and must be condemned” and that the world’s poor are feeling the impact of higher food prices. “It is a sign of the lopsided priorities of certain countries that they will resort to measures that will produce fuel at a cheaper cost in order to meet the transport requirements of a section of their population,” he said. He did not offer comments on India’s rapidly expanding capacity to do the same thing.
In further developments in Indian biofuels-fromfoodstock, Tata Chemicals said will invest $185 million between now and 2012 to develop ethanol production capacity. The company announced that it would invest the first $12.7 million of that fund in a 3 Mgy sweet sorghum ethanol demonstration plant in Maharastra. The facility, which will be constructed by Praj Industries, will open in 2010. Tata said that it is exploring jatropha cultivation at five labs in Maharashtra and Gujarat. Tata Chemicals recently said that it would join the Sweet Sorghum Ethanol Research Consortium. By joining the Consortium, TCL will have access to Consortium research, including cultivation best practices and superior hybrids.
Naturol Bioenergy said that it will commence exporting biodiesel to Europe from its plant in Hyderabad, and said that it is growing jatropa on 5,000 hectares under contract with local farmers. The company said that it planned to invest $40 million by 2010 to expand its operations.
India and other countries continue to increase their focus on sweet sorghum as a feedstock, primarily because it can be cultivated on otherwise non-arable land and is inexpensive. Earlier this month, Rusni Distilleries said it was planning to double its sweet sorghum ethanol capacity to 8 Mgy in March 2008, and Ultimate Bio Fuels has announced a 19 Mgy sweet sorghum facility in Visakhapatnam. The completion of the projects will increase India’s sweet sorgum ethanol capacity to 38 Mgy.
The central government has confirmed that new regulations allowing the conversion of sugar juice into ethanol apply only to sugar producers, and not to specialized ethanol plants, which must still use molasses as a feedstock. The Bihar state government said that the ruling would mean the loss of up to fifteen new ethanol plants proposed for the sugar-rich state.
Bihar state was forced to re-auction 60-year leases on 10 abandoned sugar mills after bids were not received on three and seven bids did not meet the reserve price. Five mills were successfully leased to Reliance Industries, Hindustan Petroleum, Rollcon Projects and SS Infrastructure were successful in their lease bids.
The facilities would be used to increase ethanol production to meet the Indian government’s existing E5 mandate and proposed E10 mandate scheduled to take effect in October 2008.
Bihar has indicated that it hopes to reactivate as many as 15 sugar mills to produce ethanol, although the central government has required that only mills that produce sugar and ethanol will receive a waiver from the 1966 Sugarcane Control Order which bans the direct conversion of sugar juice into ethanol fuel. Previously, ethanol could only be made from molasses.
In India, sugar cane growers established rail and road blockades to protest the non-payment of nearly $5 million that is owed to them by Bihar State. Noting the non-payment protests, the Bihar Times is asking how the Bihar State government is going to be able to finance its ambitious ethanol policy.
India is projected to have a surplus of 11.5 million tonnes, based on a projected 33.15 million tonnes harvest this year, which would be a world record for national sugar production. Recently, 10 sugar-producing states have agreed to a framework for a national E10 mandate. India’s sugar crop this year is expected to exceed 29 million metric tons. With domestic consumption at 19 million tons and exports at 1.5 million tons, the country is turning to ethanol production to avoid a catastrophic sugar glut.
Sugarcane Minister Nitish Mishra said that “Bihar is sure to emerge as an ethanol hub“.
Pennsylvania biofuels mandate imminent as state leaders near deal on energy policy
July 2, 2008
In Pennsylvania, the state legislature is set to reduce Governor Rendell’s proposed $850 million investment in renewable energy package to $650 million. The State Senate passed a $650 million bill last December, and the legislature an governor’s staff have been hammering out a compromise since then. Observers say that state leaders have agreed on a biodiesel and ethanol mandate for the state, and that solar and wind funding is currently holding up finalization of the bill.
Pennsylvania background
Last month, Governor Ed Rendell and Economic Development Secretary Dennis Yablonsky called for passage of the $850 million dollar state clean-energy plan, which includes $250 million for businesses for clean energy project assistance, $30 million for grants and loans for wind projects, $200 million for solar rebates and incentives, and $56 million in early-stage support for new clean energy technologies.
Last December, the Republican-controlled State Senate passed a $650 million energy package, more than $200 million short of Gov. Rendel’s proposed energy plan.
The bill provides $380 million in incentives for research and manufacturing in biofuels and other renewable energies such as wind and solar. $170 million was earmarked for consumer rebates on purchase of energy-saving items such as energy efficient appliances, hybrid cars or solar panels. $100 million would go to emergency aid for poor families for assistance with rising utility bills.
In March, BioEnergy commenced construction on its two plant complex, a 100 Mgy corn ethanol facility and a pilot cellulosic ethanol plant in Clearfield County that will both commence production in 2010. The project received $17.4 million in assistance from the Pennsylvania state government, and Pennsylvania Governor Ed Rendell was on hand for the groundbreaking ceremony. “America’s future lies in cellulosic,” he said in commencement remarks.
BioEnergy International closed financing for its two ethanol plants in Clearfield. The $201 million in debt financing was provided by TD Banknorth and WestLB, with tax exempt bond financing by Sterns Brothers. Equity funding was provided by BioEnergy and its investors Plainfield Asset Management, Camulos Capital, Itera Ethanol, LLC, Context Capital Management and NGP Capital Resources.
“The corn and cellulosic pilot plants to be built in Clearfield are core to BioEnergy’s mission of integrating the development of novel biocatalysts for use in innovative, state-of-the-art biorefineries,” the company said.
Fuel gouging legislation fails to pass US House; switch to E10 without price breaks for consumers to continue
July 1, 2008
Fuel price gouging legislation failed to pass the US House of Representatives this week by a vote of 276 to 146 that fell six votes short of the two-thirds necessary for passage under a suspension of normal House rules. The bill, H.R. 6346, would have required the Federal Trade Commission to investigate price gouging activities, which have been reported around the country and include the practice of switching from 100 percent gasoline to E10 ethanol without providing a price break for consumers.
Wall Street Journal analyzes McCain energy policy
June 30, 2008
The Wall Street Journal profiled the McCain energy policy, including his support for increased oil drilling except in the Arctic National Wildlife Refuge, and support for subsidies to nuclear and clean-coal technologies, but not for biofuels, solar or wind. The report also discusses his support for cap-and-trade emissions legislation, including the proposed McCain cap and trade bill of 2003, along with the Senator’s opposition to the recently failed Warner-Lieberman bill.
McCain background
The Washington Times provides a report on Senator John McCain’s energy plan, concluding that the plan discourages use of Canadian oil and will increases US demand for Middle Eastern oil. The carbon content of Canadian oil does not meet the low carbon standard that Senator McCain embraced, based on the California Low Carbon Standard introduced by Gov. Arnold Schwartzenegger.
“The concept behind California’s Low-Carbon Fuel Standard,” McCain campaign spokesman Brian Rogers told the Times, “is to use less oil in our transportation sector. Canada joined in to this agreement self-imposing emissions standards on the extracting of their oil resources. Ultimately, an international cap and trade system will allow us to regularize the system by which countries offset and reduce their emissions, but in the short term we should look for a cleaner and more efficient way to extra to oil resources from the tar sands.”
In Missouri, Senator John McCain of Arizona outlined the centerpiece of his new energy policy by calling for the construction of 45 new nuclear reactors by 2030 and said he would earmark $2 billion for the development of clean coal technology. McCain said “Perhaps no advancement in energy technology could mean more to America than the clean burning of coal and the capture and storage of carbon emissions.” McCain expressed support for offshore drilling earlier this week.
Senator McCain said that he supports the ending of ethanol subsidies, would back a repeal of the ethanol tariff, and would support the inclusion of Brazil and India into a larger G8 group. McCain was quoted in Estato de Sao Paulo saying that he favors the removal of Russia from the G8.
McCain on policy: “The straightest, swiftest path to energy security is to produce more, use less, and find new sources of power. In the face of climate change and other serious challenges, energy conservation is no longer just a moral luxury or a personal virtue. Conservation serves a critical national goal. Over time, we must shift our entire energy economy toward a sustainable mix of new and cleaner power sources. Quite rightly, I believe, we confer a special status on some areas of our country that are best left undisturbed. When America set aside the Arctic National Wildlife Refuge, we called it a “refuge” for a reason. We have proven oil reserves of at least 21 billion barrels in the United States. But a broad federal moratorium stands in the way of energy exploration and production. And I believe it is time for the federal government to lift these restrictions and to put our own reserves to use.I believe it is time for the federal government to lift these restrictions and to put our own reserves to use. We can do this in ways that are consistent with sensible standards of environmental protection.”
Recently, Sen. McCain, who introduced the first proposed cap-and-trade bill in the Senate in 2003, said: “The facts of global warming demand our urgent attention, especially in Washington. Good stewardship, prudence, and simple common sense demand that we act to meet the challenge, and act quickly,” he said. “I will not shirk the mantle of leadership that the United States bears. I will not permit eight long years to pass without serious action on serious challenges. Those who want clean coal technology, more wind and solar, nuclear power, biomass and bio-fuels will have their opportunity through a new market that rewards those and other innovations in clean energy.” McCain was speaking at the Vestas Wind Technology plant in Portland, Oregon.
Earlier this year, Sen. McCain led a revolt of 24 Senate Republicans have asked the EPA to waive, or restructure, the Renewable Fuel Standard passed in December. In a statement, Sen. John McCain said that “This subsidized (ethanol) program, paid for by taxpayer dollars, has contributed to pain at the cash register, at the dining room table, and a devastating food crisis throughout the world.” The Senators said that waiving the ethanol mandate would encourage farmers to grow other crops, as opposed to growing corn for food markets.
John McCain’s environmental record and policies are profiled in an investors.com article. The article focuses on his conversion to environmentalism after the 2000 elections, and his sponsorship of cap-and-trade legislation in 2003, 2005 and 2007 with Senator Joe Lieberman. The current bill would limit emissions among commercial & industrial users to 2004 levels by 2012 and moved down steadily until 2050. McCain favors an auction of emission certificates in his cap-and-trade proposal.
McCain vs Obama comparison
A comparison of the Obama and McCain approach to renewable energy was published in the Wall Street Journal. Among highlights: McCain support for renewable energy investment, but record of limited support for mandates and incentives; McCain opposition to the Brazilian ethanol tariff; Obama’s $150 billion investment plan in alternative fuels; Obama support for a 25 percent mandate for alternative energy from electricity by 2025; McCain’s support of incentives for nuclear energy. Obama supports an 80 percent emissions reduction by 2050, while McCain targets 60 percent (based on 1990 levels).
The Miami Herald published a comparison of the climate change policies of the key remaining US Presidential candidates.
Emission caps: Obama, McCain
Higher fuel efficiency standards: Obama
Pro nuclear power: McCain
Mandates and inentives for ethanol: Obama
Hybrid car development: McCain, Obama
Ethanol tariff repeal: McCain
Food Price Facts from Foodpricetruth.org
June 27, 2008
A new website, foodpricetruth.org, offers the following interesting factoids regarding corn and food prices.
Did you know:
The biggest reason food costs more today is fuel prices. USDA Secretary Schafer recently stated: “Higher oil prices affect much more than just the cost of driving; they are actually one of the major factors behind higher food costs.”
Did you know:
The USDA and the White House Council of Economic Advisors have stated that increased corn demand is only responsible for “3 percent of the more than 40 percent increase we have seen in world food prices this year.”
Did you know:
Ethanol should actually keep food prices down. According to Merrill Lynch, biofuels have reduced gasoline and diesel prices by 16-25%. If gas prices go up, food costs go up.
Did you know:
While it is true that U.S. food prices have increased about 4.5% this year, nearly all experts agree that today’s food price increases can be attributed to a combination of factors, including record oil prices, the declining value of the U.S. dollar, increased demand for grain from developing economies around the world, rampant speculation on the commodities market, weather related production shortages worldwide (especially wheat), and food company profiteering.
Did you know:
Weather related events have always affected food prices and that is no different today. In 2007, the U.S., Canada, Australia and Europe all experienced production shortfalls due to weather related causes.
Did you know:
Ethanol is made from “dent” or yellow “feed” corn. People accuse ethanol of increasing the price of beer, pasta and tortillas, which is curious because none of those products are made from “dent” corn.
Food lobby pressures New Jersey governor to request ethanol mandate waiver
June 27, 2008
The Food Before Food coalition called on Governor Jon Corzine to request a waiver from the ethanol mandate and the Renewable Fuel Standard.
Meanwhile, CNN.com reported on studies sponsored by Kraft Foods and a related coalition of food producers, Balanced Food and Fuel. Both studies projected that a 50 percent reduction in the Renewable Fuel Standard would drop corn prices by $2 per bushel. However a chart on the balancedfoodandfuel.org website projects the corn price at only $3.40 per bushel in 2010, dropping to $3.15 per bushel in 2016.
Meanwile, USDA under secretary Thomas Dorr pledged at the Corn Utilization and Technology Conference to give farmers more support in the food vs fuel debate. Dorr said the Department would highlight that ethanol has caused only 0.25% of the 4.5% increase in food prices and was holding down gas prices.
The EPA comments period in the Renewable Fuel Standard waiver consideration process ended this week. Just before the end of the comments period, the Balanced Food and Fuel coalition (American Meat Institute, National Chicken Council, National Cattlemen’s Beef Association, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers) submitted a paper commissioned from FarmEcon, and Kraft Foods submitted a paper it commissioned from Keith Collins (former chief economist of the USDA), supporting the call for the waiver by highlighting a high impact on corn prices and negligible impact on fuel prices from corn ethanol. The foodbeforefuel.org website funded by the Grocery Manufacturers Association has a link to both studies and is promoting them via press releases.
Groups supporting the campaign
American Bakers Association, American Beverage Association, American Conservative Union, American Frozen Food Institute, American Meat Institute, Competitive Enterprise Institute, Earth Policy Institute, Environmental Working Group, Food For All, Grocery Manufacturers Association, International Dairy Foods Association, International Foodservice Distributors Association, MANA (A National Latina Organization), National Cattlemen’s Beef Association, National Chicken Council, National Council of Chain Restaurants, National Restaurant Association, National Retail Federation, National Turkey Federation, Pilgrim’s Pride Corporation, Popeye’s Chicken & Biscuits, Snack Food Association, The Hispanic Institute, Tortilla Industry Association, and Women Impacting Public Policy.
“This campaign is nothing more than a ‘red herring’, distracting the American public away from the true cause of food price increases,” said Brooke Coleman of the New Fuels Alliance. “It’s unfortunate that the Grocery Manufacturers Association and others have decided to perpetuate the myth that ethanol is to blame for higher food prices, while many of their members spike their retail food prices to profit from the crisis.”
“While biofuels do play a small role in rising food costs – about 3% according to USDA – the biggest contributors to escalating food prices are growing fuel costs, weather events like droughts, rampant speculation in the commodities market and increased demand for food products from developing nations like China and India. Even though the development of biofuels is in its infancy, we’re already seeing major benefits in our pocketbooks – biofuels are keeping gasoline prices down by 15-25%, according to Merrill Lynch – and our environment, and any effort to overturn the Renewable Fuel Standard will only make us more dependent on other countries for our energy.”
“In an ironic twist, a well-respected agricultural economist at Purdue University recently concluded that ethanol is not even the central driver for corn price increases,” added Coleman, pointing to a study showing that of the $4 per bushel increase in the price of corn, ethanol accounted for 25% of the increase while oil prices caused 75% of the increase. “GMA and its supporters are clearly not interested in having an honest debate about food prices.”
GMA Campaign background
Sen. Chuck Grassley (R-IA) posted documents from the Grocery Manufacturers Association anti-ethanol story on his website. The documents are the original request for proposal from the lobbying group, and the response by Glover Park. The Grocers hired Glover and Dutko Worldwide for $300,000 to create a public perception of a link between biofuels and rising food prices.
Documents obtained by and published in Roll Call identify that the Grocery Manufacturers Association has launched a massive, global PR campaign, pledging to assemble a “global center-left coalition” including hiring “trusted third-party experts” to link ethanol mandates to global hunger, food industry job losses and inflation.
“GMA has concluded that rising food prices … create a window to change perceptions about the benefits of bio-fuels and the mandate,” said the organization’s Request for Proposals sent to PR firms.
The firm eventually hired by the GMA, Glover Park, said that it would employ an “urgent and remedy-based messaging strategy” to convince lawmakers that food prices is a “Now” issue that is fast reaching crisis proportions for American consumers,” and said it would produce an “online, viral campaign” to link ethanol and food prices.
The GMA issued the RFP in March to, quoting from the RFP, “build a groundswell in support of freezing or reversing some provisions of the 2007 Energy Bill and for the elimination/reform of ethanol subsidies and import restrictions.” Subsequently the Governors of two states and 24 Republican Senators, including presumptive Republican presidential nominee Sen. John McCain, called for a freeze. The GMA is a backer of McCain’s campaign, and the two Senators who received the most financial support from the GMA’s political action committee in this election cycle are among the 24 who signed the call for a biofuels review.
The GMA hired Andy Wright, former chief of staff to Rep. Brad Sherman (D-Calif.), to oversee a grassroots program to discredit biofuels.
Louisiana Advanced Biofuel Industry Development Initiative becomes law; will support fuels produced from La. crops with higher than 600 gpa yields
June 27, 2008
In Louisiana, state governor Bobby Jindal signed the Advanced Biofuel Industry Development Initiative, that will provide support for the development of ethanol from Louisiana crops that yield a minimum of 600 gallons of fuel per acre. The legislation includes a pilot programs for hydrous ethanol pilot program: the United States has traditionally manufactured anhydrous ethanol, while Brazil has manufactured hydrous.
Louisiana background
• The state Bond Commission approved a $100 million bond issue in support of the Dynamic Fuels project, a partnership between Tyson Foods and Syntroleum to produce synthetic diesel fuel from meat fats, corn oil and other substances into “synthetic diesel” fuel. The 75 Mgy project will commence operation in January 2010. Funding for the project comes from the Gulf Opportunity Zone tax-free, low interest bonds earmarked for economic development in areas affected by the 2005 hurricanes.
• The Colombian-controlled form Inverandino plans to commence ethanol production at a 22 Mgy plant in Lacassine, in partnership with Louisiana Green Fuels, using feedstock from three sugar plants in Southern Louisiana acquired by Inverandino in the past two years. It will be the first sugar cane ethanol plant in the US.
• Last month, Imperial Sugar said that it is investigating a 60-100 Mgy sugarcane ethanol plant that would be located next to its Gramercy sugar refinery. The company is currently investigating financial incentives as well as seeking an ethanol partner. The proposed plant would be operational in 2011.
• PetroSun announced a letter of intent to supply 54 million gallons of algal oil to a new 54 Mgy Bio-Alternatives biodiesel plant in south Louisiana.
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“Biofuels Digest is a great way to keep up on the news. I appreciate the ease with which I can pinpoint research topics.” - Diane B.
