Ethanol Producers and Consumers

The EPAC newsletter will begin publishing advertisements in the next issue. Anyone who wishes to place an ad can call Mike Allen for rates at: 406-442-7703 or 406-594-5119.

Also, if you would like to receive this newsletter via e-mail, send in your address to Shirley Ball at shirley@ethanolmt.org

Legislative Workshop

EPAC hosted a legislative workshop in Helena on June 15. The purpose of the workshop was to bring Ethanol supporters together with elected decision makers and agency officials to discuss ideas about legislation to encourage the production and use of biofuels in Montana. EPAC Executive Director Shirley Ball opened the workshop, saying that Ethanol is produced in all states and provinces surrounding Montana, and that Montana could benefit from Ethanol production. She also stated that Ethanol is not considered a partisan issue, as it is supported by both major political parties. She went on to say that while EPAC is an educational organization, EPAC has been called on when Ethanol legislation is introduced, and instead of being reactive, the organization wanted to come down on the side of being proactive. The purpose of the workshop was to learn what was going to be proposed by agencies and candidates for the next legislative session and to bring supporters together to network and iron out differences. Speakers included Senators Jon Tester and Jerry Black, Representative Dave Gallik, Democratic Governor candidate Brian Schweitzer and Republican Lt. Gov. candidate Dave Lewis. Also representatives from state agencies; Tom Livers of DEQ, Monte Brown, MT DOT, and Brent Poppe, MT Dept. of Agriculture. The DEQ announced they are in the process of crafting legislation that will ban the sale of MTBE in the state. EPAC and others offered to work with DEQ on wording for the proposed law. The session was lively as well as interesting and brought out many ideas as to how to stimulate Ethanol's use and production in Montana. The good attendance and enthusiastic response by elected officials and agency representatives was very encouraging. Several legislators said they found the session very informative and will be looking to EPAC for continued information and support.
	Dave Lewis, Republican candidate for Lt. Governor, spoke at the legislative workshop.

	Democratic candidate for Governor, Brian Schweitzer, spoke at the legislative workshop.

Membership Meeting

The annual membership meeting for EPAC was held in Helena on June 13th. The Members discussed EPAC's role in the Ethanol industry. EPAC has members in many states and other countries, and meets a real need as a grass roots, educational group. A guest asked if EPAC could "satellite" and develop Chapters in other areas that would be able to help with local educational efforts. For future projects and activities, EPAC was encouraged to continue to attend trade shows at petroleum marketers meetings, as that has been a successful way to educate owners and managers of convenience stores and service stations. Sponsors will be contacted to continue these booth events. Because EPAC has members in other states, it was suggested future conferences could be held in other states. Most who attend the conference like the time frame of Monday and Tuesday with fun activities on Sunday, as this allows for a plane ticket with a Saturday night stay. Some members expressed their appreciation that the EPAC conference is a family affair, where children can be included in extra events.

Election was held, and Ada Weeding, chair of the nominating committee, reported that all Board members, with one exception, had agreed to again be on the Board and all were elected. Wanda Zuroff has chosen to retire from the Board and the position will be announced in case someone wishes to volunteer to be on the Board.

EPAC Board members include (left to right) Shirley Ball, Russ Montgomery, Linda Nielsen, Jim Redding, Tim Babcock, Mike Allen, Ada Weeding and Gary Schaff. Board members not pictured are Stan Ozark, Tom Kryzer, Steve Boise and Harold Newman.

Cargill May Import Ethanol
. . . by Kevin Diaz, Star Tribune Washington Bureau Correspondent
(Editors note: The EPAC office has received many comments from members and readers who were dismayed that Cargill announced in May that they would be building a dehydration facility in El Salvador that would convert cheap Brazilian cane based Ethanol into fuel Ethanol to be imported tariff free into the US. While it is legal, as the Central America Free Trade Agreement (CAFTA) allows up to 7% of the previous years U.S. Ethanol output to be imported duty free, the CAFTA is meant to promote economic development in poor Latin American nations, not to serve as a vessel to enhance multinational companies. The following is reprinted from a Minnesota based newspaper.)

A plan by Minnetonka-based Cargill Inc. to import Ethanol made with cheap Brazilian sugar cane has run afoul of farmers and lawmakers who say it will undermine the fledgling Ethanol industry in Minnesota and the rest of the Midwest.

Cargill has announced plans to "become more involved in the global Ethanol trade," including a prospective plant in El Salvador, a Central American nation that is exempt from a 54-cents-a-gallon tariff that would apply to Ethanol imported directly from Brazil.

The import duties are designed to offset a 52-cents-a-gallon tax exemption for refineries that blend Ethanol in their fuel. But by importing Brazilian Ethanol through a nation covered by the Caribbean Basin Initiative, Cargill would enjoy the full benefit of the U.S. subsidy.

The move comes as Midwestern farmers have grown increasingly concerned about the role of U.S. agribusiness giants in fostering Brazil's ascendancy as an international agricultural power.

"It really ties my stomach in a knot," said Sever Peterson, a corn and soybean grower in Eden Prairie. "We grow it right here, and the rug is being pulled from right under us."

Cargill executives, under fire in Congress, said many details of the plan remain to be worked out, right down to whether the El Salvador plant will even be built.

"It's in the discussion phase, it's not a done deal," said David Feider, the company's director of media relations.

But on Capitol Hill, the plan has met a chorus of critics -- including Minnesota's two senators -- who worry that U.S. taxpayer subsidies could end up supporting competing sugar-based Ethanol imports.

Sen. Mark Dayton, D-MN, said the proposed El Salvador plant "is another result of bad U.S. trade policies and agreements, which have encouraged foreign production and cost Americans their jobs, their farms and their businesses."

Sen. Norm Coleman, R-MN, expressed his concerns in a recent telephone call to Cargill executives. "His key point is that Ethanol is about a homegrown, renewable fuel," said Andy Brehm, his spokesman. "Secondly, [Cargill's] announcement could have negative repercussions, causing an erosion in farm country for trade, particularly with Latin America."

Ronald Obermoller, president of the Minnesota Corn Growers Association, said the announcement already has sent shock waves through farm country. "For me, as a Minnesota farmer, I'm really disappointed that it's a Minnesota company that's doing this," he said. "We've spent 15 or 20 years developing a market, and now, through a loophole, they're going to walk in and take it."

Minnesota has 14 Ethanol plants, producing about 400 million gallons a year.

Bryan Edwardson, Cargill's director for public policy in Washington, said the El Salvador project, even if it goes forward, will do nothing to undermine American farmers. Worldwide demand for Ethanol outstrips supply, even as the U.S. Ethanol industry is expected to produce a record 3.3 billion gallons of the fuel additive this year. Meanwhile, bills pending in Congress are expected to double Ethanol use over the next decade.

Cargill officials noted that they are the third largest Ethanol producer in the United States, and one of the largest exporters of corn. "For us to hurt the U.S. Ethanol industry is to hurt ourselves," Edwardson said.

Cargill's plans envision a dehydration plant in El Salvador that could process as much as 63 million gallons a year. About 45 million gallons are currently imported duty free under the Reagan-era Caribbean initiative. The cap, set at 7 percent of U.S. domestic production, is currently at about 190 million gallons.

Although the Caribbean duty-free zone has broad support in Congress, some say it is a misuse of the treaty to use it as a pass-through for Brazilian Ethanol.

"This is a critical time for Ethanol in this country, and the last thing we need is duty-free imports from Brazil slipping in the back door," said Sen. Tom Harkin, D-Iowa.

Cargill has been criticized in the past for its South American imports. In 1997, the National Farmers Union publicly criticized the company for importing soybeans from Brazil, allegedly causing a drop in future market prices for American farmers.

Senate Minority Leader Tom Daschle, D-S.D., has written two protest letters to Cargill in the past month. One threatens to remove Cargill's Brazil imports from the new Ethanol mandate being contemplated under pending energy development legislation.

Cargill officials responded that their imported Ethanol could help reduce skyrocketing gasoline prices in the United States, particularly as the nation moves away from petroleum-based fuel additives.

"I do not see how exchanging one form of import dependence for another is the answer to the American motorist's gasoline price concerns," Daschle wrote back.

Still, industry observers said Cargill's move does appear to be driven in part by high U.S. gas prices, which make Brazilian Ethanol imports more competitive, even if they pay the 54-cent tariff.

By some estimates, production costs for Ethanol in Brazil are half of what they are in the United States.

"You can bring it in, pay the tariff, and apparently still make money, because people are doing it," said Monte Shaw, a spokesman for the Renewable Fuels Association, an industry group.

Ethanol produced in South and Central America also has a big transportation advantage over Midwestern Ethanol, benefiting from direct sea lanes to California, the nation's largest gasoline market. On top of all that, the trip begins and ends with government subsidies.

"Brazil already subsidizes its Ethanol, so they increase their advantage there as well," said Rep. Collin Peterson, D-Minn.

Cargill officials said that their plan fits into the long-established purpose of the Caribbean Basin Initiative -- to foster economic growth in Central America -- and that any tax benefits are incidental.

"There was no intention whatever of building this plant to avoid tariffs," Edwardson said.

(Kevin Diaz is at kdiaz@mcclatchydc.com )

Golfing In Lewis & Clark County

. . . by Mike Allen
On a warm but blustery Sunday in June, the 2004 EPAC golfers attacked the Bill Roberts Golf Course armed with their best club, golf balls and game faces

While no one took home the $10,000 cash Hole-In-One prize sponsored by Aventine Renewable Energy, many came close!

The course, located in the only county in America named for both Meriwether Lewis and William clark, was in perfect playing condition. The teams were evenly matched and the caliber of play was not to be rivaled.

A big thank-you to our sponsor, Aventine Renewable Energy and to all of this year's golfers.

Captain Clark Visits Conference

. . . by Mike Allen

A surprise visit by Captain William Clark highlighted the Monday Night Dinner at this year's EPAC Conference held in Helena, Montana.

After a spectacular boat ride, complete with a guided history lesson of the area, images of Indian picture graphs and wild mountain goats, the guests docked at Meriwether Campground in the heart of the Gates of the Mountains Wilderness. Greeted by the smells of a hot baron of beef dinner and cool drinks, all were enthralled by the natural beauty of the area and were having a great time.

As the excellent meal wound down, Captain Clark suddenly entered the camp and began to tell of his and Lewis's amazing and dangerous journey across this new and untamed area. His stories were captivating and could have gone on all night. But the good boat sounded its' horn and it was time for the EPAC guests to return to the comforts of their hotel.

Big thanks to Western States Insurance Company, Mark Biegler, for their sponsorship of the watering hole and to the Gates of the Mountains' Boat Club for their fine ride and tasty food. We also wish the best to Captain Clark (played by Hal Stearns), as he continues on his historic journey, The Voyage of Discovery.

The conference guests enjoyed their meal and the presentation given by Captain Clark (standing) at the Meriwether Campgrounds located in the Gates of the Mountains outside of Helena, Montana.

Readers Like Ethanol Idea

. . . from The Helena IR

Most of the readers responding to our question of the week agreed it would be a good idea to require that gasoline sold in Montana contain 10 percent Ethanol.

It's a popular opinion earlier this month the Democratic and Republican candidates for governor both supported the idea.

Our readers cast a few more than 600 votes, and almost 400 were in favor of the idea.

Democrat Brian Schweitzer and Republican Bob Brown touted the idea's potential to provide new markets for Montana's agricultural economy while lessening the country's dependence on foreign oil.

A bill to establish the Ethanol requirement was passed in the Senate and voted down in the House during the last session.

Schweitzer even threatened to use the governorship's bully-pulpit power, saying he would travel with Republican Sen. Jerry Black of Shelby, who sponsored the bill in the last session, to rural legislative districts and "name names" of legislators who don't support the measure.

Most readers who voted in favor of the requirement cited the possibility that building Ethanol plants could boost the economy along with the market for the state's ag products.

"Ethanol is cleaner than gasoline, does no harm to vehicle engines, and takes some pressure off of the need for oil," according to one reader. "If all fuel in Montana contained 10 percent Ethanol, maybe using the Rocky Mountain Front as an oil source wouldn't even be debated."

Others disagreed, saying they weren't happy with the mileage their cars got with Ethanol. And some questioned whether Ethanol is worth it as an energy saver.

"Ethanol is a nice octane booster," one reader said, but it certainly isn't a source of energy. The energy recovered by burning Ethanol is roughly equal to the energy that was expended growing the grain and distilling the Ethanol. It is more efficient just to burn the gas or diesel oil that went into producing the alcohol." (Editor's note: This reader should read the USDA Report on Energy Balance on page 7.)

Finally, the subject being alcohol, a few went off point in order to make a different point.

"Really want to improve the environment in Montana as well as save the government hundreds of millions in expenses? Pass a law requiring all beverages sold or possessed in Montana to be 100 percent alcohol free."

CSP Offers Incentives For Energy Management

Natural resource conservation is becoming the new flagship of American agricultural policy. But the latest conservation program to come out of that policy - USDA's Conservation Security Program - is also fostering another form of conservation on the nation's farms and ranches - energy management.

With the release of the interim final rule in mid June, the Natural Resources Conservation Service - the agency responsible for administering the program - announced that CSP would provide both cost-share and payment incentives designed to reduce dependence on fossil fuels and increase overall on-farm energy efficiency.

NRCS Chief Bruce I. Knight said his agency will be offering a limited number of enhancements and new activity payments in this first sign-up as a "test drive."

"That's good news to agriculture and the environment in general," Knight said. "And it could be even better news for agricultural sectors involved in producing bio-based, renewable energy like corn, soybean and grain sorghum growers."

Producers in the first 18 watersheds eligible for the program this year could receive incentive payments for a number of on-farm energy conservation activities. Those include using renewable fuels, such as soy diesel and Ethanol; reducing energy use based on an audit; renewable energy generation; and saving energy through a reduction in soil tillage operations.

Cost-share payments for producers who conduct an operations energy audit will also be available to qualifying producers. "This audit," Knight said, "will involve the use of industry and utilities professionals to help producers assess opportunities to reduce overall energy consumption on their entire operation."

In addition, CSP can provide cost-share payments to producer for the recycling of on-farm lubricants. "This feature not only allows the lubricants to be processed and reused," Knight said, "but it will reduce the likelihood of oil spills on the farm."

CSP qualifying producers using bio-based fuels will receive payment per 500 gallons, based on the percentage of bio-based fuel in the mixture. "Rates will be determined at the national level for the first year," Knight said, "but our agency will listen carefully to comments during the interim final rule comment period to determine how local factors should be considered in subsequent years."

Through cost-share and incentive payments, Knight said, CSP will "help producers help the country reduce its dependence on foreign oil through increased on-farm efficiencies," and will "help generate additional demand for bio-based energy fuel sources."

Additional information on CSP including the interim final rule is available at http://www.nrcs.usda.gov/programs/csp.

Biobased News

(Editor's note: Each month theBiobased Fuels, Power and Products Newsletter features a state, and in April, the state was Montana. The article is reprinted here.)

In 2000, the state of Montana consumed 594 trillion Btu's of energy. Coal and petroleum accounted for 33 and 32 percent of the total consumption, respectively. Hydroelectric provided 19 percent and natural gas provided 13 percent of the total consumption. In Montana, biomass supplied over 3 percent of the total consumption, or over 16 trillion Btu's

Currently, Montana uses 17.5 million gallons of Ethanol blend annually and has two E-85 fueling stations. Since 1997, staff at Yellowstone National Park have operated the park's fleet of 100 snowmobiles with E-10 and bio-based lube oil. In fact, the park's entire fleet of gasoline-powered vehicles are required to use E-10. In 1995, Yellowstone also was the site of a pilot project on the use of biodiesel in its fleet. As a result of the successful Truck in the Park project, the use of biodiesel in national parks was expanded through the Green Energy Parks Program. Presently 20 national parks are using biodiesel or biodiesel blends. In October 2002, Glacier National Park started testing the use of biodiesel in its fleet and, in June 2003, its entire fleet switched over to biodiesel.

Montana offers a number of incentives to encourage the use of biomass. The Alternative Energy Revolving Loan Program (AERLP) provides loans to individuals and small businesses for the purpose of building alternative energy systems, including biomass, for residences and small businesses to generate energy for their own use and for net metering. The state also offers a 35 percent tax credit for individuals or businesses that invest $5,000 or more in a commercial system or net metering system that generates energy by means of an alternative renewable energy source, such as biomass.
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The Journal of Industrial Ecology, a peer reviewed international quarterly published by MIT Press and owned by Yale University, has recently published a special issue on Bio-based products and the Environment. The entire special issue is available on the web at: http://mitpress.mit.edu/JIE/bio-based, at no charge.

This issue delivers insightful, even provocative research covering a wide range of topics relating to the environmental impacts -- good and bad -- of the production, use and disposal of bioplastics, biofuels and other industrial products derived from agricultural products, residues and wastes.

Use Of Ethanol And Biodiesel Growing

. . . by Jonathan Eisenthal

Until now, proponents of E-85 fuel have historically been caught in a "chicken or egg" conundrum - how do you encourage interest in vehicles that run on a fuel that's not in wide distribution, while simultaneously creating a fueling infrastructure for vehicles that not a lot of people drive? If signals from the annual 2004 Clean City meeting in Floridaare any indication, it appears that this conundrum is finally being overcome, and the tipping point for alternative fuels in this country may be upon us.

The 2004 Clean Cities Conference and Expo drew about a thousand people to Ft. Lauderdale, Florida to share every aspect of renewable fuels solutions. The overwhelming front-runner at the conference is E-85 and the flexible fuel vehicles that can use it. About 80 cities across the nation participate in the Clean Cities program of the Department of Energy, which aims to reduce air pollution through the reduction of vehicle idling, the use of low-emission fuel blends such as E-10, hybrid vehicles and vehicles that use alternative fuels like E-85, propane or natural gas.

"You can tell there is a lot of interest in Ethanol and biodiesel - they are really winning this competition," said Tim Gerlach, director for American Lung Association of Minnesota. "Natural gas and propane have their niches, but Ethanol and biodiesel are generating the most of interest."

The story is in the numbers. The 2000 U.S. Census counted approximately 230 million registered vehicles, of which 114 million vehicles used are for commuting to work. Estimates of the number of E-85 capable cars on the road today range from 3.5 to 4.5 million cars, light trucks and vans. By contrast, the total of natural gas and propane vehicles remains in the tens of thousands.
"There is so much interest in E-85," said Phil Lampert, the executive director of the National Ethanol Vehicle Coalition. "Clearly in a light duty vehicle, there's been propane, and natural gas, but it's E-85 where we are now seeing a huge groundswell of interest. Without a doubt, in light duty vehicles, E-85 is completely dominant as the alternative fuel choice."

The big three American automakers have all taken advantage of the Clean Cities Conference to announce initiatives, new vehicles or shown new willingness to push for the emergence of E-85-burning cars as a mass-market for America's vehicle consumers.

Daimler Chrysler announced the return of its 3.3 liter-flex-fuel engine minivan after a year's absence. The respite allowed a complete reworking of the vehicle's engine platform, but Daimler Chrysler envisions a huge popular response to the redesign and wants flex-fuel technology to be part of that. General Motors announced that the 2005 Avalanche light-duty truck would come standard with a flexible fuel engine - no special ordering necessary. GM also has brought out an FFV package in its Tahoe SUV to market directly to the law enforcement and park patrol segment.

The widely anticipated counterpart to a surge in manufacturer interest in FFVs is the passage of a Renewable Fuel Standard, a law that would ensure critical growth in Ethanol production and reward investment in E-85 infrastructure on a national basis.

"Everyone here is waiting for something to happen with the energy bill," said Gerlach. "It would have a hugely beneficial affect on the consumption of Ethanol and the manufacture of vehicles that run on it."

"Thar's Gold In Them There Hills!"

Or, in the case of the 2004 EPAC Conference, "Thar's Sapphires in that there pile of gravel!"

The fun started on Sunday, June 13 for this years conference attendees. Fifteen hearty soles braved the wind, but enjoyed the clear, blue Big Sky State and searched for sapphires in the gravel mined from the banks of the Missouri River.

Everyone involved found some precious stones, some were
very precious and will be suitable for cutting and turning into a beautiful conversation piece. We hope to be seeing them next year as a part of somebody's jewelry.

A big thanks to the Spokane Bar Sapphire Mine and all of the "Rock Hounds" who participated in and enjoyed this special event.


In addition to a fun time, Tim and Lisa Gerlachfound some quality gem stones as they screened and searched through their gravel.	From left: Russ Montgomery, Shirley Ball, Mrs. Urbanchuk, Patsy Reimche, Chelsea, Tina and Megan Paulson and Jon VonHemelryck enjoyed the afternoon at the Sapphire Mine.

Thank Farmers For Lowering Your Gas Prices

Protein-diet advocate, Dr. Robert Atkins, would have to think for a while whether he would support what is going on in today's agriculture.

Certainly, the bulk of our protein supply is coming from pork producers, cowboys and poultry farms. But the local farming community is producing more than its share of carbohydrates in those corn fields just outside of town.

The late Dr. Atkins would likely approve of the fact that our corn is contributing to a carbohydrate economy, which is displacing the hydrocarbon economy of the oil industry.

A carbohydrate fuel, such as Ethanol produced from corn, is insulating you from paying 30 cents more per gallon for your motor fuel, according to economic research of the Renewable Fuels Association. In other words, the 10 percent Ethanol blended into your gas tank will allow you to save more than $5 per trip to the gas station. Ethanol is less expensive than gasoline, so the Ethanol is saving you money.

Let's thank the investors who have opened 78 Ethanol plants in the past several years, along with the 10 other plants that are under construction. Thanks also to Archer Daniels Midland Co. and A.E. Staley Mfg. Co. for getting this process under way 20 years ago, as well as to the various state and national legions of corn growers that have pushed and pulled for Ethanol to become the most widely used alternative motor fuel we have in the country.

Clean City News
. . . by Shelley Launey

During the past 10 years, the Clean Cities Program -- along with a number of enthusiastic communities, organizations and individuals -- has succeeded in developing a national network of coalitions dedicated to increasing the use of alternative fuels. While we've made great strides in this area, growing economic, environmental and security costs of U.S. petroleum dependence have prompted us to explore new ways to achieve greater impacts.

Toward that end, last fall a working group of Clean Cities coalitions, local and state governments, federal agencies and private industry members took a fresh look at what Clean Cities can do to slow U.S. consumption of imported oil. After examining the program's accomplishments and challenges and analyzing market forces likely to define the next 25 years, the working group set out to develop a program redesign that builds on our work with alternative fuels. The result is an expanded, technology-neutral focus on petroleum displacement through fuel blends, hybrid vehicles, fuel economy and idle reduction, in addition to our commitment to alternative fuels.

Well-laid plans, certainly, but an expansion of this magnitude doesn't happen overnight. The new Clean Cities Program is a work in progress and the work on the expanded program has only begun. At Clean Cities, we are busy analyzing the petroleum displacement potential of these new strategies and practices; creating implementation plans that will provide our coalitions with concrete actions, timing and goals; establishing partnerships with other agencies and organizations; and inviting input from you, our stakeholders.

Stakeholders are still the key to the success of Clean Cities. While the program emphasis is expanding, the heart of the Clean Cities Program is still the men and women who comprise the more than 80 Clean Cities coalitions nationwide. With your continued dedication, we will succeed in displacing significant and quantifiable amounts of imported petroleum.

Clean Cities Mission

To advance the economic, environmental and energy security of the United States by supporting local decisions to adopt practices that contribute to the reduction of petroleum consumption in the transportation sector.

The Clean City Program and National Parks was the focus for one of the panels and the featured speakers were Ernie Oakes of the Denver Regional DOE office, (at podium), Beverly Miler, Clean City Coordinator for Salt Lake City, and Jim Evanoff, Park Ranger at Yellowstone National Park.

Clean Cities Mission

Biodiesel Use Increases
. . . by John Gartner

Damon Toal-Rossi of Iowa City, Iowa, jumped on the biodiesel bandwagon after a friend outlined the benefits of using a fuel made from soy or vegetable oil. The software programmer liked the idea of a cleaner-burning fuel that reduces dependence on foreign oil so much that he traded in his gasoline-powered pickup truck for a diesel-powered Volkswagen Golf.

After a few months of driving 10 miles to a biodiesel fueling station Toal-Rossi went online to find a recipe and began making his own fuel. Because Toal-Rossi gets the primary ingredient -- used cooking oil -- from a nearby restaurant for free, he spends just 41 cents per gallon to make his 12-liter batches of biodiesel.

Biodiesel enthusiasts like Toal-Rossi may soon find their oil-alternative fuel easier to acquire. According to the National Biodiesel Board, the number of consumer biodiesel fueling stations rose nearly 50 percent last year to 200. So far this year, 25 new stations have opened, including 10 in Colorado and five in New Hampshire.

Ron Heck, president of the American Soybean Association, said biodiesel can be blended with regular diesel in any ratio, or can be used as a fuel by itself. "It has almost the same amount of (energy) as petroleum diesel," Heck said. Using biodiesel will clean an engine's fuel injectors and cut down on the number of required oil changes, according to Heck. "I buy it because it's better fuel."

The reintroduction of diesel vehicles into the U.S. market is expected to increase the demand for biodiesel, according to the National Biodiesel Board's Jenna Higgins. After abandoning the U.S. market for almost 20 years, Mercedes-Benz and DaimlerChrysler are delivering new diesel vehicles in 2004, and Volkswagen has expanded its lineup of diesel-engine vehicles.

Higgins said most diesel vehicles do not have to be modified to burn biodiesel, and auto manufacturers support fueling their vehicles with biodiesel, which burns cleaner than standard fuel.

Passenger vehicles, private vehicle fleets and farmers used 25 million gallons of biodiesel in 2003, up from 15 million gallons the previous year, and new federal Environmental Protection Agency emission rules could further increase demand, according to Higgins.

Starting in 2006, the EPA will require that diesel producers reduce nitrogen oxide emissions by removing up to 99 percent of the sulfur content in the fuel used by passenger cars and trucks. In May 2004, the EPA announced that these same rules would apply to diesel for off-road vehicles starting in 2007.

While the EPA estimates that cleaning up the diesel will prevent 4,300 premature deaths per year, removing the sulfur also reduces the fuel's lubricity. Diesel producers need to regain that slipperiness to prevent engine clogging, and biodiesel is a likely additive, according to Galen Suppes, an associate professor of chemical engineering at the University of Missouri-Columbia.

"Biodiesel is cost-competitive" with the chemical alternatives, said Suppes, adding that a 2 percent biodiesel mix restores lubricity. "Technology-wise, (biodiesel) is a good solution." But Suppes said diesel refiners sometimes prefer to produce solutions internally rather than rely on external suppliers. "It's difficult to predict what the refiners will do."

The biodiesel board's Higgins said the market for the alternative fuel could climb to more than half a billion gallons per year if diesel refiners add just 2 percent biodiesel to their products. This could provide the economy of scale that would lower the price of the renewable fuel for everyone, Higgins said.

"Could we meet that demand instantly? No," said Higgins. She estimated that the 21 existing biodiesel production plants in the United States could produce up to 80 million gallons a year, and another 20 plants could quickly go online. Higgins said 90 percent of today's biodiesel comes from soy oil, and 10 percent from recycled cooking oil. Other feedstocks, such as animal carcasses, could be used to fill any gap, according to Higgins.

Biodiesel currently costs between 20 cents and 30 cents more per gallon than standard diesel, Higgins said, but legislation may help to make it more economical. In May, the Senate passed a bill that would give a 1 cent tax credit for each percent of biodiesel blended with petroleum diesel.

Higgins said that if gasoline prices continue to climb and the tax credit becomes law, biodiesel could become cost-competitive with petroleum. "Anything that lessens our demand on foreign oil helps," Higgins said.

USDA Research on Energy Balance

Dr. Roger Conway, Director for the U.S. Department of Agriculture (USDA) was one of the speakers at the EPAC Conference in Helena in June. His presentation was on the energy balance of producing Ethanol. He stated that the conversion of corn to Ethanol produces a net energy gain of 67%, according to the latest study by USDA. Conway says that a realistic and practical set of assumptions that reflect the new efficiencies of contemporary Ethanol plants is the key factor.

"Modern Ethanol plants are efficient in every way, producing 20% more Ethanol from a bushel of corn than just five years ago, and requiring 15% less energy to do so," said Dr. Conway. Other contributions include that corn yields per acre have increased and fertilizer is more energy efficient.

The study discredits the work of Dr. David Pimentel, who has received a great deal of publicity about his research that concluded that Ethanol takes more energy to produce than it generates. The USDA study updates previous work done by USDA and employs a model of assumptions such as the Greenhouse Gasses, Regulated Emissions, and Energy Use in Transportation Model (GREET) developed at Argonne National Laboratory.

"Our study is based on straightforward methodology and highly regarded quality data," said Dr. Conway. "Our data is crystal clear. We used a USDA corn survey and we also used a survey of Ethanol plants so you can see the data from the first step of the process all the way until Ethanol goes into the tank of your car." He further stated his belief that the net energy balance is going to increase because of technology in production and technology in Ethanol.


Jim Redding, Mike Allen, Larry Johnson and Matt Nakada posed for a picture as they relaxed after the conference was over.	Thanks to Larry Johnson for this picture of the breathtaking scenery of the canyon walls while going through The Gates of the Mountains, as the conference group traveled by boat to the campground for dinner.

EPAC (Ethanol Producers And Consumers) organized as a non-profit organization in 1991, with a thirteen person Board of Directors to oversee and guide activities. Membership includes individuals, businesses and organizations in over 26 states and 3 foreign countries.

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