By KIM SKORNOGOSKI
Tribune Staff Writer

Every day, trains packed with Montana grains chug past Earl Fisher Biofuels.
This morning, company officials will join BNSF representatives and U.S. Sen. Jon Tester, D-Mont., at the Havre Depot to celebrate a decision that could allow the Chester-based company to someday provide at least some of the fuel for the engines pulling those trains.

Railway officials announced last month that over the next year, Montana State University-Northern's Bio-Energy Center will test biodiesel produced by Earl Fisher Biofuels in one of two BNSF Railway switch engines used at the Havre Depot.
For now, that is 24,000 gallons of fuel, but considering that between 30 million and 40 million gallons of fuel are pumped into trains at the Havre station annually, the potential is much higher.

"If Montana farmers can provide the fuel that's shipping their grain out to Portland, that would be a win-win-win," Earl Fisher Biofuels co-founder Brett Earl said. "(BNSF) uses a tremendous amount of fuel — more fuel than we even dream about making."

BNSF Havre Diesel Shop superintendent Beau Price said Havre offers a perfect opportunity to test biodiesel on trains under extreme cold and heat conditions.
"I can't say at this point that there's a plan to put (biodiesel) in our entire fleet," he said. "The real benefit will be in the long term. It's going to allow us to see what the impacts will be on the engine and that information will be useful to us and to the entire industry."

Price said the arrangement bloomed naturally.

Many of the diesel shop employees were once students at MSU-Northern. Greg Kegel, dean of MSU-Northern's College of Technical Sciences, pitched the idea that the college could test biodiesel train engines, and Price saw it as a way to help both the Bio-Energy Center and the Hi-Line work force.

The college wasn't capable of producing the quantity of fuel needed for the test, so it turned to nearby Earl Fisher Biofuels.

One switch train will continue to use diesel to act as a control and the other will run on a mix of 20 percent biodiesel, which BNSF requires be made with Montana-grown oil seeds.

Trains currently can use as much as 5 percent biodiesel mixed with regular diesel. But because biofuels are usually more expensive than diesel and haven't had extensive testing on train engines, railway companies often only mix it in when states require them to.

The Bio-Energy Center first will certify the Chester-made fuel to make sure it's up to standards. Every three months during the test, center staff will compare the fuel performance, consumption and emissions of both of Havre's switch engines to see how the biodiesel stacks up.

Kegel is confident the biodiesel will deliver.

"This will be an extensive study, and I have no doubt that biodiesel will stand up to it," Kegel said. "Right now, they are hauling in millions of gallons of diesel from across the globe. Why wouldn't they want to buy biodiesel made right down the road?"

BNSF figures that using the blend of biodiesel will reduce the greenhouse gas emissions from the single locomotive engine by 1.4 million metric tons during the one-year test period.

MSU-Northern recently received a $2.25 million federal allocation to install new testing equipment to allow the scientists there to see if biofuels can be used in aircraft. The center also was able to add four employees, which combined with AmeriCorps workers will provide the manpower needed to test the train engine.
The Bio-Energy Center also is testing various additives that could make biodiesel less likely to gel in cold weather.

"The research and development they are doing with biofuels will be part of the next generation of transportation fuels and crops that farmers grow," said Sen. Jon Tester, D-Mont., who will be at a Saturday open house to celebrate the BNSF decision. "I look forward to seeing this made-in-Montana idea put to work in a BNSF engine."

When Earl Fisher Biofuels first got started, the company didn't sell a drop of biodiesel during Montana's long winter.

Last year, the company added the Montana Department of Transportation and the Havre and Chester school districts to its list of winter clients. With BNSF now a steady client, it will have year-round demand for biodiesel and for the crops — such as camelina, canola and safflower seeds — that produce it.

The company doesn't need to expand to meet the railway's test fuel order. But if the arrangement becomes long term, it would look to add employees and equipment, according to company officials.

For now, a sign on the train will advertise that its running on Montana-made biodiesel, and the testing will help prove the fuel's year-round reliability.
"We've finally gotten to the point where we've figured out the fuel, and we're capturing the interest of the end users," Kegel said. "It's just baby steps, but each one of those steps is getting us closer to our goal of revitalizing rural Montana. This is exciting."
________________________________________

Download the brochure here. Contact EPAC at [L=mailto:epac@ethanolmt.org]epac@ethanolmt.org or call 406-785-3722.

Senate Majority Leader Harry Reid announced Tuesday he has drafted an energy bill including provisions on clean-up in the Gulf and prevention of further offshore drilling mishaps - along with alternative energy and conservation incentives. Reid says his focus is on pollution - not cap and trade - and that means focusing on utilities. Reid expects to get the draft on the Senate floor by the 26th of this month - even though Senate Democrats haven’t resolved how to address this pollution reduction issue. The Senate isn’t expected to pass the comprehensive cap and trade provision passed in a House bill last year.

More Energy Legislation

A measure introduced by Senators Amy Klobuchar of Minnesota and Tim Johnson of South Dakota could become part of the energy bill Democratic leaders are working on. Klobuchar believes strong biofuels provisions should be part of a revamped energy bill. The bill she has introduced with Johnson - the Securing America‘s Future with Energy and Sustainable Technologies - or SAFEST - Act would provide long-term incentives for the development of renewable fuels, renewable electricity and increased energy efficiency. It would - among other things - establish a renewable electricity standard of 25-percent renewable energy by 2025 - include a long-term extension of tax credits for ethanol and biodiesel - establish a tax credit for blender pumps - and establish requirements for auto manufacturers to produce vehicles that utilize technologies and fuels that reduce direct fossil fuel consumption.

According to Klobuchar - the strength of the nation is tied to the strength of the energy economy. She says the U.S. has the ability to be the global leader in energy due to the ingenuity of American farmers and manufacturers. This bill - she says - would provide incentives that can boost the economy and help the nation secure its energy future. Klobuchar says the measure would not only reduce the nation‘s dependence on foreign oil - but would have a positive economic impact.

The measure is endorsed by several groups including Growth Energy, National Farmers Union and the National Corn Growers Association.

America’s Number One Smartphone Locates America’s Number One Alternative Fuel
(July 15, 2010) Washington - E85 fuel? There’s an app for that. The Renewable Fuels Association (RFA) is proud to announce the new iPhone application used to help flex-fuel vehicle (FFV) drivers access the latest, most accurately geo-coded E85 stations throughout the United States. Developed by Digital Laundry, a Customer Experience Consultancy, this application will also work on the iTouch and iPad. The RFA will sponsor a free download for the first 500 users.

The E85 FuelFinder allows iPhone and iPad users all over the country to map out E85 (85% ethanol, 15% gasoline) stations most accessible to them, no matter their current location or destination. With the database embedded in the iPhone itself, this application is useful, even if the user is in a no-service zone. In addition, users have the ability to add a station as a “favorite” for quick and easy accessibility, view or update the price per gallon of E85 fuel at specific locations, access driving directions through Google maps, and directly contact a specific station via telephone. The cost of the application is $1.99, which you can download here, and is also available on the App Store.

Similar to the E85 FuelFinder, the RFA has developed an E85 Point of Interest (POI) application for Garmin and TomTom GPS devices, using the E85 station database found on the U.S. Department of Energy’s Alternative Fuels & Advanced Vehicles Data Center. Updated quarterly, these GPS applications accurately guide drivers to over 2,300 E85 fueling stations throughout the United States. Step-by-step downloading instructions are available here . There, consumers can download individual state data, a combination of states, or national data directly from their computer to the GPS device. The database for both TomTom and Garmin can be found at www.ChooseEthanol.com.

“With these applications, ethanol-fuels are readily available at the fingertips of America’s consumers,” said RFA Director of Market Development, Robert White. “Improving the access and availability of E85 is an important step in educating and increasing awareness to drivers of the alternative fuel options they have available to them.”

As a reminder, only flex-fuel vehicles are capable of running on gasoline-ethanol blends up to 85 percent ethanol. Drivers should check their owner’s manual or consult with their car manufacturer to see if their vehicle is E85-compatible. You can also see if your vehicle can drive on E85 here.

PRAXAIR Signs 15 Year CO2 deal with Osage Bio Energy

DANBURY, Conn.
Industrial gas supplier Praxair Inc. said Tuesday it is buying carbon dioxide from Osage Bio Energy for use in food freezing and processing and drink applications.
Praxair said it signed a 15-year contract with the Osage Bio Product business. It is buying carbon dioxide that is produced by fermentation that converts barley to ethanol at an Osage facility in Hopewell, Va. It said the carbon dioxide will be purified and liquefied to make up to 450 tons per day.

The Osage facility is scheduled to start up in August. The processing of the carbon dioxide will be done at a Praxair facility that is expected to go online in the fourth quarter of 2011. The Praxair plant and the Osage plant will be on the same site.

IDAHO FALLS - Idaho National Laboratory has worked with local motor fuel supplier Conrad & Bischoff to make E85, an alternative fuel that is 85 percent ethanol and just 15 percent gasoline, commercially available to the public for the first time in Eastern Idaho.

With nearly 300 of its newer light-duty cars and pickup trucks able to run on E85, INL has fueling stations at multiple locations, but the fuel was not publically sold in Idaho Falls until Conrad & Bischoff agreed to market it here. Pump islands now have been installed and E85 can be purchased at the Conrad & Bischoff headquarters on North Holmes Avenue. The company also sells bio-diesel, another popular alternative fuel, at the same location.

INL fleet vehicles that use E85 will now have another fueling option for employees driving company light-duty vehicles. The INL fleet will also provide a base of support for Conrad & Bischoff’s investment in bringing this cleaner-burning fuel to Eastern Idaho motorists. INL has been seeking a local established fuel vendor to supply E85 in a place accessible to the public since the lab began receiving E85-capable vehicles about two years ago. Employees will be encouraged to fuel E85-capable INL vehicles at the Conrad & Bischoff station as a means of increasing INL’s total use of alternative fuels.

E85 is composed of 85 percent ethanol from renewable sources and 15 percent petroleum-based compounds. It reduces the nation’s dependence on foreign oil while supporting agricultural and chemical processing jobs in America. Using the fuel also helps INL, which has the largest government fleet in the region, meet government targets for increased use of alternative fuels and a reduction in petroleum fuel use.

Energy Secretary Steven Chu recently recognized INL for reducing its FY-09 fossil fuel use by 197,040 gallons, a 19 percent reduction compared to the previous year. Alternate fuel use for the same period was up 58,382 gallons, a 72 percent rise. The changes far exceed what DOE requires of INL, a two percent annual reduction in fossil fuel use each year from the base year of 2005, and a 10 percent annual increase in the use of alternate fuels.

INL is one of the DOE's 10 multi-program national laboratories. The laboratory performs work in each of DOE's strategic goal areas: energy, national security, science and environment. INL is the nation's leading center for nuclear energy research and development. Day-to-day management and operation of the laboratory is the responsibility of Battelle Energy Alliance.

Due to the size of the video files for Senator Baucus and Senator Tester, you will need to download the file as a compressed zip archive, and then use an expansion program such as PKUnzip to extract the video files.

Senator Max Baucus

Senator John Tester

Congressman Denny Rehberg

20th Anniversary Epac Conference Agenda

Conference Sponsors

David Hallberg - The Importance of a Sustainable Biofuels Market Development Program

US Ethanol Production 1980 through 2008

Bill Holmberg - Sustainable New Wealth Industry SNWI Concept

Todd Sneller - Ethanol History From an OFEC Perspective

Duane Kristensen - 2010 Ethanol Industry Update

Robert Larson - Reducing GHG Emissions through National Renewable Fuel Standards

Benjamin Schmidt - Missoula - Ethanol as an Oxygenate and Bio Fuel and Stove

Howard Haines - Montana's Biodiesel Journey

Brian He - Biodiesel Regional Challenges

Brett Earl and Logan Fisher - Earl Fisher Bio-Fuels

Manning Feraci - Biodiesel Industry and Policy Overview

Kevin Hicks - The Winter Barley Ethanol Story - It's been a long journey but the End is in sight!

Craig Shealy - Maximizing Barley Bioprocessing to Create Food and Fuel

Phil Madson - The Future of Fuel Ethanol Do Small Grains Have a Rightful Place

Jose Javier Gonzales Solano and Cap Korvick - Critical Aspects in Engineering and Construction of a Bioethenal Plant

Chris Standlee - Abengoa Bioenergy - The Global Ethanol Company

Trevor Morgan - Cellulosic biofuels - From Pilot to Demo to Commercial

Kurt Rosentrator - Progress Toward Improving the Value and Use of DDGS

Alphonsus Utioh - Wheat Distillers Dried Grains and Solubles in Food Challenges and Opportunities

Colleen Christensen - Feed Opportunities from the Biofuels Industries FOBI

Michelle Kautz - Mid and High Level Blend Opportunities

John Urbanchuk - Importance of the Ethanol Tax Incentive in Driving the Growth of Biofuels

William Bill Hagy - Administrative Initiatives on Biofuel Development and USDA's Contributions

Bob Dinneen - Ethanol Industry Update

South Dakota has just concluded the sign up period for a blender pump program that offers gas station owners $10,000 per blender pump they install.

The program was created by legislation from State Representative Mitch Fargen with the funding coming from the federal American Recovery and Reinvestment Act. Grant applications were accepted April 1 through May 28, and more than 100 applications were submitted.

The American Coalition for Ethanol (ACE) praised the grant program that will greatly enhance consumer fuel choice in South Dakota. “This is an outstanding opportunity for South Dakota gas stations, and once the station owners heard about the grant program, it basically sold itself – as evidenced by the fact that the number of grant applications exceeded the goal of the program,” said Ron Lamberty, Vice President of Market Development for ACE.

The legislation passed earlier this year approved $1 million for retailers in South Dakota to install blender pumps for ethanol up to 85 percent.

Full Report, Detailed Report: 2008 National Dry Mill Corn Ethanol Survey, at http://foodnfuel.3cdn.net/2e04acb7ed88d08d21_99m6idfc1.pdf

(May 25, 2010) Washington – The Renewable Fuels Association urged the Chair and Ranking Member of the House Ways and Means Committee to “include an extension of the expiring tax incentives for ethanol in any legislative package designed to promote green job growth and economic revitalization.”

In a letter sent on May 24 to Chairman Sander Levin and Ranking Member David Camp, the RFA encouraged the lawmakers to adopt the provisions of H.R. 4940, the Renewable Fuels Reinvestment Act. This legislation would extend through 2015 four key tax incentives for the production and use of ethanol from all feedstocks.

“By including an extension of these important incentives in any green jobs legislative package, Congress will advance the goal of providing cleaner, renewable energy alternatives and save existing green jobs while promoting additional job opportunities from an expanding biofuel industry,” wrote RFA President and CEO Bob Dinneen.

As the letter notes, “Ethanol has been an extremely useful weapon in the fight for energy independence and our efforts to promote more clean and renewable alternatives to imported petroleum based fuels.” The letter highlights the nearly 400,000 jobs ethanol has helped support, the reduction in oil imports by 364 million barrels in 2009, and the savings of approximately 10 cents per gallon of ethanol-blended fuel.

Specifically, the letter showcases the excitement generated by the opening of the Osage Bio Energy ethanol biorefinery in Hopewell, Virginia. According to company sources, more than 1,200 applications were received to fill the 43 full-time positions with the plant. Of the 43 people hired, roughly half were unemployed at the time of the job offer.

In addition, the RFA points out that a failure to extend tax incentives for the use of ethanol would result in the loss of 112,000 jobs and the reduction of America’s ability to supply its own renewable fuel by nearly 40 percent. As Dinneen wrote, “The benefits domestic ethanol production has provided and the promises for the future are not guaranteed. There is still a role for the federal government to play in continuing the evolution of this domestic industry.”

Currently, H.R. 4940 introduced by Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL) has 41 original cosponsors. Identical legislation has been introduced in the Senate by Finance Committee Ranking Member Senator Charles Grassley (R-IA) and Budget Committee Chairman Senator Kent Conrad (D-ND). That bill has 9 cosponsors to date. The bills have been referred to the House Ways and Means Committee and the Senate Finance Committee, respectively.

By Simon Lomax and Mario Parker

May 20 (Bloomberg) -- A $1-a-gallon tax credit for biodiesel that expired Dec. 31 would be extended under new legislation to extend U.S. unemployment benefits.

The legislation, to be introduced today by House Ways and Means Committee Chairman Sander Levin and Senate Finance Committee Chairman Max Baucus, extends the biodiesel credit until the end of this year, according to a summary of the bill.

Biodiesel production has almost halted since the tax credit expired more than four months ago, according to the National Biodiesel Board, the industry’s primary trade organization. The industry would like the credit to be reinstated by the May 31 U.S. Memorial Day holiday, said Michael Frohlich, a spokesman for the board.

“We’ve gone through this game before where it looks like the game is over,” Frohlich said. Producers had anticipated the credit would be extended back in February.

The credit for blending biodiesel into conventional fuel makes it cost-competitive to do so. Biodiesel, which is made from vegetable oils or waste grease, costs about $3 a gallon in the Midwest, according to data compiled by Bloomberg. Diesel in Chicago is at $1.9752 a gallon.

Renewable Energy Group Inc., the largest U.S. biodiesel producer, idled two distilleries last month. The plants, in Ralston and Newton, Iowa, can produce 42 million gallons a year combined. The company said that it laid off about 45 percent of its staff since Jan. 1.

Levin, chairman of the House Ways and Means Committee, and Baucus, chairman of the Senate Finance Committee, said the tax- and-spending package may be put to a vote in the House tomorrow. It would then have to be approved by the Senate before it could be signed into law by President Barack Obama.

There are 173 biodiesel plants in the U.S. with an annual capacity of 2.7 billion gallons, according to the National Biodiesel Board.

By Simon Lomax and Mario Parker

May 20 (Bloomberg) -- A $1-a-gallon tax credit for biodiesel that expired Dec. 31 would be extended under new legislation to extend U.S. unemployment benefits.

The legislation, to be introduced today by House Ways and Means Committee Chairman Sander Levin and Senate Finance Committee Chairman Max Baucus, extends the biodiesel credit until the end of this year, according to a summary of the bill.

Biodiesel production has almost halted since the tax credit expired more than four months ago, according to the National Biodiesel Board, the industry’s primary trade organization. The industry would like the credit to be reinstated by the May 31 U.S. Memorial Day holiday, said Michael Frohlich, a spokesman for the board.

“We’ve gone through this game before where it looks like the game is over,” Frohlich said. Producers had anticipated the credit would be extended back in February.

The credit for blending biodiesel into conventional fuel makes it cost-competitive to do so. Biodiesel, which is made from vegetable oils or waste grease, costs about $3 a gallon in the Midwest, according to data compiled by Bloomberg. Diesel in Chicago is at $1.9752 a gallon.

Renewable Energy Group Inc., the largest U.S. biodiesel producer, idled two distilleries last month. The plants, in Ralston and Newton, Iowa, can produce 42 million gallons a year combined. The company said that it laid off about 45 percent of its staff since Jan. 1.

Levin, chairman of the House Ways and Means Committee, and Baucus, chairman of the Senate Finance Committee, said the tax- and-spending package may be put to a vote in the House tomorrow. It would then have to be approved by the Senate before it could be signed into law by President Barack Obama.

There are 173 biodiesel plants in the U.S. with an annual capacity of 2.7 billion gallons, according to the National Biodiesel Board.

Researchers at Virginia Tech are developing winter barley varieties with an eye on improving the traits needed to make a successful ethanol feedstock. The hull-less barley cultivar named Eve has a 62 percent starch content, 9.3 percent protein, 58 pound test weight. That compares with corn’s 70 percent starch content, 8 percent protein and 56 pound test weight. Research results on winter barley quality were reported in a paper published in the Journal of Cereal Science 51 (2010): “Grain composition of Virginia winter barley and implications for use in feed, food, and biofuels production.” Field trials indicate that Eve is likely to yield up to 80 bushels per acre. The newest hull-less cultivar Dan exceeds Eve in yield and test weight. Newer hull-less lines have yields that are 10 bushels per acre higher than that of Eve.

Work on the region’s first barley-based ethanol plant, 65 MMgy Appomattox Bio Energy in Hopewell, Va., is progressing and on track for a late spring completion. Perdue Agribusiness is procuring grain for the new ethanol plant which is expected to use between 20 million and 30 million bushels of barley per year.

Barley as an ethanol feedstock has several advantages over wheat or corn. The relative price of feed barley is typically lower than both of these crops, and it has the potential of producing distillers grains with higher protein and lysine content for livestock feed than that from corn. To date, use of traditional hulled barley as an alternative to corn in ethanol production has been limited by its lower starch concentration, higher fiber concentration, and abrasive nature of the hull which contains silica that causes excessive wear on equipment. New hull-less varieties developed at Virginia Tech solve the problem via incorporating a trait that results in a loosely attached hull that easily separates during combining and grain cleaning. Complementary research being conducted at the USDA Agricultural Research Service’s Eastern Regional Research Center in Wyndmoor, Pa., has developed beta-glucanase enzymes which both decrease viscosity problems and improves ethanol conversion.

In addition ERRC is investigating the use of straw and barley hulls in pyrolysis to make bio-oil and biochar. The bio-oil can be used as boiler fuel now, and with some technology improvements, can be a feedstock for advanced biofuel production. Biochar is a carbon-rich product that can be used to improve soil quality and to sequester carbon in the soil. The researchers also anticipate any non feed grade barley distillers grains could be utilized in the pyrolysis process.

Barley is a high-yielding small grain adaptable to a wide range of growing conditions. In areas such as Virginia, with mild winters, it can be grown as a winter crop, providing needed ground cover and utilizing nutrients, thus preventing winter leaching of nitrogen and phosphorus into the watershed. Furthermore, a winter barley crop produces ethanol feedstock and needed distillers grains in a feed deficient region, while not displacing traditional crops. Researchers have estimated barley could produce 1 billion gallons of ethanol in the U.S. alone.

U.S. barley production has the potential to regain a more prominent position as a feed crop, and now as an ethanol feedstock. There also is the potential to develop another new line of cultivars targeted at the health food market. Phytochemicals in barley include several types of antioxidants which are often associated with cancer prevention. Beta-glucans in the bran are known to have cholesterol-lowering effects and result in a lowering of the glycemic peak that can be useful in diabetic diets. The U.S. Food and Drug Administration also recently approved a health claim petition documenting that barley contains high levels of soluble fiber (beta-glucans) that when consumed by humans helps prevent coronary heart disease.

NASCAR sets sights on E15 use by 2011
RICHMOND, VA.

NASCAR, teams look to be more green by 2011.

When NASCAR takes the green flag in 2011, race cars are expected to be fueled by E15 -- a mixture of 15 percent ethanol and 85 percent gasoline.
Hendrick Motorsports is already testing the fuel and Roush Yates engines will start development with E15 in the next few weeks. According to RYE co-owner Doug Yates, the conversion is important to the sport.

"Change is scary, but it's exciting as well," Yates said. "We have to keep up with the changes in the world to stay relevant. We need to be moving ahead."
According to the ethanol.org website, ethanol is a clean-burning, high-octane motor fuel that is produced from renewable sources. At its most basic, ethanol is grain alcohol, produced from crops such as corn.

While NASCAR switched to using unleaded fuel in its top three series in 2007, the IndyCar Series used methanol from 1965 to 2006 when it introduced an ethanol blend on the tour. The following season, IndyCar moved to 100 percent fuel-grade ethanol.
Although fuel injection remains on the drawing board for 2011,Yates agrees with other engine gurus in the garage that the fuel issue must take priority.

"Fuel injection is in our future, but it wasn't as simple," Yates said. "It has to be fair for every manufacturer. Ethanol will be first because they want it in all three series. So it would have to work for carburetor as well as fuel injection."
Certainly the greatest initial concern to the engine builders are the durability of parts -- gaskets, o-rings, fuel lines and seals -- and the reaction to the ethanol.

From a competition standpoint, the builders believe the on-track performance of the engines will be similar in horsepower to current conditions. But because engines need more ethanol to produce the same fuel mileage, teams will go on average about four to five miles less per full run. The governing body could opt for increasing the size of the fuel cells, but will likely keep the fuel cell the current dimensions and have teams make more pit stops.

Although NASCAR stepped up discussion on the introduction of E15 fuels nine months ago, manufacturers disagree on the time frame of bringing the program to fruition. While one engine builder suggested six months, another suggested that E15 could be used sometime in the next 16 races -- just not during the title-deciding Chase for the Sprint Cup.

In 2003, NASCAR inked a 10-year deal with Sunoco to be the official fuel supplier for the sport. Despite inquiries to Sunoco a week ago regarding the switch to E15, FOXSports.com has not received a response.

One possible ethanol partner appears to be POET ethanol products of Wichita, Kan. POET gained attention last week when President Barack Obama visited the company's Macon, Mo. plant.

Tue, Apr 27 2010
DETROIT, April 27 (Reuters) -
General Motors Co [GM.UL] on Tuesday said it would invest about $890 million to upgrade five North American plants to build the next-generation V8 engine for its full-sized pickup trucks.

The investment will allow GM to retain laid-off workers, and perhaps create new jobs. In all, about 1,600 jobs would be restored or created, GM said.
Since emerging from bankruptcy, GM has committed to invest $2.3 billion at 22 U.S. and Canadian sites, restoring or creating about 9,100 jobs, the company said.
The automaker will invest $400 million at its plant in Tonawanda, New York; $235 million at St. Catharines, Ontario; $115 million at Defiance, Ohio; $111 million at Bedford, Indiana; and $32 million at Bay City, Michigan.

The plants will hire laid-off workers, but GM did not say how many new workers will be hired.

Two plants are to support engine production -- Tonawanda which will fill 710 jobs, and St. Catharines which will fill 400 jobs.

Three plants will support engine casting and component production -- Bedford which will retain or create 245 jobs, Defiance which will fill 189 jobs, and Bay City which is to fill 80 positions.

The new engines are designed to increase fuel efficiency of the full-sized pickup trucks as GM and other automakers attempt to meet stricter fuel economy standards that go into effect in 2016.

The engines are made with aluminum which will help increase fuel efficiency because they are lighter, GM said.

The engines will be capable of running on E85 ethanol, which consists of a mix of 85 percent ethanol and 15 percent gasoline.

A week ago, GM said it would invest $257 million at two plants, in Kansas City, Kansas, and at the Detroit-Hamtramck plant, which is included in the $2.3 billion of spending since bankruptcy.

The U.S. Department of Agriculture (USDA) on April 16 invited public comment on proposed rules for three programs that are designed to increase the U.S. production of advanced biofuels. The proposed rules for the Biorefinery Assistance Guaranteed Loans would establish guaranteed loan regulations to develop commercial-scale biorefineries and to retrofit existing facilities using an eligible technology. Under the proposal, there would be a rolling application process for loan guarantees, with loans capped at $250 million and covering no more than 80% of the total eligible project costs. For Repowering Assistance Payments to Eligible Biorefineries, the USDA is proposing to make payments to eligible biorefineries that install new biomass energy systems to displace fossil fuels. The USDA is calling for eligible biorefineries to receive a payment equal to 50% of the cost of installing eligible systems, with a cap at $5 million. Finally, under the Advanced Biofuel Payment Program, the USDA is proposing to establish a payment program for eligible producers of advanced biofuels produced from renewable biomass, excluding corn kernel starch. Comments on the proposed rules must be received by June 15.

(April 20, 2010) Washington – Senators Charles Grassley (R-IA) and Kent Conrad (D-ND) have introduced the GREEN Jobs Act of 2010 that would extend key tax incentives for the use and production of all forms of ethanol. Specifically, the bill extends through 2015 the Volumetric Ethanol Excise Tax Credit (VEETC), the offsetting tariff on foreign ethanol, the Small Producers Tax Credit, and the Cellulosic Ethanol Producer Tax Credit. Grassley and Conrad were joined by Senators John Thune (R-SD), Tim Johnson (D-SD), Ben Nelson (D-NE), and Mike Johanns (R-NE) as cosponsors.

The Green Jobs Act of 2010 is the companion legislation to H.R. 4940, the Renewable Fuels Reinvestment Act, introduced by Reps. Earl Pomeroy (D-ND) and John Shimkus (R-IL). That bill currently has 33 bipartisan cosponsors.

Specifically, each bill would:

• Extend the Volumetric Ethanol Excise Tax Credit (VEETC) of $0.45 per gallon available to oil and gasoline refiners for each gallon of ethanol they blend through December 31, 2015. The VEETC is set to expire at the end of 2010.

• Extend the corresponding secondary tariff on ethanol through December 31, 2015. The secondary tariff exists to offset the benefit of the VEETC which is available to all sources of ethanol, regardless of its country of origin. The tariff sunsets at the end of 2010.

• Extend the Small Producers Tax Credit until January 1, 2016. This $0.10 per gallon tax credit is available on the first 15 million gallons of ethanol produced by ethanol companies producing no more than 60 million gallons per year. This tax credit expires at the end of 2010.

• Extend the Cellulosic Ethanol Producer Tax Credit until January 1, 2016. Currently, cellulosic ethanol is eligible for both the $0.45 per gallon VEETC as well as an addition $0.56 per gallon production tax credit. This tax credit expires at the end of 2012.

“Tax incentives aiding the expansion of America’s ethanol industry are sound public policies by any economic, environmental or energy measure,” said Renewable Fuels Association President Bob Dinneen. “Domestic ethanol use is lowering the price of gasoline, reducing imports of foreign oil, and helping stabilize and reinvigorate rural economies all across the country. Senators Grassley, Conrad and their colleagues continue to show tremendous leadership and a keen understanding as to the energy, economic and environmental importance of a domestic ethanol industry. Passage of their bill would ensure the evolution of American ethanol technologies continues.”

Agriculture Secretary Tom Vilsack has invited comments on several proposed rules, created as part of the 2008 Farm Bill, that are designed to increase the production of advanced biofuels (derived from renewable biomass other than corn starch) and develop biorefineries. The rules pertain to three energy programs overseen by USDA Rural Development:

Biorefinery Assistance Program — to establish guaranteed loan regulations for developing commercial-scale biorefineries and retrofit existing plants. The maximum loan amount would be $250 million, and the amount of the loan cannot exceed 80 percent of the total eligible project costs. The comment period is on or before June 15.

Repowering Assistance Payments — USDA proposes to make payments for biorefineries to install new energy systems using biomass, replacing fossil fuels. Under the proposed rule, USDA would make biorefineries eligible to receive up to 50 percent of the cost of installing eligible systems, up to $5 million, whichever is less. The comment period is on or before June 15.

Bioenergy Program for Advanced Biofuels — USDA proposed a program to support advanced biofuels production from renewable biomass, excluding corn starch. USDA would enter into contracts with advanced biofuels producers to ensure expanded production of these biofuels. The comment period is on or before May 17.
Additional information on the proposed rules and instructions on how the public can offer comments are available in the April 16 Federal Register.

Is corn-based ethanol fuel the wave of the future, creating domestic jobs and vital to the nation's energy supply? Or is it a taxpayer boondoggle responsible for higher food prices?

For some in Washington, the answers to those questions have changed.

For years, ethanol fuel derived from corn was almost politically untouchable, thanks to powerful advocates on Capitol Hill. The ethanol industry has consequently exploded over the last decade, thanks to government subsidies and incentives.
But skepticism about ethanol is rising, prompted by fluctuating food prices and an organized campaign by anti-ethanol advocates to discredit the industry.
"The old saying is that if you aren't at the table, you're on the menu," says Tom Buis, lobbyist and CEO of Growth Energy, a new ethanol industry group formed in 2008 as some ethanol companies grew worried that their political clout was waning. The organization's largest member is Poet LLC, one of the country's top two ethanol producers.

At stake are billions of dollars in tax credits for ethanol companies that expire at the end of the year and a pending action at the Environmental Protection Agency that could raise the amount of ethanol in every driver's fuel tank.

Once a slam dunk, Buis says the industry now has to work harder to convince an increasingly skeptical public and Congress that ethanol continues to deserve government money. A series of television ads launched this week are part of the group's efforts.

There's evidence that Congress is weary of giving money to an industry that critics say should be able to stand on its own after getting its start in the early 1980s with powerful congressional advocates like Sens. Bob Dole of Kansas and Tom Daschle of South Dakota.

"It is our view that after 30 years we should declare success," says Scott Faber, a lobbyist for the Grocery Manufacturers Association, which represents food companies that say they have seen their prices rise because of the high use of corn for ethanol.

GMA is part of a growing patchwork of food companies, livestock producers, environmental groups and oil companies who have spent millions of dollars in the last few years framing ethanol's success as "food vs. fuel." They argue that the increase in production of corn and its diversion for ethanol is making animal feed more expensive, raising prices at the grocery store and tearing up the land.
The diversion of corn has been particularly tough on the meat industry, which uses corn for animal feed. But the ethanol industry disputes that the fuel has a substantial effect on food prices, saying corn prices only affect a small portion of each dollar overall spent at the grocery store.

Ethanol's opponents galvanized in 2008 as food prices skyrocketed and lawmakers debated whether ethanol was to blame. On Capitol Hill, money that may have once been used to boost the ethanol industry began to be diverted to what are called "advanced" biofuels, or other non-food plant materials that could be used to make fuel. That industry is still in its infancy, but lawmakers, along with President Obama, often say they are the way of the future.

As ethanol's political stock began to drop, Growth Energy hired some of the top farm lobbyists in town. Buis, a former Daschle aide, left his post as the president of the powerful National Farmers Union to work for the group, and Growth Energy signed on Retired Army general and former presidential candidate Wesley Clark as a co-chairman. They have petitioned the EPA to increase the concentration of ethanol in gasoline and this week are launching the $2.5 million television ad campaign aimed at changing people's perception of the fuel.

The series of short ads the group is launching have no dialogue but just simple phrases on a green background and pointed digs at the oil industry. One ad says "no beaches have been closed due to ethanol spills" while another displays the phrase, "No wars have ever been fought over ethanol." Another makes the point that "Ethanol has contributed $0 to the governments of Iran, Saudi Arabia and Venezuela."

The formation of Growth Energy means the industry has now doubled its efforts in Washington. Together with a rival trade group, the Renewable Fuels Association, the industry spent more than $1.5 million on lobbying last year.

It's still unclear whether the increased efforts will pay off. After Growth Energy filed its petition last year to increase the amount of ethanol in gasoline from 10 to 15 percent, the EPA said in December it needed more tests to determine if car engines could handle it. A decision is expected later this year.

With that decision and congressional debate over the tax credits approaching, Growth Energy is now positioning the ethanol industry as the underdog.

"We have to step up our game," says Buis. "A lot of people don't want to see us succeed."

Ethanol's rivals aren't backing down. The Brazilian ethanol industry, which is pushing Congress to reduce tariffs that protect the U.S. ethanol industry, launched its own rival campaign Monday to promote the benefits of sugarcane ethanol, which they argue is more environmentally friendly than ethanol made from corn. Sugarcane ethanol is widely produced and used in Brazil.

"We have every intention of staying in this fight," says Craig Cox of the Environmental Working Group, a member of the anti-ethanol coalition. "This is a big issue for us. Our goal is to really get a federal policy that moves us toward biofuels that truly are sustainable."

Grilling enthusiasts will find a new product that uses ethanol as an alternative to charcoal or propane on the shelves of many grocery and hardware stores this summer.

The FlameDisk® actually utilizes proprietary solidified ethanol and is the first ethanol product to be used exclusively for outdoor grilling, according to manufacturer Sologear, the Wisconsin-based company that invented the product. They are marketing FlameDisk as “more eco-friendly than charcoal and lighter fluid because it features renewable ethanol. Ethanol is extremely clean burning and generates 90% fewer pollutants than charcoal. The FlameDisk®’s aluminum casing is also recyclable.”

“We buy our ethanol from an ethanol manufacturer in 200 proof,” said Sologear president Chad Sorenson. “Then we convert it from a liquid into a solid with a special chemical process that we’ve developed. Nothing like this has ever been done to my knowledge.”

Each FlameDisk utilizes one pint of domestically produced ethanol, which makes it a new market for the fuel, albeit a small one. “Obviously, the largest volume consumer of ethanol is the transportation industry and we’d have to go a long way to cut into those volumes,” Sorenson said. “But it has a lot of significant potential with about 3.8 billion grilling occasions in the U.S. every year and we are already selling product overseas so we think over time this could be a significant new use of ethanol that may have not been considered prior to this.”

The FlameDisk is already on the market and available at places like Ace Hardware, Home Depot, and True Value with a suggested retail price of $4.99.

WASHINGTON, DC – Growth Energy, the coalition of U.S. ethanol supporters, released a study today which showed that if the tariff on foreign ethanol is allowed to lapse at the end of the year, extreme job losses and the loss of billions of dollars in economic activity would follow – with 28 states being the hardest hit across the manufacturing, finance and real estate sectors, as well as agriculture.
The study found year-to-year job losses go from 39,506 in the first year after the tariff lapses, to 115,642 in the second year, and 161,384 in the third year. Job losses continue year-after-year and most of these jobs are never regained, according to the 10-year projection performed by the University of Missouri’s Community Policy Analysis Center.

The decline in economic activity following the lapse of the tariff was calculated at $9.2 billion the first year, $26.4 billion the second year, and $36.7 billion the third year – and remaining in the double digits during the 10-year projection, hitting $21.2 billion in 2021.

“We urge Congress to move rapidly to maintain the tariff. This would prevent foreign-subsidized ethanol from undercutting American ethanol companies and putting American workers out of a job. And ultimately it makes no sense to replace our addiction to foreign oil with an addiction to foreign ethanol,” said Tom Buis, CEO of Growth Energy. “The U.S. would pay a steep price to remove the tariff. This study shows it in stark detail. We’d see billions of dollars and hundreds of thousands of jobs drain out of the American economy.”

The Missouri study found that the six states that would see the largest declines in economic activity due to removal of the ethanol import tariff are (in order): Iowa, Illinois, Nebraska, Minnesota, Indiana and South Dakota. Manufacturing – already a hard-hit sector of the economy – would see the largest decline, followed by the service industry, financial services, and wholesale trade sectors. The Missouri study predicted steep drops in value for corn, wheat, barley and sorghum.

A separate study conducted by IHS Global Insight predicted that without the tariff, Brazilian ethanol imports would climb to as high as 2 billion gallons a year – but displace domestic ethanol, and virtually no oil. The Global Insight study also predicted a 24-month plunge in corn prices due to the decrease in domestic ethanol production.

“This independent analysis confirms what we’ve been saying all along. Since the domestic ethanol industry has an arbitrary regulatory cap on its access to the marketplace, removing the tariff doesn’t displace a single drop of foreign oil – but only serves to smother U.S. ethanol, which is the only large-scale domestic alternative we have to foreign oil.”

It might have been a good day for Iowa State University agricultural economist Bruce Babcock to be away from his office, as he was Thursday.
As ethanol advocates in the U.S. House of Representatives advanced a bill to extend a 45-cent federal production credit for five more years, Babcock, a prominent ethanol policy analyst in the nation's leading ethanol state, was questioning the need.

Import tariffs and a separate requirement mandating use of as much as 15 billion gallons of renewable fuel by 2015 should be enough to keep ethanol plants in prime production mode in Iowa, Nebraska and other states, Babcock said.
"It is puzzling why the biofuels industry continues to defend these subsidies when it has its mandates in place," he said in a 10-page policy brief earlier this month. "Tax credits cost taxpayers more than $5 billion per year, and import tariffs convey the message that the ethanol industry is so uncompetitive that it needs protection against foreign competition."

Babcock was not available Thursday to answer questions about his analysis, "Mandates, Tax Credits, and Tariffs: Does the U.S. Biofuels Industry Need Them All?"

Todd Sneller of the Nebraska Ethanol Board suggested Babcock's 10 pages of skeptical perspective don't account for the whole picture.

In fact, Sneller said, the industry will hit a bottleneck by the end of the year if the incentive is allowed to expire.

Trouble would take shape quickly, he asserted, because even as the fuel mandate calls for accelerating ethanol production toward 15 billion gallons, the limit of 10 percent blends for all but flex-fuel vehicles is applying the brakes below 12 billion gallons.

Without the tax incentives, which typically produce a 10-cent price advantage at Nebraska fuel pumps, Sneller said, there's no demand stimulus for fuel blenders and marketers beyond the mandate.

"If you restrict activity to no more than the mandate number," Sneller said, "you would never use more than 10 percent ethanol because that's the allowable limit."
What he described as "the fallacy of that (Babcock) mindset" is that "today we have a requirement to use about 12 billion gallons of ethanol and the U.S. gasoline pool can't fully absorb 12 billion gallons of ethanol if we only use 10 percent blends."
The economy and more fuel-efficient cars are among factors holding total fuel consumption below 120 billion gallons per year, according to Sneller. That creates the 12-billion gallon ethanol limit.

In a statement released Thursday, the Renewable Fuels Association said allowing the tax incentives to expire "is simply not an option."

If it did, said association President Bob Dinneen, nearly two of every five ethanol plants would be forced out of business.

In his written remarks, Babcock conceded that "biofuels producers want to push demand beyond mandated levels when demand for their product is high, which occurs when oil prices are high."

However, he suggested that "the political capital" expended in advocating for the tax credits might represent more cost than the tax credits themselves are worth.
Sneller noted that the Thursday push for extending the incentives comes much closer to the expiration date than previous extensions, perhaps because health-care reform has consumed so much time in Congress.

"It's come down to the point now," he said, "where it's essential that this happen this year."

NEW YORK (DTN) -- The U.S. Senate on Wednesday approved a tax-extenders bill that includes a tax credit for biodiesel after months of delay, with the bill's passage cheered by biodiesel producers across the country.

The vote passed with 62 voting in favor and 36 against.

The measure provides a $1 gallon incentive to blend biodiesel into diesel fuel, with the initial subsidy, the Biodiesel Mixture Excise Tax credit, originally passed in 2004 and subject to regular congressional renewal.

The Senate bill will now need to be reconciled with a similar bill passed by the House of Representatives last year before a final vote by both congressional bodies. The legislation will then be sent to President Barack Obama for his signature.

The House passed its version of the tax extenders bill on Dec. 8, 2009, in a 242-181 vote, ahead of the tax credit's expiration on Jan. 1. The Senate failed to take up the measure in time to head off the credit's expiration because it was preoccupied with healthcare legislation late last year.

The Senate bill calls for the tax credit to be retroactive to Jan. 1, 2010, and to run through Dec. 31.
Biodiesel supporters, including the National Biodiesel Board, have been championing the tax incentives extension for a long time, saying they can't be competitive without the $1-per-gallon tax credit.

In a news release Wednesday afternoon, the Iowa-based Renewable Energy Group, a biodiesel producer, applauded the Senate's passage of the bill, calling it a critical piece of energy independence and green-collar economy policy.

"Senate passage of the bill with the inclusion of the biodiesel tax credit confirms the availability of the tax incentive for the biodiesel industry in 2010," said Gary Haer, REG vice president of sales and marketing. "However, it is important for our partners in the petroleum industry to note that U.S. Senate approval of this legislation does not mark the end of the legislative process for this tax credit."