US ethanol exports fell for the second year in a row. I could understand the decrease in ethanol exports last year -- the global economy was shut down -- but the decline actually began one full year earlier, 2019.
It looks like Canadian imports of US ethanol accounted for almost the entire decline. Canadian ethanol imports from the US fell back to levels less than in 2016.
Gasoline prices in the U.S. surged to the highest level in more than two years and distributors tapped storage tanks to keep deliveries flowing to filling stations. The crack spread, a rough measure of how profitable it is to process crude into fuels, jumped to $27.35 a barrel on Sept. 1, compared with $18.64 the day before Harvey’s landfall.Bloomberg wrote the following, not me (don't blame me for this; again, this is from Bloomberg, and, if it's from Bloomberg, it must be true):
Still, one sticking point remains for some oil processors: federal biofuel mandates. Refiners are required to add ethanol and biodiesel to gasoline and diesel to satisfy annual quotas. Those that can’t blend the biofuels themselves must purchase credits known as renewable identification numbers, or RINs. Acquiring RINs can exact millions in extra costs for refiners.
The promise of relief for refiners faded when President Donald Trump was said to have directed the Environmental Protection Agency not to weaken the mandate.
“RINs remain a mystery,” Brad Heffern, an analyst at RBC Capital Markets LLC, said in a research note. “Optimism on RINs has faded, but there are both potential negatives and potential positives on the horizon.”’If Bloomberg says this ...
Through the first six months of 2017, U.S. weekly ethanol production averaged 1.02 million barrels per day (b/d), an increase of 5% over the same period in 2016. On a weekly basis, U.S. ethanol production set a record of 1.06 million b/d in the week of January 27, 2017, and it has averaged near or above 1 million b/d in every week of 2017 except for a few weeks in April, when ethanol plants typically undergo seasonal maintenance. If ethanol production remains relatively high through the second half of the year, as EIA’s Short-Term Energy Outlook (STEO) expects, 2017 will set a new record for annual fuel ethanol production. --- EIAThe real world:
Apple broke the code on iPhone pricing -- 3rd party payers, just like the health industry.Very few people actually pay the advertised price. The phones are greatly subsidized by the phone company with which one signs a contract for about two years. This will be a huge price to pay for ATT, Verizon. It's very possible they will have to extend the contract for 3 years to pay the $1000 and give the phone away for free to Sophia.Like health care, if there's a third party payer, the provider can charge whatever they want. In fact, the higher the cost, the more "loyal" the customers become.
Fuel ethanol production capacity in the United States reached 15.5 billion gallons per year, or 1.01 million barrels per day (b/d), at the beginning of 2017.
Total capacity of operable ethanol plants increased by about 4%—or by more than 600 million gallons per year—between January 2016 and January 2017…Of the top 13 fuel ethanol-producing states, 12 are located in the Midwest. The top three states—Iowa, Nebraska, and Illinois—contain more than half of the nation’s total ethanol production capacity. --- EIAOctane capacity. Based on a story yesterday, ethanol is NOT the concern. Rather, octane is the concern going forward; there could be a shortage sometime in the out years. I hope farmers start planting more octane.
Between fiscal years 2014 and 2015, total government spending in Illinois increased by approximately $10.8 billion—from $58.6 billion in fiscal year 2014 to an estimated $69.4 billion in 2015. This represents a 15.52-percent increase.Illinois cannot afford a cut in US federal Medicaid support. Period. Dot.
- in Illinois in fiscal year 2014, 51.9 percent of total tax revenues came from income taxes
- sales taxes and gross receipts accounted for 40.2 percent of total state tax collections.
- education accounted for 18.7 percent of state expenditures in fiscal year 2015,
- Medicaid accounted for a whopping 26%, almost 40% more than that spend on education
Oil stockpiles in the Organization for Economic Cooperation and Development—a club of 35 countries with industrialized economies—rose by 18.6 million barrels in April and were higher than they were when OPEC agreed to its cut late last year, said the International Energy Agency, a Paris-based group that advises governments on energy trends.How long will it take to re-balance? 63 weeks.
Saudi to target US shale? Saudi Arabia and other producers are frustrated that growing U.S. production is hurting the oil market. Saudi Arabia is said to be considering holding back exports into the U.S. Link at CNBC. Reduced exports would show up in weekly US government data and send a bullish signal to the market.
Wow -- Saudi should have done that from the beginning instead of flooding the US with crude oil from their "storage tanks." By the way, this may be more smoke and mirrors: during the summer, Saudi exports less oil because domestic demand is greater during the hot summer months.One can see Saudi's track record at this post.
Federally mandated ethanol blending is adding extra pressure to the faltering profits of U.S. refiners.
The worst crude oil downturn in a generation, which at first helped refiners’ profits, has now passed through to the fuel prices. Now, gasoline is cheaper than the ethanol that refiners have no choice but to use.
Ethanol averaged 30 cents above gasoline in Chicago during the first quarter, costing HollyFrontier Corp. $36 million. Chicago ethanol now runs at about a 2-cent premium to gasoline, while Los Angeles prices are 24 cents higher, David Hackett, president of energy consultancy Stillwater Associates said. Ethanol futures on the Chicago Board of Trade averaged 21.5 cents above gasoline contracts on the New York Mercantile Exchange in the quarter, compared with an average 48-cent discount in the same period during the previous five years.
The Renewable Fuel Standard program, introduced in 2005 under the Energy Policy Act by the Bush administration, mandates the use of about 18.11 billion gallons of renewable fuels this year, 80 percent of which is ethanol. For the first time, EPA this year mandated consumption targets that would exceed 10 percent of projected gasoline demand. EPA’s proposed biofuel targets for 2017 are currently under review at the White House’s Office of Management and Budget, according to a government filing.
JAMESTOWN -- Plans for a $150 million cellulosic ethanol plant at the Spiritwood Energy Park Association industrial park are underway, according to Thomas Corle, founding partner of New Energy Investors, a Pennsylvania company.
If built, the ethanol plant would directly employ about 40 people with another 60 people working indirectly for the plant.
The JSDC Board of Directors on Monday approved recommending a $75,000 match to a $225,000 grant that New Energy Investors has applied for from the Agricultural Products Utilization Committee.
If the APUC grant is approved in May, the money would be used to continue the planning and engineering work for the project, said Robert Johnsen, CEO of New Energy Investors.
Corle said the planned plant would process corn stover, corn stalks and leaves removed from the field after the grain is harvested and wheat straw to produce ethanol for fuel and lignin, a solid fuel that can be burned by coal-fired generating plants reducing carbon emissions.
Corle said the plant would use proprietary technology developed by DONG Energy, which is Denmark's largest energy company.
The partnership between DONG and an American company is a first, Corle said.“This will put Jamestown on the map,” he said. “This would be the first use of Danish technology to produce cellulosic ethanol in the Midwest. This will be covered by the national and international press.”
When operational, the plant will utilize about 190,000 tons of corn stover and wheat straw to produce about 13 million gallons of ethanol and 90,000 tons of lignin each year. This would amount to the crop residue from between 150,000 and 170,000 acres of cropland each year. Added income to the region’s farmers would amount to between $10 million and $15 million each year, Corle said.
Marathon Oil Corporation said on Monday it had signed agreements to sell non-core assets for $950 million, bringing its total sales through divestitures to about $1.3 billion since last August.
The oil and natural gas producer, which did not identify the buyers, said it will divest all of its Wyoming upstream and midstream assets for $870 million, excluding closing adjustments.
The Wyoming properties, mainly waterflood developments in the Big Horn and Wind River basins, averaged 16,500 barrels of oil equivalent per day in first quarter 2016 production. The deal, expected to close in mid-2016, also includes a 570-mile pipeline.
And now a powerful coalition including oil companies, environmentalists, grocery manufacturers, livestock farmers and humanitarian advocates is pushing Congress to weaken or repeal the mandate. As soon as this week, the Senate could vote on a measure to roll back the Renewable Fuel Standard, just days after the Iowa caucuses close and the issue largely goes to rest for another four years.
Even here, as Iowa urbanizes and diversifies, ethanol may be losing its once-powerful hold, some political consultants say. Senator Ted Cruz of Texas, one of the Republican front-runners in Iowa, has called for an end to subsidies for all forms of energy, as well as a five-year phasing out of the renewable fuel mandate that created the ethanol economy here.
That position drew an unusual repudiation from Iowa’s governor, Terry E. Branstad, a Republican who has not endorsed any candidate. “It would be a big mistake for Iowa to support him,” Mr. Branstad told reporters at a forum held by the Iowa Renewable Fuels Association.
At least now, on this single wedge issue I know who I support. LOL.At the same forum, the other front-runner, Donald J. Trump, said he was “100 percent” behind the ethanol mandate and would even support increasing it further.
Growing numbers of US voters are concerned about possible adverse impacts as the US Environmental Protection Agency prepares to issue new ethanol quotas under the federal Renewable Fuel Standard, the American Petroleum Institute said.The government is running amok.
It cited a Harris Poll telephone survey it commissioned of 1,021 registered voters nationwide Nov. 5-8 in which 78% said they were concerned that new ethanol quotas could breach the so-called blend wall, the point at which the mandate exceeds the level of ethanol in the nation’s fuel supply.
By party, API said that concern was expressed by 91% of respondents identified themselves as Republicans, 80% of independents, and 73% of Democrats.
“The results are telling,” API Downstream Group Director Bob Greco told reporters in a Nov. 19 teleconference. “Across the political spectrum, voters are concerned about the significant damage the RFS-mandated higher ethanol blends could cause to automobiles, motorcycles, and almost every type of gasoline powered engine.
“We would not be surprised if the rule came out next week, and will operate under that assumption,” Greco said. “EPA continues to insist it will be out by Nov. 30 despite the Thanksgiving holiday and Paris climate talks. We’ve heard from EPA that there’s interest in bumping the mandate up and testing the blend wall. We think that’s a bad idea.”
Exxon Mobil Corp., the world’s biggest oil explorer, declared a quarterly dividend on Wednesday that will raise the 2015 payout for the 33rd straight year.
Within hours of Exxon’s announcement, Chevron Corp. disclosed a payout that will boost its annual remittance for a 28th straight year.
Oil producers as diverse as Britain’s BP Plc, Norway’s Statoil ASA, and ConocoPhillips and Occidental Petroleum Corp. of the U.S. are following the same track, maintaining or lifting dividends while curtailing other investments. Dividends have been viewed as sacrosanct because yield-hungry investors rely on oil stocks to generate income.It really is quite impressive: in 2010, XOM paid 44 cents quarterly; the company is currently paying 73 cents.
MichiganLive published an open letter from a solar-installation owner that "net metering would destroy solar investments:So, how did that work out for the "rent-seekers"? The state legislature is still working this issue, but Midwest Energy News is reporting:
I am writing in regard to [Michigan] Senate Bill 438. My interests are self-preservation, ensuring Michigan is looking to and working toward a sustainable energy plan, and reversing the effects of global warming.
As major investor-owned utilities push the Michigan Legislature to dismantle the state’s solar net-metering program, the state’s smallest electric cooperative is taking action on its own with a similar policy effective October 1, 2015.
Roughly 20 net-metering members of the Upper Peninsula’s Ontonagon County Rural Electrification Association were notified last month that the co-op would no longer purchase their excess electricity at retail prices.
Instead, the member-owned co-op will purchase excess electricity from its net-metering customers at wholesale rates “minus line loss” — a difference of nearly 10 cents per kilowatt hour (kWh).
Authorities say 6 ethanol tanker cars caught fire after Burlington Northern Santa Fe Railroad train derailed on a bridge southeast of Scotland, SD.Environmentalists can't have it both ways: the desire to ban CBR while shipping ethanol by rail. The bad news for faux environmentalists: ethanol cannot be shipped by pipeline.
With high incomes and some of the cheapest gasoline around, Americans have little to complain about at the gas station. Imagine selling out $7.71/gallon (in Norway) or putting in a full day's work for a single gallon of gasoline (India, Pakistan).And then this:
No one can compete with the US when it comes to burning gasoline. Americans guzzle 1.2 gallons/person/day, more than any other country by a long shot.
Even with falling gas prices, America's thirst for the open road can take a toll on budget. [Really?]Reality:
The average daily income in the US is $155. It takes just 1.8% of a day's wages to afford a gallon of gas, and remember, on average, each American "guzzle's" 1.2 gallons per day or about 2% of one wages.Compare that to what one spends at fast food restaurants. Compare that to what one spends at the local multiplex theater for popcorn.
May 10, 2021: first-ever North Dakota soybean crushing plant.
November 1, 2015: MDU cancels 96-mile pipeline that would have provided natural gas for the fertilizer plant.
August 12, 2015: cooperative cancels plans for fertilizer plant.
July 25, 2015: a reader alerted me to two links regarding the Spiritwood:
Midwest AgEnergy Group started operations on the company’s new 65 million-gallon-per-year biorefinery located next to Great River Energy’s Spiritwood Station near Jamestown, North Dakota.
The Dakota Spirit AgEnergy biorefinery uses steam from the combined heat and power plant and corn from local farmers to produce ethanol, distillers grains and fuel-grade corn oil. The plant will produce 65 million gallons per year of ethanol, 198,000 tons of distillers grains for livestock feed and 6,900 tons of fuel-grade corn oil for products like biodiesel.
The ethanol produced at Dakota Spirit AgEnergy amounts to about 20 percent of North Dakota’s annual fuel demand. The biorefinery will purchase 23 million bushels of corn annually from farmers and employs 38 people.
The cost of the project was $155 million.
As an incentive, the state provided nearly $40 million in grants and loans for the renewable fuel project, including funding for feasibility studies, construction and jobs training. The state’s investment includes loans from the Bank of North Dakota and the North Dakota Department of Commerce’s Development Fund, along with grants from the North Dakota Industrial Commission and the NDDOC’s Agricultural Products Utilization Commission and Community Development Block Grant programs. Funding for new jobs training was provided by Job Service North Dakota.You know, this really is a big story, regardless of how one feels about ethanol. I think of the decades Mark Rodgers spent trying to cobble together that huge off-shore wind farm that came to naught. Here in the midwest, with similar tenacity, the developers never gave up, and came up with $155 million cobbled together from numerous sources. Whether this project thrives, survives, or dives, it must be quite a feeling of exhilaration right now for the folks who hung in there.
Another factor in the local corn market is Dakota Spirit AgEnergy at Spiritwood. The ethanol plant will begin buying corn in April and start testing equipment and operations in May. Plans call for the plant to be fully operational this summer.
Dakota Spirit will accept corn under contract on a controlled basis this month, Brown said. As the plant staff gain experience and some of the testing is complete, the plant will begin buying corn on a cash basis.
“When we become more comfortable we’ll open things up,” Brown said. “We aim to support the local producers by offering another market for their corn.”
Once in full production, the plant will use about 2 million bushels of corn per month. This exceeds the 2014 Stutsman County corn production of 18.6 million bushels.I missed the power plant story when it opened; it began operations back in November, 2014, according to The Bismarck Tribune:
Great River Energy's Spiritwood Station, North Dakota’s newest coal-fired power plant, started operations this week.
The plant, located near Jamestown, produces between 35 and 40 megawatts. At full capacity, it can pump 99 megawatts of power into the grid, said GRE spokesman Lyndon Anderson.
The plant employs 24 people and cost $425 million to build.
In addition to supplying electricity, the plant will also use steam energy to power an adjacent malting company and a 65 million gallon-per-year ethanol plant.
According to GRE, most conventional coal-fueled plants are 30 to 35 percent efficient. Spiritwood’s combined heat and power plant will be 60 percent efficient.
The plant will do so by using GRE's patented DryFining technology, which uses waste heat from GRE's Coal Creek Station near Underwood to dry lignite coal. The dry coal produces more energy with less raw material. It will be transported to Spiritwood via covered railcar.$425 million / 99 MW = $4 million / MW. Either I did the math wrong or I am misreading something or comparing apples and oranges, but $4 million/MW for a coal-powered plant seems expensive. Or maybe that's what it costs now for a "clean coal power plant." But if that's accurate, ....
The 99-megawatt coal-fired electric generating plant was completed in August 2011. The plant went through a testing and commissioning process and then was shut down because of lack of demand for electricity in Minnesota. The plant has sat idle since.
Construction on the Spiritwood Station generating plant, which is being built near Spiritwood, N.D., began in 2006. The plant cost about $350 million to construct and was intended to produce steam for use at the Cargill Malt plant and electricity for the Minnesota markets.Likewise, The Bismarck Tribune did quote an official who stated that plans for the ethanol plant had been "scrapped" but that was a long, long time ago (2009):
A Jamestown business leader says plans for a nearby ethanol plant have been scrapped and the city-county development corporation is getting its money back.Biomass Magazine provides the rest of the story, 2011:
Connie Ova, the chief executive officer of the Jamestown-Stutsman Development Corp. She says developer Harold Newman was given a deadline of June 1 to start construction on the 100 million gallon ethanol plant in the Spiritwood Energy Park. The project has been on the drawing board since 2006.
Ova said changes in the ethanol industry hurt its chances.
The Jamestown-Stutsman Development Corp. committed $6 million to the project. Ova said the corporation will get its money back with interest. She said it has purchased the land from the Newman Group.
A new industrial park under development by GRE near Jamestown, N.D., features a combined heat and power (CHP) plant designed specifically to supply process steam to adjacent industrial processors. The project, known as Spiritwood Station, was originally intended to host a 100 MMgy corn ethanol plant. Plans have since changed, and a new 20 MMgy cellulosic biorefinery is expected to be built in its place.
“Back in the 2007-‘08 timeframe, when we were just breaking ground on the [CHP] plant, the conventional ethanol plant was cancelled,” says GRE’s Manager of Business Development Sandra Broekema. “That left us with a big hole of 350,000 pounds-per-hour of steam that we were planning to produce for sale that we now need to find a home for.”
Broekema says there are several reasons why a cellulosic biorefinery is a well-suited addition to Spiritwood Station. In addition to the plant’s high-steam usage requirements, the facility will also produce purified lignin pellets as a coproduct. “Our CHP is a fluidized bed combustion system which has some inherent fuel flexibility,” he continues. “By cofiring 10 percent lignin with DryFine (a refined North Dakota lignite), we would be able to reduce our carbon footprint even further.”
As a result GRE has stepped into the lead development role of the cellulosic ethanol plant. “The primary motivation for GRE’s involvement is to secure additional steam partners for the industrial park in order to achieve our original design efficiencies and economies for our cooperative membership,” Broekema says. “Because we are taking a ‘cooperative approach’ involving as many of the key stakeholders as we can, we have laid out a somewhat conservative five-year development plan beginning in 2010 through 2014 startup, if all goes according to plan.”And then from this source:
Dakota Spirit AgEnergy Corn Ethanol Plant receives EPA Certification (Ind. Report).
Great River Energy, Dakota Spirit AgEnergy. Date: 2013-02-15.
Great River Energy, which operates a coal-fired plant near Underwood, has received federal renewable fuel certification for a 65 million gpy corn ethanol plant in the Spiritwood Park project near Jamestown.
Great River's Bismark-based subsidiary Dakota Spirit AgEnergy plans to build a plant that will utilize 23 million bushels of corn per year. The subsidiary hopes to complete financing this spring and break ground this summer (2013).
The facility will be co-located with Great River's coal-fired electric generating Spiritwood Station and will use the plants excess steam for ethanol production. The Jamestown plant will also produce corn oil, distiller's grains (DDGs), and meet the EPA's revised Renewable Fuel Standard, which requires cornstarch-based ethanol plants built after 2007 to have lifecycle carbon emissions 20 percent lower than conventional motor fuels.So, hopefully this clarifies things.
One of the most surprising findings is that ethanol might actually be worse for air quality than conventional gasoline fueled transportation.
Researchers looked not only at the end result at the tailpipes but also took into account the full cycle of energy production. For instance, the authors calculated the entire pollutant stream, meaning everything generated from the growing of the corn to the process used to turn it into ethanol.
In addition, they extrapolated the pollutants of electric vehicles when the electricity used to recharge the batteries is generated by the burning of coal.
“And we found that some options available to us, like corn ethanol or electricity from coal used in electric vehicles, actually make the air much worse,” assistant professor Jason Hill said.The source for that story: the University of Minnesota.
For years, environmental activists have opposed the Keystone XL pipeline, claiming that development of Canada’s oil sands will be “game over for the climate.” But if those same activists are sincere about climate change, why aren’t they getting arrested outside the White House to protest the use of corn ethanol?
That’s a pertinent question, given a new analysis from the Environmental Working Group, which finds that corn ethanol produces more carbon dioxide than Keystone XL would -- presuming, of course, that the pipeline ever gets built. Making the issue even more relevant, last Friday, the EPA outlined new requirements for the minimum amounts of ethanol that retailers must blend into their gasoline.
In a May 29 report, Emily Cassidy, a research analyst at EWG, says that “last year’s production and use of 14 billion gallons of corn ethanol resulted in 27 million tons more carbon emissions than if Americans had used straight gasoline in their vehicles.” [Don't confuse me with the facts.]
She continues, “That’s worse than Keystone’s projected emissions.” (Another environmental group, Natural Resources Defense Council, has estimated that Keystone XL would increase carbon dioxide emissions by about 24 million tons per year.) [Don't confuse me with the facts.]
In a graphic comparing corn ethanol with standard gasoline and fuel produced from the oil sands, Cassidy shows that the carbon intensity of corn ethanol is about 120 grams of carbon-dioxide equivalent per megajoule of energy produced. That’s about 20 percent more than standard gasoline and about 10 percent more than that produced by the oil sands.
Japan's household savings rate goes negative for 1st time since government started compiling comparable data in 1955, authorities say - @MarketWatch.More from the source:
Japan, long held up as a model of thrift and a “nation of savers,” is no longer saving, according to data cited Friday in the Nikkei Asian Review. For the fiscal year that ended in March, Japan’s household savings rate dropped to negative 1.3%, according to Cabinet Office statistics released Thursday. The result represented “the first time the ratio entered negative territory since the government started compiling comparable data in fiscal 1955.I'm not exactly sure what to make of this, but I'm sure it connects with this dot: an aging Japanese population.
Katusa believes that falling oil prices will eventually give Russia the upper hand and deeply injure the U.S. energy industry.
The falling ruble makes Russian oil less expensive and more desirable to other countries—Russia also produces oil quite cheaply while the American shale industry has a larger cost of operation. Russia is more than able to weather the current storm, Katusa says.
“They have a $200 billion a year trade surplus. They have over $400 billion in reserve currency. They’ve increased their gold reserve. They have much lower debt to their GDP than America. So yes there’s pain in the economy… [but] it's far from terminal.”We'll see.
One of the most surprising findings is that ethanol might actually be worse for air quality than conventional gasoline fueled transportation.
Researchers looked not only at the end result at the tailpipes but also took into account the full cycle of energy production. For instance, the authors calculated the entire pollutant stream, meaning everything generated from the growing of the corn to the process used to turn it into ethanol.
In addition, they extrapolated the pollutants of electric vehicles when the electricity used to recharge the batteries is generated by the burning of coal.
“And we found that some options available to us, like corn ethanol or electricity from coal used in electric vehicles, actually make the air much worse,” assistant professor Jason Hill said.But, regular readers already knew that. Warmists won't discuss the article; in their view, the subject is closed.
The amount of land enrolled in the Conservation Reserve Program (CRP), at 27.1 million acres, is down by 26 percent, or 9.7 million acres in the past five years, to a 25 year low. [It puts the Chevrolet story below into perspective: GM is "buying" 6,000 acres for CRP.]
During this same time period, corn acreage has increased by 13 million acres.
Farmers are once again planting crops on marginal lands “fencerow to fencerow” to cash in on today’s high commodity prices. CRP payments haven’t risen to compete with crop returns, and the program itself is being whittled away by Congress.Again, the amount of land enrolled in the Conservation Reserve Program (CRP), at 27.1 million acres, is down by 26 percent, or 9.7 million acres in the past five years, since the ethanol mandate, to a 25 year low.
Chevrolet has become the first corporate participant in a public-private initiative that pays farmers NOT to convert natural prairie to large-scale crop production, which would release gases that are warming the planet.
The automaker, a division of General Motors, said it has bought more than 39,000 metric tons of carbon credits from North Dakota ranchers in the prairie pothole region, a broad expanse of grasslands and wetlands reaching across the northern Great Plains and parts of Canada.
"The amount of carbon dioxide removed from our atmosphere by Chevrolet's purchase of carbon credits equals the amount that would be reduced by taking 5,000 cars off the road," U.S. Agriculture Secretary Tom Vilsack said.
Grasslands store huge volumes of carbon dioxide, one of the gases most responsible for climate change. Tilling the soil for agriculture releases the gases into the atmosphere. Preserving grasslands keeps carbon bottled up and preserves habitat for waterfowl and other wildlife.
Participating ranchers place their property in conservation easements that guarantee it will permanently remain grassland, although they can continue grazing livestock and growing hay, which can be planted without tilling the soil.
Chevrolet purchased its credits as part of a 2010 commitment to invest up to $40 million in carbon reduction programs with a goal of keeping 8 million metric tons out of the atmosphere, spokeswoman Sharon Basel said.
I would suggest that oil-millionaire-farmers in western North Dakota quit farming completely, turning their farmland back into natural plains. It's a win-win for everyone.The credits Chevy bought in North Dakota will preserve 5,000 to 6,000 acres of grasslands.
Ethanol producers are pushing back hard against new rail safety rules after a federal study found that ethanol poses hazards equal to or greater than crude oil in rail transportation.
An analysis of tank car damage in derailments published last month by the Federal Railroad Administration found that tank cars carrying ethanol were 1.5 times more likely to explode when exposed to fire for prolonged periods. The Renewable Fuels Association dismissed the report, blaming track defects for the explosions.Like almost everything else that matters, Congress has ceded authority to bureaucrats. It will be interesting to see how this plays out.
It’s shaping up to be one of the best years ever for the ethanol business.
Operating profits for many ethanol makers more than doubled in the second quarter compared with last year, reflecting lower prices for corn and strong demand for the fuel, sustained partly by exports.
Valero Energy, which owns 11 U.S. ethanol plants, including one in Minnesota, reported operating income of 63 cents per gallon, more than double that of the quarter a year ago.“It’s nice to have that,” said Brian Kletscher, CEO of Highwater Ethanol, a farmer-owned producer in Lamberton, Minn., whose operating profit more than doubled and net earnings rose 64 percent for three months ending in July. “The ethanol industry needed margins like this to stabilize.”
Just two years ago, the nation’s 212 ethanol plants, including 21 in Minnesota, saw profits take a free fall as the price of corn climbed in some regions to $8 per bushel. More than 20 U.S. ethanol plants were shuttered, though many have reopened, including a plant in Buffalo Lake, MN, earlier this month.
Transportation also poses a lingering problem. To reach markets, ethanol relies heavily on railroads, which are congested by oil trains, grain and coal shipments and other traffic. Kletscher said some plants, including Highwater’s, have shut down production for a day or more because transport was unavailable and on-site storage tanks were full.
In order to meet the excessive ethanol mandates in the RFS, more and more land has been converted to grow corn for fuel — not food. In the 16 years prior to RFS implementation, corn acreage in the U.S. rose by just 6 percent. By contrast, in the seven years since the mandate was enacted, corn acreage has spiked by 22 percent — quadruple the growth in half the time. The Environmental Working Group estimates that more than 23 million acres of America's wetlands and grasslands — an area the size of Indiana — have been converted to industrial cropland since 2008, encroaching on our wildlife habitats and gobbling up enough conservation land to cover Yellowstone, Everglades and Yosemite National Parks — combined. [And a lot of those cornfields are making North Dakota farmers rich. Hoo-ah!]
But it's not just our land that's under attack. By 2030, nearly one of every 10 gallons of water consumed in the U.S. will be used for biofuels production. That's more than is cumulatively used by every household in the country. Let that sink in.
Making matters worse, fertilizer runoff resulting from the increase in corn production to make ethanol has contributed to an alarming growth of the dead zone in the Gulf of Mexico, leaving marine life asphyxiated and surrounding industries suffering in its wake.
And what about our air? Studies have found that corn ethanol nearly doubles emissions over a 30-year period. According to the EPA, the lifecycle emissions of corn ethanol are higher than that of gasoline. So much for being a cleaner fuel.
The environment is not the only victim. Food producers and anti-hunger activist groups, including Oxfam and ActionAid, have been warning us for years of the policy's impact on food prices and security. In the U.S., the average American family of four saw an increase of $2,000 in their grocery bills during 2012.
The RFS is slated to further increase the price of staple commodities like corn, wheat, rice and soybeans by 20 percent. And policy-driven land grabs by global corporations seeking to capitalize on the crop-for-fuel craze have forced family farmers and local citizens off their land, taking access to affordable food away from the world's neediest populations.Sylvia Nasar's Grand Pursuit puts a lot of this in perspective. But you don't have to read much more to know how bad the president's ethanol program is. But if activist environmentalists are happy, that's fine with me. I don't have a dog in this fight, but I love North Dakota corn farmers getting rich off this, and North Dakota entrepreneurs getting rich with ethanol plants in the state.
Once invincible in Washington, the industry has lost a string of high-stakes lobbying battles in recent years. Congress allowed ethanol tax credits to expire, along with tariffs that protected domestic producers from imports.
But the most painful blow came late last year, when the U.S. Environmental Protection Agency broke a pattern of regularly raising the amount of ethanol oil refiners must mix into gasoline. Instead, EPA officials decided to let refiners use less of the corn-based alternative fuel.
Wounded but far from dead, ethanol advocates showed they still can draft plenty of U.S. senators to carry water for their industry, a sprawling confederacy ranging from Midwestern farmers to corporate giants like soon-to-be-Chicago-based Archer Daniels Midland Co. As my colleague Greg Hinz reported yesterday, Sen. Dick Durbin of Illinois rallied 30 colleagues to sign a letter urging EPA Administrator Gina McCarthy to reconsider. Mr. Durbin's co-signers represent a bipartisan cross-section of liberals and conservatives, but most hail from states where corn is king.
Cutting the ethanol mandate, they warn, threatens not only “the environmental benefits from ongoing development of advanced biofuels” but “rural America's economic future.” They paint a bleak picture of job losses, rising dependence on energy imports, investment losses and reduced “consumer choice at the pump.”
Don't be fooled. This isn't about the environment or rural America's future. Mr. Durbin's crew is rushing to aid a narrow interest group that needs government support to survive. Ethanol can't compete in the marketplace without taxpayer help because energy prices are pegged to the price of oil, which costs less to produce than ethanol.Corn, by the way, is destroying natural grasslands faster than the oil industry. Corn is single-use; oil is dual use.
Drive around Chicago looking for a filling station that sells a special blend of gasoline containing 85 percent ethanol and you'll see 10 reasons why the Obama administration is giving the oil industry a big win over Corn Belt constituents.
Only 10 of nearly 800 gas stations in Chicago and fewer than 200 statewide sell E85 fuel, which was supposed to absorb more of the ever-increasing amounts of ethanol that refiners have been required to blend into gasoline under federal law. Instead, E85 and its cousin, E15, barely have penetrated the market—even in Illinois, the third-largest ethanol-producing state.
A first-ever cutback in the federal government's renewable fuel standard, which mandates how much ethanol has to be blended into the nation's fuel supply, is now roiling farmers and the ethanol industry, which includes huge producers such as Decatur-based Archer Daniels Midland Co. and a dozen smaller downstate ethanol plants.I believe there are warning stickers on pumps reminding folks not to use E85 for cars older than 2012. I know I am wrong on this, but somehow, if I can't use E85 in my 2011 car, what makes me want to take a chance on my brand new Cadillac Escalade SUV?