Monday, April 30, 2007

Ethanol expansion remains robust

Ethanol expansion remains robust: Growing skepticism fails to derail boom (Source: Greg Burns, Chicago Tribune)
[...]Once the darling of the heartland, ethanol has acquired a dangerous reputation these days, amid warnings of a "gasohol glut," a "dot-corn bust" and an angry backlash from rural communities once expected to applaud the arrival of jumbo distilleries for turning grain into motor fuel.

Yet for all the ill tidings, the ethanol boom remains surprisingly robust and only moderately sobered by the outpouring of worry aimed at it in recent months. In fact, 2007 promises to be a year of historic expansion, with production soaring as scores of new and enlarged ethanol factories come on line.
[...]

A Superfluous Subsidy

A Superfluous Subsidy (Source: Geoffrey Styles, Energy Outlook)
[...] As I described last week, the new national RFS sets an annual quantity of alternative fuel--which today means principally ethanol--that must be blended into gasoline, starting with 4 billion gallons in 2006 and rising each year. Anyone caught short must buy credits from another blender who used more ethanol than required. At the same time, however, most of the present ethanol supply is used to satisfy the oxygenate specification under EPA and state reformulated gasoline (RFG) regulations. So ethanol producers have a guaranteed market on two levels: the amount required for RFG and an overlapping and steadily increasing quantity set by the RFS. And that is now in addition to the 51 cent per gallon Volumetric Ethanol Excise Tax Credit, which effectively subsidizes production of fuel ethanol by enabling refiners and blenders to pay more for it than it is worth as a gasoline extender. How many other businesses would like to have the government pay them to make something, and then force their customers to buy it? [...]


An interesting point of view that is worth a reading.

Friday, April 27, 2007

There is no ethanol without water...

Water is a key issue in ethanol production. Not only water is needed to grow feedstock crops
but it is also needed in the plant:

Water Use by ethanol plants(agobservatory.org)
[...]one of the most important emerging concerns is the consumptive use of water. Consumptive use of water is broadly defined as any use of water that reduces the supply from which it is withdrawn or diverted.
As would be expected, most ethanol plants are being sited in the Corn Belt. Many of these regions are also experiencing significant water supply concerns, particularly in the western portion of the region. Minimal data is available on groundwater depletion, and
the scope of future water availability is not clear. It will be to the benefit of the ethanol industry, and rural development initiatives in general, to get more clarity on the relationship between ethanol production, water consumption, and impacts on water supplies.
Otherwise, shortage of water could be the Achilles heel of corn-based and perhaps cellulose-based ethanol [...]


UI investigators evaluate ways for ethanol plants to recycle more water (jg-tc.com)
[...] Ethanol plants use about three gallons of water for every gallon of ethanol they make, using the dry grind process. [...]

Opportunities to conserve Water(ethanolproducer.com)

Thursday, April 26, 2007

U.S. Corn Farmers Hear a Call for Ethanol

Corn Farmers Respond to Market Signals (Source: RFA)
"The U.S. Department of Agriculture (USDA) has confirmed in March that American corn farmers are responding to the price signals from the marketplace to produce more corn. The USDA’s annual report detailing farmers’ crop planting intentions estimates that corn acres will increase to more than 90.5 million, a jump of 15% over last year. Assuming corn yields stay on their historic upward trend, America’s farmers will produce a corn crop in excess of 13 billion bushels. Such a harvest would produce ample corn supplies to economically meet the needs of all the sectors that rely on it. "


As a result there is less pressure on the corn market: above US$4 two months ago, the bushel is at US$3.7 today.

Let's listen to a farmer's point of view: