EnergyGrind

In an ironic twist of events, a driver was fined $1,000 by state inspectors for using soybean oil in his vehicle, in a state that promotes biofuels.

Bob Teixeira decided it was time to take a stand against U.S. dependence on foreign oil.

So last fall the Charlotte musician and guitar instructor spent $1,200 to convert his 1981 diesel Mercedes to run on vegetable oil. He bought soybean oil in 5-gallon jugs at Costco, spending about 30 percent more than diesel would cost.

His reward, from a state that heavily promotes alternative fuels: a $1,000 fine last month for not paying motor fuel taxes. He has been told to expect another $1,000 fine from the federal government.

To legally use veggie oil, state officials told him, he would have to first post a $2,500 bond.

Teixeira’s story began near Lowe’s Motor Speedway on May 14. As recreational vehicles streamed in for race week, revenue investigators were checking fuel tanks of diesel RVs for illegal fuel.

The investigators spotted Teixeira’s passing bumper sticker: “Powered by 100% vegetable oil.”

“It was like some twist of fate that put me there,” he said. “It was like I was asking for them to stop me.”

Full Story At News&Observer

This incident highlights the gap in existing regulations and the conflicting messages sent by government agencies as states struggle to catch up with an increasing use of biofuels. Laws which were designed to tax vehicle fossil fuel consumption are progressively becoming out of date with the increased adoption of alternative fuel vehicles running on biofuels, electricity, and hydrogen.

“State offices do not have the forms to appropriately and fairly deal with VegOil, nor the staff to enforce the nonexistent forms, so either they tell people inquiring about compliance to get lost, or they make them jump a bunch of arbitrary hoops.”Cynthia Shelton, National VegOil Board

While many states are promoting the policy of energy independence and alternative fuels almost all still rely on gasoline tax revenue to fund road improvements and maintenance. The existing gasoline tax system is counterproductive to those goals as it ties revenues to increased fuel use instead of promoting energy conservation and fuel efficiency. Perhaps this incident can spur policy reform that will make it easier for people to adopt renewable fuels.

Mercedes Benz has announced plans to introduce a new hybrid version of their Citaro bus later this year.  The bus will be configured as a series hybrid with wheel motors at the center and rear axles that will be powered by roof-mounted lithium ion batteries. The four motors have a combined output of 320kW.  The standard 12L diesel engine will be replaced by a smaller 4.8L unit which is sufficient to keep the batteries charged.  The hybrid Citaro bus is expected to cut diesel consumption twenty to thirty percent annually. Pilot operation of the series hybrid should start early in 2008 with full production starting in 2009.

Source: Autobloggreen

The Pete Store has announced the delivery of the the industry’s first class 8 hybrid truck to Walmart.   The 386 Hybrid truck is part of a comprehensive commitment by Wal-Mart called “Sustainability 360″ which promotes innovations to increase environmental conscientiousness throughout their organization, including vendors and customers. Wal-Mart has demonstrated a commitment to becoming a leader in the transportation industry by setting a goal of improving overall fleet efficiency by 25 percent.

“We are continually looking for new, innovative ways to improve the fuel economy and reduce the emissions of our fleet. We currently operate the Peterbilt Model 386, and we anticipate that the hybrid version will help us move toward our goal to increase our fleet efficiency by 25 percent over the next few years.”    -Wal-Mart’s Senior Vice President of Transportation, Tim Yatsko

The Hybrid technology utilized on this truck is designed by Eaton Corporation. The system (called Eaton Hybrid Power System) retains energy generated by the engine, which would normally be lost during braking, and stores it in batteries for later use. That electricity is then sent through the motor/generator and blended with engine torque to improve vehicle performance, operate the engine in a more fuel-efficient range for a given speed and/or operate only with electric power in certain situations. This process has been shown to increase driving efficiency by 5-7 percent. The system’s batteries even power the heating, air conditioning, and electrical system when the engine is turned off. The improved miles per gallon, combined with the reduction of idle time, could result in approximately $9,000 in annual fuel savings based on an average cost of $2.50 per gallon.

Press Release

In an effort to reduce air pollution, New York’s mayor has ordered all taxicabs to be hybrid vehicles by 2012.  The current conventional cabs get about 14 miles per gallon compared to about 30 mpg for the hybrid models.  The transition will happen gradually as old cabs are retired and owners will be required to replace them with hybrid models.

`These cars just sit there in traffic sometimes, belching fumes,” “This does a lot less. It’s a lot better for all of us.” -Mayor Bloomberg

The city will also be evaluating options to replace city vehicles such as buses and garbage trucks with hybrid models.

As China’s coal power plant boom continues to drive up domestic coal demand, in April China imported more coal than it exported.  Coal imports rose 27.1 percent from a year ago to 4.92 million metric tons in April, according to data released Tuesday by the General Administration of Customs. China’s coal exports for April fell 18.5 percent from last year to 4.46 million tons.

Mining News has some good information to put this all in perspective.   China is the worlds top coal producer but has been a net importer of coal over the past couple months.  If the trend holds it may become a a net importer of coal for the full year.

Driving this demand is economic growth and electricity consumption.  The Chinese government said its economy grew 11.1 percent in the first quarter.   China’s electricity output rose 15.5 percent in the first quarter from a year ago to 701.2 billion kilowatt-hours, according to a recent statement by the China Electricity Council. Its total power consumption rose 14.92 percent for the quarter to 718.9 billion kilowatt-hours.  Most of this additional generation capacity comes from coal fired power plants, with estimates of coals share of total generation capacity between 70-80%.  China accounted for two-thirds of the more than 560 coal-fired power units built in 26 nations between 2002 and 2006. The Chinese plants boosted annual world CO2 emissions by 740 million tons.

While some experts predict a slowdown of coal plant construction in China over the next couple of years, recently it seems  that there has been a new coal plant launched every week.

This is positive news for global coal producers as rising prices and demand should help their stocks.  China’s coal prices have been rising steadily following the increasing demand. April’s prices of the benchmark free-on-board price of Datong Quality Mix thermal coal were quoted at 480 to 495 yuan a metric ton (US$62.57-US$64.53; euro46.18-euro47.63), up 5 percent from a year ago. The benchmark prices hit a record high in mid-January at 515 to 525 yuan a metric ton.

The increased demand, logistical challenges in transportation, and environmental concerns are also driving additional research and funding for “clean coal” technologies such as co2 sequestration and gas to liquids (GTL)/Syngas.  There is an interesting article at Bitsofnews about coal.

Most of China’s coal reserves are in the north of the country while most of the demand and power plants are in the south.  The existing infrastructure of trains and barges, can not accommodate the increasing coal shipments to the south.  To support the growth China will need to invest significant amounts into upgrading logistics infrastructure including railroads, terminals, and pipelines.  According to the article on Bitsofnews, China is aggressively pursuing coal to liquids technology to be able to transport coal by pipelines. Until this happens it will continue to be less expensive and easier to import coal to the south of the country from abroad.

Amaizing Energy Holdings, a Denison Iowa based ethanol producer, has filed a preliminary S-1 filing with the SEC outlining its intent for an IPO.  The company currently operates a 55 million gallon per year ethanol plant but hopes to raise $300 million in the offering which will be used to expand its current facility and build a new ethanol plant near Atlantic, Iowa.  The current plant which was designed by ICM and built by Fagen was launched in September 2005 has a nameplate capacity of 40 million gallons per year.  The proposed plant would produce 100 million gallons per year.

Financial markets have been rough on the shares of ethanol producers as high corn costs have been cutting into profit margins.  Shares of US BioEnergy and Verasun have both dropped after the companies announced earnings bellow analyst expectations.

Red Herring Article

Ag Pellet Energy, based in Carmel, Ind., and Landers Machine Co., located in Fort Worth, Texas have developed a process to create Pellets out of DDG, a byproduct of ethanol production.  The companies have figured out a way to form the corn material into pellets while removing the remaining oil content to create 100% dry DDG pellets.  The new pellets which are easier and less costly to transport than regular DDG, have several uses.  In addition to using the pellets as an improved cattle feed which is currently being tested the groups are proposing that the pellets can be used as a partial replacement for coal at power plants.

In March, a test-burn was conducted at the Wisdom Station power plant, Spencer, Iowa, which is owned and operated by Corn Belt Power Cooperative, Humboldt, Iowa. The test burn consisted of mixing 10% of Ag Pellet Energy’s DDG Pellets with 90% coal at the power plant. Although the plant did not achieve full generation output with the fuel blend, a reduction in emissions was realized.

 “With the fuel mixture, we saw a reduction in the percent opacity, which is the measurement of visual emissions coming out of the stack. We believe the DDG ash causes the precipitator to perform better.” -Mike Thatcher, vice president, generation, at Corn Belt Power

Y et the pellets also have some drawbacks.  They have a lower BTU content than coal and during the trial the power plant experienced an 8.5% drop in energy output.  Further research is needed to demonstrate commercial feasibility of this new product as a power plant fuel source but should be interesting to follow.  While I have doubts that pellets could truly replace coal at power plants, I could see a potential where ethanol plants build cogeneration facilities powered by pellets to supply their own energy needs and sell electricity back to the grid at times of peak demand.

Article

Press Release

DDGS, a byproduct of dry mill ethanol production made from corn, has recently been gaining popularity as an animal feed and has been a growing export product from the US.  Exports reached 1.25 million metric tons in 2006, a 69% increase in three years

Now research by the US Department of Agriculture has showing that DDGS can have a variety of other uses.  Laboratory, greenhouse and field studies over the past few years,  have shown that applying DDGs to soil as a surface mulch can not only suppress weeds, but also bolster the growth of tomatoes and some turfgrasses. In one study, for example, Roma tomatoes in DDG-treated plots yielded 226 pounds, versus 149 pounds from untreated control plots.

Scientists believe  that this is due to increased levels of nitrogen, phosphorous, and other nutrients which are released as the DDGS mulch decays.  Scientists are also researching chemicals in the DDG mulch that may have kept chickweed, annual rye and other weeds from germinating in a previous study.  DDGs worked best when applied to the soil surface, because mixing them into the soil harmed both ornamentals and weeds alike.

More info from USDA

Besides being good with sushi, the Japanese rice wine might soon start powering cars as well.  In Shinanomachi, Japan, the government is funding a pilot project to produce ethanol out of locally available rice and farm waste.  The ethanol which would be similar to sake, just less tasty would help Japan develop a local biofuels industry.

“We want to present the next generation a preferable blue print — a self-sustainable use of local fuels,”  Yasuo Igarashi, a professor of applied microbiology at the University of Tokyo who heads the three year project.

Japan, which is the worlds second largest gasoline consumer after the US, has lagged behind Europe and the United States in biofuel use and production.  Major obstacles to date have been a lack of clear government policy regarding biofuels and the lack of reasonably priced agricultural feedstocks to produce the fuel.  Japan has not adopted any legislation to mandate biofuel use while some Japanese automakers produce flexible fuel vehicles for international markets, there are no flexible fuel vehicles sold in Japan.  On the feedstock side, Japan has limited farmland with many farms family run instead of large industrial operations.   This results in high agricultural prices and would make any biofuel made from traditional feedstocks excessively expensive.

This is the reason this project and other Japanese biofuel production faces many challenges.  It currently takes 1 kg of rice to produce 1/2 liter of ethanol.  Yet, projects such as this can help introduce biofuels to the Japanese motorist.  Even in small quantities producing ethanol from rice hulls and other agricultural waste may hold potential by jump starting the renewable fuel industry and starting to lead Japan away from oil consumption.

MSNBC Article

Today GM announced that it has joined the US Climate Action Partnership, becoming the first automaker to call on the US government to implement mandatory caps on emissions.

The U.S. Climate Action Partnership, formed earlier this year, seeks economy-wide greenhouse gas emission reductions of 60 to 80 percent from current levels by 2050. Its 21 companies and four environmental groups want rules leading to a cap and trade market that would put a price on emitting the gases.

“A central element as we see it, is energy diversity — being able to offer consumers vehicles that can be powered by many different energy sources and advanced propulsion systems to help displace petroleum and reduce greenhouse gas emissions,” Rick Wagoner, chairman and chief executive of General Motors

Congress is currently considering 8 separate bills to address greenhouse gas emissions.  It is a good to see large companies endorse caps, as strong corporate buy in should force congress to act the issue faster.  Yet, it also shows that many industries see some kind of greenhouse emission related legislation as inevitable and would like to get involved preemptively to help shape the legislation in their favor.

I expect to see an increasing amount of lobbying money directed to Washington where lobbyist will play a tug of war between industries to carve out exemptions, and tilt the regulations in favor of their clients.  Yet, any kind of environmental reform, or cap scheme would be positive news and is long overdue.

USCAP Members Include:

• Alcan Inc.
• Alcoa
• American International Group, Inc. (AIG)
• Boston Scientific Corporation
• BP America Inc.
• Caterpillar Inc.
• ConocoPhillips
• Deere & Company
• The Dow Chemical Company
• Duke Energy
• DuPont
• Environmental Defense
• FPL Group, Inc.
• General Electric
• General Motors Corp.
• Johnson & Johnson
• Marsh, Inc.
• National Wildlife Federation
• Natural Resources Defense Council
• The Nature Conservancy
• PepsiCo
• Pew Center on Global Climate Change
• PG&E Corporation
• PNM Resources
• Shell
• Siemens Corporation
• World Resources Institute