Biofuels Update
Critics of ethanol often use some fuzzy math when estimating how much of the U.S. corn crop goes to renewable fuel production. Get all the facts about this and other trends.
Compiled by staff
Published: Nov 15, 2008
Ethanol efficiency improves
A recent report by John Christianson, CPA of the independent accounting firm Christianson & Associates, PLLP, catalogues the energy improvements made at ethanol plants across country. The report states the average amount of energy as measured by British Thermal Units (BTUs) required to produce ethanol and a livestock feed co-product across all ethanol production technologies fell 13.5% between 2004 and 2007.
The most efficient plants showed an even more dramatic reduction - 19% reduction.
Likewise, electricity usage at ethanol biorefineries was also cut. The Christianson report shows a 13% reduction in electricity consumption at the average ethanol facility.
The results of the Christianson report are consistent with the results of the Department of Energy's recent Argonne National Laboratory analysis of the improving efficiency of the American ethanol industry between 2001 and 2006. According to Argonne:
- Water consumption - down 26.6%
- Grid electricity use - down 15.7%
- Total energy use - down 21.8%
It ain't hay
According to a new analysis by the Renewable Fuels Association, America's ethanol producers delivered 23 million metric tons of livestock and poultry feed to the world last year, or nearly three times the amount of wheat, sorghum, barley and oats fed to U.S. livestock in the 2007/08 marketing year. Put another way, the amount of feed produced by the ethanol industry in 2007/08 is roughly equivalent to the combined total amount of feed consumed by cattle on feed last year in Texas, Kansas, Nebraska, and Colorado-the nation's four largest feedlot states.
Moreover, the return of one-third of each bushel of corn used in ethanol production to the livestock feed market directly impacts ethanol's net corn usage. When the impact of the livestock feed co-product is accounted for, ethanol demand represents only 23% of total projected corn usage — significantly less than the claims of ethanol using one-third or more of the nation's corn supply.
Check out RFA's Feeding the Future
We're No. 1 - soon
The United States is ready to become the world's largest biodiesel market with 19% of consumption by 2012. The industry grew 50% from 2002-2007, and is now positioned to grow 30% between 2007 and 2012, according to SRI Consulting.
A slower pace of growth is projected for the global biodiesel industry due to market uncertainties: ongoing fuels versus food debate, rising raw material costs, changing regulatory environment, a slowing global economy and the current financial crisis. Overall, the success of the biodiesel industry relies on political support and incentives, without which the global industry is not competitive. Lead Author Milen Blagoev commented, "Demand for biodiesel is set by regulation within each individual country. Most countries have set a general target of substituting a certain amount - usually a percentage - of overall fuel or energy consumption with renewable sources by a certain year."
No •splash and dash'
The financial bailout legislation passed this fall includes an extension of the biodiesel tax incentive for one year, through Dec. 31, 2009, and provisions to shut down the "splash and dash" practice that currently allows foreign-produced fuel to enter the U.S., claim the biodiesel tax incentive and be shipped to a third country for end use.
The tax extension also continues the small biodiesel producer credit of 10 cents/gallon and the $1/gallon production tax credit for diesel fuel created from biomass until December 2009.
The provision would also eliminates allowing second-use biodiesel (which currently receives 50 cents/gal) to receive the same, full $1/gal tax credit as other biodiesel, and eliminates the requirement that renewable diesel must be produced using a thermal depolymerization process. Diesel fuel that is created by co-processing biomass with other feedstocks (e.g., petroleum) would be eligible for the 50 ct/gal tax credit for alternative fuels.
The package would also give pipeline owners the same tax benefits they receive for moving both renewable fuels and petroleum products, a sticking point in getting petroleum companies to come behind the idea of transporting ethanol via pipeline.
Ethanol market report
Research and Markets recently published its "Ethanol Market Outlook 2008." The report analyzes worldwide markets for ethanol, including Europe, Asia, North America, Latin America, Middle East and Africa, Oceania. It provides the most complete and current analytical account of the following areas: ethanol producers, plant-by-plant capacities, supply/demand, future demand trend forecasts, ethanol prices, international trade, upcoming projects. Production by company, ethanol imports and exports, prices are presented for each region. For more information visit Ethanol Market Outlook 2008
Permalink: Click here
Tagged: ethanol, biodiesel, Extension, wheat, Bushel
|