Blogging Ethanol & Biodiesel

Minnesota rolling in soybeans

Last week, Minnesota Gov. Tim Pawlenty signed into law a measure that increases the state's current 2% biodiesel mandate ten-fold in less than a decade. There could have been no increase in the mandate at all, but what, or who, caused the increase?

In December 2005, Minnesota officials had to temporarily roll back the requirement in response to complaints from truckers that the fuel was becoming viscous and clogging fuel filters.

The state currently requires diesel to contain 2% biodiesel, but the new rules under set a new mandate of 5% by May 1, 2009, 10% by 2012, and 20% by 2015. Those are some of the largest increases in the nation, putting Minnesota at the forefront of biodiesel mandating.

Minnesota farmers raise 280 million bushels of soybeans annually (about 10% of the total U.S. crop) on 7 million acres, a 165% yield increase per acre. Soybeans and soybean products now account for about one-third of Minnesota's total agricultural exports.

It takes Mother Nature 250 million years to renew her fossil fuels, but for Minnesota soybean producers it takes only nine months. Thus, Minnesota is in a better position than most to produce more biodiesel from soybeans.

Unpassable energy bill delayed on way to House floor

        House Speaker Nancy Pelosi (D-Calif.) is working with a singular focus to bring the revived energy bill to the House floor though certain facets of the current version are unlikely to stick.
        It didn't show up today, as had been expected, because Pelosi is hitting resistance in attempting to force into the package measures that would raise taxes on oil companies by around $15 billion during a 10-year period.
        If the bill passes the House, it faces an even greater hurdle in the Senate from its insistence on a Renewable Portfolio Standard - the proposed requirement that electric utilities produce 15% of their power from renewable sources by 2020.
        Sen. Pete Domenici (R-N.M.), for one, is strongly opposed to the measure, and it is not clear whether Majority Leader Harry Reid (D-Nev.) and the Minority Leader Mitch McConnell (R-Ken.) can collect enough votes among moderate Republicans to resist a filibuster if Domenici’s camp decides to mount one.
    President Bush is also opposed and has hinted that he would veto the entire bill if the version that shows up on his desk contains either the tax increase on oil companies or renewable electricity provisions.
        Meanwhile, in the Senate today, Democrats introduced a $21 billion tax package that excludes income of major integrated oil companies derived from the production, refining, processing, transportation, or distribution of oil and natural gas, permanently setting the deduction allowed at its current law level of 6% of qualified production activities.
        The proposal would also eliminate the distinction between foreign oil and gas extraction income and foreign oil related income.

House RFS caps corn ethanol

Image: Superbug via CafePress

House Dems have proposed scaling down the Senate's Renewable Fuels Standard and are heard to be nearing a deal that would require 20.5 billion gallons a year of renewable fuels by 2015. Congressional staff are trying to bring this to the floor next week.
        Interestingly, it seems that even in the renewed momentum of the RFS, critics of corn-based ethanol have been able to stir in a backwash tide. Policymakers in the House are capping the sought-after corn ethanol RFS at just 15 billion gallons of that 20.5 billion, leaving the rest as specific carve-outs for so-called next generation biofuels such as renewable diesel and ethanol fed by cellulosic feedstocks.
        This is an astute turn by House Dems and should keep the RFS portion energy bill from being viewed strictly as a bail-out for the Midwest's ethanol producers.         
        Meanwhile, the CAFE compromise, which would give vehicles such as SUVs lower standards for fuel efficiency, remains viable given Rep. John D. Dingell (D.-Mich.) ever-dutiful push for concessions to help struggling American automakers.
        House Speaker Nancy Pelosi said this week that she hoped to gain passage of an energy bill containing the new mileage rules by the middle of next week.