Switchgrass Used to Fuel Power Plant

LEXINGTON, Ky.-(UK Extension)--Officials from East Kentucky Power Cooperative and the University of Kentucky recently demonstrated switchgrass' feasibility as an alternative energy form as it was combined with coal to generate electricity at East Kentucky Power's Spurlock Station in Maysville.

This was believed to be the first time switchgrass was used as fuel for a power plant in Kentucky.

The switchgrass was mixed with the coal feedstock, replacing 1 to 2 percent of the coal normally used. East Kentucky Power will continue to study switchgrass' energy potentials, and could possibly increase the percentage of switchgrass used to 3 to 10 percent.

"We want to find out if switchgrass can be a viable supplemental fuel for our power plants," said Bob Marshall, president and CEO of East Kentucky Power. "This test will provide valuable information about how burning switchgrass affects our plant's fuel-delivery systems, boilers and emissions."

The test is part of an innovative four-year pilot project conducted by UK's College of Agriculture to determine if switchgrass can be grown sustainably and economically in Kentucky. A grant to the Kentucky Forage and Grassland Council from the Kentucky Agricultural Development Board is funding the project.

"The switchgrass burn, which was made possible by an investment from the Kentucky Agricultural Development Fund, will provide valuable information that could enhance Kentucky's agricultural opportunities outlined in my recently released seven-point energy plan," said Gov. Steve Beshear. "Energy-related research and development through public and private partnerships should be expanded throughout the state."

"This is just another example of how the college is working to develop a variety of technologies for alternative energy uses," said Scott Smith, dean of the College of Agriculture. "We appreciate our partners, East Kentucky Power Cooperative and the Governor's Office of Agricultural Policy, working with us toward this goal."

UK researchers are working with 20 farmers in northeast Kentucky to evaluate options for planting, growing, harvesting, transporting and processing the switchgrass. Each farmer manages a five-acre plot that UK forage specialists helped them establish.

"I think it's going to be a viable crop for all of us," said Greg Webb, a producer in Lewis County. "It won't replace tobacco, but it will help."

The forage specialists believe that if this project is successful, switchgrass could provide a great opportunity for producers in this area to diversify their agricultural operations as well as generate additional income.

"As people drive around northeastern Kentucky, they see a lot of land that lays fallow, and those are acres that have great potential for switchgrass production because it grows well even on marginal soils. We don't even have to take acres out of forages for cattle production," said Tom Keene, UK hay marketing specialist. "The opportunity is there."

"Kentucky farmers successfully producing switchgrass opens up tremendous opportunities for them in the emerging biomass market," said Ray Smith, UK forage extension specialist. "While further research is needed to determine the economic returns to producers, this project is allowing Kentucky farmers to be at the forefront of this movement."

Seven plots were established in 2007, and the remaining 13 were planted in 2008. The switchgrass was planted during the spring and matured until the first killing frost. After that frost, the plots were mowed, and the switchgrass was baled like hay. About 70 tons of switchgrass were harvested this fall. The bales were transported to Spurlock Station, where UK representatives used a tub grinder to further process the switchgrass for handling by the power plant's coal conveyer system.

One of Spurlock Station's generating units-the Gilbert # 3 unit-features circulating fluidized bed (CFB) technology that allows it to burn a wide range of fuels, including switchgrass. In April, EKPC plans to bring online a second unit at Spurlock Station featuring this technology. EKPC's proposed Smith CFB #1 unit at Smith Station in Clark County also is planned to feature this technology.

VeraSun Leaves Corn Farmers In Limbo As Ethanol Industry Founders

BROOKINGS, S.D.-(Dow Jones)--For many American farmers, once-lucrative corn shipments to ethanol plants run by VeraSun Energy Corp. (VSUNQ) are now in limbo.

Farmers like Mark Kuhn and Ron Litterer have no idea if the ambitious biofuels producer currently in Ch. 11 bankruptcy reorganization will honor their delivery contracts. Even worse, the farmers can't sell that corn elsewhere - at least for now.

VeraSun's plight, emblematic of the U.S. ethanol business, is hurting corn production and prices. The situation is likely to ripple through America's heartland and keep corn prices at depressed levels, market sources say.

This is putting financial stress on some farmers, who had planned to sell most of their corn to VeraSun and plow the cash from those expensive contracts into mortgage payments on their farms or equipment.

Also in jeopardy are small grain-elevator operators, who buy corn from farmers, store it, and contract to sell it to ethanol producers.

"This puts people in a terrible bind," said Kuhn of Charles City, Iowa, where VeraSun runs a plant. "There is so much uncertainty with the contracts and how they will be dealt with. We're being held hostage."

Kuhn, also an Iowa state legislator, holds a contract to sell VeraSun corn for $6.03 a bushel.

But the fate of his contract - and others that stretch as far out as 2011 - won't be known until 10 days prior to the scheduled delivery date. At that time, VeraSun can opt to buy the corn at the original price or cancel the contract, according to a recent Delaware court ruling.

"We want VeraSun to operate and for the producers to make the best of a bad situation," said Litterer, who grows corn on a 1,000 acre farm in Greene, Iowa, and also serves as chairman of the National Corn Growers Association.

He still has a contract to sell 15% of his crop to VeraSun in March.

Payday Gone

Farmers once believed a big payday was coming. This past summer, corn was trading at historic highs on U.S. grain exchanges, climbing close to $8 a bushel. But corn prices have plunged since then, with corn now fetching around $3.30 a bushel.

"What [farmers] had counted on for their income is just gone," said Darin Newsom, grains analyst at market-researcher DTN Ag in Omaha, Neb.

Before the company went bust, VeraSun had signed many deals to buy the corn between $5 and $7 a bushel. One contract was even inked for $7.70 a bushel, according to farmers.

VeraSun has "no intention of honoring some of these contracts," claims Keith Bolin, who runs the American Corn Growers Association and grows corn in Illinois.

VeraSun didn't respond to questions for this story.

At a Dec. 2 court hearing in Wilmington, Del., Bolin and Kuhn said VeraSun's lead bankruptcy attorney told them that the ethanol maker doesn't intend to buy corn above the current spot market price. Since the court hearing, Kuhn said negotiations to get the farmers released from the contracts have stalled.

The next court date is set for Jan. 8.

At least 124 farmers, known as the VeraSun Corn Suppliers, are still on the books to deliver the ethanol producer corn after January. It is believed there are many others.

To its credit, VeraSun has given some of its corn suppliers a chance to resell their bushels elsewhere. So far, the company has cancelled delivery contracts through Jan. 31 for eight of its plants in Minnesota, Nebraska, and South Dakota.

Those farmers likely will get a lower price for their corn.

"Sellers are sitting back looking for lower prices," DTN's Newsom said. "They are not pushing for huge amounts of corn."

Ethanol Industry's Toll on Corn

VeraSun was the largest publicly-traded, stand-alone ethanol maker before it filed for bankruptcy Oct. 31. The Brookings, S.D., company, started in 2001, has been one of the key beneficiaries of U.S. policies designed to encourage the use of alternative fuels.

A lucrative initial public offering helped fund its rapid expansion, including the acquisition of rival U.S. BioEnergy. But the bets VeraSun made on corn when prices were high soured, the company swallowed too much debt and ran into cash problems.

It's not alone: Five smaller ethanol producers are in bankruptcy, too.

Those left standing include privately held Poet LLC; Cargill; giant Archer Daniels Midland (ADM); Aventine Renewable (AVR); and Pacific Ethanol (PEIX).

The industry's plight has already taken a toll. In its most recent report, the U.S. Agriculture Dept. slashed its estimate on corn used for ethanol by 300 million bushels to 3.7 billion bushels. It cut its forecast for the average farm price of corn to a range of $3.65 to $4.35 a bushel, from $4 to $4.80.

VeraSun's 16 ethanol plants have the capacity to take 624 million of corn bushels a year, state legislator Kuhn said. But just a small number of those plants are currently in operation as the producer seeks to secure more permanent bankruptcy financing.

As it tries to climb out of bankruptcy, VeraSun faces another important task: mending relationships with corn farmers who championed the ethanol business long before VeraSun ever processed the grain for use at the gas pumps.

"[VeraSun's] speculation has brought millions of dollars of losses to family farmers in the Midwest," said Bolin. "VeraSun has done more damage to the ethanol industry than those that dislike and despise it."

Biofuel Economics: Future Of Renewable Energy Is Secure

FARGO, N.D.-(NDSU)--On Dec. 11, the California Air Resources Board passed sweeping new legislation that secures the future of renewable energy. As part of the scoping plan that implements the goals established in their 2006 Global Warming Solutions Act, new key provisions include:


* 33 percent of all energy must come from renewable sources by 2020.

* New homes built after 2020 must be energy self-sufficent.

* Greenhouse gas emissions must be reduced to 1990 levels.

What is especially noteworthy is the economic climate in which this legislation was passed. Generally, California is regarded as being the epicenter of housing problems. Moreover, the state's slowing economy has resulted in a $48 billion budget deficit. One would think the state would delay implementation of these standards until financial prosperity is restored.

However, financial analysis of the proposal shows net economic gains. Savings from reduced spending on energy will translate into increased spending on other consumer goods and services and lead to economic expansion. Implicit in this assumption is that higher energy prices will lead to energy efficiency and the creation of renewable energy sources at lower cost. It is estimated that energy savings of $20 billion annually will be realized. Of this, gasoline consumption is expected to fall by 25 percent, or 4.6 billion gallons. The state still will consume 13.66 billion gallons. If one-third of this will be supplied from renewable sources, this represents a demand of 4.55 billion gallons, or about half of what the U.S. is presently producing.

A key driver underlying this plan is the reduction in greenhouse gas emissions. The study assumes that carbon sequestration is worth $10 a ton. This aligns with key legislation passed last December that seeks to reduce the carbon footprint of all transportation fuels by 10 percent in 2012.

As one of the more western ethanol-producing states, North Dakota has a competitive advantage in supplying renewable energy to California. Any renewable energy provided must demonstrate carbon reduction. This can be a challenge with coal-fired ethanol plants because ethanol produced in these facilities has only a slightly smaller carbon footprint when compared with gasoline. Using reclaimed heat from a coal-fired electrical power plant provides greater reduction, but that depends on how the carbon credit is shared between the power and ethanol plants. A number of ethanol plants are exploring the merits of supplementing their coal with biomass.

(Source: Cole Gustafson, Biofuels Economist, North Dakota State Ag Extension.)

Ethanol Bailout? Environmental, Watchdog, & Food Industry Groups Respond

WASHINGTON-(AgNetwork)--This week it was reported that the Renewable Fuels Association had suggested, both to Capitol Hill staff and members of President-Elect Barack Obama's team, a variety of proposals to aid the ailing ethanol industry, including a $1 billion short-term credit facility and a $50 billion federal loan guarantee program. In response, the following statements were issued by various members of the Food Before Fuel coalition.

"A lot of industries lost money, closed plants and laid off workers when our government's ethanol policies drove corn prices to record highs this summer. In fact, the poultry and livestock industry probably suffered far more financially than the corn ethanol industry. To bail out the corn ethanol industry while ignoring other rural industries harmed by high corn prices and the sagging economy would be insulting and insensitive. The best course of action would be for Congress to revisit the renewable fuels policies that caused this disaster, but in all events it must give equal consideration to everyone affected by its corn ethanol policy." - Joel Brandenberger, president, National Turkey Federation

"The ethanol industry's claim that a bailout for their industry is justified by the creation of "green jobs" is truly a case of "green wash." The net energy yield of corn-based ethanol is marginal at best. Corn ethanol has been shown to contribute to carbon emissions, ground level ozone and water pollution. From the enormous amount of water it takes to create the fuel to the fossil fuels that run most ethanol plants, ethanol's environmental impact has been shown to be detrimental to our nation's soil, air and water - and to our planet's climate. It contributes to both soil erosion and water pollution. Virtually every major environmental organization in the world has come out against policies that expand the use of corn ethanol. " - Lester Brown, president and founder of the Earth Policy Institute

"Since corn ethanol boosters have never known a day when they weren't benefiting from government largesse, it's sadly predictable that their response to times of economic distress is to push for more handouts rather than consider reality-based business models. Ethanol lobbyists won't call their latest loan and mandate schemes 'bailouts,' but after seeing so many other interests line up for federal cash recently, taxpayers know when they're being shaken down. Americans should be outraged that yet another industry, especially one that is already dependent on the government, has the gall to ask them for even more of their hard-earned money." - Andrew Moylan, government affairs manager, National Taxpayers Union

"America needs to shift its energy policy away from biofuels like corn ethanol that drive up food prices and harm the environment toward second generation solutions that don't pit our need for fuel against our need for affordable food. An additional $50 billion in government support for the corn ethanol industry will only calcify the status quo and reduce the urgency for innovation." - Scott Openshaw, communications director, Grocery Manufacturers Association

"The ethanol industry has taken taxpayer subsidies for more than 30 years and is still not economically viable. The U.S. needs to move to the next generation of biofuels and other alternative energy sources that do not pit our energy needs against our need for affordable food. Corn based ethanol is a major contributor to higher food prices and continuing down this path will further burden America's consumers who are already struggling to put food on the table. Our investment in alternative energy sources should be directed toward truly sustainable solutions for the 21st century, not failed ideas from the 20th."- J. Patrick Boyle, President and CEO of the American Meat Institute

"For thirty years the corn ethanol industry has received billions in government subsidies. For this heavily subsidized industry to now come to Washington, hat in hand, to encourage Congress to provide over $50 billion in additional taxpayer support is way beyond the burden that taxpayers should have to bear. If anything, it is time for Congress to demand that the ethanol industry wean itself from government support and begin to compete in the market on its product's merits. The ethanol industry's hope for a bailout re-confirms the conclusion that too much corn being diverted to ethanol in too rapid of a time is a very unfortunate path to be pursuing. In these difficult economic times and market conditions for most users of corn, it is a time to tighten one's belt." - Bill Roenigk, senior vice president and chief economist, National Chicken Council

MSU Students Lay Waste to 'Biomass-as-Fuel' Obstacle

STARKVILLE, Miss.-(MSU Extension)--Plant waste offers a nearly unlimited supply of raw material for biofuel production, but the substance that stands in the way of its use is the same one that makes the plants stand.

The substance in question is lignin, a biopolymer that gives plant cells their structure and resistance to degradation. Mississippi State University biological engineering undergraduates Caleb Dulaney and Sam Pote are determined to help the world rethink biomass possibilities "one cell at a time" with their research on isolating a naturally occurring enzyme that initiates lignin breakdown.

The two students won a bronze medal in November for their work at the 2008 International Genetically Engineered Machine, or iGEM, competition among 84 universities held at the Massachusetts Institute of Technology in Cambridge. MSU's team competed in the energy category. Student teams that earn a bronze, silver or gold medal also receive the honor of entering their research into the Registry of Standard Biological Parts.

"This honor recognizes our team's accomplishment," said MSU biological engineering professor Filip To, one of the team's faculty advisers. "It shows we have a presence and strength in this new knowledge of synthetic biology and it means that our students are as world-class in their fields as those at many elite schools with strong financial backing."

The cellulose and hemi-cellulose in plant cells can be converted to sugar for making ethanol. However, these materials cannot be accessed without breaking down the lignin. Many manufacturers are unwilling to perform the process needed to break down lignin in biomass because it is costly and complex.

While some food crops, such as corn, soybeans and sugar cane, provide materials for making ethanol and other biofuels, using these important commodities to make biofuel puts a strain on the world's food supply.

"The problem with the current way of making ethanol is that resources are limited," said Dulaney, a senior from Collinsville. "The plant matter left over after harvesting can provide an almost unlimited resource for biofuel manufacturing."

Harsh chemicals are needed to break down lignin and the process is complicated. The chemical residues only add to the overall waste disposal problems that industries deal with.

"If an accelerated biological process to break down lignin were possible, there would be less of a problem for the environment," Dulaney said.

Dulaney received a fellowship from the MSU Shackouls Honors College to work on a research project as a member of the MSU Synthetic Biology Team. The team, which also included Pote, a Starkville junior, and MSU biochemistry professor Din-Low Ma, had a goal of isolating an enzyme-producing gene in white-rot fungi that initiates lignin breakdown.

"Dr. To heard about the iGEM competition four years ago, and he talked with several students before he went to MIT to observe," Pote said. "He brought back several ideas, and we talked about participating in the event."

MSU sent student teams to the competition in 2006 and 2007. The 2006 team won honorable mention for investigating the use of Escherichia coli, or E.Coli, to make a hydrogen detector. The 2007 team won a bronze medal for its investigation in tracking abnormal cell growth by marking a substance called eubiquitin.

After considerable discussion with advisers, the two students decided to research alternative material sources for biofuel for the 2008 competition. The white-rot fungus, often found on rotting wood, contains a peroxidase enzyme that contributes to lignin breakdown. Two other enzymes complete the process.

"We chose lignin-degrading peroxidase because it initiates the breakdown," Dulaney said. "The other enzymes break away the lignin from the plant material and further break up the material."

The first step of the research was to isolate the enzyme-producing gene. The second was to introduce the gene into E. coli to reproduce it. Dulaney and Pote enlisted the help of graduate students Robert Morris and Meng-Hsuan "Victor" Ho to accomplish this goal.

"We were looking for a natural and environmentally friendly way to break down the lignin at a faster rate," Pote said. "Our work on the project allowed us to isolate the gene, slice out the DNA and basically have the bacteria eat the lignin."

The students said they enjoyed the research because they were able to focus on the engineering of a biological process, a concept both wanted to master.

"Our research project is definitely an indication that science and industry are giving more thought to moving away from petroleum-based energy," Pote said. "We feel like we have taken our first step to make people aware of the possibility."

Promoting Increased Biofuel Production Globally

WASHINGTON-(Farm Progress)--A recent conference hosted by Brazil brought more than 70 countries together to advance biofuel production around the globe and discuss the beneficial impacts. The U.S. delegation was lead by Ag Secretary Ed Schafer, who highlighted the fact that Brazil and the U.S. are leading the way each in their own niche; the U.S. with corn-based ethanol and Brazil with biofuels made from sugar. However Schafer says diversifying the feedstocks is recognized as critical as the world moves toward second-generation biofuels.

"As we look beyond sugar and corn into the cellulosic efforts it is important for us to remember that this technology is going to allow energy independence for developing countries, for small countries that don't have energy that import it and that are dependent on others," Schafer says. "What comes from energy independence, which is also better for the environment, it creates economic activity in rural areas. So farmers and landowners can take advantage of this new technology, create energy independence through biofuels and increase the opportunities to make money on their own farms. It increases investment, increases economic activity; this is good all the way around for the world and Brazil and the United States are going to lead the way."

Schafer says he believes that the sharing of technologies and ideas among nations is vital in the feedstocks diversification process.

"You have different resources in different countries. You have different resources in different regions. It might be wood chips here, it might be cover grass here, it might be a short-season growth product here," Schafer says. "So I think what's important is for the 70 plus countries is to say here's what we have available for resources for us, how can that technology be tailored to work locally."

Biofuel Moves Away From Food Crops

AMSTERDAM, Netherlands-(AP)--In future years, we may look back at the Great Mexican Tortilla Crisis of 2006 as the time when ethanol lost its vroom.

Right or wrong, that was when blame firmly settled on biofuels for the surge in food prices. The diversion of American corn from flour to fuel put the flat corn bread out of reach for Mexico's poorest.

Two years later, the search is on for ways to keep corn on the table rather than in the gas tank. Moving away from food crops, the biofuel of the future may come from the tall grass growing wild by the roadside, from grain stalks left behind by the harvest, and from garbage dumps and dinner table scraps.

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VeraSun Cancels U.S. BioEnergy Corn Contracts

WASHINGTON-(Farm Progress)--VeraSun Energy announced Tuesday that nearly all contracts to buy corn for its U.S. BioEnergy ethanol plants through Jan. 15, 2009 would be canceled.







During a bankruptcy hearing, VeraSun lawyer Felicia Perlman said that contracts for plant in Welcome, Del. would be cancelled through Jan. 31, 2009. However the Marion, S.D. U.S. BioEnergy plant was not included in the planned cancellations. The eight U.S. BioEnergy plants were acquired by VeraSun earlier this year.

The bankruptcy court approved a measure that would allow VeraSun to cancel corn contracts 10 business days before delivery.

Last month VeraSun decided not to honor corn purchasing contracts at several of its locations, instead offering spot market prices to producers. According to attorney Joe Peiffer, who represents farmers engaged in contracts with the ethanol producer, VeraSun does not anticipate accepting corn contracts for any plant that are locked in above the current market price.

Peiffer says that company has designated a point person that producers can bring contracts to for decisions on whether or not the contracts will be honored.

Biodiesel Sold Overseas Still Gets U.S. Tax Credit

WASHINGTON-(Houston Chronicle)--Federal subsidies to the U.S. biodiesel industry were supposed to help wean the nation from foreign oil, and a new law in 2009 will bolster the effort, but the money has fueled a controversial side business.

Domestic producers of the renewable fuel have been selling huge quantities of biodiesel in Europe and in other foreign markets, where prices are often better, and then receiving a $1-per-gallon tax credit from Uncle Sam.

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