Archive for January, 2009

The renewable energy and energy efficiency industries represented more than 9 million jobs and $1,045 billion in U.S. revenue in 2007, according to a new report by The American Solar Energy Society (ASES), Boulder, CO, and Management Information Services, Inc (MISI), Washington, DC. ASES adds that the renewable energy industry grew three times as fast as the U.S. economy in 2007, with solar thermal, photovoltaic, biodiesel and ethanol sectors leading the way, each with more than a 25 percent annual revenue growth. For information on the new ASES Green Collar Jobs report, visit www.ases.org/greenjobs.

“There’s a new sense of optimism in the green economy,” said Brad Collins, executive director, ASES. “But while the U.S. could see million of new jobs in renewable energy and energy efficiency, this will only happen with the necessary leadership, research, development, and public policy at the federal and state levels.”

Key steps include a national renewable portfolio standard, long-term extension of the production tax credit, effective net metering policies, and improved access to electric transmission infrastructure.

Some of the main conclusions from this report include:

• As many as 37 million jobs can be generated by the renewable energy and energy efficiency industries in the U.S. by 2030 – more than 17% of all anticipated U.S. employment.

• The hottest sectors include solar thermal, solar photovoltaics, biofuels and fuel cells (in terms of revenue growth).

• Hot job areas include electricians, mechanical engineers, welders, metal workers, construction managers, accountants, analysts, environmental scientists and chemists.

• Renewable energy and energy efficiency can create millions of well-paying jobs, many of which are not subject to foreign outsourcing.

• The renewable energy industry grew more than three times as fast as the U.S. economy in 2007 (not including hydropower). Renewable energy is also growing more rapidly than the energy efficiency industry, but the energy efficiency industry is currently much larger than the renewable energy industry.

Government Action Needed Now

The report stressed that while there is huge opportunity ahead, there is also a sense of urgency. Every year’s delay by policymakers (2009, 2010) has a highly disproportionate and negative impact on long-range growth. The longer that policymakers delay in implementing ambitious renewable energy and energy efficiency programs, the more difficult it will be to achieve the report’s goals by 2030, ASES reported.

Unless quick action is taken, the U.S. risks losing millions of green jobs to other nations that offer a more serious and sustained commitment to growing its green economy. Germany, for example, has five times the wind sector jobs and four times the photovoltaic solar jobs than the U.S. Germany also produces one-half the wind rotors in the world, one-third the solar panels in the world and leads the world in biodiesel production.

The National Ethanol Vehicle Coalition has a listing of 1,914 (at last count) locations where consumers can fuel up with E85. For locations near you, visit www.e85refueling.com.

The National Biodiesel Board also has a listing of numerous locations selling biodiesel blends of B5 and higher. For locations near you, visit www.biodiesel.org/buyingbiodiesel/retailfuelingsites/showall.asp.

I’d like to hear from you. What are these biofuels selling for in your area? If we get enough responses, we’ll post them on the Biofuel Lines blog.

And while I’m asking, what would you like to find out more about in the way of biofuels analysis, news, trends, links or other resources? Please send your questions or comments. Just scroll down this page to “Your Account” to register. You can then create a login to join in the blog.

Hope to hear from you soon!

At the current spot price for ethanol, ethanol plants with capital debt are expected to lose money at near-time corn prices. This is one of the findings reported by David Peters, assistant professor of Sociology, Iowa State University, in a new study entitled “Ethanol Profit Margins—January 2009.” For a copy of the report, visit www.soc.iastate.edu/news/ethanol-margins-jan09.pdf.

At $1.50 per gallon ethanol spot prices and $3.75 per bushel corn prices, these plants stand to lose $.36 per gallon of ethanol produced, equaling $38.88 million lost annually. For these plants to break even, corn would need to fall to $2.25 per bushel, Peters found.

These results are based on a scenario where a 100-million gallon per year ethanol plant built in 2005 is financing 60 percent of its capital costs at 8 percent annual interest for 10 years.

Even plants with no capital debt are expected to lose money at this time. Peters reported that again at current spot prices of $1.50 per gallon and $3.75 per bushel corn, plants are expected to lose $.22 per gallon of ethanol produced, totaling $21.6 million annually.

At the near-term ethanol futures price of $1.75 per gallon, however, debt-free ethanol plants are expected to break even at current prices, but incur small net losses at near-term prices. At these ethanol prices, the breakeven corn price would be $3.90.

The ethanol industry is likely to see further consolidation in 2009 as it copes with continued volatility in grain markets and falling oil prices, says Renewable Fuels Association (RFA) president and CEO Bob Dinneen.

This year will also include further debate concerning high level blends as more studies demonstrate the efficiency of using high level blends (greater than 10% ethanol in gasoline) in legacy vehicles.

Dinneen reported that the ethanol industry will take advantage of congressional efforts to stimulate the general economy and to look at global climate change more aggressively. These are areas where the ethanol industry is front and center in the public policy debate, Dinneen said, adding, “We’re going to have to be there making the case for ethanol on Capitol Hill.”

Volatility, especially that in the grain markets, will mean that ethanol producers will have to employ smart risk management strategies. Some companies will be smarter than others and some may not make it, Dinneen said, but added that the fundamentals of the ethanol industry “remain strong.”

This is because the U.S. will need to increase the amount of domestically-produced renewable fuels. In addition, demand for ethanol will continue to grow because U.S. energy policy demands it and because consumers are looking for alternatives to straight petroleum, Dinneen said. He points to the increase in E85 and blender pumps around the country as evidence.

A huge issue ahead for the ethanol industry will be “attacking the blend wall.” To do this, industry must maximize the use of 10% ethanol (E10) blends across the country. Dinneen noted that the RFA is working in California to expand market opportunities and also is working to bring down state regulatory barriers to E10 in the Southeast and elsewhere.

At the same time, the RFA is looking at how to increase the use of E85 through flexible fuel vehicles and expand the E85 refueling structure. “Part of that solution is going to be higher level blends,” Dinneen said, adding that RFA is working with automakers to determine “safe and appropriate blend levels for ethanol in legacy vehicles.”

Automakers have an enormous amount of influence over this process because they will have to extend warranty coverage to these vehicles and alert consumers that higher ethanol blend levels are safe.

There is a great deal of anecdotal evidence to suggest that higher blends are safe, but this alone is not enough, Dinneen said. “We need good solid science.” He indicated that RFA as well as the Department of Energy, the Environmental Protection Agency and automakers are working on higher blend studies. Dinneen added that RFA will continue to work with all of the groups to ensure “there are no artificial barriers to ethanol use anyplace.” Visit http://www.ethanolrfa.org/

If you haven’t already registered, consider attending one or both of the biofuels industry’s leading conferences: the National Biodiesel Conference and the National Ethanol Conference.

The National Biodiesel Conference will be held Feb. 1-4 at Moscone Center West, San Francisco, CA. For registration details, visit www.biodieselconference.org.

The annual conference features a number of educational sessions focused on production, technology, fuel distribution, government policy and regulations, markets, original equipment manufacturers and sustainability.

The National Ethanol Conference will be held Feb. 23-25 at the Henry B. Gonzalez Convention Center, San Antonio, TX. For registration details, visit www.nationalethanolconference.com.

This year’s conference will address several issues, including modernizing ethanol blend regulations, expanding infrastructure; and development of next generation technologies. The meeting also will feature keynote addresses from Jack Gerard, the new president and CEO of the American Petroleum Institute; and Joe Petrowski, CEO, Gulf Oil.

You know that an industry has come of age when publishers begin to rank the biggest, the most popular, or in the recent case of Biofuels Digest, the “hottest” companies. Just this week, Biofuels Digest, an online daily bioenergy news service, posted its rankings of the “50 Hottest Companies in Bioenergy” for 2008-09. The list recognizes innovation and achievement in bioenergy development.

The top five companies (from first to fifth) are as follows: Coskata, Sapphire Energy, Virent Energy Systems, POET and Range Fuels. You can review the other top companies at http://biofuelsdigest.com/blog2/2008/12/22/behind-the-50-hottest-companies-in-bioenergy-rankings/

Checkbiotech.org noted that among the top 50, 17 are active in cellulosic ethanol development, and several are developing algae-to-energy systems or producing other advanced biofuels or waste-to-energy technologies. The companies range from start-ups, funded by venture capital and corporate investors, to new divisions of established companies such as DuPont, Genencor, and Honeywell.

Rankings were established by a Biofuels Digest panel. They ranked companies by focusing on three main factors: quality of the intellectual property owned or developed by the company; the amount of due diligence done on the company by public and private investors; and measureable progress toward commercialization.