Energy News
What's Up with Ethanol Production Profits?
Farm Doc Daily | Posted on July 5, 2017In a farmdoc daily article last week, we showed that biodiesel production profits in the U.S. had moved into the black in recent months, seemingly defying the typical pattern of losses in years following the expiration of the biodiesel tax credit. Given the anomalous movement in biodiesel production profits one wonders whether something similar has been happening to ethanol production. The U.S. ethanol production industry is coming off a good year in 2016. Net profits averaged $0.12 per gallon, about $0.05 higher than in 2015. In the following section, we examine trends in ethanol production profits in the first half of 2017. A model of a representative Iowa ethanol plant is used to track the profitability of ethanol production. It is the same basic model that has been used the last several years in numerous farmdoc daily articles on ethanol markets and policy. The model is meant to be representative of an "average" ethanol plant constructed in the last decade. There is certainly substantial variation in capacity and production efficiency across the industry and this should be kept in mind when viewing profit estimates from the model. Net profits declined sharply in January 2017, moving as low as -$0.18 per gallon. Since that time, profits have recovered and peaked in recent weeks at $0.20 per gallon. The recovery of ethanol profits can be traced to a rise in ethanol prices that has slightly outpaced the rise in corn prices (Figure 2). The average profit to date in 2017, however, is only $0.01 per gallon. A significant factor pulling down ethanol profits is low DDGS prices, which have been below $100 per ton most of the time in 2017. These are some of the lowest prices of the last decade. So, 2017 to date has essentially been a breakeven year for U.S. ethanol producers. This is in contrast to the rosier picture for biodiesel production profits. However, if ethanol production profits in the last few weeks can be maintained for the rest of the year, full year 2017 profits could be on par with 2016. With a largely stagnant domestic consumption outlook, recovery will likely depend on developments with regard to ethanol exports. Figure 4 shows that exports through March have continued very strong, but Brazil, the second largest import customer of the U.S. is considering imposing import duties to staunch the flow of U.S. imports. This could be a major drag on ethanol prices and profits in the second half of the year. On the positive side, Mexico recently announced a change in regulations to allow 10 percent ethanol blends throughout the country except in three large cities.
US mayors pass resolution to target 100% renewable energy by 2035
Utility Dive | Posted on July 5, 2017The U.S. Conference of Mayors (USCM) on Monday approved a resolution supporting a 100% renewable energy goal by 2035, and launched the Ready for 100 campaign to support the utilization of more clean power. The group of more than 250 U.S. mayors also passed resolutions to support vehicle electrification, energy efficiency grants and city-driven plans to reverse climate change. The resolutions are symbolic and represent statements of intent for city planning and work with federal and state governments. Interest in renewables is already running high in cities: A joint survey by USCM and the Center for Climate and Energy Solutions found almost 70% of responding cities already generate or purchase some clean energy, more than 20% are considering the option, and more than 60% are buying low-emissions vehicles for fleets.
Southern suspends work on Kemper coal gasification units
Utility Dive | Posted on July 5, 2017Southern Co. is "immediately suspending start-up and operations activities" on the gasifier units of its Kemper County power plant, the company said in a release Wednesday.The 582 MW plant was designed to convert locally-mined coal into a synthetic gas and capture over half of its carbon emissions. But years of cost overruns and construction delays led Mississippi regulators to direct the utility to draw up a plan for the plant to run solely on natural gas, prompting Southern's decision.Mississippi Power, Southern's subsidiary in the state, will continue to operate the Kemper plant as a combined cycle natural gas facility. Shareholders have already lost $3.1 billion on the plant and the utility could be on the hook for $3.4 billion more if the utility cannot reach a settlement with regulator
Dakota Access security firm operated in ND without license, board says
The Bismarck Tribune | Posted on July 3, 2017A North Dakota regulatory board has accused a security firm hired by the company that built the Dakota Access Pipeline of operating in the state without a license.In a complaint dated June 12, attorneys for the North Dakota Private Investigative and Security Board said the agency denied an application to James Patrick Reese, the founder of North Carolina-based TigerSwan, to become a licensed private security provider earlier this year. But Reese “and/or” the firm have “illegally continued to conduct private investigative and/or private security services in North Dakota following the denial of their application of licensure.”The complaint said TigerSwan “maintains roving security teams” to monitor valve sites in North Dakota, and the firm’s personnel are armed with semiautomatic rifles and sidearms “while engaging in security services.” The firm continues to provide private investigative services, including “monitoring of persons affiliated with the DAPL protests,” the complaint alleges.The board is asking a state district court for an injunction against TigerSwan and Reese and for an administrative fine for each violation they have allegedly committed. Providing private investigative or private security services without a current license issued by the board is a Class B misdemeanor under state law.
New best friends: GOP governors and renewables
EEnews | Posted on June 28, 2017Nevada Gov. Brian Sandoval is fresh off a legislative session in which he signed nine bills aimed at supporting the clean energy sector. In Florida, Gov. Rick Scott recently signed a tax exemption that solar installers say is essential to jump-starting the residential and commercial market in the Sunshine State. And in Iowa, where wind now accounts for 36 percent of the state's electricity generation, newly installed Gov. Kim Reynolds recently finished an energy plan that calls for growing the wind, biofuels and solar industries.in states like Iowa and Nevada, which lack a local fossil fuel industry, Republican leaders are becoming increasingly comfortable with renewables. Wind now employs more than 8,000 people in Iowa. Two utilities in the Hawkeye State announced plans last year to invest $4.6 billion in new wind farms.Reynolds follows in the footsteps of longtime Gov. Terry Branstad (R), an outspoken wind advocate during six nonconsecutive terms in Des Moines. Branstad stepped down this year to serve as the U.S. ambassador to China.As lieutenant governor, Reynolds led efforts last year to complete an Iowa Energy Plan. It calls for more ambitious renewable energy targets, best practices to help municipalities site turbines and grid modernization pilot projects, among other measures.The state's wind industry has helped attract Facebook, Microsoft and Google data centers to Iowa, said Brenna Smith, a spokeswoman for the governor."In general, renewable energy has provided for local energy production, job and business growth, increases in property tax revenue, and clean energy production in our own backyard," Smith said.
New best friends: GOP governors and renewables
EEnews | Posted on June 26, 2017Nevada Gov. Brian Sandoval is fresh off a legislative session in which he signed nine bills aimed at supporting the clean energy sector. In Florida, Gov. Rick Scott recently signed a tax exemption that solar installers say is essential to jump-starting the residential and commercial market in the Sunshine State. And in Iowa, where wind now accounts for 36 percent of the state's electricity generation, newly installed Gov. Kim Reynolds recently finished an energy plan that calls for growing the wind, biofuels and solar industries."For years, our fields have fed the world. Now, they energize it. They produce products that fuel cars, and they host wind turbines that power our communities and businesses," Reynolds said in her inaugural address last month. "And yet those fields are filled with untapped potential. Our energy plan will help us continue to lead the way in wind energy and renewable fuels. Working together, we can have the most innovative energy policy in the country."The growing embrace of renewables by Republican governors stands in stark contrast to the president. Trump's budget request for fiscal 2018 includes a 70 percent reduction to the Department of Energy's Office of Energy Efficiency and Renewable Energy. Energy Secretary Rick Perry, who has expressed concern about coal's decline and renewables' rise, has embarked on a grid reliability study. And in speeches across the country, Trump has railed against renewables while promising to revive the coal sector. But in states like Iowa and Nevada, which lack a local fossil fuel industry, Republican leaders are becoming increasingly comfortable with renewables. Wind now employs more than 8,000 people in Iowa. Two utilities in the Hawkeye State announced plans last year to invest $4.6 billion in new wind farms.Reynolds follows in the footsteps of longtime Gov. Terry Branstad (R), an outspoken wind advocate during six nonconsecutive terms in Des Moines. Branstad stepped down this year to serve as the U.S. ambassador to China.As lieutenant governor, Reynolds led efforts last year to complete an Iowa Energy Plan. It calls for more ambitious renewable energy targets, best practices to help municipalities site turbines and grid modernization pilot projects, among other measures.The state's wind industry has helped attract Facebook, Microsoft and Google data centers to Iowa, said Brenna Smith, a spokeswoman for the governor."In general, renewable energy has provided for local energy production, job and business growth, increases in property tax revenue, and clean energy production in our own backyard," Smith said.
Bitter scientific debate erupts over the future of America's power grid
Chicago Tribune | Posted on June 23, 2017Scientists are engaged in an increasingly bitter and personal feud over how much of the United States' power it can get from renewable sources, with a large group of scientists taking aim at a popular recent paper that claimed the country could move beyond fossil fuels entirely by 2055. In 2015, Stanford professor Mark Jacobson and his colleagues argued that between 2050 and 2055, the U.S. could be entirely powered by "clean" energy sources and "no natural gas, biofuels, nuclear power, or stationary batteries are needed." That would be a massive shift from the current power makeup, as in 2016, the United States only got 6.5 percent of its electricity from hydropower, 5.6 percent from wind, and 0.9 percent from solar. Nonetheless, the paper excited proponents of renewable energy, and has been embraced by Sen. Bernie Sanders, celebrity backers such actor Mark Ruffalo, and many environmental groups.But Jacobson's idea was always contentious. And now, no fewer than 21 researchers have published a study in the influential Proceedings of the National Academy of Sciences (which also published Jacobson's original study in 2015) arguing that the work "used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions." "We thought we had to write a peer reviewed piece to highlight some of the mistakes and have a broader discussion about what we really need to fight climate change," said lead study author Christopher Clack of the National Oceanic and Atmospheric Administration's Earth System Research Laboratory. "And we felt the only way to do it in a fair and unbiased way was to go through peer review, and have external referees vet it to make sure we're not saying anything that's untrue in our piece."Clack is backed in the study by a number of noted colleagues including prominent climate research Ken Caldeira of the Carnegie Institution, energy researcher Dan Kammen of the University of California, Berkeley, and former EPA Science Advisory Board chair Granger Morgan.In a simultaneous letter in the journal, meanwhile, Jacobson and three Stanford colleagues fire back that Clack's critique is itself "riddled with errors" and "demonstrably false."
Exxon, BP and Shell back carbon tax proposal to curb emissions
The Guardian | Posted on June 23, 2017Oil giants ExxonMobil, Shell, BP and Total are among a group of large corporations supporting a plan to tax carbon dioxide emissions in order to address climate change. The companies have revealed their support for the Climate Leadership Council, a group of senior Republican figures that in February proposed a $40 fee on each ton of CO2 emitted as part of a “free-market, limited government” response to climate change.The fossil fuel companies announced their backing for the plan alongside other major firms including Unilever, PepsiCo, General Motors and Johnson & Johnson.In a full-page newspaper ad, the companies called for a “consensus climate solution that bridges partisan divides, strengthens our economy and protects our shared environment”. Exxon and the others were listed as founding members of the plan, alongside the green groups Conservation International and the Nature Conservancy.
Sustainable ethanol from carbon dioxide? A possible path
Science Daily | Posted on June 23, 2017A recent discovery could lead to a new, more sustainable way to make ethanol without corn or other crops. This promising technology has three basic components: water, carbon dioxide and electricity delivered through a copper catalyst.To compare electrocatalytic performance, the researchers placed the three large electrodes in water, exposed them to carbon dioxide gas and applied a potential to generate an electric current.The results were clear. When a specific voltage was applied, the electrodes made of copper (751) were far more selective to liquid products, such as ethanol and propanol, than those made of copper (100) or (111). The explanation may lie in the different ways that copper atoms are aligned on the three surfaces."In copper (100) and (111), the surface atoms are packed close together, like a square grid and a honeycomb, respectively" Hahn said. "As a result, each atom is bonded to many other atoms around it, and that tends to make the surface more inert."
Regulatory overhaul could give boost to independent generation in Michigan
Midwest Energy News | Posted on June 23, 2017Advocates say recent regulatory changes in Michigan could spur more solar energy development from independent producers and ensure existing renewable energy generators are paid fair prices from utilities for their power. On May 31, the Michigan Public Service Commission approved changes to the way avoided costs are determined under the federal Public Utility Regulatory Policies Act (PURPA) of 1978. Avoided costs are those that utilities pay independent power producers for their electricity that the utility would have otherwise had to pay itself. In Michigan, there are 45 facilities under contract with utilities, mostly landfill gas and hydro.The long-awaited changes to determining avoided costs, which are the first in roughly 25 years in Michigan, could provide protection to independent power producers who say they are at risk of shutting down. In a rate caseinvolving Consumers Energy, producers feared their avoided costs would have been cut in half, making their plants not economically viable.