|
|
|
|
|
|
Ontario Leads in Endorsing North American Electricity Reliability Standards
TORONTO - Ontario's existing reliability and compliance framework for the electricity sector has been strengthened with the signing of a joint memorandum of understanding (MOU) between the Independent Electricity System Operator (IESO), the North American Electric Reliability Corporation (NERC), and the Northeast Power Coordinating Council (NPCC). The signing of the joint MOU follows the recognition by the provincial government of NERC's role as the North American Electric Reliability Organization (ERO).
"The Ontario Ministry of Energy confirms that NERC is recognized as the
international electric reliability standards authority in Ontario," said
Minister of Energy Dwight Duncan. "Ontario looks forward to continuing
collaboration with NERC on international electric reliability," added Duncan.
Mandatory and enforceable standards, in place in Ontario for a number of
years, was a key recommendation resulting from the investigation into the 2003
blackout. Through its authority as the ERO, NERC has been charged with
developing and enforcing continent-wide reliability standards for the
high-voltage power system in North America.
"Ontario has been widely recognized as a leader in this regard having
operated with mandatory and enforceable reliability standards since 2002
through the IESO's reliability and compliance program," said Paul Murphy, IESO
President and CEO. "The move towards continent-wide reliability standards will
contribute to improving the reliability of the North American bulk power
system," added Murphy.
This joint MOU documents the obligations of the parties respecting the
Ontario reliability framework and complements the MOU made between the Ontario
Energy Board (OEB) and NERC. As Ontario's energy regulator, the OEB will
oversee NERC's activities, and the IESO will remain accountable for Ontario's
compliance with NERC and NPCC reliability standards and criteria.
The joint MOU can be viewed at:
http://www.ieso.ca/imoweb/pubs/ircp/ero/ero-20061128-MOU_IESO_NERC_NPCC_CBRE_N
PCC-INC.pdf.
|
Private funds can drive US clean energy boom-investor
WASHINGTON (Reuters) - Private investors will help finance an end to the United States' addiction to foreign energy if the government takes a few key steps in boosting clean alternatives like ethanol, a fuel made from farm crops, a leading venture capitalist said on Thursday.
"It is relatively easy to imagine how the world becomes independent of oil," said Vinod Khosla, a top venture capitalist who has turned his interest toward ethanol.
Weaning the U.S. off pricey, polluting fossil fuels will free U.S. foreign policy, reduce the need for burdensome defense spending in the Middle East, and even eliminate poverty by giving poor nations a new, lucrative resource, he said.
Khosla, a co-founder of Sun Microsystems and patron of dot-com ventures, told a gathering of the Council on Foreign Relations that farm-based fuels and electricity were the only viable energy alternatives for the future.
A self-described "free market Republican," Khosla was careful to emphasize that he did not advocate massive subsidies for alternative fuel production. He does, however, think the sector needs some supports to flourish, especially those that kick in when oil prices are low.
Khosla put forward several steps he said would give Wall Street the confidence it needs to invest heavily.
One step would be requiring U.S. car producers to make up to 70 percent of automobiles "flex-fuel" cars that run on regular gasoline and a gasoline-ethanol blend by the year 2012. That would cost just under $200 million.
Another step would be to mandate that at least 10 percent of gas stations offer alternative fuels.
While most U.S. ethanol is made from corn -- consuming a fifth of the annual crop -- Khosla believes that cellulosic products like corn husks and switchgrass could be competitive if they are ramped up properly.
Khosla, who now heads a green-friendly venture capital firm called Khosla Ventures, is helping get three U.S. cellulosic plants get off the ground. He has also talked with Archer Daniels Midland Co. (ADM.N: Quote, Profile , Research), the leading U.S. ethanol producer, but declined to give details.
With high oil prices in recent months and turmoil in the Middle East, energy security is a hot topic in Washington.
The incoming speaker of the House, California Democrat Nancy Pelosi, and other House Democrats have pledged to work to promote alternative fuels and move away from big oil.
Some of the steps Democrats advocate include raising the national Renewable Fuels Standard -- which this year mandated refiners and gasoline blenders to use at least 4 billion gallons of biofuel -- to at least 15 billion gallons by 2010, far more quickly than the current plan.
They also want to see tax credits for ethanol producers, more flex-fuel cars, and more research on making ethanol from a broader range of crops.
U.S. ethanol refineries are forecast to produce 4.7 billion gallons (17.8 billion liters) of the fuel this year, up sharply from 3.9 billion gallons last year. There are 106 bio-refineries with construction under way on 56 projects to add 3.7 billion gallons of capacity.
© Reuters 2006
|
Crude oil and natural gas: Supply and disposition September 2006 (preliminary)
The production of crude oil and equivalent hydrocarbons reached 13.0 million cubic metres in September, 13.0% higher than the same month in the previous year. (One cubic metre is equivalent to 6.3 barrels).
This increase was the result of higher crude production from offshore Newfoundland and Labrador. In particular, the White Rose field has shown continued production growth since first coming online in November 2005.
Higher crude bitumen and synthetic crude output in Alberta compared to September 2005 supplemented the increase in crude production.
Crude oil exports, which accounted for 67.5% of total production, were 21.2% higher than September 2005.
Marketable natural gas production totalled 13.5 billion cubic metres in September, down 2.9% compared with the same month last year.
Domestic sales of natural gas have surged 14.2% since last September. According to September natural sales data, this increase was a result of gains in industrial sales (+20.3%).
| Crude oil and natural gas |
| |
September 2005 |
September 2006p |
September 2005 to September 2006 |
| |
thousands of cubic metres |
% change |
| Crude oil and equivalent hydrocarbons1 |
|
|
|
| Production |
11,464.3 |
12,952.0 |
13.0 |
| Exports |
7,215.6 |
8,742.0 |
21.2 |
| Imports2 |
4,399.5 |
4,213.1 |
-4.2 |
| Refinery receipts |
8,597.5 |
8,704.2 |
1.2 |
| |
millions of cubic metres |
% change |
| Natural gas3 |
|
|
|
| Marketable production |
13,947.7 |
13,549.2 |
-2.9 |
| Exports |
8,430.1 |
8,436.9 |
0.1 |
| Domestic sales4 |
3,646.1 |
4,162.9 |
14.2 |
| |
January to September 2005 |
January to September 2006 |
January–September 2005 to January–September 2006 |
| |
thousands of cubic metres |
% change |
| Crude oil and equivalent hydrocarbons1 |
|
|
|
| Production |
106,406.0 |
113,196.4 |
6.4 |
| Exports |
66,909.6 |
75,654.3 |
13.1 |
| Imports2 |
39,879.3 |
37,282.8 |
-6.5 |
| Refinery receipts |
80,006.8 |
77,221.4 |
-3.5 |
| |
millions of cubic metres |
% change |
| Natural gas3 |
|
|
|
| Marketable production |
126,100.3 |
128,184.8 |
1.7 |
| Exports |
79,428.0 |
76,268.6 |
-4.0 |
| Domestic sales4 |
51,211.5 |
49,053.2 |
-4.2 |
| p | preliminary |
| 1. | Disposition may differ from production because of inventory change, industry own-use, etc. |
| 2. | Crude oil received by Canadian refineries from foreign countries for processing. Data may differ from International Trade Division (ITD) estimates because of timing differences and the inclusion of crude oil landed in Canada for future re-export in the ITD data. |
| 3. | Disposition may differ from production because of inventory change, usage as pipeline fuel, pipeline losses, line-pack fluctuations, etc. |
| 4. | Includes direct sales. |
|
|
Study: Research and development for new energy technologies in the private sector - 1993 to 2003
The search for alternative forms of energy has taken on a new life during the past decade among Canadian industries, according to this new study.
Industries have been dedicating more and more of their research and development (R&D) dollars into the development of cleaner, more renewable energy practices.
In fact, industry spending on R&D into energy increased substantially in only one field between 1993 and 2003 — alternative sources of energy.
In 2003, this spending hit $204 million (all dollar values are expressed in 1997 constant dollars), which accounted for 31% of total R&D spending on energy, more than double the proportion of only 15% in 1993. The manufacturing sector accounted for most of this increase.
Energy R&D is a broad area that, for the purpose of this paper, included five different fields of R&D: fossil fuels, nuclear technologies, energy transportation and transmission, energy conservation and alternative energy sources.
Alternative energy R&D conducted by Canadian industry in 2003 was heavily concentrated in developing alternative fuels and energy storage technologies. Over 40% of the $204 million was spent on R&D in storage of energy technologies, such as hydrogen cells for use in cars, or on alternative fuels, such as ethanol and biodiesel fuels.
Some scientists involved in energy R&D are interested in photovoltaic cells, which convert sunlight to electricity. Others are looking into biomass, which is plant matter such as trees, grasses, agricultural crops, waste or other biological material, which can be used as a solid fuel, or converted into liquid or gaseous forms for the production of electric power, heat, chemicals or fuels.
This study, part of the Analysis in Brief series, examined R&D efforts made by Canadian industry from 1993 to 2003 in five different types of energy R&D. It excludes spending by others, such as government and universities.
In 2003, Canadian industries devoted a total of $649 million to overall R&D in energy, which represented about 5% of all industrial R&D in Canada.
While R&D spending into alternative energies increased, spending in other areas varied.
For example, R&D spending into fossil fuel technologies was almost identical in 1993 and 2003. In 2003, it accounted for 33% of total energy R&D, unchanged from a decade earlier. Industries spent $213 million on fossil fuel R&D in 2003, down slightly from $217 million a decade earlier.
R&D spending on the transportation and transmission of energy was cut nearly in half during the 10-year period. In 1993, this area accounted for 20% of all spending on energy R&D. By 2003, the share had slipped to 11%.
Similarly, in 1993, R&D on nuclear technologies accounted for 12% of all energy R&D spending. By 2003, this proportion had fallen to only 8%.
|
Ontario needs strategy to avert natural gas shortage: CEP
TORONTO - One of Canada's largest energy unions says the Ontario government should act now to deal with the risk to the province's natural gas supply.
Bob Huget, Ontario Administrative Vice-President for the Communications,
Energy and Paperworkers Union thanked Energy Minister Dwight Duncan for taking
CEP's advice to oppose the Keystone Pipeline Project at hearings before the
National Energy Board earlier this month, but he stressed that stronger action
is now needed to stem the potential shortage of natural gas in Ontario.
Mr. Huget says there is an immediate need for a long-term strategy for
Ontario and the union has called for an urgent meeting to discuss:
<<
- The creation of an industry task force, with representation from all
stakeholders, to develop an inventory of immediate and short-term
feedstock needs to rejuvenate the petrochemical, plastics, refining and
other sectors. The task force would also articulate a long-term
strategy to keep the benefits of value-added development of Canadian
resources in Canada and, more specifically, in Ontario.
- A joint submission from CEP and the Ontario government to the federal
government seeking a complete review of the mandate and performance of
the National Energy Board.
>>
"It makes no sense to have Western Canadian crude shipped directly to
Chicago or elsewhere in the U.S., while Ontario's refining capacity is allowed
to disappear," Mr. Huget told the minister.
"It makes even less sense to sit idly by and watch companies like Dow
Chemical in Sarnia close while the NEB caters to industry demands to keep
pumping all of the value-added potential out of our country!"
The 150,000 member CEP represents over 35,000 workers in the oil, gas and
chemical industry in Ontario, Alberta and several other provinces.
|
Honeywell Helps Toronto East General Hospital (TEGH) Upgrade Buildings, Improve Comfort and Reduce Greenhouse Gases
Project wins Conservation Bureau's Certificate of Recognition for reducing electricity use
TORONTO - Honeywell and Toronto East General Hospital (TEGH) introduced an award-winning energy retrofit and facility renewal program that will help the hospital upgrade its facilities, cut its utility bills and decrease greenhouse gas emissions.
The $9.5 million, 15-year program is expected to save the hospital more than $880,000 annually in operating costs. This money will initially be used to finance facility improvements, including automating HVAC control, upgrading a chiller plant, and installing new fixtures and equipment to reduce water consumption. Honeywell guarantees the savings under an energy performance contract with the hospital so the work will not impact capital budgets.
The program also will decrease greenhouse gas emissions by an estimated 3,000 tonnes per year. According to Environment Canada, the environmental impact of this reduction is equivalent to removing more than 475 cars from the road.
"This program supports our desire to provide high quality care to our patients and community," said Rob Devitt, President & CEO, Toronto East General Hospital. "Working with Honeywell to reduce energy consumption and improve our facilities is part of TEGH's commitment to the development and sustainability of a healthy workplace. We're excited about being a leader in environmental stewardship."
Peter Love, Ontario's Chief Energy Conservation Officer, presented the hospital with a certificate of recognition for reducing electricity consumption. "The energy retrofit portion of this project should save the hospital almost 4 million kilowatt-hours of electricity each year," Love said. "These extraordinary savings are possible when hospitals partner with companies like Honeywell to assist in the design and completion of retrofits and renewals."
Under the program, Honeywell will update TEGH facilities with a modern building automation system (BAS). This system will optimize energy efficiency and occupant comfort by automating the control and operation of heating, ventilation and cooling systems. The BAS can be integrated with security, life safety, financial and human resource databases to further drive productivity and reduce operating costs.
The company also will help TEGH reduce ozone depletion by replacing existing chillers, which contain chlorofluorocarbon-based refrigerants, with three new electric centrifugal chillers. This upgrade will reduce energy consumption as well.
In addition, to reduce water usage substantially while at the same time renewing infrastructure, Honeywell will replace plumbing fixtures and medical vacuum pumps, and eliminate city water waste in cooling equipment. The hospital will save an estimated 100 million cubic metres of water annually as a result. This makes TEGH eligible for the City of Toronto Water Saver Program, which means they could receive up to $130,000 in funding.
The program also includes communication and awareness initiatives to inform staff, patients and nearby residents about the hospital's efforts and success, and help ensure the energy conservation work will have a lasting effect on the community.
TEGH is the first health care organization in Canada to receive the Canada Award for Excellence for Organizational Quality and Wellness from the National Quality Institute. This award acknowledges the hospital's commitment to quality for its patients, staff and community. The energy retrofit and facility renewal program with Honeywell compliments the hospital's culture of continuous improvement.
"The Toronto East General Hospital is focused on strategic facility improvements and environmental protection," said Luis Rodrigues, Vice President of Energy Solutions for Honeywell Building Solutions. "Our program provides a means to effectively achieve these goals without adding costs - a win for the hospital and taxpayers."
|
A grass worth getting high on
By Bob Secter, Chicago Tribune
CHILLICOTHE, Iowa - If there were such a thing as a Comeback Plant of the Year award - maybe Comeback of the Century - a top contender would have to be switch grass, a dominant part of the tallgrass prairie that once blanketed much of North America.
That vast sea of grasses, so thick and high that pioneers said it could swallow a rider on horseback, all but disappeared as sodbusters ripped it away to make room for lush and productive cropland.
What was an obstacle to progress 150 years ago suddenly is getting a fresh, hard look as a major source of fuel. Our energy-starved nation is scrambling to come up with alternatives to limited supplies of expensive oil and natural gas, and there's a growing buzz about switch grass even though most Americans would need a botanical guide to identify it.
Agribusiness giant Archer Daniels Midland Co., the world's largest producer of ethanol made from corn, this month unveiled plans to ramp up research into switch grass as another source to make ethanol and other biofuels for cars, homes and industry. In Washington, the Democrats soon to take over as heads of the House and Senate Agriculture Committees have put development of switch grass as a fuel source high on their priority list.
This is a "natural evolution of an industry that could be massive," said Patricia Woertz, chief executive of Decatur, Ill.-based ADM.
Also known as tall panic grass, switch grass doesn't look much like the grasses that cover today's lawns. It is a lanky plant, with stems up to 8 or 9 feet high and a root system just as deep, topped with lacy seed-bearing panicles. It grows in thick, jungle-like tangles.
It also is especially good at storing energy from the sun. "A living solar battery" is what Canadian switch-grass researcher Roger Samson calls it.
The U.S. Agriculture Department calls switch grass "perhaps our most valuable native grass." Oak Ridge National Laboratory has identified it as the model plant species for fuel, better than corn, which is all the rage now as the prime ingredient of ethanol. President Bush highlighted the energy potential of switch grass in his State of the Union address this year.
So, like a once-treasured toy rediscovered after years in the attic, switch grass is now the focus of talk about its revival--this time as a cash crop--on tens of millions of acres in the Midwest, South and Great Plains.
"This could very well be the future," said Stephen Gardner, one of dozens of southeastern Iowa farmers who for years have supplied switch grass for an electric generating experiment in Chillicothe that has shown encouraging results.
The notion of converting vegetation into fuel may seem odd in a nation that runs on oil, gas and coal. But fossil fuels themselves are the detritus of ancient plants, buried in the earth for millions of years.
They are also a finite resource, while fuel crops can be grown again and again. "Nature figured out long ago how to store chemical energy in plants," explained Robert Brown, director of the office of biorenewable programs at Iowa State University.
University of Illinois research
Energy can be squeezed from most any plant, and there are a lot of them under study these days as potential fuel sources. The University of Illinois at Urbana-Champaign is leading the way in research on giant miscanthus, a grass native to Asia. It can grow to 13 feet with bamboo-like stems ripe for burning.
The trick today is to target the plants that can be most efficiently grown and tapped for fuel. For now, the renewable fuel of choice in the U.S. is corn-based ethanol. It is essentially alcohol made from the starches in grain. Humans have been fermenting and drinking it since prehistoric times.
Corn is abundant, and it has a clout-heavy lobby of farmers and agribusiness promoting it for ethanol, which is largely blended with gasoline. But corn has limitations as a raw material for fuel. Divert a lot of corn to ethanol production and food prices are bound to rise. Corn also is a resource hog, requiring good soil and lots of water, fertilizer and herbicide, heightening environmental concerns.
One prominent researcher contends it takes more fossil energy to grow and transform corn starch into ethanol than the new fuel can yield, suggesting the process is a waste. Other experts disagree, but if there is an energy benefit to making ethanol this way, it is not huge.
The hope for switch grass is that it may bypass a lot of those problems while providing more bang for the energy buck in an ecologically friendly and low-maintenance way.
The explanation hearkens back to the prairies of old. Near-treeless vistas of undulating grass once stretched from the Gulf of Mexico up into Canada, providing a feasting ground for birds and other wildlife and packing the soils with nutrients. The grasses once covered 60 percent of what is now Illinois, which calls itself the Prairie State.
Ironically, the fertile soil of the prairie also was its undoing. The farmers who eventually chopped it away liked to boast that the prairie topsoil was so deep and rich that it could grease the axles of their wagons.
There were lots of different grasses in the Midwest prairie, but switch grass was one of the three predominant varieties. It didn't need much water, it adapted to a wide range of latitudes and soils, and it sucked in a lot of carbon dioxide from the air as fuel to grow on.
Prairie fires burned so hot that they would create their own cyclones, a testament to the energy that the grasses stored away.
Those are some of the traits that are kindling interest in switch grass as the nation scrambles to grow its way into energy self-sufficiency. David Bransby, a grasslands expert at Auburn University in Alabama, suggests a few more.
And it grows prodigiously
Bransby, who has studied switch grass for 20 years, says the plant grows prodigiously, yielding huge per-acre amounts of what the energy industry calls biomass--a term for living material that can be turned into fuel.
Switch grass requires no herbicides and little fertilizer, it can take hold on poor-quality land not suitable for most crops, and it is a perennial, meaning it doesn't have to be replanted like corn after each harvest. Stands of good-quality switch grass can last 10 years or more.
Switch grass also has ecological benefits, Bransby said. Its deep roots bind soil and block erosion. They also pump a lot of carbon into the ground, essentially recycling carbon-based greenhouse gases emitted when the plant is burned as fuel.
"If we really put our minds to it, we can use this to help replace the oil we import from the Middle East very easily in the next 20 years," Bransby said.
Unlike with corn, a cost-effective process to convert switch grass and other fibrous plant material into ethanol hasn't been perfected, though researchers say they're close. ADM's Woertz said biofuel producers right now are in a "chicken and egg" situation as they explore the potential of switch grass.
"How do you build massive facilities when you haven't grown the stuff yet, and then how do you grow the stuff if you haven't anywhere to process it?" she asked.
Some experts argue that switch grass would be an even better option as an ingredient for fuels other than ethanol, and the technology to make them exists now.
Samson, who runs a non-profit agricultural research institute in Quebec, said switch grass already is being used to make a low-quality natural gas substitute suitable for heating farm structures and small industrial buildings. Such biogas systems are in wide use in Germany and China, he said.
Switch grass also can be easily chopped and pressed into fuel pellets for burning in special furnaces to heat homes, Samson said. The slow-burning pellets heat for a price far less than natural gas, quickly paying for the cost of new heating equipment, he said.
"We think we're heading toward an agrarian industrial revolution," Samson predicted.
In Iowa, Gardner and more than 100 other growers have supplied switch grass for years to a federally sanctioned experiment that burns the grass alongside coal in a power plant in tiny Chillicothe, 80 miles southeast of Des Moines. Preliminary results indicate that switch grass burns almost as hot as the coal, and its presence in the fuel mix reduces sulfur dioxide and carbon dioxide emissions.
The Iowa farmers reaped their switch grass from stands they had planted as part of the federal conservation reserve program, which pays farmers to take erosion-prone, low-quality cropland out of production.
Around the country, there are 36 million acres enrolled in the program, an area that if stitched together would cover every square inch of Illinois. Some already is planted in switch grass to help with erosion control.
In the prairies of old, nature mixed in switch grass with other plant varieties that kept each other in check. That wouldn't be the case if it is reintroduced as a fuel crop across wide stretches of the nation, and the prospect is troubling to some experts in invasive species.
Writing recently in the journal Science, a team of researchers led by S. Raghu of the Illinois Natural History Survey warned that wholesale plantings of switch grass, miscanthus or other grasses grown for fuel could have an ecological downside.
The grasses are attracting interest as biofuel crops because they grow rapidly, need little water and appear resistant to most pests and diseases. But those are also traits that help invasive species wreak havoc on ecosystems and agriculture.
The U.S. spends more than $100 billion annually trying to beat back the ravages of invasive species such as kudzu, so Raghu and his colleagues urged caution as the pressure to develop new crops for fuel intensifies.
"We're not saying every one of these is a nightmare waiting to happen, but we've made mistakes in past," he said. "There's no such thing as a free lunch."
Switch grass facts
- Switch grass was one of the dominant plant species of the American tallgrass prairie.
- The perennial's Latin name--panicum virgatum-- explains why it's called tall panic grass.
- Switch grass can grow 9 feet high, produces seeds the size of a grain of pepper, resists drought and flourishes in poor-quality soil.
- Switch grass test plots at Auburn University in Alabama have produced 1,150 gallons of ethanol per acre annually.
Copyright © 2006, Chicago Tribune
|
Experts call for Iowa to lead world in biofuels
By Jerry Perkins
Iowa needs to cash in on its leadership in making ethanol from corn to become the worldwide leader in renewable fuels made from other plant materials, Iowa State University President Gregory Geoffroy said Tuesday at a "call to action summit."
Geoffroy said ISU invited state leaders, farm group representatives, government officials and policy experts to discuss how Iowa can meet competition from states such as California that are aggressively pursuing research, education and commercialization of biorenewable resources.
He said the summit was timed to be held after the election and ahead of the upcoming Iowa legislative session, which begins in January.
"This train is moving very, very fast," Geoffroy said. "All of us in Iowa need to be thinking about making the state the leader in renewable fuels."
In his remarks kicking off the summit, Geoffroy said Iowa is the leading ethanol-producing state and ranks first in per-capita production of electricity produced by wind turbines.
Iowa has an opportunity to help the United States reduce its dependence on foreign oil because of its fertile soil and abundant production of crops and plants that can be used to convert into energy. Using crop waste and other plant material - or cellulose - will yield enough material to replace 60 percent of the gasoline in the United States, Geoffroy said - much more than ethanol made from corn grain.
"It's dangerous for Iowa to assume that just because we are the leader in ethanol from corn that we will be the leader in cellulosic ethanol," he said.
The stakes of the race are enormous, Geoffroy said. "This will be world-changing and enormously profitable," he said.
Robert Brown, director of ISU's office of biorenewable programs, said California wants to be the leader in cellulosic energy production.
"Make no mistake, California is enacting policies to become the leader in cellulosic energy," Brown said. "Their governor is very, very interested."
California voters rejected a ballot measure in November aimed at developing biofuels. Proposition 87 would have funded a $4 billion program to reduce oil and gas usage by 25 percent through incentives for alternate-fuel and energy-efficient vehicles.
Ted Crosbie, chief technology officer for Iowa and vice president of global plant breeding for Monsanto Co. in Ankeny, said ISU needs to look into how much native grasses, such as switchgrass, or corn stover - parts of the corn plant that don't include the kernel - can be removed from farm fields to make ethanol without doing environmental damage.
Soil conservationists say corn plant residues should be left on the fields after harvest to prevent wind and water erosion and to rebuild the soil's fertility.
"Right now, it's a guess how much" plant material can be removed in an environmentally sound way, Crosbie said.
He said the next farm bill must address how native grasses should be grown and harvested in an environmentally sound manner.
Crosbie also said state and local roads need to be monitored so loaded trucks bringing corn to ethanol plants and hauling ethanol to urban markets don't do serious damage.
"We're talking lots and lots of trucks," he said. "With the tax breaks that have been granted to ethanol plants by local governments, I don't know if we are going to have the money to fix the infrastructure."
More than 460 people attended the summit, including about 20 state legislators.
Four state senators - two Republicans and two Democrats - said there will be bipartisan support in the next legislative session for funding initiatives that will boost Iowa's role as a leader in renewable fuels.
State Sen. Thurman Gaskill, R-Corwith, said he would support increased spending for research on renewable fuels if the money is there.
"We haven't seen the revenue estimates yet, but it appears that state revenues are going to be up, and I'd like to see some of that money going to fund additional research at Iowa State," Gaskill said.
State Sen. David Johnson, R-Ocheyden, said other states like Wisconsin are investing in research, and Iowa needs to be competitive.
"We don't have any choice," he said. "We have to look at this seriously."
State Sen. Herman Quirmbach, D-Ames, said funding renewable fuels research is "a common-ground issue. It's rural-urban, rich and poor, farmer and non-farmer."
State Sen. Tom Rielly, D-Oskaloosa, said voters want more bipartisanship in their legislature, and renewable fuels is a bipartisan issue.
"We need to support this fledgling industry," he said.
Copyright © 2006, The Des Moines Register
|
Alternative Energy Sources Requests Issuance of Bonds for Kankakee, Ill., Plant
KANSAS CITY, Mo., - Kansas City-based Alternative Energy Sources Inc. on November 28, 2006, requested that the Illinois Finance Authority issue $70 million in tax-exempt, solid-waste bonds to finance pollution-control facilities and equipment for a planned 110-million-gallon ethanol plant in Kankakee, Ill., 65 miles south of Chicago.
"Bonds issued for this portion of the Kankakee facility and equipment
are expected to be doubly tax-exempt," said John Holland, AENS's chief
financial officer. "Illinois statutes will likely render interest on
the bonds exempt from state income tax," he pointed out, noting that
federal tax exemption relies on meeting the requirements of Sections
141 and 142 of the Internal Revenue Code of 1954. AENS is working with
the public finance division of Raymond James & Associates Inc. in
Chicago.
"The ability to install pollution controls and to convert stillage to
animal feed are both fundamental to our business model," said Lee
Blank, AENS's chief operating officer. Stillage, a waste byproduct of
the corn-to-ethanol process, can be converted to nutritious livestock
feed, marketed and then shipped to remote markets in the United States
and abroad.
Before designing the modern $220 million Kankakee plant, AENS initiated
talks to expand feed markets, to ensure a customer base for its plants
under development, said Mark Beemer, AENS president and CEO, including
ones planned in Boone County, Iowa, and Greenville, Ill. All three
plants will be designed to produce marketable livestock feed known as
DDG (dried distillers grains).
"We can leave nothing to chance in our efforts to serve traditional and
new markets for alternative energy," Beemer said, "and that includes
marketing feed that can account for 10 to 15 percent of total revenue."
He explained that profits for many other U.S. ethanol plants will
diminish substantially if they are unable to successfully market
livestock feed produced by the refining process.
Holland began his career with the Arthur Andersen & Co. accounting
firm, and later rose to become chairman of Butler Manufacturing Co.,
with worldwide operations in steel and industrial building
construction. An Iowa native, Beemer is a former vice president of
Archer Daniels Midland's grain division, the nation's No. 1 ethanol
producer. Blank is also an Iowa native and former ADM executive. In
addition, John A. Ward, director of operations, is a chemical engineer
with a Ph.D. from The Queens University of Belfast, Northern Ireland,
and formerly was ADM's principal technical adviser for alcohol
processing. The four seasoned executives comprise AENS's senior
management team.
"We plan to start construction in about six months and have the
Kankakee plant in operation by fall 2008," said Blank.
|
Govts need to push green fuels to match demand
By Ashok B Sharma
NEW DELHI - Bio-fuel production needs more investments and policy support from governments to help meet the growing demand for energy, a study done by the US-based International Food Policy Research Institute (IFPRI) has recommended.
It said that bio-fuel production would make “a difference in the lives of the poor as both energy producers and consumers.”
The study jointly authored by IFPRI director-general, Joachim von Braun and noted global environmentalist, RK Pachauri brushed aside what they called skeptics’ argument that bio-fuel production would threaten food supplies for the poor and fail to achieve the claimed environmental benefits.
IFPRI researchers have used their International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) to determine how a scenario of aggressive growth in bio-fuel production could effect food availability and consumption at global and regional levels.
The IFPRI model considered three possibilities and found food-versus-fuel trade-off would be possible only in cases where innovations and technology investment would be largely absent and where trade and subsidies would be flawed. The situation changes considerably when technological advances in bio-fuels and crop production are considered.
However, in the first scenario of aggressive growth in bio-ethanol and bio-diesel production shows significant increases in world prices for various feedstock crops. If cassava is aggressively used as a feedstock, its prices will rise significantly causing sizable welfare losses to the major consumers of this crop in sub-Saharan Africa.
Saying so the researchers said : “It should be noted that past experiments with cassava-based bio-fuels in Brazil were not promising.”
In the second possible scenario, the IFPRI model suggests that if cellulosic bio-fuel technologies which rely on by-products of food and feed and feedstock produced for non-food purposes on marginal lands, becomes commercially viable and widely adopted in about a decade, the impact on markets and food systems could be significantly mitigated.
According to the third possible scenario suggested by the IFPRI, consumer-level impact can be mitigated through crop technology innovation at the farm level and investment in the bio-fuel industry and agriculture sector.
The study assumes that rapid growth in demand for bio-ethanol all over the world and for bio-diesel in Europe together with continued high oil prices and rapid breakthrough in bio-fuel technology.
It considered potential feedstock crops for bio-ethanol —maize, sugarcane, sugar beet, and wheat and for bio-diesel crops like oil seeds, including soybeans. According to the study, bio-fuels will account for 10% of transport fuel production by 2010, 15% by 2015 and 20% by 2020 in most parts of the world, except for adjustments in line with other projections for Brazil, the European Union and US.
The projection for bio-diesel were limited in Europe because the EU-15 countries represent almost 90% of the world production by volume.
The second generation cellulosic conversion technologies may come on line for large scale production by 2015 and this would help bio-fuel production from crops grown for non-food purposes on marginal lands.
© 2006: Indian Express Newspapers (Mumbai) Ltd
|
Natural gas sales September 2006 (preliminary)
Warmer than normal temperatures in the western provinces led to a decline in natural gas sales in the residential sector in September.
However, the 6.4% decline in the residential sales was more than offset by the 20.3% gain in the volume of industrial and direct sales and the 2.4% increase in the commercial sector.
Natural gas sales totalled 4 155 million cubic metres, up 14.3% from September 2005.
On a year-to-date basis, sales at the end of September were down 4.7% from the same nine-month period last year, in the wake of across-the-board declines in all sectors.
Volume of sales to the industrial sector (including direct sales) has fallen 3.3% so far this year, while sales were down 7.0% in the residential sector and down 6.3% in the commercial sector.
| Natural gas sales |
| |
September 2006p |
September 2005 |
September 2005 to September 2006 |
| |
thousands of cubic metres |
% change |
| Total sales |
4 154 941 |
3 635 844 |
14.3 |
| Residential |
498 513 |
532 734 |
-6.4 |
| Commercial |
441 330 |
431 176 |
2.4 |
| Industrial and direct |
3 215 098 |
2 671 934 |
20.3 |
| |
Year-to-date |
| |
2006p |
2005 |
2005 to 2006 |
| |
thousands of cubic metres |
% change |
| Total sales |
48 784 298 |
51 168 898 |
-4.7 |
| Residential |
11 182 684 |
12 020 175 |
-7.0 |
| Commercial |
8 292 276 |
8 854 252 |
-6.3 |
| Industrial and direct |
29 309 338 |
30 294 471 |
-3.3 |
|
|
| CFB Kingston Receives Award for Energy Saving Measures
Defence base, Direct Energy awarded Certificate of Recognition by Conservation Bureau
KINGSTON - Peter Love, Ontario’s Chief Energy Conservation Officer, today awarded his prestigious Certificate of Recognition to Lt. Col. David MacLeod, Deputy Commander at Canadian Forces Base (CFB) Kingston. The Certificate recognizes CFB Kingston’s leadership in pursuing an energy performance contract awarded through Defence Construction Canada to Direct Energy that will save more than $2 million annually in utility costs. He also presented a Certificate to David Bowden, Senior Vice President, representing Direct Energy, for designing the retrofits.
“These actions will save Canadian taxpayers millions of dollars, while saving energy and reducing greenhouse gases,” said Love. “I congratulate CFB Kingston and Direct Energy for their partnership, an efficient and cost-effective way of advancing a culture of conservation in Ontario.”
Mr. Love also read a congratulatory letter from local MPP and Minister of Municipal Affairs and Housing, John Gerretsen. Love noted that energy efficiency oriented amendments (announced in June 2006) to the Ontario Building Code, overseen by Minister Gerretsen, increased energy efficiency requirements that will save Ontario an estimated 550 megawatts over the next eight years.
The two-year project on the Base consists of over 300 energy conservation initiatives, including lighting retrofits, using more efficient bulbs, better fixture design and occupancy sensors; expanding and reprogramming building automation systems to be more efficient; modifying heating, ventilation and air conditioning fan systems; and switching to high-efficiency chillers. The large central boiler plant and extensive potable water distribution system will have their operations improved as well.
“We are extremely proud to be receiving such an esteemed honour. Through this project, CFB Kingston will demonstrate how the wise use of energy and new equipment can result in improved infrastructure and a holistic approach to upgrading facilities and investing in the future,” commented Deputy Base Commander Lt. Col. David MacLeod.
The Base also embraced renewable energy by installing a solar heating system and is investigating the potential for a 1.5 megawatt wind turbine.
“Direct Energy has extensive experience helping large organizations reduce greenhouse gas emissions,” noted David Bowden, Senior Vice-President, Direct Energy Business Services. “The energy performance contract is expected to save CFB Kingston over 30 per cent of the energy used prior to the commencement of the program. This is a significant amount of savings, both financially and to the environment.”
The work at the base, the largest Federal Building Initiative ever awarded in Canada, began in 2005 and is expected to be completed in August 2007.
|
New Double Return incentive program rewards Hydro One's medium-sized commercial/industrial customers to reduce peak loads
TORONTO - Hydro One November 22, 2006 announced a new incentive program for medium-sized interval metered customers. The newest in Hydro One's wide range of conservation programs, Double Return provides a cash incentive to customers for actions they take to reduce peak energy usage. By reducing their average winter and summer peak electricity consumption by 5-10%, commercial/industrial customers will receive a cheque for double the amount of the delivery charges they have already saved.
"Investing in conservation means investing in the 'triple' bottom line:
conservation saves energy, it saves money, and its good for the environment,"
said Energy Minister Dwight Duncan. "Hydro One's innovative Double Return
program is the first of its kind in Ontario and demonstrates the McGuinty
government's commitment to creating a culture of conservation in all corners
of the province."
"This program has been specifically designed with our medium-sized
commercial/industrial customers in mind," said Giuliana Rossini, Director
Strategy and Conservation Officer, Hydro One. "A 5-10% reduction in peak can
be achieved by reducing the use of lighting, HVAC, and non-critical equipment
with minimal or no impact on normal business operations. Through Double
Return, companies could potentially save over $30,000 annually."
Medium commercial and industrial customers are automatically enrolled in
the Double Return program. Hydro One will provide these customers with a
detailed energy efficiency guide to assist them with the development and
implementation of their electricity reduction plans. In addition, participants
will be given access to a secure web site which will provide individual
historical peak consumption information as well as their targets for 10%
reduction this year. The site will also highlight the day and time when
companies reached their peak energy use, so that they can gear their reduction
plans to address peak usage.
For customers who require individual assistance to develop a plan to
reduce peak demand, Hydro One will provide one-on-one consultations with an
energy specialist who will visit their facility and provide a walk through to
identify energy savings opportunities.
In conjunction with Double Return, customers can also take advantage of Hydro One's Power$aver Business Incentive Program launched earlier this fall. Specific energy efficiency retrofits may qualify for financial incentives. Incentives are available for new, energy efficient equipment such as lighting, motors, transformers and air conditioners. The Double Return program will run for two, 3-month periods. The winter program starts December 1, 2006 and includes January and February. The summer program will run from June to August 2007. Customers can benefit from savings in one or both periods. For more information about Double Return visit www.HydroOneNetworks.com/DoubleReturn |
U.S. company aims to build first cellulosic ethanol plant in the country
DES MOINES, Iowa - A South Dakota company said Monday it plans to build the first commercial scale cellulosic ethanol plant in the U.S., meaning it will use corn stalks and leaves - not just the kernels - to produce the renewable motor fuel.
With an investment of about $200 million (€155.75 million), Broin Companies plans to expand the capacity of an existing 50 million gallon (189 million liters) plant in Emmetsburg, Iowa, by an additional 75 million gallons (283 million liters), the company's CEO Jeff Broin said.
"Broin made a very important first step today," said Matt Hartwig, a spokesman for the Renewable Fuels Association. "Other companies are looking at it as well, but it is a very important step for the industry as a whole."
Abengoa Bioenergy, a company based in Sevilla, Spain, is building a cellulosic ethanol plant in Spain and is planning a pilot project in the United States. Iogen Corp., of Ottawa, Canada, produces cellulose ethanol from wheat, oat and barley straw in a demonstration facility and also is exploring a U.S. plant.
That said, most ethanol in the United States is made solely from the starch contained in a corn kernel. In this less expensive process, the starch is broken down into basic sugar components, which are fermented using yeast and a cooking process into grain alcohol.
The Sioux Falls, South Dakota, company, which owns 18 ethanol plants in five states, will use technology it has developed with Denmark-based Novozymes and Delaware-based DuPont that breaks down the cellulose in corn stalks and other plant parts into basic sugars that can be fermented into ethanol.
Professor Robert Brown, director of the Iowa State University Office of Biorenewables Programs, said using plant fibers to make ethanol is more difficult and costly because it takes a more sophisticated cocktail of enzymes to extract the sugars. But he said a process for converting other plant material into ethanol is a needed breakthrough to significantly expand production in the United States.
The process to be used at the Emmetsburg plant will enable the plant to make 11 percent more ethanol from a bushel of corn and 27 percent more from an acre of corn, Broin said. The process cuts the need for fossil fuel power at the plant by 83 percent by using some of its own byproduct for power, Broin said.
Most ethanol plants rely on natural gas to power their processing equipment.
Brown said many experts believe corn can be used to displace up to 12 percent of the nation's fuel supply, but beyond that, another source for the ethanol needs to be found.
Currently, about 3 percent of the nation's 140 billion gallon (529 billion liters) annual fuel consumption is ethanol, according to the American Coalition for Ethanol, a trade group.
Copyright © 2006 the International Herald Tribune
|
Shakers: BP plans investment in crop-based fuels
BP, one of the world's largest publicly traded oil companies, plans to invest $500 million in a research program to develop crops that can be converted into fuel, its chief executive said Sunday.
The research will try to develop energy-producing crops that do not displace food crops and also to find ways to turn entire plants into energy sources, said John Browne, BP's chief executive. Ethanol is primarily made from corn, but much of the unused portion of the plant is thrown away.
The aim is to "harness the latest science to develop crops which can supplement the contribution already made to energy supply by ethanol," Browne said. "The potential could be enormous - here and in many other places around the world."
The company will announce the details of the investment before the end of the year, he said.
Demand for ethanol surged in the United States after it became the primary additive in reformulated gasoline in May.
"Our hope is that the next generation of biofuels can make a cost effective, local and environmentally positive contribution to the protection of energy security," Browne said.
Separately, Browne apologized for the series of problems that have damaged the company's reputation recently.
"We've fallen short of the standards we expect for ourselves and which people in this country and every other country in the world should be able to expect from one of the world's largest companies," he said.
In August, the company had to partially shut its 400,000 barrel-a-day operation in Prudhoe Bay, Alaska, the largest oil field in the United States, because of pipeline corrosion.
Copyright © 2006 the International Herald Tribune
|
Will there be enough corn?
By Philip Brasher
Washington, D.C. - Iowa helps feed the country, and increasingly fuels the country's cars. The question is how long it can do both.
The state's farmers already produce about 20 percent of the nation's corn. But they will have to grow a lot more to keep up with the booming demand for fuel ethanol and maintain affordable supplies of corn for all its traditional uses, from livestock feed to tortillas, breakfast cereal and sweeteners.
Iowa has 25 ethanol plants in operation, some of which are expanding. The state has 11 new plants under construction, plus a couple dozen on the drawing boards.
If all of those are built, Iowa farmers would have to plant an additional 8 million acres of corn - nearly two-thirds more than they harvested this year - to make ethanol and still feed the millions of hogs, chickens and turkeys produced here, according to estimates developed by Iowa State University grain economist Robert Wisner.
Eight million acres is the amount of land in Connecticut and Massachusetts combined.
Eight million acres of corn is the equivalent of Nebraska's entire harvest in a typical year.
"There is a collision course on the horizon, but when and how severe it is going to be, I don't know," said Doug Thompson, a corn and soybean grower near Kanawha, in north-central Iowa.
Two years ago, the nearest ethanol plant was 55 miles away from Thompson's farm. Today, there are four either in operation or under construction within 40 miles of him - and he has invested in one of them.
"This is such uncharted territory we're in," he said.
More money, more pollution
No one thinks Iowa will really convert 8 million acres of land to corn, and some of those proposed distilleries may never be built, given the recent slide in ethanol prices.
But the price of corn is steadily rising, and farmers are going to have grow more of it.
What does this mean for Iowa?
- More money in the pockets of farmers and landowners.
- Without careful conservation measures, more pollution in the state's rivers and streams as farmers use more fertilizer.
- Potentially, higher prices for food, primarily meat, as the price of feed goes up.
Tyson Foods Inc., the world's No. 1 meat processor and poultry producer, warned Tuesday that consumers would have to pay more for beef, pork and chicken next year because of the rising price of corn.
"Quite frankly, the American consumer is making a choice here," said Richard Bond, Tyson's chief executive. "This is either corn for feed or corn for fuel - that's what's causing this."
To keep up with the demand for corn by producers like Tyson, some Iowa farmers are starting to grow corn year after year on the same ground, rather than rotating the fields between corn and soybeans. Farmers who do that increase their use of fertilizers and pesticides to maintain corn yields. Soybean plants add nitrogen to the soil, which reduces the need for synthetic fertilizer when corn is planted the following year.
Some of the nitrogen fertilizer applied by farmers will inevitably run off fields and pollute nearby streams and rivers, including the Des Moines and Raccoon, which supply drinking water to the Des Moines area.
"It's not an environmentally benign process, the growing of corn," said Rich Leopold, executive director of the Iowa Environmental Council, which issued a report this year urging state policymakers to address the potential ecological impact of the biofuels industry.
"We think ethanol is a good thing," he said. "We just want to make sure we have our eyes wide open as we go into this."
And there are global ramifications to the ethanol boom as well: Poor people in the developing world could face higher prices for food as ethanol demand drives up global grain prices.
"What this is shaping up as at the global level is competition between the 800 million people who own automobiles and the 2 billion low-income people in the world, many of whom are already spending over half their income on food," said Lester Brown, president of the Washington, D.C.-based Earth Policy Institute.
A welcome change: Higher farm income
Iowa farmers have another view. To them, the ethanol boom is the best thing to happen to rural Iowa since the Soviet grain buys of the 1970s.
"That wealth is generating revenues that we haven't seen in the past," said Craig Lang, a dairy producer who is president of the Iowa Farm Bureau. "It's generating an opportunity for new homes and new schools and all of those things we've been lacking in the last two decades."
Farmers say concerns about the corn supply are overblown. They point to the steady increases in corn yields, due in part to genetically modified varieties that are more resistant to pests and therefore drought. In 2005, the average corn yield reached 173 bushels per acre in Iowa, up 20 percent from 2000 and up more than 40 percent since 1995.
Seed companies such as Pioneer Hi-Bred International are rushing to develop new varieties of corn that will yield still more bushels per acre and more ethanol per bushel of grain.
Using corn for ethanol doesn't necessarily rob livestock of feed, either. The fermented mash, or distiller's grain, left over from ethanol production can be fed to beef and dairy cattle in lieu of corn. Hogs and poultry can eat distiller's grain in relatively small amounts.
Ethanol plants also have increased the amount of ethanol they can distill from a bushel of corn, moving from 2.5 gallons a few years ago to 2.7 gallons today. A leading ethanol producer, Broin Cos., claims to have reached a yield of about 3 gallons to the bushel.
With continued increases in corn yields and distillery efficiency, the National Corn Growers Association estimates that 15 billion gallons of ethanol can be distilled from corn nationwide by 2015 - triple this year's production - without having a significant impact on food and feed markets.
By that time, according to goals set by the Bush administration, the nation will be well on its way to economically producing ethanol from crop waste, perennial grasses and other sources of biomass that are much more plentiful than corn. The first biomass distillery in Iowa, to be developed by Broin, could be in operation as early as 2009.
Rick Tolman, the NCGA's chief executive, said the 15 billion-gallon target, based on corn only, is "very reasonable and conservative. We were a little surprised with all the hysteria that's going on with this issue."
Outlooks differ in livestock industry
Livestock producers have mixed views about the growth in ethanol production. Because cattle can readily eat distiller's grain, feedlot operators and dairy farms have little to fear from a run-up in grain prices. Pork and egg producers - Iowa ranks first in both commodities - are more sensitive to the price of corn.
"It's going to put pressure on the livestock industry to fine-tune what they do and be as efficient as we can to make profitability," said Bill Gass, feed manager for Golden Oval Eggs, a farmer-owned cooperative with operations in Minnesota and Iowa. "Will we lose some livestock producers? I think we probably will."
Hens can eat a diet of up to 15 percent distiller's grain, he said. Most of the feed is still corn.
Eugene Ver Steeg, president of the Iowa Pork Producers Association, said the government should waive the nation's ethanol mandate if corn supplies become too tight.
The 2005 energy bill allows such waivers if the mandate, which will be 4.7 billion gallons in 2007, would cause economic or environmental harm.
"All in all, I welcome the ethanol industry, and I am looking forward to having our energy come out of Iowa rather than Saudi Arabia or Iran," said Ver Steeg, who raises about 60 percent of the corn he needs for his hogs.
Tyson Foods, which slaughters cattle at Denison, expects the ethanol plants to draw cattle production to the Midwest. That "is positive for us, because that's where many of our beef processing plants are located," said Tyson's Bond.
Add acres, cut sales or buy from outside?
Iowa's existing distilleries can produce 1.6 billion gallons of ethanol per year, according to the Iowa Renewable Fuels Association. The plants now under construction or expansion will add a billion gallons of capacity. Several more are nearing construction, including a 275 million-gallon-a-year plant that Illinois-based Archer Daniels Midland plans in Cedar Rapids.
The estimates of future corn needs developed at Iowa State are based on supplying about 60 ethanol distilleries, which would produce about 5.9 billion gallons.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, says many of those proposed plants will not be built, partly because of soaring construction costs. He expects about a dozen of the proposed plants to materialize in the next two to three years. Together, they could produce up to a billion additional gallons of ethanol.
Still, that would push the state's ethanol output to more than 3.6 billion gallons a year, which at existing usage rates would consume nearly 1.3 billion bushels of corn, or two of very three bushels that Iowa farmers harvested this year.
So whatever the final number of plants, the state will still need significantly more corn.
Farmers could produce additional corn in Iowa from the 2 million retired acres in the federal Conservation Reserve Program, but how much is not clear. The USDA has estimated that as much as 7 million acres of CRP land throughout the Corn Belt could be brought out of the program.
Iowa could also reduce the amount of corn that is shipped out of the state.
Finally, farmers contend some of the additional corn supplies could be brought into Iowa from other states, an idea disputed by Wisner, the Iowa State economist.
"Where would we get it from?" Wisner asked. "Given the number of new plants in the planning stage, I don't see where we would find a ready supply of corn in neighboring states."
Bet the farm on it: Prices are going up
Whatever the answer, no one doubts that the price of corn will go up as ethanol plants compete with livestock producers and other buyers for grain.
In Sioux County, livestock farms and feed suppliers already have to bring in corn from South Dakota, Minnesota and neighboring Iowa counties, even though Sioux is the state's second-largest producer of corn after Kossuth County. Local farmers were getting more than $3.25 a bushel for their corn recently, up from $1.90 a year ago.
Sioux County is home to 2.3 million laying hens, nearly 1 million hogs, more than 200,000 cattle, and an ethanol plant, Siouxland Energy and Livestock in Sioux Center. The plant produces 25 million gallons a year and is being expanded to 35 million gallons. There are two other plants, which together produce more than 100 million gallons annually, nearby in Marcus and Ashton.
Three other ethanol plants have broken ground or are under development in neighboring Plymouth and O'Brien counties.
"It's really going to put a bite onto it as far as where that corn is going to come from," said Skip Hein, general manager of Midwest Farmers Cooperative, which has an elevator in Sioux Center.
Hein's co-op still ships up to 12 million bushels of corn out of state by rail, primarily to the Southwest and California. But those shipments may have to stop if the planned ethanol plants in northwest Iowa are built, he said.
John Hansen, grain manager of Farmers Cooperative Society in Sioux Center, used to joke that he would someday have to ship in corn by rail to supply local feed demand. The idea is no longer far-fetched.
"I'll buy it where ever it takes to get corn," he said. "Does that mean the livestock guy has to pay more money? Yes. Does that mean the ethanol plant has to pay more? Yes."
To keep up with the demand, Sioux County farmers increased their plantings from 230,000 acres in 2001 to 251,000 in 2005. Soybean acreage dropped, from 194,000 in 2001 to 172,000 last year.
But soybean prices are rising, too, and the crop produces so well in the county - yields can reach 70 bushels per acre - that farmers may be reluctant to switch too much of their acreage to corn unless its price keeps increasing, local Extension specialists say.
Mark Rensink, who raises corn, soybeans and hogs near Sioux Center and also has invested in the Siouxland plant, has stuck to a 50-50 rotation of corn and soybeans for now. He isn't sure what he will do in the future.
"Where is it going to stop? I'm not sure," Rensink said. "Hopefully, we won't overdo a good thing."
Reporter Philip Brasher can be reached at (202) 906-8138 or pbrasher@dmreg.com
Copyright © 2006, The Des Moines Register
|
Ontario Power Generation reports 2006 third quarter financial results
TORONTO - Ontario Power Generation Inc. ("OPG" or the "Company") today reported its financial and operating results for the third quarter and nine months ended September 30, 2006. Net income for the three months ended September 30, 2006, was $167 million compared to net income of $181 million for the same period in 2005. For the nine months ended September 30, 2006, net income was $509 million compared to $206 million for the same period last year.
"Our third quarter and year to date results continue to reflect strong
generating asset performance. Despite lower Ontario electricity demand in the
second and third quarter, our year to date electricity production was
essentially equal to that of 2005 due to an increase in low marginal cost
nuclear production. Third quarter earnings were unfavourably impacted by lower
average sales prices for electricity generation not receiving a fixed
regulated price due to lower Ontario spot market electricity prices. Ontario
spot market prices were almost fifty per cent lower than during the third
quarter of 2005. During the quarter, we continued to make notable progress on
a number of generation projects aimed at increasing Ontario's electricity
supply," said President and CEO Jim Hankinson.
Net income for the three months ended September 30, 2006, of $167 million
was lower compared to the same period in 2005 as a result of a decrease in
gross margin from electricity sales primarily due to lower Ontario spot market
prices, and by an increase in pension and other post employment benefit costs
due to changes in economic assumptions used to measure the costs. Third
quarter earnings were favourably affected by a decrease in depreciation
expense as a result of extending the service lives of OPG's coal-fired
generating stations and the Pickering A and B nuclear generating stations, for
purposes of calculating depreciation.
Net income for the nine months ended September 30, 2006, of $509 million
increased compared to the same period in 2005 as a result of an increase in
gross margin from electricity sales due primarily to higher nuclear
production, and a decrease in depreciation expense. The improved gross margin
was partially offset by higher pension and other post employment benefit
costs.
Net income during the nine months ended September 30, 2005, was
unfavourably affected by a number of one-time charges including impairment
charges of $202 million related to OPG's Lennox generating station and
$63 million related to Units 2 and 3 of the Pickering A nuclear generating
station. In addition, as part of the transition to a rate regulated
environment in 2005, OPG eliminated a net future income tax asset of
$74 million and recorded a corresponding one-time extraordinary loss.
Electricity generated in the third quarter of 2006 was 27.0 terawatt
hours (TWh) compared to 27.1 TWh for the third quarter of 2005. Nuclear
production increased by over eight per cent primarily as a result of the
return to service of Unit 1 at the Pickering A nuclear generating station.
Both regulated and unregulated hydroelectric generation increased due to
higher water levels. Fossil generation declined primarily as a result of lower
Ontario electricity demand and higher nuclear generation.
For the nine months ended September 30, 2006, total production from OPG's
generating stations was 80.9 TWh compared to 81.4 TWh for the same period in
2005. This marginal decrease was primarily due to lower fossil-fuelled
generation caused by lower electricity demand, partially offset by higher
nuclear and hydroelectric generation. The higher nuclear generation was
primarily due to the return to service of Unit 1 at the Pickering A generating
station late in 2005.
During the third quarter, OPG continued to make progress on a number of
electricity generation projects aimed at increasing Ontario's electricity
supply, including the following:
<<
- Excavation of a new water diversion tunnel, using a tunnel boring
machine, to increase the amount of water flowing to existing
turbines at the Sir Adam Beck generating stations in Niagara began
in early September;
- Construction of a new 12.5 megawatt (MW) Lac Seul hydroelectric
generating station on the English River that started during the
first quarter of 2006 is expected to be completed in the fourth
quarter of 2007;
- In September, Portlands Energy Centre ("PEC"), a 550 MW gas-fired,
combined cycle station near downtown Toronto, signed a 20 year
Accelerated Clean Energy Supply contract with the Ontario Power
Authority. PEC is a limited partnership between OPG and
TransCanada Energy Ltd.;
- OPG will proceed with an environmental assessment as part of its
business case study for the potential refurbishment and life
extension of its Pickering B nuclear generating station;
- OPG initiated a federal approvals process with the Canadian
Nuclear Safety Commission in September by filing an Application
for a Site Preparation Licence for new nuclear generating units at
OPG's Darlington nuclear generating site;
- The definition phase for a 450 MW hydroelectric development, which
includes the replacement and expansion of certain hydroelectric
generating stations located on the Lower Mattagami River, is
proceeding. OPG is identifying Environmental Assessment
requirements and detailing technical project specifications; and
- OPG is exploring the potential development of a gas-fuelled
electricity generation station at its Lakeview site and is
continuing with the decommissioning and demolition of the Lakeview
coal-fired generating station.
|
Ontario Power Generation and Lac Seul First Nation sign settlement agreement
TORONTO - The Lac Seul First Nation (LSFN) and Ontario Power Generation (OPG) are pleased to announce the signing of an agreement that resolves past impacts in the Lac Seul First Nation traditional territory and establishes the foundation for a positive relationship between the Lac Seul First Nation and Ontario Power Generation. The agreement also provides the opportunity for a commercial relationship with Lac Seul First Nation that will benefit both parties.
OPG's President and CEO, Jim Hankinson stated: "This agreement redresses
issues of the past and provides the opportunity for establishing a new
commercial relationship with the Lac Seul First Nation."
LSFN Elder Shamandy Kejick, speaking in Anishinaabemowin, opened the
signing ceremony with a prayer and spoke about the hardships felt by the
people of Lac Seul in the years since the first flooding. Councilor Mervin
Ningewance followed the Elder with a drum song and traditional blessings for
the signing ceremony. Chief Clifford Bull said: "This agreement recognizes the
impacts of the past and looks forward to a more positive future. Our people
support the work that is being done by OPG to add additional generation at the
Lac Seul site. In the future we want to build a commercial relationship with
OPG in which our people can benefit from projects on our traditional lands."
Chief Bull also spoke on the First Nation now being able to begin to address
the impacts to the reserve and its people. Several other Band Councilors,
Youth Council Chief Dinah Maud, and former Chief David Gordon were also in
attendance at the signing ceremony.
OPG's Executive Vice President, Hydro, John Murphy said: "This agreement
is a model to facilitate the construction of new clean, renewable hydro power
through a partnership between OPG and the Lac Seul First Nation." A new
hydroelectric plant is currently being constructed at the Ear Falls site that
will add over 12 MW of renewable supply to Northern Ontario.
This settlement addresses the impacts of the Root River diversion project
and the generating stations at Ear Falls and Manitou Falls. The First Nation
represents over 2,710 Band members, with approximately 850 living in one of
the reserve's three communities.
Ontario Power Generation is an Ontario-based electricity generation
company whose principal business is the generation and sale of electricity in
Ontario. OPG's focus is on the efficient production and sale of electricity
from our generation assets, while operating in a safe, open and
environmentally responsible manner.
|
Quebec and Ontario sign an historic agreement for construction of a new transmission interconnection
GATINEAU, QC - Pierre Corbeil, Québec's Minister of Natural Resources and Wildlife, and the Honourable Dwight Duncan, Ontario's Minister of Energy, held a teleconference earlier On November 14, 2006 announced the signing of an agreement between Hydro-Québec TransEnergie and Hydro One Networks for the construction of a new 1,250 MW Québec-Ontario interconnection.
The Honourable Madeleine Meilleur, MPP for Ottawa-Vanier, Minister of
Community and Social Services and Minister Responsible for Francophone
Affairs, along with Benoît Pelletier, MNA for Chapleau, Minister for Canadian
Intergovernmental Affairs and Minister Responsible for the Outaouais Region,
and Norman MacMillan, the Chief Government Whip and MNA for Papineau, also
attended the meeting.
"As stipulated in Québec's Energy Strategy, and thanks to the flexibility
that our Government is striving to restore, Québec will be able to meet its
own energy needs, create wealth and take advantage of export opportunities,"
said Minister Corbeil. "Ontario, for its part, wants guaranteed access to
clean energy sources in order to meet its electricity needs. The agreement for
the construction of an interconnection between the two provinces is therefore
extremely meaningful."
"The project will help meet the needs of more than 400,000 average homes
in Ontario," said Minister Duncan. "By modernizing and strengthening the
province's transmission lines, we can be sure of always having enough
electricity to meet the demand. Under the new agreement, Ontario will have
access to a form of energy produced without greenhouse gas emissions, and will
also improve its infrastructure."
By exporting energy that is surplus to requirements, Québec will obtain
additional revenues for the Generations Fund and help pay down the debt for
future generations. Exports will also help reduce greenhouse gas emissions,
since the clean, renewable energy from Québec will replace fossil fuel
sources. "This new agreement clearly illustrates the ties that bind Québec and
Ontario," said Minister Pelletier. "Not only is it of interest in terms of
cooperation and environmental conservation, but it also illustrates the
effectiveness of the agreements signed by our two governments last June."
"In its Energy Strategy, the Québec Government clearly states its desire
to increase the volume of transactions between Québec and Ontario," said
Minister Corbeil. "The proposed interconnection will not only allow
Hydro-Québec Production to export its surplus energy to Ontario, it will also
improve local load reliability by providing access to an additional supply
source."
The project will generate investments totalling $684 million for Québec
and $124 million for Ontario. It will add an important new connection between
the two grids, as well as fostering exchanges of energy and enhancing the
overall supply security of Québec's grid.
"The new connection will produce direct spin-offs for our region," said
Mr. Macmillan. "I congratulate all the parties for signing an agreement that
meets shared goals."
The first phase of the project - the new connection with Ontario - will
come into service on May 1, 2009, and will have a capacity of 900 MW. The
second phase - the addition of a reinforcement line - will be brought into
service in the spring of 2010, and will increase the connection's capacity to
1,250 MW. The line will be built in the Outaouais region of Quebec and runs
through the Cumberland area on the east side of Ottawa in Ontario.
"The project will have some significant positive impacts, in both Ontario
and Québec," said Minister Meilleur. "It is a perfect example of how our
governments are working closely together on behalf of consumers and future
generations in both provinces."
|
Hydro One announces 2006 third quarter net income
TORONTO - Hydro One Inc. on November 14, released its third quarter results with net income of $354 million and revenues of $3,403 million for the nine months ended September 30, 2006.
"Hydro One's financial performance remains on target while at the same
time we have taken aggressive steps to improve overall supply reliability in
Ontario by increasing transmission capacity," said Tom Parkinson, President
and CEO of Hydro One. "We have concluded a milestone agreement with
Hydro-Québec to connect our two provincial high voltage systems. This project,
together with the substantial completion of our Niagara Reinforcement Project
and the rebuilding of an interconnection circuit to the U.S., represent key
investments to improve supply reliability in the public interest."
<<
There were several industry developments and company initiatives, some of
which are highlighted below:
- In September, the North American Electric Reliability Council (NERC)
gave our transmission operations facilities, work processes and staff
a grading of excellence for their abilities to reliably operate and
maintain Ontario's electricity transmission system. The report
singled out our industry leading physical security procedures,
infrastructure and program management as well as our innovative and
fully integrated, multi-functional communications system.
- On October 16, 2006, we signed an agreement with Hydro-Québec
TransEnergie for the construction of a new 1,250 MW interconnection
between our systems that will allow us to commence construction
before the end of 2006. This project provides Ontario with more
reliability and flexibility in supply with access to emission-free
hydroelectric power, in support of government policy.
- We rebuilt a two-kilometre 230kV interconnection circuit to the U.S.
that was removed after gale-force winds brought down a transmission
tower in the Sarnia, Ontario area. This interconnection will provide
about 100 MW of import capacity to our transmission system.
- On October 17, 2006, the Ontario Government announced that publicly-
owned utilities will be exempt for two-years from paying electricity
transfer tax when they sell electricity assets to other publicly-
owned utilities in Ontario. In addition, the Government has lifted a
moratorium on our purchase or sale of electricity distribution
assets. We will be open to voluntary and commercially beneficial
opportunities.
>>
Net income was lower by $30 million, or 23%, in the third quarter, and by
$25 million, or 7%, on a year-to-date basis compared to 2005 results. Net
income levels in the quarter and year-to-date periods reflect the impacts of
higher expenditures required to operate and maintain our transmission and
distribution systems, particularly as a result of the damaging storms
experienced over the summer months, and lower transmission tariff revenues,
including the impact of the Ontario Energy Board's (OEB's) transmission
earnings sharing mechanism. We also experienced a higher effective tax rate in
the quarter due to timing differences. The impact of these factors was
partially offset by higher distribution tariff revenues associated with
OEB-approved tariff rate increases and, for the year-to-date period, a
reduction in our effective tax rate. This rate reduction resulted from the
relative size of tax benefits recognized in the first quarter of 2006 and in
the second quarter of 2005.
Capital expenditures of $593 million for the first nine months were
higher than in 2005 by $112 million, or 23%. Expenditures made to expand our
transmission system increased primarily as a result of two critical
investments: the Niagara Reinforcement Project and the Downtown Toronto Cable
Project, both of which will improve reliability when completed. Increases in
asset replacements, including those resulting from significant storm activity
in early February and the summer of 2006, also contributed to higher capital
expenditures on our low-voltage distribution system.
Total revenues for the nine-month period were $12 million higher than
last year. Revenues increased primarily due to OEB-approved distribution
tariff increases. However, this increase was substantially offset by the
effects of milder weather and the impact of the OEB's earnings sharing
mechanism on our transmission revenues. Net cash from operating activities was
$715 million for the first nine months of 2006. During this period we paid
$286 million in dividends to the Province of Ontario.
|
Energy Security High On G-20 Summit Agenda: Australia
“Oil prices and energy supplies would be high on the agenda at a summit of
G-20 finance ministers and central bank governors in Australia this week,
the meeting's chairman said Sunday.
Australian Treasurer Peter Costello said he hoped the summit would agree
on a broad pact aimed at securing energy supplies, with the growing needs
of Asian giants China and India of particular concern. … The Group of 20
Finance Ministers and Central Bank Governors, which brings together major
industrialized and developing economies, meets in Melbourne on November 18
and 19. … Costello acknowledged that the last G-20 summit, in China last
year, had a similar aim of stabilizing oil prices but was followed by a
period of extreme volatility. …” [Agence France Presse (11/12)/Factiva]
“… Costello said the meeting would bring major oil producing nations Saudi
Arabia and Russia together with major customers, including China and
India, which are experiencing growing demand for energy and resources. …Melbourne, Australia's second largest city, will be under tight security
for the two-day G-20 meeting, and organizers hope to head off any
disruption caused by protesters. But Costello said he could not understand
why anyone would protest against the G-20 meeting, which was a summit
which included representatives from developed and developing nations. ‘If
you are concerned about aid, and poverty, and the developing world, this
is a summit you should be protesting for,’ Costello said.” [Reuters
(11/11)/Factiva]
“… Costello will hand over the chairmanship of G-20 to South Africa this
month. He also said Sunday that Australia should consider moving toward a
carbon trading system if other countries also took up the idea. ‘We ought
to be in there negotiating what this system would look like, so that we
protect our own interests,’ he said … . ‘The next chapter is bringing the
key consumers in, China and India, the kind of countries that we're trying
to bring into the world financial system,’ Costello said.” [The
International Herald Tribune and Bloomberg News (11/13)]
“Costello has urged the G-20 to take the role of global economic policy
co-operation away from the International Monetary Fund, speaking before
this week's meeting of the world's most powerful finance ministers and
central bankers. … Costello said a key success of the G-20 had been as a
force for starting to change the outdated arrangements governing the IMF
and World Bank, whose credibility in recent decades had been diminished by
the fact they remained predominantly under the control of the US and
Europeans. But he said there was considerable reform to push through on
both the voting structures of the two bodies and their policies, and he
questioned the IMF's capacity to produce change and global co-operation.
…” [Australian Financial Review (11/13)/Factiva]
In a commentary published in Australia’s The Age, Executive Director
(macro-economic) at the Australian Treasury and Co-Chairman of the G-20
Deputies process this year, Martin Parkinson writes: “The G-20 meeting
will be an opportunity to help the world's poorest. … Since 1990, 200
million people have been lifted out of extreme poverty and the World
Bank's latest projections are that we're on track to meet our goal of
halving the proportion of people with an income of less than $1 a day.
This is remarkable progress over a relatively short period of time, but
there is still a long way to go. … But achieving the goals requires more
than increased aid and debt relief. Most important is establishing the
conditions necessary for sustained economic growth and job creation. This
is where the G-20 can make a difference. …
Australia decided it was important for the G-20 to start focusing on aid
effectiveness in 2006. Costello will highlight to his colleagues that - in
addition to increased aid, debt relief and greater trade opportunities
through the removal of global trade barriers - further action is required
to improve the effectiveness of aid to achieve the MDGs. Greater effort is
required from both developed and developing countries to fight global
poverty. The G-20 meeting in Melbourne will be an important opportunity to
help in that effort.” [The Age (11/13)/Factiva]
“… The G-20, set up in Berlin in 1999, includes the Group of Seven
industrial countries -- the United States, Japan, Germany, France, Italy,
Britain and Canada -- plus Argentina, Australia, Brazil, China, India,
Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea and
Turkey. The European Union is also a member, represented by the rotating
Council presidency and the European Central Bank.” [The Associated Press
(11/11)/Factiva]
|
Nine Clouds on ethanol's horizon
By Cole Gustafson
A frenzy to build ethanol plants is spreading across rural America, due in large part to the passage of the Renewable Fuel Standard (RFS) in 2005. Interest and investment in the ethanol industry has been steadily rising during the past decade, but reached fever pitch when RFS bill mandated the use of 7.5 billion gallons of renewable energy by 2012. Prior to passage, ethanol plant investments were highly profitable, with some paying off original investors in five years or less.
RFS insures that demand for ethanol probably will remain strong for at least the near term. Consequently, North Dakota agriculture likely will be affected by ramifications of this frenzy. In addition, several emerging changes in technology may temper robust growth of the industry.
There are nine factors that will influence the industry.
1) A very noticeable impact will be the increased demand for corn by these plants. It is estimated that Iowa will be a net importer of corn by 2008. Corn acreage likely will expand significantly across North Dakota as well. Even so, rotational limits and other agronomic considerations will limit the expansion of corn in many regions. Thus, corn prices probably will rise in response. While this is good news for corn producers, other corn users, such as livestock feeders and processors, should factor in a new "corn price plateau" when formulating future budgets. Rising corn prices also could jeopardize many small ethanol plants that were marginally profitable before passage of the RFS.
2) The volatility of energy markets will be transmitted directly to agriculture. Since so much of agriculture is tied to corn, such as livestock, feed barley and soybean prices, those commodities will experience increased volatility as well. This past summer, fuel ethanol terminal market prices reached $4 a gallon in June and fell to less than half that by September. The ethanol industry's derived demand for corn suddenly shifted and impacted the price it could pay for corn as a feedstock.
3) The RFS contains tax credits that underpin ethanol industry profitability at the moment. The current tax credit is 51 cents a gallon to blenders, which effectively lowers the cost of producing ethanol. However, these credits are due to expire in 2010. Last year, when retail ethanol prices spiked, several congressional members suggested terminating the credits even earlier. While renewal of the tax credits is likely in 2010 because of the strong political support for the industry, it is not assured. Thus, investors need to carefully assess future investment risks.
4) With less corn available, North Dakota livestock producers must plan on using more dried distillers grains (DDG) in their rations. For every bushel of corn entering an ethanol plant, one-third bushel of DDG is produced. Although DDG is not a perfect feed and difficult to handle in cold climates because of its high moisture content, the price likely will be quite competitive. DDG partially replace corn and soybean oil meal because they are lower in energy and higher in protein than corn grain. Given the saturation of ethanol plants in many areas, feasibility studies for new ethanol plants are placing minimal value on this byproduct because of the difficulty in finding willing buyers. For the long term, DDG prices probably will rise and protein prices could fall if soybean meal becomes more plentiful from biodiesel processors.
5) The impact of a new ethanol plant on local corn prices is modest. Any effects evaporate more than 60 miles from the site because the corn market is very large and fluid. While corn producers always hope for higher local prices and livestock feeders dread the new competition, research shows that the total effects are quite modest, often increasing corn prices less than 10 cents a bushel. New plants do end up being a convenient delivery point for many growers, which reduces local transportation costs.
6) The growth of ethanol plants nationwide could indirectly dampen relative prices for crops that are shipped by railroad out of North Dakota. Ethanol plants are high-volume businesses and prefer to have corn railed in and DDG railed out. To meet the emerging need for existing and planned ethanol plants, the railroad industry says it will need 30,000 new rail cars.
Historically, North Dakota has had difficulty obtaining adequate numbers of rail cars to ship grain to buyers. Given strong profits in the ethanol industry, grain elevator managers will have greater difficulty competing and obtaining cars to ship other commodities, leading to a wider basis for those crops.
Although demand for all crops likely will increase, those dependent on rail transportation may increase less rapidly.
7) Although DDG are readily available and a surplus byproduct at the moment, livestock producers should not count on their future availability. Since ethanol producers place minimal value on DDG at the moment, they are diligently working to find other outlets for disposal. Some alternatives under consideration include DDG gasification to extract even more ethanol from residue starch (not all starch is removed from DDG) or even direct burning of DDG to reduce plant energy needs. It is quite foreseeable that future ethanol plants could fully utilize all DDG, further reducing livestock feeders' access to corn and its byproducts.
8) Other new technologies, such as fractionation, will yield different byproducts including higher fiber feedstuffs, a smaller amount of high-protein feed, and corn oil. Feed manufacturers may be better able to adapt these byproducts to specific livestock species.
9) While corn ethanol plants are highly profitable at the moment, this could rapidly change as new technologies emerge. The federal government is exploring and heavily investing in many new alternative renewable energy feedstocks, including cellulostic materials, such as grasses and tree pulp. Several of these technologies are being commercialized in Canada, Denmark and Spain. | |
