Transcript Infrastructure Incentives - re

Alternative Energy
Ethanol
Corn Marketing Program of Michigan
&
Michigan Corn Growers Association
September 21, 2005
Michigan Corn Basics
• Michigan Corn Basics
– 1.9 million acres planted per year
– Average 134 bushels per acre
– 255 million bushels harvested for sale
– 45% of our corn shipped out of state
– 35% of corn fed to livestock in-state
– 7% of corn used for ethanol production
Michigan Corn Basics
• Michigan Corn Basics
– 1.9 million acres planted per year
– Average 134 bushels per acre
– 217 million bushels harvested for sale
– 45% of our corn shipped out of state
– 35% of corn fed to livestock in-state
– 7% of corn used for ethanol production
Ethanol Policy
• Energy Policy Act of 2005
– Signed August 8, 2005
• Renewable Fuel Standard (RFS)
• Phase-in of RFS from
4 billion gallons in 2006
7.5 billion gallons in 2012
• Farm Bill
• Potential legislation
– 10% ethanol mandate or RFS for Michigan
– Btu legislation
Ethanol Policy
• States requirements and bans
– 10% ethanol requirements
• Effective in MN, HI, MT
• Proposed in MI, WI, MO, NE
– MTBE bans
• 17 states implemented
• 8 states not yet implemented
What is MTBE
• MTBE - Methyl tertiary butyl ether (MTBE) is a fuel
oxygenate derived from petroleum.
• MTBE has been proven to pollute groundwater
resources
– foul taste or odor
– carcinogen for humans
• MTBE banned in several states as an oxygenate
• The elimination of MTBE from the nation’s fuel supply
will create increased demand for ethanol as an
oxygenate by 3.6 billion gallons
Statistics according to NCGA
Environmental Benefits of Ethanol
• Reduces tailpipe carbon monoxide emissions
by as much as 30 percent
• Reduces exhaust volatile organic compounds
(VOC) emissions by 12 percent
• Reduces toxic emissions by 30 percent
• Reduces particulate matter (PM) emissions by
more than 25 percent
Statistics according to EPIC
Ethanol Usage
• Ethanol Usage & Markets
– E85
– E10
– E-diesel
– Aviation ethanol
– Fuel cells
State Ethanol Utilization
Michigan
• Michigan - 5 billion gallons of gas
• 10% blend = 500 million gallons of
ethanol
• Would use 178 million bushels of corn
Ethanol Production
• Michigan Ethanol, Caro
– Economics
• 40 million gallon nameplate capacity
• 15 million bushels of corn
• 35-41 jobs
• Narrowed/closed bases
Ethanol Plants – Under Construction
• Great Lakes Ethanol, Blissfield
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Working group formed Jan ‘03
Feasibility study complete
Stock offering near completion
Groundbreaking held August 25, 2005
• Economics
– 57 million gallons
– 15-17 million bushels of corn
– 35-41 jobs
Ethanol Plants – Under Construction
• U.S. Bio Superior Ethanol, LLC, Lake Odessa
– Working group formed
– Feasibility study complete
– Groundbreaking – September 15, 2005
• Economics
– 45 million gallons
– 16 million bushels of corn
– 40 jobs
Ethanol Plants – Under Construction
• Andersons Ethanol, LLC - Albion
– Owned by The Andersons
– Township board approved
– Groundbreaking Sept. 15, 2005
• Economics
– 55 million gallons
– 20 million bushels of corn
– 35-41 jobs
Proposed Ethanol Production
• Marysville Ethanol, LLC – Marysville
– Private partnership of investors and Michigan
energy companies
– Plant to be located next to Marysville
Hydrocarbon’s industrial complex
• Economics
– 50 million gallons
– 18 million bushels of corn
– 45 jobs
Michigan Ethanol Usage
• Increased Michigan Usage
– ’99
– ’00
– ’01
– ’02
– ’03
29 million gallons
70 million gallons
80 million gallons
120 million gallons
150 million gallons
National Ethanol Usage
Nationally
• U.S.-139 billion gallons of gas in ‘03
• 10% blend = 14 billion gallons of
ethanol
• Would use 5 billion bushels of corn
National Ethanol Production
• 90 plants currently operating
– 1.41 billion bushels of corn
– 3.95 billion gallons of ethanol
• 17 plants under construction
• 2 increasing capacity
• Producer owned plants
– comprise 40% of production
Ethanol Production Facilities
National Ethanol Production
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’84-500 million gallons
’90-900 million gallons
’94-1.35 billion gallons
’00-1.63 billion gallons
’02-2.1 billion gallons
’03-2.8 billion gallons
’04-3.4 billion gallons
’05-4.34 billion gallons* (estimate)
Ethanol Usage
• Ethanol Usage & Markets
– E85
– E10
– E-diesel
– Aviation ethanol
– Fuel cells
E10
• 10 percent ethanol, 90 percent gasoline
• Primary use of ethanol in Michigan
• Warranted for use by all automobile manufacturers
• Combination produces a higher octane, cleaner
burning fuel for consumers
• In MI sold at
– most Speedway and Sunoco
– some Citgo and Marathon stations.
– some independently owned stations chains
included By-Lo and Speedy-Q
E85
• 85 percent ethanol, 15 percent gasoline
• Warranted for use only in Flexible Fuel
Vehicles (FFVs)
• Burns cleaner than gasoline – 25 percent
reduction in smog-forming pollutants; 35-40
percent in greenhouse gas emissions
• E-85 sold at 5 locations - handout
What is an FFV?
• Flexible Fuel Vehicles (FFVs) are specially
designed to run on any ethanol blend up to
85 percent
• FFV may use a blend of gasoline or E-85 from
100 percent ordinary unleaded to 85 percent
ethanol
• Engine Control Module reads the fuel blend –
oxygen
• Complete listing of FFVs
www.E85 fuel.com
Renewable Fuels Association
Aviation Fuel
• 100 low lead (LL) is the only remaining
leaded product currently in the U.S. fuel
supply
• Ethanol properly blended with lubricity
additives show great promise as an aviation
fuel
• The ethanol in the fuel helps to prevent fuel
system freezing and also provides excellent
detonation margins
E-diesel
• Ethanol blended with diesel fuel
• Ongoing research to reduce smoke and
hazardous emissions from diesel fuel
• Research is also looking for optimum blend of
ethanol and diesel
• May help to eliminate sulfur in diesel, a
primary source of acid rain
Fuel Cells
• Fuel cells are expected to become next great
innovation in the automobile industry
• Fuel cells need a hydrogen source for the
chemical reaction to in turn create electricity
• Ethanol has a hydrogen rich molecular
structure
• Ethanol is easy to transport and safe
Questions?