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Business Briefs - April 23, 2008
Ecofin receives up to $30 million for rural biorefinery

LEXINGTON, Ky. — Ecofin, an affiliate of Alltech, Inc., received a grant of up to $30 million from the U.S. Department of Energy (DOE) to be used toward the establishment of its rural community biorefinery. The plant will be located in Springfield, Ky., and is estimated to employ 93 people when operating at full capacity.

As part of the DOE proposal, the biorefinery will be one of the first in the United States to utilize cellulose, such as switchgrass, corncobs and corn stover, at raw material levels of up to 30 percent. This will be converted to ethanol and other value-added products.

In addition, the project has received an incentive to the value of $8 million from the Kentucky Economic Development Finance Authority (KEDFA). The biorefinery will have an impact on Kentucky’s agricultural production by housing dairy and beef cattle to be branded under the Kentucky Proud label. Such actions could be a significant step toward addressing Kentucky’s $250 million milk deficit and this concept has already drawn interest from the Netherlands, Ireland, South Africa and China.

The facility will also have the capability to produce algae, a plant that needs little besides sunlight and carbon dioxide. According to National Geographic, algae can theoretically produce 5,000 gallons of biofuel per acre per year, whereas corn can produce 400 gallons per acre. Additionally, algae can absorb up to 450 tons of carbon dioxide per acre when grown commercially.

The biorefinery also presents an opportunity to forge partnerships with regional universities, giving students and faculty the opportunity to be actively involved with the state’s emerging energy economy through research and development. As part of the project’s research component, Ecofin will coordinate R&D activities with the University of Kentucky and the University of Cincinnati. Researchers will work to identify and address process improvements, develop economically and environmentally-sound technologies and use process simulation to reduce raw material costs and optimize energy utilization.

USGC: Barley a major player in Japan, despite limited supplies

WASHINGTON, D.C. — Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) held its second 2008 Simultaneous Buy and Sell (SBS) program for feed barley on April 16. The tender amount announced by MAFF was 331,000 metric tons (15.2 million bushels) of feed barley. The actual tendered quantities were 179,740 metric tons (8.2 million bushels).

“Based on conversations with Japanese trade, we estimate the results for the second SBS feed barley tender in 2008 to include 54,740 tons (2.5 million bushels) from the United States, 10,000 tons (459,000 bushels) from Canada and 105,000 tons (4.8 million bushels) being sourced from Australia,” said Cary Sifferath, U.S. Grains Council (USGC) senior director in Japan.

“However, remember that these are just estimates based on discussions with Japanese trade. We are still trying to clear up how much Canadian barley was traded. It is possible that the 10,000 tons I mentioned is also U.S. barley.”

 He said Argentina stepped in as a small player during the last tender, but did not have a presence at the most recent SBS. Australia made its way back into the SBS tenders, however, after seeing limited or even zero amounts over the last four tenders going back to August of 2007. The tender results were representative of his projection subsequent to the first tender of 2008, where U.S. barley acquired a 54 percent market share.

 “I anticipated that it would be difficult for U.S. barley to play any major shares until our new crop is harvested in August, unless we were to find excess U.S. barley stocks hiding somewhere,” said Sifferath.

“Still, 55,000 tons is impressive and great news for U.S. growers, given the limited amounts of U.S. barley stocks still available.”

WPS Corp. wins approval to build wind farm in Iowa

MILWAUKEE, Wis. (AP) — Wisconsin Public Service (WPS) Corp. has won approval from state regulators in Wisconsin to build a wind farm in Iowa.

It’s part of the company’s effort to comply with a state mandate to increase its supply of renewable power. The Crane Creek wind farm in Howard County, Iowa, is estimated to cost $251 million, and would help the utility comply with a requirement that 2 percent of its power come from renewable sources.

The approval means WPS customers will be asked to pay higher prices than even what the utility announced earlier this month. WPS had sought to raise rates nearly 8 percent to add $107 million in 2009. Now, wind farm costs would add $20 million to customers’ bills in 2009 and $34 million in 2010, WPS said in a filing with state regulators.

State law requires utilities boost their supply of power from renewable energy such as wind turbines, solar panels, landfill and manure-to-energy systems to 10 percent by 2015. WPS said it opted to build a wind farm in Iowa rather than Wisconsin because the winds are stronger there, enabling more power to be generated by each turbine.

The project still faces regulatory hurdles in Iowa. It would consist of 66 turbines over 29 acres and comes after WPS announced another deal to buy renewable power outside Wisconsin. The utility plans to spend more than $2 billion to buy a long-term supply of power generated by dams Manitoba Hydro plans to build in northern Manitoba in 2018 and 2020.

This farm news was published in the April 23, 2008 issue of the Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.
4/23/2008