December 2006

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Business Briefs

NABC unveils Orders Direct



View From the Hill

By Bob Dinneen

The Way I See It

By Mike Bryan

Editor's Note

By Tom Bryan

NBB In Sight

By Joe Jobe

Legal Perspective

By Todd J. Guerrero and Mark J. Hanson

Talking Point

By Jess Hewitt


Ethanol proponents will look back on 2006 as a year of landmark policy implementation and dramatic growth. From the president's priceless plug for cellulosic ethanol to a flurry of state and federal legislative efforts, the biofuel's political presence did not wane after the accomplishments of 2005.

With the implementation of the Energy Policy Act of 2005 and the simultaneous phaseout of MTBE in 2006, the U.S. ethanol industry witnessed another unprecedented period of growth that is carrying into 2007.

In 2006, the ethanol pendulum didn't just swing back and forth—it unhinged from its fulcrum altogether. Much of the past year's activities focused on less costly, more efficient methods of making ethanol.

Lights, Camera, Action

By Lindsey Irwin

Newcomers to the international ethanol community made significant advances following in the footsteps of the world's renewable fuels leaders—the United States, Brazil and the European Union (EU)—in what some in the industry are calling a turning point year for ethanol. The emerging producers have the benefit of learning from industry leaders who have weathered the trials and tribulations of building an industry from the ground up.

RFA President and CEO Bob Dinneen addressed attendees of the 2006 National Ethanol Conference: Policy and Marketing in February

Topping the Charts

By Anduin Kirkbride McElroy

Attendance at nearly all ethanol conferences was record-breaking in 2006, mirroring the rapid growth of the biofuels industry. Likewise, the sheer number of ethanol conferences was mind-boggling. In retrospect, EPM looked at the biggest conferences, most important issues and hottest trends to hit ethanol events in 2006.

The Road to Wall Street

By Lindsey Irwin

Propelled by federal policy and high crude oil prices, the demand for ethanol ballooned in 2006. The ensuing race to satiate the nation's hunger for ethanol—and to get in on the profits—led some ethanol producers to pack their bags and head for Wall Street.

Aiming to keep shipments of increased supplies fluid, rail companies were shelling out the dough this year to curb future delays on their heavily traveled lines.

Alternatives to natural gas as a source for process heat and steam were especially hot topics this year despite retreating natural gas prices. Here's a look at what went down energy-wise in the ethanol industry in 2006.


Footings In Place

By Nicholas Zeman

After the president's powerful plug for cellulosic ethanol in early 2006, "switchgrass" became a more common word. Funding for scientific and technological efforts to produce ethanol from biomass on a commercial scale reached new heights, and although no actual concrete was poured to construct cellulosic ethanol plants, the foundation for the ethanol industry's next era began to cure.

U.S. corn growers produced the third-largest crop on record in 2006 despite drought conditions in some major production areas. When not focused on production, growers and industry leaders turned their attention to rebuilding the lock system on the Mississippi River and tracking the Doha round of the World Trade Organization discussions.

This past year saw greater diffusion of novel production techniques worldwide, reaffirming the notion that this trade's process model is myriad, and its base is diverse.

From use by fleets to home heating oil, the popularity of biodiesel blends gained ground in the past year as people became more familiar with the renewable fuel's positive characteristics. For many, especially over-the-road truckers, fueling up with biodiesel has become synonymous with displaying the American flag.

Michigan Gov. Granholm signed a seven-bill package in July that granted several incentives to the biodiesel industry.

A Common Thread

By Lindsey Irwin

There was tight-knit support for biodiesel legislation in 2006 at the federal and state government levels, and from both sides of the political spectrum. Scores of new state bills sponsored by both Democrats and Republicans covered issues ranging from tax incentives to quality control. The increased activity leaves no doubt that biodiesel is increasingly becoming an important thread in the fabric of America's fuel supply.

Three biodiesel projects under construction in North Dakota plan on using canola oil as a feedstock.

Feedstock Flashback

By Holly Jessen

In the world of biodiesel feedstocks, soybeans continue to reign supreme. As the industry grows, however, some producers are singing the praises of other feedstocks such as canola, corn oil and grease.

Western Iowa Energy, designed by REG, started production of its 30 MMgy facility in Wall Lake, Iowa, in May.

How Significant Is Scale?

By Nicholas Zeman

Agriculture processing giants Bunge, Cargill Inc., and Archer Daniels Midland Co. entered the biodiesel game with mega-sized projects that could change the identity of methyl-ester manufacturing. As these plants come on line, the industry will continue to evaluate the efficiencies and deficiencies involved when agricultural processing is combined with biodiesel production on a large scale.

The National Biodiesel Board offers two biodiesel quality-control programs, one for producers and one for marketers.

A Defining Year

By Ron Kotrba

If this year taught just one lesson to biodiesel advocates, it was that this industry can't afford to sacrifice quality at such a defining, developmental moment in its history.

With the amount of theoretical production capacity far outweighing the current output of biodiesel operations, 2006 was a year of intense planning, fundraising and strategizing. As the dust settles, investors, bankers and others in the business are left with a lot of questions. Will the immense plans and ambitions of start-ups be brought to fruition, and how can companies secure logistical advantages in a fiercely competitive market?

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