Renewable Energy Report: April 2017 Report

In this month’s article, we look at pure biodiesel production and its feedstock usage for the last eight years. Pure or traditional biodiesel is known as Fatty Acid Methyl Ester (FAME). Renewable diesel (also known as Hydrotreated Vegetable Oil or HVO) and FAME often are confused. They are both made from organic biomass, but are different products due to their production process and quality attributes. 

Renewable diesel is produced by hydrotreating very clean biomass materials after removing impurities from the raw biomass-based feedstocks. Renewable diesel has an identical chemical composition with traditional petroleum diesel (i.e. both are hydrocarbons) and can be used in high concentration in all diesel engines. Pure biodiesel, an ester, is produced by esterifying vegetable oil and fats. The usage of pure biodiesel in high concentration can cause problems in conventional diesel engines, so in general is limited to a maximum inclusion rate of up to 20 percent (B20) in the United States.

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U.S. ethanol production increased 3.5% to 15.329 billion gallons in 2016 compared with 2015 (14.807 billion gallons). The growth rate of ethanol production in 2016 remained the same as in the previous year, but the level of production set another record high volume with ethanol biorefineries in 28 states and a total nameplate capacity of 15.998 billion gallons (RFA, 2017). The U.S. Energy Information Administration’s (EIA) State Energy Data System for ethanol production is current to 2014. 2015 and 2016 ethanol production data for the states included in this report was estimated based on each state’s historical data trend. 

From 2010 to 2014, Iowa’s ethanol production accounted for about 27% (3.67 billion gallons, on average) of the U.S. fuel ethanol production (13.61 billion gallons, on average) during that period (see Figure 1). From 2015 to 2016, Iowa produced 26.1% (3.91 billion gallons, on average) of U.S. ethanol production (15.07 billion gallons, on average). In 2016 alone, Iowa’s ethanol production was estimated at 3.9 billion gallons. At this rate, Iowa continued as the country’s leader in ethanol production. 

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The California Air Resources Board recently renewed its sticker emissions standards for cars and trucks. California can set its own standards because the Clean Air Act allows states to choose their own emissions standards. View this interesting report published by New York Times.

Ann Johannsaholste@iastate.edu

The spreadsheets listed below provide data and trends for various components of the renewable energy industry. These files are updated with new information each month.

Energy prices and their grain feedstock prices are commodity prices that are vulnerable to large swings over time.  This section provides time-series trends in these prices and their relationship to each other. Comparisons are presented for crude oil, diesel fuel and gasoline with corn and soybean prices. These monthly data series include comparisons between energy prices (crude oil, gasoline and diesel fuel) and crop prices (corn and soybeans).

The profitability of production for corn, ethanol, and biodiesel is extremely variable. Due to the volatile price nature of these products and their feedstocks, profitability can change rapidly from month to month. In addition, price variations of co-products such as distillers grains with solubles and the production facility’s energy source of natural gas add to the variability of profits. The models are updated with monthly input and output prices to show the changes in production profitability.

Balance sheets for ethanol and biodiesel, as well as their feedstocks of corn and soybean oil provide insight on available supplies, various sources of demand, and carryover stocks that are left at the end of the marketing year after all demands have been met.


Prices

Profitability