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Wheatland – Cattle industry challenges created by the biofuel era aren’t over, according to North Dakota State University Professor Cole Gustafson.
    “All this is driven by policy,” said Gustafson to a group of ranchers gathered for a recent educational seminar in Wheatland. University of Wyoming Cooperative Extension Service Educator Dallas Mount organized the mid-March event with about 40 local ranchers attending. “Ethanol was not economical, but we made it economical through the tax credits, the tariffs and the mandate,” said Gustafson. The mandate is metropolitan areas requiring a percentage of biofuels in place of MTBE.
    “Cellulose is not economical, but it will be,” said Gustafon. “We’re going to make it that way.” Listing recent U.S. Department of Agriculture and U.S. Department of Energy grant disbursements, he estimates $200 million in federal dollars have recently been invested in cellulosic fuel research. An additional $400 million in matching funds takes total research dollars to $600 million.
    Gustafson said the scenario began with the passage of the renewable fuels standard by Congress in August 2005. “It set a national goal to produce 7.5 billion gallons of ethanol by 2025,” he recounted. At the time ethanol was not economical to produce, but Gustafson said a 51-cent tax credit coupled with a 54-cent tariff on imported ethanol made the industry pencil out. Ethanol plants going on line were reporting an ability to pay back their initial investment within three years, a scenario that caught Wall Street’s eye.
    With an interjection of what Gustafson called “New York money,” the Wall Street Journal reported $3 billion has been invested in agriculture as part of the ethanol movement. With that kind of support the 2025 goal was quickly passed with the U.S. on course to produce between eight and nine billion gallons of ethanol this year.
    “National leaders need something to strive for,” said Gustafson, noting new policy passed December 2007. The legislation puts forth a goal of 36 billion gallons of ethanol production by 2022. Of that, 15 billion gallons is to come from traditional sources and the remainder through sources like cellulos sources, which includes sugar.
    “We’re now looking at a new national goal that’s four times higher than we had before,” he said. “Think of all the adjustments that already have taken place.”
    Gustafson said two companies, one in Mexico and the other in South America, have announced plans to invest $22 billion in new plants. Gustafson said 60 plants that will use sugarcane as stock are being built on the Texas and Mexico border. “We’ve passed this mandate and foreign countries are responding,” he noted.
    A decline in the ability of distiller’s grain as a feed source can also be expected. “Gasification is probably going to be happening with distillers grains,” said Gustafson, noting that plant operators find distribution of the grains to be a headache. “They’d rather find other things to do with it. New ethanol plants plan to gasify it and use it as a heat source instead of selling it as a byproduct.”
    Additional pressure for acres may also impact the cattle sector. Gustafson said the people pushing for cellulosic fuel production hope to avoid competition with prime agricultural areas. “They’re talking about crops that can be grown in marginal areas so they don’t compete with things like corn,” he noted. “What they forget is that it will be grown on ground that could be used for livestock. Let’s say switchgrass ends up being the crop of choice. I think we’re going to find that if you sprinkle a little fertilizer on it you get more switchgrass. A few years down the road there will be Roundup Ready switchgrass. Then it will be raised on our most productive lands. This goal of developing liquid energy and not competing with corn or soybeans is flawed.”
    Jennifer Womack is editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..
Casper — In a March 31 letter to the nation’s agricultural and energy leaders, the National Cattlemen’s Beef Association (NCBA) said any effort to increase the nation’s ethanol blend rate must first be fully assessed for market and production implications.
    The letter was sent to Secretary of Energy Steven Chu, Secretary of Agriculture Tom Vilsack, Environmental Protection Agency (EPA) Administrator Lisa Jackson and Assistant to the President for Energy and Climate Change Carol Browner.
     “The blend percentage is currently set at 10 percent,” wrote NCBA, “which is causing significantly more competition for corn and driving up feed costs for cattle producers.”
    NCBA asked the decision makers to oppose “any administrative or legislative efforts to increase the amount of ethanol permitted to be blended with gasoline.” Vilsack has stated that an increase into the 12 to 13 percent range could be made at the discretion of the EPA.
     “As you know,” wrote NCBA, “current corn-based ethanol production is capped at 15 billion gallons, which is the equivalent of 10 percent of the U.S. projected gasoline market. Increasing the blend percentage to 15 percent would mean the immediate addition of 4.5 billion gallons of ethanol, and would require an extra 1.6 billion bushels of corn. Based on 2008 yields, to reach this level an additional 10.4 million acres of corn would need to be planted.”
    NCBA wrote, “Corn ethanol production is significant to the cattle industry because of its impact on feed grain prices. Since January of 2008, cattle feeders have lost a record $4.3 billion in equity because of high feed costs. The additional 1.6 billion bushels of additional corn needed for an E15 blend percentage is equivalent to the entire amount of corn the cattle industry utilizes in one year.”
    Talk of increasing the blend percentage has also earned the attention of the Colorado-based Livestock Marketing Information Center (LMIC). “USDA, along with ethanol producers,” said a March 20 paper released by the group and written by Mississippi State University Economists under the direction of Dr. John Anderson, “appears to be pursuing an increase in the ethanol blend limit as a means of providing financial relief to the ethanol industry with little consideration of how such an increase might affect participants in related markets.”
    The LMIC paper says, “For livestock producers, who have already experienced a dramatic rise in production costs over the past two years, a further increase in ethanol production represents a potentially serious challenge.” Increases, they said, could further drive ongoing contraction in the beef, pork, poultry and dairy sectors.
    Early on by-products were thought to be an alleviation factor for ethanol production’s impact on the cattle sector, but according to Anderson’s paper, “…so far byproducts prices and corn prices remain closely correlated. If corn prices move higher, the price of substitutes will move higher as well.”
    The National Corn Growers Association supports the increase. A posting on their website from the Illinois Corn Growers Association calls for an immediate increase to E12 or E13 with further consideration for E15 says increasing the blend rate would “stimulate the rural economy.” The group says two billion gallons of capacity are sitting idle in their state. “Many other plants in Illinois are in crisis due to the lack of blending opportunities,” says the group citing plants on the verge of bankruptcy. “Increasing the level of allowable blends will help return these plants to full operation and full employment.”
    “The marketplace offers many adequate risk management tools, which when combined with good business practices,” wrote NCBA noting their support for energy independence, “help build a competitive and strong industry. Cattle producers do not support government interventions via subsidies and mandates; these practices disrupt the market and are never substitutes for good business practices.”
    Jennifer Womack is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Rancher makes biodiesel from vegetable oil

Otto – After spending $30,000 every year for diesel when it was just $2.60 per gallon, Phil Boreen, who ranches near Otto, began to search for options to either compensate for or replace the purchase of commercial fuel.
    Boreen says he uses 12,000 gallons of diesel each year, mainly in three pivots run by generators. “That was the impetus behind this whole thing.”
    “If we could have gotten on the grid, we would have, but we couldn’t because of the $140,000 it cost,” he says. The ranch also looked into using wind energy to compensate for the cost of fuel, but recently completed anemometer data shows the location coming in a little low to make that a viable option.
    “I got way laid on a flight from Denver to Cody and ended up spending the night in Salt Lake City,” says Boreen. “I got on the plane the next day and the guy sitting next to me was an oil trader from Billings. I let off on him about the price of diesel, and he said, ‘Why don’t you make your own?’”
    “When I got home I researched it and got a hold of an engineer in Michigan,” he says. The engineer, who specializes in process engineering, was Paul Oliver of Murphy’s Machines. “I was looking at online biodiesel forums and they kept talking about this guy, whom everyone calls ‘Murphy,’ and I went to his website and started emailing him.”
    Boreen asked if Oliver, who was marketing a 60-gallon process, could help design a process to make 350 gallons of biodiesel per batch. After 500 emails and a thousand phone calls, Boreen’s system was up and running. “I was on the phone with him about every 15 minutes for two days while we were making the first batch,” he says. “All along I’d take pictures of things and send them to him and he’d say if it was right.”
    The system, now situated in a corner of the newly-insulated heated shop of an existing building, is composed primarily of old propane tanks and a fuel tank, all stood on end. “I paid a guy to do some of the welding for me on the inside of the tanks to ensure they wouldn’t leak, and Oliver designed it all and we tweaked it as we went along,” says Boreen.
    “The most expensive single part on the whole thing is the pump, which was $500,” he says of the system cost. “The equipment cost around $10,000, and with insulating the building there’s about $13,000 in it.” To help out with the project the Boreens received a grant from Rural Development, which paid a quarter of the costs.
    As for oil supply, Boreen says he has 38 cans out at restaurants all over the Basin. “That’s the biggest pain, because it’s a 50-mile shot from here to everywhere I go, and I pick them up once a week in the summer.”
    “What makes good oil is that the restaurant has to change it every once in a while,” he says, noting that Cody restaurants supply the best. “There are certain restaurants that I wouldn’t eat at in this county because I see their oil. If oil stinks, it’s probably no good.”
    “The restaurants were paying between $35 and $80 each month to get rid of their oil, and they can give it to me for nothing,” says Boreen, noting that most restaurants were easy to get into once he showed them he’d be consistent in collection. He’s still looking for a few more restaurants to bring his barrel count up to 50.
    Boreen fabricated a machine that sits in the back of his truck and sucks oil out of the barrels along his route. Right now the raw oil sits in barrels to settle before the oil is sucked off the top, but two additional tanks are planned for the shop that will filter the oil as it’s pumped in.
    So far the system has produced 10,000 gallons of biodiesel. “Some people say you have to have all the filters to go with the system, but you don’t,” he explains. “The only filters on this system are the regular fuel tank filters, and they hardly ever get plugged.”
    The byproduct of biodiesel – glycerin – is stored before being spread on the fields. “We put the glycerin through the pivots and it feeds the bacteria in the ground,” says Boreen.
    “This biodiesel gels at about 20 degrees, and I wouldn’t recommend it below that,” he notes, adding that it does initially plug equipment filters as it cleans the fuel tanks. “In all my tractors, after the first three tanks or so, I had to change all the filters, but since that I haven’t changed one. This stuff is like detergent, and when it gets in there it takes everything loose from inside the tank.”
    “This process is absolutely environmentally friendly because it’s all organic, and it’s all made from waste products, so I’m reusing and recycling a product that has to be handled somehow,” explains Boreen. “It doesn’t take as much energy to make it as I get out of it.”
    In the third phase he says the plan is to build a waste oil boiler to use instead of the current electric heaters. “Then we won’t use any electricity except for the pump.”
    When giving advice to others who may be interested in making their own biodiesel, Boreen says the first thing is to find a source. “Get a solid oil source, which is the most important thing. Figure out what your needs are and then figure 20 percent more because that’s what you lose to glycerin. Figure out your summer fuel use, and if it’s high enough, then it’s worth it.”
    The Boreens use management intensive grazing with their cattle, only putting up enough hay to last a few months in the winter. “Our goal is to graze 10 months out of the year, and we haven’t got there yet, but we will,” he says.
    The most irrigation water they’ve had since moving to the place in 2002 is 30 percent of normal. Two ponds have been renovated and two new ones constructed, and the three pivots have been added in the last five years. Plans also exist to tear an existing barn down to the foundation and rebuild it with an apartment, community space and wood shop within.
    The Boreens have also gone natural with their cattle and are moving to organic this year with their herd of Hereford and commercial cows. Boreen says his wife, Kate, is the marketer and he’s sure they’ll get a good price for their natural cattle this year now that their herd numbers are up and they have a higher quantity to sell.
    Previously, Boreen spent 30 years as a fireman in Washington. “My wife brought us to Wyoming because she hated the Coast. We had 50 cows out there and we thought we could either retire and move to Arizona and play golf and look at each other for the next 30 years, or we could do this.”
    The Boreens recently adopted four children and plan to build a new house after the current list of projects has been checked off.
    “I’m lucky,” says Boreen. “I got to do two of the things in my life that make me happy. I got to run my cows and I got to be a fireman and not many people could go through life and say they did exactly what they wanted.”
    For more information on this biodiesel process visit Paul Oliver’s website at Christy Hemken is assistant editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..

In light of a tight corn supply and costly feed resources, ranching groups across the U.S. are asking that the renewable fuel standard (RFS) be suspended for the rest of 2012, into 2013.
    During the week of July 30, a coalition of meat and poultry organizations and 159 members of the U.S. House of Representatives approached the EPA asking for a waiver of the federal mandate for ethanol production.
Background on the RFS
    In 2005, the renewable fuel standard was created under the Energy Policy Act of 2005. The original standard required 7.5 billion gallons of renewable fuel to be blended into gasoline by 2012.
    “Under the Energy Independence and Security Act of 2007, the RFS program was expanded in several key ways,” says the EPA, listing inclusion of diesel, increasing the volume to 36 billion gallons by 2022, and establishment of new categories of renewable fuel as some changes.
    EPA adds, “RFS2 lays the foundation for achieving significant reductions of greenhouse gas emissions from the use of renewable fuels, for reducing imported petroleum and encouraging the development and expansion of our nation’s renewable fuels sector.”
    The 2007 mandate requires refiners to utilize 13.2 billion gallons of ethanol this year, with that number increasing to 13.8 billion gallons in 2013. At those levels, 4.7 billion bushels and 4.9 billion bushels of corn, respectively, would be required by the industry.
Cause for concern?
    The coalition of livestock groups and Congressmen filed a petition that said, “It is abundantly clear that sufficient harm is occurring now and that economic conditions affecting grain supplies and feed prices will worsen in the months ahead. Both conditions provide an independent basis for a waiver of the RFS.”
    With corn prices high, CME Group says livestock producers could be forced out of business in facing high feed costs.
    They additionally refer to the EPA position on the RFS as a “wild card,” asking, “At what point does the impact of high feed costs on livestock producers becomes high enough to warrant a temporary waiver of the mandate?”
    However, the group acknowledges that the decision is a political one and, in light of the election year, coming to an agreement become more complicated.
Corn growers
    The National Corn Growers Association (NCGA) encouraged producers to remember that, while the drought is severe, the corn crop is still in the field, and yield forecasts are just predictions.
    “We won’t know the actual size of the 2012 corn crop until months from now. In the meantime, the market is working,” said NCGA President Garry Niemeyer in a press release. “All corn users are responding to market signals. Ethanol production and exports are down.”
    He also added that a current surplus of ethanol in the U.S. will reduce demand on the U.S. corn crop.
    “When it comes to the renewable fuel standard for ethanol and other biofuels, now is not the time for changes. It’s working,” comments Niemeyer. “The RFS is revitalizing rural America, reducing our dependence on foreign fuel and reducing the cost of gasoline. Making changes to the RFS now would only ensure that consumers suffer due to significantly higher fuel prices.”
    The American Corn Growers Foundation (ACGF) also adds that drought has caused tight corn supplies, not ethanol production, and the by-products of ethanol production are still used as livestock feed.
    “Consumers, livestock feeders and politicians all need to acknowledge that only the starch from corn is used in ethanol production,” explains Gale Lush, chairman of ACGF. “The protein, minerals and oil from that same corn kernel still provides abundant feed for the livestock sector, which is where most of the corn supply would have gone in the first place.”
The ethanol industry
    From the other side, members of the ethanol industry have said that instituting a waiver or suspension of the RFS is “non-supportive” and “changes the rules of the game in the middle.”
    One representative explained that the RFS has incorporated provisions for flexibility to accommodate shortages, such as those that are happening now. The industry is also making adjustments in light of supply concerns.
    “The ethanol industry has reduced production by at least 15 percent over the last six months,” he said.
    With the RFS a hot topic in the news and the political climate in the U.S. becoming increasingly volatile, the outcome of the RFS and petition to the EPA is still unknown.
    Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Corn prices increase
    On Aug. 8, CME Group reported that corn futures for September increased to $8.15. Corn for December delivery rose 16 cents, or two percent, to $8.165 per bushel.
    Doane Advisory Services reported on the same day that corn futures closed eight to 14 cents higher overall, garnering strength from high cattle and soybean price action.
    “Light rain forecast for portions of the Corn Belt over the next few days held price in check early, but anxiety over prospects for sharply lower production estimates from USDA on Aug. 3 sparked renewed buying,” said Doane Advisory Services.
    Prices have increased since the release of the USDA World Agriculture Supply and Demand Estimates (WASDE), which predicted corn yield to be an additional 20 bushels per acre lower, at 146 bushels per ace. The most recent WASDE report was issued on Aug. 10.

Laramie – Don Collins of the Western Research Institute (WRI) suggests that new technology that utilizes bacteria to create biodiesel could help the U.S. eliminate the need for petroleum imports.

Collins, Chief Executive Officer of WRI in Laramie, along with UW Extension Energy Coordinator Milt Geiger, spoke at AgriFuture 2011, providing student attendees with the opportunity to learn more about the nexus between agriculture and energy.

“The Western Research Institute is a research and development center,” said Collins. “Our objective is to help solve problems to make the world a better place. We take science, develop technology and seek for commercialization of those technologies.”

Some current research at the WRI focuses on bioenergy.

“Fossil fuels are just very old biomass,” explained Collins. “The objective is to really displace our dependency on petroleum fuels, but also the biomass.”

Collins added, “The largest growth is in the feedstock area. Projections say that cellulosic ethanol will be far cheaper than crude oil. We have a very competitive position for biofuels.”

He said biofuels have the potential to expand the agriculture industry, as well as the American economy.

“The projection is that there would be more than 400,000 jobs within the agriculture industry and nearly 1.9 million jobs in the American economy as a result of these biofuels,” said Collins.

Multiple aspects of renewable energy and biofuels are being pursued by the Department of Energy to increase chances at a viable, successful program.

“We always establish our goals to be commercially viable without subsidies,” said Collins. “One of the key things we really have been told is that we need to get very aggressive with research and take high-risk projects with high uncertainty, because those have the greatest benefits to society.”

Collins explained several technologies, including gasification and pyrolysis, that are being pursued. Gasification involves a heating process that produces hydrogen and carbon monoxide.

“We can make gasoline, diesel, ethanol and fertilizer,” explains Collins. “The process results in the formation of the essential building block molecules for these products. That is one of the motivators for gasification – there are more valuable products created than just electrons.”

With gasification, biofuels can be created for a cost of about 55 cents per gallon.

“It is a very involved process, but it provides flexibility,” said Collins. “We have a one megawatt gasifier in Laramie that allows us to operate on biomass, coal or blends of the two to produce the hydrogen and carbon monoxide.”

Pyrolysis can also be used, at the slightly higher cost of 68 cents per gallon, and Collins described the process as being a partial combustion. The partial burning of the biomass allows the products to be stored longer, however, the efficiency isn’t quite as high.

“Basically, we put a char on the biomass,” said Collins. “That gives it a stronger, firmer texture so it is easier to grind. It is also very attractive to the bioenergy industry for storage.”

“It is very suitable for small scale local use, as well as large scale processing,” continued Collins. “We have also found that if we take wood pellets or other biomass and run it through the system, it holds it together better, so there is some attraction to increasing the durability of other biomass.”

Another interesting project the WRI is working on involves the use of bacteria that consumes CO2, creating an oily substance that would be used as biodiesel. The bacteria do not require sunlight and can be grown in tanks beneath the ground.

“The idea is to produce more biodiesel than we can consume in the U.S. with these bacteria,” said Collins. “We would also use the carbon from coal twice – once in burning it and a second time for the creation of biodiesel.”

CO2 resulting from burning coal is captured and used to feed the bacteria. Collins explained this bacterium could also be used to reduce CO2 emissions in the United States and could lessen dependence on foreign oil. He said bioenergy industry and its connection to agriculture allows for potential developments and continued expansion of the industry long term.

Aside from biofuels, Geiger also looked at agriculture as a consumer of energy.

“Food is an important user of energy in the United States,” stated Geiger. “Ag has done a great job since about 1950 in reducing the overall energy intensity of the industry. We produce the same things with less energy.”

Geiger said that, according to the USDA, approximately 15 percent of total expenses on an ag operation are related to energy, only five percent of which is direct energy use. The remaining 10 percent is largely fertilizer use.

Volatility in the energy markets, including electricity, gas and diesel, provides instability for producers, he said, adding that there are opportunities to reduce energy use from these volatile sources, recommending producers start by assessing their energy consumption, then look at conserving energy on their operations. Next, producers should look to change technology and efficiencies and evaluate where energy is used. Finally, after looking at their operation, Geiger mentioned that alternative energy production should be considered.

“Producers would be doing themselves a great disservice by jumping to alternative energy before looking at their energy use or conservation,” said Geiger.

For alternative energy options, Geiger described geothermal, hydroelectric, solar and wind energies as viable sources. Geothermal energy looks at utilizing pumps based on the temperature gradient in the earth.

“Consumers can use that resource to heat or cool a structure,” said Geiger. “Hydroelectric can also be used on a small scale or a massive scale. Solar power can be used to create thermal energy and heat structures.”

In looking toward renewable energy, Geiger mentioned, “Small renewable energy systems are designed to reduce the costs. The goal is not to generate a revenue, but rather offset the costs.”

Geiger also mentioned that UW and Extension offer energy audits and renewable energy assessments to help producers look at their operation and energy consumption.

Saige Albert is assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..