Oil Prices on the Rise

  • Stephen Schork says the rising prices are based more on investor momentum than anything else, and that there’s plenty of oil on the market.(Photo courtesy of the Federal Highway Administration)

Oil and gasoline prices are going up this summer. Lester Graham reports, it appears the higher prices are not caused by lower supplies.

Transcript

The Energy Information Administration’s new short-term energy outlook says gasoline prices will average about $2.92 this summer– hitting $3.00 or more in some regions. That’s about 50-cents a gallon higher than last summer.

The outlook also predicts oil prices to average $82 a barrel this summer. But, oil already hit $86 a barrel this week.

Stephen Schork with The Schork Report says… the government projections were put together about a week ago… and didn’t really anticipate the investors driving prices up this week.

“So this rally that we are seeing and this upward buy is based more on investor momentum than it is on underlying fundamentals. There’s plenty of oil on the market right now.”

The government says prices should remain relatively stable but rising… although is notes uncertainty over crude oil price forecasts remains high.

For The Environment Report, I’m Lester Graham.

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Biodiesel Gets Lost in the Shuffle

  • Biodiesel is an alternative fuel that isn't getting much love from Congress. (Photo by Lester Graham)

Biofuels made from corn and soybeans have been bi-partisan political favorites in Washington for years, but Shawn Allee reports, one biofuel’s in political trouble right now:

Transcript

Biofuels made from corn and soybeans have been bi-partisan political favorites in Washington for years, but Shawn Allee reports, one biofuel’s in political trouble right now.

Biodiesel’s made from soybean oil.
It usually gets a one-dollar per gallon federal tax credit, but that expired in December.
Since then, biodiesel makers have been laying off workers.
Alan Yoder manages Iowa Renewable Energy.
Yoder says he’s puzzled Congress has not renewed the biodiesel tax credit especially since other alternative energy sources still get help:

“A lot of alternative fuel projects they’re talking about are really still in the research stage. Biodiesel is on main street. It’s working and there’s production, there’s people using it, people employed. This is big stuff.”

A biodiesel trade group claims the industry’s laid off 22,000 workers.

Congressional aides say there’s support for renewing the biodiesel tax credit, but it got lost in the shuffle during debates on health care and new stimulus spending.

For The Environment Report, I’m Shawn Allee.

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Biofuels in Europe: Part 1

  • The National Renewable Energy Laboratory's cellulosic ethanol plant. (Photo courtesy of the National Renewable Energy Laboratory)

The US government is spending
millions of dollars to build bio-energy
plants. They’ll turn everything from
wood chips to algae into energy. But
these facilities are years behind what
they are already doing in Europe –
especially in Germany. In the first
part of our three-part series on biofuels
in Europe, Sadie Babits takes us to one
German plant that makes green energy
on a massive scale:

Transcript

The US government is spending
millions of dollars to build bio-energy
plants. They’ll turn everything from
wood chips to algae into energy. But
these facilities are years behind what
they are already doing in Europe –
especially in Germany. In the first
part of our three-part series on biofuels
in Europe, Sadie Babits takes us to one
German plant that makes green energy
on a massive scale:

We’re in Eastern Germany where crews work on what looks like brew vats.

(construction sound)

These monster tanks remind me of vats for brewing beer, except these vats will brew energy from fermenting rye, manure and bacteria.

“Basically, we’re standing here in front of the biogas and bio fertilizer production area. The big fermenter is for the biogas production.”

Oliver Lutke is our tour guide. He’s really a chemical engineer for Verbio. The company is one of Germany’s largest commercial producers of biofuels. Lutke’s been involved in turning this ethanol facility into a plant that makes ethanol and biogas. That’s methane.

“We convert everything into energy by using biological processes. This combination biogas and bioethanol production plant isn’t existing in the world.”

That’s what Verbio claims anyway. The company buys grain from some four-thousand farmers in the region. The grain gets turned into biogas and ethanol. Verbio then turns the minerals from making these biofuels into fertilizer.
That goes back to the farmers for their crops.

“We’re closing the loop to the farmer converting all the carbon to energy and the minerals going back to the farmers as fertilizer which is growing the plants used to extract the energy.”

Lutke says the company has the technology to make this industrial sized plant profitable. That baffles skeptics because it costs a lot to make green energy. You have to buy the grain. And the actual process of turning that grain into fuel can be really inefficient. By the time you’ve made one gallon of biofuel, that gallon of oil is cheaper.

Jan Liebetrau isn’t convinced Verbio has the answer. He researches bioenergy and its potential in Germany.

“If you put lots of energy into the system and you get bioethanol you’re putting more energy in than you get out.”

So making bio ethanol costs energy, which defeats the whole purpose of producing it in the first place. Lutke doesn’t see it that way. He says Verbio has the technology to make biofuels without losing energy. And because the company’s process is more efficient, Lutke says they’ve cut down on greenhouse gas emissions.

“We emit 200,000 tons and the plants we are using will eat off 180,000 tons and that’s a closed cycle.”

It’s not perfect, but there’s less greenhouse gas being released than, say, from an oil refinery. Lutke is convinced bio energy will play a big role in cutting greenhouse gas emissions.

Germany, and Europe for that matter, have become leaders on this. Germany wants to be the first industrialized nation to be powered entirely by renewable energy – a goal Germany could reach by 2050, well ahead of the U.S.

For The Environment Report, I’m Sadie Babits.

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Squeezing More Oil Out of Soybeans

  • Recently, scientists completed a big-picture map of soy's basic genetic make-up. (Photo courtesy of the USDA)

Bio-diesel is supposed to make
big-rigs and trucks run cleaner.
But to make enough biodiesel on
the cheap, we’ll need to get more
oil out of soybeans. Shawn Allee says we could be one step
closer to fixing that:

Transcript

Bio-diesel is supposed to make
big-rigs and trucks run cleaner.
But to make enough biodiesel on
the cheap, we’ll need to get more
oil out of soybeans. Shawn Allee says we could be one step
closer to fixing that:

Tom Clemente is a kind of true-believer in biodiesel. He studies plant biology at the University of Nebraska. Clemente says the problem is, we use pricey soy-bean oil to make biodiesel.

“The downside is there’s just not enough of the oil to really make a dent on petroleum.”

Clemente figures scientists can manipulate genes inside soy beans to boost oil content, but no one knew exactly where the genes are. Recently, though, scientists completed a big-picture map of soy’s basic genetic make-up. Clemente hopes that’ll speed up development of oily soy beans – just for biodiesel.

“Really getting a bio-based sustainable fuel from some sort of cropping system, the production’s going to have be really up there.”

Clemente hopes we get enough biodiesel to clean up the nation’s dirtiest vehicles, such as construction equipment and city buses.

For The Environment Report, I’m Shawn Allee.

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Ethanol Goes to Court in Cali

  • California regulators want car fuels to come from sources that create fewer greenhouse gas emissions. That means corn-based ethanol will soon get a kind of penalty in California's fuel market. (Photo courtesy of the National Renewable Energy Laboratory)

The US government is steadily
increasing the amount of ethanol
used in our gasoline supply.
But Shawn Allee reports
that effort’s hit a roadblock
in the country’s largest gasoline
market:

Transcript

The US government is steadily
increasing the amount of ethanol
used in our gasoline supply.
But Shawn Allee reports
that effort’s hit a roadblock
in the country’s largest gasoline
market:

California regulators want car fuels to come from sources that create fewer greenhouse gas emissions. That means corn-based ethanol will soon get a kind of penalty in California’s fuel market.

Environmental groups like the Natural Resources Defense Council say ethanol should be at a disadvantage. The NRDC’s Roland Hwang says when we grow corn for fuel, farmers overseas plant more corn.

“Someone’s going to cut down a rain forest or convert pasture land or grass land to grow more food. Unfortunately, converting that land will lead to very dramatic increases in global warming pollution.”

Hwang wants the ethanol industry to stop using food crops for fuel.

Ethanol makers are not taking California’s rules sitting down, though; they’ve gone to court. They argue more lenient federal rules on ethanol should trump California’s.

For The Environment Report, I’m Shawn Allee.

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Study: Ethanol Sucking Up Water

  • It can take a lot of water to make ethanol. (Photo courtesy of the National Renewable Energy Laboratory)

The ethanol industry and the government
want more ethanol to be produced. They
say the homegrown biofuel is a good way
to move away from foreign oil. But a new
government report says many ethanol
refineries are putting a strain on another
natural resource – water. Mark Brush has
more:

Transcript

The ethanol industry and the government
want more ethanol to be produced. They
say the homegrown biofuel is a good way
to move away from foreign oil. But a new
government report says many ethanol
refineries are putting a strain on another
natural resource – water. Mark Brush has
more:

When you fuel up at the pump, chances are you’re putting ethanol into your car. Nearly half of the gasoline in the U.S. is blended with ethanol. And that’s likely to increase as they build more refineries.

But the Government Accountability Office says these ethanol refineries should consider local water resources before they build. It can take a lot of water to make ethanol.

Anu Mittel follows water resource issues for the Government Accountability Office:

“Many of them are being built in areas where they are relying on groundwater aquifers for their water supply and that could have a devastating effect on the local community that is also relying on that same water source for all of its other needs.”

Refineries built in those areas often rely on irrigated corn to make ethanol. So it means drawing millions of gallons of water just to make the ethanol at the refinery.

And millions of gallons more to grown the corn.

For The Environment Report, I’m Mark Brush.

Related Links

Pitching Diesels as an Eco-Friendly Option

  • VW's Jetta TDI - a diesel that the EPA estimates at 40 miles per gallon (Photo by Julie Grant)

If you’re thinking about buying a cleaner, more fuel-efficient
car, you might think a hybrid is your best option. But some
automakers want people to look at an older technology when
they’re looking for green cars: the diesel engine. Julie Grant
reports:

Transcript

If you’re thinking about buying a cleaner, more fuel-efficient
car, you might think a hybrid is your best option. But some
automakers want people to look at an older technology when
they’re looking for green cars: the diesel engine. Julie Grant
reports:

Lots of automakers make diesel cars – BMW, Ford, General
Motors, Volkswagen. But they sell most of them in Europe,
not the U.S. Diesel engines have a bad rap here.

Just ask Jerry Doble; he used to drive a diesel truck.

“They’re noisy and they’re smelly and they’re hard to start in
the winter. And that’s about it, I guess.”

But Doble hasn’t seen the new diesel cars making their way
from Europe.

Mike Omotoso is an auto industry analyst with JD Power and
Associates.

He says diesel carmakers have lowered their tailpipe
emissions. They’ve put in extensive filtering systems. Plus,
the fuel, itself, is cleaner than it used to be.
Diesel used to have lots of stinky sulfur – up to 500 parts per
million – now it has only 15 parts per million.

But Omotoso says when most Americans think of clean cars,
diesels aren’t the first thing that come to mind.

“When people think of clean vehicles they think of the Prius
first, and then they think of Toyota and they think of Honda
as well. The manufacturers, especially the German
manufacturers, are having to do a job catching up to the
positive publicity of hybrids. So they have to persuade the
American public that diesels can be clean as well.”

That’s why you may have seen those Volkswagen
commercials on TV – where one neighbor has a Prius, and
the other a new Jetta TDI-diesel:

VW: “A TDI set a Guiness World Record – 58 miles per
gallon.”

Prius owner: “58 miles per gallon!”

VW: “But this baby hauls. It’s like errr…errr… What does
your Prius sound like?”

Prius owner: (sound of quietly exhaling)

VW: “Oh. That’s cool.”

There’s a couple of things going on in that commercial.
It’s pushing the diesel as a green car. It’s also trying to
dispel the image of diesels being slow and clunky. They’re
trying to push diesels as green, muscle cars.

At this Volkswagen dealership, salesman Aaron Heinlein
says these commercials are having some success.

He says the only people who used to buy diesels worked
with the railways, in construction, or on farms. But this
week, he sold a TDI Jetta to a dietician.

“She would be the customer that, if she came in four years
ago, I would have said, ‘wow, you want to look at a diesel?
Cool, I’ll show you one.’ Now it’s just, that’s the norm. It’s
the lawyer, it’s the dentist, it’s the traveling salesperson who
is in their car a lot and needs better fuel mileage that you
wouldn’t have seen four years ago.”

Diesels cars still makeup less than 1% of the market.

Americans want power and speed and that’s not how they
think about diesel engines. Things are different in Europe,
where gas is upwards of $8 per gallon and consumers are
focused on good gas mileage.

Auto industry analysts are expecting to see a jump in diesel
sales in the U.S. in the next few years.

But JD Power and Associates doesn’t expect all this
marketing to make a huge dent in American car sales.
They’re forecasting diesel car sales at 4% to 5% of the
market by 2016.

That’s when the new federal fuel standards take effect.

For The Environment Report, I’m Julie Grant.

Related Links

Cellulosic Ethanol Breaks Ground

Getting fuel from plants like corn
and sugar cane is not that efficient. That’s
why researchers are working on so-called
cellulosic biofuels. The process turns things
like corn stalks, wood chips, and grasses into
fuel. As Mark Brush reports, some new
cellulosic refineries are breaking ground:

Transcript

Getting fuel from plants like corn
and sugar cane is not that efficient. That’s
why researchers are working on so-called
cellulosic biofuels. The process turns things
like corn stalks, wood chips, and grasses into
fuel. As Mark Brush reports, some new
cellulosic refineries are breaking ground:

The new refineries are being built with money from the federal government. The hope is
to perfect a fuel source that a) doesn’t come from food, and b) is much more efficient
than corn-based ethanol.

The problem is it’s hard to get at the sugars inside the
plants. But the payback could be big. For every one unit of energy going in,
cellulosic ethanol could spit out about five to ten units of energy.

Brian Davidson is with the BioEnergy Science Center. He says industry officials are
hopeful, but he thinks these new refineries are just a first step.

“They believe that those technologies will be more widely applicable, but I actually
believe that we’re going to need further technology improvements to go from these first
few handful of plants, handful of bio-refineries, to make them widespread.”

Davidson says scientists still have not perfected ways to break down the plants in a
cost-effective way.

For The Environment Report, I’m Mark Brush.

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High School Student Is Biofuel Whiz-Kid

  • John working on his converter in his workshop (Photo by Sarah Russell)

It’s hard to be optimistic about
paying $4 a gallon at the pump.
But when you’re a teenager working on new
ways to make cheap fuel, it can be pretty
exciting. Julie Grant met one high school
student who is showing off his biodiesel
converter at the county fair:

Transcript

It’s hard to be optimistic about
paying $4 a gallon at the pump.
But when you’re a teenager working on new
ways to make cheap fuel, it can be pretty
exciting. Julie Grant met one high school
student who is showing off his biodiesel
converter at the county fair:

(sounds of the fair)

The Fairgrounds sit in a quiet countryside of rolling green
hills. Small children yell and wave to family members as
they enter the Fair. There’s a steer auction in the barn. And
an antique tractor pull in the grandstand.
It’s like a scene is right out of a Norman Rockwell painting.

I’m here to talk with John Russell. He’s walking around in
faded wrangler jeans. A red t-shirt with the sleeves cut off.
And a ballcap advertising a tractor company.


“We’re at the Columbiana County Fair in Lisbon, Ohio. In
the junior fair building.”

John is 17 years old, and amidst 4-H project displays, he has
set up his view of the future. His homemade biodiesel
converter.

It’s a rectangular box – nearly as tall as me.
It’s made of stainless steel. There’s a row of toggle switches
along the side. They light up when John plugs it in. He’s
been working on this for more than a year, and says it
makes vegetable oil into a usable fuel.

“I started out with new oil from Save-A-Lot. I went down to
the local grocery store and picked up a bottle of frying oil.
And just from a recipe I found online, with methanol from an
auto parts store, they sell it as heat. It’s gasoline antifreeze.
Just methanol from an auto parts store, Caustic soda from a
hardware store, and oil from a grocery store, I set out to
make this fuel. And it took me couple of times. I finally got it
right when I actually tried a batch of waste vegetable oil from
the valley drive in. So that was my first successful batch.”

Last year, John was only able to fill a Gatorade bottle with
his fuel. Soon, he expects to convert 240 gallons of
vegetable oil into biodiesel in a day.

He hasn’t quite figured out how much the electricity costs to
run the thing, so he doesn’t know how much it’s costing him
to make the fuel.

Back five years ago, he met a guy who claimed to be making
biodiesel for 46 cents per gallon.

Headlines then were already screaming about skyrocketing
fuel prices. 1.60 per gallon. That’s what sparked John’s
interest in making his own converter.

“46 cents a gallon was pretty cool. And I’m into sustainable
agriculture. It’s recycling and its ecofriendly. The
culmination of all those things, that’s what makes it
interesting for me.”

Now that’s he’s almost 18, most of John’s friends are into
cars. And they’re taking an interest in his biodiesel project.

John Russell: “I’m a senior in high school. So most of my
friends’ reactions are ‘when are you going to give me free
fuel?’ But they all think it’s pretty sweet. It does make fuel a
lot cheaper than you could buy it at the pump.”

Julie Grant: “How much are you selling it for?”

John: “Well, I can’t sell it. Or else I’ll get in trouble with the
big man.”

Julie: “Is your dad the big man?”

John: “no. The IRS.”

He’s got to do some research into state and federal laws.
John wants to use the fuel to run his family’s tractors and
help heat homes in his neighborhood.

He’s not sure if biodiesel is the future of fuel, or even in his
long term future. But John is sure he wants a career in
green industry.

“Anything that’s gonna be tied into this fuel situation that
we’re faced with. Something’s gonna change and
something’s gonna change fast. So I’m very excited for
what’s going to happen.”

For now, John’s trying to put the finishing touches on his
converter so it’s ready for the Ohio state fair later this
summer. He’s the new face of agriculture – making eco-friendly practices into traditional American values.

For The Environment Report, I’m Julie Grant.

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Deep-Fried Road Trip

  • Devin Smith and Matthew Rolen Stucky use waste oil from deep fryers to power their diesel car (Photo by Katie Carey)

For many people, the summer road
trip includes trips to the beach, and of
course, frequent stops to the gas station.
Two college students are driving across the
country in a car that runs on used vegetable
oil. So when most people pull in to the gas
station this summer, they pull up to the
grease traps. They say it’s a way to raise
awareness about alternative fuels, and save
a bit of money. Katie Carey brings us this
audio postcard:

Transcript

For many people, the summer road
trip includes trips to the beach, and of
course, frequent stops to the gas station.
Two college students are driving across the
country in a car that runs on used vegetable
oil. So when most people pull in to the gas
station this summer, they pull up to the
grease traps. They say it’s a way to raise
awareness about alternative fuels, and save
a bit of money. Katie Carey brings us this
audio postcard:

MATT: My name is Matthew Rolen Stucky. I am taking this ’85 Mercedes Benz Diesel
with a grease car kit, putting old vegetable oil that we find from restaurants along the way
and sticking it in and making it go.

DEVIN: Hi, I’m Devin and we’re getting our fuel for the car from mainly restaurants
from the deep fryer. They dispose of the grease and we just take that and filter it a couple
times.

MATT: Well I pre-filter it – it’s basically a water filter. I have a couple mesh filters that
it goes through and then it goes through a second gas tank where it heats up and runs
through the car and then has one more engine filter that it goes through secondary. You
can drive this around everyday nearly in every situation and it doesn’t slow down your
gas mileage you have the same top speeds, the same acceleration, literally you will not be
able to tell the difference, until you realize you’re not buying the gas, and then you are
happy about it.

DEVIN: We have a journal in the car and we have a tally of how many hummers we’ve
seen on the road trip so far and I think the tally is to sixteen, and we kind of do a little
‘ha-ha’ every time we see one. Just because we know how much they are spending on
gas.

MATT: The reactions range from people saying, “Oh yeah, you are putting it in your car,
great, yeah here take it.” To people going “You do what? What does it do in your car?”
And they don’t believe it and they want to go see it sometimes.

DEVIN: Some people this is the first grease car they have ever seen and they just think it
is awesome that someone is out there doing it. It’s not a solution for everyone, again,
there’s not going to be waste vegetable oil for every single person that wants to drive in
the car around the country, so it definitely is not a solution to the fuel crisis. It’s just us
trying to do our part to raise awareness.

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