EPA wavers on E15 waiver deadline, as ethanol awakens: overcapacity looming anew?

The Long and short of ethanol production: first-gen ethanol may be long again, while cellulsoic ethanol continues to look short on 2010 production targets.

According to a report in Reuters, the EPA is reportedly warning that it may not meet an expected December 1st deadline for a decision on allowing E15 ethanol to be blended with the gasoline supply. According to the Reuters report, EPA “is still reviewing test results on how the higher blend rate would affect engines “across the board,” — including cars, trucks, snow mobiles, motor boats and lawnmowers.”

The news comes amidst signs of revival of ethanol capacity. In South Dakota, Tenaska BioFuels and Tri-State Financial signed a two-year tolling deal that will result in a restart of ethanol production at the 26 Mgy North Country Ethanol plant, which was idled 13 months ago and languished in bankruptcy proceedings. Under the tolling agreement, Tenaska will purchase corn and natural gas and own the ethanol and distillers grains produced by the plant.

Meanwhile, INEOS Bio announced commencement of an advanced biofuels feasibility study for a plant proposed for the company’s Tees Valley site in the UK. The $5.83 million feasibility study, which includes detailed engineering design work, will inform an investment decision in 2010 for a commercial facility. The INEOS Bio process is a combined thermochemical and biochemical technology for the production of ethanol and renewable power from a wide range of low-cost carbon materials, including biodegradable household and industrial wastes, using an anaerobic fermentation step, through which naturally occurring bacteria convert gases derived directly from biomass into ethanol. The process supports high recycling and high landfill diversion rates.

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