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However, there were some very notable highlights that at least offset the bad news, if not outweigh it.

First and foremost would be the EPA decision to deny the governor of Texas a partial waiver of the Renewable Fuels Standard (RFS). This was a major victory for the ethanol industry in the first test of the RFS. In addition, it was a major blow to the food versus fuel critics, as the EPA ruling noted that a “waiver would have no impact on ethanol production volumes in the relevant time frame, and therefore no impact on corn, food, or fuel prices.”

Secondly, despite all the challenges faced by the industry this year in the form of market volatility, ethanol producers stepped up to the plate and actually exceeded the RFS goal of nine billion gallons this year. According to the Renewable Fuels Association, ethanol production will top ten billion gallons in 2008.

Another high point for ethanol was the presidential election, in which renewable energy was a major campaign issue. The ethanol industry played an active role in both the Democratic and Republican national conventions, drawing attention to the importance of renewable fuels in helping to make the country less dependent on foreign oil.

The number of E-85 pumps increased by about 40 percent nationwide in 2008, getting close to the 2000 mark at this point. In addition, several states began blender pump initiatives giving flexible fuel vehicle owners the choice of filling up with E20, E30, E40 or E85.

Finally, development of cellulosic technology in 2008 continued to bring the next generation of ethanol closer to reality.

All in all, not a bad year - here’s to an even better 2009!

The article attempts to answer the question “Now that corn prices have plunged, is the ethanol industry still in the hot seat for driving up prices?” They apparently asked GMA’s Scott Faber for his thoughts.

I think we could call that a Christmas miracle.

You can listen to “The Ethanol Report” on-line here:

Or you can subscribe to this podcast by following this link.

And, last week, Alberta (the Canadian province which produces over one million barrels of oil per day, has reserves of crude second only to Saudi Arabia in the world, and is the single largest exporter of oil to the U.S.) announced they are moving to a renewable fuel standard of 5% ethanol and 2% biodiesel by 2010; a very significant development. This province is building on their strong energy and agricultural sectors, moving towards creating new green jobs and diversifying both industries. Not only is Alberta a large producer of wheat and canola for ethanol and biodiesel production, respectively, but as was announced this past June, the Edmonton municipal landfill will see the world’s first commercial-scale waste to ethanol facility being built there next year.

Both positive announcements show Canada continues to grow beyond oil.

Today, former Iowa governor Tom Vilsack was announced as Obama’s choice for Secretary of Agriculture and Colorado Sen. Ken Salazar for interior secretary.

Vilsack served two terms as governor of Iowa from from 1998 until 2006 and was a short-lived opponent of Obama’s in the presidential race. As governor, Vilsack was a strong supporter of ethanol and other biofuels as a way to help rural economies. In his brief run for the Democratic presidential nomination last year, Vilsack made the focus of his campaign a plan to end U.S dependence on foreign oil by promoting alternative energy sources.

AgWeb quotes Vilsack from an interview:

“Paying lip service to the need for renewable fuels isn’t real change. unless you’re a lifelong apologist for the oil industry. Providing the incentives, leadership, and backbone to actually build production plants when most people say it can’t be done. That’s real change. But that’s what we did in Iowa, and as a result, not only are we number one in ethanol production, which may not seem like a surprise, but we’re also number one in biodiesel production and number three in wind energy.”

As for Salazar, the interior secretary will play a key role in setting the new administration’s environmental, energy and land-use policies.

Salazar has also has been a strong supporter of biofuels, this year co-sponsoring the Open Fuel Standard Act, legislation would require that half of all new automobiles starting in 2012 be flex-fuel vehicles warranted to operate on gasoline, ethanol, and methanol, or be warranted to operate on biodiesel.

American Farm Bureau Federation says Sen. Salazar is “uniquely qualified and experienced to serve as Secretary of the Interior. He serves on the Energy and Natural Resources Committee and has been a strong proponent of expanding the development of renewable fuels.”

Much has been made lately about bankruptcies and plants closing, but the majority of producers are still in business and some are even making a profit in this year of very tight margins.  One example is Golden Grain Energy in Mason City, Iowa.

Agri-News has a nice article with Walt Wendland, president of Golden Grain Energy, who talks about how his company has managed to survive this year.

“Golden Grain wasn’t speculating this summer when others were,” Wendland said at last week’s Worth County Corn and Soybean Clinic in Northwood. “Anyone who followed the VeraSun situation, they talked about the fact that corn was going to go down in May and they shorted corn and they got out at $8 and then they went long corn on the way down. That’s not the way this industry can survive.”

Wendland believes the key to survival of the industry in the future is increasing ethanol blends from 10 percent to 12 percent or 15 percent sometime next year.

“We need to work with the EPA and automakers” to make that happen, Wendland said.

All of us recognize that high gasoline prices and rising food prices are important “pocketbook” issues for American consumers. We also recognize the national and economic secutiry importance of reducing our dependence on imported oil as well as the urgency of developing new, cleaner fuels to reduce greenhouse gas emissions. The Administration’s biofuels policy makes important contributions to each of these goals.

The letter also included a state-by-state comparison showing what ethanol saves consumers in any given state.

On July 11, 2008, the Department of Energy estimated that gasoline prices would be 20-35 cents per gallon higher without ethanol. For a typical household, this means saving about $150 to $300 a year. Nationwide, this means a reduction in gas expenditures of $20 billion to $40 billion based on annual gas consumption of roughly 140 billion gallons.

Read the entire letter here (along with the state-by-state benefit analysis).

Photo by Unhindered by Talent via Creative Commons license.

“The most dramatic change in the December WASDE report was the big drop in corn used for ethanol production,” said Francl in an AFBF press release. “I am surprised that corn use for ethanol dropped by that much. Demand for ethanol is down, just like demand for gasoline is down, but I just don’t think the decline is that large. I believe 3.8 billion bushels to 3.9 billion bushels is closer to the mark.”

The WASDE estimates corn used for ethanol production this year at 3.7 billion bushels, down 300 million bushels from the November estimate. Francl explained that a number of ethanol plants are idled due to weak demand, which explains the drop in corn used for ethanol. However, he believes the Renewable Fuel Standard would seem to imply that at least 3.8 billion bushels of corn will be utilized for ethanol production in 2008/09.

Still, America’s ethanol producers are expected to produce approximately 9 billion gallons of ethanol in 2008 and demand continues to outpace production - even with some plants closing. Maybe that is a surprise.

Obama also plans to appoint Carol M. Browner, Environmental Protection Agency administrator for eight years under President Bill Clinton, to fill a new White House post overseeing energy, environmental and climate policies, and Lisa P. Jackson to head the EPA.

Finally, Nancy Sutley, a deputy mayor of Los Angeles for energy and environment, will chair the White House Council on Environmental Quality.

Read about the background of these appointees at the Washington Post.