The Free Press

March 27, 2014

By Josh Moniz

WASECA — Despite numerous problems for the ethanol industry looming in the future, the CEO of two regional ethanol plants is optimistic that the industry is headed for a positive period.

Randall Doyal, CEO of Al-Corn Clean Fuel in Claremont and board chairman for Janesville ethanol plant's owner Guardian Energy, said Wednesday at the Waseca Farmer Forum that several positive factors were converging to help ethanol producers. He noted that corn prices were dropping while the yields from the crop were exploding in size.

He also noted that automobile manufacturers were starting to push for 25 to 30 percent blends of ethanol in U.S. fuel, which would help them better design vehicles that maximize ethanol instead of merely accommodating its presence. He said this will inevitably lead to a larger market for producers.

But he said that each shift in the ethanol market produced varied outcomes for plants on either end of growing industry. The fluctuating corn prices helped or hurt the Janesville plant and the Claremont plants in different ways.

He said the three year stint of record high corn prices, which included a Midwest drought for one of the years, forced small or weak ethanol plants to reduce, shutter or close. But small plants closing provided an opportunity for bigger or better-positioned ethanol plants, such as the resurrected Janesville plant.

He said the reduced corn prices help smaller or new plants prosper and grow the overall industry. However, he said that may cause overproduction, which can hurt plants across the board.

Doyal said he had foreseen the 2008 ethanol market collapse by recognizing the growing overproduction and making efforts to protect his plants, such as paying off the debt on the Claremont plant. He said he feels another market collapse will be inevitable.

A good deal of ethanol profitability around the country has been caused by plants having issues with getting their product to market. He said these transportation issues will eventually be cleared up, resulting in current production exceeding the market's demand.

Despite his predictions, he said he feels the cycles are a natural part of the industry growth that will eventual lead it to becoming more stable.

Similarly, he said he opposes the Environmental Protection Agency's proposal to reduce the federal Renewable Fuel Standard by 10 percent, or 1.4 billion gallons of the ethanol mixed into the U.S. gasoline supply.

He said the idea behind the EPA's proposal to reduce the requirement due to lower market demand had some merit, but it carried too large of a risk of creating a permanent cap on the RFS and scuttling all research efforts on other types of biofuels.

Doyal said he expects the EPA to ultimately reduce the RFS by less than 10 percent due to the volume of negative public comments about the proposal.

The EPA is scheduled to issue its final order sometime before the end of the summer.

Read the original story here : Ethanol Producer : Outlook Good Despite Challenges

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Ethanol Producer Magazine

By Holly Jessen

March 4, 2014

The U.S EPA final rule for emission standards for cars and gasoline made E10 the new federal emissions test fuel, finalized specifications for E85 test fuel for flex-fuel vehicles (FFV) and left the door open for vehicle manufacturers to request approval for alternative certification fuel, such as E30, for vehicles optimized for that fuel. 

“It’s not the greatest thing since sliced bread; but at least there’s dough in the machine,” said Advanced Biofuels USA’s vehicle emissions expert, Robert Kozak, in a press release. In other words, the standards, known as Tier 3 rules, don’t contain everything the ethanol industry could have hoped for, but it did include some positive elements.

The final rule requires that all Tier 3 light duty and chassis-certified heavy-duty gasoline vehicles be certified on E10. The test fuel will be used for new vehicle certification, assembly lines and in-use testing. The EPA considered a change in the volatility of the fuel, or pounds per square inch (psi) Reid Vapor Pressure, but ultimately concluded that an RVP of 9 psi should be maintained for the E10 test fuel.

General Motors addressed the fact that E10, rather than straight gasoline, is now the new test fuel. “We commend EPA for selecting a certification fuel that is representative of in-use fuels,” the company said in a prepared statement. “This allows OEMs (original equipment manufacturers) to optimize vehicle performance to an actual fuel that our customers use nationwide.”

In addition, finalizing specifications for an E85 emissions test fuel for FFVs will help resolve uncertainty and confusion, the EPA said.

The agency also said that it intended to finalize in-use fuel quality standards for E51 to E83 and possibly E16 to E50 as well but wasn’t able to do it in time to include it in this final rule.

“As the number of flex-fuel vehicles in the in-use fleet increases, it is becoming increasingly important that all fuels used in FFVs, not just gasoline, meet fuel quality standards,” the EPA said. “A lack of clarity regarding the standards that apply to fuels used in FFVs could also act to impede the further expansion of ethanol blended fuels with concentrations greater than 15 volume percent, which is important to satisfying the requirements of the RFS2 program.”

Read the original story here : EPA Sets E10 As New Test Fuel

More Responses To Misleading Commentary On Ethanol

March 17, 2014

On March 11, the Duluth News Tribune carried the Minnesota Bio-Fuels Association's (MBA) response to a misleading and inaccurate commentary on the ethanol industry by the Freedom Foundation of Minnesota. Today, on March 17, Ag Week, ran MBA's response as well as another by the CEO of Growth Energy.

To recap, Annette Meeks of the Freedom Foundation of Minnesota, wrote in the Duluth News Tribune on Feb 19 a commentary piece critical over the ethanol industry. That commentary was republished in Ag Week on March 10.

Today, on March 17, Ag Week published MBA's response which can be found here : Meeks Letter Misses The Mark

In addition, to MBA's response, Ag Week also published a response from Growth Energy's CEO, Tom Buis, which can be read below:

Ag Week

March 17, 2014

Renewable Fuel Standard Reality Check

By Tom Buis

The Renewable Fuel Standard has been so successful that the oil industry now sees ethanol as a major threat to its bottom line. Unfortunately, Annette Meeks’ opinion piece, “Ethanol mandate hurts environment,” recently published in Agweek, shamelessly parroted many of the oil industry’s false claims about ethanol and repeatedly cites skewed facts from an Associated Press story that can only be described as a “hatchet job” against the ethanol industry.

Meeks’ op-ed was riddled with errors. It erroneously claimed that 5 million acres of land set aside for conservation have vanished. Actually, as U.S. Agriculture Secretary Tom Vilsack recently noted, the total acreage of conservation programs has increased more than 70 percent in recent years to more than 350 million acres. While land use change in the U.S. is a complex and dynamic process, Secretary Vilsack emphasized that it was unlikely that significant amounts of acreage set aside for conservation in 2012 went into corn production in 2013.

Meeks also cited rising food prices, and erroneously shifted the blame onto the back of the ethanol industry. In fact, a recent World Bank study outlined how crude oil prices are responsible for 50 percent of the increase in food prices since 2004 — a year before the RFS was even enacted. Furthermore, this analysis has been validated by the U.S. Department of Agriculture and countless other objective economic studies.

Here’s what’s indisputable, however: clean, renewable biofuels are helping cut our dangerous dependence on foreign oil and creating significant economic opportunities here at home. And because ethanol costs about 60 cents per gallon less than gasoline, it saves us all money at the pump.

It’s time to set the record straight on Big Oil’s cynical scheme to stifle American innovation and protect their own profits — no matter the costs to our environment, our economy and our national security. Ethanol and other biofuels are making our country stronger, safer and more prosperous and deserve the steadfast support of our leaders in Washington.

Read the original response here : Renewable Fuel Standard Reality Check