In the News
July 9, 2018
By Ryan Matheny
Members of Iowa's Congressional delegation are saying good riddance to former EPA Administrator Scott Pruitt.
"I am glad that he pulled the plug," said U.S. Senator Joni Ernst. "It was time for him to go."
Ernst discussed the embattled cabinet member's resignation in a town meeting with constituents Friday morning at the Gladys Wirsig-Jones Auditorium in Shenandoah. Pruitt's resignation comes amid several ethics violations and as he faced pressure from several Midwest members of Congress, who were critical of his stance regarding renewable fuels. Ernst had grown increasingly angry with Pruitt, accusing him of lying to her and other senators last year when he pledged to uphold the Renewable Fuel Standard mandates for ethanol and biodiesel.
"Hopefully we can forge a good relationship with the EPA," said Ernst. "We want to make sure that the EPA is doing the right thing and supporting the RFS. That's vitally important to Iowa."
Before Pruitt's resignation, Iowa Third District Congressman David Young called the criticism Pruitt was receiving "well deserved."
"I think it's well deserved that he's getting this criticism," said Young. "We've heard about the ethical issues, and there's hearings on that. Then, I'm concerned, as well, about the treatment he is giving rural Iowa, and rural America, in terms of Renewable Fuel Standards, biofuels, and those kind of things, and not keeping the president's promises."
Pruitt is being succeeded by Deputy Administrator Andrew Wheeler -- a former coal industry lobbyist. Ernst says she is already working to schedule a meeting with the acting administrator.
"I want to make it very clear to him that he needs to uphold the congressional intent of the RFS," said Ernst. "He needs to maintain that. No if's, and's or but's about it."
Likewise, Senator Chuck Grassley announced his support for Pruitt's resignation, saying "President Trump made the right decision. Administrator Pruitt’s ethical scandals and his undermining of the President’s commitment to biofuels and Midwest farmers were distracting from the agency’s otherwise strong progress to free the nation of burdensome and harmful government regulations."
Before Pruitt's resignation, the EPA did raise production standards for ethanol and biodiesel, however, the administration failed to commit to eliminate hardship waivers that allow refiners to bypass biofuel requirements.
Read the original article: Ernst: It Was Time For Pruitt To Go
July 6, 2018
By Ed Tibbetts
EPA Administrator Scott Pruitt resigned Thursday, a move biofuels backers hope will lead to a fresh start for the Renewable Fuels Standard.
President Donald Trump announced Pruitt’s resignation over Twitter.
Pruitt, a former Oklahoma attorney general, has been at the center of a number of ethical controversies, which appear to have played a role in his stepping aside. In his resignation letter to the president, he said “unrelenting attacks” have taken a “sizable toll” on him and his family.
In Iowa, Pruitt had drawn criticism over the EPA’s implementation of the RFS, the law that requires a certain level of biofuels to be blended into the nation’s fuel supply.
Lawmakers from farm states say Pruitt has been undermining promises Trump made about the RFS during the 2016 presidential campaign by granting waivers to the law for refineries. They say the moves have dampened demand and hurt farmers.
“President Trump made the right decision. Administrator Pruitt’s ethical scandals and his undermining of the president’s commitment to biofuels and Midwest farmers were distracting from the agency’s otherwise strong progress to free the nation of burdensome and harmful government regulations,” said Sen. Charles Grassley, R-Iowa.
Grassley and Sen. Joni Ernst, R-Iowa, both voted for Pruitt’s confirmation after saying they had received assurances on the RFS. And Pruitt was praised by many in the agriculture industry and Republican lawmakers in Iowa for suspending the Obama administration’s controversial Waters of the U.S. rule, a measure aimed at clarifying the requirements of the Clean Water Act.
However, the battles over the RFS left a bad taste with some of those same lawmakers, as did the spending allegations. Ernst described Pruitt in June as “about as swampy as you get.”
The president tweeted that Andrew Wheeler, the EPA’s deputy administrator, would take over as acting administrator of the agency.
Wheeler is a former coal lobbyist, but ethanol backers said Thursday they were hopeful Pruitt’s departure will mean a new start.
Ernst tweeted Thursday, “I have confidence that Andrew Wheeler will be a good partner at #EPA and I look forward to working with him on the #RFS.”
Grassley said he hoped Wheeler would “restore this administration’s standing with farmers and the biofuels industry.”
Industry officials were hopeful, too.
“I think it’s a great opportunity for a reset of the conversation,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Pruitt has drawn fire over the RFS in recent weeks because of waivers the agency granted to refineries. Biofuels groups say the waivers lowered demand for renewable fuels.
Last month, when the EPA issued new volume requirements for 2019 that were higher than the previous year, industry officials and supporters in Congress were nonetheless skeptical. And they were upset the volumes that had been waived for some refineries weren’t reallocated to others.
Earlier, lawmakers and industry officials were angry over the idea EPA might count ethanol exports toward the legal requirement. The idea eventually was abandoned.
Read the original article: Biofuel Backers Hopeful for a Change as Pruitt Resigns
July 3, 2018
By Rachel Gantz
A record number of travelers will take to America’s highways and byways this Fourth of July holiday, and ethanol will be lowering the price they pay for gasoline while simultaneously strengthening our nation’s energy security.
According to AAA, a record 39.7 million Americans will travel 50 miles or more by automobile for Independence Day—5 percent more than a year ago. Those drivers will be paying at least 12 percent less for gasoline—or $0.26 per gallon—thanks to ethanol, according to a new analysis by the Renewable Fuels Association (RFA). In fact, ethanol is expected to reduce household spending on gasoline by $37 billion this year, or $292 per household.
The analysis also shows that if E15 were available nationwide in place of E10, consumers would be saving even more money. The wholesale savings currently attributable to E15 is $0.32 per gallon, or 15 percent lower than E0 gasoline.
“As a record number of travelers hit the roads this holiday, there is no better way to celebrate Independence Day than to fill up with fuel containing American-made ethanol. In addition to saving American families money at the pump, ethanol boosts rural economies and helps increase our energy independence,” said RFA President and CEO Bob Dinneen.
U.S. dependence on imported petroleum is falling, thanks in part to booming domestic production of renewable fuels. In 2005, the year the original renewable fuel standard was adopted, America’s net dependence on foreign petroleum peaked at just over 60%. However, by 2017, net petroleum import dependence fell to just 20%, and would have been 27% without the addition of 15.8 billion gallons of domestically produced ethanol to the fuel supply. Last year, ethanol displaced an amount of gasoline refined from 560 million barrels of crude oil—more than the volume imported annually from Saudi Arabia and Venezuela combined.
Additionally, the U.S. ethanol industry continues to make a significant contribution to the economy. Last year, the industry supported nearly 360,000 direct, indirect, and induced jobs across all sectors of the economy, added more than $24 billion in income for American households, and generated an estimated $5 billion in tax revenue to the Federal Treasury and $5.7 billion in revenue to state and local governments.
Read the original article: Ethanol Helps Fourth of July Travelers Declare Independence from High Gas Prices
June 29, 2018
By Cindy Zimmerman
U.S. ethanol production is continuing at a strong and steady pace, hitting a new four week high for the year, according to the latest Energy Information Administration data analyzed by the Renewable Fuels Association.
Last week, ethanol production averaged 1.072 million barrels per day (b/d) or 45.02 million gallons daily. Output grew 8,000 b/d over the week before, climbing to a 26-week high. The four-week average for ethanol production lifted to 1.057 million b/d, which is the highest this year, for an annualized rate of 16.20 billion gallons.
Stocks of ethanol were 21.7 million barrels. That is a 0.5% draw down from last week.
There were zero imports recorded for the 29th week in a row.
Read the original article: Ethanol Production Continues Strong
June 29, 2018
By Jennifer Dlouhy
A deluge of political scandals hasn’t sunk EPA Administrator Scott Pruitt. But a wonky debate over the nation’s biofuel policy just might.
Republican Senator Chuck Grassley bluntly warned last month he would call for Pruitt’s resignation if the Environmental Protection Agency continued exempting small oil refineries from a mandate to use renewable fuels such as ethanol made from corn, a staple crop in his home state of Iowa.
When Pruitt moved to do what Grassley wanted -- with a plan that would force larger refineries to make up for the waivers by using more biofuel -- he sparked an intense, angry uproar among oil executives and allied lawmakers who telephoned top Trump administration officials to complain. Their not-so-subtle message: Pruitt’s job was on the line.
Pruitt’s long-term tenure at the helm of the EPA was already in doubt, as lawmakers, the White House and federal investigators look into allegations of ethical lapses, abuses of power and questionable spending.
Pruitt faces scrutiny over his costly travel, the $43,000 installation of a soundproof phone booth in his office and his penchant for enlisting aides to run personal errands (including contacting the chief executive officer of Chik-fil-A Inc. to pursue a franchise for Pruitt’s wife and trying to buy a second-hand mattress from the Trump International Hotel in Washington).
President Donald Trump has generally stood by Pruitt, praising his efforts to roll back Obama administration environmental regulations while acknowledging he is "not happy" with Pruitt’s personal lapses. Yet even with the president’s public support, the allegations intrude, providing rhetorical fodder to critics of EPA regulatory shifts and leverage to lawmakers pushing particular policy outcomes.
During the biofuel policy skirmish, at least one aide to Senator Ted Cruz made an explicit threat, warning administration officials that if the EPA didn’t back off the plan, the Texas Republican would seek Pruitt’s resignation.
Other top congressional Republicans -- including House Majority Whip Steve Scalise of Louisiana, Senator Jim Inhofe of Oklahoma, Pruitt’s home state, and Senator Pat Toomey of Pennsylvania -- also protested the proposal. The lawmakers all have significant refining interests in their states, including facilities owned by HollyFrontier Corp., Valero Energy Corp. and Exxon Mobil Corp.
The interactions were described by people familiar with the encounters who sought anonymity to describe the private conversations. Representatives for Cruz did not immediately respond to emails seeking comment.
"That issue brought together the entire spectrum of the oil refining industry," said Frank Macchiarola, a group director at the American Petroleum Institute. "The refining industry was unified."
The backlash worked. After the outcry, Pruitt agreed to abandon the plan as part of a proposed biofuel regulation -- at least for now.
The episode underscored how the cloud of allegations and ethical questions hovering over Pruitt are affecting his day-to-day work on intricate environmental policy, limiting his room to maneuver on sensitive issues. That includes the Renewable Fuel Standard, a 13-year-old mandate that pits oil refining and agricultural interests against each other in a zero-sum contest over gasoline market share.
"Forget the secret phone booth, Chik-fil-A and the mattress, the story is the RFS," said Tristan Berne, an analyst with the independent research firm Capital Alpha Partners LLC. "He managed to put himself in a sort of tug-of-war -- and he’s the rope."
The Renewable Fuel Standard has long been politically treacherous terrain; now, it’s even more fraught.
"His issues have given opponents free rein to take shots at him when they disagree with him," said Frank Maisano, a senior principal at Bracewell LLP. "It’s a little bit unfair, because he’s doing the best he can to address a very complex and difficult issue where there’s lots of disagreement and lots of competing interests."
It’s not clear that political threats against Pruitt or his other problems are affecting policy outcomes. The EPA has doggedly continued rewriting rules governing air pollution and climate change, with Pruitt just this week ordering new limits on the EPA’s ability to preemptively veto projects because of water pollution concerns.
And Deputy EPA Administrator Andrew Wheeler said in an interview Wednesday that neither negative headlines nor concerns about them were "impacting our decisions or how he’s managing the agency at all."
Berne observed that in the biofuel policy dispute, Pruitt "didn’t act as though he had any political restraints on him." After all, the EPA’s decision not to immediately reallocate biofuel blending requirements was seen as a slap in the face of politically important agricultural interests.
Pruitt initially embraced the reallocation idea on June 18, following a tour through Kansas, Nebraska and South Dakota, where he met with farmers angry that the EPA was exempting refineries from biofuel-blending requirements.
Federal law allows small refineries facing a "disproportionate economic hardship" to get the waivers. But Trump’s EPA is more liberally awarding the exemptions, which can be worth hundreds of millions of dollars for the refineries that qualify. And because farmers are on the front lines of the simmering trade war with China, the administration has less flexibility to address the issue, according to Craig Irwin, a senior research analyst with Roth Capital Partners LLC.
Key White House officials were not immediately aware of the EPA’s reallocation policy decision, according to a person familiar with the situation. The ensuing firestorm -- including phone calls to White House officials -- prompted the EPA’s swift pivot away from the plan.
But it didn’t quell the threats. Immediately after the EPA unveiled its stripped-down biofuel quota plan -- without the language the farm-state lawmakers wanted -- Grassley issued a statement casting the proposal as a betrayal of Trump’s campaign vow to support ethanol and invoking his powerful role as chairman of the Senate Judiciary Committee.
If the EPA doesn’t make up for the biofuel waivers, Grassley said, "Administrator Pruitt should let someone else do the job who won’t continue to undermine the president."
Read the original story: Scandals Haven't Beaten Pruitt. A Biofuel Policy Fight Might
Minnesota Pollution Control Agency
June 28, 2018
News Release
State regulators and biofuel industry leaders want Minnesota companies to be able to grow quickly and create jobs without sacrificing environmental standards.
With those common goals, they formed a public-private collaboration to reduce complexity and streamline the process for permitting while bolstering environmental compliance for all industries in the state. It started with a meeting last year of representatives from the state’s 20 ethanol plants and officials from the Minnesota Pollution Control Agency (MPCA) and Dept. of Agriculture.
With an eye toward environmental stewardship and clean business productivity, the second "ethanol summit" convened June 28 in Willmar to review progress and set future objectives.
Ethanol production plants operate with a variety of state and federal environmental permits regulating air emissions, water use, and stormwater and wastewater management.
“The meetings of the joint state-ethanol industry work group have resulted in a cooperative, improved understanding of how to work with each other,” says Sarah Kilgriff, manager of the land and air compliance in the MPCA’s Industrial Division. “It's already leading to better regulatory outcomes for the environment and producers in the ethanol industry.”
The meetings help to see other perspectives and create a better understanding of the complexity of the respective processes. The MPCA has defined the most urgent and useful information needed for the industry. The industry better understands how to work with the MPCA and the regulatory process.
The MPCA already has made some changes. New permit language allows more flexibility in making facility changes to avoid triggering the permit amendment process.
“Working together produces better outcomes for Minnesotans in terms of both the environment and economy compared with top-down regulation,” Kilgriff says. “Industry participants say they have great relationships with the MPCA and confidence that they can do a better job growing the industry.”
Minnesota is a national leader in ethanol policy and development. It was the first state to mandate the use of ethanol in motor vehicle fuel. State law requires that all gasoline sold in Minnesota contain 10 percent biofuel — that being exclusively ethanol.
The 20 plants in Minnesota produce more than one billion gallons of clean biofuel annually providing a market for more than 400 million bushels of corn. A by-product, distillers dried grains, is used for livestock feed.
Read the original release: Ethanol Summit Getting Industry, Environmental Regulators On Same Page
June 20, 2018
Press Release
Democratic members of the House Energy and Commerce Committee and the House Committee on Agriculture today called on the Environmental Protection Agency (EPA) to provide additional information regarding their failed implementation of the Renewable Fuel Standard (RFS). In a letter led by Congressman Dave Loebsack and Congresswoman Cheri Bustos, the members laid out a series of questions seeking information about the mismanagement of a program that provided waivers to some of our nation’s largest, most profitable refiners, but were intended to help support small refiners with demonstrated economic hardship and were in danger of going bankrupt. The group of 12 lawmakers is also seeking information about the EPA’s retroactive awarding of Renewable Identification Numbers (RINS), which undermine the biofuels market. The lawmakers have made repeated requests for this information, which the EPA has refused to answer. A copy of the letter can be found here.
“We write to convey our grave concerns and request additional information regarding your failed implementation of the Renewable Fuel Standard (RFS) program. We are deeply troubled by the lack of transparency and continued manipulation of the RFS program through your misuse of the small refinery exemption process,” the lawmakers wrote in a letter to EPA Administrator Scott Pruitt. “The Environmental Protection Agency (EPA) continues to hurt farmers and undermine the biofuels market by extending waivers to an unusually large number of refineries. Additionally, your implementation of the RFS program is undercutting the market for renewable fuels, and inflicting further economic pain in rural communities and throughout the agriculture sector.”
“We remain extremely concerned about your implementation of the RFS program and its effects on rural communities. Your actions are clearly designed to enrich the oil industry at the expense of farmers and the renewable fuels industry by undermining the RFS program. We request that you suspend the small refinery exemption process until you provide Congress with information to evaluate this program,” the lawmakers concluded.
Read the original press release: Lawmakers Demand Answers from EPA on Failed Implementation of Renewable Fuel Standard
June 26, 2018
Press Release
Today, U.S. Senator Tina Smith (D-Minn.) said she is skeptical of the Environmental Protection Agency’s (EPA) announcement of the amount of corn-based ethanol and other renewable fuels the agency says will be blended into the nation’s gasoline supply in 2019.
Sen. Smith, who has pressed for expanded use of renewables, said the EPA-announced target of 19.88 billion gallons—required under the federal Renewable Fuels Standard (RFS)—does not specify how refiners will make up for the gallons lost from controversial EPA-granted waivers. Earlier this year, the agency granted a “financial hardship” waiver to an oil refinery owned by billionaire Carl Icahn, exempting the facility from RFS rules, and reportedly saving it tens of millions of dollars in related RFS costs. Such waivers will cut demand for ethanol by an estimated 1.6 billion gallons, according to the Minnesota Biofuels Association.
“A strong Renewable Fuels Standard is critically important to Minnesota, where ethanol produced from corn creates an estimated $6.7 billion in economic output and supports almost 18,000 jobs across the state,” said Sen. Smith. “But if the EPA is going continue to allow refineries to get around RFS requirements by granting them waivers, the amount of ethanol and other renewables used in the nation’s fuel supply will fall far short of the target levels announced today. The EPA needs to step up and ensure that our nation meets the 19.88 billion target, and I plan to hold them accountable for doing so.”
The 2019 target of 19.88 billion gallons of renewable fuels blended into the nation’s fuel supply is scheduled to be finalized by November 30. It includes 15 billion gallons of corn-based ethanol. In Minnesota, the state’s 19 corn ethanol plants can produce 1.2 billion gallons each year.
Read the original press release: Tina Smith Remains Skeptical of EPA’s Proposed Targets for Ethanol, Other Renewable Fuels to be Blended into Nation’s Fuel Supply in 2019
More...
June 26, 2018
By Jarrett Renshaw, Chris Prentice
The Trump administration’s Environmental Protection Agency has consistently ignored recommendations from the Department of Energy to reject or limit waivers to oil refiners seeking exemptions from nation’s biofuels law, according to five sources familiar with the matter.
The U.S. Renewable Fuel Standard requires the firms to cover costs of blending corn-based ethanol into gasoline. But the EPA, after consulting with the energy department, can exempt small refineries in cases where compliance presents a “disproportionate economic hardship.”
The waivers can save refiners tens or even hundreds of millions of dollars a year.
Under EPA chief Scott Pruitt, an appointee of President Donald Trump, the agency has issued more than two dozen such exemptions in recent months - about triple the usual number granted under past administrations.
During that time, EPA has consistently granted full waivers in cases where the energy department recommended only partial exemptions, and, at least once, granted a full approval when the energy department advised an outright rejection, according to two sources familiar with the decisions.
That approach marks a sharp break from Obama administration’s EPA, which had often either adopted energy department recommendations or, when it didn’t, ruled against exempting oil refiners, the sources said.
The shift between the Democratic and Republican administrations shows how political ideologies and constituencies can steer bureaucratic interpretation of a law that never changed - with major impacts on industry.
The waivers save refineries money by freeing them from their obligation to blend ethanol into their gasoline or to purchase compliance credits from those who do. The broad use of waivers lately has angered the powerful corn lobby, which argues they threaten corn demand.
The Renewable Fuels Association, which represents U.S. ethanol makers, last month estimated that the waivers have reduced the amount of ethanol refiners are required to blend by 1.6 billion gallons. The law currently requires refiners to blend 15 billion gallons of the biofuel per year.
The surge in waivers has sent the price of biofuels compliance credits to five-year lows, saving refiners such as Valero Energy Corp and PBF Energy hundreds of millions of dollars.
Until now, it was not known if the EPA gave the waivers on the basis of the energy department recommendations or despite them. The EPA has denied public records requests seeking information on the waivers, which it considers proprietary company information.
Biofuel groups have asked the U.S. Court of Appeals for the 10th Circuit in Washington to review legality of the waivers - arguing the EPA is “methodically destroying the demand for renewable fuels” - and to force the EPA to disclose them.
EPA spokeswoman Molly Block declined to comment on the pending litigation or on whether the agency has approved waivers that the energy department recommended rejecting.
“From the beginning of this administration, we have worked closely with our partners at DOE on this issue,” she said in a written statement.
DOE spokeswoman Shaylyn Hynes did not respond to requests for comment.
During a recent Midwest tour, Pruitt told Nebraska farmers that the EPA works “in alliance with the Department of Energy” to grant the waivers, saying there was just one example of disagreement. EPA spokespeople have repeatedly said the agency’s criteria for granting waivers have not changed.
The sources with knowledge of the two agencies’ interactions disputed the assertion that the EPA and DOE are acting as partners in these decisions. They declined to provide a specific number of cases in which the EPA has gone against energy department recommendations or to name most of the companies involved, but did provide two examples of what they said has become regular practice.
In one case, the EPA provided a full waiver to a refiner after the energy department had recommended rejecting the exemption, two sources told Reuters.
In another, the EPA granted full waivers to refineries owned by Andeavor - a large U.S. refining company which reported $1.4 billion in net income last year - after the energy department had recommended a 50-percent exemption, according to two other sources familiar with the company’s approval. The waivers for Andeavor were first reported by Reuters in April.
The company said in a May earnings statement that the waivers, provided to its smallest refineries, saved it about $100 million in compliance costs.
Scott LaBelle, an Andeavor spokesman, declined to comment beyond the company’s previous statements.
Obama’s administration was accused of being too stingy with the waivers. Last year, an appellate judge said Obama’s EPA had used too narrow a definition of “financial hardship” when it denied Sinclair Oil waivers for its Wyoming refineries for 2014 and 2015. But appellate judges in two other similar cases upheld the EPA’s denials and its methods.
Neither the rulings nor the change in presidential administrations changed the way energy department analysts scored applications, according to the sources.
Energy department analysts score applications on a two-part test that considers whether compliance would lead to disproportionate impact or threaten a refinery’s viability. Qualifying under either leads to a partial exemption; qualifying under both leads to a full exemption.
The EPA’s relaxed standard for the waivers is the latest illustration of the agency’s leadership seeking to deliver relief to refiners from the law, which was signed under Republican President George W. Bush to help farmers, reduce petroleum imports and improve air quality.
Pruitt has repeatedly recommended overhauling the law to reduce strain on refiners and advocated for changes during months of failed negotiations between oil and corn representatives mediated by President Donald Trump.
Republican Senator Joni Ernst from Iowa, the top ethanol-producing state, said Pruitt’s handling of the waivers appeared to be based on a political goal of helping the oil industry - a charge the EPA has denied.
“This is definitely a workaround that they have figured out. That’s why we are demanding transparency,” Ernst said in an interview, referring to requests her and other lawmakers for the EPA to disclose information on the waivers.
The current administration has attempted to lower compliance costs for some refiners since billionaire investor and refinery-owner Carl Icahn first raised concerns to Trump during his campaign, and then again after Trump named Icahn as a “special advisor” on industry regulation after his election.
Icahn resigned from his advisory post in August under pressure from lawmakers who said his dual role as investor and advisor posed ethical concerns. Icahn’s CVR Energy was among the refining companies that received a waiver from EPA, Reuters reported earlier this year.
Read the original article: Exclusive: Trump's EPA Ignored Energy Department Calls to Limit Biofuel Waivers
June 24, 2018
In letters to U.S. Department of Agriculture Secretary Sonny Perdue, more than 100 business and farm leaders across seven Midwest states called on regulators to lift restrictions on the sale of ethanol, a crop-based biofuel that drives Nebraska agricultural revenues and rural manufacturing. Signers from Nebraska included Alan Tiemann of Seward, Dinkel’s of Norfolk, Midwest Labs of Omaha and 20 others.
“New markets for American-made biofuels promise to rejuvenate growth, but long-standing policies designed to promote cleaner, more cost-effective options at the fuel pump have been under siege by special interests in Washington,” wrote 73 business groups and Midwest employers. “We ask that you stand firm against these attacks and use every tool available to prevent U.S. Environmental Protection Agency Administrator Scott Pruitt from adopting regulatory schemes that would further undercut demand for biofuels and their energy-rich farm feedstocks.”
The business leaders noted an urgent need to reverse a five-year dive in farm income that threatens to stall the rural economy “well beyond farm communities.” They also called on Perdue to act swiftly on the President’s pledge to lift outdated restrictions against the summertime sales of E15, a motor fuel containing 15 percent ethanol. The message was mirrored by farm leaders in their own letter to Secretary Perdue.
“For far too long, the EPA has failed to update regulations on Reid Vapor Pressure, which hold E15 to tougher standards than traditional gasoline during the summer,” wrote 37 Midwest agricultural groups and farmers, who harvest the renewable energy for nearly every gallon of U.S. ethanol. “There’s no reason for the restriction, which prohibits many retailers from offering cleaner, more-affordable options to their customers. Lifting these needless restrictions would provide a vital outlet for America’s 3.9 billion bushels of surplus grain, boost rural growth, and promote American energy dominance.”
The letters were offered in a show of support for an ongoing campaign organized by Growth Energy, America’s leading trade association of biofuel producers and supporters. Under Growth Energy’s leadership, rural advocates from across the country have urged policymakers in Washington to unleash America’s vast renewable resources to lower fuel prices, strengthen U.S. energy security, protect the climate, and put an end to a farm crisis that threatens to send an entire generation of farmers out of business. A similar call to action was issued earlier this month by 55 public officials from Michigan, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin.
“Starting June 1, outdated federal regulations cut off millions of drivers from a lower-cost fuel that supports farmers and rural manufacturing,” Growth Energy CEO, Emily Skor, said. “President Trump promised Midwest lawmakers that he would fast-track a fix, and Secretary Perdue is working with the EPA on a solution, but time is running out. Farmers cannot afford to be locked out of the market for another driving season, especially when we could be holding down quickly-rising gas prices.”
Intended to reduce evaporative emissions, the current RVP guidelines were drafted before E15 hit the market, resulting in outdated restrictions that hold E15 to higher standards than less eco-friendly options offered all year long. Those limits now threaten growth opportunities for farm crops amid the sharpest agricultural downturn since the 1980s.
“Ethanol is really about enhancing the value of corn, as I sell #2 corn as a commodity and then buy distillers grain as a feed for my cow herd, and then you add in the cleaner air that ethanol provides, it is such a win-win for Nebraskans”, stated LaVon Heidemann of Elk Creek another signer on the letter.
Read the original article: Business and Farm Leaders Seek Relief from Limits on Biofuels
June 21, 2018
Gevo, Inc. announced today that it has entered into a long-term agreement to supply its renewable alcohol-to-jet fuel (ATJ) to Avfuel Corporation, effective July 1, 2018 (the “Supply Agreement”). Avfuel is a leading global supplier of aviation fuel and services to all industry consumer groups, servicing more than 3,000 locations worldwide. The Supply Agreement with Avfuel is Gevo’s first long-term commercial supply agreement for its ATJ.
“We are pleased to have a customer and partner like Avfuel. Avfuel has tremendous reach with more than 650 Avfuel-branded locations and 3,000-plus fueling locations worldwide to a vast scope of customers. We appreciate its vision and leadership in working with us to bring a better and more sustainable fuel to the market place. Not only can we reduce greenhouse gas emissions, but we also can produce a higher quality product than petroleum-based jet fuel from a technical standpoint. The whole supply chain should benefit, as well as the end customer. This contract with Avfuel is an excellent first step and will serve as a catalyst for Gevo to build up the aggregate demand so we can proceed with the development of a larger scale ATJ facility,” said Patrick Gruber, Gevo’s chief executive officer.
Craig Sincock, owner, president and CEO of Avfuel said, “As a leader in the global supply of aviation fuel and services, we have a social responsibility to make sustainable alternative jet fuel a reality in the marketplace. Our agreement with Gevo is a notable component in our overall strategy to support our industry’s commitment to reduce carbon emissions and enhance sustainability to mitigate its effect on climate change.”
Sincock remarked that the agreement with Gevo will help the company meet the demand of its customers for a low-carbon, alternative jet fuel, filling a gap in the industry’s supply chain.
The Supply Agreement contemplates two phases. During the first phase, Gevo will supply Avfuel from its smaller-scale hydrocarbon processing facility it operates in Silsbee, Texas, in partnership with South Hampton Resources, Inc. (the “Silsbee Facility”). Currently, the Silsbee Facility has the capacity to produce approximately 70,000 gallons of renewable hydrocarbon products per year (50% of which is ATJ and 50% of which is isooctane).
During the first phase, Gevo expects to construct a larger-scale hydrocarbon facility at its existing ethanol and isobutanol production facility located in Luverne, Minnesota, (the “Luverne Facility”) to produce larger quantities of ATJ (the “Luverne Hydrocarbon Facility”), subject to Gevo's receipt of sufficient financing. Upon completion of the Luverne Hydrocarbon Facility, the second phase of the Supply Agreement would commence, which would have a term of five years, subject to extension upon the mutual agreement of the parties. During the second phase, Gevo would supply Avfuel with larger volumes of ATJ, ramping up to 1,000,000 gallons of unblended ATJ per year, which, when blended with conventional jet fuel, would produce many millions of gallons of finished ASTM D1655 jet-fuel product for distribution per year.
With further regard to the environment, for every one million gallons of ATJ produced, approximately 20 million pounds of animal feed and protein would also be produced and sold into the food chain. To produce ATJ, Gevo fractionates grain to produce protein and animal feed while using the residual carbohydrate portion of the grain for fermentation to produce the intermediate chemical: isobutanol. The isobutanol is then chemically transformed using a hydrocarbon processing facility into ATJ meeting ASTM D7566 (standard specification for aviation turbine fuel containing synthesized hydrocarbons). The ATJ made by this process has very low sulfur, low particulates, and higher energy density than petro-based jet fuel.
About Gevo
Gevo is a leading renewable technology, chemical products, and next generation biofuels company. Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks. Gevo can produce isobutanol, ethanol and high-value animal feed at its production facility in Luverne, MN. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. Gevo currently operates a biorefinery in Silsbee, TX, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester. Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water. Learn more at our website: www.gevo.com.
About Avfuel Corporation
Avfuel provides fuel and services to the global aviation industry and is the leading independent supplier in the United States. Established as a supply and logistics company 45 years ago, Avfuel is core competent in every aspect that surrounds the delivery of fuel—from refinery to wingtip. Avfuel combines global access with personalized service throughout a fueling network of more than 3,000 locations worldwide and 650+ Avfuel-branded FBOs. Our 100% dedication to aviation demonstrates our passion and commitment to a global community that prospers on the movement of goods and services around the world.
Read the original article: Gevo and Avfuel Enter into Renewable Jet Fuel Supply Agreement
June 20, 2018
By ADM
Archer Daniels Midland Co. and DuPont Industrial Biosciences today announced a collaboration to develop, produce and market cellulase enzymes for operators of grain-based ethanol plants.
Cellulase enzymes assist in hydrolyzing the corn kernel fiber, which consists mostly of cellulose and hemicellulose carbohydrates. Once the fiber is broken down, more sugars can be liberated and then fermented into ethanol, helping grain-based fuel ethanol producers get more out of existing feedstocks. As corn kernel fiber is part of a lower-value co-product stream, the potential to develop more valuable “Gen 1.5” ethanol is attractive. Ethanol from corn kernel fiber may qualify for D3 RINS under the Renewable Fuel Standard, which encourages producers to use technology in order to utilize non-starch components of grains and other waste products in the production of biofuels.
“The industry is looking increasingly at enzyme-based tools to boost yields and produce additional ethanol without having to make significant capital investments, and we look forward to working with DuPont to help deliver solutions in this space,” said Collin Benson, ADM’s vice president of bioactives.
“We’re thrilled to add yet another significant pillar in our partnership with ADM. We are already working together in high performance renewable bio-materials; now this agreement brings together substantial resources and capabilities in the pursuit of new innovations for grain-based biofuels,” said Troy Wilson, DuPont Industrial Biosciences’ global industry leader of grain processing.
Initial product prototypes have proven successful in both laboratory and ethanol plant scale testing, and more evaluations are planned.
Read the original article: ADM, DuPont to Develop, Produce and Market Cellulase Enzymes
June 20, 2018
By Jarrett Renshaw, Chris Prentice
The U.S. Environmental Protection Agency will propose reallocating biofuel blending obligations waived under its small refinery exemption program to other refiners, in an announcement that could come as early as Friday, according to two sources familiar with the agency’s plans.
The move is a nod to biofuel groups frustrated with the agency’s broad expansion of the waiver program under the Trump administration, but will antagonize refining companies who say it will unjustly increase their regulatory costs.
U.S. renewable fuel credits tied to ethanol jumped by a nickel on Wednesday on the news, hitting 28 cents apiece, according to two traders.
The EPA is expected to make the announcement as part of the release on Friday of the agency’s proposed annual biofuel blending mandates under the U.S. Renewable Fuel Standard (RFS), one source told Reuters.
The RFS requires refiners to blend biofuels like ethanol into the fuel pool or buy compliance credits from those who do. Refineries with capacity of less than 75,000 barrels per day can seek waivers from the program if they can show that complying would cause them significant financial damage.
The EPA under administrator Scott Pruitt has roughly tripled the number of waivers issued compared with the previous administration, drawing criticism that he is gutting the program. Biofuel groups say the waivers have cut the ethanol mandate from 15 billion gallons to 13.5 billion gallons.
Under the proposed reallocation, refiners that do not receive exemptions would be forced to make up the volumes waived to others. The sources were not certain how the EPA planned on handling those reallocations, which the refining industry has said it would strongly oppose.
“Our view is reallocating volumes would obviously conflict with public and private statements on the issue,” said Frank Macchiarola, group director of downstream and industry operations at the American Petroleum Institute.
Macchiarola said the move would be a breach of trust and add to the burden of the program on all the refiners that do not qualify for the exemptions.
EPA spokesman Jahan Wilcox did not respond to a phone call and email seeking comment.
Last week, the EPA drew criticism when it said it could not reallocate volumes retroactively without an act of Congress, which at the time dashed hopes of the biofuel industry.
Read the original article: EPA to Propose Reallocating Waived Biofuels Volumes to Other Refiners: Sources
June 13, 2018
By Erin Voegele
On June 13, the Senate ag committee approved its version of the 2018 Farm Bill with bipartisan support. The legislation includes an amendment offered by Sen. Amy Klobuchar, D-Minn., that restores mandatory funding to Farm Bill Energy Title programs. The legislation, officially titled the Agriculture Improvement Act of 2018, will now be considered by the full Senate.
Klobuchar offered the amendment during a June 13 committee meeting held on Farm Bill legislation. The amendment aims to restore mandatory funding for Energy Title programs to 2014 levels.
“In the 2014 Farm Bill, I successfully pushed for a strong Energy Title with funding necessary to continue to support homegrown renewable fuels…which support thousands of jobs and millions of dollars in economic growth,” Klobuchar said.
Committee Chairman Pat Roberts, R-Kan., noted that some of the Energy Title programs impacted by Klobuchar’s amendment include the Biomass Research and Development Initiative; the Biobased Markets Program; the Biorefinery, Renewable Chemical and Product Manufacturing Assistance Program; the Bioenergy Program for Advanced Biofuels; and the Biomass Crop Assistance Program.
Ranking Member Debbie Stabenow, D-Mich., spoke out in support of the amendment and Klobuchar’s leadership, calling the legislation a jobs amendment. “It’s about the rural bio economy,” she said. “It’s about jobs and rural America. These program have leveraged more than $5 billion in private investments since 2009.”
The Agriculture Energy Coalition has spoken out to applaud Klobuchar for offering the amendment, noting it was cosponsored by a bipartisan group of committee members, including Sens. Tina Smith, D-Minn.; Chuck Grassley, R-Iowa; Joni Ernst, R-Iowa; Deb Fischer, R-Neb.; Michael Bennet, D-Colo.; Heidi Heitkamp, D-N.D.; and Bob Casey, R-Pa.
“The Coalition thanks all of the Senators for their strong, bipartisan leadership on this amendment,” said Lloyd Ritter, director of the AgEC. “The farm bill energy title programs support more than 1.5 million U.S. workers who manufacture biobased products. The programs have helped rural business, farms and ranches secure more than $5 billion in private investment to adopt new renewable energy technologies and generate economic opportunities.
“We look forward to working with the Senate and House to ensure that the final farm bill includes an Energy Title, with stable mandatory funding and necessary updates for the vital programs.”
Also during the Farm Bill meeting, committee members discussed the Renewable Fuel Standard and the U.S. EPA’s misuse of small refinery hardship waivers.
Klobuchar stressed the RFS is critically important to Minnesota, and cited recent reports that indicate the EPA has granted dozens of small refinery waivers to large refining companies. “These actions hurt not only biofuel producers, but farmers across the U.S. at a time when farm income is at its lowest since 2006,” she said. “The secretary of agriculture has deemed these waivers as demand destruction for biofuels.”
According to Klobuchar, the EPA has historically granted between six and eight waivers per year for extraordinary reasons. “But, recent reports have noted that the EPA has already issued 25 disproportionate hardship waivers this year.”
Grassley cited news reports that EPA Administrator Scott Pruitt said in Kansas yesterday that he has the authority to reallocate gallons offset by the waivers. He stressed that President Trump has repeatedly promised to meet the 15 billion gallon statutory renewable volume obligation (RVO) for conventional biofuels. However, the EPA’s misuse of waivers has effectively cut the RVO to 13.8 billion gallons. Grassley also spoke about the agency’s proposed 2019 RVOs, which are expected to be released soon. He said we don’t know what the EPA will propose for 2019, but stressed the EPA better keeps Trump’s promises with regard to the RFS.
Read the original article: Senate Ag Committee Restores 2018 Farm Bill Energy Title Funding
June 15, 2018
By Erin Voegele
The U.S. Energy Information Administration has released the June edition of its Short-Term Energy Outlook, maintaining its May prediction that ethanol production will average 1.04 million barrels per day in 2018 and 2019, up from an average of 1.03 million barrels per day in 2017.
On a quarterly basis, the EIA predicts U.S. ethanol production will average 1.04 million barrels per day during the second quarter of this year, falling to 1.03 million barrels per day during the third and fourth quarters. In 2019, the EIA currently predicts ethanol production will be maintained at 1.03 million barrels per day during the first quarter, before increasing to 1.04 million barrels per day in the second and third quarters, and increasing again to 1.05 million barrels per day during the final quarter of the year.
Ethanol consumption is expected to reach 950,000 barrels per day this year, up from 940,000 barrels per day in 2017. Next year, ethanol consumption is expected to increase, reaching an average of 960,000 barrels per day.
The EIA’s most recent weekly ethanol production data shows production averaged 1.053 million barrels per day the week ending June 8, up from 1.041 million barrels per day the previous week.
The EIA’s most recent monthly data shows the U.S. imported 141,000 barrels of ethanol in March. Ethanol exports reached 5.122 million barrels in March, with Brazil, Canada and China listed as the top three destinations.
Read the original article: EIA Maintains It's 2018, 2019 Ethanol Production Forecasts
June 15, 2018
By Bob Dineen
It all started last weekend when word of his visit started to leak out and the ethanol and agriculture community began wondering aloud if the whole thing was anything more than a hollow good will tour to deflect attention from his anti-ethanol policy.
Day 1 of his Redemption Tour had Pruitt telling ethanol producers his role was to provide stability to the market only to be told the company he was visiting would be shutting down a brand new, state-of-the-art renewable diesel plant because of market volatility created by Pruitt’s indiscriminate use of small refiner waivers. The same meeting included farmers telling Pruitt they were “mad as hell” at him.
Trying to deflect criticism, Pruitt told ethanol producers EPA had the authority to expand E15 sales year-around and that EPA could reallocate RINs lost to waivers. But the next day, he said EPA lawyers weren’t so sure about reallocating RINs and RVP could only be done if part of a package in which refiners got something too. Really? 1.6 billion gallons in lost biofuel market share is not enough for them?
So much for market stability.
Kansas Corn Growers Association President Ken McCauley summed up the feelings of those who met with Pruitt when he said, “Our concern was that Administrator Pruitt thought he could come to Kansas, take a few photos with smiling farmers and tell the President that corn farmers are okay with his actions. That would be a gross misinterpretation of what happened here today.”
With that, day 1 was in the books.
Day 2 of Pruitt’s redemption tour started with farmers hosting a rally to protest Pruitt’s moves undercutting the RFS while the conservative Iowa-based America’s Future Fund started running an ad titled, “You’re Fired” and admonishing Pruitt for acting more like the Sultan of Brunei than the head of a federal agency. In a statement Pruitt said he thought it was “important to hear directly from the community that EPA regulates, and today we heard from farmers and utility workers about the impact of the Agency’s work.” We’re sure protest rallies and negative ad campaigns are not exactly what Pruitt had in mind.
Day 3 started with a bang as DC reporters got wise to the PR-fail engulfing Pruitt and one publication asked if ethanol would finally tip the balance and put Pruitt out on his ear. It sure looked that way after Iowa’s Republican governor said, “Pruitt needs to follow through with what the President promised to Iowans, and if he can’t, then we need to find someone who will.”
Forecasts of Mr. Pruitt’s future were stark.
The GOP Chairman in Anderson County, KS summed it up thusly: “I think that Mr. Pruitt probably is a dead man walking,” said Dane Hicks. “I can’t imagine he rebounds from this in any way to salvage his position. I would expect his resignation soon.”
Neil Koehler, CEO of Pacific Ethanol, which operates nine ethanol plants was equally direct when he said, “We have a rogue EPA secretary who should probably find another job because he’s making the President look like a liar.”
Reviews of his visit were dim and seemed to get worse and worse and worse and worse still.
The headlines said he is “hurting industries” and the news featured local politicians rallying the crowd and asking, “Administrator Pruitt, Do you hear us?” Others pointed out that Pruitt was breaking his promise to uphold the law and destroying demand for ethanol.
For his part, well, Pruitt seemed to oblivious to fervor when he said that “there were a few billboards, but they didn’t say I hope you’re having fun.”
No, Mr. Pruitt, 1.6 billion gallons of lost demand and your failure to promulgate a rule making allowing E15 year-round is NOT fun.
Come again soon. Or not.
Read the original article: Scott Pruitt’s Terrible, Horrible, No Good, Very Bad Ethanol Tour