Ethanol Producer Magazine

March 17, 2016

By Bob Dinneen

There’s a rather pernicious meme making the rounds on Capitol Hill lately—that the renewable fuel standard (RFS) is no longer relevant because America is now producing more oil through fracking. Oil company lobbyists are scouring congressional offices in a desperate effort to create the misplaced narrative that ethanol did nothing to make us more energy independent, that tight oil supplies from the Bakken are fueling a resurgence of the U.S. energy sector, and policies promoting renewable fuels are costly intrusions into the energy free market that hurt consumers and the environment. Seriously. I can’t make this stuff up.

Indeed, in his state of American energy speech last month, American Petroleum Institute president Jack Gerard doubled down on the oil industry’s attack on ethanol and the RFS, calling it a “relic of our nation’s energy past.” He’s whistling past the graveyard, of course, ignoring the fact that an oil glut they helped create is wreaking as much havoc on the stock market and the economy today as the oil shortage that caused prices to skyrocket to $140 per barrel in 2008. He’s ignoring the fact that 2015 was the hottest year on record, caused in large part by greenhouse gas (GHG) emissions from fossil fuels, which are exacerbated by fracking and tar sands. And he dismisses the fact we still import more than 45 percent of the oil processed by U.S. refineries, much of it from hostile nations that pose an existential national security threat to our homeland.

But here’s the point—the RFS was enacted to address several important policy priorities, not just energy security. It was passed at a time when corn farmers were selling their commodity for less than the cost of production and ag subsidies were necessary to avoid economic calamity. The RFS provided a value-added market that empowered farmers and allowed Congress to dramatically reduce farm program support. The RFS was enacted at a time when Congress was looking for effective programs to address climate change. The RFS has provided significant GHG benefits, reducing GHG emissions by more than 354 million metric tons over the course of the program. The RFS was passed in recognition of the fact that consumers benefit by competition. One analysis concluded the use of ethanol through the RFS reduced gasoline prices by about $1 per gallon. Even in today’s market, with the unusually low oil price driving gasoline costs lower than ethanol for the first time in years, ethanol remains a bargain for refiners and consumers because it is still the cleanest and lowest-cost octane source available.

API’s revisionist history notwithstanding, the RFS has also demonstrated its effectiveness in enhancing U.S. energy security. Net petroleum import dependence fell to just 25 percent in 2015, but would have been 32 percent without the addition of 14.7 billion gallons of domestically produced ethanol to the fuel supply. The surge in ethanol production has reduced gasoline imports from nearly 10 billion gallons in 2005 to almost zero today. Indeed, the ethanol produced in 2015 displaced an amount of gasoline refined from 527 million barrels of crude oil. That’s roughly equivalent to the volume of oil imported annually from Saudi Arabia and Kuwait combined.  Not a bad relic.

No, it is not the RFS that is a “relic of our nation’s energy past.” It is the very notion that prosperity can only be driven by petroleum without regard for the environmental, economic or national security implications of that dependency that is the “relic” world leaders need to recognize and relegate to the trash heap of history.

Read the original story here : I'll Show You A Relic

Renewable Fuels Association

March 16, 2016

Today, the House Oversight Subcommittees on Interior and Healthcare, Benefits and Administrative Rules are holding a joint hearing to ostensibly examine the Renewable Fuel Standard. However, once again, no one from the U.S. biofuels industry was invited to testify, silencing a powerful voice that could speak to the provision’s implementation and effect. If invited to testify, the ethanol industry would have talked about the numerous benefits of the program and why continued support is needed to help overcome barriers erected by the incumbent oil industry.

“The Renewable Fuel Standard is currently the only law to reduce greenhouse gas emissions from the transportation sector,” said Renewable Fuels Association President and CEO Bob Dinneen. “It has enhanced U.S. energy security by virtually eliminating gasoline imports. Ethanol is the cleanest, lowest cost, highest value octane source available to refiners today, and so is helping to lower consumer gasoline prices. The RFS has been an unmitigated success, something the subcommittees should hear today from someone in the industry,” he added.

“Unfortunately, the committee has stacked the witness list with oil company apologists intent upon undermining public support for this important program,” Dinneen said. “Why is the committee afraid to hear all sides of the debate?”

According to prepared remarks provided on the committee’s website, EPA plans to again cite concern with the “E10 blend wall” as part of the reason why the agency lowered the final conventional 2014–2016 RFS renewable volume obligations below the statutory requirement. That issue is currently before the D.C. Court of Appeals in multiple lawsuits filed by both biofuel and petroleum interests.

“EPA is sticking to its script,” said Dinneen. “But the agency is once again demonstrating it does not understand Congress’ objective in passing the RFS in the first place. Congress wanted to maximize the use of renewable fuels. It wanted to break down the blend wall and other obstacles to low carbon fuels. It wanted the RFS to drive marketplace change and promote investment in new technologies and infrastructure to reshape America’s energy portfolio. However, EPA’s timid enforcement of the RFS has prevented that from happening.”

Conversely, the U.S. Department of Agriculture has been helpful through its recent Biofuel Infrastructure Partnership, which aims to add more than 1,400 ethanol blender pumps to market in 21 states. This effort, along with those already underway in ethanol and agriculture, will add E15 and E85 at nearly 2,000 new stations. Today, E15 and E85 are sold at 180 stations and 3,434 stations, respectively.

“It is bewildering to me how two agencies, under the same administration, are taking such disparate approaches to biofuels,” said Dinneen. “USDA’s efforts are helping to grow our industry, while EPA is hampering our industry and preventing the continued evolution of biofuels toward lower carbon, higher octane alternatives.”

The subcommittees will also hear anti-RFS testimony from ActionAid USA and The Heritage Foundation.

Read the original release: What’s Missing from House Oversight RFS Hearing? The Ethanol Industry

Renewable Fuels Association

By Ann Lewis

March 7, 2016

U.S. ethanol exports had a strong start in 2016, expanding 7% over December volumes to a 14-month high, according to RFA analysis of government data released late Friday. The industry shipped 87.1 million gallons (mg), with China taking a third of the market at 29.4 mg—rivaling the record of 32.6 mg to China last October. Meanwhile, the long-time top export destination of Canada received just 13.7 mg—the lowest volume of exports north of the border since October 2010. The United Arab Emirates (10.9 mg) and South Korea (10.4 mg) were other top markets in January. Brazil brought in a fairly sizable volume (6.6 mg) considering its recent absenteeism from the U.S. export picture. January’s robust exports equate to 1.05 billion gallons on an annualized basis.

Denatured fuel ethanol exports saw a 29% month-on-month increase to 65.0 mg in January. China grabbed 29.4 mg (45%) of that market, with Canada (12.2 mg, or 19%), the UAE (8.1 mg, or 12%) and South Korea (5.9 mg, or 9%) continuing as stable partners. January exports of undenatured ethanol for fuel use fell 29% from December to 20.2 mg. Brazil (6.6 mg) and South Korea (4.5 mg) received 55% of undenatured fuel exports, while the Philippines (2.9 mg), the UAE (2.8 mg), Mexico (2.2 mg) and Peru (1.1 mg) rounded out our primary customers. Sales of undenatured ethanol for non-fuel, non-beverage use crashed to the lowest level since February 2013, dipping 64% to 212,369 gallons. Similarly, denatured non-fuel use ethanol exports slumped 21% to 1.7 mg—the lowest volume in over a year. The U.S. kept exports of non-fuel product close to home with 78% of total shipping to Canada and 9% to Mexico.

As for imports, the United States imported just a splash of ethanol for fuel use in January. Inbound shipments came from Canada (500 gallons) and the Netherlands (165 gallons). Given the paltry import figure, January U.S. net exports of 87.1 mg were the highest since the record month of December 2011.

January exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—fell 19% from January to 800,580 metric tons (mt). DDGS exports to China tallied at 218,961 mt, representing a 3% decrease over December volumes but an increase in market share (27% of total U.S. exports vs. 23% in December). DDGS exports to Mexico were also a healthy 195,669 mt (24%), with smaller shipments distributed across several countries including Ireland (48,456 mt), Canada (47,617 mt), Thailand (46,838), Vietnam (45,744 mt) and South Korea (45,046 mt). Contracting volumes in China, Spain and Turkey were responsible for a substantial portion of the month-on-month decrease in exports, with shipments to Mexico doing their part to help offset those losses.

Read the original release: China Takes U.S. Ethanol Export Market by Storm; DDGS Exports Slip by 19%

Ethanol Producer Magazine

March 3, 2016

By Erin Voegele

On Feb. 24, the House Committee on Agriculture held a hearing on the state of the rural economy. Biofuels and bioenergy were among the topics discussed during the nearly three-hour event.

When asked to characterize the state of the biofuels industry, Agriculture Secretary Tom Vilsack spoke about the need to maintain a strong rural economy. “I think the ability to maintain a strong and vibrant rural economy is dependent on our capacity to diversify and to create new opportunities to complement production agriculture and exports, which has been the traditional way of supporting rural America,” he said. “In my lifetime, agricultural production has increased by 170 percent even though the inputs have been relatively stable. That’s producing 170 percent more on 26 percent less land, with 22 million less farmers. The challenge that we have in rural areas is that as we were getting fewer and fewer farmers and were becoming more and more efficient with production agriculture, we didn’t overlay that with a complimentary economy that would allow folks to live work and raise their families in small communities. We’re now doing that,” he noted, adding that the development of the bioeconomy, biofuels industry and bioenergy industry all play a part in bringing manufacturing back to small towns.  

Vislack stressed that the biofuels industry is something people like and want. It’s helping create jobs, reducing the cost of gas over time, reducing emissions, reducing the trade deficit, and helping to reduce U.S. reliance on foreign oil. According to Vilsack, the industry is also helping to diversify the economy and is creating jobs in rural America.

Responding to questions about USDA support of biomass fuels, Vilsack noted the department is working through its network of research centers to look for ways in which appropriate biomass supply chains can be created for each region of the country. He also spoke about Farm Bill programs that support the production of advanced biofuels and provide loan guarantees for biorefinery projects.

In his testimony, Vilsack also highlighted the potential for biofuel use by the U.S. military. The Navy wants half their fuel to be biobased and domestically produced, he said, adding “I was privileged enough to be on a destroyer watching it be refueled with beef tallow fuel out on the Pacific theater just a couple of weeks ago.”

According to Vilsack, interest in biofuels is also strong in the private aviation sector. “There are roughly 40 airports that sell 90 percent of the jet fuel, and they are extremely interested in doing this because of the emissions and the benefit from the emissions to meet international standards,” he said, noting aviation use represents a 17 to 19 billion gallon market.

Vilsack also defended the USDA’s Biofuel Infrastructure Partnership during the event. The 21 states that participate in the program match $100 million in USDA funds with $120 million in commitments, he said. “We anticipate and expect over 5,000 additional distribution systems being put in those 21 states, so there is a lot of interest in this program,” Vilsack continued.

Vilsack said the biofuels industry directly and indirectly supports 450,000 jobs and has lowered the price of gas. “You can’t deny the fact that study after study shows that this industry has indeed over time reduced the cost of gas to consumers,” he added. Responding to misinformation regarding the food versus fuel debate, Vislack stressed there is no correlation between ethanol production and the cost of food.

Read the original story: Vislack Defends Biofuels, Bioenergy During House Hearing