In the News
February 29, 2016
By Christopher Findlay
Data released today by the Energy Information Administration (EIA) officially confirmed that new records were set in 2015 for U.S. ethanol production and blending. According to the EIA data, U.S. ethanol producers churned out 14.81 billion gallons of ethanol in 2015, while refiners and blenders integrated an unprecedented 13.69 billion gallons into the U.S. gasoline supply. The industry’s monthly average output in December 2015 also crested the 1 million-barrel-per-day mark for the first time in history.
Meanwhile, recent U.S. Environmental Protection Agency (EPA) data show that historic output levels of corn ethanol were primarily responsible for the generation of a record 14.83 billion renewable fuel RIN credits, which are used to oil companies to demonstrate compliance with the Renewable Fuel Standard (RFS).
While these record numbers are impressive, Renewable Fuels Association (RFA) President and CEO Bob Dinneen stated that the American ethanol industry was prepared to do even more. Unfortunately, however, mismanagement of the RFS program and the oil industry’s intransigence to adopt higher-level ethanol blends like E15 kept the ethanol industry from realizing its full potential. EPA set the 2015 blending obligation for renewable fuel at just 14.05 billion gallons, rather than the 15 billion gallon level established by Congress.
“The U.S. ethanol industry had an incredible year in 2015, but the failure of the White House and EPA to enforce the RFS as designed by Congress means our nation missed a huge opportunity to provide consumers with even larger volumes of domestically produced, low-carbon, high-octane biofuels,” Dinneen said. “There is no doubt that the ethanol industry could have produced even more renewable fuel if the Administration had stood firm on implementation of the statutory RFS volumes, rather than caving to the oil industry’s ‘blend wall’ narrative.”
RFA noted that the record December output rate of 1.002 million barrels per day would result in 15.36 billion gallons if maintained for an entire year, well above the 15 billion gallon blending requirement originally stipulated by Congress for 2015 and beyond. “By eclipsing the 1 million-barrel-per-day mark in December, ethanol producers have proven once again that they are more than capable of delivering the volumes necessary to meet the RFS blending requirements established by Congress,” Dinneen said. “The industry just needs to be set free to achieve the laudable goals set forth by Congress, which are as important today as they were nearly a decade ago when the RFS was expanded.”
Even though RFS requirements for 2015 weren’t finalized until November, Dinneen said the data from EIA and EPA show the volume requirement established by Congress could have been easily met by oil companies. “When the 14.83 billion new renewable fuel RIN credits generated in 2015 are combined with the existing surplus of 1.8 billion RINs that resulted from past over-compliance with the RFS, it becomes quite obvious that we had more than enough supply to meet the 2015 statutory renewable fuel volume of 15 billion gallons,” he said.
Today’s EIA data also revealed that total U.S. gasoline consumption hit in 140.4 billion gallons in 2015, the third-highest on record and well above the projections used by EPA to establish 2015 blending obligations.
Read the original release: Official Numbers Released Today Confirm Record U.S. Ethanol Production and Use
February 23, 2016
By Erin Voegele
The U.S. EPA has released renewable identification number (RIN) generation data for January, reporting that a net total of 1.44 billion RINs were generated during the month, including nearly 1.74 million cellulosic RINs.
According to the EPA, a total of 1.74 million D3 cellulosic biofuel RINs were generated in January, including 285,432 for ethanol, 1.29 million for renewable compressed natural gas and 161,044 for renewable liquefied natural gas. All 1.74 million D3 RINs were generated domestically. No D7 cellulosic diesel RINs were generated during the first month of the year.
More than 4.52 million D5 advanced biofuel RINs were generated in January, including 2.22 million for ethanol, 1.7 million for naptha, 201,225 for heating oil and 400,028 for nonester renewable diesel. All D5 RINs generated in January were generated domestically.
A net total of 1.24 billion D6 renewable fuel RINs were generated during the first month of the year, with the majority, 1.21 billion, generated for ethanol. According to the EPA, 17,461 D6 RINs were generated for biodiesel, along with 27.88 million generated for nonester renewable diesel. More than 1.21 billion D6 RINs were generated domestically, with 858,078 generated by importers and 27.88 million generated by foreign entities.
A net total of 191.57 million D4 biomass-based diesel RINs were generated in January, with 159.1 million generated for biodiesel and 32.69 million generated for nonester renewable diesel. Approximately 147.65 million D4 RINs were generated domestically, with 31.04 million generated by importers and 13.11 million generated by foreign entities.
Of the 1.44 billion RINS generated so far this year, 7.92 have been retired, with 60.13 million locked and available and 1.37 billion unlocked and available.
Read the original story: EPA: 1.74 million Cellulosic RINs Generated in January
February 18, 2016
U.S. exports of distillers grains (DG) — a co-product of dry mill ethanol production — set a new record of 12.56 million metric tons (MMT) in 2015, according to a new summary of ethanol co-product trade statistics released today by the Renewable Fuels Association (RFA). Last year’s DG export number was 11 percent higher than 2014, and was more than double the amount exported in 2009. The report finds that U.S. DG exports were shipped to 45 countries on five continents in 2015.
“This report shows the global reach of American-made distillers grains,” said Bob Dinneen, RFA president and CEO. “In 2015, an estimated 34 percent of U.S. distillers grains production was exported, meaning one out of every three tons produced was shipped to foreign markets. These data make it crystal clear that the U.S. ethanol industry is both fueling and feeding the world. It is also worth noting that DG exports were worth almost $3 billion in 2015, providing a critical source of revenue to ethanol producers.”
RFA’s statistical summary, which draws on data from several U.S. government entities, shows that China, Mexico, Vietnam, South Korea, and Canada represented the top five markets in 2015 for DG exports. China received 50 percent of DG exports, while Mexico received 13 percent. Both Vietnam and South Korea received 5 percent of DG exports. With respect to imports, the report finds that last year Canada was once again the top supplier of DG imports to the United States, and shipped 401,554 MT to the United States. China and Brazil were the only other exporters of DG to the U.S. market in 2015. The RFA document also provides statistics on feed co-product exports from wet mills, including corn gluten feed and meal.
View the RFA summary of co-product exports here.
The co-product export summary is a complimentary publication to the RFA’s ethanol export summary published earlier in February. “Between ethanol and distillers grains, our industry exported the equivalent of 800 million bushels of corn last year,” Dinneen said. “If that amount of corn had been exported in raw form, it would have been worth $3.6 billion. But in the form of ethanol and distillers grains it was worth $4.8 billion. This is value-added agriculture at its best.”
Read the original release: U.S. Exports of Distillers Grains Set New Record in 2015, According to RFA Report
Global Renewable Fuels Alliance
February 17, 2016
Bliss Baker, the president of the Global Renewable Fuels Alliance, called upon national leaders to take advantage of the low price and abundant stockpiles of crude oil to eliminate fossil fuel subsidies. Baker pointed to the latest figures from the International Energy Agency that estimated global fossil fuel subsidies to be worth $490 billion, and outlined how global oil demand is forecast to drop by 25 percent in 2016 to 1.2mb/d.
Fossil fuel subsidies are theoretically intended to increase energy access during periods of high prices, but with the current state of global energy markets these subsidies are only succeeding in discouraging investment in energy efficiencies and renewables.
“The persistent oversupply of oil, and the resulting low prices, gives countries an opportunity not seen in recent memory to eliminate fossil fuel subsidies and encourage a transition to viable low-carbon energy sources like ethanol,” Baker said. “World leaders couldn’t ask for better circumstances to take action,” he added.
At the recently concluded Conference of the Parties to the UN Framework Convention on Climate Change (COP 21) in Paris, a landmark agreement on combating climate change was reached. The deal aims to ensure that the global temperature rise this century does not exceed 2°C above pre-industrial levels by shifting to a low carbon global economy and encouraging the development of clean technologies as the basis for future development.
Over the past year, almost 30 countries have reduced their fossil fuel subsidy programs. These changes have been made in recognition of the fact that the current low price of oil reduces the impact of eliminating consumer fossil fuel subsidies, and that their removal results in lower domestic national emissions of greenhouse gases.
“It is blatantly counter productive for governments to continue to subsidize the industry that contributes the majority of global greenhouse gas emissions, especially after 195 countries agreed that drastically cutting back GHG emissions was necessary to combat climate change” Baker said. “It’s time to take the brakes off of clean technology development and meaningfully begin the transition to a sustainable future,” he concluded.
The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 90% of global biofuels productions. Through the development of new technologies and best practices, Alliance members are committed to producing renewable fuels with the smallest possible footprint.
Read the original story: GRFA Calls on National Governments to End Fossil Fuel Subsidies
February 16, 2016
The U.S. ethanol industry added $44 billion to the nation’s gross domestic product and supported nearly 360,000 jobs in 2015, according to a new study conducted by ABF Economics. The study, which was released today by the Renewable Fuels Association (RFA) at the National Ethanol Conference (NEC), quantified the impact of domestic ethanol production in 2015 on the national economy.
The study showed that as a result of last year’s record domestic ethanol production, 85,967 direct jobs and 271,440 indirect and induced jobs were sustained. Additionally, the ethanol industry added $43.9 billion to the national GDP, $23.5 billion to household income, and paid $8.7 billion in taxes. These monies helped to stimulate and sustain economies at the national, state, and local levels. The study also revealed that the 14.7 billion gallons of ethanol produced in 2016 displaced 527 million barrels of foreign oil worth almost $26 billion.
Bob Dinneen, president and CEO of the RFA, lauded the study’s finding, noting: “The numbers speak for themselves and underscore the indelible positive impact the domestic ethanol industry continues to have on America’s economy. The nearly 360,000 jobs the industry sustained last year represent stable, well-paying positions in communities where, unfortunately, the employment situation is often bleak. The $8.7 billion the industry spent last year in local, state, and federal taxes contributes to improving and maintaining public services. And, each of the 527 million barrels of oil that we did not have to import last year keeps America on a path toward a more secure energy future.”
Economist John Urbanchuk, the study’s author and a managing partner at ABF Economics, concluded the analysis by stating: “The ethanol industry continues to make a significant contribution to the economy in terms of job creation, generation of tax revenue, and displacement of imported crude oil and petroleum products. The importance of the ethanol industry to agriculture and rural economies is particularly notable. Continued growth and expansion of the ethanol industry through new technologies and feedstocks will enhance the industry’s position as the original creator of green jobs, and will enable America to make further strides toward energy independence.”
Below is a brief summary of the study’s findings. In 2015, the production and use of 14.7 billion gallons of ethanol:
- Added $43.9 billion to the national gross domestic product
- Supported 85,967 direct jobs and 271,440 indirect and induced jobs
- Boosted household income by $23.5 billion
- Increased federal, state and local taxes by $8.7 billion
- Displaced 527 million barrels of imported oil, keeping $26 billion in the U.S. economy
The full study, prepared on behalf of the Renewable Fuels Association, can be found here
Read the original story: Ethanol Industry had Wide-Ranging Impact on National Economy in 2015, According to New Study
February 16, 2016
Renewable Fuels Association (RFA) President and CEO Bob Dinneen announced today at the National Ethanol Conference (NEC) the launch of the “Flex My Choice” campaign, which is designed to voice consumer support for flex-fuel vehicles (FFVs). This effort is aimed directly at automakers, auto dealerships, and the Environmental Protection Agency (EPA). Dinneen said the time is ripe for such a campaign because, as the government phases out CAFE credits for producing FFVs, automakers have begun to limit the total number of FFV models that roll off their assembly lines.
“The auto companies claim there has not been meaningful consumer demand for these vehicles and the incremental cost, albeit trivial, cannot be justified in the absence of a more balanced CAFE regime,” said Dinneen. “The ethanol industry needs to demonstrate the continued enthusiasm for FFVs. We want to raise our voices so that E85 and other mid-level ethanol fuels remain viable options for consumers.”
As part of the campaign, RFA intends to distribute 75,000 postcard pamphlets to targeted parties across the country in the hopes of changing the conversation on the future of FFV production. The postcard pamphlets will contain five panels: the first panel is a brief introduction to the issues; panels 2 through 4 are individual postcards to General Motors, Ford Motor Company, and Fiat Chrysler Automobiles (the “Detroit Three”); and the fifth panel contains a pledge that consumers can drop off at their local auto dealership. Additionally, the campaign launched two petitions on www.Change.org directed at the automakers and the EPA respectively.
“It goes without saying that when consumers’ choices within a given market are limited, everyone loses,” said Robert White, RFA’s vice president of industry relations. “The ‘Flex My Choice’ campaign intends to ensure that consumers have choices when it comes to buying and fueling their vehicles. Thanks to USDA, the ethanol industry, and agriculture, 2016 will mark the largest expansion of E85 stations in history; it is not the time to stop the momentum. This campaign will send a clear signal to the automakers, their auto dealerships, and the EPA that there is a real demand on the part of consumers for more vehicle choices, more choices at the pump and increased access to higher ethanol blends.”
For postcard pamphlets and additional information, go to www.FlexMyChoice.com. Consumers are encouraged to amplify their support for FFVs on social media using the hashtag #FlexMyChoice.
Read the original story: Raise Your Voice or Lose Your Choice: RFA Launches #FlexMyChoice FFV Awareness Campaign
February 12, 2016
By Richard Childress
Ethanol takes the spotlight in two high-octane events in late February in Florida. NASCAR’s season-opening Daytona 500 is Feb. 26 and the seventh annual Growth Energy Executive Leadership Conference is Feb. 20-23. As a former driver, the team owner of Richard Childress Racing (RCR) and a believer in the importance of homegrown renewable fuels, I couldn’t be more thrilled to see these two events align. This year’s conference theme is Full Throttle and I believe that it’s as important to go full throttle in the real world as it is on the race track.
At RCR, we are proud to partner with this American-grown, American-made industry for many reasons. Biofuels, like ethanol, keep money we would normally send abroad for oil in the U.S., creating jobs and economic activity here at home instead of overseas. We have a unique platform to share this message with race fans and to demonstrate that E15 is a reliable, high performance fuel that can withstand the toughest driving conditions. Nationwide, moving to E15 will create another 136,000 American jobs that can’t be outsourced, reduce our demand for foreign oil by 7 billion gallons and reduce greenhouse gas emissions relative to regular gasoline, all while saving consumers between 5 and 15 cents per gallon at the pump. From RCR’s perspective, we should be doing things that help drivers adopt biofuels and encourage companies to produce advanced and cellulosic biofuels.
Of course, we didn’t become successful by not paying attention to the performance details of our race cars. In 2011, NASCAR switched to a 15 percent ethanol fuel blend, Sunoco Green E15. After several tests done by our engineers at ECR Engines, we have seen increased horsepower from the higher-octane ethanol fuel blend, decreased emissions and an overall cooler running engine. RCR and ECR Engines have even tested ethanol blends up to E30, finding no issues. These are areas our team of talented engineers and mechanics are really excited about.
The final formulation of Sunoco Green E15 was the result of extensive analysis by Sunoco scientists and the support of over 100 members of the technical areas of the NASCAR Research and Development Center, nearly all of the race teams, their engine shops and the extended NASCAR green team. After over a year and a half of work on the lab bench, the engine dynamometer and in thousands of miles of live on-track endurance testing of a range of fuel blend levels from substantially below to substantially greater than 15 percent ethanol, Sunoco Green E15 was selected. E15 provided the optimal synergy of high performance as reflected by roughly 10 additional horsepower on average over the prior fuel, and 100 percent reliability on the track.
E15 is a great fuel for RCR and for the entire NASCAR community. Now in its sixth season of use, the fuel has been used in over 8 million miles of racing with zero reported engine problems or increased maintenance issues. As a lifelong fan of the sport, I am certain that the switch to a higher blend of ethanol has been a great move by NASCAR. The transition has been seamless; we’re proud of our connection to the ethanol industry and all of the good that it’s doing for our country. I hope the attendees of the Growth Energy Executive Leadership Conference enjoy the Daytona 500 and are inspired to go full throttle in 2016. With the right energy, strategy and momentum, I believe that the ethanol industry will finish in victory lane.
Read the original story: Going Full Throttle With Ethanol
February 12, 2016
By Susanne Retka Schill
The renewable fuel standard (RFS) does not expire in 2022, but an analysis of the statute reveals major changes could occur. University of Illinois economist Jonathan Coppess examined recent RFS discussions regarding the RFS in campaign coverage in a FarmDoc Daily post, “Following-up on RFS Questions.”
The statute does not contain a sunset or end date provision, writes Coppess, but setting the annual mandates becomes more discretionary for the U.S. EPA. “After 2022, the applicable volumetric mandates for renewable fuels are to be determined by the EPA administrator,” he writes, “and based on analysis of the impact of the production and use of renewable fuels on various matters such as environment factors, U.S. energy security, infrastructure, cost to consumers of using renewable fuels and other factors including job creation and food and commodity prices.” Estimates of expected commercial renewable fuel production are to be included as well.
Two features of the post-2022 provisions speak to the current discussions around the agency’s interpretation of its waiver authority—specifically consumer and infrastructure considerations. “On one hand, Congress included issues related to the ultimate consumer and fueling infrastructure (the blend wall) in EPA's volumetric determinations. On the other hand, however, those matters are included only for determinations made after 2022 when the statutory levels (and arguably the waiver authority) no longer apply. Additionally, these are among a large set of factors within six categories for EPA to consider and all of the analysis is to be based upon a review of implementation of the RFS during the calendar years leading up to 2022.”
Another feature in the statute affects the impact of waiver decisions already made by the EPA. “If any of the statutory mandated levels are reduced by at least 20 percent for two consecutive years or at least 50 percent in any single year, the EPA administrator is given the authority to write a rule modifying the applicable volumes for all years that follow the final year of the waiver, except that this modification cannot take place prior to 2016,” Coppess writes, citing the statute language. That already has happened regarding advanced and cellulosic biofuels, but did not occur for other fuels in the modified mandates for 2014-’16, though it came close, he points out.
Crossing that 20 percent threshold in future years could become easier, if EPA’s interpretation of its waiver authority prevails. The ethanol industry has brought suit to challenge that, however. “The fact that EPA's use of the waiver authority could also set it up to completely modify the statute might well impact a judge's review of the reasonableness of EPA's arguments,” Coppess writes, adding the outcome of the litigation is “very much unknown.”
To read his full analysis, including citations to specific statute language, click here.
To read the original story: Economist: No Sunset for RFS, Waivers Impact Future Authority
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February 11, 2016
By Kassidi Andres
New research by American Coalition for Ethanol President Ron Alverson indicates life cycle modeling has demonstrated significant improvement in emissions performance of the corn-based ethanol life cycle, with continued improvements expected during the next few years.
Alverson conducted research based on the Greenhouse gases Regulated Emissions and Energy use in Transportation model. The model was developed by Argonne National Laboratory to evaluate the life cycle emissions of various fuel combinations, including ethanol and gasoline and ethanol-gasoline blends.
According to the national lab, "The peer-reviewed model has laid to rest some long-held misunderstandings about ethanol (EtOH) and its important role in reducing petroleum use and greenhouse gas emissions. In terms of key energy and environmental benefits, Argonne’s GREET shows that cornstarch ethanol clearly outpaces petroleum-based fuels, and that tomorrow’s cellulose-based ethanol would do even better."
According to Alverson’s research, life cycle greenhouse gas (GHG) emissions associated with ethanol have dropped by approximately 60 percent over the last 25 years and will continue to decrease with improvements in production efficiencies and negative land-use change.
GREET’s calculations show that the fossil energy input per unit of ethanol is lower, with 0.78 million British thermal units (Btu) of fossil energy consumed for each 1 million Btu of ethanol delivered. In comparison, 1.23 million Btu of fossil energy consumed for each 1 million Btu of gasoline delivered.
Read the original story: ACE: GREET Shows Improvement in Life Cycle Ethanol Emissions
February 9, 2016
By Susanne Retka Schill
A 25 million bushel increase in projected corn use for ethanol in USDA’s February supply-demand report is partially offsetting a 50 million bushel lower export forecast. Corn imports are projected 10 million bushels higher based on recent imports of corn into southeastern U.S. feed markets and corn exports are projected 50 million bushels lower as larger supplies of South American corn further increase competition for U.S. exports. The result is USDA is projecting feed grain ending stocks for the 2015-’16 crop year higher by 35 million bushels. USDA narrowed its projected range for season-average farm prices by 5 cents on both ends to $3.35 to $3.85 per bushel.
The increase in ethanol use projections are based on the strong pace of ethanol production during January, as indicated by weekly Energy Information Administration data and higher forecast gasoline consumption. Corn use for ethanol is now projected to reach 5.225 billion bushels, up from 5.2 billion in the January report. That compares with 5.124 billion used in the 2013-’14 marketing year (beginning Sept. 1) and the estimated 5.209 billion bushels in 2014-’15.
Global coarse grain supplies for 2015-’16 are projected 1.3 million tons higher. Higher Brazil and Argentina corn production more than offset lower corn beginning stocks in these same countries and lower production elsewhere. Brazil and Argentina 2015-’16 beginning stocks are lowered with higher 2014-’15 exports. Brazil corn production for 2015-’16 is raised 2.5 million tons based on higher first-crop yields and indications that strong domestic corn prices, reflecting the devalued local currency, will increase second-crop plantings. Argentina corn production is increased 1.4 million tons on higher area. Argentina corn production is revised higher for 2014-’15, also on higher area. South Africa corn production for 2015-’16 is lowered 1.0 million tons, as continued historic drought conditions further reduce crop prospects despite some stabilizing rain during the month of January. Indonesia corn production is reduced 500,000 tons.
Global coarse grain consumption for 2015-’16 is raised 900,000 tons with foreign consumption up 200,000 tons. The largest change this month is a 2.0-million-ton increase in China corn feed use as relative internal market prices are expected to support greater corn feeding at the expense of wheat. Corn use is also increased for Mexico, India and Turkey. Partially offsetting are corn feeding reductions for Brazil and Argentina. Sorghum feed use is lowered for Mexico.
Global coarse grain imports for 2015-’16 are raised 4.3 million tons with corn imports higher for South Africa, Iran, India, Indonesia, Mexico, and Turkey. Corn exports are raised for Brazil, Argentina, and South Africa, but lowered for the United States. Barley exports are raised for Argentina and Kazakhstan, with higher imports for Saudi Arabia. Global coarse grain ending stocks for 2015-’16 are slightly higher, as larger barley and rye stocks more than offset a small reduction for corn.
Read the original story: Corn Use for Ethanol Offsets Lower USDA Export Forecast
February 8, 2016
By DTN/Progressive Farmer
DuPont filed a motion Friday to intervene in a lawsuit seeking review of the Environmental Protection Agency’s latest Renewable Fuel Standard volumes, arguing the final volume requirements put the company’s cellulosic ethanol investments at risk.
DuPont filed a motion to intervene on behalf of a petition for review filed with the D.C. Circuit Court of Appeals by American Coalition for Ethanol, Americans for Clean Energy, Biotechnology Innovation Organization, Growth Energy, National Corn Growers Association, National Sorghum Producers and the Renewable Fuels Association.
DuPont has completed construction and is in the process of launching commercial cellulosic ethanol production at its plant in Nevada, Iowa.
In the court filing, the company said the final RFS numbers released in November 2015 hurt DuPont’s efforts.
“DuPont has invested substantial resources in cellulosic ethanol, including hundreds of millions of dollars to construct a state-of-the-art facility in central Iowa to produce commercial quantities of cellulosic ethanol,” DuPont stated in its motion to intervene. “Having made this substantial investment, DuPont is keenly interested in ensuring that the RFS program remains true to its intended purpose — incentivizing investment to grow the renewable fuel market in the United States.
“…Quite simply, EPA’s action puts DuPont’s investment at risk.”
EPA announced a three-year program for 2014, 2015 and 2016 that includes biofuel volumes below those set in the original 2007 law.
The agency also announced biomass-based diesel volumes through 2017. The overall RFS cuts came about as a result of overall decreased demand for gasoline, reflected in about a 20% reduction in overall biofuels volumes in the RFS.
“DuPont shares the petitioners’ concerns with EPA’s decision to reduce the statutory renewable fuel volumes,” DuPont said in the court motion. “Additionally, DuPont brings a different and complimentary perspective to this litigation — namely, the impact of the RFS rule on the nascent cellulosic renewable fuel industry and on a company that has invested hundreds of millions of dollars in cellulosic biofuel technology.”
The DuPont motion comes about one month after the American Fuel and Petrochemical Manufacturers filed a motion to intervene on EPA’s behalf.
DuPont’s 30-million-gallon, $228 million plant is expected to employ about 80 people, including about 50 on a seasonal basis for stover harvest, which is conducted by DuPont on a contract basis for farmers within 30 to 35 miles of the plant. The plant is co-located with corn-based ethanol producer Lincolnway Energy.
Read the original story: DuPont Says RFS Volumes Put Company’s Cellulosic Ethanol Investments at Risk
February 5, 2016
The U.S. ethanol industry exported 836 million gallons of ethanol worth $1.8 billion in 2015, according to a new summary of ethanol trade statistics released today by the Renewable Fuels Association (RFA). The final tally for 2015 was identical to the 2014 export total. The RFA publication, which draws data from several U.S. government entities, offers a succinct overview of U.S. ethanol export and import trends in 2015 and prior years. RFA’s new statistical summary will be distributed to attendees of the upcoming National Ethanol Conference (NEC), including prospective ethanol importers attending the International Buyer Program (IBP).
The RFA report finds that U.S. ethanol made its way to all six inhabited continents in 2015, reaching more than 75 countries. The top five countries receiving U.S. ethanol last year included Canada, Brazil, the Philippines, China, and South Korea. Notably, China emerged in 2015 as a leading destination for U.S. ethanol, and total exports to Asia are up 1,515 percent over 2012. While U.S. ethanol exports had a strong showing in 2015, imports of ethanol continued to sag. The United States imported just 93 million gallons of ethanol last year, with more than one-third entering through California ports.
Bob Dinneen, RFA president and CEO, noted, “Ethanol’s value as an octane booster was in the global spotlight in 2015. Even with falling crude oil prices, ethanol remained the lowest-cost—and cleanest—source of octane in the world. Clearly, refiners in foreign markets are optimizing their operations to take advantage of ethanol’s unique octane properties, just as U.S. refiners have done in recent years.”
Dinneen said the RFA and its partners will continue to seek opportunities to expand foreign markets in 2016. “Growth in the export market is critically important to the future of our industry,” Dinneen stated. “With EPA failing to enforce the Renewable Fuel Standard volumes established by Congress, we must continue to aggressively seek new market opportunities around the world. We will continue to work collaboratively with the U.S. Department of Commerce, the Foreign Agriculture Service, U.S. Grains Council, Growth Energy, and others to expand international markets for American-made ethanol.”
One such opportunity to build new markets is just around the corner. RFA’s upcoming National Ethanol Conference, held Feb. 15–17 in New Orleans, will serve as host to the U.S. Department of Commerce’s International Buyer Program (IBP). Through the department’s network of offices in U.S. embassies and consulates worldwide, the IBP recruits pre-screened foreign buyer delegations and brings them to selected trade shows and conferences in the United States, connecting U.S. companies with international buyers. Prospective ethanol buyers from Brazil, India, Mexico, Peru, and the Philippines are expected to attend.
“The RFA is excited about participating in the IBP, and for the opportunity the program provides to create a pathway that connects domestic ethanol producers with international markets,” said Randall J. Doyal, RFA Board of Directors Chairman. “By providing a forum to establish these important business-to-business relationships, the NEC will serve as the premier destination for U.S. ethanol producers who are looking for opportunities to promote their products on the world stage.”
View the summary here.
Read the original news release: As RFA Prepares to Host International Buyers, New Report Shows U.S. Ethanol Exports Reached 836 Million Gallons in 2015
February 4, 2016
By Susanne Retka Schill
Ethanol continues to maintain its status as the low-cost octane enhancer, in spite of low oil prices reducing the cost of competing petroleum-based aromatics. The biggest threat, say University of Illinois economists Scott Irwin and Darrel Good, would be a shortfall in U.S. corn production that would cause both corn and ethanol prices to spike. The economists analyzed octane enhancers in the refinery business in a recent FarmDocDaily post, “The Competitive Position of Ethanol as an Octane Enhancer.”
Benzene, toluene, and xylene are petroleum-based aromatic compounds with long histories as octane enhancers in gasoline blends, all with similar octane ratings as ethanol. “Despite the recent increase in ethanol prices relative to gasoline, ethanol prices still remain below that of the aromatics,” Irwin and Good found.
In examining weekly prices of the aromatics and the price of ethanol at the Gulf for two years, January 2013 through January 2015, ethanol was priced under each of the aromatics, with the exception of one brief period in spring 2014. Benzene was the highest priced, but this premium disappeared in early 2015, and now all three aromatics prices are moving together, they write. “CBOB prices were always substantially lower than the price of the aromatics, which is not surprising given the higher production costs of the aromatics compared to other petroleum blendstocks. In general, the aromatics have been priced about 140 to 170 percent above CBOB. It is interesting to note that the aromatic price premium has actually increased in recent months.”
The spread between ethanol and competing aromatics has shrunk, they continue. “The average price of aromatics increased sharply during the first half of 2015, causing the spread between aromatics and ethanol to exceed $1 per gallon. The price of aromatics has since declined below $2 per gallon, but still sits today at 35 cents above the price of ethanol, which has been relatively constant over the past year.”
The economists point out that blending economics for gasoline are rather complicated “due to the differing array of characteristics of alternative blending components and regulatory requirements to produce spec gasoline. For example, ethanol has chemical characteristics that may be beneficial, e.g., as an octane enhancer, or detrimental, e.g., high vapor pressure. Energy companies have developed sophisticated mathematical refinery models to determine optimal blends of the various gasoline components given prices and technical specifications.” Thus, while the direct comparison of the price of ethanol and alternative octane enhancers sheds some light on their relative value, it doesn’t represent all of the factors involved in blending economics.
Read the original story: Economists: Ethanol Retains Low-cost Octane Enhancer Status
February 4, 2016
By Holly Jessen
Which needs to come first, a new high-octane midlevel ethanol blend or new vehicles optimized to more efficiently take advantage of the higher octane content?
“It is that classic chicken and egg thing,” says Timothy Theiss, bioenergy technologies program manager at Oak Ridge National Laboratory. “The analysts say it's the simultaneous introduction of a new fuel and a new vehicle, which is very difficult.”
Brian West, deputy director of the Fuels, Engines and Emissions Research Center at ORNL, offered a slight tweak to that perspective. “All we are talking about doing, and I don't mean to make it sound easy, is just changing that ratio a little bit,” he says, adding that the nation already has a gasoline and ethanol infrastructure. “It would certainly seem to me to be a much simpler thing than putting in a whole new infrastructure of, say, hydrogen.”
West believes a new E25 or E40 blend, perhaps marketed as a “renewable super premium,” could be sold in a way that is a win for consumers, retailers and everybody involved. In fact, vehicles optimized for the new fuel could be manufactured today. “I often say, there's not a good technical reason we couldn't see this in the marketplace in five or 10 years,” West adds. “That doesn't mean I think it will happen in that time frame. There's just too many parties that need to be in agreement.”
Thiess and West are two of many researchers at ORNL, Argonne National Laboratory and the National Renewable Energy Laboratory who have been engaged in a study since 2013. The goal of the U.S. DOE-sponsored scoping study was to assess the potential of an E25 to E40 mid-level blend.
In mid-January researchers were wrapping things up, preparing to provide a short, high-level summary to the DOE. The last of the data will be released in publications within the next year, West says. Up next is the Optima initiative, which will focus on developing new, co-optimized fuels and engines to maximize performance and carbon efficiency. While the high-octane fuel study focused specifically on ethanol, Optima will look at fuels like ethanol as well as other high-octane fuels, Thiess says.
Significant Findings
The high-octane fuel study found that E25 and E40—when used to fuel a vehicle optimized for the blend—could achieve volumetric fuel-economy parity with E10. In other words, each additional gallon of ethanol added would displace a full gallon of gasoline and fuel economy would be the same as one of today's vehicles using E10. Vehicle efficiency would also increase, at 5 percent for E25 and 10 percent for E40.
Of course, fuel economy varies according to multiple factors, such as how fast the vehicle is driven and engine design. “Not everybody is going to see all of this across the board every time,” Theiss says. “Your mileage may vary.”
An ANL report concluded that, compared to E10, when 40 percent corn ethanol was used for blending, total greenhouse gas emissions were reduced by 18 percent. If corn stover were the feedstock, E40 achieved a 32 percent GHG emission reduction.
NREL was involved in the high-octane fuel study in several capacities, says Robert McCormick, principal engineer and platform lead in fuels performance R&D. For example, a market analysis concluded that high-octane vehicles could make up 43 to 79 percent of light-duty vehicle stock by 2035. Another thing NREL completed was an infrastructure assessment. “There are no technical issues in deploying equipment for higher ethanol blends, only cost considerations and station knowledge of their equipment,” he says.
That's what's exciting to Thiess about the high-octane fuel study. “In this, we're finding we have a lot of ands,” he says. “We can get better fuel economy. And. When ethanol is traditionally priced a little less than gasoline, we can get a fuel that is a little bit less because we are using less petroleum and more ethanol. And. We're showing that we'd get pretty nice greenhouse gas emission reductions. And. We're showing that the vehicle manufacturers would be favorably inclined to build those vehicles. And. We're showing that the biofuel infrastructure could pretty much be adapted to handle it. And. We're showing that there's a lot of feedstock out there that could be used to make it. So, there's a lot of ands, and not the major ors, where we have to make very big trade-off decisions right up front. Now, that's not to say that it's not a difficult thing. It is very difficult to introduce any new fuel. And this would be no exception. But there are a lot of benefits that stack on top of each other.”
Making It Happen
In order to make high-octane fuels and vehicles a reality, quite a few players, including the U.S. EPA and the auto industry, have to get on board. “For manufacturers to build cars that are dedicated for this fuel, I think a number of things have to happen,” West says. “It has to be widely available. They have to believe the consumer is going to buy it all the time, or they aren't going to get the fuel economy benefit that they are getting in the certification test. In order for the consumer to buy it all the time, it has to be on a cost-parity basis with E10.”
But that doesn't mean that the fuel can't be sold until that happens. In fact, E30 is already being sold at some blender pumps across the nation and work to increase the infrastructure for higher ethanol blends is ongoing. And, most flex-fuel vehicles on the road today can already use midlevel ethanol blends and actually see a performance benefit doing so. Thiess sees the FFV fleet as a bridge across the chicken and egg dilemma in establishing a new midlevel ethanol blend and new vehicles optimized for that fuel.
Read the original story: E25, E40 for the Masses
Jan 28, 2016
By Tom Bryan
U.S. presidential candidate Sen. Ted Cruz (R-Tex.) was given an opportunity to clarify his position on ethanol and the U.S. Renewable Fuel Standard during a high-profile Fox News GOP debate in Des Moines, Iowa, Thursday night. Here’s what Cruz said when Fox News' Chris Wallace asked him why Iowa voters should support him.
“I’m glad to discuss my views on ethanol and energy," Cruz said. "I think God has blessed this country with enormous natural resources, and we should be developing all of the above. We should be developing coal, oil, natural gas and nuclear, wind and solar, and ethanol and biofuels. But I don’t believe that Washington should be picking winners and losers. And I think there should be no mandates and no subsidies whatsoever.”
Cruz went on to say that he has introduced a comprehensive tax plan that eliminates all federal subsidies.
“So there are no subsidies for oil and gas, no subsidies for anyone," he said. "Now, it is true that there are a bunch of lobbyists, and a bunch of Democrats in this state, spending millions of dollars trying to convince the people of Iowa that I somehow oppose ethanol. That’s not true. I have introduced legislation that would phase out the ethanol mandate over five years, but that is in the context of having no mandates whatsoever for anyone. But there is a much more important regulation for ethanol, and that’s the EPA’s blend wall, which makes it illegal to sell mid-level blends of ethanol in gasoline. I will tear down the EPA’s blend wall, which will enable ethanol to expand its market share by up to 60 percent … all without any government mandates whatsoever, through the marketplace.”
Read the original story here : Cruz Reiterates Firm Opposition To RFS, Other Mandates
Globe Gazette Des Moines Bureau
January 25, 2016
By James Q Lynch and Rod Boshart
Another day, another round in the Ted Cruz-Terry Branstad battle over ethanol and the Renewable Fuels Standard.
The Iowa Republican governor stood by his comment that he wants to see the Texas senator defeated in Iowa’s GOP precinct caucuses Feb. 1 because of Cruz’s opposition to the RFS. It was created by Congress in an effort to reduce greenhouse gas emissions and expand the nation’s renewable fuels sector while reducing dependence on imported oil. It requires transportation fuel to contain a minimum volume of renewable fuels.
“They asked me a point-blank question, I gave them a one-word answer,” Branstad said when asked Monday about his comment last week that Cruz should be defeated. “I gave an honest answer to a point-blank question, and you know me, that’s the kind of person that I am.”
Branstad said he’s the kind of person who will “fight for and stand up for things that are important to my state, and certainly farm income and jobs are among those.”
However, Cruz wasn’t backing off his position that ethanol should not enjoy a mandate that, he said, makes Iowa and Iowa corn farmers dependent on Washington.
“The lobbyists very much want Iowa to stay focused on the RFS,” Cruz told more than 100 people who crowded into the Fireside Pub & Steakhouse in Manchester. “If every year Iowa has to go back to the Washington politicians and say ‘keep this Band-Aid in place,’ it means the lobbyists will be paid each and every year. It means the politicians get paid each and every year.”
Branstad pointed out that since the EPA reduced the volume of renewable fuel that must be included in transportation fuel it’s been farmers who aren’t getting paid. The price of corn has dropped below the cost of production, he said.
“That has hurt not only farm income but it’s caused layoffs by John Deere and Kinze Manufacturing and others,” Branstad said at his weekly news conference.
“It’s interesting,” Branstad said. “I’m being attacked by Hillary Clinton and now I’m being attacked by a lobbyist group that’s supporting Ted Cruz.
“But listen, I’ve been attacked and I’ve been attacked regularly by a lot of people, but that doesn’t bother me, because I recognize that my responsibility is to the people of Iowa and to be an advocate and a supporter of things that are important to them,” the governor said.
Cruz said he doesn’t have it in for Branstad or ethanol, but believes that Washington shouldn’t be picking winners and losers in energy or any other marketplace.
“My view on energy is that God has blessed this nation with abundant resources and we should pursue all of them,” he said.
Branstad agrees there’s room in the marketplace for other energy sources.
“I’m proud to stand up and support all of those jobs at the ethanol plants, the biodiesel plants, the people who are working to make wind turbines and blades and towers, and the farmers who are getting income from selling their corn to ethanol plants and buying (dried distiller’s grain) to feed their cattle,” he said. “This is important to our state’s economy and I want to make sure that the voters of Iowa are knowledgeable and well-informed on all of the candidates and that they get out and vote in those caucuses because it’s important to our economy.”
Read the original story: Cruz, Branstad Continue Ethanol Feud