In the News

June 1, 2015

By Sen. Chuck Grassley

It’s been a familiar few weeks for biofuels.  First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency (EPA) caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.  

Those of us from states that produce ethanol and biodiesel are used to the attacks.  We always fight back, and producers continue to do their best to develop the next generation of clean biofuels. Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the United States freedom from volatile oil-producing countries is appealing.  

The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law. Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments. While I support the Agriculture Department’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the President who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.

Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of déjà vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.

It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard (RFS) was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat over the past seven years. Corn prices are expected to be the lowest in nearly 10 years.

The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn co-products available for feed use is larger today than at any time in history.  It’s hardly being diverted.

Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were prior to the RFS. Food inflation is at the lowest rate of increase than at any time over the last 40 years.  At the same time, the United States is producing record amounts of corn ethanol.

As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, the U.S. Department of Agriculture is projecting record meat and poultry production.

A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.  Now that corn prices have dropped by more than half, are consumers seeing the benefits?  If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.

Omaha World-Herald

June 6, 2015

By Russell Hubbard

U.S. Agriculture Secretary Tom Vilsack said Friday that his agency has initiated a $100?million federal grant program to encourage installation of gas station fuel pumps capable of dispensing blends made with a greater percentage of ethanol.

In late May, the Department of Agriculture said its Biofuels Infrastructure Partnership has budgeted $100 million in matching funds for states willing to invest their own money in incentives to encourage the retail sale of higher ethanol blends, such as the E15 and E85 varieties that contain 15 percent and 85 percent ethanol.

“We have to figure out ways to get more E85 and E15 access,” Vilsack said in an interview. “This could expand the number of service-station pumps by 10,000 or more.”

Iowa is the largest ethanol producer with 42 plants, followed by Nebraska, with 24. The industry in Nebraska has an economic impact of $5 billion per year, according to a University of Nebraska-Lincoln study released this year.

Ethanol producers, however, have been up against the so-called “blend wall,” or the point at which formulations, such as E10, are insufficient to get all the envisioned production into the nation’s gas tanks at current levels of U.S. fuel consumption.

Last week, the Environmental Protection Agency set biofuel blending requirements for 2015 and 2016 that were seen as a compromise between what ethanol supporters and critics wanted, but which industry observers said will require the adoption of higher blends.

Shannon Textor, a spokeswoman for the Iowa Corn Growers Association, said that the group supports efforts to assist retailers in offering higher blends and that it is evaluating the specifics of the grant program. Todd Sneller, administrator of the Nebraska Ethanol Board, also said that his group is evaluating the grant program and that efforts to sell higher ethanol blends are needed.

Vilsack, a former governor of Iowa, also said Friday that U.S. exports of ethanol are rising and that foreign trade benefits Nebraska and Iowa. He said Congress should allow President Barack Obama to confer “fast-track status” to a major in-progress trade agreement, the Trans-Pacific Partnership, which would do away with barriers such as tariffs between the United States and 11 mostly Asian nations.

The proposal has been opposed by some organized labor and farm groups that say earlier free trade pacts, such as the North American Free Trade Agreement, have cost jobs and not boosted exports.

Read the original story here : Ag Secretary Vilsack Pushes For High Blends Of Ethanol

June 1, 2015

St Paul - CHS Inc, North America's leading farmer-owned cooperative and a global energy, grains and foods company, announced today it has acquired the Patriot Renewable Fuels ethanol plant from Patriot Holdings, LLC, Annawan, Ill. 

The Annawan facility produces 125 million gallons of ethanol annually, and is the second ethanol plant that CHS has purchased. In June 2014, CHS acquired the former Illinois River Energy Plant at Rochelle, Ill.

"CHS will pursue ethanol manufacturing ownership in strategic current and new geographies that allow us to add value for our owners across our ag business and energy enterprise from inputs to value-added fuel and feed ingredients to the marketplace," said Gary Anderson, CHS senior vice president, North America grain marketing and renewable fuels.

Gene Griffith, Patriot Holdings, LLC, chairman, president and CEO said CHS was a marketer of the plant's DDGS (distillers dried grains with solulubles) and ethanol products. "CHS is the right fit to take this business to the next level," Griffith said. "The Patriot board of directors is confident that CHS is commited to continuing to grow the business, which bodes well for all suppliers delivering grain to the plant."

The facility will be rebranded as CHS. Its 68 employees will become CHS employees.

Visit chsinc.com for more information.

 

 

 

Star Tribune

May 30, 2015

By David Shaffer

– Farmers who own one of Minnesota’s oldest, problem-plagued ethanol plants are making a fresh bet on the future of fuel from corn. An uprising by hundreds of farmer-investors in the Corn Plus Cooperative killed a deal to sell the plant, which led to the ouster of top managers last year. Now, investors have put up more capital, arranged financing for equipment upgrades and hired leading industry experts to revive the 20-year-old operation in this southern Minnesota town. “We want to maintain the ownership for farmers and have this plant do what it was meant to do — add value to corn,” said Bill Drager, a Mapleton, Minn., farmer who led a breakaway group of shareholders that successfully opposed the sale last August. He later became president of a reconstituted board of directors.

It is the latest sign that many farmers still see benefits in owning ethanol plants, even as the industry has consolidated. In Minnesota, where the ethanol business sprouted in the early 1990s, more than half of the 21 ethanol plants still have farmer or local owners.

When farmers opened the Corn Plus plant in 1994, it was one of two farmer-owned ethanol producers in Minnesota, and it quickly became a success story — proof that farmers facing cyclical low prices for corn could profitably turn it into fuel and animal feed.

Over the years, Corn Plus expanded to 42 million gallons of yearly output. It replaced some equipment but couldn’t keep pace with newer, larger, more-efficient producers. It had unplanned outages in 2013 and 2014, and profits lagged. The plant repeatedly broke environmental laws, resulting in $1.1 million in fines since 2009 and a rare felony ­conviction.

Letter: Plant for sale

Against that backdrop last August, the more than 600 shareholders got a letter from the co-op announcing a deal to sell the plant to an Iowa-based ethanol cooperative. It would be close to a fire sale price, about 34 cents per gallon of annual capacity, or nearly $14 million. That’s far below the median price of $1.10 to $1.20 per gallon of annual capacity, said ethanol consultant Larry Johnson of Cologne, who was not involved in the deal.

“It was a real big surprise,” Don De Langhe, a Marshall, Minn., farmer who owns shares in Corn Plus and two other ethanol plants, said of the proposed sale.

De Langhe knew that other ethanol plants made record profits in 2014, and believed that Corn Plus could do the same. Under the co-op bylaws, the sale needed approval from two-thirds of shareholders.

“They voted it down almost 2 to 1,” said Drager, who campaigned with De Langhe against the deal. “It says a lot about the way farmers in this area felt about this investment way back when. They made a lot of money over the years, and they didn’t want to see it go out in this fashion.”

After the sale was rejected, five of nine board members resigned, eventually replaced by directors including Drager and De Langhe. CEO Mark Drake was ousted, and the board began looking for new leadership — and fresh capital.

That’s when ICM Inc. of Colwich, Kan., entered the picture. ICM is an ethanol-focused technology and engineering company that designed most of the nation’s ethanol plants, though not Corn Plus. Five years ago, ICM created a new unit, Energy Management Solutions, to revive and manage underperforming ethanol plants, starting with one in Casselton, N.D.

‘Diamond in the rough’

Corn Plus’ board approached ICM to run the Winnebago plant late last year. ICM CEO Dave Vander Griend made a visit, and agreed to do it. ICM bought 25 percent of Corn Plus for $4 million — the first time it has taken a stake in a distressed ethanol operation.

“I saw it as a diamond in the rough,” Vander Griend said in an interview. “The plant is in rough shape but it is a good location. It is a good market area. The plant needed some money spent on it. It needed some working capital, and we said we’ll come in and put a stake into the plant because it will be a good investment.”

Corn Plus’ new CEO, Rick Serie, is an employee of ICM’s management unit, EMS. He brings 20 years of experience developing and running ethanol plants, starting with one in Luverne, Minn., in the mid-1990s. Since January, Serie has made operational changes to boost the plant’s efficiency.

He also is tackling environmental issues. State and federal pollution regulators have cracked down on the plant three times since 2009, leveling $1.1 million in fines. The biggest case, related to faking emissions data, resulted in a felony conviction for the co-op in 2011. Regulators announced the most recent violation, related to air emissions equipment, in December just before Serie became CEO.

Serie said that in his first meeting with regulators this year “we basically told them that not being in compliance is unacceptable to us. This plant will never be out of compliance again.”

To recapitalize Corn Plus, $7 million was raised from shareholders, including ICM, in a convertible debt offering. That set the stage for farm-sector lenders AgStar Financial Services and Farm Credit Services to close on a revolving loan agreement in late May.

“Plants of this size can absolutely make money if they have good management,” said Ron Monson, AgStar vice president of agribusiness capital, who helped put the financing together.

Boosting efficiency

Just outside the plant sits a pile of new equipment to be installed during a $5.7 million upgrade. Serie said the front end of the plant, where corn is ground in the first stage of making ethanol, will be torn out and replaced with ICM’s patented Selective Milling Technology. The goal is to improve the margin on every gallon of fuel.

“It is all being done to gain efficiencies so we can compete with a modern plant,” Serie said.

ICM’s Vander Griend said his privately held company is “definitely interested” in investment and management relationships with other ethanol plants. That’s long been the business model of Poet Inc., the Sioux Falls-based ethanol company that built, partly owns and manages many ethanol plants, including four farmer-owned operations in Minnesota.

For plants like Corn Plus, the relationship offers access to industry expertise. For ICM, it offers the potential to introduce new ethanol technologies. One of them is ICM’s Generation 1.5, a way to produce ethanol from fibrous parts of the corn kernel, like the shell, whose starch is untouched in the traditional fermenting process.

“It opens the door to do these technologies at plants where you have some influence,” Vander Griend said.

Read the original story here : Farmer-owners of Corn Plus Ethanol Plant Double Down On Their Investment

Reuters

May 28, 2015

The U.S. Department of Agriculture (USDA) plans to inject $100 million in funding to get more ethanol at the gas pump, according to two industry sources, the latest push to get beyond a "blend wall" that has capped demand for the biofuel.

That would mark a big push for an overhaul of fuel-blending pumps and related infrastructure to generate higher demand for the biofuel. The USDA is expected to announce the funding on Friday, the sources said.

A USDA spokesman declined to comment on the plans.

Ethanol groups have asked the USDA to continue to offer this funding amid rising calls for policy reform from policymakers, oil companies, and environmentalists. The USDA launched a program in 2011 designed to get 10,000 flex-fuel options at gas pumps nationwide that would allow use of blends as high as E85, which is 85 percent ethanol.

The United States sets use requirements for biofuels, including ethanol, through the Renewable Fuel Standard (RFS) program, but has delayed setting targets for the current year and 2014 amid concern from oil companies that ethanol use has hit a saturation point without major infrastructure changes.

The plans come as oil companies and biofuels producers await a proposal from the Environmental Protection Agency (EPA) on biofuels use requirements for 2014, 2015, and 2016, widely expected to be announced on Friday.

Read the original story here : USDA Plans To Inject $100 Million On Ethanol Infrastructure : Sources

The Gazzette

May 28, 2015

By Hillary Clinton

On my first trip to Iowa this year, I pledged to be a champion for all Iowans — from cities like Davenport, Cedar Rapids, and Des Moines to small towns and rural communities like Norwalk, Monticello, and LeClaire. It’s not enough for Iowans to just get by, you deserve to be able to get ahead and stay ahead. To make that possible across Iowa and across America, we’re going to have to work together to build an economy for tomorrow, not yesterday.

I believe the United States can and must be the clean energy super power for the 21st century. China and other competitors are already racing ahead with big bets on renewables. Yet there are still some here in America — even candidates for President — who want to keep the deck stacked for the fuels of the past. They support wasteful subsidies for oil and gas, block investments in new clean technologies, and even deny the science of climate change. We can’t afford to cede our leadership in developing and deploying the advanced, clean fuels of the future that will grow our economy, lower our energy bills, reduce pollution, and protect the health of our families and communities. And America’s farmers and rural communities have to be at the heart of this effort.

Eighty years ago this month, President Franklin D. Roosevelt created the Rural Electrification Administration, which connected nearly all Americans to the grid in a little more than a decade. Today, rural America is an energy leader, providing clean electricity and transportation fuels to the rest of the country, reducing energy waste, and strengthening our economic competitiveness. In the past seven years, the United States has added enough wind capacity to power more than 13 million homes. Ninety nine percent of that energy comes from rural communities, creating jobs, providing a second source of income for family farms, and attracting $100 billion in new investment.

Rural energy innovation is also reducing our dependence on foreign oil and making our economy more resilient to supply disruptions in other parts of the world. Domestic renewable fuel production has expanded by more than 350 percent over the past decade with enough supply in the market today to fuel more than 30 million cars. And today U.S. biofuels companies not only offer an alternative to imported oil, they’re increasingly selling their product abroad as well.

Renewable fuels can also play an important role in reducing carbon emissions and other sources of pollution, not just from cars and trucks on our interstates, but also from ships and airplanes. Rural innovators are finding new ways to produce low-carbon biofuels, using feedstocks ranging from algae to agricultural waste, with a range of applications.

The U.S. Department of Agriculture has a successful history of partnering with farmers, rural small businesses, and rural co-ops in deploying renewable energy and energy efficiency solutions. These programs should be expanded. The United States should also continue supporting — and improving — the Renewable Fuel Standard and other federal incentives that have been a success for Iowa and much of rural America.

The Renewable Fuel Standard can continue to be a powerful tool to spur the development of advanced biofuels and expand the overall contribution that renewable fuels make to our national fuel supply. But we also can’t ignore significant changes to the energy landscape since the RFS was expanded in 2007. We have to get the RFS back on track in a way that provides investors with the certainty they need, protects consumers, improves access to E15, E85, and biodiesel blends, and effectively drives the development of cellulosic and other advanced biofuels.

Smart investments in rural America aren’t rocket science — it’s just good sense that delivers for all Americans. Providing investment certainty, removing barriers, and investing in the infrastructure to deliver reliable and affordable energy to rural households and deliver rural clean energy to the rest of the country is a good start.

As president, I’ll champion what works, ensure that Americans have the tools they need to lead the world in clean energy, and stand up to those who block our way and want to keep us trapped in an energy economy of the past.

Read the original story here : Clinton : Invest In Rural Energy

Bloomberg BNA

May 26, 2015

By Andrew Childers

The Environmental Protection Agency is grappling with how much ethanol the market can absorb as petroleum refiners and renewable fuels producers offer competing rationales for how renewable fuel blending requirements should be set in an upcoming proposed rule.

The EPA will address the ethanol “blend wall” as part of the proposed rule expected by June 1 that would set renewable fuel blending requirements for 2014, 2015 and 2016.

Previous EPA efforts to address the blend wall issue in 2014 derailed the rule amidst opposition from corn states and renewable fuels producers, resulting in no standards being issued during that year. How the agency addresses that issue will be central to the upcoming rule.

“Obviously, the biggest and single issue is the methodology,” Tom Buis, chief executive officer of Growth Energy, an ethanol trade group, told Bloomberg BNA. “It has been from day one. That’s the critical component.”

For 2014, the EPA had originally proposed to reduce the overall renewable fuel blending requirement for that year in an effort to keep the ethanol content of the gasoline supply from exceeding 10 percent, the maximum amount approved for all vehicles on the road. The move was opposed by renewable fuels producers, who argued that the market was capable of absorbing additional ethanol through E15 (gasoline containing 15 percent ethanol) and E85 (gasoline containing 85 percent ethanol).

The petroleum industry has urged the EPA to cap the amount of ethanol that must be blended into the gasoline supply at 10 percent, arguing that flex-fuel vehicles capable of operating on E85 are not widespread enough to support significant amounts of additional ethanol in the marketplace. Though the EPA has approved use of E15 in model year 2001 and newer passenger vehicles, petroleum refiners caution that many automobile manufacturers have warned that use of E15 could void warranties.

“Because the ethanol blend wall is such a critically important issue to the refining industry, fuel retailers, engine manufacturers and fuel consumers, EPA must acknowledge these realities in the upcoming rulemakings,” the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said in a May 1 letter to the EPA.

Waiver Authority Opposed 

Section 211 of the Clean Air Act allows the EPA to use its waiver authority to reduce the annual renewable fuels blending mandates below the levels set out in the Energy Independence and Security Act (Pub. L. No. 110-140) if implementing them at those volumes would cause economic harm or during instances of inadequate domestic supply. The EPA in 2014 proposed for the first time to use its waiver authority to reduce the overall renewable fuels blending requirements as it sought to address the ethanol blend wall.

Renewable fuels producers argued that they are able to produce more than enough fuels to satisfy the statutory requirements. The prior EPA proposal to reduce the blending requirements was based not on adequacy of fuel supply but rather the inability of the petroleum industry to consume the fuels in the volumes required, they said.

The EPA proposal to waive the 2014 blending requirements over supply issues “ultimately rewards the intransigence of oil refiners to invest in renewable fuels infrastructure, protects their market share, and thus blocks increased volumes of cleaner and more sustainable renewable fuels from entering the marketplace,” the Renewable Fuels Association said in May 20 comments on a proposed consent decree that would set deadlines for the EPA to issue the standards.

“Adopting the same methodology for [renewable volume obligations] in 2015 and beyond would continue to reward oil companies for their stubborn refusal to follow the spirit and intent of the RFS as adopted by Congress,” the Renewable Fuels Association said.

Rule Under Review 

The upcoming proposal is under review by the White House Office of Management and Budget.

The EPA has agreed to propose the rule by June 1, with a final rule by Nov. 30 as part of proposed consent decree reached with petroleum refiners that sued the agency over its delays in issuing the requirements for 2014 and 2015 (Am. Fuel & Petrochemical Mfrs. v. EPA, D. D.C., No. 15-cv-00394, consent decree proposed 4/10/15).

“We want EPA to hit the deadline. EPA assured us they will, and we have every expectation they will at this point,” Bob Greco, director of downstream operations at the American Petroleum Institute, told reporters May 20. “This has gone on long enough, and we need EPA to move forward with this as quickly as they can.”

The EPA has announced it will set the attest deadlines, a step in the compliance process for the 2013 and 2014 renewable fuel standards as part of its upcoming proposal, but it has revealed no further details.

In a memorandum posted May 26, the Office of Enforcement and Compliance Assurance said it will take no action on the attest demonstrations for 2013 and 2014 until the EPA completes its rulemaking.

Advanced Fuel Producers Fear Uncertainty 

Advanced biofuel producers are also closely watching the upcoming proposal. They have argued that the EPA's increasing delays in setting the standards for 2014 have paralyzed the industry's ability to secure financing for new production facilities.

“EPA sets this self-fulfilling prophecy with the numbers,” Paul Winters, a spokesman for the Biotechnology Industry Organization (BIO), told Bloomberg BNA. “[If] they set the numbers low then, the advanced biofuels will be low. If they set them aggressively, then there will be investment then the numbers will beat the projections.”

Cellulosic ethanol exceeded EPA projections for the first time in 2014, largely due to a rule change that reclassified millions of gallons of advanced biofuels being produced from compressed and liquefied natural gas from landfills and wastewater treatment as cellulosic ethanol, but still lagged well behind the amounts required by statute.

But producers of advanced biofuels such as cellulosic ethanol said the uncertainty caused by the EPA's ongoing delays has hampered the ability of the industry to grow. The delays have caused a $13.7 billion shortfall in the investment necessary to meet the renewable fuel program's advanced biofuel requirements, BIO said in a May 4 white paper.

Read the original story here : EPA Grapples With Competing Rationales For Setting Renewable Fuel Requirements

Renewable Fuels Association

May 27, 2015

The National Renewable Energy Laboratory (NREL) released a new study today that found most of the existing fuel dispensing infrastructure components — including underground storage tanks — are compatible with E15. The researchers interviewed retail fuel equipment experts and examined manufacturer warranty statements, official records, and industry trends in a multifaceted look into the compatibility of fuel blends beyond E10 with all retail station fuel dispensing equipment.

Key NREL findings:

“It is often stated that tanks cannot be used to store E15, but this assumption is incorrect as the majority of installed tanks can store blends above E10. For many decades, underground storage tank (UST) manufacturers approved their tanks for blends up to E100…”

“…there are UL testing standards available now for all gasoline–ethanol blends from 0% to 85% ethanol… Certain equipment types are typically UL listed—these include tanks, pipes, dispenser, hanging hardware, submersible turbine pumps, and shear valves.”

“A review was conducted with each manufacturer to determine compatibility with ethanol blends. There is an extensive list of E15 and E15+ compatible equipment available in the appendices.”

Bob Dinneen, president and CEO of the Renewable Fuels Association, commented on the study, noting, “This comprehensive analysis is both timely and relevant to the current debate about the so-called ‘blend wall’ that some would like to use to limit the growth opportunities for ethanol under the RFS. Clearly, the constraints to the increased use of E15 have more to do with the recalcitrance of refiners and marketers than they do any real infrastructure barriers. Today’s comprehensive study should once and for all belie the misplaced conclusion that infrastructure and ethanol demand limitations should justify a reduction in the RFS as it found most equipment at a retail fuel station today, including underground storage tanks, are compatible with E15. This study demonstrates that most retailers will not be required to break concrete and spend hundreds of thousands of dollars to offer E15.”

In addition to E15 compatibility, the report examined literature from the past 15 years to find out if “…there were any negative impacts during the multi-year deployment of E10 nationwide” and ultimately determined that “No incidents of E10 causing releases (also referred to as leaks) from UST systems were identified.” It concluded that “None of the reviewed literature noted any association between E10 and any specific UST release.”

This technical report will become a go-to resource for any retailer looking to complete an assessment of their retail fueling system before offering E15. It includes “an extensive list of E15 and E15+ compatible equipment available in the appendices” of retail fueling equipment manufacturer’s compatibility statements.

A webinar will be held at 1 p.m. CT on June 11 to review the report and answer any questions. A copy of the full report — commissioned by the RFA with financial support from the BYO Ethanol campaign — can be found here.

Read the original story here : New NREL Report : Most Retail Fueling Equipment Is Already E15 Compatible

The National Renewable Energy Laboratory (NREL) released a new study today that found most of the existing fuel dispensing infrastructure components — including underground storage tanks — are compatible with E15. The researchers interviewed retail fuel equipment experts and examined manufacturer warranty statements, official records, and industry trends in a multifaceted look into the compatibility of fuel blends beyond E10 with all retail station fuel dispensing equipment. - See more at: http://www.ethanolrfa.org/news/entry/new-nrel-report-most-retail-fueling-equipment-is-already-e15-compatible/#sthash.IBvUXRxB.dpuf