In the News

Star Tribune

Nov 17, 2015

By David Shaffer

Low prices at the gas pump have put a persistent squeeze on Midwest ethanol producers, but most are staying profitable.

Of eight Minnesota-affiliated ethanol producers tracked by the Star Tribune, all but one made money in the third quarter, although not like the high profits of 2014.

“The Midwest ethanol industry is healthy,” said Ron Monson, vice president for agribusiness capital at AgStar Financial Services in Apple Valley. “Plants have been able to make money and operate in the environment we have today.”

Low gasoline prices pinch ethanol producers because they sell into the same fuel market. The result is thinner operating margins at ethanol plants, a condition that could persist for 12 to 18 months, according an ethanol industry analysis by the national cooperative bank CoBank.

Valero Energy, the San Antonio-based owner of Minnesota’s largest ethanol plant in the city of Welcome, said its companywide ethanol margins fell by more than half — from $1 a gallon in third quarter 2014 to 47 cents in the same period this year.

“There is just so much oil, and oil refiners have been producing a tremendous amount of gasoline and that has weighed on the gas price,” said Brian Milne, energy editor for Schneider Electric, whose DTN service tracks farm and fuel commodities.

Ethanol sold for more than $2 per gallon on the commodities market during much of 2014. Lately, the front-month contract has been below $1.50 per gallon. Ethanol is blended into gasoline at a rate of 10 percent or more at the pump.

Lower third-quarter revenue

On average, Minnesota-affiliated ethanol refiners reported a 26 percent drop in revenue in the third quarter, which ends in July for most smaller companies and in September for large, multistate producers. The newspaper tracked publicly reported results for companies that own seven of Minnesota’s 21 ethanol plants and two Minnesota companies that own plants in North Dakota and South Dakota.

Midwest AgEnergy, a North Dakota ethanol producer majority-owned by Maple Grove-based Great River Energy, increased sales by 22 percent to $53 million thanks to its new Spiritwood, N.D., plant. But start-up costs triggered a $1.5 million loss for the quarter. Its Dakota Spirit AgEnergy plant went online in June and is now operating at above its 65 million gallon per year capacity, said Chief Operating Officer Jeff Zueger.

“We are projecting it to be, long-term, a very profitable entity,” said Zueger, who noted that the plant, like its sibling Blue Flint Ethanol in Underwood, N.D., gets steam for plant processes from an adjacent Great River Energy power plant, cutting operating costs.

Some good signs

Not all signs are negative for the ethanol sector.

Monson said corn is plentiful, with good levels of starch needed to ferment alcohol, and the price has remained below $4 per bushel for months. Corn is the main ingredient in ethanol and its largest single cost.

“Farmers would like a better price, but it is what it is,” Monson said.

Americans also are driving more, which has boosted demand for gasoline by 3 percent this year. Monson and others say that fuel demand, thanks partly to low prices, is projected to increase 1 percent or more in 2016.

“With gas being under $2.50 [per gallon] for quite a few months, that seems to have stimulated driving and it’s probably an indication that the economy is getting stronger,” he added. “We don’t see that changing.”

Exports also have remained strong for ethanol and its animal-feed co-product called dried distillers grains, helping to offset domestic price pressures. Green Plains, the Omaha-based ethanol producer that owns large plants in Fairmont and Fergus Falls, Minn., said it exported 21 percent of its production in the third quarter.

“[W]e are there every day aggressively trying to … export gallons as we focus continually on getting more product offshore,” Todd Becker, Green Plains chief executive, told analysts recently.

Brazil, a major ethanol producer, recently increased its domestic fuel blending to 27 percent ethanol, which has curbed that nation’s ability to export its cane sugar-based biofuel, CoBank said in its industry outlook. That’s an opportunity for U.S. producers, although CoBank warned that U.S. ethanol exports need to grow by 22 percent to 39 percent over the next two years to keep the nation’s 214 ethanol plants operating at 90 percent of their capacity.

Ethanol makers also are hopeful that domestic sales will rise as more gas stations are equipped to dispense 15 percent ethanol blends. The U.S. Department of Agriculture in October announced details of its $100 million matching grant program, saying 1,400 gas stations, including 165 in Minnesota, will get help converting pumps and tanks to dispense E15.

E15 is approved by the federal government for 2001 and newer cars. At some stations, a gallon of E15 sells for 10 cents less than regular E10. Zueger said that discount is possible because the value of extra renewable fuel credits is passed on to consumers.

For the first time, Zueger said, the program will help gas stations replace or add tanks to dispense E15. Those projects take time, but the domestic market impact could be felt later next year.

“It will open the door for folks to offer this product,” Zueger added.

Read the original story here : Ethanol Industry Making Profits Despite Lower Price Of Fuel

Ethanol Producer Magazine

Nov 12, 2015

Fuels America is announcing a significant television campaign today calling out Rep. Peter Welch (VT-AL) for signing on to a Congressional letter that was authored by oil industry lobbyists. The first phase of the campaign includes 250 GRPs in the Burlington media market for one week.

The ad calls out Rep. Welch for protecting oil company profits and criticizes the 96 signers who are climate change deniers, urging viewers to “Remind Peter Welch to stand up for Vermont, not oil companies and climate deniers.” The 184 Members of Congress who signed on have collectively received more than $39 million from the oil and gas industry throughout their careers. Altogether the signers have an average score of 2.74 from the League of Conservation Voters; 154 have an LCV score below 10, 140 have an LCV score below 5, and 76 have an LCV score of 0.

"After years of pleading with Congressman Welch, it is time to inform Vermonters about his beltway exploits with the oil industry attacking renewable fuels,” Advanced Biofuels Business Council Executive Director Brooke Coleman responded. “Mr. Welch didn't just join an anti-biofuel campaign underwritten by the oil industry, he led the effort to recruit others. It is time to shine a brighter light on those encouraging EPA and the President to gut the renewable fuel standard (RFS). It's not a chorus, it is the oil industry, climate deniers and EPA bashers disguised as one. This letter and the millions of dollars of oil contributions flowing to its signers tell you everything you need to know about the anti-RFS crowd."

Rep. Welch’s letter, released last week, was sent to EPA Administrator McCarthy asking the Administration to gut the Renewable Fuel Standard—America’s most successful policy on the books aimed directly at fighting climate change and reducing greenhouse gas emissions—and a policy which Administrator McCarthy has called a “vital tool” in combatting climate change.

A final rule on the Renewable Fuel Standard for 2014, 2015, and 2016 is expected by the end of the month. President Obama and his Administration must choose to either maintain a strong RFS as Congress intended, or gut the program at the behest of the oil industry.

“Congressman Welch should know better than to accept without question the oil company’s narrative about biofuels,” Bob Dinneen, President and CEO of the Renewable Fuels Association responded. “Of course the oil companies are going to whine they can’t possibly blend any more biofuel than they do today – they don’t want to! Of course they’re going to exaggerate, distort and outright lie about the environmental footprint of biofuels – they don’t want to talk about their own! Congressman Welch should have done his homework. He would have found out that American ethanol has reduced consumer gasoline prices, lowered the taxpayer burden of farm program costs, and incentivized an unprecedented investment in private sector funds in new technologies that are being commercialized today and leading a revolution in biofuels production. None of this would happen if Big Oil had its way.”

The anti-RFS letter by the oil lobby came on top of the release of a letter from 16 members of the Congressional Black Caucus to Administrator McCarthy urging the EPA to support the RFS and showing the major harm to our air and lungs caused by the oil industry, particularly in vulnerable communities. In the same vein, Rep. Donald Payne (NJ-10) recently penned an op-ed in The Hill stressing the climate and public health benefits of the RFS in contrast to fossil fuels’ pollution that disproportionately impacts urban areas and communities of color.

Brent Erickson, Executive Vice President at the Biotechnology Industry Organization (BIO) also weighed in. “The oil industry has been caught red-handed in authoring the letter to EPA Administrator McCarthy and duping 180 lawmakers into putting their names on it. It is very disturbing to see the lengths the oil refining industry will go to distort the record and protect their profits and fuel monopoly.”

Read the original story here : Fuels America Launches TV Campaign To Counter Anti-RFS Letter

Domestic Fuel.com

Nov 11, 2015

By Joanna Schroeder

Organizations are still reacting to the letter sent by 184 Congressman, including some for top corn producing states, calling on the Environmental Protection Agency (EPA) to reduce the volumes of corn-based ethanol blended into America’s fuel supply as part of the Renewable Fuel Standard (RFS). The EPA has sent their final rule drafts to the Office of Budget and Management (OMB) and the rules are expected to be released by November 30, 2015.

“The RFS has been an unqualified success since its passage in 2005,” said Roger Johnson, president of the National Farmers Union (NFU), in a letter to President Obama. “Wavering from our commitment to the RFS would be a grave mistake for both America’s family farmers and this nation as a whole. We urge you to reject Big Oil’s talking points and stay the course on the RFS.”

Last week NFU released the results of a poll that showed that released a poll that showed popularity and support for political candidates that support the Renewable Fuel Standard within a majority of rural congressional districts in which the poll was conducted.

Johnson stressed in the letter that the RFS has boosted incomes for family farmers while making strides in mitigating climate change through the use of biofuels. He noted that climate change is a threat to both farmers’ operatons and, in turn, the nation’s food security.

“The RFS has helped family farmers and the nation make tangible steps toward mitigating our impact on climate change by driving the U.S. to make real reductions in greenhouse gas (GHG) emissions,” Johnson wrote in the letter. “Corn ethanol reduces GHG emissions by 34 percent, and more substantial gains can be made through new types of biofuels.”

Johnson noted that, unfortunately, most popular public policies face a small but vocal group of critics, and the RFS is no different.

“Earlier this month, a minority of House members sent a letter requesting that the U.S. Environmental Protection Agency (EPA) curb the growth of this promising industry by backing off volume targets set forth in the statute,” said Johnson. “These members are reversing themselves by asking for less ethanol production than was signed into law by President Bush.”

“We deeply appreciate your administration’s demonstrated commitment to mitigating climate change for the sake of domestic and global food security among other things. On behalf of America’s family farmers, we ask you to stay the course on the RFS, maintaining your commitment to biofuels and to fully implementing the statutory volume targets laid out in the law.”

Read the original story here : NFU Highlights RFS Success

The Hill

Nov 10, 2015

By Rep. Donald Payne

For over a century, we have seen fossil fuels pollute our environment, damage our climate, and spew toxic chemicals into the air we breathe. Unfortunately, our most vulnerable communities are hit the hardest from this pollution. Poor air quality affects urban areas and communities of color disproportionately.

To combat the problem, Congress created America’s Renewable Fuel Standard (RFS) in 2005. The RFS is Congress’s answer to lowering greenhouse gas emissions and expanding the nation’s renewable fuels sector while reducing reliance on imported oil. The RFS is the most successful law on the books that cuts greenhouse gas emissions and pollution. In fact, studies have shown that higher renewable fuel blends reduce asthma- and cancer-causing emissions by 6.6 percent compared to regular gasoline.

To help our environment, strengthen public health, stimulate our economy, and boost our confidence in renewable fuels, we must invest in advanced and cellulosic biofuels—the cleanest motor fuel in the world. Advanced biofuels have reduced greenhouse gas emissions by nearly 590 million metric tons, an amount equivalent to taking more than 124 million cars off the road.

The renewable fuel industry is responsible for creating more than 852,000 good, American jobs and generating $184.5 billion in annual economic output. In my home state of New Jersey, the RFS is responsible for $1.6 billion of economic output each year, including $88.3 million in the 10th Congressional District. Lowering the biofuels volume requirement would devastate our economy and threaten the livelihoods of hundreds of thousands of Americans.

The Environmental Protection Agency’s recent proposal on the RFS would weaken the biofuels volume requirements and overturn the progress from the past 10 years of its existence. The EPA’s current proposal is inconsistent with Congress’s intent when it passed the law with strong, bipartisan support. The weakened proposal also runs counter to the Obama administration’s goals on fighting climate change and curbing carbon pollution.

That is why I led a group of colleagues in urging the EPA against reducing the biofuels volume requirement. In addition to the health benefits of reducing greenhouse gases, Congress intended for the RFS to provide an incentive to drive investments in biofuel production and technology. Reducing the biofuels volume requirement could have a chilling effect on innovation, and thus directly affect job creation.

Our communities cannot afford to suffer any longer from the toxic fossil fuel emissions that are hurting public health and leading to a whole host of different health issues, including childhood asthma, emphysema, and chronic bronchitis. 

At the end of November 2015, the administration will release its final rule on the RFS biofuels volume requirement. It can and must choose to strengthen the Renewable Fuel Standard and protect our economy, environment, and public health.

Read the original story here : Don't Weaken The RFS

Bloomberg Government

November 6, 2015

By Mark Drajem

An odd-bedfellows group of lawmakers — led by an oil-industry ally from Texas and a progressive Vermonter — raised a familiar-sounding concern about ethanol in a letter this week to EPA chief Gina McCarthy.

Their argument that the Environmental Protection Agency is requiring more ethanol than can be safely blended into gasoline has been made repeatedly by the oil industry. The echo in the letter wasn’t a coincidence: A lobbyist for refiner Marathon Petroleum Corp. was listed as an author of early drafts of what was distributed to lawmakers for them to sign on. The company says it offered input, but didn’t write the letter.

Ethanol producers say this shows that a campaign including chain restaurants, chicken producers, small-engine makers and even some environmental groups is being driven by oil producers and refiners, which oppose the mandates of the Renewable Fuel Standard. They found the lobbyist’s name in the letter’s electronic record and shared it with a reporter.

“It’s not hard to see the oil industry’s fingerprints all over this campaign,” said Brooke Coleman, the executive director of the Advanced Biofuels Business Council, which represents biofuel makers. “What this is about is trying to destroy the only competition they have in the marketplace.”

Michael Birsic, the lobbyist for Marathon and a former congressional aide, was listed electronically as the letter’s author.

Seeking Relief

“As you would expect, these types of documents are collaborative in nature,” he wrote in an e-mail. “Marathon Petroleum was one of the collaborators and suggested technical comments. We were not the original or primary author of the letter. We are just one the many interested parties who are seeking relief from the unreasonableness of the RFS mandate.”

Oil and ethanol companies have intensified their battle over the future of the program in recent weeks, as President Barack Obama’s administration prepares to issue long-overdue requirements for the fuel’s use last year, this year and next year.

Blend Wall

Lobbyists representing companies such as Exxon Mobil Corp. and Tesoro Corp.say the EPA’s proposal would force them to blend ethanol in at more than 10 percent of the gasoline supply, breaching what they call the blend wall of how much can be safely used. Ethanol producers say EPA is proposing to illegally cut the requirement for ethanol, and should prod refiners into using higher blends of the fuel.

In recent weeks the debate has a surprising turn, as the oil industry and its allies unveiled a television advertising campaign that argued ethanol is worse for the climate than gasoline. The ads used a quote from former Vice PresidentAl Gore, who won the 2007 Nobel Peace Prize for his work to stop climate change: “First-generation ethanol was a mistake.”

The letter to McCarthy was sent Wednesday and signed by more than 180 lawmakers. The EPA proposal for 2016 “would constitute a breach of the ethanol blendwall, which would cause adverse impacts on American consumers and the economy,” they said. The signers include a wide range of lawmakers, including Vermont Democrat Peter Welch, Virginia Republican Bob Goodlatte and the incoming chairman of the House Ways and Means Committee, Kevin Brady.

Not Aware

Republican congressman Bill Flores of Texas, who first circulated the letter, “was not aware until last week that the letter contained some material which might have originated from a stakeholder,” his spokesman, Andre Castro, said in an e-mail.

Spokespeople for both Welch and Goodlatte, who were signatories of the draft that went around to congressional offices, said the letter came from Flores’ staff.

“Congressman Welch signed on to Congressman Flores’ bipartisan letter to Administrator McCarthy regarding the RFS because it is consistent with his view that the corn ethanol mandate is a well-intentioned flop that is bad for consumers, bad for small engines, bad for farmers, and bad for the environment,” his spokeswoman said in an e-mail.

The EPA has a deadline of the end of this month to set the ethanol mandates.

Read the original story: Oil Lobby Had Hand in House Lawmakers’ Anti-Ethanol Note to EPA

Biofuels Digest

Nov 9, 2015

By Jim Lane

In Hungary, Clean Fuels Development Coalition Executive Director Douglas Durante said as a way for ethanol to find value beyond limitations of government imposed limits, both in the EU and the U.S., the focus should be on providing clean, low carbon octane to help meet health, climate, and efficiency goals.

In the wake of continuing revelations regarding the Volkswagen emissions problems, Durante said this should lead air quality officials around the world to look again at the often erroneous assumptions and  calculations used in determining emissions.  Further, a better understanding of the importance of looking at fuels and vehicles as an integrated system would tell a far more positive story than what many current, and outdated models would indicate.

“Despite the lies and the misinformation spread by the petroleum industry, ethanol is a superior fuel and additive to anything out of the oil barrel.  Gasoline is a mix of hundreds of different chemicals and hydrocarbons, the worst of which are the toxic, often carcinogenic aromatics”, said Durante.   “In the Unites States, EPA is actually required to reduce these harmful components and if we were allowed to splash blend additional volumes of ethanol we would be able to improve fuel quality and protect public health,” he said.

Durante also told the delegates at the F.O. Licht ethanol conference that despite the challenges facing the biofuels industry in regard to political and public support, solutions exist that can easily surmount the imaginary blend wall.  “The auto industry continually recognizes the value of ethanol in reducing carbon emissions while providing the octane they need. Positive discussions among the ethanol, agriculture and auto industries as well as the Departments of Energy and Agriculture are focusing on blends of 25, 30 and even 40% in the next decade.”

He said hundreds of millions of dollars are being invested in refueling infrastructure and the industry is working to provide consumers with choice by creating access to the market.

"With vehicles that can use ethanol, and the ability to distribute the fuel, the potential is nearly unlimited for both first and 2nd generation fuels. The opposition to these programs is all about lost market share to the petroluem industry which admittedly funds the opposition we see in all of our countries," said Durante. "Working together we can tell the real story and how biofuels provide a wealth of environmental, energy, and economic benefits."

Read the original story here : Ethanol Reduces Emissions : Clean Fuels Development Coalition

Ethanol Producer Magazine

Nov 5, 2015

By Ann Bailey

It would behoove congressional candidates in the Midwest to support the renewable fuel standard (RFS), according to results from a National Farmers Union poll.

The NFU announced Thursday that poll results of more than 4,000 respondents in six Midwestern congressional districts showed rural voters were more likely to vote for candidates who support the RFS. Given the results of the poll, conducted Oct. 5-7 in congressional districts in Illinois, Missouri, Kansas and South Dakota, Pres. Barack Obama it’s important not only for the good of the environment, but also for Democratic candidates that he get the RFS back on track, Johnson said.

The Obama administration will set the volume obligations for the RFS in the next several weeks. The poll showed support for the RFS outweighed opposition in five of the six congressional districts polled.

 “We want the President to understand that this is not only the right policy for the environment but also will do damage to his party,” he said. “Almost all of us in agriculture have been strong supporters of the RFS. If the President make the wrong decision he is likely going to do an awful lot of damage to his candidates.”

In addition, not supporting the RFS would give leverage to the claims of organizations that accuse Obama of being a hypocrite because he is a proponent of legislation that protects the environment, but doesn’t support the RFS.

Support of the RFS likely won’t be a magic elixir for candidates, but it “is a real good multi-vitamin,” said Ryan Fitzpatrick, Third Way Clean Energy Program deputy director. Third Way provided an analysis of the poll, titled “Strong RFS support offers low-risk opportunity for Democrats to connect with voters they need to retake majority.” 

“If you are going to have a real tough race, why don’t you take the multi-vitamin?” Fitzpatrick said.

Read the original story here : Poll : Rural Americans Support Candidates Who Support The RFS

Ethanol Producer Magazine

November 2, 2015

By Syngenta

Iowa Republican presidential candidate and former U.S. Sen. Rick Santorum visited the site of the first commercial cellulosic ethanol production in the state of Iowa at Quad County Corn Processors (QCCP) Oct. 30.

QCCP recently passed the two-million gallon milestone for cellulosic ethanol production using trademarked Cellerate-process technology. Cellerate is a collaboration between Syngenta and Cellulosic Ethanol Technologies LLC, a wholly owned subsidiary of QCCP.

Santorum met with QCCP and Syngenta representatives, including QCCP CEO Delayne Johnson, to discuss renewable fuels policy and see first-hand the innovative process technology that has enabled QCCP to become a leader in cellulosic ethanol production. Cellulosic ethanol is seen as a major contributor to meeting renewable fuel standard (RFS) targets.

"One of the things that's helped rural small towns and farmers, particularly in Iowa, is the Renewable Fuel Standard,” Santorum said.

Increased demand for ethanol has helped revive many rural communities by providing thousands of new, good-paying jobs. In 2013 alone, the ethanol industry created and supported nearly 400,000 new jobs across the country, while contributing more than $44 billion to the Gross Domestic Product and generating more than $4.5 billion in federal tax revenues.

Santorum also called for investment in flex fuel infrastructure to increase access to biofuels – which he believes would provide consumers with increased access to the fuel marketplace and allow greater market competition.

During 2014, QCCP achieved EPA certification to generate D3 renewable identification numbers (RINs) for cellulosic ethanol. According to Johnson, the generation of D3 RINs helps fulfill advanced and cellulosic requirements set forth by the RFS. QCCP is among the first companies to issue D3 RINs, which has also enabled the company to expand sales into racing and advanced biofuels markets.

“We are excited to have achieved our goal of producing 2 million gallons per year of cellulosic ethanol, and are on target to continue, or increase, this production level going forward,” Johnson said. “We’re now focusing on growing alliances and relationships within the industry.”

In 2014, Syngenta announced an agreement with Cellulosic Ethanol Technologies to license Cellerate process technology to ethanol plants. “Ethanol plants can integrate Cellerate process technology into their existing production process,” said Chris Tingle, head of Marketing for trademarked Enogen at Syngenta. “We believe that not only will Cellerate process technology help make advanced and cellulosic ethanol a reality, but the combination of Cellerate and Enogen could represent the next leap forward for ethanol production.”

Read the original story: Presidential Candidate, Former Senator Visits Quad County