In the News
Governor Tim Walz
Press Release
September 16, 2019
Today, Governor Tim Walz signed Executive Order 19-35, establishing the Governor’s Biofuels Council to advise the Governor and Cabinet on policy and budget proposals to foster the growth of the Minnesota biofuel industry. Recent action at the federal level has led to an increasing number of renewable fuel plants closing or idling production, including the Corn Plus ethanol plant in Winnebago, Minnesota.
“Minnesota farmers endure a lot of uncertainty when it comes to the weather and the economy. They shouldn’t face that uncertainty from their government,” said Governor Walz. “The Governor’s Biofuels Council demonstrates our commitment to supporting the agriculture and biofuels industries and seizing the opportunity to move Minnesota toward a cleaner, greener transportation sector.”
The Council will be tasked with creating a report advising the Governor and Cabinet on how to best expand the use of biofuels, increase the carbon efficiency of biofuels, and implement biofuels as part of Minnesota’s larger goal to reduce greenhouse gas production in the transportation sector. The Council will be made up of 15 members including representatives of agriculture, biofuels, and transportation industries, as well as environmental, and conservation groups. The Executive Order mandates that the report be completed by November 2020.
Governor Walz is the Chair of the Governors’ Biofuels Coalition. On September 4, 2019, he and Republican South Dakota Governor Kristi Noem, Vice Chair of the Coalition, sent a joint letter to President Donald Trump urging him to support Minnesota farmers and renewable fuel producers. The Governor also published an op-ed emphasizing the need for urgent action.
September 16, 2019
By Jarrett Renshaw, Stephanie Kelly
U.S. President Donald Trump has tentatively approved a plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners by the Environmental Protection Agency, two sources familiar with the matter said.
The plan is intended to address a major source of anger in U.S. farm country as Trump seeks to hold favor in the Midwest ahead of next year’s election, but it is likely to upset the oil industry, another important political constituency, underscoring the pitfalls of U.S. biofuel policy.
Under the plan, the U.S. EPA will calculate a three-year rolling average of total biofuels gallons exempted from the mandates under its Small Refinery Exemption program and add that figure to its annual biofuel blending quotas each year, the sources said. For 2020, that figure would be 1.35 billion gallons, according to a Reuters calculation.
That would come in addition to a tentative agreement to boost next year’s blending volumes by 1 billion gallons, including 500 million gallons for conventional biofuels like corn-based ethanol and 500 million gallons for advanced biofuels like biodiesel, the sources said.
A court in 2016 ruled that the Obama administration illegally lowered the mandate by 500 million gallons, and part of the current proposed addition would satisfy the decision.
As a result, if the Trump administration followed through on the plan, next year’s total blending mandate would come out to about 22.4 billion gallons, from just over 20 billion in the EPA’s current proposal, according to the Reuters calculation.
The EPA has until the end of November to finalize its 2020 biofuel volumes mandates.
Under the Renewable Fuel Standard, oil refiners are required to blend increasing volumes of biofuels like corn-based ethanol into their fuel each year, to help farmers and reduce imports, but small refining facilities in financial straits can seek waivers.
Trump inserted himself into negotiations between the rival oil and corn industries after his administration recently granted 31 oil refiners exemptions to their blending requirements, infuriating corn farmers and ethanol producers who say the program undermines demand for ethanol at a time the industry is already suffering from a loss of foreign markets.
He and senior administration officials have held a series of meetings with biofuel company officials, chief executives from Marathon Petroleum Corp and Valero Energy Corp, and lawmakers from key farm states including the Republican senators Joni Ernst and Chuck Grassley.
Trump was expected to meet with senators representing oil-producing states on Monday to continue discussions on the issue, sources said.
It was unclear if Trump would secure the backing of the oil industry for the plan without granting it any concessions.
One idea that Trump discussed during the meeting with Marathon and Valero last week to help refiners was to potentially cap the price of blending credits refiners must earn or purchase to comply with the RFS, sources familiar with the matter said.
Senators including Pennsylvania’s Pat Toomey and Texas’s Ted Cruz sent a letter to Trump on Thursday, asking any increase to biofuel volumes be accompanied by safeguards against higher credit prices.
Read the original article: Trump Backs Plan that Would Boost Biofuel Quotas 10% in 2020
September 16, 2019
By Jarrett Renshaw, Stephanie Kelly
U.S. President Donald Trump has tentatively approved a plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners by the Environmental Protection Agency, two sources familiar with the matter said.
The plan is intended to address a major source of anger in U.S. farm country as Trump seeks to hold favor in the Midwest ahead of next year’s election, but it is likely to upset the oil industry, another important political constituency, underscoring the pitfalls of U.S. biofuel policy.
Under the plan, the U.S. EPA will calculate a three-year rolling average of total biofuels gallons exempted from the mandates under its Small Refinery Exemption program and add that figure to its annual biofuel blending quotas each year, the sources said. For 2020, that figure would be 1.35 billion gallons, according to a Reuters calculation.
That would come in addition to a tentative agreement to boost next year’s blending volumes by 1 billion gallons, including 500 million gallons for conventional biofuels like corn-based ethanol and 500 million gallons for advanced biofuels like biodiesel, the sources said.
A court in 2016 ruled that the Obama administration illegally lowered the mandate by 500 million gallons, and part of the current proposed addition would satisfy the decision.
As a result, if the Trump administration followed through on the plan, next year’s total blending mandate would come out to about 22.4 billion gallons, from just over 20 billion in the EPA’s current proposal, according to the Reuters calculation.
The EPA has until the end of November to finalize its 2020 biofuel volumes mandates.
Under the Renewable Fuel Standard, oil refiners are required to blend increasing volumes of biofuels like corn-based ethanol into their fuel each year, to help farmers and reduce imports, but small refining facilities in financial straits can seek waivers.
Trump inserted himself into negotiations between the rival oil and corn industries after his administration recently granted 31 oil refiners exemptions to their blending requirements, infuriating corn farmers and ethanol producers who say the program undermines demand for ethanol at a time the industry is already suffering from a loss of foreign markets.
He and senior administration officials have held a series of meetings with biofuel company officials, chief executives from Marathon Petroleum Corp and Valero Energy Corp, and lawmakers from key farm states including the Republican senators Joni Ernst and Chuck Grassley.
Trump was expected to meet with senators representing oil-producing states on Monday to continue discussions on the issue, sources said.
It was unclear if Trump would secure the backing of the oil industry for the plan without granting it any concessions.
One idea that Trump discussed during the meeting with Marathon and Valero last week to help refiners was to potentially cap the price of blending credits refiners must earn or purchase to comply with the RFS, sources familiar with the matter said.
Senators including Pennsylvania’s Pat Toomey and Texas’s Ted Cruz sent a letter to Trump on Thursday, asking any increase to biofuel volumes be accompanied by safeguards against higher credit prices.
Read the original article: Trump Backs Plan that Would Boost Biofuel Quotas 10% in 2020
September 12, 2019
News Release
U.S. Senators Amy Klobuchar (D-MN) and Tammy Duckworth (D-IL) led a letter to President Donald Trump today strongly urging him to help rural Americans, and the environment, by rescinding the 31 recently approved small refinery exemptions (SRE) for biofuels. They also urged his Administration to uphold the intent of the Renewable Fuel Standard (RFS). The letter follows recent news reports indicating that the Administration is considering changes to the RFS that would boost biofuel volumes following backlash from farmers after 31 additional SREs were approved on August 8. SREs, or so-called “hardship” waivers, are intended to help small refineries by exempting them from the RFS, but the EPA has issued dozens of waivers, including for some of the most profitable oil companies in the world. The abuse of these waivers has resulted in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. Under the Trump Administration, 85 SREs have been approved, contributing to a reduction in the use of billions of gallons of renewable fuel.
Biofuels are a key pathway toward decarbonizing the transportation sector while lowering gas prices, driving economic growth, and creating jobs. Every gallon of biofuels we use displaces a gallon of oil and cuts carbon emissions. The U.S. Department of Agriculture (USDA) found that first generation biofuels cut greenhouse gas emissions by between 39 and 43 percent.
Klobuchar and Duckworth were joined on the letter by Senator Debbie Stabenow (D-MI), Ranking Member of the Senate Committee on Agriculture, and Senators Tina Smith (D-MN), Dick Durbin (D-IL), Sherrod Brown (D-OH), Ron Wyden (D-OR), Gary Peters (D-MI), and Tammy Baldwin (D-WI).
“In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in thousands of lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns,” the senators wrote.
“The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.”
In June, Klobuchar and Duckworth led a letter, signed with 11 other senators, urging EPA Administrator Andrew Wheeler to cease issuing SREs and requesting that the EPA immediately reallocate the remaining gallons and make public the information regarding any recipients of these exemptions.
The full text of today’s letter can be found below:
Dear Mr. President:
We understand that your Administration has convened meetings to consider proposals related to the Renewable Fuel Standard (RFS) and the continued issuance of small refinery exemptions (SRE), based on recent reports. As you continue to deliberate on a final package, we strongly urge you to rescind the 31 SREs that were approved on August 8, 2019, and to prospectively account for any future SREs when calculating Renewable Volume Obligations (RVO) for 2020.
For the compliance years of 2016, 2017, and 2018, the EPA has approved 85 SREs, all of which have contributed to a reduction of over 4 billion gallons of renewable fuel blending volumes and 1.4 billion bushels of corn. The abuse of SRE authority by the EPA is negatively impacting the rural economy, and the consequences resulting from the continued misuse of these exemptions are becoming more apparent by the day.
In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns.
According to reports, the latest proposal under discussion would increase blending requirements for some categories of renewable fuels including biodiesel, but would fail to rescind the recently granted SREs and delay the reallocation of prospective exemptions until the 2021 compliance year.
The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.
Thank you for your attention to this issue.
Sincerely,
Read the original news release: Klobuchar, Duckworth Lead Colleagues in Urging President to Help Rural Americans, and the Environment, by Upholding the Intent of the Renewable Fuel Standard
September 11, 2019
By Dion Cheney
The recent closure of the Corn Plus plant in Winnebago has many wondering about a major industry here in southern Minnesota.
Earlier in the month, POET told KEYC that the three main reasons for the volatility in the ethanol markets that caused the shutdown include: Challenging farming weather this year, trade tensions with China and EPA Small Refinery Waiver’s.
U.S. Senator Tina Smith says ethanol is a vital part of Minnesota's economy.
"Renewable fuels like ethanol and other biofuels are a key part of Minnesota’s economy and Minnesota has real strength in ethanol, so I have been strongly opposed to the Trump administration’s secret waivers to refineries that let them off the hook for blending in what they’re required to blend into their regular fuels with ethanol,” Sen. Smith said.
Sen. Smith says the trade disputes are a crisis for Minnesota farmers involved in both plant and animal agriculture.
Read the original article: Sen. Tina Smith Weighs In On Volatile Ethanol Economics
May 15, 2019
Press Release
A Midwest consumer advocacy group is imploring automakers to stay committed to flex-fuel vehicles, which offer American car buyers real choice—on the lot and at the pump. Seeking 20,000-plus signatures, the grassroots group has launched a petition in response to a noticeable downtick in the number of FFVs being manufactured and model types available to prospective car buyers.
Chris Schwarck, of Mason City, Iowa, kicked off the campaign after hearing about General Motors’ apparent retreat from FFVs in favor of other powertrain priorities. “It became apparent to many of us that car manufacturers, in particular General Motors, are moving away from flex-fuel vehicles as we know them today,” Schwarck explained in an e-mail to ethanol producers and corn growers last week. “Many of you have probably had as difficult a purchasing experience as I have in trying to buy a flex-fuel vehicle in a size vehicle you would like. It appears they do not really care what you want; it’s more of “this is what we have” type of thing. In my view, if we are to achieve our goal of selling more gallons of alcohol, we must have more flex-fuel vehicles to do it.”
Schwarck expects a groundswell response from the consumer public and has already gathered nearly 1,000 signatures. “We need everyone’s hands on the rope to pull this off,” he said. “We hope to garner 20,000 or more signatures when we deliver the petition to the vehicle manufacturers. It will take a lot of coordination to do this.”
While the ethanol industry has been especially supportive of the petition, Schwarck said the entire ag community needs be concerned about FFV production. “Every corn grower has a lot at stake here, whether they use ethanol or not; a lot of their corn is ground to make the product,” he said. “In addition, if you are a livestock or poultry producer, I’m sure you want a reliable, dependable supply of distillers grains available to you. The time has come when we must do some of the heavy lifting ourselves and cannot look to Washington or anyone else to do it for us.”
Pleading with automakers to stay the course on FFV manufacturing, the petition states: “We are consumers of your vehicles and we request that you manufacture cars and trucks of all models, engines and trim levels that will allow the use of higher ethanol blends such as E15, E20, E30 and E85. This would make our purchasing experience more enjoyable and less cumbersome than it is today. Many of us can simply not find the vehicles we wish to purchase. In addition, this would be beneficial to your sales presentation to offer environmentally friendly vehicles that burn clean, high-octane American made fuel, while supporting rural America and U.S. agriculture. We wish to support and promote the automakers that choose to produce quality cars and trucks that run on higher ethanol blends.”
The petition can be found here.
September 9, 2019
By Jerry Perkins
Exports of U.S. ethanol could set another record this year, according to Mike Dwyer, chief economist for the U.S. Grains Council.
U.S. ethanol exports during the current marketing year that ends August 31, 2019, are on track to hit between 1.8 billion gallons and 2 billion gallons, Dwyer predicts. If achieved, that amount of ethanol exports would top the current record of 1.62 billion gallons set during the marketing year that ended August 31, 2018. During that 12-month period, U.S. ethanol was exported to 74 countries, according to the USDA’s Foreign Agricultural Service.
The U.S. Grains Council and its ethanol export market development partners – the Renewable Fuels Association and Growth Energy – have set a goal of boosting U.S. ethanol exports to 4 billion gallons a year by 2022, Dwyer states. The Grains Council believes that by 2022, 75% of U.S. ethanol exports will go to six countries: China, India, Japan, Brazil, Canada, and Mexico.
The U.S. Grains Council is a Washington, D.C.-based organization that promotes the exports of U.S. corn, sorghum, and barley and value-added products made from those commodities.
Dwyer says the Grain Council’s global strategy includes selling ethanol to China despite trade disputes between the U.S. and China that have roiled the markets there for U.S. crops and other products such as ethanol.
China currently imposes a 70% duty on U.S. ethanol, Dwyer says, but it will have to find a way to import foreign ethanol if it aims to fulfill the mandate it has imposed to use a blend of 10% ethanol and 90% gasoline (E10) by 2020. If trade issues between the U.S. and China are resolved, Dwyer says, ethanol imports by China in 2020 could hit between 300 million gallons and 1 billion gallons.
Kelly Nieuwenhuis, a farmer from Primghar, Iowa, who traveled to China last year on a U.S. Grains Council trade mission, says that he was told by Chinese gasoline retailers that they want to do business with the U.S. ethanol industry. The Chinese also expressed a desire to use more ethanol because it knows that will improve the air quality, Nieuwenhuis says.
Ron Lamberty, senior vice president and market development director for the American Coalition for Ethanol in Sioux Falls, South Dakota, has made seven trips to Mexico to advise the transportation fuels industry there on how it can integrate the use of E10 into Mexico’s fuel supply.
Mexico has made the use of E10 legal in the country, Lamberty says, however, a Reid vapor pressure (RVP) waiver or the use of a lower RVP blendstock would be required for E10 to be used in the nation’s three largest cities: Mexico City, Guadalajara, and Monterrey. Small quantities of ethanol are currently being sold in Mexican cities on the U.S.-Mexico border, Lamberty says.
Lamberty has participated in technical workshops on ethanol that have been held for Mexico’s petroleum equipment installers and retailers. The workshops were a joint effort of the U.S. Grains Council and the Mexican Association of Petroleum Equipment Suppliers, and they were intended to inform Mexican fuel marketers about sourcing, blending, distributing, and retailing ethanol-blended gasoline.
Mexico’s potential annual use of E10 totals 1.2 billion gallons, Lamberty says.
Read the original article: Future of Ethanol Exports
September 6, 2019
Governor Tim Walz
Farmers are used to dealing with unpredictability when it comes to the weather, commodity prices, even equipment and animal health. But one thing they shouldn’t have to plan for is unpredictability from their government.
Yet that’s exactly what ethanol producers in Minnesota and the Midwest are rightly expressing anger over, as the federal government issues an increasingly large number of small-refinery exemptions from requirements of the Renewable Fuel Standard (RFS), releasing those refineries from their obligations to blend biofuels.
The law sets forth annual amounts of renewable fuel of various types to be blended into the nation’s transportation fuel supply. Fuels such as corn starch ethanol, biodiesel and other advanced biofuels provide an important market for farmers in a rough agricultural economic cycle. They also help improve air quality and reduce greenhouse gas emissions.
The U.S. Environmental Protection Agency under the Donald Trump Administration has granted “hardship” exemptions to 85 oil refineries since 2016, including 31 granted in early August, reducing the volume of renewable fuels blended into the nation’s transportation supply by a whopping 4.04 billion gallons. This is a dramatic increase over the previous administration, which granted a total of 23 exemptions over three years, representing 690 million gallons.
The hardship created by these exemptions has been equally dramatic, depressing demand and prices for biofuels. The damage is adding up, and, as a result, 14 ethanol and eight biodiesel plants have shut down or been idled nationwide, including the announced closing of the Corn Plus ethanol plant in Winnebago, Minnesota.
The impact has not only forced ethanol plants offline, it has been a kick in the gut to corn and soybean farmers who provide the grain for ethanol and biodiesel production, especially when they had planned for growth in the use of renewable fuels. Each time one of these plants idles production, farmers for hundreds of miles in all directions are affected.
That is why South Dakota Gov. Kristi Noem and I sent a letter to President Trump this week expressing our deep concern. We told the president that these waivers undermine the integrity of the Renewable Fuel Standard and harm agricultural communities that are already spinning from the administration’s tariffs. We called on him to take immediate action to mitigate the effects of small refinery waivers and laid out concrete steps for how he could support farmers and renewable fuel producers.
As chair of the bipartisan Governors’ Biofuels Coalition, I urge the president to make good on his promise to “support our ethanol industry and to fight for the American farmer like no other president has ever fought before.” It has been reported that the president has been considering revoking some of these recently granted exemptions. While this would be a positive step, farmers and the ethanol industry need certainty that the administration will apply the law fairly and consistently. This should be a promise that farmers can depend on.
Tim Walz is governor of Minnesota and chair of the Governors Biofuels Coalition.
Read the original article: Tim Walz: Exempting Refineries From Biofuel Requirements is a Kick in the Gut to Farmers
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Press Release
August 26, 2019
U.S. Senator Tina Smith (D-Minn.)—along with Sens. Amy Klobuchar (D-Minn.), Debbie Stabenow (D-Mich.), Dick Durbin (D-Ill.), Gary Peters (D-Mich.), Tammy Baldwin (D-Wis.), and Sherrod Brown (D-Ohio)—is standing up for the nation’s rural economy by urging the Environmental Protection Agency (EPA) to end the harmful abuse of small refinery hardship waivers under the Renewable Fuel Standard (RFS).
In a letter sent to EPA Administrator Andrew Wheeler, Sen. Smith and her colleagues pointed out that under the Trump Administration, the granting of waivers has increased by 370 percent with “small refinery” waivers going to large oil companies. While the president has signaled he wants federal agencies to reverse course on this practice, Sens. Smith, Klobuchar, Stabenow, Durbin, Peters, Baldwin and Brown want actions that live up to this promise.
“This pattern of demand destruction is wreaking havoc on our nation's rural economy. In recent months, more than 13 ethanol plants and 8 biodiesel plants have idled production or shut down across the country,” wrote Sen. Smith and her colleagues to Administrator Wheeler. “Not only did these biofuel plants support thousands of rural jobs across the country, they served as important markets for farmers, processing millions of bushels of corn, soybeans, and other commodities. At a time when farmers are already struggling after years of low prices and a chaotic trade agenda, this Administration chose to destroy more markets for farmers and harm rural communities across the country.”
The senators continued, “to add insult to injury, recent reports indicate that President Trump personally made the decision to grant these 31 waivers, despite numerous promises to support renewable fuels. EPA continues to undercut the integrity of the RFS by misusing its waiver authority, which in turn has a direct adverse impact on farmers and jobs in rural communities. We write to urge you once again to end the abuse of these small refinery exemptions, immediately reallocate the remaining gallons, and make public information regarding any recipients of these exemptions.”
You can access text of the letter here or below:
The Honorable Andrew Wheeler
Administrator
Environmental Protection Agency
1200 Pennsylvania Avenue, N.W.
Washington, D.C. 20460
Dear Administrator Wheeler,
We are extremely concerned that the U.S. Environmental Protection Agency (EPA) continues to abuse the use of small refinery hardship waivers under the Renewable Fuel Standard (RFS). On Friday, August 8, 2019, the EPA issued another 31 such waivers, effectively reducing demand for renewable fuels by over 1.4 billion gallons. This is on top of the 54 refinery waivers already approved by this Administration over the last two years, which eliminated demand for more than 2.6 billion gallons of biofuels. Comparing the last three years of the previous administration to the first three years of the current administration, the Trump Administration has increased the granting of waivers by an astounding 370 percent, with "small refinery" waivers going to some of the world's largest oil companies.
This pattern of demand destruction is wreaking havoc on our nation's rural economy. In recent months, more than 13 ethanol plants and 8 biodiesel plants have idled production or shut down across the country. Not only did these biofuel plants support thousands of rural jobs across the country, they served as important markets for farmers, processing millions of bushels of corn, soybeans, and other commodities. At a time when farmers are already struggling after years of low prices and a chaotic trade agenda, this Administration chose to destroy more markets for farmers and harm rural communities across the country.
To add insult to injury, recent reports indicate that President Trump personally made the decision to grant these 31 waivers, despite numerous promises to support renewable fuels. EPA continues to undercut the integrity of the RFS by misusing its waiver authority, which in turn has a direct adverse impact on farmers and jobs in rural communities. We write to urge you once again to end the abuse of these small refinery exemptions, immediately reallocate the remaining gallons, and make public information regarding any recipients of these exemptions.
Thank you for your attention to this critical issue.
Sincerely,
Read the original press release: Senators Smith, Klobuchar, Stabenow, Durbin, Peters, Baldwin, and Brown Call for Stronger Renewable Fuel Standard
August 20, 2019
By James Lynch
Democratic U.S. Reps Abby Finkenauer and Dave Loebsack are calling for a review of the Environmental Protection Agency’s granting of waivers that exempt small oil refineries from complying with the nation’s biofuel law.
Finkenauer and Loebsack want the Government Accountability Office to investigate how the waiver program is being applied under the Renewable Fuel Standard, which generally requires refineries to blend renewable sources — including corn-based ethanol — into the nation’s fuel supply or to buy credits instead.
“Our concerns stem from the economic consequences to our rural communities created by exempting nearly 4 billion gallons of fuel from the RFS, a standard intended to expand the nation’s renewable fuels sector,” they wrote in a letter to Gene Dodaro, the U.S. comptroller general. “By 2016, the ethanol industry has grown to support over 339,000 U.S. jobs and driven $41 billion in economic activity by supporting corn and soy markets and reducing gasoline prices.”
Finkenauer, Loebsack and other members of the bipartisan House Biofuels Caucus, including Iowa Democratic U.S. Rep. Cindy Axne, have joined Republican U.S. Sens. Chuck Grassley and Joni Ernst in criticizing the waivers they say hurt the renewable fuel industry in the state.
“They screwed us,” Grassley said last week when asked about the latest round of waivers — 31 — granted by the EPA. In addition to the number of waivers, “it’s that it is being granted to people that really aren’t (experiencing) hardship, and that is where it ought to be identified.”
The fuel standard allows the EPA to provide waivers to small refineries that demonstrate compliance with the rule would create significant economic hardship for the facility. Between 2013 and 2015, the EPA granted no more than eight waivers in a year, according to Loebsack and Finkenauer. But the EPA retroactively approved 19 waivers for 2016, then proceeded to grant 35 waivers in 2017, which is equal to removing a total of 1.82 billion gallons of renewable fuel in 2017 alone.
“With the recent approval of 31 waivers for 2018, it is imperative that we fully understand how EPA is reaching these conclusions despite (the Department of Energy’s) viability analysis,” wrote Finkenauer, who represents the 20-county northeast Iowa 1st District. Loebsack represents the 24-county southeast Iowa 2nd District.
Illinois Democratic U.S. Sen. Tammy Duckworth asked the inspector general’s office to launch an independent investigation into whether top EPA officials violated the law by inappropriately exempting a number of oil refineries from having to use legally required levels of biofuel.
In granting waivers, EPA Administrator Andrew Wheeler has suggested that the EPA follows the recommendations of the Energy Department. However, a letter from the department to Grassley admitted that the EPA granted at least one waiver in conflict with the agency’s recommendation.
Due to the process used by the EPA to review waiver applications, it’s unknown how many of the recent 31 exemptions are being granted to large and profitable oil companies.
ExxonMobil and Chevron are among those that received these economic hardship exemptions.
Read the original article: Finkenauer, Loebsack Call for Probe of EPA Biofuel Waivers
August 23, 2019
By Jennifer A. Dlouhy and Mario Parker
President Donald Trump, seeking to tamp down political fallout in U.S. farm states essential to his re-election, has ordered federal agencies to shift course on relieving some oil refineries of requirements to use biofuel such as corn-based ethanol.
Trump and top cabinet leaders decided late Thursday they wouldn’t make changes to just-issued waivers that allow small refineries to ignore the mandates, but agreed to start boosting biofuel-blending quotas to make up for expected exemptions beginning in 2021. The outcome was described by four people familiar with the matter who asked not to be named before a formal announcement could be made.
The decision was reached after a flurry of White House meetings this week on the issue, which divides two of Trump’s top political constituencies: rural Americans and the oil industry. With the move, Trump is largely siding with farmers, ethanol producers and political leaders in Iowa that have accused the president of turning his back on the industry.
But the administration’s shift risks blowback in Pennsylvania and other battleground states, where blue-collar refinery workers have held rallies to push for relief from U.S. biofuel quotas they say are too expensive. The largest coalition of U.S. building trades unions on Thursday warned Trump that changing course on exemptions would betray the president’s “campaign promise to protect every manufacturing job.”
“President Trump is committed to ensuring our country not only continues to be the agricultural envy of the world, but also remains energy independent and secure,” White House spokesman Judd Deere said.
Iowa-based biodiesel producer Renewable Energy Group Inc. climbed as much as 4.5% on the news, and traded up 5.5% to $11.64 at 1:50 p.m. in New York. Pacific Ethanol Inc. and Green Plains Inc. briefly gained before resuming losses as the U.S.-China trade war showed signs of deepening with the latter announcing plans to levy additional tariffs on American-made goods and Trump promising to respond.
Administration officials agreed to the broad contours of a renewable fuel plan, including further moves to encourage the use of E15 gasoline containing 15% ethanol, beyond the 10% variety common across the U.S. E15 could be dispensed alongside conventional ethanol blends at filling stations, under the drafted changes.
Under the tentative plan, the Environmental Protection Agency also will give a 500-million-gallon boost to the amount of conventional renewable fuel, such as ethanol, that must be used in 2020. A separate quota for biodiesel, typically made from soybeans, would get a 250 million gallon increase.
Additionally, the administration will enhance a program meant to expand U.S. fueling infrastructure and get more ethanol into the system. The EPA will adopt an Agriculture Department assessment of the greenhouse gas emissions associated with renewable fuel, and will expand environmental credits encouraging automakers to produce “flex-fuel” vehicles that can run on high-ethanol gasoline.
The EPA has drawn intense criticism for its Aug. 9 decision to exempt 31 refineries from 2018 biofuel-blending requirements. Although federal law authorizes the waivers for small refineries facing an economic hardship, the number of those exemptions has surged during the Trump administration, and biofuel producers say they are being handed out too freely.
The backlash has been most severe in Iowa, the nation’s top producer of ethanol and the corn used in its manufacture. It is also critical for Trump’s re-election; the state twice voted for Barack Obama before voting to send Trump to the White House in 2016.
Trump’s Democratic challengers have seized on the issue, with frontrunner Joe Biden accusing the president of lying to farmers and abandoning a campaign promise to “unleash ethanol.”
However, EPA officials and oil industry leaders say the waivers haven’t harmed domestic ethanol demand and blame a glut of the product for suppressing prices. Trump’s trade war with China has exacerbated the industry’s economic challenges. As with U.S.-grown agricultural products, including soybeans, ethanol faces retaliatory tariffs in China.
Against the backdrop of tariffs, the exemptions delivered another blow to the U.S. Midwest, where guaranteed domestic ethanol demand helps provide a floor of support for corn farmers and buttresses swings in commodity prices. Ethanol refining accounts for about 40% of U.S. corn consumption.
American “agriculture has a problem if ethanol doesn’t do well,” Green Plains Inc. chief executive officer Todd Becker said in a telephone interview on Thursday. The Omaha, Nebraska-based company created a political action committee last month, and Becker told analysts in May that Green Plains plans to “engage” 2020 U.S. presidential candidates on ethanol policies.
Becker said he “can’t fault” Trump for getting tough on China, but the combination of the trade war and small refinery exemptions was causing too much pain. “You don’t fight China and then give out SREs,” Becker said. “Farmers are furious now.”
Agriculture Secretary Sonny Perdue had urged the White House to rescind some of the recently issued waivers -- at least those for refineries tied to “big” oil companies -- according to an Aug. 20 memo obtained by Bloomberg.
EPA officials successfully argued that would be illegal.
Instead, Trump directed the agency to increase biofuel quotas to make up for the exemptions, a so-called “reallocation” that will effectively boost the burden for larger refineries that are not eligible to win waivers. The EPA will start incorporating expected exemptions into annual biofuel quotas beginning with 2021.
Oil industry leaders blasted the tentative agreement on Friday, saying it would do little for U.S. farmers while hurting domestic refiners.
“Reallocation would be a major hit to fuel manufacturers in Pennsylvania and Ohio -- and refinery workers across the country -- with zero benefit to ethanol,” said Derrick Morgan, a senior vice president with the American Fuel and Petrochemical Manufacturers. “Those celebrating will ultimately be foreign biofuel producers whose biodiesel is being imported to help meet mandates.”
The EPA typically sets each year’s biofuel blending requirements by Nov. 30 of the preceding year, except for biodiesel quotas, which are set two years in advance. Under the U.S. Renewable Fuel Standard program, there’s a specific mandate for biodiesel, but the soybean-based product can also be used to satisfy an implied 15 billion gallon quota for conventional renewable fuel.
Frank Macchiarola, a vice president at the American Petroleum Institute, called the drafted plan a “rushed, arbitrary policy.”
“We hope the administration walks back from the brink of a disastrous political decision that punishes American drivers,” Macchiarola said. “Bad policy is bad politics.”
Although the tentative plan was meant to assuage biofuel allies, it’s not clear it was having the intended effect Friday, amid industry skepticism the EPA will follow through on the agreement. Iowa officials are preparing to visit Washington for a formal rollout of the policy changes.
Biodiesel industry advocates say they can produce more fuel -- and the Trump administration needs to take that into account.
“With a level playing field in biodiesel trade in 2018, domestic producers increased output by several hundred million gallons,” said National Biodiesel Board spokesman Paul Winters. “We can continue to do so -- as long as EPA stops using RFS waivers to destroy demand and put biodiesel producers out of business.”
Read the original article: Trump Orders Biofuel Boost in Bid to Temper Farm State Anger
August 21, 2019
by Humeyra Pamuk and Jarrett Renshaw
The agriculture and biofuel industries and their U.S. congressional allies ramped up pressure on the Trump administration on Wednesday over the relief he has given oil refiners from rules requiring use of biofuels.
Long-suffering American farmers, a constituency President Donald Trump is counting on in his campaign for re-election in 2020, have seen prices for crops hit hard by his trade war with China. This month, farmers also complained that a government crop report did not reflect damage from historic flooding this spring.
Farmers have been infuriated at the administration’s decision to grant waivers exempting 31 oil refineries from rules requiring them to blend corn-based ethanol into gasoline.
National and state trade groups along with their political allies delivered letters to the White House over the past 48 hours detailing the damage the waivers have caused the biofuel industry.
Democratic presidential hopefuls have used the refinery issue as a cudgel, echoing farm groups who say Trump has betrayed them by siding with Big Oil. Alarmed, the Republican president ordered his cabinet to find ways to boost biofuel demand.
The Iowa Soybean Association’s letter to the White House said the refining exemptions were forcing biodiesel producers to shut plants and lay off workers. Soybeans are a feedstock for biodiesel, so growers have been hurt.
“It’s becoming more difficult to understand why your administration is choosing to support higher profits for oil companies instead of providing some stability for farmers,” said the letter, signed by Lindsay J. Greiner, president of the state’s soybean association.
Iowa, the largest U.S. producer of corn and ethanol, is a swing state won twice by Democrat Barack Obama. The state switched to the Republican candidate in 2016, in part because Trump promised to support ethanol.
Cindy Axne, a Democrat who represents Iowa’s third district, wrote to the U.S. Environmental Protection Agency, urging its independent watchdog to investigate the small refinery waivers granted between 2016 and 2018.
“What we’re seeing with this administration is a dogged approach to allow the biggest fossil fuel players an opportunity to put more money back in the pockets of their large shareholders and take that money out of the pockets of hardworking farmers right here in Iowa,” Axne said at a news conference.
Republican Iowa Governor Kim Reynolds, a Trump political ally, along with the state’s head of agriculture, said in a letter to the EPA that rural families have borne the brunt of the trade war and are now being pinched by the refinery waivers.
“Ethanol consumption fell for the first time in 20 years, commodity markets are depressed, and many biofuel plants, including several in Iowa, have already slowed or halted production,” the letter said.
The battle between Big Oil and farmers over the U.S. biofuel policy has been a headache for Trump, who campaigned in 2016 as a champion for ethanol.
U.S. regulations require refiners to blend biofuels into the nation’s gasoline pool or buy credits to fund those refiners who can. Small refiners can get exemptions from the EPA if they prove compliance causes them hardship.
But Trump’s EPA expanded the waivers significantly, granting exemptions to refineries owned by the likes of Exxon Mobil Corp (XOM.N), Chevron Corp (CVX.N) and billionaire Carl Icahn. This saved refiners billions of dollars, but farmers complained that it has destroyed ethanol demand and forced plants to shut down or idle. Refiners maintain the waivers have not hurt overall demand for biofuels.
Biofuel producers and farmers say increasing the annual blending obligations for 2020, to be finalized in November, is the best solution, but oil refiners oppose that.
“The president will have an opportunity to make this right in the fall,” Gene Gebolys, chief executive of biodiesel producer World Energy. The company said last week it was closing plants in Mississippi, Georgia and Pennsylvania, and putting 100 workers on furlough.
“If he doesn’t, the voters will have an opportunity to make it right next fall. He’s made a promise throughout the Midwest and he’s broken the promise,” he said.
Read the original article: U.S. Farmers, Lawmakers Dial Up Pressure on Trump Over Biofuel Policy
August 14, 2019
By Sen. Chuck Grassley (R-Iowa) and former Sen. Timothy Wirth (D-Colo.)
The question of how best to address environmental challenges has increasingly become a partisan flashpoint. So, when there is a green solution on which many Republicans and Democrats see eye-to-eye, as we do, it’s worth paying attention.
It’s time to take another look at biofuels.
The economic benefits to a hard-pressed farm economy are plain as day. Renewable energy – not just biofuels, but also wind and solar – are helping farmers and the rural economy survive in a year when the weather has been unkind, to say the least.
There is a lot of talk about reducing greenhouse gas emissions, but what’s needed are practical strategies to get there. Transportation is now the single greatest source of greenhouse gas emissions in the United States, making it critical to any carbon reduction strategy. But public policy to date has put almost the entire burden of the sector’s transformation on the nation’s vehicles. Shouldn’t the fuels they burn get equal attention?
Look at the numbers: Even a rapid transition to electric vehicles will leave hundreds of millions of conventional cars and trucks on U.S. roads for the next 30 years. According to a review of the relevant studies by USDA, Ethanol reduces carbon emissions by 40 percent or more compared to gasoline. Increasing ethanol blends from the 10 percent used today by most vehicles to 15 percent, now approved by the EPA, is an important start – but we can do more.
There are also major public health benefits. Today, the octane in your gasoline is supplied by a class of toxic chemicals called aromatics, which make up roughly 25 percent of every gallon of gasoline. Breathing in these toxins from car exhaust can cause cancer. Moreover, Frederica Perera, head of the Columbia Center for Children's Environmental Health, has shown through more than a decade of research that the worst emissions from those chemicals – polycyclic aromatic hydrocarbons, or PAHs – have effects on pregnant women and small children comparable to airborne lead: low birth weight, diminished IQ and cognitive and behavioral disorders. In addition, fine particle pollution from aromatics causes thousands of premature deaths each year.
Higher ethanol blends reduce the need for aromatics in gasoline. The reason is that ethanol has higher octane than gasoline and improves engine performance – with lower emissions. NASCAR vehicles run on 15 percent ethanol. Those blends should become standard nationwide.
We should also give more attention to the potential of higher blends of ethanol for engine performance. With wider availability, automakers could tune their engines to perform even better than they do today. Research at Oak Ridge National Laboratory has shown that mid-level blends of 25-40 percent, despite the lower energy content of ethanol, can match the vehicle fuel efficiency of cars running on today’s blends. Indeed, a multiyear study by the Department of Energy points to such blends as the best way to optimize vehicle and fuel performance. Blends of 30 percent are being used by the city fleet in Watertown, S.D,, with great success, and Nebraska is testing them in its state fleet. In Brazil today, every vehicle on the road (along with motorcycles and off-road equipment like boats) runs on a minimum of 27 percent ethanol.
It’s still true today that America’s national, energy and economic security is tied to our economic and consumer dependence on oil imported from volatile regions of the world. Using our farm commodities and agricultural by-products – such as corn, soybeans, switchgrass and livestock waste – and capturing natural resources – such as wind – to produce homegrown renewable energy is a winning solution to address the nation’s energy and climate challenges. Despite relentless misinformation campaigns by the oil industry and its allies, ethanol should again be seen and valued for what it is – a cleaner, healthier renewable fuel produced in the USA.
Read the original article: Environmental Advocates Should Take Another Look at Biofuels
August 18, 2019
By Noah Fish
Producers of corn and ethanol say the Trump administration has bailed out refineries owned by large oil companies at their expense.
The Environmental Protection Agency granted biofuel waivers to 31 refineries on Aug. 9, displeasing the corn and ethanol industry.
Refineries are eligible for exemptions if they can prove they are in financial strife. The waivers free them from their obligation under the Renewable Fuel Standard (RFS) to blend biofuels into their gasoline or buy credits from others that do.
In 2017, the EPA granted 35 of 37 applications it received. Both Chevron and Exxon, two of the world’s most profitable energy companies, have been granted waivers by the EPA.
Randy Doyal, CEO of Al-Corn Clean Fuel in Claremont, said he was surprised with the number of waivers. He said the decision takes away "a big chunk of demand" in a market that's already oversupplied.
"It will depress the price of ethanol, and when you add the volatility of the corn market, it keeps pushing us in the wrong direction," said Doyal. "It's causing some definite tightness in the ethanol industry."
That could cause more plants to scale back or be put up for sale, he said, but Al-Corn is not one of them.
Doyal said he wasn't shocked by the number of applications that came in for waivers last year, because the EPA has developed a pattern of granting them. What he is startled by is the EPA not meeting its legal obligation to reallocate the lost ethanol gallons.
Despite an order from the U.S. Court of Appeals, the EPA has said it will not reinstate the 500 million gallons withheld by the agency in 2016.
If the EPA is going to waive the lost gallons, it should be properly accounted for, said Doyal.
"So they've basically thumbed their noses and said no," said Doyal of the EPA. "That's incredible to me, from an administration that says it's on the side of the farmers and is looking out for them."
A decision on the waivers was delayed for months, which made Doyal think something was being worked out between the Department of Agriculture and the EPA to reassign lost gallons.
"And then we get nothing," he said.
The difference of reassigning the gallons compared to waiving them is crucial for the health of the market, said Doyal.
"I'm scratching my head wondering where the heck the EPA thinks they're going with this," said Doyal. "And it's rather concerning because they seem to have the support of this administration."
According to National Corn Growers Association, the Trump administration has undermined the Renewable Fuel Standard, granted more than 50 waivers to big oil companies and lost the industry more than 2 billion ethanol-equivalent gallons of fuel.
The hit to ethanol demand will affect famers growing corn in the Midwest, who sell most of their corn to ethanol plants. This comes at a time when farmers are also dealing with the loss of export markets due to ongoing trade disputes.
"Actions by the EPA are now also costing corn farmers ethanol markets at home," said Brian Thalmann, president of the Minnesota Corn Growers Association. "The billions of biofuel gallons lost through the issuing of waivers to oil refineries only benefit big oil companies while lowering the value of our nation’s corn crop."
Read the original article: Farmers Stung by EPA's Waivers
Airline Geeks
July 26, 2019
EgyptAir took delivery of its latest Boeing 787-9 Dreamliner earlier this week, the fifth of six next-generation Boeing aircraft destined for its fleet. While EgyptAir has been taking deliveries since the beginning of 2019, this delivery flight had a twist in that it was fueled with sustainable aviation flew, making it the longest flight flown with sustainable aviation fuel (SAF) as it flew from Everett, Wash. to Cairo
The delivery flight inaugurated a new program implemented by Boeing to give the option of using the SAF on any delivery flight. EgyptAir chose to perform the longer than 13-hour flight home on the biofuel to demonstrate the airline’s desire for efficiency and sustainability, of which the Dreamliner is emblematic.
The Egyptian flag carrier operates a modest long-haul fleet consisting of Boeing 777 family and Airbus A330 family aircraft with the Dreamliner being the newest type to be inducted into the fleet. From its base in Cairo, the fuel-efficient Dreamliner is currently deployed on long-haul routes over 10 hours including Washington and Tokyo, some of the longest routes in the airline’s fleet.
Long-haul isn’t the only sector of which EgyptAir is looking to modernize and become more efficient as the airline’s regional brand, EgyptAir Express, prepares to take delivery of its first Airbus A220-300. The similarly economical aircraft will also serve EgyptAir’s goal of achieving efficiency and sustainability.
During the delivery festivities, Captain Ahmed Adel, chairman and CEO of EgyptAir Holding Company spoke to the crowd, “We are committed to the sustainable growth of our airline and supporting commercial aviation’s efforts to protect the environment. The 787-9 Dreamliner is a great fit for our network and provides our customers with a responsible choice for air travel”
While the Dreamliner program was designed for exceptional fuel efficiency, the added bonus of the SAF is not only in the burning performance but in weight as well. Jets like the Dreamliner typically run on Jet-A fuel, which weighs 6.8 pounds per gallon whereas SAF weighs less at just 6.6 pounds.
Though only .2 pounds, the savings is when a 787-8 Dreamliner’s fuel capacity is 33,340 gallons. The fuel composition is 30 percent sustainable aviation fuel plus 70 percent Jet-A, meaning that 10,002 gallons of the total amount is lighter than a normal fill-up. The carbon dioxide emission should also be reduced by around 80 percent during the lifecycle of the airplane when using SAF.
EgyptAir leases its Dreamliner fleet from Irish leasing company Aercap, Boeing’s largest 787 customer with 114 owned, managed and on order.
“We are delighted to support EGYPTAIR’s fleet renewal strategy and to be a part of this important industry-first milestone,” Aengus Kelly, CEO of Aercap, said. “The 787 is a perfect choice for EGYPTAIR, allowing the airline to reduce fuel use and emissions by up to 25 percent while meeting its sustainable growth ambitions, as well as supporting Aercap’s target to transition its fleet to over two-thirds new technology aircraft by 2021.”
The biofuel used to power this EgyptAir 787’s journey home from Everett was created down the coast in a facility in Paramount, Calif. by World Energy. The plant is able to make the renewable fuel in quantities necessary for the airline industry. This particular sustainable fuel is made from agricultural waste mixed with the currently used Jet-A and is used interchangeably as a regular fuel without the need to change any engine systems.
“Boeing and the industry believe sustainable fuel has significant long-term potential to help commercial aviation earn its license to keep growing and meet our climate goals,” said Sheila Remes, vice president of strategy at Boeing Commercial Airplanes.
The use of SAF is not a new concept as commercial passenger flights began using it as early as 2011. Since that time, the fuels have become more refined and are able to be produced at levels to meet the needs of increasing air travel. The use of the fuel on such a long flight on an already fuel-efficient aircraft is a big step in attaining environmental goals, reducing carbon footprints and making air travel sustainable for the future.
Read the original article: EgyptAir Flies Newest Dreamliner Home Using Biofuel, Sets Distance Record
August 5, 2019
As China turns its back on American ethanol in a lingering trade spat, Brazil is considering opening its doors to U.S. biofuel.
Brazilian authorities are debating whether to yield to Washington, D.C.’s request to lift ethanol-import duties as a way of facilitating talks for a bilateral trade deal with the U.S., two people with direct knowledge of the matter said. A broad trade accord would benefit many Brazilian products and may be announced by October.
Officials in Brazil’s Economy Ministry are willing to remove ethanol barriers while those from the more protectionist Agriculture Ministry are pushing to renew the current import quotas with zero tariffs, the people said, asking not to be identified because talks are private.
Two years ago, Brazil slapped a 20% tariff on U.S. ethanol shipments that exceed an annual quota of 600 million liters (158 million gallons) after American corn-ethanol imports surged, flooding the Brazilian market and pushing down prices.
A biofuel deal between the two nations would come as a relief for the U.S. ethanol industry, which has been beset by a supply glut and the weakest margins in more than 15 years. American producers had expanded rapidly to cater to fast-growing Chinese demand, only to be left without buyers amid President Donald Trump’s trade war with Beijing.
Indiana has the fifth-largest production capacity for fuel ethanol among states, according to 2018 numbers from the U.S. Energy Information Administration.
A decision would have to be made by the end of this month, when the quota expires and a 20% duty on all imports would go back into effect, the people said. Brazil’s sugar-cane industry group Unica and the Economy and Agriculture ministries didn’t immediately respond to requests for comment.
The administration of President Jair Bolsonaro would at least exclude some American ethanol shipments from the 20% tax in order to preserve relations given Brazil is striving to address other U.S. trade complaints, according to the people. In March, Brazil agreed to open a wheat import quota of 750,000 tons a year free of duty, a move U.S. Wheat Associates says could benefit American farmers.
In a worst-case scenario, the Economy Ministry would extend the 600 million-liter quota to gain more time to negotiate, the people said.
Brazil was the top destination for U.S. corn-ethanol shipments last year, with imports of more than 1.7 billion liters.
Read the original article: Brazil Considers Dropping Barriers to U.S. Ethanol