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In the News

EPA Aims to Reject Request to Move RFS Point of Obligation

November 10, 2016

By Jack Fitzpatrick

The Environmental Protection Agency on Thursday proposed to reject requests to change the point of obligation to comply with the Renewable Fuel Standard.

The RFS currently requires importers and refiners to comply with requirements to mix ethanol and other renewable fuels into the gasoline supply, or to buy credits from those who have done so. Some refiners requested the agency consider moving the obligation to wholesale purchasers.

On Thursday, the EPA proposed to reject that request.

“We believe that the current structure of the RFS program is working to incentivize the production, distribution, and use of renewable transportation fuels in the United States,” the agency wrote in its proposal.

It added, “We do not believe that the petitioners have demonstrated that changing the point of obligation would likely result in increased use of renewable fuels.”

Read the original story: EPA Aims to Reject Request to Move RFS Point of Obligation

AgMRC Looks At Drivers Behind High Ethanol Blending

Ethanol Producer Magazine

Nov 11, 2016

By Susanne Retka Schill

The economic drivers behind recent higher ethanol blending rates were examined by Iowa economic research Sampath Jayasinghe in the Renewable Energy Report from the Iowa Agricultural Marketing Resource Center.

In the week ending Sept 23, the percentage of ethanol in the U.S. gasoline market averaged 10.21, topping 10 percent for the first time. A few weeks later, Oct 14, the percentage went slightly higher to 10.4, as reported by the U.S. Energy Information Administration.

There are several economic drivers beyond the simple one, that the value of blending ethanol is determined by the value of petroleum-crude oil and gasoline, Jayasinghe writes.

"Ethanol blending is economically attractive when the gasline-ethanol price spread is larger," he wrote. And, when the economics of ethanol blending with gasoline is unfavorable based on current wholesale prices, a higher renewable indentification (RIN) price can reduce the cost of ethanol blending. He cited a 2015 analysis by S. Hill at the EIA that described this as the "net of RIN" - ethanol minus RIN value - which makes it harder to choose the option of purchasing RINs rather than blending ethanol. An earlier analysis by AgMRC found the value of RINs increases as the blending economics become unfavorable, and as the supply of RINs becomes tighter.

"The major assumption in the above descriptions is that the blender is the obligated party and has compliance options that must be met by either buying ethanol or buying RINs, and there is no other reason to buy ethanol," Jayasinghe writes, adding there are other factors that limit that reasoning, such as not all blenders are obligated parties and ethanol also is needed as an octane booster, particularly to meet reformulated gasoline specifications.

Read the original story here: AgMRC Looks At Drivers Behind High Ethanol Blending

RFA: September Ethanol Exports Balloon as China Returns to Market

Ethanol Producer Magazine

November 9, 2016

By the Renewable Fuels Association

U.S. ethanol exports totaled 99.6 million gallons (mg) in September, up 28 percent–nearly 22 mg–over August, according to government trade data released Nov. 4 and analyzed by the Renewable Fuels Association. This marks the highest monthly volume exported in almost five years (December 2011). Much of the upturn can be attributed to 27.9 mg in shipments to Canada, as trade across the northern border expanded by 33 percent over August rates. Brazil imported 18.1 mg in September, down 7 mg from August and falling back to second place. China reappeared as a significant buyer after taking the summer off, with imports of 17.8 mg of U.S. product in September. The Philippines (10.4 mg), the United Arab Emirates (9.2 mg) and South Korea (5.4 mg)–countries which tend to make larger purchases on an intermittent basis–all made larger purchases in September. Just six countries purchased 92 percent of U.S. ethanol exports in September. Year-to-date exports stood at 693.9 mg, implying an annual total of 925.2 mg for calendar year 2016.

September exports of U.S. denatured fuel ethanol more than doubled from the prior month to 44.1 mg. Canada (26.0 mg, or 59 percent), China (14.9 mg, or 34 percent) and Peru (3.1 mg, or 7 percent) were the primary markets—a change from the typically Canadian-dominated trade flow. Export sales of undenatured fuel ethanol in September held firm at high levels, increasing 2 percent over August levels to 51.5 mg. Brazil backed off from August undenatured imports, buying 18.1 mg (35 percent) in September. The Philippines export market was reinvigorated with 10.4 mg (20 percent) of undenatured product, while the 9.2 mg (18 percent) to the UAE reflected only the second time in two years that U.S. undenatured ethanol entered the country. South Korea, China and Singapore were other larger customers for undenatured fuel ethanol.

September sales of denatured ethanol for non-fuel use dropped back to a more normal volume of 2.1 mg after reaching nearly 6.5 mg in August. Canada was the primary customer with 1.9 mg, down from 3.0 mg the prior month, while the remaining volume was parceled out among several countries. September sales of undenatured fuel for non-fuel, non-beverage use increased 79 percent to 1.9 mg. South Korea purchased 1.5 mg (79 percent) in September–more product than it has brought in over the past two years combined–while Mexico returned to a more typical volume of 180,042 gallons (9 percent).

Following three straight months of sizable ethanol imports, September volumes entering the United States were fairly insignificant at just 5,535 gallons. About 5,000 gallons of undenatured ethanol were sourced from China and the remainder was Canadian denatured ethanol. Year-to-date total imports are 33.7 mg, suggesting annualized imports just shy of 45 mg. Should this volume be realized, the United States would import less than half of what it brought in for calendar year 2015.

September Ethanol Exports 2016

U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product from dry mill ethanol production—in the global marketplace have been making measurable strides since the beginning of the year; however, September data showed a 15 percent pull-back from the prior month with 990,971 metric tons (mt) shipped. Once again China was the top market for U.S. exports with 166,650 mt, which is a third less than entered the country in August. China’s share of the total U.S. export market in September fell to just 17 percent–in sharp contrast to taking in half of all U.S. distillers grains exports in calendar year 2015. In September, South Korea increased its offtake to 166,650 mt (13 percent) and Vietnam purchased 123,267 mt (12 percent), while Mexico scaled back from August volumes by 39 percent to 122,513 mt (12 percent). Other larger markets include Thailand (87,506 mt), Egypt (56,461 mt), Turkey (46,200 mt) and Canada (41,291 mt). Through September, DDGS exports stood at 8.6 million mt, indicating an annualized total of 11.5 million mt. If realized, this would be the second largest DDGS export volume in history.

Read the original story: RFA: September Ethanol Exports Balloon as China Returns to Market

Emails Show Collusion Against Ethanol

Ethanol Producer Magazine

November 7, 2016

By Susanne Retka Schill

The Scoop Blog -- No, this is not about the email controversies surrounding the election. This one’s about the U.S. EPA and a Freedom of Information Act request that uncovered emails providing evidence of collusion between EPA and the oil industry to make sure ethanol looks bad.

Many in the industry are familiar with Steve VanderGriend’s work in identifying the problem with the test fuels used in EPA emissions testing. Steve looked into it because the results contradicted what he knew to be true about ethanol and emissions. And what he found is that the higher ethanol blend test fuels were spiked and the increased emissions blamed on ethanol, when they were caused by the toxic additives. It is well known that ethanol reduces NOX and PM but the EPAct study found the opposite. In 2014, EPA issued MOVES2014, a model for emissions modeling that states must use for writing their regs and the emissions factors used in the MOVES model were based on an earlier EPAct study.

The Urban Air Initiative has worked at laying out the case that EPA’s EPAct study was deliberately designed to show ethanol in a bad light, and the MOVES model must be corrected. Recently, UAI held a conference call where the UAI attorneys laid out what they found.

It took some time, explained Adam Gustafson, attorney with Boyden Gray Associates. EPA initially produced only three documents in response to the UAI’s Freedom of Information Act request, so the attorneys filed suit and the court required EPA to supply thousands more. The lawyers are going back to the court to require EPA broaden the search criteria to get more documents, and to remove the redactions to what already has been produced.

James Conde is the lawyer at Boyden Gray who drew the straw to review the 4,000 documents, many of which were emails to oil industry consultants and members of the Coordinating Research Council. In the UAI conference call, Conde quoted documents, one that was soliciting funds from oil industry contacts to run the study, saying in the solicitation that the study would give beneficial results for policy discussions and that they “expected bad results for ethanol.” He quoted segments of other emails where EPA said tests were being changed “to emphasize ethanol’s effects.”

The UAI provided a 20-page memo from the attorneys laying out the evidence of collusion. The memo shows correspondence indicating the oil industry influenced the EPAct study’s design from the beginning. When a DOE request to include higher ethanol blends was attached to DOE funding, there’s a trail of emails showing the request for higher ethanol content prompted more oil industry intervention. The EPA redesigned the fuel matrix to address the oil industry’s concerns and delegated the design of the EPAct study to an oil industry consultant. The attorneys also found evidence that EPA abandoned test results and test fuels that challenged its prior assumptions about ethanol’s emissions effects. “Among other strategies, EPA considered adding test fuels with more matched parameters to generate the desired anti-ethanol results,” the brief says.

UAI is trying to make hay with the FOIA document revelations. Inside the EPA, a subscription-based service that follows EPA news, was contacted and they did a rather lengthy piece on the latest evidence. Inside the EPA didn’t get a response to requests from comments from EPA and the American Petroleum institute on the latest charges, but referred to its November 2014 stories where API vigorously denied undue oil industry influence.

UAI and its attorneys are pursuing legal action. In the first round filed in Kansas, the judges ruled the petitioners did not have standing as they hadn’t shown injury. Gustafson said they intend to file suit again, perhaps in a different state. They also are laying a case for a second suit, saying “EPA’s secret consultation with a group of oil company employees about the test fuel parameters violated the requirement of the Federal Advisory Committee Act and EPA’s Scientific Integrity Policy that such committees be balanced, that they be publicly announced and that their meetings be open to the public.” The law firm is also using the FOIA documents in preparing to file a request for correction of information on the MOVES model, which will go into great detail on the scientific defects in MOVES, Gustafson said.

Legal actions and agency requests are slow moving. They could be moved along if there were a public outcry, but capturing the public attention for such a technical subject isn’t easy. UAI is putting together information, explaining in plain English what the emails revealed about the collusion to cook the results of the emissions testing by creating test fuels designed to make ethanol look bad. Industry supporters need to look for that information and pass it along.

There’s a long history of this sort of collusion between Big Oil and government agencies. The secret history of lead will be the subject of a future blog.

Read the original story: Emails Show Collusion Against Ethanol

Ethanol Advocates, Opponents Brace for Ruling

Des Moines Register

November 2, 2016

By Donelle Eller

Ethanol foes are expected to face off again over the federal mandate that requires ethanol and biodiesel to be blended into the nation's fuel supply later this month.

The U.S. Environmental Protection Agency is supposed to release its final Renewable Fuel Standard rule by the end of November.

The agency has been listening to arguments from oil, renewable fuel, environmental groups and others on where the standard should be set since May, when it released its proposed levels.

It's a decision that's critical to Iowa, the nation's largest producer of both biodiesel and ethanol.

The federal agency's proposed rule recommends increasing:

Ethanol made from corn to 14.8 billion gallons in 2017, 300 million gallons more than this year. Still, it falls short of the 15 billion gallons outlined in the federal law, says Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Cellulosic ethanol made from grasses, wood chips and corn stalks to 312 million gallons, 82 million more gallons than this year. Iowa is home to three cellulosic ethanol plants, in Galva, Emmetsburg and Nevada.
Biodiesel made from soybean oil, cooking oil and animal fat to 2.1 billion gallons in 2018, inching 100 million gallons higher than the levels required in 2017.

While most gasoline purchased nationally is E10 — 10 percent ethanol and 90 percent gasoline — Shaw said U.S. motorists are getting more comfortable buying higher ethanol blends, such as E15 and E85.

Ethanol's share of the U.S. gasoline market has pushed past 10 percent a couple of times this fall, according to the U.S. Energy Information Administration.

"We already exceeding the blend wall," Shaw said.

The blend wall is a threshold that occurs when the required blending volume exceeds the amount that can be added into most gasoline.

Congress created the Renewable Fuel Standard in 2005 and expanded it in 2007 as part of an effort to reduce the nation’s dependence on foreign oil and curb greenhouse gas emissions.

The EPA has said it has the legal authority to adjust the numbers to below what Congress intended.

The EPA said in 2011 that E15 is safe to use in cars and trucks built since 2001. E85 can only be used in flex-fuel vehicles.

Kum & Go's Kristie Bell said she was among those concerned about using E15, but decided to take advantage of the convenience store chain's promotion this fall offering the higher ethanol blend for $1.15 a gallon.

"People are hesitant to try something new," said Bell, adding that the West Des Moines-based company had employees available to answer questions. E15 is about a dime cheaper than E10.

Gov. Terry Branstad has been critical of the EPA and Obama administration over the Renewable Fuel Standard.

He's blamed part of the fall in corn prices on the EPA's failure to set the renewable fuel mandate to levels outlined in the 2007 federal law.

"This administration has really reneged on its commitment to a strong Renewable Fuel Standard," Branstad said recently.

Chad Hart, an Iowa State University economist, said the mandate's lower levels probably hasn't impacted corn and soybean prices much.

"What EPA has enforced has a relatively small reduction in prices for corn," he said.

The Environmental Working Group said the renewable fuel mandate "will make air pollution worse and push farmers to grow corn for fuel instead of food."

The proposed standard "continues a wrong-headed policy that promotes a fuel that is bad for the environment, rather than pushing the market toward better renewable fuel options,” said Emily Cassidy, a research analyst at the Environmental Working Group.

Read the original story: Ethanol Advocates, Opponents Brace for Ruling

Novozymes Named to Climate “A-List”

Energy AgWired

November 1, 2016

By Joanna Schroeder

The international non profit CDP, an organization that runs a global carbon disclosure system, has announced its annual “A-List” of highest scoring companies on climate action. On the list was Novozymes for its efforts to reduce carbon emissions and mitigate the business risks of climate change.

“Apart from being honored to once again be recognized as a global leader on climate action, we are also extremely thrilled to see that business is making substantial effort to transit to a low-carbon world. The Paris Agreement and the SDGs are already working as the new compass for business,” said Claus Stig Pedersen, Novozymes’ Head of Corporate Sustainability. “It is exciting to witness the ongoing shift in the role of business as it realizes that some of the world’s most pressing challenges, including climate change, also represent some of the biggest future business opportunities.”

Novozymes implemented 40 different energy-saving and process optimization projects in 2015, helping reduce CO2 emissions in the company’s own operations by 7 percent, as compared with 2014. Last year, Novozymes’ customers avoided an estimated 60 million tons of CO2 emissions by applying the company’s products. The savings achieved are equivalent to taking approximately 25 million cars off the road.

According to Novozymes, its biological solutions save customers 100kg CO2 for every 1kg of product applied, on average. The company made history last year by becoming one of the first in the world to align its corporate strategy with the SDGs.

Read the original story: Novozymes Named to Climate “A-List”

SeaTac Aims to be National Leader in Jet Biofuels, Announces Study with Richard Branson’s Nonprofit

Geek Wire

October 31, 2016

By John Stang

One big hurdle in getting airlines to use biofuels is the cost difference biofuels and petroleum-based fuels. Right now, petroleum-based jet fuels are cheaper. But biofuels produce fewer carbon emissions.

So the Port of Seattle, sustainable jet fuel company SkyNRG and Sir Richard Branson’s nonprofit Carbon War Room announced today that they are partnering on a study to find out how to compensate airlines for the difference in fuel prices. Backers of the study hope to have some results by February.

Their goal to set up a way so all airlines at SeaTac International Airport can economically use biofuel for their passenger jets. They want SeaTac to become the first American airport to provide biofuel for all of its passenger planes. Worldwide, only the airport in Oslo, Norway, does that. In the United States, United Airlines uses biofuel in its airplanes leaving Los Angeles International Airport.

“We’re intrigued by the Oslo model. … We’re interested in being the model for the rest of the country,” said John Creighton, president of the Port of Seattle Commission, in an interview.

SkyNRG supplies biofuels for jets worldwide. Branson founded the nonprofit Carbon War Room in 2009 to tackle carbon emissions with business-based solutions.

Biofuels do not totally replace petroleum-based fuels when used in jets. Instead, they are mixed with petroleum-based fuels to reduce carbon emissions.

In an interview, Creighton, Elizabeth Leavitt, the Port of Seattle’s director for the environment and sustainability, and Stephanie Meyn, the port’s senior environment program manager, pointed to a number of gaps in information needed to figure out how to compensate airlines for using biofuels.

One problem is that the prices of biofuels and petroleum-based fuels are constantly fluctuating. Also there are several processes — with varying expenses — for creating biofuels. And there are several sources for raw materials for biofuels: sugars, corn, other crops and wood. These sources have their own constantly shifting economic pictures.

“We have to drill down on what the costs will be,” Creighton said.

Another unknown is where the money will come from to compensate airlines for the greater cost of using biofuels, Creighton, Leavitt and Meyn said. A central question is how the production of more biofuels can be spurred so it becomes more economical at larger volumes.

The nation uses roughly 23 billion gallons of aviation fuel a year, according to the Commercial Aviation Alternative Fuels Initiative, a national coalition of airlines, biofuel producers and government agencies. CAAFI has set a target of manufacturing 400 million gallons of biofuels a year by 2020, or 1.7 percent.

A July 2016 U.S. Department of Energy report concluded that the nation has the partly-untapped potential to produce at least 1 billion tons of crops, biomass from forests and other waste materials capable of replacing 30 percent of the United States’ 2005 petroleum consumption. The airline industry and the federal government are aiming to cut commercial aviation carbon emissions to 50 percent of 2012 levels by 2050.

In a press release, Jules Kortenhorst, CEO of Carbon War Room, pointed to a December 2015 agreement signed by 192 nations to hold global warming to less than an increase of two degrees. That goal “cannot be achieved without the participation of the aviation industry, with its emissions projected to consume approximately a quarter of the world’s remaining carbon budget by 2050,” he said.

Creighton said SeaTac is interested in reducing the Seattle region’s carbon footprint. “We need to work really hard to be a good neighbor,” he said.

Meanwhile, two major steps in Washington’s infant jet biofuel industry are expected to take place in the next few months. A study group is expected to provide the Port of Seattle with a report studying the feasibility of a biofuel-blending operation for jets using SeaTac airport.

In addition, Alaska Airlines is expected to fly its first cross-country wood-based biofueled passenger jetliner from Seattle to somewhere on the East Coast. Alaska Airlines has been test flying passenger planes with biofuels throughout 2016. The airline has already used corn-based biofuel for a cross-country trip in July. The upcoming Alaska Airlines flight will use biofuel created by adapting chemical processes used by the wood-pulping industry. Farmers can sell corn for food or biofuel — depending on which industry provides better prices. Wood-based biofuel facilities won’t have to compete against agricultural prices.

“The state of Washington is trying to stay three to four steps ahead of everyone else,” said Leavitt, the port’s director for the environment and sustainability.

Read the original story: SeaTac Aims to be National Leader in Jet Biofuels, Announces Study with Richard Branson’s Nonprofit

USDA Awards $327 Million in REAP Funding

Ethanol Producer Magazine

October 25, 2016

By Erin Voegele

On Oct. 25, the USDA announced it is investing more than $300 million to help hundreds of small businesses adopt renewable energy sources or implement more efficient energy options. The investment includes $327 million to support 423 businesses through the Rural Energy for America Program and a $68 million loan awarded to the Pedernales Electric Cooperative of Johnson City, Texas, through the Energy Efficiency and Conservation Loan Program to fund system-wide energy efficiency improvements to assist a rural portion of the co-op’s service territory.

"Cutting our energy waste is one of the fastest, easiest and cheapest ways to help families save money on their energy bills while reducing harmful carbon pollution. Over the course of nearly eight years, the Obama Administration has taken strong actions to advance energy efficiency in our homes and businesses," said Agriculture Secretary Tom Vilsack. "Through efficiency upgrades and private-sector partnerships, America has been able to cut its carbon emissions, create jobs and save families hundreds of dollars at the pump and on their utility bills every year. The Rural Energy for America Program alone has helped roughly 15,000 rural small businesses, farmers and ranchers improve their bottom lines by installing renewable energy systems and energy efficiency solutions. When businesses lower their energy costs, they are also able to expand their services and contribute to stronger local economies."

Recipients of the REAP funds will use the loans and grants to install renewable energy systems, such as biomass, geothermal, hydropower and solar. The funds can also be used to make energy efficiency improvements to heating, ventilation and cooling systems; insulation; or lighting and refrigeration units.

Bioenergy-related REAP awards made through the current round of funding include:

Gwitchyaa Zhee Utility Co. (Alaska): $250,000 grant to purchase and install a biomass boiler renewable energy system.

WOF SW GGP 1 LLC (Arizona): $444,000 grant to purchase and install an anaerobic digester renewable energy system.

Desert View LLC (California): $88,111 grant to purchase and install an anaerobic digester renewable energy system.

Lone Oak Energy LLC (California): $438,899 grant to purchase and install an anaerobic digester renewable energy system.

Synergy Solutions Crisp County LP (Georgia): $371,292 grant to purchase and install a biomass boiler renewable energy system.

Wheeler Logging LLC (Georgia): $95,980 grant to purchase and install a wood chipper renewable energy system.

Little Sioux Corn Processors LLC (Iowa): $165,000 grant to make energy efficiency improvements with the retrofitting of an ethanol refinery.

Siouxland Energy Cooperative (Iowa): $165,000 grant to make energy efficiency improvements with the retrofitting of an ethanol refinery.

Lincolnland Agri-Energy LLC (Illinois): $77,984 grant to purchase and install a fermenter for ethanol production.

Bruce Stedman (Maine): $42,226 grant to purchase and install two biomass boiler renewable energy systems.

Chippewa Valley Ethanol Cooperative LLP (Minnesota): $250,000 grant to make energy efficiency improvements with the evaporator of an ethanol refinery.

Holliday Investments Inc. (Missouri): $42,775 grant to purchase and install a biomass boiler.

Siouxland Ethanol LLC (Nebraska): $500,000 grant to purchase and install the equipment for the retrofiting of an ethanol facility.

Greene Bioenergy LLC (Ohio): $500,000 grant and $1.015 million loan to purchase and install an anaerobic digester renewable energy system.

Natural Bioenergy LLC (Ohio): $309,805 grant to purchase and install an anaerobic digester renewable energy system.

Northwest Bioenergy (Ohio): $166,000 grant to purchase and install a drying and gasification renewable energy system.

Drew E. Remley (Pennsylvania): $231,356 grant to purchase and install an anaerobic digester renewable energy system.

New River Hardwoods Inc. (Tennessee): $125,243 grant to purchase and install a steam biomass renewable energy system.

Kingdom Pellets LLC (Vermont): $2.5 million loan to purchase and install a biomass renewable energy system.

Spaulding Construction Inc. (Vermont): $134,422 grant to purchase and install a wood chipper to produce biomass fuel for electricity generation.

WOF PNW POG 1 LLC (Washington): $500,000 grant to make energy efficiency improvements to an anaerobic digester.

Badger State Ethanol LLC (Wisconsin): $492,327 grant to purchase and install the equipment for the retrofiting of an ethanol facility.

A full list of awards can be downloaded from the USDA website.

Since 2009, REAP has helped finance more than 11,600 renewable energy and energy efficiency projects that have reduced energy costs for roughly 15,000 rural businesses. In mid-October, the USDA announced it is currently accepting applications for the next rounds of REAP funding.

Applications for energy audit and renewable energy development assistance grants are due Jan. 31. Applications for renewable energy systems and energy efficiency grants of $20,000 or less are due Oct. 31 for the first funding cycle and March 31 for the second. Applications for renewable energy system and energy efficiency grants of greater than $20,000 and all combination grants and guarantees are due March 31. According to the USDA, it will set aside 20 percent of the funds for grants of $20,000 or less. The agency also said applications for renewable energy system and energy efficiency grants or for loan-grant combinations that are received after March 31 will be considered in fiscal year 2018, which starts Oct. 1, 2017. Guaranteed loan applications will be reviewed and processed when received, with periodic completions.

Read the original story: USDA Awards $327 Million in REAP Funding

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RFA: Data Show the So-Called “Blend Wall” is Crumbling

Renewable Fuels Association

October 19, 2016

Gasoline supplied to the U.S. market last week contained an average of 10.4 percent ethanol, according to data released this morning by the Energy Information Administration (EIA). It was the second time in the last four weeks that the ethanol blend rate topped 10.0 percent, a level the oil industry has suggested could not be breached. Renewable Fuels Association (RFA) President and CEO Bob Dinneen said the data confirms that the so-called “blend wall” is nothing more than a fiction created by oil companies in an effort to undermine support for the Renewable Fuel Standard (RFS).

“These EIA figures show once again that the oil industry’s false blend wall narrative is not rooted in reality. This clearly shows that there’s no reason for the administration to roll back the 2017 RFS conventional biofuel blending levels required by the statute,” said Dinneen. “It also shows that supporters of legislative proposals to cap ethanol content at 9.7 percent are completely out of touch with what is really happening in the marketplace.”

EIA data show that an average of 8.798 million barrels per day (mbpd) of gasoline were supplied to the market last week. Ethanol blending averaged 0.915 mbpd, meaning gasoline contained an average of 10.4 percent ethanol. This is the highest weekly blend rate on record, topping the 10.21 percent rate seen just three weeks earlier.

The weekly data come on the heels of EIA’s October Short-term Energy Outlook, which similarly projected that gasoline consumed in 2016 will contain an average of 10.1 percent ethanol. That is up from 9.9 percent last year. In September, RFA ran ads showing that nearly half of the states in the U.S. had already blown by the 10.0 percent threshold as early as 2014.

Weekly Ethanol Blend Rate Oct2016

Read the original story: RFA: Data Show the So-Called “Blend Wall” is Crumbling

White House OMB Reviews 2017 RFS Rule

Ethanol Producer Magazine

October 20, 2016

By Erin Voegele

On Oct. 19, the U.S. EPA delivered its proposed rule to set renewable fuel standard (RFS) volume standards for 2017 and biobased diesel standards for 2018 to the White House Office of Management and Budget. OBM review marks a final step before a final rule is issued.

The proposed rule was first issued by EPA on May 18. It aims to set RFS renewable volume obligations (RVOs) for 2017, along with the 2018 RVO for biomass-based diesel. In the proposed rule, the agency set the 2017 RVO for cellulosic biofuel at 312 million gallons, with the advanced biofuel RVO at 4 billion gallons and the RVO for total renewable fuel at 18.8 billion gallons. The 2018 RVO for biomass-based diesel has been proposed at 2.1 billion gallons.

The proposed percentage standards call for renewable fuel to comprise 10.44 percent of the transportation fuel pool next year. The cellulosic standard would be 0.173 percent, with the biomass-based diesel standard at 1.67 percent, and the advanced biofuel standard at 2.22 percent.

A public comment period on the proposal closed in mid-July. During the comment period, more than 42,500 public comments were filed on the proposal.

The EPA’s Regulatory Development and Retrospective Review Tracker currently states a final rule is expected to be published in the Federal Register in December.

Read the original story: White House OMB Reviews 2017 RFS Rule

UAI: EPA Emails Show Oil Industry Helped Design Test Fuels

Ethanol Producer Magazine

October 19, 2016

By the Urban Air Initiative

The Urban Air Initiative has discovered that the U.S. EPA relied heavily on the oil industry to help design test fuels used for the EPAct Study. This is a critical development because the data in the EPAct Study erroneously shows that blending ethanol into gasoline increases pollution. The information was uncovered through a Freedom of Information Act request submitted by Boyden Gray & Associations on behalf of UAI.

The emails released under the FOIA show that the EPA asked oil industry employees what test fuels they would “prefer to see tested” and then revised the test fuels in response to their input. Internal documents also show that the EPA threw out three test fuels after preliminary results showed that ethanol lowered emissions of nitrogen oxides and other pollutants and otherwise altered its slate of test fuels to “emphasiz[e] ethanol effects.”

This new evidence of collusion between Chevron, BP, and EPA is important, because EPA used the results of the EPAct study to update its vehicular emissions model, MOVES2014. As a result of the oil industry's influence, the model reports that ethanol increases emissions of many pollutants, even though other studies have demonstrated the opposite.

UAI and scientists from Ford, GM, and other organizations have demonstrated that the EPAct study and MOVES2014 model are inaccurate and biased against ethanol. UAI's FOIA project goes a step further by seeking out the source of that bias, the petroleum industry's direct influence in EPA's own emails and other records.

The information uncovered directly ties to UAI's regulatory and legal efforts to reform the MOVES2014 model. This emissions model, which States must use when developing implementation plans to comply with EPA's air quality standards, promotes anti-ethanol state and federal policies because it erroneously reports that higher-ethanol fuels emit more pollution than gasoline with lower levels of ethanol.

UAI will use this internal evidence of oil industry involvement with the EPA to seek a corrected emissions model through regulatory and legal channels.

Read the original story: UAI: EPA Emails Show Oil Industry Helped Design Test Fuels

Don’t Let Foreign Interests Prevent US Biofuels Future

The Hill

October 18, 2016

By Retired Maj. Gen. Paul D. Eaton

Ninety-seven percent America’s motor fuel is blended with homegrown ethanol. From an energy security perspective, this is major progress that should be celebrated and encouraged.

Energy is not a luxury; it’s a necessity that has shaped conflicts across the globe and plunged U.S. warfighters into countless battles to protect U.S. interests, allies, and access to scarce resources. Renewable fuels like ethanol represent the best tools available to reduce our dependence on oil and minimize the risks associated with conflicts over fossil fuels.

Under the Renewable Fuel Standard (RFS), America has been steadily increasing its capacity to grow, blend and utilize homegrown biofuels made from plants. We’ve cut oil imports in half since 2005. In 2015 alone, biofuels displaced more oil than the U.S. imported from Saudi Arabia and Kuwait combined. And making these biofuels now supports more than 852,000 American jobs across manufacturing, engineering, science, research and development.

Yet, some lawmakers are proposing legislation that would roll back our progress, capping consumption of homegrown ethanol at 9.7 percent — essentially mandating U.S. reliance on oil for over 92 percent of our fuel. It could accurately be labeled the Oil Monopoly Protection Act. They claim that any fuel containing less than 90 percent petroleum will break the so-called “blend wall” — a well-financed myth based on the refusal of some oil companies to offer consumers blends of ethanol beyond the standard 10 percent.

There was a time when some cars weren’t designed to run on higher ethanol blends, but that hasn’t been true for most conventional vehicles since 2001, according to the Environmental Protection Agency (EPA).

As a result, many retailers are responding to consumer demand by offering higher ethanol blends like E15 and E85. Consumers appreciate that ethanol saves money at the pump, increases octane for better performance and slashes carbon emissions.

As a result, the so-called “blend wall” was broken years ago in some states where ethanol contributes as much as 12 percent or more of the total fuel consumed. A 9.7 percent cap wouldn’t just stall America’s progress toward energy security, it would reverse it.

The goal of blocking competition is shared by major oil exporters like Saudi Arabia and Iran.

Their current strategy is to temporarily flood oil markets, curtailing the growth of alternatives and forcing massive layoffs in the U.S. oil and gas sector. It’s working. Last month, Saudi Arabia retook its lead as the world’s largest oil producer, according to the International Energy Agency. We’ve seen this cycle before, and it always ends with U.S. drivers sending massive sums of money overseas and greater U.S. vulnerability to supply interruptions by hostile nations.

Now a vocal group, dominated by the same climate-change deniers who exist to promote the oil industry, are attacking biofuels in an effort to cap the growth of homegrown alternatives. In their own time-honored fashion, they even cite oil-funded studies that seek to cast doubt on the accepted climate science behind biofuels.

Yet the Department of Energy’s own Argonne National Laboratory found that corn-based ethanol cuts carbon emission by an average of 34 percent compared to gasoline, with cellulosic varieties yielding a carbon savings of 100 percent or more.

In short, the whole campaign is fueled by misinformation, and the only real winners are Russia, Iran, Saudi Arabia and other foreign powers that still supply a quarter of all U.S. oil. If we are to achieve true energy security, we cannot allow entrenched fossil fuel interests to set a legal cap on their only real competition. Public policy should protect consumers, not monopolies, especially those that threaten global stability.

Read the original story: Don’t Let Foreign Interests Prevent US Biofuels Future

Auto Club Monitoring Proves Ethanol Blending Safe

Ethanol Producer Magazine

October 17 2016

By Gene Hammond

I woke up Sat., Dec. 1, 2012, to a front page headline in the Sioux Falls, South Dakota, Argus Leader that made this former South Dakota farm boy mad! The headline read “AAA issues warning on E15.”
I was raised on the farm, and after a short career in teaching, I have been in the motor business for the past 42 years. I founded both the Association for Motor Club Marketing and Travelers Motor Club. Based on my experience, I could not understand what AAA was talking about. I knew off the top of my head that ethanol had reduced road service calls for our corporations because ethanol use had reduced wintertime gas line freeze.

As a principle owner of AMCM and Travelers Motor Club, representing over 19 million members, my next move was to contact our claims departments to see how many road service claims we could attribute to ethanol use. An initial road service analysis of past claims could not attribute one single service call to ethanol use. I immediately ordered the monitoring of all road service claims going forward to determine if AAA knew something about E15 that we didn’t. After two years of monitoring claims, we shared our claim history with the American Coalition for Ethanol and Growth Energy. We reported to both groups that after two years of claims monitoring we could not attribute one claim to ethanol use. Today we can report that during a four-year period, we still cannot report one claim attributed to ethanol use, E15 or any blend, for that matter.

Since sharing our real-life claim history with ethanol industry leaders, we have made two trips to Washington, D.C., to convey a very simple message to Congress and the U.S. EPA. Our four-year record of monitoring motor service claims indicates ethanol poses no problem, so when AAA spouts oil industry talking points about E15 damage, we demand that AAA provide its real-life road service claim history. We are confident that AAA’s claims mirror ours.

Besides sharing our findings with decision makers in our nation’s capital, we also have lobbied in favor of the renewable fuel standard (RFS) and sent a letter of support to the mayor and city council of Chicago during their E15 debate. I have also had the opportunity to be interviewed a number of times on the radio to tell our claims history. Long story short, we are doing all we can do to tell the truth about ethanol and encourage AAA to tell its story about E15 claims, rather than repeating the petroleum industry’s self-serving talking points.

We did not engage in this fight for E15 and the RFS to sell motor club memberships. We just wanted to set the record straight and to support rural America. We believe the ethanol industry has done a great job of adding to our nation’s security through oil independence and contributing to a cleaner environment. Add that to the economic benefits of ethanol for farmers and small town America, and it makes it easy for us to stand up and set the record straight. With that being said, we do want to thank the many ethanol industry individuals who have purchased motor club memberships and the ethanol plants that have gifted their shareholders and employees with AMCM memberships.

We are going to continue to stand up for ethanol and rural America. We are going to continue to pressure AAA to talk about its claims and not petroleum industry studies. If you or your ethanol plant would like us to address your board of directors meeting, shareholders meeting or a community event to tell our real life motor club claims story, we are available and more than willing to do so.

Read the original story: Auto Club Monitoring Proves Ethanol Blending Safe

Ethanol Plant Keeping Up at Harvest

Brownfield Ag News

October 13, 2016

By Mark Dorenkamp

The general manager of a southeast Minnesota ethanol plant says the facility is running near capacity with harvest in full swing.

Randall Doyal with Al-Corn Clean Fuel in Claremont tells Brownfield the staff is operating around the clock to keep up.

“We’re grinding and consuming the volume of corn on a daily basis and we’re not seasonal in that regard. Our farmers are, and they tend to try to push forward and deliver as much as they can when they need to.”

Grain storage is a concern for many farmers this fall, but Doyal says producers he works with have been preparing for harvest by increasing on-farm capacity while taking steps to ensure quality.

“Frankly, we get better quality from our farmers than we do from commercials because (farmers) have gotten so good at being able to maintain and take care of that corn. And they deliver rate-ably through the year at a cooperative facility like ours, or they deliver when the market sends signals or they choose to make a sale.”

Doyal expects bin space at Al-Corn to remain close to full through December, with inventories dropping steadily after the holidays.

Read the original story and hear the full interview: Ethanol Plant Keeping Up at Harvest

Gevo Produces First Cellulosic Renewable Jet Fuel Specified for Use on Commercial Airline Flights

Gevo

October 11, 2016

ENGLEWOOD, Colo., Oct. 11, 2016 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ:GEVO), announced today that it has completed production of the world’s first cellulosic renewable jet fuel that is specified for commercial flights. Gevo successfully adapted its patented technologies to convert cellulosic sugars derived from wood waste into renewable isobutanol, which was then further converted into Gevo’s Alcohol-to-Jet fuel (ATJ) fuel. This ATJ meets the ASTM D7566 specification allowing it to be used for commercial flights. The revisions to the ASTM D7566 specification, which occurred earlier this year, includes ATJ derived from renewable isobutanol, regardless of the carbohydrate feedstock (i.e. cellulosics, corn, sugar cane, molasses, etc.).

Gevo produced over 1,000 gallons of the cellulosic ATJ. Alaska Airlines is expected to fly the first commercial flight using this cellulosic jet fuel in the next few months. Gevo believes that this would be the first ever commercial flight flown with a cellulosic renewable jet fuel. This follows on the back of the two commercial flights that were flown by Alaska Airlines on Gevo’s ATJ in June of this year. The ATJ for the June flights was derived from isobutanol produced at Gevo’s Luverne, MN, production facility using sustainable corn as the sugar feedstock.

The cellulosic ATJ was produced in conjunction with the Northwest Advanced Renewables Alliance (NARA). NARA supplied the sugars that were derived from forest residuals in the Pacific Northwest. Gevo produced the cellulosic renewable isobutanol at its demonstration facility in St. Joseph, MO, that it jointly operates with ICM Inc. The cellulosic renewable isobutanol was then transported to Gevo’s biorefinery facility in Silsbee, TX, that Gevo operates with South Hampton Resources where the cellulosic renewable isobutanol was converted into ATJ.

“I have long championed the development of commercial jet fuel made from renewable sources. It was what we first envisioned when the Virgin Green Fund invested in Gevo with the aim of developing fuel from cellulosic materials such as wood waste. I am very pleased the first commercial flight using Gevo's cellulosic jet fuel is to be flown soon by Alaska Airlines, as we look to move the aviation industry towards a renewable future," said Sir Richard Branson.

“Gevo’s production of this cellulosic ATJ removes all doubt that cellulosic sugars can be successfully converted into isobutanol using Gevo’s technology. Gevo’s ATJ technology then reliably converts isobutanol into renewable jet fuel, regardless of the sugar source. I’m looking forward to seeing this fuel power an Alaska Airlines flight in the near future. I wish to congratulate our team at Gevo, all the other NARA members, and thank the U.S. Department of Agriculture, National Institute of Food and Agriculture, who funded the work,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer.

Gevo is a member of the Northwest Advanced Renewables Alliance (NARA) and is providing the organization with technology to enable the commercial scale processing of cellulosic sugars from wood waste into valuable products. NARA is a five-year project supported by the U.S. Department of Agriculture, National Institute of Food and Agriculture, and is comprised of 33 member organizations from industry, academia and government laboratories. Its mission is to facilitate development of biojet and bioproduct industries in the Pacific Northwest using forest residuals that would otherwise become waste products.

About Gevo

Gevo is a leading renewable technology, chemical products, and next generation biofuels company. Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks. Gevo’s strategy is to commercialize biobased alternatives to petroleum-based products to allow for the optimization of fermentation facilities’ assets, with the ultimate goal of maximizing cash flows from the operation of those assets. Gevo produces isobutanol, ethanol and high-value animal feed at its fermentation plant in Luverne, Minnesota. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. Gevo currently operates a biorefinery in Silsbee, Texas, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester. Gevo has a marquee list of partners including The Coca-Cola Company, Toray Industries Inc. and Total SA, among others. Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water.

Read the original press relase: Gevo Produces First Cellulosic Renewable Jet Fuel Specified for Use on Commercial Airline Flights

Data Dispel the Myth of the Blend Wall

Inside Sources

October 11, 2016

By Brent Erickson

Washington policymakers tend to accept without question that U.S. refiners are incapable of blending ethanol into gasoline above concentrations of 10 percent, due to the so-called blend wall. Oil refiners are pressuring their allies in Congress to change the Renewable Fuel Standard (RFS) in order to address the blend wall, predicting catastrophic market consequences if they don’t get their way.

But conventional wisdom about the blend wall is demonstrably wrong. Data recently released by EPA disprove the widely held assumption that reaching and exceeding the blend wall triggered volatility in the market for RFS compliance credits, known as RINs. This newly available data should give lawmakers plenty of reason to rethink changing the RFS.

Back in 2012, researchers at the University of Missouri and other Midwest universities predicted that RIN prices would rise sharply when U.S. fuel refiners hit the blend wall. According to their relatively straightforward economic theory, the blend wall would cause a shortage in available RINs because refiners could not put more than 10 percent ethanol into gasoline; the shortage would in turn cause RIN prices to rise.

The researchers sought to understand why RIN prices failed to rise in 2012, given estimated constraints on biofuel supplies in comparison to RFS requirements that year. When RIN prices rose in 2013, everyone assumed the blend wall was the cause — but that’s simply circular logic. Washington policymakers ended up disrupting and delaying implementation of the RFS, which ended up delaying the collection of data showing that there was no shortage of RINs as had been predicted.

Now, the EPA has finally released the data on obligated parties’ reported fuel use and use of RINs to satisfy annual obligations from 2010 through 2013 (the latest year for which refiners have fully demonstrated annual compliance). The numbers indicate that obligated parties reached the blend wall as early as 2010 and definitely breached it by 2012.

The explanation is simple and often overlooked in economic analyses of the RFS program: small refiners and small refineries (even those owned by large refiners) were exempt from the RFS through 2012. The remaining obligated refineries were nevertheless able to blend ethanol into the obligated volumes of gasoline at a rate exceeding 10 percent or to obtain needed RINs at low cost. Moreover, the data reveal that despite having reached the blend wall by 2010, obligated parties continued to accumulate excess RINs to carry over for future compliance years.

One faction of the oil industry is currently working Capitol Hill, trying to win last-minute passage of a bill that would cap the RFS below 10 percent of gasoline volumes. This cap is demonstrably unnecessary — obligated parties were able to exceed the blend wall as early as 2010.

At the same time, another faction of oil refiners is working Capitol Hill, trying to get a brand-new exemption from the RFS for themselves. Notably, the first faction of oil producers opposes this new exemption. Congress should reject both groups’ requests for special favors, primarily because they are aimed at solving a blend wall problem that doesn’t (and never did) exist.

Similarly, EPA should reconsider its proposed rule for the 2017 RFS volumes, which is due to be finalized by the end of November. The agency’s program changes along with its two-year delay in issuing previous rules were based on the myth that the blend wall was the cause of high RIN prices. Rather than further changes and delays, EPA should work instead to get this vital program back on track and continue tearing down this fictional wall.

Read the original story: Data Dispel the Myth of the Blend Wall

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