In the News
October 16, 2017
By Emily Druckman
Despite continued claims by opponents of the Renewable Fuel Standard (RFS), prices of the Renewable Identification Number (RINs) credits used for RFS compliance have not caused changes in retail gasoline prices, according to a new analysis by Informa Agribusiness Consulting.
The analysis, commissioned by the Renewable Fuels Association (RFA), looked at trends in the prices for conventional biofuel RINs and retail gasoline from 2013 to the summer of 2017.
“Based on statistical analysis, it can be concluded that changes in RIN prices did not ‘cause’ the changes that occurred in retail gasoline prices in 2013, and this has continued to be the case through the summer of 2017,” according to Informa Agribusiness Consulting. Instead, the price of retail gasoline has been primarily driven by movements in crude oil prices and by changes in the spread between domestic and international crude oil prices, as well as seasonal demand, the analysis found.
“…[C]hanges in RIN prices have not caused changes in retail gasoline prices (or vice-versa). To any extent that the two are related, it is not a direct causal relationship,” the analysis noted.
“EPA seems to be on a mission to lower the price of RINs,” said RFA President and CEO Bob Dinneen. “The Agency’s proposed 2018 RFS renewable volume obligations, which for the first time lowered the total RFS volumes from the previous year, a subsequent Notice of Data Availability proposing to lower the RFS further to reflect anticipated reductions in imported biodiesel, and rumors of an impending proposal to allow exported biofuel to qualify for the domestic program, all would have the effect of lowering the price of RINs. But this analysis demonstrates that EPA’s efforts will have no impact on consumer gasoline prices. If finalized, however, these proposals will have a decidedly negative impact on the U.S. ethanol industry by artificially cannibalizing demand. If the intent is to lower the price of RINs, EPA should consider expanding ethanol demand by empowering consumers to utilize higher level ethanol blends. After all, ethanol is less expensive than gasoline today and RINs attached to each gallon of ethanol purchased from a producer are free,” he said.
“Thanks to the RFS, U.S. ethanol jobs have grown 121% and the value of ethanol’s output quadrupled to $32.8 billion in 2016. Big Oil needs to stop scapegoating the RFS and ethanol. The RFS is helping to bring the cleanest, lowest-cost and highest-octane fuel to consumers, and no amount of obfuscation can dispute that fact,” Dinneen added.
The Informa Agribusiness Consulting analysis is available here.
Read the original story: New Statistical Analysis: No Relationship Between RIN Credits and Retail Gasoline Prices
Press Release
October 17, 2017
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WASHINGTON, D.C. – U.S. Senator Joni Ernst (R-IA), a member of the Senate Committee on Agriculture, Nutrition, and Forestry and the Senate Committee on Environment and Public Works, issued the following statement after meeting with Environmental Protection Agency (EPA) Administrator Scott Pruitt to express her significant concerns over the agency’s recent action to potentially set biodiesel volumes in the Renewable Fuel Standard (RFS) for 2018 and 2019 at substantially lower volumes, which could in turn, hurt Iowa farmers, manufacturers, and rural communities. “Iowa is the largest producer of ethanol and biodiesel in the nation. Our farmers, ranchers and rural communities depend on maintaining a strong RFS. Time and again, the RFS has proven to be a major driver of alternative fuels and economic development. “Throughout his confirmation process, Administrator Pruitt promised me multiple times that he would uphold the spirit of the RFS, as intended by Congress. Additionally, the President has consistently stated his support for biofuels and made it clear to Administrator Pruitt that he is supportive of the RFS. While the administrator has insisted that the recent actions taken by the EPA are simply to receive additional input on the RFS from stakeholders, it is evident that the ‘stakeholders’ he refers to are not the farmers and manufacturers across the State of Iowa who would be directly affected if the biodiesel volume requirements were lowered. “Our meeting today was another clear demonstration that biofuel-producing states will never stop fighting to protect the RFS. Administrator Pruitt again claimed today that he will not do anything to undermine the program. However, we have heard this before. We now need to see it. I will continue to work with the EPA, but they must prove to the agricultural community who put their faith in this administration that they will fulfill their promise to maintain the letter and the spirit of the RFS. We will not accept anything less.” |
Senator Ernst has been a vocal opponent of any actions taken to lower RFS volumes, stressing her position through letters to EPA Administrator Pruitt and to President Trump. The Senator received commitments from Administrator Pruitt in their pre-confirmation meeting and during his confirmation hearing that he would follow the law and maintain the RFS.
Read the original press release: Ernst Meets with EPA Administrator Pruitt to Stress Need to Maintain a Strong RFS
October 11, 2017
By Trey Mewes
As federal officials back off of the Obama-era Clean Power Plan, U.S. Sen. Al Franken believes there's going to be more work to do to ensure farmers and rural communities benefit from renewable energy sources.
The Minnesota Democrat met with regional agriculture and energy experts Wednesday at Minnesota State University to discuss energy initiatives that will be included in the 2018 farm bill.
"This is added value to our agricultural products," Franken said. "Biofuels, in terms of ethanol and biodiesel, is extremely important to our economy."
Minnesota is one of the nation's leading renewable energy producers, and about 1 in 5 Minnesotans have agriculture-related jobs.
Franken, who serves on the Senate Energy Committee, is helping to write an energy component to the farm bill that could tweak a few energy programs to better fund renewable energy efforts. The bill would, among other things, link federal funding between fire hazard reduction and reducing undergrowth in forests by removing biomass.
One of those tweaks would remove a requirement that bio-based material work needs to produce energy, which experts say could open the door to more plastics, chemicals and other products made from bio-material.
Mike Youngerberg of the Minnesota Biodiesel Council points to a new kind of asphalt sealant made from biodiesel products that works better than current oil-based sealants.
Farmers could one day be able to grow 100 bushels of corn or soybeans for every lane mile, and renewable energy representatives are pushing state officials to use the biodiesel sealant on roads, bridges and parking lots across Minnesota.
"The city of Hutchinson, Minnesota, is saving material on their road maintenance budget just by preserving what they have," Youngerberg said.
Other projects that came up included converting wood chips into biofuel to heat turkey barns, and potential energy storage improvements with renewable fuels that would decrease costs for rural and low-income areas if implemented.
Some experts even advocated for more flexibility to pursue industrial hemp products — which is different than marijuana-based products, though the two have been linked in agricultural and manufacturing discussions in the past.
"We think as a specialty crop it would open some doors for us," said Dan Skogen, a former state senator who serves as the planning and government relations director for the Agricultural Utilization Research Institute.
Yet the energy and ag experts were mainly concerned with securing enough funding to continue renewable energy initiatives such as the Rural Energy for America Program grants and loans.
"There are a lot of great products that could come out of some of these," said Joe Smentek, director of public affairs for the Minnesota Soybean Growers Association. "But if they're not fully funded, if they're not funded adequately, they're worthless."
It appears the Trump administration is souring on renewable energy, however. Environmental Protection Agency Administrator Scott Pruitt announced this week the EPA would roll back greenhouse gas regulations established under former President Barack Obama. And President Donald Trump has publicly pushed for more coal and oil energy in the past.
Franken said after the meeting that despite the president and his administration's opposition to some renewable energy issues, Congress needed to push on as more renewable energy gets produced across the U.S.
"There's no question that ethanol is much more efficient than gasoline in terms of what we're putting in and what we're getting out," Franken said.
Read the original story: Farm Bill Energy Issues Essential for State, Franken Says
Visalia, Calif. October 12, 2017 – Edeniq, Inc., a leading cellulosic and biorefining technology company announced today that the U.S. Environmental Protection Agency (“EPA”) has approved Flint Hills Resources’ registration of its 100 million gallons per year Iowa Falls, Iowa ethanol plant for cellulosic ethanol production using Edeniq’s technology.
Iowa Falls is the fifth existing ethanol plant to receive approval from the EPA for cellulosic ethanol production using Edeniq’s Pathway technology. The four existing ethanol plants that have previously received this approval are: Pacific Ethanol’s Stockton, CA plant; Flint Hills Resources’ Shell Rock, IA plant; Little Sioux Corn Processors’ Marcus, IA plant; and, Siouxland Energy Cooperative’s plant located in Sioux Center, IA.
Edeniq’s registered customers now total 500 MGPY of nameplate ethanol capacity and are averaging more than one percent cellulosic ethanol. Customers’ cellulosic ethanol yields have increased on average in 2017, and Edeniq expects its technology will continue to advance cellulosic yields for its customers. Significant results are now being shown from process improvements and tuning, yielding ever-increasing production and product diversification.
Edeniq’s technology remains the lowest-cost solution for producing and measuring cellulosic ethanol from corn kernel fiber utilizing existing fermenters at existing corn ethanol plants, and has already proven cellulosic ethanol yields of up to 2.5% or higher, as a percentage of its customers’ total volume output. Once approved by EPA, customers are eligible to qualify cellulosic gallons with D3 RINs, which are considered the most valuable on the RIN market. Additional benefits of Edeniq’s technology include increases in corn oil production and greater overall ethanol yields, all provided by a zero-capex cellulosic ethanol production option.
Cam Cast, Edeniq’s Chief Operating Officer, remarked that, “With the investment, partnership and success of existing corn ethanol plants like Flint Hills Resources, Edeniq is the clear market leader in its technology that is enabling—today—millions of gallons of EPA approved cellulosic ethanol to come online. In turn, these gallons materially contribute to the profitability of Edeniq’s customer plants and help achieve the goals of the federal Renewable Fuel Standard. It is a win-win all around.”
Edeniq’s President and CEO, Brian Thome, further stated, “We are encouraged by this latest EPA approval, which enables another customer plant to add significant new value to its existing corn ethanol plant through our technology. Every ethanol plant in the country has the ability to bring millions of EPA approved cellulosic ethanol gallons to market, every year, utilizing our technology. We look forward to working with our existing and future customers to secure additional EPA approvals for cellulosic ethanol. We appreciate EPA’s continued diligent work to process the registration petitions in a timely manner.”
October 10, 2017
By Growth Energy
Growth Energy announced that more than 1,000 fuel stations around the country are offering E15—a fuel with 15 percent ethanol—more than doubling the number of stations from the same time last year.
“This spectacular growth is a testament to the value E15 brings to fuel retailers and consumers,” said Emily Skor, CEO of Growth Energy. “Forward-thinking retailers have figured out that giving their customers more fuel choices is smart business and American drivers have figured out that E15 allows them to save money at the pump all while making a smarter choice for their engines and the environment.”
E15 is cleaner and cooler burning fuel that works well for cars model 2001 and newer and typically saves up to 10 cents per gallon. More and more retailers are responding to consumer demand for those fuel attributes by providing E15 as a choice at their pumps.
Leading retailers including Casey’s, Cenex, Family Express, Kum & Go, Kwik Trip, MAPCO, Minnoco, Murphy USA, Protec Fuel, QuikTrip, RaceTrac, Sheetz, and Thorntons all currently offer E15 at 1,039 locations across the U.S. Many of these are in major metropolitan areas including: Atlanta, Charlotte, Chicago, Dallas, Houston, and San Antonio.
Read the original story: Growth Energy: More Than 1,000 US Fuel Stations Now Offering E15
October 5, 2017
On Oct. 5, a bipartisan group of 38 senators led by Sens. Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., sent a letter to EPA Administrator Scott Pruitt, asking him to ensure the 2018 Renewable Fuel Standard blending requirements promote growth in the U.S. biofuels sector and the U.S. economy.
The letter stresses that when congress adopted the RFS in 2005, its goal was to drive innovation and investments that would bring biofuels to American consumers. “The biofuel industry supports hundreds of thousands of jobs throughout the country, reduces the environmental impact of our transportation and energy sectors, and cuts our reliance on foreign oil,” said the senators in the letter. “The stability of our policy has led to billions of dollars of investment in the biofuel sector. America’s production capacity has expanded more than threefold since 2005 with fuels such as biodiesel, cellulosic ethanol, recycled-waste, algal, and other advanced biofuels.”
“We need to build on this progress,” the senators continued.
The senators argue the proposed renewable volume requirements (RVOs) for 2018 represent a step back when it comes to advanced biofuels, and would result in less renewable fuels being blended than in 2017. “The rule unjustifiably flatlines biomass-based diesel, reduces advanced biofuels, and reduces the cellulosic biofuel blending target by about 25 percent,” said the senators. “The agency arrives at these lower targets by utilizing a new methodology more reliant on historical data than projected volumes. The RFS must by law be administered in a forward-looking manner. The final rule should address these shortfalls.”
The letter also addresses the notice of data availability (NODA) published by the EPA on Sept. 26 that aims to lower the blending targets by the number of gallons of biofuels imported, but still permits those imported gallons to generate compliance credits. In addition, the letter also criticizes reports that the EPA is considering allowing exported gallons of biofuel to generate compliance credits. “Taken together, these actions would reduce renewable fuel blending in the U.S. and create uncertainty for producers,” the senators said.
“If done right, this rule is an opportunity to continue our nation’s path to be not only the world leader in first generation ethanol production, but also in cellulosic ethanol and advanced biofuel production by spurring investment and manufacturing here in the United States rather than overseas,” the senators continued. “We urge you to continue to implement the RFS as intended by Congress and release a strong final rule that would give consumers more choices at the pump, strengthen our economy and make our country more secure.”
In addition to Klobuchar and Grassley, the letter is signed by Sens. Richard Durbin, D-Ill.; John Thune, R-S.D.; Al Franken, D-Minn.; Joni Ernst, R-Iowa; Sheldon Whitehouse, D-R.I; John Hoeven, R-N.D.; Heidi Heitkamp, D.-N.D.; Deb Fischer, R-Neb.; Debbie Stabenow, D-Mich.; Roy Blunt, R-Mo.; Claire McCaskill, D-Mo.; Pat Roberts, R-Kan.; Mazie Hirono, D-Hawaii; Jerry Moran, R-Kan.; Gary Peters, D-Mich.; Tammy Baldwin, D-Wis.; Tammy Duckworth, D-Ill.; Ron Wyden, D-Ore.; Patty Murray, D-Wash.; Jack Reed, D-R.I.; Margaret Hassan, D, N.H.; Jeanne Shaheen, D.- N.H.; Joe Donnelly, D-Ind.; Sherrod Brown, D-Ohio; Maria Cantwell, D-Wash.; Brian Schatz, D-Hawaii; Martin Heinrich, D-N.M.; Bill Nelson, D-Fla.; Jeffrey Merkley, D-Ore.; Catherine Cortez Masto, D-Nev.; Richard Blumenthal, D-Conn.; Edward Markey, D-Mass.; Jon Tester, D-Mont.; Patrick Leahy, D-Vt.; Elizabeth Warren, D-Mass.; and Michael Bennet, D-Colo.
Read the original article: Senators Urge Pruitt to Issue Strong 2018 RFS RVOs
October 2, 2017
Individual markets in Africa vary greatly, but the continent as a whole offers significant potential demand for U.S. ethanol exports.
Brian Healy, U.S. Grains Council (USGC) manager of ethanol export market development, recently traveled to Kenya to evaluate and develop opportunities for U.S. ethanol in the continent and speak at a regional ethanol and sugar conference. There, he was able to engage with senior agricultural, energy and environmental ministry officials to learn more about ethanol production, use and trade across the region.
Healy explained that Kenya is a significant importer of finished gasoline, driven by an expanding middle class, high levels of development and access to capital. In addition, the country already has pro-ethanol policies in place, providing the foundation for ethanol use.
“Kenya, which has had an ethanol mandate since 2010, is currently not blending ethanol into their fuel due to infrastructure constraints related to refining and blending as well as limited expansion in feedstock production,” Healy said. “However, opportunities for U.S. ethanol do exist in this and other African markets.”
USGC is working to identify new market opportunities for U.S. ethanol in Africa, including promoting the development of pro-ethanol policies throughout the region and providing production and market information on the value of U.S. ethanol.
While many African countries have opportunities to expand their own domestic feedstock production, U.S. ethanol is already making its way into these markets via the Persian Gulf, where greater refining capacity exists. According to a study commissioned by the council, U.S. ethanol exports to the United Arab Emirates are being blended into gasoline and shipped to East African markets.
The use of ethanol supports these countries in achieving goals related to reducing environmental pollution and improving air quality for human health, in addition to providing economic value as an octane enhancer. These important components form the foundation of USGC’s global ethanol market development engagements and programs.
To communicate these benefits, the council focuses on building relationships in the fuel and ethanol sectors by working with local industry to share with regulators lessons learned from the U.S. adoption of ethanol, particularly related to reducing air pollution and diversifying fuel supplies. These efforts also help establish the U.S. as a reliable and affordable source of ethanol.
“We are broadening our outreach by identifying and analyzing potential new markets and developing strategies tailored to the culture and conditions of each market,” Healy said. “At the same time, we are committed to our established markets in this truly global engagement.
Read the original article: USGC Works to Expand Ethanol Use in Africa
October 4, 2017
By James Q. Lynch
Sen. Chuck Grassley believes there still is time to prevent the U.S. Environmental Protection Agency from implementing changes in the Renewable Fuel Standard that could do “severe harm” to the biofuels industry.
After speaking with President Donald Trump, Grassley and fellow Iowa Republican Sen. Joni Ernst, and Sen. Deb Fischer, R-Nebraska, announced they will meet Oct. 17 with EPA Administrator Scott Pruitt to discuss the future of the standard.
Renewable fuels advocates are concerned over the EPA’s announcement it might lower required levels of advanced biofuels for 2018 — and that exports of traditional ethanol could count toward meeting that.
Although Trump pledged during the 2016 election campaign he would support renewable fuels, Pruitt has been critical of the rule.
Maintaining or increasing the standard is important “because we’ve kind of reached the breaking point on getting ethanol out (and) mixed as E10,” Grassley said Wednesday. Ethanol advocates want to develop the market for E15 — a blend of gasoline and 15 percent ethanol.
To do that, Grassley said it’s important “not to screw around” with the standard in a way that could discourage investment in getting E15 distributed to retailers.
Grassley also wants a change to the renewable volume obligations, which the EPA uses to implement the fuel standard, so the higher ethanol blend could be sold year-round in all parts the country.
Although Grassley did not say Trump offered any assurance the EPA won’t lower the required levels for advanced biofuels, his expectation is that the agency will follow the law.
“That means these cutbacks by EPA can’t go through,” he said.
The EPA has not finalized the proposed changes and is seeking input from stakeholders.
“I think public comments are going to make some difference,” Grassley said.
Read the original article: Grassley Hopeful on Fate of Renewable Fuels
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October 3, 2017
Press Release
ENGLEWOOD, Colo., Oct. 03, 2017 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ:GEVO), announced today that it expects to supply its renewable alcohol-to-jet fuel (ATJ) to the Virgin Australia Group, a leading Australian airline group. The Virgin Australia Group will be responsible for coordinating the purchase, supply and blending of the ATJ into the fuel supply system at Brisbane Airport in Queensland, Australia. Gevo’s ATJ is expected to be blended with traditional jet fuel and supplied on flights departing Brisbane Airport, including Virgin Australia flights. It is currently contemplated that Gevo will ship the first gallons of ATJ to the Virgin Australia Group in October 2017.
Gevo will supply the ATJ from its hydrocarbon plant based in Silsbee, Texas. The ATJ is derived from isobutanol produced at its commercial isobutanol plant located in Luverne, Minnesota (the “Luverne Facility”).
Gevo is looking to expand its isobutanol production capabilities at the Luverne Facility to enable larger production volumes of its ATJ in the future. Gevo has a goal in 2017 of obtaining binding supply contracts for a combination of isobutanol and hydrocarbon products (ATJ and isooctane) equal to at least 50% of the capacity of the anticipated expanded Luverne Facility. These supply contracts are expected to form the basis on which Gevo would set the specific configuration of the Luverne Facility in terms of end product mix between isobutanol, ATJ and isooctane.
The Queensland government is supporting the arrangement as a first step in the development of a renewable jet fuel production industry in the state. Queensland is looking to leverage carbohydrate-based feedstocks, abundant to its local agricultural sector, to support the build-out of renewable jet fuel production plants in the future. Gevo is well positioned to play a role in this growth, as the company believes its ATJ is cost advantaged in comparison to other renewable jet alternatives derived from carbohydrate-based feedstocks.
Virgin Australia Group Chief Executive Officer John Borghetti said: “This initiative builds on Virgin Australia’s commitment to be a leader in the commercialization of the sustainable aviation fuel industry in Australia. The project announced today is critical to testing the fuel supply chain infrastructure in Australia to ensure that Virgin Australia and Brisbane Airport are ready for the commercial supply of these exciting fuels.”
“Biojet is fast becoming a staple of the aviation industry, and Brisbane is joining major airports such as Los Angeles and Oslo in embracing a sustainable aviation future. Although the aviation biojet fuel sector is quite new, there has been more than a decade of work behind it and hundreds of thousands of hours of fuel testing to prove the fuels are compatible with fossil based fuels. The first aviation biojet fuels were approved for commercial flights in 2011,” said Queensland Premier Annastacia Palaszczuk.
“We are excited to work in partnership with Virgin Australia, the Queensland government and the Brisbane Airport Corporation to enable flights out of the Brisbane Airport using our ATJ. We believe Queensland offers huge potential for low-cost, biomass-based feedstocks to produce biofuels. When I visited Queensland last year for the Biofutures Industry Forum, I discovered the depth and diversity of its agriculture sector. It really opened our eyes to Queensland's potential for sustainable aviation fuels based on Gevo’s ATJ technology,” added Dr. Patrick Gruber, Gevo’s Chief Executive Officer.
About Gevo
Gevo is a 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 bio-based 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.
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include statements relating to the commercial flights to be flown by Virgin Australia, Gevo’s supply of ATJ, Gevo’s plans and goals, including its plans to expand the Luverne Facility, the Queensland government’s plans to develop the renewable jet fuel production industry and the properties of Gevo’s ATJ, are made on the basis of the current beliefs, expectations and assumptions of the management of Gevo and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and Gevo undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Gevo believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Gevo in general, see the risk disclosures in the Annual Report on Form 10-K of Gevo for the year ended December 31, 2016, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the U.S. Securities and Exchange Commission by Gevo.
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Read the original press release: Gevo to Supply Jet Fuel to Virgin Australia at Brisbane Airport in Australia Flights Expected to be Flown through the End of 2018
October 2, 2017
By Steve Roe
In the decade since the Renewable Fuel Standard (RFS) has been in place, it's been a tremendous success, providing a cleaner, lower-cost choice for consumers and boosting local economies.
However, two recent actions by Environmental Protection Agency administrator Scott Pruitt, and a rumored third proposal, threaten to reverse the progress made and put refiners — not consumers — in the driver's seat.
Administrator Pruitt has indicated he wants to lower the price of Renewable Identification Numbers (RINs), the credits used by refiners in the RFS to add flexibility and lower cost in the program. That's driving EPA's rationale for proposing to lower the 2018 Renewable Volume Obligations (RVO), the first time the agency has lowered the RFS from the previous year's level.
Administrator Pruitt's RIN price destruction campaign is not ending there. Recently, EPA released a Notice of Data Availability, seeking comment on another idea hatched by the oil industry — to lower the 2018 RVO's equivalent to potential biodiesel imports, arguing that the RFS was intended as a domestic fuel program and imported volumes should not be accounted for in determining available supply.
The problem with this approach is obvious. First, reducing the RVO will not discourage imports from entering the U.S., meaning that available supply will remain the same, but demand will have been butchered, thus lowering prices for refiners. Second, for the U.S. to use a domestic energy program to discourage imports has "World Trade Organization violation" stamped all over it.
Meantime, a rumor circulating now suggests EPA is considering a proposal to allow RINs attached to exported gallons to count toward a refiner's RFS obligation. Currently, those RINs are retired because the statute requires the renewable fuel be used in the United States. It is a domestic energy program, after all.
One might conclude that if EPA were to lower the RFS to account for imports, it would increase the RFS to account for exports. But that's apparently not what EPA is contemplating. The objective here is to add about 1.2 billion RINs (the approximate amount exported today) to an already saturated RIN market, cratering the market and undermining any future investment in biofuels infrastructure or technology.
Administrator Pruitt is missing a critical point — lowering the price of RINs does not translate into consumer savings. RINs are free. When ethanol producers sell a gallon of biofuel to a gasoline marketer, EPA requires them to supply an RIN, as well. The RIN market is created when obligated parties separate them from the gallon of biofuel and sell them to another obligated party that has failed to blend enough ethanol to meet their obligation.
Consumer prices are unaffected.
Whenever President Trump visits Iowa, he extols the virtues of ethanol, American energy and the RFS. It is past time for the President to act on his commitment. He must rein in his EPA administrator, who is implementing the RFS in a way that accommodates oil companies, not renewable fuels and certainly not consumers. He must make the RFS great again.
Read the original article: Trump Must Make the Renewable Fuel Standard Great Again
October 3, 2017
By Emily Druckman
The Environmental Protection Agency’s recent “consideration of drastic, unprecedented changes to the Renewable Fuel Standard” would undermine the future growth of the biofuels industry, the Renewable Fuels Association and 10 other biofuel groups wrote today to President Trump. In the letter, the groups urged the president to ensure the administration remains firm in its commitment to the U.S. biofuels industry.
In July, EPA proposed to reduce the total 2018 RFS renewable fuel blending requirements below the levels required in 2017 and late last month, the agency said it was considering further reductions to the 2018 RFS volumes. This is in addition to rumors that EPA is considering a proposal in which U.S. biofuel export volumes would count towards compliance with the RFS.
“If the proposed changes are finalized, EPA’s actions would cause severe harm to our industry, undermining your efforts to drive economic growth and secure America’s status as the global leader in biofuel production. We urge you to act quickly to continue to grow the RFS….” the groups wrote.
In the letter, the groups clarified that they oppose any weakening of the 15 billion gallon conventional biofuel requirement, believe the proposed reduction of the 2018 advanced biofuel requirement is unwarranted and the current treatment of imports and exports under the RFS should be maintained.
“President Trump has been a strong and consistent supporter of fuel ethanol generally and the RFS specifically,” said RFA President and CEO Bob Dinneen. “However, recent proposals by EPA appear to run counter to the president’s renewable energy vision. We want to ensure a strong RFS is maintained, providing consumers with the cleanest, lowest cost and highest octane fuel on the planet.”
To view a copy of the letter, visit: http://www.ethanolrfa.org/wp-content/uploads/2017/10/POTUSletterOct3.pdf.
Read the original release: RFA Signs Letter Urging President Trump to Maintain Strong Commitment to Biofuels
September 20, 2017
By Mark Dorenkamp
The CEO of an ethanol plant in southeast Minnesota says area corn farmers will benefit from an ongoing construction project.
Randy Doyal with Al-Corn Clean Fuel in Claremont tells Brownfield the 50 million-gallon facility is being updated to become more efficient.
“I know that the producers who sell to Al-Corn are licking their chops because they know we’re going to really increase our corn draw. That means our local corn price is going to go up.”
When finished, the Al-Corn plant will generate some of its own electricity using a combined heat and power (CHP) unit.
“What it really is (like) is a jet engine. And this jet engine doesn’t burn kerosene, it burns natural gas. As it spins and turns the generator to generate electricity. We’ll be generating about as much power as we use in the current plant, so not quite half of what we’re going to be using in the future. But a nice amount.”
Doyal says the CHP system also produces steam for the plant by taking exhaust and running it through a boiler.
“So we’re generating both electricity and steam off the same BTU of natural gas. That makes it really efficient.”
The Al-Corn expansion and modernization project is expected to be completed by next spring.
Read the original story and listen to the full interview: Al-Corn Ethanol Project Will Benefit Area Corn Farmers
September 27, 2017
The Environmental Protection Agency is considering a change to U.S. biofuels policy that would allow exports of ethanol to count toward the country’s annual biofuels volumes mandates, two sources familiar with the matter told Reuters on Wednesday.
The proposal would represent a significant shift from the original mandate of the 2005 renewable fuel program, designed to increase the amount ethanol and biodiesel in the country’s fuel pool while boosting the U.S. agricultural sector.
The move would benefit U.S. merchant refiners like Valero and PBF Energy, who are required under the U.S. Renewable Fuel Standard to blend increasing volumes of ethanol and other biofuels into the country’s gasoline and diesel every year, at a cost of hundreds of millions of dollars.
The refiners, led by billionaire Carl Icahn, fought to get the Trump Administration to shift the obligation further down the supply chain, but those efforts failed.
The current proposal, still in the discussion stage in the office of EPA Administrator Scott Pruitt, is seen as a way to reduce their financial burden.
Under the program, refiners must either blend the renewable fuels into the fuel pool or buy credits from those who do.
Currently, U.S. biofuels policy only counts fuels blended in the United States toward the annual volumes mandates and does not count ethanol that is produced in the United States and exported for use abroad.
By counting the exports, it would increase the amount of available credits by the equivalent of as much 1 billion gallons of biofuel and push down prices.
The EPA proposed a requirement that refiners and importers blend in 15 billion gallons of corn-based ethanol and other conventional renewable fuels next year. Last year, the United States exported more than 1 billion gallons of ethanol in 2016, mainly to Brazil, Canada and China, according to the Energy Information Administration.
It was unclear if the proposal would require legislative approval. If so, it would face stiff opposition from the powerful corn lobby.
The sources, who asked not to be named because they were not authorized to speak on the issue, said the EPA was considering the idea but had not made a decision.
EPA spokeswoman Liz Bowman did not respond to a request for comment.
Brooke Coleman, executive director of the Advanced Biofuels Business Council, said that counting exports was illegal under the 2007 Renewable Fuels Standard, which was supposed to increase the amount of biofuels used in the United States.
He said making such a change at a time when companies have already invested under the program was wrong and would discourage future investments.
Read the original article: EPA Mulls Counting Ethanol Exports Against Mandates: Sources
September 26, 2017
The US Environmental Protection Agency said Tuesday it was considering cutting by up to 15% how much advanced biofuel and biodiesel must get mixed into the US fuel supply in 2018 and 2019, based on a potential spike in biodiesel prices.
The agency said new US duties expected on imports of biodiesel from Argentina and Indonesia, coupled with the expiration of a federal tax credit at the end of 2016, could disrupt biodiesel supply and drive up prices.
It asked industry in a regulatory notice to weigh in on that possibility and comment on whether EPA has statutory authority to cut volumes under the Renewable Fuel Standard. As of early Tuesday afternoon, there was no closing date for the comment period.
"EPA remains concerned about the high cost of advanced biofuels," the notice said.
RIN prices quickly reacted to the notice, plunging after a morning uptick.
Biodiesel (D4) RINs for 2017 compliance traded as low 95 cents after S&P Global Platts assessed them at $1.0375 on Monday. Ethanol (D6) RINs also tumbled, trading as low as 75 cents after Platts assessed them at 83.5 cents Monday.
In July, EPA proposed requiring refiners and blenders to mix 19.24 billion gallons of total renewable fuel, including 4.24 billion gallons of advanced biofuel, in 2018. It proposed the 2019 biodiesel blending mandate at 2.1 billion gallons.
Cutting the advanced biofuel and biodiesel portions of the blending mandate would also lower the total volume to keep conventional ethanol's share from climbing above 15 billion gallons.
EPA said the expiration of the $1/gal biodiesel blenders tax credit at the end of 2016 has had a significant impact on the effective price of biodiesel sold to blenders.
"We also expect the price of biodiesel used in the US could increase further following a recent preliminary determination by the Department of Commerce that it would be appropriate to place countervailing duties of 41%-68% on imports of biodiesel from Argentina and Indonesia," the notice said.
The Commerce Department is expected to make a final decision on the countervailing duty orders on December 29.
A biofuels trader said the cuts contemplated by EPA would zero out any gains domestic biodiesel producers were hoping to realize from countervailing duties.
"It was like, 'Here you go, we will impose duties on imports. Oh and by the way, for that we are reducing demand domestically,'" the trader said.
Read the original article: US EPA Considers Cutting 2018-19 Advanced Biofuel Mandate on Biodiesel Supply
September 26, 2017
On Tuesday, the Environmental Protection Agency (EPA) announced they wanted comments for the potential options for reducing biofuels and renewable fuel volumes lower than those proposed in the 2018 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS).
The Notice of Data Availability (NODA) issued by the EPA outlined how the EPA could reduce the 2018 biofuel volume requirement from a proposed 4.24 billion gallons to 3.77 billion gallons, and the total renewable fuel volume requirement from a proposed 19.24 billion gallons to 18.77 billion gallons.
These proposed decreases are driven by concerns over biofuel imports.
Bob Dinneen, president and CEO of the Renewable Fuels Association, issued a statement, explaining his continuing frustrations to the proposed cuts from the EPA. It reads in part:
“There is no rationale for further lowering either the 2018 advanced biofuel volume requirement or the total renewable fuel volume…We see no statutory basis whatsoever for attempting to limit biofuel imports through the use of a general waiver.”
Sen. Chuck Grassley (R-Ia.) expressed his concerns about the opportunity for the public to comment on the potential reductions. His statement reads in part:
“It’s outrageous that the EPA would change course and propose a reduction in renewable fuel volumes. This seems like a bait-and-switch from the EPA’s prior proposal and from assurances from the President himself and Cabinet secretaries in my office prior to conformation for their strong support of renewable fuels. That’s contrary to the goal of America first. I plan to press the Administration to drop this terrible plan.”
Read the original article: Grassley: Proposed Biofuel Reduction Seems Like "Bait-And-Switch"
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By Michael Hirtzer
CHICAGO (Reuters) - U.S. ethanol makers, taking advantage of low corn prices, are ramping up production and expanding capacity to try to squeeze less-efficient competitors out of an overcrowded market.
The ethanol industry, which for years bolstered corn prices and U.S. farming, faces saturated domestic demand and lost exports as trade wars bite into the global market.
But U.S. producers have added more capacity in 2017 than in any of the previous six years and hit record output levels - and there is more to come.
“There’s only two speeds - there’s full throttle or off,” said Randall Doyal, chief executive officer of Al-Corn Clean Fuel in Minnesota. His company, which accounts for about 1 percent of total U.S. ethanol production, is three months ahead of schedule to double annual capacity to 120 million gallons by early 2018. “We are going to oversupply the market,” he said.
Since 2007, nearly every gallon of gasoline sold in the United States is mixed with about 10 percent ethanol as part of a mandate enacted to reduce dependence on foreign oil and boost use of renewable fuels.
Doyal said the expansion would increase fixed costs only slightly, enabling more profit per unit from higher volumes.
The top U.S. ethanol producer, Archer Daniels Midland Co, is also wielding its volume power. “We’ll probably run our plants to maximize yield,” Chief Executive Officer Juan Luciano said last month on a conference call with analysts. ADM can produce about 1.8 billion gallons annually - more than total U.S. exports last year.
The United States currently has production potential of about 16.3 billion to 16.4 billion gallons a year, according to producers and analysts, up from roughly 15.2 billion in 2016. That is more than enough to cover the call from the domestic market, which should be about 15 billion gallons in 2018, according to requirements from the Environmental Protection Agency.
Production hit 1.060 million barrels a day (44.52 million gallons) at the end of August, close to the all-time high touched at the end of January.
THIN MARGINS, HIGHER YIELDS
Average margins in the top ethanol state of Iowa hit a 2017 high of 30 cents a gallon in August. That was less than a third of the record highs seen in late 2014, despite corn prices near one-year lows. Efficiencies have boosted yields only slightly, to 2.91 gallons from a bushel of corn from 2.84 gallons last year, according to the Renewable Fuels Association.
Exports, which sucked up much of the oversupply last year at 1.17 billion gallons, were up 30 percent in the first seven months of this year to 803 million gallons.But now that outlet is under threat after Brazil and China - the second- and third-biggest importers in 2016 after longtime No. 1 buyer Canada - slapped on tariffs. China’s imports plunged to 53,000 gallons through the end of July from 146 million gallons in the same period of 2016 after tariff hikes in January, while Brazil set a limit on tax-free imports on Sept. 1.
“Added capacity for the industry will have to lean heavily on exports, and that’s why the Brazil decision is so damaging,” said Scott Irwin, agricultural economist for the University of Illinois.
Those that can, continue to ramp up output. No. 2 ethanol maker POET LLC, which can make nearly 1.6 billion gallons, is spending $120 million to expand an Ohio plant to 150 million gallons from 70 million gallons by late 2018.
Ring-Neck Energy & Feed LLC is pouring concrete for a $140 million plant in South Dakota and Tharaldson Ethanol of North Dakota has a $3.4 million expansion funded in part with a $341,000 federal grant.
Those that cannot expand could face closure, said John Christianson of consultancy Christianson & Associates.
“There’s a laggard group that hasn’t had the ability to improve themselves,” he said, declining to name specific companies. “If we produce too much... there’s a bottom group that runs out of cash and they will shut down.”
Read the original story here.