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Ethanol Producer Magazine

Jul 17, 2020

Sen. Chuck Grassley, R-Iowa, confirmed during a press call on July 17 that he and Sen. Joni Ernst, R-Iowa, will advocate for the inclusion of dedicated relief for ethanol producers the fourth COVID-19 stimulus bill, which Congress is expected to take up as soon as next week.

Grassley sponsored a bill introduced in Maythat would provide relief to ethanol producers via payments for feedstock made through the USDA’s Commodity Credit Corp. During the July 17 call, Grassley indicated he and Ernst would work to include provisions of that bill into the upcoming COVID-19 bill.

In the long-term, however, Grassley said he thinks that hope for the ethanol industry will be directly related to the extent to which the economy picks up and people start driving. While ethanol production has picked up in recent weeks following sharp declines in March and April, Grassley said he thinks it will be a slow turnaround for the industry to return to pre-COVID-19 production levels. “I think the Ernst-Grassley bill will help in that effort a lot, if we can get it put into the [upcoming COVID-19 relief bill],” he said.

Grassley also briefly addressed the “gap year” small refinery exemption (SRE) petitions that several small refineries have filed with the U.S. EPA in recent months in an effort to circumvent a January ruling made by the Tenth Circuit Court of Appeals that determined the EPA cannot extend SREs to any small refinery whose earlier, temporary exemptions had lapsed. The 58 gap year SRE petitions that have been submitted to the EPA so far represent an effort by several small refiners to create a continuous chain of SRE approvals that would allow the impacted refineries to maintain eligibility for future SREs.

Grassley discussed a conversation he and Ernst recently had with EPA Administrator Andrew Wheeler regarding the gap year waivers, noting that Wheeler said the agency is considering the waivers as required by law. Grassley also noted that Wheeler indicated the agency isn’t sure how it would provide relief for any approved gap year waivers. “We got the feeling they don’t know what to do about these, but they have to consider them,” Grassley said.   

He also briefly addressed comments made by Energy Secretary Dan Brouillette during a July 14 hearing held by the House Subcommittee on Energy.  During that hearing, Brouillettee was questioned on the gap year SRE petitions and the Department of Energy’s process to evaluate them. He confirmed that he will work with the DOE’s general council to ensure the analysis his agency is required to conduct is fully compliant with both the Tenth Circuit Court decision and federal statute.

Read the original story here

Senator Amy Klobuchar

Jul 15, 2020

WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) sent a letter to Department of Agriculture (USDA) Secretary Sonny Perdue urging USDA to allow businesses that have received grants under the Higher Blends Infrastructure Incentive Program (HBIIP) to use grant funds to cover project costs incurred any time in 2020—before or after their grant agreements are signed. Eligible fuel retailers in Minnesota may not be able to effectively participate in the HBIIP if construction of storage tanks and blender pumps cannot begin before cold weather and frozen ground halts their ability to complete projects. The senators note that biofuel infrastructure improvement efforts have a significant impact on increasing demand for clean energy and providing consumers with more environmentally friendly fuel choices. 

“Our state has proven to be a valuable partner in utilizing United States Department of Agriculture cost-share programs to aid in the adoption of infrastructure upgrades that deliver higher blends of biofuels to consumers,” the senators wrote.

“Under the original Biofuels Infrastructure Partnership (BIP), the combined federal, state, and matching funds provided investments of $14 million in new biofuels infrastructure in the state, where we now exceed 350 retail stations selling E15,” the senators continued. “These efforts have had an enormous impact in driving investment, increasing demand for clean energy, and providing consumers with more low-emission, environmentally friendly fuel choices when they fill up at the pump. Last year, sales of E15 in Minnesota tripled in volume from 2017 and exceeded 70 million gallons.” 

“With an application window that is set to close on August 13, the effectiveness of the HBIIP in Minnesota and other cold weather states may be limited unless additional flexibility is granted,” the senators continued. “We urge you to modify the program to allow grant funds to cover costs incurred during the 2020 calendar year.”

For years, Klobuchar has been a leader in the fight to strengthen the RFS to support American jobs and decrease dependence on foreign oil. Klobuchar has led several letters urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses and rural communities. 

In June, Klobuchar led a bipartisan letter joined by Smith, with Senators Joni Ernst (R-IA), Tammy Duckworth (D-IL), and Chuck Grassley (R-IA) urging the Environmental Protection Agency (EPA) to reject petitions for Small Refinery Exemptions (SREs) under the Renewable Fuel Standard (RFS) for past compliance years.

At a Senate Agriculture hearing in June, Klobuchar highlighted the urgent need to help farmers identify conservation techniques that would have the greatest benefit for the climate and farmers’ bottom lines.

In December 2019, Klobuchar led a public comment letter to EPA Administrator Andrew Wheeler expressing concern over the proposed supplemental rule establishing the Renewable Fuel Standard’s (RFS) 2020 Renewable Volume Obligations and 2021 Biomass-Based Diesel Volumes. The senators argued that the proposed rule—which determines how much biofuel is required to be blended into our transportation fuel supply on an annual basis—fails to adequately account for the waivers, including those given to big oil companies. In October 2019, Klobuchar sent a letter to U.S. Department of Agriculture Secretary Sonny Perdue asking the agency to document the impact of small refinery waivers on farm income, commodity prices, and renewable fuel usage.

In May 2020, Klobuchar and Senator Chuck Grassley (R-IA) introduced bipartisan legislation to support biofuel producers that are feeling economic hardship from fuel demand and ethanol price declines as a result of the coronavirus pandemic. The Renewable Fuel Feedstock Reimbursement Act will require the U.S. Department of Agriculture (USDA) to reimburse biofuel producers for their feedstock purchases from January 1, 2020 through March 31, 2020 through the Commodity Credit Corporation.

As a senior member of the Senate Agriculture Committee Klobuchar successfully pushed for key climate provisions in the 2018 Farm Bill, including provisions to increase acres in the Conservation Reserve Program (CRP) by 3 million acres, invest in renewable energy programs including the Rural Energy for America Program (REAP), protect native prairies by fixing a loophole in the “Sodsaver” program, and improve the use of conservation data so that farmers are able to make better choices about conservation practices that benefit their yields and the environment - based on her Agriculture Data Act with Senator Thune.  

Full text of today’s letter can be found HERE and below:

Dear Secretary Perdue:

We write to urge you to modify the Higher Blends Infrastructure Incentive Program (HBIIP) so that fuel retailers may use grant funds to cover costs incurred for qualified projects throughout the full 2020 calendar year. Doing so will ensure that the HBIIP meets its goals of increasing the availability of higher-blend biofuels, driving demand for our farmers, and improving air quality through decreased emissions.

Our state has proven to be a valuable partner in utilizing United States Department of Agriculture cost-share programs to aid in the adoption of infrastructure upgrades that deliver higher blends of biofuels to consumers. Under the original Biofuels Infrastructure Partnership (BIP), the combined federal, state, and matching funds provided investments of $14 million in new biofuels infrastructure in the state, where we now exceed 350 retail stations selling E15. These efforts have had an enormous impact in driving investment, increasing demand for clean energy, and providing consumers with more low-emission, environmentally friendly fuel choices when they fill up at the pump. Last year, sales of E15 in Minnesota tripled in volume from 2017 and exceeded 70 million gallons.

That’s why we were disappointed to learn that funds from HBIIP cannot be used to reimburse expenses that are incurred on qualified projects before a grant agreement is signed. Fuel retailers in our state are ready to utilize the HBIIP to purchase, install, and enhance storage tanks and blender pumps dedicated to dispensing E15 and E85, but are concerned that they will not be able to promptly receive permits and begin construction before cold weather and frozen ground halts their ability to complete projects. With an application window that is set to close on August 13, the effectiveness of the HBIIP in Minnesota and other cold weather states may be limited unless additional flexibility is granted.

We urge you to modify the program to allow grant funds to cover costs incurred during the 2020 calendar year.

Thank you for your consideration.

Sincerely,

Read the original press release here.

Renewable Fuels Association

Jul 15, 2020

The COVID-19 crisis has already led to more than $3.4 billion in lost revenues for the U.S. ethanol industry, according to an economic analysis released today by the Renewable Fuels Association. Based on the latest projections from the Energy Information Administration and the Food and Agriculture Policy Research Institute, the RFA study also found that pandemic-related damages in 2020 and 2021 could reach nearly $9 billion.

The new study by RFA Chief Economist Scott Richman uses empirical data to assess the actual impact of COVID-19 on the ethanol industry to date.  For the period running from March through June 2020, the study found:

  • The cumulative decline in ethanol production and consumption exceeded 1.3 billion gallons.
  • Nearly 500 million fewer bushels of corn were used in ethanol production during the period.
  • Industry revenues from ethanol and co-products sales were reduced by over $3.4 billion due to the combination of reduced output and lower prices.

Based on EIA and FAPRI projections and assuming current market conditions do not deteriorate, total pandemic-related revenue losses for the industry could approach $7 billion in 2020 and $1.8 billion in 2021. However, if additional travel and business restrictions are adopted by states, the losses would be larger and may even surpass the $10 billion estimate from RFA’s initial forward-looking analysis released in April.

“At one point in late April, more than half of the ethanol industry’s production capacity was shut down,” said RFA President and CEO Geoff Cooper. “The idling of dozens of ethanol plants reverberated throughout rural America and sent ripple impacts across the farm economy. We have seen conditions improve since the low point in April, but ethanol production and consumption remain well below pre-COVID-19 levels.”

Cooper said the report provides a clearer picture of the damage done to date, and the challenges the industry will continue to face well into 2021. “The analysis again underscores the need for Congress to act expeditiously to deliver emergency relief to the renewable fuels industry,” he said. “As members of the Senate begin to craft their next COVID-19 stimulus package, we implore them to ensure the renewable fuels industry is not left behind again. We ask that they stand up for the 350,000 critical and essential workers whose jobs are supported by the ethanol industry.”

Cooper said RFA strongly supports the Renewable Fuel Reimbursement Program included in the HEROES Act passed by the House on May 15, as well as the Renewable Fuel Feedstock Reimbursement Act of 2020, introduced in the Senate May 19 by Sens. Chuck Grassley (R-IA) and Amy Klobuchar (D-MN). Both programs would provide vital emergency relief to the nation’s struggling ethanol producers and help ensure the industry is able to participate in the nationwide economic recovery from COVID-19. According to RFA, either program should be included in the next comprehensive COVID-19 stimulus bill.

Read the original story here.

Ethanol Producer Magazine

Jul 14, 2020

This winter, countries around the globe introduced months of unprecedented lockdown and shelter-in-place restrictions to stop the spread of COVID-19. An economic shutdown is the worst possible way to get environmental improvement, full stop. However, only a few weeks into lockdown, many noticed fresher air, and earnest talk began of this being a serious wake-up call about the environment. Whether governments in Canada will capitalize on this moment, however, remains to be seen. 

The pandemic quickly cut down car traffic and saw oil prices plummet, a combination that set off a record 5 percent drop in annual carbon emissions from the burning of fossil fuels. Environmentally impressive but not at all perfect. First, this record cut in global emissions is still less than what scientists say is needed every year this decade to avoid disastrous climate impacts for much of the world. Second, even with remarkably less traffic, air pollution did not improve. Analysis by NPR shows that while car traffic decreased by 40 percent across the U.S., ozone pollution dropped only by 15 percent or less, which is to say barely at all, compared with levels over the past five years. Part of the reason is continued air pollutants beyond those from passenger cars, like emissions from trucking, refineries, petrochemical plants and coal power. But the more important lesson is that merely driving less, in and of itself, does little to improve climate outcomes unless we find ways to make sustained improvements. Put another way, the long-term solution remains cleaner fuel, not fewer cars. 

Next come automobiles. On the surface, having a car can seem unnecessary when working from home and getting more purchases delivered. However, an April survey by Capgemini Research Institute suggests otherwise. Capgemini surveyed more than 11,000 potential buyers in 11 countries that account for 62 percent of global vehicle sales. It found half of all global respondents said they plan to drive their cars more in the future and will rely less on public transportation and ride-sharing services such as Uber and Lyft. The reason: “greater control of hygiene.” At the same time, one-third of those surveyed said they plan to buy a car in 2020, with 45 percent of those potential buyers under age 35. That’s a significant percentage, considering that 79 percent of people ages 25 to 35 currently do not own cars. Policymakers need to take note, especially when projecting post-pandemic vehicle fleets and fuel mixes.

As I write this, many jurisdictions are beginning to reopen. Consumers are emerging eager to return to a semblance of “normal”—including driving and the associated carbon and tailpipe emissions. Ethanol blended in gasoline is proven to reduce both, and those designing Canada’s Clean Fuel Standard and proposed provincial increases to E15 in Ontario and Quebec should take note. Even though the pandemic delivered an unprecedented shock, the prospect of a green recovery will ultimately be decided by the strength of our climate policies and the content of our gas tanks.

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Ethanol Producer Magazine

Jul 13, 2020

The Biogenic CO2 Coalition on July 10 issued a statement commending a bipartisan group of four members of Congress for pressing the U.S. EPA to address the concerns of agricultural crop producers and processors in a biogenic CO2 rulemaking.

Reps. Rodney Davis, R-Ill.; Collin Peterson, D-Minn.; Dave Loebsack, D-Iowa; and Roger Marshall, R-Kan., sent a letter to EPA Administrator Andrew Wheeler on June 29 asking the agency “to expeditiously provide regulatory clarity on thede minimisnature of biogenic carbon emissions generated from the processing of agricultural feedstocks such as corn, soybeans, oilseeds, and farm residues before the end of 2020.” The representatives also stressed that “current policy is a significant barrier to opportunities for economic growth across rural America, and a clarified and improved standard for biogenic CO2 from annual crops is needed in 2020.”

In the interim, the representatives said adding language offering background on thede minimus nature of biomass as a preamble to the EPA’s existing woody biomass rule might help reduce the amount of time needed to develop an annual crop standard.

“There is scientific research that supports the position that classifying biogenic emissions from crop-based feedstocks as carbon neutral,de minimis, or insignificant from a carbon accounting and regulatory perspective,” the representatives wrote. “In contrast, current EPA policy treats biogenic emissions the same as those from fossil fuels. This policy does not reflect the fact that biogenic CO2 from agricultural crops is part of a natural baseline carbon cycle by which agricultural crops absorb carbon dioxide as they grow, release it during fermentation or use, and repeat the cycle the next year. As you know, EPA regulates additional biogenic emissions from the baking sector that often present complications in permitting under the Clean Air Act.

“The current regulatory status quo hinders development of the domestic bioeconomy and creates a competitive advantage for competitors outside of the United States,” they continued. “According to USDA, our bioeconomy contributes approximately $459 billion in economic activity, and provides 4.6 million American jobs. It is critical that rural America has the ability to access new opportunities for growth when prospects in traditional markets are uncertain or declining. Farmers, processors, and manufacturers are ready and able to use our food and agricultural strengths to provide high-quality, competitive crop-derived consumer products and materials here and abroad.”

The Biogenic CO2 Coalition issued a statement July 10 thanking Davis, Peterson, Loebsak and Marshall for the letter. Members of the coalition include the American Farm Bureau Federation, Corn Refiners Association, Hemp Industries Association, National Corn Growers Association, National Cotton Council of America, National Cottonseed Products Association, National Farmers Union, National Grain and Feed Association, National Oilseed Processors Association, North American Millers’ Association, and the Plant Based Products Council.

“It’s great to see such strong support from Congress on this important issue. We need the EPA to address this regulatory barrier to help unleash jobs and investment in rural America,” said Zippy Duvall, president of the AFBF. “Farmers need certainty that the growing and processing of crops won’t be regulated the same as fossil fuels. We hope to see more members of Congress come forward to support this commonsense rulemaking.

“America’s agriculture industry greatly appreciates the strong, bipartisan support this critical issue continues to receive from Members of Congress and we encourage even more of them to make their voices heard,” said John Bode, president and CEO of the CRA. American farmers, processors, and manufacturers are poised to make significant investments into new technology, rural development, and infrastructure. This will mean more jobs in America’s heartland, but we must be able to compete fairly against foreign competitors and this unfair regulatory barrier is preventing that from happening.  We hope the EPA will listen to the bipartisan voices of our elected leaders in Congress, as well as those in the scientific community who have also called for action.”

A full copy of the letter can be downloaded from the Biogenic CO2 Coalitionwebsite.

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Biofuels International

Jul 10, 2020

Ethanol destined for industrial-use applications helped stabilise overall US ethanol exports in April and May amid a bleak period for fuel demand globally. 

 
The world’s fuel markets were dramatically disrupted in early 2020 as governments instituted movement restrictions and released social distancing guidelines to address the COVID-19 pandemic. Industrial end-use markets – including chemical, solvent and consumer products – were impacted to a lesser extent as the pandemic triggered substantial uptick for sanitizing and disinfecting products that also use ethanol as an ingredient.  


As a result, industrial ethanol played a significant role in stabilizing the overall US ethanol export mix. At the same time, the US Grains Council (USGC) has been working with its global staff to determine the best opportunities to assist the world’s expanding needs for industrial ethanol alongside a robust fuel ethanol programme.  


“As we work to expand the global use of ethanol, we are creating awareness of how the environmental, human health and economic benefits of the product apply to uses outside of the fuel market,” said Lucas Szabo, USGC manager of global ethanol market development. “We are working to foster the development of end-use applications for industrial ethanol and support current uses like sanitisers.”  


Industrial-use markets typically account for 25% of total U.S. ethanol exports, bought for uses like windshield wiper fluid in South Korea and the European Union or bioplastics in India. As fuel demand began to decline in March, industrial ethanol exports started to represent a larger proportion of the export mix and help support overall US ethanol exports. 

 
US ethanol exports for industrial uses equated to approximately 50 percent of total exports in April and May, at roughly 44 million gallons (15.7 million bushels in corn equivalent) and 33 million gallons (11.7 million bushels in corn equivalent), respectively. 


The remaining half of exports continued to supply fuel markets. India, Nigeria and the Persian Gulf remained strong purchasers of U.S. ethanol for industrial use, while increases in exports to South Korea and Mexico were notable. 


“The importance of industrial ethanol has been highlighted in recent months,” Szabo said. “These markets play a key role in supporting global environmental and human health initiatives in a variety of sectors beyond transportation fuel.”

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Ethanol Producer Magazine

Jul 8, 2020

U.S. ethanol production was up nearly 2 percent the week ending July 3, while weekly ending stocks of fuel ethanol increased by more than 2 percent, according to data released by the U.S. Energy Information Administration on July 8.

U.S. ethanol production averaged 914,000 barrels per day the week ending July 3, up from an average of 900,000 barrels per day the previous week. The week ending July 3 marks the tenth consecutive week of growth following sharp declines that began in late March and continued through April due to market impacts caused by the COVID-19 pandemic. Production was down 133,000 barrels per day when compared to the same week of 2019 and down 165,000 barrels per day when compared to the final week of February, before COVID-19 began to impact U.S. fuel markets.

Weekly ending stocks of fuel ethanol increased for the first time since mid-April, reaching 20.62 million barrels for the week ending July 3, up from 20.164 million barrels the previous week. The increase follows 10 consecutive weeks of falling U.S. weekly ending stocks of fuel ethanol following a record high of 27.689 million barrels that was set the week ending April 17. Weekly ending stocks, however, were down 2.389 million barrels when compared to the same week of last year.

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Ethanol Producer Magazine

Jul 7, 2020

The U.S. Energy Information Administration increased its forecasts for 2020 and 2021 ethanol production in its latest Short-Term Energy Outlook, which was released July 7. Forecasts for ethanol consumption were also revised up.

The EIA currently predicts ethanol production will average approximately 900,000 barrels per day in 2020, up from the 850,000-barrel-per-day prediction made in the agency’sJune STEO. The EIA has also increased its forecast for 2021 ethanol production to an average of 1 million barrels per day, up from its June prediction of 860,000 barrels per day. Production averaged approximately 1.03 million barrels per day in 2019.

On a quarterly basis, the EIA currently expects ethanol production to average 920,000 barrels per day in the third quarter of 2020, increasing to 960,000 barrels per day during the fourth quarter of the year. Data released by the agency shows ethanol production averaged 1.02 million barrels per day during the first quarter of this year, but fell to 710,000 barrels per day during the second quarter. Moving into 2021, the EIA predicts ethanol production to average 980,000 barrels per day during the first quarter, 1 million barrels per day during the second quarter, 1.01 million barrels per day during the third quarter and 1.02 million barrels per day during the fourth quarter.

The EIA currently expects the U.S. to blend 836,000 barrels per day of ethanol this year, up from the June prediction of approximately 800,000 barrels per day. The agency also increased its prediction for 2021 blending to 919,000 barrels per day, up from approximately 880,000 barrels per day predicted in June. Ethanol blending averaged 948,000 barrels per day in 2019. This level of consumption would result in the ethanol share of total gasoline averaging 10.1 percent in 2020 and 2021, compared to 10.2 percent in 2019 and 10.1 percent in 2018. The EIA said this stable ethanol share assumes that growth in higher-level ethanol blends is limited by a combination of lower gasoline prices reducing incentives for increased ethanol blending and limited consumer demand for ethanol blends beyond E10.

The EIA’smost recent weekly ethanol datashows production reached 900,000 barrels per day the week ending, June 26, up from 893,000 barrels per day the previous week. Ethanol stocks fell to 20.164 million barrels the week ending June 26, down from 21.034 million barrels the previous week.

The agency’s most recent monthly data shows the U.S. imported 255,000 barrels of ethanol in March, all from Brazil. The U.S. exported 2.457 million barrels of ethanol in April, primarily to Brazil, India, and Mexico.

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