In the News

University Analysis: EPA’s Refiner Waivers Could Cost Ethanol Industry $20 Billion in Losses

September 7, 2018

By Rachel Gantz

A recent analysis by economists at the University of Missouri’s Food and Agriculture Policy Research Institute (FAPRI) shows that the U.S. ethanol industry could lose 4.6 billion gallons of domestic demand and nearly $20 billion in sales revenue over the next six years if the Environmental Protection Agency (EPA) continues its current practice of exempting dozens of small refiners from their blending obligations under the Renewable Fuel Standard (RFS).

The Renewable Fuels Association (RFA) said the analysis demonstrates the need for EPA to prospectively reallocate small refiner exemptions to larger refiners to ensure statutory RFS volumes are maintained.

FAPRI recently published an update to its March 2018 U.S. Baseline Outlook for Agricultural and Biofuel Markets. The update adopts a new assumption that future “…implementation of the Renewable Fuel Standard follows recent practices, including small refinery waivers.”

The result of integrating this new assumption into the outlook underscores the impact of the small refiner exemptions on the ethanol industry. Comparing the March 2018 outlook to the updated outlook reveals the following effects of the small refiner waivers through 2023:

-The de facto RFS requirement for conventional biofuel like corn ethanol falls from the statutory level of 15 billion gallons annually to just 13.7 billion gallons.

-U.S. ethanol consumption drops by an average of 761 million gallons per year between 2018 and 2023, or a total of 4.6 billion gallons over the six-year period. That is equivalent to 1.64 billion bushels of corn demand, or nearly 300 million bushels per year.

-The average ethanol inclusion rate in gasoline falls under 10.0% in 2019 and steadily slides to 9.5% by 2023. By comparison, the March 2018 outlook projected the national average blend rate above 10.0% every year, rising steadily to 10.4% by 2023.

-Consumption of ethanol in flex fuels (like E85) and mid-level blends (like E15) falls 17% between 2018 and 2023.

-Wholesale ethanol prices plunge by an average of 19 cents per gallon, or 11%, between 2018 and 2023. Ethanol prices are hit especially hard in the longer term, with the updated outlook lowering 2023 ethanol prices by 27 cents per gallon, or 15%, compared to the March 2018 outlook.

-The combination of reduced U.S. ethanol production and lower ethanol prices reduces the industry’s gross ethanol sales revenues by an average of $3.3 billion per year, or $19.7 billion over the 2018-2023 period. That’s 12% below the March 2018 projection.

-Conventional ethanol RIN prices plummet, averaging just 10 cents between 2018 and 2023. That’s 85% lower than the 64-cent average in the March 2018 outlook.

An annual summary of the comparison between the March 2018 outlook and the new update is available here.

“The FAPRI analysis clearly shows that demand destruction from small refiner exemptions is real and has substantial economic consequences,” said RFA Chief Economist Scott Richman. “If EPA continues to retroactively grant these exemptions, it will cause further harm to the ethanol industry through lower prices, reduced production, and additional demand erosion. The solution to this problem is straightforward: EPA should project exempted volumes when it sets the annual RVOs, which effectively reallocates them to other obligated parties and keeps the RFS whole.”

Read the original release: University Analysis: EPA’s Refiner Waivers Could Cost Ethanol Industry $20 Billion in Losses

President Trump Calls for E15 Relief Now

Brownfield News

August 29, 2018

By Mark Dorenkamp

U.S. Ag Secretary Sonny Perdue says President Trump wants E15 relief now.

Secretary Perdue visited the Farm Progress Show Wednesday, telling attendees of an RFS rally hosted by the Iowa Renewable Fuels Association he received a phone call from the President on his way in.

“He said ‘Sonny, I’ve got two things for you. And one is we need to get this RFS situation straightened out and get E15 12 months.”

Perdue said this was the fifth or sixth time President Trump had reached out to him personally asking about a year-round waiver for E15.

“It’s on his mind, and he wants something done quickly. He said ‘You get with that EPA administrator and bring me something next week that I can announce.”

Perdue says he’s optimistic a solution could materialize quickly, similar to the preliminary trade agreement between the U.S. and Mexico announced earlier this week.

Read the original article: President Trump Calls for E15 Relief Now

RFA, Growth Energy File Lawsuit Over RFS Exemption Records

Ethanol Producer Magazine

August 30, 2018

By the Renewable Fuels Association and Growth Energy

The Renewable Fuels Association and Growth Energy today filed a lawsuit in federal district court, alleging that the U.S. EPA and U.S. Department of Energy have improperly denied agency records requested by RFA, Growth Energy, and others under the Freedom of Information Act. The requested documents relate to exemptions from Renewable Fuel Standard compliance obligations granted by EPA.

“As recently as November of 2016, EPA itself has proposed a rule that would make basic information regarding small refiner exemptions available to the public, including the name of the refinery requesting the exemption, its location, and the nature of the relief requested. EPA has admitted that such information should not be treated as confidential,” said RFA President and CEO Bob Dinneen. “So, why is EPA continuing to hide this information from public scrutiny and protect both the previous EPA administrator and highly profitable refiners who probably exploited and abused the exemption provision? Because EPA and DOE both ignored our repeated requests for basic information on the exemptions, we had no choice but to take this legal action. America’s ethanol producers, who are experiencing economic hardship because of EPA’s mishandling of the small refiner exemptions, deserve to know what was happening behind the curtain at EPA. We will continue to fight and take every action necessary to ensure the RFS is implemented and enforced as intended by Congress.”

“EPA should come clean and provide the public with what it deserves—a full accounting of the stark increase in the number of small refinery exemptions it has granted in recent years,” said Growth Energy CEO Emily Skor. “We deserve to know why EPA has supercharged its approvals of these exemptions without reallocating lost gallons and making sure that RFS volumes are met each year.”

RFA and Growth Energy are the named plaintiffs in the lawsuit, filed in the U.S. District Court for the District of Columbia. Both RFA and Growth Energy have submitted several records requests dating back to April 2018 seeking information related to exemptions from the RFS that EPA has granted to small refineries in complete secrecy. EPA and DOE have failed to act within the timeframes required by FOIA and have improperly withheld the requested documents.

By filing this lawsuit now, RFA, Growth Energy, and their allies in the renewable fuel industry aim to increase transparency and foster better oversight of EPA’s use of small refinery exemptions.

Background:

Under the RFS, refineries producing transportation fuel must demonstrate each year that they have blended certain volumes of renewable fuel into gasoline or diesel fuel or acquired credits from others called “RINs” representing all or part of those volume obligations. The RFS allows certain “small” refineries—those with a throughput of less than 75,000 barrels per day—to petition EPA for a temporary extension of an exemption from the renewable fuel volume requirements for a given year if they can show that compliance would impose a “disproportionate economic hardship” on them. EPA is required to consult with the Department of Energy to determine whether to grant an exemption.

To date, EPA has yet to provide the public with any information regarding how it assesses small refinery exemption petitions and it has resisted release of almost all information regarding recent exemptions that have been granted, including: (1) the fact that it has granted an exemption; (2) the name of the exempted refinery; (3) the volume of renewable fuel exempted; (4) the years covered by the exemptions; (5) EPA’s analysis of whether the small refinery would be subject to disproportionate economic harm if it had to comply with the RFS.

Earlier this year, RFA, Growth Energy and allied organizations also filed a lawsuit in the D.C. Circuit Court of Appeals and a related administrative petition with EPA on the misuse of small refiner exemptions. In addition, RFA, the National Corn Growers Association, and other partners filed a lawsuit in the 10th Circuit Court of Appeals on specific exemptions improperly granted by EPA.

Read the original article: RFA, Growth Energy File Lawsuit Over RFS Exemption Records

USDA Memo Encourages EPA To Account For Small Refinery Waivers

Ethanol Producer Magazine

By Erin Voegele

Aug 29, 2018

A recent memo sent to the U.S. EPA by the USDA Office of the Chief Economist shows the USDA believes the EPA should account for the impact of small refinery hardship waivers in its annual Renewable Fuel Standard rulemaking.

The memo, dated Aug. 15, was filed as a public comment with regard to the EPA’s proposed rulemaking to set 2019 renewable volume obligations (RVOs) under the RFS, along with the 2020 RVO for biomass-based diesel. The public comment period on the rulemaking closed Aug. 17.

Within the memo the USDA said that although it is one of the agencies that participates in the internal comment period as publication of the final rule is in development, the department also elected to “publicly comment on specific points appearing from all commentators in the dock concerning issues, after reviewing the docket and proposed rule, which the USDA feels strongly should be considered when addressing the final rule.”

The memo outlines USDA support for accounting the impact of small refinery hardship waivers in annual RFS rulemakings. “USDA agrees with points in the docket which suggest that the current methodology in projecting zero small refinery waivers and volumes in the preliminary rule is inappropriate and results in an analytical inconsistency, significantly reduces the transparency of EPA operations and increases the uncertainty for market participants,” said the USDA in the memo. “Furthermore the USDA supports corrective suggestions for using a realistic projection of waived small refinery volumes of gasoline and diesel production in the docket concerning these points.”

The USDA cites a comment from interagency review that states the EPA should include an estimate for 2019 small refinery waivers based on waivers granted over the past two years, as current procedures ensure the RVO isn’t met.

“The USDA strongly agrees with this conclusion,” said the department in the memo, stressing that lack of a proper or correct estimate of small refinery waivers causes an inconsistency between the EPA analysis of available supplies used in setting the RVOs, the percent standards, the costs calculated for the program, and EPA assertions that actions are “RIN stock neutral.” According to the USDA, “current methodology results in over estimating costs, a failure to hit the total RVO supported by the analysis, and has resulted in a more than doubling of carry in stocks of RINs, despite the year over year increase in the stated total RVO.”

The USDA also expresses its agreement with a comment that asks the EPA to provide information on total volumes waived, the status of 2018 waivers at the time of release, and a discussion about the use of small refinery waiver estimates for gasoline and diesel. According to the UDSA, a lack of public information regarding the number and size of small refinery waivers adds volatility to the RIN markets, reduces market transparency and efficiency, and raises costs of the program.

The memo also discusses the EPA’s use of its cellulosic waiver authority. While the USDA said it does not disagree with the appropriateness of using the cellulosic waiver authority to lower the total and cellulosic standards, the department stressed that it does disagree with newly stated constrains the EPA has placed on the agency when those waivers are applied. The memo explains that there has been a change in tone within the RFS rulemaking under which the agency has imposed on itself the idea that total and advanced RVOs must be reduced by the same amount. A comment cited by the USDA states this change of tone should be removed to “remain consistent with [the agency’s] previous rules noting that this simply reflects a preference for advanced over conventional fuels, if available, when backfilling the cellulosic waiver.”

In the memo, the USDA states “it is unclear why EPA would add or reinforce language which places a constraint on future actions.” The USDA goes on to explain that under a scenario where the market was able to absorb ethanol, but supplies of advanced biofuels were constrained, the result of the artificial constraint laid out by EPA in the proposed rule would give preference to gasoline usage, which results in no greenhouse gas (GHG) reductions, over corn ethanol, which results in a 20 percent GHG reduction.

A full copy of the memo can be downloaded from the Regulations.gov website.

Industry faults EPA as Cellulosic Ethanol Production Lags

E&E News

August 22, 2018

By Marc Heller

EPA is sharply underestimating the amount of cellulosic ethanol that U.S. companies could produce — and its own administrative lag is partly to blame, industry sources say.

The agency faces a backlog of applications from companies that want to make cellulosic biofuel from various feedstocks and have them qualify under the federal renewable fuel standard's mandates. That's discouraging investment and undermining the RFS, said the Biotechnology Innovation Organization, a trade group supporting biofuels.

"Cellulosic biofuel companies have waited on average more than 29 months for EPA to address their petitions for approval. Due to these delays, six have abandoned plans to produce biofuels due to the impact of petition approval delay. Three additional companies simply withdrew their petitions for the same reason," the organization said in comments submitted to EPA for the agency's proposed 2019 biofuel volumes.

"A wait time of multiple years can be fatal for commercialization of new technology," the organization said. "Without a pathway to the fuel market, companies find it difficult to attract the investment necessary to initiate, continue, and complete the construction and startup of new facilities."

In some cases, companies using feedstocks already allowed as "pathways" under the RFS are waiting for EPA to approve related applications, such as for registering facilities that plan to make ethanol from corn kernel fibers.

At EPA, the challenge may be both bureaucratic and technical. The agency said it received more than 1,700 requests for fuels registrations last year and already a similar number to handle this year.

"Registration applications under the cellulosic pathways are typically among the most complicated and resource intensive to evaluate," an EPA spokesman said. "A number of the registration requests for cellulosic pathways involve novel regulatory and technical issues that must be resolved prior to facility registration."

The pipeline wasn't always so slow, said Brian Thome, president and CEO of Edeniq Inc., a Visalia, Calif., company that develops ways to produce and measure cellulosic ethanol from corn kernel fiber. In 2017, the agency typically moved applications along within six to eight months, and the Trump and Obama administrations each approved applications for the company's clients, he said.

Still, Thome said, he believes factors other than staffing shortages and technical issues may be at play. And while he declined to speculate on what those are, the administration has sent mixed signals on ethanol generally. EPA recently approved an RFS pathway for sorghum, for instance, but the agency's increased granting of RFS waivers to small petroleum refineries has irked the ethanol industry.

Several applications are pending at EPA for Edeniq clients, Thome said, adding that his interactions with the agency over time have been positive. EPA officials haven't told him of any staffing shortages, Thome said, but they have said the agency is trying to decide how to approach applications from multiple companies using very similar technologies.

Edeniq outlined some of its concerns in comments submitted to EPA on the proposed 2019 biofuel volumes.

EPA has also projected, overall, that cellulosic ethanol production will increase in 2019. The proposed volumes in the agency's published rule would climb from 288 million gallons this year to 381 million gallons in 2019, although most of that represents compressed natural gas and liquefied natural gas derived from biogas, EPA said.

The agency proposed 24 million gallons of liquid cellulosic ethanol for next year. With approvals in place, the industry could provide as much as 50 million gallons more than that, Edeniq said in comments submitted to the agency. Thome told E&E News that as much as 100 million gallons of the biofuel could be at stake.

"This is real volume and growth that appear to be sitting still now," Thome told E&E News.

Overall, cellulosic ethanol trails far behind where Congress thought it would be as a fuel source when the RFS was updated in 2007. The RFS mandated 8.5 billion gallons for 2019, and EPA proposed to use its waiver authority, as it has done in prior years, to set a lower level.

In its proposed rule, EPA said it bases the cellulosic biofuel volumes on facilities already registered, as well as ones officials believe will come on line. The projections aren't always on target; for 2015, the agency underestimated production. Then, estimates for 2016 and 2017 turned out too high, EPA said.

The "somewhat inaccurate" track record, the agency said, reflects the inherent difficulty with projecting cellulosic biofuel production. "It also emphasizes the importance of continuing to make refinements to our projection methodology in order to make our projections more accurate," EPA said.

This year, the agency has made improvements to the registration review system, including a more streamlined approach and posting a pending application list, a spokesman said.

Reprinted with permission from E&E News

Read the original article: Industry faults EPA as Cellulosic Ethanol Production Lags

Advanced Fuel Dynamics Announces Performance Flex Fuel Systems For UTV Applications

August 2018

advancedfueldynamics2

Advanced Fuel Dynamics, the leading manufacturer of performance flex fuel systems, released its PROFLEX Commander flex fuel system for multiple UTV applications. Available for major powersports manufacturers such as Polaris, Yamaha, Can-Am, and Textron, this system allows UTV-owners to install a hassle-free and ready-to-use fully flex fuel system for their off-road vehicle so they can immediately start making more power on E85 fuel.

Advanced Fuel Dynamics’ PROFLEX Commander turns a gasoline-powered vehicle into a flex fuel vehicle capable of running E85, gas, or any mixture of ethanol and gas. The PROFLEX Commander allows the user to run any fuel mixture without the need to adjust the tune or switch maps. The kits are installed through a simple bolt-on installation and are compatible with the vehicle’s factory or aftermarket tune.

Advanced Fuel Dynamics offers its PROFLEX Commander for a variety of powersports manufacturers. Specific applications include the 2008-2015 Polaris RZR 4 800 and RZR S 800, 2016 and up Yamaha YXZ1000R, Can-Am Commander 1000 and Textron Wildcat Sport 700 and Wildcat XX.

Each PROFLEX Commander system comes with the PROFLEX Commander unit, a Flex Fuel Sensor with fuel lines and fittings, and a wiring harness for each application. The kit also allows for smartphone connectivity through the PROFLEX Connect app, enabling the user to monitor ethanol content in real time.

For more information on the PROFLEX Commander fuel system and applications, please visit www.advancedfueldynamics.com. Each PROFLEX Commander kit is backed by a limited 12-month warranty and comes standard with all parts needed for installation.

Read the original press release: Advanced Fuel Dynamics Announces Performance Flex Fuel Systems For UTV Applications

Six States Account For More Than 70% Of U.S. Fuel Ethanol Production

Energy Information Administration

Aug 15, 2018

Six states accounted for 72 percent of U.S. fuel ethanol production in 2016, according to the most recent estimates from EIA’s State Energy Data System. Iowa, Nebraska, Illinois, Minnesota, Indiana, and South Dakota collectively produced 265 million barrels of fuel ethanol out of the U.S. total of 367 million barrels. All 6 states are among the top 10 U.S. producers of corn, the primary feedstock for ethanol plants, according to the U.S. Department of Agriculture (USDA)

U.S. fuel ethanol production more than doubled from 2006 to 2016. The Energy Policy Act of 2005 created the Renewable Fuel Standard, and by the end of that decade, most motor gasoline sold in the United States was blended with 10% fuel ethanol by volume. In recent years, growth in export markets has contributed to further increases in domestic fuel ethanol production.

Iowa’s 41 ethanol plants have a capacity of more than 102 million barrels of fuel ethanol per year. The state’s capacity is nearly twice that of the next-highest state and represents about 19 percent of total U.S. ethanol production capacity. The state has also received grant money from the USDA’s Biofuel Infrastructure Partnership (BIP) and now has 256 public E85 stations, the third-most in the nation, according to the U.S. Department of Energy’s Alternative Fuels Data Center. E85 is a gasoline-ethanol blend containing 51 percent to 83 percent ethanol.

Nebraska’s 26 ethanol plants have a combined nameplate capacity of more than 50 million barrels per year, the second-highest level in the nation. The plants use more than 700 million bushels of corn per year and annually produce more than 6 million tons of distillers’ grains, which are used to feed cattle.

Illinois, with 13 ethanol plants capable of producing 40 million barrels per year, has the third-highest annual fuel ethanol nameplate capacity in the nation. The state’s farmland, which covers about three-quarters of the state’s total land area, provides most of the corn used as the feedstock for the plants. Illinois has also received grant money from the BIP and has the second-highest number of public E85 stations, at 262.

Minnesota’s 19 ethanol plants have a nameplate capacity of 28 million barrels per year. In 2007, the Minnesota legislature created a four-year grant program that offered incentives to encourage the adoption of E85. By the end of the program in 2011, Minnesota had 78 public E85 stations. The state has since received BIP grant money and now leads the nation with almost 400 public E85 refueling stations, more than one-tenth of the U.S. total.

Indiana and South Dakota each have more than 27 million barrels of annual nameplate capacity, at 14 and 15 plants, respectively. Although it is one of the top national ethanol producers, South Dakota consumes only about 50 million gallons of fuel ethanol per year, making it a major supplier to other states.

EIA ethanol production

Grassley Says EPA No Longer Considering Export RINs

Agri Pulse

Aug 15, 2018

By Spencer Chase

Sen. Chuck Grassley says the Environmental Protection Agency is no longer considering a controversial provision that would have made exported ethanol and biodiesel eligible for the credits used to measure compliance with the federal blending mandate.

The Iowa Republican makes the inference based on recent dialogue with EPA Acting Administrator Andrew Wheeler, leading him to conclude the policy is no longer being considered as a potential compromise that would allow for year-round sale of E15.

“Only one thing you can say for certain, that the idea that (former EPA Administrator Scott) Pruitt had and refineries were pushing to have RINs applied to exports, that’s not on the table,” Grassley told reporters Wednesday morning.

The idea of making exported biofuels eligible for Renewable Identification Numbers – the credits used to track Renewable Fuel Standard compliance – has seen a good deal of movement in the last 12 months. Pruitt sent a letter to Capitol Hill in October assuring lawmakers that at the time, EPA had “not taken any formal action to propose this idea, nor will EPA pursue regulations.”

But the idea reemerged earlier this year, leading President Donald Trump to reject a deal that would have traded the export RIN for the Reid Vapor Pressure waiver necessary for year-round E15 sales.

The export RIN being taken out of consideration would be a win for ethanol interests, but the desire to secure the RVP waiver remains. Grassley said he believes Wheeler is acting on a directive from the White House to find a deal.

“There seems to be a real message from the White House to Wheeler to do something for E15 12 months out of the year, but there has to be something also done for refineries,” he said. “So I think Wheeler is trying to find some balance.”

Wheeler addressed the issue shortly after being named EPA’s acting administrator, telling reporters that any changes to the RFS would need to move as a package. Those comments seemingly eliminated the possibility the agency could pursue the RVP waiver as a standalone action, something Grassley – and a host of pro-biofuel lawmakers and lobbyists – still hopes could happen.

“I can’t say for sure he’s of this frame of mind, but I sure hope he … that we’ve already accomplished what the refineries want, and he would just go ahead with just something for ethanol,” Grassley said, noting the drop in RIN prices since biofuel talks at the administration level began.

Under a provision in the Clean Air Act, E15 - a gasoline mix with 15 percent ethanol - cannot be sold during the summer months, a restriction that begins in June. Grassley said he drew the conclusion from his conversations with Wheeler that he wants to “get it done a long time before next season,” and “there may be some time limit that he has set for himself, and he didn’t say what it was, but if he doesn’t find some sort of compromise, that he’s going to have to move ahead anyway.”

In a statement to Agri-Pulse, EPA spokesman Michael Abboud did not address specific questions about the export RIN, but he noted the agency is working with the White House as well as the Energy and Agriculture departments “to develop a win-win solution for the president that provides regulatory relief for the agriculture community and RIN stability for our nation’s refiners.”

Read the original story here : Grassley Says EPA No Longer Considering Export RINs

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EPA Chief Does Little to Calm Iowa Farmers' Fears

The Gazette

August 13, 2018

By Erin Murphy

A visit from the federal government’s top environmental protection chief Monday did not ease the concerns of Iowa agricultural leaders.

Andrew Wheeler, who last month took over as administrator of the U.S. Environmental Protection Agency, discussed myriad issues Monday in a meeting with top Iowa government and industry leaders at the State Fair.

The chief topic was the Renewable Fuel Standard, the federal requirement that a certain amount of corn-based ethanol be blended into the nation’s fuel supply. Iowa leaders have expressed concern that various moves by President Donald Trump’s administration has weakened the mandate, thus dampening the demand for ethanol and other biofuels.

Wheeler said earlier Monday in an interview that the administration fully supports the letter and spirit of the mandate. But he also hedged on potential ways to preserve the mandate, leaving industry disappointed.

Under previous EPA administrator Scott Pruitt, the agency granted to some oil refineries waivers that allowed them to skirt the mandate.

Wheeler did not say the agency would cease the waiver process, only that he would provide more transparency to the waiver process.

“I know that’s been a point of contention,” Wheeler said during his interview with the Gazette-Lee Des Moines Bureau. “I want to provide more transparency about how we make those decisions.”

Industry leaders have called for year-round access to E15, an ethanol blend that is available only during summer, and for the agency to reallocate the millions of gallons that were lost as a result of previous agency actions.

Wheeler said the agency is “looking into” those proposals, saying he wants to be certain the agency has the legal authority to take such action.

He also indicated any approval of E15 for year-round access likely will be part of a package deal. Ag leaders say any concessions to the oil industry as part of any such deal will weaken the mandate.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said any such deal would not be greeted with approval from the renewable fuels industries.

Shaw was one of the industry leaders to meet with Wheeler at the State Fair.

“If you have a 15-billion (gallons mandated) RFS and every year you waive 1.5 billion gallons through the small refinery exemption, you really have a 13.5 billion (gallons mandated) RFS, which means you don’t have an RFS for corn ethanol because we already blended in the low 14 (million gallons),” Shaw said.

Gov. Kim Reynolds, Iowa ag secretary Mike Naig, 3rd District U.S. Rep. David Young and former Iowa Farm Bureau President Craig Lang also were among the dozens of government and industry leaders who attended the discussion with Wheeler.

Wheeler, in his interview with the bureau, said under his watch the agency will continue to examine ways to reduce regulations, and that a new rule regarding what small waterways are subject to federal regulations.

Ag groups pushed back against the rule under President Barack Obama’s administration, saying it was too broad and subjected farmers to regulation of small collections of water on their farms. Environmental groups warn softening the rule will make it more difficult to observe and punish pollution.

“We want to provide certainty on what is a wetland to the American public so you know without going to court,” Wheeler said.

Wheeler also said throughout his career he has been cognizant of costs associated with office expenses.

Pruitt resigned amid scrutiny of the agency’s spending under his watch, among other allegations.

“I can’t comment on any investigations,” Wheeler said, “but I always have been, throughout my career, cognizant about costs. And that’s continuing.”

Wheeler said any expenses over a certain threshold must be approved my multiple individuals, and all travel expenses are “scrutinized.”

Read the original article: EPA Chief Does Little to Calm Iowa Farmers' Fears

Gevo Discusses Future Expansion Plans for Luverne Plant Site

Ethanol Producer Magazine

August 9, 2018

By Erin Voegele

Gevo Inc. released second quarter financial results on Aug. 8, reporting a 28.9 percent increase in product sales when compared to the same period of last year, and discussing the company’s future plans.

“During the quarter we made very good progress in restructuring our balance sheet and on the business development front by securing our first commercial off-take agreement for our renewable alcohol-to-jet fuel,” said Patrick Gruber, CEO of Gevo. “We continue to make progress with our plan to improve our profitability through low-carbon ethanol, which we expect to reduce our net cash burn over time, and we continue to work to secure solid offtake agreements to support the buildout of our plant at Luverne for isobutanol, jet fuel and isooctane. As a company, we believe our strengthened balance sheet should enable us to execute our plans.”

During an investor call, Gruber discussed the company’s plans to become profitable. He said that improving the Luverne, Minnesota, plant site will set the stage for low-carbon isobutanol, low-carbon jet fuel and low-carbon isooctane production. Along the way, he said the company intends to produce low-carbon ethanol. Gruber said the company expects to announce more detailed plans to improve plant economics soon, once timelines for equipment and other factors are pinned down.

Gevo reported the sale of its products increased by 28.9 percent during the second quarter, when compared to the same period of last year. The increase is primarily attributed to the increased production of ethanol and distillers grains.

Revenues for the second quarter reached $9.4 million, up from $7.5 million during the same period of last year. Gross loss was $1.3 million for the quarter, compared to a $2.2 million gross loss for the same quarter of last year. Loss from operations was $4.4 million, compared to a $6.2 million loss from operations during the second quarter of 2017. Non-CAPP cash EBITDA loss was $2.6 million, compared to a $4.4 million non-CAAP cash EBITDA loss during the same period of last year. Net loss for the quarter was $11.5 million, compared with a net loss of $10.2 million during the second quarter.

Read the original article: Gevo Discusses Future Expansion Plans for Luverne Plant Site

U.S. Ethanol Shipments Rebound as Brazil and Canada Vie for the Top Spot; DDGS Shipments Push Higher

Renewable Fuels Association

August 8, 2018

By Ann Lewis

U.S. ethanol exports totaled 151.5 million gallons (mg) in June—up 65% from the prior month and in line with the monthly average for 2018, according to government data released last week and analyzed by the Renewable Fuels Association (RFA). Brazil resumed its position as the largest export market with 35.7 mg (24% of total ethanol exports), nearly quadrupling its May volume. Canada was close on Brazil’s heels with 33.5 mg imported in June—up 5%—and securing 22% of the U.S. ethanol export market.

Seven of the top 10 export markets saw growth in June. Exports to India surged to 26.7 mg—more than four times the volume shipped in May and its second-largest monthly imports on record. For the second straight month, shipments to the Philippines nearly doubled, surging to a record high of 19.1 mg in June (13% market share). The Netherlands imported 11.4 mg for its largest volume in six months. A record 4.3 mg was exported to Malaysia, and Jamaica boosted its offtake to 3.1 mg. Among markets that saw a decrease in export volumes were South Korea (6.8 mg, down 19%), Colombia (3.7 mg, down 27%), and Mexico (1.9 mg, down 47%). Notably, after 27 straight months as a customer, Peru stepped out of the U.S. ethanol export market altogether following a record buy (12.7 mg) in May. Year-to-date U.S. ethanol exports stand at 927.7 mg, implying a record annualized total of 1.86 billion gallons.

Shipments of U.S. undenatured fuel ethanol in June rose 159% to 80.5 mg. Brazil was the top undenatured fuel ethanol customer at 32.6 mg (41% of all shipments). This was a 246% increase over May, but still only coming in at about half of its April purchases. India re-entered the marketplace with its strongest demand of the year, taking 18.8 mg (23% share). Record volumes of undenatured product were shipped to the Netherlands (9.8 mg, 12%) and Malaysia (3.7 mg, 5%). The Philippines—May’s top undenatured fuel customer—decreased its purchases by 13% to 8.2 mg (10%). These five largest markets accounted for over 90% of the U.S. undenatured fuel ethanol market in June.

June exports of U.S. denatured fuel ethanol expanded 15% to a three-month high of 58.3 mg. Top customer Canada took in half of all U.S. denatured fuel product at 30.4 mg. The Philippines entered the market after a quiet six months with 10.9 mg (19% market share). Sizable volumes also went to Colombia (3.7 mg, down 16%), Jamaica (3.1 mg, for a 22-month high), and Brazil (3.0 mg).

June sales of ethanol for non-fuel, non-beverage purposes grew 25% to the largest monthly volume on record. American shippers more than doubled exports of denatured non-fuel product at 12.3 mg, besting the record set seven months ago by over 3 mg. India accounted for two-thirds of the export market at 7.9 mg. Canada decreased its purchases by 9% to 2.9 mg, losing its grip as our largest customer for the first time in nine months. Most of the remaining denatured, non-fuel exports headed to South Korea (1.4 mg). Shipments of undenatured non-fuel product winnowed down 95% to just 335,031 gallons, the lowest volume in 14 months. Top importers were South Korea and Mexico.

June was essentially absent of any fuel ethanol imports. As a result, just 1.6 mg of Brazilian ethanol has entered the United States in the first half of 2018, according to the monthly data.

American exports of dried distillers grains with solubles (DDGS)—the animal feed co-product generated by dry mill ethanol plants—improved by 4% to reach a 16-month high of 1.035 million metric tons (mt) in June. Exports shipped south of the border to Mexico increased 28% to 186,989 mt (18% market share). That volume was enough to surpass Turkey as the top customer; still, Turkey imported 175,030 mt (17% market share). Shipments to South Korea (103,357 mt) and Vietnam (78,157 mt) contracted by 17% and 13%, respectively. Indonesia (64,614 mt) and Thailand (63,909 mt) were other sizable markets. Year-to-date exports stand at 5.67 million mt, implying an annualized total of 11.33 million mt. If realized, distillers grains exports would yield a three-year high.

Read the original article: U.S. Ethanol Shipments Rebound as Brazil and Canada Vie for the Top Spot; DDGS Shipments Push Higher

USGC Joins USDA Trade Mission to Promote Ethanol

Ethanol Producer Magazine

August 7, 2018

By the U.S. Grains Council

The U.S. Grains Council and ethanol industry partners added an octane enhancer to the USDA’s Agricultural Trade Mission to Indonesia in July, led by USDA Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney.

The Council delegation joined the larger mission to Indonesia to follow-up on the productive discussions at the Ethanol Summit of the Asia-Pacific (ESOTAP) this spring, then traveled separately to Vietnam to meet with industry and ministry leaders there.

The Indonesian government has had an ethanol policy in place since 2006, but the mandate has largely gone unmet. Indonesia currently imports half of its gasoline demand, and the government has set a goal for renewables to represent 23 percent of the country’s energy mix by 2025 and to reduce greenhouse gas (GHG) emissions by 29 percent by 2030. Importing a lower-cost form of octane, ethanol, could help Indonesia secure these achievements by reducing the use of aromatics.

“On the books, Indonesia has goals to ratchet up ethanol blends in its fuel supply from 2 percent to 5 percent and eventually 10 percent,” said Manuel Sanchez, USGC regional director for Southeast Asia. “To date, however, Indonesia has blended almost no ethanol, despite global availability and the potential for immediate cost savings.”

Instead, the Indonesian government has instituted import restrictions and high tariff rates for ethanol and ethanol products inconsistent with those for gasoline or aromatics. As a result, the Council delegation met with Indonesian ministry officials to highlight the benefits of increased ethanol use in terms of air quality and GHG emission reductions and the importance of a policy with a role for trade in developing a consistent supply of ethanol.

The delegation also highlighted the competitiveness of U.S. ethanol as an octane enhancer compared to MTBE (methyl tertiary-butyl ether) and other aromatics, such as benzene, toluene and xylene. Substituting ethanol for aromatics also reduces ultrafine particulate matter, which is nanoscale sized and comprises the bulk of airborne particulate matter. This type of particulate matter can penetrate deep within the lungs and enter the bloodstream, making it a major respiratory healthy concern, especially for children and young adults.

“Reducing market access barriers is a critical component of the Council’s engagement,” Sanchez said. “Regulatory hurdles impede Indonesia’s ability to capture the societal and cost-saving benefits generated by increased ethanol use.”

Other markets in Southeast Asia are already implementing policies that work toward accomplishing the goals of open trade and achieving the full range of economic, environmental and human health benefits associated with increased ethanol usage.

Vietnamese officials helped craft the guiding document the Council uses in its global ethanol promotion efforts—the Asia-Pacific Economic Cooperation (APEC) road map for best practices for creating and implementing ethanol policies with a role for trade. The country started offering E5 on Jan. 1, 2018, with a goal to move to E10 by 2020, as total gasoline consumption rates are expected to grow by nearly 10 percent annually. The Council delegation met with Vietnamese energy ministry officials, ethanol producers and oil industry members to learn more and offer their support for the country’s trade-friendly policies.

The Vietnamese ethanol industry expects to source some of the ethanol needed to fulfill these mandates domestically from local cassava producers. But, the government and industry are open to importing ethanol should domestic production fall short of feedstock needed to fulfill the mandate, as ethanol plants come back online or feedstock prices fluctuate.

“Vietnam has set ambitious targets for ethanol blending levels,” Sanchez said. “The government and industry are working through best practices in incentivizing consumers at the pump and ethanol blenders to support increased ethanol use – a major improvement from unsuccessful attempts nearly a decade ago and critical for successful implementation.”

Work in Vietnam and Indonesia offers a good example of the broad scope of the Council’s efforts to promote ethanol in Southeast Asia. From strong policies with a role from trade to regulatory barriers, Council delegations like the one in July aim to learn more about the specific needs of each individual market and how to pave the way for increased global ethanol usage.

Find the APEC ethanol roadmap here and more information on ESOTAP here.

Read the original article: USGC Joins USDA Trade Mission to Promote Ethanol

USGC Explores Potential Ethanol Demand in Chile and Argentina

Ethanol Producer Magazine

August 3, 2018

By U.S. Grains Council

Increased global bioethanol use is only a well-constructed policy decision away in markets like Argentina and Chile. The U.S. Grains Council (USGC) traveled to both countries in June to investigate their existing ethanol markets and discover how new or improved ethanol policies could boost demand while opening the door to imports.

“New market development opportunities for ethanol continue to arise in the Western Hemisphere,” said Mike Dwyer, USGC chief economist and lead on ethanol promotion globally. “The Council is discussing with governments and industries how to meet increasing demand for fuel and achieve economic, environmental and human health benefits through the use of blending ethanol into their gasoline supplies.”

After participating in the Ethanol Summit of the Americas in Houston in October 2017 (an event sponsored by the Council and its domestic partners), another South American country, Bolivia, decided to dramatically boost its commitment to bioethanol by starting at E10 in January 2019 and rising to E25 by 2025. The Council decided to visit Argentina and Chile with the hope officials there would see the value of enacting similar policies but with substantially more gallons involved.

In Chile, inexperience using ethanol is hindering U.S. ethanol export opportunities. Government regulations do allow blending of ethanol into fuel between 2 and 5 percent. However, importers and domestic refiners have selected MTBE (methyl tertiary butyl ether)—a substance displaced by ethanol in the United States due to potential health effects in drinking water—as the preferred oxygenate based on a lack of knowledge of how to use ethanol and insufficient domestic feedstock production. As a result, Chile is the third largest user of MTBE in the region.

The Council delegation gauged interest in using ethanol as a biofuel in addition to investigating the major regulatory and technical obstacles to adopting a national ethanol program in Chile.

“Our meetings in Chile opened the door for future technical dialogues between the U.S. ethanol industry and Chilean refineries,” Dwyer said. “The use of ethanol could help the Chilean government fulfill fuel quality requirements and comply with Chilean environmental standards—all at a price economically advantageous to Chilean fuel blenders.”

Argentina, in contrast, has both an existing ethanol policy and domestic ethanol industry to supply octane for the 2.4 billion gallons of gasoline consumed annually. The biofuels program, established in 2006, has encouraged the development of a domestic industry that uses both corn and sugarcane as feedstock.

The current E12 blend results in 278 million gallons of ethanol consumption annually, pulled equally from both corn and sugarcane via a government quota.

The sugarcane industry has been unable to fill its portion of the ethanol quota in months preceding the harvesting season when supplies of sugarcane are at their lowest (May-June). Despite goals to increase plant capacity by up to 20 percent, the domestic ethanol industry in Argentina also has geographical constraints that limit sugarcane production in the northern region of the country. These dynamics led to temporary ethanol imports of 1.3 million gallons (5 million liters) in the second quarter of 2018 to compensate for the deficit in local sugarcane-based ethanol production.

In contrast, the country’s corn-based ethanol industry—with five refineries—could increase production but is awaiting the government to signal support before increasing infrastructure investment.

Policy changes could come by 2021, including price liberalization for ethanol. Ethanol producers are in discussions with the government regarding whether to move to the Brazilian model of flex-fuel vehicles that can use pure E100 hydrous or to stay with anhydrous ethanol blended with gasoline at a rate not to exceed a 27 percent blend.

The Council delegation explored how these projected changes could affect the future of the ethanol industry in Argentina. The group also planted the concept of adjusting these policies to allow for trade when domestic supplies of feedstock are short, allowing for consistency in fuel blending and stability that would support the domestic industry’s growth.

“The Council will continue strengthening relationships with the ethanol industry in Argentina and Chile,” Dwyer said. “We saw in these markets the importance of engagement on how to build a robust ethanol program with a role for trade when domestic ethanol supplies are insufficient. We would like them to see the United States as a reliable partner—both in terms of import supply to supplement domestic production and as a source of technical and policy advice as they seek to decarbonize their fuel markets in the years ahead.”

Read the original article: USGC Explores Potential Ethanol Demand in Chile and Argentina

US Fuel Ethanol Production Capacity Continues to Increase

Ethanol Producer Magazine

August 1, 2018

By U.S. Energy Information Administration

Fuel ethanol production capacity in the United States reached more than 16 billion gallons per year, or 1.06 million barrels per day (b/d), at the beginning of 2018, according to EIA's most recent U.S. Fuel Ethanol Plant Production Capacity report. Total listed, or nameplate capacity, of operable ethanol plants increased by 5 percent—more than 700 million gallons per year—between January 2017 and January 2018.

The U.S. Fuel Ethanol Plant Production Capacity report shows EIA’s most up-to-date data tracking of the U.S fuel ethanol industry. Part of the increase in nameplate fuel ethanol production capacity in the most recent report is the result of EIA’s outreach to survey respondents that were operating at levels higher than their listed production capacities, which had resulted in utilization rates higher than 100 percent.

In previous surveys, these respondents reported the facilities’ original design capacity values and may not have accounted for expansions and modifications at the plants. This year, some respondents increased their nameplate production capacity values to be consistent with EIA’s definition. The remaining increase in production capacity was a result of plant improvements and process modifications such as equipment upgrades, plant expansions, improved maintenance routines, and installation of new equipment at some facilities.

Most of the U.S. fuel ethanol production capacity is located in the Midwest region (as defined by Petroleum Administration for Defense District, or PADD, 2). Total nameplate capacity in the Midwest was 14.8 billion gallons per year at the beginning of 2018 (967,000 b/d), an increase of 5 percent—more than 650 million gallons per year—between January 2017 and January 2018. Of the top 13 fuel ethanol-producing states, 12 are located in the Midwest. The top three states—Iowa, Nebraska, and Illinois—contain more than half of the nation’s total ethanol production capacity.

Actual U.S. production of fuel ethanol reached a total of 15.8 billion gallons (1.03 million b/d) in 2017. In EIA's June Short-Term Energy Outlook (STEO), U.S. production of fuel ethanol was forecast to reach 15.9 billion gallons (1.04 million b/d) in 2018, resulting in 98 percent utilization of reported nameplate capacity as of January 1, 2018.

Read the original article: US Fuel Ethanol Production Capacity Continues to Increase

EPA: 25.57 Million Cellulosic RINs Generated in June

Ethanol Producer Magazine

July 26, 2018

By Erin Voegele

The U.S. EPA has released renewable identification number (RIN) generation data for June, reporting that more than 1.6 billion RINs were generated during the month, including nearly 25.57 million cellulosic RINs.

More than 25.27 million D3 cellulosic biofuel RINs were generated in June, bringing the net total for the first half of the year to 109.75 million. So far this year, 5.58 million D3 RINs have been generated for ethanol, with 74.4 million generated for renewable compressed natural gas and 29.76 million generated for renewable liquefied natural gas. Nearly 93.53 million D3 RINs have been generated domestically, with 16.22 million generated by importers.

According to the EPA, 297,480 D7 cellulosic diesel RINs were generated in June, bringing the net total for the first six months of the year to 1.51 million. More than 1.5 million D7 RINs were generated for cellulosic heating oil, with 11,256 generated for cellulosic diesel. So far this year, 11,256 D7 RINs were generated domestically, with 1.5 million generated by importers.

More than 4.59 million D5 advanced biofuel RINs were generated in June, bringing the net total for the first half of the year to 40.27 million. Nearly 12.27 million D5 RINs were generated for ethanol, with 15.04 million generated for naphtha, 1.73 million generated for heating oil, 10.92 million generated for nonester renewable diesel, and 887,405 generated for renewable compressed natural gas. So far this year, all 40.85 million D5 RINs have been generated domestically.

Nearly 1.26 billion D6 renewable fuel RINs were generated in June, bringing the net total for the first half of the year to 7.45 billion. Most, 7.33 billion, were generated for ethanol, with 118.61 million generated for nonester renewable diesel. To date, 7.33 billion D6 RINs have been generated domestically, with 4.89 million generated by importers and 118.61 million generated by foreign entities.

Nearly 317.47 million D4 biomass-based diesel RINs were generated in June, bringing the net total for the first six months of the year to 1.76 billion. The majority, 1.39 billion, were generated for biodiesel, with 381.86 million generated for nonester renewable diesel and 1.39 million generated for renewable jet fuel. To date, 1.46 billion D4 RINs were generated domestically, with 123.23 million generated by importers and 188.79 million generated by foreign entities.

The EPA estimates nearly 9.42 billion RINs have been generated so far this year, with 312.46 million retired, 355.21 million locked and available and 8.75 billion unlocked and available.

Read the original article: EPA: 25.57 Million Cellulosic RINs Generated in June

Inver Grove Heights Biofuel Plant Still on Track, But Hurdles Remain

Star Tribune

July 21, 2018

By Erin Adler

Plans to create the country’s first garbage-to-ethanol plant in Inver Grove Heights are progressing. Yet hurdles remain for Enerkem, the Canadian company that wants to build the multimillion-dollar facility.

“[I] hope it happens,” said Joe Lynch, Inver Grove Heights’ city administrator. “It could put us on the map.”

A victory for the Montreal-based company came in late June when the Metropolitan Council approved plans for a new wastewater reuse facility in Rosemount, only the second such plant in the Twin Cities.

Turning waste into fuel is a water-intensive process. The proposed Southeast Metro Water Reclamation Facility would treat wastewater — water already used by humans or industry — and provide the reclaimed water to the Enerkem facility. That means the biofuel plant wouldn’t need to draw its daily requirement of 1.6 million gallons or so from area aquifers.

“Getting their support was a key element for us,” said Pierre Boisseau, Enerkem’s senior communications director.

Boisseau said the facility’s plans are in the engineering phase. Enerkem is wading through the permit process, seeking several environmental permits to build the estimated $200 million facility, including from the Minnesota Pollution Control Agency, he said.

The city will also have to grant at least three permits for plans to proceed, and officials there still have questions, Lynch said. “Does it actually do what they say it does on this scale?” he said. “And then, what kind of unintended consequences are there?”

Enerkem first presented plans for a waste-to-biofuel operation at a City Council meeting last winter. The company operates a similar plant in Edmonton, Alberta, but it is half the size of the one proposed for the 10-acre Inver Grove Heights plot a mile west of Hwy. 52, near two landfills.

Boisseau said the technology is proven to work. The Enerkem Alberta Biofuels facility in Edmonton is “ramping up production” and will produce 11 million gallons of ethanol by the end of 2018, he said.

Lynch said city officials so far have dealt mostly with SKB Environmental, not Enerkem. SKB, a Minnesota waste management company, owns the proposed plant site and is partnering with Enerkem.

The City Council would have to study the facility’s impacts — noise, odor, lights and traffic — before giving it the green light, Lynch said.

But council members view the property tax benefits and the jobs it would generate as favorable, he said. And the plant would help solve the problem of what to do with the 200,000 tons of garbage that Dakota County generates annually.

Plant construction wouldn’t start until 2019 or 2020, with operations coming 18 to 24 months later, Boisseau said.

Conversion to fuel starts with workers pulling bulky materials out of the waste; then machines pull out recyclables, organics and items such as rocks. What is left is shredded and broken down into a gas until a chemical reaction turns it into cellulosic ethanol, according to the company.

The plant could process an estimated 1,000 to 1,500 tons of garbage daily, using more than a million gallons of water to do it. Water-supply issues in the area could make obtaining that much groundwater challenging, said Deborah Manning, the Met Council’s assistant manager of plant engineering.

That’s why building the $28 million wastewater reuse facility in Rosemount makes sense, she said. The idea of reusing wastewater in the southeast metro has come up before, she said, but the Met Council wouldn’t have considered the project if not for Enerkem.

Enerkem would pay the Met Council for engineering and design along with construction and operation costs. The Met Council may chip in construction funds if it decides the facility would benefit the region, Manning said.

Rosemount City Administrator Logan Martin said city officials think reusing wastewater is smart, and they see ways to use reclaimed water.

Read the original article: Inver Grove Heights Biofuel Plant Still on Track, But Hurdles Remain

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