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Ethanol Producer Magazine

May 8, 2020

Three dozen Midwestern electric cooperatives and rural electric associations send a letter to 20 federal lawmakers on May 7 asking Congress to provide much-needed economic relief for rural America, which continues to suffer from the impacts of the COVID-19 pandemic.

“Rural electric cooperatives were created to provide electricity to farms and rural communities and have continued to expand this essential service as rural America has grown and prospered,” the groups said in the letter. “Our member-owners have invested billions in not only electric infrastructure through their cooperative to serve these areas, but also in helping to develop the rural economy in which they live. These investments have allowed for diversification into biofuels, food processing, and other business development opportunities.”

The letter notes that a steep drop in liquid fuel demand has had a major impact on biofuel plants. Rural food processing facilities have also been severely impacted by the pandemic. “These events have left producers of several agricultural commodities without a market for their product, forcing some to euthanize animals or destroy their products,” the groups wrote. “The pandemic has compounded the impacts of low commodity prices and extreme weather events that had already created a struggling farm and rural economy.”

As congress considers a new COVID-19 stimulus package, the groups are asking for relief that specifically benefits food and ethanol processing plants, along with the farmers and ranchers who serve them.  “Estimates show as much as half of U.S. ethanol production has been idled,” the groups continued. “Without ethanol sales, our corn farmers are significantly harmed. Reduced ethanol production and livestock processing threatens our food and energy security, and in turn results in reduced electric load, a burden that ultimately falls on the individual members of an electric cooperative. The combination of these issues poses a significant threat to the overall wellbeing of the rural communities that we serve.”

The letter also urges the senators and representatives to reject any attempts by EPA to grant new RFS waivers and encourage the agency to rein-in its use of small refinery exemptions (SREs).  

“Further, additional economic support is necessary through the U.S. Department of Agriculture (USDA),” they wrote. “We have learned that the USDA is unlikely to directly provide biofuels producers any of the increased funding from the Coronavirus Aid, Relief and Economic Security Act appropriated to the Commodity Credit Corporation. Any additional stimulus legislation must provide biofuels-specific support. Failure to do so will significantly threaten investments made to develop biofuel and agricultural processing infrastructure, and the role these facilities play in supporting rural communities.

“Again, these industries are absolutely vital to the economic health of rural America, and we appreciate your consideration of these requests,” they continued.

The letter is signed by Basin Electric Power Cooperative, Power Electric Cooperative, McLean Electric Cooperative, Dakota Valley Electric Cooperative, Roughrider Electric Cooperative, Minnkota Power Cooperative, East River Electric Power Cooperative, Central Electric Cooperative, FEM Electric Association, Northern Electric Cooperative, Oahe Electric Cooperative, Sioux Valley Energy, Southeastern Electric Cooperative, Agralite Electric Cooperative, Rural Electric Association, Minnesota Valley Cooperative Light and Power Association, Redwood Electric Cooperative, South Central Electric Association, Upper Missouri Power Cooperative, Harrison County Rural Electric Cooperative, North West Rural Electric Cooperative, Northwest Iowa Power Cooperative, Corn Belt Power Cooperative, Iowa Lakes Electric Cooperative, Raccoon Valley Electric Cooperative, Midland Power Cooperative, Nishnabotna Valley Rural Electric Cooperative, Butler County Rural Electric Cooperative, L&O Power Cooperative, Osceola Electric Cooperative, Nebraska Electric Generation and Transmission Cooperative, North Dakota Association of Rural Electric Cooperatives, Iowa Association of Electric Cooperatives, South Dakota Rural Electric Association, Minnesota Rural Electric Association, and Nebraska Rural Electric Association.

The letter is addressed to Sens. John Hoeven, R-N.D.; Kevin Cramer, R-N.D.; John Thune, R-S.D.; Mike Rounds, R-S.D.; Chuck Gassley, R-Iowa; Joni Ernst, R-Iowa; Deb Fischer, R-Neb.; Ben Sasse, R-Neb.; Amy Klobuchar, D-Minn.; Tina Smith, D-Minn.; and Reps. Kelly Armstrong, R-N.D.; Dusty Johnson, R-S.D.; Steve King, R-Iowa; Cindy Axne, D-Iowa; Abby Finkenauer, D-Iowa; Dave Loebsack, D-Iowa; Adrian Smith, R-Neb.; Jeff Fortenberry, R-neb.; Jim Hagedorn, R-Minn.; and Collin Peterson, D-Minn.

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Ethanol Producer Magazine

May 5, 2020

The U.S. exported 139.93 million gallons of ethanol and 899,730 metric tons of distillers grains in March, according to data released by the USDA Foreign Agricultural Service on May 5. Exports of both products were down when compared to March 2019.

The 139.93 million gallons of ethanol exported in March was down significantly from the 194.16 million gallons exported in February but was relatively flat when compared to the 140 million gallons exported during the same period of 2019.

The U.S exported ethanol to nearly four dozen countries in March. Brazil was the top destination for U.S. ethanol with 37.22 million gallons, followed by Canada at 27.49 million gallons, and India with 19.63 million gallons.

The value of U.S. ethanol exports was at $241.64 million in March, down from $323 million in February, but up from $234.26 million in March 2019.

Total ethanol exports for the first three months of the year reached 485.32 million bgallons at a value of $821.17 million, compared to 381.74 million gallons at a value of $612.07 during the same period of last year.

The U.S. exported 899,730 tons of distillers grains in March, up from the 852,904 tons exported in February, but down from 956,828 tons exported in March 2019.

The U.S. exported the ethanol coproduct to more than three dozen countries in March. Mexico was the top destination with 190,125 metric tons, followed by Vietnam at 139,974 metric tons and South Korea at 127,636 metric tons.

The value of U.S. distillers grains exports reached $194.77 million in March, up from $178.24 million in February, but down from $202.65 million in March 2019.

Total U.S. distillers grains exports for the first quarter of 2020 reached 2.73 million metric tons at a value of $572.49 million, compared to 2.45 million tons at a value of $518.13 reported for the same period of last year.

Additional data is available on the USDA FAS website

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Energy and Environment News - ClimateWire

May 5, 2020

An oil bailout remains unpopular with U.S. voters despite weeks of nonstop pain for the industry, according to a new poll.

Morning Consult's latest tracking poll found that 38% of the roughly 2,000 voters it contacted were in support of an oil and gas bailout.

Those results, collected in surveys last week, showed that public sentiment hadn't budged from late March and early April, when the same pollster also found 38% support for a bailout.

Opposition to an oil bailout also remained static at 43% of registered voters, and 19% had no opinion, according to the nationwide tracking polls. The polls had a margin of error of 2 percentage points.

Clean energy fared better. A majority of voters backed bailouts for renewable energy, with 56% of voters in support and 24% opposed.

Trump voters were more likely to support an oil bailout (50%), though a plurality also supported a renewable bailout (45%).

Oil allies responded to the poll by urging flexibility. Industry aid doesn't have to look like a bailout, they said.

"This is further evidence that tax cuts for energy extracted on federal lands might be more favorably viewed than direct spending/bailouts," Paul Blair, director of strategic initiatives at Americans for Tax Reform, wrote on Twitter.

"Cut the royalty rate!" he said.

The oil industry suffered historic blows in the time between the two polls. Amid a price war between Russia and Saudi Arabia, President Trump helped negotiate an agreement for oil-producing nations to cut output. But it wasn't enough to counteract a sharp decline made worse by the coronavirus pandemic.

Storage tanks are filled near capacity, and one benchmark showed negative prices for the first time ever.

The Federal Reserve last week expanded a loan program to include struggling oil and gas firms. Environmentalists blasted that move as a quiet bailout, but industry officials said it wasn't that simple.

Steve Everley, a managing director at FTI Consulting who works with the oil and gas sector, responded to the Morning Consult poll by pointing to one of its other findings: More Americans say low oil prices hurt the economy (52%) than say it's helped their personal finances (42%).

Everley added that he would be curious what voters consider to be a bailout.

Extending tax credits and offering Treasury loans with interest aren't the same as direct cash payments, he said.

"Many of these are not bailouts, or at least should not be considered bailouts. But do voters see the nuance?" he wrote on Twitter.

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US Department of Agriculture

May 4, 2020

(Washington, D.C.) - U.S. Secretary of Agriculture Sonny Perdue announced the U.S. Department of Agriculture intends to make available up to $100 million in competitive grants for activities designed to expand the availability and sale of renewable fuels.

“America’s energy independence is critical to our economic security, and President Trump fully recognizes the importance of our ethanol and biofuels industries and the positive impacts they deliver to consumers and farmers with an affordable, abundant, and clean burning fuel,” Secretary Perdue said. “American ethanol and biofuel producers have been affected by decreased energy demands due to the coronavirus, and these grants to expand their availability will help increase their use during our economic resurgence.”

The Higher Blends Infrastructure Incentive Program (HBIIP) consist of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels. Funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment, and infrastructure.

Additional Information:

USDA is making the grants available under the Higher Blends Infrastructure Incentive Program (HBIIP). The program is intended to increase significantly the sale and use of higher blends of ethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products.

Grants for up to 50 percent of total eligible project costs, but not more than $5 million, are available to vehicle fueling facilities, including, but not limited to, local fueling stations/locations, convenience stores, hypermarket fueling stations, fleet facilities, fuel terminal operations, midstream partners and/or distribution facilities.

USDA plans to make available approximately $86 million for implementation activities related to higher blends of fuel ethanol, and approximately $14 million for implementation activities related to higher blends of biodiesel. Higher biofuel blends are fuels containing ethanol greater than 10 percent by volume and/or fuels containing biodiesel blends greater than five percent by volume.

For application information and other program details, see the public inspection notice in the Federal Register (PDF, 369 KB), or visit the Higher Blends Infrastructure Incentive Program web page.

Read the original press release here.

Renewable Fuels Association

May 1, 2020

A coalition of ethanol and farm groups today sent a letter to the Environmental Protection Agency opposing the American Petroleum Institute’s recent petition requesting reconsideration of the 2020 Renewable Fuel Standard (RFS) final rule.

API claims reconsideration of the 2020 RFS rule is necessary in light of the coalition’s recent Tenth Circuit court victory that overturned small refinery exemptions illegally granted by EPA. The successful Tenth Circuit court challenge was brought against EPA by the Renewable Fuels Association, National Corn Growers Association, National Farmers Union, and American Coalition for Ethanol.

Specifically, API argues that the 2020 RFS rule should be revised to eliminate measures that prospectively “reallocate” RFS blending obligations expected to be lost to refinery waivers. API claims reallocation of expected waivers is no longer needed because the Tenth Circuit decision should significantly curtail the number of waivers granted. However, EPA has not yet confirmed that it will implement the tenets of the Tenth Circuit court decision nationwide, meaning reconsideration of the 2020 RFS rule would be woefully premature.

“There is no basis for revisiting or modifying EPA’s current approach until EPA acknowledges that the central tenets of the Tenth Circuit’s decision are appropriately applied throughout the country,” the groups wrote.

In fact, the 2020 RFS volumes should not be adjusted downward to remove reallocated volumes even after EPA applies the Tenth Circuit court decision nationally, according to the coalition’s letter.

“As noted by the Court, EPA’s recent abuse of its small refinery exemption authority has significantly harmed the U.S. ethanol industry.  Indeed, nationally, more than four billion gallons of 2016-2018 renewable fuel volume requirements were lost due to EPA’s illegally issued small refinery waivers.  Applying the Tenth Circuit decision nationally while leaving the 2020 RFS rule intact would begin to restore a small amount of the renewable fuel volume requirements lost to past small refinery exemptions; still, doing so would come nowhere near fully redressing the demand destruction wrought by the exemptions.”

The letter is available here

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Congresswoman Angie Craig

Apr 28, 2020

Today, Congresswoman Angie Craig (MN-02) announced the introduction of the Clean Fuels Deployment Act of 2020. The bipartisan legislation she introduced with U.S. Reps. Abby Finkenauer (D-IA), Don Bacon (R-NE), and Roger Marshall (R-KS), would provide funding for installing and converting fuel pump infrastructure to deliver higher blends of ethanol and biodiesel.

The bill authorizes $500 million over five years to help retailers offer higher ethanol blends, expand the geographic area selling ethanol blends, support biodiesel, bioheat, and sustainable aviation fuel markets, and accelerate the deployment of fueling infrastructure. Given recent uncertainties in the renewable fuels industry, it is more important than ever to fund infrastructure improvements and remove market barriers to accessing clean and renewable fuels.

“The Clean Fuels Deployment Act is a critical step toward supporting biofuels at a particularly difficult time. As a member of the Congressional Biofuels Caucus, I’ve long supported the year-round sale of E15 and increasing options for consumers at the pump,” said Rep. Angie Craig. “This commonsense solution would provide additional certainty to Minnesota family farmers. I look forward to following through on much needed relief to our producers across the country.”

"The time is now to further diversify our fuel supply and move more biofuels into the market,"Finkenauer said. "Biofuels offer a proven path to reducing greenhouse gas emissions, decarbonizing the transportation sector, driving economic growth and creating jobs. I'm grateful to have bipartisan support from Representatives Bacon, Craig and Marshall. Cleaner fuels are good for our economy and our environment, and we’re going to keep fighting for them.”

In addition to supporting the distribution of higher ethanol and biodiesel blends at fueling stations, the program could also be used to enhance pipelines and terminals to blend and carry ethanol and biodiesel. Funding from the clean fuels grant program could be used to incentivize the deployment of ethanol and biodiesel fueling infrastructure and convert existing infrastructure to deliver ethanol blends greater than 10 percent and biodiesel blends greater than 20 percent.

Read the original story here

Ethanol Producer Magazine

Apr 27, 2020

Ethanol blends save lives through reduced vehicle emissions. That is the conclusion of a new peer reviewed technical paper published in the  Journal of Air & Waste Management, validating previous research efforts by the Urban Air Initiative that find when ethanol is added to gasoline, it significantly reduces toxic emissions tied to air pollution.

The research team leading this effort included notable refinery and fuel emission experts who looked at hundreds of earlier studies on emissions and ethanol.  A glaring error, according to the authors, is that these studies assume a standard fuel is created for testing emissions. However, the research found that test fuels rarely resemble real-world fuels, similar to what consumers purchase.

The paper found that when simply adding ethanol to fuel, it reduces the most carbon intensive and carcinogenic fuel additives called aromatics. Replacing these benzene-based additives with ethanol directly reduces particulate matter (PM) and NOx emissions, both of which are ozone precursors and represent significant health risks to the public. The discrepancy the authors found in the previous studies centered on the fact that test fuels add ethanol and aromatics together to raise octane, while oil refiners actually reduce aromatics to utilize ethanol as an octane enhancer. Comparing a baseline E0 fuel to E10 and E15 shows the ethanol blends are significantly better when real world fuel blending conditions are used.

“What this new paper makes clear is the aromatic reduction resulting from increased ethanol volumes provides significant health benefits from lower particulate emissions,” said Urban Air President Dave VanderGriend. “The Urban Air Initiative and its supporters in the ethanol industry call on the EPA to look at this research and consider the facts uncovered in this paper as it prepares to make regulatory decisions about ethanol blended fuels.”

And, in light of the current health crisis, the fact that regions suffering from air pollution are experiencing higher cases of the COVID-19 virus suggests reducing emissions needs to be a national priority for the EPA, according to VanderGriend.

Read the original story here.

Granite Falls News

Apr 26, 2020

The leadership at Highwater Ethanol, which is located near Lamberton in Redwood County, is always looking for new ways to add value to its product.

In a time when fuel consumption is down due to the reduction in travel, the demand for ethanol has also decreased.

For many of the facilities producing ethanol in the region that could mean, and has meant, reducing hours and even some temporary shutdowns.

“People are driving less and that is having an impact on the industry,” said Brian Kletscher, Highwater Ethanol general manager and CEO.

A new venture is helping Highwater Ethanol keep the doors open.

According to Kletscher a couple of the ethanol facility’s vendors began talking with Highwater’s leadership about an idea.

Would it be interested in providing denatured 190 proof that would be used in hand sanitizer?

The Highwater leadership did the research and determined that moving forward with this plan was in the best interest of the facility and the people it employs.

So, as of the end of March the company began the process of supplying the product to the industry.

Kletscher said development of the denatured 190 proof at the plant did not mean making any changes to the operation.

“The plant was already producing it,” explained Kletscher, adding it just meant taking it off of the production line before the ethanol process is complete.

The facility had to work through some FDA requirements in order to move ahead with the new product.

Highwater recognized the Renewable Fuels Association for bringing clarity with the FDA, adding those efforts have been appreciated.

A guidance document from the FDA has allowed the ethanol industry and plants like the one in Lamberton to help slow the spread of COVID-19. Now it is shipping that denatured 190 proof to its vendors that are then able to ship that product as hand sanitizer across the United States.

Kletscher said as of the beginning of April, the product coming from the Highwater Ethanol plant has been shipped by those vendors to eight different states.

In this way, Highwater Ethanol has been able to help in the global battle against COVID-19.

Is this part of the long-term future at Highwater?

Kletscher said that is an answer that continues to be up in the air, adding that will all depend on demand.

Kletscher said the Highwater facility was set up in a way that it could easily make the move, adding not all of the ethanol plants have been able to do that.

“We are fortunate to have great vendors who do a good job using our products,” Kletscher said. “The board is excited, the employees are excited and I am excited about this opportunity.”

Highwater continues to purchase corn, sell dried distillers grains, modified distillers grain, corn oil and denatured ethanol for the transportation fuel market.

Highwater encourages everyone to be safe during these unprecedented times.

Learn more at highwaterethanol.com.

Read the original story here.