In the News
June 29, 2015
By Jeannine Otto
GALVA, Ill. — We want our billion back.
It might be the catchphrase for a taxtime TV ad, but it’s also what one member of Congress feels farmers and gas-buying consumers in her district are owed by the U.S. Environmental Protection Agency.
“I would say they owe us a billion, the way I look at it right now,” said U.S. Rep. Cheri Bustos, D-East Moline.
Bustos visited Big River Resources LLC’s Galva ethanol plant. The plant is one of seven biofuels plants in the Rock Island Democrat’s 17th Congressional District.
Bustos was greeted by Big River administration, including CEO Ray Defenbaugh, board member Gene Youngquist and others.
“Let’s talk about where, hopefully, I can play a role here,” Bustos said after she greeted some of the stakeholders for the Galva plant and some of the founders.
“RVO,” said Wilbur Nelson, one of the founders.
Defenbaugh explained some of the problems with the numbers released in May by the EPA.
Those numbers fell short of what the U.S. ethanol industry was hoping they would be.
“The initial problem is with the methodology. It sets a precedent. They are not allowed to do that, it’s like waters of the U.S., the EPA is not authorized to do that. If you let them get away with it, the next step, whatever they come up with, may be even less favorable,” Defenbaugh said.
He echoed the sentiments of many in the ethanol industry who claim the EPA does not have the authority to reduce the amount of ethanol blended into the U.S. fuel supply below levels set by Congress in the 2008 Renewable Fuel Standard.
Bustos agreed.
“I agree with you. I don’t think they are authorized to do this. I think if they don’t alter this and get it back to where we want it to be, I think there are going to be some legal issues with this,” she said.
1.5 Billion Bushel-Loss
According to the Illinois Corn Growers Association Corn Corps publication, cutting the corn ethanol obligation by 3.75 billion gallons would equal about a 1.5 billion bushel-loss in demand for U.S. corn.
Defenbaugh said to cut one demand avenue for corn could devastate some farmers.
“If we produce the grain, the potential is there that everybody thinks, if we produce that, it will be way more than the 180 bushel average we had this year. That has brought us 60 to 70 cents below the cost of production. No business can survive producing below the cost of production so you’ve got to create demand,” he said.
“The story I want to be able to tell the administration and EPA when I go back to Washington is what this is going to do to Galva, Ill., what this will do to the rural economy if we don’t get this back to the level that we want it to be and what it should be,” Bustos said.
She said the ethanol industry is a $2.1 billion business in her district, from the seven plants and related economies.
“You don’t take it lightly when somebody is trying to harm a $2.1 billion industry. I see this as a kick to the gut, it’s not what we need to just sit back and accept,” she said.
Bustos also noted that if blend levels are not raised, consumers could feel more pain at the pump.
“This ruling, if it keeps at this level, a billion less than where we want it to be, it will raise the cost of fuel for our consumers,” she said, adding the hike to gasoline could be as much as six cents per gallon.
Bustos toured the plant and a plant under construction next door that will extract zein, a corn protein used in candy, pill and other coatings. She spoke with plant workers and urged them to be part of the public comment period that continues to Nov. 30.
“That’s why this public comment period is so important,” she said.
“I don’t think the folks in the ethanol business are going to take this lying down and so when it’s all said and done, this could end up in court and could be a battle for quite a while,” she said.
Bustos vowed to continue to fight to restore the RFS levels.
“We have to keep fighting to get the blend level at the rate that will make plants like this one sustainable and put them in a position where they can continue to grow,” she said. “We’ll have to wait and see but this is not all said and done.”
Read the original story here : Bustos Says Fight Over RFS Levels Not Over
June 29, 2015
By
The Urban Air Initiative (UAI) has released a study that finds ethanol free gasoline blends actually increase the wear and tear on engines including hoses, seals and fuel tanks. In other words, the data supports ethanol blends lead to cleaner engines. The findings were presented at the semi-annual meeting of ASTM by Steve Vander Griend, technical director for UAI who also works for ICM.
The report demonstrated that high aromatic content of gasoline, including toxic aromatics like benzene and toluene, negatively impact engine parts. Vander Griend explained in his presentation that the toxic aromatics create a significant increase in the escape of harmful emissions that can have a devastating impact on public health as these are considered by the Environmental Protection Agency has known and suspected carcinogens.
“What we are seeing is that benzene and toluene are increasing permeation, which means increasing the amount of fuel vapors that seep from a vehicle. For anyone who has a garage at home and smells gasoline, vapors are escaping through the vehicles fuel system or small engine gas tank,” said Vander Griend.
Also during his presentation Vander Griend explained that extensive testing was conducted on fuel lines, gas containers, and plastic components. The materials were each soaked in straight gasoline (E0) and a 10 percent ethanol blend (E10) for extended periods of time. In every case, said Vander Griend, the ethanol free gasoline increased the damage to fuel lines, gas containers, and plastic components, while the materials soaked in E10 were impacted less.
“The notion that somehow ethanol free gasoline is a superior product could not be further from the truth,” continued Vander Griend. “In our home town of Wichita [Kansas], the average E0 has 46% more benzene and toluene by volume than the same 87 octane blend with ethanol. The fuel costs more and presents a mechanical and health risk that is incorrectly being attributed to ethanol.”
Vander Griend called on ASTM to establish a task force to define maximum levels of aromatics in gasoline and to establish standards for the use of toluene as a blend component and ASTM said it will begin to study the aromatic levels of gasoline.
Read the original story here: Urban Air Initiative: Ethanol Reduces Engine Wear
June 26, 2015
By Randy Doyal
Good morning,
My name is Randy Doyal and I am the CEO of Al-Corn Clean Fuel, a farmer-owned corn ethanol facility in Claremont, Minnesota, that produces 50 million gallons of fuel ethanol per year. I also currently serve as the Chairman of the Renewable Fuels Association.
Al-Corn Clean Fuel was founded as a cooperative in 1994 by local farmers who endeavored to add value to their corn crop, stimulate the local economy, and contribute to enhanced energy security and a cleaner environment.
We are adamantly opposed to EPA’s proposed rule reducing the 2014–2016 renewable volume obligations from the levels envisioned by Congress. The Renewable Fuel Standard has been a tremendous success and has worked exactly as intended to drive growth in biofuel production and consumption. The program has played a pivotal role in reducing petroleum imports, lowering gas prices, improving air quality, and strengthening the economic health of rural America. We simply do not understand why EPA is proposing to move backward on a program that has undoubtedly delivered on its promise.
Moreover, the Clean Air Act statute does not permit EPA to take into account “factors that affect consumption,” such as purported infrastructure constraints or the so-called “blend wall,” in determining whether to grant a general waiver of the RFS. By embracing the “blend wall” concept, the EPA proposal not only violates the law, but also undermines the incentive to expand biofuel production and distribution capacity, and allows oil companies to blend only as much renewable fuel as they are comfortable using.
Even though gasoline consumption may be slightly lower today than Congress anticipated in 2007 when the RFS2 was adopted, it was always the intent of the program to push well beyond the so-called “blend wall” and increase the share of renewable fuels in our nation’s fuel supply.
EPA may grant a waiver based on an “inadequate domestic supply” of “renewable fuel” only if the biofuels industry lacks the capability to produce the required volumes of renewable fuel needed to meet the statutory requirements. But that is clearly not the situation today, given record production in 2014 and the forecasted supply of ethanol and carryover RIN credits in 2015 and 2016.
It also strikes us as illogical that EPA would ignore RIN stocks in determining whether supply is “adequate” to meet statutory volumes. Because carryover RINs represent physical gallons that are—or were—in the fuel supply, they must be included in calculating the proper RVOs.
Over the past 10 years, the RFS has provided the stability and certainty needed for our business to invest in multiple expansion projects, as well as new technologies to increase production efficiencies, decrease environmental impacts, and diversify product streams.
We are greatly concerned that backtracking on the RFS, as EPA is proposing to do, will cause RIN stocks to swell to burdensome levels, undermining further innovations and investments in ethanol production and distribution.
On behalf of both Al-Corn Clean Fuel and the RFA, I urge you to get the RFS back on track. We encourage you to abandon the illegal “blend wall” methodology and let farmers and ethanol producers respond to the challenge set forth by Congress in 2007.
Thank you.
Randy Doyal
CEO at Al-Corn Clean Fuel; Claremont Renewable Energy, Chairman Renewable Fuels Association
Read the original testimony here
June 24, 2015
By Urban Air Initiative
One of the great misconceptions following ethanol is that it causes compatibility issues in certain engines. But new data shows that the opposite is true, and ethanol-free gasoline blends actually increase much of the wear and tear on hoses, seals, and fuel tanks.
This is the finding of new research released today by ICM Inc. and the Urban Air Initiative. The findings were presented at the semi-annual meeting of ASTM, an international standards organization that develops and publishes technical standards. Steve VanderGriend of ICM and technical director for UAI presented data showing how the high aromatic content of gasoline, particularly toxic aromatics like benzene and toluene negatively impacts engine parts. The toxic aromatics create a significant increase in the escape of harmful emissions that can have a devastating impact on public health given that these aromatic compounds are known and suspected carcinogens.
"What we are seeing is that benzene and toluene are increasing permeation, which means increasing the amount of fuel vapors that seep from a vehicle. For anyone who has a garage at home and smells gasoline, vapors are escaping through the vehicles fuel system or small engine gas tank,” VanderGriend said.
Ethanol is often blamed for increasing evaporative emissions. However, the ICM and Urban Air Initiative research clearly shows increased aromatics cause a greater degradation on hoses, plastics, and other components which creates an escape route for gasoline vapors to permeate into the air.
In his presentation at ASTM, VanderGriend explained the extensive testing done on fuel lines, gas containers, and plastic components. These materials were each soaked in straight gasoline (E0) and a 10 percent ethanol blend (E10) for extended periods of time. In every case the ethanol free gasoline increased the damage to fuel lines, gas containers, and plastic components, while the materials soaked in E10 were impacted less.
To better visualize the damaging effects of straight gasoline, click here to watch a time lapse video involving a simple Styrofoam cup. The E10 blend contained 20 percent aromatics and had a slower impact on the cup. The E0 blend, with 26 percent aromatics, instantly destroyed the cup. While not as scientific as soak testing, the results are similar.
"The notion that somehow ethanol free gasoline is a superior product could not be further from the truth,” VanderGriend said. "In our home town of Wichita, the average E0 has 46 percent more benzene and toluene by volume than the same 87 octane blend with ethanol. The fuel costs more and presents a mechanical and health risk that is incorrectly being attributed to ethanol.”
He went on to explain that ethanol, with the highest octane value of any fuel additive on the market today, could not only continue to replace aromatics like benzene and toluene in today's gasoline but it will be critical as future vehicle designs will require higher octane to meet mileage and emission standards.
VanderGriend called on ASTM to establish a task force to define maximum levels of aromatics in gasoline and to establish standards for the use of toluene as a blend component. ASTM agreed and will begin to look into aromatic levels of gasoline.
Read the original story here : UAI : New Data Shows Ethanol-Free Blends Increase Engine Wear
June 24, 2015
By Sen. Chuck Grassley
First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.
Those of us from states that produce ethanol and biodiesel are used to the attacks. We always fight back, and producers continue to do their best to develop the next generation of clean biofuels.
Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the U.S. freedom from volatile oil-producing countries is appealing.
The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law.
Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments.
While I support the U.S. Department of Agriculture’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the president who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.
Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of deja vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.
It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat in the past seven years. Corn prices are expected to be the lowest in nearly 10 years.
The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn coproducts available for feed use is larger today than at any time in history. It’s hardly being diverted.
Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were before the RFS. Food inflation is at the lowest rate of increase than at any time in the past 40 years. At the same time, the U.S. is producing record amounts of corn ethanol.
As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, USDA is projecting record meat and poultry production.
A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.
Now that corn prices have dropped by more than half, are consumers seeing the benefits? If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.
Read the original story here : Ethanol A Scapegoat For What's Really Wrong
First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.
Those of us from states that produce ethanol and biodiesel are used to the attacks. We always fight back, and producers continue to do their best to develop the next generation of clean biofuels.
Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the U.S. freedom from volatile oil-producing countries is appealing.
The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law.
Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments.
While I support the U.S. Department of Agriculture’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the president who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.
Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of deja vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.
It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat in the past seven years. Corn prices are expected to be the lowest in nearly 10 years.
The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn coproducts available for feed use is larger today than at any time in history. It’s hardly being diverted.
Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were before the RFS. Food inflation is at the lowest rate of increase than at any time in the past 40 years. At the same time, the U.S. is producing record amounts of corn ethanol.
As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, USDA is projecting record meat and poultry production.
A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.
Now that corn prices have dropped by more than half, are consumers seeing the benefits? If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.
- See more at: http://www.agweek.com/event/article/id/26938/#sthash.0J2qaO9j.dpufJune 17, 2015
By Mike Bryan
Over the years, we have had a host of articles, books, press releases and talking heads highlight the shortcomings of biofuels, in particular ethanol. Almost all of these “experts” fail to account for the contributions of ethanol or, in many cases, simply ignore those contributions in order to make their point, sell their book, or get published in the newspaper.
They ignore the economic impact to the countries in which ethanol is produced and ignore the hundreds of millions, and in some countries billions, of dollars of economic growth that is created by a robust ethanol industry.
They ignore the true cost of fossil fuels, the damage to the environment, the billions of dollars in added healthcare cost as a result of fossil fuel use. In addition, most seem to gloss over the cost of military intervention to protect sources of oil, the pipelines, the oil spills and the utter environmental devastation that fossil fuels have caused in the world. Instead they focus on the small contribution that ethanol has on the price of food, as if fossil fuels had no impact on food cost worldwide.
They ignore the contributions made by the high quality distillers grains that feeds a myriad of livestock for human consumption. Distiller’s grains is shipped to countries rich and poor all around the world. Rather, they focus on the price of corn tacos in Mexico, or the cost of a loaf of bread in Uruguay, and blame ethanol.
They ignore the impact ethanol production has in keeping farmers in business so they can help feed a hungry world. The biofuels industry has helped to stabilize farm prices, has been a tremendous tool in keeping farmers on the farm. It has not only served to keep existing farmers in business, but has been instrumental in encouraging young people to stay on the farm. It’s not just the money, but often for the younger generation the commitment that they have to not only help feed a hungry world, but to contribute to a cleaner environment in the process. It’s a pride thing and they wouldn’t understand.
They ignore the cost reduction to consumers at the pump. Ethanol has been a significant contributor to reducing gasoline prices and has saved consumers hundreds of millions of dollars. This is money that often would have gone to someone outside the country. One can only assume that by ignoring this, they would prefer that we pay more at the pump and make an oil baron a little richer. I’m not sure how that helps a subsistence farmer in the Baltics, but perhaps I just don’t get it.
They ignore the hundreds of thousands of jobs that are created and the impact on the economy that those jobs have. They ignore the contribution capabilities of those with good jobs have to contribute financial aid to a hungry world, or to make someone’s life a bit easier by helping build a home in the U.S. or a foreign country. People in poverty can’t do those things, people who are fortunate enough to have good jobs can and many do. Rather than focusing on the wealth created and the contributions made to the world because of that wealth, they focus on the price of wheat in Chile and make a feeble attempt to pin it on biofuels.
As I have said many times, ethanol is not a perfect fuel, it is a fuel that over time will transition us into an even better fuel, one that probably will be cleaner, cheaper and have fewer negatives. But until that happens, let’s stop ignoring the benefits of ethanol and embrace its attributes. I guess if you are looking for a story, writing a book or publishing a paper on the negatives of ethanol, ignoring can be as blissful as ignorance.
That’s the way I see it.
Read the original story here : Ignorance or Ignoring Is Bliss
June 12
Following an announcement by the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack on May 29, 2015, the Commodity Credit Corporation (CCC) today announced that all 50 states, the Commonwealth of Puerto Rico and Washington, D.C. may now apply for up to $100 million in grants under the Biofuels Infrastructure Partnership (BIP). The funding is to support the infrastructure needed to make more renewable fuel options available to American consumers. The Farm Service Agency will administer BIP.
USDA continues to aggressively pursue investments in American-grown renewable energy to create new markets for U.S. farmers and ranchers, help Americans save money on their energy bills, support America's clean energy economy, cut carbon pollution and reduce dependence on foreign oil and costly fossil fuels. A typical gas pump delivers fuel with 10 percent ethanol, which limits the amount of renewable energy most consumers can purchase at the pump.
Through BIP, USDA will award competitive grants, matched by states, to expand the infrastructure for distribution of higher blends of renewable fuel. These competitive grants are available to assist states, the Commonwealth of Puerto Rico and Washington, D.C. with infrastructure funding. States that offer funding equal to or greater than that provided by the federal government will receive higher consideration for grant funds. States may work with private entities to enhance their offer.
CCC funds must be used to pay a portion of the costs related to the installation of fuel pumps and related infrastructure dedicated to the distribution of higher ethanol blends, for example E15 and E85, at vehicle fueling locations. The matching contributions may be used for these items or for related costs such as additional infrastructure to support pumps, marketing, education, data collection, program evaluation and administrative costs.
This new investment seeks to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers. This will expand markets for farmers, support rural economic growth and the jobs that come with it, and ultimately give consumers more choices at the pump.
Applications must be submitted by July 15, 2015, using www.grants.gov. To locate, search by funding opportunity number "USDA-FSA-2015-22."
June 11, 2015
By Susanne Retka Schill
The U.S. EPA’s May 29 proposed renewable volume obligations (RVO) is under scrutiny by University of Illinois economists in recent FarmDocDaily posts.
Jonathan Coppess examines the argument that EPA appears to be turning the renewable fuel standard (RFS) upside down, “switching it from one that was meant to force industry action to one that permits industry inaction to override the statue.” Coppess’ post, “EPA doubles Down on Questionable Reading of the RFS Statute,” evaluates EPA’s waiver arguments. He picks apart the EPA’s commentary in the proposed RVO document and compares that with the language in the statute, as well as the legislative history for the RFS. “It is very difficult to square the statute's words with EPA's reading of them,” he concludes. “The RFS was designed to push the renewable fuel industry to supply, and the blending/refining industry to purchase, renewable fuels. EPA admits that ‘there is no shortage of ethanol’ but it feels that ‘legal requirements limit[ing] ethanol content of most gasoline to 10 percent’ and ‘marketplace and infrastructure constraints’ are sufficient to justify the agency's revision of the Congressional mandate.”
Scott Irwin and Darrel Good continue to examine whether the proposed RVO does work as a ‘push’ for ethanol consumption, particularly looking at alternative scenarios in the post “Does it Matter Whether the EPA Targets Volumetric or Fractional RFS Standards?”
EPA develops two sets of RFS compliance numbers when it publishes the RVO for each year. The first is an overarching volumetric RVO which is also expressed as a percentage standard. The percentage standard for a given year is the mandated national biofuels volume divided by total national use of transportation fuel. The preliminary proposal for 2014, released in November 2013, projected total gasoline and diesel use at 165.27 percent, with a conventional ethanol mandate set at 13.01 billion gallons for an implied fractional mandate of 7.87 percent for corn ethanol.
The recently released revised RVO proposal projects EPA estimated total gasoline and diesel use in 2014 at 176.68 billion gallons, “a substantial increase from the forecast in the first proposal,” Irwin and Good comment. “The conventional ethanol mandate was increased to 13.25 billion gallons in the latest proposal, but this resulted in the (implied) fractional mandate dropping to 7.5 percent (13.25/176.68). The EPA, in essence, ‘reset’ the volumetric standard to a lower percentage of total transportation fuel use. If the EPA had maintained the fractional mandate from the first proposal, the conventional ethanol mandate for 2014 would have been set in the latest proposal at 13.91 billion gallons (0.0787 X 176.68) instead of 13.25 billion.”
In comparing the 2014 RVO with the 2015 and 2016, the economists note the ethanol mandate, taken at face value, imply a substantial push above the E10 blend wall. They also suggest the assumptions for a 1.4 percent in gasoline use in 2015 and a drop in 2016 may be too conservative based on recent Department of Transportation data. Good and Irwin examine three scenarios: keeping the volumetric standards fixed, versus keeping the fractional standards fixed and a third where EPA targets the magnitude of the push. “Our analysis highlights the sensitivity of estimates of the push in conventional ethanol mandates to the policy target of EPA. It does indeed matter whether the EPA targets fixed volumetric standards, fixed fractional standards, or a fixed push in the standards.”
Pointing to the collapse in the D6 RINs market, the renewable identification numbers used by blender to demonstrate RFS compliance, they add, “RINs market participants appear to believe that the EPA is targeting a fixed volumetric standard and the degree of push in the conventional ethanol mandates will largely disappear if, as expected, gasoline and diesel use increases more rapidly. If these expectations are incorrect the RINs market could be setup for a major surprise when the EPA finalizes the standards for 2014-2016.”
They note that the EPA’s behavior when comparing the November 2013 proposal with the May 29 suggests the agency leans towards a fixed volumetric standard. The language in the most recent proposal, however, “suggests the EPA currently leans more towards a fixed fractional standard, or even a fixed push in the standard.” The bottom line, they conclude, “is the EPA needs to much more clearly communicate the target it is currently using in setting the RFS standards. Much may hang in the balance for biofuels producers, feedstock suppliers, obligated parties under the RFS, and RINs market traders.”
Read the original story here : Proposed RVO Raises Multiple Questions For Illinois Economists
More...
June 10, 2015
By Erin Voegele
On June 10, the U.S. EPA published its proposed rule to set 2014, 2015 and 2016 renewable volume requirements (RVOs) under the renewable fuel standard (RFS) in the Federal Register, officially opening the public comment period on the proposal. Comments are due July 27.
The agency released a pre-publication version of the proposed rule on May 29. It contains proposed 2014, 2015, and 2015 RVOs, along with the proposed 2017 RVO for biomass-based diesel.
According to the EPA, the proposed 2014 RVOs reflects the actual amount of domestic biofuel used last year. The cellulosic requirement is set at 33 million gallons, with the biomass-based diesel requirement set at 1.63 billion gallons, the advanced biofuel requirement set at 2.68 billion gallons, and the requirement for total renewable fuel set at 15.93 billion gallons. Statutory requirements for 2014 called for 18.15 billion gallons of renewable fuel, including 1.75 billion gallons of cellulosic biofuels, and 3.37 billion gallons of total advanced biofuels.
The proposed rule calls for the 2015 RVOs to include a cellulosic requirement of 106 million gallons, a biomass-based diesel requirement of 1.7 billion gallons, an advanced biofuel requirement of 2.9 billion gallons and a requirement for total renewable fuel of 16.3 billion gallons. This is far below the statutory requirement of 20.5 billion gallons of total renewable fuel, including 3 billion gallons of cellulosic biofuels and 5.5 billion gallons of total advanced biofuels.
The EPA’s proposal calls for the 2016 RVOs to include 206 million gallons of cellulosic biofuels, along with 1.8 billion gallons of biomass-based diesel, 3.4 billion gallons of advanced biofuel, and 17.40 billion gallons of total renewable fuel. This is also far below the statutory requirement of 22.25 billion gallons of total renewable fuel, including 4.25 billion gallons of cellulosic biofuel and 7.25 billion gallons of total advanced biofuel.
In addition, the proposed rule aims to set the 2017 RVO for biomass-based diesel at 1.9 billion gallons.
Comments on the proposed rule can be filed under Docket ID No. EPA-HQ-OAR-2015-0111 on the Federal eRulemaking Portal www.regulations.gov. Additional information on submitting comments is available in the Federal Register notice.
The EPA also recently announced plans to hold a public hearing on the RFS proposal on June 25 in Kansas City, Kansas.
Read the original story here : EPA Opens Public Comment Period On RFS Rulemaking
June 1, 2015
By Sen. Chuck Grassley
It’s been a familiar few weeks for biofuels. First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency (EPA) caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.
Those of us from states that produce ethanol and biodiesel are used to the attacks. We always fight back, and producers continue to do their best to develop the next generation of clean biofuels. Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the United States freedom from volatile oil-producing countries is appealing.
The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law. Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments. While I support the Agriculture Department’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the President who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.
Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of déjà vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.
It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard (RFS) was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat over the past seven years. Corn prices are expected to be the lowest in nearly 10 years.
The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn co-products available for feed use is larger today than at any time in history. It’s hardly being diverted.
Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were prior to the RFS. Food inflation is at the lowest rate of increase than at any time over the last 40 years. At the same time, the United States is producing record amounts of corn ethanol.
As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, the U.S. Department of Agriculture is projecting record meat and poultry production.
A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately. Now that corn prices have dropped by more than half, are consumers seeing the benefits? If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.
June 6, 2015
By Russell Hubbard
U.S. Agriculture Secretary Tom Vilsack said Friday that his agency has initiated a $100?million federal grant program to encourage installation of gas station fuel pumps capable of dispensing blends made with a greater percentage of ethanol.
In late May, the Department of Agriculture said its Biofuels Infrastructure Partnership has budgeted $100 million in matching funds for states willing to invest their own money in incentives to encourage the retail sale of higher ethanol blends, such as the E15 and E85 varieties that contain 15 percent and 85 percent ethanol.
“We have to figure out ways to get more E85 and E15 access,” Vilsack said in an interview. “This could expand the number of service-station pumps by 10,000 or more.”
Iowa is the largest ethanol producer with 42 plants, followed by Nebraska, with 24. The industry in Nebraska has an economic impact of $5 billion per year, according to a University of Nebraska-Lincoln study released this year.
Ethanol producers, however, have been up against the so-called “blend wall,” or the point at which formulations, such as E10, are insufficient to get all the envisioned production into the nation’s gas tanks at current levels of U.S. fuel consumption.
Last week, the Environmental Protection Agency set biofuel blending requirements for 2015 and 2016 that were seen as a compromise between what ethanol supporters and critics wanted, but which industry observers said will require the adoption of higher blends.
Shannon Textor, a spokeswoman for the Iowa Corn Growers Association, said that the group supports efforts to assist retailers in offering higher blends and that it is evaluating the specifics of the grant program. Todd Sneller, administrator of the Nebraska Ethanol Board, also said that his group is evaluating the grant program and that efforts to sell higher ethanol blends are needed.
Vilsack, a former governor of Iowa, also said Friday that U.S. exports of ethanol are rising and that foreign trade benefits Nebraska and Iowa. He said Congress should allow President Barack Obama to confer “fast-track status” to a major in-progress trade agreement, the Trans-Pacific Partnership, which would do away with barriers such as tariffs between the United States and 11 mostly Asian nations.
The proposal has been opposed by some organized labor and farm groups that say earlier free trade pacts, such as the North American Free Trade Agreement, have cost jobs and not boosted exports.
Read the original story here : Ag Secretary Vilsack Pushes For High Blends Of Ethanol
June 1, 2015
St Paul - CHS Inc, North America's leading farmer-owned cooperative and a global energy, grains and foods company, announced today it has acquired the Patriot Renewable Fuels ethanol plant from Patriot Holdings, LLC, Annawan, Ill.
The Annawan facility produces 125 million gallons of ethanol annually, and is the second ethanol plant that CHS has purchased. In June 2014, CHS acquired the former Illinois River Energy Plant at Rochelle, Ill.
"CHS will pursue ethanol manufacturing ownership in strategic current and new geographies that allow us to add value for our owners across our ag business and energy enterprise from inputs to value-added fuel and feed ingredients to the marketplace," said Gary Anderson, CHS senior vice president, North America grain marketing and renewable fuels.
Gene Griffith, Patriot Holdings, LLC, chairman, president and CEO said CHS was a marketer of the plant's DDGS (distillers dried grains with solulubles) and ethanol products. "CHS is the right fit to take this business to the next level," Griffith said. "The Patriot board of directors is confident that CHS is commited to continuing to grow the business, which bodes well for all suppliers delivering grain to the plant."
The facility will be rebranded as CHS. Its 68 employees will become CHS employees.
Visit chsinc.com for more information.
May 30, 2015
By David Shaffer
WINNEBAGO, Minn. – Farmers who own one of Minnesota’s oldest, problem-plagued ethanol plants are making a fresh bet on the future of fuel from corn. An uprising by hundreds of farmer-investors in the Corn Plus Cooperative killed a deal to sell the plant, which led to the ouster of top managers last year. Now, investors have put up more capital, arranged financing for equipment upgrades and hired leading industry experts to revive the 20-year-old operation in this southern Minnesota town. “We want to maintain the ownership for farmers and have this plant do what it was meant to do — add value to corn,” said Bill Drager, a Mapleton, Minn., farmer who led a breakaway group of shareholders that successfully opposed the sale last August. He later became president of a reconstituted board of directors.
It is the latest sign that many farmers still see benefits in owning ethanol plants, even as the industry has consolidated. In Minnesota, where the ethanol business sprouted in the early 1990s, more than half of the 21 ethanol plants still have farmer or local owners.
When farmers opened the Corn Plus plant in 1994, it was one of two farmer-owned ethanol producers in Minnesota, and it quickly became a success story — proof that farmers facing cyclical low prices for corn could profitably turn it into fuel and animal feed.
Over the years, Corn Plus expanded to 42 million gallons of yearly output. It replaced some equipment but couldn’t keep pace with newer, larger, more-efficient producers. It had unplanned outages in 2013 and 2014, and profits lagged. The plant repeatedly broke environmental laws, resulting in $1.1 million in fines since 2009 and a rare felony conviction.
Letter: Plant for sale
Against that backdrop last August, the more than 600 shareholders got a letter from the co-op announcing a deal to sell the plant to an Iowa-based ethanol cooperative. It would be close to a fire sale price, about 34 cents per gallon of annual capacity, or nearly $14 million. That’s far below the median price of $1.10 to $1.20 per gallon of annual capacity, said ethanol consultant Larry Johnson of Cologne, who was not involved in the deal.
“It was a real big surprise,” Don De Langhe, a Marshall, Minn., farmer who owns shares in Corn Plus and two other ethanol plants, said of the proposed sale.
De Langhe knew that other ethanol plants made record profits in 2014, and believed that Corn Plus could do the same. Under the co-op bylaws, the sale needed approval from two-thirds of shareholders.
“They voted it down almost 2 to 1,” said Drager, who campaigned with De Langhe against the deal. “It says a lot about the way farmers in this area felt about this investment way back when. They made a lot of money over the years, and they didn’t want to see it go out in this fashion.”
After the sale was rejected, five of nine board members resigned, eventually replaced by directors including Drager and De Langhe. CEO Mark Drake was ousted, and the board began looking for new leadership — and fresh capital.
That’s when ICM Inc. of Colwich, Kan., entered the picture. ICM is an ethanol-focused technology and engineering company that designed most of the nation’s ethanol plants, though not Corn Plus. Five years ago, ICM created a new unit, Energy Management Solutions, to revive and manage underperforming ethanol plants, starting with one in Casselton, N.D.
‘Diamond in the rough’
Corn Plus’ board approached ICM to run the Winnebago plant late last year. ICM CEO Dave Vander Griend made a visit, and agreed to do it. ICM bought 25 percent of Corn Plus for $4 million — the first time it has taken a stake in a distressed ethanol operation.
“I saw it as a diamond in the rough,” Vander Griend said in an interview. “The plant is in rough shape but it is a good location. It is a good market area. The plant needed some money spent on it. It needed some working capital, and we said we’ll come in and put a stake into the plant because it will be a good investment.”
Corn Plus’ new CEO, Rick Serie, is an employee of ICM’s management unit, EMS. He brings 20 years of experience developing and running ethanol plants, starting with one in Luverne, Minn., in the mid-1990s. Since January, Serie has made operational changes to boost the plant’s efficiency.
He also is tackling environmental issues. State and federal pollution regulators have cracked down on the plant three times since 2009, leveling $1.1 million in fines. The biggest case, related to faking emissions data, resulted in a felony conviction for the co-op in 2011. Regulators announced the most recent violation, related to air emissions equipment, in December just before Serie became CEO.
Serie said that in his first meeting with regulators this year “we basically told them that not being in compliance is unacceptable to us. This plant will never be out of compliance again.”
To recapitalize Corn Plus, $7 million was raised from shareholders, including ICM, in a convertible debt offering. That set the stage for farm-sector lenders AgStar Financial Services and Farm Credit Services to close on a revolving loan agreement in late May.
“Plants of this size can absolutely make money if they have good management,” said Ron Monson, AgStar vice president of agribusiness capital, who helped put the financing together.
Boosting efficiency
Just outside the plant sits a pile of new equipment to be installed during a $5.7 million upgrade. Serie said the front end of the plant, where corn is ground in the first stage of making ethanol, will be torn out and replaced with ICM’s patented Selective Milling Technology. The goal is to improve the margin on every gallon of fuel.
“It is all being done to gain efficiencies so we can compete with a modern plant,” Serie said.
ICM’s Vander Griend said his privately held company is “definitely interested” in investment and management relationships with other ethanol plants. That’s long been the business model of Poet Inc., the Sioux Falls-based ethanol company that built, partly owns and manages many ethanol plants, including four farmer-owned operations in Minnesota.
For plants like Corn Plus, the relationship offers access to industry expertise. For ICM, it offers the potential to introduce new ethanol technologies. One of them is ICM’s Generation 1.5, a way to produce ethanol from fibrous parts of the corn kernel, like the shell, whose starch is untouched in the traditional fermenting process.
“It opens the door to do these technologies at plants where you have some influence,” Vander Griend said.
Read the original story here : Farmer-owners of Corn Plus Ethanol Plant Double Down On Their Investment
Reuters
May 28, 2015
The U.S. Department of Agriculture (USDA) plans to inject $100 million in funding to get more ethanol at the gas pump, according to two industry sources, the latest push to get beyond a "blend wall" that has capped demand for the biofuel.
That would mark a big push for an overhaul of fuel-blending pumps and related infrastructure to generate higher demand for the biofuel. The USDA is expected to announce the funding on Friday, the sources said.
A USDA spokesman declined to comment on the plans.
Ethanol groups have asked the USDA to continue to offer this funding amid rising calls for policy reform from policymakers, oil companies, and environmentalists. The USDA launched a program in 2011 designed to get 10,000 flex-fuel options at gas pumps nationwide that would allow use of blends as high as E85, which is 85 percent ethanol.
The United States sets use requirements for biofuels, including ethanol, through the Renewable Fuel Standard (RFS) program, but has delayed setting targets for the current year and 2014 amid concern from oil companies that ethanol use has hit a saturation point without major infrastructure changes.
The plans come as oil companies and biofuels producers await a proposal from the Environmental Protection Agency (EPA) on biofuels use requirements for 2014, 2015, and 2016, widely expected to be announced on Friday.
Read the original story here : USDA Plans To Inject $100 Million On Ethanol Infrastructure : Sources
May 28, 2015
By Hillary Clinton
On my first trip to Iowa this year, I pledged to be a champion for all Iowans — from cities like Davenport, Cedar Rapids, and Des Moines to small towns and rural communities like Norwalk, Monticello, and LeClaire. It’s not enough for Iowans to just get by, you deserve to be able to get ahead and stay ahead. To make that possible across Iowa and across America, we’re going to have to work together to build an economy for tomorrow, not yesterday.
I believe the United States can and must be the clean energy super power for the 21st century. China and other competitors are already racing ahead with big bets on renewables. Yet there are still some here in America — even candidates for President — who want to keep the deck stacked for the fuels of the past. They support wasteful subsidies for oil and gas, block investments in new clean technologies, and even deny the science of climate change. We can’t afford to cede our leadership in developing and deploying the advanced, clean fuels of the future that will grow our economy, lower our energy bills, reduce pollution, and protect the health of our families and communities. And America’s farmers and rural communities have to be at the heart of this effort.
Eighty years ago this month, President Franklin D. Roosevelt created the Rural Electrification Administration, which connected nearly all Americans to the grid in a little more than a decade. Today, rural America is an energy leader, providing clean electricity and transportation fuels to the rest of the country, reducing energy waste, and strengthening our economic competitiveness. In the past seven years, the United States has added enough wind capacity to power more than 13 million homes. Ninety nine percent of that energy comes from rural communities, creating jobs, providing a second source of income for family farms, and attracting $100 billion in new investment.
Rural energy innovation is also reducing our dependence on foreign oil and making our economy more resilient to supply disruptions in other parts of the world. Domestic renewable fuel production has expanded by more than 350 percent over the past decade with enough supply in the market today to fuel more than 30 million cars. And today U.S. biofuels companies not only offer an alternative to imported oil, they’re increasingly selling their product abroad as well.
Renewable fuels can also play an important role in reducing carbon emissions and other sources of pollution, not just from cars and trucks on our interstates, but also from ships and airplanes. Rural innovators are finding new ways to produce low-carbon biofuels, using feedstocks ranging from algae to agricultural waste, with a range of applications.
The U.S. Department of Agriculture has a successful history of partnering with farmers, rural small businesses, and rural co-ops in deploying renewable energy and energy efficiency solutions. These programs should be expanded. The United States should also continue supporting — and improving — the Renewable Fuel Standard and other federal incentives that have been a success for Iowa and much of rural America.
The Renewable Fuel Standard can continue to be a powerful tool to spur the development of advanced biofuels and expand the overall contribution that renewable fuels make to our national fuel supply. But we also can’t ignore significant changes to the energy landscape since the RFS was expanded in 2007. We have to get the RFS back on track in a way that provides investors with the certainty they need, protects consumers, improves access to E15, E85, and biodiesel blends, and effectively drives the development of cellulosic and other advanced biofuels.
Smart investments in rural America aren’t rocket science — it’s just good sense that delivers for all Americans. Providing investment certainty, removing barriers, and investing in the infrastructure to deliver reliable and affordable energy to rural households and deliver rural clean energy to the rest of the country is a good start.
As president, I’ll champion what works, ensure that Americans have the tools they need to lead the world in clean energy, and stand up to those who block our way and want to keep us trapped in an energy economy of the past.
Read the original story here : Clinton : Invest In Rural Energy
May 26, 2015
By Andrew Childers
The Environmental Protection Agency is grappling with how much ethanol the market can absorb as petroleum refiners and renewable fuels producers offer competing rationales for how renewable fuel blending requirements should be set in an upcoming proposed rule.
The EPA will address the ethanol “blend wall” as part of the proposed rule expected by June 1 that would set renewable fuel blending requirements for 2014, 2015 and 2016.
Previous EPA efforts to address the blend wall issue in 2014 derailed the rule amidst opposition from corn states and renewable fuels producers, resulting in no standards being issued during that year. How the agency addresses that issue will be central to the upcoming rule.
“Obviously, the biggest and single issue is the methodology,” Tom Buis, chief executive officer of Growth Energy, an ethanol trade group, told Bloomberg BNA. “It has been from day one. That’s the critical component.”
For 2014, the EPA had originally proposed to reduce the overall renewable fuel blending requirement for that year in an effort to keep the ethanol content of the gasoline supply from exceeding 10 percent, the maximum amount approved for all vehicles on the road. The move was opposed by renewable fuels producers, who argued that the market was capable of absorbing additional ethanol through E15 (gasoline containing 15 percent ethanol) and E85 (gasoline containing 85 percent ethanol).
The petroleum industry has urged the EPA to cap the amount of ethanol that must be blended into the gasoline supply at 10 percent, arguing that flex-fuel vehicles capable of operating on E85 are not widespread enough to support significant amounts of additional ethanol in the marketplace. Though the EPA has approved use of E15 in model year 2001 and newer passenger vehicles, petroleum refiners caution that many automobile manufacturers have warned that use of E15 could void warranties.
“Because the ethanol blend wall is such a critically important issue to the refining industry, fuel retailers, engine manufacturers and fuel consumers, EPA must acknowledge these realities in the upcoming rulemakings,” the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said in a May 1 letter to the EPA.
Waiver Authority Opposed
Section 211 of the Clean Air Act allows the EPA to use its waiver authority to reduce the annual renewable fuels blending mandates below the levels set out in the Energy Independence and Security Act (Pub. L. No. 110-140) if implementing them at those volumes would cause economic harm or during instances of inadequate domestic supply. The EPA in 2014 proposed for the first time to use its waiver authority to reduce the overall renewable fuels blending requirements as it sought to address the ethanol blend wall.
Renewable fuels producers argued that they are able to produce more than enough fuels to satisfy the statutory requirements. The prior EPA proposal to reduce the blending requirements was based not on adequacy of fuel supply but rather the inability of the petroleum industry to consume the fuels in the volumes required, they said.
The EPA proposal to waive the 2014 blending requirements over supply issues “ultimately rewards the intransigence of oil refiners to invest in renewable fuels infrastructure, protects their market share, and thus blocks increased volumes of cleaner and more sustainable renewable fuels from entering the marketplace,” the Renewable Fuels Association said in May 20 comments on a proposed consent decree that would set deadlines for the EPA to issue the standards.
“Adopting the same methodology for [renewable volume obligations] in 2015 and beyond would continue to reward oil companies for their stubborn refusal to follow the spirit and intent of the RFS as adopted by Congress,” the Renewable Fuels Association said.
Rule Under Review
The upcoming proposal is under review by the White House Office of Management and Budget.
The EPA has agreed to propose the rule by June 1, with a final rule by Nov. 30 as part of proposed consent decree reached with petroleum refiners that sued the agency over its delays in issuing the requirements for 2014 and 2015 (Am. Fuel & Petrochemical Mfrs. v. EPA, D. D.C., No. 15-cv-00394, consent decree proposed 4/10/15).
“We want EPA to hit the deadline. EPA assured us they will, and we have every expectation they will at this point,” Bob Greco, director of downstream operations at the American Petroleum Institute, told reporters May 20. “This has gone on long enough, and we need EPA to move forward with this as quickly as they can.”
The EPA has announced it will set the attest deadlines, a step in the compliance process for the 2013 and 2014 renewable fuel standards as part of its upcoming proposal, but it has revealed no further details.
In a memorandum posted May 26, the Office of Enforcement and Compliance Assurance said it will take no action on the attest demonstrations for 2013 and 2014 until the EPA completes its rulemaking.
Advanced Fuel Producers Fear Uncertainty
Advanced biofuel producers are also closely watching the upcoming proposal. They have argued that the EPA's increasing delays in setting the standards for 2014 have paralyzed the industry's ability to secure financing for new production facilities.
“EPA sets this self-fulfilling prophecy with the numbers,” Paul Winters, a spokesman for the Biotechnology Industry Organization (BIO), told Bloomberg BNA. “[If] they set the numbers low then, the advanced biofuels will be low. If they set them aggressively, then there will be investment then the numbers will beat the projections.”
Cellulosic ethanol exceeded EPA projections for the first time in 2014, largely due to a rule change that reclassified millions of gallons of advanced biofuels being produced from compressed and liquefied natural gas from landfills and wastewater treatment as cellulosic ethanol, but still lagged well behind the amounts required by statute.
But producers of advanced biofuels such as cellulosic ethanol said the uncertainty caused by the EPA's ongoing delays has hampered the ability of the industry to grow. The delays have caused a $13.7 billion shortfall in the investment necessary to meet the renewable fuel program's advanced biofuel requirements, BIO said in a May 4 white paper.
Read the original story here : EPA Grapples With Competing Rationales For Setting Renewable Fuel Requirements