Nov 16, 2020
ELLISVILLE, Mo. — The ethanol industry is familiar with adversity and the recently elected chairperson of the Renewable Fuels Association believes a rebound is on the horizon.
Jeanne McCaherty, CEO of Guardian Energy Management, was selected as the new chair at the RFA’s annual meeting. McCaherty becomes the first female chairperson in the organization’s history and first among any national ethanol trade association.
As CEO of Guardian Energy Management, McCaherty, of Prior Lake, Minnesota, provides executive management for Guardian Energy LLC, Guardian Energy Holdings LLC and Hankinson Renewable Energy LLC, three ethanol biorefining businesses.
She has a master’s degree in biochemistry from the University of Missouri and serves on the board of directors for the Renewable Product Marketing Group LLC and the board of directors for the Minnesota Biofuels Association.
McCaherty, a longtime proponent and advocate for low-carbon renewable fuels, also serves on the Minnesota Governor’s Biofuels Council to develop recommendations to increase the incorporation of biofuels in transportation fuels in Minnesota. She succeeds Neil Koehler, co-founder and co-CEO of Pacific Ethanol, in chairing the RFA board.
“Renewable fuels have a critically important role to play in improving liquid transportation fuels. I am excited to work with the members and staff of the RFA to continue to position renewable fuels and co-products to support rural economies, improve air quality, and provide better options for consumers,” McCaherty said.
She spoke of the challenges the industry faces and federal actions that show promise for the future in a recent podcast.
“The ethanol industry is really a reasonably new industry overall and it has had a lot of very highs and a lot of very lows in the history and the evolution of that business. I would say that 2020 probably has been the low point for the industry. The pandemic has been challenging for the ethanol industry the same as it has for all other industries,” McCaherty said.
“At one point in the ethanol industry, we were down demand-wise by 45%, so prices tumbled to record lows and we’ve lost somewhere between $7 billion and $10 billion in revenue due to COVID.
“In that kind of a year it’s very difficult to say it’s a really high point in the ethanol industry, but this industry is very familiar with adversity. Many of the owners/investors are corn producers. They’re also investors in ethanol and they’re used to adversity. This isn’t something that will keep them down.”
In the midst of the pandemic, there has been good news on the ethanol front.
U.S. Department of Agriculture Secretary Sonny Perdue announced Oct. 8 a series of grants as part of Higher Blends Infrastructure Incentive Program. The agency is investing at least $22 million in grant funding to increase demand for ethanol and biodiesel.
USDA said more funding may be available from a total $100 million pool, with the $22 million projected to increase demand by more than 150 million gallons. HBIIP helps fuel distribution centers to convert to higher blends through equipment and infrastructure improvements cost sharing.
Two bills in the U.S. House — the Next Generation Fuels Act and the Renewable Fuels Standard Integrity Act — also would benefit the ethanol industry if passed.
“The Next Generation Fuels Act establishes a 98 (research octane number) fuel standard for the highest octane and also speaks to the lower greenhouse gas emissions. So, low carbon while high octane and we’re pretty excited about that. It puts a limit on the aromatics and really pushes higher ethanol blends going forward,” McCaherty noted.
“That’s one we’ll be working on and helping to move that further. It has a number of other conditions in it, including things around the Reid vapor pressure and some of the (compliance with fuel economy) credits around flex-fuel vehicles. It’s very positive for the ethanol industry and one that we’re very excited about.”
The RFS Integrity Act aims at requiring more transparency for companies seeking Small Refinery Exemptions through the EPA. The bill has been rolled into a new House energy bill, the Clean Economy Jobs and Innovation Act.
“That would set a deadline for refiners to request their exemptions from the RFS and would require the EPA to publicly release the name of those refiners requesting a waiver so that we get more transparency around SREs, how they’re working and make sure the RFS is upheld,” McCaherty said.
Congress has yet to include the ethanol industry in any COVID-19 relief packages and McCaherty addressed that issue.
“It means obviously that we’re going to continue on without aid. It’s a very difficult time. There’s $7 billion to $10 billion in lost revenue for the ethanol industry that we believe has been a result of COVID. It’s been a very difficult time,” she said.
“We’ve had plants that have been idled. We’ve had some of the plants that have had to furlough their folks. Some are still not back up and running. The industry is essential and critical for U.S., but at the some time if a COVID relief package isn’t in the cards the industry will continue and we’ll continue to put ourselves on solid footing and move forward.”
In light of this year’s challenges, McCaherty commented on the general mood of ethanol producers.
“This is a group that’s used to adversity. They’re used to hard work and hard times. This has not been an easy year for anyone. I think everybody is a little worn out, not just ethanol producers, but everyone is a little bit worn out over COVID, but at the same time I think everybody realizes that it’s not time to sit down, but time to roll up our sleeves and continue to work,” she said.
“Ethanol is critical to these rural economies. Many of our producers also have stakes in the ethanol world and I think the mood generally is let’s get to work, let’s continue to work at positioning the ethanol industry to where it belongs.”
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