Media
Jan 24, 2014
By Philip K. Verleger, Jr
Consumers paid $ 3.25 to 3.30 per gallon for gasoline over the holidays. This was a large savings compared to the $ 4.11 they paid in June 2008 when oil prices peaked. Those days are distant and becoming forgettable to everyone. However, but for action taken in 2007, consumers could easily have paid $4.25 or even $5/gallon for gasoline this Christmas. To be blunt, we got lucky. For once, the U.S. government did something that paid very large dividends.
I realize most Americans doubt that Washington policymakers can accomplish anything. Well, in this case they did. In 2007, Democrats and Republicans worked together to pass the Energy Independence and Security Act (EISA). This law requires U.S. oil refiners to blend increasing amounts of renewable fuels into gasoline and diesel. In 2013, the oil industry had to mix almost one million barrels per day of renewables into America’s motor fuels. This volume saved American and world consumers from yet another oil shock.
Now this is not the story one hears today from politicians, oil industry lobbyists, or even some economists. Most commentators today believe the renewable fuels program has raised gasoline prices. The American Petroleum Institute, the trade organization for Big Oil, has been particularly aggressive in financing studies that make this assertion. Other organizations such as the American Fuel & Petrochemical Manufacturers have followed suit. Unfortunately, the Obama administration and many in Congress cannot see through the smoke and mirrors. Thus in November, the administration issued draft regulations to reduce the renewable fuels blending requirement for oil refiners, thus allowing the industry to push more oil onto consumers.
In its successful misinformation campaign, the oil industry maintain that consumers paid as much as ten or even twenty cents more per gallon for gasoline in 2013 than they might have had refiners been free of the renewables mandate. What the industry omits is that consumers actually saved $1 per gallon or more in 2013 because the greater renewable supplies replaced crude oil volumes that countries such as Libya, Iraq, Nigeria, Iran, Sudan, and several others failed to produce. Although no one notices, 2013 saw in aggregate the largest disruption of global oil production since at least 1990, according to a US Energy Information Administration report. The amount of lost output reached more than three million barrels per day at one point, which translates to three percent of global capacity.
Much of the “missing” oil was made up by increased output from Saudi Arabia. But most experts agree that the Saudis produced at or very close to capacity in 2013. The country managed to substitute probably two-thirds or maybe three-quarters of the lost oil. It could not, however, replace all of it.
Some in the oil industry likely wish the volume Saudi Arabia could not match had remained lost. Oil company officials and leaders of oil-exporting nations would have cheered if crude prices averaged $150 per barrel rather than $108 in 2013. Make no mistake, prices would have hit such levels had none of the three million barrels per day of lost output been replaced.
Fortunately, that did not happen. The lost oil was supplanted by ethanol and other renewable fuels. EISA did just what its title proclaimed: it assured consumers of energy security (and lower-priced gasoline). The act protected consumers by introducing one million barrels per day of renewables into the nation’s energy picture. The extra biofuel arrived just in time to make up for the diminished production from Libya, Nigeria, and Sudan. This marks a very rare triumph for US energy policy. As one who has followed this issue closely for forty-two years, I am hard pressed to find many such successes, certainly none of this magnitude.
This achievement has gone unnoticed. As noted, the EPA has issued rules that, if enacted, will roll back the renewable fuels program. The agency apparently has failed to notice that consumers are enjoying gasoline prices possibly one-third lower than they would be absent the renewables program. Even worse, the EPA issued these proposed rules under the bogus assertion that refiners could not comply with the standards mandated by Congress. The bureaucrats, who seem to think the renewables program has raised gasoline prices, believe their actions will lower them and thus give consumers a break.
Again, the truth is just the opposite. The EPA’s new regulations will likely boost global crude prices and gasoline prices, unless of course political stability somehow returns to the key oil-producing countries where production fell in 2013. In other words, the EPA strategy will work if Libya’s situation stabilizes so the country can increase output, if Iraq can assuage Al-Qaeda and restore a working government in Fallujah, if the war between Sudan and South Sudan can be resolved, and if the West and Iran can come to some agreement regarding the Iranians’ desire to build nuclear weapons.
Frankly, the Obama administration is foolish to think these international problems can be solved. It should return to the path ordered by Congress in 2007 and ignore the bellyaching of oil refiners. The renewable fuels program saved consumers billions in 2013. If allowed to operate as written, it will save them far more in 2014.
Read the original story here : RFS Kept Gas Prices Down
By Tom Cherveny
March 18, 2014
ATWATER — Bushmills Ethanol is helping lower the bar, and in this case that’s a very good thing.
The Atwater plant has joined the growing number of ethanol producers in the country reducing the water they use, and shrinking their environmental footprint by doing so.
Bushmills Ethanol on Feb. 28 began operating a newly installed zero liquid discharge system built by U.S. Waters Services of St. Michael, Minn.
It’s the fifth such system the company has installed at ethanol plants in Minnesota, according to Christian Hess, area manager with the water services company.
The $3.8 million inves.tment is expected to reduce the Bushmills Ethanol plant’s overall use of water by one-third.
It works like this: Water that was previously discharged into Judicial Ditch 17, part of the Middle Fork of the Crow River watershed, is now returned and re-conditioned. That in turn reduces the amount of water the plant must draw from its wells, and ends the plant’s liquid discharges entirely.
Bushmills Ethanol General Manager Erik Osmon cautions that it’s too early to know for certain, but he said the new system should reduce the amount of water used per gallon of ethanol produced from about 2.9 gallons to 2 gallons.
Hess noted that when the industry was first launched, the ratio of water to ethanol produced was as much as 11 gallons to 1. The industry has steadily made gains in efficiency: The standard today is believed to be somewhere between 3 to 4 gallons of water per gallon of ethanol produced.
Osmon said it is part of a good neighbor approach by the farmer cooperative.
“We are in Minnesota,’’ said Osmon. “The Pollution Control Agency has made water very much a priority both in quality and the amount used, and we’ve reacted accordingly. They didn’t tell us to do this.’’
Bushmills is in compliance with its discharge permit, but in 2012 it paid civil penalties for previous violations.
The new system allows the plant to recycle the water coming mainly from the cooling system.
The U.S. Water Services system uses a cold lime treatment and softening process, not unlike that used by some municipalities to supply drinking water. At Bushmills, the water drawn from the aquifer and the recycled water are mixed and treated in a multi-step process. All of the elements that are naturally found in the local groundwater — magnesium, iron, strontium, and ferrium among them — are greatly reduced in the softening process.
Their removal benefits operations at the plant, as these minerals otherwise concentrate and adversely affect the plant’s boiler and water cooling systems. The new, largely gravity-fed treatment system also reduces overall energy usage.
An important part of the treatment process involves adjusting the pH of the water with the use of carbon dioxide. Bushmills will be using the carbon dioxide that results from its ethanol production in the water treatment system, furthering reducing its carbon footprint, noted Hess.
The lime used in the treatment process is captured at the end of the cycle, pressed dry and formed into cakes for easy transport. At this point the lime will be placed in an approved landfill. The company is working out an arrangement so that in the future the lime can be spread on farm fields to the east, where it will help reduce soil acidity.
Work on the project began last November, and this winter’s severity made it a challenge for the construction workers, said Hess. Osmon said the project was completed right on schedule and the start-up went very well.
U.S. Water Services has installed similar zero liquid discharge in Minnesota ethanol plants including: Highwater Ethanol, Lamberton; Granite Falls Energy, Granite Falls; Biofuel Energy, Fairmont; and Guardian Energy, Janesville.
Read the original story here : With New Discharge System, Bushmills Ethanol Expects To Shrink Its Water Usage
March 19, 2014
Washington -Today, the White House, National Oceanic and Atmospheric Administration (NOAA) and the National Aeronautics and Space Administration (NASA) are hosting an event on the topic of climate change. Various technology companies, scientists, and other climate experts will meet to discuss the possible impacts of climate change and announce data-driven technologies to build products and services to better prepare our Nation for those impacts.
Commenting on this event, which will include John Podesta, Counselor to the President, among others, Bob Dinneen, President and CEO of the Renewable Fuels Association, highlights the Renewable Fuel Standard (RFS) as a vital piece of any plan to reduce greenhouse gas (GHG) emissions and curb future climate change:
“Today’s meeting is about finding successful ways to address climate change, including the use of data to help limit future impacts. That makes sense and the effort should be applauded. But it should be noted that the single most effective program this Nation has for reducing GHG emissions is the RFS. Last year alone, the use of biofuels like ethanol and the RFS reduced CO2-equivalent GHG emissions from transportation by 37.9 million metric tons. That’s akin to removing 7.9 million cars from the road for an entire year.”
Dinneen continued, “A recent Life Cycle Associates study found that corn ethanol reduces GHG emissions by 32% compared to petroleum in 2012, including hypothetical land use change emissions. The same study found that corn ethanol reduces GHG emissions by 37-40% compared to tight oil from fracking and tar sands.
“Why then, is the Administration contemplating a reduction in the RFS? Why would the Administration scale back its most successful carbon program? Rolling back the RFS as proposed by the Environmental Protection Agency would INCREASE carbon emissions by some 3.7 million metric tons of CO2-equivalent GHG. That’s like adding 725,000 cars to the road overnight! Talking about climate change is one thing.
"But the Administration has the opportunity to do something about it by restoring the RFS to its statutorily mandated levels for carbon-reducing biofuels.”
Read the original story here : RFS Is Single Most Effective Policy on Greenhouse Gas Reductions
Sept 13, 2017
By Erin Voegele
The U.S. Energy Information Administration has increased its 2017 and 2018 ethanol production forecasts in the September edition of its Short-Term Energy Outlook. The U.S. is now expected to produce 1.03 million barrels of ethanol per day this year, increasing to 1.04 million barrels per day next year. Last year, production averaged 1 million barrels per day. In the August STEO, the EIA predicted 2017 ethanol production would average 1.02 million barrels per day, falling to 1.01 million barrels per day in 2018.
On a quarterly basis, the EIA predicts ethanol production will average 1.03 million barrels per day during the third and fourth quarters of this year. During the first quarter of 2018, ethanol production is expected to be maintained at 1.03 million barrels per day, increasing to 1.04 million barrels per day during the second and third quarters, and increasing to 1.05 million barrels per day during the fourth quarter of next year.
The EIA currently predicts an average of 940,000 barrels of ethanol per day will be blended into motor gasoline this year, maintaining the 2016 blend volume. In 2018, ethanol blending is expected to increase to 960,000 barrels per day.
The STEO also notes U.S. regular gasoline prices reached $2.69 per gallon on Sept. 11, up 29 cents per gallon from Aug. 28 and the highest weekly average since August 2015. EIA forecasts the average U.S. regular gasoline retail price will be $2.61 per gallon in September, falling to $2.40 per gallon in October. These prices are 25 cents per gallon and 10 cents per gallon higher, respectively, when compared to the forecasts made in the August STEO. Regular gasoline prices are expected to fall to $2.23 per gallon in December.
The EIA’s most recent weekly ethanol production data shows production reached 1.047 million barrels per day the week ending Sept. 8, down from a near record setting 1.06 million barrels per day the previous week. The current weekly ethanol production record sits at 1.061 million barrels per day and was set the week ending Jan. 27.
The EIA’s most recent monthly import data shows the U.S. imported 252,000 barrels of ethanol in June, all from Brazil. During the same month, the U.S. exported 2.21 million barrels of ethanol, primarily to Canada, Brazil, and India.
Ethanol producers looking to expand beyond our shores may be looking at China as an export destination. RFA CEO, Bob Dineen, said in a recent column in Ethanol Producer Magazine that the RFA, along with Growth Energy, joined the USDA in a recent trip to China to explore the potential of exporting ethanol and dried distillers grains with solubles (DDGS) to Asia's second largest economy.
The American Lung Association of Minnesota is hosting a series of workshops on B10 this month to help diesel retailers and farmers better understand the state's requirement for diesel and biodiesel fuel.
From July 1 to Sept 30, all #2 diesel fuel in Minnesota will contain 10% biodiesel (B10). Following September, all #2 diesel will revert to containing 5% biodiesel (B5). From 2015 onwards, B10 will be available from April 1 to Sept 30 while B5 will be available in the other months.
With the EPA's decision on 2014's Renewable Volume Obligations (RVO) for ethanol production expected to be announced in the near future, the agency may want to take a closer look at current crude oil prices which have been trending upwards.
A strong basis for the Renewable Fuel Standard, which was enacted in 2005 and expanded under the Energy Independence Security Act (EISA) in 2007 was to wean America off foreign oil.
The shale oil boom is now leading to crude oil exports from the US for the first time since the 1970s, reports the Wall Street Journal.
The report said two companies have been given permission to export shale oil, lifting an export ban on crude oil that has been in place since the 70s.
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Sales of E85 in both Minnesota and Iowa were up in the first quarter of 2014. Based on data from the Minnesota Department of Commerce, E85 sales in Minnesota in the first quarter totaled 3.77 million gallons, representing a 49 percent increase from 2.52 million gallons reported in the same period of 2013.
In Iowa, E85 sales in the first three months of this year amounted to 2.7 million gallons, up 48 percent from the first quarter of 2013, reports Domestic Fuel.com.
A new advertisement from Americans United For Change ties high pump prices to the current turmoil in Iraq and argues for ethanol production levels under the Renewable Fuel Standard (RFS) to be maintained.
In particular, the ad urges viewers to notify the EPA to maintain the 2014 renewable volume obligations for ethanol as stipulated in the RFS. The EPA, as widely reported, has proposed to reduce ethanol consumption this year. Watch the video below.
As if there aren't enough problems associated with fracking (ie: minor earthquakes, radioactive waste), the Wall Street Journal today reports that Bakken Shale drillers have been burning excessive natural gas that are a byproduct of hydraulic fracturing.
According to the report, drillers burned 10.3 billion cubic feet of natural gas (valued at $50 million) in April which in turn has degraded air quality in towns in North Dakota that are in close proximity to the oil wells.
Today's Star Tribune ran a story that's been the topic of the month : high gas prices. As the fourth of July weekend approaches, motorists looking to travel up north for the holiday weekend are feeling it in their wallets as pump prices reach the highest point they've been since 2008.
As we've written on countless occasions, the recent spike in gas prices is a direct result of the ongoing conflict in Iraq, although just about any global uncertainty (re: Ukraine), sends traders into a panic and the price of crude oil goes up. Consumers, in turn, feel the pinch (no prizes for guessing who profits from this).
The Renewable Fuels Association's (RFA) recent report on current practices by oil companies to block the sale of E85 and E15 is nothing short of explosive. While we've all suspected for some time that oil companies weren't necessarily on the renewable fuels bandwagon, this report details specific practices employed by oil companies to block the availibility of E85 and E15.
The report has made a significant enough impact that it has led Senators Amy Klobuchar and Chuck Grassley, from Minnesota and Iowa respectively, to demand a federal probe to investigate the allegations made by the RFA in the report.
The Environmental Protection Agency's (EPA) final rule on biofuel consumption for 2014 may be higher than the reduced levels it proposed in November 2013, said Sen. Al Franken, according to various reports today.
Franken reportedly said the EPA would scale back on the reductions it originally proposed but that the final ethanol consumption level for 2014 would still be lower than the renewable volume obligations (RVO) under the Renewable Fuel Standard (RFS) which originally called for the consumption of 14.4 billion gallons of ethanol this year. The EPA, in November last year, proposed reducing it to 13.01 billion gallons.
A big debate has erupted in Chicago over the city's proposal to require many gas stations to sell E15. Proponents for E15 want it to replace the mid-grade 89 octane gas sold in most stations in the city, a move which makes sense considering that E15 blended with 87 octane gas would produce a fuel with an octane rating of closer to 90. And it would be cheaper than 87 octane gas.
For the last seven months, the biofuel industry has been left in limbo with regards to the Renewable Volume Obligations (RVO) under the Renewable Fuel Standard (RFS) for 2014. The fact that it has taken this long has had a negative effect on ethanol producers as well as investments into advanced biofuels. Uncertainty has done the industry no good.