In the News

Renewable Fuels Association

April 3, 2014

WASHINGTON — Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), today sent a list of questions regarding the “abject failure of the rail system to adequately address the needs of all of its customers,” to Ed Hamberger, President and CEO of the Association of American Railroads (AAR).

U.S. ethanol is the lowest price liquid transportation in the world, saving American consumers between $0.50 and $1.50 per gallon. Dinneen writes, “Over the past several weeks, however, the sheer chaos that is today’s rail system is denying consumers that price relief by driving up the transportation cost for and impacting the supply of ethanol and other commodities. Nothing has changed with regard to ethanol production costs or efficiencies. The only change has been abject failure of the rail system to adequately address the needs of all its customers. The U.S. economy is suffering as a consequence.”

The letter spells out in clear detail the limiting impact the rail situation is having on the ethanol industry. “In response to increasing demand, the ethanol industry was producing at an average rate of 949,000 barrels per day (bpd) in December 2013. But disarray on the rail system in the first quarter of 2014 has forced ethanol producers to significantly curtail output.

By the first week of March 2014, ethanol output had fallen to 869,000 bpd, as producers were forced to slow down. Onsite storage tanks were brimming full and, in many cases, the railcars and/or locomotives needed to ship ethanol were simply not available. As a result, ethanol stocks in key regions have been depleted and prices have increased. All of this is due to the turmoil on the rails—dislocated railcars and locomotives, increased terminal dwell times, slower train speeds, an insufficient number of crews, and a shortage of spare railcars and locomotives.”

Dinneen exposes the excuse of winter weather, and drives straight to the heart of the issue, “The railroads have attributed this lackluster performance and inefficiency to winter weather. But they seem to have forgotten that winter comes every year!... Indeed, a more plausible explanation for the severity of the current epidemic is the explosive growth in railcar shipments of Bakken and Canadian crude oil.

"The surge in crude oil production from fracking has reshuffled the existing fleet of railcars and locomotives, pressured lease rates, changed normal rail traffic patterns, and generally exerted significant stress on the rail system. According to AAR, crude oil shipments have increased from 9,344 carloads in 2008 to 434,032 carloads in 2013.In addition, AAR data show rail shipments of industrial sand nearly tripled between 2008 and 2013, stating, ‘…frac sand is almost certainly the primary driver behind the increased industrial sand movements on railroads over the past few years.’

"It seems absurd to suggest, as some have, that the efficiency of the rail system has been unaffected by the 4545% increase in crude oil shipments and the 170% increase in sand shipments since 2008.”

In an effort to better understand the causes, extent, and strategies for resolution of the current situation, Dinneen asks AAR to answer the following questions:

• What role has the explosive growth in crude oil (and frac sand) shipments played in current rail inefficiencies?

• What steps are being taken in the short term by the rail industry to alleviate the current logjam on the rail system?

• When do you expect service on each of the Class I railroads to return to more normal operating conditions?

• How can you assure the ethanol industry—and other rail-reliant industries—that crude oil shipments are not being prioritized over shipments of other goods and commodities?

• Will average train speeds recover to historically normal levels, or do you expect slower speeds to be the “new normal” due to the increase in crude oil shipments?

• What efforts are being made to educate the public about the impact of the current rail situation on the U.S. economy and prices for individual consumer goods?

• As a longtime customer of the railroads, what can the ethanol industry do to assist in your industry’s efforts to ensure similar situations are avoided in the future?

Read the letter here

Read the original story here : Oil-Induced Rail Chaos Driving Up Consumer Costs For Gasoline And Goods

Rapid City Journal

April 5, 2014

By Keith Alverson

We are blessed as Americans to have the safest, most affordable and abundant food supply in the world. Consumers have thousands of choices when it comes to food any time of the year. It’s the American way.

But when it comes to fuel, choice is extremely limited, as the oil industry has had a monopolistic hold on our country. Until just the past decade, there was basically zero choice for consumers. Now ethanol and other biofuels provide the option of an American-made, cleaner-burning, less expensive, renewable fuel.

So it’s troubling when an academic like David Miller (March 15 Forum) ignores the facts with his column, “We shouldn’t use food crops as fuel sources,” and serves up another dose of misinformation about America’s most successful alternative to gasoline.

Does Miller realize humans don’t directly consume the type of corn used in ethanol production? Field corn is much different than the fresh, frozen and canned sweet corn that humans eat and represents 99 percent of the corn grown in the United States.

Ethanol produces feed and fuel. One-third of the corn used for ethanol production is turned into the co-product, distillers grains, a high-protein livestock feed in high demand because it efficiently displaces the need for corn and soybean meal in livestock rations.

Meat prices have reached market highs, and companies like Tyson reap record profits. But when it comes to rising food prices, corn isn’t the culprit; in fact, it has little to do with your grocery bill. For example, corn was $7 per bushel a year ago and this winter it was just $4. Has your grocery bill come down? At $4 per bushel, corn’s value is 18 cents in a pound of beef, 13 cents in a gallon of milk and 6 cents in an 18-ounce box of corn flakes.

Do you know how much of your food dollar goes back to the farm? The answer is about 12 cents, according to the U.S. Department of Agriculture. Statistics show a strong correlation between the price of oil and the price of food as the rest of your food dollar goes towards transportation, processing, packaging and energy.

Food security is vital, but what about energy security? Since 2007 the United States has reduced oil imports by 20 percent. Ethanol now makes up 10 percent of America’s fuel supply and last year displaced 476 million barrels of imported oil; that’s approximately $48.2 billion that would have left the country. And we did this with less than 3 percent of the world’s grain supply.

When it comes to the environment, precision agriculture tools reduce energy usage, emissions and spray overlap. More farmers are optimizing their fertilizer and using lesser tillage practices to prevent runoff and erosion along with buffers and cover crops.

Better yet, South Dakota State University research shows that South Dakota cornfields over the past 25 years have become carbon sinks due to lesser tillage practices and higher yields.

Can oil companies say the same? Google the latest oil spills in Lake Michigan and the Gulf of Mexico for your answer.

Read the original story here : A Brief Lesson On Ethanol And Food Prices

Renewable Fuels America

April 2, 2014

WASHINGTON — Today’s editions of the New York Times and Politico have published a good-humored, but factual takedown of Big Oil’s false, hypocritical attacks against clean, renewable ethanol.

The full page ad, which is published in Politico and all DC editions of the New York Times, is an open letter to Jack Gerard, President of the American Petroleum Institute. It is signed jointly by the Renewable Fuels Association’s Bob Dinneen and Growth Energy’s Tom Buis.

Dinneen and Buis write, “Despite the millions of dollars your industry has spent on bogus TV ads, there hasn’t been a single reported case of engine damage from ethanol blended fuels like E15. But last week, Exxon admitted selling customers in Louisiana more than 5 million gallons of oil-based gasoline that was so bad that it’s been stopping cars dead in their tracks. In fact, one auto shop reported 40 or 50 customers who had trouble starting their engines as a result of Exxon’s contaminated gas. That’s 40 or 50 more cases of engine problems than have been reported in the entire country from E15, and that’s just one shop in Baton Rouge!”

Going directly at the current API boat ads, the open letter continues, “While your ads are misleading people about the impact of ethanol on marine engines, boats in Houston are in dry dock because of your oil spill! In fact, that one company has been fined for 77 different oil spills since 2008, which means they have averaged more than one oil spill per month for the last six years. That’s a lot of boaters impacted by oil spills, Jack.”

The open letter is summed up in one simple closing thought, “You see, Jack, the real environmental peril is oil, not renewable fuels like ethanol.”

Read the original story here : Open Letter From RFA And Growth Energy Take On API

The Bemidji Pioneer

By Don Davis

March 18, 2014

ST. PAUL — Plans to increase the percentage of soybean oil in diesel fuel sold in Minnesota survived a delay attempt Monday.

"This isn’t over," state Senate Commerce Chairman James Metzen, D-South St. Paul, said moments after his committee overwhelmingly defeated a bill that would have delayed implementation of a 2008 law requiring 10 percent of diesel fuel to come from soybeans.

Sen. Melisa Franzen, D-Edina, brought the bill to Metzen’s committee, saying diesel engines are not ready to run on fuel containing 10 percent soybean oil on July 1, as now is required. The bill would “try to address some of the problems our constituents are likely to face this summer,” she said.

She said most cars and light trucks are built to handle 5 percent biodiesel, which now is required to be sold in Minnesota, not the planned 10 percent, known as B10.

Biodiesel supporters said they have heard this argument before, reaching back years to when ethanol first was required to be blended with gasoline. Problems have been few and far between once the state mandated that gasoline and diesel contain plant-based fuel, they said.

Jerry Schoenfeld, who represents soybean farmers and the Minnesota Biodiesel Council, said those who support Franzen’s bill sit on a biodiesel task force but never brought up their complaints until the bill surfaced recently.

Biodiesel pumps $1 billion a year into the Minnesota farm economy, Schoenfeld said, and reduces pollution in areas such as the Twin Cities, which the committee heard is near the federal limit on air pollution.

Schoenfeld said that biodiesel supporters probably would agree to exempt a variety of industries from complying with state requirements, those such as railroads, logging and mining.

Both sides used Illinois as an example to support their cause. Those wanting a B10 delay pointed to fuel-blamed engine problems such as clogged filters and acceleration hesitation. Biodiesel supporters said that even in Illinois, Mercedes-Benz praised biodiesel and urged owners to monitor oil levels and strictly follow oil change intervals, but few problems have been reported.

Illinois allows, but does not require, sales of biodiesel above 5 percent.

Minnesota lawmakers began requiring 2 percent of diesel to be biodiesel more than a decade ago, then upped the figure to 5 percent in 2008. The 2008 law gave the state agriculture, commerce and pollution control commissioners the ability to up the level to 10 percent when they felt there was enough of the fuel. They decided that can happen July 1.

Existing law also allows for B20 at some point, a provision Franzen wants to eliminate.

Franzen, who owns a diesel-powered vehicle, said older vehicles were not made to run on biodiesel and newer ones were made for no more than B5. The committee learned that 125,000 diesel vehicles use Minnesota roads.

The senator said 11 cars and light truck models were available with diesel engines in 2008, and 28 are sold now. But, she added, higher biodiesel content scares buyers.

“Minnesota dealerships are paying the price,” said Amber Backhaus of the Minnesota Automobile Dealers Association.

Kyle Kottke of Buffalo Lake, Minn., said he and his brothers operate a 95-truck fleet and drivers buy fuel in other states when possible to avoid higher Minnesota prices due to the B5 biodiesel mandate.

“We purchase 2 million gallons of diesel fuel per year, so buying even a portion of that (in other states) adds up fast,” he said.

Assistant Agriculture Commissioner Charlie Poster said the current law “works well.” He said the state’s three biodiesel production facilities made 65 million gallons last year.

“We should not come down on the side of big oil companies,” President Doug Peterson of Minnesota Farmers Union said, discussing the importance of growing American energy in Minnesota.

Metzen, who supports the Franzen bill, and Sen. Gary Dahms, R-Redwood Falls, who opposes it, agreed that the bill could reappear yet this legislative session.

Read the original story here : Committee Rejects Biodiesel Mandate Delay

West Central Tribune

By Tom Cherveny

March 19, 2014

Montevideo - Seventh District Congressman Collin Peterson is hopeful that the Environmental Protection Agency will not reduce the nation’s Renewable Fuel Standard by as much as it has proposed.

“I think we have made some progress with the administrator,’’ said Peterson, D-Minn., after two recent meetings with EPA Director Gina McCarthy. Peterson spoke to the Chippewa County Corn and Soybean Growers on Wednesday in Montevideo.

The EPA has proposed a 10 percent or 1.4 billion-gallon reduction in the nation’s standard for 2014. It has not yet acted on it.

It would cut demand for Minnesota-made ethanol by 110 million gallons, according to the Minnesota Department of Agriculture.

Peterson said it appears that the EPA proposed the reduction to deal with a problem created by 2007 legislation. It established what he termed unrealistic targets for cellulosic ethanol and other advanced bio-fuels. It required that cellulosic and advanced biofuels comprise an ever growing share of the renewable fuels used each year.

Congress has been scaling back the targets in recognition that they cannot be achieved at this time. Peterson said he’s had a steady parade of people in his office over the last 10 years telling him that a large-scale, cellulosic ethanol plant is only six months or a year away, but it’s never happened.

“So I am very skeptical about whether cellulosic ethanol is ever going to be commercially viable, but we’ll see,’’ he said.

In the meantime, Peterson and his Minnesota colleagues have been joined by other Corn Belt lawmakers in urging the director not to harm the market for corn-based ethanol. “Long and short of it is, she seems to understand they need to leave corn ethanol alone,’’ he told the Chippewa County Corn Growers.

Peterson said he doesn’t expect any new corn ethanol plants to be built in the nation. “What we’ve got to be able to do is maintain what we’ve got. We don’t want to get in a situation where we are putting plants that are built into jeopardy.’’

He predicts the EPA will back off on its reduction, but not completely. “(We’ll) probably end up with something we can live with,’’ he said.

Read the original story here : Congressman Hopeful EPA Will Not Cut Renewable Fuels Standard By 10 Percent

The Free Press

March 27, 2014

By Josh Moniz

WASECA — Despite numerous problems for the ethanol industry looming in the future, the CEO of two regional ethanol plants is optimistic that the industry is headed for a positive period.

Randall Doyal, CEO of Al-Corn Clean Fuel in Claremont and board chairman for Janesville ethanol plant's owner Guardian Energy, said Wednesday at the Waseca Farmer Forum that several positive factors were converging to help ethanol producers. He noted that corn prices were dropping while the yields from the crop were exploding in size.

He also noted that automobile manufacturers were starting to push for 25 to 30 percent blends of ethanol in U.S. fuel, which would help them better design vehicles that maximize ethanol instead of merely accommodating its presence. He said this will inevitably lead to a larger market for producers.

But he said that each shift in the ethanol market produced varied outcomes for plants on either end of growing industry. The fluctuating corn prices helped or hurt the Janesville plant and the Claremont plants in different ways.

He said the three year stint of record high corn prices, which included a Midwest drought for one of the years, forced small or weak ethanol plants to reduce, shutter or close. But small plants closing provided an opportunity for bigger or better-positioned ethanol plants, such as the resurrected Janesville plant.

He said the reduced corn prices help smaller or new plants prosper and grow the overall industry. However, he said that may cause overproduction, which can hurt plants across the board.

Doyal said he had foreseen the 2008 ethanol market collapse by recognizing the growing overproduction and making efforts to protect his plants, such as paying off the debt on the Claremont plant. He said he feels another market collapse will be inevitable.

A good deal of ethanol profitability around the country has been caused by plants having issues with getting their product to market. He said these transportation issues will eventually be cleared up, resulting in current production exceeding the market's demand.

Despite his predictions, he said he feels the cycles are a natural part of the industry growth that will eventual lead it to becoming more stable.

Similarly, he said he opposes the Environmental Protection Agency's proposal to reduce the federal Renewable Fuel Standard by 10 percent, or 1.4 billion gallons of the ethanol mixed into the U.S. gasoline supply.

He said the idea behind the EPA's proposal to reduce the requirement due to lower market demand had some merit, but it carried too large of a risk of creating a permanent cap on the RFS and scuttling all research efforts on other types of biofuels.

Doyal said he expects the EPA to ultimately reduce the RFS by less than 10 percent due to the volume of negative public comments about the proposal.

The EPA is scheduled to issue its final order sometime before the end of the summer.

Read the original story here : Ethanol Producer : Outlook Good Despite Challenges

Domestic Fuel

March 31, 2014

By Cindy Zimmerman

American Ethanol is once again partnering with NASCAR® for the NASCAR Race to Green™initiative now through April 25 to promote environmentally friendly biofuels.

The goal of the initiative is to highlight the accomplishments of green programs that have helped reduce the NASCAR’s carbon footprint. “This partnership with NASCAR Green truly shows the sport’s commitment to preserving our environment. Each race further proves ethanol is a reliable, high-performance fuel that has revitalized our rural communities and created more than 400,000 jobs across the country,” said Tom Buis, CEO of Growth Energy.

American Ethanol has partnered with NASCAR since 2011 to promote the use of biofuels by using Sunoco Green E15, a 15 percent ethanol blended fuel, across its three national series. American Ethanol also sponsors the Richard Childress Racing No. 3 Chevrolet SS driven by Sunoco Rookie of the Year™ contender and 2013 NASCAR Nationwide Series™ Champion Austin Dillon. I had a chance to catch up with Buis while in DC last week and this year’s American Ethanol program was one of several topics we discussed.

Read the original story here : American Ethanol On The NASCAR Green Team