Des Moines Register

January 3, 2017

By Delayne D. Johnson

Refinery owner Carl Icahn has been pressing the incoming administration to turn its back on homegrown biofuels, like those produced here in Iowa. Normally, that wouldn’t matter much, because President-elect Donald Trump campaigned and won on the promise of supporting ethanol and other biofuels. Unfortunately, Icahn has just been named as President-elect Trump’s new special adviser on regulation, an unofficial position that shields Icahn from legal requirements designed to curtail conflicts of interests.

It’s a sad state of affairs that threatens to derail President-elect Trump’s core of support in America’s heartland and turn Midwestern senators against cabinet picks like Scott Pruitt, Trump’s nominee to oversee the Environmental Protection Agency. As someone who wants to see Trump succeed, my hope is that he’ll maintain a healthy skepticism about Icahn’s motives and keep the new administration focused on fulfilling its promise to revitalize rural economies, support agriculture and create jobs.

Step one will be for Pruitt to publicly reject the changes that Icahn is demanding to the Renewable Fuel Standard, America’s most successful domestic energy program for 11 years.

As currently structured, the RFS ensures that oil companies give biofuels a chance to compete at the pump, which creates competition and offers consumers more affordable fuel options. It does so by setting minimum targets for the volume of biofuels that refiners and importers must include in the fuel supply.

Refiners can meet their obligations by investing in renewable energy blending, and major players like Tesoro have called this the “rational, business-oriented” approach. But a handful of refiners allied with Icahn have elected to buy credits from other blenders, and now they are demanding a bailout from the EPA. Their plan would exempt select refineries and place new obligations onto fuel marketers and gas station owners.

The market for biofuels is strong. As a result, consumers have access to better fuel options at a lower price. Ethanol blends like E15 (15 percent ethanol) deliver more octane at a cost typically 10 to 15 cents less per gallon (saving consumers $15 to $22 billion annually) than standard E10. Mid-level blends, like E30, could save drivers twice as much. Even better, a new report from the Energy Department's Oak Ridge National Laboratory shows how increased octane in mid-level ethanol blends can boost mileage and acceleration.

These homegrown fuels also support hundreds of thousands of energy jobs across the country, including those at Quad County Corn Processors, where we produce up to 110,000 gallons of ethanol per day. And they reduce our reliance on nations like Iraq and Venezuela.

Rather than incentivize retailers to offer consumers lower cost fuels like E15, E30 and E85; Mr. Icahn’s plan would put those savings into his own pocket, stifle market growth for renewable energy and decimate rural America. With farm income declining for the third straight year and a massive surplus of grain threatening to stagnate rural growth, we can’t afford for the administration to go back on its promise to support the RFS.

Delayne D. Johnson is chief executive officer of Quad County Corn Processors in Galva.

Read the original story: Activist Investor Wrong to Attack Homegrown Biofuels

Ethanol Producer Magazine

December 29, 2016

By Ann Bailey

Iowa Lt. Gov. Kim Reynolds has released to the public the Iowa Renewable Energy Plan, which establishes priorities and provides strategic guidance for Iowa’s energy future.

The plan was created to provide a “clear path to ensure Iowans have access to affordable, reliable clean energy, while recognizing energy’s strategic importance to the Iowa’s economy,” according to the plan’s executive summary.

“IRFA appreciates Lt. Gov. Reynold’s recognition of the role biofuels have played in powering Iowa’s economy,” Iowa Renewable Fuels Association said. “And we commend the Iowa Energy Plan for seeking to build on this foundation, as there is much more biofuels and biomass can do for Iowa in the future.”

Development of the comprehensive state energy plan began in 2015. Since then, six forums, attended by hundreds of Iowa residents, have been held to get input for the plan and 48 Iowa residents were members of working groups which helped identify strategies that could be important parts of Iowa’s energy future. The plan is made up of 15 objectives and 45 strategies which, together, propose a balanced approach to Iowa’s energy sector while emphasizing sustainable practices, statewide economic development and support the research and development required to keep the state on the cutting edge of innovation, the Iowa Energy Plan executive summary said.

One of the themes identified as key in the plan is alternative fuel vehicles. The plan notes that increasingly more stringent fuel economy standards have enhanced the need for auto makers to embrace diversification of transportation fuels and vehicles. Iowa, which has a plentiful supply of ethanol and biodiesel, has an opportunity to help the auto industry meet its fuel economy targets while increasing economic gain, the executive summary said. The executive summary notes that customers and businesses continue to benefit from expanded access to higher blends of ethanol and biodiesel at affordable prices and that diversification of transportation fuels results in energy security, economic advantages and environmental benefits.

Strategies that help grow Iowa’s biofuels industry will lead to higher diversification in available fuel sources for consumers and businesses and also result in more affordable distribution of the biofuels which will mean savings for customers and operators of fueling infrastructure. Continued growth in the use of alternative fuel vehicles requires strategic collaboration with the renewable fuels industry, utilities, auto manufacturers, fuel retailers and related industry shareholders, the executive summary said.  That includes giving incentives for alternative fueling infrastructure such as blender pumps. It is key to fostering successful business models the regulatory barriers which have an impact on infrastructure development are addressed. Collaborating with the ethanol industry and auto makers to produce the next generation of highly efficient vehicles to run optimally on ethanol is a critical factor for sustaining the industry’s growth, the executive summary said.

“Optimizing vehicles for biofuels and empowering consumers to choose higher blends of ethanol and biodiesel will be keys to unlocking this potential,” IRFA said. “We look forward to working with Lt. Gov. Reynolds to put this plan in action for the betterment of Iowa farmers, consumers and workers.”

Read the original story: Iowa Energy Plan Includes Role Ethanol Can Play in State's Future

Ethanol Producer Magazine

December 22, 2016

By Dave VanderGriend

Last November, I flew to India, a country suffering with some of the worst air pollution in the world. You can see smog hanging over cities like a blanket. I was there because India wants to increase its ethanol blending from E2.5 to E22. I thought about the hurdles it will encounter moving toward that goal, but, I realized if India wants to make it happen, it can be done, as it has in Brazil, Paraguay, Thailand and other countries using the same cars that we drive right here at home.

The United States, fortunately, has cleaned up much of its visual smog, but just because we can’t see it doesn’t mean many pollutants aren’t there. So, I started to think, what would it take to get the U.S. back to a leadership position in biofuel blending instead of just being an E10 follower? The simple answer is: to be able to put any ethanol blend into any car, from any pump. 

Now, I know saying it is much easier than getting it done. But it does take us out of the box everyone tries to put us in and allows us to ask the question, why not? Every regulation, every rule making, every warning sticker is a made-up box that we find ourselves struggling to get out of. 

The U.S. EPA finally allowing corn ethanol to meet the maximum of 15 billion gallons annually is certainly good news. At the same time, it is somewhat sobering, as this is as good as it will get in terms of what the renewable fuels standard (RFS) can provide as a demand driver. By 2022, when the RFS enters its next phase, the ethanol industry could be at 130 percent of current production, with supply exceeding demand. This could cause RIN and ethanol pricing to decline, if we are trading only in a fixed market.

It is no secret I have been ringing the alarm bell that we need to look beyond the RFS. Our blueprint for long-term success requires us to develop a future in which ethanol is given full access to the market and, in so doing, receives its full value for being a quality fuel.

This is where we may be able to capitalize on the new administration and a new attitude in Washington. Removing the dozens of unnecessary and burdensome regulations that thwart higher blends and infrastructure investment is a message that is well-received. Ethanol’s tried and true benefits of local job creation, agricultural benefits, energy independence, engine performance, low carbon and cleaner air have never been better positioned to flourish in a free market.

If you are like me, you want to see a plan to make this happen. I wrote a white paper in 2015 in which I offered a number of specifics. But as Urban Air gets deeper into the issues of ASTM, terminals, retailers, certification fuels, lifecycle analysis, emission testing and fuel studies, our list of unnecessary regulations has grown significantly. Then the question I ask myself is what does a free market look like and how do I know I’m there?

I look at our industry groups at the national and state levels and see so much talent. I am committed in 2017 to continue working with each of these groups and call us to action around creating an extensive list of all the roadblocks limiting a free market. We can then prioritize them, split them up according to our talents and eliminate them. 

I have been in the situation many times, where politicians will ask what they can do for the industry. But I have yet to be able to hand them a comprehensive plan coming from a unified industry on how to get ethanol to a free market. Frankly, get us onto a level playing field, then the government can get out of the way and let us compete.

2017 is the year for the industry to pull together and grow beyond our dependence on D.C. We can take control of our own destiny by truly gaining access to a free market in which the consumer can choose the best fuel. If we are allowed to compete, ethanol will win.

Read the original article: Call to Action

Tri State Neighbor

December 27, 2016

By Janelle Atyeo

A new company in South Dakota is looking to optimize the nutrition cattle get from dried distillers grain.

Novita Nutrition will open a $95 million processing plant east of Brookings, S.D., early next year.

The plant will use distillers grain – a byproduct created when processing corn into ethanol. It will remove indigestible oil from the grain and create a pelletized feed called NovaMeal.

Making a better quality feed from distillers grain is something that Novita Nutrition CEO and President Don Endres came up with when working in the ethanol industry. Endres founded VeraSun Energy, an ethanol producer that grew rapidly in the 2000s but quickly went bankrupt when corn prices fell and the company was left with contracts it bought high.

Endres has seen other business ventures of his be successful. While the ethanol industry didn’t work out for him, it gave Endres the idea for his next big venture.

VeraSun, like other ethanol plants, sold distillers grain to cattle producers for use in the feed mix. Endres noticed, though, that after a few years, dairy farmers stopped buying their products.

He learned that oil in the grain – unsaturated fat – was an issue for the dairy cow diet. The cows already were getting unsaturated fat from silage and other grains in their diets. The amount of fat in the distillers grain varied depending on the ethanol production process, so it was difficult for dairy nutritionists to keep tabs on how much their cows were getting.

“If you put any amount of unsaturated fat in the diet, you can really throw them off,” Enders said.

Too much can cause milk fat levels to go down, he said, and milk fat is what dairies get paid for.

Distillers grain still packs nutritious protein and fiber, and Novita Nutrition has found a way to deliver those nutrients with less fat. NovaMeal is made by removing oil from distillers grain in the same way oil is extracted from soybeans, sunflowers and canola.

“It improves the digestibility of the protein,” Endres said.

Dairy nutritionists are concerned with the amount of protein that cows get after feed passes through the rumen. The amount that’s left is known as rumen undegradable protein, or RUP. In NovaMeal, the amount of protein left for the cows to absorb in the small intestine, where they can use it most, is 63 percent – more than soybean meal or canola, according to studies done by South Dakota State University.

NovaMeal also has more digestible fiber than common distillers grain, cottonseed, canola or soybean meal. Higher nutrient values means cows are getting more out of their feed.

“They’re able to absorb more of those nutrients rather than having it go out the tail end,” Endres said.

Novita Nutrition is preparing to process distillers grain on a large scale. The site near Aurora, S.D., was busy with construction crews on a cold November morning. The plant – located just west of the former VeraSun ethanol plant, now owned by Valero Energy – has been under construction since the summer of 2015.

Come next year, the plant will employ 40 people, and another 10 will continue working at the Novita Nutrition offices in nearby Brookings. Distillers grain will come in by truck and rail from ethanol plants in South Dakota, Minnesota and northwestern Iowa.

The raw material will wait for processing in a flat storage building that’s able to hold 5,100 tons.

The plant will be capable of processing 13 rail cars’ worth of distillers grain in a day, or 1,300 tons. That will mike 1,200 tons of NovaMeal pelletized feed and 100 tons of separated oil for used in biofuel or poultry feed.

A massive round bin will store the finished pellets, up to 6,000 tons.

Endres envisions selling 5 percent to 10 percent of their product to local customers along the Interstate 29 corridor. Much of it will go to dairy markets in central California, Washington, southern Idaho, western Texas and New Mexico.

Novita recently partnered with the Omaha, Neb.-based feed supplier Gavilon to deliver NovaMeal to western states.

Dairy markets are the primary focus for Novita Nutrition for now. Dairies are very focused on nutrition and often work closely with nutritionists, Endres said, but he added that it would be a nutritious meal in any kind of cattle feeding.

“It’s a very high-quality protein and fiber,” he said.

Endres grew up around Herefords on a farm east of Watertown, S.D., the son of Jim Endres and Teresa Endres. He wanted to raise Herefords like his parents, he said, and he went to South Dakota State University in Brookings to get a degree in animal science.

His career path led him in other directions, though, and he relied more on his minors in computer science and economics.

The first companies he helped start dealt with online payment platforms and electronic equipment. He helped build up both companies and saw them through successful mergers. He entered the ethanol industry in 2001 and soon afterward started brainstorming the idea that would become NovaMeal.

Nearing the opening of the plant in Aurora, Endres already is looking forward to building a second plant soon. He said he’s open as to where to build: “Anywhere with ethanol production and a base of livestock.”

Read the original story: Pellet Made from Distillers Grain Packs Protein, Not Fat