Reuters

June 6, 2017

By Valerie Volcovici

Five Democratic senators asked the Environmental Protection Agency in a letter on Tuesday to hand over documents relating to the role of Carl Icahn, a refining company owner, in shaping biofuels policy at the agency.

Lawmakers have for months raised concerns that Icahn's dual role as a high-powered investor and an adviser to President Donald Trump on regulation could lead to conflicts of interest. Icahn, a billionaire, owns the oil refining company CVR Energy , which is heavily impacted by U.S. policies requiring refiners to blend biofuels into their gasoline and diesel.

The senators - Sheldon Whitehouse, Elizabeth Warren, Debbie Stabenow, Jeff Merkley and Tammy Duckworth - addressed the letter to EPA Administrator Scott Pruitt, requesting that he hand over communications between the EPA and Icahn or representatives of CVR Energy.

They also requested reports, data and briefings exchanged between the agency and Icahn.

"Statements made by him or actions taken by his companies may now be seen as signaling changes in EPA or administration policy which may, in turn, affect the price of CVR stock and the RIN market," the senators wrote in a letter sent to Pruitt on Tuesday.

A RIN, or Renewable Identification Number, is the name given to biofuels blending credits that many refiners are required to purchase under the U.S. biofuels regulation.

In February, Icahn, who is an unpaid adviser to Trump, submitted a proposal to the White House to change the U.S. biofuels program, the Renewable Fuel Standard, in a way that would ease the burden on oil refining companies, including his own.

A Reuters review of corporate filings in April showed that Icahn's company had also taken a large short position on biofuels credits - a bet that prices for biofuels credits would fall - that would have yielded big profits if the White House adopted the proposal.

White House officials have said the EPA is now considering Icahn's proposed overhaul to the biofuels program.

The senators gave Pruitt until June 16 to provide the information. The letter comes after the senators twice asked the White House and Icahn for information about his biofuels dealings but received no response.

Those senators last month sent a letter to the U.S. Commodity Futures Trading Commission, urging that it probe Icahn's activity in the market. The CFTC on Monday informed them and four other senators that it will not investigate the credits because RINS are not traded on futures markets.

Read the original story: U.S. Senators Press EPA for Documents on Icahn's Biofuel Dealings

Minneapolis, June 1– Eleven students from Worthington High School visited Heron Lake Bioenergy on May 30 to learn about ethanol production.

Ethanol Producer Magazine

By Luke Geiver

May 26, 2017

It’s hard to believe that Jeanne McCaherty holds only one title for Guardian Energy Management LLC. The former Cargill executive-turned ethanol company CEO has a master’s degree in biochemistry, has run a fermentation optimization research group, developed and operated a wet-milling research team, started a culture-growing company, overseen a global biotechnology effort and spent time as a private equity consultant. Nearly one year after becoming CEO of Guardian Energy, a unique ethanol joint-venture organization that includes 10 ethanol producers spread throughout Minnesota, North Dakota, Iowa and Nebraska, McCaherty spoke with us about her efforts to inject previous experiences into day-to-day operations, observations on the opportunities for plant and organizational upgrades and why the ethanol industry is unlike any she’s been in before.
 
Letting the Past Inform the Present
After receiving her master’s degree in biochemistry, McCaherty took a position with Cargill. Her time spent working in labs, leading research and development efforts and running big-name-backed businesses has already proven useful. “All of that tech background I have has been very useful. It is amazing how much I’m putting that to use in our business today,” she says.

One of her early roles at Cargill involved working on continuous improvements for large scale fermentation, including ethanol. She called Eddyville, Iowa, home and her place of work while she was working on fermentation improvements. She has also spent time researching corn wet milling issues related to making corn starch-based products. Upon her return to Minneapolis, McCaherty led a biotechnology research group that focused on multiple areas. A fermentation optimization group studied processes to improve organisms. Another group developed and utilized gene manipulation techniques for organisms involved in fermentation processes. “When I look at what the yeast suppliers are doing today and what the enzyme suppliers are doing today, it is all very relevant to the work I did back then,” she says.

McCaherty has already brought her experiences and insight from the past into the ethanol business. With vendors, she can talk in great detail about the viability and usefulness of product claims. She is also well-versed on the technical side of fermentation, she says.

“I come from a place where everything has a science or engineering answer to it,” she says. “The idea of continuous improvement and bringing scientific rigor is something I pride myself on.”

That approach to the ethanol business has brought some changes to the Janesville, Minnesota, plant owned and operated by Guardian. The team is setting up lab fermenters to test new enzymes and nutrients. “There comes a time when you need to own your own destiny and look at things in detail that maybe aren’t very relative to your vendors,” she says. McCaherty hopes to test how enzymes react to different temperatures, nutrients or additives used at the Guardian facility. Previously, the team depended on vendors to supply the information, or in some cases, was unable to look at products with much detail.

“The industry has been very effective at making improvements to the process and now you are getting to the point where you are at diminishing returns,” she says. “You no longer see a 4 percent increase in yields. You have to go after every 0.2 or 0.5 percent improvement to make more optimization happen.” Such improvements may not be as obvious, she adds, and could take longer to achieve than previous yield gains took.

Leveraging Ethanol’s Uniqueness
Before joining Guardian, McCaherty spent a year performing private equity consulting. She decided she wanted to get back into running a business, having a team of dedicated people and making real products. “I wanted to be somewhere where my background would be relevant,” she says, “where our products were good and good for the environment.” McCaherty—raised on a small farm—also likes the connection her team and ethanol facilities hold to the rural community.

On the business front, she was attracted to the unique opportunities present in the greater ethanol industry and at Guardian. The joint-venture entity offers multiple sites and scale, so when improvements are found or made, she says, “we can really move the dial.” With a board made up of experienced CEOs and GMs from six independent ethanol companies, McCaherty is pleased with her options to find answers.

“If I have never seen something or need information, I certainly have someone on the board that has seen it before,” she says. “Being able to leverage that experience and knowledge has been useful.”
Since taking over nearly a year ago, she has also learned about—and has leveraged—the culture of the ethanol industry. McCaherty calls the industry “unusual” compared to her previous experiences. Although it is a massive industry in terms of production and economic impact, it is a very small industry, she explains. Many of the consultants or supplier organizations know each other. In many cases, McCaherty doesn’t have to explain the intricacies of her business when speaking to vendors for the first time. “Being able to leverage that part of the industry has been valuable,” she says.

Despite McCaherty’s drive and enthusiasm to improve on a well-established ethanol operation, she still recognizes that certain efforts may not be as relevant as others. Working with existing vendors, partners and established entities is important to McCaherty. “We want to make sure we have and keep networks set up so we aren’t reinventing the wheel,” she says.

For her, the network of people linked to Guardian is most important. “As a leader I think the most important thing is to have a strong team. At Guardian, I’ve been lucky. The people have great industry knowledge and a passion for the industry,” she says. The part of the industry she is still working to navigate and understand is on the policy side.

“I’ve never been in a business where policy has influenced it so much,” she says. Although she finds it challenging in some ways, she is more focused and concerned with implementing the three tenets Guardian is working towards under McCaherty’s leadership.

Triple Tenets
The first tenet is collaboration. With RPMG—Renewable Products Marketing Group, Guardian Energy’s marketing arm—McCaherty believes the larger group of ethanol operators can find answers and avenues to nearly everything ethanol related. Achieving greater scale—the second tenet of Guardian—is possible through the make-up of the group, she also says. The new research work being done at the Janesville facility is an example of how McCaherty hopes to turn a good idea into a major success by implementing change on a large scale. The third tenant for McCaherty isn’t as easy to explain or achieve. “We also work towards excellence,” she says.

According to McCaherty, excellence is a concept that is kind of a black box and difficult to truly understand or measure. But, although she freely admits she hasn’t attained it yet during her short time in the ethanol industry, McCaherty says with a calm confidence that her past successes and technical know-how, combined with her new links to other experts in the industry, have her in a good position to lead. She’s always been in the business of finding the best, or at least better, answer to a challenge or to a position in the market. That is where her personal approach to business—especially under her new role in ethanol—comes in, she says. Based on that, Guardian Energy appears to have found a fitting leader for its future. “You want leaders who will lead an organization as if it is their own,” she says.

Read the original story: Owning The Ethanol Exec Role

Ethanol Producer Magazine

May 24, 2017

By Growth Energy

American consumers have helped E15—a fuel containing 15 percent ethanol and 85 percent gasoline—reach a significant milestone. According to Growth Energy’s ongoing analysis of fuel sales and consumption data reported by major gasoline retailers, drivers across the United States have logged more than 1 billion miles on E15—attesting to the fuel’s performance, safety, and value. The availability of E15 could save consumers up to $72 million by the end of 2017, based on U.S. EPA data.

“American drivers are taking advantage of the proven performance, environmental benefits, and savings E15 provides,” said Growth Energy CEO Emily Skor. “That’s why Congress should pass the Consumer and Fuel Retailer Choice Act and give drivers freedom to choose E15 year-round. This common-sense fix to the Reid vapor pressure (RVP) law will end confusing restrictions on retailers and allow consumers to choose a fuel that is kinder to the earth, good for their engines, and saves them up to 10 cents per gallon each trip to the pump in the summer.”

Growth Energy is proud to celebrate this milestone and highlight the value E15 delivers in terms of better performance, reduction of toxic emissions, and savings at the pump. Today, E15 is sold at more than 800 retail outlets across 29 states, and its availability continues to grow each day because 21st century drivers are demanding 21st century fuels.

The EPA approves E15 for use in any vehicle manufactured since 2001, which equates to 9 out of 10 cars on the road today. Automakers also approve E15 for use in nearly three-quarters of new cars.

Read the original story: American Drivers Surpass 1 Billion MIles on E15

Ethanol Producer Magazine

May 24, 2017

By Bliss Baker

The year is shaping up to be very significant for the ethanol industry and the role it will play in international efforts to reduce global transport emissions. From the signing of the Canada-European Union Comprehensive Economic and Trade Agreement, to the termination of the Trans-Pacific Partnership, to speculation about Brexit and the change in outlook with the new U.S. administration, what happens in 2017 could shape the global economic landscape for years to come.

While biofuels do not always make headlines in international trade discussions, the potential for the impressive growth and maturation of the global biofuels industry to be impacted by upcoming trade negotiations is very real. For the industry to continue to create jobs, reduce transport sector emissions, develop new technologies and drive down costs, a stable investment climate is crucial.

The recent rise of economic populist and protectionist language used in several countries is a troubling sign as it could harm investors’ confidence at a time when the biofuels industry’s future is particularly bright. 

Projections for 2017 show that total global ethanol production will hold firm at 97.80 billion liters (25.8 billion gallons), continuing the trend of incremental annual ethanol production growth since 2013. The industry has achieved this resilience during a period when oil prices dropped to record lows. Bolstering this resilience, some of the favorite attacks used by opponents of the biofuels industry have finally been put to rest.

The food vs. fuel issue has been conclusively disproven as real-world data has become available, and the American Petroleum Institute’s self-serving myth that 10 percent is the marketplace limit for ethanol content in U.S. gasoline has been shattered. Data from the U.S. Energy Information Administration shows that in 2016, gasoline consumed in the U.S. contained more than 10 percent ethanol on average, demonstrating that the so-called blend wall is not a real constraint on ethanol consumption.

As these specious arguments are disproven by hard evidence, the enormous growth potential still available for biofuels globally becomes more clear every day. In the International Energy Agency’s World Energy Outlook for 2016, the IEA is forecasting global energy demand will increase by 30 percent by 2040, with a significant portion from the transport sector.

Where this demand would historically have been addressed with increased reliance on fossil fuels, the global mindset has shifted. The ratification of the Paris Agreement last year established very ambitious targets for CO2 emission reductions, and set aspirational goals of shifting to a low-carbon global economy and encouraging the development of clean technologies as the basis for future growth.

Ethanol, as an immediately dispatchable low-carbon transport fuel alternative, represents a key policy solution that will be integral to meeting this challenge.

Multiple nongovernmental organizations have published reports since the ratification of the agreement outlining how current national policies aimed at reducing CO2 emissions from global transport activity will not achieve the targets laid out in the Paris Agreement, and that governments will have to redouble efforts to meet steeper targets in coming years.

Developing low-carbon alternatives to fossil fuels while maintaining growth will require the maximization of all cost-effective options and continued investment in clean technology development. Biofuels represent an ideal solution, but for the global industry to continue to grow, international free trade and a stable investment climate is key.

International trade negotiators would be extremely shortsighted to consider protectionist measures that would undermine the biofuels industry and the hundreds of billions of dollars of economic activity it represents. Creating barriers to trade would only serve to increase global reliance on crude oil and increase greenhouse gas emissions. As major economies look to negotiate trade agreements that will shape the investment outlook for the foreseeable future, it is critical that countries avoid protectionist policies.

It’s time to recognize ethanol for the ideal low-carbon transport fuel alternative that it is, take the brakes off biofuels technology development and meaningfully begin the transition to a sustainable future.

Read the original story: Free Trade Needed to Maximize Biofuels’ Benefit

Ethanol Producer Magazine

May 22, 2017

By Erin Voegele

The U.S. EPA has published renewable identification number (RIN) generation data for April, reporting that nearly 1.79 billion RINs were generated during the month, including more than 17.29 million cellulosic RINs. A net total of 5.92 billion RINs were generated during the first four months of the year.

More than 17.29 million D3 cellulosic biofuel RINs were generated in April, bringing the net total for the first four months of the year to 49.91 million. Nearly 1.31 million D3 RINs have been generated for ethanol so far this year, with 30.67 million generated for renewable compressed natural gas and 17.93 million generated for renewable liquefied natural gas. Nearly 44.73 million D3 RINs have been generated domestically, with 5.21 million generated by importers. No D7 cellulosic diesel RINs have been generated so far this year.

Nearly 7.02 million D5 advanced biofuel RINs were generated in April, bringing the net total for the first third of the year to 22.67 million. To date, 8.13 million D5 RINs have been generated for ethanol, with 10.94 million generated for naphtha, 890,603 generated for heating oil, and 2.72 million for nonester renewable diesel. More than 22.68 million D5 RINs have been generated domestically, with none generated by importers or foreign entities so far this year.

More than 1.18 billion D6 renewable fuel RINs were generated in April, bringing the net total for the first four months of the year to 4.87 billion. Most, 4.79 billion, were generated for ethanol, with 84.75 million generated for nonester renewable diesel. Approximately 4.79 billion D6 RINs have been generated domestically, with 3.83 million generated by importers and 84.75 million generated by foreign entities.

More than 279.63 million D4 biomass-based diesel RINs were generated in April, bringing the net total for the first four months of the year to 970.85 million. The majority, 736.51 million, were generated for biodiesel, with 235.88 million generated for nonester renewable diesel and 937,219 million generated for renewable jet fuel. Approximately 694.9 million have been generated domestically, with 168.55 million generated by importers and 109.88 million generated by foreign entities.

As of the end of April, the EPA estimates total RIN generation so far this year has reached nearly 5.93 billion, with 144.52 million RINs retired, 175.1 million locked and available and 5.61 billion unlocked and available.

Read the original story: EPA: 1.79 billion RINs generated in April

Gevo

May 11, 2017

Press Release

ENGLEWOOD, Colo., May 11, 2017 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ:GEVO) announced today that it was selected to collaborate with researchers at the U.S. Department of Energy (DOE) as part of DOE’s Small Business Vouchers (SBV) program.

The SBV program provides funding for DOE’s national laboratories to partner with selected U.S. businesses, enabling these clean technology companies to leverage the laboratories’ technical and intellectual resources. Specifically, Argonne National Laboratory and the National Renewable Energy Laboratory (NREL) received funding to work with Gevo to develop a predictive octane blending model for isobutanol and gasoline blendstocks for oxygenated blending (BOBs). While it is known that isobutanol increases octane when blended into BOBs, the effect is non-linear, and dependent on a BOB’s properties. This project is intended to measure the actual octane effect on finished fuels when blending Gevo’s isobutanol with existing BOBs, obviating the need for blenders to perform these expensive and time consuming tests themselves.

This work is expected to support the investments that Gevo and its value chain partners are currently making to develop BOBs specifically for isobutanol (iBOBs). Isobutanol possesses a range of properties which makes it an ideal blendstock for gasoline such as high energy content, high octane, low water solubility and low volatility. By developing optimized iBOBs to blend with Gevo’s isobutanol, Gevo and its partners can produce high performance finished fuels which can benefit end consumers, as well as provide margin to all participants across the fuel blending value chain.

“Gevo is excited to be collaborating with Argonne and NREL on this project. We believe that expanding the blending of Gevo’s isobutanol will benefit the U.S. by reducing the need for petroleum imports while reducing harmful carbon emissions. We, and our partners, want to ensure that we develop finished gasoline that delivers the highest value to the end-customer. At the same time, we want to make sure that we are taking advantage of the superior properties of isobutanol to develop economical iBOBs that drive the highest margin through our value chain, while still delivering a high quality finished product to the consumer,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer. 

About Gevo

Gevo is a renewable technology, chemical products, and next generation biofuels company. Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks. Gevo’s strategy is to commercialize bio-based alternatives to petroleum-based products to allow for the optimization of fermentation facilities’ assets, with the ultimate goal of maximizing cash flows from the operation of those assets. Gevo produces isobutanol, ethanol and high-value animal feed at its fermentation plant in Luverne, Minnesota. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. Gevo currently operates a biorefinery in Silsbee, Texas, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester. Gevo has a marquee list of partners including The Coca-Cola Company, Toray Industries Inc. and Total SA, among others. Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water.

Read the original release: Argonne National Laboratory and National Renewable Energy Laboratory Receive Funding to Support the Blending of Gevo’s Isobutanol with Gasoline

Biomass Magazine

May 10, 2017

By Erin Voegele

Gevo Inc. has announced first quarter financial results, reporting revenue of $5.6 million and a gross loss of $3.8 million. During an investor call, the company described plans to convert its Luverne, Minnesota, biorefinery to exclusively produce isobutanol and hydrocarbon products.

Revenue for the quarter was $5.6 million, down from $6.3 million during the same quarter of 2016. Revenue derived from ethanol sales and related products was $5.5 million, down $300,000 when compared to the first quarter of last year. The decrease is primarily attributed to lower ethanol and distiller grain prices. Hydrocarbon revenues were $100,000, down $200,000 from the same period of 2016. The loss from operations at $7.2 million.

Gross loss was $3.8 million, compared to $2.9 million during the first quarter of last year. Loss from operations was $7.2 million, compared to $5.9 million during the same period of 2016. The non-GAAP cash EBITDA loss was $5.4 million compared to $3.9 million during the first quarter of last year. Net loss was $5.9 million compared to $3.6 million during the first quarter of 2016. The non-GAAP adjusted net loss was $7.9 million, compared to $8 million during the first quarter of last year.The company reported net loss per share of 51 cents for the three months ending March 31, with a non-GAAP adjusted net loss per share of 68 cents.

Gevo produced approximately 100,000 gallons of isobutanol at its Luverne facility during the first quarter. According to the company, it was focused on producing sufficient quantities of isobutanol to meet immediate customer demand and providing enough inventory to support additional market and customer development efforts. Gevo’s production goals were not to maximize production, but to align production with isobutanol sales efforts. As a result, only ethanol was produced during certain periods of the quarter. The company also indicated it may elect to produce only ethanol during the second quarter of the year.

During an investor call, Patrick Gruber, CEO of Gevo, discussed future plans for the Luverne facility. The Gevo team, he said, remains laser focused on getting the company to profitability. He said the company believes the best path to achieve profitability to convert 100 percent of the grind and fermentation capacity at Luverne to its isobutanol and hydrocarbon products, specifically alcohol-to-jet (ATJ) and isooctane.

According to Gruber, Gevo is already executing on the conversion plan and is well into the engineering work needed to make it happen. The expanded plant is expected to have a capacity of more than 12 MMgy. However, Gruber noted the actual size and configuration of the expanded plant will be dependent on customer contracts, capital requirements and financing.

Given the level of engagement by customers, Gruber said the company currently expects 8-10 MMgy of that capacity to be processed into hydrocarbons. He cautioned, however, that could change for a variety of reasons.

To accomplish the build-out of Luverne, Gruber said the company has identified two key near-term goals it must accomplish. First is the restructuring of the company’s balance sheet to lessen its near-term liquidity issues. Second is the need to sign up customers for long-term supply agreements.

Read the original story: Gevo Discusses Future Plans for Luverne Plant