The Hill

June 16, 2018

By Miranda Green

Environmental Protection Agency (EPA) Administrator Scott Pruitt is facing harsh criticism from two Republican senators who say he is failing to follow through on President Trump’s pro-ethanol agenda.

The two senators, Joni Ernst and Chuck Grassley from corn-heavy Iowa, are specifically displeased with Pruitt for granting a number of exemptions to the Renewable Fuel Standard (RFS) to refineries that allow them to use less ethanol in their fuel mixes.

The senators say this is a disappointment given Trump’s promises in Iowa and are quick to point out the string of controversies following Pruitt in voicing their displeasure.

“He’s been such a bad actor in so many areas. He’s promised to hold up the letter of the law when it came to the RFS. He has not done that,” Ernst said “And then we see other examples related to taxpayer dollars, his personal staff. I don’t think it’s appropriate.”

Grassley had equally harsh things to say about Pruitt, calling the various reports on his scandals “pretty condemning.”

“From the standpoint of what Scott Pruitt has done on ethanol, I would say he's not serving the president right,” Grassley said. “And if the president wants to keep the respect that farmers and ethanol ... he better do one of two things: either get rid of Scott Pruitt or get Scott Pruitt to deliver on the president's promises.” 

He also took a shot at Pruitt over a story that the EPA chief had sought to use his power to get his wife a Chick-fil-A franchise, saying: “I didn't want to say about the Chick-fil-A thing, but I believe that's pretty condemning.”

Pruitt has survived as EPA administrator despite a steady drip of controversies in part because Trump and conservatives see him as a strong foot soldier in drawing down Obama-era environmental policies.

This latest criticism from Republican senators on a policy issue is therefore notable.

During the 2016 Iowa primary, Trump expressed support for bolstering the ethanol industry, embracing the RFS.

And in April the president signaled support for the ethanol industry, saying he would change the biofuels policy that limits higher blends of 15 percent ethanol in gas during summer months. Speaking to reporters at the White House, Trump said, “We’re going to raise it up to 15 percent and raise it to a 12-month period.”

But since then, no firm policy decisions have come to light and players close to the issue are growing testy over the final outcome.

In the Senate, there are divisions over the RFS and Ernst and Grassley have been embroiled in at times heated conversations with Sens. Ted Cruz (R-Texas) and Pat Toomey (R-Pa.).

The two Iowa senators want to increase the percentage of ethanol blended into gasoline. Cruz and Toomey, who represent heavy oil and gas regions, oppose the current RFS standard mandating that oil and gas companies mix their fuel with ethanol or buy credits on the market to offset their emissions.

Additionally, a number of smaller companies have recently gotten around the rule through applying for small refinery exemptions.

In early April, the Trump administration came under fire by the ethanol industry and environmental groups for granting 25 small refinery exemptions. Previous administrations had granted between six to eight waivers under the 10-year-old program.

The RFS defines a small refinery as creating no more than an average of 75,000 barrels of crude oil per day. However, much larger oil and gas companies have sought to get in on the small refinery exemption, with giants Chevron and Exxon both seeking waivers under the program in early April, according to Reuters.

Some senators are happy with the administration’s actions on refineries and are offering support for Pruitt.

Cruz called him an active part of discussions and said he had an optimistic outlook for negotiations.

“Administrator Pruitt has been an active part of those discussions along with the president and senators across the spectrum and I remain hopeful that we will arrive upon a win-win solution that benefits farmers and refinery workers,” he said.

He said the criticism aimed at Pruitt from senators over the issue simply reflects the politics of the ethanol debate.

“The ethanol lobbyists are used to wielding significant power and unfortunately they have personalized their attacks on Administrator Pruitt as an effort to stop policy decisions they disagree with,” Cruz told The Hill.

Corn farmers and ethanol groups say many of the exemptions granted to EPA are unwarranted, as some of the refineries were offshoots of major companies.

Last Tuesday, Pruitt sat down at a roundtable with representatives from the corn industry during a trip to Kansas.

Ken McCauley, president of the Kansas Corn Growers Association, said farmers were candid about their concerns.

“We took it as a good way to get our information straight to the administration. We took advantage of that and we told him just how we felt, that we were mad as hell,” McCauley, who attended the meeting, told the Hill.

Corn farmers in South Dakota held a tractor rally in Sioux Falls this week to protest the EPA chief as he paid a visit to the state.

“The Administrator of the Environmental Protection Agency (EPA), Scott Pruitt, continues to bail out multi-billion-dollar oil refiners at the expense of South Dakota farmers. It’s time to get Administrator Pruitt on board with President Trump’s agenda,” South Dakota Corn wrote in its event description.

When asked about Pruitt’s lackluster welcome to corn country, Ernst said: “What goes around comes around.” 

Read the original article: Pruitt’s New Problem With The GOP: Ethanol

Ethanol Producer Magazine

May 23, 2018

By Lisa Gibson

In their inaugural year, the Ethanol Producer Awards proved to be a worthwhile endeavor, with excellent nominations of noteworthy producers and partners summitted in each of the five categories—The Good Neighbor Award, Board of the Year, Workplace of the Year, Project of the Year and Collaboration of the Year.

Winners were chosen by Ethanol Producer Magazine’s editorial staff and editorial board. Many categories brought tough decisions, as more than one nominee seemed deserving of recognition. 

The winners have shown themselves to be exemplary in their respective award categories. They are as follows:

THE GOOD NEIGHBOR AWARD
Exemplary Community Service and Support
Pacific Ethanol Magic Valley Inc., Burley, Idaho
“As a company, Pacific Ethanol has always promoted community outreach efforts at all of our locations,” says Wayne Rylant, human resources manager for Pacific Ethanol. “One of our plants, the Magic Valley Plant in Burley, Idaho, stands out above the rest. They have consistently pushed all of our plants to think of new and better ways to help make the communities we live and work in better and stronger. They have been true pioneers in promoting our community service programs.”

The Magic Valley plant won Pacific Ethanol Inc.’s month-long food drive competition in September 2016, collecting and donating 1,976 pounds of food to the Community Council of Idaho and the South Central Community Action Agency. In 2017, Magic Valley upped its donation to 2,173 pounds.

Al Lowe, plant manager, says Pacific Ethanol Magic Valley’s largest community service project is the food drive, but many employees participate in parades, Christmas toy drives, charity walks, community clean-up and local youth athletics. “We try to encourage employees to do their part in our community,” Lowe says.

“We want to be part of the community fabric,” he adds. “We all live here and raise our families in this small area. When we support the community in organized activities, we are essentially saying ‘We are part of this with you and we care.’”

During the 2016 Trunk-or-Treat event, employees started a trend by decorating their float to hand out Halloween candy. The next year, 10 other participating companies followed suit, distributing candy to about 1,500 local children.

“Pacific Ethanol realizes that being part of a community is more than receiving a pay check and spending it here,” Lowe says. “They understand that personal involvement requires time spent by people at events that may not be able to be scheduled around time away from work. When employees express a desire to be involved in these scheduled activities, they attend with management approval.”

Pacific Ethanol offers eight paid hours per year for community service and one-third of the Magic Valley plant employees logged their hours in 2017, making it a company-wide leader, Rylant says.

BOARD OF THE YEAR
Exceptional Board Leadership, Planning and Vision  
Chippewa Valley Ethanol Co. LLLP, Benson, Minnesota 
In her nomination for CVEC, Renewable Fuels Association Director of Regulatory Affairs Kelly Davis starts with, “Best board in the business” and goes on to describe “excellent” diversification moves, strategic growth through investments, and passion.

Chad Friese, CVEC general manager, agrees. “They are a great group of people and individuals and they certainly deserve the accolades and recognition,” he says. “They certainly go beyond the call of duty, not just looking out for the members they represent, but always looking at opportunities to engage in a positive outcome for the future.”

Diversification moves include production of beverage and industrial alcohol, both niche markets, says Dave Thompson, CVEC’s board chairman. The board has also invested in Guardian Energy, which owns plants across the country. Friese adds that the CVEC board has invested in technology and efficiency.

“We’re one of the older plants in the industry,” Thompson says. “This is our 23rd year of grinding corn, so we end up doing a lot of capital projects to keep us modern and efficient.”

Board members have varying backgrounds including banking and farming, but all have a passion for the ethanol industry, Thompson says. “If you’re involved in the industry, you have to believe in the industry and you have to have a passion for it. Our board has always been engaged in industry events. We’re very active in Renewable Fuels Association and American Coalition of Ethanol events.”

The board consists of nine members, each serving three-year terms and eligible for reelection after those three years are up. Most are also serving on boards of other companies and organizations.
“The CVEC board is very engaged and active,” Friese says. “They participate on other boards, have strong business knowledge and maintain an awareness of new technologies, investments, policies and politics that may influence decisions at a rural cooperative.

“The board is very supportive and is a true extension of the team approach at CVEC,” he adds. “Management spends a lot of time looking forward and gathering information and opportunities. The board reviews and audits those thoughts and ideas and handles them with a real-world collaborative efficiency.”

Thompson says CVEC was one of the earliest in the industry to separate corn oil and to market E85, and is always looking for new ways to increase efficiency. But, humbly, he adds, “I don’t know that we’re more deserving than a lot of other plants. I expect many plants are able to increase efficiency in their own ways.”

WORKPLACE OF THE YEAR
Outstanding Employment and Management Practices
Midwest AgEnergy
Midwest AgEnergy, the parent company of Dakota Spirit AgEnergy in Spiritwood, North Dakota, and Blue Flint Ethanol in Underwood, North Dakota, has a focus on peer-to-peer communication, cooperative problem solving and overall wellness.

Midwest AgEnergy recently provided a behavioral training course to help drive peer-to-peer feedback, effective communication and employee engagement, says Cindy Griffin, director of human resources and corporate services. The course teaches nonconfrontational inquiring skills that employees can use with each other to help solve issues on the job. “Everyone is engaged and holding each other accountable,” she says.

Similarly, the company employs the Kaizen Process, a concept that uses crossfunctional focus teams to address setbacks and opportunities for improvement. Those team members can be anyone in any position up the ladder. “These people come together and say, ‘What can we learn from this?’ And they work together to fix it,” Griffin says. “We empower our newest individuals, up to our senior people. Everyone has a say in their work.”

Those communication skills show in the plants’ safety records, she says. Blue Flint, which began operating in 2007, has achieved 11 years with no lost-time accidents and Dakota Spirit, which started up in 2015, recently marked three.

Midwest AgEnergy contracts a third party to lead the communication initiative, providing training, developing action plans and evaluating the results. Additional coaching and leadership seminars are offered for managers. “It’s a big investment but it’s something our CEO is committed to doing,” Griffin says of CEO Jeff Zueger.

Brian Markegard, engineer at Dakota Spirit, says he has always felt valued as an employee of Midwest AgEnergy. “Management continues to show a commitment to the employees and the culture of valuing each individual,” he says. “Employee appreciation is definitely a part of the culture at Midwest AgEnergy.”

Beyond its dedication to communication and engagement, Midwest AgEnergy encourages and offers training on wellness—physical, financial and mental. The company has offered depression management, financial and tax planning, and spine health presentations, among others. And Midwest AgEnergy’s wellness benefits program reimburses employees and spouses up to $175 per year for activities including gym memberships and massages.

About a year and a half ago, the company boosted its 401k employer contribution to allow up to a 4 percent dollar-for-dollar match, and added an additional nonelective 4 percent contribution, for an employer total of 8 percent.

“There are many great benefits of working at Dakota Spirit other than the work environment,” Markegard says. “We are provided with great insurance options and a wellness program, as well as an excellent retirement plan. The company also values giving back to the communities that we live in and has developed a program that encourages volunteering, without taking time off from work.”

Markegard adds Midwest AgEnergy is a great company to work for, where employees feel heard and are given opportunities to grow and develop.

PROJECT OF THE YEAR
Overall Scale, Complexity and Impact   
Homeland Energy Solutions LLC, Lawler, Iowa
At the end of November 2017, a $42.5 million, 35 MMgy expansion was commissioned at Homeland Energy Solutions. It was on budget and six weeks ahead of schedule, despite the fact that it was done on an operating facility that maintained expected production and efficiencies during construction. The only shutdown, according to Plant Manager Kevin Howes, was for 15 days in late September and early October, when required tie-ins and revamping of the distillation system were completed.

Howes says the expansion touched all areas of the plant. It included: 7,700 feet of track to add a rail loop; a 1.2 million-bushel Sukup grain bin and updated reclaim system; two additional hammermills, feed system and flour conveyor; an additional three-cell, two-pump cooling tower; two additional fermenters; a third beer/mash train and ferm fill booster pumps; two additional evaporators; an energy center consisting of two new dryers, three decanter centrifuges, RTO and boiler; an upgraded sieve vaporizer; a complete overhaul of the beer column and rectifier system; and installation of six larger pumps and several hundred feet of upsized piping and instrumentation to handle higher flows. More than 10 engineering firms, construction companies and contractors assisted in the project.

But before all that work was done, planning included a corn origination study to estimate what percentage of corn in the plant’s draw area was being contracted, Howes says. “The study showed the area could support an additional draw of 11.5 million to 12 million bushels with only a $0.01-per-bushel impact on basis,” Howes says. “The extra profit from the additional gallons would more than offset this.”

In addition, Homeland Energy contracted a plant debottlenecking study. “Each main part of our operation was examined to determine what areas needed to be expanded to meet the additional production,” Howes says. “Based on the results, preliminary project scope items were identified and further evaluations were completed to determine what all was going to be needed.”

The purpose of the expansion was to make Homeland Energy, which is farmer-owned, a low-cost producer of ethanol, which gives shareholders the greatest return on their investment, he says. 

Howes says the biggest lesson learned is to make sure to check out all the contractors who will be involved in a large project. “Don’t just use their list of references. Check within your network of people also.”

And he has some advice for other ethanol plants looking at enormous expansions:

“Make sure your corn draw area can support the additional gallons.”

“Don’t be hesitant to use multiple general contractors for various parts of the project. We had many different companies working side by side with no issues.”

“You could spend months evaluating what to do, but there comes a time where you just need to move forward with what you have. We live in a commodity market, and sometimes a few-month delay could make a huge difference on your ROI.”

He adds that the economics in this commodity industry will dictate any future plans.

COLLABORATION OF THE YEAR
Technology Advancement through Partnership
Al-Corn Clean Fuel, Claremont, Minnesota; Karges-Faulconbridge Inc., St. Paul, Minnesota; and McGough Construction, St. Paul
Randall Doyal, CEO of Al-Corn Clean Fuel, says the company has two important beliefs: “They believe that there is always a better way, and you work better by working together with others.” The concept is dubbed “Constant Improvement and Collaboration.”

Al-Corn has a 20-year collaboration history with engineering firm Karges-Faulconbridge Inc., increasing efficiencies and an original 10 MMgy capacity to 50 MMgy. Because KFI works closely with McGough Construction, Al-Corn has enlisted McGough’s services many times, also.

Most recently, the three collaborated on the 70 MMgy expansion at Al-Corn, boosting the plant’s capacity to 120 MMgy.

“McGough management brought real-world experience and advice to the project, helping Al-Corn make good decisions about design and desires that would bring the project to completion within the budget provided,” Doyal says. “It was very much a joint effort between Al-Corn staff, KFI engineers and McGough management teams to work through design, bidding, contractor and vendor selection, and contracting.”

The expansion was finished on budget, three months ahead of schedule and with no unplanned shutdowns. Tim Dunnwald, executive vice president and project principal for McGough, attributes that to clear and effective communication within the team. “The core of our teamwork’s success stems from the mutual trust and respect instilled in each of our companies’ cultures,” he says. “Continuous communication, honest feedback, transparency—there was a clear understanding from the get-go of the roles and responsibilities of each team member on this project.”

Doyal agrees. “For collaboration to work, you have to be willing to share your ideas freely,” he says. “You have to be willing to hear why your favorite idea is a bad one. You have to have some humility and be gracious to the ideas of others. But most important is to make sure you invest the time to create a relationship that can stand the trials and tensions that come when you face serious problems that need serious solutions. Investing your time, investing yourself in building a relationship is basic to getting to a deep collaborative association.

“The reason collaboration is important is because you are never as smart as you think you are,” he adds. “You can fall in love with your own ideas but still be completely wrong.”

Respect for the knowledge and viewpoints of all the collaborators is a must, says James Faulconbridge, president of KFI. “Our joint commitment to continuously push the reliability, efficiency and capacity of the plant drives everything. When you couple that with having respect for everyone’s knowledge and input, and accepting that no one has all the answers or is perfect, great things begin to happen. They know they can call us anytime with a question or an idea. We know we can do the same with them.”

Read the original article: Best in the Business

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Reuters

June 5, 2018

The Trump administration has indefinitely delayed a proposed overhaul of U.S. biofuels policy aimed at reducing costs for the oil industry, under pressure from corn state lawmakers who worry the move would undermine demand for ethanol, according to two sources familiar with the matter.

The White House had been poised to announce the reforms to the U.S. Renewable Fuel Program early this week after hosting months of difficult negotiations between representatives of the key constituencies.

“The announcement won’t be happening,” one of the sources said. The second source said the deal had apparently collapsed. Both sources asked not to be identified discussing the matter.

The RFS requires oil refiners to mix increasing volumes of biofuels like ethanol into the nation’s fuel each year, and prove compliance by earning or acquiring blending credits that must be handed in to the Environmental Protection Agency.

The law has helped Midwest corn farmers by creating a 15-billion-gallon-a-year market for ethanol, but refining companies have complained it incurs steep costs for them.

The White House deal would have eased pressure on the refining industry by allowing biofuels exports to count toward the annual volumes quotas. It would also have expanded sales of high-ethanol gasoline in a concession to biofuels producers.

Republican Senators Chuck Grassley and Joni Ernst of Iowa both praised President Donald Trump on Twitter on Tuesday evening.

“@realDonaldTrump has said he loooovves the farmers! #Iowa is feeling that love today, as the President just assured me he ‘won’t sign a deal that’s bad for farmers!’ Thank you Mr. President,” wrote Ernst.

“Pres Trump helped farmers by rejecting bad ethanol deal. I appreciate. GREAT NEWS,” wrote Grassley.

Bob Dinneen, head of the Renewable Fuels Association, said: “We are happy the President continues to recognize the importance of our industry to America’s farmers and rural economies across the nation.”

Read the original article: Trump Administration Biofuels Deal Delayed Indefinitely: Sources