MN Biofuels Submits Comments to EPA on Year-Round E15
On April 29, the Minnesota Bio-Fuels Association submitted the following comments to the Environmental Protection Agency (EPA) regarding its proposed rules to extend an RVP-waiver to E15 and make modifications to the RIN market.
Time to Keep the Promises for Farmers to Compete in Energy
April 23, 2019
By James Talent
Over the last few years, biofuel policy has become a major flashpoint of conflict between rural supporters of President Trump and oil lobbyists working in Washington. The last administrator of the Environmental Protection Agency handed out dozens of secret exemptions to big oil companies, allowing them to sidestep long standing renewable energy laws. It is an approach that cut billions of gallons of homegrown ethanol out of the market, destroying a key segment of the rural economy.
As a result, ethanol consumption in the United States fell for the first time in 20 years. Farmers were hit the worst and now carry the highest debt income ratio since the farm bust of the 1980s. Calls to the Farm Aid crisis hotline have doubled. President Trump, who vowed that his administration is protecting ethanol, fired the former EPA chief and appointed Andrew Wheeler to take over, but the damage has yet to be repaired. In fact, it may be getting worse. Wheeler announced more oil industry handouts last month, bringing the total to 2.6 billion gallons over two years, which is enough to eliminate the market for nearly one billion bushels of grain.
Rural Republicans who gave the new EPA administrator the benefit of the doubt are understandably livid. Dozens of ethanol plants across the country have cut production or closed their doors, even as farm communities look to rebuild from recent devastating floods and a demoralizing trade war. Meanwhile, oil refiners like Exxon and Chevron that won the “hardship” exemptions have had multibillion dollar profits.
Democrats are already pouncing on this blunder. Senator Amy Klobuchar, who is running for president, told Iowa caucus goers that “biofuels in the Midwest get screwed” by the EPA exemptions. It is a message winning her new followers among rural voters who overwhelmingly voted for President Trump in 2016. The headlines do not help either. In a Reuters story titled “EPA disregarded biofuel rules to help refineries,” it was revealed that the agency quietly ignored recommendations from the Energy Department, which could find no financial justification for the oil industry handouts.
The truth is that petroleum companies simply worry about losing the battle for market share if consumers get more options at the fuel pump. Biofuel blends reduce emissions and deliver more octane. Moreover, they also cost less, as pure ethanol now trades for about 70 cents less per gallon than unblended gasoline. That is why competition is good for drivers and American energy security. It is also precisely why Congress enacted the renewable fuel standard under President Bush back in 2005.
With all eyes on the Organization of the Petroleum Exporting Countries and gasoline headed toward $4 per gallon in some markets, it is hard to see why any agency would shut out lower cost fuel made in the United States. In response, rural advocates like Senator Joni Ernst have called on the EPA “to reallocate waived gallons and establish a clear procedure” to evaluate future exemptions. However, Wheeler has argued the agency simply has no mechanism that would allow it to restore lost gallons, as exemptions are filed retroactively after regulators determine how much biofuel each refinery is responsible for adding to the national fuel mix.
But there is some hope. Representative Dave Loebsack got to the key point during a recent hearing in the House Energy and Commerce Committee. He questioned Wheeler whether the EPA could decide on exemptions first before setting annual biofuel targets. By shifting from a retroactive approach to forward looking approach, the EPA could ensure the full volume of biofuel required by law actually reaches consumers.
Indeed, Wheeler admitted the EPA “would have the ability to do that.” All it would take is for the agency to account for anticipated exceptions in the annual biofuel targets. It is worth noting that the EPA already does the calculation. It simply just has not been willing to act on it. President Trump has shown he is willing to crack down on insiders at the EPA when they threaten to undermine rural prosperity. This is one of those times. We cannot accept bureaucratic excuses for inaction. Farmers were promised a chance to compete at the fuel pump, and it is time to keep that promise.
James Talent served in Congress as a Republican senator from Missouri and championed the creation of the renewable fuel standard in 2005. He is a chairman of Americans for Energy Security and Innovation and a senior fellow at the American Enterprise Institute and the Bipartisan Policy Center.
Read the original article: Time to Keep the Promises for Farmers to Compete in Energy
Pierz Healy High School Tours Central Minnesota Renewables
Minneapolis, April 23 – Forty-seven students from Pierz Healy High School toured Central Minnesota Renewables (CMR) in Little Falls yesterday to learn more about clean Minnesota-produced renewable chemicals.
“We were pleased to welcome Pierz Healy High School to our plant to learn about locally produced bio-based chemicals. Tours like this are an opportunity for students to engage with our employees on the facility’s production processes and to highlight renewable chemical’s many benefits,” said Jonathan Olmscheid, VP of Finance at CMR.
CMR produces renewable chemicals such as acetone and n-butanol from corn and has a 45 percent greater carbon efficiency during production in comparison to petroleum-based chemicals.
During the tour, the students visited CMR’s administrative office, energy center, fermentation, distillation, laboratory operations, control room, protein and fiber storage, incoming grain handling and storage and chemical loadout areas.
The students, from grades 10 to 12, were from Pierz Healy High School’s agriculture business and natural resource classes.
CMR’s renewable chemicals are used as raw materials in many consumer products such as Kingsford GreenFlame charcoal lighter fluid, Beauty Secrets acetone nail polish remover, paints, adhesives and coatings.
The tour was organized by the Minnesota Bio-Fuels Association (MN Biofuels), a non-profit trade organization that represents the ethanol and renewable chemical industries in Minnesota. CMR is a member of MN Biofuels.
“It’s important for students to learn about clean, Minnesota-produced renewable chemicals and how they reduce harmful emissions and support the local economy,” said Tim Rudnicki, executive director of MN Biofuels.
Pat Tax, who teaches agriculture at Pierz Healy High School, said her students had learned about fermentation processes prior to today’s tour.
“I want the students to understand that we are trying to mitigate our dependence on foreign sources for energy and to see that their crops are helping, plus a look at how renewable chemicals are processed,” Tax said.
St Peter High School Tours Guardian Energy
Janesville - April 16- Fourteen students from St Peter High School toured Guardian Energy in Janesville this morning to learn about homegrown renewable fuel production.
During the tour, the students, who were from the school’s plant science class, learned about several components of ethanol production including incoming grain grading, grain handling, fermentation, grain storage, dried distiller grain production and storage, ethanol storage and shipment.
“We provided the students a first hand look at the important role science plays in ethanol production as well as the importance of the ethanol industry to the economy in rural Minnesota and the environment,” said Jeanne McCaherty, CEO of Guardian Energy.
The students were from grades 10-12.
The tour was organized by the Minnesota Bio-Fuels Association (MN Biofuels). Guardian Energy, a member of MN Biofuels, is the largest ethanol plant in Minnesota and produces 150 million gallons of ethanol a year.
“With these tours, we are able to educate students on the importance of a homegrown renewable fuel and how it reduces prices at the pump and makes America more energy independent,” said Tim Rudnicki, executive director at MN Biofuels.
Gena Lilienthal, agriculture science instructor at St Peter High School, said her students had learned about alternative plant uses and completed a lab that measured the energy content in ethanol.
“Exposing our students to numerous career opportunities is always very beneficial. We have been learning about crop production and it was a great opportunity to complete our unit by learning about the actual uses of our crops,” she said.
Klobuchar Talks Ethanol Challenges at Nevada Plant
April 12, 2019
By
In order to battle the tough Friday afternoon winds, presidential candidate and Minnesota senator Amy Klobuchar donned a lime-green hard hat and thick pea coat as she toured the Lincolnway Energy Plant in Nevada.
But for the presidential hopeful, battling the wind isn’t the issue, it’s battling major oil companies and Environmental Protection Agency (EPA) small-refinery waivers on behalf of ethanol companies.
The waivers grant a small refinery temporary exemption from its annual Renewable Volume Obligations, which determine how many gallons of biofuel refineries will add to the motor fuel mix.
Following her tour of the ethanol plant, Klobuchar held a roundtable discussion with local ethanol plant producers and ethanol experts to hear the concerns and challenges the ethanol industry is facing.
Ethanol producers stated that small-refinery waivers issued by the EPA are “taking three billion gallons of demand or 20 percent of demand from the ethanol industry.”
“I think part of (this discussion) is taking on the oil companies and blatantly talking about it,” Klobuchar said. “Yeah, they have their market, but (ethanol) has their market, too, and they are trying to stomp on us and we need to speak out or we don’t have a chance.”
In terms of policy, Klobuchar said, “replacing the gallons lost” in the industry is important, as well as promoting cellulosic ethanol, ethanol produced from the fiber of a plant as a means to help recoup losses suffered in the past years.
Klobuchar also vouched for protecting and addressing how the waivers affect the Renewable Identification Numbers (RIN) market and the year-round sale of gasoline with up to 15 percent ethanol, also known as E15.
RIN is a serial number assigned to a batch of biofuel that act as credits of compliance or a type of currency of the Renewable Fuel Standard Program.
One of the concerns expressed Friday was that that small refinery exemptions issued by former EPA Administrator Scott Pruitt eroded demand for ethanol in 2018 and created the RIN market for ethanol.
?(One of the things we can do) is the RIN market, and making sure it’s functioning and addressing whatever the problems are,” Klobuchar said. “We know that people are going to mess around with it, and those waivers mess around with it, too.”
In 2018, President Trump directed the Environmental Protection Agency (EPA) to consider reforming the RIN market, and to allow the year-round sale of E15.
However, many at the roundtable said that the EPA small refinery waivers and exemptions have been overused, threatening demand for corn-based ethanol at a time when farmers are already struggling.
“We don’t make a fraction of a cent on RINs,” said Blair Picard, Commercial Manager of Lincolnway Energy. “Our RINs go out the door free with our ethanol,so you could say on one hand, we’re not as concerned with the price of RINs as we are with the price of ethanol and our margin, which both have deteriorated as a direct example of these small refinery exemptions.”
Klobuchar blended the concerns of ethanol producers with the “immediate need” to address climate change and environmental issues.
The senator said she would address climate change on day one by entering the United States back into the international climate change agreement, bringing back the clean power standards adopted under the Obama Administration, and re-implementing gas mileage standards.
“I’m a strong believer that we have to do something about climate change on day one,” Klobuchar said following the roundtable discussion. “Those are rules so they are easier to put (out for a vote), and you may have comment periods, but you can get those done in the first year.”
Klobuchar also shared her visions to get to universal health care through a public health insurance option.
Read the original article: Klobuchar Talks Ethanol Challenges at Nevada Plant
Kwik Trip #1045
Byron, MN 55920
Byron,Minnesota
United States 55920
U.S. EPA Revives Provision That May Name Refiners Applying for Biofuel Waivers
April 12, 2019
By Humeyra Pamuk
The U.S. Environmental Protection Agency on Friday took the first step to revive part of a rule that could, if finalized, reveal the names of oil refineries which applied for exemptions from the nation’s biofuel laws.
The move is seen as a win for the corn industry, which has criticized the waiver program due to its lack of transparency. The EPA only in 2017 first began releasing the number of waiver petitions it has received and granted but the names have been kept confidential so far.
Under the federal Renewable Fuel Standard (RFS) program, refiners are required to blend biofuels into the nation’s gasoline pool, but small operations can apply for exemptions. The Trump administration made extensive use of such waivers in the last two years, saving refiners money but angering the corn lobby, particularly after major companies like Exxon Mobil Corp received exemptions for certain facilities.
The issue is a battlefield between the rival oil and corn industries. The ethanol industry claims the exemptions have been overused, threatening demand for corn-based ethanol at a time when farmers are already struggling.
The oil companies have long complained that speculation in the biofuels credit market has inflated prices and complying with cost them hundreds of millions of dollars - one of a long list of complaints by the industry about U.S. biofuel policy.
On Friday, the EPA signed a Federal Register notice saying it is reopening the comment period for a provision in a rule related to the small refinery exemption program that was first introduced in 2016.
That provision from 2016 proposed to establish a determination that basic information related to EPA actions on petitions for RFS small refinery and small refiner exemptions may not be claimed as confidential business information, according to a document on the provision on EPA’s website.
“With respect to each decision on a small refinery/refiner exemption request, we would release to the public the petitioner’s name, the name and location of the facility for which relief was requested, the general nature of the relief requested, the time period for which relief was requested, and the extent to which EPA granted or denied the requested relief,” the document said.
While ethanol groups mostly hailed the move, oil industry representatives were largely critical. Fuelling American Jobs Coalition said the proposal, if finalized, would do more harm than good.
“The data underlying Small Refinery Exemption requests reflects the underlying financial health of facilities in the highly competitive refining sector. Such information can affect access to capital for marginal refineries and can make them attractive targets of acquisition, literally moving markets,” it said in a statement.
To obtain a waiver, refineries with a capacity of less than 75,000 barrels per day (bpd) have to prove that compliance with RFS would cause them significant financial strain. They submit information about the company’s financial health while doing that, although the EPA’s provision does not include revealing that.
EPA Administrator Andrew Wheeler, in an interview with Reuters on Thursday, hinted there could be fewer exemptions under his leadership due to the lower price of biofuel credits that have reduced economic hardship, which is one of the conditions for the exemption.
Read the original article: U.S. EPA Revives Provision That May Name Refiners Applying for Biofuel Waivers
Grassley Questions Hardship RFS Exemption Review Process at DOE
April 11, 2019
Press Release
U.S. Sen. Chuck Grassley of Iowa sent a letter to Department of Energy (DOE) Secretary Rick Perry asking for clarity about the department’s review process concerning Renewable Fuel Standard (RFS) hardship exemptions, submitted by small refineries. The DOE provides recommendations on exemption requests to the Environmental Protection Agency (EPA).
“EPA has granted an unprecedented number of small refinery hardship exemptions for 2016 and 2017 and even more small refineries are seeking exemptions from the RFS for 2018,” Grassley wrote. “With Renewable Identification Numbers (RINs) at multi-year lows, it’s hard to comprehend the alleged disproportionate economic hardship that any refinery could face.”
Grassley is a leader in the fight to maintain a strong Renewable Fuel Standard (RFS). He led efforts to put pressure on the EPA to stop issuing “hardship waivers” to obligated refiners as well as make the waiver process more transparent and highlight the importance of the RFS to President Trump and his administration.
Full letter is available here and below.
The Honorable Rick Perry
Secretary
United States Department of Energy
1000 Independence Ave., SW
Washington, DC 20585
Dear Secretary Perry:
U.S. Environmental Protection Agency (EPA) Administrator Wheeler has informed me and my colleagues in Congress recently that EPA is waiting on recommendations from the Department of Energy (DOE) regarding a record number of 39 applications submitted by small refineries seeking disproportionate economic hardship exemptions from the Renewable Fuel Standard (RFS) for the year 2018. EPA has granted an unprecedented number of small refinery hardship exemptions for 2016 and 2017 and even more small refineries are seeking exemptions from the RFS for 2018. With Renewable Identification Numbers (RINs) at multi-year lows, it’s hard to comprehend the alleged disproportionate economic hardship that any refinery could face. I am writing to seek clarity regarding the DOE’s review of requests to exempt certain small refineries from their obligations to comply with the RFS provisions of the Clean Air Act.
As you know, Section 211(o)(9)(B)(ii) of the Clean Air Act requires the EPA to consult with DOE in evaluating the small refinery hardship exemptions. EPA makes the final decision on granting such exemptions but Administrator Wheeler also suggested that EPA simply follows the recommendations of DOE. If this is the case, I would like to understand what has changed in DOE’s approach to evaluating such requests that would explain the sudden surge in the number of exemption extensions granted to small refineries over the last two years.
The criteria by which DOE is supposed to evaluate small refinery exemption extensions have not changed since 2011, when DOE created a scoring methodology for such requests as part of a congressionally-mandated study. DOE’s methodology requires an evaluation of the structural impacts that compliance with the RFS might cause, such as limited access to capital and credit, as well as an evaluation of how RFS compliance would significantly impair refinery operations viability. Although DOE maintains it hasn’t changed these criteria, the number of small refinery exemption applications and approvals inexplicably has soared in the last two years.
Recent litigation in the D.C. Circuit has revealed that out of 48 applications for small refinery exemptions to EPA for compliance years 2016 and 2017, DOE had given the applicant a viability score of zero in at least half of those cases. This seems to indicate that compliance costs with the RFS had little to no impact on the small refinery’s ability to stay competitive and profitable. Given EPA’s assertion that it’s granting of small refinery exemptions remains based on DOE’s analysis and recommendations, I respectfully seek the following information from DOE:
1. Has DOE changed the criteria, the interpretation of the criteria, the methodology, or any other significant aspect of how it makes its recommendations to EPA for small refinery exemptions?
2. Are you aware of any instances where DOE recommended no small refinery exemption (or only a partial exemption) but EPA granted a small refinery exemption anyway? If so, how many times has this occurred?
3. DOE’s 2011 Small Refinery Study states that DOE would make a recommendation of disproportionate impact if scoring of both indices—Disproportionate Structural Impacts Metrics and Viability Index—were greater than one. How does DOE’s recommendation for a partial exemption to a small refinery with a Viability Index of 0.0 square with the statute’s requirement that the exemption can be extended only if the refinery is subject to a “disproportionate economic hardship” from compliance with the RFS?
I look forward to your response.
Read the original press release: Grassley Questions Hardship RFS Exemption Review Process at DOE
EIA Predicts Increased Ethanol Blending This Summer
April 10, 2019
By Erin Voegele
The U.S. Energy Information Administration has released the April edition of its Short-Term Energy Outlook, maintaining its March forecast for 2019 and 2020 ethanol production and predicting increased ethanol blending during the upcoming summer driving season.
In the new STEO, the EIA maintains its previous prediction that ethanol production will average 1.04 million barrels per day this year, increasing to 1.05 million barrels per day next year.
On a quarterly basis, the EIA shows ethanol production averaged approximately 1.01 million barrels per day during the first three months of this year. Production is expected to increase to 1.05 million barrels per day during the second quarter, and then fall to 1.04 million barrels per day during the final half of 2019. In 2020, ethanol production is expected to average 1.04 million barrels per day during the first quarter, before increasing to 1.05 million barrels per day for the remainder of the year.
The EIA currently expects ethanol consumption to average 950,000 barrels per day in both 2019 and 2020, up from 940,000 barrels per day in 2018.
The EIA’s April STEO also addresses ethanol blending in its outlook for summer gasoline. According to the report, the EIA currently forecasts fuel ethanol blending will reach 974,000 million barrels per day during the second quarter of this year, up 3.2 percent when compared to the same quarter of last year. Ethanol blending during the third quarter is expected to reach 966,000 barrels per day, up 0.8 percent when compared to the same period of 2018. For the full six-month period, the EIA expects ethanol blending to average 970,000 barrels per day, up 2 percent when compared to the same period of last year.
The EIA’s most recent weekly data shows ethanol production averaged 1.0.2 million barrels per day the week ending April 5, up from 999,000 barrels per day the previous week. Weekly ending stocks of ethanol fell to 23.193 million barrels the week ending April 5, down from 23.992 million barrels the previous week.
The agency’s most recent monthly data shows the U.S. imported 255,000 barrels of ethanol in December, all from Brazil. The EIA’s most recent export data shows the U.S. exported 3.048 million barrels of ethanol in January, primarily to Brazil, Canada, and India.
Read the original article: EIA Predicts Increased Ethanol Blending This Summer
Students Learn About Ethanol Production at Heartland Corn Products
Minneapolis, April 10 – Twenty-seven students from Central High School in Norwood Young America visited Heartland Corn Products in Winthrop yesterday to get a closer look at how clean, homegrown renewable fuels are produced.
The students, from the school’s Small Gas Engines class, toured the various processes of ethanol production at Heartland Corn Products, which produces 120 million gallons of ethanol a year.
“Today’s tour allowed us to showcase how the ethanol industry enhances Minnesota’s economy, reduces harmful greenhouse gas emissions and makes America more energy independent,” said Scott Blumhoefer, Vice-President at Heartland Corn Products.
During the tour, the students from grades 9-12, learned about incoming grain grading, grain handling, fermentation, grain storage, dried distiller grain production and storage, liquefaction and ethanol storage and shipment.
The tour was organized by the Minnesota Bio-Fuels Association (MN Biofuels), a non-profit trade organization that represents Minnesota’s ethanol industry. Heartland Corn Products is a member of MN Biofuels.
Today’s visit was also the fourth consecutive year Central High School has toured Heartland Corn Products.
“Central High School’s latest visit to Heartland Corn Products highlights the value educators see in bringing their students to tour an ethanol plant,” said Tim Rudnicki, executive director of the MN Biofuels.
Jim Mesik, agriculture teacher at Central High School, has accompanied his students for each of the school’s tours at Heartland Corn Products.
“Heartland Corn Products and MN Biofuels always put on a great tour. They really explain the ethanol process very thoroughly from just about all perspectives possible. We really get to see things in action at the plant. Students really enjoy it and learn a lot,” he said.
Mesik teaches his students about ethanol in both his Small Gas Engines and Natural Resource Science classes.
“Students talk about how they didn't realize that there is an animal feed byproduct in the end. They also see how ethanol benefits area farms by creating an additional market for the corn they are raising. We are using a lot of ethanol in vehicles these days and we grow a lot of corn, so being informed consumers and citizens are a good thing,” he said.