Reuters

September 16, 2019

By Jarrett Renshaw, Stephanie Kelly

U.S. President Donald Trump has tentatively approved a plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners by the Environmental Protection Agency, two sources familiar with the matter said.

The plan is intended to address a major source of anger in U.S. farm country as Trump seeks to hold favor in the Midwest ahead of next year’s election, but it is likely to upset the oil industry, another important political constituency, underscoring the pitfalls of U.S. biofuel policy.

Under the plan, the U.S. EPA will calculate a three-year rolling average of total biofuels gallons exempted from the mandates under its Small Refinery Exemption program and add that figure to its annual biofuel blending quotas each year, the sources said. For 2020, that figure would be 1.35 billion gallons, according to a Reuters calculation.

That would come in addition to a tentative agreement to boost next year’s blending volumes by 1 billion gallons, including 500 million gallons for conventional biofuels like corn-based ethanol and 500 million gallons for advanced biofuels like biodiesel, the sources said.

A court in 2016 ruled that the Obama administration illegally lowered the mandate by 500 million gallons, and part of the current proposed addition would satisfy the decision.

As a result, if the Trump administration followed through on the plan, next year’s total blending mandate would come out to about 22.4 billion gallons, from just over 20 billion in the EPA’s current proposal, according to the Reuters calculation.

The EPA has until the end of November to finalize its 2020 biofuel volumes mandates.

Under the Renewable Fuel Standard, oil refiners are required to blend increasing volumes of biofuels like corn-based ethanol into their fuel each year, to help farmers and reduce imports, but small refining facilities in financial straits can seek waivers.

Trump inserted himself into negotiations between the rival oil and corn industries after his administration recently granted 31 oil refiners exemptions to their blending requirements, infuriating corn farmers and ethanol producers who say the program undermines demand for ethanol at a time the industry is already suffering from a loss of foreign markets.

He and senior administration officials have held a series of meetings with biofuel company officials, chief executives from Marathon Petroleum Corp and Valero Energy Corp, and lawmakers from key farm states including the Republican senators Joni Ernst and Chuck Grassley.

Trump was expected to meet with senators representing oil-producing states on Monday to continue discussions on the issue, sources said.

It was unclear if Trump would secure the backing of the oil industry for the plan without granting it any concessions.

One idea that Trump discussed during the meeting with Marathon and Valero last week to help refiners was to potentially cap the price of blending credits refiners must earn or purchase to comply with the RFS, sources familiar with the matter said.

Senators including Pennsylvania’s Pat Toomey and Texas’s Ted Cruz sent a letter to Trump on Thursday, asking any increase to biofuel volumes be accompanied by safeguards against higher credit prices.

Read the original article: Trump Backs Plan that Would Boost Biofuel Quotas 10% in 2020

Senator Amy Klobuchar

September 12, 2019

News Release

U.S. Senators Amy Klobuchar (D-MN) and Tammy Duckworth (D-IL) led a letter to President Donald Trump today strongly urging him to help rural Americans, and the environment, by rescinding the 31 recently approved small refinery exemptions (SRE) for biofuels. They also urged his Administration to uphold the intent of the Renewable Fuel Standard (RFS). The letter follows recent news reports indicating that the Administration is considering changes to the RFS that would boost biofuel volumes following backlash from farmers after 31 additional SREs were approved on August 8. SREs, or so-called “hardship” waivers, are intended to help small refineries by exempting them from the RFS, but the EPA has issued dozens of waivers, including for some of the most profitable oil companies in the world. The abuse of these waivers has resulted in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. Under the Trump Administration, 85 SREs have been approved, contributing to a reduction in the use of billions of gallons of renewable fuel.

Biofuels are a key pathway toward decarbonizing the transportation sector while lowering gas prices, driving economic growth, and creating jobs. Every gallon of biofuels we use displaces a gallon of oil and cuts carbon emissions. The U.S. Department of Agriculture (USDA) found that first generation biofuels cut greenhouse gas emissions by between 39 and 43 percent.

Klobuchar and Duckworth were joined on the letter by Senator Debbie Stabenow (D-MI), Ranking Member of the Senate Committee on Agriculture, and Senators Tina Smith (D-MN), Dick Durbin (D-IL), Sherrod Brown (D-OH), Ron Wyden (D-OR), Gary Peters (D-MI), and Tammy Baldwin (D-WI).

“In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in thousands of lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns,” the senators wrote.

“The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.”

In June, Klobuchar and Duckworth led a letter, signed with 11 other senators, urging EPA Administrator Andrew Wheeler to cease issuing SREs and requesting that the EPA immediately reallocate the remaining gallons and make public the information regarding any recipients of these exemptions.

The full text of today’s letter can be found below:

Dear Mr. President:

We understand that your Administration has convened meetings to consider proposals related to the Renewable Fuel Standard (RFS) and the continued issuance of small refinery exemptions (SRE), based on recent reports. As you continue to deliberate on a final package, we strongly urge you to rescind the 31 SREs that were approved on August 8, 2019, and to prospectively account for any future SREs when calculating Renewable Volume Obligations (RVO) for 2020.

For the compliance years of 2016, 2017, and 2018, the EPA has approved 85 SREs, all of which have contributed to a reduction of over 4 billion gallons of renewable fuel blending volumes and 1.4 billion bushels of corn. The abuse of SRE authority by the EPA is negatively impacting the rural economy, and the consequences resulting from the continued misuse of these exemptions are becoming more apparent by the day.

In recent months, the biofuels industry has seen an increase in the number of plant closures, and many other plants are beginning to reduce overall production, resulting in lost jobs in rural communities and lost markets for farmers at a time when they are already struggling with low commodity prices and ongoing trade disputes. We have previously expressed our serious concerns to the EPA about the impact of your Administration’s policies on the rural economy as a result of the improper issuance of SREs. Since that time, the approval of additional SREs and the worsening economic conditions facing biofuel producers and farmers have only exacerbated those concerns.

According to reports, the latest proposal under discussion would increase blending requirements for some categories of renewable fuels including biodiesel, but would fail to rescind the recently granted SREs and delay the reallocation of prospective exemptions until the 2021 compliance year. 

The EPA’s continued issuance of SREs is undermining the statutory intent of the RFS to the detriment of rural communities and farmers. It is for this reason that we ask you to ensure that any plan negotiated with the EPA and USDA rescinds the 31 recently granted SREs and upholds the intent of the RFS by accounting for future SREs in the calculation of the 2020 RVOs.

Thank you for your attention to this issue.

Sincerely,

Read the original news release: Klobuchar, Duckworth Lead Colleagues in Urging President to Help Rural Americans, and the Environment, by Upholding the Intent of the Renewable Fuel Standard

KEYC

September 11, 2019

By Dion Cheney

Fridley, September 12 – The Minnesota Bio-Fuels Association (MN Biofuels) and KS95 FM teamed up today at the Holiday on University Ave to reward drivers who chose E15 (Unleaded Plus).

During the hour-long promotion from 12 pm to 1 pm, over 25 drivers who fueled up with E15 were rewarded with prizes that included $20 in cash, tickets to the Minnesota Twins, tickets to the Minnesota Renaissance Festival, Crayola passes, gift cards to Seven Steakhouse and KS95 merchandise.

“Every gallon of E15 reduces harmful greenhouse gas emissions while boosting Minnesota’s economy and making America more energy independent,” said Tim Rudnicki, executive director of MN Biofuels.

During the promotion, KS95’s personality, Rudy Pavich, and MN Biofuels staff were at the station educating drivers on the various benefits of using E15.

Today’s event was the eleventh time MN Biofuels and KS95 have teamed up at a fuel station in the Twin Cities metro this year to promote E15.

E15 sales in the first seven months of 2019 totaled 43.58 million gallons. The total volume of E15 sold in 2018 was 59.4 million gallons.

E15, E85

WhiteFox Technologies Limited

May 15, 2019

Press Release

A Midwest consumer advocacy group is imploring automakers to stay committed to flex-fuel vehicles, which offer American car buyers real choice—on the lot and at the pump. Seeking 20,000-plus signatures, the grassroots group has launched a petition in response to a noticeable downtick in the number of FFVs being manufactured and model types available to prospective car buyers.

Chris Schwarck, of Mason City, Iowa, kicked off the campaign after hearing about General Motors’ apparent retreat from FFVs in favor of other powertrain priorities. “It became apparent to many of us that car manufacturers, in particular General Motors, are moving away from flex-fuel vehicles as we know them today,” Schwarck explained in an e-mail to ethanol producers and corn growers last week. “Many of you have probably had as difficult a purchasing experience as I have in trying to buy a flex-fuel vehicle in a size vehicle you would like. It appears they do not really care what you want; it’s more of “this is what we have” type of thing. In my view, if we are to achieve our goal of selling more gallons of alcohol, we must have more flex-fuel vehicles to do it.”

Schwarck expects a groundswell response from the consumer public and has already gathered nearly 1,000 signatures. “We need everyone’s hands on the rope to pull this off,” he said. “We hope to garner 20,000 or more signatures when we deliver the petition to the vehicle manufacturers. It will take a lot of coordination to do this.”

While the ethanol industry has been especially supportive of the petition, Schwarck said the entire ag community needs be concerned about FFV production. “Every corn grower has a lot at stake here, whether they use ethanol or not; a lot of their corn is ground to make the product,” he said. “In addition, if you are a livestock or poultry producer, I’m sure you want a reliable, dependable supply of distillers grains available to you. The time has come when we must do some of the heavy lifting ourselves and cannot look to Washington or anyone else to do it for us.”

Pleading with automakers to stay the course on FFV manufacturing, the petition states: “We are consumers of your vehicles and we request that you manufacture cars and trucks of all models, engines and trim levels that will allow the use of higher ethanol blends such as E15, E20, E30 and E85. This would make our purchasing experience more enjoyable and less cumbersome than it is today. Many of us can simply not find the vehicles we wish to purchase. In addition, this would be beneficial to your sales presentation to offer environmentally friendly vehicles that burn clean, high-octane American made fuel, while supporting rural America and U.S. agriculture. We wish to support and promote the automakers that choose to produce quality cars and trucks that run on higher ethanol blends.”

The petition can be found here.

Successful Farming

September 9, 2019

By Jerry Perkins

Exports of U.S. ethanol could set another record this year, according to Mike Dwyer, chief economist for the U.S. Grains Council.

U.S. ethanol exports during the current marketing year that ends August 31, 2019, are on track to hit between 1.8 billion gallons and 2 billion gallons, Dwyer predicts. If achieved, that amount of ethanol exports would top the current record of 1.62 billion gallons set during the marketing year that ended August 31, 2018. During that 12-month period, U.S. ethanol was exported to 74 countries, according to the USDA’s Foreign Agricultural Service. 

The U.S. Grains Council and its ethanol export market development partners – the Renewable Fuels Association and Growth Energy – have set a goal of boosting U.S. ethanol exports to 4 billion gallons a year by 2022, Dwyer states. The Grains Council believes that by 2022, 75% of U.S. ethanol exports will go to six countries: China, India, Japan, Brazil, Canada, and Mexico. 

The U.S. Grains Council is a Washington, D.C.-based organization that promotes the exports of U.S. corn, sorghum, and barley and value-added products made from those commodities.

Dwyer says the Grain Council’s global strategy includes selling ethanol to China despite trade disputes between the U.S. and China that have roiled the markets there for U.S. crops and other products such as ethanol.

China currently imposes a 70% duty on U.S. ethanol, Dwyer says, but it will have to find a way to import foreign ethanol if it aims to fulfill the mandate it has imposed to use a blend of 10% ethanol and 90% gasoline (E10) by 2020. If trade issues between the U.S. and China are resolved, Dwyer says, ethanol imports by China in 2020 could hit between 300 million gallons and 1 billion gallons.

Kelly Nieuwenhuis, a farmer from Primghar, Iowa, who traveled to China last year on a U.S. Grains Council trade mission, says that he was told by Chinese gasoline retailers that they want to do business with the U.S. ethanol industry. The Chinese also expressed a desire to use more ethanol because it knows that will improve the air quality, Nieuwenhuis says.

Ron Lamberty, senior vice president and market development director for the American Coalition for Ethanol in Sioux Falls, South Dakota, has made seven trips to Mexico to advise the transportation fuels industry there on how it can integrate the use of E10 into Mexico’s fuel supply.

Mexico has made the use of E10 legal in the country, Lamberty says, however, a Reid vapor pressure (RVP) waiver or the use of a lower RVP blendstock would be required for E10 to be used in the nation’s three largest cities: Mexico City, Guadalajara, and Monterrey. Small quantities of ethanol are currently being sold in Mexican cities on the U.S.-Mexico border, Lamberty says.

Lamberty has participated in technical workshops on ethanol that have been held for Mexico’s petroleum equipment installers and retailers. The workshops were a joint effort of the U.S. Grains Council and the Mexican Association of Petroleum Equipment Suppliers, and they were intended to inform Mexican fuel marketers about sourcing, blending, distributing, and retailing ethanol-blended gasoline.

Mexico’s potential annual use of E10 totals 1.2 billion gallons, Lamberty says.

Read the original article: Future of Ethanol Exports

Pioneer Press

September 6, 2019

Governor Tim Walz

Farmers are used to dealing with unpredictability when it comes to the weather, commodity prices, even equipment and animal health. But one thing they shouldn’t have to plan for is unpredictability from their government.

Yet that’s exactly what ethanol producers in Minnesota and the Midwest are rightly expressing anger over, as the federal government issues an increasingly large number of small-refinery exemptions from requirements of the Renewable Fuel Standard (RFS), releasing those refineries from their obligations to blend biofuels.

The law sets forth annual amounts of renewable fuel of various types to be blended into the nation’s transportation fuel supply. Fuels such as corn starch ethanol, biodiesel and other advanced biofuels provide an important market for farmers in a rough agricultural economic cycle. They also help improve air quality and reduce greenhouse gas emissions.

The U.S. Environmental Protection Agency under the Donald Trump Administration has granted “hardship” exemptions to 85 oil refineries since 2016, including 31 granted in early August, reducing the volume of renewable fuels blended into the nation’s transportation supply by a whopping 4.04 billion gallons. This is a dramatic increase over the previous administration, which granted a total of 23 exemptions over three years, representing 690 million gallons.

The hardship created by these exemptions has been equally dramatic, depressing demand and prices for biofuels. The damage is adding up, and, as a result, 14 ethanol and eight biodiesel plants have shut down or been idled nationwide, including the announced closing of the Corn Plus ethanol plant in Winnebago, Minnesota.

The impact has not only forced ethanol plants offline, it has been a kick in the gut to corn and soybean farmers who provide the grain for ethanol and biodiesel production, especially when they had planned for growth in the use of renewable fuels. Each time one of these plants idles production, farmers for hundreds of miles in all directions are affected.

That is why South Dakota Gov. Kristi Noem and I sent a letter to President Trump this week expressing our deep concern. We told the president that these waivers undermine the integrity of the Renewable Fuel Standard and harm agricultural communities that are already spinning from the administration’s tariffs. We called on him to take immediate action to mitigate the effects of small refinery waivers and laid out concrete steps for how he could support farmers and renewable fuel producers.

As chair of the bipartisan Governors’ Biofuels Coalition, I urge the president to make good on his promise to “support our ethanol industry and to fight for the American farmer like no other president has ever fought before.” It has been reported that the president has been considering revoking some of these recently granted exemptions. While this would be a positive step, farmers and the ethanol industry need certainty that the administration will apply the law fairly and consistently. This should be a promise that farmers can depend on.

Tim Walz is governor of Minnesota and chair of the Governors Biofuels Coalition.

Read the original article: Tim Walz: Exempting Refineries From Biofuel Requirements is a Kick in the Gut to Farmers

E15, E85

Senator Smith

Press Release

August 26, 2019

U.S. Senator Tina Smith (D-Minn.)—along with Sens. Amy Klobuchar (D-Minn.), Debbie Stabenow (D-Mich.), Dick Durbin (D-Ill.), Gary Peters (D-Mich.), Tammy Baldwin (D-Wis.), and Sherrod Brown (D-Ohio)—is standing up for the nation’s rural economy by urging the Environmental Protection Agency (EPA) to end the harmful abuse of small refinery hardship waivers under the Renewable Fuel Standard (RFS).

In a letter sent to EPA Administrator Andrew Wheeler, Sen. Smith and her colleagues pointed out that under the Trump Administration, the granting of waivers has increased by 370 percent with “small refinery” waivers going to large oil companies. While the president has signaled he wants federal agencies to reverse course on this practice, Sens. Smith, Klobuchar, Stabenow, Durbin, Peters, Baldwin and Brown want actions that live up to this promise.

“This pattern of demand destruction is wreaking havoc on our nation's rural economy. In recent months, more than 13 ethanol plants and 8 biodiesel plants have idled production or shut down across the country,” wrote Sen. Smith and her colleagues to Administrator Wheeler. “Not only did these biofuel plants support thousands of rural jobs across the country, they served as important markets for farmers, processing millions of bushels of corn, soybeans, and other commodities. At a time when farmers are already struggling after years of low prices and a chaotic trade agenda, this Administration chose to destroy more markets for farmers and harm rural communities across the country.”

The senators continued, “to add insult to injury, recent reports indicate that President Trump personally made the decision to grant these 31 waivers, despite numerous promises to support renewable fuels. EPA continues to undercut the integrity of the RFS by misusing its waiver authority, which in turn has a direct adverse impact on farmers and jobs in rural communities. We write to urge you once again to end the abuse of these small refinery exemptions, immediately reallocate the remaining gallons, and make public information regarding any recipients of these exemptions.”

You can access text of the letter here or below:

The Honorable Andrew Wheeler

Administrator

Environmental Protection Agency

1200 Pennsylvania Avenue, N.W.

Washington, D.C. 20460

Dear Administrator Wheeler,

We are extremely concerned that the U.S. Environmental Protection Agency (EPA) continues to abuse the use of small refinery hardship waivers under the Renewable Fuel Standard (RFS). On Friday, August 8, 2019, the EPA issued another 31 such waivers, effectively reducing demand for renewable fuels by over 1.4 billion gallons. This is on top of the 54 refinery waivers already approved by this Administration over the last two years, which eliminated demand for more than 2.6 billion gallons of biofuels. Comparing the last three years of the previous administration to the first three years of the current administration, the Trump Administration has increased the granting of waivers by an astounding 370 percent, with "small refinery" waivers going to some of the world's largest oil companies.

This pattern of demand destruction is wreaking havoc on our nation's rural economy. In recent months, more than 13 ethanol plants and 8 biodiesel plants have idled production or shut down across the country. Not only did these biofuel plants support thousands of rural jobs across the country, they served as important markets for farmers, processing millions of bushels of corn, soybeans, and other commodities. At a time when farmers are already struggling after years of low prices and a chaotic trade agenda, this Administration chose to destroy more markets for farmers and harm rural communities across the country.

To add insult to injury, recent reports indicate that President Trump personally made the decision to grant these 31 waivers, despite numerous promises to support renewable fuels. EPA continues to undercut the integrity of the RFS by misusing its waiver authority, which in turn has a direct adverse impact on farmers and jobs in rural communities. We write to urge you once again to end the abuse of these small refinery exemptions, immediately reallocate the remaining gallons, and make public information regarding any recipients of these exemptions.

Thank you for your attention to this critical issue.

Sincerely,

Read the original press release: Senators Smith, Klobuchar, Stabenow, Durbin, Peters, Baldwin, and Brown Call for Stronger Renewable Fuel Standard