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Ethanol Producer Magazine

December 31, 2018

By Erin Voegele

The USDA recently released the December edition of its Grain Crushing and Co-Products Production report, noting corn use for fuel ethanol was at 462 million bushels in October, up 4 percent from September, but down 2 percent from October 2017.

Total corn consumed for alcohol and other uses was at 513 million bushels in October, up 3 percent from September, but down 2 percent from October 2017. October usage included 92 percent for alcohol and 8 percent for other purposes.

Corn consumed for beverage alcohol reached 3.29 million bushels, up 17 percent from September and up 11 percent from October 2017.

Of the 462 million bushels that went to fuel ethanol production, 90.6 percent went to dry milling fuel production and 9.4 percent went to wet milling fuel production.

Sorghum consumed for fuel alcohol production reached 4.588 million hundredweight (cwt) (256,928 tons), up from 4.29 million cwt in September and 2.419 million cwt in October 2017.

At dry mills, condensed distillers solubles production fell to 124,404 tons, down from 131,317 tons in September and 136,200 tons the previous October. Corn oil production was at 128,678 tons, up from 155,284 tons in September 2018, but down from 169,314 tons in October 2017. Distillers dried grains production was at 378,003 tons, up from 376,510 tons in September, but down from 449,199 tons in October 2017. Distillers dried grains with solubles production reached 1.98 million tons, up from 1.93 million tons in September and 1.96 million tons in October 2017. Distillers wet grains production reached 1.35 million tons, up from 1.3 million tons in September and 1.34 million tons in October 2017. Modified distillers wet grains production reached 456,259 tons, up from 408,473 tons in September and 443,221 tons in October 2017.

At wet mills, corn germ meal production was at 61,021 tons, up from 59,667 tons in September, but down from 90,646 tons in October 2017. Corn gluten feed production fell to 282,713 tons, down from 293,548 tons in September and 353,394 tons in October 2017. Corn gluten meal production was at 90,899 tons, up from 83,183 tons in September, but down from 302,618 tons in October of the previous year. Wet corn gluten feed production was at 245,681 tons, up from 229,183 tons in September, but down from 302,618 tons in October 2017.

At dry and wet mill plants, carbon dioxide captured was at 252,895 tons, down from 260,179 tons in September, but up from 225,146 tons in October 2017.

Read the original article: Corn Use For Fuel Ethanol at 462 million Bushels in October

Renewable Fuels Association

December 19, 2018

News Release

Eleven years ago today, President George W. Bush signed into law what has become the single most successful clean fuels policy in the United States–the expanded Renewable Fuel Standard (RFS2). The RFS2, included in the Energy Independence and Security Act of 2007, requires petroleum refiners and importers to blend annually increasing volumes of renewable fuels with gasoline and diesel, culminating with 36 billion gallons in 2022. Since enactment, the United States has experienced cleaner air, greater energy security, revived economic activity in rural areas, and more affordable choices at the pump.

Among the numerous benefits since signed into law, the RFS has:

? Helped clean the air. The greenhouse gas emissions avoided from using ethanol has increased four-fold from 12.7 million tons CO2e in 2007 to 55 million tons CO2e in 2018. Carbon monoxide and particulate matter emissions are down as well, as is the concentration of ground-level ozone.
? Boosted energy security. U.S. dependence on imported crude oil and petroleum products fell from 58% in 2007 to just 14% in 2018, thanks in large part to growth in the use of ethanol and other biofuels.
? Lowered fuel prices. Because ethanol is priced below gasoline and far below competing octane sources, the RFS has led to lower gas prices for consumers. One recent study found ethanol reduces spending on gasoline by $142 per American household.
? Supported jobs and economic activity. Since enacted, the number of jobs supported by the ethanol industry has increased by 53%–from 238,541 jobs in 2007 to 365,491 in 2018. Additionally, the industry generates more than $40 billion in GDP every year.

“The RFS has unquestionably lived up to its promise,” said RFA President and CEO Geoff Cooper. “It has lowered consumer fuel prices, decreased reliance on imported petroleum, reduced emissions of harmful tailpipe pollutants and greenhouse gases, supported hundreds of thousands of jobs in rural America, and added value to the crops produced by our nation’s farmers. With proper oversight and implementation, the program will continue to drive innovation, support rural economies, and provide cleaner and more affordable fuel choices at the pump,” he added.

Read the original release: On Eleventh Anniversary, RFS2 ‘Has Unquestionably Lived Up to its Promise’

University of Illinois Urbana College of Agricultural, Consumer and Environmental Sciences

December 20, 2018

News Release

Ethanol production has increased sharply in the United States in the past 10 years, leading to concerns about the expansion of demand for corn resulting in conversion of non-cropland to crop production and the environmental effects of this. However, a new study co-authored by a University of Illinois researcher shows that the overall effects of ethanol production on land-use have been minimal.

The research, published in the American Journal of Agricultural Economics, looks at the effects of ethanol production capacity and crop prices on land use in the U. S. from 2007 to 2014.

The increase in corn ethanol production has led to concerns that it would raise the price of corn and the demand for cropland; thus making it worthwhile to bring land that was not previously cultivated (such as grasslands) into production, says Madhu Khanna, a professor of agricultural and consumer economics at U of I.

“Studies have simulated the crop price effects of producing 15 billion gallons of corn ethanol and shown that they could lead to large expansion in crop acres,” Khanna says. “We now have actual data on land-use change that has occurred since the ethanol expansion began in 2007 and can test whether the predictions of these models have held up. Interestingly, the raw data shows that although corn ethanol production more than doubled between 2007 and 2014, total cropland acres in 2014 were very similar to those in 2007 and the crop price index was lower in 2014 than in 2007.”

Khanna and her co-authors, including Yijia Li, a graduate student at U of I and Ruiqing Miao from Auburn University, analyzed cropland data from the U.S. Department of Agriculture’s National Agricultural Statistics Service to explain the extent to which changes in cropland acres could be causally attributed to changes in crop prices and proximity to ethanol plants.

“Establishment of an ethanol plant in a county can increase corn acres and total cropland acres by reducing grain transportation costs and increasing the net revenue from corn production, creating an incentive to plant more corn,” Khanna says. “Additionally, higher crop prices that accompany the expansion in ethanol production can also create incentives for increasing crop acres even in locations that do not have an ethanol plant in their vicinity.”

Khanna adds that in examining the causes of changes in cropland acres that have taken place it is important to consider both of these effects. Previous studies have looked at one of the other, but not simultaneously at both.

“Corn ethanol capacity went up from about 6 to 14 billion gallons between 2007 and 2014 and the number of plants doubled, from about 100 to about 200, so it’s a pretty dramatic increase,” Khanna says. There was also a sharp upturn in corn prices between 2008 and 2012, but by 2014 the prices were almost down to 2007 levels again.

Khanna and her co-authors found that while crop prices had a greater effect than plant proximity, overall changes in land use were minimal over the seven years included in the study.

And while the higher corn prices did lead to an 8.5 percent increase in corn production, most of that increase came from conversion of other crops rather than non-cropland.

Total cropland increased by 2 percent between 2008 and 2012, so in the aggregate it was relatively small, Khanna says. “In fact, by 2014 a lot of the land which did convert into crops actually went back into non-crop, so the change in cropland, if you look at 2008 to 2014, was only by half a percent. We find that land use does respond to prices, but not by a lot.”

Studies using satellite images of cropland to compare acres in 2008 and 2012 have suggested that there was a significant and irreversible increase in those acres, all attributed to corn ethanol. But a careful analysis of the data all the way to 2014 shows that the overall impact of corn ethanol production on increasing total crop acreage was very negligible.

Moreover, the impact of crop price varied over time; it was a bit higher up to 2012 but then reverted almost back to previous levels in 2007-2008 by 2014 as crop prices dropped, Khanna concludes. “Our study shows that changes in land use should not be considered irreversible; as prices dropped after 2012, land reverted back to non-crop uses close to levels in 2007 and 2008.”

The paper, “Effects of Ethanol Plant Proximity and Crop Prices on Land-Use Change in the United States,” was published in the American Journal of Agricultural Economics and is available online. Authors include Yijia Li and Madhu Khanna, Department of Agricultural and Consumer Economics in the College of Agricultural, Consumer and Environmental Sciences and the Center for Advanced Bioenergy and Bioproducts Innovation, University of Illinois, and Ruiqing Miao, Department of Agricultural Economics and Rural Sociology, Auburn University.

Read the original release: Corn Ethanol Production Has Minimal Effect on Cropland Use, Study Shows

Reuters

December 19, 2018

By Chris Prentice, Humeyra Pamuk

The U.S. Environmental Protection Agency granted oil major Exxon Mobil Corp (XOM.N) a financial hardship waiver this year temporarily freeing its Montana refinery from U.S. biofuel laws, three sources familiar with the matter told Reuters.

Exxon, which reported earnings of almost $20 billion in 2017, became the largest known company to be awarded a such a waiver by the Trump administration’s EPA under a program meant to protect the smallest fuel facilities from going bust.

Farm state lawmakers have complained that the hardship waivers are being overused in a way that is killing demand for corn-based ethanol, and they were likely to criticize the waiver awarded to one of the world’s biggest and most profitable companies.

The U.S. Renewable Fuel Standard requires refiners to blend biofuels like ethanol into their fuel each year or buy compliance credits from competitors that do. But it allows the EPA to exempt plants of less than 75,000 barrels per day if they show complying would cause financial hardship.

The EPA has vastly expanded the program under President Donald Trump, but is reviewing how it handles further requests as it seeks to balance the competing interests of refiners and ethanol producers.

Exxon’s waiver was granted before the review began, and covers its 60,000 barrel-per-day refinery in Billings, Montana, for the 2017 compliance period, said the sources, who asked not to be named.

EPA spokesman Michael Abboud declined to comment on whether the refinery received a waiver, but pointed out that the waiver program requires the agency only to consider the financial situation of the refinery and not its owner.

“This was a decision Congress made when drafting the Renewable Fuel Standard and EPA implements the small refinery exemption program consistent with that explicit direction,” he told Reuters in an emailed statement.

ExxonMobil declined to comment.

Reuters reported earlier this year that Andeavor (MRO.N) and Chevron (CVX.N), both large and highly profitable refiners, were also granted recent EPA exemptions for their small facilities.

The EPA keeps the identities of companies receiving waivers secret, arguing the information is business sensitive. But the agency recently began publishing the numbers of exemptions granted. It said it awarded 29 exemptions to small refineries in 2018 for the 2017 compliance year so far, up from 19 for 2016 and just seven for 2015.

The EPA has attributed the program’s expansion mainly to a lawsuit brought by two oil refiners that challenged its denial of their waiver requests under President Barack Obama’s administration.

A federal judge ruled last year the EPA was using too narrow a test to evaluate applications. The EPA, which relies partly on advice from the Department of Energy, has asked DOE to review its scoring system for applications before considering additional waiver requests.

Biofuel backers have argued that the waiver program’s expansion was politically driven by former EPA administrator Scott Pruitt, a supporter of the fossil fuels industry who sought ways to lower compliance costs for energy companies.

Republican Senator Chuck Grassley from Iowa responded to the news with a call for an overhaul of the waiver process.

“That Exxon was reportedly granted a ‘small refiner’ waiver for ‘hardship’ just goes to show how abused the process has been,” he said in an emailed statement. “There’s no good reason multibillion dollar oil refining giants should be able to skirt the law.”

Pruitt resigned amid a slew of ethics scandals last July and has been replaced in the interim by his deputy Andrew Wheeler.

Trump has said he was likely to nominate Wheeler to serve as the permanent EPA chief. That would require U.S. Senate confirmation, and several powerful pro-corn Senators such as Grassley are agitating for measures to protect ethanol demand.

“I suspect Wheeler would be more invested in maintaining the reputation of the agency,” a biofuels industry participant said, asking not to be named. “He also would not want to upset people who will have a say in his confirmation.”

Read the original article: Exclusive: Exxon Mobil Secured U.S. Hardship Waiver From Biofuels Laws - Sources