In the News
March 31, 2017
By State Representative Mary Franson
The ethanol industry contributed over $1.98 billion to Minnesota's economy in 2016. However, recent news surrounding the Renewable Fuel Standard (RFS), which regulates blending volumes in fuel, threatens to significantly impact this important market and severely affect our state's economy.
First, the White House is currently debating a change to the RFS point of obligation. Shifting the point of obligation would essentially overturn the current RFS structure and likely prevent future expansion of ethanol blending.
This potential market uncertainty is compounded by the fact that the Environmental Protection Agency is set to take full control over the RFS after 2022. The EPA would then have complete authority to reduce or eliminate corn ethanol from blending standards. This would cause a decline in ethanol production, which would raise fuel prices for consumers, and devastate business for both the ethanol producers and the Minnesota corn farmers that supply them.
As a state representative, I am firmly against policy changes that could negatively impact some of our state's most lucrative industries. Ethanol production is crucial to the state's economy and Minnesota should capitalize on this market instead of allowing government regulation to hinder its potential.
Farmers and ethanol producers should not have to rely on the RFS. If ethanol were allowed to compete in a free market, I believe corn ethanol would thrive in the fuel marketplace and continue providing economic growth and opportunity for Minnesota.
Read the original letter: LETTER: Ethanol Production is Crucial for Economy
March 28, 2017
By Emily Skor
An important debate is happening in the nation’s capital, and it revolves around the efforts by biofuel critics to rewrite a key element of the Renewable Fuel Standard—the point of obligation.
Under the RFS, the point of obligation defines which participants in the fuel supply chain (currently oil refiners and importers) are responsible for ensuring that biofuel blends reach consumers. To comply with the law, refiners that don’t add biofuels to the mix must purchase credits from other market participants. These credits are known as renewable identification numbers (RINs), and the current system creates strong financial incentive for retailers to sell higher biofuel blends. In turn, this has allowed us to rapidly expand the market for affordable consumer options such as E15.
Now, a small group of refiners are working to secure an exemption from the RFS by shifting the obligation to retailers and fuel distributors. This would not only eliminate the incentive to sell higher biofuel blends, it would create a logistical and regulatory nightmare in fuel markets. Hundreds, if not thousands, of retailers would suddenly be required to demonstrate compliance—demanding new rules, new staff, new infrastructure and years of recalibrating a program that already works. The three-year delay we experienced in biofuel targets before 2016 from the U.S. EPA is just a sample of what could occur. Worse, the savings that consumers now enjoy thanks to homegrown biofuels could evaporate, raising costs and depressing the market for renewable fuels.
At a time when rural communities are suffering and grain surpluses are rising, this is a regulatory scheme that cannot be allowed. Farmers are already facing a fourth straight year of declining income, down nearly 50 percent from 2013, according to the USDA.
The sales pitch by refiners is hardly new. They’ve attempted to make this change for years. And, as always, the biofuels industry has stood united with farmers, distributors, retailers and other market participants to protect the RFS. Just recently, Growth Energy rallied with a broad coalition of trade groups representing everyone from the American Highway Users Alliance to the National Association of Convenience Stores to oppose changes to the point of obligation. Even other refiners like Tesoro agree.
The reason our critics are wrong is simple—the RFS is working, exactly as intended. In fact, the flexible system for trading RINs was originally created at the behest of the oil companies. Infrastructure is being deployed, and the number of stations selling E15 doubled last year, thanks to our efforts with programs like Prime the Pump.
The small band of refiners seeking to change the rules are the same group that have worked for over 11 years to gut the RFS. More recently, the owner of CVR refining, Carl Icahn, has even sought to convince biofuel advocates that sacrificing the RFS should be acceptable in exchange for a long-sought waiver from an unnecessary and outdated regulatory barrier that limits summer sales of E15. But without any incentive to sell higher biofuel blends, those sales would never take place, and retailers that have worked hand-in-hand with ethanol producers to offer new consumer options would be left at the mercy of oil refiners. To capture these summer sales, we need a functional RFS and a real fix for Reid vapor pressure (RVP) limits, such as the bill recently introduced by our biofuel champions in Congress, including Sens. Deb Fischer, R-Neb., Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, as well as Reps. Adrian Smith, R-Neb., and Dave Loebsack, D-Iowa.
To win these fights, we must stand united. This industry is strongest when we all work together. Our critics are too well-financed and too sophisticated for anything less. I’ve seen this first-hand since taking the helm at Growth Energy almost a year ago. In that time, Growth Energy has worked side-by-side with dedicated champions from across our industry to strengthen the RFS and protect the growth of our industry and the jobs it provides. It hasn’t always been easy, but if we stand strong, we can ensure that fuel retailers have the certainty they need to invest in growth and help consumers gain access to cleaner, more affordable choices at the pump.
Read the original story: To Win RFS Fights, We Must Stand United
March 21, 2017
By Ron Kotrba
March 21 represents the end of the 60-day freeze period on new regulations pending review, implemented by the incoming U.S. administration Jan. 20. Among the regulations on hold during the two-month freeze period was the final rule for the 2017-’18 renewable volume obligations (RVO) under the Renewable Fuel Standard.
While U.S. EPA has yet to announce anything on the matter, biodiesel and renewable diesel stakeholders welcome implementation of the boosted advanced biofuel volumes for 2017 and biomass-based diesel volumes for 2018, finalized by the Obama administration’s EPA last November after Donald J. Trump won the presidential election.
The advanced biofuel category for 2017 was finalized at 4.28 billion ethanol-equivalent gallons, up 19 percent over the 2016 RVO and up 7 percent from the 2017 proposal issued in spring 2016. The biomass-based diesel category for 2018 was finalized last November at 2.1 billion gallons, up 100 million from 2017, the same as what EPA proposed last spring.
“Though last year’s market actually outpaced the 2018 requirement, we are pleased that the rule is effective and that the industry can move forward under the program as outlined,” said Anne Steckel, vice president of federal affairs with the National Biodiesel Board. “With the help of a strong RFS, American biodiesel supports some 64,000 jobs across the nation, many the most affluent in their region. We look forward to working with EPA and the new administration as they begin the process of setting volumes moving forward and are confident American biodiesel producers can do even more to contribute to energy security, economic prosperity and clean air.”
Renewable diesel producer Neste Corp., which exported more than 200 million gallons of renewable diesel to the U.S. in 2016, also commented on the expiration of the regulatory freeze period.
“The regulatory freeze pending review by the new U.S. administration, which was applied to the renewable fuel volume requirements for 2017, has expired,” the company stated in a press release March 21. “Hence, the EPA continues to implement the final ruling under the RFS program as published Nov. 23.”
Kaisa Hietala, executive vice president of Neste’s renewable products business area, said, “We are pleased with the EPA’s continued commitment to the RFS program. Determination and ambitious targets are required to combat climate change globally.”
Read the original story: 2017-'18 RVOs Assumed Intact as Regulatory Freeze Deadline Passes
March 18, 2017
By Bob Shaw
Dump it today, drive with it tomorrow.
That’s the promise of the nation’s first waste-to-ethanol plant, proposed for Inver Grove Heights.
The $200 million biofuels plant would process Dakota County’s garbage into ethanol, to be blended with gasoline for use in cars and trucks.
If the plant works as described, it would make the county more environmentally friendly, said county Environmental Resources Director Georg Fischer.
The plant would be built by the Canadian company Enerkem Inc. and SKB Environmental Inc., a St. Paul-based waste and recycling company. The companies made a preliminary presentation to the Inver Grove Heights City Council in February but have not yet made any formal proposals to the city.
“There seems to be a potential for a lot of benefits, but there are also a lot of unknowns,” said city administrator Joe Lynch.
If the council and state and federal agencies approve, the plant could be operating by 2020, according to David McDonnell, Enerkem’s vice president for business development for North America.
The companies would build the plant near existing landfills, south of 117th Street and about 1 mile west of U.S. 52.
The plant would employ 100 workers and would pay Inver Grove Heights about $1.5 million annually in fees and taxes. “Economically, there is an attraction here,” Lynch said.
Enerkem operates two waste-to-ethanol plants in Canada. One is a small demonstration facility at the company’s headquarters in Quebec, and the other is a commercial plant for the 800,000-population city of Edmonton.
The Minnesota plant would be the first in the U.S. and would be twice of the size of the Edmonton plant.
Dakota County’s Fischer described how the plant could revolutionize garbage processing for the county, which produces 400,000 tons of garbage a year — half recycled and half going into landfills.
At the biofuels plant, workers would pick through the garbage destined for landfills a second time for recyclables, boosting the county’s recycling rate from 50 percent to about 70 percent, according to Fischer. The remaining material would be shredded into 2-inch pieces, heated and processed into ethanol.
The garbage-based ethanol, just like corn-based ethanol, would be blended into automotive fuels. The plant would produce about 20 million gallons of ethanol annually.
There’s another environmental advantage to the plant — the re-use of water.
McDonnell said Enerkem likes the site because the plant could use water from the Empire Wastewater Treatment Facility in Empire Township. The Empire plant processes sewage from the metro area and pipes the wastewater to the Mississippi River.
If the ethanol plant used that water, it wouldn’t have to pump water up from aquifers.
The savings? About 1.6 million gallons annually.
“If they were able to do that, it would become more and more of a green project,” Fischer said.
He said that by slashing the volume of garbage going into landfills, the plant would help the county meet environmental goals set by the state.
State law lists environmental practices from worst to best: landfilling, landfilling that captures flammable gases, composting or burning garbage, composting yard waste and food waste, recycling, and reduction and re-use.
The biofuels plant, said Fischer, would move Dakota County up two levels. “In that respect, it would be a great thing,” he said.
The waste-to-ethanol process is so new that many environmental groups and the Environmental Protection Agency don’t list it under methods they have evaluated.
The EPA’s website, like Minnesota’s waste-management hierarchy, places “energy recovery” in the mid-range of treatment options. Presumably, “energy recovery” would include turning garbage into ethanol.
“The process, if it works as they say, could potentially be a good alternative for us,” said city administrator Lynch.
Read the original release: Inver Grove Plant Would be First in U.S. to Turn Garbage Into Ethanol
March 19, 2017
By Jim Lane
The state of Louisiana has become the 29th state to offer consumers what Growth Energy termed “a better choice at the pump – gasoline blended with 15 percent ethanol known as E15.”
E15 saves consumers an average of 5 to 10 cents per gallon and burns cleaner and cooler than regular gasoline, allowing engines to perform at their peak while reducing drivers’ impact on the environment. The latest in this market expansion is a RaceTrac station in Baton Rouge – now one of 672 locations nationwide to offer Americans this more affordable, cleaner biofuel. Growth Energy applauds RaceTrac and all additional major retailers who currently sell E15 including Sheetz, Kum and Go, Thorntons, Minnoco, Murphy USA, MAPCO, Family Express, Cenex, and Protec Fuels.
“The ethanol industry stands ready to provide American drivers with this performance-boosting, homegrown fuel and with every new pump offering E15, we are doing just that. Growth Energy is committed to working with our retail partners to continue this expansion,” Growth Energy CEO Emily Skor said.
“American consumers have surpassed 750 million miles on E15. When given the option, consumers choose E15, and, thanks to dedicated retailers who care about their customers, more Americans can make this choice.”
Read the original story: Louisiana Becomes 29th State to Adopt E15 Ethanol
March 16, 2017
By Susanne Retka Schill
Ethanol critics bash the fuel for its lower energy value than gasoline, while ethanol supporters point to its octane-boosting properties. University of Illinois ag economists Scott Irwin and Darrel Good analyze the value of ethanol in blended gasoline over the past decade based on those components in a recent FarmDoc Daily post, “On the Value of Ethanol in the Gasoline Blend.”
Much of the analysis of the cost of ethanol relative to CBOB has ignored the potential benefit of the octane-enhancing qualities, particularly in the face of the reported retooling of refineries to producer lower-octane base fuels that need to be oxygenated to meet specifications. Many analyses focus only on ethanol’s energy deficit compared to gasoline, the economists point out.
The economists lay out their methodology underlying their economic analysis to determine the net benefit of ethanol, when looking at energy-adjustments and octane-enhancements. The analysis includes charts that compare the price of ethanol to CBOB, and then the energy-adjusted price of ethanol, which increases due to its lower Btu content. It also looks at the cost of aromatics, the petroleum-based oxygenates used instead of ethanol, and the shift in use from aromatics to ethanol in one state over the past decade.
“As expected, the energy-adjusted price of ethanol (assuming ethanol has only two-thirds the energy value of CBOB) was consistently higher than the price of CBOB by an average of $1.02 per gallon. On the other hand, the price of ethanol was consistently below the price of aromatics, considered as alternative octane enhancers, by an average of $1.06 per gallon.” That calculates to the net value of ethanol, which though just 4 cents per gallon, calculates to “nearly $7 billion over the nine-year period from 2008 through 2016.”
The net benefit was highest in 2012 during the decade examined, Irwin and Good report. “The reason is that gasoline prices were high enough relative to ethanol to reduce the energy penalty, while at the same time lofty aromatic prices drove the octane premium to high levels. The large negative net value in 2016 is essentially driven by the reverse of the 2012 price patterns.”
Limitations to the analysis, the authors point out, include other factors not examined that could impact value, such as the value of Reid vapor pressure and the lower energy value of aromatics. “The bottom-line is that a refinery optimization model is needed to conduct a complete analysis of value of ethanol in the gasoline blend. Nonetheless, our analysis points out the partial and misleading nature of work that only focuses on the energy penalty of ethanol and ignores the octane premium.”
To view the complete analysis click here.
Read the original story: Economists: Octane Premium Offsets Ethanol Energy Penalty
March 16, 2017
By EPM Staff
Nearly two dozen U.S. senators have signed a letter advising President Trump not to change the federal biofuels program's longtime compliance protocol.
Sen. Chuck Grassley, R-Iowa, and Sen. Amy Klobuchar, D-Minn., today led 23 senators in a bipartisan letter urging President Trump to maintain the Renewable Fuels Standard’s point of obligation and reject proposed changes that, they say, would upend the current system.
“We believe such changes are unwarranted and indefensible,” the senators wrote to Trump. “We appreciate the commitment you have made to support the RFS. We strongly urge you to steer clear of administrative changes to the policy that would undermine the program and run contrary to your goals of promoting domestic energy independence and more choices at the pump. We look forward to working with you to ensure the RFS continues to provide the stability and predictability that is creating jobs and economic growth across the country.”
The senators outlined the detrimental effects of changing the point of obligation from refiners to blenders, marketers or retailers, as one prominent refiner is suggesting. The letter said shifting the point of obligation would give refiners little incentive to produce necessary fuel blends, making it difficult for downstream entities to comply.
Changing the point of obligation also would “result in a massive, costly, time-consuming shift in compliance” because small businesses, especially in rural areas, lack the resources needed to comply. Administration of the program would become complicated and “unnecessarily result in significant uncertainty and market disruptions,” the senators wrote.
Such a change is widely opposed—by fuel marketers, retailers, truck stop operators, petroleum producers and renewable fuel producers—because of the added complexity and the undermining of investments that businesses have made to comply, the senators wrote. “The overwhelming majority of transportation fuel market participants oppose any change to the point of obligation because it would cause massive disruptions and could lead to higher prices for consumers,” the letter states.
Responding to the letter immediately, Brooke Coleman, executive director of the Advanced Biofuels Business Council, said, “We applaud champions in the Senate for rallying against changes to the RFS that would harm consumers, threaten the growth of U.S. biofuels and jeopardize investments in clean, American energy."
Coleman continued, "The RFS has worked effectively for more than 11 years to foster market access for homegrown biofuels, and efforts to rewrite the point of obligation are categorically opposed by a broad coalition of biofuel producers, retailers, consumers, and other market participants. Restructuring the program would halt any progress under the RFS, creating regulatory chaos for retailers and dragging down economic growth in rural America.”
Growth Energy CEO Emily Skor issued the following statement in response to the letter:
“Growth Energy thanks Sen. Grassley, Sen. Klobuchar, and the other 21 senators leading this important effort to support the Renewable Fuel Standard, the nation’s most successful energy policy. The point of obligation is a vital component of the RFS and is working as intended to make sure that consumers have a choice of fuel at the gas pump. Growth Energy has consistently opposed any change in the point of obligation.
“The fact is, shifting the point of obligation from refiners and importers to fuel marketers, convenience stores, railroads, truck stops and trucking companies, and even consumer service companies like FedEx and UPS, would throw the RFS into chaos. A change would immediately trigger long and complicated rulemaking that would take years to complete. It would create long-term uncertainty in the entire marketplace and reduce consumer choice at the gas pump by removing the economic incentive for retailers to offer higher biofuel blends, ultimately raising prices on consumers.
“The vast majority of the industry remains united in its opposition to any change to the point of obligation. An America-first energy policy means American consumers can access cleaner, more affordable biofuel options at every gas station nationwide. This is an issue where there is no room to equivocate or barter – preserving the point of obligation is essential to maintaining a strong RFS and growing ethanol demand in the U.S.
“We stand proudly with these 23 senators in opposition to this change and will continue to fight for the ethanol industry and rural America.”
The senators’ letter is available here.
Read the original story: Senators Urge Trump to Maintain RFS Point of Obligation
March 6, 2017
By Lance Klatt
There has been a lot of news coverage recently about changing the point of obligation associated with the Renewable Fuel Standard (RFS). Some seek to shift the responsibility of adding biofuels into the fuel mix downstream to fuel marketers, rather than those who produce or import gasoline.
As operators of locally owned fueling stations, we wish to clarify that this change would harm fuel marketers, retailers and our customers. In fact, hundreds of single-store owners spearheaded the adoption of the first blender pumps, which allow individual stations to offer options like gasoline blended with 15 percent ethanol (E15) and E85. In the Twin Cities alone, there are 34 locally owned Minnoco gas stations selling E15 and other higher blends of ethanol, with more on the way. The number of Minnesota gas stations selling E15 gasoline doubled in 2016.
Chains like Kum & Go, Murphy USA and Sheetz have caught on, too. Today, retailers can blend their own ethanol or buy ethanol blends at a deep discount from distributors and pass the savings on to consumers. This business model makes single stores more competitive, while reducing costs for our customers. Not only is ethanol more affordable, but it also boosts the octane content of fuel, giving our consumers more appealing options for their vehicles.
Retail outlets owned or under contract with a few oil industry giants aren't always allowed to sell new blends like E15, which is becoming commonplace at more and more fueling sites. This corporate resistance to renewable energy actually benefits small retailers who can offer customers a cleaner, better-performing and more affordable option at the pump.
On the other hand, requiring fuel marketers to meet the Renewable Fuel Standard compliance would open hundreds of fuel retailers to potential new Environmental Protection Agency (EPA) compliance requirements. The change would threaten investments made under the current RFS and force the EPA to fundamentally restructure the fuels market, creating turmoil for retailers, producers, distributors, and consumers.
Further, as the end-user of the fuel, fuel retailers are not able to determine the composition of the fuel provided by refiners. As a result, changing the RFS would not only deprive retailers of valuable sales opportunities, but it could also impose dramatically higher costs on consumers or even result in the withdrawal of options from the marketplace.
That is why more than 35 organizations — including the National Association of Truckstop Operators (NATSO), NACS, the Association for Convenience & Fuel Retailing; and the Society of Independent Gasoline Marketers of America (SIGMA) — have all voiced opposition to changes in the RFS.
In exchange for yielding to demands from refining moguls like Carl Icahn, who would profit from a change in the point of obligation, RFS critics have reportedly even offered to endorse a long-sought waiver from the EPA's outdated Reid Vapor Pressure (RVP) limits, which complicate sales of E15 during the summer driving season. That's a commonsense change, with bipartisan support, but it would lose any value to retailers if the incentive to offer blends containing homegrown biofuels were to evaporate.
Of course, there are other reasons to support ethanol. Corn-based ethanol is an earth-friendly biofuel that reduces carbon emissions by an average of 43 percent, according to the U.S. Department of Agriculture. And with advanced biofuels, like cellulosic ethanol, carbon savings can rise to 100 percent or more, according to experts at the Department of Energy's Argonne National Laboratory.
Ethanol production also supports nearly 400,000 U.S. jobs, including many in states like Minnesota, which is home to 20 ethanol plants and one biobutanol plant, with a combined ethanol production capacity of more than 1 billion gallons.
No one benefits when a few massive entities can monopolize our fueling options. Biofuels provide a clean, homegrown alternative that protects consumers — and by extension, fuel retailers — from spikes in oil prices. We shouldn't let a few special interests stand in the way.
Rewriting the RFS now to benefit the refining sector would create a logistical nightmare for fuel retailers, raise costs, and threaten the future deployment of clean, American energy.
Read the original story: COMMENTARY: Small Retailers Against Changing RFS Point of Obligation
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March 09, 2017
News Release
In 2016, the United States was again the world’s largest net exporter of ethanol, according to U.S. Department of Agriculture (USDA) trade data and as demonstrated in this U.S. Grains Council (USGC) chart of note.
Net exports are calculated as the difference between exports and imports. The 2016 calendar year concluded with U.S. net exports of 838 million gallons, the second highest level ever, exceeded only in 2011. U.S. ethanol shipments exceeded 1 billion gallons, and incoming shipments totaled nearly 215 million gallons in 2016.
For a majority of the 2000s, Brazil was the largest net exporter of ethanol in the world, and the United States was among the world’s largest net importers. The United States started as a net exporter of ethanol in 2010, exporting more than 410 million gallons and importing more than 131 million gallons that year.
By 2011, U.S. exports rose so sharply (more than 1.2 billion gallons) that the United States seized the top world net exporter of ethanol slot from Brazil. However, the drought in the 2012/2013 marketing year decreased the competitiveness of U.S. ethanol in global markets, cutting global exports. In 2014, U.S. net ethanol exports rebounded, exceeding Brazil’s net exports by 166 million gallons.
Today, the United States is both a major ethanol exporter and one of the world’s largest importers. Roughly 85 percent of U.S. ethanol imports originate from Brazil, with most imports entering the United States through the Gulf ports (largely Houston-Galveston) and West Coast ports (California).
Brazilian ethanol imported into Houston-Galveston is processed into ETBE (a fuel oxygenate) and then re-exported to Japan to meet that country’s strict greenhouse gas criteria, which favors Brazilian ethanol over U.S. ethanol. This is one issue USGC and its partners are working to address as part of their ethanol market development efforts in Japan.
The importation of Brazilian ethanol into California is driven by the state’s Low Carbon Fuel Standard (LCFS), which favors sugarcane ethanol over Midwest corn ethanol based on California’s calculation of carbon intensity. This year, however, the United States has imported very little Brazilian ethanol due to the much lower price for U.S. corn ethanol relative to Brazilian ethanol.
Conversely, U.S. ethanol exports to Brazil have increased substantially due to the price disparity relative to competitively-priced corn ethanol. The relatively high price of sugar compared to ethanol has redirected Brazilian sugarcane into sugar production rather than ethanol. As a result, Brazil has increased its imports of price-competitive U.S. ethanol to meet growing fuel ethanol demand, a trend USGC expects to continue through much of 2017.
Find more about USGC ethanol programs here.
Read the original release: Chart of Note: The U.S. Is The Top World Net Exporter Of Ethanol
March 8, 2017
By Eric Wolff
A consumer advocacy group is filing a complaint to Congress on Wednesday accusing President Donald Trump's friend and fellow billionaire Carl Icahn of violating lobbying rules by pushing the White House to change the federal ethanol regulations.
Public Citizen contends that Icahn, his company Icahn Enterprises and the CVR oil refining company he owns failed to register as lobbyists, yet pushed the White House to change the EPA's decade-old rules on ethanol — a move that would save Icahn's company hundreds of millions of dollars.
Trump named Icahn, whose net worth is pegged by Forbes at nearly $22 billion, as the White House's special adviser for regulatory reform in December, but said he would "not be serving as a federal employee or a special government employee and will not have any specific duties."
Icahn has aggressively advocated for the change in the ethanol rules under the EPA's Renewable Fuel Standard since last year, and according to the Public Citizen complaint, he submitted a proposal to the White House on Feb. 27 to overhaul the program and shift the burden for complying with the ethanol rules to fuel wholesalers. The RFS, which was created by Congress, gives EPA authority to operate the nation's biofuels program.
The letter to the secretary of the Senate and the clerk of the House calls for an investigation into whether Icahn and CVR's activities constitute lobbying of the White House for changes to the program. The complaint also cites Icahn's work in helping select EPA Administrator Scott Pruitt, and the proposed language he and fellow oil refiner Valero Energy submitted to the White House for a memo that would direct EPA to make the change.
"All of this has occurred with no record of any [Lobbying Disclosure Act] filings by or on behalf of Mr. Icahn, Icahn Enterprises or CVR Energy," the complaint reads. "It is unlikely that all these activities occurred without some individual or entity being obligated to report lobbying activity under the LDA."
The letter is latest controversy around the ethical complications that Trump, the wealthy members of his Cabinet and his advisers have faced because of their myriad business holdings.
Read the entire filed letter here.
Read the original story: Trump Adviser Icahn Accused of Breaching Lobbying Rules
March 6, 2017
By William Petroski
Gov. Terry Branstad said Monday he is aware of reports of a backroom deal in the Washington, D.C., that would hurt Iowa's renewable fuels industry, but has been assured President Donald Trump's administration will support producers of ethanol and biodiesel fuels.
"I know the rumors and I can tell you who was involved, and I can tell you they are not true," Branstad told reporters Monday. He added that he has talked with his son, Eric Branstad, who works in the Trump administration, and that his son told him that "this is not going to happen."
The renewable fuels industry was in an uproar last week after a national advocacy group said a Trump official told the organization the president would sign an executive order shifting the burden for blending ethanol and biodiesel into the nation’s fuel supply from oil refiners to fuel retailers. The move, critics said, would hurt Iowa farmers and consumers by hindering the widespread use of ethanol and biodiesel. The White House subsequently distanced itself from the reports.
Branstad said he shared concerns about a possible shift of responsibility for blending biofuels to retailers. The agreement allegedly involved the Renewable Fuels Association and Trump adviser Carl Icahn, a billionaire investor in CVR Refining, a Texas energy company.
"It would be much more difficult to enforce the renewable fuels standard if you had to deal with all the retailers in the nation, rather than the people who are distributing the fuel," Branstad said. "That is the reason why practically it doesn’t make sense, and that is the reason why it was shot down real quick when the rumors surfaced."
Branstad said he had had a "very good meeting" with Scott Pruitt, the newly confirmed administrator of the Environmental Protection Agency. He said Pruitt indicated that the Trump administration's EPA will make timely decisions regarding the Renewable Fuel Standard, which requires transportation fuel to contain a minimum volume of renewable fuels.
"We are pleased with that," Branstad said. "I think he got a very clear message from the president at the time that he was appointed that he will support ethanol, and he is supporting ethanol."
Read the original story: Branstad Shoots Down Rumored Anti-Ethanol Backroom Deal
March 4, 2017
By Mike Hughlett
The U.S. ethanol industry set a production record last year. Exports boomed. And after a tough first six months, profits picked up in the last half of 2016, including in Minnesota.
While there are positive indicators for 2017 — corn prices are forecast to be stable and the federal mandate for ethanol production has been increased — the industry faces some significant uncertainties. Players in Minnesota, the fourth-largest producer of ethanol in the U.S., said there could be some export challenges.
Perhaps the biggest is President Donald Trump, who has strong ties to the oil industry, often ethanol’s nemesis pushing against higher ethanol production.
Trump has told ethanol producers he backs biofuel, but “it’s impossible to predict what he is going to do,” said Bruce Babcock, professor of energy economics at Iowa State University. “This is a complete wild card.”
Just this past week, discord among large ethanol companies erupted after Trump adviser Carl Icahn, who controls one of the largest independent U.S. refiners, made a deal with the president of the Renewable Fuels Association to recommend a change in policy that could directly benefit his company.
The industry is tied to the federal government through the renewable fuel standard, which was created in 2005 by Congress and reinforced two years later. It requires that biofuels be blended into gasoline.
The U.S. Environmental Protection Agency (EPA) administers the renewable fuel program. In November, former President Barack Obama’s EPA mandated a record amount of ethanol production for 2017: 19.28 billion gallons. Of that, 15 billion gallons — the statutory maximum — would come from conventional biofuels, primarily ethanol.
It marked the first time the EPA had mandated the full 15 billion gallons for conventional ethanol. With a precedent set, “it will be hard to go back on that,” Babcock said.
The increased mandate came at the end of a year that was an improvement for the ethanol industry over 2015, though no match for the boom of 2014. The United States, by far the world’s largest ethanol producer, pumped out 15.3 billion gallons of the stuff in 2016, up 3.4 percent over a year ago.
Minnesota in 2016 contributed 1.18 billion gallons, a bit below the all-time high of 1.2 billion gallons the previous year, according to the Minnesota BioFuels Association. The decline stemmed from a shutdown of one ethanol plant during 2016, the association says.
Minnesota producers actually saw operating income fall in 2016 over 2015, the association said. Like elsewhere, higher corn prices and low oil prices that began in 2015 squeezed ethanol producers’ profitability in the first half of last year. But corn costs declined in 2016’s second half, and exports — needed for producers’ bottom lines — rallied.
“Margins were pretty low, but as the year progressed we finished strong,” said Randall Doyal, CEO of Al-Corn Clean Fuel, a farmer-owned ethanol producer in the southern Minnesota town of Claremont.
Underscoring its confidence in ethanol, Al-Corn just started site work on a big expansion, raising its capacity from 50 million gallons annually to 120 million, which would make it one of the largest ethanol plants in the state.
“As the industry grows, those plants that enjoy economies of scale are the most valuable for their owners,” Doyal said. He’s looking for a continuation of last year’s trends for 2017, though January was a weak month for the industry. “It will be a decent year,” he said, “though I wouldn’t predict a barn burner.”
Minnesota has 20 ethanol plants, from farmer-owned co-ops to outposts of publicly traded companies. The industry directly employs 2,264 and supports an additional 2,589 direct farm and farm-related jobs, according a recent study for the state’s biofuel association.
Plus, Minnetonka-based agribusiness giant Cargill has three large ethanol plants, one in Nebraska and two in Iowa. And Inver Grove Heights-based CHS, the nation’s largest agricultural cooperative, owns two ethanol plants in Illinois.
With motor fuel prices relatively low, Americans drove a record amount of miles in 2016 and gasoline consumption also hit a record, according to federal agencies. Ethanol demand rose with gasoline, as motor fuel usually contains 10 percent of the biofuel.
One positive factor is the growth of E-15, a blend of 15 percent ethanol and 85 percent gasoline that can be used in vehicles made from 2001 on. It’s usually about 10 cents cheaper than E-10, the common ethanol blend.
E-15 sales in Minnesota have risen from 258,000 gallons in 2014 to 5.7 million gallons last year, according to the Minnesota Department of Commerce. There are 68 gas stations now selling the blend. “E-15 is becoming more popular in the metro area,” said Brian Kletscher, CEO of Highwater Ethanol in Lamberton and chairman of the state’s biofuels association.
The widespread adoption of E-15, though, is still bogged down by disputes with automakers and restrictions from the EPA. The Renewable Fuel Association’s deal with Icahn, reported by Bloomberg, removes some of those restrictions in return for not opposing a rule change, which could come through a White House executive order, to remove some of the fuel blending regulations that added costs to Icahn’s refinery business. The rule change, however, could add cost pressures to other players in the ethanol industry.
Sioux Falls-based Poet LLC — the largest U.S. ethanol producer with four Minnesota plants and a founder of Growth Energy, a separate trade group vehemently opposed to the Icahn move — called the agreement “a backroom deal” made while “leading voices” were absent. White House officials deliberated with all the players last week to try to reach a compromise, people familiar with the talks told Bloomberg.
However the EPA regulations change, if at all, the renewable fuel standard law essentially puts a ceiling on domestic ethanol production. So the main prospect for ethanol’s growth will continue to be exports.
“Exports are the lifeblood of profits for the industry,” said Scott Irwin, an agricultural economics professor at the University of Illinois. “The real frosting on the cake for ethanol producers last year was the red-hot export market.”
At 1.05 billion gallons, 2016 ethanol exports were second only to 2011, according to the Renewable Fuels Association.
Brazil and Canada are the prime destinations for U.S. ethanol, together accounting for half of the industry’s exports. China has become U.S. ethanol’s third biggest export market over the past few years, with a 17 percent share. China is also the largest U.S. export market for distillers grains, an ethanol byproduct used for animal feed.
But China has indicated that it plans to significantly raise tariffs on ethanol and distillers grains, a potential blow to exports.
“There are definitely storm clouds on the trade side,” Irwin said, heightened by the uncertainty over Trump’s positions and last week’s controversy.
While skepticism exists, several executives emphasize that the president has reiterated his support for the federal ethanol mandate as recently as two weeks ago.
“He is very supportive of domestic renewable energy,” said Poet CEO Jeff Broin. “He will stand behind rural America and the voters who put him into office.”
Read the original story: Trump Administration a Wild Card for Ethanol Industry
March 3, 2017
Press Release
Congressman Collin C. Peterson, D-Minn., yesterday joined a bipartisan group of lawmakers to introduce the Consumer and Fuel Retailer Choice Act. The legislation lifts the summertime ban on E15 gasoline, allowing the renewable fuel to be sold year-round.
The bill would grant a one-pound per square inch ethanol waiver for applicable Reid Vapor Pressure (RVP) limitations for fuel blends containing more than 10 percent ethanol between June 1 and September 15. The Environmental Protection Agency (EPA) currently prohibits E15 fuel sales in non-flex fuel vehicles during the summer months when most driving occurs due to fuel volatility limits.
“This bill is about reducing confusion for retailers and providing more fuel choices for consumers. This RVP fix is a common sense measure that grants the consistent sale of E15 at gas stations, a fuel that has become increasingly popular in Minnesota,” said Congressman Peterson.
Read the original press release: Peterson Statement: Consumer and Fuel Retailer Choice Act
Feb 28, 2017
By Jennifer A Dlouhy, Ari Natter and Bill Alison
Carl Icahn's stake in a Texas refiner grew by as much as $126 million Tuesday after the billionaire investor and special adviser to President Donald Trump helped broker a proposal to alter U.S. biofuels policy.
Icahn Enterprises LP holds an 82 percent stake in refiner CVR Energy Inc., which gained as much as 7.7 percent on news of a proposed deal to change the way the renewable-fuels program operates.
"This is the purest definition of a conflict of interest that you can get," said Tyson Slocum, a director at Washington-based watchdog Public Citizen. "It is clear that Icahn has played a role in influecing aspects of administration policy that have a direct financial impact on Icahn's business at CVR."
A spokeswoman for Icahn, Susan Gordon, didn't respond to telephone and email requests for comment. CVR Energy Cheif Executive Jack Lipinski decline to comment.
While federal ethics rules prohibit government employees from profiting from their government service, those rules may not apply to Icahn, who isn't paid for his service to the White House. Trump's transition team said in December that Icahn would advise the president in his "individual capacity" and wouldn't be a federal employee or a special government employee.
"He is simply a private citizen whose opinion the president respects and whom the president speaks with from time to time," said Stefan Passantino, deputy councel to the president for compliance and ethics. "Mr. Icahn does not have a position with the administration nor a policymaking role."
Icahn, the Renewable Fuels Association, Valero Energy Corp., and other entities hammered out a proposal on how they would overhaul the administration of the biofuel mandate and recently presented a memo to the While House outlining their compromise. That document included draft language for a presidential directive from Trump compelling the Environmental Protection Agency to make the administrative changes.
It was unclear whether the accord would gain traction in the Trump administration. White House spokeswoman Kelly Love said there was no executive order in the works dealing with ethanol.
Asked about criticism of Icahn's role in renewable fuel policy, Deputy Press Secretary Lindsay Walters said, "I can't speak to the particular issue in that article, but the only criteria the president uses to make policy decisions is what is the best interests of the American people."
Under the accord, the adminsitration, if it agrees, would begin changing who must comply with the Renewable Fuel Standard. Under the current structure, the onus falls on refiners and importers. Reginers that have relatively little or no blending infrastructure - like Icahn's CVR Energy and Valero Energy - must instead buy compliance credits known as "renewable indentification numbers" to make up the shortfall. They have been pressing the EPA to move the point of obligation from refiners to blenders.
Identification Numbers
CVR said in a regulatory filing it spent more than $200 million on renewable identification numbers last year. The price of those credits plunged on the news and have been falling since Trump's election. At one point Tuesday morning, Icahn's stake in CVR and one of its subsidiaries increased by about $126 million, according to a Bloomberg analysis of mark data. Some of the gains were erased by the time CVR closed up 77 cents, or 3.5 percent, at $22.92 in New York. It was the highest close since Feb 21.
The Renewable Fuels Association, like other biofuel groups, had opposed the change as recently as last week in formal comments filed with the government. But the RFA's president, Bob Dinneen, said the group agreed to the negotiations after being told the White House would make the adjustment with it or without it.
"I was told in no uncertain terms that the point of obligation was going to be moved, and I said I wanted to see one of our top agenda items moved," he said.
Jeff Broin, the chief executive officer of POET LLC, the largest U.S. ethanol producer, said the "back-room deal" didn't reflect major voices in the ethanol industry.
"Carl Icahn has long been a self-interested, vocal critic of the program," Broin said in an emailed statement.
Icahn wrote the EPA last year to complain that the current set-up of the program had resulted in a rigged marketplace and would cause "a number of refinery bankruptcies."
Critics questioned whether Icahn was acting in his own capacity or as a presidential adviser.
"It's all disturbing," said Todd Becker, chief executive officer of Green Plains Inc, the third-largest U.S. ethanol producer.
Federal ethics rules govern employees and outside consultants and experts, called special government employees. It's not clear than an informal adviser like Icahn would be covered by them, even in a case when the advice given produced a personal benefit, according to John Wonderlich, executive director of the Sunlight Foundation, a government transparency advocate.
"It's certainly unethical, but as to whether it breaks any laws isn't clear," Wonderlich said.
Read the original story here : 'Purest Definition Of A Conflict': Icahn's $126 million Gain On Biofuel Deal Draws On Criticism
February 28, 2017
By Cindy Zimmerman
Renewable Fuels Association (RFA) president and CEO Bob Dinneen says he has been talking with a special regulatory adviser to President Trump about how they might work together on regulatory changes to the Renewable Fuel Standard (RFS), but it involves compromising on the point of obligation issue.
Dinneen issued a statement regarding a call he received from “an official with the Trump administration,” identified as Carl Icahn, who owns CVR Refining. Dinneen says he was informed that “a pending executive order would change the point of obligation from refiners to position holders at the terminal, a potentially small increase in the number of obligated parties, but one which would distribute the obligation more equitably.”
“Despite our continued opposition to the move, we were told the executive order was not negotiable,” said Dinneen. RFA just submitted comments last week opposing the proposed change in point of obligation from refiners to blenders, while one of RFA’s largest members, Valero Energy, supports it – as does CVR Refining.
Dinneen would rather relent on the point of obligation to get a waiver allowing higher ethanol blends to be sold year round. “Our top priority this year is to ensure consumers have year-round access to E15 (15% ethanol) and we would like to Trump administration to help cut through the red tape on this unnecessary regulation,” he said. “We will continue to do everything we can to ensure consumers have access to the lowest cost, cleanest, highest octane source of fuel in the world, and to ensure a strong RFS is maintained.”
Press reports indicate this was the deal that was struck between RFA and Ichan, which was denounced by ethanol trade group Growth Energy. “Neither RFA nor Carl Icahn have the authority to strike a ‘deal.’ Mr. Icahn does not work for the U.S. government; he owns CVR Refining, which would profit directly from this change,” said Emily Skor, CEO of Growth Energy.
American Coalition for Ethanol Executive Vice President Brian Jennings also commented. “Despite rumors, this is not a done deal and not a take-it-or-leave-it scenario. Changing the RFS point of obligation and providing RVP relief will both require EPA rulemaking and public comments,” said Jennings. “The only clear winners in a deal to move the RFS point of obligation would be Carl Icahn and oil refiners like Valero.”
Read the original story: RFA Talking Ethanol Regs with Trump Adviser
New Economic Analysis Exposes Problems with Changing the Renewable Fuel Standard Point of Obligation
February 22, 2017
Press Release
Growth Energy today released an expert economic analysis that identifies numerous problems associated with changing the Renewable Fuel Standard (RFS) point of obligation. Growth Energy strongly supports EPA’s proposed denial to move the point of obligation.
“Changing the point of obligation would have a disastrous impact on the industry, retailers, and consumers,” Growth Energy CEO Emily Skor said.
“Shifting the financial and administrative burden to retailers and fuel distributors would result in a logistical and regulatory nightmare. Hundreds – if not thousands – of new parties would suddenly be required to demonstrate compliance. This would require new rules, new staff, new infrastructure, and years of recalibrating a program that already works, not to mention potential delays with annual renewable volume obligations (RVO)s. Changing the point of obligation would dramatically expand the number of new obligated parties including fuel marketers, convenience stores, truck stops, trucking companies, railroads, and even consumer service companies like FedEx and UPS.”
The analysis, conducted by Edgeworth Economics, is part of the association’s detailed comments, to the U.S. Environmental Protection Agency (EPA), which were filed today. Growth Energy’s comments and the analysis detail how a shift in point of obligation would be detrimental to growing the renewable fuels marketplace and would ultimately undermine an energy policy that has cut oil imports and reduced transportation-related emissions. A change to the point of obligation would limit consumer fueling options and would increase costs for consumers by stifling competition among market participants.
The analysis’ key findings include the following:
Shifting the point of obligation would have no impact on the incentives to invest in biofuel infrastructure or increase blending of renewable fuels.
Renewable Identification Number (RIN) values represent neither windfalls for blenders nor out-of-pocket costs for refiners.
RIN markets are, for the most part, operating efficiently and competitively; moreover, a change in the point of obligation would have no beneficial impact on those conditions.
Changing the point of obligation would have no impact on fraud in the RIN markets.
The petitioners’ proposal would result in an increase in the number of obligated parties and an increase in the overall administrative burden of the RFS.
“The RFS point of obligation must be preserved to ensure that fuel retailers continue to have the incentive to make the investments necessary to deliver renewable fuels that provide consumers with better, cleaner, and more affordable choices at the pump,” Skor added.
Read the original release: New Economic Analysis Exposes Problems with Changing the Renewable Fuel Standard Point of Obligation