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With the mid-term elections finally behind us, 2019 is set to usher in a new political landscape in both St Paul and Washington, D.C.  For us in the ethanol industry, it will be an opportunity to work with leaders and lawmakers who actually understand the dynamics in rural and urban communities and the role biofuels can play in solving a host of problems.

From the Governor to the state legislature to Minnesota’s two senators and members of congress in Washington, we now have fresh leadership that is more open and willing to work with us to further lower the artificial barriers to the ethanol industry. We are eager to work with these leaders and lawmakers to find pragmatic solutions to tangible problems and thereby unleash the pent-up production and demand potential for ethanol in Minnesota.

We believe Governor-elect Tim Walz will provide a fresh perspective to Minnesota’s ethanol industry.  Over the last few years, we have worked with then Rep. Walz and his team to seek solutions to the challenges confronting our industry.  Despite the many obstacles, Walz, along with Rep. Peterson and Rep. Emmer and other supporters of the Biofuel Caucus, have led efforts to push back on the oil industry and protect the RFS.

Walz’ experience on the RFS at the federal level also opens the possibility of an energizing approach for the ethanol industry in Minnesota. Indeed, over the years, he met many of the women and men who run our ethanol plants so he has firsthand knowledge about the barriers standing between ethanol producers and air permits and greater access to E15.

With regards to Minnesota’s Petroleum Replacement Promotion Law (which calls for at least 30 percent biofuels in transportation fuel by 2025), Walz told us, prior to the elections, that he plans to work with his commissioners of agriculture, pollution control and commerce to achieve this goal. We look forward to working with him on this, among a significant host of issues, as well as a Plan B for an RVP waiver for E15.

In the Minnesota House, there will be some new and returning representatives in leadership positions.  These members, from both parties, have also expressed strong support to meeting the goals of the Minnesota Petroleum Replacement Law as well as funding for E15 storage and dispensing systems.

On the federal level, we can expect a new beginning for the Biofuels Caucus with several new members of the Minnesota Congressional Delegation. These new members went on-the-record in some depth to express their support for the RFS, finding a permanent fix for the RVP problem and funding for additional biofuel infrastructure. It is important to note that some of these new members are from largely urban districts in the Twin Cities metro. In the past, representatives from these districts have not always been supportive of our industry.  

All of this points to new possibilities for Minnesota’s ethanol industry at both the state and federal level in 2019. The new alignment of leadership at the Minnesota legislature and in the Minnesota Congressional Delegation presents us with opportunities to unlock the potential of E15 and higher ethanol blends to provide even greater energy independence, economic and environmental benefits to Minnesota.  

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In 2019, all eyes will be on the EPA and its planned rulemaking in February to extend a Reid Vapor Pressure (RVP) waiver to E15 and thus enable E15 to be sold during the summer months. It’s no secret that the RVP ban on E15 in the summer has been a major impediment on the growth of E15 in Minnesota and the rest of the country. While the EPA’s shorter-than-usual timeframe for the rulemaking process raises some concerns, we remain cautiously optimistic that RVP parity for E15 will be achieved in 2019. As such, we have already begun planning advertising and promotional activities in the summer of 2019 to boost E15 usage in Minnesota during the traditionally high driving season.

On the legislative front, there will be several new opportunities for Minnesota’s ethanol industry in 2019. During the run-up to the recently concluded mid-term elections, we communicated with both state and federal candidates on issues concerning Minnesota’s ethanol industry. We are pleased to note that many of the incoming federal and state lawmakers, as well as Governor-elect Tim Walz, have voiced strong support for increasing the amount of ethanol in Minnesota’s transportation fuel and the need for funding for more E15 and E85 stations in the state. 

It should also be noted that several new members of Minnesota’s delegation in congress that represent districts in the Twin Cities metro have gone on record , in some depth, to express their support for the RFS, finding a permanent fix for the RVP problem and biofuel infrastructure funding. 

This new dynamic means the Congressional Biofuel Caucus can grow with strong support from Minnesota’s second, third and fifth congressional districts.

In the 2019 Minnesota legislative session specifically, we will work on expanding the availability of E15. Even with 315 E15 fuel retailers in Minnesota, just under 10 percent of the total fuel supply chain network in the state is equipped to offer E15 and higher ethanol blends. Our aim is to push closer to 20 percent market penetration so that at least 660 fuel retailers can offer E15 to motorists. But some fuel retailers will need some financial assistance to modify their fuel storage and dispensing systems and we intend to address this issue in the 2019 legislative session. 

We will also work to make further refinements to the air permitting process to decrease the number of days it takes for the issuance of permits to ethanol producers from approximately 730 to 150 or fewer days. At the time of this writing, we are preparing for a face-to-face meeting with the commissioner of the MPCA and the outcome of this meeting will determine whether additional action needs to be taken during the 2019 legislative session.

We will also work to support efforts aimed at creating a tax stimulus for a modern distributed generation system that makes lower carbon intensive electricity available to ethanol producers. Such systems could include combined heat and power and expander generators. These systems decrease the transmission line loss and have the potential to move from coal-fired generating systems to those operated by less carbon-intensive natural gas.

In closing, for 2019, we will continue to focus on lowering tangible barriers to ethanol producers and increase ethanol consumption in Minnesota. We will also continue our efforts to learn more about two new vehicle concepts - Toyota’s hybrid flex fuel and Nissan’s solid oxide fuel cell - that have the potential to present new opportunities for the ethanol industry in the future. 

ED Column Web

With 1,125 bills introduced thus far in the 2019 Minnesota Legislative session, it can be easy for issues to get lost in the process of making laws. This is where MN Biofuels comes in to do its advocacy work by providing legislative leaders the tools to focus on issues that are important to the ethanol industry and the state.

To keep the focus on lowering barriers for biofuel producers and providing the growing number of motorists greater access to biofuels, we have opened up key discussions with the Governor and some of his cabinet members and state lawmakers. Specifically, our focus this 2019 legislative session will be on advancing four initiatives.

Our first initiative is about securing additional funding for biofuel infrastructure. We are working with legislative leaders to find a pathway to provide financial assistance to some 150 retailers who are keen on offering E15 and higher blends of ethanol.

Our second initiative recognizes the challenges that come with the EPA's approach to providing RVP relief for E15 by this summer. While we remain optimistic that the agency will promulgate some rule, given the recent government shutdown and possibly another one on the horizon, we are working on a backup plan should the EPA fail to lift the RVP ban on E15 this summer.  Such a plan will require close work with the Governor and other stakeholders.

Our third initiative goes to the potential use of E15 and higher ethanol blends by state, county and municipal fleet vehicles. Our focus will be on the Department of Administration and fully using state procurement contracts to make E15 readily available for the aforementioned fleet vehicles. This would be another incremental step in the process of making E15 the new regular fuel across Minneosta.

Lastly, we are working with lawmakers and the Governor to make Minnesota a new and refreshed leader when it comes to biofuels. Toward this end, we are exploring a fleet testing program concept and how we might engage with various state agencies and the University of Minnesota to either add to existing research on 30 percent and 40 percent blends of ethanol or blaze our own trail.

It should be noted that the bedrock principles for our initiatives are found in two important Minnesota laws. One law calls for displacing petroleum with at least 30 percent volume ethanol by 2025 (Governor Walz has signaled strong interest in fulling the aims of the Petroleum Replacement Promotion law). The other law calls for cutting greenhouse gas emissions to a level at least 30 percent below 2005 levels by 2025.  Given that ethanol reduces greenhouse gas emission in the transportation sector, ethanol is an ideal tool by which to satisfy this policy objective.  

Given the receptivity to the concepts presented by MN Biofuels, we expect the 2019 legislative session to be fast paced and filled with potential to move the ethanol industry closer to fulfilling the Minnesota public policy objectives and more fully and effectively reducing greenhouse gas emissions.  

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Earlier this month the Minnesota Bio-Fuels Association, along with the American Coalition for Ethanol, the Renewable Fuels Association and 29 other stakeholders, lent its name to the white paper, “A Clean Fuels Policy for the Midwest.” For more than nine months we participated in stakeholder discussions that developed the white paper, which lays the foundation for a clean fuels policy that could expand ethanol usage in Minnesota’s transportation sector. 

Simply put, a clean fuels program is a performance-based incentive program that supports the usage of fuels with a lower lifecycle carbon intensity (CI) such as ethanol. Moreover, this program is designed to contribute to existing goals at the state level such as the Minnesota Petroleum Replacement Promotion Law, which calls for ethanol to comprise 30 percent of all transportation fuel in Minnesota by 2025.

While we are unlikely to meet that target in the next five years, a Minnesota Clean Fuels Policy could set us on the right path to achieving that goal and more. This is because when there is an economic value on carbon, the right incentives are placed for more ethanol usage in Minnesota’s transportation sector.

Here’s how the policy would work:  a governing body is established and a price is set for a ton of carbon (greenhouse gas emissions). As farmers and ethanol producers continue to improve their respective CI scores, so does ethanol’s CI score improve. The standards set through the policy and ethanol’s low CI then provides the necessary incentive for the petroleum industry to use more ethanol.

The policy could also lead to the usage of mid-level blends of ethanol as well as the introduction of new vehicles such as a plug-in flex fuel hybrid because auto manufacturers would also be provided an incentive.

And just like it would for the Minnesota Petroleum Replacement Promotion Law, a Minnesota Clean Fuels Policy would contribute to achieving the Walz Administration’s greenhouse gas emissions goal in the transportation sector.

Last year, the Minnesota Department of Transportation released a report that said a push for higher blends of ethanol and the necessary storage and dispensing infrastructure is a critical component in decarbonizing the state’s transportation sector.

The need for rapid GHG reductions underscores the need for more ethanol in the global transportation system. Over here in Minnesota, ethanol’s GHG savings are widely known but there hasn’t been an official policy that recognizes ethanol’s improving CI scores as a result of sustainable farming practices and increased efficiencies at ethanol plants.

Furthermore, a properly crafted Clean Fuels Policy for Minnesota holds the potential to further transform production efficiencies from the farm to ethanol plants to end-users and in turn, replace significant volumes of carbon-intensive petroleum.  If we get this right, the beneficiaries will be farmers (and by extension rural communities), ethanol producers and present and future generations of Minnesotans.

Covid 19 Message CC

The Covid-19 pandemic has upended much of life as we knew it a few weeks ago. First, and foremost, we extend our best wishes to all of you as you work to protect the safety and health of your teams and family members. And to the ethanol producers that have stepped up to the current challenge by managing multiple priorities while making renewable transportation fuel, animal feed and ingredients for sanitizers, we thank you.

In an effort to slow the spread of Covid-19, Gov. Tim Walz has issued a shelter-in-place order in Minnesota for two weeks. During this period, there will be a big decline in the sale of transportation fuel which in turn will adversely impact Minnesota’s ethanol industry. 

We will continue to engage with members of Minnesota’s Congressional Delegation, the Minnesota Department of Agriculture and state lawmakers by providing updates on the present and anticipated challenges facing our ethanol industry and offering some suggestions for ways to keep our ethanol industry viable. 

One suggestion is a funding package to keep ethanol plants open. Rural Minnesota needs the jobs created and provided by ethanol plants and retaining those jobs is our top priority. We are also looking at various funding mechanisms to cover some of the costs associated with the procurement of corn. 

Finally, on the advocacy front, we have been working with a variety of state agencies and the Governor's office to find certain regulatory flexibility in response to the need for sanitizers and other valuable ethanol co-products.

We are also working with E15 fuel retailers in the state to shift an even greater share of their existing and foreseeable consumer demand to E15. We have also launched advertising campaigns encouraging consumers in the Twin Cities who have to travel during this period to support Minnesota’s local economy by fueling up with E15. 

To all of our friends and supporters, we wish you the very best during this challenging time and extend our sincerest gratitude to all front line healthcare workers. 

ED Column Web

Since the onset of the COVID-19 pandemic, Minnesota’s ethanol industry, like the rest of the nation, has and continues to face an unprecedented crisis. Some plants have reduced production by as much as 50 percent while others have temporarily idled production. This, in turn, has adversely affected the countless number of industries that work closely with Minnesota’s ethanol industry. 

Over here at the Minnesota Bio-Fuels Association, we have been working closely with our state government and congressional delegation to find ways to keep our industry afloat and position it toward an upward trajectory when this crisis ends.

Earlier this month, as demand for sanitizing agents skyrocketed, the FDA relaxed its rules concerning the use of industrial alcohol from ethanol plants for sanitizer. Back here in Minnesota, we worked closely with the Minnesota Pollution Control Agency, the Departments of Agriculture and Public Safety - Alcohol and Gambling Division and the Department of Employment and Economic Development (DEED) to provide our ethanol producers with the necessary guidelines to produce 190 proof and 200 proof ethanol for hand sanitizer or surface sanitizer. Since then, several ethanol producers in Minnesota have diversified their operations to produce ethanol for in-demand sanitizer products. 

Other opportunities for diversification for the ethanol industry include meeting the growing demand for CO2 from beverage makers and the livestock industry. We have engaged several engineering firms to explore some options for the rapid deployment of systems to capture CO2 during the ethanol production process. We hope we’ll be able to share some developments in this area with you in the very near future.

Still, it is important to note that these diversification opportunities are not nearly enough to replace the gallons of ethanol that have been lost from this crisis. As such, we have been working with our congressional delegation, the Walz Administration and state lawmakers for some aid that could keep our ethanol industry afloat. 

One of our proposals includes cash payments for bushels of corn that were processed by an ethanol plant over a certain date range based on tracked and recorded data. These cash payments would help ethanol plants remain financially viable for a few months so that they will be ready to resume full production when this crisis begins to dissipate. Additionally, we have been working with DEED to provide our ethanol producers with up-to-date information about the federal Paycheck Protection Program (PPP) and other loan options that are part of the CARES Act to help them retain their teams.

For the medium and long-term viability of the ethanol industry, we have long advocated to our congressional delegation on the need for funding for fuel infrastructure that can dispense E15 and other higher blends of ethanol. We are pleased to note that on April 28, Minnesota’s Rep. Angie Craig introduced the bipartisan Clean Fuels Deployment Act of 2020 which authorizes $500 million over five years to help retailers offer higher blends of ethanol. This initiative will help increase the availability and use of E15 and other blends and provide rural Minnesota with some much needed economic relief while reducing harmful greenhouse gas emissions.

In the coming days and weeks, we hope we will be able to share with you more positive developments for our industry. There is a light at the end of the COVID-19 tunnel and it is aimed at a new and positive upward trajectory for our renewable fuels industry.

ED Column Web

When the US Senate returns from its one-week Memorial Day break, it will begin discussions for a fifth coronavirus relief bill.

With unemployment at record highs and the economy contracting at unseen rates, there is little time for discussions. Relief is needed now and this time around, the Senate should follow the lead of its colleagues in the House and include the ethanol industry in any aid package.

More than 130 ethanol plants across the nation have partially or fully shutdown operations as a result of the COVID-19 pandemic which has led to a plunge in fuel demand. In Minnesota, the traffic volume in the Twin Cities metro area was 67.1 percent below a baseline for 2016-2019. 

Since then, as the state economy has slowly reopened, the traffic volume has increased. But as of May 20, it was still 15.5 percent lower than the baseline. As such, the ethanol industry in Minnesota is still in serious distress, putting in jeopardy the 18,000 jobs it supports. 

The Senate does not need to look too hard to find a way to help the ethanol industry. 

Two of its members, Sen. Chuck Grassley and Sen. Amy Klobuchar, introduced the Renewable Fuel Feedstock Reimbursement Act last week. 

Advocates for the ethanol industry like MN Biofuels have in the past month suggested to both Sen. Klobuchar and Sen. Tina Smith that cash payments for bushels of corn processed by an ethanol plant during a specific timeframe would help keep them financially viable for a few months. 

This bill does that. 

Under the act, the USDA will use the Commodity Credit Corporation to reimburse ethanol producers 75 percent of the price of feedstock purchases made from Jan 1, 2020 to March 31, 2020. 

The Senate could also take a page out of the HEROES Act that was recently passed by Congress. 

The HEROES Act includes the Renewable Fuel Reimbursement Program which would require the USDA to make payments to renewable fuel or advanced biofuel producers that experienced unexpected market losses due to the pandemic. 

The program will pay ethanol producers 45 cents per gallon of ethanol produced from Jan 1, 2020 to May 1, 2020. Minnesota’s Rep. Collin Peterson and Rep. Angie Craig were both instrumental in including aid for the ethanol industry in the HEROES Act. 

The ethanol industry, and to a larger extent the agriculture industry, cannot wait for the Senate to drag its feet during the deliberations for the upcoming relief package. 

Both the Renewable Fuel Feedstock Reimbursement Act and the Renewable Fuel Reimbursement Program would significantly help the ethanol industry. Either one would provide the industry with a much-needed shot in the arm. 

Members of the Senate who like talking about homegrown industries and American jobs should act fast to save America’s ethanol industry. 

Unlike those senators, the industry doesn’t have the luxury of taking a one-week Memorial Day break.

ED Column Web

The worst may be over for the ethanol industry as production in Minnesota and other parts of the country begin to approach pre-pandemic numbers. But it would be a mistake for anyone to believe the industry is back on a sound footing.

When traffic volumes plunged in April and May, ethanol production throughout the country fell to unforeseen levels with many plants idling production while others reduced output by 50 percent. 

That is why it is imperative for the Senate to include the financial aid package for the ethanol industry that was introduced by Sen. Chuck Grassley and Sen. Amy Klobuchar in the next COVID-19 relief bill. 

While this aid package is much needed for the short-term to stabilize the industry in this turbulent time, there are several measures that can be adopted at the state level to rebuild and regrow the ethanol industry for the medium and long-term. 

Moreover, these measures would grow the economy, retain jobs in the ethanol industry and significantly cut greenhouse gas (GHG) emissions in the transportation sector.

One way is to boost the use of E15. State vehicle fleets should be able to have access to, and use, E15 and E85. As more fleets use E15 and E85, these renewable fuels will gain even greater acceptance and become the new standards.

The second measure is focused on the use mid-level blends in non-flex fuel vehicles. The Walz Administration could set up a task force to identify the next steps to obtain data required by the EPA to certify a mid-level blend fuel for use in non-flex fuel vehicles and obtain certification. 

Biofuel infrastructure should also be a high priority to give Minnesotans greater access to renewable fuels. This can be done through creative funding options to help fuel retailers transition to E15 and higher blends. With 370 fuel retailers in the state already offering E15, we should focus on bringing another 290 retailers online.  

With 660 fuel retailers offering E15 and higher blends, we will reach critical mass and help E15 become the new standard in Minnesota. 

Another medium to longer term project would be a clean fuels policy. If such a policy were properly designed to account for the GHG value of ethanol and technology improvements made at ethanol plants, the policy would amplify the benefits of ethanol compared to petroleum. This could provide a huge catalyst for the petroleum industry in Minnesota to use E15 as the new regular fuel. 

Another measure would be to use the Clean Cars Minnesota rulemaking process to stimulate automakers to offer a variety of Low Emission Vehicles (LEVs) powered with ethanol.  

This vehicle rule gives us an opportunity to advocate for flex fuel, hybrid flex fuel and plug-in hybrid flex fuel as well as evolving technologies that can use E100. Success with this initiative will ensure future vehicles are compatible with E15 and higher blends.

All these measures will serve to fulfill a vision wherein Minnesota’s transportation sector is powered with increasing amounts of a homegrown renewable fuel and the energy dollars now used to import petroleum are kept in Minnesota, and the GHG emissions from the transportation sector are more rapidly reduced.