Duluth News Tribune

January 21, 2017

By Don Davis and Maureen McMullen

ST. PAUL — Minnesota's plant-based fuel industries of ethanol and biodiesel are success stories, but their future depends on the new Trump administration.

"We are a little nervous," Assistant Commissioner Andrea Vaubel of the Minnesota Department of Agriculture said, not knowing the future U.S. agriculture secretary's biofuels attitude.

Vaubel has reason to be nervous. Leading up to Trump's Friday inauguration, based on reporting from national media with access to his inner circle.

Minnesota officials say they know little about former Georgia Gov. Sonny Perdue, whom Trump nominated as U.S. secretary of agriculture, about his stance on ethanol.

Two other Cabinet nominees who would be involved in biofuel decisions have anti-biofuel histories.

The questions come at a time when the Minnesota biofuels industry is mature and doing well.

Tim Rudnicki, executive director of the Minnesota Biofuels Association, described biofuel as "apolitical."

"It’s about people, the environment and the economy and really about wins for everybody," he said.

The biofuel industry pumps $6 billion into the state economy annually.

The state was the first to require that all gasoline include 10 percent corn-based ethanol, helping spur the construction of 20 ethanol plants, providing corn farmers a lucrative new market. More than a billion gallons of ethanol come out of the plants each year.

Minnesota has the country's most pumps for E85, a blend of 85 percent ethanol and 15 percent gasoline that can be used in "flex fuel" capable vehicles.

Minnesota legislators voted to require 2 percent biodiesel — made from soybeans, animal fat, used cooking oil and other oil products — in most diesel sold in Minnesota in 2002. That rose to 5 percent four years later and 10 percent in 2012.

Three state commissioners must decide later this year if 20 percent biodiesel will be required May 1, 2018.

Chairman Paul Anderson, R-Starbuck, of the state House Agriculture Policy Committee said that early problems with biodiesel gelling and causing other problems, mostly in cold weather, largely have disappeared.

"We did go through some growing pains," Anderson said, adding that "I have not heard many complaints the last few years."

As to ethanol, Anderson said, one of the major factors people should know is "has helped clean up the air. We sometimes forget that."

A 2015 study from the University of Illinois in Chicago determined the use of E15, a gasoline mixture with 15 percent ethanol, would eliminate 385,000 metric tons of carbon dioxide each year. This, according to U.S. Environmental Protection Agency calculations, would have the same result of eliminating more than 75,000 passenger vehicles from Minnesota's roads.

Most biofuel programs operate at the mercy of the federal government
In many cases, federal agencies must approve higher biofuel use. In other situations, the state uses federal money to help support biofuels.

When Trump campaigned in Iowa, the country's top ethanol producer, he usually delivered the same line: "I love ethanol."

At one Iowa stop, he added: "You’re going to get a really fair shake from me."

However, he provided few details and his inner circle raises questions about what his intentions are with ethanol.

"Billionaire Carl Icahn, a special adviser to Donald Trump and a skeptic of the U.S. ethanol mandate, said there are others on the president-elect’s team who have even deeper criticisms of the program," Bloomberg News reported in late December.

Many of Trump's top advisors, including Icahn, are involved in petroleum production, and may see biofuels as competition.

Oklahoma Attorney General Scott Pruitt is Trump's pick to head the Environmental Protection Agency, key to deciding the percentage of biofuel that goes into fuel. He is described as an ethanol opponent, but some Midwesterners have been assured Trump told him to back ethanol.

A December survey of 3,000 Midwestern Trump voters found that 88 percent believe ethanol is important to create American jobs, and 85 percent believe it is important for U.S. energy security.

Read the original story: Successful Minnesota Biofuels Industry Awaits Trump

Feedstuffs

January 16, 2017

Exports of U.S. ethanol are off to a strong start for the first quarter of the 2016-17 marketing year and are at their highest levels during that time frame over the past five years, according to data recently released by the U.S. Department of Agriculture’s Global Agricultural Trade System (GATS).

Exports totaled 353.2 million gal. for the months of September, October and November 2016, the first quarter of the 2016-17 marketing year.

Brazil, Canada and China were the top three customers for U.S. ethanol, respectively. India, Peru, South Korea and Mexico were the next largest markets for U.S. ethanol exports, totaling 62.4 million gal. over the same time period. According to the U.S. Grains Council (USGC), these top seven markets accounted for 88% of U.S. ethanol exports in the first quarter. As such, USGC said it, as well as industry partners, are currently or will be working these countries to further develop demand for U.S. ethanol.

Exports of U.S. ethanol to Brazil increased substantially to 111.6 million gal. in the first three months of the current marketing year, representing nearly a third of total U.S. ethanol exports -- the second highest volume of U.S. ethanol exports to that country over the last decade.

“Enforceable government ethanol mandates are driving the increases in Brazilian imports of U.S. ethanol, as Brazilian sugarcane has been diverted to sugar production to capture a price premium,” USGC noted. “To enforce its mandates, Brazil ramped up imports of price-competitive U.S. ethanol, highlighting the important role of trade in meeting ethanol mandates globally.”

U.S. ethanol exports to Canada totaled 87.8 million gal. during the first quarter of the 2016-17 marketing year. USGC said this is the highest level of U.S. ethanol imports by Canada during this time frame, with a 26% increase in imports over the first quarter of marketing year 2015-16.

USGC said it will continue working to increase ethanol demand. In fact, the council and its partners in global ethanol market development -- Growth Energy, the Renewable Fuels Assn. and USDA's Foreign Agricultural Service -- recently conducted technical workshops in Asia and Latin America describing the positive environmental and public health benefits of increased ethanol use. USGC also uses trade missions to target countries, trade teams bringing stakeholders to the U.S. and industry working groups to support the development of the global ethanol market.

Read the original story: U.S. Ethanol Exports up 85% During First Quarter

Ethanol Producer Magazine

January 13, 2017

By Erin Voegele

The U.S. Energy Information Administration recently released the January edition of its Short-Term Energy Outlook, predicting ethanol production will average approximately 1 million barrels per day in 2017, increasing slightly to 1.02 million gallons per day in 2018. In 2016, production averaged 1 million barrels per day. In its December STEO, the EIA predicted ethanol production would average only 990,000 barrels per day in 2016, increasing to 1 million barrels per day in 2017. 

On a quarterly basis, ethanol production is expected to average 1 million barrels per day during the first and second quarters of 2017, increasing to 1.02 million barrels per day during the third quarter, and falling to 1 million barrels per day in the fourth quarter. In 2018, ethanol production is expected to be at 1.03 million barrels per day during the first quarter, falling to 1.02 million barrels per day during the second and third quarters, and falling to 990,000 barrels per day during the fourth quarter. 

Ethanol consumption averaged approximately 940,000 barrels per day last year, and is expected to be maintained at that level in 2017. In 2018, ethanol consumption is expected to increase to 950,000 barrels per day. According to the EIA, this level of consumption results in the ethanol share of the total gasoline pool averaging approximately 10 percent in both 2017 and 2018. Only marginal increases in higher-level ethanol blends are assumed to occur during the STEO forecast period.

Biodiesel production averaged 99,000 barrels per day in 2016 and is expected to increase to an average of 104,000 barrels per day this year and 111,000 barrels per day next year. Net imports of biomass-based diesel are expected to increase from 47,000 barrels per day in 2016 to 51,000 barrels per day in 2017 and 57,000 barrels per day in 2018.

Within the STEO, the EIA predicts U.S. regular gasoline retail prices will increase from an average of $2.25 per gallon in December to $2.31 per gallon during the first quarter of 2017. Overall, gasoline prices are forecast to average $2.38 per gallon this year, increasing to $2.41 per gallon in 2018.

The EIA’s most recently weekly ethanol production data shows a new record was set the week ending Jan. 6, with production reaching an average of 1.049 million barrels per day. The most recent monthly import data shows the U.S. imported only 31,000 barrels of ethanol in September, all from Brazil. In October, the U.S. exported nearly 3.14 million barrels of ethanol, with top export destinations of Brazil, Canada and India.

Read the original story: EIA: Ethanol Production Expected to Increase Slightly in 2018

Biomass Magazine

January 10, 2017

By Erin Voegele

On Jan. 9, Gevo Inc. published an update describing fourth quarter operations at its Luverne, Minnesota, biorefinery. The U.S. EPA also recently released a notice approving a fuel pathway for the plant regarding the production of butanol from corn and sorghum.

In its update, Gevo indicated the Luverne plant produced approximately 190,000 gallons of isobutanol during the final three months of 2016, achieving the highest quarterly production level in the company’s history. Based on results measured across the final six weeks of the quarter, Gevo said it demonstrated an isobutanol production capacity of approximately 1.5 million gallons per year. For the full year 2016, isobutanol production reached approximately 440,000 gallons.

According to Gevo, it also produced a record number of batches during the quarter since switching the plant to the side-by-side model of production, achieving its targeted back-to-back five-day turnaround batch times over much of the three-month period. In addition to butanol, 2.8 million gallons of ethanol was produced during the fourth quarter.

Gevo also noted it surpassed production cost targets for butanol and demonstrated variable costs of production of less than the targeted $3:00-3:50 per gallon.

In its statement, Gevo announced the Luverne plant was taken offline on Dec. 21 to perform unplanned necessary repairs and maintenance on certain components of the plant’s regenerative thermal oxidizer (RTO). As of Jan. 9, the plant remained offline, as the company said it decided to make further upgrades to the RTO, which was installed approximately 10 years ago. The facility is expected to be back online within the next two weeks.

Also in early January, the EPA posted a notice to its website announcing the agency has approved a fuel pathway filed by Gevo for the production of butanol from corn starch and grain sorghum. The pathway approval applies to both D5 advanced biofuel and D6 renewable fuel renewable identification numbers (RINs).

Within the approval, the EPA states that Gevo’s butanol produced from corn starch feedstocks appears to already qualify under an existing pathway for the production of D6 RINs, assuming the company satisfies the pathway specifications and other requirements specified in the Clean Air Act and regulations. The EPA also said it has determined that butanol produced by the Luverne facility from grain sorghum feedstock can also qualify for D-code 6 RINs, and butanol produced by the Luverne facility from corn starch and grain sorghum feedstock can qualify for D-code 5 RINs if the fuel meets the conditions and certain associated regulatory provisions.

Documents published by the EPA notes corn starch butanol produced at the Luverne plant achieves a 50.3 percent lifecycle greenhouse gas (GHG) reduction when compared to baseline gasoline, while grain sorghum butanol produced at the plant achieves a 54.6 percent lifecycle GHG reduction when compared to baseline gasoline.

A full copy of the pathway approval can be downloaded from the EPA’s website.

Read the original story: Gevo Releases Operational Update, Achieves EPA Pathway Approval