Renewable Fuels Association

April 3, 2014

WASHINGTON — Bob Dinneen, President and CEO of the Renewable Fuels Association (RFA), today sent a list of questions regarding the “abject failure of the rail system to adequately address the needs of all of its customers,” to Ed Hamberger, President and CEO of the Association of American Railroads (AAR).

U.S. ethanol is the lowest price liquid transportation in the world, saving American consumers between $0.50 and $1.50 per gallon. Dinneen writes, “Over the past several weeks, however, the sheer chaos that is today’s rail system is denying consumers that price relief by driving up the transportation cost for and impacting the supply of ethanol and other commodities. Nothing has changed with regard to ethanol production costs or efficiencies. The only change has been abject failure of the rail system to adequately address the needs of all its customers. The U.S. economy is suffering as a consequence.”

The letter spells out in clear detail the limiting impact the rail situation is having on the ethanol industry. “In response to increasing demand, the ethanol industry was producing at an average rate of 949,000 barrels per day (bpd) in December 2013. But disarray on the rail system in the first quarter of 2014 has forced ethanol producers to significantly curtail output.

By the first week of March 2014, ethanol output had fallen to 869,000 bpd, as producers were forced to slow down. Onsite storage tanks were brimming full and, in many cases, the railcars and/or locomotives needed to ship ethanol were simply not available. As a result, ethanol stocks in key regions have been depleted and prices have increased. All of this is due to the turmoil on the rails—dislocated railcars and locomotives, increased terminal dwell times, slower train speeds, an insufficient number of crews, and a shortage of spare railcars and locomotives.”

Dinneen exposes the excuse of winter weather, and drives straight to the heart of the issue, “The railroads have attributed this lackluster performance and inefficiency to winter weather. But they seem to have forgotten that winter comes every year!... Indeed, a more plausible explanation for the severity of the current epidemic is the explosive growth in railcar shipments of Bakken and Canadian crude oil.

"The surge in crude oil production from fracking has reshuffled the existing fleet of railcars and locomotives, pressured lease rates, changed normal rail traffic patterns, and generally exerted significant stress on the rail system. According to AAR, crude oil shipments have increased from 9,344 carloads in 2008 to 434,032 carloads in 2013.In addition, AAR data show rail shipments of industrial sand nearly tripled between 2008 and 2013, stating, ‘…frac sand is almost certainly the primary driver behind the increased industrial sand movements on railroads over the past few years.’

"It seems absurd to suggest, as some have, that the efficiency of the rail system has been unaffected by the 4545% increase in crude oil shipments and the 170% increase in sand shipments since 2008.”

In an effort to better understand the causes, extent, and strategies for resolution of the current situation, Dinneen asks AAR to answer the following questions:

• What role has the explosive growth in crude oil (and frac sand) shipments played in current rail inefficiencies?

• What steps are being taken in the short term by the rail industry to alleviate the current logjam on the rail system?

• When do you expect service on each of the Class I railroads to return to more normal operating conditions?

• How can you assure the ethanol industry—and other rail-reliant industries—that crude oil shipments are not being prioritized over shipments of other goods and commodities?

• Will average train speeds recover to historically normal levels, or do you expect slower speeds to be the “new normal” due to the increase in crude oil shipments?

• What efforts are being made to educate the public about the impact of the current rail situation on the U.S. economy and prices for individual consumer goods?

• As a longtime customer of the railroads, what can the ethanol industry do to assist in your industry’s efforts to ensure similar situations are avoided in the future?

Read the letter here

Read the original story here : Oil-Induced Rail Chaos Driving Up Consumer Costs For Gasoline And Goods

Renewable Fuels America

April 2, 2014

WASHINGTON — Today’s editions of the New York Times and Politico have published a good-humored, but factual takedown of Big Oil’s false, hypocritical attacks against clean, renewable ethanol.

The full page ad, which is published in Politico and all DC editions of the New York Times, is an open letter to Jack Gerard, President of the American Petroleum Institute. It is signed jointly by the Renewable Fuels Association’s Bob Dinneen and Growth Energy’s Tom Buis.

Dinneen and Buis write, “Despite the millions of dollars your industry has spent on bogus TV ads, there hasn’t been a single reported case of engine damage from ethanol blended fuels like E15. But last week, Exxon admitted selling customers in Louisiana more than 5 million gallons of oil-based gasoline that was so bad that it’s been stopping cars dead in their tracks. In fact, one auto shop reported 40 or 50 customers who had trouble starting their engines as a result of Exxon’s contaminated gas. That’s 40 or 50 more cases of engine problems than have been reported in the entire country from E15, and that’s just one shop in Baton Rouge!”

Going directly at the current API boat ads, the open letter continues, “While your ads are misleading people about the impact of ethanol on marine engines, boats in Houston are in dry dock because of your oil spill! In fact, that one company has been fined for 77 different oil spills since 2008, which means they have averaged more than one oil spill per month for the last six years. That’s a lot of boaters impacted by oil spills, Jack.”

The open letter is summed up in one simple closing thought, “You see, Jack, the real environmental peril is oil, not renewable fuels like ethanol.”

Read the original story here : Open Letter From RFA And Growth Energy Take On API

West Central Tribune

By Tom Cherveny

March 19, 2014

Montevideo - Seventh District Congressman Collin Peterson is hopeful that the Environmental Protection Agency will not reduce the nation’s Renewable Fuel Standard by as much as it has proposed.

“I think we have made some progress with the administrator,’’ said Peterson, D-Minn., after two recent meetings with EPA Director Gina McCarthy. Peterson spoke to the Chippewa County Corn and Soybean Growers on Wednesday in Montevideo.

The EPA has proposed a 10 percent or 1.4 billion-gallon reduction in the nation’s standard for 2014. It has not yet acted on it.

It would cut demand for Minnesota-made ethanol by 110 million gallons, according to the Minnesota Department of Agriculture.

Peterson said it appears that the EPA proposed the reduction to deal with a problem created by 2007 legislation. It established what he termed unrealistic targets for cellulosic ethanol and other advanced bio-fuels. It required that cellulosic and advanced biofuels comprise an ever growing share of the renewable fuels used each year.

Congress has been scaling back the targets in recognition that they cannot be achieved at this time. Peterson said he’s had a steady parade of people in his office over the last 10 years telling him that a large-scale, cellulosic ethanol plant is only six months or a year away, but it’s never happened.

“So I am very skeptical about whether cellulosic ethanol is ever going to be commercially viable, but we’ll see,’’ he said.

In the meantime, Peterson and his Minnesota colleagues have been joined by other Corn Belt lawmakers in urging the director not to harm the market for corn-based ethanol. “Long and short of it is, she seems to understand they need to leave corn ethanol alone,’’ he told the Chippewa County Corn Growers.

Peterson said he doesn’t expect any new corn ethanol plants to be built in the nation. “What we’ve got to be able to do is maintain what we’ve got. We don’t want to get in a situation where we are putting plants that are built into jeopardy.’’

He predicts the EPA will back off on its reduction, but not completely. “(We’ll) probably end up with something we can live with,’’ he said.

Read the original story here : Congressman Hopeful EPA Will Not Cut Renewable Fuels Standard By 10 Percent

Domestic Fuel

March 31, 2014

By Cindy Zimmerman

American Ethanol is once again partnering with NASCAR® for the NASCAR Race to Green™initiative now through April 25 to promote environmentally friendly biofuels.

The goal of the initiative is to highlight the accomplishments of green programs that have helped reduce the NASCAR’s carbon footprint. “This partnership with NASCAR Green truly shows the sport’s commitment to preserving our environment. Each race further proves ethanol is a reliable, high-performance fuel that has revitalized our rural communities and created more than 400,000 jobs across the country,” said Tom Buis, CEO of Growth Energy.

American Ethanol has partnered with NASCAR since 2011 to promote the use of biofuels by using Sunoco Green E15, a 15 percent ethanol blended fuel, across its three national series. American Ethanol also sponsors the Richard Childress Racing No. 3 Chevrolet SS driven by Sunoco Rookie of the Year™ contender and 2013 NASCAR Nationwide Series™ Champion Austin Dillon. I had a chance to catch up with Buis while in DC last week and this year’s American Ethanol program was one of several topics we discussed.

Read the original story here : American Ethanol On The NASCAR Green Team