In the News
Dec 13, 2016
WASHINGTON — Recent data from the U.S. Department of Energy (DOE) shows that gasoline consumed in 25 states and the District of Columbia contained more than 10.0 percent ethanol on average in 2015, demonstrating that the so-called “E10 Blend Wall” continues to crumble. The national average ethanol blend rate was 9.91 percent according to the DOE data. According to the Renewable Fuels Association (RFA), the data completely undermine legislation proposed by Reps. Bill Flores (R-Texas) and Peter Welch (D-Vt.) that suggests the gasoline market cannot withstand more than 9.7 percent ethanol content.
The data show that ethanol comprised 12.5 percent of the gasoline pool in Minnesota in 2015. Not coincidentally, ethanol flex fuels like E85 are available at roughly one out of every eight stations in the Gopher State. In Iowa, gasoline contained an average of 11.5 percent ethanol in 2015, up from 10.3 percent in 2014 and just 9.5 percent in 2013. The 2015 data is the latest available and was just published by DOE’s Energy Information Administration.
Ethanol also exceeded 10.0 percent of gasoline consumption in 2015 in coastal states like California, Oregon, New Jersey, Massachusetts, Connecticut, and even Louisiana. For the first time ever, not a single state had average ethanol content below 9.0 percent in 2015, the data show. Vermont ranked last in average ethanol concentration at 9.18 percent.
In 2014, the national average ethanol content was 9.83 percent and 22 states (plus the District of Columbia) were above 10.0 percent on average.
RFA President and CEO Bob Dinneen said the DOE data underscore that the Renewable Fuel Standard (RFS) is working as intended to drive increased use of ethanol and other biofuels. “As E15 and ethanol flex fuels like E85 have gained in popularity in recent years, the so-called blend wall has been reduced to a pile of rubble,” Dinneen said. “This data clearly shows that the RFS is delivering on its promise to expand consumer access to lower-cost, cleaner fuel options at the pump. And with EPA putting the RFS back on track in 2017, the share of renewables in our nation’s motor fuel will only continue to grow.”
Read the original story here: DOE Data: Half of United States Broke Through So-Called "Blend Wall" In 2015
Dec 9, 2016
By Anna Simet
A United Kingdom company has successfully converted a Minnesota ethanol plant into an n-butanol production facility, which is now online after two years of development.
David Anderson of Green Biologics Inc., the U.S. subsidiary of U.K.-based Green Biologics Ltd., said the plant has already made its first customer shipment and facility operations are going well so far. “We have a nice pipeline of customers lined up, and it’s pretty exciting times,” he said. “We’re going to ramp up production, and that will take from anywhere from 12 to 18 months, before it’s running at full capacity. But we’re meeting orders right now, which is always a nice thing.”
The first order was shipped out via bulk tank truck and in drums to a customer in the U.S., he said, but added that the company is working on capabilities to enable shipping to European customers as well.
The plant marks Green Biologics’s first commercial facility in the U.S., adding to its existing portfolio that includes a one-thirtieth-scale demonstration plant in Emmetsburg, Iowa, and a pilot plant in Gahanna, Ohio. Green Biologics acquired the Little Falls ethanol plant in December 2014 and renamed it Central MN Renewables LLC, taking advantage of the existing grain handling and storage facilities, fermentation assets, water treatment capabilities, and feedstock supply chain—corn—already in place. On top of that, most of the existing staff was kept in place, employees familiar with the facility, new technology and, Minnesota winters, during which Anderson said he doesn’t foresee any operational challenges. “The good news is this plant already existed as a fully functional ethanol plant, they’re [plant staff] a hearty bunch up there,” he said. “It’s the same crew, we didn’t change out a whole lot, and we have even added some head count there.”
Area growers and the state supported the project, including the Minnesota Department of Employment and Economic Development, and the Minnesota Department of Agriculture, which awarded the project $500,000 in state Next-Gen funding last year.
On future development, Anderson said the company is always looking for additional assets, but it’s possible the Little Falls site could be expanded, and fairly easily. “Rather than doing another retrofit project at a different location, we can weigh the options to determine whether it’s more effective to expand the existing asset,” he said. “The whole concept of our fermentation process says that the fermenter can produce more product than we can currently distill, so to add more capacity, it really just means add some more distillation columns to the end of the process, and it’ll give us more yield.”
Green Biologics’ advanced fermentation process can convert a wide range of feedstocks into green chemicals such as n-butanol, acetone and, through chemical synthesis, derivatives of butanol and acetone. For now, and for the foreseeable future, Anderson said, Green Biologics will focus on specialty markets. “We’ve been watching how the markets are developing—the larger, more commodity-type end-uses for n-butanol, and we decided to change our strategy and become less focused on that, and more focused on specialty applications where, under our own brand name, we put products in small bottles in retail stores,” he said.
Anderson said that to date, Green Biologics has avoided the transportation fuel market. “Once oil gets back up to a reasonable number, $100 per barrel, we might look at it again, but right now, we don’t see potential in trying to slug it out. The battlefield of renewable chemicals is littered with companies, but making a run for it.”
Read the original story here : Minnesota n-Butanol Plant Comes Online
December 7, 2016
By Representative Tim Walz
Following a bipartisan letter my colleagues and I sent on July 13 to the Environmental Protection Agency (EPA), the Obama Administration made a momentous decision affecting both US energy policy and the rural economy. On Nov. 23, the EPA released its 2017 volume obligations for transportation fuels under the Renewable Fuel Standard (RFS), and to the relief of rural America, the RFS is back on track.
After calling on the administration to aggressively expand the production of renewable fuels to levels consistent with congressional intent, the EPA reversed its initial proposal to cut RFS volumes and instead increased the 2017 target for ethanol by 200 million gallons, bringing it in line with the 15 billion gallon per year target in the RFS law. The final rule also increased the target for advanced biofuels by 280 million gallons.
I would argue that this decision, while not as high-profile as the Paris Climate Accord, is more consequential to Minnesota’s First District.
The RFS, first introduced in 2005 and expanded in 2007, is the most significant program ever established by Congress aimed at invigorating rural economies, achieving energy independence and tackling the threat of climate change.
For climate change and greenhouse gas (GHG) emissions, the equation is fairly simple: renewable transportation fuels emit less carbon than gas. Thus, at a time when the administration is clamping down on emissions and placing regulatory burdens on power plants to reign in carbon, it only made sense for the EPA to drop its misguided proposal in favor of increased renewable fuel volume obligations. The emission reductions that will result constitute another step in the right direction towards tackling the threat of climate change.
Similarly consequential is the significant economic impact of the RFS. The RFS has helped employers create thousands of jobs and jumpstarted local economies throughout the country. In the ethanol industry alone, the RFS has contributed to nearly 400,000 American jobs, bringing in more than $44 billion in economic activity. Today there are at least 211 ethanol bio-refineries across the country and new biofuel production facilities are in the works that will create even more jobs. The final 2017 RFS volumes will undoubtedly protect and expand this economic engine by spurring even more ethanol production.
Finally, the economic benefits of the RFS are significant, but equally as significant is the achievement of these benefits while at the same time lessening our dependence on foreign oil. Instead of sending our hard earned dollars out of the country to buy fossil fuels, we are drawing in investments from countries across the globe interested in supporting a renewable economic success story. In fact, since the creation of the RFS in 2005, America’s dependence on foreign oil has dropped by 45 percent. The administration’s newly minted rule will help Minnesota’s ethanol producers continue to advance American energy security.
The EPA’s final rule fosters the RFS’ three distinct and important benefits: rural economic invigoration, energy independence and reduction of GHGs. I support the Administration’s November 23 decision and, as I have persistently done so in the past, I will continue to fight for a robust RFS that maintains congressional intent to promote these benefits.
Read the original story: Reinvigorating Renewable Energy in Southern Minnesota
December 7, 2016
By Chris Lusvardi
DECATUR — Ethanol producers including Archer Daniels Midland Co. are hoping to find ways to increase usage of the product domestically and abroad.
Ethanol can continue to remain competitive, primarily because of its price advantage and benefits to air quality, Craig Willis, president of the ethanol business in ADM's corn processing business unit.
Willis spoke Tuesday during an agribusiness update seminar sponsored by Sikich held at the Decatur Conference Center & Hotel.
Having more retailers offer blends of E15 fuel is an important step, Willis said.
“We've worked several years to start the ball rolling downhill,” Willis said. “It's a domino effect as more E15 goes into the market. It affects everybody up and down the chain.”
Willis said 10 chains currently offer E15 at gas pumps in about 4,800 locations nationwide.
Exports continue to be significant as ethanol competes with other products around the world, he said.
Although gasoline prices have recently dropped and remained lower than a few years ago, Willis said it has led to more driving.
“Any growth in gas demand is more demand for ethanol,” Willis said.
The status of the ethanol industry was one of the updates related to agribusiness provided during the seminar.
The Midwest Inland Port continues to be the primary focus of local economic development efforts, said Ryan McCrady, Economic Development Corporation of Decatur and Macon County president. Marketing efforts are under way to make Decatur an attractive place for businesses to grow, he said.
The ADM intermodal ramp is at the center of those efforts, with users coming from surrounding areas including Springfield, Centralia and Peoria, McCrady said. That can lead to more job creation in Decatur as the ramp gets more use, he said.
“The benefit is it brings the costs down for everybody,” McCrady said. “Regional collaboration is the wave of the future.”
A portion of Decatur's work force, about 10,400 workers, is driving in from other counties, McCrady said.
Work force availability and quality, transportation networks and quality of life are all factors for decision makers looking to attract and retain employees, each of which McCrady said Decatur can provide.
The Midwest Inland Port and ethanol are among the big ideas and opportunities available in agriculture, said Tom Bayer, Sikich's partner in charge of agribusiness services. Bayer discussed various opportunities for tax credits, including for farmers, that can help businesses reach desired profit numbers.
“The business of farming has gotten more complicated,” Bayer said. “A lot of risk is out there.”
Commodity prices have made margins thinner, which Bayer said means farmers need to look at all opportunities.
Read the original story: Ethanol Industry Offers Agribusiness Potential
December 5, 2016
U.S. Sen. Al Franken (D-Minn.) issued the following statement after the Environmental Protection Agency (EPA) finalized a strong 2017 Renewable Fuel Standard (RFS), which dictates how much biofuel is blended into our nation's fuel supply.
Six months ago, the EPA proposed 2017 renewable fuel volume requirements that Sen. Franken said weren't good enough. Since then, he's pressed the Obama Administration to make the RFS stronger, and today, the EPA acted by improving future biofuel targets for ethanol, biodiesel, and advanced biofuels.
"The Renewable Fuel Standard creates good jobs, promotes homegrown energy, and decreases our reliance on foreign oil," said Franken, a member of the Senate Energy Committee. "So that's why earlier this year, when the EPA proposed inadequate RFS targets for 2017, I immediately fought back. I'm very pleased to see that the Obama Administration listened and that we're going to see stronger requirements for ethanol, biodiesel, and advanced biofuels. This is big news for farmers, rural businesses, and communities across Minnesota."
The RFS was created around a decade ago as a method to expand our energy portfolio by requiring that the nation's fuel supply is blended with renewable fuels like ethanol and biodiesel.
Read the original story: Franken Successfully Helps Fight to Improve RFS
December 4, 2016
By AJ Taylor
At the Homeland Security and Governmental Affairs’ Subcommittee on Regulatory Affairs and Federal Management hearing entitled “Examining Two GAO Reports Regarding the Renewable Fuel Standard,” U.S. Senator Joni Ernst (R-IA) stressed the importance of maintaining a strong Renewable Fuel Standard (RFS) to continue to grow the rural economy in Iowa, and bring consumer choice at gas pumps across the country.
As Senator Ernst noted, the RFS “really has spurred investment in domestic energy production, it’s helped grow our economy throughout the Midwest, especially in those rural areas, and it’s brought a lot of competition–needed competition—to the gas pump, and saves American consumers money and reduces reliance on foreign oil sources.”
Ernst pointed to a GAO report which illustrated that bolt-on cellulosic technology at existing plants is the most cost-effective means for generating advanced biofuels.
Specifically, the Iowa Senator highlighted a stop on her 99 county tour in Galva, Iowa, in which she explained the facility is “using corn fiber, which is a by-product of the ethanol process to create cellulosic ethanol. This is a great example of what this was originally intended to do; it was to support the expansion of conventional biofuels, as a springboard for those advanced biofuels.”
The Iowa Senator also cited her concerns over premature criticism of the RFS, “If we create further uncertainty about the future of the RFS and our commitment to biofuels, it will only serve to slow our research and investment down towards attaining those goals originally set by Congress.”
Senator Ernst’s remarks today follow her comments over the Environmental Protection Agency’s (EPA) recent release of their final RFS renewable volume obligations (RVO) for 2017 at the Congressionally-approved level of 15 billion gallons of conventional biofuel.
Read the original story: Ernst Stresses Importance of Strong RFS for Rural Economies at Hearing
December 2, 2016
By Ted Reed
United Airlines (UAL) , which uses about 4 billion gallons of fuel annually -- making it one of the world's biggest fuel consumers -- also has become the airline industry's leader in seeking to reduce global carbon emissions.
United said it accounts for about 60% of the global aviation industry's commitment to biofuels. It expects to purchase about 900 million gallons of biofuel or 90 million gallons a year for the next 10 years.
According to United figures, Cathay Pacific is second, committed to 413 million gallons of biofuel use, while JetBlue is committed to 109 million gallons, Lufthansa is committed to 42 million gallons and other airlines collectively are committed to about 70 million gallons.
In March, in a demonstration of its commitment, United became the first U.S. airline to use a high percentage of biofuel (about 30%) to power a regularly scheduled flight, which operated between Los Angeles and San Francisco for two weeks.
On Friday, sustainability officers from United, JetBlue and Alaska will discuss their efforts during the final day of a Fort Lauderdale, Fla. conference presented by Jersey City, N.J.-based Companies Vs. Climate Change, which seeks to provide a forum for businesses to discuss climate change solutions.
United is "trying to grow the biofuels industry for aviation," said Natalie Mindrum, the carrier's director of environmental responsibility. "We want to be a leader in this area."
Biofuels are sustainable fuels created from renewable sources, such as agricultural waste and even household wastes, but not, in United's case, from corn or other edible sources. "We are not competing with food sourcing," Mindrum said.
U.S. commercial aviation produces 2% of the nation's man-made greenhouse gas, while driving 5% of GDP, according to figures from Airlines for America.
Most airlines seek to reduce fuel use through the purchase of new aircraft, the installation of winglets on aircraft, and fuel conservation programs such as single-engine taxi, careful calibration of how much fuel to carry and the use of electricity rather than engines when aircraft are on the ground.
But United goes a step farther in its biofuels commitment, which has played out in two efforts.
One is a partnership with AltAir Fuels, a Paramount, Calif.-based biofuel company. United signed its first agreement with Altair in 2009; fuel production begin in March 2016. "We will purchase up to 15 million gallons annually over the next three years," Mindrum said. "This is a small percentage, but we have to start somewhere."
In a continuing effort, at Los Angeles International Airport, United has spearheaded the inclusion of biofuel (a single-digit percentage) in the airport fuel supply used by all of the airport's carriers.
Fuel from AltAir is provided to the fuel farm at LAX, with the result that "every flight {which takes on fuel at LAX} has a small quantity of biofuel," she said.
The bulk of United's potential biofuel use will result from a partnership with Fulcrum BioEnergy, a Pleasanton, Calif.-based company that seeks to convert municipal waste into aviation biofuel.
In 2015, United invested $30 million in Fulcrum, the single largest investment by a U.S. airline in alternate fuel. The two companies envision joint development of up to five projects at United's hubs, expected to produce 180 million gallons of biofuel annually. The first site has yet to be selected.
Fulcrum takes household trash, converts it to gas through one process, and then converts carbon monoxide and hydrogen gases into liquid fuel. Cathay Pacific has also invested in Fulcrum.
Mindrum said the use of Altair fuel reduces carbon dioxide emissions by 60%, while the use of Fulcrum fuel reduces carbon dioxide emissions by 80%. "By using waste, we are not pulling fossil fuels out of the ground," she said. "We are using {materials} that have already been pulled out."
U.S. airlines are all committed to reducing carbon emissions, although the extent of their current commitments vary.
Among the four largest carriers, American (AAL) -- which already has the youngest fleet of the network carriers -- takes a new airplane every week. Employees are strongly encouraged to seek out methods to reduce fuel consumption, and the carrier is "evaluating the alternative jet fuel industry and identifying the most promising companies and technologies," said spokesman Matt Miller.
Delta (DAL) has reduced fuel burn per available seat mile by 6% since 2008 and is phasing out some older aircraft, such as the Boeing 747 and 50-seat regional jets. It has a program that enables passengers to make financial contributions to offset the environmental impact of its flights.
"We're the only U.S. airline committed to carbon-neutral growth," said spokesman Trebor Banstetter. "We also nabbed the top airline spot for global companies in the 2016 Newsweek Green Rankings, ranking 85th."
Southwest (LUV) not only is modernizing its fleet and implementing fuel savings project, but also it signed a 2014 agreement with Red Rock Biofuels to purchase 3 million gallons of biofuel annually.
"This renewable fuel will be refined in Oregon from forest residues, helping to reduce the risk of destructive forest fires," the carrier said on its website. "The blended product of biofuel and jet fuel is expected to be used at Southwest's San Francisco Bay Area operations, with first delivery anticipated in 2018."
Read the original story: How United Leads the Airline Industry in Reducing Carbon Emissions
December 1, 2016
By Rachel Gantz
Today the Senate Homeland Security & Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management is holding a hearing examining two reports by the Government Accountability Office (GAO) on the Renewable Fuel Standard (RFS). The reports incorrectly suggest the RFS is falling short of its goals to support commercialization of advanced and cellulosic biofuels.
In response to the hearing and the GAO reports, Renewable Fuels Association (RFA) President and CEO Bob Dinneen issued the following statement:
“This hearing and the GAO reports really miss the point. The RFS has been a resounding success by any measure. It has created high-paying jobs across America, reduced oil imports from OPEC, lowered consumer fuel prices, slashed emissions from the transportation sector, and driven substantial investment into advanced and cellulosic biofuel technologies.
“While first-generation biofuels were already proven in 2007 when Congress expanded the RFS, legislators knew full well that the pace of commercialization for advanced and cellulosic biofuel technologies was somewhat uncertain. That’s precisely why Congress included measures allowing EPA to adjust advanced and cellulosic volume requirements. Indeed, the volumes in the 2007 bill were not a forecast, but rather an aggressive goal and bold vision to support the creation of a vibrant low-carbon advanced biofuel market.
“That bold vision is in fact being realized, and advanced biofuel production has grown dramatically under the RFS. Production and use of advanced biofuels has risen from less than 200 million gallons when the original RFS was adopted in 2005 to approximately 4 billion gallons (RINs) in 2016—a 20-fold increase. That’s a remarkable achievement that simply wouldn’t have occurred without the RFS.
“GAO also ignores a number of important factors that have impeded more rapid growth in advanced and cellulosic biofuel production. The Great Recession and financial crisis, lengthy delays by EPA in setting annual RFS volume requirements, uncertainty caused by oil industry lawsuits and repeal efforts, and OPEC manipulation of world oil markets are just a handful of unforeseen challenges that have undercut more rapid development of next generation biofuels.
“Still, even with that uncertainty and instability in the background, leading innovators like DuPont, POET/DSM, Quad County Corn Processors, East Kansas Agri-Energy, CHS, Adkins Energy, ICM, Valero and many others are showing that advanced and cellulosic biofuels are real and are poised for explosive growth in the years ahead.”
Read the original story: RFA Statement on Senate Hearing Focused on GAO RFS Reports
More...
November 29, 2016
By Ron Kotrba
The U.S. Government Accountability Office issued two reports Nov. 28 suggesting that the renewable fuel standard (RFS) program is unlikely to meet its targets for reducing greenhouse gas (GHG) emissions and expanding the U.S. renewable fuels sector. The reports largely attribute this supposition to production of advanced biofuels falling short of statutory requirements. Advanced biofuels such as biodiesel, renewable diesel and cellulosic ethanol provide the largest GHG reductions and, per statutory requirements of the RFS, were to make up 21 billion gallons of the 36 billion gallon renewable fuel volume obligations under the program by 2022.
The biofuels industries, however, can attribute this shortfall of advanced biofuels production back to the federal government by way of the U.S. EPA, which has questionably used its general waiver authority to reduce overall renewable fuel obligations under the RFS for the past several years—the subject of a pending lawsuit—and its cellulosic waiver authority to significantly reduce the cellulosic biofuel targets in the agency’s implementation of the program vs. statutory requirements.
Biofuel industries can hardly achieve the statutory goals when EPA continues to reduce the targets set out in the statute. Year after year, biofuel industry organizations representing producers of conventional and advanced biofuels call on EPA to increase the targets to more closely resemble those laid out in the statute. For instance, the National Biodiesel Board urged EPA to boost the biomass-based diesel target for 2018 to 2.5 billion gallons, which the agency finalized at 2.1 billion. The statute mandates that advanced biofuels are to provide 9 billion ethanol-equivalent gallons (6 billion biodiesel-equivalent gallons) to market by 2017, but the EPA has reduced this target to 4.28 billion ethanol-equivalent gallons (2.85 billion biodiesel-equivalent gallons). NBB pushed EPA to boost the advanced biofuel target for 2017 to 4.75 billion ethanol-equivalent gallons (3.17 billion biodiesel-equivalent gallons), citing ample feedstock and domestic production capacity to meet the increase, but EPA was not persuaded.
The GAO initially incorrectly reported that “less than 5 percent of the 3 billion gallon advanced biofuel RFS target was produced in 2015, and additional investments for commercialization seem unlikely.” Biodiesel Magazine contacted Frank Rusco with the GAO to advise him of this error. Rusco admitted this was a mistake, as it should have read “less than 5 percent of the 3 billion gallon cellulosic biofuel RFS target was produced in 2015.” Rusco thanked Biodiesel Magazine for pointing out the inaccuracy and the statement was subsequently corrected on the GAO website. Several media outlets, however, took this initial error as fact and reported the incorrect figures.
“The advanced biofuel category requirements of the RFS have been met every year of the program in large part thanks to the growth of the biodiesel industry providing the numerous benefits Congress sought for the environment, economy, and energy security,” said Donnell Rehagen, CEO of the National Biodiesel Board. “While the cellulosic biofuel category has taken a smaller portion of the overall advanced biofuel category to date than what Congress originally envisioned, the program is still driving growth of these and other advanced biofuels into the marketplace. The advanced biofuel requirement finalized by EPA last week will be met by a variety of fuels in the marketplace, all which reduce emissions by greater than 50 percent compared to petroleum.”
In its summary report, the GAO admitted that experts advised the office of the federal government’s role in influencing the effectiveness of the RFS, and how the investment climate for advanced biofuels could be improved by reducing uncertainty about the future of the RFS program and tax credits.
One aspect of the report was particularly contentious for the biodiesel sector. “Experts said that several advanced biofuels are technologically well understood and some are being commercially produced, but they noted there is limited potential for increased production in the near term and cited several factors that will make significant increases challenging,” the report summary stated. “Given that current advanced biofuel production is far below RFS targets and those targets are increasing every year, it does not appear possible to meet statutory target volumes for advanced biofuels in the RFS under current market and regulatory conditions. Biofuels that are technologically well understood include biodiesel, renewable diesel, renewable natural gas, cellulosic ethanol, and some drop-in fuels. A few of these fuels, such as biodiesel and renewable diesel, are being produced in significant volumes, but it is unlikely that production of these fuels can expand much in the next few years because of feedstock limitations.”
John Kruse, the principal and director of quantitative analysis of World Agricultural Economic and Environmental Services, told Biodiesel Magazine, “Although the U.S. biodiesel industry has demonstrated the ability to diversify its feedstocks significantly over the past few years, the feedstock issue continues to emerge as the primary reason for limiting the expansion of volume obligations for biodiesel.”
In the narrow focus of biodiesel and renewable diesel feedstocks, Kruse said distillers corn oil (DCO) is a prime example of a new and growing source. “While many [ethanol] plants already have extraction capabilities in place, the growth is occurring through enhanced extraction yields,” Kruse said. “We see corn oil extraction yields growing nearly 45 percent over the next five years.”
Furthermore, Kruse said along with DCO, other fats and oils are used primarily as an energy source in livestock rations. “With the significant decline in feed grain prices, there is a large supply of less expensive sources of energy available for livestock feed. We expect to see some substitution away from the use of oils in livestock rations as an energy source.”
Soybean oil provides roughly 50 percent of U.S. biodiesel feedstock, and as Kruse pointed out, U.S. soybean yields have been at record levels the past four years, further increasing the supply of soybean meal and oil. “Sometimes it is forgotten that soybean oil is primarily a byproduct of soybean crush and that the soybean market has and will continue to be driven by the demand for soybean meal,” he said. “There continues to be no shortage of protein meal demand in the global marketplace with growing meat consumption and the historical underutilization of protein meal in livestock rations. Developing countries with the strongest income growth tend to demand poultry and aquaculture products, which are produced with protein-intensive rations. The strong demand for meals results in increased supply of soybean oil.” Overall, Kruse said an abundant and expanding supply of vegetable oils exists.
Biodiesel from virgin soybean oil reduces GHG emissions by more than 50 percent compared to petroleum diesel, according to EPA data, and when made from waste materials such as used cooking oil, biodiesel can achieve more than 80 percent GHG reductions.
“It is ironic how quickly it has been forgotten that prior to biofuels, the agricultural industry was focused on developing new sources of demand for its products,” Kruse said. “With brief exceptions—biofuels as the most recent example—agriculture has struggled the past century with falling real commodity prices. Falling real commodity prices results from supply outpacing demand. Yet even with record global stocks for most commodities and significantly lower commodity prices, there is a lingering perception of scarcity.”
Read the original story: GAO RFS Reports Paint Incomplete Picture of Advanced Biofuels
December 1, 2016
By Ann Bailey
Several associations sent a letter this week to Gina McCarthy, EPA administrator, expressing their unified support for keeping the Renewable Fuel Standard program’s point of obligation unchanged.
The associations, made up members of the bioenergy and energy industries, said in the letter, that while they each have unique, and often conflicting, positions regarding the broader RFS program, they are one in their opposition to move the point of origin for RFS compliance. The letter was signed by the Advanced Biofuels Association, American Petroleum Institute, Growth Energy, Association for Convenience & Fuel Retailing, NATSO, Petroleum Marketers Association of America, Renewable Fuels Association and Society of Independent Gasoline Marketers of America.
“Each of the undersigned associations strongly supports the Environmental Protection Agency’s proposed denial of petitions for a rulemaking to change the point of obligation under the RFS. There is no sound public policy rationale for moving the point of obligation and further, such a change would add complexity and uncertainty to the current RFS program,” the letter said. “We urge EPA to finalize its conclusion and deny the petitions to move the point of obligation,” said the letter representing the eight organizations.
Growth Energy CEO Energy Skor reiterated her association’s support of the current RFS point of obligation in a statement released after the letter to the EPA was sent.
“The point of obligation, as outlined under the RFS, is doing exactly what it is designed to do, incentivizing marketers to blend additional biofuels and encouraging the availability of higher-level ethanol blends to retailers who wish to sell them,’ Skor said. “The bottom line is that the current point of obligation encourages consumer choice and cost savings at the pump, and any change would undermine the continued success of the RFS and reward those parties who have refused to comply with the intent of the law.”
The Advanced Biofuels Association said in a statement it also strongly supports EPA’s recent published proposed rejection of the waiver request to move the point of obligation.
“For us it is a Trojan horse intended to undercut and punish those companies who made investments to be able to blend the mandated fuels under the Renewable Fuels Standard,” said Michael McAdams, ABFA president. “It would create more uncertainty, be harder to enforce and discourage and reduce levels of current blending. As for the group of so called “savvy” business guys, sometimes being too cute by half comes at a price. Time to make investments for the future, rather than simply try and escape your commitment to blend renewable sustainable fuels.”
Read the signed letter here.
Read the original story: Groups Letter to EPA: Don't Change RFS Program Point of Obligaton
November 30, 2016
More than 80 percent of new 2017 model year (MY) vehicles are explicitly approved by the manufacturer to use 15 percent ethanol blends (E15), according to an analysis of warranty statements and owner’s manuals conducted by the Renewable Fuels Association (RFA). That is up from last year, when approximately 70 percent of MY2016 vehicles were approved by automakers for the use of E15.
For the first time, Hyundai Motor Company has approved the use of E15 in MY 2017 Hyundai and Kia vehicles, joining the majority of its auto competitors. Together, Hyundai and Kia represent slightly more than 8 percent of the U.S. light-duty automobile market.
In 2012, EPA approved the use of E15 in vehicles built in MY 2001 or later. However, auto manufacturers did not retroactively endorse the use of E15 in legacy vehicles that were already on the road.
Other key points from RFA’s analysis include:
The Detroit Three (Chrysler, General Motors and Ford), which collectively represent 45 percent of U.S. market share, all clearly allow E15 in their vehicles. GM started approving the use of E15 with its MY 2012 vehicles, while Ford joined the following year and Chrysler began E15 approval with its MY 2016 vehicles.
Other automakers explicitly offering E15 approval for MY 2017 vehicles include Honda, Toyota, Volkswagen Group, and Tata Motors (maker of Land Rover and Jaguar). Altogether, auto manufacturers with approximately 81 percent of the U.S. market share now approve the use of E15 in their MY 2017 vehicles.
With 9 percent of the U.S. market share, Nissan Motor Corporation remains the largest vehicle manufacturer that does not explicitly approve E15 in its vehicles. Despite announcing earlier this year that it is developing a vehicle powered by an ethanol fuel cell, the automaker only approves the use of E10 in its vehicles. Curiously, Nissan approves the use of gasoline containing up to 15 percent MTBE, a toxic additive that is banned in more than two dozen states.
Mazda, Subaru and The Daimler Group (maker of Mercedes-Benz) also continue to exclude E15 from fuel approvals and warranty statements. Together, these three manufacturers own about 7.5 percent of the U.S. market share.
Of note, BMW Group’s Mini vehicles again allow the use of 25 percent ethanol blends. The manufacturer states, “Fuels with a maximum ethanol content of 25 percent, i.e., E10 or E25, may be used for refueling.”
While neither automaker approves the use of E15, both Mercedes-Benz and Nissan produce some flex fuel vehicle models that are capable of operating on up to 85 percent ethanol blends (E85).
RFA estimates that approximately 25–30 percent of the 230 million vehicles on the road today are clearly approved by the automaker to use E15. Meanwhile, roughly 90 percent of vehicles on the road were built in 2001 or later, meaning they are legally approved by EPA to use E15.
“This analysis demonstrates that automaker acceptance and approval of E15 continues to expand rapidly,” said RFA President and CEO Bob Dinneen. “More than four out of every five new vehicles carries the manufacturer’s explicit endorsement of E15, putting to rest the myth propagated by the American Petroleum Institute that automakers don’t allow or warranty the use of this lower-cost, higher-octane fuel blend. We applaud Hyundai for joining the ‘E15 Club’ with its model year 2017 vehicles, and we’re thrilled to see Mini going above and beyond to offer E25-compatible vehicles. At the same time, we encourage Nissan, Mazda, Subaru and Daimler to get with the times and offer their customers greater freedom and flexibility when it comes to making a fuel choice at the pump.”
E15 is sold today at nearly 400 retail stations in 28 states, including major chains such as Sheetz, Thorntons, RaceTrac, Kum & Go and Murphy USA.
The RFA analysis can be found here.
Read the original story: RFA Analysis: Automakers Approve E15 in More than 80% of New 2017 Vehicles
November 24, 2016
By Mike Hughlett
The Obama administration has mandated a record amount of biofuel use in 2017 — a victory for the ethanol industry, which counts Minnesota as one of its top producers.
The U.S. Environmental Protection Agency Wednesday finalized an annual rule that sets volume requirements for biofuel in the nation’s motor fuel supply. The agency set the total renewable fuel requirement for 2017 at 19.28 billion gallons, up 6.4 percent over 2016 and higher than the EPA’s original proposals this spring.
For 2017, the EPA is mandating the use of 15 billion gallons of conventional biofuel, which is primarily corn-based ethanol. It marks the first time the agency has mandated the 15 billion-gallon statutory maximum for conventional biofuels, which was established by Congress a decade ago.
“We were very pleased today,” said Minnesota Sen. Amy Klobuchar, a member of the Senate Committee on Agriculture who has worked with farm groups to help push for greater biofuel usage. “It’s kind of a Thanksgiving surprise.”
The EPA is required to set targets by the Renewable Fuel Standard, with annual mandates for how much ethanol and biodiesel need to be blended with gasoline and diesel.
The program, signed into law by President George W. Bush, was designed to curb greenhouse gas emissions, promote energy independence and boost rural economies.
The EPA on Wednesday also increased its usage mandates for biomass-based diesel fuel, advanced biofuel and cellulosic biofuel — all three of which are far smaller sources of biofuel than ethanol.
The Renewable Fuel Standard regularly sparks battles between the oil industry and the ethanol industry. Reactions to Wednesday’s decision were no different.
Chet Thompson, president of the American Fuel and Petrochemical Manufacturers, told Bloomberg News that the 2017 targets are “completely detached from market realities.”
The ethanol industry is a big market for corn growers, and Minnesota is the nation’s fourth largest corn growing state.
“This certainly helps,” Harold Wolle, president of the Minnesota Corn Growers Association, said of the 2017 mandate. “We have been fighting to get the renewable obligations up to the statutory limits for a number of years.”
Minnesota has about 20 ethanol plants, mostly in the state’s southern half. The state is the nation’s fourth largest ethanol producer, churning out 1.16 billion gallons of biofuel per year, according to the Minnesota Bio-Fuels Association.
Most U.S. gasoline mixed with ethanol is E10, which contains 10 percent of the biofuel.
Read the original story: New Federal Mandate a Victory for Minnesota's Ethanol Producers
November 25, 2016
By Erin Voegele
The U.S. EPA has released renewable identification number (RIN) generation data for October, reporting that nearly 1.66 billion RINs were generated during the month, including nearly 17.79 million cellulosic RINs.
Nearly 17.56 million D3 cellulosic biofuel RINs were generated during the month, bringing the net total for the first 10 months of the year 142.82 million. Nearly 3.05 million D3 RINs have been generated for ethanol, with 85.47 million generated for renewable compressed natural gas and 56.14 million for renewable liquefied natural gas. Nearly 129.16 million D3 RINs have been generated domestically, with 15.5 million generated by importers.
According to the EPA, 229,819 D7 cellulosic diesel RINs were generated in October, bringing the net total for the first 10 months of the year to 227,424. A total of 456,975 D7 RINs have been generated so far this year, with a 229,551 error correction. All D7 RINs generated so far this year have been generated for cellulosic heating oil by importers.
Nearly 17.1 million D5 advanced biofuel RINs were generated in October, bringing the net total for the first 10 months of the year to 84.99 million. Nearly 56.89 million D5 RINs have been generated for ethanol, with 20.2 million generated for naptha, 118 million for heating oil, and 6.81 million for nonester renewable diesel. So far this year, 50.69 D5 RINs have been generated domestically, with 34.39 million generated by importers.
More than 1.29 billion D6 renewable fuel RINs were generated in October, bringing the net total for the first 10 months of the year to 12.59 billion. Most, 12.24 billion, were generated for ethanol, with 236.59 million generated for nonester renewable diesel and 126,227 generated for butanol. Nearly 12.23 billion D6 RINs have been generated domestically, with 140.87 million generated by importers and 236.59 million generated by foreign entities.
Nearly 224.27 million D4 biomass-based diesel RINs were generated in October, bringing the net total for the first 10 months of the year to 3.09 billion. The majority, 2.52 billion, were generated for biodiesel, with 571.43 million generated for nonester renewable diesel and 1.82 million for renewable jet fuel. More than 2.27 billion D4 RINs have been generated domestically, with 560.75 million generated by importers and 260.48 million generated by foreign entities.
As of the close of October, the EPA reports a total of 15.93 billion RINs have been generated so far this year, with 645.14 million retired, 882.94 million locked and available and 14.1 billion unlocked and available.
Read the original story here: EPA: Cellulosic RIN Generation Reaches 17.79 Million in October
November 23, 2016
Press Release
Many American farmers are thankful today for an Obama administration decision to boost the amount of renewable fuels, such as made from corn and soybeans, in the country's gasoline and diesel supply.
The Wednesday, Nov. 23 announcement was a turnaround for the Environmental Protection Agency, which earlier planned to require less renewable fuel to be mixed with gas and diesel.
"During a tough time in farming and low commodity prices, we couldn't have better Thanksgiving news for our corn and soybean farmers and the thousands of people are who are in biofuels in Minnesota," U.S. Sen. Amy Klobuchar, D-Minn., told Forum News Service.
Much of corn from Upper Midwest farms is used to make ethanol, which is blended with gasoline to raise octane and lower emissions. Similarly, soybean oil is blended with diesel fuel.
Klobuchar, a member of the Senate Agriculture Committee, said the EPA's announcement follows congressional intent, unlike preliminary proposals. "They did the right thing. ... Gradually, they have gotten this rule better."
President-elect Donald Trump often has said that he supports ethanol, particularly when campaigning in Iowa. However, he has not been specific about what he would do about renewable fuels.
Trump has expressed strong support for the American oil industry, which often is at odds with ethanol and biodiesel.
President Barack Obama's agriculture secretary told Bloomberg News that he thinks Trump will continue renewable fuel standards.
"There's going to be a lot of saber-rattling, but it supports too many jobs and too much rural infrastructure is set up for it," Vilsack said. "The Renewable Fuel Standard is solid."
Sen. Heidi Heitkamp, D-N.D., called the Wednesday announcement good news for her state.
"Ambitious blend levels are critical to supporting North Dakota's biofuels industry because it supports good-paying jobs, increases our energy security, and creates clean, reliable fuel," Heitkamp said.
The EPA is required by law to set fuel blending levels annually so biodiesel and ethanol producers can plan for the future, Heitkamp said, but the agency failed to do so for years.
The EPA set the target for total renewable fuel use at 19.28 billion gallons for 2017. That includes 15 billion gallons for conventional biofuel, which is mainly corn-based ethanol, and 4.28 billion gallons for the advanced biofuels mandate.
The final plan is up from the 18.8 billion gallons the agency proposed in May and marks a 6 percent increase from this year. While many anticipated an increase for the conventional fuel target, that increase alongside the boost for advanced biofuels was more than many expected.
The increase to 15 billion gallons for the conventional biofuels target marked a victory for the U.S. ethanol industry, after years of battling regulators to increase the mandates to levels laid out by Congress in 2007.
"The move will send a positive signal to investors, rippling throughout our economy and environment," said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association.
In Sioux Falls, S.D., the CEO of one of the largest ethanol companies was happy.
"The grain ethanol industry is ready and able to meet its obligation under the Renewable Fuel Standard, and today's rule from the EPA reflects that reality," Jeff Broin of POET said. "I commend the EPA on holding firm to the letter of the law despite enormous pressure from oil interests."
After the announcement, shares in oil companies Tesoro, Valero Energy and HollyFrontier were down while shares of biofuels producers Green Plains and Pacific Ethanol rose.
Read the original press release: Klobuchar on Obama's Renewable Fuel Requirement: 'We couldn't have better Thanksgiving news'
November 28, 2016
By Jeff Rice
There aren't many bright spots in agriculture these days; most experts agree it will be at least 2018 before commodities prices turn around, and even then it will be slow and sporadic. But there is one light of hope, a beacon that glows brightly at the east edge of Sterling and helps provide a little more price stability than would otherwise exist.
Mark Sponsler, executive director of Colorado Corn Growers Association, told the Journal-Advocate a week ago he believes the price of corn would be a dollar a bushel lower if not for the demand for ethanol, and he credited ethanol producers with providing long-term stability for corn prices.
Dave Kramer is flattered by Sponsler's assessment, but says the effect is a little inflated. "I'd say it's about half that, if even that much. Maybe 40 cents a bushel," he said.
Kramer is CEO and founder of Sterling Ethanol LLC, which has plants in Sterling and Yuma, and in Bridgeport, Neb. And if Kramer seems overly modest about his industry's impact on corn prices, he's perfectly willing to accept credit when credit is due. After all, the Sterling-based plants provide more than three-fourths of the ethanol used in the gasoline sold in Colorado and surrounding areas. Anyone who has been stuck in traffic on southbound I-25 in Denver on a Monday morning can quickly figure out, that's a lot of ethanol.
Most people know ethyl alcohol most intimately as the stuff that makes us funnier, better-looking, smarter, and generally more likeable when imbibed in moderate quantities. But its value as an internal combustion fuel has been recognized since the invention of the internal combustion engine. More recently, it was recognized as an additive to help those engines burn cleaner, but large-scale production was more expensive than the other additives.
The nascent ethanol industry bloomed suddenly after the implementation of the Energy Policy Act of 2005. But while the provisions of the legislation had mostly to do with subsidizing and incentivizing energy production, including alternative energy sources, Dave Kramer saw the opportunities a little differently. After a couple of decades in the livestock feed business, Kramer's employer was bought out by a competitor, and he suddenly found his employment options to be, as they say, limitless.
"I got investors together from the corn and cattle industries and from other related areas, and we approached this as a feed mill that produces ethanol," Kramer said. "The wet distiller's grain that we produce is easier for cattle to process."
According to Kramer's figures, feed corn normally contains about 12 percent protein and 4 percent fat. But when it's ground and processed to produce ethanol, the distiller's grain contains about 33 percent protein and 10 percent fat. All that's taken out is the starch, which cattle don't use anyway. The result is cattle feeders paying less for the corn they can feed.
"We estimate that (distiller's grain) reduces the cost of cattle feeding by anywhere from five to 10 cents per pound of gain," Kramer said. When you consider that weight gain over the feedyard life of an average beef animal is about 92 cents per pound (according to the University of Arkansas) even a nickel a pound is a respectable savings.
One reason the distiller's grain from Sterling Ethanol's plants is so economical is that the plants are what Kramer calls "origin and destination" facilities. An origin plant, he explained, is one that takes in corn from local sources and then ships the ethanol and dried feed product to distant customers; a destination plant takes in corn from distant sources and sells the products locally.
"We're a combination of those," Kramer said. "We take in corn from local sources in Colorado and Nebraska, and we sell the products locally in Colorado and Wyoming."
Because the feed product is used locally, there's no need to dry it before shipping, which saves the considerable energy costs of drying the product. That means less energy used by the plant resulting in a lower cost for the feed.
And speaking of saving energy, the Sterling plants produce some of their own electricity from waste steam. Each of the three distilleries has its own steam turbine, which produces about a megawatt of electricity to be used in the plant. It saves about $60,000 a month in operating costs.
"We have the lowest carbon scores of any ethanol plants in the U.S.," Kramer said.
And then, of course, there's all that ethanol. After all, Kramer's investors saw their opportunity to build a state-of-the-art feed mill come from a piece of legislation that was meant to spur energy independence in the United States.
Part of that legislation is an incentive to goose production of a replacement for methyl tert-butyl ether (MTBE), a fuel additive that prevents engine knock and lowers harmful exhaust emissions from internal combustion engines. And while the billions of dollars in tax incentives and outright subsidies did give the industry a bit of a boost, it was not one the Sterling company took advantage of. In only seven months, Sterling Ethanol's investors had the $52 million plant up and running. And while Kramer is reluctant to divulge hard numbers on the company's finances, he does say that it is profitable and looks to stay that way for a very long time.
Sterling Ethanol turns 51 million bushels of corn into 165 million gallons of ethanol in its three plants each year. With the 48 million gallons produced by the plant owned by Front Range Energy in Windsor, that's enough to supply the gasoline blending stations in Denver, Cheyenne, and Colorado Springs. In other words, virtually all of the ethanol burned in Colorado is from Colorado, and most of it is from Sterling Ethanol plants.
While they're at it, the company employs 26 full-time people and pumps about $2 million in paychecks into the local economies.
As good as all of that is, however, there's bound to be a down side to ethanol, isn't there?
Well, yes ... or rather, there might have been.
At one time.
But not really.
Read the original story: Ethanol Provides a Bright Spot in Dismal Ag Picture
Environmental Protection Agency
November 23, 2016
Rule Summary:
EPA finalized the volume requirements and associated percentage standards that apply under the RFS program in calendar year 2017 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel. EPA also finalized the volume requirement for biomass-based diesel for 2018.
The final volumes represent continued growth over historic levels. The final standards meet or exceed the volume targets specified by Congress for total renewable fuel, biomass-based diesel, and advanced biofuel.
| 2014 | 2015 | 2016 | 2017 | 2018 | |
|---|---|---|---|---|---|
| Cellulosic biofuel (million gallons) | 33 | 123 | 230 | 311 | n/a |
| Biomass-based diesel (billion gallons) | 1.63 | 1.73 | 1.9 | 2.0 | 2.1 |
| Advanced biofuel (billion gallons) | 2.67 | 2.88 | 3.61 | 4.28 | n/a |
| Renewable fuel (billion gallons) | 16.28 | 16.93 | 18.11 | 19.28 | n/a |
Total renewable fuel volumes grow by 1.2 billion gallons from 2016 to 2017, a 6 percent increase.
Advanced renewable fuel – which requires 50 percent lifecycle carbon emissions reductions – grow by roughly 700 million gallons between 2016 and 2017.
Non-advanced or “conventional” renewable fuel increases in 2017 meet the 15 billion gallon congressional target for conventional fuels.
The standard for biomass-based biodiesel – which must achieve at least 50 percent lifecycle greenhouse gas emission reductions compared to petroleum-based diesel – grows by 100 million gallons. The required volume of biomass-based diesel for 2017 is twice as high as the minimum congressional target.
Cellulosic biofuel – which must achieve at least 60 percent lifecycle greenhouse gas emissions reductions – grows by 35 percent over the 2016 standard.
The advanced biofuel standard – which is comprised of biomass-based diesel, cellulosic biofuel, and other biofuel that achieves at least 50 percent lifecycle greenhouse gas emissions reductions – increases by 19 percent over the 2016 standard.
Rule History:
On May 18, 2016, EPA proposed the volume requirements and associated percentage standards that would apply under the RFS program in 2017 for cellulosic biofuel, advanced biofuel, and total renewable fuel. EPA also proposed the volume requirement for biomass-based diesel for 2018.
Additional Resources:
Final rule: Renewable Fuel Standard Program: Standards for 2017 and Biomass-Based Diesel Volume for 2018 (PDF)
Read the original release: Final Renewable Fuel Standards for 2017, and the Biomass-Based Diesel Volume for 2018