In the News
By Luke Geiver
May 26, 2017
It’s hard to believe that Jeanne McCaherty holds only one title for Guardian Energy Management LLC. The former Cargill executive-turned ethanol company CEO has a master’s degree in biochemistry, has run a fermentation optimization research group, developed and operated a wet-milling research team, started a culture-growing company, overseen a global biotechnology effort and spent time as a private equity consultant. Nearly one year after becoming CEO of Guardian Energy, a unique ethanol joint-venture organization that includes 10 ethanol producers spread throughout Minnesota, North Dakota, Iowa and Nebraska, McCaherty spoke with us about her efforts to inject previous experiences into day-to-day operations, observations on the opportunities for plant and organizational upgrades and why the ethanol industry is unlike any she’s been in before.
Letting the Past Inform the Present
After receiving her master’s degree in biochemistry, McCaherty took a position with Cargill. Her time spent working in labs, leading research and development efforts and running big-name-backed businesses has already proven useful. “All of that tech background I have has been very useful. It is amazing how much I’m putting that to use in our business today,” she says.
One of her early roles at Cargill involved working on continuous improvements for large scale fermentation, including ethanol. She called Eddyville, Iowa, home and her place of work while she was working on fermentation improvements. She has also spent time researching corn wet milling issues related to making corn starch-based products. Upon her return to Minneapolis, McCaherty led a biotechnology research group that focused on multiple areas. A fermentation optimization group studied processes to improve organisms. Another group developed and utilized gene manipulation techniques for organisms involved in fermentation processes. “When I look at what the yeast suppliers are doing today and what the enzyme suppliers are doing today, it is all very relevant to the work I did back then,” she says.
McCaherty has already brought her experiences and insight from the past into the ethanol business. With vendors, she can talk in great detail about the viability and usefulness of product claims. She is also well-versed on the technical side of fermentation, she says.
“I come from a place where everything has a science or engineering answer to it,” she says. “The idea of continuous improvement and bringing scientific rigor is something I pride myself on.”
That approach to the ethanol business has brought some changes to the Janesville, Minnesota, plant owned and operated by Guardian. The team is setting up lab fermenters to test new enzymes and nutrients. “There comes a time when you need to own your own destiny and look at things in detail that maybe aren’t very relative to your vendors,” she says. McCaherty hopes to test how enzymes react to different temperatures, nutrients or additives used at the Guardian facility. Previously, the team depended on vendors to supply the information, or in some cases, was unable to look at products with much detail.
“The industry has been very effective at making improvements to the process and now you are getting to the point where you are at diminishing returns,” she says. “You no longer see a 4 percent increase in yields. You have to go after every 0.2 or 0.5 percent improvement to make more optimization happen.” Such improvements may not be as obvious, she adds, and could take longer to achieve than previous yield gains took.
Leveraging Ethanol’s Uniqueness
Before joining Guardian, McCaherty spent a year performing private equity consulting. She decided she wanted to get back into running a business, having a team of dedicated people and making real products. “I wanted to be somewhere where my background would be relevant,” she says, “where our products were good and good for the environment.” McCaherty—raised on a small farm—also likes the connection her team and ethanol facilities hold to the rural community.
On the business front, she was attracted to the unique opportunities present in the greater ethanol industry and at Guardian. The joint-venture entity offers multiple sites and scale, so when improvements are found or made, she says, “we can really move the dial.” With a board made up of experienced CEOs and GMs from six independent ethanol companies, McCaherty is pleased with her options to find answers.
“If I have never seen something or need information, I certainly have someone on the board that has seen it before,” she says. “Being able to leverage that experience and knowledge has been useful.”
Since taking over nearly a year ago, she has also learned about—and has leveraged—the culture of the ethanol industry. McCaherty calls the industry “unusual” compared to her previous experiences. Although it is a massive industry in terms of production and economic impact, it is a very small industry, she explains. Many of the consultants or supplier organizations know each other. In many cases, McCaherty doesn’t have to explain the intricacies of her business when speaking to vendors for the first time. “Being able to leverage that part of the industry has been valuable,” she says.
Despite McCaherty’s drive and enthusiasm to improve on a well-established ethanol operation, she still recognizes that certain efforts may not be as relevant as others. Working with existing vendors, partners and established entities is important to McCaherty. “We want to make sure we have and keep networks set up so we aren’t reinventing the wheel,” she says.
For her, the network of people linked to Guardian is most important. “As a leader I think the most important thing is to have a strong team. At Guardian, I’ve been lucky. The people have great industry knowledge and a passion for the industry,” she says. The part of the industry she is still working to navigate and understand is on the policy side.
“I’ve never been in a business where policy has influenced it so much,” she says. Although she finds it challenging in some ways, she is more focused and concerned with implementing the three tenets Guardian is working towards under McCaherty’s leadership.
Triple Tenets
The first tenet is collaboration. With RPMG—Renewable Products Marketing Group, Guardian Energy’s marketing arm—McCaherty believes the larger group of ethanol operators can find answers and avenues to nearly everything ethanol related. Achieving greater scale—the second tenet of Guardian—is possible through the make-up of the group, she also says. The new research work being done at the Janesville facility is an example of how McCaherty hopes to turn a good idea into a major success by implementing change on a large scale. The third tenant for McCaherty isn’t as easy to explain or achieve. “We also work towards excellence,” she says.
According to McCaherty, excellence is a concept that is kind of a black box and difficult to truly understand or measure. But, although she freely admits she hasn’t attained it yet during her short time in the ethanol industry, McCaherty says with a calm confidence that her past successes and technical know-how, combined with her new links to other experts in the industry, have her in a good position to lead. She’s always been in the business of finding the best, or at least better, answer to a challenge or to a position in the market. That is where her personal approach to business—especially under her new role in ethanol—comes in, she says. Based on that, Guardian Energy appears to have found a fitting leader for its future. “You want leaders who will lead an organization as if it is their own,” she says.
Read the original story: Owning The Ethanol Exec Role
May 24, 2017
By Growth Energy
American consumers have helped E15—a fuel containing 15 percent ethanol and 85 percent gasoline—reach a significant milestone. According to Growth Energy’s ongoing analysis of fuel sales and consumption data reported by major gasoline retailers, drivers across the United States have logged more than 1 billion miles on E15—attesting to the fuel’s performance, safety, and value. The availability of E15 could save consumers up to $72 million by the end of 2017, based on U.S. EPA data.
“American drivers are taking advantage of the proven performance, environmental benefits, and savings E15 provides,” said Growth Energy CEO Emily Skor. “That’s why Congress should pass the Consumer and Fuel Retailer Choice Act and give drivers freedom to choose E15 year-round. This common-sense fix to the Reid vapor pressure (RVP) law will end confusing restrictions on retailers and allow consumers to choose a fuel that is kinder to the earth, good for their engines, and saves them up to 10 cents per gallon each trip to the pump in the summer.”
Growth Energy is proud to celebrate this milestone and highlight the value E15 delivers in terms of better performance, reduction of toxic emissions, and savings at the pump. Today, E15 is sold at more than 800 retail outlets across 29 states, and its availability continues to grow each day because 21st century drivers are demanding 21st century fuels.
The EPA approves E15 for use in any vehicle manufactured since 2001, which equates to 9 out of 10 cars on the road today. Automakers also approve E15 for use in nearly three-quarters of new cars.
Read the original story: American Drivers Surpass 1 Billion MIles on E15
May 24, 2017
By Bliss Baker
The year is shaping up to be very significant for the ethanol industry and the role it will play in international efforts to reduce global transport emissions. From the signing of the Canada-European Union Comprehensive Economic and Trade Agreement, to the termination of the Trans-Pacific Partnership, to speculation about Brexit and the change in outlook with the new U.S. administration, what happens in 2017 could shape the global economic landscape for years to come.
While biofuels do not always make headlines in international trade discussions, the potential for the impressive growth and maturation of the global biofuels industry to be impacted by upcoming trade negotiations is very real. For the industry to continue to create jobs, reduce transport sector emissions, develop new technologies and drive down costs, a stable investment climate is crucial.
The recent rise of economic populist and protectionist language used in several countries is a troubling sign as it could harm investors’ confidence at a time when the biofuels industry’s future is particularly bright.
Projections for 2017 show that total global ethanol production will hold firm at 97.80 billion liters (25.8 billion gallons), continuing the trend of incremental annual ethanol production growth since 2013. The industry has achieved this resilience during a period when oil prices dropped to record lows. Bolstering this resilience, some of the favorite attacks used by opponents of the biofuels industry have finally been put to rest.
The food vs. fuel issue has been conclusively disproven as real-world data has become available, and the American Petroleum Institute’s self-serving myth that 10 percent is the marketplace limit for ethanol content in U.S. gasoline has been shattered. Data from the U.S. Energy Information Administration shows that in 2016, gasoline consumed in the U.S. contained more than 10 percent ethanol on average, demonstrating that the so-called blend wall is not a real constraint on ethanol consumption.
As these specious arguments are disproven by hard evidence, the enormous growth potential still available for biofuels globally becomes more clear every day. In the International Energy Agency’s World Energy Outlook for 2016, the IEA is forecasting global energy demand will increase by 30 percent by 2040, with a significant portion from the transport sector.
Where this demand would historically have been addressed with increased reliance on fossil fuels, the global mindset has shifted. The ratification of the Paris Agreement last year established very ambitious targets for CO2 emission reductions, and set aspirational goals of shifting to a low-carbon global economy and encouraging the development of clean technologies as the basis for future growth.
Ethanol, as an immediately dispatchable low-carbon transport fuel alternative, represents a key policy solution that will be integral to meeting this challenge.
Multiple nongovernmental organizations have published reports since the ratification of the agreement outlining how current national policies aimed at reducing CO2 emissions from global transport activity will not achieve the targets laid out in the Paris Agreement, and that governments will have to redouble efforts to meet steeper targets in coming years.
Developing low-carbon alternatives to fossil fuels while maintaining growth will require the maximization of all cost-effective options and continued investment in clean technology development. Biofuels represent an ideal solution, but for the global industry to continue to grow, international free trade and a stable investment climate is key.
International trade negotiators would be extremely shortsighted to consider protectionist measures that would undermine the biofuels industry and the hundreds of billions of dollars of economic activity it represents. Creating barriers to trade would only serve to increase global reliance on crude oil and increase greenhouse gas emissions. As major economies look to negotiate trade agreements that will shape the investment outlook for the foreseeable future, it is critical that countries avoid protectionist policies.
It’s time to recognize ethanol for the ideal low-carbon transport fuel alternative that it is, take the brakes off biofuels technology development and meaningfully begin the transition to a sustainable future.
Read the original story: Free Trade Needed to Maximize Biofuels’ Benefit
May 22, 2017
By Erin Voegele
The U.S. EPA has published renewable identification number (RIN) generation data for April, reporting that nearly 1.79 billion RINs were generated during the month, including more than 17.29 million cellulosic RINs. A net total of 5.92 billion RINs were generated during the first four months of the year.
More than 17.29 million D3 cellulosic biofuel RINs were generated in April, bringing the net total for the first four months of the year to 49.91 million. Nearly 1.31 million D3 RINs have been generated for ethanol so far this year, with 30.67 million generated for renewable compressed natural gas and 17.93 million generated for renewable liquefied natural gas. Nearly 44.73 million D3 RINs have been generated domestically, with 5.21 million generated by importers. No D7 cellulosic diesel RINs have been generated so far this year.
Nearly 7.02 million D5 advanced biofuel RINs were generated in April, bringing the net total for the first third of the year to 22.67 million. To date, 8.13 million D5 RINs have been generated for ethanol, with 10.94 million generated for naphtha, 890,603 generated for heating oil, and 2.72 million for nonester renewable diesel. More than 22.68 million D5 RINs have been generated domestically, with none generated by importers or foreign entities so far this year.
More than 1.18 billion D6 renewable fuel RINs were generated in April, bringing the net total for the first four months of the year to 4.87 billion. Most, 4.79 billion, were generated for ethanol, with 84.75 million generated for nonester renewable diesel. Approximately 4.79 billion D6 RINs have been generated domestically, with 3.83 million generated by importers and 84.75 million generated by foreign entities.
More than 279.63 million D4 biomass-based diesel RINs were generated in April, bringing the net total for the first four months of the year to 970.85 million. The majority, 736.51 million, were generated for biodiesel, with 235.88 million generated for nonester renewable diesel and 937,219 million generated for renewable jet fuel. Approximately 694.9 million have been generated domestically, with 168.55 million generated by importers and 109.88 million generated by foreign entities.
As of the end of April, the EPA estimates total RIN generation so far this year has reached nearly 5.93 billion, with 144.52 million RINs retired, 175.1 million locked and available and 5.61 billion unlocked and available.
Read the original story: EPA: 1.79 billion RINs generated in April
May 16, 2017
WILMINGTON, Del – Solenis signed an agreement to acquire the business and assets of Nopco Colombiana S.A. (“Nopco Colombiana”), a producer and supplier of specialized chemical solutions for water intensive industries, including pulp and paper, oil and gas, food and beverage and other industrial markets in Central and South America. The transaction is expected to close in the third quarter of 2017, following receipt of customary regulatory approvals.
Headquartered in Medellin, Colombia, Nopco Colombiana employs over 75 people. Until this acquisition, the company was Solenis’ pulp and paper specialty chemical distributor in Central and South America. Nopco Colombiana produces and distributes wet strength resins, antiscalants, dispersants and defoamers in Colombia, Ecuador and Peru.
“This is an opportunity to combine Nopco Colombiana’s position in northwestern South America with Solenis’ global direct-to-market strategy,” said John Panichella, president and CEO, Solenis.
“This acquisition will strengthen our portfolio for the water treatment market and enable us to better serve the growing Central and South American markets through expanding our production footprint and customer service capabilities,” stated José Armando Piñón Aguirre, vice president, Latin America, Solenis.
May 11, 2017
By Erin Voegele
The U.S. Energy Information Administration has released the May edition of its Short-Term Energy Outlook, predicting ethanol production will average 1.03 million barrels per day this year, up from 1 million barrels per day next year. Ethanol production is currently expected to fall to 1.02 million barrels per day in 2018. The May STEO increases the outlook for 2017 ethanol production when compared to the projection made in April, when the EIA predicted production would average 1.02 million barrels per day this year.
On a quarterly basis, the May STEO indicates ethanol production averaged approximately 1.03 million barrels per day during the first quarter of this year. Production is expected to fall to 1.02 million barrels per day during the second quarter, and increase to 1.03 million barrels per day during the third and fourth quarters. In 2018, the EIA predicts ethanol production will average 1.02 million barrels per day during the first two quarters of the year, increasing to 1.03 million barrels per day in the third quarter, and again falling to 1.02 barrels per day in the fourth quarter.
According to the EIA, U.S. regular gasoline retail prices are expected to average $2.39 per gallon during the April through September driving season, up from $2.23 per gallon last summer. The higher forecast gasoline price is primarily attributed to higher forecasted crude prices. The annual average price for regular gasoline in 2017 is expected to be $2.34 per gallon.
The EIA’s most recent weekly ethanol production data shows production averaged 1.006 million barrels per day the week ending May 5, up from 986,000 barrels per day the previous week. The EIA’s most recent monthly export data shows the U.S. exported nearly 3.35 million barrels of ethanol in February, primarily to Brazil, India and Canada. During the same month, the U.S. imported only 377,000 barrels of ethanol, all from Brazil.
Read the original story here : EIA Increases 2017 Ethanol Production Outlook
May 11, 2017
Press Release
ENGLEWOOD, Colo., May 11, 2017 (GLOBE NEWSWIRE) -- Gevo, Inc. (NASDAQ:GEVO) announced today that it was selected to collaborate with researchers at the U.S. Department of Energy (DOE) as part of DOE’s Small Business Vouchers (SBV) program.
The SBV program provides funding for DOE’s national laboratories to partner with selected U.S. businesses, enabling these clean technology companies to leverage the laboratories’ technical and intellectual resources. Specifically, Argonne National Laboratory and the National Renewable Energy Laboratory (NREL) received funding to work with Gevo to develop a predictive octane blending model for isobutanol and gasoline blendstocks for oxygenated blending (BOBs). While it is known that isobutanol increases octane when blended into BOBs, the effect is non-linear, and dependent on a BOB’s properties. This project is intended to measure the actual octane effect on finished fuels when blending Gevo’s isobutanol with existing BOBs, obviating the need for blenders to perform these expensive and time consuming tests themselves.
This work is expected to support the investments that Gevo and its value chain partners are currently making to develop BOBs specifically for isobutanol (iBOBs). Isobutanol possesses a range of properties which makes it an ideal blendstock for gasoline such as high energy content, high octane, low water solubility and low volatility. By developing optimized iBOBs to blend with Gevo’s isobutanol, Gevo and its partners can produce high performance finished fuels which can benefit end consumers, as well as provide margin to all participants across the fuel blending value chain.
“Gevo is excited to be collaborating with Argonne and NREL on this project. We believe that expanding the blending of Gevo’s isobutanol will benefit the U.S. by reducing the need for petroleum imports while reducing harmful carbon emissions. We, and our partners, want to ensure that we develop finished gasoline that delivers the highest value to the end-customer. At the same time, we want to make sure that we are taking advantage of the superior properties of isobutanol to develop economical iBOBs that drive the highest margin through our value chain, while still delivering a high quality finished product to the consumer,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer.
About Gevo
Gevo is a renewable technology, chemical products, and next generation biofuels company. Gevo has developed proprietary technology that uses a combination of synthetic biology, metabolic engineering, chemistry and chemical engineering to focus primarily on the production of isobutanol, as well as related products from renewable feedstocks. Gevo’s strategy is to commercialize bio-based alternatives to petroleum-based products to allow for the optimization of fermentation facilities’ assets, with the ultimate goal of maximizing cash flows from the operation of those assets. Gevo produces isobutanol, ethanol and high-value animal feed at its fermentation plant in Luverne, Minnesota. Gevo has also developed technology to produce hydrocarbon products from renewable alcohols. Gevo currently operates a biorefinery in Silsbee, Texas, in collaboration with South Hampton Resources Inc., to produce renewable jet fuel, octane, and ingredients for plastics like polyester. Gevo has a marquee list of partners including The Coca-Cola Company, Toray Industries Inc. and Total SA, among others. Gevo is committed to a sustainable bio-based economy that meets society’s needs for plentiful food and clean air and water.
Read the original release: Argonne National Laboratory and National Renewable Energy Laboratory Receive Funding to Support the Blending of Gevo’s Isobutanol with Gasoline
May 10, 2017
By Erin Voegele
Gevo Inc. has announced first quarter financial results, reporting revenue of $5.6 million and a gross loss of $3.8 million. During an investor call, the company described plans to convert its Luverne, Minnesota, biorefinery to exclusively produce isobutanol and hydrocarbon products.
Revenue for the quarter was $5.6 million, down from $6.3 million during the same quarter of 2016. Revenue derived from ethanol sales and related products was $5.5 million, down $300,000 when compared to the first quarter of last year. The decrease is primarily attributed to lower ethanol and distiller grain prices. Hydrocarbon revenues were $100,000, down $200,000 from the same period of 2016. The loss from operations at $7.2 million.
Gross loss was $3.8 million, compared to $2.9 million during the first quarter of last year. Loss from operations was $7.2 million, compared to $5.9 million during the same period of 2016. The non-GAAP cash EBITDA loss was $5.4 million compared to $3.9 million during the first quarter of last year. Net loss was $5.9 million compared to $3.6 million during the first quarter of 2016. The non-GAAP adjusted net loss was $7.9 million, compared to $8 million during the first quarter of last year.The company reported net loss per share of 51 cents for the three months ending March 31, with a non-GAAP adjusted net loss per share of 68 cents.
Gevo produced approximately 100,000 gallons of isobutanol at its Luverne facility during the first quarter. According to the company, it was focused on producing sufficient quantities of isobutanol to meet immediate customer demand and providing enough inventory to support additional market and customer development efforts. Gevo’s production goals were not to maximize production, but to align production with isobutanol sales efforts. As a result, only ethanol was produced during certain periods of the quarter. The company also indicated it may elect to produce only ethanol during the second quarter of the year.
During an investor call, Patrick Gruber, CEO of Gevo, discussed future plans for the Luverne facility. The Gevo team, he said, remains laser focused on getting the company to profitability. He said the company believes the best path to achieve profitability to convert 100 percent of the grind and fermentation capacity at Luverne to its isobutanol and hydrocarbon products, specifically alcohol-to-jet (ATJ) and isooctane.
According to Gruber, Gevo is already executing on the conversion plan and is well into the engineering work needed to make it happen. The expanded plant is expected to have a capacity of more than 12 MMgy. However, Gruber noted the actual size and configuration of the expanded plant will be dependent on customer contracts, capital requirements and financing.
Given the level of engagement by customers, Gruber said the company currently expects 8-10 MMgy of that capacity to be processed into hydrocarbons. He cautioned, however, that could change for a variety of reasons.
To accomplish the build-out of Luverne, Gruber said the company has identified two key near-term goals it must accomplish. First is the restructuring of the company’s balance sheet to lessen its near-term liquidity issues. Second is the need to sign up customers for long-term supply agreements.
Read the original story: Gevo Discusses Future Plans for Luverne Plant
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May 8, 2017
By Cindy Zimmerman
During his first visit to Iowa as Secretary of Agriculture, Sonny Perdue made his support for renewable energy and ethanol perfectly clear.
“Do you know who I work for?,” the Secretary asked the local FFA officer who wanted to make sure he supported renewable energy. “I work for a fellow by the name of Donald J. Trump. Did you hear what he said during the campaign? Renewable energy, ethanol is here to stay…you have nothing to worry about.”
Secretary Perdue visited Couser Cattle Company in Nevada, Iowa where he was welcomed by Bill, Nancy and Tim Couser, as well as Iowa Senators Joni Erst and Chuck Grassley, and Rep. Steve King. Looking comfortable in worn jeans, Perdue related that he calmed Sen. Grassley’s concerns about him as secretary when he told him, “I got 12 grain elevators, all we do is corn, wheat and beans and we sell to an ethanol plant.”
Couser, who is co-founder of Lincolnway Energy ethanol plant in Nevada, presented Perdue with his custom made corn products display, as well as a Don’t Mess with the RFS button from the Iowa Renewable Fuels Association.
Perdue held a round table discussion with Iowa biofuels and agricultural leaders and answered questions during a town hall event, all held on the Couser operation. During his visit to Iowa, Perdue also met with current Governor and soon to be Ambassador Terry Branstad, and incoming governor Kim Reynolds.
Read the original story: Secretary Perdue Shows Support for Renewable Energy
May 4, 2017
By Brian Jennings
Enactment of the Renewable Fuel Standard in Congress did more than save money at the pump and clean up the air for consumers, it also helped boost demand for U.S. corn and soybeans which, in turn, increased prices received by American farmers. By every measure, increasing the production and use of homegrown renewable fuels has spurred economic growth for U.S. farmers and supported high-skill, high-wage jobs in rural communities.
When the use of renewable fuels is curbed, the opposite is true. Starting in 2013, economic insecurity spread across rural America because the Environmental Protection Agency took implementation of the RFS off-track, reducing annual renewable volume obligations (RVOs) below levels established by Congress. During this period, EPA sided with oil companies that claimed infrastructure constraints and the mythical E10 “blend wall” prevented higher ethanol blends, such as E15 and E30, from being used in the marketplace. As a result, leading biofuel groups were forced to sue the Obama administration’s EPA. This litigation is ongoing and oral arguments were held last week by the U.S. Court of Appeals for the District of Columbia. A court decision is expected later this year.
The timing of EPA’s mismanagement of the RFS was awful and the consequences have been worse. While EPA was riding the brakes on the RFS, the productivity of American farmers led to record-high corn crops in 2015 and 2016. Supplies grew while demand and farm income fell. According to the United States Department of Agriculture, surplus stocks of corn will swell to a 30-year high of 2.4 billion bushels and corn prices will fall to a 10-year low in 2017. Liquidity ratios and working capital have deteriorated to their weakest levels since 2002 and the value of farm sector assets is expected to decline by $32 billion in 2017. Farm debt is mounting and will represent about 20 percent of farm income this year. The share of farm loans that are delinquent is creeping up and reports of farm auctions have been on the rise.
Net farm income has dropped from $124 billion in 2013 to an expected $62 billion in 2017, a decrease of nearly 50 percent since EPA took the RFS off-track. As some will remember, similar conditions forced Congress to authorize yearly ad hoc economic emergency disaster payments to farmers between 1999 and 2002 and required additional spending of $73.5 billion in the 2002 Farm Bill to avert economic collapse in rural America. It was enactment of the RFS in 2005 that restarted the rural economy and allowed farmers to profit from the free market versus relying so heavily on government payments. The lesson learned is that increasing the demand for renewable fuels leads to higher market prices for farmers and reduced taxpayer spending on farm program payments.
Growing the renewable fuels market in 2017 is even more critical given the uncertainty created by efforts to renegotiate existing trade pacts. While we are hopeful that these new negotiations will lead to better trade opportunities, the uncertainty in the near term will impact the U.S. farm economy which makes a strong and growing market for ethanol-blended fuel even more important.
To restore badly needed economic security to rural America, EPA and Congress should take a number of steps. First, Congress must reject any attempt to reduce or repeal the RFS. To get the RFS back on track, the Trump administration needs to make good on its campaign promise to set and keep RFS volumes at statutory levels. Likewise, EPA Administrator Scott Pruitt needs to follow through on the statement made during his confirmation hearing “to honor the intent of the RFS statute…, use RFS waivers judiciously, and honor RVO timelines.”
Second, legislative or regulatory action must be taken so E15 and higher blends of ethanol have access to the market. Retailers want to sell E15 in the summer months because the fuel is less emitting and lower cost than E10 and straight gasoline, but EPA’s current interpretation of its Reid vapor pressure (RVP) rule handcuffs them. This RVP regulation is the most burdensome hurdle preventing more immediate growth of E15 use nationwide. Bipartisan legislation is pending in Congress to fix this problem and EPA has options at its disposal to make a commonsense regulatory change that would allow consumers to have access to E15 and other lower cost fuels that improve air quality. Action needs to be taken soon.
A third hurdle impeding the use of higher ethanol blends is the mountain of EPA red tape over the approval process for new certification fuels and the registration of those fuels. EPA needs to streamline its fuel petition process and eliminate unreasonable criteria for approval of high-octane fuels, such as E25-E40, that currently discourages innovation and obstructs the ability for new efficient high-octane fuels to compete in the marketplace.
Read the original story: Renewable Fuels Are Part of an ‘America First’ Energy Plan
April 26, 2017
By Bob Dinneen
In 2016, the U.S. ethanol industry produced a record 15.25 billion gallons of clean, high-octane fuel and exported more than a billion gallons of the fuel to Brazil, China, Canada and other countries. I anticipate 2017 will be another record year for production and use, but I remain focused on growing demand for our fuel. Growing demand means expanded market opportunities for higher ethanol blends and to that end, the Renewable Fuels Association’s top priority this year is securing RVP parity for all ethanol blends.
How did we get here? In 1989, the U.S. EPA provided a Reid vapor pressure (RVP) waiver to 10 percent ethanol blends, concluding there would be no air quality consequence and retailers would otherwise be unable to secure blendstocks for ethanol blending year-round. In 2011, EPA approved the use of E15 in 2001 and newer vehicles, but the agency did not extend the same RVP waiver as it did to E10. As a result of this disparity, retailers in conventional gasoline areas (most of the country) have to secure specialty—and costly—gasoline blendstocks in order to continue selling E15 in the summer (June 1-Sept. 15).
The RFA has repeatedly urged EPA to take immediate administrative actions to eliminate this nonsensical regulatory barrier that is impeding growth in the use of E15 and other higher ethanol blends. We have provided the agency with reams of data from the U.S. DOE and independent laboratories proving that extending the RVP tolerance currently provided only to E10 would have no detrimental impact on ozone or other air quality standards. In fact, because of the increased oxygen content of higher ethanol blends, there would actually be improved air quality.
Inexplicably, the Obama administration’s EPA did not seem to understand the damage inflicted on retailers and consumers by denying RVP parity, however we have hope under this new administration. One of President Trump’s priorities is an overhaul of the regulatory code that has needlessly burdened American businesses, stymied growth and increased cost with little or no environmental or consumer benefit; EPA’s treatment of volatility for ethanol-blended gasoline is a perfect example. The failure to grant the RVP waiver has needlessly discouraged retailers from offering the fuel blend year-round and punished consumers who cannot take advantage of the lowest cost, highest octane source of fuel in the world.
There are several ways for RVP parity to be achieved. RFA has worked for years on an administrative fix. To date, EPA has been reluctant to use its statutory authority to grant an RVP tolerance for E15. EPA could also lower the volatility of conventional fuels; but, while supportive, the agency has not shown much enthusiasm for getting that done either. RFA remains optimistic that, with a new sheriff in town and a fresh look at the existing statutory authority, we might soon be able to offer the lower-priced, higher-octane E15 to consumers year-round.
Of course, a legislative fix is also possible and the RFA supports bills that have been introduced, as long as they don’t jeopardize the Renewable Fuels Standard. For example, our champions on Capitol Hill have introduced two bills that would address the issue. In early March, Sens. Deb. Fischer, R-Neb., Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, introduced the Consumer and Fuel Retailer Choice Act (S. 517) that would extend RVP parity for ethanol blends above 10 percent. A companion bill, H.R. 1311, was also introduced in the House by Reps. Dave Loebsack, D-Iowa, and Adrian Smith, R-Neb.
We will continue to pursue all avenues to make sure parity is addressed. I want consumers to have a choice at the pump, whether that’s in February or July or November. Let’s work on making sure that happens this year.
Read the original article: RVP Parity a Win, Win for Consumers
April 26, 2017
Danish biotechnology firm Novozymes said it expects a slight rise in US ethanol output in 2017, after an increase in production in the first quarter of the year. But the company says US demand is down and inventories in the country are rising.
The firm said it had boosted sales of its enzymes to US bioethanol producers in the first three months of this year, helping grow sales of its bioenergy segment to 681mn kroner ($100mn) up by 9pc compared with January to March 2016. Novozymes said this was the result of estimated US ethanol output rising by 4pc in the first three months of this year, set against the first quarter a year ago. The company said it expects US ethanol output this year to be "on a par or slightly up on 2016." It also expects second generation ethanol output to increase by an unspecified amount.
The increase in its bioenergy enzymes sales reverses a decline in 2016 when Novozymes said US ethanol producers were looking to cut costs, as profits remained thin. The company has been aided in the last year by the launch of new products and in part by the decline in the oil price, which supported gasoline demand in the US, into which ethanol is blended.
But the firm said today US ethanol consumption had declined slightly in the first quarter and inventories were building. "Margins came down in the first quarter," said head of bioenergy Tina Sejersgard Fano.
The EIA said inventories are around 23mn bl, up by 1mn bl on the year, with its most recent production data giving output of 993,000 b/d, up by around 6pc on the year. That inventory build "could lead to a reduction in production," in the rest of the year said Holk Nielsen.
In Europe Novozymes owns a 10pc stake in the 40,000 tonnes/yr Crescentino cellulosic ethanol plant in northern Italy, operated by Beta Renewables. The unit was first started up in December 2012 but it ran into familiar problems associated with plants aiming to create ethanol from straw and other biomass. Novozymes said the plant is still not at capacity.
The company also supplies enzymes to cellulosic ethanol plants in the US, Brazil and China, all of which have faced similar issues. But Sejersgard Fano said US cellulosic plants were having "more and more stable production," despite being only a small part of overall US ethanol output.
But the company has successfully launched a new corn innoculant Acceleron B-300 SAT, partnering biotechnology firm Monsanto, aiming to boost US crop yields. The microbe coats seeds of corn hybrids sold by Monsanto, with Novozymes estimating the innoculant's use will reach 4.5mn to 9mn acres of planted US corn in 2017. Monsanto's sells its seeds to around 45mn acres in the US, around half of all US corn acreage.
The firm increased its first quarter net profit to 772mn kroner, up from 745mn on the year.
Read the original story: Novozymes Eyes Increase in US Ethanol Output
April 25, 2017
By Ann Bailey
The benefits in feeding distillers grains are well known—it’s an economical, nutritious, palatable addition to livestock and poultry rations. Less well known are its environmental benefits that range from reducing methane emissions from cattle to minimizing phosphorus content in manure and the risk from runoff into waterways. These little-known benefits are something that University of Minnesota professor and animal nutritionist Gerald (Jerry) Shurson believes the ethanol industry should tout.
“We’re entering an era where we have to think about the environmental impact of feed ingredients,” Shurson says. One of the biggest challenges today is to sustainably produce enough nutritious, safe and affordable food for a growing population, while at the same time preserving natural resources and minimizing negative impacts on the environment. Food demand is projected to increase 70 percent between 2010 and 2050 and the growing middle class is expected to have 1.8 times more consumer buying power, allowing more people to be able to buy more milk, meat and eggs, he says. Meeting the goal of feeding the world sustainably will be multidimensional, requiring innovations in production techniques and systems that increase the efficiency and amount of food produced, while preserving finite natural resources, protecting ecosystems and biodiversity, and mitigating the effects of global climate change, Shurson says.
Estimates indicate about 14 percent of human-produced greenhouse gas (GHG) emissions globally come from the livestock sector, Shurson says. While 14 percent is not a huge contribution to the total, nonetheless, it is significant and there are opportunities for the livestock industry to play a significant part in reducing greenhouse gases. Growing consumer concern about the effect the global livestock industry has on the environment and climate change is prompting integrated livestock and poultry producers and food production companies to begin emphasizing supply chain management to reduce their carbon footprints, Shurson says. “In other words, in addition to nutrition and economic value, they are also sourcing ingredients that have less negative impact on the environment.” Feed ingredients are beginning to be classified by renewable and nonrenewable resource use, acidification and eutrophication potential, and contribution to GHG emissions, he says.
DDGS can play an important role. In 2015, the ethanol industry produced roughly 37 million metric tons of DDGS for export and domestic use. Historically, most of the corn coproduct was fed to dairy and beef cattle, but because ethanol and DDGS production has greatly increased during the past 15 years, the need to build the market has increased, both domestically and overseas. Inclusion rates for dairy and beef cattle have also risen and demand from other livestock sectors, such as swine, poultry and aquaculture, both domestically and overseas, has increased.
Methane, Phosphorus Benefits
One side effect of increasing the inclusion rate of DDGS in the diet of dairy cows is it increases the amount of corn oil consumed. Several studies have shown that raising dietary fat content reduces methane production, Shurson notes. That’s important because methane is a significant contributor to greenhouse gas emissions. “The reduction in methane production in cattle is a positive environmental story that makes DDGS even more attractive, beyond its economic and performance benefits.”
On top of reducing methane emission in cows, feeding distillers grains brings an important environmental benefit to poultry and swine operations. “One of the unique advantages of using DDGS in swine and poultry diets is that it contains a greater concentration of digestible phosphorus than all other grains and grain coproducts, which can dramatically reduce the amount of phosphorus excretion in manure,” Shurson says.
“Whatever is not digested and absorbed by the animal comes out in the manure, so there is a dramatic reduction in phosphorus excretion in manure when adding DDGS to these diets.”
The reduced phosphorus content in manure from pigs and poultry fed DDGS means that when manure is applied to soil, there is less phosphorus runoff into rivers, lakes and streams, Shurson says.
“Because we take corn and put it through a fermentation process with yeast in an ethanol plant, that process converts much of the indigestible phosphorus into a digestible form which is important to pigs and poultry.” Less risk of runoff into waterways Shurson says, minimizes the risk of eutrophication, which can lead to algae blooms and fish kill, if it’s severe enough.
Another environmental advantage of the high digestibility of phosphorus in DDGS is that animal nutritionists can reduce inorganic phosphorus supplementation, Shurson says. “Some experts have predicted that within the next 20 years, our natural phosphate reserves around the world will be close to being depleted, so there’s a big amount of interest, and even organizations, focused on phosphorus conservation.” Distillers dried grains plays a big role because it is not only high in phosphorus content, but the phosphorus is more digestible, reducing the pressure on inorganic reserves, he says. “That’s a good thing from a long-term environmental perspective.”
Besides having positive environmental benefits, reducing the amount of inorganic phosphates in the animals’ diets is cost effective, Shurson adds. “Inorganic phosphate sources are relatively expensive and phosphorus is the third most expensive nutritional component in animal feeds. Using more DDGS to replace inorganic phosphate supplements reduces diet cost when diets are formulated on a digestible phosphorus basis.”
On top of reducing the amount of methane in cattle and phosphorus in pigs, DDGS also have potential to mitigate the smell in commercial swine operations. Some studies have shown that the amount of hydrogen sulfide emitted from stored manure is reduced in pigs that are fed 30 percent DDGS diets compared with corn-soybean meal diets, Shurson says, which reduces odor in manure storage pits. Odor reduction is a significant advantage because as urban areas move closer to large confinement operations, complaints about the smell emitted from the manure storage pits increase, Shurson says.
Telling the Story
Historically, the focus of nutritionists and livestock producers has been on minimizing costs while optimizing animal performance. That will continue, Shurson says, but there are already signs that environmental concerns will add another level to purchasing decision. “What I’m suggesting is, we’re entering an era where we have to think about the environmental impact of feed ingredients, because global agriculture is projected to represent more than 50 percent of total agricultural economic value in the next 10 years,” he says. The growing middle class in China and other Asian countries, together with an increasing global population, will result in the production of more food animals than ever before, Shurson notes. Furthermore, driven by consumer desire, food companies and major livestock and poultry integrators are beginning to make claims that the food they produce is, among other things, environmentally friendly, he says. The business models of companies such as Walmart, Smithfield Foods and Pepsico are putting more emphasis on limiting environmental impacts in response to those concerns.
Because DDGS are a significant global feed ingredient, Shurson believes the ethanol industry has an important story to tell. “A lot of companies are talking about, and struggling with, how they can move toward a bioeconomy. The role of ethanol and its major coproduct, DDGS, contribute to a positive environmental story. I’ve begun introducing these positive environmental impact stories in many of my presentations at feed conferences in the U.S. and overseas.”
Measuring the Impact
Feeding food-producing animals diets that reduce the negative effect on the environment is important because it is something that can have an appreciable, measurable effect, says Jennifer Schmitt, program director and lead scientist at the NorthStar Initiative for Sustainable Enterprise, a program at the Institute on the Environment at the University of Minnesota. During the next year, Schmitt will be working on a project with Shurson and Pedro Urriola, University of Minnesota animal science research assistant professor, that will look at how four hog diets affect the life-cycle (cradle to grave) environmental impact of hog production. One of the diets will contain DDGS, another food waste, a third, phytase enzymes and a fourth, synthetic amino acids. Hogs were chosen for the project because their digestive systems can handle a wider variety of feeds than animals such as dairy and beef cattle.
“If we can show ways to improve the environmental impacts with pork, we can reduce the overall environmental burden of meat animals,” Schmitt says. “Meat consumption has large environmental impacts in the world, so if we want to address greenhouse gas emissions, water use, water quality, land use, etc., we must either decrease meat consumption in the world or have more sustainable meat production.” It is unlikely total world meat consumption will decrease because the middle class is expected to grow and they will be eating more, not less, meat, Schmitt says. That means that finding a more sustainable way to produce meat is important. Manure management is the No. 1 environmental “hot spot” or the largest contributor, to the greenhouse gases associated with hog production. Second is production of corn feed products, followed by in-home consumption, which includes food waste, she says. “If we can hit those big hot spots and make improvements, we can have environmental gains.”
Read the original story: Untold Story of DDGS’ Positive Environmental Impact
April 19, 2017
By Emily Druckman
Gasoline consumed in the United States in 2016 contained more than 10% ethanol on average for the first time ever, according to an analysis of U.S. Energy Information Administration (EIA) data released today by the Renewable Fuels Association (RFA). The EIA data dispels the myth that 10% is the marketplace limit for ethanol content in U.S. gasoline, and demonstrates that the so-called “blend wall” is not a real constraint on ethanol consumption.
According to EIA data, finished motor gasoline consumption totaled 143.367 billion gallons in 2016. That volume of gasoline contained 14.399 billion gallons of ethanol, meaning the average ethanol content of gasoline consumed in 2016 was 10.04%. According to the RFA report, the data “…further underscore that statutory Renewable Fuel Standard (RFS) blending obligations in excess of the 10.0% level can be readily satisfied by the marketplace.”
Growing consumption of E15 (gasoline blends containing 15% ethanol), mid-level blends (containing 20-50% ethanol) and flex fuels (containing 51-83% ethanol) was responsible for the increase in the average ethanol content of U.S. gasoline in 2016. The RFA report finds that 2016 consumption of mid-level blends and flex fuels was at least 450 million gallons, and may have been more than 1 billion gallons if the American Petroleum Institute’s (API) assertions about ethanol-free gasoline (E0) demand are correct.
A summary of key findings include:
• National average ethanol content was 10.0% or higher in six of the last seven months of 2016, culminating with a record high monthly rate of 10.30% in December.
• On a weekly basis, the ethanol blend rate hit a weekly record of 10.41% in early January 2017.
• These data undermine the assertion by API and others that the gasoline market cannot accommodate more than 9.7% ethanol due to purported infrastructure and vehicle constraints. April 2015 was the last time average ethanol content was below 9.7%.
• Using the most conservative assumptions, EIA data imply that 447 million gallons of mid-level blends and flex fuels (containing 313 million gals. of ethanol) were consumed in 2016.
• However, if API’s assumptions about E0 demand are used, then consumption of mid-level blends and flex fuels was 1.2 to 1.7 billion gallons (843 mil. to 1.17 bil. gals. of ethanol).
“EIA’s data once again shows that the oil industry’s blend wall narrative is bankrupt, intended only to mislead consumers and undermine support for the Renewable Fuel Standard,” said RFA President and CEO Bob Dinneen. “The facts provide a different narrative. Ethanol is the lowest cost and cleanest burning source of octane today. Driven by the RFS and attractive blending economics, domestic refiners and blenders used more ethanol in 2016 than ever before and it’s likely that trend will continue this year. Consumers are gravitating toward E15, E85, and other mid-level blends where they are available. The oil industry can no longer claim the blend wall is any barrier to the effective implementation of the RFS.”
“Additionally, with EPA poised to soon issue its proposed 2018 RFS renewable volume obligations, this analysis unequivocally proves the agency needs to implement the 15 billion gallon statutory requirement for conventional biofuel. A strong RFS benefits consumers with cleaner air, greater energy security and a boost to local economies. We look forward to EPA implementing a strong RFS for 2018,” Dinneen added.
To view a copy of the analysis click here.
Read the original story: U.S. Gasoline Contained More than 10% Ethanol in 2016, Shattering the ‘Blend Wall’ Myth Once and For All
April 6, 2017
News Release:
MINNETONKA, Minn., USA, – Developments in cellulosic ethanol technology, including a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, are viewed as opportunities to help grow demand for Earth-friendly American ethanol.
According to Miloud Araba, head of Enogen® technical services at Syngenta, cellulosic innovation could enable dry grind ethanol producers to capitalize on steadily increasing Renewable Fuel Standard (RFS) volume requirements for cellulosic biofuels, which are up 35 percent for 2017.1 Araba discussed opportunities for cellulosic ethanol at the 2017 National Ethanol Conference.
“Approximately 10 percent of the corn kernel dry weight is fiber, and converting corn kernel fiber feedstock to cellulosic ethanol has been possible for some time,” Araba said. “However, recent advances in technologies can enable commercial deployment today. In fact, the approximately 12 million tons of corn kernel fiber feedstock already available at U.S. dry grind ethanol plants each year could produce a potential 1.5 billion gallons of additional, cellulosic ethanol.”
Araba added that the California Low Carbon Fuel Standard (LCFS) offers further opportunities for corn kernel fiber. “Low carbon intensity fuel that puts out fewer emissions will be increasingly needed in California to meet the goals of the LCFS program and the demand for LCFS credits,” he said. “Looking ahead, cellulosic ethanol from corn kernel fiber will be in demand because long-term objectives of the LCFS cannot be met with D6 ethanol at 10 percent.”2
In 2014, the U.S. Environmental Protection Agency added corn kernel fiber to the list of qualifying cellulosic biofuel feedstocks as part of the RFS. That same year, using Cellerate™ process technology, Quad County Corn Processors (QCCP) was the first commercial cellulosic facility – using corn kernel fiber as feedstock – and achieved EPA certification to generate D3 RINs. Through November 2016, QCCP’s output represented approximately 85 percent of D3 RIN ethanol produced. To date, QCCP has produced more than 5.5 million gallons of cellulosic ethanol.
Araba added that Cellerate enables an ethanol plant to leverage its existing infrastructure to produce cellulosic ethanol and significantly increase throughput. Performance results achieved at QCCP to date include: a six percent yield increase plus a 20 percent throughput increase combined for a 26 percent increase in ethanol production3; higher protein feed co-products; and improved oil yield.
“In addition to improvements in throughput and yield, Cellerate enhanced by Enogen® corn enzyme technology drives corn oil yield, leads to increased protein levels and lower residual starch content in co-products,” Araba said. “Protein increases were observed immediately after Cellerate was integrated at QCCP in July of 2014. Initial feed formulation evaluations have shown that Cellerate can lead to an increase in the value of feed co-products, as well as potential access to higher value feed markets.”4
For Cellerate technical inquiries, or a tour of the Cellerate process at QCCP, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.">Tim Tierney with Syngenta at 612-801-9775 or Travis Brotherson with QCCP at 712-282-4628. Learn more about Cellerate process technology at www.Enogen.com
Read the original release: Syngenta Discusses the Future of Cellulosic Ethanol and Opportunities for Dry Grind Ethanol Producers
April 7, 2017
By Rachel Gantz
This morning, the American Petroleum Institute will issue yet another push poll, claiming that a majority of Americans oppose the Renewable Fuel Standard (RFS). But repeating the same tired, skewed results doesn’t make it true.
If past is prologue, API will have framed its RFS polling questions to be biased against the biofuels program. Take API’s April 2016 polling results. Here’s API’s first misleading question:
“As you may know, much of the gasoline in the U.S. market currently contains up to a 10% ethanol blend. Most auto manufacturers have said they will not cover vehicle damage caused by higher ethanol fuel blends over 10% if the vehicle is not specifically designed for it. Given that situation, how concerned are you about government requirements that would increase the amount of ethanol in gasoline?”
What’s the truth? The RFS does not require consumers to purchase increasing—or any—biofuels in their fuel, while ethanol blends of up to 15% are approved for approximately 90% of the vehicles on U.S. roads today.
Think API’s new push poll will be any different? Neither do we.
Here’s the truth. Nearly sixty percent of those polled in a recent national survey support the RFS.
The survey, conducted in late March by Morning Consult on behalf of the Renewable Fuels Association, found that 58% of those polled support the RFS, with only 17% of those polled opposed to the RFS. That’s a more than 3:1 margin of support for the RFS.
“Consumers all across our country are seeing the benefits of the RFS, whether it’s cleaner air, a reduction in our dependence on petroleum or a boost to local economies,” said RFA President and CEO Bob Dinneen. “The RFS has been an unmitigated success, stimulating growth in domestic renewable fuels, creating a value-added market for farmers and providing choice at the pump for consumers.”
“It’s no wonder that API, which represents petroleum producers, wants to obfuscate the success of a program that boosts the production and use of renewable fuel. Consumers want a choice at the pump and the RFS helps ensure that choice exists. API can release all the push polls it wants, but the truth speaks for itself,” Dinneen added.
Read the original release: API Push Poll Doesn’t Reflect Reality