In the News

The Hill

Aug 21, 2021

After suffering through more than a year of quarantines, stay-at-home orders, and travel lockdowns, millions of Americans have eagerly returned to the nation’s highways this summer for long-awaited vacations and road trips. As a result, gasoline demand has surged to record highsand pump prices are at levels not seen since 2014.

In recent weeks, regular-grade gas prices averaged $3.17 per gallon, up almost 50 percent from the same time last year. With higher fuel prices threatening to undermine the nation’s ongoing economic recovery, it’s easy to see why the Biden administration is looking for ways to ease America’s pain at the pump.  

But what’s not easy to see is why the White House recently chose to respond to higher pump prices bypushing OPEC+ countries to increase oil production. It was a baffling move that raised eyebrows across the political spectrum. After all, calling on countries like Saudi Arabia and Russia to boost their output of dirty, high-carbon crude oil obviously runs counter to the president’s stated goals regarding climate change, clean energy, domestic job creation and energy security.

At the same time, the administration’s ambitious electric vehicle goals are taking a hit due to geopolitical instability and uncertainty regarding the availability of minerals needed for electric vehicle batteries. The rapid fall of Afghanistan to the Taliban regime threatens to hand one of the world’s largest deposits of lithium— the most crucial mineral for batteries — over to Russiaand China, which already dominates the world market for rare earth metals. Indeed, the Pentagon once warned that Afghanistan could become the "Saudi Arabia of lithium.” 

Before the Biden administration looks to OPEC+ countries or mineral-rich nations like Afghanistan, China and Bolivia for help, it has an opportunity to turn to America’s heartland for a homegrown solution. Renewable fuels like ethanol have a 40-year proven track record of success in helping to lower prices at the pump while simultaneously reducing carbon emissions,  supporting good-paying clean energy jobsand curtailing crude oil imports.

Four decades’ worth of investment and innovation by ethanol producers has resulted in real breakthroughs in lower-carbon transportation fuels. Today’s corn-based ethanol reduces carbon emissions by 52 percent when compared directly to gasoline, according to a recent studyfrom the Department of Energy’s Argonne National Laboratory. Another studyby scientists from Harvard University, Massachusetts Institute of Technology (MIT) and Tufts University similarly shows corn ethanol achieves an average carbon reduction of 46 percent compared to gasoline, with some ethanol in the market today achieving a 61 percent carbon reduction. 

In response to policies like the Renewable Fuel Standard (RFS), California Low Carbon Fuel Standard, and Oregon Clean Fuels Program, along with the Biden administration’s recommitment to the Paris Agreement, the pace of low-carbon innovation and investment is accelerating. We firmly believe ethanol will achieve a net-zero carbon footprint in the years ahead, as the supply chain adopts carbon capture and sequestration technologies, uses more renewable electricity and biogas to power biorefineries, and expands carbon-efficient feedstock production. In fact, the members of my organization sent a letterto President Bidenin July pledging to ensure that ethanol is a fully carbon-neutral fuel source by 2050 or sooner.

For this vision to become a reality, our industry is looking to the Biden administration and Congress to take action that drives further innovation and creates certainty in the biofuels marketplace. The first step should be enforcing robust RFS volumes and resisting presurefrom oil refiners to waive biofuel blending requirements or push their blending obligations off on retail gas station owners. In addition, Congress and the administration should support the development of a national clean fuel standard, as well as provisions to expand ethanol infrastructure and production of flex-fuel vehicles that can operate on fuels containing up to 85 percent ethanol. 

Before we turn to the Persian Gulf for answers to our nation’s energy and climate challenges, let’s give the American heartland a shot. The solution to high pump prices and decarbonization lies in the farm fields of Minnesota, Wisconsin, Iowa and other Midwest states — not in the oil fields of Iraq, Saudi Arabia, and other Middle East nations.

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Fuels Market News

Aug 11, 2021

If the global priority with regards to the transportation sector is to reduce carbon emissions, then putting all our eggs in one basket and waiting for electrification to transform the world is already a failed strategy. With nearly 1.5 billion vehicles in the world, and with more than 90 million new vehicles sold annually (*nonpandemic years, of course), it is impossible to envision a transition to relying on only battery electric vehicles (BEV) any time soon, no matter what governments may try to do in terms of sales requirements. So, what should be done regarding the existing and continuing combustion engine-liquid fuels market? To find viable solutions—and we certainly can—we must adopt a broader perspective, be open to options and think about engines and fuels as a system.

Relevant to this topic is our musical feature of the month: Willie Nelson. The song “On the Road Again” plays well with some of the recurring themes found in this column, but the primary importance is found with Willie himself, a strong advocate for the use of biofuels who even established a brand of biodiesel called “BioWillie.” His support for the fuel was based upon personal experience with its performance but also his interest in supporting farmers and reducing America’s reliance on foreign oil.

There are options to improve the emissions profile and lower the carbon impact of traditional powertrains by evaluating engines and fuels from a systemic perspective. One of the most developed efforts in this context involves high compression engines and higher-octane fuel. The U.S. Department of Energy’s Co-Optimization of Fuels and Engines initiative has done great work evaluating what might be possible and how fuel enabling more efficient engine design could be produced.

In addition to what Co-Optima has produced, the Fuels Institute published two reports on octane evaluating its role in engine performance and what it would take to introduce a new high-octane fuel into the market to support advanced engine design. Short story: It would take about 20 years and cost quite bit of money to transition the entire market. But the idea of maximizing fuel properties to improve the efficiency of engines is the right approach, and the results of the Co-Optima research provide some valuable insights into possibilities.

The octane discussion continues, and there are opportunities to be exploited.

BIOWILLIE AND FRIENDS

We have been blending biofuels into petroleum products for decades, and there could be opportunities to leverage that experience to reduce the overall carbon intensity of our fuel, thereby having an immediate impact on carbon emissions from existing and future combustion engine vehicles.

According to the California Air Resources Board (CARB), biofuels already provide a lower carbon footprint than hydrocarbon fuels and are projected to improve over time as energy inputs for producing the fuels becomes greener. Compared with California-specification gasoline, starch ethanol (i.e., produced from corn) is 28% less carbon intense and is projected to reach 55% reduction by 2040. Meanwhile, biomass-based diesel (both biodiesel and renewable diesel) is 70% less carbon intense. These are fuels currently available throughout the market with decades of user experience.

While there are some compatibility issues associated with increasing the use of biofuels, these can be overcome on a shorter time frame than will be required to convert the fleet to BEVs. And, according to a study currently under development by the Fuels Institute (slated for release this summer), there are business opportunities associated with the retail of biofuel blends.

The benefits of incorporating more biofuel blends into the market can be enhanced if we apply the systems approach mentioned above. Not all vehicles are manufactured to run on all the biofuel blends that can be brought to market, but if there were a strategy in place in which new combustion engines were designed to take advantage of the performance properties of biofuels, then new markets could develop.

LESSONS FROM THE HIGHWAYMEN

Willie Nelson was a great solo act, but he also found success by joining with Johnny Cash, Waylon Jennings and Kris Kristofferson to form the Highwaymen—a country music supergroup. I think our policymakers can learn a lot from this example of bringing together the best of the best to create something even better—let’s combine the best options available to us to reduce emissions.

I believe the next couple of years represent a unique opportunity to consider the future of federal biofuels policies. The statutory volumetric standards of the Renewable Fuel Standard extend only through 2022, at which point the Environmental Protection Agency will be fully responsible for setting requirements. There are many who believe the program needs to be reconsidered by Congress, and some are suggest that California’s Low Carbon Fuel Standard should be reviewed as a possible model. I have no idea how these discussions will play out, but the data suggest a robust biofuels policy could be a significant contributor to the overall objectives of lowering our carbon emissions.

In the shadow of all the attention being given to electrification, it is my hope that policy discussions will incorporate the many ideas that exist and do not ignore the continuous role of the dominant transportation energy source in the world—liquid fuels.

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Ethanol Producer Magazine

Aug 10, 2021

The U.S. Energy Information Administration increased its forecast for 2022 ethanol production in its latest Short-Term Energy Outlook, released Aug. 10. The forecasts for 2021 ethanol production and 2021 and 2022 ethanol blending were maintained.

The EIA currently predicts fuel ethanol production will average 970,000 barrels per day this year, up from 910,000 barrels per day in 2020. In 2022, ethanol production is currently expected to average 1.01 million barrels per day, up slightly from the agency’s forecast of 1 million barrels per day made in the July STEO.

On a quarterly basis, ethanol production is expected to average 1.01 million barrels per day during the third quarter of this year, falling to 980,000 barrels per day in the fourth quarter. In 2022, ethanol production is expected to average 980,000 barrels per day in the first quarter, 1.02 million barrels per day in the second quarter, 1.03 million barrels per day in the third quarter, and 1.02 million barrels per day in the fourth quarter.

Ethanol blending is currently expected to average 900,000 barrels per day in 2021, up from 820,000 barrels per day in 2020. Moving into 2020, ethanol blending is expected to increase to an average of 920,000 barrels per day.

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Ethanol Producer Magazine

Aug 9, 2021

Growth Energy, Renewable Fuels Association, National Biodiesel Board, National Corn Growers Association, National Farmers Union and American Farm Bureau Federation are urging federal lawmakers to ensure any future tax credit for sustainable aviation fuel (SAF) is based on accurate carbon accounting lifecycle analysis led by the U.S. Department of Energy.

The six biofuel and ag groups on Aug. 6 sent a letter to the U.S. Senate Committee on Finance and the U.S. House of Representatives Committee on Ways and Means outlining recommendations for a sound and effective SAF tax credit.

“As the Senate and House of Representatives consider new legislation to establish a tax credit for sustainable aviation fuel (SAF) this year, we respectfully request this tax credit be based on the most updated and accurate science-based lifecycle carbon assessment (LCA) methods,” the groups wrote. “Without a sound LCA as its basis, a SAF tax credit will be significantly less effective in driving investment in new fuels and reducing aviation emissions.

“Numerous members of our respective organizations are poised to produce SAF or sustainable feedstocks for SAF,” they continued. “Many others are looking to work toward participation in the full value chain in the relatively near future. We recognize the importance of decarbonizing the aviation sector with low carbon liquid fuels. Because biomass feedstocks are essential SAF sources, it is imperative that the tax credit properly account for the lifecycle emissions of these sources and the petroleum products these new fuels will replace.”

The ag and biofuel groups ask lawmakers to make the DOE the lead agency in establishing a regularly updated LCA for any SAF credit. “Across our federal government, DOE has the best resources, expertise, and current ability to assess lifecycle emissions fairly and scientifically,” the groups wrote. “At minimum, the DOE should be a full and equal partner in this role with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA).”

The letter explains that current legislation relies heavily on LCA modeling from the International Civil Aviation Organization. That modeling, the groups explain, does not use the most comprehensive model approaches or most recent data for some important SAF pathways. As a result, “carbon intensity estimates under ICAO for some SAF pathways are inaccurate and inappropriately penalized,” the groups said.

The letter also points to potential problems with the use of EPA modeling. “Unlike the DOE, EPA does not maintain a regularly updated LCA model or methodology for biofuels,” the groups wrote. “Notably EPA’s most recent comprehensive analysis for biofuels was conducted in 2009. EPA’s analysis does not reflect or capture the continuous improvement that has been witnessed over the past decade in biomass production or the technology and efficiency improvements in fuel production. As climate-smart agriculture practices continue to improve and expand and as new fuel production technologies for SAF are developed and scaled to market, a regularly updated LCA is essential to the success of a SAF tax credit and its ability to incentivize new fuels and reduce emissions.”

In addition, the biofuel and ag groups ask lawmakers to ensure LCA for petroleum jet fuels be based on the most recent and accurate data and recommend Congress designate a baseline carbon intensity value for fossil jet fuel.

“In summary, our recommendation for a sound, sustainable, and effective SAF tax credit is to ensure the legislation allows a DOE-led LCA, unencumbered by ICAO, utilizing USDA expertise on agriculture feedstocks,” the groups wrote. “Furthermore, a date-certain, near-term transition to this DOE-led LCA methodology must be an integral part of any SAF tax credit legislation. Finally, we urge that you consider establishing or directing a clear baseline emissions value for petroleum-based aviation fuel, informed by the most recent science and data.

“Without these reforms, the federal government’s desire to promote and develop robust domestic SAF production capabilities as quickly as possible will be put at serious risk,” they continued. “Sustainable biomass use, with a proper, scientifically driven LCA, is essential to produce SAF here in America for domestic and international consumption. Our organizations could only support a SAF tax credit with a sound LCA as its basis.”

A full copy of the letter can be downloaded from the Growth Energy  website

Read the original story here.

Renewable Fuels Association

Aug 5, 2021

August 5, 2021 — American exports of ethanol bounced back by 16% in June to 81.9 million gallons. Nearly three-fourths of all U.S. ethanol exports were shipped to just three countries, with Brazil and China markedly absent from the list. Exports to Canada—our largest customer—jumped 23% to 33.5 mg. South Korea imported 15.9 mg (up 76%) and Peru imported a record 9.4 mg (a seven-fold increase from May). Other substantial markets included Mexico (5.4 mg, up 68% to a ten-month high), the Netherlands (3.8 mg), Jamaica (3.3 mg), India (3.2 mg), and Sweden (2.0 mg). U.S. ethanol exports for the first half of 2021 totaled 664.2 mg, or 7% less than last year at this time.

The U.S. logged the first significant imports of foreign ethanol of the year. Brazil exported 12.6 mg of undenatured ethanol while a minimal volume of denatured ethanol arrived from France and Canada.

U.S. exports of dried distillers grains (DDGS)—the animal feed co-product generated by dry-mill ethanol plants—eased 10% to 939,177 metric tons (mt). Mexico imported 232,786 mt (slipping 9%), representing a quarter of all U.S. DDGS exports in June, and remained our top customer for the ninth consecutive month. Sales to Vietnam were robust at 119,463 mt (up 11%) and New Zealand imported a record 66,612 mt. However, DDGS exports to South Korea dropped 28% to 72,857 mt for the lowest volume in a year. Other larger trade partners included Indonesia (61,148 mt, down 6%), Turkey (55,727 mt, down 29%), Canada (55,388 mt, up 45% to the largest volume in nearly two years), Japan (34,744 mt, down 35%), Israel (32,658 mt, up 19%), and Thailand (25,209 mt, down 52%). Total DDGS exports for the first half of the year totaled 5.42 million mt, or 10% ahead of last year.

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U.S. Grains Council

Jul 29, 2021

The U.S. Grains Council (USGC) brought members together in person Wednesday for the first time since the beginning of the pandemic, launching its summer annual meeting in Des Moines, Iowa, and online through a virtual meeting platform.

Joining for his first in-person meeting since taking on his role as U.S. Department of Agriculture Secretary, Tom Vilsack addressed attendees on the status and future of U.S. agricultural trade.

Vilsack began his remarks by calling the U.S. grains industry the “secret sauce” of trade, noting that its members understand the importance of partnership to growing export demand.

“We are in the process at USDA to build back better for trade,” Vilsack said. “We’ve been working on removing barriers to trade and are ready to engage more frequently and closely with our counterparts in other countries. American agriculture is at the center of that work because if something happens internationally, U.S. ag will feel that change. We are prepared and ready to look for more opportunities and diversity in trade partners.”

In addition, Vilsack emphasized the continued need for biofuels in the future, including for aviation and marine use.

“It will be a long time before we’re in the position where we won’t need biofuels. We need to take a look at creative ways that we can use bio-based products. If we can do this, I think we’ll see a bright future for American agriculture,” he said.

USGC Chairman Jim Raben, a farmer from Illinois, began the 61st Annual Board of Delegates Meeting by thanking the industry for their perseverance during the global pandemic.

“Over the last year, our members provided customers around the world a virtual, behind-the-scenes look at their operations and ensured our global partners that the United States would continue to provide them a reliable, high-quality product, despite these uncertain times,” Raben said.

“Likewise, our staff – time and time again – have stepped up to the plate and trade has continued despite the pandemic keeping us at home and the technology challenges we’ve all encountered and had to overcome.”

USGC President and CEO Ryan LeGrand offered his assessment of where markets stand for U.S. corn, sorghum, barley, distiller’s dried grains with solubles (DDGS) and ethanol.

“During this time, we were challenged to think in new ways, figure out how we could use technology to keep servicing our customers and to keep markets open,” he said. “I can definitively say we have been successful. We’ve had record sales of U.S. corn and U.S. sorghum during this period. While it’s still a challenging trade horizon beyond our shores, it’s one that holds great promise.”

Nearly 400 in-person and online attendees also heard a recorded presentation by former World Trade Organization (WTO) Deputy Director-General Ambassador Alan Wolff and a live presentation by futurist Christopher Kent of Foresight Alliance, who shared his vision for what U.S. trade may look like in a post-COVID world.

World Food Prize winner, Ohio State University distinguished professor and soil scientist Dr. Rattan Lal spoke on the role of agriculture in sustainability as the world emerges from the global pandemic.

In the afternoon, attendees spent time in one or more of seven Council Advisory Team (A-Team) meetings. Each A-Team has a specific focus – including Asia, Ethanol, Innovation and Sustainability, Middle East/Africa/South Asia, Trade Policy, Value-Added and Western Hemisphere – allowing members the chance to offer input, set priorities and help determine the Council’s course of action over the coming year.

On Thursday, Council programming is scheduled to focus on selected markets around the world in which it works – including Latin America, the Middle East and Africa, South Asia, Mexico and China. The meeting will culminate on Friday with the Council’s Board of Delegates meeting, appointment of new A-Team leaders and election of members of the 2021/2022 Board of Directors.

More from the meeting is available on social media using the hashtag #grains21.

Read the original press release here.

CHS Inc

Aug 2, 2021

ST. PAUL, MINN. (August 2, 2021) - CHS Inc., the nation’s leading agribusiness cooperative, will expand access to higher ethanol blend fuels by offering E15 through 19 additional fuel terminals starting in early August 2021.  

CHS is registered with the U.S. Environmental Protection Agency (EPA) as an E15 manufacturer and sells E15 as an approved grade of fuel through its Cenex® brand retail locations.  

CHS plans to offer E15 at the following Magellan terminals: Alexandria, Minnesota; Cheyenne, Wyoming; Columbia, Missouri; Des Moines, Iowa; Doniphan, Nebraska; Fargo, North Dakota; Grand Forks, North Dakota; Great Bend, Kansas; Mankato, Minnesota; Marshall, Minnesota; Mason City Iowa; Milford, Iowa; Minneapolis, Minnesota; Omaha, Nebraska; Rochester, Minnesota; Springfield, Missouri; Waterloo, Iowa. The fuel will also now be available through the Nustar terminal in Jamestown, North Dakota; as well as the CHS terminal in McPherson, Kansas.  

In addition to these terminals, CHS already  offers E15 at 10 Nustar terminals and one CHS terminal.  

“As the nation’s leading farmer-owned cooperative, expanding options for ethanol blended fuel is important for our Cenex brand retailers and our farmer-owners,” says Akhtar Hussain, director of refined fuels marketing, CHS. “CHS has always been committed to offering ethanol blended flexible fuels throughout its network of 1,450 Cenex brand retail facilities. We continue to demonstrate this commitment by working with our terminal partners to offer higher ethanol blends in a broader geography across the Cenex retail network.” 

To make E15 more accessible, CHS has removed barriers for its Cenex brand retail locations by establishing an EPA-approved misfueling mitigation plan – the only refiner to do so – and establishing E15 as a qualifying grade of fuel. CHS also owns two EPA-approved ethanol plants in Rochelle and Annawan, Illinois.  

CHS Inc.  (www.chsinc.com)  is a leading global agribusiness owned by farmers, ranchers and cooperatives across the United States. Diversified in energy, agronomy, grains and foods, CHS is committed to creating connections to empower agriculture, helping its farmer-owners, customers and other stakeholders grow their businesses through its domestic and global operations. CHS supplies energy, crop nutrients, seed, crop protection products, grain marketing services, production and agricultural services, animal nutrition products, foods and food ingredients, and risk management services. The company operates petroleum refineries and pipelines and manufactures, markets and distributes Cenex® brand refined fuels, lubricants, propane and renewable energy products.

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Ethanol Producer Magazine

Juil 29, 2021

The USDA recently released its Grain Crushings and Co-Products Production report for July, reporting that corn use for fuel ethanol in May was up significantly from both the previous month and May 2020.

Total corn consumed for alcohol and other uses was at 503 million bushels in May, up 9 percent from the previous month and up 42 percent from May 2020. May 2021 usage included 91.2 percent for alcohol and 8.8 percent for other purposes.

Corn consumed for fuel alcohol reached 488 million bushels, up 10 percent from the previous month and up 49 percent when compared to May 2020. Corn consumed for dry milling fuel production and wet milling fuel production was 91.7 percent and 8.3 percent, respectively.

Approximately 182,000 hundredweight (cwt) (10,192 tons) of sorghum also went to fuel ethanol production in May, down from 2.047 million cwt in May 2020. The volume of sorghum used for fuel ethanol production in April 2021 was withheld by USDA to avoid disclosing data for individual operations.

At dry mills, condensed distillers with solubles production reached 95,299 tons, up from 86,074 tons in April and 80,971 tons in May 2020. Corn oil production reached 167,905 tons, up from 149,431 tons the previous month and 105,231 tons in May of the previous year. Distillers dried grains production increased to 380,620 tons, up from 342,870 tons in April and 205,750 tons in May 2020. Distillers dried grains with solubles production reached 1.94 million tons, up from 1.77 million tons the previous month and 1.24 million tons in May 2020. Wet distillers grains production reached 1.08 million tons, up slightly from the previous month and up significantly from 739,106 tons in May 2020. Modified distillers wet grains production was at 320,803 tons, down from 373,090 tons in April, but up from 242,365 tons the same month of last year.

At wet mills, corn germ meal production reached 64,607 tons, up from 63,568 tons in April and 64,200 tons in May 2020. Corn gluten feed production reached 299,123 tons, up from 291,558 tons the previous month and 291,064 tons in May of last year. Corn gluten meal production reached 114,135 tons, up from 113,905 tons in April and 91,013 tons in May 2020. Wet corn gluten feed production was at 208,575 tons, up from 202,491 tons in April, but down from 211,741 tons in May 2020.

At dry and wet mills, carbon dioxide captured reached 229,471 tons, up from 225,169 tons in April and 149,453 tons in May 2020.

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