In the News
Nov 1, 2014
By David Fondler
To Randall Doyal, ethanol seems like a no-brainer: a renewable, domestically produced automotive fuel that reduces the need for imported oil; that burns clean, reducing harmful greenhouse gases and pollution; that boosts farmers and rural economies by creating jobs and raising land values.
And he's ready to face down the detractors -- those who say corn-based ethanol operates in an artificial market, with demand created by political fiat through fuel-blend mandates and engine-emission standards; that its production removes corn from the food chain, thus raising commodity prices; that at higher blends it can harm car engines.
The food-vs.-fuel debate has been going on for years, though ebbing somewhat recently with an abundant U.S. corn harvest and low prices and low inflation. Meanwhile, the development of so-called cellulosic ethanol, made from nonfood grass products, has been slow to develop.
Doyal runs Al-Corn Clean Fuel, a Claremont, Minn., farmer-owned co-op that produces 50 million gallons of ethanol a year. On Oct. 1, he became chairman of the Renewable Fuels Association, which lobbies for ethanol in Washington, D.C.
In a recent interview, Doyal described his organization and gave its side of some of the issues ethanol faces. His answers have been edited for context and clarity.
Tell us about the RFA and how you came to lead it.
"The RFA is our national ethanol organization based in Washington, D.C. It provides us with a person who can do lobbying on Capitol Hill, and it provides a focal point for our industry to get together to learn about policy, to have some effect or influence on what happens in Washington, and to keep ourselves advised of all the issues that affect our industry.
"It's funded by ethanol producers around the U.S., ethanol producers who are dues-paying members and have a seat on the board. After years of being on the board and doing various things for RFA, I was asked to serve on the executive committee, at one point was the treasurer; for the last couple of years was the vice chair, and was just elected chairman."
Does the RFA concern itself with other forms of renewable energy, say wind or solar, or do you solely advocate for automotive fuel?
"Correct. It has been historically the fuels industry, the renewable fuels industry in the U.S., which is primarily ethanol."
Do you see the industry moving away from using food stocks to produce fuel?
"We are really feed stock-neutral. The majority of the industry does utilize corn; we don't utilize food. There's a big difference between food and feed, and I would hope that this last year, when ethanol production has been high and corn prices have fallen, and food prices haven't done anything but go up, would kind of put the lie to that idea that there's a food-vs.-fuel debate that ought to be had. It's not that ethanol production influences the cost of food at all. Oil prices have more to do with that than anything else."
How does that work?
"Because of transportation costs, because of packaging, there's a lot more impact from the price of oil on food prices than anything else."
What about making ethanol from grass or other nonedible plant material? Will that ever go large-scale?
"We certainly think there's an opportunity there. There's a lot of work and research being done, but it's still a very fledgling industry and has a lot of need to grow. There's some recent opening of cellulosic plants that make this much more visible, but as an industry it's still very small compared to the potential for production and demand."
Do you think ethanol-blending mandates should be flexible, taking the price of corn into account, so as not to artificially raise the price in lean years?
"Within the renewable fuels standard, there is a mechanism to allow (the Environmental Protection Agency) to say there is an issue with the cost of corn, and it has more to do with availability than anything else.
"But as you can see right now, corn prices have fallen precipitously; supplies are way up. So thank goodness we've got an ethanol industry that's consuming some of that corn; it's providing some support."
But would your industry, and your market, even exist and compete if it weren't for the government mandates?
"Ethanol competes in the market today. We're selling ethanol below the price of gasoline. I think it's completely off base to think it's not competitive because there's a mandate. Frankly, we have a mandate in the U.S. for 90 percent gasoline, and it's time that we change that. We're producing a fuel that's cheaper, that's higher octane, that burns cleaner, that's renewable and that could displace petroleum."
What about the debate over whether car engines can be harmed by higher blends of ethanol in gas?
"E15 (a 15 percent blend of ethanol), according to EPA, can be run in any vehicle manufactured after the year 2001. Their concerns had to do more with emissions systems and catalytic converters, but it will operate with relatively no difference in performance, as far as the vehicle goes.
"There has been a tremendous amount of noise by folks who don't want to lose another 5 percent of the market share and have fought very hard to prevent acceptance of anything higher than E10."
You mean the oil companies?
"Yes. When we look around the country, there are folks who are adopting E15 or even higher blends, folks that are offering E20-30-40, but those fuels by law are only supposed to be introduced to vehicles that have flex-fuel engines in them, that are higher ethanol-compatible.
"Anyway, you see independents, those folks that are not part of any major oil company, starting to offer those. You see it around the Twin Cities, a new group that calls itself Minnoco, offering E15, and they're growing. But there's almost no E15 in stations that are controlled or owned by the major oil companies."
Do you see that changing? Say, ethanol producers partnering with oil companies to jointly market a product?
"I haven't seen much of that yet. I would certainly hold out hope for that to happen down the road, because, frankly, that's our customer, that's who we sell to. So we'd love to work together with them. It hasn't been a stellar relationship so far."
Ethanol previously has received a lot of bipartisan support in Washington. Do you see that waning at all?
"It's hard me to say what happens in Washington, because Washington seems to be such a dysfunctional place, but in terms of bipartisan support for the ethanol industry, I continue to see that as I go through the Midwest and talk to Midwest legislators; it really is a bipartisan issue for them, they get it and they understand."
Read the original story here : Ethanol Advocate Wants To Keep His Issue On The Front Burner
Oct 30, 2014
By Russell Hubbard
Green Plains Inc., whose shares have climbed 80 percent this year, told investors Wednesday that higher blends of ethanol are making it into the nation’s gas supply but that congested rail networks make it hard to get it out there.
“The last couple of weeks or so, we are seeing a significant degradation of service on several carriers,” Green Plains Chief Executive Todd Becker said on a conference call, discussing rail service and third-quarter earnings.
At the same time, gasoline blended to form a fuel that is 15 percent ethanol, called E15, is growing in popularity, Becker said.
“We think there will be hundreds more stations offering it next year,” Becker said. “We are seeing big initiatives from very large retail chains to get this product in the pipeline.”
Omaha-based Green Plains operates 12 plants around the country, producing about 1 billion gallons of ethanol a year. The company Tuesday reported a third-quarter profit that jumped more than fourfold, to $41.7 million.
Additional gallons of E15, now available at only about 90 stations in 14 states, will boost volumes going forward, Becker said. He told analysts and investors on the conference call that the ethanol industry is working hard to persuade retailers. Consumers, he said, are already sold.
“The stations that offer E15 are the cheapest on the street and they are draining their tanks all the time,” Becker said. “The product gets sold when offered to consumers.”
Blending ethanol into gasoline can create a motor fuel that is cheaper than clear gas because ethanol, produced mainly from corn, is less expensive. Iowa and Nebraska are the top ethanol-producing states, and rank first and third in corn production.
Ethanol has its opponents, who say per-gallon savings are offset by lower mileage from ethanol’s lower energy content.
On the rail transport front, Becker said it was better than the previous quarter but has hit recent snags. All of the nation’s major freight railroads are now required to file weekly reports with the federal Surface Transportation Board. The reports were ordered after grain shippers complained that crude oil gets priority over other cargoes, a scenario denied by the railroads.
“We are still able to move product pretty well, but have seen some slowdowns of late,” Becker said.
The nation’s two largest railroads acknowledge problems. Omaha-based Union Pacific and Berkshire Hathaway-owned BNSF Railway say they are working to speed service by hiring crews, adding equipment and improving track.
“BNSF is working with our ethanol customers, including Green Plains, to make sure their products get to their ultimate destination,” spokeswoman Amy Casas said. “Our ethanol customers are experiencing gradual improvements on our railroad and have our continued commitment that we will add the resources necessary to handle all of our customers’ business.”
Union Pacific spokeswoman Calli Hite said Chief Executive Jack Koraleski discussed rail network problems during a conference call with investors and analysts last week, and pledged to remedy them.
“Union Pacific has increased its locomotive fleet by around 900 units since September of last year and will hire 5,500 new employees this year,” Hite said. “The company also has stepped up its overall resource plan to provide the level of service our customers have come to expect.”
Read the original story here : Ethanol Maker Green Plains Says Rail Transport Not Keeping Up As More Embrace E15
Oct 27, 2014
By ICM Inc
ICM Inc. is pleased to announce that Patriot Renewable Fuels LLC of Annawan, Illinois, has entered into a professional services agreement for ICM’s patent-pending Fiber Separation Technology and ICM’s patent-pending Generation 1.5 Grain Fiber to Cellulosic Ethanol Technology (Gen 1.5) for its ethanol plant.
FST is a value-added platform technology that increases ethanol yield and throughput, as well as increases oil recovery for its customers. The FST process separates the fiber that will be used as the feedstock for the Gen 1.5 process to produce cellulosic ethanol. Removing the fiber from the standard ethanol stream with the FST process allows the plant to produce each gallon more efficiently as well as creates the option for diversified co-products with high protein feeds and fiber to be produced.
Chris Mitchell, president of ICM, said, “ICM is pleased to see Patriot take another step forward toward cellulosic ethanol by agreeing to complete the specific engineering and design of our technologies for their Annawan site. This step will enable their board to evaluate a construction start in 2015. We appreciate Patriot’s continuing business as it continues to build on ICM’s base ethanol plant and our Selective Milling Technology. Patriot will be positioning itself to lead our industry into cellulosic ethanol, which not only diversifies its plant, but improves ethanol yield to over 3.08 gallons per bushel. Our team is excited to continue working with Patriot as it grows its business.”
“ICM’s ethanol technology is a logical platform on which to build our business as a biorefinery,” said Rick Vondra, vice president and general manager of Patriot Renewable Fuels. “There are many new products and growth possibilities using corn as our feedstock, and we have identified these as two high-potential processes that we can adopt now.”
Read the original story here : ICM Announces Agreement With Patriot Renewable Fuels
Oct 27, 2014
By Isabel Lane
In the US, Fuels America has launched a six-figure TV and radio campaign in Minnesota, Michigan, and Nebraska thanking American renewable fuels champions Sen. Al Franken, Rep. Collin Peterson, Rep. Lee Terry and Rep. Gary Peters for supporting the Renewable Fuel Standard and “fighting for local jobs and working to end America’s reliance on foreign oil. Each are facing competitive elections come November 4th.
The ads are detailed below:
- Michigan Statewide: Radio ad titled “Our Pockets” about Gary Peters’ support of the RFS and fight to break America’s addiction to foreign oil, and how the Koch Brothers and Big Oil have spent millions against Peters. The ad can be heard here.
- Minnesota Statewide: Radio ad titled “Next Caller” highlighting Senator Franken’s support of the RFS and his work pushing the Obama Administration to increase production of renewable fuels. The ad can be heard here.
- Minnesota’s 7th District: Radio ad titled “Change Course” highlighting Collin Peterson’s support for a strong RFS, reduced reliance on foreign oil, and a stronger rural economy. The ad can be heard here.
- Nebraska’s 2nd District: TV ad titled “Solution” highlighting Lee Terry’s support of the RFS. The ad can be viewed here and a screenshot is below.
Earlier this election season, Fuels America ran a full-page USA ad warning that the EPA’s proposal to fundamentally alter the Renewable Fuel Standard would seriously undermine his Administration’s efforts to combat climate change, promote energy independence, and support the emerging cellulosic ethanol industry.
Read the original story here : Fuels America Debuts Campaign For RFS Supports Facing Reelection
Oct 24, 2014
By Erin Voegele
The U.S. EPA has published renewable identification number (RIN) data for September, reporting that both D3 cellulosic biofuel and D7 cellulosic diesel RINs were generated during the month.
Nearly 7.56 million D3 cellulosic biofuel RINs were generated in September, bringing the total for the first nine months of the year to more than 11.12 million. According to the EPA, 35,473 of those RINs have been generated for cellulosic ethanol so far this year, along with 44,168 for cellulosic renewable gasoline, 5.12 million for renewable compressed natural gas and 5.93 million for renewable liquefied natural gas. All 11.12 million D3 RINs have been generated by domestic producers.
EPA data indicates 17,073 D7 cellulosic diesel RINs were generated in September, bringing the total for the first nine months of the year to 32,680. About 8,859 of those RINs have been generated for cellulosic diesel, with 26,416 generated for cellulosic heating oil. According to the EPA, 8,859 D7 RINS were generated by domestic producers and 26,416 by importers.
More than 4.2 million D5 advanced biofuel RINs were generated in September, bringing the year-to-date total to 119.47 million. Most, 77.09 million, have been generated for ethanol, with 20.35 million generated for biogas, 11.15 million generated for naptha, and 10.97 million generated for non-ester renewable diesel. To date, 61.83 million D5 RINs have been generated by domestic producers this year, with 57.72 million generated by importers.
More than 1.16 billion D6 renewable fuel RINs were generated in September, bringing the total for the first nine months of the year to 10.68 billion. The vast majority, 10.44 billion, have been generated for ethanol. Approximately 48.06 million D5 RINs were generated for biodiesel, along with 197.07 million for non-ester renewable diesel. So far this year, 10.44 billion D5 RINs have been generated by domestic producers, with 46.14 million generated by importers and 197.07 million generated by foreign entities.
Approximately 211.49 million D4 biomass-based diesel RINS were generated in September, bringing the year-to-date total to nearly 1.92 billion. Most, 1.49 billion, were generated for biodiesel, with 432.29 million generated for renewable diesel. Nearly 1.55 billion D5 RINs have been generated domestically, with 115.34 million generated by importers and 255.76 generated by foreign entities.
As of the close of September, the EPA estimates nearly 12.74 billion RINs have been generated this year. More than 324.94 million of those RINs have been retired, with 378.33 million locked and available and 12.03 billion unlocked and available.
Read the original story here : EPA : Cellulosic Fuel Production Continues In September
Oct 22, 2014
By Tom Bryan
Two weeks from Election Day, Bob Dinneen told a crowd of international grain and animal feed buyers gathered in Seattle that whichever party controls Congress next year will “have the gavel” on energy and agriculture but lack the power to advance or upset biofuels policy.
“Elections matter,” Dinneen said, citing President George W. Bush’s unlikely ascendance into ethanol industry favor when he signed both Renewable Fuels Standards into law in 2005 and 2007. “If Gore would have won [in 2000], his vision for renewables would have been more reaching but it would have had a climate change component and probably not taken up by Congress,” Dinneen said. “If McCain would have won [in 2008], he would have tried to dismantle the RFS.”
Dinneen said Obama’s current 41 percent approval rating isn’t terrible as public support for second-term presidents goes, but it is a signal of the trouble awaiting Democrats on Nov. 2. “The Democrats have more seats to defend, which means they’re on the defensive,” Dinneen told attendees of the 2014 Export Exchange in Seattle. “Republicans only need to pick up six seats to take the Senate, and where those seats are makes it more likely to happen.”
Most Senate races are still tough to predict, Dinneen said, but several national news outlets have already called the victor. The Washington Post recently predicted that it is a 94 percent certainty that Republicans will take the Senate, while the New York Times estimated the same outcome with 68 percent certainty. Dinneen reminded the audience, which included delegations from 34 different nations, that either party needs “51 percent to get the gavel, but 60 percent to get anything done.” Nevertheless, he said, a Republican controlled Senate could have implications for the ethanol industry, depending on the inclinations of the reigning party’s committee chairs. Notably, the Washington Times recently reported that seven in ten likely voters believe Republicans will retain control of the House.
One of the few things that is expected to be accomplished between the elections and the start of the next Congressional session is the passage of a continuing resolution, or “CR,” that would extend certain renewable energy provisions including tax credits for biodiesel and renewable diesel, cellulosic biofuel and biofuels pump installation. Meanwhile, there is still no word on when the U.S. EPA will release its 2014 renewable volume obligation numbers, or RVOs. Dinneen said the EPA’s RVO suggestions “make no sense,” showing no sign of letting up on the agency in light of unsubstantiated reports that its forthcoming RVO numbers will be higher than initially thought. Holding the line, Dinneen said the EPA can only reduce the RFS schedule if there is inadequate supply of biofuels. The lack of infrastructure, on the other hand, is not a valid reason for deferment, he said. “Everyone knew we were going to put 36 billion gallons of renewable fuel into a 140-billion-gallon market,” Dinneen said. “Congress knew we were going to move past 10 percent. So the EPA’s suggestion that we need to roll back the RFS because ExxonMobil can’t use E85 is ridiculous.”
Dinneen said whatever the outcome of the 2014 RVO, one or more industries will be disgruntled over it. “This rule will be litigated,” he said, adding that he expects the oil industry’s campaign against the RFS to continue for years.
Dinneen touted the industry’s progress in the cellulosic ethanol arena, pointing to the start of commercial production at Poet-DSM and Abengoa Bioenergy. “It’s happening now,” he said, explaining that cellulosic ethanol producers view policy uncertainty as their largest risk. “It’s no time to be pulling back the program.”
Addressing industry growth, Dinneen said getting E15 into the marketplace has been slow but steady, and he said ethanol exports may reach 800 million gallons in 2014, and perhaps trend toward the 1 billion mark in 2015. Showing a chart of the world’s top U.S. ethanol importers, Dinneen said, “If this country doesn’t take it, others will.”
Circling back to politics, Dinneen said today’s $3 corn could “drive painful decisions” for American agriculture. “If the ethanol industry is not allowed to grow, and corn exports don’t grow, and the carry out is big, deficiency payments [to U.S. corn farmers] are likely,” he said, calling for a return of bipartisanship amongst farm-state policy makers. “Ag needs to get back together and fight these fights together,” he said. “Or we’re going to lose.”
Read the original story here : Dinneen : 'Elections Matter'
Oct 20, 2014
By Syngenta
Minnetonka, MN - Quad County Corn Processors (QCCP) has achieved EPA certification to generate D3 Renewable Identification Numbers (RINs) for cellulosic ethanol produced with Cellerate™ process technology. Formerly known as Adding Cellulosic Ethanol, Cellerate is a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, a wholly owned subsidiary of Quad County Corn Processors.
QCCP earned D3 pathway approval from the EPA on Oct. 7 and Quality Assurance Program (QAP) certification on Oct. 10. Clearing these hurdles led to production of QCCP’s first QAP D3 RINs on Oct. 16.
To qualify as cellulosic biofuel, a renewable fuel must meet a 60 percent threshold for lifecycle greenhouse gas emissions. RINs are used for compliance with the Renewable Fuel Standard (RFS) program and may be "banked," traded or sold for use by parties (fuel producers and importers) who must comply with the RFS.
According to QCCP Chief Executive Officer Delayne Johnson, as cellulosic D3 RINs become available on the commercial market, biofuels opponents will no longer be able say there are no D3 RINs as a strategy to weaken the RFS.
“The biofuels industry now has the technology available to create two billion gallons of cellulosic ethanol – with no more corn,” Johnson said. “QCCP is proud to be one of the first companies to issue D3 RINs. We look forward to higher D3 RIN requirements in 2015 as new production comes on.”
In July 2014, collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, produced the first commercial-scale cellulosic ethanol in Iowa. QCCP expects to produce one million gallons of cellulosic ethanol in 2014 and two million gallons in 2015. Earlier this year, Syngenta announced an agreement with Cellulosic Ethanol Technologies to license Cellerate process technology to ethanol plants.
“Cellerate is designed to increase an ethanol plant’s production by allowing the corn kernel fiber to be converted into cellulosic ethanol,” said Jack Bernens, head of marketing and stakeholder relations for Enogen® corn enzyme technology. “Ethanol plants can easily integrate Cellerate process technology into their existing production process. Cellerate, in conjunction with Enogen corn, will deliver notable benefits to ethanol plants beyond what can be achieved through either technology alone.”
Read the full press release here : Cellulosic Ethanol Produced With Cellerate Process Technology Recieves EPA Certification For Cellulosic Biofuels RINs
Oct 15, 2014
By Joanna Schroeder
As a biofuels plant, how do you make sound plant management and investment decisions in an environment of political turmoil? This was the theme of one of the panel discussions during the 2014 National Advanced Biofuels Conference that took place in Minnesota this week. The conversation focused on how the uncertainty surrounding the Renewable Fuel Standard (RFS) that has not been finalized for 2014 as of this writing, affects decisions made for biofuels plants. The panelists discussed tips and strategies on how they try to keep their business healthy and growing while also trying to position themselves for continued, future success.
Insights were given by Mike Jerke, CEO, Guardian Energy Management LLC; Brian Kletscher, CEO/General Manager, Highwater Ethanol; and Randall Doyal, CEO/General Manager, AL-Corn Clean Fuel who all run currently operating ethanol production facilities. While each one pointed to the prices of feedstocks as being the number one cost of production (feedstock costs are 80 percent of a plant’s production costs) there are other ways to streamline efficiencies to stay competitive and one strategy is to diversify into bolt on advanced biofuels technologies.
Doyal noted that the big takeaway for the attendees was that the existing ethanol industry is looking at those next generation biofuel opportunities. “They look down the road all the time, and that the existing ethanol plants are not Gen 1 – we’re way down the road from Gen 1. We’re far more advanced than that and we look forward to bringing that type of thinking into advanced biofuels,” Doyal said.
When focusing on policy, Doyal said policy directly affects a plant when it decides how to deploy its capital. “If you have uncertainty in policy, it creates an uncertain environment in the lending community and it creates uncertainty in your own board room.”
Doyal stressed, “If you don’t have good, consistent, clear policy, it’s hard to figure out your path forward.”
Read the original story here : Tips For Biofuel Investment In Turbulent Times
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Oct 13, 2014
By Holly Jessen
Growth Energy and the Renewable Fuels Association responded to the USDA’s October supply/demand report released Oct. 10, which forecasted a record corn yield. Growth Energy said it definitively ended the food vs. fuel myth and RFA said it underscores the need for market certainty.
Growth Energy pointed to the WASDE projections and other recent reports from the Food and Agriculture Organization of the United Nations and Bureau of Labor Statistics as confirmation that there's virtually no correlation between U.S. ethanol production and food prices for consumers. “In report after report, we see that the American farmer can produce an abundant amount of food and fuel," said Tom Buis, CEO of Growth Energy. "It is clear that the food and fuel myth is completely unfounded and does a great disservice to the hardworking men and women that help feed the world and fuel our nation.
Growth Energy further pointed out that the FAO international food price index has declined 2.6 percent since August and is down 6 percent in the last year. In contrast, looking at the past year, grain prices are down nearly 9 percent, FAO said, but meat prices are nearly 22 percent higher. Domestically, food prices for August are up 2.5 percent compared to December. Corn and grain prices are rapidly going down while meat prices for consumers are up 11.6 percent for the same time period.
Even as livestock and poultry companies represented by the Turkey Federation, the National Chicken Council and the National Council of Chain Restaurants brag about record profits and margins they are continuing a campaign to mislead consumers about the real cause of rising U.S. food prices. “Corn prices are below the cost of production for most farmers, and ethanol is selling approximately $1 per gallon less than the gasoline on the wholesale marketplace,” Buis said. “The unrelenting deception coming from these trade associations to continue to perpetuate this lie to mask their growing profits at the expense of the American consumer is deplorable. Their greed and deception knows no boundaries. It’s time for Big Oil and its Big Food allies to begin telling the truth.”
RFA came out with a statement that the crop report underscores the need for demand certainty and market expansion. “The American Petroleum Institute has spent millions upon millions of dollars on ad campaigns trying to sell people on the canard that ethanol drives up food prices in a misguided attempt to garner opposition to the renewable fuel standard,” said RFA President and CEO Bob Dinneen. “But their argument is bankrupt. Because of the RFS, farmers have invested in technology and increased yields to assure ample supply for all users. Today’s report demonstrates the API campaign is intellectually dishonest.”
In fact, Dinneen feels the report should close the debate over the 2014 RFS final rule. Farmers making their planting decisions for this year anticipated that the biofuels volumes in the RFS would be enforced. “But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum,” he said. “Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments. The White House has an opportunity to help alleviate this situation simply by fixing the badly misguided 2014 RFS proposal and getting the program back on track.
Read the orginal story here : Report Shows Ethanol's Connection To High Food Prices Is A Lie
Oct 13, 2014
By Dave Shaffer
Leaders of the nation’s biofuels industry on Monday accused the Obama administration of undermining the commercial success of advanced renewable fuels, like ethanol produced from corn cobs and stalks.
Michael McAdams, president of the Advanced Biofuels Association, said at an industry conference in Minneapolis that innovative, biofuel companies are looking to expand in countries like Brazil, China and India, rather than in the United States, because of this nation’s unstable renewable fuel policy.
“It has put us in suspended animation and has made it inherently difficult … to find financing to build these new, innovative plants in the United States of America,” McAdams said at the National Advanced Biofuels Conference & Expo at the Minneapolis Hyatt Regency.
McAdams’ association represents producers of low-carbon and other advanced biofuels, including Gevo Inc., which is trying to produce isobutanol, a higher-value alcohol, at an ethanol plant in Luverne, Minn. He and other industry officials sharply criticized the U.S. Environmental Protection Agency’s still-pending proposal to reduce the level of advanced biofuels that must be blended into the nation’s fuel supply.
“They pulled the rug out from under the industry,” McAdams said.
The EPA did not respond Monday to e-mail and telephone requests to comment.
“This administration is still dithering on whether or not to do the right thing,” added Joe Jobe, CEO of the National Biodiesel Board, a trade group for producers of biodiesel from soybeans, corn oil and waste oils.
Jobe said the biodiesel industry showed in 2013 that it could produce 1.8 billion gallons of biodiesel, which is considered an advanced biofuel because of its significantly lower carbon footprint compared to fossil fuels. Yet under the Renewable Fuel Standard, a 2007 federal law that aimed to expand the biofuels market, the EPA now proposes blending significantly less advanced biofuel than the biodiesel industry produced last year, he said.
Randall Doyal, CEO of Al-Corn Clean Fuel, a farmer-owned ethanol plant in Claremont, Minn., said he believed the EPA administrative action is “illegal” under the federal law.
“It’s unbelievable,” said Doyal, chairman of the Renewable Fuels Association, an industry trade group. “I can’t believe it happened.”
Industry officials said they are worried about financing large stand-alone commercial biofuel projects, such as the first three, large cellulosic ethanol plants recently or soon to be completed in the Midwest. Those plants — two in Iowa, and another in Kansas, all costing $200 million or more — could end up being the last ones in the United States, industry officials have warned.
Yet industry officials remain interested in lower-cost technology that can be added to the nation’s existing 214 ethanol plants to boost production or expand into new or greener products. This year, many ethanol plants have reported solid profits, leaving room on balance sheets for investment.
Doyal said Al-Corn is close to a deal to install two, pilot biodiesel production units at the Claremont plant, which is one of Minnesota’s oldest ethanol refineries. He said the portable technology developed by Revolution Fuels of St. Louis Park would produce biodiesel from corn oil extracted during ethanol making.
Brian Kletscher, CEO of Highwater Ethanol in Lamberton, Minn., said his company is looking at converting production to isobutanol, a higher-value ethanol that can be used not only as a motor fuel, but as a chemical feedstock for many other products.
“There’s a lot of different technologies out there,” added Mike Jerke, CEO of Guardian Energy Management, which operates three ethanol plants including one in Janesville, Minn. “If someone talks to me about technology that bolts on … that is going to get my attention a lot quicker than something that is stand-alone.”
Read the original story here : Biofuel Leaders Says EPA Has Treated Industry Unfairly
Oct 9, 2014
By Ayesha Rascoe
The Obama administration's proposed cuts to U.S. biofuel use targets could undermine the White House's plan to tackle climate change, according to two Democrats on the Senate committee that oversees the renewable fuel mandate.
The Environmental Protection Agency's plan, slashing requirements for blending ethanol and biodiesel into U.S. fuel supplies in 2014, would lead to increased oil use and carbon emissions, Senators Barbara Boxer and Edward Markey said in a letter sent to White House late on Wednesday.
The lawmakers are the latest to weigh in as the White House's Office of Management and Budget considers revisions to the EPA's original proposal on 2014 targets.
"EPA's proposed rule would not only increase carbon pollution, but would also derail our efforts to ... drive the development of fuels that further reduce carbon pollution in the long-term," the lawmakers said.
A study by the Biotechnology Industry Organization cited by Boxer and Markey that found the proposed targets would increase net carbon pollution by 28.2 million metric tons in 2014.
California's Boxer is chairman of the Senate committee on environment and public works, which has oversight authority for the Renewable Fuel Standard. Markey, from Massachusetts, is a committee member and frequent critic of the oil industry.
Producers of renewable fuels say the proposed cuts have already hurt investment in advanced fuels made from crop wastes and led to less output of biodiesel than would otherwise have been the case.
Boxer and Markey also took aim at EPA's reasoning that the cuts were needed due to a shortage of gas-station pumps that can dispense gasoline with higher blends of ethanol, a problem known as the blend wall.
"EPA ... relies on a questionable reading of the statute that would allow the oil industry to escape its obligation under the RFS by simply blocking or limiting the distribution of renewable fuel blends to consumers," the letter said.
The Renewable Fuel Standard requires increasing amounts of ethanol and biodiesel to be mixed into U.S. fuel supplies each year until 2022.
Obama administration officials have said the final targets will likely be higher than the initial proposal, but industry analysts do not expect EPA to restore the requirements fully to the levels set by federal law.
Read the original story here : U.S. Biofuel Mandate Cuts Would Raise Carbon Pollution : Lawmakers
Oct 10, 2014
By Joanna Schroeder
The Minnesota Bio-Fuels Association is working on behalf of the biofuels industry and consumers throughout Minnesota. With several successes under their belt, the Association has identified several more goals they would like to achieve on behalf of the biofuels industry over the next few years.
“We are hopeful the next two years will lead us into opportunities to develop higher usage of ethanol blends, in particular we will work hard on promoting usage of E15 in 2001 and newer vehicles,” said Brian Kletscher, CEO of Highwater Ethanol and President of the Board of the Minnesota Bio-Fuels Association. “To help accomplish this we have hired a Biofuels Marketing Manager, this will allow us to directly communicate with the many gas station owners in the State of Minnesota and give them guidance on how to bring in E15 to their gas station while providing and economic benefit to them as owners while also passing on a savings to their customers in lower cost for E15.”
Tim Rudnicki, executive director of the Minnesota Bio-Fuels Association echoes Kletscher’s goal. In addition, Rudnicki said they are continuing to increase the use of E85. “Sales of E85 in Minnesota have been on the rise but there is still plenty of room to grow. There are many flex-fuel vehicle owners who don’t know the benefits of using E85 or even the fact that it’s 80 cents cheaper per gallon on average in Minnesota.”
When asked if the biofuels industry would have seen as many successes without the Minnesota Bio-Fuels Association, Kletscher said while the industry was growing prior to the formation of the Association, by working with Minnesota Corn Growers Association, Soybean Growers Association and other ethanol related organization, the formation of the Association has allowed the ethanol industry and biofuels industry the opportunity to branch out and grow in supporting and promoting the usage of their products.
“While doing this we have maintained a strong relationship with the associations and related organizations that walked with and grew the biofuels industry to the point that it is today,” said Kletscher.
However, as Rudnicki identifies, the political landscape will have an effect on their work but for the most part, the view of biofuels is positive. “We are fortunate that many of our federal and state-level senators and representatives are supportive of biofuels and support measures to increase its usage,” he said. “We work closely with many of them and they understand how important biofuels are to the economy in Minnesota and its role in reducing prices at the pump, greenhouse gases and our dependence on foreign oil. Biofuels are the only viable solution to removing our dependence on harmful fossil fuels and many of them understand that.”
Despite the positive political landscape, there are still three critical things that need to happen to ensure the future growth of the Minnesota biofuels industry as outlined by Rudnicki:
1. The renewable volume obligations (RVO) under the Renewable Fuel Standard (RFS) need to be adhered to. The Environmental Protection Agency (EPA) needs to stick to the RFS and not bend to Big Oil. The “Blend Wall” is pure fiction. Eight out of 10 cars can use E15.
2. Minnesota has set its own laws that call for the increase of biofuels over the next 10 years. Like the RFS, we need to stick to these goals if we are truly serious about reducing the use of fossil fuels and emission of harmful greenhouse gases.
3. We – along with all other similar organizations – need to continue communicating and educating the public on the benefits of using biofuels. When there is sufficient demand, supply will increase.
The biggest hurdle according to Rudnicki is what the industry is facing with the EPA’s proposed RVOs under the RFS for 2014. “It’s October and the EPA has yet to make an announcement on the RVO for this year,” he said. “Such delays hinder the industry, be it in Minnesota or elsewhere. It has stifled investments in advanced biofuels. Some ethanol producers have even shelved plans to expand their plant capacity. Meanwhile such delays by the EPA have also affected the growth of fuels like E15.”
The EPA has submitted its final proposal to the Office of Management and Budget and Obama administration for review, but the final rule has yet to be released.
It is this issue among others as to why Kletscher encourages other biofuel stakeholders to be involved with the Minnesota Bio-Fuels Association. “Biofuels stakeholders are not just the facility that produce the ethanol or biofuels or the farmers that raise the corn or soybeans, or the vendors that services the industry,” explained Kletscher. “The real stakeholders are every citizen in Minnesota. They should be involved because of the environmental and economic benefits that biofuels offers to them plus there are renewed agricultural opportunities.”
He also noted the problem of smog in hundreds of cities across the country and in Minnesota. He points to the air quality problems faced by Minnesota in the St. Paul/Minneapolis metro area in the 1970’s and 1980’s and with the addition of 10 percent ethanol fuel blend, ethanol helped clean the air quality.”
I believe the ethanol industry gave every citizen the opportunity for better air quality, and the positive impact on air quality is still here today. Growth and usage of E15 will continue to help promote clean air quality,” said Kletscher.
The Minnesota Bio-Fuels Association is showcasing their work during the 2014 National Advanced Biofuels Conference taking place October 12-14, 2014 in Minneapolis, Minnesota. Their goal is continue educating the industry about their work and gain additional support for their efforts.
Read the original story : Minnesota Bio-Fuels Association Working For You
Oct 9, 2014
By Joanna Schroder
In April 2011 the Minnesota Bio-Fuels Association was founded to represent and promote the renewable fuels industry in Minnesota. According to Tim Rudnicki, executive director, as a state and a union, the country faces many challenges on the energy and environmental front and the Minnesota Bio-Fuels Association is providing solutions to these challenges.
When asked about the Association, Rudnicki explained, “We are a non-profit organization and our members include ethanol producers in Minnesota as well as industry vendors. Our aim is to work with our stakeholders in a collaborative manner to achieve our collective goal of a greener future, a stronger economy in Minnesota, consumer savings at the pump and a more energy independent America.”
The Association has three key areas of focus:
1. Advocacy: Their active engagement takes place at the state capitol in St Paul with a variety of state agencies and departments as well as through the governor’s office. They work with policymakers and agency officials to give voice to the biofuels industry in matters that impact day-to-day production operations and to further grow the industry.
2. Fuel Supply Chain Development: They work closely with fuel retailers in the state to increase the availability of fuels such as E15 and E85. They are also able to connect them with wholesale suppliers of E15 and E85 and infrastructure and equipment providers and also educate them on the business case to sell E15 and E85.
3. Communications: As the representative of the biofuels industry in Minnesota, they organization is constantly communicating and educating consumers on the various benefits of ethanol in transportation fuel as well as changing negative perceptions. Their communication channels include a website with extensive resources on biofuels, social media, advertising and email marketing and they also liaise with the media throughout the state.
One of the founding members of the Minnesota Bio-Fuels Association is Highwater Ethanol, a 59.5 million gallon per year denatured ethanol facility located in Lamberton. They also produce nearly 150,000 tons of dried distillers grains (DDGs) and in April of this year began producing corn oil.
In May of 2006, Brian Kletscher began working with Hightower Ethanol as the president of the Board of Directors and then in November of 2008 was hired as the CEO. He has served as the president of Minnesota Bio-Fuels Association since 2011.
When asked why Highwater Ethanol became involved with the Association, Kletscher noted that being a part of Minnesota biofuel producers, they needed another strong voice to deal directly with potential challenges for the industry and the Association is set up to address many biofuel opportunities. For example, the Association has been participating in bringing additional biofuel usage to Minnesota, by supporting usage of higher blends of ethanol and other biofuels.
“This means educating and promoting the clear, clean benefits of ethanol and biofuels for the consumer,” explained Kletscher. “We want to make sure the biofuels industry voice is heard when we are involved in developing pro-biofuel public policies to improve the environmental quality. We needed a strong organization to help in convening stakeholders for continued promoting and usage of ethanol and biofuels. We are involved to ensure that our message to consumers is clear on the benefits of ethanol and biofuels.”
Kletscher also said that their plant, along with the Association, is helping Minnesotans to understand that rural and urban leaders are united in the use and clean benefits of ethanol and biofuels. “We want to make sure that our education system is empowered to understand the clean, clear benefits of ethanol and biofuels use for the environment, the job base and the economic impact in rural and urban areas,” added Kletscher. “We promote the use of a Minnesota grown agricultural product such as corn, while demonstrating the enhanced economic benefit to the end user in price reduction at the pump when filling up your car or truck.”
Minnesota Bio-Fuels Association has enjoyed several key successes in the past several years. Rudnicki noted that the organization successfully spearheaded a multi-legislative session to increase the tiered petroleum replacement to at least 30 percent by 2025. They also worked with Governor Mark Dayton to declare October 2013 as Biofuels Month. This year, they led a campaign to bring about equitable tax treatment for biofuel producers.
“We have also expanded our presence in social media platforms such as Facebook and today, we have 5,669 fans, which is more than other similar organizations,” said Rudnicki. “Social media has given us the ability to speak directly to consumers and in turn change perceptions and make consumers aware of the biofuel options that can cut down greenhouse gas emissions while saving them dollars at the pump.”
Kletscher is also proud of the work the Association did when working with rural and urban legislators to develop an equitable property tax treatment for biofuel producers. “We have also worked closely with agricultural educators in the state to provide students with a better understanding of biofuel production,” added Kletscher.
The story continues tomorrow….
Read the original story here : Get To Know The Minnesota Bio-Fuels Association
Oct 7, 2014
Washington D.C. - E85 retailers in the St. Louis area may be purposely price gouging Missouri drivers, according to an in-depth case study released today by the Renewable Fuels Association (RFA). During the 2014 summer driving season, average E85 prices were 12 percent below gasoline prices at the wholesale level, but 1 percent above gasoline prices at the retail level. Further, the wholesale-to-retail markup on E85 was nearly twice the markup on gasoline. Finally, the study found E85 retail prices were roughly $1 per gallon higher than was justified by wholesale prices for locally available ethanol and hydrocarbon blendstock.
The study’s results offer “… clear support for the notion that some gasoline producers/suppliers and their franchised retailers purposely employ E85 pricing strategies meant to discourage E85 consumption and negatively influence consumer perceptions about the fuel.”
Bob Dinneen, president and CEO of the RFA, stated, “It’s fairly obvious that the retailers examined in this study—all of whom are branded by one of the Big Five oil companies—don’t really want to sell E85. In many cases it appears they were pricing E85 above their branded gasoline for the sole purpose of making their gasoline prices look more attractive to the consumer. Sneaky E85 pricing strategies ultimately give oil refiners the opportunity to wrongly claim that consumers are ‘rejecting’ E85; and it gives them an opportunity to claim they can’t comply with Renewable Fuel Standard (RFS) requirements above the so-called ‘blend wall.’ This study exposes the utter hypocrisy of that argument.”
RFA tracked E85 and gasoline (E10) prices at all nine retail stations selling E85 in the St. Louis metro area. All nine stations carry the brand of one of the five largest integrated oil production and refining companies, which makes the St. Louis E85 market highly unusual because nationwide “…retail stations affiliated with a ‘Big Five’ oil company brand are four to six times less likely to offer E85 than independent or unbranded stations.”
Across more than 250 observations during the summer, the average E10 retail price was $3.452 per gallon and the average E85 retail price was $3.476 per gallon. Meanwhile, E85 was available at a local wholesale terminal for an average of $2.582 per gallon, while E10 averaged $2.933 per gallon at the wholesale level. Based on prices for locally available ethanol, hydrocarbon blendstock, RFS RIN credits, and a typical markup, E85 could have been offered at retail for $2.44–2.55 per gallon.
So, why is the St. Louis E85 market so dysfunctional, when other markets are seeing competitive pricing and strong demand for E85? The study offers several potential explanations:
1. As RFA pointed out in July, retailers affiliated with a Big Oil brand are often bound by franchise agreements that make it difficult to sell anything other than “branded” fuel. These agreements often set up roadblocks for retailers who wish to sell “unbranded” fuels like E85.
2. Many oil companies require branded retailers to sell a specified amount of “branded” fuel such as premium or diesel. Therefore, competitively priced E85 would potentially drive sales away from those fuels, leaving retailers in jeopardy of failing to meet contractual obligations.
3. A small number of consumers purchase E85—no matter the price relative to gasoline—because of ethanol’s environmental benefits. Retailers may be taking advantage of these consumers by keeping E85 prices artificially high.
4. Due to the relative proximity of the stations offering E85 in the St. Louis market, there is very little price competition to attract FFV drivers to one station over another.
5. Retailers may be implementing “decoy pricing,” which means they set the price of E85 high so that other fuel options seem more reasonably priced.
“The bottom line is some retailers and their upstream franchisors appear to be employing pricing strategies meant to negatively impact consumer perceptions of E85 and biofuels in general,” Dinneen said. “This is just one more way Big Oil attempts to quash competition and discourage consumers from choosing greener, cheaper, domestically-produced renewable fuels.”
Read the original story here : New RFA Case Study : Evidence of E85 Price Gouging
View the study here
E85 retailers in the St. Louis area may be purposely price gouging Missouri drivers, according to an in-depth case study released today by the Renewable Fuels Association (RFA). During the 2014 summer driving season, average E85 prices were 12 percent below gasoline prices at the wholesale level, but 1 percent above gasoline prices at the retail level. Further, the wholesale-to-retail markup on E85 was nearly twice the markup on gasoline. Finally, the study found E85 retail prices were roughly $1 per gallon higher than was justified by wholesale prices for locally available ethanol and hydrocarbon blendstock.
The study’s results offer “… clear support for the notion that some gasoline producers/suppliers and their franchised retailers purposely employ E85 pricing strategies meant to discourage E85 consumption and negatively influence consumer perceptions about the fuel.”
Bob Dinneen, president and CEO of the RFA, stated, “It’s fairly obvious that the retailers examined in this study—all of whom are branded by one of the Big Five oil companies—don’t really want to sell E85. In many cases it appears they were pricing E85 above their branded gasoline for the sole purpose of making their gasoline prices look more attractive to the consumer. Sneaky E85 pricing strategies ultimately give oil refiners the opportunity to wrongly claim that consumers are ‘rejecting’ E85; and it gives them an opportunity to claim they can’t comply with Renewable Fuel Standard (RFS) requirements above the so-called ‘blend wall.’ This study exposes the utter hypocrisy of that argument.”
RFA tracked E85 and gasoline (E10) prices at all nine retail stations selling E85 in the St. Louis metro area. All nine stations carry the brand of one of the five largest integrated oil production and refining companies, which makes the St. Louis E85 market highly unusual because nationwide “…retail stations affiliated with a ‘Big Five’ oil company brand are four to six times less likely to offer E85 than independent or unbranded stations.”
Across more than 250 observations during the summer, the average E10 retail price was $3.452 per gallon and the average E85 retail price was $3.476 per gallon. Meanwhile, E85 was available at a local wholesale terminal for an average of $2.582 per gallon, while E10 averaged $2.933 per gallon at the wholesale level. Based on prices for locally available ethanol, hydrocarbon blendstock, RFS RIN credits, and a typical markup, E85 could have been offered at retail for $2.44–2.55 per gallon.
So, why is the St. Louis E85 market so dysfunctional, when other markets are seeing competitive pricing and strong demand for E85? The study offers several potential explanations:
- As RFA pointed out in July, retailers affiliated with a Big Oil brand are often bound by franchise agreements that make it difficult to sell anything other than “branded” fuel. These agreements often set up roadblocks for retailers who wish to sell “unbranded” fuels like E85.
- Many oil companies require branded retailers to sell a specified amount of “branded” fuel such as premium or diesel. Therefore, competitively priced E85 would potentially drive sales away from those fuels, leaving retailers in jeopardy of failing to meet contractual obligations.
- A small number of consumers purchase E85—no matter the price relative to gasoline—because of ethanol’s environmental benefits. Retailers may be taking advantage of these consumers by keeping E85 prices artificially high.
- Due to the relative proximity of the stations offering E85 in the St. Louis market, there is very little price competition to attract FFV drivers to one station over another.
- Retailers may be implementing “decoy pricing,” which means they set the price of E85 high so that other fuel options seem more reasonably priced.
“The bottom line is some retailers and their upstream franchisors appear to be employing pricing strategies meant to negatively impact consumer perceptions of E85 and biofuels in general,” Dinneen said. “This is just one more way Big Oil attempts to quash competition and discourage consumers from choosing greener, cheaper, domestically-produced renewable fuels.”
- See more at: http://www.ethanolrfa.org/news/entry/new-rfa-case-study-evidence-of-e85-price-gouging/#sthash.w8Ih5Oas.dpuf
Oct 6, 2014
By Darrel Good
Department of Agricultural and Consumer Economics, University of Illinois
Ethanol production, consumption, and stocks data are typically reviewed on a calendar year basis since Renewable Fuel Standards (RFS) are established for calendar years. However, since corn is the major feedstock for domestic ethanol production, ethanol data on a corn marketing year basis (September-August) are important for monitoring and anticipating marketing year corn consumption.
For the 2013-14 corn marketing year, monthly estimates of domestic ethanol production and stocks are available from the U.S. Energy Information Administration (EIA) through July 2014. Weekly estimates are available for August. Census Bureau estimates of ethanol imports and exports are available for the entire marketing year. Based on these estimates, domestic ethanol production for the year totaled a record 14.15 billion gallons, 1.3 billion gallons more than produced during the 2012-13 marketing year and 354 million gallons more than the previous record production during the 2011-12 marketing year.
Ethanol imports during the 2013-14 marketing year are estimated at 275 million gallons, 509 million gallons less than imported during the previous year when domestic ethanol production was limited by a short supply and high price of corn. The vast majority of imports are from Brazil. Exports of U.S. ethanol during the 2013-14 marketing year are estimated at 788 million gallons, 227 million gallons more than exported last year, but nearly 300 million gallons less than exports during the 2011-12 marketing year. Exports were exceptionally large in 2011-12 resulting from a sharp decline in Brazilian ethanol production due to a small supply and high price of sugar. Ethanol is exported to a large number of countries, with Canada being the largest customer by a wide margin. The exception was the unusually large exports to Brazil in 2011-12.
Domestic stocks of ethanol during the 2013-14 corn marketing year increased by an estimated 35 million gallons, following a decline of 94 million gallons during the previous marketing year. The estimates of production, imports, exports, and stocks imply that domestic consumption of ethanol during the 2013-14 marketing year totaled 13.6 billion gallons, 443 million gallons more than the previous record consumption in 2012-13. The three percent increase in consumption was supported by a modest increase in motor fuel consumption and a modest increase in consumption of higher ethanol blends, primarily E85.
The USDA has forecast that a record 5.125 billion bushels of corn were used to produce ethanol during the 2013-14 corn marketing year that ended on August 31. That forecast will be revised as EIA ethanol production and stocks estimates are finalized. Based on current estimates for August, corn consumption may have been slightly larger than the current forecast.
On a side note, a large quantity of corn used for ethanol production results in a large quantity of the co-product of distillers' grains. Those distillers' grains are mostly fed to livestock, domestically or in importing countries, and substitute for other feed ingredients, mostly whole corn and soybean meal. During the 2013-14 marketing year, a larger portion of those distillers grains were exported than was the case in the previous two years. The Census Bureau estimates that 13.2 million tons of distillers' grains were exported during the 2013-14 marketing year, about 50 percent more than in each of the previous two years. China was the largest importer of distillers' grains, followed by Mexico. Chinese restrictions on import of some GMO products have raised concerns about future U.S. exports of distiller's grains to China. A slowdown in those exports, however, might have a minimal impact for the current year. Smaller Chinese imports could alter the mix of feed ingredients consumed, but it would not likely alter the global demand for total feed ingredients. That is, China would presumably replace U.S. distillers' grains with some other feed ingredient that in turn would make room for more U.S. corn or distillers' grains in other markets.
With a record large U.S. corn crop this year, the magnitude of ethanol production will be important in determining the extent of the build-up in domestic corn inventories by the end of the current marketing year. With only limited potential for growth in domestic ethanol consumption, expansion in production will be dependent on continued small or declining imports and growth in exports of ethanol. Export potential is enhanced by the current low price of ethanol relative to gasoline, but increases are not yet evident in monthly Census Bureau export estimates.
Weekly estimates from EIA indicate that ethanol production in September 2014 was about 6.5 percent larger than in September 2013. The large increase, however, reflects the relatively low level of production in September 2013 so that rate of expansion will not likely be maintained. Growth in ethanol production alone will not be sufficient to prevent a substantial build-up in corn inventories, but may be helpful in limiting the magnitude of the build-up.
Read the original report here : Big Year For Ethanol
Oct 3, 2014
By Rich Keller
The Renewable Fuel Standard (RFS) jumped up as a hot topic around the nation again last week as 33 state governors asked the Obama administration to increase the blending mandates for biodiesel and ethanol from sources not previously receiving much attention.
This was happening at the same time as U.S. ethanol prices hit four-year lows and profits were sharply lower than the excellent earnings being obtained for most of 2014. The Wall Street Journal reported ethanol futures dropped 28 percent last month due to falling domestic demand, and U.S. ethanol producers are holding the largest inventories they’ve had for more than a year.
Illinois Gov. Pat Quinn (D) and Iowa Gov. Terry Branstad, the leaders of the Governors’ Biofuels Coalition told the administration on behalf of the coalition that the Environmental Protection Agency’s expected downward adjustment of the RFS is unacceptable, and if anything the volumes of renewable fuels should be increased, not lowered.
The EPA proposed last year to lower the ethanol that refiners have to blend into their petroleum-based fuels in 2014 and keep the biodiesel level at the same as 2013, which would use less than the industry actually produced. The storm around this proposal seems to have slowed the agency from acting because no mandate has been issued in 2014.
The governors want to make sure that the mandate doesn’t all of a sudden find the light of day, especially as ethanol from corn is in such a financial bind. Corn prices that are lower than last year could go lower as ethanol facilities are reportedly cutting production in response to weaker profit margins.
The governors also noted that the proposed cuts in the RFS, even before any final action, have curtailed investment in biodiesel and cellulosic ethanol, and this has hurt rural economies relying on industries associated with biofuels production.
The governors are interested in more than corn-based ethanol production. The letter was sent to the White House Office of Management and Budget, which is known to be reviewing the EPA’s proposed volume cuts to the RFS.
The governors’ letter pointed out the potential for “advanced biofuels,” or those from waste products generated by our economy, could create thousands of jobs and further decrease the U.S. reliance on imported oil.
“However, the adoption of EPA’s proposed 2014 RFS volume requirements threatens to have a negative economic impact on the rural economy and on the biofuels industry, specifically on biodiesel and cellulosic ethanol,” the letter states.
Editorials in support of the governor’s stance and the biofuels industry again began showing up around rural America, as they did back in 2013 when the EPA made its proposed adjustment strategy. An editorial by Bartholomew McLeay, an Omaha, Neb., attorney practicing agriculture and energy sector law, appeared in The Kansas City Star. He noted, “The law is clear RFS is not to be reduced through 2022 unless it is shown to harm the economy or environment or there is an inadequate domestic supply. None of these conditions exist.”
He further suggests, “No farmer or ethanol producer will receive a single penny from taxpayers if RFS is unchanged.”
What McLeay brought back into the discussion what the Renewable Fuels Association and other organizations have pushed for—an increase in the limit of ethanol blended into fuel to 15 percent from the current “blend wall” of 10 percent. It is this blend wall that at times has meant a glut of ethanol and large volumes of ethanol being exported that triggered the EPA to propose lowering of the RFS.
“There would be no blend wall or RFS reduction if E15 was not suppressed by certain Big Oil interests,” McLeay contends.
“E15 is acceptable in 75 percent of cars, trucks and SUVs on the road. Numerous studies have found no ‘meaningful differences between E15 and E10 in any performance category. NASCAR uses E15 on ‘every lap.’”
The controversy hasn’t ended but only seems to be firing up again.
Read the original story here : Biofuels RFS Jumps Up As A Hot Topic Again