In the News
Jun 2, 2020
The U.S. Food and Drug Administration on June 1 updated guidance to provide additional clarification on the manufacturing and compounding of certain alcohol-based hand sanitizer products to help ensure that harmful levels of impurities are not present in ethanol used in hand sanitizer. The Renewable Fuels Association said the guidance provides clarity, but won’t resolve the shortage of hand sanitizer products.
In its announcement, the FDA said it appreciates industry’s willingness to help meet the increasing demand for alcohol-based hand sanitizers during the COVID-19 pandemic. Early on during the public health emergency, the FDA said it issued temporarily policies to provide flexibility to help meet increased demand for alcohol-based hand sanitizers.
“We previously updated these temporary guidances in April to reflect data submitted by fuel ethanol manufacturers producing ethanol via fermentation and distillation, indicating that at least some of their fuel ethanol products have harmful chemicals, including gasoline and benzene, which are known human carcinogens (cancer-causing agents),” said the FDA in a statement released June 1. “These impurities would not be expected from a typical fermentation and distillation process but may be present in the manufacturing environment of fuel or technical-grade ethanol, due to the use of certain chemicals, equipment or containers.
“The FDA is working with industry to ensure that harmful levels of impurities are not present if ethanol is used in these products,” the agency continued. “Based on careful review and consideration of available data, we are specifying interim levels of certain impurities that we have determined can be tolerated for a relatively short period of time, given the emphasis on hand hygiene during the COVID-19 public health emergency and to avoid exacerbating access issues for alcohol-based hand sanitizer.”
FDA’s updated guidance comes roughly a week after Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, sent a letter to FDA Commissioner Stephen Hahn on May 26 urging the agency to clarify its temporary policy for the manufacture of alcohol-based hand sanitizer products during the COVID-19 pandemic. In that letter, Ernst and Grassley addressed concerns by the agency that gasoline or other fuel additives come into contact with ethanol during the ethanol production process. That concern, they said, “appears to reflect a misunderstanding of how ethanol plants operate.” The senators stressed that “gasoline is not present at ethanol plants, and alcohol for hand sanitizer that is produced at ethanol plants does not come in contact with gasoline, benzene, or other petroleum contaminants.”
Following the FDA’s June 1 announcement, the RFA issued a statement indicating the updated guidance provides clarity to ethanol producers, but said it won’t resolve current shortages of hand sanitizer products.
“While we appreciate that FDA responded to RFA’s request for more clarity and specific interim impurity limits, we do not believe the new guidance will help alleviate the hand sanitizer shortage in any meaningful way,” said Geoff Cooper, president and CEO of the RFA. “We welcome the specificity in the new guidance, but the new interim limits for certain impurities are overly restrictive and create a roadblock for producers who could otherwise supply huge volumes of safe, clean, high-quality ethyl alcohol to hand sanitizer manufacturers. For example, FDA’s new limits for certain impurities are eight times more restrictive than what is typically found in a glass of red wine and twenty times more restrictive than what has been allowed in hand sanitizer by other countries, including Canada, during the COVID-19 pandemic.
“Meanwhile, as hospitals, first responders, nursing homes, restaurants, retail stores, churches, and other public and private spaces seek out new sources of hand sanitizer to address the shortage, the U.S. continues to significantly ramp up imports of hand sanitizer from China and other countries,” Cooper added. “It is unfortunate that we are importing this product from China, when abundant supplies of high-purity American-made ethanol could be used instead. Still, we will continue to work with the FDA to ensure ethanol producers can do their part to combat COVID-19 and provide larger quantities of ethyl alcohol for hand sanitizer.”
Additional information is available on the FDA website.
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May 31, 2020
In Washington, D.C.,according to EIA data analyzed by the Renewable Fuels Association for the week ending May 22, ethanol production shifted 9.2%,or 61,000 barrels per day (b/d), to 724,000 b/d—equivalent to 30.41 million gallons daily and the largest volume since March. However, production remains tempered due to COVID-19 disruptions, coming in 31.5% below the same week in 2019.
The four-week average ethanol production rate rose 7.8% to 651,000 b/d, equivalent to an annualized rate of 9.98 billion gallons.
Ethanol stocks thinned by 1.9% to a 19-week low of 23.2 million barrels. Inventories tightened across all regions except the Rocky Mountains (PADD 4), including a 7.8% drop in the West Coast (PADD 5). Total reserves are 2.4% above year-ago volumes.
The volume of gasoline supplied to the U.S. market, a measure of implied demand, rebounded by 6.8% to 7.253 million b/d (111.19 bg annualized). Gasoline demand remained 22.8% lower than a year ago.
Refiner/blender net inputs of ethanol followed, rising 4.7% to 712,000 b/d, equivalent to 10.91 bg annualized but 24.9% below the year-earlier level.
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May 26, 2020
Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, sent a letter to Food and Drug Administration Commissioner Stephen Hahn on May 26 urging the agency to clarify its temporary policy for the manufacture of alcohol-based hand sanitizer products during the COVID-19 pandemic.
The letter references temporary guidance that was issued by the FDA on March 27 and updated on April 15. In its March 27 guidance, the FDA said ethanol used for hand sanitizer production does not need to meet U.S. pharmacopeia (USP) or food chemical codex (FCC) standards as long as other purity standards were met. “Based on this guidance, biofuel manufacturers made investments and began production of alcohol for hand sanitizer,” Ernst and Grassley wrote.
“On April 15, the FDA inexplicably revised this guidance to require ethanol made for hand sanitizer to adhere to USP or FCC standards unless otherwise approved and requested ethanol companies to submit data regarding impurities,” they continued. “Our staff has received conflicting messages about FDA’s concerns and what standard applies for alcohol for use in hand sanitizer. At one point, the indication was that FDA had become concerned that gasoline or other fuel additives might come into contact with ethanol in the production process, which appears to reflect a misunderstanding of how ethanol plants operate. Gasoline is not present at ethanol plants, and alcohol for hand sanitizer that is produced at ethanol plants does not come in contact with gasoline, benzene, or other petroleum contaminants.”
Ernst and Grassley indicated that their constituents in Iowa have said most, if not all, submitted samples of ethyl alcohol have been rejected. “It appears that these rejections may be based on levels of acetaldehyde, a substance that occurs naturally in the distillation process, comparable to what is common in alcoholic beverages,” they wrote. “We note that Health Canada—the Canadian government’s equivalent to FDA—has published a temporary standard that slightly relaxes limitations on acetaldehyde so that ethanol producers may help meet the growing need for hand sanitizer. We trust the FDA will use science and data to ensure the proper threshold for acetaldehyde in hand sanitizer, and I encourage you to consider Canada’s approach.”
The senators ask the FDA to update the April 15 guidance to clarify the threshold for acetaldehyde to give regulatory certainty and end the confusion that renewable fuel manufacturers currently face.
A full copy of the letter can be downloaded from Grassley’s website.
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May 22, 2020
Today, U.S. Senator Amy Klobuchar held a conference call with CEO of Al-Corn and Chairman of Guardian Energy Janesville Randy Doyal and Vice President of Federal Advocacy for POET Energy Rob Walther to discuss the challenges ethanol plants in Claremont, Janesville, Crystal Lake and throughout southern Minnesota are facing due to the coronavirus pandemic.
“The coronavirus pandemic has caused market volatility and decreased demand for many agricultural commodities, which has impacted farmers and rural communities particularly hard,” Klobuchar said.“Renewable fuel processing plants provide stability in our agricultural supply chain and employ thousands of people in rural areas. I will continue fighting in the Senate to ensure farmers and workers receive our support during these challenging times.”
This week, Klobuchar and Senator Chuck Grassley (R-IA)introduced bipartisan legislation to support biofuel producers that are feeling economic hardship from fuel demand and ethanol price declines as a result of the coronavirus pandemic. TheRenewable Fuel Feedstock Reimbursement Act will require the U.S. Department of Agriculture (USDA) to reimburse biofuel producers for their feedstock purchases from January 1, 2020 through March 31, 2020 through the Commodity Credit Corporation.
Klobuchar and Grassley have led bipartisan letters calling for a strong Renewable Fuel Standard (RFS) as the EPA has worked toward finalizing its annual rules on biofuels volume requirements. Klobuchar and Grassley also led a bipartisan group of senators urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses, and rural communities.
Read the original press release here.
May 20, 2020
U.S. ethanol production for the week ending May 15 was up nearly 8 percent while weekly ethanol ending stocks fell by more than 2 percent, according to data released on May 20 by the U.S. Energy Information Administration. The data shows U.S. ethanol production and use continues to slowly rebound following sharp declines in March and April due to market impacts caused by the COVID-19 pandemic.
U.S. ethanol production averaged 663,000 barrels per day the week ending May 15, up from an average of 617,000 barrels per day the previous week. Production was down 409,000 barrels per day when compared to the same week of last year, and down 416,000 barrels per day when compared to the volume of ethanol produced during the final week in February, before COVID-19 began to impact U.S. fuel markets.
Weekly ethanol ending stocks fell to 23.63 million barrels the week ending May 15, down from 24.19 million barrels the previous week, and down from a record-setting 27.689 million barrels the week ending April 17. When compared to the same week of 2019, weekly ethanol ending stocks were up only 222,000 barrels.
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May 18, 2020
The true question may not be which came first—the chicken or the egg—but rather, what was the color of the yolk? In Mexico, the U.S. Grains Council is working with poultry producers to examine how U.S. corn distillers oil (CDO)—a co-product of ethanol production—can help achieve the darker yellow egg yolk desired by consumers and boost the immune systems of the chickens that lay those eggs.
Mexican consumers prefer yellow-skinned chickens and dark yellow egg yolks. Shifting the color of an egg yolk from pale yellow to dark yellow can be accomplished by changing a chicken’s diet. To do so, Mexican layer producers often add a pigmenting agent, mainly marigold extract, to feed rations, which also adds to the cost of the finished feed.
Council staff proposed a different solution—CDO, which was already being added to Mexican poultry rations for its energy value. A research project conducted with North Carolina State University successfully demonstrated CDO contained carotenoid pigments, naturally occurring pigments that would enhance yolk color and provide other nutritional benefits.
The Council—using a combination of funding from the USDA’s Market Access Program and Agricultural Trade Promotion program—took this information to Mexico’s largest importer and distributor of CDO and formed a partnership to conduct one-on-one visits with major poultry companies.
Throughout 2019, the Council conducted specific batch testing on imported product and developed marketing materials and feeding guides. The Council also set up booths to provide information and facilitate networking with suppliers at meetings for ANFACA, one of the largest grain and feed associations in Mexico, and AVECAO, the largest poultry event in Tepatitlan.
“Several companies in Mexico were already utilizing CDO, but for energy content value, not pigment,” said Patricia Esqueda, USGC western Mexico marketing specialist. “While many of the nutritionists at poultry companies did not initially look at pigment as an advantage of CDO, they did consider the total carotenoid content as an excellent source of antioxidants that would promote healthy immune systems in the birds.”
By fall 2019, the Council convinced three additional poultry companies to import CDO for the first time, making weekly purchases. Other companies also expressed interest and received CDO samples to test in their rations. While CDO supplies are currently limited due to constraints within the U.S. ethanol industry, these companies remain engaged with the Council and interested in adding the co-product to their formulations.
“Egg yolks have been looking paler in Mexico, due to the current pricing and availability for both U.S. CDO and Chinese marigold,” Esqueda said. “But as customer preferences continue to exist for a darker yolk, we do expect demand for CDO to come back in the poultry market as pigment prices stabilize.”
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May 15, 2020
The U.S. ethanol industry is showing some signs of recovery as government officials ease stay-at-home orders that depressed fuel demand, while a vote Friday in Congress could bring the industry one step closer to federal aid, industry officials said.
Fuel demand collapsed by about a third with the spread of the novel coronavirus this spring, and U.S. ethanol production capacity halved as around 150 facilities either idled or reduced rates. Now as restrictions ease and gasoline demand inches higher, about 140 facilities are idled or running at reduced rates, Renewable Fuels Association President Geoff Cooper said on Friday.
“It seems the worst may be behind us,” Cooper said in a call with reporters. “But make no mistake, we still have a very long way to go to climb out of the hole that COVID-19 put us in.”
U.S. production of ethanol - a corn-based fuel that refiners must blend into their gasoline - has increased since the start of May, rising to 617,000 barrels per day in the week to May 8, U.S. Energy Information Administration data showed. Production bottomed at the end of April, at 537,000 bpd.
Output is still down more than 40% from year-ago levels, though. And while inventories fell in the most recent week to 24.2 million barrels, stored supply is still nearly 9% higher than the same time last year, EIA data showed.
“We are seeing inventories come down, but we need to see frankly many more weeks of that to get this thing back into balance,” said Neil Koehler, chief executive of Pacific Ethanol.
The increased production comes as Congress readies a vote on Friday for a coronavirus relief bill that includes aid for the biofuels industry. After assistance to the industry failed to make its way into the first relief package from Congress, advocates hope that the new bill will pass the House of Representatives on Friday before moving on to the Senate.
The bill, introduced by House Democrats, would reimburse producers that suffered unexpected market losses because of the pandemic from Jan. 1 through May 1.
“I’m confident it will get through today’s legislation, but after that, that’s another story,” Congresswoman Cheri Bustos, a biofuels advocate who represents Illinois, told Reuters. “More help will be necessary. We need help in the ag industry; we need help for our family farmers.”
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May 11, 2020
A group of 11 ag and biofuel groups sent a letter to House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell on May 11 asking congress to provide COVID-19 relief for ethanol and biodiesel producers.
“The situation we face is dire,” the groups wrote. “More than 130 biofuel plants have already partially or fully shut down as motor fuel demand plunged to 50-year lows. America’s biofuel plants purchase annually more than one-third of U.S. corn and U.S. soybean oil, and the loss of those markets has depressed farm income and will continue to push corn and soybean prices down dramatically.
“The damage has rippled across the entire agricultural supply chain,” the continued. “Ethanol plants are the top supplier of carbon dioxide (CO2) to the food industry, and shutdowns have triggered commercial CO2 supply shortages, inhibiting the ability of our food and beverage sector to manufacture, preserve and supply food. Biodiesel plants provide critical demand for soybean oil, distillers corn oil, animal fats from livestock production, and recycled oils from restaurants. Reduced demand for these oil byproducts will result in higher prices for livestock feed and ultimately higher prices for consumers. And shortages of dried distiller grains (DDGs)—a high-protein animal feed produced by ethanol plants—are already impacting livestock rations and meat prices.”
The letter notes that biofuel producers are doing what they can to support the public health response by repurposing ethanol and glycerin supplies to produce hand sanitizer. “However, sanitizer markets are not nearly substantial enough to sustain our workforce and bridge the industry through the crisis,” the groups said.
The letter states that some facilities are eligible for CARES Act loan programs, but stresses that the legislation did not include specific relief for biofuel producers. In addition, the USDA’s subsequent disbursement of Commodity Credit Corp. funds excluded the biofuel sector despite letters of support sent to Agriculture Secretary Sonny Perdue by broad, bipartisan coalitions in the House and Senate.
“While it is important that biofuel producers are included in any infrastructure or tax legislation designed to hasten America’s long-term economic recovery from COVID-19, relief is needed now to ensure these producers are positioned to bring renewable fuel production back online when conditions improve,” the groups wrote. “It is vital that the next COVID-19 relief package include immediate, temporary, and direct assistance to help the U.S. biofuel industry retain its skilled workforce and mitigate the impact of plant closures on the food and feed supply chain and rural communities. There are numerous mechanisms overseen by the USDA that could quickly facilitate direct assistance to the biofuel industry. Preserving the vital biofuels market for farmers supports long-term demand for agriculture and farm sector recovery.”
The letter is signed by the Renewable Fuels Association, Growth Energy, National Biodiesel Board, Farm Bureau, National Corn Growers Association, American Soybean Association, National Farmers Union, National Oilseed Processors Association, National Renderers Association, National Sorghum Producers, and Fuels America. A full copy of the letter is available on the Fuels America website.
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May 8, 2020
Three dozen Midwestern electric cooperatives and rural electric associations send a letter to 20 federal lawmakers on May 7 asking Congress to provide much-needed economic relief for rural America, which continues to suffer from the impacts of the COVID-19 pandemic.
“Rural electric cooperatives were created to provide electricity to farms and rural communities and have continued to expand this essential service as rural America has grown and prospered,” the groups said in the letter. “Our member-owners have invested billions in not only electric infrastructure through their cooperative to serve these areas, but also in helping to develop the rural economy in which they live. These investments have allowed for diversification into biofuels, food processing, and other business development opportunities.”
The letter notes that a steep drop in liquid fuel demand has had a major impact on biofuel plants. Rural food processing facilities have also been severely impacted by the pandemic. “These events have left producers of several agricultural commodities without a market for their product, forcing some to euthanize animals or destroy their products,” the groups wrote. “The pandemic has compounded the impacts of low commodity prices and extreme weather events that had already created a struggling farm and rural economy.”
As congress considers a new COVID-19 stimulus package, the groups are asking for relief that specifically benefits food and ethanol processing plants, along with the farmers and ranchers who serve them. “Estimates show as much as half of U.S. ethanol production has been idled,” the groups continued. “Without ethanol sales, our corn farmers are significantly harmed. Reduced ethanol production and livestock processing threatens our food and energy security, and in turn results in reduced electric load, a burden that ultimately falls on the individual members of an electric cooperative. The combination of these issues poses a significant threat to the overall wellbeing of the rural communities that we serve.”
The letter also urges the senators and representatives to reject any attempts by EPA to grant new RFS waivers and encourage the agency to rein-in its use of small refinery exemptions (SREs).
“Further, additional economic support is necessary through the U.S. Department of Agriculture (USDA),” they wrote. “We have learned that the USDA is unlikely to directly provide biofuels producers any of the increased funding from the Coronavirus Aid, Relief and Economic Security Act appropriated to the Commodity Credit Corporation. Any additional stimulus legislation must provide biofuels-specific support. Failure to do so will significantly threaten investments made to develop biofuel and agricultural processing infrastructure, and the role these facilities play in supporting rural communities.
“Again, these industries are absolutely vital to the economic health of rural America, and we appreciate your consideration of these requests,” they continued.
The letter is signed by Basin Electric Power Cooperative, Power Electric Cooperative, McLean Electric Cooperative, Dakota Valley Electric Cooperative, Roughrider Electric Cooperative, Minnkota Power Cooperative, East River Electric Power Cooperative, Central Electric Cooperative, FEM Electric Association, Northern Electric Cooperative, Oahe Electric Cooperative, Sioux Valley Energy, Southeastern Electric Cooperative, Agralite Electric Cooperative, Rural Electric Association, Minnesota Valley Cooperative Light and Power Association, Redwood Electric Cooperative, South Central Electric Association, Upper Missouri Power Cooperative, Harrison County Rural Electric Cooperative, North West Rural Electric Cooperative, Northwest Iowa Power Cooperative, Corn Belt Power Cooperative, Iowa Lakes Electric Cooperative, Raccoon Valley Electric Cooperative, Midland Power Cooperative, Nishnabotna Valley Rural Electric Cooperative, Butler County Rural Electric Cooperative, L&O Power Cooperative, Osceola Electric Cooperative, Nebraska Electric Generation and Transmission Cooperative, North Dakota Association of Rural Electric Cooperatives, Iowa Association of Electric Cooperatives, South Dakota Rural Electric Association, Minnesota Rural Electric Association, and Nebraska Rural Electric Association.
The letter is addressed to Sens. John Hoeven, R-N.D.; Kevin Cramer, R-N.D.; John Thune, R-S.D.; Mike Rounds, R-S.D.; Chuck Gassley, R-Iowa; Joni Ernst, R-Iowa; Deb Fischer, R-Neb.; Ben Sasse, R-Neb.; Amy Klobuchar, D-Minn.; Tina Smith, D-Minn.; and Reps. Kelly Armstrong, R-N.D.; Dusty Johnson, R-S.D.; Steve King, R-Iowa; Cindy Axne, D-Iowa; Abby Finkenauer, D-Iowa; Dave Loebsack, D-Iowa; Adrian Smith, R-Neb.; Jeff Fortenberry, R-neb.; Jim Hagedorn, R-Minn.; and Collin Peterson, D-Minn.
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May 5, 2020
The U.S. exported 139.93 million gallons of ethanol and 899,730 metric tons of distillers grains in March, according to data released by the USDA Foreign Agricultural Service on May 5. Exports of both products were down when compared to March 2019.
The 139.93 million gallons of ethanol exported in March was down significantly from the 194.16 million gallons exported in February but was relatively flat when compared to the 140 million gallons exported during the same period of 2019.
The U.S exported ethanol to nearly four dozen countries in March. Brazil was the top destination for U.S. ethanol with 37.22 million gallons, followed by Canada at 27.49 million gallons, and India with 19.63 million gallons.
The value of U.S. ethanol exports was at $241.64 million in March, down from $323 million in February, but up from $234.26 million in March 2019.
Total ethanol exports for the first three months of the year reached 485.32 million bgallons at a value of $821.17 million, compared to 381.74 million gallons at a value of $612.07 during the same period of last year.
The U.S. exported 899,730 tons of distillers grains in March, up from the 852,904 tons exported in February, but down from 956,828 tons exported in March 2019.
The U.S. exported the ethanol coproduct to more than three dozen countries in March. Mexico was the top destination with 190,125 metric tons, followed by Vietnam at 139,974 metric tons and South Korea at 127,636 metric tons.
The value of U.S. distillers grains exports reached $194.77 million in March, up from $178.24 million in February, but down from $202.65 million in March 2019.
Total U.S. distillers grains exports for the first quarter of 2020 reached 2.73 million metric tons at a value of $572.49 million, compared to 2.45 million tons at a value of $518.13 reported for the same period of last year.
Additional data is available on the USDA FAS website.
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Energy and Environment News - ClimateWire
May 5, 2020
An oil bailout remains unpopular with U.S. voters despite weeks of nonstop pain for the industry, according to a new poll.
Morning Consult's latest tracking poll found that 38% of the roughly 2,000 voters it contacted were in support of an oil and gas bailout.
Those results, collected in surveys last week, showed that public sentiment hadn't budged from late March and early April, when the same pollster also found 38% support for a bailout.
Opposition to an oil bailout also remained static at 43% of registered voters, and 19% had no opinion, according to the nationwide tracking polls. The polls had a margin of error of 2 percentage points.
Clean energy fared better. A majority of voters backed bailouts for renewable energy, with 56% of voters in support and 24% opposed.
Trump voters were more likely to support an oil bailout (50%), though a plurality also supported a renewable bailout (45%).
Oil allies responded to the poll by urging flexibility. Industry aid doesn't have to look like a bailout, they said.
"This is further evidence that tax cuts for energy extracted on federal lands might be more favorably viewed than direct spending/bailouts," Paul Blair, director of strategic initiatives at Americans for Tax Reform, wrote on Twitter.
"Cut the royalty rate!" he said.
The oil industry suffered historic blows in the time between the two polls. Amid a price war between Russia and Saudi Arabia, President Trump helped negotiate an agreement for oil-producing nations to cut output. But it wasn't enough to counteract a sharp decline made worse by the coronavirus pandemic.
Storage tanks are filled near capacity, and one benchmark showed negative prices for the first time ever.
The Federal Reserve last week expanded a loan program to include struggling oil and gas firms. Environmentalists blasted that move as a quiet bailout, but industry officials said it wasn't that simple.
Steve Everley, a managing director at FTI Consulting who works with the oil and gas sector, responded to the Morning Consult poll by pointing to one of its other findings: More Americans say low oil prices hurt the economy (52%) than say it's helped their personal finances (42%).
Everley added that he would be curious what voters consider to be a bailout.
Extending tax credits and offering Treasury loans with interest aren't the same as direct cash payments, he said.
"Many of these are not bailouts, or at least should not be considered bailouts. But do voters see the nuance?" he wrote on Twitter.
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May 4, 2020
(Washington, D.C.) - U.S. Secretary of Agriculture Sonny Perdue announced the U.S. Department of Agriculture intends to make available up to $100 million in competitive grants for activities designed to expand the availability and sale of renewable fuels.
“America’s energy independence is critical to our economic security, and President Trump fully recognizes the importance of our ethanol and biofuels industries and the positive impacts they deliver to consumers and farmers with an affordable, abundant, and clean burning fuel,” Secretary Perdue said. “American ethanol and biofuel producers have been affected by decreased energy demands due to the coronavirus, and these grants to expand their availability will help increase their use during our economic resurgence.”
The Higher Blends Infrastructure Incentive Program (HBIIP) consist of up to $100 million in funding for competitive grants or sales incentives to eligible entities for activities designed to expand the sales and use of ethanol and biodiesel fuels. Funds will be made directly available to assist transportation fueling and biodiesel distribution facilities with converting to higher ethanol and biodiesel blends by sharing the costs related to and/or offering sales incentives for the installation of fuel pumps, related equipment, and infrastructure.
Additional Information:
USDA is making the grants available under the Higher Blends Infrastructure Incentive Program (HBIIP). The program is intended to increase significantly the sale and use of higher blends of ethanol and biodiesel by expanding the infrastructure for renewable fuels derived from U.S. agricultural products.
Grants for up to 50 percent of total eligible project costs, but not more than $5 million, are available to vehicle fueling facilities, including, but not limited to, local fueling stations/locations, convenience stores, hypermarket fueling stations, fleet facilities, fuel terminal operations, midstream partners and/or distribution facilities.
USDA plans to make available approximately $86 million for implementation activities related to higher blends of fuel ethanol, and approximately $14 million for implementation activities related to higher blends of biodiesel. Higher biofuel blends are fuels containing ethanol greater than 10 percent by volume and/or fuels containing biodiesel blends greater than five percent by volume.
For application information and other program details, see the public inspection notice in the Federal Register (PDF, 369 KB), or visit the Higher Blends Infrastructure Incentive Program web page.
Read the original press release here.
May 1, 2020
A coalition of ethanol and farm groups today sent a letter to the Environmental Protection Agency opposing the American Petroleum Institute’s recent petition requesting reconsideration of the 2020 Renewable Fuel Standard (RFS) final rule.
API claims reconsideration of the 2020 RFS rule is necessary in light of the coalition’s recent Tenth Circuit court victory that overturned small refinery exemptions illegally granted by EPA. The successful Tenth Circuit court challenge was brought against EPA by the Renewable Fuels Association, National Corn Growers Association, National Farmers Union, and American Coalition for Ethanol.
Specifically, API argues that the 2020 RFS rule should be revised to eliminate measures that prospectively “reallocate” RFS blending obligations expected to be lost to refinery waivers. API claims reallocation of expected waivers is no longer needed because the Tenth Circuit decision should significantly curtail the number of waivers granted. However, EPA has not yet confirmed that it will implement the tenets of the Tenth Circuit court decision nationwide, meaning reconsideration of the 2020 RFS rule would be woefully premature.
“There is no basis for revisiting or modifying EPA’s current approach until EPA acknowledges that the central tenets of the Tenth Circuit’s decision are appropriately applied throughout the country,” the groups wrote.
In fact, the 2020 RFS volumes should not be adjusted downward to remove reallocated volumes even after EPA applies the Tenth Circuit court decision nationally, according to the coalition’s letter.
“As noted by the Court, EPA’s recent abuse of its small refinery exemption authority has significantly harmed the U.S. ethanol industry. Indeed, nationally, more than four billion gallons of 2016-2018 renewable fuel volume requirements were lost due to EPA’s illegally issued small refinery waivers. Applying the Tenth Circuit decision nationally while leaving the 2020 RFS rule intact would begin to restore a small amount of the renewable fuel volume requirements lost to past small refinery exemptions; still, doing so would come nowhere near fully redressing the demand destruction wrought by the exemptions.”
The letter is available here.
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Apr 28, 2020
Today, Congresswoman Angie Craig (MN-02) announced the introduction of the Clean Fuels Deployment Act of 2020. The bipartisan legislation she introduced with U.S. Reps. Abby Finkenauer (D-IA), Don Bacon (R-NE), and Roger Marshall (R-KS), would provide funding for installing and converting fuel pump infrastructure to deliver higher blends of ethanol and biodiesel.
The bill authorizes $500 million over five years to help retailers offer higher ethanol blends, expand the geographic area selling ethanol blends, support biodiesel, bioheat, and sustainable aviation fuel markets, and accelerate the deployment of fueling infrastructure. Given recent uncertainties in the renewable fuels industry, it is more important than ever to fund infrastructure improvements and remove market barriers to accessing clean and renewable fuels.
“The Clean Fuels Deployment Act is a critical step toward supporting biofuels at a particularly difficult time. As a member of the Congressional Biofuels Caucus, I’ve long supported the year-round sale of E15 and increasing options for consumers at the pump,” said Rep. Angie Craig. “This commonsense solution would provide additional certainty to Minnesota family farmers. I look forward to following through on much needed relief to our producers across the country.”
"The time is now to further diversify our fuel supply and move more biofuels into the market,"Finkenauer said. "Biofuels offer a proven path to reducing greenhouse gas emissions, decarbonizing the transportation sector, driving economic growth and creating jobs. I'm grateful to have bipartisan support from Representatives Bacon, Craig and Marshall. Cleaner fuels are good for our economy and our environment, and we’re going to keep fighting for them.”
In addition to supporting the distribution of higher ethanol and biodiesel blends at fueling stations, the program could also be used to enhance pipelines and terminals to blend and carry ethanol and biodiesel. Funding from the clean fuels grant program could be used to incentivize the deployment of ethanol and biodiesel fueling infrastructure and convert existing infrastructure to deliver ethanol blends greater than 10 percent and biodiesel blends greater than 20 percent.
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Apr 27, 2020
Ethanol blends save lives through reduced vehicle emissions. That is the conclusion of a new peer reviewed technical paper published in the Journal of Air & Waste Management, validating previous research efforts by the Urban Air Initiative that find when ethanol is added to gasoline, it significantly reduces toxic emissions tied to air pollution.
The research team leading this effort included notable refinery and fuel emission experts who looked at hundreds of earlier studies on emissions and ethanol. A glaring error, according to the authors, is that these studies assume a standard fuel is created for testing emissions. However, the research found that test fuels rarely resemble real-world fuels, similar to what consumers purchase.
The paper found that when simply adding ethanol to fuel, it reduces the most carbon intensive and carcinogenic fuel additives called aromatics. Replacing these benzene-based additives with ethanol directly reduces particulate matter (PM) and NOx emissions, both of which are ozone precursors and represent significant health risks to the public. The discrepancy the authors found in the previous studies centered on the fact that test fuels add ethanol and aromatics together to raise octane, while oil refiners actually reduce aromatics to utilize ethanol as an octane enhancer. Comparing a baseline E0 fuel to E10 and E15 shows the ethanol blends are significantly better when real world fuel blending conditions are used.
“What this new paper makes clear is the aromatic reduction resulting from increased ethanol volumes provides significant health benefits from lower particulate emissions,” said Urban Air President Dave VanderGriend. “The Urban Air Initiative and its supporters in the ethanol industry call on the EPA to look at this research and consider the facts uncovered in this paper as it prepares to make regulatory decisions about ethanol blended fuels.”
And, in light of the current health crisis, the fact that regions suffering from air pollution are experiencing higher cases of the COVID-19 virus suggests reducing emissions needs to be a national priority for the EPA, according to VanderGriend.
Read the original story here.
Apr 26, 2020
The leadership at Highwater Ethanol, which is located near Lamberton in Redwood County, is always looking for new ways to add value to its product.
In a time when fuel consumption is down due to the reduction in travel, the demand for ethanol has also decreased.
For many of the facilities producing ethanol in the region that could mean, and has meant, reducing hours and even some temporary shutdowns.
“People are driving less and that is having an impact on the industry,” said Brian Kletscher, Highwater Ethanol general manager and CEO.
A new venture is helping Highwater Ethanol keep the doors open.
According to Kletscher a couple of the ethanol facility’s vendors began talking with Highwater’s leadership about an idea.
Would it be interested in providing denatured 190 proof that would be used in hand sanitizer?
The Highwater leadership did the research and determined that moving forward with this plan was in the best interest of the facility and the people it employs.
So, as of the end of March the company began the process of supplying the product to the industry.
Kletscher said development of the denatured 190 proof at the plant did not mean making any changes to the operation.
“The plant was already producing it,” explained Kletscher, adding it just meant taking it off of the production line before the ethanol process is complete.
The facility had to work through some FDA requirements in order to move ahead with the new product.
Highwater recognized the Renewable Fuels Association for bringing clarity with the FDA, adding those efforts have been appreciated.
A guidance document from the FDA has allowed the ethanol industry and plants like the one in Lamberton to help slow the spread of COVID-19. Now it is shipping that denatured 190 proof to its vendors that are then able to ship that product as hand sanitizer across the United States.
Kletscher said as of the beginning of April, the product coming from the Highwater Ethanol plant has been shipped by those vendors to eight different states.
In this way, Highwater Ethanol has been able to help in the global battle against COVID-19.
Is this part of the long-term future at Highwater?
Kletscher said that is an answer that continues to be up in the air, adding that will all depend on demand.
Kletscher said the Highwater facility was set up in a way that it could easily make the move, adding not all of the ethanol plants have been able to do that.
“We are fortunate to have great vendors who do a good job using our products,” Kletscher said. “The board is excited, the employees are excited and I am excited about this opportunity.”
Highwater continues to purchase corn, sell dried distillers grains, modified distillers grain, corn oil and denatured ethanol for the transportation fuel market.
Highwater encourages everyone to be safe during these unprecedented times.
Learn more at highwaterethanol.com.
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