In the News
May 8, 2017
By Cindy Zimmerman
During his first visit to Iowa as Secretary of Agriculture, Sonny Perdue made his support for renewable energy and ethanol perfectly clear.
“Do you know who I work for?,” the Secretary asked the local FFA officer who wanted to make sure he supported renewable energy. “I work for a fellow by the name of Donald J. Trump. Did you hear what he said during the campaign? Renewable energy, ethanol is here to stay…you have nothing to worry about.”
Secretary Perdue visited Couser Cattle Company in Nevada, Iowa where he was welcomed by Bill, Nancy and Tim Couser, as well as Iowa Senators Joni Erst and Chuck Grassley, and Rep. Steve King. Looking comfortable in worn jeans, Perdue related that he calmed Sen. Grassley’s concerns about him as secretary when he told him, “I got 12 grain elevators, all we do is corn, wheat and beans and we sell to an ethanol plant.”
Couser, who is co-founder of Lincolnway Energy ethanol plant in Nevada, presented Perdue with his custom made corn products display, as well as a Don’t Mess with the RFS button from the Iowa Renewable Fuels Association.
Perdue held a round table discussion with Iowa biofuels and agricultural leaders and answered questions during a town hall event, all held on the Couser operation. During his visit to Iowa, Perdue also met with current Governor and soon to be Ambassador Terry Branstad, and incoming governor Kim Reynolds.
Read the original story: Secretary Perdue Shows Support for Renewable Energy
May 4, 2017
By Brian Jennings
Enactment of the Renewable Fuel Standard in Congress did more than save money at the pump and clean up the air for consumers, it also helped boost demand for U.S. corn and soybeans which, in turn, increased prices received by American farmers. By every measure, increasing the production and use of homegrown renewable fuels has spurred economic growth for U.S. farmers and supported high-skill, high-wage jobs in rural communities.
When the use of renewable fuels is curbed, the opposite is true. Starting in 2013, economic insecurity spread across rural America because the Environmental Protection Agency took implementation of the RFS off-track, reducing annual renewable volume obligations (RVOs) below levels established by Congress. During this period, EPA sided with oil companies that claimed infrastructure constraints and the mythical E10 “blend wall” prevented higher ethanol blends, such as E15 and E30, from being used in the marketplace. As a result, leading biofuel groups were forced to sue the Obama administration’s EPA. This litigation is ongoing and oral arguments were held last week by the U.S. Court of Appeals for the District of Columbia. A court decision is expected later this year.
The timing of EPA’s mismanagement of the RFS was awful and the consequences have been worse. While EPA was riding the brakes on the RFS, the productivity of American farmers led to record-high corn crops in 2015 and 2016. Supplies grew while demand and farm income fell. According to the United States Department of Agriculture, surplus stocks of corn will swell to a 30-year high of 2.4 billion bushels and corn prices will fall to a 10-year low in 2017. Liquidity ratios and working capital have deteriorated to their weakest levels since 2002 and the value of farm sector assets is expected to decline by $32 billion in 2017. Farm debt is mounting and will represent about 20 percent of farm income this year. The share of farm loans that are delinquent is creeping up and reports of farm auctions have been on the rise.
Net farm income has dropped from $124 billion in 2013 to an expected $62 billion in 2017, a decrease of nearly 50 percent since EPA took the RFS off-track. As some will remember, similar conditions forced Congress to authorize yearly ad hoc economic emergency disaster payments to farmers between 1999 and 2002 and required additional spending of $73.5 billion in the 2002 Farm Bill to avert economic collapse in rural America. It was enactment of the RFS in 2005 that restarted the rural economy and allowed farmers to profit from the free market versus relying so heavily on government payments. The lesson learned is that increasing the demand for renewable fuels leads to higher market prices for farmers and reduced taxpayer spending on farm program payments.
Growing the renewable fuels market in 2017 is even more critical given the uncertainty created by efforts to renegotiate existing trade pacts. While we are hopeful that these new negotiations will lead to better trade opportunities, the uncertainty in the near term will impact the U.S. farm economy which makes a strong and growing market for ethanol-blended fuel even more important.
To restore badly needed economic security to rural America, EPA and Congress should take a number of steps. First, Congress must reject any attempt to reduce or repeal the RFS. To get the RFS back on track, the Trump administration needs to make good on its campaign promise to set and keep RFS volumes at statutory levels. Likewise, EPA Administrator Scott Pruitt needs to follow through on the statement made during his confirmation hearing “to honor the intent of the RFS statute…, use RFS waivers judiciously, and honor RVO timelines.”
Second, legislative or regulatory action must be taken so E15 and higher blends of ethanol have access to the market. Retailers want to sell E15 in the summer months because the fuel is less emitting and lower cost than E10 and straight gasoline, but EPA’s current interpretation of its Reid vapor pressure (RVP) rule handcuffs them. This RVP regulation is the most burdensome hurdle preventing more immediate growth of E15 use nationwide. Bipartisan legislation is pending in Congress to fix this problem and EPA has options at its disposal to make a commonsense regulatory change that would allow consumers to have access to E15 and other lower cost fuels that improve air quality. Action needs to be taken soon.
A third hurdle impeding the use of higher ethanol blends is the mountain of EPA red tape over the approval process for new certification fuels and the registration of those fuels. EPA needs to streamline its fuel petition process and eliminate unreasonable criteria for approval of high-octane fuels, such as E25-E40, that currently discourages innovation and obstructs the ability for new efficient high-octane fuels to compete in the marketplace.
Read the original story: Renewable Fuels Are Part of an ‘America First’ Energy Plan
April 26, 2017
By Bob Dinneen
In 2016, the U.S. ethanol industry produced a record 15.25 billion gallons of clean, high-octane fuel and exported more than a billion gallons of the fuel to Brazil, China, Canada and other countries. I anticipate 2017 will be another record year for production and use, but I remain focused on growing demand for our fuel. Growing demand means expanded market opportunities for higher ethanol blends and to that end, the Renewable Fuels Association’s top priority this year is securing RVP parity for all ethanol blends.
How did we get here? In 1989, the U.S. EPA provided a Reid vapor pressure (RVP) waiver to 10 percent ethanol blends, concluding there would be no air quality consequence and retailers would otherwise be unable to secure blendstocks for ethanol blending year-round. In 2011, EPA approved the use of E15 in 2001 and newer vehicles, but the agency did not extend the same RVP waiver as it did to E10. As a result of this disparity, retailers in conventional gasoline areas (most of the country) have to secure specialty—and costly—gasoline blendstocks in order to continue selling E15 in the summer (June 1-Sept. 15).
The RFA has repeatedly urged EPA to take immediate administrative actions to eliminate this nonsensical regulatory barrier that is impeding growth in the use of E15 and other higher ethanol blends. We have provided the agency with reams of data from the U.S. DOE and independent laboratories proving that extending the RVP tolerance currently provided only to E10 would have no detrimental impact on ozone or other air quality standards. In fact, because of the increased oxygen content of higher ethanol blends, there would actually be improved air quality.
Inexplicably, the Obama administration’s EPA did not seem to understand the damage inflicted on retailers and consumers by denying RVP parity, however we have hope under this new administration. One of President Trump’s priorities is an overhaul of the regulatory code that has needlessly burdened American businesses, stymied growth and increased cost with little or no environmental or consumer benefit; EPA’s treatment of volatility for ethanol-blended gasoline is a perfect example. The failure to grant the RVP waiver has needlessly discouraged retailers from offering the fuel blend year-round and punished consumers who cannot take advantage of the lowest cost, highest octane source of fuel in the world.
There are several ways for RVP parity to be achieved. RFA has worked for years on an administrative fix. To date, EPA has been reluctant to use its statutory authority to grant an RVP tolerance for E15. EPA could also lower the volatility of conventional fuels; but, while supportive, the agency has not shown much enthusiasm for getting that done either. RFA remains optimistic that, with a new sheriff in town and a fresh look at the existing statutory authority, we might soon be able to offer the lower-priced, higher-octane E15 to consumers year-round.
Of course, a legislative fix is also possible and the RFA supports bills that have been introduced, as long as they don’t jeopardize the Renewable Fuels Standard. For example, our champions on Capitol Hill have introduced two bills that would address the issue. In early March, Sens. Deb. Fischer, R-Neb., Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, introduced the Consumer and Fuel Retailer Choice Act (S. 517) that would extend RVP parity for ethanol blends above 10 percent. A companion bill, H.R. 1311, was also introduced in the House by Reps. Dave Loebsack, D-Iowa, and Adrian Smith, R-Neb.
We will continue to pursue all avenues to make sure parity is addressed. I want consumers to have a choice at the pump, whether that’s in February or July or November. Let’s work on making sure that happens this year.
Read the original article: RVP Parity a Win, Win for Consumers
April 26, 2017
Danish biotechnology firm Novozymes said it expects a slight rise in US ethanol output in 2017, after an increase in production in the first quarter of the year. But the company says US demand is down and inventories in the country are rising.
The firm said it had boosted sales of its enzymes to US bioethanol producers in the first three months of this year, helping grow sales of its bioenergy segment to 681mn kroner ($100mn) up by 9pc compared with January to March 2016. Novozymes said this was the result of estimated US ethanol output rising by 4pc in the first three months of this year, set against the first quarter a year ago. The company said it expects US ethanol output this year to be "on a par or slightly up on 2016." It also expects second generation ethanol output to increase by an unspecified amount.
The increase in its bioenergy enzymes sales reverses a decline in 2016 when Novozymes said US ethanol producers were looking to cut costs, as profits remained thin. The company has been aided in the last year by the launch of new products and in part by the decline in the oil price, which supported gasoline demand in the US, into which ethanol is blended.
But the firm said today US ethanol consumption had declined slightly in the first quarter and inventories were building. "Margins came down in the first quarter," said head of bioenergy Tina Sejersgard Fano.
The EIA said inventories are around 23mn bl, up by 1mn bl on the year, with its most recent production data giving output of 993,000 b/d, up by around 6pc on the year. That inventory build "could lead to a reduction in production," in the rest of the year said Holk Nielsen.
In Europe Novozymes owns a 10pc stake in the 40,000 tonnes/yr Crescentino cellulosic ethanol plant in northern Italy, operated by Beta Renewables. The unit was first started up in December 2012 but it ran into familiar problems associated with plants aiming to create ethanol from straw and other biomass. Novozymes said the plant is still not at capacity.
The company also supplies enzymes to cellulosic ethanol plants in the US, Brazil and China, all of which have faced similar issues. But Sejersgard Fano said US cellulosic plants were having "more and more stable production," despite being only a small part of overall US ethanol output.
But the company has successfully launched a new corn innoculant Acceleron B-300 SAT, partnering biotechnology firm Monsanto, aiming to boost US crop yields. The microbe coats seeds of corn hybrids sold by Monsanto, with Novozymes estimating the innoculant's use will reach 4.5mn to 9mn acres of planted US corn in 2017. Monsanto's sells its seeds to around 45mn acres in the US, around half of all US corn acreage.
The firm increased its first quarter net profit to 772mn kroner, up from 745mn on the year.
Read the original story: Novozymes Eyes Increase in US Ethanol Output
April 25, 2017
By Ann Bailey
The benefits in feeding distillers grains are well known—it’s an economical, nutritious, palatable addition to livestock and poultry rations. Less well known are its environmental benefits that range from reducing methane emissions from cattle to minimizing phosphorus content in manure and the risk from runoff into waterways. These little-known benefits are something that University of Minnesota professor and animal nutritionist Gerald (Jerry) Shurson believes the ethanol industry should tout.
“We’re entering an era where we have to think about the environmental impact of feed ingredients,” Shurson says. One of the biggest challenges today is to sustainably produce enough nutritious, safe and affordable food for a growing population, while at the same time preserving natural resources and minimizing negative impacts on the environment. Food demand is projected to increase 70 percent between 2010 and 2050 and the growing middle class is expected to have 1.8 times more consumer buying power, allowing more people to be able to buy more milk, meat and eggs, he says. Meeting the goal of feeding the world sustainably will be multidimensional, requiring innovations in production techniques and systems that increase the efficiency and amount of food produced, while preserving finite natural resources, protecting ecosystems and biodiversity, and mitigating the effects of global climate change, Shurson says.
Estimates indicate about 14 percent of human-produced greenhouse gas (GHG) emissions globally come from the livestock sector, Shurson says. While 14 percent is not a huge contribution to the total, nonetheless, it is significant and there are opportunities for the livestock industry to play a significant part in reducing greenhouse gases. Growing consumer concern about the effect the global livestock industry has on the environment and climate change is prompting integrated livestock and poultry producers and food production companies to begin emphasizing supply chain management to reduce their carbon footprints, Shurson says. “In other words, in addition to nutrition and economic value, they are also sourcing ingredients that have less negative impact on the environment.” Feed ingredients are beginning to be classified by renewable and nonrenewable resource use, acidification and eutrophication potential, and contribution to GHG emissions, he says.
DDGS can play an important role. In 2015, the ethanol industry produced roughly 37 million metric tons of DDGS for export and domestic use. Historically, most of the corn coproduct was fed to dairy and beef cattle, but because ethanol and DDGS production has greatly increased during the past 15 years, the need to build the market has increased, both domestically and overseas. Inclusion rates for dairy and beef cattle have also risen and demand from other livestock sectors, such as swine, poultry and aquaculture, both domestically and overseas, has increased.
Methane, Phosphorus Benefits
One side effect of increasing the inclusion rate of DDGS in the diet of dairy cows is it increases the amount of corn oil consumed. Several studies have shown that raising dietary fat content reduces methane production, Shurson notes. That’s important because methane is a significant contributor to greenhouse gas emissions. “The reduction in methane production in cattle is a positive environmental story that makes DDGS even more attractive, beyond its economic and performance benefits.”
On top of reducing methane emission in cows, feeding distillers grains brings an important environmental benefit to poultry and swine operations. “One of the unique advantages of using DDGS in swine and poultry diets is that it contains a greater concentration of digestible phosphorus than all other grains and grain coproducts, which can dramatically reduce the amount of phosphorus excretion in manure,” Shurson says.
“Whatever is not digested and absorbed by the animal comes out in the manure, so there is a dramatic reduction in phosphorus excretion in manure when adding DDGS to these diets.”
The reduced phosphorus content in manure from pigs and poultry fed DDGS means that when manure is applied to soil, there is less phosphorus runoff into rivers, lakes and streams, Shurson says.
“Because we take corn and put it through a fermentation process with yeast in an ethanol plant, that process converts much of the indigestible phosphorus into a digestible form which is important to pigs and poultry.” Less risk of runoff into waterways Shurson says, minimizes the risk of eutrophication, which can lead to algae blooms and fish kill, if it’s severe enough.
Another environmental advantage of the high digestibility of phosphorus in DDGS is that animal nutritionists can reduce inorganic phosphorus supplementation, Shurson says. “Some experts have predicted that within the next 20 years, our natural phosphate reserves around the world will be close to being depleted, so there’s a big amount of interest, and even organizations, focused on phosphorus conservation.” Distillers dried grains plays a big role because it is not only high in phosphorus content, but the phosphorus is more digestible, reducing the pressure on inorganic reserves, he says. “That’s a good thing from a long-term environmental perspective.”
Besides having positive environmental benefits, reducing the amount of inorganic phosphates in the animals’ diets is cost effective, Shurson adds. “Inorganic phosphate sources are relatively expensive and phosphorus is the third most expensive nutritional component in animal feeds. Using more DDGS to replace inorganic phosphate supplements reduces diet cost when diets are formulated on a digestible phosphorus basis.”
On top of reducing the amount of methane in cattle and phosphorus in pigs, DDGS also have potential to mitigate the smell in commercial swine operations. Some studies have shown that the amount of hydrogen sulfide emitted from stored manure is reduced in pigs that are fed 30 percent DDGS diets compared with corn-soybean meal diets, Shurson says, which reduces odor in manure storage pits. Odor reduction is a significant advantage because as urban areas move closer to large confinement operations, complaints about the smell emitted from the manure storage pits increase, Shurson says.
Telling the Story
Historically, the focus of nutritionists and livestock producers has been on minimizing costs while optimizing animal performance. That will continue, Shurson says, but there are already signs that environmental concerns will add another level to purchasing decision. “What I’m suggesting is, we’re entering an era where we have to think about the environmental impact of feed ingredients, because global agriculture is projected to represent more than 50 percent of total agricultural economic value in the next 10 years,” he says. The growing middle class in China and other Asian countries, together with an increasing global population, will result in the production of more food animals than ever before, Shurson notes. Furthermore, driven by consumer desire, food companies and major livestock and poultry integrators are beginning to make claims that the food they produce is, among other things, environmentally friendly, he says. The business models of companies such as Walmart, Smithfield Foods and Pepsico are putting more emphasis on limiting environmental impacts in response to those concerns.
Because DDGS are a significant global feed ingredient, Shurson believes the ethanol industry has an important story to tell. “A lot of companies are talking about, and struggling with, how they can move toward a bioeconomy. The role of ethanol and its major coproduct, DDGS, contribute to a positive environmental story. I’ve begun introducing these positive environmental impact stories in many of my presentations at feed conferences in the U.S. and overseas.”
Measuring the Impact
Feeding food-producing animals diets that reduce the negative effect on the environment is important because it is something that can have an appreciable, measurable effect, says Jennifer Schmitt, program director and lead scientist at the NorthStar Initiative for Sustainable Enterprise, a program at the Institute on the Environment at the University of Minnesota. During the next year, Schmitt will be working on a project with Shurson and Pedro Urriola, University of Minnesota animal science research assistant professor, that will look at how four hog diets affect the life-cycle (cradle to grave) environmental impact of hog production. One of the diets will contain DDGS, another food waste, a third, phytase enzymes and a fourth, synthetic amino acids. Hogs were chosen for the project because their digestive systems can handle a wider variety of feeds than animals such as dairy and beef cattle.
“If we can show ways to improve the environmental impacts with pork, we can reduce the overall environmental burden of meat animals,” Schmitt says. “Meat consumption has large environmental impacts in the world, so if we want to address greenhouse gas emissions, water use, water quality, land use, etc., we must either decrease meat consumption in the world or have more sustainable meat production.” It is unlikely total world meat consumption will decrease because the middle class is expected to grow and they will be eating more, not less, meat, Schmitt says. That means that finding a more sustainable way to produce meat is important. Manure management is the No. 1 environmental “hot spot” or the largest contributor, to the greenhouse gases associated with hog production. Second is production of corn feed products, followed by in-home consumption, which includes food waste, she says. “If we can hit those big hot spots and make improvements, we can have environmental gains.”
Read the original story: Untold Story of DDGS’ Positive Environmental Impact
April 19, 2017
By Emily Druckman
Gasoline consumed in the United States in 2016 contained more than 10% ethanol on average for the first time ever, according to an analysis of U.S. Energy Information Administration (EIA) data released today by the Renewable Fuels Association (RFA). The EIA data dispels the myth that 10% is the marketplace limit for ethanol content in U.S. gasoline, and demonstrates that the so-called “blend wall” is not a real constraint on ethanol consumption.
According to EIA data, finished motor gasoline consumption totaled 143.367 billion gallons in 2016. That volume of gasoline contained 14.399 billion gallons of ethanol, meaning the average ethanol content of gasoline consumed in 2016 was 10.04%. According to the RFA report, the data “…further underscore that statutory Renewable Fuel Standard (RFS) blending obligations in excess of the 10.0% level can be readily satisfied by the marketplace.”
Growing consumption of E15 (gasoline blends containing 15% ethanol), mid-level blends (containing 20-50% ethanol) and flex fuels (containing 51-83% ethanol) was responsible for the increase in the average ethanol content of U.S. gasoline in 2016. The RFA report finds that 2016 consumption of mid-level blends and flex fuels was at least 450 million gallons, and may have been more than 1 billion gallons if the American Petroleum Institute’s (API) assertions about ethanol-free gasoline (E0) demand are correct.
A summary of key findings include:
• National average ethanol content was 10.0% or higher in six of the last seven months of 2016, culminating with a record high monthly rate of 10.30% in December.
• On a weekly basis, the ethanol blend rate hit a weekly record of 10.41% in early January 2017.
• These data undermine the assertion by API and others that the gasoline market cannot accommodate more than 9.7% ethanol due to purported infrastructure and vehicle constraints. April 2015 was the last time average ethanol content was below 9.7%.
• Using the most conservative assumptions, EIA data imply that 447 million gallons of mid-level blends and flex fuels (containing 313 million gals. of ethanol) were consumed in 2016.
• However, if API’s assumptions about E0 demand are used, then consumption of mid-level blends and flex fuels was 1.2 to 1.7 billion gallons (843 mil. to 1.17 bil. gals. of ethanol).
“EIA’s data once again shows that the oil industry’s blend wall narrative is bankrupt, intended only to mislead consumers and undermine support for the Renewable Fuel Standard,” said RFA President and CEO Bob Dinneen. “The facts provide a different narrative. Ethanol is the lowest cost and cleanest burning source of octane today. Driven by the RFS and attractive blending economics, domestic refiners and blenders used more ethanol in 2016 than ever before and it’s likely that trend will continue this year. Consumers are gravitating toward E15, E85, and other mid-level blends where they are available. The oil industry can no longer claim the blend wall is any barrier to the effective implementation of the RFS.”
“Additionally, with EPA poised to soon issue its proposed 2018 RFS renewable volume obligations, this analysis unequivocally proves the agency needs to implement the 15 billion gallon statutory requirement for conventional biofuel. A strong RFS benefits consumers with cleaner air, greater energy security and a boost to local economies. We look forward to EPA implementing a strong RFS for 2018,” Dinneen added.
To view a copy of the analysis click here.
Read the original story: U.S. Gasoline Contained More than 10% Ethanol in 2016, Shattering the ‘Blend Wall’ Myth Once and For All
April 6, 2017
News Release:
MINNETONKA, Minn., USA, – Developments in cellulosic ethanol technology, including a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, are viewed as opportunities to help grow demand for Earth-friendly American ethanol.
According to Miloud Araba, head of Enogen® technical services at Syngenta, cellulosic innovation could enable dry grind ethanol producers to capitalize on steadily increasing Renewable Fuel Standard (RFS) volume requirements for cellulosic biofuels, which are up 35 percent for 2017.1 Araba discussed opportunities for cellulosic ethanol at the 2017 National Ethanol Conference.
“Approximately 10 percent of the corn kernel dry weight is fiber, and converting corn kernel fiber feedstock to cellulosic ethanol has been possible for some time,” Araba said. “However, recent advances in technologies can enable commercial deployment today. In fact, the approximately 12 million tons of corn kernel fiber feedstock already available at U.S. dry grind ethanol plants each year could produce a potential 1.5 billion gallons of additional, cellulosic ethanol.”
Araba added that the California Low Carbon Fuel Standard (LCFS) offers further opportunities for corn kernel fiber. “Low carbon intensity fuel that puts out fewer emissions will be increasingly needed in California to meet the goals of the LCFS program and the demand for LCFS credits,” he said. “Looking ahead, cellulosic ethanol from corn kernel fiber will be in demand because long-term objectives of the LCFS cannot be met with D6 ethanol at 10 percent.”2
In 2014, the U.S. Environmental Protection Agency added corn kernel fiber to the list of qualifying cellulosic biofuel feedstocks as part of the RFS. That same year, using Cellerate™ process technology, Quad County Corn Processors (QCCP) was the first commercial cellulosic facility – using corn kernel fiber as feedstock – and achieved EPA certification to generate D3 RINs. Through November 2016, QCCP’s output represented approximately 85 percent of D3 RIN ethanol produced. To date, QCCP has produced more than 5.5 million gallons of cellulosic ethanol.
Araba added that Cellerate enables an ethanol plant to leverage its existing infrastructure to produce cellulosic ethanol and significantly increase throughput. Performance results achieved at QCCP to date include: a six percent yield increase plus a 20 percent throughput increase combined for a 26 percent increase in ethanol production3; higher protein feed co-products; and improved oil yield.
“In addition to improvements in throughput and yield, Cellerate enhanced by Enogen® corn enzyme technology drives corn oil yield, leads to increased protein levels and lower residual starch content in co-products,” Araba said. “Protein increases were observed immediately after Cellerate was integrated at QCCP in July of 2014. Initial feed formulation evaluations have shown that Cellerate can lead to an increase in the value of feed co-products, as well as potential access to higher value feed markets.”4
For Cellerate technical inquiries, or a tour of the Cellerate process at QCCP, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.">Tim Tierney with Syngenta at 612-801-9775 or Travis Brotherson with QCCP at 712-282-4628. Learn more about Cellerate process technology at www.Enogen.com
Read the original release: Syngenta Discusses the Future of Cellulosic Ethanol and Opportunities for Dry Grind Ethanol Producers
April 7, 2017
By Rachel Gantz
This morning, the American Petroleum Institute will issue yet another push poll, claiming that a majority of Americans oppose the Renewable Fuel Standard (RFS). But repeating the same tired, skewed results doesn’t make it true.
If past is prologue, API will have framed its RFS polling questions to be biased against the biofuels program. Take API’s April 2016 polling results. Here’s API’s first misleading question:
“As you may know, much of the gasoline in the U.S. market currently contains up to a 10% ethanol blend. Most auto manufacturers have said they will not cover vehicle damage caused by higher ethanol fuel blends over 10% if the vehicle is not specifically designed for it. Given that situation, how concerned are you about government requirements that would increase the amount of ethanol in gasoline?”
What’s the truth? The RFS does not require consumers to purchase increasing—or any—biofuels in their fuel, while ethanol blends of up to 15% are approved for approximately 90% of the vehicles on U.S. roads today.
Think API’s new push poll will be any different? Neither do we.
Here’s the truth. Nearly sixty percent of those polled in a recent national survey support the RFS.
The survey, conducted in late March by Morning Consult on behalf of the Renewable Fuels Association, found that 58% of those polled support the RFS, with only 17% of those polled opposed to the RFS. That’s a more than 3:1 margin of support for the RFS.
“Consumers all across our country are seeing the benefits of the RFS, whether it’s cleaner air, a reduction in our dependence on petroleum or a boost to local economies,” said RFA President and CEO Bob Dinneen. “The RFS has been an unmitigated success, stimulating growth in domestic renewable fuels, creating a value-added market for farmers and providing choice at the pump for consumers.”
“It’s no wonder that API, which represents petroleum producers, wants to obfuscate the success of a program that boosts the production and use of renewable fuel. Consumers want a choice at the pump and the RFS helps ensure that choice exists. API can release all the push polls it wants, but the truth speaks for itself,” Dinneen added.
Read the original release: API Push Poll Doesn’t Reflect Reality
More...
April 4, 2017
By Renewable Fuels Association
U.S. ethanol exports hit 138 million gallons in February, the third-highest monthly volume on record, according to government data released today and analyzed by the Renewable Fuels Association. The February total falls short of only two other months—November 2011 (152.5 mg) and December 2011 (172.7 mg).
Brazil was again the top customer, taking in more than one-third of all U.S. ethanol exports (50.8 mg, or 37 percent) but 14 percent less than record shipments to Brazil in January. Canada also decreased its purchases in February with 24.7 mg (18 percent of total exports) entering the country. Sales to India, however, nearly doubled from the prior month, increasing from 13.2 mg to 24.3 mg. The United Arab Emirates (10.1 mg) and the Philippines (7.0 mg) were other significant importers in February. Year-to-date exports stood at 259.8 mg, up nearly 70 percent from the year-ago total of 154.1 mg.
Exports of U.S. undenatured fuel ethanol rose by 14 percent over January to a record volume of 106.3 mg—nearly double the quantity shipped two months prior. About half of the undenatured product (50.8 mg) went to Brazil. India received a quarter of U.S. undenatured fuel ethanol (24.2 mg), up 118 percent from its January intake. The UAE (10.1 mg) and Philippines (7.0 mg) rounded out top markets for undenatured fuel ethanol. Denatured fuel ethanol exports in February experienced a slight uptick, rising 1 percent to 26.7 mg. Canada and Peru again accounted for the bulk of the market, receiving 23.6 mg (88 percent) and 3.0 mg (11 percent), respectively.
Exports of distillers grains hit 1.07 million metric tons (mmt) in February, the highest monthly total in six months and up 14 percent over January. Mexico expanded its purchases by 36 percent to 241,249 mt (23 percent of total U.S. exports), firmly holding on to its status as the top DDGS destination for a third straight month. Similarly, the Turkish market has been expanding, with a 21 percent increase in DDGS exports in February to 152,537 mt (14 percent). Thailand (71,838 mt), China (64,534 mt), Japan (62,562 mt), Indonesia (58,934 mt), and Spain (58,263 mt) were other top markets, and together with Mexico and Turkey, accounted for two-thirds of February exports. The remaining one-third of DDGS was distributed to 29 countries around the globe. Year-to-date exports stood at 2.01 million metric tons.
Read the original story: RFA: February Ethanol Exports Neared Record, DDGS Shipments Rose
April 3, 2017
By Cindy Zimmerman
A new Department of Energy (DOE) study shows that military veterans make up a significant share of America’s ethanol industry workforce which is not only larger than any other energy sector but more than twice the national average.
Nearly one in five ethanol industry employees is a veteran (18.9%), compared to a national average of 7% across all sectors of the workforce, according to the DOE study. The study also finds that the ethanol industry employs twice as many veterans as the oil and gas sector and nearly four times as many veterans as the coal and nuclear power generation sectors. Other renewable energy sectors, including advanced biofuels, wind and solar, also employ a relatively large share of military veterans.
These statistics confirm what veterans working in the ethanol industry have been saying recently, like East Kansas Agri-Energy (EKAE) CEO Jeff Oestmann, a former U.S. Marine who recently organized a letter from industry vets urging President Trump to include renewable fuels in his energy plan.
Nine of the 52 employees at EKAE are veterans, which is very close to the national average. “Working and investing in the ethanol industry allows us to continue honoring our commitment to making America stronger and more independent,” said Oestmann during the recent National Ethanol Conference.
Read the original story: Ethanol Workforce Big on Military Vets
March 31, 2017
By State Representative Mary Franson
The ethanol industry contributed over $1.98 billion to Minnesota's economy in 2016. However, recent news surrounding the Renewable Fuel Standard (RFS), which regulates blending volumes in fuel, threatens to significantly impact this important market and severely affect our state's economy.
First, the White House is currently debating a change to the RFS point of obligation. Shifting the point of obligation would essentially overturn the current RFS structure and likely prevent future expansion of ethanol blending.
This potential market uncertainty is compounded by the fact that the Environmental Protection Agency is set to take full control over the RFS after 2022. The EPA would then have complete authority to reduce or eliminate corn ethanol from blending standards. This would cause a decline in ethanol production, which would raise fuel prices for consumers, and devastate business for both the ethanol producers and the Minnesota corn farmers that supply them.
As a state representative, I am firmly against policy changes that could negatively impact some of our state's most lucrative industries. Ethanol production is crucial to the state's economy and Minnesota should capitalize on this market instead of allowing government regulation to hinder its potential.
Farmers and ethanol producers should not have to rely on the RFS. If ethanol were allowed to compete in a free market, I believe corn ethanol would thrive in the fuel marketplace and continue providing economic growth and opportunity for Minnesota.
Read the original letter: LETTER: Ethanol Production is Crucial for Economy
March 28, 2017
By Emily Skor
An important debate is happening in the nation’s capital, and it revolves around the efforts by biofuel critics to rewrite a key element of the Renewable Fuel Standard—the point of obligation.
Under the RFS, the point of obligation defines which participants in the fuel supply chain (currently oil refiners and importers) are responsible for ensuring that biofuel blends reach consumers. To comply with the law, refiners that don’t add biofuels to the mix must purchase credits from other market participants. These credits are known as renewable identification numbers (RINs), and the current system creates strong financial incentive for retailers to sell higher biofuel blends. In turn, this has allowed us to rapidly expand the market for affordable consumer options such as E15.
Now, a small group of refiners are working to secure an exemption from the RFS by shifting the obligation to retailers and fuel distributors. This would not only eliminate the incentive to sell higher biofuel blends, it would create a logistical and regulatory nightmare in fuel markets. Hundreds, if not thousands, of retailers would suddenly be required to demonstrate compliance—demanding new rules, new staff, new infrastructure and years of recalibrating a program that already works. The three-year delay we experienced in biofuel targets before 2016 from the U.S. EPA is just a sample of what could occur. Worse, the savings that consumers now enjoy thanks to homegrown biofuels could evaporate, raising costs and depressing the market for renewable fuels.
At a time when rural communities are suffering and grain surpluses are rising, this is a regulatory scheme that cannot be allowed. Farmers are already facing a fourth straight year of declining income, down nearly 50 percent from 2013, according to the USDA.
The sales pitch by refiners is hardly new. They’ve attempted to make this change for years. And, as always, the biofuels industry has stood united with farmers, distributors, retailers and other market participants to protect the RFS. Just recently, Growth Energy rallied with a broad coalition of trade groups representing everyone from the American Highway Users Alliance to the National Association of Convenience Stores to oppose changes to the point of obligation. Even other refiners like Tesoro agree.
The reason our critics are wrong is simple—the RFS is working, exactly as intended. In fact, the flexible system for trading RINs was originally created at the behest of the oil companies. Infrastructure is being deployed, and the number of stations selling E15 doubled last year, thanks to our efforts with programs like Prime the Pump.
The small band of refiners seeking to change the rules are the same group that have worked for over 11 years to gut the RFS. More recently, the owner of CVR refining, Carl Icahn, has even sought to convince biofuel advocates that sacrificing the RFS should be acceptable in exchange for a long-sought waiver from an unnecessary and outdated regulatory barrier that limits summer sales of E15. But without any incentive to sell higher biofuel blends, those sales would never take place, and retailers that have worked hand-in-hand with ethanol producers to offer new consumer options would be left at the mercy of oil refiners. To capture these summer sales, we need a functional RFS and a real fix for Reid vapor pressure (RVP) limits, such as the bill recently introduced by our biofuel champions in Congress, including Sens. Deb Fischer, R-Neb., Joe Donnelly, D-Ind., and Chuck Grassley, R-Iowa, as well as Reps. Adrian Smith, R-Neb., and Dave Loebsack, D-Iowa.
To win these fights, we must stand united. This industry is strongest when we all work together. Our critics are too well-financed and too sophisticated for anything less. I’ve seen this first-hand since taking the helm at Growth Energy almost a year ago. In that time, Growth Energy has worked side-by-side with dedicated champions from across our industry to strengthen the RFS and protect the growth of our industry and the jobs it provides. It hasn’t always been easy, but if we stand strong, we can ensure that fuel retailers have the certainty they need to invest in growth and help consumers gain access to cleaner, more affordable choices at the pump.
Read the original story: To Win RFS Fights, We Must Stand United
March 21, 2017
By Ron Kotrba
March 21 represents the end of the 60-day freeze period on new regulations pending review, implemented by the incoming U.S. administration Jan. 20. Among the regulations on hold during the two-month freeze period was the final rule for the 2017-’18 renewable volume obligations (RVO) under the Renewable Fuel Standard.
While U.S. EPA has yet to announce anything on the matter, biodiesel and renewable diesel stakeholders welcome implementation of the boosted advanced biofuel volumes for 2017 and biomass-based diesel volumes for 2018, finalized by the Obama administration’s EPA last November after Donald J. Trump won the presidential election.
The advanced biofuel category for 2017 was finalized at 4.28 billion ethanol-equivalent gallons, up 19 percent over the 2016 RVO and up 7 percent from the 2017 proposal issued in spring 2016. The biomass-based diesel category for 2018 was finalized last November at 2.1 billion gallons, up 100 million from 2017, the same as what EPA proposed last spring.
“Though last year’s market actually outpaced the 2018 requirement, we are pleased that the rule is effective and that the industry can move forward under the program as outlined,” said Anne Steckel, vice president of federal affairs with the National Biodiesel Board. “With the help of a strong RFS, American biodiesel supports some 64,000 jobs across the nation, many the most affluent in their region. We look forward to working with EPA and the new administration as they begin the process of setting volumes moving forward and are confident American biodiesel producers can do even more to contribute to energy security, economic prosperity and clean air.”
Renewable diesel producer Neste Corp., which exported more than 200 million gallons of renewable diesel to the U.S. in 2016, also commented on the expiration of the regulatory freeze period.
“The regulatory freeze pending review by the new U.S. administration, which was applied to the renewable fuel volume requirements for 2017, has expired,” the company stated in a press release March 21. “Hence, the EPA continues to implement the final ruling under the RFS program as published Nov. 23.”
Kaisa Hietala, executive vice president of Neste’s renewable products business area, said, “We are pleased with the EPA’s continued commitment to the RFS program. Determination and ambitious targets are required to combat climate change globally.”
Read the original story: 2017-'18 RVOs Assumed Intact as Regulatory Freeze Deadline Passes
March 18, 2017
By Bob Shaw
Dump it today, drive with it tomorrow.
That’s the promise of the nation’s first waste-to-ethanol plant, proposed for Inver Grove Heights.
The $200 million biofuels plant would process Dakota County’s garbage into ethanol, to be blended with gasoline for use in cars and trucks.
If the plant works as described, it would make the county more environmentally friendly, said county Environmental Resources Director Georg Fischer.
The plant would be built by the Canadian company Enerkem Inc. and SKB Environmental Inc., a St. Paul-based waste and recycling company. The companies made a preliminary presentation to the Inver Grove Heights City Council in February but have not yet made any formal proposals to the city.
“There seems to be a potential for a lot of benefits, but there are also a lot of unknowns,” said city administrator Joe Lynch.
If the council and state and federal agencies approve, the plant could be operating by 2020, according to David McDonnell, Enerkem’s vice president for business development for North America.
The companies would build the plant near existing landfills, south of 117th Street and about 1 mile west of U.S. 52.
The plant would employ 100 workers and would pay Inver Grove Heights about $1.5 million annually in fees and taxes. “Economically, there is an attraction here,” Lynch said.
Enerkem operates two waste-to-ethanol plants in Canada. One is a small demonstration facility at the company’s headquarters in Quebec, and the other is a commercial plant for the 800,000-population city of Edmonton.
The Minnesota plant would be the first in the U.S. and would be twice of the size of the Edmonton plant.
Dakota County’s Fischer described how the plant could revolutionize garbage processing for the county, which produces 400,000 tons of garbage a year — half recycled and half going into landfills.
At the biofuels plant, workers would pick through the garbage destined for landfills a second time for recyclables, boosting the county’s recycling rate from 50 percent to about 70 percent, according to Fischer. The remaining material would be shredded into 2-inch pieces, heated and processed into ethanol.
The garbage-based ethanol, just like corn-based ethanol, would be blended into automotive fuels. The plant would produce about 20 million gallons of ethanol annually.
There’s another environmental advantage to the plant — the re-use of water.
McDonnell said Enerkem likes the site because the plant could use water from the Empire Wastewater Treatment Facility in Empire Township. The Empire plant processes sewage from the metro area and pipes the wastewater to the Mississippi River.
If the ethanol plant used that water, it wouldn’t have to pump water up from aquifers.
The savings? About 1.6 million gallons annually.
“If they were able to do that, it would become more and more of a green project,” Fischer said.
He said that by slashing the volume of garbage going into landfills, the plant would help the county meet environmental goals set by the state.
State law lists environmental practices from worst to best: landfilling, landfilling that captures flammable gases, composting or burning garbage, composting yard waste and food waste, recycling, and reduction and re-use.
The biofuels plant, said Fischer, would move Dakota County up two levels. “In that respect, it would be a great thing,” he said.
The waste-to-ethanol process is so new that many environmental groups and the Environmental Protection Agency don’t list it under methods they have evaluated.
The EPA’s website, like Minnesota’s waste-management hierarchy, places “energy recovery” in the mid-range of treatment options. Presumably, “energy recovery” would include turning garbage into ethanol.
“The process, if it works as they say, could potentially be a good alternative for us,” said city administrator Lynch.
Read the original release: Inver Grove Plant Would be First in U.S. to Turn Garbage Into Ethanol
March 19, 2017
By Jim Lane
The state of Louisiana has become the 29th state to offer consumers what Growth Energy termed “a better choice at the pump – gasoline blended with 15 percent ethanol known as E15.”
E15 saves consumers an average of 5 to 10 cents per gallon and burns cleaner and cooler than regular gasoline, allowing engines to perform at their peak while reducing drivers’ impact on the environment. The latest in this market expansion is a RaceTrac station in Baton Rouge – now one of 672 locations nationwide to offer Americans this more affordable, cleaner biofuel. Growth Energy applauds RaceTrac and all additional major retailers who currently sell E15 including Sheetz, Kum and Go, Thorntons, Minnoco, Murphy USA, MAPCO, Family Express, Cenex, and Protec Fuels.
“The ethanol industry stands ready to provide American drivers with this performance-boosting, homegrown fuel and with every new pump offering E15, we are doing just that. Growth Energy is committed to working with our retail partners to continue this expansion,” Growth Energy CEO Emily Skor said.
“American consumers have surpassed 750 million miles on E15. When given the option, consumers choose E15, and, thanks to dedicated retailers who care about their customers, more Americans can make this choice.”
Read the original story: Louisiana Becomes 29th State to Adopt E15 Ethanol
March 16, 2017
By Susanne Retka Schill
Ethanol critics bash the fuel for its lower energy value than gasoline, while ethanol supporters point to its octane-boosting properties. University of Illinois ag economists Scott Irwin and Darrel Good analyze the value of ethanol in blended gasoline over the past decade based on those components in a recent FarmDoc Daily post, “On the Value of Ethanol in the Gasoline Blend.”
Much of the analysis of the cost of ethanol relative to CBOB has ignored the potential benefit of the octane-enhancing qualities, particularly in the face of the reported retooling of refineries to producer lower-octane base fuels that need to be oxygenated to meet specifications. Many analyses focus only on ethanol’s energy deficit compared to gasoline, the economists point out.
The economists lay out their methodology underlying their economic analysis to determine the net benefit of ethanol, when looking at energy-adjustments and octane-enhancements. The analysis includes charts that compare the price of ethanol to CBOB, and then the energy-adjusted price of ethanol, which increases due to its lower Btu content. It also looks at the cost of aromatics, the petroleum-based oxygenates used instead of ethanol, and the shift in use from aromatics to ethanol in one state over the past decade.
“As expected, the energy-adjusted price of ethanol (assuming ethanol has only two-thirds the energy value of CBOB) was consistently higher than the price of CBOB by an average of $1.02 per gallon. On the other hand, the price of ethanol was consistently below the price of aromatics, considered as alternative octane enhancers, by an average of $1.06 per gallon.” That calculates to the net value of ethanol, which though just 4 cents per gallon, calculates to “nearly $7 billion over the nine-year period from 2008 through 2016.”
The net benefit was highest in 2012 during the decade examined, Irwin and Good report. “The reason is that gasoline prices were high enough relative to ethanol to reduce the energy penalty, while at the same time lofty aromatic prices drove the octane premium to high levels. The large negative net value in 2016 is essentially driven by the reverse of the 2012 price patterns.”
Limitations to the analysis, the authors point out, include other factors not examined that could impact value, such as the value of Reid vapor pressure and the lower energy value of aromatics. “The bottom-line is that a refinery optimization model is needed to conduct a complete analysis of value of ethanol in the gasoline blend. Nonetheless, our analysis points out the partial and misleading nature of work that only focuses on the energy penalty of ethanol and ignores the octane premium.”
To view the complete analysis click here.
Read the original story: Economists: Octane Premium Offsets Ethanol Energy Penalty