In the News

Ethanol Producer Magazine

By Susanne Retka Schill

July 8, 2014

The five Big Oil brands got an “F” in the Renewable Fuels Association’s score card for their poor performance in offering E15 or E85. A new report released July 8, shows that out of the nearly 48,000 retail gas stations carrying the brand of ConocoPhillips, BP, Chevron, Shell and ExxonMobil, fewer than 300 offer E15 or E85, or less than 1 percent.

Among the 34,000 stations carrying other refiner-affiliated brands, only Speedway/SuperAmerica and Cenex received high marks. About 13 percent of Speedway/SuperAmerica branded stations offering higher blends for an A-, and 6 percent of Cenex stations for a B grade. The other oil-refiner branded stations had percentages at 1 percent or less.  

The 74,000 independent, unbranded stations are four to six times more likely to offer E85, the report says. According to U.S. DOE data on E85 and RFA data on E15, 1,700 stations (2.3 percent) sell the higher blends. A separate data set pegs the number higher at 2,570 stations offering renewable fuels.

On the scorecard, RFA gave A+ to several independent/unbranded chains for offering higher blends at more than 25 percent of their stations, including Meijer, Thorntons, Kum & Go, Break Time and Kwik Trip. Meijer Gas took the top honors with 58 percent of its branded stations offering E85 or E15.

The scorecard accompanies RFA’s latest report outlining the strong arm tactics used to prevent or discourage the sale of renewable fuels at Big Oil-branded stations. “Big Oil companies are rigging the market to take away consumer choice and prevent many retailers from offering these clean, homegrown fuels,” RFA president and CEO Bob Dinneen said in releasing the report. “When Big oil companies are doing everything they can to keep a lower cost, high performance fuel from the American public, we’ve got to do more.”

A favorite argument of oil companies is that they don’t own many stations and thus don’t have any control over stations offering E15 or E85, said Geoff Cooper, senior vice president. “If you step back, you quickly see the major oil companies still exert tremendous control. There’s a variety of methods used to shut out competition from renewable fuels.”

Among those Cooper listed were fuel contracts that require supplier exclusivity or minimum sales volumes of branded fuels. Contracts often require multiple grades of branded gasoline to be sold at all times or require intimidating warning labels on E85 or E15 dispensers. Branding agreements can discourage or prohibit retailers from promoting or advertising the availability of E85 and contracts can include substantial penalties for violating the terms.

The report also outlines a combination of policy and market-based solutions including:

- A federal investigation into anticompetitive practices

- Enforcement of the Petroleum Marketing Practices Act and Gasohol Competition Act

- Enforcement of the statutory Renewable Fuel Standard (RFS) requirements

- Investment in infrastructure

- Consumer education about the economic and environmental benefits of biofuels

- Incentivize the continued production of FFVs

The single most important thing, Dinneen stressed in the press call accompanying the release, is “we have to enforce the renewable fuels standard. The RFS was the mechanism to break the monopolistic hold the Big Oil companies have.”

Read the original story here : RFA Scores Retailers For E85, E15 Offerings ; Big Oil Gets An 'F'

Download the RFA report, "Protecting The Monopoly : How Big Oil Covertly Blocks The Sale Of Renewable Fuels," here

Des Moines Register

July 7, 2014

By Christopher Doering

The ethanol industry Monday urged a federal regulator overseeing the nation's railroads to provide relief for shippers of the renewable fuel who have faced delays.

Growth Energy, which represents ethanol manufacturers, told the Surface Transportation Board that producers of the renewable fuel should be given the same relief that the agency provided to grain shippers in June.

Last month, the STB ordered Canadian Pacific Railway and BNSF Railway to provide the agency an update on their plans to reduce the backlog of grain cars across their networks -- a step welcomed by agricultural groups concerned that farmers could struggle to get their crops to market this fall.

In a letter sent Monday to the STB, Tom Buis, chief executive with Growth Energy, said with more than 61 percent of all ethanol delivered by rail, it is "imperative that these issues be directly addressed and given the same priority as grain shipments."

Buis said immediate action was necessary to "ensure that railroads improve their service." Ethanol supplies were squeezed and prices soared earlier this year, he noted, because of the inability to get rail cars to ship their product. Many ethanol producers were forced to reduce production because they had no place to store the fuel.

Dennis Watson, a spokesman with the STB, said the agency had received the letter but had no comment on it. The agency, he said, is constantly reviewing all commodities shipped by train and the service the rail companies are providing.

In recent months, BNSF and Canadian Pacific have come under fire from shippers, Washington lawmakers and the STB itself for shortages and delays in delivering rail cars to farmers, ethanol plants and grain elevator operators. The rail system in much of the western Corn Belt has been slowed by a plentiful 2013 harvest, higher coal and oil volumes, and the extraordinarily long, cold winter that reduced the size and speed of trains that operated.

Ethanol cannot be shipped through gasoline pipelines because of its corrosive properties, leaving movement of the flammable liquid to trains and trucks, often through densely populated residential areas. As ethanol production has grown, more of it must be shipped outside of the Midwest where much of it is produced, forcing makers of the renewable fuel to depend more heavily on railroads.

The corn-based fuel is a small but growing commodity for railroads, with ethanol shipments commanding just over 1 percent of total carloads moved by train annually, according to the STB. In 2011, 32 percent of U.S. ethanol shipments originated from Iowa, the country's biggest producer of the corn-based fuel.

Read the original story here : Ethanol Industry Asks For Relief From Rail Delays

 

On July 2, 2014, the Star Tribune ran a story titled, "Marine Engines Balk At Ethanol." Below is our response to that story.

With regards to E15 and its use in marine engines, we would like to inform you that E15 is currently only available in seven stations in Minnesota and all E15 pumps carry a disclaimer that specifically states that it is only intended for passenger cars 2001 and newer or flex fuel vehicles and not for other vehicles, boats or gasoline-powered equipment. As such, there shouldn’t be any confusion for marine engine owners.

As for E10, we would like to point out to you that both Mercury Marine and Yamaha (which were both cited in your story) state that E10 can be used in their engines. Mercury Marine states on its website, “The fuel-system components of Mercury engines will withstand up to 10 percent ethanol in gasoline” while Yamaha says on its website, “All current models as well as most engines built since the late 1980s have been designed with fuel components that are tolerant to fresh fuel containing ethanol up to 10% (E10).” Owners should always consult with their owner’s manual or with their manufacturer on the proper fuel requirements for their boats.

Renewable Fuels Association

By Geoff Cooper

June 27, 2014

A new report from the Congressional Budget Office (CBO) suggests that full compliance with RFS requirements “poses significant challenges” and could increase fuel prices. The CBO’s conclusions are largely based on a careless analysis that relies on unsupported assumptions. Further, the report blatantly acknowledges that the economic impact of substituting biofuels for gasoline and diesel (i.e., downward pressure on crude oil prices) has been purposely omitted. Finally, the CBO results contradict the findings of more credible research from independent university economists. Key flaws in the report are detailed below.

1.       The report’s main scenario contains a number of erroneous assumptions and fundamental errors that render the conclusions meaningless in the context of the ongoing debate over RFS implementation.

The exaggerated economic impacts discussed in the CBO report result primarily from the “EISA Volume Scenario,” in which the EISA statutory volumes of advanced biofuel (9 bg) and conventional renewable fuel (15 bg) are consumed in 2017. This scenario is based on the faulty assumptions below (among others):

  • Most important, CBO improperly assumes EPA will require waivered cellulosic biofuel volumes to be entirely offset by other advanced biofuels. EPA has the statutory authority to waive the advanced biofuel standard and total RFS by the same, or lesser, amount as the waiver of the cellulosic biofuel standard. Thus, for example, if only 300 mg of cellulosic biofuel are available in 2017, EPA could (and likely would) reduce the cellulosic biofuel standard from 5.5 bg to 300 mg, reduce the advanced biofuel standard from 9.0 bg to 3.8 bg, and reduce the total RFS from 24 bg to 18.8 bg. Biodiesel and renewable diesel could very likely account for most of the 3.8 bg advanced biofuel requirement, while primarily ethanol would be used to fulfill the statutory 15.0 bg requirement for renewable fuel. In this example, which entirely comports with EPA’s statutory authority, required renewable fuel blending would be 5.2 bg lower (-22%) than the extreme scenario used by CBO.

  • CBO somehow arrives at a total renewable fuel blend percentage of 14.5% in the 2017 “EISA Volume Scenario” (Table 1 of the report). However, EIA projects gasoline and diesel consumption of 191.7 bg in 2017, meaning the blend percentage from the “EISA Volume Scenario” would actually be 12.5%. But, as described above, CBO mistakenly assumes EPA will not exercise its authority to lower the advanced biofuel standard and total RFS by the same amount of the cellulosic waiver. If EPA were to use this discretion, as in the example above (i.e., total RFS of 18.8 bg), the total blend percentage for 2017 would be 9.8%.

  • CBO assumes only 1.5 bg of biodiesel (2.0 billion RINs) will be used toward the advanced biofuel standard in 2017. EPA data show that 1.57 bg of biodiesel was produced in 2013, generating 2.36 billion RINs. In addition, 386 million gallons of renewable diesel were produced, generating another 657 million RINs. Thus, biodiesel and renewable diesel generated more than 3 billion RINs in 2013—50% more than CBO assumes will occur in 2017.

  • CBO assumes ONLY corn ethanol is used to meet the statutory requirement for 15.0 bg of renewable fuel in 2017. EPA data shows this to be an erroneous assumption. More than 250 million (2% of the total) renewable fuel (“D6”) RINs generated in 2013 came from non-ethanol biofuels, including renewable diesel, biodiesel, and butanol. The share of non-ethanol fuels generating renewable fuel RINs is expected to grow slightly—particularly if EPA limits the advanced biofuel standard.

Because the CBO “EISA Volume Scenario” is based on these fatal flaws, the report’s discussion on RIN price impacts and transportation fuel price effects should be rejected out of hand. CBO should re-evaluate the “EISA Volume Scenario” and consider a case where EPA uses its statutory authority to lower the advanced biofuel standard and total RFS by the same amount as the cellulosic biofuel waiver.

2.       The analysis adopts the oil industry’s “blend wall” argument and grossly underestimates the ability of E15 and E85 to aid in compliance with future RFS requirements.

CBO has apparently fallen victim to the same unclear thinking displayed by the oil industry with regard to the so-called “blend wall.” The report effectively dismisses E15 outright as a potential RFS compliance option moving forward, citing the same myths and misinformation propagated by the oil industry. Further, the report’s discussion of E85 ignores real-world evidence from 2013 showing that higher RIN prices drove dramatically increased consumption of E85. Data from the state governments of Minnesota and Iowa showed a tripling and doubling, respectively, in E85 consumption over the period in which RIN prices increased. Meanwhile, retail gasoline (E10) prices were unaffected by the rise in RIN prices.

3.       CBO’s outlandish predictions regarding the impact of the RFS and RINs on gasoline prices contradict the observed real-world experience.

The report adopts yet another of the oil industry’s talking points—that the RFS, through higher RIN prices, will cause retail gasoline prices to increase. Such an assertion not only misunderstands how RINs are transferred and traded, but it also runs contrary to the observed experience of 2013. Retail gasoline prices were not correlated in any way with changes in RIN prices in 2013, and there is absolutely no evidence that pump prices were affected by RINs.

4.       Unbelievably, CBO completely ignores the aggregate effect that using more renewable fuels would have on crude oil demand and prices.

In its haste to pin higher gasoline and diesel prices on the RFS, CBO admittedly makes a grave omission. According to the report, “Because renewable fuels substitute for gasoline and diesel, they reduce consumptions of those fuels…which could lower the world price of crude oil and thus the price that fuel suppliers pay for petroleum-based fuels. CBO did not account for that effect in this analysis…” The authors attempt to justify this omission by speculating that the effects would be small. However, renowned energy economists believe otherwise. According to recent analysis by energy economist Philip K. Verleger, a former energy advisor to Presidents Ford and Carter, “…the U.S. renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion. This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.”[1] Economic analyses from Iowa State University and the University of Wisconsin, Louisiana State University, Duke University, Merrill Lynch, the U.S. Department of Energy’s National Renewable Energy Laboratory, and others have also concluded that increased substitution of ethanol for gasoline substantially reduces retail gas prices.[2]

5.       CBO’s findings on potential economic impacts of RFS implementation contradict results from University of Missouri and Iowa State University.

The report’s doomsday findings about the potential economic effects of the RFS are contrary to the conclusions from respected economists who have conducted more detailed and comprehensive analysis. A recent analysis by FAPRI at the University of Missouri, for instance, analyzed a case in which EPA would reduce the advanced biofuel standard and total RFS by the same amount of cellulosic biofuel waivers (as noted above, CBO failed to examine such a case). In this case, gas prices were 0-2% higher than in the case where EPA froze the RFS at 2014 proposed levels (similar to CBO’s “2014 Volumes Scenario”). Ethanol prices in this case are just 53-60% the price of retail gasoline, which would encourage wider usage. Similarly, extensive analysis by Iowa State University has convincingly demonstrated that near-term statutory RFS requirements can in fact be satisfied without meaningfully affecting retail gas prices for consumers.[3] CBO failed to discuss the other literature in this area and neglected to include reviewers from MO-FAPRI and ISU.

6.       On the bright side, the CBO report gets two things right: 1) changes to the RFS would not have any effect on food prices, and 2) EPA’s recent management of the RFS program has significantly discouraged investment in next generation biofuels and retail infrastructure to dispense higher volumes of renewable fuels.

CBO recognizes that “…differences in food prices and spending under the agency’s three scenarios for the RFS would probably be small.” The report suggests that strong demand for ethanol even in the absence of RFS requirements means the program itself “will have no effect on food prices.” In addition, CBO rightly acknowledges that EPA’s recent proposals regarding implementation of the RFS “…reduces incentives for companies to invest in production capacity for cellulosic and other advanced biofuels and to expand the availability of high-ethanol blends.” This statement precisely underscores the importance of maintaining meaningful RFS requirements that are consistent with Congress’ intent and EPA’s statutory authority.

Read the original story here : Response to CBO Study - the Renewable Fuel Standard: Issues for 2014 and Beyond

Des Moines Register

Nearly six full months into 2014, the amount of ethanol that is supposed to be blended into the gasoline supply this year still has not been announced — and is not expected to be for several more weeks.

The Environmental Protection Agency is required by law to finalize the blending requirements for the Renewable Fuel Standard for the following year by Nov. 30, a deadline an oil trade group said the agency hasn't met since 2011. EPA Administrator Gina McCarthy said in May the agency was reviewing more than 200,000 comments on its November proposal for 2014 that would cut the mandate from the level set out in a 2007 law, and was expecting to issue the final rule in "late spring or early summer."

But the EPA has yet to send the proposed 2014 blending requirements to the Office of Management and Budget, the agency tasked with vetting proposed regulations. An EPA spokesperson said that submission should occur "soon."

In November, the EPA proposed reducing ethanol produced from corn in 2014 to 13.01 billion gallons from 14.4 billion gallons initially required by Congress in the 2007 Renewable Fuel Standard, a law that requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country's dependence on foreign energy.

McCarthy told farm broadcasters last month that the EPA believes Congress gave it the authority to make changes to the Renewable Fuel Standard in certain cases, such as the looming blend wall — a level where refiners must include more ethanol into the country's fuel mix than can be blended in at a 10 percent threshold accepted in all cars and trucks. "I get how important our proposal is — and the longevity of the RFS program itself," McCarthy said.

While those who follow the ethanol debate expect the EPA will increase the Renewable Fuel Standard blending level from the November estimate, it remains to be seen whether it will be enough to please ethanol industry officials. They have warned a cut could slow growth, especially in the nascent cellulosic industry that uses crop residue, grasses or wood chips to produce ethanol.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, acknowledged that whatever the EPA announces is "going to be heavily scrutinized" and likely be fought in court by the oil or ethanol industry depending on the outcome.

"Once it goes to OMB you're still probably weeks away from a final announcement," Shaw said. "There's no use holding your breath right now because we're not even close."

The American Petroleum Institute, which represents 550 oil and natural gas companies, said the EPA's delay in finalizing the 2014 levels has increased uncertainty for those who must comply with the controversial requirement. In a letter to the EPA's McCarthy sent last week, Bob Greco, API's downstream director, said the delays in implementing the Renewable Fuel Standard "are unacceptable, fundamentally unfair" and show a disregard for a deadline put in place by Congress.

Earlier this month, the EPA extended the deadline for complying with the 2013 blending level requirements through Sept. 30. The agency said the extra time was necessary because of the delay in finalizing the 2014 figures. The change was widely seen by those who follow the Renewable Fuel Standard as further evidence that the EPA wasn't close to announcing figures for this year.

Read the original story here : EPA's Ethanol Mandate For 2014 Behind Schedule

Ethanol Producer Magazine

June 23, 2014

By Erin Voegele

The U.S. EPA has published renewable identification number (RIN) data for May. While overall RIN generation reached nearly 1.48 billion for month, up from nearly 1.45 billion in April, May marked the first month of 2014 during which no cellulosic RINs were generated.

According to the EPA, more than 27.4 million D5 advanced biofuel RINs were generated during the month, bringing the total for the first five months of the year to 79.93 million D5 RINs. The majority, 52.73 million, were generated for ethanol. More than 11.95 million D5 RINs were generated for biogas, along with 6.93 million for naptha. In addition, 5.4 million D5 RINs were generated for non-ester renewable diesel. Approximately 34.83 million D5 RINs have been generated by domestic producers, with nearly 42.18 million generated by importers.

More than 1.22 billion D6 renewable fuel RINs were generated in May, bringing the year-to-date total to more than 5.81 billion. Approximately 5.69 billion D6 RINs have been generated for ethanol this year, with 5.41 million generated for biodiesel. In addition, 120.22 million D6 RINs have been generated for non-ester renewable diesel. Most, 5.69 billion, have been generated by domestic producers, with 4.57 million generated by importers. More than 120.22 million D6 RINs were generated by foreign entities.

Nearly 230.46 million D4 biomass-based diesel RINs were generated in May, bringing the total for the first five months of the year to 970.06 million. Approximately 689.42 million D4 RINs have been generated for biodiesel this year, with an estimated 282.43 million generated for non-ester renewable diesel. The majority, 753.99 million D4 RINs, have been generated by domestic producers. Approximately 53.74 million and 164.12 million were generated by importers and foreign entities, respectively.

While no cellulosic RINs were generated in May, a total of 72,754 D3 cellulosic RINs were generated during the first five months of the year, along with 11,213 D7 cellulosic diesel RINs. All D3 RINs were generated by domestic producers. According in the EPA, 2,563 D7 RINs were generated by importers, with the remaining 8,859 generated by domestic producers.

As of the close of May, the EPA estimates nearly 6.87 billion RINs have been generated this year. Approximately 177.6 million have been retired. Nearly 271.68 million are locked and available, along with nearly 6.42 billion unlocked and available.

Read the original story here : May Rin Data Shows Increased Biofuel Production

 

Reuters

June 18, 2014

By Michael Hirtzer

U.S. ethanol production increased for the sixth week in a row to a record high, government data showed on Wednesday, as rising gasoline prices helped boost demand for the grain-based biofuel.

Ethanol production surged 28,000 barrels per day, or about 3 percent, to an average of 972,000 bpd in the week ending June 13, according to the U.S. Energy Information Administration. Production surpassed the previous record of 963,000 bpd reached in the last week of 2011.

Despite the higher output, strong demand squeezed stocks of ethanol, which fell 572,000 barrels to 17.85 million barrels, a three-week low.

Makers of the biofuel are earning near-record profits as prices for corn, the main feedstock used in ethanol production, hovered near a four-month low. Meanwhile, gasoline futures have maintained roughly a $1-per-gallon premium over ethanol futures throughout June, making ethanol attractive for fuel blenders during the early days of the summer driving season.

Read the original story here : U.S. Ethanol Output Surges To Record High As Gasoline Costs Rise

Renewable Fuels Association

By Geoff Cooper

June 12, 2014

Lifecycle analysis experts and economists from Argonne National Laboratory and three leading universities blasted a recent Environmental Working Group (EWG) report that made audacious claims and arrived at “erroneous conclusions” about corn ethanol’s greenhouse gas impacts.

The experts issued a scathing 13-page response today to EWG’s May report titled “Ethanol’s Broken Promise.” EWG “confused parameters” and “misunderstood” previous modeling results, according to experts from Argonne, North Carolina State University, Purdue University and University of Illinois-Chicago. “…based on an analysis of the methodology EWG used and a comparison of their results to those in the literature, from models, and from other data sets, EWG appears to have overestimated the amount of land converted for corn farming between 2008 and 2012. Second, EWG used emission factors that appear too high.”

More specifically, the experts found the following problems—among many others—with EWG’s report:

- “EWG confused parameters in GREET with those in an economic model, the Global Trade Analysis Project (GTAP).”

- “EWG misunderstood EPA’s GHG emissions for years 2012 and 2017.”

- “In their report, EWG picked the EPA 2012 GHG emissions for corn ethanol and applied them to the EPA-proposed reduced volume for corn ethanol in 2014 to make the erroneous conclusion that the proposal resulted in 3 million tonnes of CO2 reduction in 2014.”

- “…the emission factors they applied are high compared to those in other reports and studies that take into account important variations in initial and final land states.”

- The satellite data set used by EWG is “…explicitly not designed to be used for pixel-by-pixel or localized analyses.”

- The land use change data used by EWG is “…based on data that is decades old, reflecting wetland conversion over a much longer time horizon.”

- The report “…overestimated wetland conversion, especially for the conversion of wetlands to corn farms.” Wetlands and grasslands conversion estimates are “…too high when compared with estimates in other studies and data sources.”

Finally, the authors point out that EWG is stuck in the past when it comes to lifecycle analysis. They write, “Since 2009, when EPA conducted corn ethanol LUC GHG modeling…, significant efforts have been made to improve economic models and soil carbon models to better estimate biofuel LUC GHG emissions. EPA and other federal agencies should consider updating RFS LUC modeling so that up-to-date LUC results can be used for biofuel policy making.”

Read the original story here : Government and University Experts Blast EWG Corn Ethanol Report

Download the response from Argonne National Laboratory here.

 

 

Lifecycle analysis experts and economists from Argonne National Laboratory and three leading universities blasted a recent Environmental Working Group (EWG) report that made audacious claims and arrived at “erroneous conclusions” about corn ethanol’s greenhouse gas impacts.

The experts issued a scathing 13-page response today to EWG’s May report titled “Ethanol’s Broken Promise.” EWG “confused parameters” and “misunderstood” previous modeling results, according to experts from Argonne, North Carolina State University, Purdue University and University of Illinois-Chicago. “…based on an analysis of the methodology EWG used and a comparison of their results to those in the literature, from models, and from other data sets, EWG appears to have overestimated the amount of land converted for corn farming between 2008 and 2012. Second, EWG used emission factors that appear too high.”

More specifically, the experts found the following problems—among many others—with EWG’s report:

  • “EWG confused parameters in GREET with those in an economic model, the Global Trade Analysis Project (GTAP).”
  • “EWG misunderstood EPA’s GHG emissions for years 2012 and 2017.”
  • “In their report, EWG picked the EPA 2012 GHG emissions for corn ethanol and applied them to the EPA-proposed reduced volume for corn ethanol in 2014 to make the erroneous conclusion that the proposal resulted in 3 million tonnes of CO2 reduction in 2014.”
  • “…the emission factors they applied are high compared to those in other reports and studies that take into account important variations in initial and final land states.”
  • The satellite data set used by EWG is “…explicitly not designed to be used for pixel-by-pixel or localized analyses.”
  • The land use change data used by EWG is “…based on data that is decades old, reflecting wetland conversion over a much longer time horizon.”
  • The report “…overestimated wetland conversion, especially for the conversion of wetlands to corn farms.” Wetlands and grasslands conversion estimates are “…too high when compared with estimates in other studies and data sources.”

Finally, the authors point out that EWG is stuck in the past when it comes to lifecycle analysis. They write, “Since 2009, when EPA conducted corn ethanol LUC GHG modeling…, significant efforts have been made to improve economic models and soil carbon models to better estimate biofuel LUC GHG emissions. EPA and other federal agencies should consider updating RFS LUC modeling so that up-to-date LUC results can be used for biofuel policy making.”

- See more at: http://www.ethanolrfa.org/exchange/entry/government-and-university-experts-blast-ewg-corn-ethanol-report/#sthash.ncL2zyhW.dpuf