By Tim Rudnicki, Esq.

Every runner has a set of tactics (or survival skills) they use to propel themselves across the
finish line. For me, when I’m running a marathon, one of my tactics is to keep looking forward.
The aim is to get far away from the starting line by putting my energy and focus on moving
toward and crossing the finish line up ahead. Many of us think the U.S. EPA should do the same
with respect to the Renewable Fuel Standard - Keep Looking Forward!

We are half way into the biofuel marathon and the U.S. EPA has proposed that we slow down
and then go backwards. What do I mean by this? Just as we are making progress in moving
toward the use of more biofuels (E85 for Flex Fuel Vehicles and E15 for all 2001 and newer
vehicles) the EPA has proposed a substantial reduction in the amount of biofuel to be used by
consumers in 2014.

The Renewable Fuel Standard (RFS), however, is a law that is intended to be a paced and ramped
up implementation of biofuel usage through the year 2022. Specifically, for 2014, Congress
directed that at least 18.15 billion gallons of biofuels (14.4 billion gallons from renewable fuel
such as ethanol) be used in the United States. That is a very clear mile post that has been known
by the petroleum industry, biofuel producers and the EPA for at least seven years!

The petroleum industry likes to say they can’t comply with the law because the amount of
gasoline being consumed is going down. Basic math and, according to the Energy Information
Administration, the total actual and projected fuel consumption in the United States tells us
otherwise. Just because the petroleum industry is comfortable with the E10 status quo, this is no
time for the EPA to look backwards, retreat and accept defeat. In fact, under the law, the Agency
has a clear duty to keep looking forward and to push even harder to reach the 2014 biofuel mile
post as well as the next one.

How can one conclude the EPA has a duty to “push” for the use of more biofuels? The law
explicitly requires the EPA to “ensure that transportation fuel sold or introduced into commerce
in the United States (except in noncontiguous States or territories), on an annual average basis,
contains at least the applicable volume of renewable fuel, advanced biofuel, cellulosic biofuel,
and biomass-based diesel, determined in accordance with” the Energy Independence and Security
Act of 2007. In other words, it is not an option for the EPA to capitulate to the petroleum
industry by reducing the amount of biofuel to be used in 2014. Instead, the EPA should accept
the renewable volume requirements in law and take proactive steps to ensure consumers have
greater access to more biofuels as intended by Congress.

Minnesota biofuel producers are doing their part to comply with the RFS, so to should the
petroleum industry and the EPA. Biofuel producers in Minnesota have made, and continue to
make, significant investments in their operations to meet the RFS requirements. This translates
into more clean, renewable biofuels that can and should be made available to consumers through
the petroleum infrastructure.

Any retreat the EPA makes from the gallon volume requirements of the black letter law will have
adverse environmental and economic impacts. Biofuels have lower carbon footprints compared
to petroleum gasoline. If the EPA proposal to reduce the amount of biofuels for 2014 moves
forward, more gasoline will be used instead of biofuels. The unintended consequence will be a
boost in greenhouse gas emissions. This situation is especially troubling as more highly carbon
intensive tar sands from the boreal forest in Alberta are used for fuel in the United States.
Biofuels also save consumers money at the pump. The Center for Agricultural and Rural
Development found biofuels, in the Midwest, held down the price of gasoline by approximately
$1.69 per gallon. If the EPA fails to comply with the law and slows down the pace of biofuel
usage, environmental and consumer benefits will be lost.

Will the EPA and White House listen to your voice? Thanks to many of you, thousands of
messages in support of biofuels and the RFS were sent to the Minnesota Congressional
Delegation, U.S. EPA and the White House. If the EPA heard you, the Agency will continue to
keep looking forward and implement the RFS as signed into law. With the EPA implementation
of the RFS as written, the economic, consumer and environmental benefits will move us, as a
Nation, closer to the next renewable fuel mile post. This will put us, as a Nation, well on the
path toward winning the biofuel marathon and a better environmental quality.

As always, I look forward to your This email address is being protected from spambots. You need JavaScript enabled to view it..

By Tim Rudnicki, Esq

The details might be complicated, but the overarching blueprint is straightforward: continue to grow the biofuels industry AND build out the biobased feedstock industry.

On the continuum of an industry's development, the biofuel industry in Minnesota is very young. Relative to other Minnesota industries, such as agriculture and mining, the biofuels industry is just getting started. Nevertheless, the latest economic analysis of the Minnesota-based biofuels industry finds it supports 48,506 jobs with wages close to $3 billion and has a total annual economic impact of approximately $11.7 billion. And today's Minnesota-based biofuels industry still has room to grow.

More than two years ago the United States Environmental Protection Agency approved the use of E15 (that's a blend of 15% ethanol and 85% petroleum gasoline) for use in vehicles from model year 2001 to the present. If we focused on the current law and if all the owners of those vehicles had access to and chose to use E15 (when it's available, they do indeed use it), Minnesota would nearly triple the amount of biofuel used within the State. That outcome would have spin off benefits for the biofuels industry, Minnesota consumers and the environment. 

Who is the Minnesota biofuels industry? It's the men and women that live and work throughout Minnesota. Some of the more than 48,000 jobs supported by the industry include those who live and work in the metro area of Minneapolis and St. Paul as well as in Minnesota’s rural communities where the production plants are located. All these men and women provide a broad range of products and services. The products provided for the biofuels industry include, for example, renewable ingredients, enzymes, all the processing tanks and related production equipment. Similarly, the scope of services is broad. It covers, for instance, finance, transportation, communications and engineering to name a few.

In practical terms, Minnesota made biofuels support thousands of Minnesotans, keep energy dollars at home on Main Street and add to the vitality of rural communities.

How do consumers benefit from increased use of biofuels? The short answer is this: an ample supply of less expensive, renewable biofuels decreases the demand for more expensive finite petroleum. Biofuels helped Minnesota consumers save nearly $2 billion dollars in 2012 because biofuels, such as ethanol, held down the price of petroleum gasoline. Today, biofuels continue to hold down the price of petroleum gasoline. By keeping the bioeconomy blueprint focused on building up the existing biofuel industry, more renewable fuel will be available to continue holding down the price of gasoline. That’s good for people who live and work here in Minnesota.

What are the environmental benefits associated with expanding the use of existing biofuels in Minnesota? Briefly, studies by Argonne National Laboratory and other reputable science based organizations find ethanol made from corn starch has a lifecycle greenhouse gas emission (GHG) footprint that is up to 57% lower than petroleum. Even when counting the energy used to plant, cultivate, harvest, process and use biofuels, the GHG emissions for biofuels is significantly lower compared to petroleum. Right here, right now, nearly 85% of the vehicles on the highway today can be using a lower GHG fuel with existing vehicle technology. Regular engines in 2001 and newer vehicles can use E15, a 5% higher blend of ethanol compared to regular unleaded gasoline at most retail fuel stations. Let’s not forget that green plants are the best solar collectors, and its that renewable plant material that is used to make biofuels.

Where do biobased feedstocks, that displace petroleum, fit on the bioeconomy blueprint?  Next to, not in place of, biofuels.  The bioeconomy blueprint is not about picking one over the other, but instead building synergy between one and the other. A truly growth oriented and sustainable bioeconomy will focus on expanding the use of both biofuels and biobased feedstocks which can be used in paints, adhesives, inks and resins to name a few uses.

This basic blueprint is offered in the hope we can build upon the discussion now taking place in Minnesota. Let’s work together to find ways to expand the success in the biofuels industry and to build upon that success in ways that can further grow the biobased feed stock industry. If we do this the correct way, Minnesota will be a leader on this front. Most importantly, we can further improve the environment and quality of life for Minnesotans.

As always, direct any questions or comments to me This email address is being protected from spambots. You need JavaScript enabled to view it.

This month, we spotlight Solenis, a global specialty chemical supplier. Read our interview with Allen. M. Ziegler, director of global biorefining and marketing at Solenis.

Q. Please tell us about Solenis.

A. Solenis is the new company formed via the recent purchase of Ashland Water Technologies, formally a commercial business unit of Ashland Inc., by the private equity firm Clayton, Dubilier & Rice. Solenis, rooted in “solutions” and “genesis,” underscoring the company’s mission to be at the source – genesis – of solutions for customers.

This standalone company continues a 94-year reputation as a respected manufacturer of specialty chemicals for biorefining, pulp, paper, oil & gas, chemical processing, mining, power and municipal markets.

Headquartered in Wilmington, Delaware, Solenis operates 30 manufacturing facilities strategically located around the globe and employs a team of 3,500 professionals in 118 countries across five continents. For additional information about Solenis, please visit www.solenis.com.

Q. Please tell us your company’s role within the ethanol industry in Minnesota and why the company is committed to supporting the ethanol industry now and in the future?

A. Solenis has designated Biorefining as one of the six specific market areas we will concentrate both research & development and commercial resources going forward. Specific patented/patent pending process chemistries currently in commercialization such as corn oil extraction aids, regulated scale inhibitors and new technologies slated for introduction in 2015 are the result of years of development work and financial commitment.

Q. From your perspective, what would you like consumers to know about the ethanol industry and the fuel it produces?

A. I have a unique perspective in that I have experience in the industry from that of an agriculture producer, investor and supplier to the industry. I cannot stress enough the economic and environmental significance this industry had provided and will continue to provide long into the future.

Q. What do you think is needed for the availability of E15 to grow?

A. Providing the consumer choice via blender pumps and in addition, regulation to allow retailers under the auspices of oil companies a pathway to provide.

Q. What do you see as the ethanol industry’s biggest challenge?

A. Volatility of demand.

Q. What does your company see for the future of ethanol and advanced biofuels?

A. The global projected growth of biofuels to as far out as 2040 is healthy with advanced biofuels contributing a significant portion. Solenis process technologies in conjunction with the water treatment programs are designed to address - not only the current demands but anticipated regulatory, feedstock and water usage challenges.
 

This month, we spotlight Boulay, which is a renowned accounting firm with strong ties to the biofuels industry. Read our interview with Jadin Bragg, partner at Boulay, below.

Q. Please tell us about Boulay.

A. Boulay works with individuals, closely-held businesses, nonprofit organizations and public companies who are, or who aspire to be, successful. Our focus is to protect your business, build your wealth and secure your future by partnering with you and integrating our depth of experience in accounting, tax and financial consulting services designed to “help you get there.”

Founded in 1934 by Joseph A. Boulay, today our team consists of 29 partners and over 125 employees in Eden Prairie, MN. We’ve experienced a long history of consistent growth and rank 11th in the Minneapolis/St. Paul Business Journal’s Book of Lists for accounting firms. We were also named a 2014 Best of the Best CPA firm by INSIDE Public Accounting.

Our professionals adhere to rigorous quality control policies and have a proud tradition of unqualified opinions in our peer reviews since the inception of the program in 1988. Again, we received an unqualified opinion and a rating of pass, the highest of the three potential opinions designated by the American Institute of Certified Public Accountants.

Boulay is a member of PrimeGlobal, one of the Top 5 largest associations of independent accounting firms in the world. Boulay’s membership offers clients access to trusted people who can help you get your business done around the world — anytime, anywhere, any way.

Q. Please tell us about your company’s role within the ethanol industry in Minnesota and why the company is committed to supporting the ethanol industry now and in the future?

A. The renewable fuels industry is a highly complex environment that requires a strong commitment to understanding the current environment along with seeing the long-term picture. We have been long-standing advocates of the industry, from grass roots efforts as an unknown energy alternative through today’s dramatic political, environmental and economic challenges. Since we started serving the renewable fuels industry in 1997, Boulay has served 50 private and public renewable energy clients representing approximately 2 billion gallons of potential capacity nationwide. Manufacturing and distribution embodies approximately 200 clients for our firm with more than 20 professionals dedicated to servicing the renewable fuels industry.

This experience allows us to bring tried and true practices and support to you through the following financial services:

• Assurance
• Accounting Advisory
• Business Consulting
• Employee Benefits
• ESOP
• Estate and Trust
• Public Company
• Tax
• Wealth Management

Specific services that may be of interest to ethanol companies include:

• Member Tax Consulting
• Cash Flow Forecasting
• RIN Attestation
• Strategic Planning
• Retreat Facilitation

Whether understanding the construction phase, start-up of the plant or production efficiencies, we will be there for you with the collective knowledge of our renewable energy team. We also have a wide network of contacts that we use to assist you in resolving intricate operating challenges.

Through our immersion in renewable energy we developed a unique knowledge of ethanol and other alternative energy sources that you won’t find with other firms. Our professionals are passionate about the industry and work with producers to find tax incentives and other financial strategies that best serve your business. At Boulay, our clients’ goals are our goals, which is why we are committed to serving the ethanol industry and “helping you get there.”

Q. From your perspective, what would you like consumers to know about the ethanol industry and the fuel it produces?

A. Since 1997, when Boulay began serving clients in the industry, technology has come a long way. The industry and the plants used to create ethanol continue to evolve to efficiently produce a product that is a viable alternative to gasoline. The industry now uses less energy, water and other resources than ever before to create the same gallon of ethanol. It also gets more out of each bushel of corn as it converts into not just ethanol, but also oil and animal feed.

Q. What do you think is needed for the availability of E15 to grow?  

A. In order for E15 to grow, consumers need to have the ability to choose a blend at the pump. This expansion of infrastructure will lead to increasing demand and to further acceptance in the marketplace. Pricing and value will drive consumer demand.

Q. What do you see as the ethanol industry’s biggest challenge?

A. Dealing with the influence of fuel prices, commodity pricing, government support, limited supply of crop-based feed stocks and a limited distribution infrastructure are a few of the biggest challenges your industry faces. With these ongoing challenges, getting bogged down in financial reporting and tax compliance details is the last thing you have time for as an entrepreneur. That's why it's important to work with an entrepreneurial-minded professional services team who knows your industry and can help you navigate these pressures. With Boulay we know you'll experience:

• Genuine, thoughtful, cooperative partners
• Honest, down-to-earth, long-term relationships
• Listen first, help next approach
• Business advisors vs. transactional compliance providers
• Better service with more partner attention than national firms
• “Go the extra mile” mentality

We go beyond meeting your financial reporting matters and provide you sound business advice. When you want help understanding options and best practices regarding specific financial matters, you can count on your client service partner to weigh in with not only their knowledge and experience, but the collective expertise at Boulay.

Q. What does your company see for the future of ethanol and advanced biofuels?

A. The future looks bright for the ethanol and advanced biofuels industry. Climate change, energy independence, and new tax incentives and subsidies are opening up new opportunities, and growing concerns about the environment and fossil fuel dependence will likely lead to an increase of ethanol and advanced biofuels production in years to come.