In the News

Ag Professional 

Oct 3, 2014

By Rich Keller

The Renewable Fuel Standard (RFS) jumped up as a hot topic around the nation again last week as 33 state governors asked the Obama administration to increase the blending mandates for biodiesel and ethanol from sources not previously receiving much attention.

This was happening at the same time as U.S. ethanol prices hit four-year lows and profits were sharply lower than the excellent earnings being obtained for most of 2014. The Wall Street Journal reported ethanol futures dropped 28 percent last month due to falling domestic demand, and U.S. ethanol producers are holding the largest inventories they’ve had for more than a year.

Illinois Gov. Pat Quinn (D) and Iowa Gov. Terry Branstad, the leaders of the Governors’ Biofuels Coalition told the administration on behalf of the coalition that the Environmental Protection Agency’s expected downward adjustment of the RFS is unacceptable, and if anything the volumes of renewable fuels should be increased, not lowered.

The EPA proposed last year to lower the ethanol that refiners have to blend into their petroleum-based fuels in 2014 and keep the biodiesel level at the same as 2013, which would use less than the industry actually produced. The storm around this proposal seems to have slowed the agency from acting because no mandate has been issued in 2014.

The governors want to make sure that the mandate doesn’t all of a sudden find the light of day, especially as ethanol from corn is in such a financial bind. Corn prices that are lower than last year could go lower as ethanol facilities are reportedly cutting production in response to weaker profit margins.

The governors also noted that the proposed cuts in the RFS, even before any final action, have curtailed investment in biodiesel and cellulosic ethanol, and this has hurt rural economies relying on industries associated with biofuels production.

The governors are interested in more than corn-based ethanol production. The letter was sent to the White House Office of Management and Budget, which is known to be reviewing the EPA’s proposed volume cuts to the RFS.

The governors’ letter pointed out the potential for “advanced biofuels,” or those from waste products generated by our economy, could create thousands of jobs and further decrease the U.S. reliance on imported oil.

“However, the adoption of EPA’s proposed 2014 RFS volume requirements threatens to have a negative economic impact on the rural economy and on the biofuels industry, specifically on biodiesel and cellulosic ethanol,” the letter states.

Editorials in support of the governor’s stance and the biofuels industry again began showing up around rural America, as they did back in 2013 when the EPA made its proposed adjustment strategy. An editorial by Bartholomew McLeay, an Omaha, Neb., attorney practicing agriculture and energy sector law, appeared in The Kansas City Star. He noted, “The law is clear RFS is not to be reduced through 2022 unless it is shown to harm the economy or environment or there is an inadequate domestic supply. None of these conditions exist.”

He further suggests, “No farmer or ethanol producer will receive a single penny from taxpayers if RFS is unchanged.”

What McLeay brought back into the discussion what the Renewable Fuels Association and other organizations have pushed for—an increase in the limit of ethanol blended into fuel to 15 percent from the current “blend wall” of 10 percent. It is this blend wall that at times has meant a glut of ethanol and large volumes of ethanol being exported that triggered the EPA to propose lowering of the RFS.  

“There would be no blend wall or RFS reduction if E15 was not suppressed by certain Big Oil interests,” McLeay contends.

“E15 is acceptable in 75 percent of cars, trucks and SUVs on the road. Numerous studies have found no ‘meaningful differences between E15 and E10 in any performance category. NASCAR uses E15 on ‘every lap.’”

The controversy hasn’t ended but only seems to be firing up again.   

Read the original story here : Biofuels RFS Jumps Up As A Hot Topic Again

 

Renewable Fuels Association

Oct 1, 2014

DES MOINES, Iowa — Today, the Renewable Fuels Association (RFA) announced the election of Randall Doyal, General Manager and CEO of Minnesota-based Al-Corn Clean Fuel, as the next Chairman of the Board of Directors. Doyal heads an ethanol facility in Claremont, Minn., that produces 50 million gallon annually.

An industry expert, Doyal’s career in the ethanol industry began in 1982 at Mountain Development Corporation. In addition to Al-Corn Clean Fuel, he serves as Chairman of the Board of Guardian Energy, LLC and Renewable Products Marketing Group. Doyal previously served as Vice-Chairman and Treasurer of the RFA.

“It is truly an honor to be selected by my peers to head the Renewable Fuels Association. The RFA has the technical knowledge, political influence, and market acumen to positively impact today’s ethanol industry, which will in turn help bolster biofuels production and consumption in Minnesota. I am proud to take the helm and lead this great organization as ethanol is establishing itself as an indispensable part of this country’s motor fuel supply. We will work to protect the Renewable Fuel Standard and expand markets abroad. The future is bright and I look forward to this new challenge,” Doyal said.

Read the original story here : Minnesota Ethanol Producer Named Chairman Of The Renewable Fuels Association

Doyal serves on the board of directors of the Minnesota Bio-Fuels Association

DES MOINES, Iowa — Today, the Renewable Fuels Association (RFA) announced the election of Randall Doyal, General Manager and CEO of Minnesota-based Al-Corn Clean Fuel, as the next Chairman of the Board of Directors. Doyal heads an ethanol facility in Claremont, Minn., that produces 50 million gallon annually.

An industry expert, Doyal’s career in the ethanol industry began in 1982 at Mountain Development Corporation. In addition to Al-Corn Clean Fuel, he serves as Chairman of the Board of Guardian Energy, LLC and Renewable Products Marketing Group. Doyal previously served as Vice-Chairman and Treasurer of the RFA.

“It is truly an honor to be selected by my peers to head the Renewable Fuels Association. The RFA has the technical knowledge, political influence, and market acumen to positively impact today’s ethanol industry, which will in turn help bolster biofuels production and consumption in Minnesota. I am proud to take the helm and lead this great organization as ethanol is establishing itself as an indispensable part of this country’s motor fuel supply. We will work to protect the Renewable Fuel Standard and expand markets abroad. The future is bright and I look forward to this new challenge,” Doyal said.

- See more at: http://www.ethanolrfa.org/news/entry/minnesota-ethanol-producer-named-chairman-of-rfa/#sthash.5GMaqYwF.dpuf

The Hill

Sept 30, 2014

By Rep. Tim Walz (D-Minn)

Imagine a future where America controls its own energy destiny — a future in which we stop spending $1 billion per day on foreign oil and start investing those funds to rebuild our crumbling infrastructure and help pay down the debt, all while creating well-paying American jobs and growing our economy at home.

While this might seem like a faraway dream, there are measures already in place that will help wean us off foreign oil. The Renewable Fuel Standard (RFS) is one such measure, and we must oppose attempts to reduce or eliminate this job-creating initiative that reduces our dependence on foreign oil.

The RFS, first introduced in 2005 and reauthorized in 2007, could be the most significant program ever established toward achieving energy independence. It garnered overwhelming support in both the House and Senate as well as the signature of President George W. Bush, a former oilman from Texas. The RFS has helped employers create thousands of jobs and jump-started local economies throughout the country.

In the ethanol industry alone, the RFS contributed to nearly 400,000 American jobs, bringing in more than $44 billion in economic activity. Today there are at least 212 ethanol bio-refineries across the country and new biofuel production facilities are in the works that will create even more jobs.

The economic benefits of the RFS are significant; even more noteworthy is that we have managed to achieve these benefits while at the same time lessening our dependence on foreign oil. Instead of sending our hard-earned dollars out of the country to buy fossil fuels, we are drawing in investments from countries across the globe interested in supporting a renewable economic success story. In fact, since the creation of the RFS in 2005, America’s dependence on foreign oil has dropped by about 50 percent.

Opponents of the RFS would like you to believe that the program was crafted by narrow special interests, designed to increase food prices and corrode your car engine. These claims are false, and I would like to set the record straight.

Opposition to the RFS is led by the same interests that have a bottom line impacted by decreased fossil fuel consumption. The opposition likes to argue that the RFS is responsible for increases in livestock feed prices, corn prices and food prices. This is a blatantly false claim. Regardless of the fact that only 17.5 percent of the corn crop actually goes toward creating biofuels, a 2013 World Bank study found that the main cause of increased global food prices is rising energy costs, not the use of corn to produce ethanol. Furthermore, only the starch of the corn is required for biofuel production and, once it is acquired, the protein, fiber and oil of the corn are all returned and made into animal feed supply.

Lastly, the price of corn is dropping, not rising. The U.S. Department of Agriculture is projecting the average 2014/2015 price of corn at $3.50 per bushel, a 21 percent drop from 2013/2014 and a 49 percent drop from 2012/2013. So while the cost of corn drops exponentially, opponents of the RFS still blame the standard for increasing the cost of corn. It makes no sense.

Another claim that you will hear from the opposition is that ethanol, as a result of the RFS volume requirements, is a danger to your car’s engine. Again, this is patently false. Ethanol in cars is not a new development. In fact, it’s been around for more than 100 years. In 1908 Henry Ford designed the

Model-T to run on ethanol. Since 2010 virtually all fuel pumped in the U.S. is 10 percent ethanol (E-10), and cars have been running just fine.

But don’t just take my word for it, take that of automotive professionals. NASCAR switched to E-15 (15 percent ethanol-blended fuel) almost five years ago. Its drivers have driven millions of miles in the most punishing automotive conditions since that time. Rather than breakdowns, they have reported performance increases; 20 percent fewer emissions with a 9 to 12 horsepower increase. In fact, Dale Earnhardt Jr. called the transition “seamless.”

The RFS is working to create jobs, reinvigorate local economies and reduce our dependence on foreign oil. We need to be sure to keep it that way. That is why I oppose any short-sighted attempts to reduce or eliminate this important, all-American energy promoting program.

Read the original story here : Fuel Standard Good For US's Economic Engine

Ethanol Producer Magazine

Sept 25, 2014

By Erin Voegele

A new report published by the Biotechnology Industry Organization indicates U.S. EPA inaction on finalizing the 2014 renewable fuel standard (RFS) has resulted in a significant increase in greenhouse gas (GHG) emissions.

In March, BIO released an analysis that predicted that EPA’s 2014 RFS proposal, if left unchanged, would result in increased emissions. That paper utilized U.S. Energy Information Administration projections for fuel use spanning from 2014 to 2022 to estimate volumes of petroleum and biofuel use for each year.  Based on EPA’s 2014 RFS proposal, the analysis determined the U.S. would emit 6.6 million more metric tons of CO2 equivalent GHG emissions this year than it did in 2013. If the EPA’s proposal, however, had allowed the overall RFS mandates for 2014 to remain at the statutory level, a GHG emissions reduction of 21.6 million metric tons could have been achieved on a CO2 equivalent basis. According to information published by BIO, the difference between the increase and achievable decrease is the equivalent of putting 5.9 million additional cars on the road next year.

Based on new EIA data on transportation fuel demand, BIO has now updated the results of that study. Recent EIA estimates indicate that U.S. transportation fuel demand in 2014 has increased and is already 2.5 billion gallons higher than projected in November 2013, when the EPA first released its 2014 RFS proposal.  “Because biofuel use is expected to increase only slightly in 2014 compared to 2013, the United States has missed the opportunity to achieve GHG emission reductions in 2014 through consistent RFS regulatory policy,” said BIO in its updated white paper.

Within the paper, BIO points out that since the EPA has not yet finalized the 2014 RFS rulemaking, oil refiners and biofuel producers have essentially been left to follow the proposed rule as guidance, effectively guaranteeing that biofuel use in 2014 will fall to near the levels EPA proposed.

The updated analysis considers two scenarios. The first is based on EPA’s 2014 RFS proposal. The second uses estimated volumes based on a waiver of cellulosic biofuel and a corresponding increase in advanced biofuel. Both scenarios were modeled on the GREET1.2013 model.

According to BIO, the newly modeled estimates of GHG emissions are higher across the board than those published by the organization in March. The change is attributed to the estimated changes in transportation fuel use for both 2013 and 2014. “It appears that it is no longer possible to achieve a year-over-year reduction in GHG emissions. The reduced estimate of petroleum diesel use and increased biodiesel use for 2013 created a larger reduction in GHG emissions in 2013 than can now be achieved in 2014. And while gasoline and diesel use have been rising in 2014, in the absence of a final rule oil refiners have blended ethanol and biodiesel only at rates consistent with EPA’s November 2013 proposal. They cannot now go back and blend at higher rates,” said BIO in the paper. “Unless actual fuel use again changes from current estimates, the United States will see an increase in GHG emissions from 2013 to 2014.”

BIO noted that the difference between the levels of modeled GHG emissions that result from EPA’s proposed volume obligations and those achievable through consistent enforcement of the RFS is more than 21 metric tons of CO2 equivalent, an amount comparable to putting 4.4 million cars on the road or the emissions of 5.5 new coal-fired power plants.

“During the U.N. Climate Summit this week, the Obama administration is sure to promote the regulatory actions it has taken to reduce climate change emissions from stationary sources such as power plants. But regulatory inaction on the RFS has opened the door to an increase in greenhouse gas emissions from the transportation sector,” said Brent Erickson, executive vice president of BIO’s Industrial and Environmental Section.

“Last November, EPA proposed a steep reduction in the use of biofuels in order to avoid hitting the so-called blend wall – a proposal the administration still has not finalized. What the agency failed to consider is that demand for transportation fuel has been increasing – the United States is now using several billion gallons more gasoline and diesel than projected. The so-called blend wall is an invention of the oil industry and has simply been a red herring,” he continued. “The administration must finalize the 2014 renewable fuel standard using a methodology based on biofuel production and continue the program’s successful support for commercialization of advanced and cellulosic biofuels. The renewable fuel industry has already created hundreds of thousands of good jobs and boosted economic growth.”

The EPA published its proposed rule for the 2014 RFS in mid-November. The comment period on the rulemaking closed on Jan. 28. On Aug. 22 the EPA delivered the final rule to the White House of Office and Budget for review. That review process is currently ongoing. The EPA’s Regulatory Development and Retrospective Review Tracker currently indicates the final rule is expected to be published in the Federal Register in October. The EPA’s review tracker also indicates the agency began work on the 2015 RFS proposal in June. According to EPA documentation, the notice of proposed rulemaking for the 2015 RFS rule is currently expected to be released in February.

A full copy of BIO’s white paper can be downloaded here.

Read the original story here : BIO : EPA Inaction On RFS Proposal Has Increased GHG Emissions

Domestic Fuel

Sept 23, 2014

By Joanna Schroeder

Professors Sebastien Pouliot and Bruce A. Babcock with Iowa State University’s Center for Agricultural and Rural Development (CARD) have released a new paper, “Impact of Ethanol Mandates on Fuel Prices When Ethanol and Gasoline are Imperfect Substitutes“. The authors note papers that consider the two transportation fuels “equal” have been of limited use in informing current policy debates because the short-to-medium-run reality is one of sets restrictions on how ethanol can be consumed in the U.S.

The authors’ objective of the paper was to improve understanding of how these restrictions change the findings of existing studies. The paper estimated the impacts of higher ethanol mandates using a open-economy, partial equilibrium model of gasoline, ethanol and blending whereby motorists buy one of two fuels: E10, which is a blend of 10 percent ethanol and 90 percent gasoline, or E85 which is a high ethanol blend. The model is calibrated to recent data to provide current estimates.

The authors find that the effects of increasing ethanol mandates that are physically feasible to meet on the price of E10 are close to zero. In other words, White House fears of higher RIN prices due to higher gas prices are unfounded. The report also shows the impact of the size of the corn harvest on E10 prices is much larger than the effects of mandates. However, increased mandates can have a large effect on the price of E85 if the mandates are increased to levels that approach consumption capacity. These findings show that concerns about the consumer price of fuel do not justify a reduction ethanol mandates under the Renewable Fuel Standard (RFS).

The 2014 RFS rule is currently under review with the Office of Management and Budget (OMB).

Read the original story here : Impact of Ethanol Mandates On Fuel Prices Nil

 

Star Tribune

By David Shaffer

Sept 20, 2014

It’s shaping up to be one of the best years ever for the ethanol business.

Operating profits for many ethanol makers more than doubled in the second quarter compared with last year, reflecting lower prices for corn and strong demand for the fuel, sustained partly by exports.

Valero Energy, which owns 11 U.S. ethanol plants, including one in Minnesota, reported operating income of 63 cents per gallon, more than double that of the quarter a year ago.

“It’s nice to have that,” said Brian Kletscher, CEO of Highwater Ethanol, a farmer-owned producer in Lamberton, Minn., whose operating profit more than doubled and net earnings rose 64 percent for three months ending in July. “The ethanol industry needed margins like this to stabilize.”

Just two years ago, the nation’s 212 ethanol plants, including 21 in Minnesota, saw profits take a free fall as the price of corn climbed in some regions to $8 per bushel. More than 20 U.S. ethanol plants were shuttered, though many have reopened, including a plant in Buffalo Lake, Minn., earlier this month.

Corn is the main ingredient in making ethanol. In Minnesota, corn sold for $3.55 per bushel in August, less than half the price during the peak of the drought two years ago, government data show. With a record corn crop projected this year, ethanol industry officials are upbeat, although ethanol’s recent, lower selling price could cut into profit margins.

Green Plains Renewable Energy, the nation’s fourth largest ethanol maker whose 12 plants include ones in Fergus Falls and Fairmont, Minn., is projecting a record year. The Andersons, a producer with plants in Ohio, Indiana, Michigan and Iowa, reported record ethanol profits in the quarter.

“These are margins that no one has seen in the ethanol business,” Chief Operating Officer Harold Reed told stock analysts in August.

Another big producer that reported stellar second-quarter ethanol results is Archer Daniels Midland, whose ethanol operations include a plant in Marshall, Minn. Valero, owner of Minnesota’s largest ethanol plant in Welcome, Minn., reported that overall ethanol operating profits nearly doubled to $223 million over the same quarter last year.

Smaller producers also did well, including Bloomington-based Advanced BioEnergy, which produces ethanol in two South Dakota plants, and the jointly managed Granite Falls Energy and Heron Lake BioEnergy plants located in those Minnesota cities. Gevo, owner of a plant in Luverne, Minn., resumed making money on ethanol, helping to cut its losses as it tries to ramp up production of an alternate biofuel.

Some Minnesota ethanol plants have farmer-investors who own membership units. Granite Falls Energy reported second-quarter earnings per unit of $425, up nearly sixfold from the same quarter last year. Highwater Ethanol’s earnings per unit rose to $866, up 174 percent over the quarter last year.

Not all earnings get distributed to members, but the payments to farmers can be a boon in times of low corn prices.

“If you are a farmer invested in an ethanol plant, the potential is high that it will cushion a downfall in the farm economy,” said Highwater’s Kletscher, who also is president of the Minnesota Biofuels Association. “If you think back, this is why farmers developed ethanol plants.”

Alex Breitinger, a commodities broker with Paragon Investments of Valparaiso, Ind., said ethanol producer margins probably will narrow because of a slight drop in ethanol futures and an increase in corn futures. One thing to watch, he said, is whether farmers plant less corn in 2015, affecting prices going forward.

Transportation also poses a lingering problem. To reach markets, ethanol relies heavily on railroads, which are congested by oil trains, grain and coal shipments and other traffic. Kletscher said some plants, including Highwater’s, have shut down production for a day or more because transport was unavailable and on-site storage tanks were full.

Yet the ethanol business has remained strong partly because the fuel is finding international buyers. Exports of ethanol were up 54 percent to 10 million gallons in the first half of this year compared with the period in 2013, and are on track to match the high-export years of 2011 and 2012, government data show.

Exports help with what the industry calls the “blend wall.” U.S. motor fuel is typically blended at 10 percent ethanol. U.S. producers already have the capacity to produce more than that. But higher-percentage blends like E-15, or 15 percent ethanol, have been slow to make inroads into the market. E-15 sales have risen in Minnesota, which now has 25 stations selling the blend.

Breitinger said the United States is energy rich thanks to the boom in oil and gas extraction from shale. Although gasoline is exported, crude oil exports are barred by U.S. law.

“But ethanol can be exported, so they really have hit a sweet spot,” he said.

Read the original story here : Ethanol Industry Having A Solid Year

Biomass Magazine

Sept 18, 2014

By Gevo Inc.

Gevo reported an update on the progress of the side-by-side operational mode (SBS) of its plant in Luverne, Minnesota, on Sept. 18. In the beginning of June, Gevo commenced the coproduction of isobutanol and ethanol, with one fermenter dedicated to isobutanol production and three fermenters dedicated to ethanol production. With the completion of the last phase of capital for SBS, Gevo has begun to produce and ship isobutanol in railcar volumes.

In its 2nd quarter earnings release, Gevo reported that it would be installing distillation equipment at the plant, representing the final phase of capital for the SBS. This equipment facilitates the extraction of isobutanol from the plant, which should enable Gevo to boost production levels of isobutanol by debottlenecking the downstream side of the plant. This distillation equipment was commissioned in early September and is already showing improved results at the plant, such as:

A doubling of isobutanol batch sizes.

A 50% reduction in isobutanol batch turnaround times.

Consistent yields of 90 percent  based on starch content.

A continued decrease in isobutanol production costs towards targeted economic rates.

"We are on track with the SBS. We completed the installation of our isobutanol distillation column and it operates well. We are continuing to boost isobutanol production levels while simultaneously driving cost out of our production processes. We are pleased to be shipping both ethanol and isobutanol in railcar quantities. This isobutanol is destined for the solvents and specialty gasoline blendstock markets, as well as to supply our demo plant in Silsbee, TX, to convert our isobutanol into hydrocarbons such as bio-jet fuel and isooctane," said Dr. Patrick Gruber, Gevo CEO.

"By installing the last phase of capital at Luverne, we remain confident that we will be able to achieve production levels of 50-100 thousand gallons of isobutanol per month by the end of 2014. As we continue to learn and optimize the isobutanol production process, we believe we can ultimately increase our production rate to approximately

2-3 million gallons of isobutanol per annum under the SBS, while we are producing ethanol in the other three fermenters," continued Gruber.

Read the original story here : Gevo Provides Update On Luverne, Minnesota Plant

Little Canada, Sept 18 - Minnoco announced today an expansion program that will bring more of the locally owned fuel retail outlets to the Twin Cities area. After successful introduction of four retail outlets during the fall of 2013, the retail group has identified another 18 locations planning to convert to the new brand, bringing the total to 24 outlets when completed.

“Our owners believe we have a competitive advantage by offering more fuel choices like E15 to consumers,” stated Lance Klatt, executive director for Minnoco. “Our new brand not only draws in consumers for more affordable fuels but is also a great business model for retailers.”

Leveraging existing convenience store and automotive repair locations in many cases, retail owners are moving away from a branded oil contract into the independent brand of Minnoco. “With Minnoco, I’m able to offer E15 as a more competitive fuel to my customers at a much lower price vs. regular,” explained Rick Bohnen, president of Minnoco and owner of Penn Minnoco. “This is a better business model for me because it significantly reduces my operational costs vs. branded fuels and I’m able to pass the savings on to consumers.”

In addition, Minnoco retailers have more freedom to offer biofuels that are grown and produced in Minnesota. Though the product offering will vary slightly by retail location, Minnoco will be offering E15, E30, E85 and diesel along with regular grades of gasoline.

“All of our regular 87 gas already contains 10% ethanol,” explained Jerry Charmoli, Minnoco owner and a mechanic for more than 30 years. “E15 is approved for vehicles 2001 and newer and we’ve had zero problems, in fact my customers love the cost savings and extra performance.”

“We also want to thank the Minnesota Corn Growers Association and Minnesota Corn Research & Promotion Council, Minnesota Department of Agriculture, Growth Energy, Minnesota Bio-Fuels Association and the American Lung Association in Minnesota for helping us to make more biofuel choices available to our customers,” added Klatt.

MINNOCO (Minnesota Independent Oil Company) is a brand of gasoline developed for the members of the MSSA (Minnesota Service Station & Convenience Store Association) by the members of the MSSA. Allowing members of the Association the opportunity to own and control their own brand of fuel while offering alternative renewable fuels such as E85, E30, and E15, as well as diesel, 87, 89 and 91 octane fuels. For more information visit www.Minnoco.com.