In the News
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
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
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
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.
Sept 16, 2014
By Christopher Doering
U.S. Agriculture Secretary Tom Vilsack Tuesday offered support Tuesday to ethanol producers facing challenges, saying that the White House is committed to boosting use of the fuel in the country's gasoline supply.
Speaking before a friendly audience of biofuel producers in Washington, the former Iowa governor said he was confident the administration would restore at least some of the proposed cuts to a mandate that would lower the amount of ethanol required to be blended into the country's fuel supply in 2014.
The proposed reduction rattled producers in Iowa, the country's biggest producer of the renewable fuel, and others in the ethanol industry. They feared the change would thwart investment in the technology, hurting agriculture and rural communities that depend on the fuel for jobs and income.
"I'm very positive about this industry despite the challenges, despite the issues," Vilsack said at a conference sponsored by Growth Energy, an ethanol trade group. "I want you to know that I'm committed, that the administration is committed. You cannot let one decision ... slow the process down."
Vilsack said the White House has pledged to boost U.S. ethanol production to 15 billion gallons at some point. "We just have to figure out the best, most appropriate way to get there," he said. "I continue to be bullish on this industry."
The Environmental Protection Agency, which oversees the biofuels program, has proposed slashing ethanol produced from corn to 13 billion gallons, compared with the 14.4 billion-gallon figure set by Congress for this year. The EPA hinted it would increase the blending level above 13 billion later this fall but has not said by how much. Vilsack stopped short of disclosing the increase Tuesday.
Vilsack's appearance was part of a three-day energy conference in Washington, where ethanol supporters met with congressional lawmakers and White House officials to urge them to stay committed to the ethanol mandate known as the Renewable Fuel Standard. The law requires refiners to buy alternative fuels made from corn, soybeans and other products.
Matt Merritt, a spokesman with Sioux Falls-based ethanol producer Poet, said any wavering by Congress or the White House on the commitment to the Renewable Fuel Standard would thwart efforts by his company to expand development of cellulosic ethanol fuel — made from crop residue, grasses and wood chips — by chilling new investments.
Poet, which celebrated the opening of its $275 million cellulosic facility in Emmetsburg this month — along with its Dutch-based partner DSM — is looking to license its technology to make the next generation of renewable fuel. If the atmosphere is not conducive for growth in the United States, the ethanol giant may focus more attention on growing cellulosic ethanol overseas in Brazil, India and China.
"We're going to operate in the market that makes the most sense," Merritt said. "We're hopeful we'll be able to expand here in the U.S., but if the market doesn't allow it, we might have to look overseas for that (growth)."
The oil industry, an outspoken opponent of a law requiring ethanol to be blended into the gasoline supply, said the EPA should ignore pressure to increase the level in 2014. The American Petroleum Institute, which represents more than 550 oil and natural gas companies, has said there is not enough demand to justify increasing the amount of ethanol that must be blended this year.
Read the original story here : Vilsack Sees Some Proposed Ethanol Cuts Being Restored
Sept 14, 2014
By Delayne Johnson
This month, our company, Quad County Corn Processors, will debut an innovative new technology that promises to make one of Iowa's signature agricultural products — corn — go even further.
Over a four-year period, Quad County Corn Processors' research and development team developed a patented process for converting corn kernel fiber into cellulosic ethanol. The new "bolt on" bio-refinery at our plant in Galva, Ia., is one of the first facilities in the United States to begin commercialized cellulosic ethanol production.
The new addition will produce two million gallons of cellulosic ethanol from the same kernel used to create conventional ethanol, corn oil and livestock feed. We will add four additional workers to the 36 already staffing our facility 24/7 and increase our ethanol yields — already 35 million gallons annually — by 6 percent.
Our yearly corn oil production, now 750,000 gallons, will multiply three times, and we will be able to offer livestock feed that is much higher in protein and lower in fiber than what we've been able to generate with previous technology.
The bottom line is that this breakthrough technology will create more value out of the more than 12 million bushels of corn that our cooperative's 350 shareholder farmers bring to us each year and help Quad County Corn Processors remain a leader in America's burgeoning ethanol industry.
That industry has grown by leaps and bounds in large part because Congress created the Renewable Fuel Standard requiring motor vehicle fuel to include renewable elements such as ethanol. The Renewable Fuel Standard developed the infrastructure and industrial process to generate conventional ethanol, which gave us a base on which to build our new cellulosic ethanol technology.
For the owners of America's tens of millions of cars and trucks, ethanol has numerous benefits, such as reducing exhaust emissions, stretching our oil supplies to make us less dependent on foreign petroleum and lowering the price of gasoline at the pump. Energy economist Philip Verleger concluded that the Renewable Fuel Standard saves U.S. consumers an average of $1 on each gallon of gasoline.
A typical U.S. ethanol plant supports nearly 3,000 jobs — not just at the production point itself, but also in transportation, equipment production and maintenance, and other sectors. All in all, the Renewable Fuel Standard supports nearly 400,000 jobs.
But special interests, including the petroleum industry, are pressuring Congress to jettison the Renewable Fuel Standard. Ethanol's opponents have fashioned all manner of misleading arguments against ethanol and the fuel standard. So far, Congress has resisted the pressure. But in today's Washington, even a great, proven idea like ethanol is never safe from political maneuvering and twisted messages.
Now is the time to intensify our commitment to domestic renewable fuels, ensuring that Americans can continue to enjoy their freedom to hit the road, while paying a reasonable price for fuel. Ethanol has proven its value as an integral part of national energy policy. It's also an important part of Iowa's economy now, and must remain so for years to come.
Delayne Johnson is the CEO of Quad County Corn Processors, based in Galva.
Read the original story here : Renewable Fuels Standard Spurred Ethanol Breathroughs
Sept 10, 2014
By Susanne Retka Schill
Buffalo Lake Advanced Biofuels restarted Sept. 8, expecting to bring all systems up during the next several days and begin continuous operation once again. The plant was idled in 2009, purchased and run briefly in 2012, then purchased out of bankruptcy and renamed. The plant has run intermittently since June as repairs and upgrades were installed and tested, explained plant manager Kyle Peik. “We are up and running now, we started grinding this morning.” About 35 people are working at the newly restarted plant, which includes a small staff in New Jersey at the offices of current owners, West Ventures LLC.
The legacy Katzen-designed plant in Buffalo Lake, Minnesota, first came online in 1997 as the 9 MMgy Minnesota Energy Cooperative, expanding to 18 MMgy before shutting down in 2009 during the industry downturn. It was restarted in June 2012 by Purified Renewable Energy LLC, with a purchase announced a few months later. Purified filed for bankruptcy in March 2013 and ultimately, the plant was purchased by one of its creditors, West Ventures.
The investment group brought in Colorado-based IR1 Group to evaluate the plant and offer recommendations. IR1 has helped with repairs and upgrades in preparation for restart, along with the installation and shakedown of a new technology. Buffalo Lake Advanced Biofuels will be using new solids separation technology developed by Yield & Capacity Group LLC to process thin and whole stillage through an innovative system that eliminates the need for evaporators and centrifuges. The system will be the focus of a feature article in the upcoming November issue of Ethanol Producer Magazine.
Read the original story here : Legacy 18 MMgy Minnesota Plant Restarts Ethanol Production
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Sept 9, 2014
By Ayesha Rascoe
The nascent U.S. cellulosic ethanol industry has urged the White House to change course on targets for biofuel use, warning in a letter to President Barack Obama on Tuesday that current policy risks losing investments to China and Brazil.
Federally set mandates for the use of fuels such as corn ethanol and cellulosic ethanol, made from plant waste like grasses and wood, must be based on the industry's ability to produce the fuel, not on infrastructure restraints, executives of several biofuel companies wrote.
The Environmental Protection Agency rocked the biofuels industry last year with a draft plan slashing requirements for blending renewable fuels into U.S. gasoline and diesel in 2014.
Companies including POET LLC, Abengoa Bioenergy and Dupont told Obama that investments in innovative fuel technology could be lost if EPA does not reconsider.
"If the proposed methodology is not fixed in the final rule ... the 2014 rule will have inadvertently done more than your worst critics have to harm a low carbon industry you have always championed," the executives said.
Following a backlash to the initial proposal, the companies said they expect the administration to raise the targets from the proposed rule to the final rule, sent to the White House for review in August.
But an increase in targets will not be enough to support new investment, the companies said, as long as the agency continues to limit targets based on the number of fueling pumps available to dispense higher blends of ethanol in gasoline - a variable mostly controlled by big oil companies.
The Renewable Fuel Standard requires increasing amounts of ethanol and biodiesel to be mixed into U.S. fuel supplies each year until 2022.
The EPA said it lowered the targets for 2014 because the nation had reached a point where the law would require ethanol to be blended into gasoline at levels higher than the 10 percent per-gallon mixture that dominates retail fuel stations.
But capping ethanol at 10 percent of the fuel supply will not give oil companies any incentive to invest in new fueling equipment, and the biofuel program will "cease to be effective," the companies said.
After years of falling far short of the targets set by Congress, makers of cellulosic biofuels are starting to gain some momentum.
While 2014 production will come nowhere near the 1.75 billion gallon target originally set by Congress, POET and Dutch food and chemicals group DSM last week jointly opened a plant in Iowa with an initial production target of 20 million gallons a year using corn cobs, stalks and other crop waste as its feedstock.
Quad County Corn Processors opened a plant this week that should produce 2 million gallons cellulosic ethanol a year.
It is unclear how much cellulosic ethanol will be produced in 2014. EPA's draft proposal set the target at 17 million gallons.
Read the original story here : U.S. Cellulosic Fuel Makers Press Obama To Alter Biofuel Plan
Sept 8, 2014
Today, the Renewable Fuels Association (RFA) released a report that further debunks the fictional food vs. fuel argument. The report shows that while corn prices have dropped dramatically over the past two years, retail food prices of dairy, pork, poultry, eggs, and beef have remained steady or continue to increase. The report concluded, “… fluctuations in corn prices do not significantly affect consumer food prices.”
Bob Dinneen, president and CEO of the RFA, commented, “The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases. However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them.”
He continued, “The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”
The report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food...” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”
The report compared corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014, finding:
Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.
…retail prices for other items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.
Read the original story here : Food vs Fuel Debunked (Again) - Corn Prices Fall, Retail Food Prices Remain Steady
Read the full report here
Today, the Renewable Fuels Association (RFA) released a report that further debunks the fictional food vs. fuel argument. The report shows that while corn prices have dropped dramatically over the past two years, retail food prices of dairy, pork, poultry, eggs, and beef have remained steady or continue to increase. The report concluded, “… fluctuations in corn prices do not significantly affect consumer food prices.”
Bob Dinneen, president and CEO of the RFA, commented, “The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases. However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them.”
He continued, “The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”
The report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food...” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”
The report compared corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014, finding:
- Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.
- …retail prices for other items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
- Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
- Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.
Sept 9, 2014
By Donnelle Eller
Quad County Corn Processors celebrates its $9 million cellulosic ethanol project today near Galva, technology that was "bolted on" the existing corn ethanol facility.
It's the second major Iowa facility to mark adding cellulosic ethanol this month, a more environmentally friendly fuel. Last week, Poet-DSM celebrated beginning operation of its $275 million facility in Emmetsburg.
Quad County Corn Processors uses the corn kernel fiber to make cellulosic ethanol. The 35-million gallon ethanol facility will produce an additional 2 million gallons per year of cellulosic ethanol.
That's different technology from Poet and the DuPont Danisco, a $225 million cellulosic ethanol plant under construction in Nevada. Those facilities use crop residue -- corn cobs, husks and other materials -- to make cellulosic ethanol.
Among the speakers at today's event include Iowa Agriculture Secretary Bill Northey and Bob Dinneen, CEO of the Renewable Fuels Association.
Read the original story here : Second Iowa Plant Adds New Ethanol Technology
Sept 3, 2014
By Holly Jessen
The grand opening of Poet-DSM Advanced Biofuels LLC’s Project Liberty is the start of what Jeff Broin, founder of Poet and executive chairman, believes will be a complete transformation of the energy supply. “This is just the very tip of the iceberg,” he said at the Sept. 3 event, adding that while it might not happen in this lifetime, he is certain that it will happen, because at some point, there will be an end to the fossil fuel supply. “The world needs a solution and the solution is right here,” he said.
A large group gathered at the plant in Emmetsberg, Iowa, where Poet-DSM will convert 285,000 tons of biomass annually into 20 MMgy, and later, 25 MMgy, of cellulosic ethanol. The capital cost of the project, which is co-located with one of Poet’s corn-ethanol plants, was $275 million.
Rob van Leen, chief innovation officer at Royal DSM, spoke briefly about the company’s next step, to build a facility to produce enzymes onsite. In addition, a next-generation yeast is expected to be in use at the plant during the second half of the year and a third generation yeast will be introduced next year. Poet-DSM is ready, he said, to license out the cellulosic ethanol technology that made Project Liberty possible.
Iowa native, Michael Knotek, U.S. DOE deputy undersecretary for science and energy, said on his drive from Minneapolis to Emmetsberg, he saw biomass all around and the wind blowing through it. “It’s all there, all we have to do is take it,” he said, adding that biofuels addresses the three major concerns of energy security, job creation and climate change. In order to reduce fuel prices due to volatility in the global market, 1,000 biofuel facilities like Project Liberty are needed. “When I return to Washington, I want to make a big deal out of this,” he said. “The wind is at our back, let’s make biofuels.”
Read the original story here : POET-DSM Project Liberty Goes From Fantasy To Reality
Aug 27, 2014
By Donnelle Eller
DES MOINES, Iowa — EPA delays in setting the Renewable Fuel Standard are contributing to weaker corn prices for farmers and costing manufacturing jobs, Iowa Gov. Terry Branstad said Wednesday.
"Farmers aren't buying equipment and John Deere is laying people off. What EPA has done is not only damage farm income but cost us jobs in farm machinery and manufacturing," Branstad told reporters at the Farm Progress Show near Boone.
In November, the Environmental Protection Agency proposed reducing ethanol produced from corn in 2014 to 13.01 billion gallons from 14.4 billion gallons initially required by Congress. The 2007 Renewable Fuel Standard requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country's dependence on foreign energy.
"I feel like they're playing politics instead of doing what's right for America, and doing what's right for reducing our dependency on foreign oil, and improving farm income and creating jobs," he said.
Branstad said the increase in food prices was one of the biggest arguments against the increase in the ethanol mandate.
"They put out this garbage, when the price of corn was $7-$8, that it drove up the price of food. Well, have you seen the price of food go down?" he said. "The price of corn is down to $3.50 a bushel, and the price of food hasn't gone down at all."
Bill Northey, Iowa's secretary of agriculture, said he's hopeful that the EPA won't cut quite as much in the Renewable Fuel Standard as it initially proposed last winter.
"I hear it will be better than what EPA initially announced, but it's not going to be as good under the original RFS," Northey told reporters at the show.
Iowa should be expanding its ethanol production, given low prices for corn, but instead companies are hesitant to invest, Northey said.
"It's taken away that optimism that was there," especially for expansion of the next generation of ethanol, such as cellulosic ethanol. It uses corn stover instead of corn to make the alternative fuel.
"Without a green light from EPA, I don't think we'll see that investment in technology and improved efficiencies," he said.
Read the original story here : Iowa Governor Blasts EPA On Ethanol Mandate
Aug 26, 2014
St Paul - CHS, a leading energy, grains and foods company and the nation's leading farmer-owned cooperative, has announced a new program to better enable some of the 1,400 Cenex branded locations to meet consumer demand for an E15 ethanol blend.
"We are excited to offer a new Cenex Tank Program, which further demonstrates CHS leadership in renewable fuels and helps keep the Cenex brand at the forefront in meeting consumer demand for ethanol blends," says Doug Dorfman, CHS vice president – refined fuels.
For Cenex retailers wanting to offer E15 in addition to their current gasoline products, the Cenex Tank Program will cover a significant portion of the cost to purchase and install an additional storage tank for the purpose of offering E15.
The Cenex network was among the first in the country to offer mid-level ethanol blends under its brand and has achieved significant increases in ethanol sales over the last five years, according to Dorfman.
"We value our partnership with Cenex retailers and will continue to assist them in their efforts to meet consumer demand for ethanol blends," says Dorfman. "Supporting ethanol demand also adds value to CHS member owners and farmers."
As the nation's leading farmer-owned cooperative, CHS is involved in renewable fuels from the farm to the end-user. A long-time, global marketer of ethanol and distillers dried grains with solubles (DDGS), CHS also produces ethanol at a recently acquired plant in Rochelle, Ill.
Read the original press release here : Cenex Tank Program Assists Retailers Offering E15
Aug 22, 2014
By Sussane Retka Schill
The U.S. EPA has finalized its 2014 renewable volume obligation (RVO) rule for the renewable fuels standard (RFS) and submitted it to the Office of Management and Budget (OMB) for review on Friday, Aug. 22.
The publication of the proposed rule on Nov. 15 precipitated widespread concern in the ethanol industry and a large number of responses during the comment period. .
Industry leaders are optimistic the proposed will be modified
“While we have not seen the rule, we hold strong in our belief that EPA and OMB will fulfill President Obama’s commitment to biofuels as a means of greater energy independence, lower greenhouse gas emissions, and wider availability of cost-saving alternative fuels for American consumers,” Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a statement. “This decision is about more than targets and gallons, it is about a rationale that places highest importance on the long term strength of this country and not the bottom line of oil companies.”
“While OMB has up to 90 days to review this rule, what is most important is the content of the final rule,” said Tom Buis, CEO of Growth Energy. “The renewable fuels industry has provided extensive comments highlighting how the proposed reduction in the 2014 RVO’s would be detrimental to the biofuels industry, the American consumer and our environment. I hope that after reviewing these thorough comments, they will finalize a rule that moves our nation forward on the adoption of renewable fuels, not backwards.
“Ultimately, this final rule should promote the policy goals of the RFS and call for an increase in the production of renewable fuels, so we can continue to reduce our dependence on foreign oil, create jobs at home that cannot be outsourced and mitigate climate change, while we improve our environment. Furthermore, it is critical we have the support of the Administration to end the monopoly oil companies have on the liquid fuels marketplace and finally provide consumers with a choice and savings at the pump.”
From the American Coalition for Ethanol, Brian Jennings, executive vice president, provided this statement: “ACE members are pleased the 2014 RVO is now at OMB for interagency review and we continue to encourage the administration to finalize a rule that allows the RFS to work by incentivizing oil companies to blend above the E10 limit. Anything short of that turns the keys to the RFS over to the oil companies and puts cellulosic biofuel at risk. While all stakeholders have waited a long time for the final rule, and it could take another 30 days or more for interagency review, getting the rule done right is far more important than getting it done quickly.”
Read the original story here : EPA's Final 2014 RVO Delivered To The OMB; Industry Reacts
Aug 22, 2014
By Jane Whitmore
U.S. Senator Charles Grassley was given a tour of POET/DSM Project LIBERTY last week.
"I won't be able to come to the Grand Opening, so they invited me here to see it," said Sen. Grassley. "When I go to a business place to tour, I always talk to the employees."
The Senator spent half of his time at POET talking to the employees and answering questions. They talked mostly about ethanol.
"We talked about the possibility about retaining the RFS (Renewable Fuel Standard)," said Grassley. "It's in EPA, where it's been since last November. They could have issued a rule around Feb. 1. We think we've made some impact, I can't prove that, but by the delay and the delay and the delay now I think it's going to be delayed until after the election."
Grassley said he did not know if the RFS would be the original 13 billion gallons or, if they don't do anything, it would go to 14.4 billion gallons.
"That's what they're supposed to use this year (14.4 billion gallons), or somewhere in between," he said. "We don't know even when we talk to the director. We've even talked to people at the White House."
The last person employee to speak said that he was born in Emmetsburg and glad to live here.
"He said, 'just look at the good jobs we've been creating.' I said, you just said one-fifth of what I generally end a speech with on ethanol:
"It's good for the jobs in rural America that you never thought you'd have.
"It's good for agricultural income.
"It's good for the environment.
"It's good for national security, because energy is very essential to protect our country and help the military.
"It's good for balance of trade because you keep exporting.
"So I always end my speech: Everything about ethanol is good, good, good. There's no negatives about it."
One Of A Kind
Sen. Grassley pointed out, "When they keep using the phrase 'one of a kind' 'the biggest' or 'the second biggest' it's pretty impressive, coming from rural America.
"The foresight of people, not only for ethanol from grain, moving to cellulosic it's phenomenal very, very impressive. Just the capitalization of it, the ability to get that done to even do all this building is pretty impressive, and then the scientific work that goes into the process."
Grassley encourages people to go back to the 1970s. "Who would ever thought you and I would never think that we were going to be able to run our cars off of stuff made from corn. Here we are, doing it big time.
"You would have been laughed at if you'd have said we're going to make it from corn stalk, and leaves and stover and all that stuff.
"It's just kind of unbelievable. Seeing is believing" he said.
On a personal note, Grassley related, "In 1984 I bought a 1964 Oldsmobile and I had it for about 20 years and I always burned the 10-percent (ethanol) in it. Somebody was telling me that a car made in the 1980s, ethanol was ruining it. Don't tell me that stuff, I burn it in a 1964 Oldsmobile."
A Look At Ethanol
"Our biggest problem in Washington is ignorance about ethanol," said Grassley. "It's difficult to fight ignorance. One of the best examples about ethanol is the number of people that pronounce it 'eethanol'."
Continuing on that thought, Grassley added, "There's a great deal of ignorance. A few years ago, the biggest uproar about ethanol was, we've got $7 corn because of a drought, you shouldn't be using corn for ethanol, we've got to use it for feed. We were planting 93 million acres of corn. Why are we planting 93 million acres instead of 85 million acres? Because of ethanol. If we didn't have ethanol, we'd be planting 85 million acres of corn and if we had a drought we'd still have $7 corn. I probably made people mad if I tried to tell people that, but sometimes you have to explain that to farmers, livestock farmers. That's part of the problem we have defending ethanol."
Read the original story here : Everything About Ethanol Is Good-Good-Good