In the News
July 13, 2015
By Susanne Retka Schill
The Auto Channel recently launched the Ethanol Chronicles to aggregate questions and information on ethanol. The Auto Channel is a focused content channel covering all things automotive. A long-time champion for ethanol, copublisher Marc Rauch describes the almost-daily blog as “lively, spirited and sometimes humorous repartee concerning energy issues.”
Posts to the Ethanol Chronicles began July 2 and, according to a note introducing the blog, include questions and responses to comments emailed to Rauch and his partner Bob Gordon at The Auto Channel, as well as comments found on other outlets. “Following are some of the best of the banter sessions,” Rauch writes.
The first set of comments covers issues such as the irrelevancy of Btu as a measurement of ethanol performance compared to gasoline that gets into a lengthy dialogue about what a Btu measures and a discussion on engines. “The whole creation of Btu rating and understanding was to determine what it takes to heat water one degree. This was important (and still is important) when dealing with steam engines or water heaters or cooking using fire. Btus have no importance in internal combustion engines. Engine optimization is the key,” Rauch writes.
Other dialogues discuss “energy returned on energy invested,” subsidies, ethanol and oil’s relationships to food prices, impact on classic cars, and more.
The site has attracted other commentators. Bobby Likis, who also supports ethanol on his Car Clinic site and broadcasts, added information on his experiences with ethanol and the Ricardo EBDI ethanol-optimized engine. Another commentator included a video of to the Urban Air Initiative’s video of E0 and E10’s impacts on a Styrofoam cup.
Read the original story here.
July 7, 2015
By Bob Dinneen
One of the hallmarks of our nation’s representative democracy is that its public institutions are charged with implementing policies that take the best interests of the American people into account. In most instances, they do a fine job of ensuring that their policies are meeting the needs of the people. But, there are times when public interests and public policy clash. Such has been the case with the Environmental Protection Agency (EPA), and its proposed implementation of the Renewable Fuel Standard (RFS).
When Congress passed the RFS in 2007, it specified in the legislation the annual amount of biofuels that were to be blended with gasoline. In proposing renewable fuel volumes (RVOs) for 2014 through 2016 the EPA, however, has chosen to ignore the law and is proposing to cut the biofuels requirements by 20 percent, or a total of 11.3 billion gallons, over the course of three years. In making the decision to waive the congressionally mandated RFS volumes, the agency has relied on the false “blend wall” narrative that has been perpetuated by the oil industry which claims that ethanol has reached its saturation point at 10 percent ethanol blend (E10), and that higher level ethanol blends, like E15 and E85, are not yet available enough to justify higher blending requirements.
The EPA’s proposal shows that instead of looking out for the best interests of the public it is, instead, looking out for the interests of the oil industry. So it should come as no surprise to the agency that the public has been frustrated with its RFS proposal. And public frustration was on full display last month at a hearing that the EPA held in Kansas City, Kansas on the proposal. Media reports on the hearing state that approximately 230 of the 262 people that testified at the hearing were opposed to the EPA’s proposal and were supportive of the RFS as adopted by Congress in 2007.
Conrad Clement of Conrad Clement Farms summed up the feeling of those in attendance during his testimony when he called the RFS “America’s most successful policy in 40 years,” but charged that the EPA was “tearing [the RFS] apart.” Clement urged the EPA to “endorse the original RFS as it was.” Geoff Cooper, Senior Vice President for the Renewable Fuels Association, said in his remarks at the hearing that the EPA was “overstepping the bounds of its legal authority by proposing to partially waive the RFS based on perceived capacity constraints,” and that “nothing in the statute allows EPA to set the RVOs based on the so-called ‘blend wall’ or alleged infrastructure limitations.”
In a blog post he wrote shortly after the Kansas City hearing, Cooper deconstructed the myth that the “blend wall” is an impenetrable and immovable barrier, by pointing out that recently released data by the Energy Information Administration (EIA) showed that nearly half of our nation’s 50 states blew past the 10 percent ethanol level two years ago. “The data prove that augmenting E10 blending with even small amounts of higher-level blends like E85 and E15 can break through the so-called ‘blend wall,’ further diversifying a state’s fuel supply, and facilitating compliance with the congressionally enacted RFS volumes,” Cooper wrote.
I’ve said time and time again that there is nothing wrong with the RFS that cannot be fixed by what is right with the RFS. By any measure, the RFS has been a tremendous success: it has stimulated growth in biofuel production; revitalized rural economies; reduced greenhouse gas emissions; and lowered pump prices. The RFS has also reduced petroleum consumption and introduced competition into the fuel market, which is precisely why the oil industry opposes the program and is calling for its repeal.
I commend the EPA for going to the heart of the conversation and holding the hearing in the heartland of the nation, but the agency cannot simply discard the comments at the next convenient opportunity. The EPA must listen to the voice of the American people, who have an outspoken desire for a strong RFS, and not the oil industry.
- See more at: http://www.ethanolrfa.org/exchange/entry/the-voice-of-the-people/#sthash.BSkob3vX.dpufOne of the hallmarks of our nation's representative democracy is that its public institutions are charged with implementing policies that take the best interests of the American people into account. In most instances, they do a fine job of ensuring that their policies are meeting the needs of the people. But, there are times when public interests and public policy clash. Such has been the case with the Environmental Protection Agency (EPA), and its proposed implementation of the Renewable Fuel Standard (RFS).
When Congress passed the RFS in 2007, it specified in the legislation the annual amount of biofuels that were to be blended with gasoline. In proposing renewable fuel volumes (RVOs) for 2014 through 2016 the EPA, however, has chosen to ignore the law and is proposing to cut the biofuels requirements by 20 percent, or a total of 11.3 billion gallons, over the course of three years. In making the decision to waive the congressionally mandated RFS volumes, the agency has relied on the false "blend wall" narrative that has been perpetuated by the oil industry which claims that ethanol has reached its saturation point at 10 percent ethanol blend (E10), and that higher level ethanol blends, like E15 and E85, are not yet available enough to justify higher blending requirements.
The EPA's proposal shows that instead of looking out for the best interests of the public it is, instead, looking out for the interests of the oil industry. So it should come as no surprise to the agency that the public has been frustrated with its RFS proposal. And public frustration was on full display last month at a hearing that the EPA held in Kansas City, Kansas on the proposal. Media reports on the hearing state that approximately 230 of the 262 people that testified at the hearing were opposed to the EPA's proposal and were supportive of the RFS as adopted by Congress in 2007.
Conrad Clement of Conrad Clement Farms summed up the feeling of those in attendance during his testimony when he called the RFS "America's most successful policy in 40 years," but charged that the EPA was "tearing [the RFS] apart." Clement urged the EPA to "endorse the original RFS as it was." Geoff Cooper, Senior Vice President for the Renewable Fuels Association, said in his remarks at the hearing that the EPA was "overstepping the bounds of its legal authority by proposing to partially waive the RFS based on perceived capacity constraints," and that "nothing in the statute allows EPA to set the RVOs based on the so-called 'blend wall' or alleged infrastructure limitations."
In a blog post he wrote shortly after the Kansas City hearing, Cooper deconstructed the myth that the "blend wall" is an impenetrable and immovable barrier, by pointing out that recently released data by the Energy Information Administration (EIA) showed that nearly half of our nation's 50 states blew past the 10 percent ethanol level two years ago. "The data prove that augmenting E10 blending with even small amounts of higher-level blends like E85 and E15 can break through the so-called 'blend wall,' further diversifying a state's fuel supply, and facilitating compliance with the congressionally enacted RFS volumes," Cooper wrote.
I've said time and time again that there is nothing wrong with the RFS that cannot be fixed by what is right with the RFS. By any measure, the RFS has been a tremendous success: it has stimulated growth in biofuel production; revitalized rural economies; reduced greenhouse gas emissions; and lowered pump prices. The RFS has also reduced petroleum consumption and introduced competition into the fuel market, which is precisely why the oil industry opposes the program and is calling for its repeal.
I commend the EPA for going to the heart of the conversation and holding the hearing in the heartland of the nation, but the agency cannot simply discard the comments at the next convenient opportunity. The EPA must listen to the voice of the American people, who have an outspoken desire for a strong RFS, and not the oil industry.
Read the original story here
July 7 2015
By Paul Marathe
We ask a lot of the land: feed the world with crops, power the world with bioenergy, retain nutrients so they don’t pollute our water and air. To help landscapes answer these high demands, scientists from the U.S. Department of Energy’s Argonne National Laboratory are designing ways to improve—and hopefully optimize—land use.
In collaboration with the farming community of the Indian Creek Watershed in central Illinois, these researchers are finding ways to simultaneously meet three objectives: maximize a farmer’s production, grow feedstock for bioenergy and protect the environment. These goals, as it turns out, are not necessarily mutually exclusive.
All it takes is a multifunctional landscape, where resources are allocated efficiently and crops are situated in their ideal soil and landscape position. Planting bioenergy crops like willows or switchgrass in rows where commodity crops are having difficulty growing could both provide biomass feedstock and also limit the runoff of nitrogen fertilizer into waterways — all without hurting a farmer’s profits. This is what a group of Argonne scientists has discovered through careful data collection and modeling at a cornfield in Fairbury.
“The issue we’re working to address is how to design bioenergy systems that are sustainable” said Cristina Negri, principal agronomist and environmental engineer at Argonne. “It’s not idealistic. We wanted to show that it’s doable; if we design for specific outcomes, we’ll see real results.”
So Negri and her team created a pilot farm site that balances the priorities of economic feasibility, bioenergy and environmental health.
Meeting this challenge called for a change in perspective. Rather than looking at whole fields as the unit of planting decisions, researchers analyzed subareas of the cornfield. They found that subareas with the lowest yield also had the lowest nitrogen retention. These sections of land are doubly taxing — unprofitable for the farmer and damaging to the environment.
Negri explained what happens in the underproductive land: “Imagine pouring a nice, nutrient-rich solution through a fertile soil with plants growing in it,” she said. These nutrients would be retained by the soil long enough to be taken up by plants, minimizing any leakage. “Now imagine pouring this same solution through a colander: If nutrients filter through the soil too quickly, they’re no longer available for plants. The corn grows less, and more nitrogen is leached into groundwater.”
But planting bioenergy crops in the colander-like soil could solve both problems — environmental and economic — as the Argonne team showed with the Denitrification Decomposition simulation.
Willows and switchgrass are perennial bioenergy crops, meaning their life cycle spans multiple years. These plants have a more extensive root system than annual plants, which start their growth from scratch every year. Deeper roots are better able to absorb nitrogen as it seeps deeper into the soil.
The loss of nitrogen from agricultural land is a major environmental concern. If not retained by soil or taken up by plants, nitrogen escapes into air or water. It is released into the atmosphere as nitrous oxide, a greenhouse gas with 310 times the warming potential of carbon dioxide. Nitrate leaking into water spurs oxygen depletion that harms aquatic ecosystems and can lead to toxic algal blooms, as seen in Lake Erie. The Fairbury cornfield is located within the Indian Creek Watershed, draining to the Vermilion River and eventually to the Gulf of Mexico, which for years has been suffering from oxygen depletion caused by nutrient runoff.
While scientists may be invested in energy and environment, the team recognized that farmers — the true agents of change — have to think first and foremost about their economic bottom line.
“Across the entire field your farm might be profitable, but by collecting more specific data we can identify subareas where the farmer is not recovering his or her investment,” said Argonne postdoctoral researcher Herbert Ssegane.
The money lost comes from farmers cropping and applying expensive nitrogen fertilizers to patches of the field that are just not producing enough. Inserting rows of bioenergy crops where there is low corn yield means the farmer is not sacrificing substantial profit from row crops. As a cost-saving bonus, the deep-rooted bioenergy crops naturally accumulate the lost nitrogen as a free fertilizer.
Argonne scientists planted willows at the Fairbury site in 2013 and will continue collecting data through next year to see how results compare to their predictions. “We’ve already reached a 28 percent reduction in nitrate, even with two full growing seasons still ahead of us,” Ssegane said. Willow growth has also been good, without the researchers applying any fertilizer.
According to Ssegane, this project is about proving a concept. It shows farmers that strategic planting of bioenergy crops can increase productivity and save money, while demonstrating to the scientific community that bioenergy will be sustainable if we match plants to their optimal position within a landscape.
“Before this work, the popular idea was ‘dedicated fields,’ where you might convert a large area from corn to switchgrass,” Ssegane said. “But dedicated fields of bioenergy crops are currently inviable in an agricultural setting where the economy is tied to grain. What does pass the cost-benefit test is converting underproductive subareas to an alternative crop.”
A multifunctional landscape finds the happy, efficient medium between a dedicated bioenergy field and a farm growing continuous acres of the same cash crop.
The scientists are exploring how these design principles can be scaled up to the entire watershed. Eventually, they hope this research informs agricultural planning for scientists and farmers alike.
“Multifunctional landscapes: Site characterization and field-scale design to incorporate biomass production into an agricultural system,” the most recent paper analyzing data from Fairbury, was published in the journal Biomass and Bioenergy. Funding for this research comes from the DOE’s Office of Energy Efficiency and Renewable Energy, Bioenergy Technologies Office.
Read the original story here.
July 6, 2015
By Ken McCauley
The Renewable Fuel Standard (RFS) is critical for small, rural farms in America’s heartland. The renewable fuel industry stimulates job growth, spurs investment and drives down costs at the pump. Why, then, do so many oppose this critical component to domestic renewable fuel growth?
According to the Environmental Protection Agency (EPA), Congress established the RFS to promote energy security by increasing the percentage of domestic renewable fuels (like ethanol) used in transportation fuel. The RFS led to the emergence of a burgeoning biofuels industry, harnessing the energy from natural, domestic products like corn to produce ethanol. The program works by imposing a yearly requirement on refiners and importers of fuel to include an increasing percentage of renewable fuel, called Renewable Volume Obligations (RVOs).
Each year since enactment, the RVOs were to be slightly increased, as the industry adjusted and infrastructure and technology were developed to keep up. However, in recent years, the EPA has dropped the ball. The agency neglected to issue RVOs for the past three years, causing confusion and uncertainty in the marketplace.
In late May, the EPA finally released its proposed RVO numbers for 2014, 2015 and 2016. The levels were much lower than Congress intended when it passed the standard in 2005. The comment period on the proposed levels extends until July 27. We must urge the EPA to reconsider and push for higher levels.
The initial enactment of the RFS spurred companies to invest billions into the industry, causing renewable fuel production to triple, driving oil import levels down to their lowest in decades and significantly decreasing our carbon emissions into the atmosphere. However, EPA’s failure to issue RVOs in a timely manner has had a chilling effect on the industry, causing investment to shrink by almost $14 billion in the past two years and putting American jobs at risk.
American farmers stepped up when called upon, increasing production levels of corn ethanol to meet the growing standards. We restructured our production plants and ways of life to help wean the United States off foreign oil from unfriendly nations, resulting in billions being injected into a new industry. But now, the EPA is submitting to the demands of Big Oil — with newly proposed RVOs disappointing, at best — after not issuing standards for the past three years. Instead of letting the oil industry rewrite the rules of renewable fuel, the EPA should uphold its end of the deal.
A recent economic impact report commissioned by Fuels America tracked the data, showing that the RFS has stimulated $4.1 billion dollars in economic activity annually in Kansas.
The renewable fuel industry supports 16,620 jobs and generates $1 billion in wages annually in Kansas. It has created job growth for the tens of thousands of people who work on the 400,000 farms across America that grow corn. Of last year’s total corn production, a staggering 35 percent of the 14 billion bushels of domestic corn production went to produce corn ethanol.
Cuts in the RVO will have serious consequences across the board, specifically in the American heartland, and would adversely impact our agricultural economy. It could have ripple effects on the rest of our economy, as well, with higher prices at the pump. Environmentally, it could lead to a reversal of the past decade of decreases in carbon dioxide emissions into the atmosphere.
The RFS represents a highly successful energy policy that has created American jobs, decreased our reliance on foreign fuel and contributed to a cleaner environment. We must encourage the EPA to reconsider and reinstate strong renewable fuel volumes, for the good of our economy, our national security and our environment.
Read the original story here
High Plains / Midwest Ag Journal
July 6, 2015
By Doug Rich
Iowa Gov. Terry Branstad summed up the feelings of many when he told the Environmental Protection Agency not to mess with the Renewable Fuels Standard.
Branstad was one of many who offered testimony at the public hearing for the proposed RFS for 2014, 2015 and 2016 and biomass-based diesel volume for 2017 under the RFS program. The public hearing was held in Kansas City, Kansas, on June 25.
Even though EPA is required under the Clean Air Act to set annual standards for the RFS program each year it has not done so since 2013. Now it is proposing to reduce those volumes below the statutory levels established by Congress.
EPA cites two reasons for reducing these volumes. First, it cited limitations in the volume of ethanol that can be consumed given practical constraints on the supply of higher ethanol blends to the vehicles that can use them. Secondly, it cites limitations in the ability of the industry to produce sufficient volumes of qualifying renewable fuel, particularly non-ethanol fuels.
“The EPA has a choice—protect the deep pockets of Big Oil and their monopolistic practices or nurture consumer choice, renewable energy growth and a healthy rural economy,” Branstad said. “Unless you advance a robust RFS, you will constrain growth in the rural economy, negatively impacting family farms, agribusiness and the biofuels industries, the citizens and businesses that are part of our nation’s rural fabric.
“The EPA’s indecision the last two years led to market uncertainty that hurt farmers and froze investment in next generation technology,” Branstad said. “My hope is that the EPA is open to improving the proposal much further and meeting the original congressional intent of expanding the use of biofuels throughout the country.”
Missouri Gov. Jay Nixon followed Branstad with his testimony to EPA. Nixon reminded EPA farmers in Missouri and across the Midwest stepped up years ago to invest in ethanol plants before there was any guarantee of a return on their investment because they thought it was the right thing to do. Nixon said these farmers were the first to step up and say they will do what is needed to break Americans loose from the dependence on foreign oil.
“The current proposal, that we are dealing with here today, continues to fail in significant ways to meet the renewable targets that are part of the law,” Nixon said. “That is not the way we do things in Missouri, we don’t stop plowing 80 percent of the way through the field.”
Nixon added that the Energy Policy Act of 2005 established renewable fuel standards including specific volume requirements. This was done to stimulate investment in renewable fuels to promote cleaner air and less reliance on foreign oil supplies.
“We invested big time with risk,” Nixon said. “There were no guarantees.”
Farmer leaders of the American Soybean Association and the National Corn Growers Association also presented testimony at this public hearing. Bob Henry, a farmer from Robinson, Kansas, and a board member of the American Soybean Association, stated that the biodiesel industry has grown to a point of producing well over 1 billion gallons annually and has the capacity to produce over 3 billion gallons of advanced biofuels annually.
“We are glad that, compared to last year’s proposal which called for just 1.28 billion gallons for 2014 and 2015, EPA’s new proposed rule increases the volumes for biomass-based diesel starting with 1.64 billion gallons in 2014 and increasing to 1.9 billion in 2017,” Henry said. “However, for the many benefits that biodiesel provides, we think EPA should enthusiastically support more aggressive, but easily achievable, volume targets for biodiesel. We see no reason why EPA should not, at a minimum, support biomass-based diesel volumes of at least 2 billion gallons or more for 2016 and 2017.”
Chip Bowling, a third generation farmer from Maryland, is president of the National Association of Corn Growers. Bowling said corn growers in this country continue to produce record amounts of corn and for that reason need to protect and promote markets for that production.
“We simply cannot afford, and will not tolerate, efforts to cut the demand for corn and that’s exactly what your proposal will do,” Bowling told the EPA. “We have done our part and our allies in the ethanol industry have done their part. It is time the EPA sided with those of us supporting a domestic, renewable fuel that is better for the environment.”
Across the street from the Jack Reardon Center where the EPA hearing was held over 450 RFS supporters gathered for the Rally for Rural America. Farmers, politicians, fuel industry leaders, FFA students from the across the country and ethanol supporters gathered to protest the EPA proposal to slash the level of renewable fuel required to be blended in the national fuel supply by nearly 4 billion gallons through 2016.
Kevin Hurst, president of the Missouri Corn Growers Association, summed up in his testimony how many farmers at the hearing felt.
“Today I could and should be planting,” Hurst said. “Instead I again have to spend time away from my farm to remind the EPA they are ignoring the law.”
Read the original story here : Don't Mess With RFS
July 1, 2015
By Geoff Cooper
Not surprisingly, the proposal by the Environmental Protection Agency (EPA) to base Renewable Fuel Standard (RFS) requirements for 2014–2016 on the so-called “E10 blend wall” drew high praise from oil industry representatives testifying at last week’s public hearing in Kansas City, Kansas.
At the hearing, the American Petroleum Institute (API) told EPA officials that oil companies “…support EPA’s proposal to waive the RFS volumes in recognition of the blend wall. This action is appropriate and necessary to avoid near-term economic harm.” Meanwhile, the American Fuel & Petrochemical Manufacturers (AFPM) testified that “EPA’s recognition of the ethanol blend wall and the potential adverse effects on consumers is a welcome first step.” And Chevron USA characterized EPA’s acceptance of the blend wall concept as “…a step in the right direction.”
Since 2013, both API and AFPM have advocated that the RFS should be confined to levels that would require gasoline to contain no more than 9.7% ethanol. These groups speciously claim that anything above this level would force a breach of the “blend wall” and cause “harmful economic effects.” Unfortunately, it appears that some in the Obama administration and EPA bought into the oil industry’s “blend wall” narrative. Indeed, EPA’s 2014–2016 RFS proposal states that “…the ability of the market to use ethanol is constrained by the E10 blend wall.” What’s more, the Agency’s proposed Renewable Volume Obligations (RVOs) of 9.02% in 2014, 9.04% in 2015, and 9.63% in 2016 bear a conspicuous resemblance to the 9.7% “cap” requested by API and AFPM.
Given their apparent belief that the “E10 blend wall” is some impenetrable and immovable barrier, it may come as quite a shock to EPA, the White House, and the oil industry that nearly half of our nation’s 50 states blew past the 10.0% ethanol level two years ago. Recently released data from President Obama’s own Energy Information Administration (EIA) show that in 2013 ethanol comprised more than 10.0% of gasoline consumption in 22 states and the District of Columbia. The data prove that augmenting E10 blending with even small amounts of higher-level blends like E85 and E15 can break through the so-called “blend wall,” further diversify a state’s fuel supply, and facilitating compliance with the congressionally enacted RFS volumes. Consider this: if E85 accounted for just one out of every 100 gallons of fuel produced by refiners and blenders (and E10 accounted for the other 99 gallons), the average ethanol content across all 100 gallons would be 10.65%.
The EIA data show that in 2013 ethanol accounted for 12.2% of the gasoline consumed in Minnesota. This is not surprising given that the “Land of 10,000 Lakes” is also referred to as the “Land of E85.” Nearly one out of every eight gas stations in Minnesota offers E85, and the state has made a sustained and concerted effort to educate consumers about the benefits of renewable fuels like ethanol.
In 2013, ethanol accounted for between 10.1% and 10.3% of gasoline consumption in 21 additional states and the District of Columbia. This group includes the Midwestern agricultural states of Illinois, Indiana, Ohio, Michigan, North Dakota, South Dakota, and Wisconsin. But a number of coastal states also broke through the so-called “blend wall” in 2013, including Louisiana, Massachusetts, California, and New Jersey. These states sailed past the 10.0% ethanol level without so much as a blink in 2013, and certainly there have been no claims of “harmful economic effects” coming from them. Nationally, ethanol constituted 9.75% of gasoline consumption in 2013, according to the EIA data—slightly above the supposed limit of 9.7% supported by API and AFPM.
If ethanol already made up more than 12% of the gasoline market in Minnesota in 2013 and more than 10% of the market in 21 states from Arkansas to New Hampshire, why shouldn’t we expect the same transition to quickly and easily occur in states that were below the 10% level? While we don’t yet have a state-by-state breakdown of ethanol consumption for 2014, we know that total U.S. consumption rose more than 2% over 2013 levels. Thus, it’s likely other states joined the “bye-bye blend wall” club last year.
The EIA data provide compelling proof that the so-called “E10 blend wall” can be conquered; in reality, it already has been conquered in almost half of our states! If the EPA would simply enforce the RFS volumes enacted by Congress—rather than kowtowing to the wishes of API and AFPM—all 50 states would bust through the oil industry’s self-imposed “blend wall” for good.
Read the original story here : 22 States Broke Through The "E10 Blend Wall" ... Two Years Ago
June 27, 2015
By Doug Peterson
Consumers across the nation have embraced the option of purchasing foods that are produced either through a natural or organic process, in hopes of providing the best and tastiest energy source possible for their bodies. Indeed, this market has grown from being nearly nonexistent several decades ago to occupying a considerable portion of shelf space in most major grocery chains.
In that same light, there are now fuel options available that are cleaner, greener, healthier and renewable, and thus not only better for our planet but also the air we breathe and the water we drink. To that end, Congress passed the Renewable Fuel Standard in 2008 in hopes of slowly weaning this nation off of its dirty oil addiction and onto a renewable, healthier source of fuel. That law has not only benefited this nation's overall environment and thus our health, but has also been a major economic boon to farmers and the rural economies they support.
The RFS mandated that 36 billion gallons of ethanol — the lion's share of which comes from corn — be blended into the U.S. gasoline supply by 2022. Almost out of thin air, a new domestic market for U.S. corn was created, boosting prices for not only corn farmers but those who raised other commodities as well. For generations, corn prices had been flat and farmers were making less and less in real dollars as corn prices lagged behind input prices. The RFS turned that equation on its head.
Farmers are the engines that drive rural America's economy, and when they have extra money in their pockets, they spend it on upgrading equipment, improving their land and investing in farm infrastructure.
The passage of the RFS also sparked a surge of investment in rural America, primarily in building new ethanol plants to produce enough biofuels to meet the mandate. In fact, today there are at least 18 ethanol plants in Minnesota, providing a reliable market for farmers and reliable jobs for American workers. Nationally in 2014, the RFS supported 83,949 direct and 295,265 indirect jobs, many in rural America.
With the advent of homegrown biofuels, this nation is not only purchasing less petroleum products from countries who really don't like us, but we're also saving consumers money. A recent study from Iowa State University showed that domestic ethanol saved consumers an average of $1.09 per gallon in 2011. Money that once flowed to the Middle East and elsewhere is now remaining in Minnesota and being spent on durable goods.
There is no question that American made, farm-raised biofuels are also much friendlier to the environment. A recent study by Argonne National Laboratory finds that corn ethanol greenhouse gas emissions are 34 percent lower than those of regular gasoline. And that is better for humanity's long-term prospects on this planet.
Unfortunately, the Environmental Protection Agency, the government agency tasked with overseeing the RFS, has failed to adhere to the production targets set by Congress in the law. As a result, investments are turning away from the renewable fuel sector at a time when the industry should be expanding, not contracting.
Both cellulosic ethanol and advanced biofuels have now reached commercial status and offer the greatest potential for environmental benefits, but delays in issuing volume targets have caused an estimated $13.7 billion gap in capital investment needed to comply with the volume targets set in the statutes that enacted the RFS.
It doesn't take a rocket scientist to see the fact that growing corn in the Midwest is much better for the country than drilling for oil in the Arctic or off the fragile coastal areas of our nation. And the promise of new kinds of advanced biofuels holds even greater promise down the road. The EPA needs to adhere to the targets set forth by Congress and allow America's hardworking farmers to do their part in our quest for energy independence.
Read the original story here.
June 29, 2015
By Jeannine Otto
GALVA, Ill. — We want our billion back.
It might be the catchphrase for a taxtime TV ad, but it’s also what one member of Congress feels farmers and gas-buying consumers in her district are owed by the U.S. Environmental Protection Agency.
“I would say they owe us a billion, the way I look at it right now,” said U.S. Rep. Cheri Bustos, D-East Moline.
Bustos visited Big River Resources LLC’s Galva ethanol plant. The plant is one of seven biofuels plants in the Rock Island Democrat’s 17th Congressional District.
Bustos was greeted by Big River administration, including CEO Ray Defenbaugh, board member Gene Youngquist and others.
“Let’s talk about where, hopefully, I can play a role here,” Bustos said after she greeted some of the stakeholders for the Galva plant and some of the founders.
“RVO,” said Wilbur Nelson, one of the founders.
Defenbaugh explained some of the problems with the numbers released in May by the EPA.
Those numbers fell short of what the U.S. ethanol industry was hoping they would be.
“The initial problem is with the methodology. It sets a precedent. They are not allowed to do that, it’s like waters of the U.S., the EPA is not authorized to do that. If you let them get away with it, the next step, whatever they come up with, may be even less favorable,” Defenbaugh said.
He echoed the sentiments of many in the ethanol industry who claim the EPA does not have the authority to reduce the amount of ethanol blended into the U.S. fuel supply below levels set by Congress in the 2008 Renewable Fuel Standard.
Bustos agreed.
“I agree with you. I don’t think they are authorized to do this. I think if they don’t alter this and get it back to where we want it to be, I think there are going to be some legal issues with this,” she said.
1.5 Billion Bushel-Loss
According to the Illinois Corn Growers Association Corn Corps publication, cutting the corn ethanol obligation by 3.75 billion gallons would equal about a 1.5 billion bushel-loss in demand for U.S. corn.
Defenbaugh said to cut one demand avenue for corn could devastate some farmers.
“If we produce the grain, the potential is there that everybody thinks, if we produce that, it will be way more than the 180 bushel average we had this year. That has brought us 60 to 70 cents below the cost of production. No business can survive producing below the cost of production so you’ve got to create demand,” he said.
“The story I want to be able to tell the administration and EPA when I go back to Washington is what this is going to do to Galva, Ill., what this will do to the rural economy if we don’t get this back to the level that we want it to be and what it should be,” Bustos said.
She said the ethanol industry is a $2.1 billion business in her district, from the seven plants and related economies.
“You don’t take it lightly when somebody is trying to harm a $2.1 billion industry. I see this as a kick to the gut, it’s not what we need to just sit back and accept,” she said.
Bustos also noted that if blend levels are not raised, consumers could feel more pain at the pump.
“This ruling, if it keeps at this level, a billion less than where we want it to be, it will raise the cost of fuel for our consumers,” she said, adding the hike to gasoline could be as much as six cents per gallon.
Bustos toured the plant and a plant under construction next door that will extract zein, a corn protein used in candy, pill and other coatings. She spoke with plant workers and urged them to be part of the public comment period that continues to Nov. 30.
“That’s why this public comment period is so important,” she said.
“I don’t think the folks in the ethanol business are going to take this lying down and so when it’s all said and done, this could end up in court and could be a battle for quite a while,” she said.
Bustos vowed to continue to fight to restore the RFS levels.
“We have to keep fighting to get the blend level at the rate that will make plants like this one sustainable and put them in a position where they can continue to grow,” she said. “We’ll have to wait and see but this is not all said and done.”
Read the original story here : Bustos Says Fight Over RFS Levels Not Over
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June 29, 2015
By
The Urban Air Initiative (UAI) has released a study that finds ethanol free gasoline blends actually increase the wear and tear on engines including hoses, seals and fuel tanks. In other words, the data supports ethanol blends lead to cleaner engines. The findings were presented at the semi-annual meeting of ASTM by Steve Vander Griend, technical director for UAI who also works for ICM.
The report demonstrated that high aromatic content of gasoline, including toxic aromatics like benzene and toluene, negatively impact engine parts. Vander Griend explained in his presentation that the toxic aromatics create a significant increase in the escape of harmful emissions that can have a devastating impact on public health as these are considered by the Environmental Protection Agency has known and suspected carcinogens.
“What we are seeing is that benzene and toluene are increasing permeation, which means increasing the amount of fuel vapors that seep from a vehicle. For anyone who has a garage at home and smells gasoline, vapors are escaping through the vehicles fuel system or small engine gas tank,” said Vander Griend.
Also during his presentation Vander Griend explained that extensive testing was conducted on fuel lines, gas containers, and plastic components. The materials were each soaked in straight gasoline (E0) and a 10 percent ethanol blend (E10) for extended periods of time. In every case, said Vander Griend, the ethanol free gasoline increased the damage to fuel lines, gas containers, and plastic components, while the materials soaked in E10 were impacted less.
“The notion that somehow ethanol free gasoline is a superior product could not be further from the truth,” continued Vander Griend. “In our home town of Wichita [Kansas], the average E0 has 46% more benzene and toluene by volume than the same 87 octane blend with ethanol. The fuel costs more and presents a mechanical and health risk that is incorrectly being attributed to ethanol.”
Vander Griend called on ASTM to establish a task force to define maximum levels of aromatics in gasoline and to establish standards for the use of toluene as a blend component and ASTM said it will begin to study the aromatic levels of gasoline.
Read the original story here: Urban Air Initiative: Ethanol Reduces Engine Wear
June 26, 2015
By Randy Doyal
Good morning,
My name is Randy Doyal and I am the CEO of Al-Corn Clean Fuel, a farmer-owned corn ethanol facility in Claremont, Minnesota, that produces 50 million gallons of fuel ethanol per year. I also currently serve as the Chairman of the Renewable Fuels Association.
Al-Corn Clean Fuel was founded as a cooperative in 1994 by local farmers who endeavored to add value to their corn crop, stimulate the local economy, and contribute to enhanced energy security and a cleaner environment.
We are adamantly opposed to EPA’s proposed rule reducing the 2014–2016 renewable volume obligations from the levels envisioned by Congress. The Renewable Fuel Standard has been a tremendous success and has worked exactly as intended to drive growth in biofuel production and consumption. The program has played a pivotal role in reducing petroleum imports, lowering gas prices, improving air quality, and strengthening the economic health of rural America. We simply do not understand why EPA is proposing to move backward on a program that has undoubtedly delivered on its promise.
Moreover, the Clean Air Act statute does not permit EPA to take into account “factors that affect consumption,” such as purported infrastructure constraints or the so-called “blend wall,” in determining whether to grant a general waiver of the RFS. By embracing the “blend wall” concept, the EPA proposal not only violates the law, but also undermines the incentive to expand biofuel production and distribution capacity, and allows oil companies to blend only as much renewable fuel as they are comfortable using.
Even though gasoline consumption may be slightly lower today than Congress anticipated in 2007 when the RFS2 was adopted, it was always the intent of the program to push well beyond the so-called “blend wall” and increase the share of renewable fuels in our nation’s fuel supply.
EPA may grant a waiver based on an “inadequate domestic supply” of “renewable fuel” only if the biofuels industry lacks the capability to produce the required volumes of renewable fuel needed to meet the statutory requirements. But that is clearly not the situation today, given record production in 2014 and the forecasted supply of ethanol and carryover RIN credits in 2015 and 2016.
It also strikes us as illogical that EPA would ignore RIN stocks in determining whether supply is “adequate” to meet statutory volumes. Because carryover RINs represent physical gallons that are—or were—in the fuel supply, they must be included in calculating the proper RVOs.
Over the past 10 years, the RFS has provided the stability and certainty needed for our business to invest in multiple expansion projects, as well as new technologies to increase production efficiencies, decrease environmental impacts, and diversify product streams.
We are greatly concerned that backtracking on the RFS, as EPA is proposing to do, will cause RIN stocks to swell to burdensome levels, undermining further innovations and investments in ethanol production and distribution.
On behalf of both Al-Corn Clean Fuel and the RFA, I urge you to get the RFS back on track. We encourage you to abandon the illegal “blend wall” methodology and let farmers and ethanol producers respond to the challenge set forth by Congress in 2007.
Thank you.
Randy Doyal
CEO at Al-Corn Clean Fuel; Claremont Renewable Energy, Chairman Renewable Fuels Association
Read the original testimony here
June 24, 2015
By Urban Air Initiative
One of the great misconceptions following ethanol is that it causes compatibility issues in certain engines. But new data shows that the opposite is true, and ethanol-free gasoline blends actually increase much of the wear and tear on hoses, seals, and fuel tanks.
This is the finding of new research released today by ICM Inc. and the Urban Air Initiative. The findings were presented at the semi-annual meeting of ASTM, an international standards organization that develops and publishes technical standards. Steve VanderGriend of ICM and technical director for UAI presented data showing how the high aromatic content of gasoline, particularly toxic aromatics like benzene and toluene negatively impacts engine parts. The toxic aromatics create a significant increase in the escape of harmful emissions that can have a devastating impact on public health given that these aromatic compounds are known and suspected carcinogens.
"What we are seeing is that benzene and toluene are increasing permeation, which means increasing the amount of fuel vapors that seep from a vehicle. For anyone who has a garage at home and smells gasoline, vapors are escaping through the vehicles fuel system or small engine gas tank,” VanderGriend said.
Ethanol is often blamed for increasing evaporative emissions. However, the ICM and Urban Air Initiative research clearly shows increased aromatics cause a greater degradation on hoses, plastics, and other components which creates an escape route for gasoline vapors to permeate into the air.
In his presentation at ASTM, VanderGriend explained the extensive testing done on fuel lines, gas containers, and plastic components. These materials were each soaked in straight gasoline (E0) and a 10 percent ethanol blend (E10) for extended periods of time. In every case the ethanol free gasoline increased the damage to fuel lines, gas containers, and plastic components, while the materials soaked in E10 were impacted less.
To better visualize the damaging effects of straight gasoline, click here to watch a time lapse video involving a simple Styrofoam cup. The E10 blend contained 20 percent aromatics and had a slower impact on the cup. The E0 blend, with 26 percent aromatics, instantly destroyed the cup. While not as scientific as soak testing, the results are similar.
"The notion that somehow ethanol free gasoline is a superior product could not be further from the truth,” VanderGriend said. "In our home town of Wichita, the average E0 has 46 percent more benzene and toluene by volume than the same 87 octane blend with ethanol. The fuel costs more and presents a mechanical and health risk that is incorrectly being attributed to ethanol.”
He went on to explain that ethanol, with the highest octane value of any fuel additive on the market today, could not only continue to replace aromatics like benzene and toluene in today's gasoline but it will be critical as future vehicle designs will require higher octane to meet mileage and emission standards.
VanderGriend called on ASTM to establish a task force to define maximum levels of aromatics in gasoline and to establish standards for the use of toluene as a blend component. ASTM agreed and will begin to look into aromatic levels of gasoline.
Read the original story here : UAI : New Data Shows Ethanol-Free Blends Increase Engine Wear
June 24, 2015
By Sen. Chuck Grassley
First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.
Those of us from states that produce ethanol and biodiesel are used to the attacks. We always fight back, and producers continue to do their best to develop the next generation of clean biofuels.
Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the U.S. freedom from volatile oil-producing countries is appealing.
The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law.
Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments.
While I support the U.S. Department of Agriculture’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the president who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.
Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of deja vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.
It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat in the past seven years. Corn prices are expected to be the lowest in nearly 10 years.
The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn coproducts available for feed use is larger today than at any time in history. It’s hardly being diverted.
Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were before the RFS. Food inflation is at the lowest rate of increase than at any time in the past 40 years. At the same time, the U.S. is producing record amounts of corn ethanol.
As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, USDA is projecting record meat and poultry production.
A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.
Now that corn prices have dropped by more than half, are consumers seeing the benefits? If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.
Read the original story here : Ethanol A Scapegoat For What's Really Wrong
First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency caved to the oil industry in proposing weak requirements for the amount of biofuels to be included in the fuel supply.
Those of us from states that produce ethanol and biodiesel are used to the attacks. We always fight back, and producers continue to do their best to develop the next generation of clean biofuels.
Consumers like biofuels. The idea of a homegrown product that reduces emissions harmful to the environment and brings the U.S. freedom from volatile oil-producing countries is appealing.
The EPA should know this. Instead, the agency continues to buy into Big Oil’s argument that the infrastructure isn’t in place to handle the fuel volumes required by law.
Big Oil’s obstruction and the EPA’s delays and indecision have harmed biofuel producers and delayed infrastructure developments.
While I support the U.S. Department of Agriculture’s efforts to promote alternative fuel infrastructure, if the program were allowed to function as intended, private investments already would have been made. What happened to the president who claimed to support biofuels? He seems to have disappeared, to the detriment of consumers and our country’s fuel needs.
Meanwhile, an op-ed in The Wall Street Journal (“Paying for Ethanol at the Pump and on the Plate,” May 15), gave me an overwhelming sense of deja vu. Once again, the food industry is teaming up with Big Oil to smear homegrown biofuels producers at the expense of energy independence and cleaner air. This time, it’s the chicken producers and chain restaurants making many of the same erroneous, intellectually dishonest claims we’ve heard before.
It’s pure myth that food commodity costs have spiked since the Renewable Fuel Standard was adopted in 2005. In fact, consumer food prices have increased by an annual average of 2.68 percent since 2005, compared with an increase of an average of 3.47 percent in the 25 years leading up to passage of the RFS. Chicken breast prices have been nearly flat in the past seven years. Corn prices are expected to be the lowest in nearly 10 years.
The op-ed repeats the false claim that because of the RFS, corn is being “diverted” from livestock feed to ethanol. Corn used for ethanol has come from the significant increases in corn production since 2005. And, one-third of the corn used for ethanol production is returned to the market as animal feed. The amount of corn and corn coproducts available for feed use is larger today than at any time in history. It’s hardly being diverted.
Next is the misleading claim that ethanol production has contributed to global food scarcity. Corn exports are slightly higher than they were before the RFS. Food inflation is at the lowest rate of increase than at any time in the past 40 years. At the same time, the U.S. is producing record amounts of corn ethanol.
As for the mistaken claim that the increases in feed costs have affected the American production of beef, pork and chicken, USDA is projecting record meat and poultry production.
A few years ago, when corn prices were at a peak, grocers, food producers and restaurants warned of being forced to pass those higher costs on to consumers immediately.
Now that corn prices have dropped by more than half, are consumers seeing the benefits? If ethanol is a convenient scapegoat for what’s wrong, maybe it also should get credit for what’s right.
- See more at: http://www.agweek.com/event/article/id/26938/#sthash.0J2qaO9j.dpufJune 17, 2015
By Mike Bryan
Over the years, we have had a host of articles, books, press releases and talking heads highlight the shortcomings of biofuels, in particular ethanol. Almost all of these “experts” fail to account for the contributions of ethanol or, in many cases, simply ignore those contributions in order to make their point, sell their book, or get published in the newspaper.
They ignore the economic impact to the countries in which ethanol is produced and ignore the hundreds of millions, and in some countries billions, of dollars of economic growth that is created by a robust ethanol industry.
They ignore the true cost of fossil fuels, the damage to the environment, the billions of dollars in added healthcare cost as a result of fossil fuel use. In addition, most seem to gloss over the cost of military intervention to protect sources of oil, the pipelines, the oil spills and the utter environmental devastation that fossil fuels have caused in the world. Instead they focus on the small contribution that ethanol has on the price of food, as if fossil fuels had no impact on food cost worldwide.
They ignore the contributions made by the high quality distillers grains that feeds a myriad of livestock for human consumption. Distiller’s grains is shipped to countries rich and poor all around the world. Rather, they focus on the price of corn tacos in Mexico, or the cost of a loaf of bread in Uruguay, and blame ethanol.
They ignore the impact ethanol production has in keeping farmers in business so they can help feed a hungry world. The biofuels industry has helped to stabilize farm prices, has been a tremendous tool in keeping farmers on the farm. It has not only served to keep existing farmers in business, but has been instrumental in encouraging young people to stay on the farm. It’s not just the money, but often for the younger generation the commitment that they have to not only help feed a hungry world, but to contribute to a cleaner environment in the process. It’s a pride thing and they wouldn’t understand.
They ignore the cost reduction to consumers at the pump. Ethanol has been a significant contributor to reducing gasoline prices and has saved consumers hundreds of millions of dollars. This is money that often would have gone to someone outside the country. One can only assume that by ignoring this, they would prefer that we pay more at the pump and make an oil baron a little richer. I’m not sure how that helps a subsistence farmer in the Baltics, but perhaps I just don’t get it.
They ignore the hundreds of thousands of jobs that are created and the impact on the economy that those jobs have. They ignore the contribution capabilities of those with good jobs have to contribute financial aid to a hungry world, or to make someone’s life a bit easier by helping build a home in the U.S. or a foreign country. People in poverty can’t do those things, people who are fortunate enough to have good jobs can and many do. Rather than focusing on the wealth created and the contributions made to the world because of that wealth, they focus on the price of wheat in Chile and make a feeble attempt to pin it on biofuels.
As I have said many times, ethanol is not a perfect fuel, it is a fuel that over time will transition us into an even better fuel, one that probably will be cleaner, cheaper and have fewer negatives. But until that happens, let’s stop ignoring the benefits of ethanol and embrace its attributes. I guess if you are looking for a story, writing a book or publishing a paper on the negatives of ethanol, ignoring can be as blissful as ignorance.
That’s the way I see it.
Read the original story here : Ignorance or Ignoring Is Bliss
June 12
Following an announcement by the U.S. Department of Agriculture (USDA) Secretary Tom Vilsack on May 29, 2015, the Commodity Credit Corporation (CCC) today announced that all 50 states, the Commonwealth of Puerto Rico and Washington, D.C. may now apply for up to $100 million in grants under the Biofuels Infrastructure Partnership (BIP). The funding is to support the infrastructure needed to make more renewable fuel options available to American consumers. The Farm Service Agency will administer BIP.
USDA continues to aggressively pursue investments in American-grown renewable energy to create new markets for U.S. farmers and ranchers, help Americans save money on their energy bills, support America's clean energy economy, cut carbon pollution and reduce dependence on foreign oil and costly fossil fuels. A typical gas pump delivers fuel with 10 percent ethanol, which limits the amount of renewable energy most consumers can purchase at the pump.
Through BIP, USDA will award competitive grants, matched by states, to expand the infrastructure for distribution of higher blends of renewable fuel. These competitive grants are available to assist states, the Commonwealth of Puerto Rico and Washington, D.C. with infrastructure funding. States that offer funding equal to or greater than that provided by the federal government will receive higher consideration for grant funds. States may work with private entities to enhance their offer.
CCC funds must be used to pay a portion of the costs related to the installation of fuel pumps and related infrastructure dedicated to the distribution of higher ethanol blends, for example E15 and E85, at vehicle fueling locations. The matching contributions may be used for these items or for related costs such as additional infrastructure to support pumps, marketing, education, data collection, program evaluation and administrative costs.
This new investment seeks to double the number of fuel pumps capable of supplying higher blends of renewable fuel to consumers. This will expand markets for farmers, support rural economic growth and the jobs that come with it, and ultimately give consumers more choices at the pump.
Applications must be submitted by July 15, 2015, using www.grants.gov. To locate, search by funding opportunity number "USDA-FSA-2015-22."
June 11, 2015
By Susanne Retka Schill
The U.S. EPA’s May 29 proposed renewable volume obligations (RVO) is under scrutiny by University of Illinois economists in recent FarmDocDaily posts.
Jonathan Coppess examines the argument that EPA appears to be turning the renewable fuel standard (RFS) upside down, “switching it from one that was meant to force industry action to one that permits industry inaction to override the statue.” Coppess’ post, “EPA doubles Down on Questionable Reading of the RFS Statute,” evaluates EPA’s waiver arguments. He picks apart the EPA’s commentary in the proposed RVO document and compares that with the language in the statute, as well as the legislative history for the RFS. “It is very difficult to square the statute's words with EPA's reading of them,” he concludes. “The RFS was designed to push the renewable fuel industry to supply, and the blending/refining industry to purchase, renewable fuels. EPA admits that ‘there is no shortage of ethanol’ but it feels that ‘legal requirements limit[ing] ethanol content of most gasoline to 10 percent’ and ‘marketplace and infrastructure constraints’ are sufficient to justify the agency's revision of the Congressional mandate.”
Scott Irwin and Darrel Good continue to examine whether the proposed RVO does work as a ‘push’ for ethanol consumption, particularly looking at alternative scenarios in the post “Does it Matter Whether the EPA Targets Volumetric or Fractional RFS Standards?”
EPA develops two sets of RFS compliance numbers when it publishes the RVO for each year. The first is an overarching volumetric RVO which is also expressed as a percentage standard. The percentage standard for a given year is the mandated national biofuels volume divided by total national use of transportation fuel. The preliminary proposal for 2014, released in November 2013, projected total gasoline and diesel use at 165.27 percent, with a conventional ethanol mandate set at 13.01 billion gallons for an implied fractional mandate of 7.87 percent for corn ethanol.
The recently released revised RVO proposal projects EPA estimated total gasoline and diesel use in 2014 at 176.68 billion gallons, “a substantial increase from the forecast in the first proposal,” Irwin and Good comment. “The conventional ethanol mandate was increased to 13.25 billion gallons in the latest proposal, but this resulted in the (implied) fractional mandate dropping to 7.5 percent (13.25/176.68). The EPA, in essence, ‘reset’ the volumetric standard to a lower percentage of total transportation fuel use. If the EPA had maintained the fractional mandate from the first proposal, the conventional ethanol mandate for 2014 would have been set in the latest proposal at 13.91 billion gallons (0.0787 X 176.68) instead of 13.25 billion.”
In comparing the 2014 RVO with the 2015 and 2016, the economists note the ethanol mandate, taken at face value, imply a substantial push above the E10 blend wall. They also suggest the assumptions for a 1.4 percent in gasoline use in 2015 and a drop in 2016 may be too conservative based on recent Department of Transportation data. Good and Irwin examine three scenarios: keeping the volumetric standards fixed, versus keeping the fractional standards fixed and a third where EPA targets the magnitude of the push. “Our analysis highlights the sensitivity of estimates of the push in conventional ethanol mandates to the policy target of EPA. It does indeed matter whether the EPA targets fixed volumetric standards, fixed fractional standards, or a fixed push in the standards.”
Pointing to the collapse in the D6 RINs market, the renewable identification numbers used by blender to demonstrate RFS compliance, they add, “RINs market participants appear to believe that the EPA is targeting a fixed volumetric standard and the degree of push in the conventional ethanol mandates will largely disappear if, as expected, gasoline and diesel use increases more rapidly. If these expectations are incorrect the RINs market could be setup for a major surprise when the EPA finalizes the standards for 2014-2016.”
They note that the EPA’s behavior when comparing the November 2013 proposal with the May 29 suggests the agency leans towards a fixed volumetric standard. The language in the most recent proposal, however, “suggests the EPA currently leans more towards a fixed fractional standard, or even a fixed push in the standard.” The bottom line, they conclude, “is the EPA needs to much more clearly communicate the target it is currently using in setting the RFS standards. Much may hang in the balance for biofuels producers, feedstock suppliers, obligated parties under the RFS, and RINs market traders.”
Read the original story here : Proposed RVO Raises Multiple Questions For Illinois Economists
June 10, 2015
By Erin Voegele
On June 10, the U.S. EPA published its proposed rule to set 2014, 2015 and 2016 renewable volume requirements (RVOs) under the renewable fuel standard (RFS) in the Federal Register, officially opening the public comment period on the proposal. Comments are due July 27.
The agency released a pre-publication version of the proposed rule on May 29. It contains proposed 2014, 2015, and 2015 RVOs, along with the proposed 2017 RVO for biomass-based diesel.
According to the EPA, the proposed 2014 RVOs reflects the actual amount of domestic biofuel used last year. The cellulosic requirement is set at 33 million gallons, with the biomass-based diesel requirement set at 1.63 billion gallons, the advanced biofuel requirement set at 2.68 billion gallons, and the requirement for total renewable fuel set at 15.93 billion gallons. Statutory requirements for 2014 called for 18.15 billion gallons of renewable fuel, including 1.75 billion gallons of cellulosic biofuels, and 3.37 billion gallons of total advanced biofuels.
The proposed rule calls for the 2015 RVOs to include a cellulosic requirement of 106 million gallons, a biomass-based diesel requirement of 1.7 billion gallons, an advanced biofuel requirement of 2.9 billion gallons and a requirement for total renewable fuel of 16.3 billion gallons. This is far below the statutory requirement of 20.5 billion gallons of total renewable fuel, including 3 billion gallons of cellulosic biofuels and 5.5 billion gallons of total advanced biofuels.
The EPA’s proposal calls for the 2016 RVOs to include 206 million gallons of cellulosic biofuels, along with 1.8 billion gallons of biomass-based diesel, 3.4 billion gallons of advanced biofuel, and 17.40 billion gallons of total renewable fuel. This is also far below the statutory requirement of 22.25 billion gallons of total renewable fuel, including 4.25 billion gallons of cellulosic biofuel and 7.25 billion gallons of total advanced biofuel.
In addition, the proposed rule aims to set the 2017 RVO for biomass-based diesel at 1.9 billion gallons.
Comments on the proposed rule can be filed under Docket ID No. EPA-HQ-OAR-2015-0111 on the Federal eRulemaking Portal www.regulations.gov. Additional information on submitting comments is available in the Federal Register notice.
The EPA also recently announced plans to hold a public hearing on the RFS proposal on June 25 in Kansas City, Kansas.
Read the original story here : EPA Opens Public Comment Period On RFS Rulemaking