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AgriNews

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

Domestic Fuel

June 29, 2015

By Joanna Schroeder

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

 

 

Renewable Fuels Association

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

Ethanol Producer Magazine

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

AgWeek

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.dpuf

Ethanol Producer Magazine

June 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

USDA

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."

Ethanol Producer Magazine

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