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In the News

Reuters

October 20, 2017

By Jarrett Renshaw

The U.S. Environmental Protection Agency has backed off a series of proposed changes to the nation’s biofuels policy after a massive backlash from corn-state lawmakers worried the moves would undercut ethanol demand, according to a letter from the agency to lawmakers seen by Reuters.

The letter could end uncertainty about the future of the U.S. Renewable Fuel Standard under the administration of President Donald Trump that has roiled commodity and energy markets for months. The program, which requires refineries to blend increasing amounts of ethanol and other biofuels into the nation’s fuel supply every year, appeared on the verge of a massive overhaul.

EPA Administrator Scott Pruitt said in the letter dated Oct. 19 that the agency will keep renewable fuel volume mandates for next year at or above proposed levels, reversing a previous move to open the door to cuts. He said the EPA would not pursue another idea floated by EPA leadership that would have allowed exported ethanol to be counted toward those volume quotas.

Pruitt also said the EPA did not believe a proposal to shift the biofuels blending obligation away from refiners was appropriate. That plan is backed by representatives of a handful of independent refining companies.

Those ideas would have eased the burden on some in the refining industry, who have argued that biofuels compete with petroleum, and that the blending responsibility costs them hundreds of millions of dollars a year.

But Midwestern lawmakers, including Republicans Charles Grassley and Joni Ernst, had vocally opposed all those ideas, calling them a betrayal of the administration’s promises to support the corn belt. They were concerned the moves would undercut domestic demand for ethanol, a key industry in the region that has supported corn growers.

In Pruitt’s letter, he said the EPA was prepared to work with Congress to examine the possibility of a waiver that would allow the sale of E15 gasoline, containing 15 percent ethanol, year-round - something currently not permitted during the summer due to concerns about smog.

Renewable Fuels Association President and CEO Bob Dinneen said in a response to the letter on Friday morning that the U.S. ethanol industry was “grateful for Administrator Pruitt’s epiphany on the road to the RFS.”

Read the letter from Pruitt here.

Read the original article: EPA Abandons Changes to U.S. Biofuel Program After Lawmaker Pressure

Bloomberg

October 18, 2017

By Jennifer Jacobs, Jennifer A Dlouhy, and Ari Natter

President Donald Trump intervened personally with the Environmental Protection Agency amid pressure from Republicans in the politically important state of Iowa who worried the agency was poised to weaken biofuel quotas, three people familiar with the discussions said.

Trump directed EPA Administrator Scott Pruitt to back off any changes that would dilute a federal mandate for biofuel use, the people said.  A top EPA official said Trump’s urging was unnecessary because Pruitt wasn’t planning on weakening the mandate.

Nevertheless, the agency was told by the White House to drop two changes that were under consideration: a possible reduction in biodiesel requirements and a proposal to allow exported renewable fuel to count toward domestic quotas, said the people, who asked not to be identified because they were not authorized to speak publicly about the move. 

The issue is politically treacherous for the president because it pits his allies in the oil industry against Midwest voters who helped elect him, including Iowans who hold first-in-the-nation presidential caucuses. While campaigning in Iowa last year, Trump pledged to protect ethanol and the biofuel mandate.

Trump called Iowa Governor Kim Reynolds Wednesday to reassure her of his commitment to the program. "It was a really good, productive conversation," she said in an interview.

Pruitt has also been working behind the scenes to soothe Midwestern politicians and biofuel backers alarmed by the possible changes the EPA was considering, the top agency official said.

Reynolds is one of a phalanx of Midwest politicians who have lobbied the administration by highlighting the president’s promises to support ethanol and signaling that any move to weaken annual quotas would be seen as a betrayal. 

"They are feeling the pressure, and that’s why we need to keep it up, we can’t let down," Reynolds said during a press conference with biofuel backers in Pella, Iowa.

The 12-year-old Renewable Fuel Standard compels refiners and importers to use biodiesel and alternative fuels such as corn-based ethanol. It is especially valued in the Midwest, where corn and soybean farmers see the program as vital to ensure predictable demand. But the RFS also is opposed by many oil refiners that argue it’s a costly and burdensome mandate that forces them to blend ethanol into gasoline -- or buy credits to make up the difference.

It was not immediately clear whether the administration’s assurances -- which weren’t announced publicly -- will be enough to satisfy lawmakers who have threatened to stall EPA nominees over the issue. The EPA official said the latest information they have is that the senators are not holding up any particular nominee.

But Iowa Republican Senator Joni Ernst refused to commit to backing one EPA nominee in a news release Wednesday, only saying she was close to getting the assurances she needed. 

The EPA has a Nov. 30 deadline to finalize next year’s quotas, and it may not announce any changes before then.

"The proof is in the pudding," said Monte Shaw, head of the Iowa Renewable Fuels Association. "We need to see the details."

The EPA ignited a backlash last month when it asked for public comment on potential biofuel quota reductions and floated the idea of a 15 percent reduction in requirements for biodiesel. Pruitt has said that notice was only seeking comment, not committing to any reduction in biofuel quotas.

Separately, EPA staff had been considering a proposal from some refiners to allow some exported biofuel to count toward the domestic mandate -- a move that would make it easier and cheaper to meet annual domestic quotas. Pruitt is also concerned about imported biodiesel being used to fulfill the quotas and jeopardizing U.S. energy independence.

The market for credits refiners use to show compliance with the mandates indicates that traders think ethanol backers will prevail.

Renewable Identification Numbers tracking ethanol consumption for 2017 fell in late September after the reports of possible EPA changes. Since hitting a low of 66 cents per credit on Sept. 28, those RINs bounced back to 83 cents apiece after news emerged that Trump had intervened.

Pruitt has assured people he is following through on Trump’s pro-ethanol promises. In July, the agency proposed requiring U.S. refiners use 15 billion gallons of conventional renewable fuels in 2018 -- the maximum allowed under the Renewable Fuel Standard. Oil refiners had pushed for a lower target.

And agency officials have been studying whether they have authority to allow gasoline containing 15 percent ethanol to be sold year-round, something the biofuel industry is seeking.

But news of possible changes to other parts of the program provoked a strong response from Midwestern Republicans, led by Iowa Senator Chuck Grassley who immediately began pressuring the Trump administration to back off those ideas.

Grassley took to Twitter to blast a "bait and switch" by the administration, saying any moves to weaken the Renewable Fuel Standard program conflicted with Trump’s vow to support ethanol and Pruitt’s assurances to uphold congressional intent behind the mandates during his confirmation hearing.

"You can get in the weeds about what you want to do or not do in the way of policy, but this is an issue of the president keeping his promise," Grassley said Tuesday.

Trump urged Pruitt to work with Grassley to resolve the issues.

Farm-state senators met with Pruitt over the issue on Tuesday, after Ernst told reporters she couldn’t commit to backing a nominee to head the EPA air office that administers the renewable fuel program. A planned Senate committee vote on that nomination, scheduled for Wednesday, was scrapped afterward. Ernst is a member of that committee, on which Republicans hold a narrow 11-10 margin.

"A handful of senators completely cornmailed the administration by threatening to hold nominees hostage until they get their way," Stephen Brown, the head of federal affairs for refiner Andeaver, said in an email. "Faced with tactics that would have made Don Corleone blush, the administration essentially had no choice but to relent."

On Wednesday, Ernst said she was close to getting the reassurances she needs.

“My staff and I will continue to keep a watchful eye as these assurances come to life, and while we are still in negotiations, I do feel good about the direction we are headed," Ernst said in an emailed statement.

Outside analysts predicted that Iowa’s political clout will help it prevail in the end.

"The track record here has been pretty strong with these Midwest senators," said Paul Niznik, a consultant to refiners and others who track the RIN market for Argus Consulting Services. "We know it’s not going to happen. It looks like political theater."

Read the orignal article: Trump Tells EPA to Boost Biofuels After Iowa Uproar

Renewable Fuels Association

October 16, 2017

By Emily Druckman

Despite continued claims by opponents of the Renewable Fuel Standard (RFS), prices of the Renewable Identification Number (RINs) credits used for RFS compliance have not caused changes in retail gasoline prices, according to a new analysis by Informa Agribusiness Consulting.

The analysis, commissioned by the Renewable Fuels Association (RFA), looked at trends in the prices for conventional biofuel RINs and retail gasoline from 2013 to the summer of 2017.

“Based on statistical analysis, it can be concluded that changes in RIN prices did not ‘cause’ the changes that occurred in retail gasoline prices in 2013, and this has continued to be the case through the summer of 2017,” according to Informa Agribusiness Consulting. Instead, the price of retail gasoline has been primarily driven by movements in crude oil prices and by changes in the spread between domestic and international crude oil prices, as well as seasonal demand, the analysis found.

“…[C]hanges in RIN prices have not caused changes in retail gasoline prices (or vice-versa). To any extent that the two are related, it is not a direct causal relationship,” the analysis noted.

“EPA seems to be on a mission to lower the price of RINs,” said RFA President and CEO Bob Dinneen.  “The Agency’s proposed 2018 RFS renewable volume obligations, which for the first time lowered the total RFS volumes from the previous year, a subsequent Notice of Data Availability proposing to lower the RFS further to reflect anticipated reductions in imported biodiesel, and rumors of an impending proposal to allow exported biofuel to qualify for the domestic program, all would have the effect of lowering the price of RINs. But this analysis demonstrates that EPA’s efforts will have no impact on consumer gasoline prices. If finalized, however, these proposals will have a decidedly negative impact on the U.S. ethanol industry by artificially cannibalizing demand. If the intent is to lower the price of RINs, EPA should consider expanding ethanol demand by empowering consumers to utilize higher level ethanol blends. After all, ethanol is less expensive than gasoline today and RINs attached to each gallon of ethanol purchased from a producer are free,” he said.

“Thanks to the RFS, U.S. ethanol jobs have grown 121% and the value of ethanol’s output quadrupled to $32.8 billion in 2016. Big Oil needs to stop scapegoating the RFS and ethanol. The RFS is helping to bring the cleanest, lowest-cost and highest-octane fuel to consumers, and no amount of obfuscation can dispute that fact,” Dinneen added.

The Informa Agribusiness Consulting analysis is available here.

Read the original story: New Statistical Analysis: No Relationship Between RIN Credits and Retail Gasoline Prices

Senator Joni Ernst

Press Release

October 17, 2017

WASHINGTON, D.C. – U.S. Senator Joni Ernst (R-IA), a member of the Senate Committee on Agriculture, Nutrition, and Forestry and the Senate Committee on Environment and Public Works, issued the following statement after meeting with Environmental Protection Agency (EPA) Administrator Scott Pruitt to express her significant concerns over the agency’s recent action to potentially set biodiesel volumes in the Renewable Fuel Standard (RFS) for 2018 and 2019 at substantially lower volumes, which could in turn, hurt Iowa farmers, manufacturers, and rural communities.

“Iowa is the largest producer of ethanol and biodiesel in the nation. Our farmers, ranchers and rural communities depend on maintaining a strong RFS. Time and again, the RFS has proven to be a major driver of alternative fuels and economic development.

“Throughout his confirmation process, Administrator Pruitt promised me multiple times that he would uphold the spirit of the RFS, as intended by Congress. Additionally, the President has consistently stated his support for biofuels and made it clear to Administrator Pruitt that he is supportive of the RFS. While the administrator has insisted that the recent actions taken by the EPA are simply to receive additional input on the RFS from stakeholders, it is evident that the ‘stakeholders’ he refers to are not the farmers and manufacturers across the State of Iowa who would be directly affected if the biodiesel volume requirements were lowered.

“Our meeting today was another clear demonstration that biofuel-producing states will never stop fighting to protect the RFS. Administrator Pruitt again claimed today that he will not do anything to undermine the program. However, we have heard this before. We now need to see it. I will continue to work with the EPA, but they must prove to the agricultural community who put their faith in this administration that they will fulfill their promise to maintain the letter and the spirit of the RFS. We will not accept anything less.”

Senator Ernst has been a vocal opponent of any actions taken to lower RFS volumes, stressing her position through letters to EPA Administrator Pruitt and to President Trump. The Senator received commitments from Administrator Pruitt in their pre-confirmation meeting and during his confirmation hearing that he would follow the law and maintain the RFS.

Read the original press release: Ernst Meets with EPA Administrator Pruitt to Stress Need to Maintain a Strong RFS

Mankato Free Press

October 11, 2017

By Trey Mewes

As federal officials back off of the Obama-era Clean Power Plan, U.S. Sen. Al Franken believes there's going to be more work to do to ensure farmers and rural communities benefit from renewable energy sources.

The Minnesota Democrat met with regional agriculture and energy experts Wednesday at Minnesota State University to discuss energy initiatives that will be included in the 2018 farm bill.

"This is added value to our agricultural products," Franken said. "Biofuels, in terms of ethanol and biodiesel, is extremely important to our economy."

Minnesota is one of the nation's leading renewable energy producers, and about 1 in 5 Minnesotans have agriculture-related jobs.

Franken, who serves on the Senate Energy Committee, is helping to write an energy component to the farm bill that could tweak a few energy programs to better fund renewable energy efforts. The bill would, among other things, link federal funding between fire hazard reduction and reducing undergrowth in forests by removing biomass.

One of those tweaks would remove a requirement that bio-based material work needs to produce energy, which experts say could open the door to more plastics, chemicals and other products made from bio-material.

Mike Youngerberg of the Minnesota Biodiesel Council points to a new kind of asphalt sealant made from biodiesel products that works better than current oil-based sealants.

Farmers could one day be able to grow 100 bushels of corn or soybeans for every lane mile, and renewable energy representatives are pushing state officials to use the biodiesel sealant on roads, bridges and parking lots across Minnesota.

"The city of Hutchinson, Minnesota, is saving material on their road maintenance budget just by preserving what they have," Youngerberg said.

Other projects that came up included converting wood chips into biofuel to heat turkey barns, and potential energy storage improvements with renewable fuels that would decrease costs for rural and low-income areas if implemented.

Some experts even advocated for more flexibility to pursue industrial hemp products — which is different than marijuana-based products, though the two have been linked in agricultural and manufacturing discussions in the past.

"We think as a specialty crop it would open some doors for us," said Dan Skogen, a former state senator who serves as the planning and government relations director for the Agricultural Utilization Research Institute.

Yet the energy and ag experts were mainly concerned with securing enough funding to continue renewable energy initiatives such as the Rural Energy for America Program grants and loans.

"There are a lot of great products that could come out of some of these," said Joe Smentek, director of public affairs for the Minnesota Soybean Growers Association. "But if they're not fully funded, if they're not funded adequately, they're worthless."

It appears the Trump administration is souring on renewable energy, however. Environmental Protection Agency Administrator Scott Pruitt announced this week the EPA would roll back greenhouse gas regulations established under former President Barack Obama. And President Donald Trump has publicly pushed for more coal and oil energy in the past.

Franken said after the meeting that despite the president and his administration's opposition to some renewable energy issues, Congress needed to push on as more renewable energy gets produced across the U.S.

"There's no question that ethanol is much more efficient than gasoline in terms of what we're putting in and what we're getting out," Franken said.

Read the original story: Farm Bill Energy Issues Essential for State, Franken Says

Visalia, Calif. October 12, 2017 – Edeniq, Inc., a leading cellulosic and biorefining technology company announced today that the U.S. Environmental Protection Agency (“EPA”) has approved Flint Hills Resources’ registration of its 100 million gallons per year Iowa Falls, Iowa ethanol plant for cellulosic ethanol production using Edeniq’s technology.

Iowa Falls is the fifth existing ethanol plant to receive approval from the EPA for cellulosic ethanol production using Edeniq’s Pathway technology. The four existing ethanol plants that have previously received this approval are: Pacific Ethanol’s Stockton, CA plant; Flint Hills Resources’ Shell Rock, IA plant; Little Sioux Corn Processors’ Marcus, IA plant; and, Siouxland Energy Cooperative’s plant located in Sioux Center, IA.

Edeniq’s registered customers now total 500 MGPY of nameplate ethanol capacity and are averaging more than one percent cellulosic ethanol. Customers’ cellulosic ethanol yields have increased on average in 2017, and Edeniq expects its technology will continue to advance cellulosic yields for its customers. Significant results are now being shown from process improvements and tuning, yielding ever-increasing production and product diversification.

Edeniq’s technology remains the lowest-cost solution for producing and measuring cellulosic ethanol from corn kernel fiber utilizing existing fermenters at existing corn ethanol plants, and has already proven cellulosic ethanol yields of up to 2.5% or higher, as a percentage of its customers’ total volume output. Once approved by EPA, customers are eligible to qualify cellulosic gallons with D3 RINs, which are considered the most valuable on the RIN market. Additional benefits of Edeniq’s technology include increases in corn oil production and greater overall ethanol yields, all provided by a zero-capex cellulosic ethanol production option.
Cam Cast, Edeniq’s Chief Operating Officer, remarked that, “With the investment, partnership and success of existing corn ethanol plants like Flint Hills Resources, Edeniq is the clear market leader in its technology that is enabling—today—millions of gallons of EPA approved cellulosic ethanol to come online. In turn, these gallons materially contribute to the profitability of Edeniq’s customer plants and help achieve the goals of the federal Renewable Fuel Standard. It is a win-win all around.”

Edeniq’s President and CEO, Brian Thome, further stated, “We are encouraged by this latest EPA approval, which enables another customer plant to add significant new value to its existing corn ethanol plant through our technology. Every ethanol plant in the country has the ability to bring millions of EPA approved cellulosic ethanol gallons to market, every year, utilizing our technology. We look forward to working with our existing and future customers to secure additional EPA approvals for cellulosic ethanol. We appreciate EPA’s continued diligent work to process the registration petitions in a timely manner.”

Ethanol Producer Magazine

October 10, 2017

By Growth Energy

Growth Energy announced that more than 1,000 fuel stations around the country are offering E15—a fuel with 15 percent ethanol—more than doubling the number of stations from the same time last year.

“This spectacular growth is a testament to the value E15 brings to fuel retailers and consumers,” said Emily Skor, CEO of Growth Energy. “Forward-thinking retailers have figured out that giving their customers more fuel choices is smart business and American drivers have figured out that E15 allows them to save money at the pump all while making a smarter choice for their engines and the environment.”

E15 is cleaner and cooler burning fuel that works well for cars model 2001 and newer and typically saves up to 10 cents per gallon. More and more retailers are responding to consumer demand for those fuel attributes by providing E15 as a choice at their pumps.

Leading retailers including Casey’s, Cenex, Family Express, Kum & Go, Kwik Trip, MAPCO, Minnoco, Murphy USA, Protec Fuel, QuikTrip, RaceTrac, Sheetz, and Thorntons all currently offer E15 at 1,039 locations across the U.S. Many of these are in major metropolitan areas including: Atlanta, Charlotte, Chicago, Dallas, Houston, and San Antonio.

Read the original story: Growth Energy: More Than 1,000 US Fuel Stations Now Offering E15

Ethanol Producer Magazine

October 5, 2017

On Oct. 5, a bipartisan group of 38 senators led by Sens. Chuck Grassley, R-Iowa, and Amy Klobuchar, D-Minn., sent a letter to EPA Administrator Scott Pruitt, asking him to ensure the 2018 Renewable Fuel Standard blending requirements promote growth in the U.S. biofuels sector and the U.S. economy.  

The letter stresses that when congress adopted the RFS in 2005, its goal was to drive innovation and investments that would bring biofuels to American consumers. “The biofuel industry supports hundreds of thousands of jobs throughout the country, reduces the environmental impact of our transportation and energy sectors, and cuts our reliance on foreign oil,” said the senators in the letter. “The stability of our policy has led to billions of dollars of investment in the biofuel sector. America’s production capacity has expanded more than threefold since 2005 with fuels such as biodiesel, cellulosic ethanol, recycled-waste, algal, and other advanced biofuels.”

“We need to build on this progress,” the senators continued.

The senators argue the proposed renewable volume requirements (RVOs) for 2018 represent a step back when it comes to advanced biofuels, and would result in less renewable fuels being blended than in 2017. “The rule unjustifiably flatlines biomass-based diesel, reduces advanced biofuels, and reduces the cellulosic biofuel blending target by about 25 percent,” said the senators. “The agency arrives at these lower targets by utilizing a new methodology more reliant on historical data than projected volumes. The RFS must by law be administered in a forward-looking manner. The final rule should address these shortfalls.”

The letter also addresses the notice of data availability (NODA) published by the EPA on Sept. 26 that aims to lower the blending targets by the number of gallons of biofuels imported, but still permits those imported gallons to generate compliance credits. In addition, the letter also criticizes reports that the EPA is considering allowing exported gallons of biofuel to generate compliance credits. “Taken together, these actions would reduce renewable fuel blending in the U.S. and create uncertainty for producers,” the senators said.

“If done right, this rule is an opportunity to continue our nation’s path to be not only the world leader in first generation ethanol production, but also in cellulosic ethanol and advanced biofuel production by spurring investment and manufacturing here in the United States rather than overseas,” the senators continued. “We urge you to continue to implement the RFS as intended by Congress and release a strong final rule that would give consumers more choices at the pump, strengthen our economy and make our country more secure.”

In addition to Klobuchar and Grassley, the letter is signed by Sens. Richard Durbin, D-Ill.; John Thune, R-S.D.; Al Franken, D-Minn.; Joni Ernst, R-Iowa; Sheldon Whitehouse, D-R.I; John Hoeven, R-N.D.; Heidi Heitkamp, D.-N.D.; Deb Fischer, R-Neb.; Debbie Stabenow, D-Mich.; Roy Blunt, R-Mo.; Claire McCaskill, D-Mo.; Pat Roberts, R-Kan.; Mazie Hirono, D-Hawaii; Jerry Moran, R-Kan.; Gary Peters, D-Mich.; Tammy Baldwin, D-Wis.; Tammy Duckworth, D-Ill.; Ron Wyden, D-Ore.; Patty Murray, D-Wash.; Jack Reed, D-R.I.; Margaret Hassan, D, N.H.; Jeanne Shaheen, D.- N.H.; Joe Donnelly, D-Ind.; Sherrod Brown, D-Ohio; Maria Cantwell, D-Wash.; Brian Schatz, D-Hawaii; Martin Heinrich, D-N.M.; Bill Nelson, D-Fla.; Jeffrey Merkley, D-Ore.; Catherine Cortez Masto, D-Nev.; Richard Blumenthal, D-Conn.; Edward Markey, D-Mass.; Jon Tester, D-Mont.; Patrick Leahy, D-Vt.; Elizabeth Warren, D-Mass.; and Michael Bennet, D-Colo.

Read the original article: Senators Urge Pruitt to Issue Strong 2018 RFS RVOs