In the News
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
June 1, 2015
By Sen. Chuck Grassley
It’s been a familiar few weeks for biofuels. First, chain restaurants and chicken producers blamed ethanol for raising food prices. Then, the federal government’s Environmental Protection Agency (EPA) 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 United States 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 Agriculture Department’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 déjà 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 (RFS) 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 over 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 co-products 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 prior to the RFS. Food inflation is at the lowest rate of increase than at any time over the last 40 years. At the same time, the United States 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, the U.S. Department of Agriculture 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.
June 6, 2015
By Russell Hubbard
U.S. Agriculture Secretary Tom Vilsack said Friday that his agency has initiated a $100?million federal grant program to encourage installation of gas station fuel pumps capable of dispensing blends made with a greater percentage of ethanol.
In late May, the Department of Agriculture said its Biofuels Infrastructure Partnership has budgeted $100 million in matching funds for states willing to invest their own money in incentives to encourage the retail sale of higher ethanol blends, such as the E15 and E85 varieties that contain 15 percent and 85 percent ethanol.
“We have to figure out ways to get more E85 and E15 access,” Vilsack said in an interview. “This could expand the number of service-station pumps by 10,000 or more.”
Iowa is the largest ethanol producer with 42 plants, followed by Nebraska, with 24. The industry in Nebraska has an economic impact of $5 billion per year, according to a University of Nebraska-Lincoln study released this year.
Ethanol producers, however, have been up against the so-called “blend wall,” or the point at which formulations, such as E10, are insufficient to get all the envisioned production into the nation’s gas tanks at current levels of U.S. fuel consumption.
Last week, the Environmental Protection Agency set biofuel blending requirements for 2015 and 2016 that were seen as a compromise between what ethanol supporters and critics wanted, but which industry observers said will require the adoption of higher blends.
Shannon Textor, a spokeswoman for the Iowa Corn Growers Association, said that the group supports efforts to assist retailers in offering higher blends and that it is evaluating the specifics of the grant program. Todd Sneller, administrator of the Nebraska Ethanol Board, also said that his group is evaluating the grant program and that efforts to sell higher ethanol blends are needed.
Vilsack, a former governor of Iowa, also said Friday that U.S. exports of ethanol are rising and that foreign trade benefits Nebraska and Iowa. He said Congress should allow President Barack Obama to confer “fast-track status” to a major in-progress trade agreement, the Trans-Pacific Partnership, which would do away with barriers such as tariffs between the United States and 11 mostly Asian nations.
The proposal has been opposed by some organized labor and farm groups that say earlier free trade pacts, such as the North American Free Trade Agreement, have cost jobs and not boosted exports.
Read the original story here : Ag Secretary Vilsack Pushes For High Blends Of Ethanol
June 1, 2015
St Paul - CHS Inc, North America's leading farmer-owned cooperative and a global energy, grains and foods company, announced today it has acquired the Patriot Renewable Fuels ethanol plant from Patriot Holdings, LLC, Annawan, Ill.
The Annawan facility produces 125 million gallons of ethanol annually, and is the second ethanol plant that CHS has purchased. In June 2014, CHS acquired the former Illinois River Energy Plant at Rochelle, Ill.
"CHS will pursue ethanol manufacturing ownership in strategic current and new geographies that allow us to add value for our owners across our ag business and energy enterprise from inputs to value-added fuel and feed ingredients to the marketplace," said Gary Anderson, CHS senior vice president, North America grain marketing and renewable fuels.
Gene Griffith, Patriot Holdings, LLC, chairman, president and CEO said CHS was a marketer of the plant's DDGS (distillers dried grains with solulubles) and ethanol products. "CHS is the right fit to take this business to the next level," Griffith said. "The Patriot board of directors is confident that CHS is commited to continuing to grow the business, which bodes well for all suppliers delivering grain to the plant."
The facility will be rebranded as CHS. Its 68 employees will become CHS employees.
Visit chsinc.com for more information.
May 30, 2015
By David Shaffer
WINNEBAGO, Minn. – Farmers who own one of Minnesota’s oldest, problem-plagued ethanol plants are making a fresh bet on the future of fuel from corn. An uprising by hundreds of farmer-investors in the Corn Plus Cooperative killed a deal to sell the plant, which led to the ouster of top managers last year. Now, investors have put up more capital, arranged financing for equipment upgrades and hired leading industry experts to revive the 20-year-old operation in this southern Minnesota town. “We want to maintain the ownership for farmers and have this plant do what it was meant to do — add value to corn,” said Bill Drager, a Mapleton, Minn., farmer who led a breakaway group of shareholders that successfully opposed the sale last August. He later became president of a reconstituted board of directors.
It is the latest sign that many farmers still see benefits in owning ethanol plants, even as the industry has consolidated. In Minnesota, where the ethanol business sprouted in the early 1990s, more than half of the 21 ethanol plants still have farmer or local owners.
When farmers opened the Corn Plus plant in 1994, it was one of two farmer-owned ethanol producers in Minnesota, and it quickly became a success story — proof that farmers facing cyclical low prices for corn could profitably turn it into fuel and animal feed.
Over the years, Corn Plus expanded to 42 million gallons of yearly output. It replaced some equipment but couldn’t keep pace with newer, larger, more-efficient producers. It had unplanned outages in 2013 and 2014, and profits lagged. The plant repeatedly broke environmental laws, resulting in $1.1 million in fines since 2009 and a rare felony conviction.
Letter: Plant for sale
Against that backdrop last August, the more than 600 shareholders got a letter from the co-op announcing a deal to sell the plant to an Iowa-based ethanol cooperative. It would be close to a fire sale price, about 34 cents per gallon of annual capacity, or nearly $14 million. That’s far below the median price of $1.10 to $1.20 per gallon of annual capacity, said ethanol consultant Larry Johnson of Cologne, who was not involved in the deal.
“It was a real big surprise,” Don De Langhe, a Marshall, Minn., farmer who owns shares in Corn Plus and two other ethanol plants, said of the proposed sale.
De Langhe knew that other ethanol plants made record profits in 2014, and believed that Corn Plus could do the same. Under the co-op bylaws, the sale needed approval from two-thirds of shareholders.
“They voted it down almost 2 to 1,” said Drager, who campaigned with De Langhe against the deal. “It says a lot about the way farmers in this area felt about this investment way back when. They made a lot of money over the years, and they didn’t want to see it go out in this fashion.”
After the sale was rejected, five of nine board members resigned, eventually replaced by directors including Drager and De Langhe. CEO Mark Drake was ousted, and the board began looking for new leadership — and fresh capital.
That’s when ICM Inc. of Colwich, Kan., entered the picture. ICM is an ethanol-focused technology and engineering company that designed most of the nation’s ethanol plants, though not Corn Plus. Five years ago, ICM created a new unit, Energy Management Solutions, to revive and manage underperforming ethanol plants, starting with one in Casselton, N.D.
‘Diamond in the rough’
Corn Plus’ board approached ICM to run the Winnebago plant late last year. ICM CEO Dave Vander Griend made a visit, and agreed to do it. ICM bought 25 percent of Corn Plus for $4 million — the first time it has taken a stake in a distressed ethanol operation.
“I saw it as a diamond in the rough,” Vander Griend said in an interview. “The plant is in rough shape but it is a good location. It is a good market area. The plant needed some money spent on it. It needed some working capital, and we said we’ll come in and put a stake into the plant because it will be a good investment.”
Corn Plus’ new CEO, Rick Serie, is an employee of ICM’s management unit, EMS. He brings 20 years of experience developing and running ethanol plants, starting with one in Luverne, Minn., in the mid-1990s. Since January, Serie has made operational changes to boost the plant’s efficiency.
He also is tackling environmental issues. State and federal pollution regulators have cracked down on the plant three times since 2009, leveling $1.1 million in fines. The biggest case, related to faking emissions data, resulted in a felony conviction for the co-op in 2011. Regulators announced the most recent violation, related to air emissions equipment, in December just before Serie became CEO.
Serie said that in his first meeting with regulators this year “we basically told them that not being in compliance is unacceptable to us. This plant will never be out of compliance again.”
To recapitalize Corn Plus, $7 million was raised from shareholders, including ICM, in a convertible debt offering. That set the stage for farm-sector lenders AgStar Financial Services and Farm Credit Services to close on a revolving loan agreement in late May.
“Plants of this size can absolutely make money if they have good management,” said Ron Monson, AgStar vice president of agribusiness capital, who helped put the financing together.
Boosting efficiency
Just outside the plant sits a pile of new equipment to be installed during a $5.7 million upgrade. Serie said the front end of the plant, where corn is ground in the first stage of making ethanol, will be torn out and replaced with ICM’s patented Selective Milling Technology. The goal is to improve the margin on every gallon of fuel.
“It is all being done to gain efficiencies so we can compete with a modern plant,” Serie said.
ICM’s Vander Griend said his privately held company is “definitely interested” in investment and management relationships with other ethanol plants. That’s long been the business model of Poet Inc., the Sioux Falls-based ethanol company that built, partly owns and manages many ethanol plants, including four farmer-owned operations in Minnesota.
For plants like Corn Plus, the relationship offers access to industry expertise. For ICM, it offers the potential to introduce new ethanol technologies. One of them is ICM’s Generation 1.5, a way to produce ethanol from fibrous parts of the corn kernel, like the shell, whose starch is untouched in the traditional fermenting process.
“It opens the door to do these technologies at plants where you have some influence,” Vander Griend said.
Read the original story here : Farmer-owners of Corn Plus Ethanol Plant Double Down On Their Investment
Reuters
May 28, 2015
The U.S. Department of Agriculture (USDA) plans to inject $100 million in funding to get more ethanol at the gas pump, according to two industry sources, the latest push to get beyond a "blend wall" that has capped demand for the biofuel.
That would mark a big push for an overhaul of fuel-blending pumps and related infrastructure to generate higher demand for the biofuel. The USDA is expected to announce the funding on Friday, the sources said.
A USDA spokesman declined to comment on the plans.
Ethanol groups have asked the USDA to continue to offer this funding amid rising calls for policy reform from policymakers, oil companies, and environmentalists. The USDA launched a program in 2011 designed to get 10,000 flex-fuel options at gas pumps nationwide that would allow use of blends as high as E85, which is 85 percent ethanol.
The United States sets use requirements for biofuels, including ethanol, through the Renewable Fuel Standard (RFS) program, but has delayed setting targets for the current year and 2014 amid concern from oil companies that ethanol use has hit a saturation point without major infrastructure changes.
The plans come as oil companies and biofuels producers await a proposal from the Environmental Protection Agency (EPA) on biofuels use requirements for 2014, 2015, and 2016, widely expected to be announced on Friday.
Read the original story here : USDA Plans To Inject $100 Million On Ethanol Infrastructure : Sources
May 28, 2015
By Hillary Clinton
On my first trip to Iowa this year, I pledged to be a champion for all Iowans — from cities like Davenport, Cedar Rapids, and Des Moines to small towns and rural communities like Norwalk, Monticello, and LeClaire. It’s not enough for Iowans to just get by, you deserve to be able to get ahead and stay ahead. To make that possible across Iowa and across America, we’re going to have to work together to build an economy for tomorrow, not yesterday.
I believe the United States can and must be the clean energy super power for the 21st century. China and other competitors are already racing ahead with big bets on renewables. Yet there are still some here in America — even candidates for President — who want to keep the deck stacked for the fuels of the past. They support wasteful subsidies for oil and gas, block investments in new clean technologies, and even deny the science of climate change. We can’t afford to cede our leadership in developing and deploying the advanced, clean fuels of the future that will grow our economy, lower our energy bills, reduce pollution, and protect the health of our families and communities. And America’s farmers and rural communities have to be at the heart of this effort.
Eighty years ago this month, President Franklin D. Roosevelt created the Rural Electrification Administration, which connected nearly all Americans to the grid in a little more than a decade. Today, rural America is an energy leader, providing clean electricity and transportation fuels to the rest of the country, reducing energy waste, and strengthening our economic competitiveness. In the past seven years, the United States has added enough wind capacity to power more than 13 million homes. Ninety nine percent of that energy comes from rural communities, creating jobs, providing a second source of income for family farms, and attracting $100 billion in new investment.
Rural energy innovation is also reducing our dependence on foreign oil and making our economy more resilient to supply disruptions in other parts of the world. Domestic renewable fuel production has expanded by more than 350 percent over the past decade with enough supply in the market today to fuel more than 30 million cars. And today U.S. biofuels companies not only offer an alternative to imported oil, they’re increasingly selling their product abroad as well.
Renewable fuels can also play an important role in reducing carbon emissions and other sources of pollution, not just from cars and trucks on our interstates, but also from ships and airplanes. Rural innovators are finding new ways to produce low-carbon biofuels, using feedstocks ranging from algae to agricultural waste, with a range of applications.
The U.S. Department of Agriculture has a successful history of partnering with farmers, rural small businesses, and rural co-ops in deploying renewable energy and energy efficiency solutions. These programs should be expanded. The United States should also continue supporting — and improving — the Renewable Fuel Standard and other federal incentives that have been a success for Iowa and much of rural America.
The Renewable Fuel Standard can continue to be a powerful tool to spur the development of advanced biofuels and expand the overall contribution that renewable fuels make to our national fuel supply. But we also can’t ignore significant changes to the energy landscape since the RFS was expanded in 2007. We have to get the RFS back on track in a way that provides investors with the certainty they need, protects consumers, improves access to E15, E85, and biodiesel blends, and effectively drives the development of cellulosic and other advanced biofuels.
Smart investments in rural America aren’t rocket science — it’s just good sense that delivers for all Americans. Providing investment certainty, removing barriers, and investing in the infrastructure to deliver reliable and affordable energy to rural households and deliver rural clean energy to the rest of the country is a good start.
As president, I’ll champion what works, ensure that Americans have the tools they need to lead the world in clean energy, and stand up to those who block our way and want to keep us trapped in an energy economy of the past.
Read the original story here : Clinton : Invest In Rural Energy
May 26, 2015
By Andrew Childers
The Environmental Protection Agency is grappling with how much ethanol the market can absorb as petroleum refiners and renewable fuels producers offer competing rationales for how renewable fuel blending requirements should be set in an upcoming proposed rule.
The EPA will address the ethanol “blend wall” as part of the proposed rule expected by June 1 that would set renewable fuel blending requirements for 2014, 2015 and 2016.
Previous EPA efforts to address the blend wall issue in 2014 derailed the rule amidst opposition from corn states and renewable fuels producers, resulting in no standards being issued during that year. How the agency addresses that issue will be central to the upcoming rule.
“Obviously, the biggest and single issue is the methodology,” Tom Buis, chief executive officer of Growth Energy, an ethanol trade group, told Bloomberg BNA. “It has been from day one. That’s the critical component.”
For 2014, the EPA had originally proposed to reduce the overall renewable fuel blending requirement for that year in an effort to keep the ethanol content of the gasoline supply from exceeding 10 percent, the maximum amount approved for all vehicles on the road. The move was opposed by renewable fuels producers, who argued that the market was capable of absorbing additional ethanol through E15 (gasoline containing 15 percent ethanol) and E85 (gasoline containing 85 percent ethanol).
The petroleum industry has urged the EPA to cap the amount of ethanol that must be blended into the gasoline supply at 10 percent, arguing that flex-fuel vehicles capable of operating on E85 are not widespread enough to support significant amounts of additional ethanol in the marketplace. Though the EPA has approved use of E15 in model year 2001 and newer passenger vehicles, petroleum refiners caution that many automobile manufacturers have warned that use of E15 could void warranties.
“Because the ethanol blend wall is such a critically important issue to the refining industry, fuel retailers, engine manufacturers and fuel consumers, EPA must acknowledge these realities in the upcoming rulemakings,” the American Petroleum Institute and American Fuel & Petrochemical Manufacturers said in a May 1 letter to the EPA.
Waiver Authority Opposed
Section 211 of the Clean Air Act allows the EPA to use its waiver authority to reduce the annual renewable fuels blending mandates below the levels set out in the Energy Independence and Security Act (Pub. L. No. 110-140) if implementing them at those volumes would cause economic harm or during instances of inadequate domestic supply. The EPA in 2014 proposed for the first time to use its waiver authority to reduce the overall renewable fuels blending requirements as it sought to address the ethanol blend wall.
Renewable fuels producers argued that they are able to produce more than enough fuels to satisfy the statutory requirements. The prior EPA proposal to reduce the blending requirements was based not on adequacy of fuel supply but rather the inability of the petroleum industry to consume the fuels in the volumes required, they said.
The EPA proposal to waive the 2014 blending requirements over supply issues “ultimately rewards the intransigence of oil refiners to invest in renewable fuels infrastructure, protects their market share, and thus blocks increased volumes of cleaner and more sustainable renewable fuels from entering the marketplace,” the Renewable Fuels Association said in May 20 comments on a proposed consent decree that would set deadlines for the EPA to issue the standards.
“Adopting the same methodology for [renewable volume obligations] in 2015 and beyond would continue to reward oil companies for their stubborn refusal to follow the spirit and intent of the RFS as adopted by Congress,” the Renewable Fuels Association said.
Rule Under Review
The upcoming proposal is under review by the White House Office of Management and Budget.
The EPA has agreed to propose the rule by June 1, with a final rule by Nov. 30 as part of proposed consent decree reached with petroleum refiners that sued the agency over its delays in issuing the requirements for 2014 and 2015 (Am. Fuel & Petrochemical Mfrs. v. EPA, D. D.C., No. 15-cv-00394, consent decree proposed 4/10/15).
“We want EPA to hit the deadline. EPA assured us they will, and we have every expectation they will at this point,” Bob Greco, director of downstream operations at the American Petroleum Institute, told reporters May 20. “This has gone on long enough, and we need EPA to move forward with this as quickly as they can.”
The EPA has announced it will set the attest deadlines, a step in the compliance process for the 2013 and 2014 renewable fuel standards as part of its upcoming proposal, but it has revealed no further details.
In a memorandum posted May 26, the Office of Enforcement and Compliance Assurance said it will take no action on the attest demonstrations for 2013 and 2014 until the EPA completes its rulemaking.
Advanced Fuel Producers Fear Uncertainty
Advanced biofuel producers are also closely watching the upcoming proposal. They have argued that the EPA's increasing delays in setting the standards for 2014 have paralyzed the industry's ability to secure financing for new production facilities.
“EPA sets this self-fulfilling prophecy with the numbers,” Paul Winters, a spokesman for the Biotechnology Industry Organization (BIO), told Bloomberg BNA. “[If] they set the numbers low then, the advanced biofuels will be low. If they set them aggressively, then there will be investment then the numbers will beat the projections.”
Cellulosic ethanol exceeded EPA projections for the first time in 2014, largely due to a rule change that reclassified millions of gallons of advanced biofuels being produced from compressed and liquefied natural gas from landfills and wastewater treatment as cellulosic ethanol, but still lagged well behind the amounts required by statute.
But producers of advanced biofuels such as cellulosic ethanol said the uncertainty caused by the EPA's ongoing delays has hampered the ability of the industry to grow. The delays have caused a $13.7 billion shortfall in the investment necessary to meet the renewable fuel program's advanced biofuel requirements, BIO said in a May 4 white paper.
Read the original story here : EPA Grapples With Competing Rationales For Setting Renewable Fuel Requirements
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May 27, 2015
The National Renewable Energy Laboratory (NREL) released a new study today that found most of the existing fuel dispensing infrastructure components — including underground storage tanks — are compatible with E15. The researchers interviewed retail fuel equipment experts and examined manufacturer warranty statements, official records, and industry trends in a multifaceted look into the compatibility of fuel blends beyond E10 with all retail station fuel dispensing equipment.
Key NREL findings:
“It is often stated that tanks cannot be used to store E15, but this assumption is incorrect as the majority of installed tanks can store blends above E10. For many decades, underground storage tank (UST) manufacturers approved their tanks for blends up to E100…”
“…there are UL testing standards available now for all gasoline–ethanol blends from 0% to 85% ethanol… Certain equipment types are typically UL listed—these include tanks, pipes, dispenser, hanging hardware, submersible turbine pumps, and shear valves.”
“A review was conducted with each manufacturer to determine compatibility with ethanol blends. There is an extensive list of E15 and E15+ compatible equipment available in the appendices.”
Bob Dinneen, president and CEO of the Renewable Fuels Association, commented on the study, noting, “This comprehensive analysis is both timely and relevant to the current debate about the so-called ‘blend wall’ that some would like to use to limit the growth opportunities for ethanol under the RFS. Clearly, the constraints to the increased use of E15 have more to do with the recalcitrance of refiners and marketers than they do any real infrastructure barriers. Today’s comprehensive study should once and for all belie the misplaced conclusion that infrastructure and ethanol demand limitations should justify a reduction in the RFS as it found most equipment at a retail fuel station today, including underground storage tanks, are compatible with E15. This study demonstrates that most retailers will not be required to break concrete and spend hundreds of thousands of dollars to offer E15.”
In addition to E15 compatibility, the report examined literature from the past 15 years to find out if “…there were any negative impacts during the multi-year deployment of E10 nationwide” and ultimately determined that “No incidents of E10 causing releases (also referred to as leaks) from UST systems were identified.” It concluded that “None of the reviewed literature noted any association between E10 and any specific UST release.”
This technical report will become a go-to resource for any retailer looking to complete an assessment of their retail fueling system before offering E15. It includes “an extensive list of E15 and E15+ compatible equipment available in the appendices” of retail fueling equipment manufacturer’s compatibility statements.
A webinar will be held at 1 p.m. CT on June 11 to review the report and answer any questions. A copy of the full report — commissioned by the RFA with financial support from the BYO Ethanol campaign — can be found here.
Read the original story here : New NREL Report : Most Retail Fueling Equipment Is Already E15 Compatible
May 21, 2015
By Erin Voegele
Several ethanol trade associations have weighed in on recent announcements by the American Petroleum Institute regarding demand for E0 and the use of E10 in marine and small engines.
On May 20, API held a joint press conference with the National Marine Manufacturers Association addressing E0 demand and urging the U.S. EPA to take small and marine engines into account when setting 2014, 2015, and 2016 renewable volume requirements (RVOs) under the renewable fuel standard (RFS).
“Once again, API and its allies are trying to keep Americans addicted to foreign oil, said Tom Buis, CEO of Growth Energy. “They are afraid of competition, plain and simple, and are using every possible tactic, whether it be legal, regulatory or through false public relations campaigns designed to fool people to buy into their false narrative to discourage the use of a cleaner, less expensive, homegrown renewable fuel.”
“All major manufacturers of outboard and marine motors, as well as small engines, are approved for the use of gasoline blended with up to 10 percent ethanol. The largest problems associated with engine failure in such equipment and machinery is associated with failure of proper maintenance, not ethanol. The Outdoor Power Equipment Institute, which represents manufactures of small engines, has even gone on the record to say, ‘We pump E10 without a second thought.’
“What probably does concern boaters is the amount of time they spend dry docked as a result of oil spills, like the one that dumped 21,000 gallons of oil along four miles of coastline in Santa Barbara, California just yesterday,” Buis added.
“This latest charge by API and NMMA does, however, raises a more important question. In Brazil, consumers only have a choice of 27 percent or 100 percent ethanol,” Buis said. “To my knowledge, they have boats, outboard motors, lawnmowers, weed whackers and other outdoor power equipment, as well as cars identical to the ones that are sold right here in the U.S., which begs the question, how is the sky not falling there from ethanol use? The answer is pretty simple, ethanol is a safe, reliable alternative fuel that is taking away from the market share of Big Oil and they, along with their aligned special interests, will do and say anything to fool the American consumer and protect their bottom line.”
Bob Dinneen, CEO of the Renewable Fuels Association, also stressed that E10 can be safely used in marine engines. “There has been a fair amount of misinformation lately about the use of ethanol in marine engines,” he said. “But boating enthusiasts heading to the water this weekend need to know that E10 has been used successfully in marine engines for 30 years now. E10 has been approved for years in engines made by popular marine manufacturers including Johnson/Evinrude, Mercury Marine, Pleasurecraft and more. Indeed, E10 gives boaters the extra octane boost they need to pull skiers, tubers, or wake boarders while also keeping the water clean by reducing harmful exhaust emissions.”
Ron Lamberty, senior vice president of the American Coalition for Ethanol, has also weighed in on the information presented at API’s press conference. “Big Oil knows that small engines are built and warrantied to operate on any blend up to E10, but that doesn’t help their cause, so their presser included a chart showing dwindling E0 sales and availability, a boat lobbyist trying to frighten people about potential misfueling, and the requisite imagery of stranded boaters being swallowed by Moby Dick… The chart was ironic, because it showed that E0 makes up 5 percent of gasoline sales, which is about twice as much as every small engine in America would use, if every one of them were fueled with E0, every time. Put that together with 94.5 percent E10 (which, again, every small engine can also use), and that means the skipper of any given boat only has a 99.5 percent chance of buying the right fuel for his three-hour tour,” he said.
“But here’s the thing – oil companies don’t have to ask EPA to make sure there is plenty of E0 around. They can do it themselves,” Lamberty added. “The RFS doesn’t require ethanol in every gallon of gas, it says refiners must use a certain amount of renewable fuel or buy credits from other refiners. That means all Big Oil would have to do to make more ethanol-free fuel available is sell some fuel(s) that have ‘extra’ ethanol. How lucky are they that 80 percent of all cars and light trucks can use E15? If you’re a refiner, and you sell 10 gallons of E15, you earn enough extra credits (RINs) to sell 4 or 5 gallons of gasoline with no ethanol in it. In the real world, there is a 100 billion gallon market for E15, and it would only take two billion gallons – 2 percent of that market - to create ALL of the extra RINs refiners would need to maintain volume of E0 they say they is ‘required’ (but actually not needed at all).”
“None of this would be an issue if Big Oil were looking for solutions instead of erecting roadblocks to the RFS. Most retailers that offer E15 tell us it makes up between 15 percent and 25 percent of their fuel sales,” Lamberty continued. “One of those marketers, Bruce Vollan, provided the simple solution to Big Oil’s dilemma in some comments he made at an EPA hearing last year: ‘The best way to get over the blend wall is to TRY to get over the blend wall.’"
Read the original story here : Ethanol Industry Weighs In On API E0 Claims
May 18, 2015
By Bob Dineen
There is nothing quite like the feeling of being on the water on a clear summer day. Tennis champion Rafael Nadal once described it as, “I like fishing. Not actual fishing, I like the peace and quiet of being at sea. It’s different.” Boating is a beloved pastime for many Americans, whether taking part in fishing, water skiing or simply enjoying the exhilarating feeling of cruising on the water.
Over the years, a lot of misinformation has been creating waves when it comes to ethanol use in marine engines. In a sign of their desperation, API actually ran ads last year claiming that ethanol—and the renewable fuel standard (RFS)—will strand boaters on the water. Nothing could be further from the truth. But as the summer months rapidly approach, we must once again equip the boating community with the facts they need to cut through the wake of misinformation being churned up by the petroleum industry.
All boaters must know that E10 can safely be used in their marine engines. Oftentimes marine publications will exaggerate concerns about E15 marine use to vilify all ethanol blends; but E15 is not approved for use in these engines. However, E10 is perfectly fine for marine engines. It doesn’t matter whether their boat has a two-stroke or four-stroke engine, an in-board or out-board motor, or a built-in or portable fuel tank.
But, don’t just take my word for it. Every marine engine manufactured today provides warranty coverage for E10. The Honda owner’s manual for the BF25A/30A Outboard Motor states that “You may use gasoline containing up to 10 percent ethanol by volume.” Additionally, Yamaha owner’s manual for the F115 notes that “Gasohol containing ethanol can be used if ethanol content does not exceed 10 percent and the fuel meets minimum octane ratings.” Manufacturers would certainly not approve a fuel that would harm the product or the consumer. Similar language appears in the owner’s manuals for Kawasaki, Mercury Marine, OMC (Johnson/Evinrude), Pleasurecraft, Tigershark (Artco) and Tracker marine engines.
In addition to the owner’s manuals clearly approving E10, Vernon Barfield, former vice president and technical chairman of the National Boat Racing Association said that “There is a myth out there that 10 percent ethanol is not good for marine engines, but we have been operating for over 20 years and have not had any issues with it whatsoever.” He continues, “…there are absolutely no problems running on 10 percent ethanol.”
We now have the facts from manufacturers and experts alike. So how do we disseminate the information? The new digital age offers a plethora of opportunities to easily get the word out at very little cost. It can be as easy as posting the information on Facebook or Twitter. E-mail also offers a quick and easy way to send the information to family and friends.
But, let’s not forget traditional media and the power of one-on-one interaction. Individuals or groups can write an op-ed or submit a letter to the editor of the local paper, ultimately reaching a larger audience. But, nothing can compete with one-on-one conversation. Have a conversation with boaters filling up at the local gas stations, strike up a discussion when launching your boat at the boat dock or chat with the local gas station owner to make sure they have the correct facts for their customers. Every little bit helps calm the waves of ethanol misinformation and create a more informed boating community.
Read the original story here : Waves Of Ethanol Misinformation
May 12, 2015
By Erin Voegele
On May 12, representatives of two biofuel trade organizations discussed the choice the White House and U.S. EPA face in proposing upcoming renewable volume requirements (RVOs) under the renewable fuel standard.
Bob Dinneen, president and CEO of the Renewable Fuels Association, kicked of the media call by discussing a letter the American Petroleum Institute and American Fuel & Petrochemical Manufacturers issued to the EPA earlier this month advocating for the agency to continue using the flawed methodology contained in the original 2014 RVO proposed rule. The RFA was among a group of 10 biofuel trade associations and companies that sent a letter EPA Administrator Gina McCarthy last week in response to the API/AFPM statement.
During the call, Dinneen noted that the heart of the controversy around the EPA’s initial 2014 RVO rulemaking is whether the agency, as a matter of law, is allowed to consider the so-called E10 blend wall in determining RFS volumes.
“The oil industry says ‘yes,’” he said, adding that the petroleum industry indicated we’ve reached the maximum level of ethanol that can be blended into gasoline because there aren’t enough vehicles or infrastructure to accommodate higher blends. “We say that’s nonsense because the RFS legislation was designed to break the blend wall, to force the investment in infrastructure and technology that would drive increased consumer choice,” Dinneen said. “The fact the law ultimately requires 36 billion gallons of renewable fuel to be used, far more than can be used in a 10 percent blend, certainly suggests where a bipartisan Congress landed on this issue in 2007.”
Dinneen also argued that API is wrong about its belief about the blend wall for other reasons. “The law provides a waiver from the required volumes for two circumstances: severe harm to the economy, which can’t be demonstrated when ethanol is less expensive than gasoline, and inadequate domestic supply. But, congress specifically rejected versions of the bill that included infrastructure and demand as a factor in such a waiver,” he said.
“Second, as a practical matter, API is also wrong about the market’s ability to consume more than 10 percent ethanol,” Dinneen continued. “There are now 17.5 million FFVs on the road capable of using anything from E10 to E15 to E85, and while EPA has approved E15 for as much as 85 percent of the vehicles on the road, manufacturers themselves now provide warranty coverage for E15 for as many as 41 million vehicles, that’s more than three times as many cars warrantied for E15 than are currently required to use premium gasoline. We don’t have a problem locating premium fuel in this country and there is no reason, other than greed, that E15 is so scarce. This is not a market or consumer issue, this is a clear case of an incumbent industry unwilling to acknowledge a changing landscape and trying desperately to hang on to its monopoly, refusing to make investments in infrastructure or allow franchisees to offer consumers a lower-priced higher-octane renewable fuel.”
To help McCarthy, members of Congress and President Obama understand the choice they face in setting the RFS RVOs, Fuels America has launched a six-figure ad buy in Washington, D.C., that includes television and digital advertisements. Dinneen stressed the choice in how to implement the RFS is essentially a choice between American innovators or oil industry profits; low carbon fuels or fracking; value-added markets for farmers and jobs in rural America or imports; and a sustainable energy future or a return to the failed energy policies of the past. “It seems like a pretty clear choice,” he said.
Brooke Coleman, executive director of the Advanced Ethanol Council, said the question is whether the EPA will, for the first time, waive the RFS if the oil industry refuses to distribute renewable fuels. “If oil companies know they can avoid the RFS by simply refusing to enter into contracts to buy and distribute our fuel, advanced biofuels will cease to have a U.S. market, and U.S. investment will dry up,” he said.
According to Coleman, the EPA’s initial proposal for 2014 RVOs has already impacted the willingness of some advanced biofuel companies to commit to additional U.S. investments. “Almost without exception, our companies are looking in China, in Brazil, in some cases in India and in some cases in Europe, to develop their second and third projects, while the first ones wait to see what the president is going to do,” he said.
Coleman also noted that the issue with the RFS rulemaking could have far-reaching impacts. If Big Oil’s refusal to comply with the RFS works, Coleman indicated that refusal could become the playbook for other industries on how to avoid compliance with Clean Air Act programs.
When asked about plans to meet with the White House to discuss the upcoming RVO proposals, Dinneen was unable to offer any specific details, but said those meetings are likely to occur. He also noted that the EPA has not held any stakeholder meetings during the initial rulemaking process.
Regarding the administration’s rulemaking decision, Dinneen added that while the RFS rule will be the EPA’s, the content of the rule will essentially be the White House’s call. He also noted that there have been so many personnel changes at the White House, it’s hard to determine what the decision will be.
Coleman added that he is fairly certain White House advisors are still considering the bad methodology, primarily because it alleviates political pressure from the oil industry. “We don’t know where they are going to go. We suspect there is more than one option on the table,” he said, adding that the Fuels America ad buy is only the first in a long series of strategies that will be deployed over the course of the month to help explain to those in Washington, D.C., and consumers as a whole, what the choice is all about.
Coleman also said that he expects the EPA to issue the RVO proposal within the June 1 timeline agreed to in court documents. While the White House Office of Management and Budget technically has up to 90 days to consider a proposed rule, Coleman said the OMB has acknowledged the EPA’s timeframe in announcing an expedited review of the rule. “I would be quite surprised if the administration was not able to get the proposal out in the timeframe that they’ve agreed to with the courts,” he said.
The EPA submitted the proposed rule for the 2014, 2015 and 2016 RVOs to the OMB on May 7. In April, the agency announced its intent to release proposed rulemaking for the 2014, 2015, and 2016 RFS renewable volume requirements (RVOs), along with 2017 RVOs for renewable diesel, by June 1. Final rulemaking is scheduled to be issued by Nov. 30.
Read the original story here : Biofuel Trade Groups Discuss RFS Rulemaking, Announce Ad Campaign
May 12, 2015
By Chris Prentice
May 12 In a long-running battle between oil refiners and the U.S. farm lobby over the future of ethanol fuel, biofuel producers may have just made a small, but important dent in big oil's formidable defenses.
Over the past few months, privately held retailers Kum & Go and Sheetz have become the first significant chains to announce plans to start selling E15, a gasoline with 15 percent of ethanol, 50 percent more than the typical U.S. blend.
By the end of 2016, those two retailers plan to add E15 at pumps at 125 stations. That will more than double the number of U.S. outlets offering cheaper fuel with a higher ethanol content than the standard E10 blend that contains 10 percent of ethanol.
If retailers continued to add stations at a similar pace over the next five years, there would be some 1,300 stations offering E15.
That would still be just a fraction of the 150,000 stations nationwide, but the roll-out of the fuel by two significant operators with outlets in 17 states challenges a central pillar of oil industry's opposition to ethanol's wider use.
Effectively forced to surrender a tenth of the U.S. market by government policies promoting biofuels, oil firms have argued the U.S. market for ethanol has reached a saturation point.
Yet retailers' expansion plans suggest room for greater E15 acceptance.
"Until now, the conversation around E15 was: why in the world would you have that?" said John Eichberger, Executive Director of the National Association of Convenience Stores' Fuels Institute. "Now, it's that there may be a reason, an economic incentive."
For retailers that blend their own fuel, the incentives are clear.
$15 BILLION PRIZE
Bumper crops have sent corn prices tumbling and shaved a quarter off ethanol's cost over the past year. At the same time blenders, such as Kum & Go and Sheetz get government credits for mixing in ethanol, which they can sell to oil companies that need them to meet federal biofuels targets.
Ultimately at stake is about $15 billion oil firms would lose to ethanol producers in a motor-fuel market worth $370 billion, based on futures and retail prices compiled by the U.S. government, if E15 replaced E10 as the new standard.
Based on last year's E10 consumption, Aakash Doshi, vice president at Citigroup in New York, estimates countrywide adoption of E15 would boost ethanol-for-fuel consumption by 40 percent to some 20 billion gallons.
That increase would propel consumption in the United States beyond the level set by the 2007 biofuels policy of some 15 billion gallons annually through 2022.
"It'll be years before E15 really takes off, but it is becoming a larger market," Doshi said.
Even incremental increases in E15 use would be a boon for corn producers as ethanol inventories stay at multi-year highs.
Eichberger, whose group represents gas retailers and fuel blenders, warns E15 has yet to win broader acceptance among retailers and drivers.
Long painted by oil firms as an engine-killer, E15 has been cleared by the U.S. authorities as safe for most newer cars and several manufacturers including Audi, Ford Motor Co and General Motors have approved its use in newer models.
However, the majority of automobiles on the road are still not approved to run on E15 and drivers who use it could risk losing their warranty, said a spokesman for the American Automobile Association.
Gas station owners' fears that they might be held liable for engine problems have largely limited E15's availability to some 100 mom-and-pop stations, primarily in the U.S. Corn Belt states that support the ethanol industry.
Selling for 5-10 cents a gallon less than an already cheap E10, the higher blend may still appeal to cost-conscious drivers and an important test of its popularity will be whether it can spread beyond the Midwest, the U.S. farm and biofuel heartland.
Kum & Go started its roll out in April in Iowa, the largest ethanol-producing state and the center of political support for the renewable fuels, and will add it at pumps in six more states.
Sheetz plans to start offering the fuel by the end of this month and will have it at 60 stations throughout North Carolina by spring 2016, a company spokeswoman said.
"We are getting closer to a point of critical mass," said Kum & Go vice president of fuels Jim Pirolli.
Read the original story here : At The Gas Pump, US Biofuel Lobby Scores A Point Against Big Oil
May 11, 2015
By David Shaffer
Increased driving and gasoline consumption are helping the ethanol industry pull out of a first-quarter slump.
Producers of the corn-based fuel reported steep declines in operating income for the first quarter, marking a sudden end to companies’ record 2014 profits.
“The industry as a whole had a tough go in the first quarter,” said Mark Warren, partner and CFO for Ascendant Partners, a Denver-based financial advisory firm that tracks ethanol plants’ performance. “We are seeing things turn a little bit as of late.”
Industry officials say that Americans are driving more, and are projected to use more fuel in 2015. Demand for ethanol is expected to increase. Some ethanol plants are making investments to boost output.
“U.S. gasoline consumption continues to improve,” Juan Luciano, CEO of the nation’s largest ethanol producer Archer Daniels Midland (ADM), told analysts on a conference call last Tuesday. “That will translate into stronger domestic demand for ethanol. These, combined with strong exports, will keep our assets running hard, especially as we move through the summer driving season.”
ADM, which has an ethanol plant in Marshall, Minn., reported a 73 percent decline in its ethanol-related operating profit, to $42 million for the three months ending in March. The biofuel segment reported $156 million in operating profit in the first quarter of 2014.
Ethanol makers largely attributed the quarter’s slump to the drop in the wholesale price of ethanol, which typically is blended at 10 percent at the pump. As crude oil and gasoline prices began to decline in late 2014, ethanol sold for less, squeezing some ethanol producer margins.
“They certainly did get slammed — a year ago they were having record margins,” said Alex Breitinger, a commodities futures broker at Paragon Ag Advisors.
Of seven Minnesota-affiliated ethanol makers tracked by the Star Tribune, Green Plains, the nation’s fourth-largest producer, reported the only ethanol-related operating loss — $3 million — in the quarter ending in March. Other producers said first-quarter operating profits declined by two-thirds or more from the same period last year.
Valero Energy Corp., the nation’s third-largest ethanol producer and owner of Minnesota’s largest biofuel plant in Welcome, reported a 95 percent drop in quarterly ethanol operating profits to $12 million. A year ago, Valero’s record first-quarter generated $243 million in ethanol operating profits.
But executives said ethanol margins have rebounded since March. At Green Plains, the Omaha-based owner of 12 ethanol plants including large operations in Fergus Falls and Fairmont, CEO Todd Becker projected ethanol will be profitable for the year.
U.S. ethanol exports should range from 800 million to 1 billion gallons, Becker told analysts. The nation’s producers exported 836 million gallons of ethanol in 2014, a 35 percent increase over 2013, but short of the 2011 record, according to the Renewable Fuels Association.
On the domestic market, wholesale ethanol is trading at least 40 cents per gallon less than gasoline, Becker said. That’s important because even with government blending mandates, ethanol’s penetration of the fuel market still relies heavily on price.
Minnesota, which requires a 10 percent ethanol blend, has 21 ethanol plants with a total capacity of 1.1 billion gallons annually. The industry refined 36 percent of the state’s 2014 corn crop into fuel, corn oil and animal feed, contributing $2.4 billion to the state’s gross domestic product, according to a report issued last week by the Minnesota Biofuels Association.
Although low gasoline prices hurt the industry’s margins early this year, the long-term effect may be quite the opposite.
U.S. gasoline consumption is on the rise. For the six months ending in March, consumption rose 2.7 percent over the same period last year. The U.S. Energy Information Administration says it expects another 1.6 percent hike this year, mainly because of lower fuel prices and a better economy.
If the consumption and export projections are correct, U.S. ethanol plants could be running at full capacity and still need to draw on stocks in storage, Becker said.
Warren of Ascendant Partners said some ethanol producers, including Green Plains, have announced upgrade projects to boost output. After the banner year in 2014, many producers are in a position to make such investments, he added.
“Last year a lot of these plants paid down a lot of debt,” Warren added. “A lot of them are in pretty good financial shape … These guys aren’t strapped.”
Another pressure on ethanol plants — high corn prices — also has gone away for now. A bushel of corn has been trading at a relatively low $3.60, below the break-even point for many farmers.
“Since the first of the year, I would expect every ethanol producer is much happier,” said Breitinger of Paragon. “Corn is down 40 cents a bushel and ethanol has gone up pretty substantially at the same time. So their margins should be looking better.”
Read the original story here : Ethanol Industry Looks To Drivers and Exports For Path Out Of A Slump
May 6, 2015
By Timothy Cama
The Obama administration is conducting the last step in its review of proposed annual ethanol blending mandates for three separate years.
The Environmental Protection Agency (EPA) sent the proposal, which has not been revealed publicly, to the White House Office of Management and Budget, Reuters reported, citing industry sources.
The proposal would cover ethanol and biodiesel blending requirements for fuel refiners for 2014, 2015 and 2016 under the renewable fuel standard.
The EPA agreed in court last month to propose the levels for 2014 and 2015 by June and to release the final mandates by November. The 2014 level should have been out in November 2013, and the 2015 one a year later.
White House review is the final step before the EPA can release the proposals publicly and gather comments from the public on them.
The declined to comment on the Tuesday report.
Read the original story here : EPA Sends Ethanol Proposals For Final Review
May 4, 2015
By Chris Prentice
NEW YORK (Reuters) - U.S. government delays in rolling out renewable fuels policy have stymied some $13.7 billion in investments and have prevented advanced biofuels companies from meeting mandated target volumes, according to an industry group analysis.
The U.S. Environmental Protection Agency's (EPA) slow rulemaking on the Renewable Fuel Standard program over the past two years has "chilled" an influx of capital needed to boost commercial production, according to the Biotechnology Industry Organization (BIO).
The Washington firm represents biotechnology companies like Abengoa Bioenergy and DuPont.
Production of advanced and cellulosic renewable fuels, which use plant waste as a feedstock, has failed to meet targets set by Congress in 2007, stoking debate over the policy. Corn-based ethanol represents the vast majority of renewable fuels in use.
The EPA has been late in meeting annual deadlines to set volumes of renewable fuels required to be blended into the transportation fuel pool, which critics say has created uncertainty throughout the industry. The agency is late in announcing mandates for both 2014 and 2015.
The EPA has to approve new ways companies have designed to qualify a fuel under RFS policy. Delays in that process have helped dry up funding, according to BIO.
Read the original story here : EPA Delays Prompt $13.7 billion Shortfall In Biofuels Investment : Report