In the News
April 27, 2015
WASHINGTON (April 27, 2015) — Today, Morning Consult released the results of a national survey conducted on behalf of the Renewable Fuels Association (RFA). Morning Consult contacted 2,047 registered voters on April 5–7. The results show that Americans overwhelmingly support the Renewable Fuel Standard (RFS) as 62 percent came out in support of the RFS while only 18 percent opposed the successful policy. Results from the full survey have a margin of error of ± 2 percent.
Bob Dinneen, president and CEO of the Renewable Fuels Association, commented on the new poll, stating, “This poll clearly shows that the oil industry’s misinformation, hyperbole, and manufactured angst against the RFS is not resonating with an American public that wants competition for the pump, relief for their wallet, and lower carbon fuels for the planet. More than six in ten Americans understand the economic, environmental, and national security benefits of the RFS. Congress and the Environmental Protection Agency should take note of the high level of support for the program and allow the RFS to work at the levels Congress envisioned in 2007. Failure to do so only rewards the recalcitrant incumbent industry, jeopardizes investment in new innovative technologies, and ignores an American public intent upon moving our nation’s energy future forward.”
Key Takeaways:
More than Six in 10 Support the Renewable Fuel Standard (RFS)
Nearly two in three registered voters (62 percent) support the RFS, which requires a certain amount of the fuel produced each year to come from ethanol, bio-diesel and other renewable sources that are not fossil fuels. The RFS garners broad, bipartisan support from Democrats (65 percent), Independents (61 percent) and Republicans (57 percent) alike. Less than two in 10 voters (18 percent) oppose the standard and two in 10 have no opinion (20 percent).
Strong Support for Federal Tax Incentives on Cellulosic Ethanol Expansion
Federal tax incentives to assist funding of Cellulosic ethanol — a biofuel produced from wood, grasses and other non-edible parts of plants — receive support from two-thirds of voters (65 percent).
Voters Oppose Tax Incentives for Oil Companies
Fifty-one percent of voters oppose tax incentives given by the federal government to oil companies in order to help pay for such things as equipment depreciation, oil depletion allowances, and foreign investment tax credits for taxes they pay in foreign countries. Only about one-third of voters (34 percent) support such government assistance to oil companies and 15 percent have no opinion.
Seven in 10 Support Requiring Automobile Manufacturers to Build Alternative Fuel Cars
Sixty-nine percent of registered voters support requiring automobile manufacturers to build cars that will run on fuel sources other than oil, such as electricity, natural gas and bio-fuels.
Key Data :
- 65 percent of men and 58 percent of women support the Renewable Fuel Standard (RFS).
- 70 percent of voters with a Bachelor's degree and 69 percent of government employees support the RFS.
- 68 percent of Democrats, 65 percent of Independents and 62 percent of Republicans support federal tax incentives to help fund the expansion of cellulosic ethanol
- By more than a 30-point margin, voters support federal tax incentives to expand the use of cellulosic ethanol over those for oil companies
- 57 percent of Independent voters oppose federal tax incentives for oil companies
- 85 percent of Democratic Men support requiring auto manufacturers to build alternative fuel cars.
Read the results of the survey here : Renewable Fuels Association Poll : Over Six In 10 Voters Support The RFS
April 27, 2015
By Cindy Zimmerman
Over the weekend at Richmond International Raceway, American Ethanol and NASCAR officially celebrated five years and seven million miles of running on 15% ethanol blended Sunoco Green E15, unveiling a new paint scheme with E15 prominently located on the hood of Austin Dillon’s No. 3 Chevrolet SS.
“This has been a tremendous partnership,” said Tom Buis, CEO of Growth Energy. “Since NASCAR switched to Sunoco Green E15 five years ago, we have seen a very a substantial change in the national dialogue regarding ethanol – when people see NASCAR rely on ethanol week after week in all three of its national racing series, they understand that it is a fuel that they can rely on as well.”
During a press conference on Saturday, National Corn Growers Association President Chip Bowling talked about what the American Ethanol partnership has meant for American farmers. “E15 American Ethanol turns our unrivaled ability to produce corn into a national asset. Consumer demand for ethanol is good for family farmers and fans appreciate that,” said Bowling. “We have grown the 12 largest corn crops in history in the last 12 years so ethanol demand is critical. It means farmers can pay their bills, reinvest in the broader economy and keep family operations like mine viable for future generations.”
Bowling added that according to a 2014 study, NASCAR fans are over 75 percent more likely than non-fans to support the use of ethanol blended with gasoline to fuel their own car.
Apr 23, 2015
Washington, DC – As the Environmental Protection Agency (EPA) works toward finalizing its proposed rule on biofuels volume requirements for 2014 and subsequent years under the Renewable Fuel Standard (RFS), U.S. Senators Amy Klobuchar (D-MN), Chuck Grassley (R-IA), Dick Durbin (D-IL), John Thune (R-SD), Al Franken (D-MN), and Mark Kirk (R-IL) are leading a bipartisan group of 37 senators in calling for a strong RFS. The EPA’s latest proposal would create uncertainty for ethanol and biodiesel producers and undermine job creation. In a letter to the EPA, the senators urged the agency to reverse course from the 2014 proposed rule and maintain a strong RFS to drive innovation and growth in America’s economy while helping reduce our dependence on foreign oil.
“The RFS has already proven to be an effective driver of alternative fuels and economic development,” the senators wrote. “It has strengthened agriculture markets and created hundreds of thousands of jobs in the new energy economy, many of which are in rural areas. The biofuels volume requirements for 2014 and beyond have serious implications for our economy and energy security. We encourage you to ensure a final proposal continues to work toward achieving the RFS’s long-term economic and renewable energy goals.”
The RFS requires that transportation fuel sold in the United States contain an increasing amount of renewable fuel each year through 2022. While the volume of biofuels that transportation fuel must contain each year has already been set by Congress, the EPA proposed a lower level than Congress intended for 2014. The EPA recently stated it will finalize the biofuels volumes for 2014, 2015, and 2016 by November 30, 2015, but it has not indicated what the volume levels will be. Once the EPA finalizes the required 2014 level, refineries will be able to determine whether they met last year’s biofuels requirements or need to purchase additional renewable fuel credits in order to come into compliance. Moving forward, the senators are calling on the EPA to ensure that the RFS continues to drive further adoption of biofuels.
Last year, the senators met with EPA Administrator Gina McCarthy and sent a letter to McCarthy with 25 other colleagues to urge changes to the administration’s proposed 2014 RFS rule, which would hurt the nation’s agriculture economy and energy security.
The following senators also signed onto today’s letter: Tammy Baldwin (D-WI), Michael Bennet (D-CO), Roy Blunt (R-MO), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Maria Cantwell (D-WA), Dan Coats (R-IN), Joe Donnelly (D-IN), Joni Ernst (R-IA), Deb Fischer (R-NE), Lindsey Graham (R-SC), Martin Heinrich (D-NM), Heidi Heitkamp (D-ND), Mazie Hirono (D-HI), John Hoeven (R-ND), Ed Markey (D-MA), Claire McCaskill (D-MO), Jeff Merkley (D-OR), Patty Murray (D-WA), Bill Nelson (D-FL), Gary Peters (D-MI), Jack Reed (D-RI), Pat Roberts (R-KS), Mike Rounds (R-SD), Brian Schatz (D-HI), Jeanne Shaheen (D-NH), Debbie Stabenow (D-MI), Jon Tester (D-MT), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), and Ron Wyden (D-OR).
The full text of the senators’ letter is available below:
Dear Administrator McCarthy:
As you work toward finalizing the proposed rule on biofuels volume requirements for 2014 and subsequent years under the Renewable Fuel Standard (RFS), we urge you to take this opportunity to reverse course from the 2014 proposed rule and craft targets for domestic biofuels that reflect Congress’ intended goals for the RFS.
The RFS has already proven to be an effective driver of alternative fuels and economic development. It has strengthened agriculture markets and created hundreds of thousands of jobs in the new energy economy, many of which are in rural areas. Setting strong biofuels volume requirements for 2014 and beyond will ensure this progress continues. A stable RFS will also provide the certainty needed to unlock future investments in renewable fuels and necessary infrastructure, reduce our nation’s dependence on foreign sources of energy, and drive innovation and progress toward cellulosic, biodiesel, recycled-waste, algal, and other advanced biofuels.
When Congress passed the RFS and it was enacted into law, the intent was a forward-looking policy that drives future investments in both biofuels production and the infrastructure necessary to bring these biofuels to market. With its harmful 2014 proposed rule, the U.S. Environmental Protection Agency limited biofuels volume requirements based on available existing infrastructure, a condition that falls outside of the EPA’s clearly defined waiver authority provided by Congress in the RFS.
The biofuels volume requirements for 2014 and beyond have serious implications for our economy and energy security. We encourage you to ensure a final proposal continues to work toward achieving the RFS’s long-term economic and renewable energy goals.
Sincerely,
April 20, 2015
By Devin Henry
A progressive group is promoting ethanol on the anniversary of the Gulf of Mexico oil spill.
Americans United For Change has launched a six-figure ad campaign in the Midwest, promoting the federal ethanol mandate in Des Moines, Iowa and warning that efforts to repeal it could result in more incidents like Deepwater Horizon. The oil drilling rig exploded five years ago Monday, killing 11 and eventually spilling 3.19 million barrels of crude oil into the Gulf of Mexico.
The ad is meant to target Republican presidential candidates — some of whom are wary about the Renewable Fuel Standard (RFS) — in the state that produces the most ethanol and hosts the nation's first presidential caucuses.
"It comes down to this: the more Big Oil drills, the more they spill," the group's president, Brad Woodhouse, said in a statement. "If lawmakers discourage innovation towards cleaner renewable fuels of tomorrow, Big Oil will only be encouraged to drill, and spill, more."
A separate ad campaign in Chicago promotes a proposed ordinance requiring gas stations offer a fuel made with a higher blend of ethanol.
Green groups and environment-minded lawmakers have used the anniversary of the Gulf oil spill to make the case against expanded off-shore oil drilling. Americans United for Change's ads come as the energy industry, environmental groups and lawmakers gear up for a larger fight over the 10-year-old ethanol mandate.
Read the original story here : Progressive Group Pushes Ethanol On Gulf Oil Spill Anniversary
April 15, 2015
By Timothy Cama
Former Secretary of State Hillary Clinton met with representatives of Iowa’s ethanol industry Wednesday as part of the first trip of her campaign for the president.
Clinton, the Democratic frontrunner, met with Iowa former secretary of agriculture and lieutenant governor Patty Judge and Bruce Rohwer, director of the Iowa Corn Growers Association, among other Democrats.
Judge is also a co-chairwoman of America’s Renewable Future, an ad-hoc group advocating for 2016 presidential contenders to endorse the federal ethanol blending mandate.
“We had the opportunity to talk about issues facing Iowa — renewable fuels being one of them,” Judge said in a statement after the meeting in Marshalltown, Iowa.
“Secretary Clinton was extremely receptive and I feel encouraged by her comments about the Renewable Fuel Standard,” she said.
Rohwer also said he was happy with the meeting.
“I was able to thank Secretary Clinton for her past support of the RFS and I am confident future conversations will be just as positive,” he said in the statement.
Clinton opposed the ethanol mandate in the Senate in 2002 and called it a “tax.”
But when she ran in the 2008 presidential election, Clinton was strongly supportive of the renewable standard, which is widely supported in Iowa, whose economy depends large on the corn that makes most ethanol.
She said ethanol provides one of the best chances toward “limiting our dependence on foreign oil.”
Read the original story here : Clinton Meets With Ethanol Representatives
American Coalition For Ethanol
April 13, 2015
By Gene Hammond, owner of Association Motor Club Marketing
As the co-owner of Travelers Motor Club and Association Motor Club Marketing, my colleagues and I never imagined we would be on Capitol Hill visiting with Members of Congress about the safety of ethanol-blended fuels, but that’s exactly what we did recently as part of the American Coalition for Ethanol annual grassroots fly-in.
We’re not lobbyists. We’re in the business of helping motorists who get stranded and need fuel, a tire repair, a quick tow or who lock themselves out of their cars. Our companies serve nearly 20 million motorists in all 50 states, and we’ve operated auto clubs for more than forty years. But for two short days on Capitol Hill in March, we met with 17 congressional officesfrom Arizona, California, Georgia, Louisiana, Mississippi, Nevada, New Jersey, New York, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin to explain what we’ve heard from our auto club members regarding E15.
More than two years ago gas stations around the country began selling E15, a new fuel approved by EPA for cars made in model year 2001 and later. AAA and some gas companies predicted frequent and severe engine problems from this new fuel and called on the federal government to suspend the sale of E15. As stations began to offer E15 and motorists began using it, we closely monitored our road service calls for any indication of problems from the new fuel. The results? We’ve never had an E15 related service call or complaint of any kind. That E15 hasn’t caused any damage to cars is no surprise to us, because during our entire time in the motor club business, we’ve never had a complaint about any blend of ethanol in gasoline, period.
But the critics and the E15 ghost stories haven’t gone away, so we did our part recently by meeting with Members of Congress about what we’ve seen, and more importantly what we haven’t seen, from the usage of E15 by our motor club members. If the anti-E15 predictions and warnings Congress has heard for the last two years were true, the people who had those problems would be well known to you by now. But the charges aren’t true. We let Congress know how safe this fuel is. We don’t think motorists should be forced to use any fuel, but what the Renewable Fuel Standard (RFS) does is give every driver in the United States the option to buy a quality American made product like the E15 fuel blend if they choose. More fuel choices mean more competition and that means our members save at the pump.
With nearly 20 million members nationwide, we’ve seen it all. Flat tires, dead batteries, and a lot of people who accidently put diesel in their gasoline-powered cars. When these things happen, we’ll be there to help. What we haven’t seen and don’t ever expect to see, are problems from using E15 or any other blend of ethanol.
Read the original story here : Motor Club's Blog Post : E15 Is Safe
April 10, 2015
By Erin Voegele
The U.S. EPA has posted a notice to its website announcing that the volume requirements for the 2014, 2015 and 2016 renewable fuel standard (RFS), along with the 2017 volume requirement for biomass-based diesel, will be finalized by Nov. 30. A portion of the new compliance schedule is the result of a proposed consent decree in litigation brought against EPA by the American Petrochemical Institute and American Fuel and Petrochemical Manufacturers.
Under the proposed consent decree, the EPA said that it will propose 2015 RFS volume requirements by June 1 and finalize volume requirements for 2014 and 2015 by Nov. 30. Also under the decree, the EPA will resolve a pending waiver petition for 2014.
Outside the scope of the decree, the EPA has committed to propose RFS volume requirements for 2016 by June 1 and finalize them by Nov. 30. The agency also said it will finalize the RFS biomass-based diesel volume requirements for 2017 on the same schedule. Regarding the 2014 standard, the EPA said it will re-propose 2014 volume requirements by June 1 that reflect the volumes of renewable fuel that were actually used in 2014.
The consent decree relates to a lawsuit filed against the EPA by the API and AFPM on March 18 in the U.S. District Court for the District of Columbia. In the compliant, the oil groups allege the EPA has violated a nondiscretionary duty under the Clean Air Act to establish renewable fuels obligations for 2014 and 2015 and to approve or disapprove a petition filed by the API and AFPM to waive, in part, the 2014 RFS. That waiver petition was submitted to the EPA in August 2013.
Documents published by the EPA explain that the consent decree is not yet final. While it has been signed by the API and AFPM and lodged with the court, it has not been signed by EPA and has not been signed or entered by the court at this time. According to a notice filed by the EPA with the court, the consent decree is not final and cannot be entered by the court until the EPA administrator provides a reasonable opportunity by notice in the Federal Register for members of the public to comment in writing. Following the public comment period, if none of the comments disclose facts or considerations which indicate that the decree is inappropriate, improper, inadequate, or inconsistent with the CCA requirements, the administrator will request that the court enter the decree.
The Renewable Fuels Association has spoken out in support of the EPA rulemaking timeline. “We applaud EPA and API for reaching an agreement that will provide all stakeholders some certainty with regard to the renewable fuel standard,” said Bob Dinneen, president and CEO of the RFA. “No one has benefited from the delays in setting annual renewable volume obligations; and while we are sympathetic to the difficulty EPA faces in promulgating annual targets, the statute is clear about the volumes required and the agency simply has to do a better job moving forward. This consent agreement is a good start. We are particularly pleased that the agency has committed to addressing the 2016 RVO in the same timeframe even though that is outside the scope of the consent agreement. More important than EPA meeting its statutory deadlines, however, is that the agency recognize the market transforming purpose of the RFS and allow the RIN mechanism to drive investment in infrastructure and compel consumer choice at the pump.”
The Adavanced Ethanol Council also supports the agreement between the EPA, API and AFPM. “The scheduling agreement between the oil industry and EPA is actually a good signal for the advanced biofuels industry because it lays out a time frame and a reasonable market expectation for resolving the regulatory uncertainty around the RFS,” said Brooke Coleman, executive director of the AEC. “Now that we have a better idea of when it will happen, we look forward to working with EPA to make sure that the new RFS proposal supports the commercial deployment of advanced biofuels as called for by Congress. We were encouraged by EPA’s decision late last year to pull a problematic 2014 proposal, and we are optimistic that EPA will make the necessary adjustments and put the RFS back on track going forward.”
Growth Energy said the EPA’s timeline will provide the industry with some certainty. “I am pleased to hear that the EPA has finally put a process in place to establish some certainty for biofuel producers with the recent announcement of the timeline for the proposed 2015 RVO rule by June 1st as well as the final 2014 and 2015 volume obligations by Nov. 30, 2015,” Tom Buis, CEO of Growth Energy, said. “Our producers have faced ambiguity for too long and today is welcome news that they are establishing a level of certainty with this announcement. However, far more important than timing is that that the EPA establishes a final rule that moves our industry forward, and reflects the bipartisan vision Congress intended for the RFS. Additionally, while not part of the consent decree, we are pleased to see that the EPA has committed to finalizing the 2016 RFS RVO numbers this year as well. By taking this action, they are ensuring that the RFS is back on a path to certainty for the biofuels industry, providing the necessary guidance for the industry to continue to thrive and advance alternative fuel options for American consumers.”
The American Coalition for Ethanol is also pleased with the EPA’s newly announced timeline. “ACE has consistently said it is much more important for EPA to get the RFS done right than it is for them to get the RFS done quickly, and that bears repeating given today’s announcement that the RFS will be getting back on track for implementation,” said Brian Jennings, executive vice president of ACE. “Last year Big Oil came close to bullying EPA to completely re-write the RFS so they could escape their legal responsibility to blend E15 and flex fuels into gasoline. But thanks to comments from ACE members and other biofuel supporters, EPA wisely chose to abandon their proposal to set the 2014 RFS on the E10 blend wall. It appears EPA is going to get the RFS back on track for implementation. Our priority will continue to be to ensure EPA holds oil companies legally responsible under the RFS for making cleaner and less expensive fuel choices, such as E15 and E85, available to consumers.”
The National Biodiesel Board said it is supportive of the EPA’s announcement. “We are pleased to see the EPA make these further commitments toward ending these delays,” said Anne Steckel, vice president of federal affairs at the NBB. “Biodiesel is the most successful EPA-designated Advanced Biofuel under the RFS to date, and the Obama Administration should be doing everything it can to promote biodiesel so we can show that Advanced Biofuels are here today, cutting greenhouse gas emissions by more than 50 percent, creating jobs and reducing our dependence on global petroleum markets that wreak havoc on our economy. The RFS is the most successful policy we have for reducing emissions in the transportation sector, and it is working. We applaud the EPA for taking this step and look forward to working with the Administration in the coming weeks to get this program back on track.”
Read the original story here : EPA To Finalize 2014, 2015 and 2016 RFS Rules By November
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April 10, 2015
By David VanderGriend
In baseball, they often refer to the leadoff man as the igniter, whose job is to get the offense going: get on base, start a rally and set the stage for a lot of runs. In many respects, that’s the role of the renewable fuel standard (RFS), to set the stage for a bigger score for biofuels. But rather than focusing on a big inning, the ethanol industry may be playing small ball as we await the final rulemaking renewable volume obligations (RVO). The U.S. EPA stated it intends to package 2014 with the 2015 and 2016 volumes in what could be one heck of an announcement by the end of June.
I am encouraged by numerous recent statements out of EPA that it remains committed to making the RFS all it can be. But at the same time, let’s not kid ourselves. Do we really think there are going to be any surprises? We know that the 2014 RVO will be exactly what was consumed and 2015 is not likely to be any different. EPA will be hard-pressed to do anything more than take what was used the first half of 2015 and multiply by two, so we probably know that number as well. Sure, there might be a little more due to an increase in E15, midlevel blends and E85. For 2016, there might be a slight increase, if total gasoline use goes up. But for now, it is clear we will wind up somewhere in the 14 to 15 billion-gallons-per-year range for corn ethanol. There may be another billion or two gallons in the export market, but would the corn ethanol industry be satisfied with a 17 billion-gallon cap, when the motor fuel market is 125 billion gallons plus? I certainly am not.
I have always viewed the RFS as an important building block, assuring a base market. Whether wearing my hat as CEO of ICM or as president of the Urban Air Initiative, or as a member of most ethanol trade organizations, I support the RFS. However, it should not be viewed as what defines the value of biofuels, a value which can only be realized if we get the fuel into the market.
How do we get access to the market? How do we maintain the RFS and build on it? The answer lies with carbon controls and protecting public health—the new value proposition.
One element Congress got right with the RFS was to reward fuels that reduce carbon emissions. While the corn cap is law and, to some extent, EPA's hands are tied, the carbon footprint of corn ethanol is demonstrably better than the credit given by EPA. Our work at ICM and other new, and constantly evolving, research clearly shows that corn ethanol can attain advanced biofuel carbon-reduction levels, one of the primary objectives of the RFS.
If refocusing on achieving carbon reduction is one way to create new demand, another is the critical issue of improving fuel quality and emissions of gasoline. Ethanol's greatest strength is its high octane. This is an issue of public health in that ethanol used in midlevel blends like E15 or E30 can replace some of the most harmful components of gasoline—if we have access to the market. At ICM and Urban Air Initiative, we have concluded that EPA is blocking access to the market for midlevel blends and we are challenging them.
In legal action along with the Energy Future Coalition, ICM has asked the courts to agree that the certification procedures adopted by EPA are keeping E30 out of the market. In another challenge, UAI is calling EPA out on its antiquated modeling used to guide states on how to control pollution that includes an unwarranted penalty for ethanol. Our research, supported by auto industry experts, clearly shows many of the negative emissions attributed to ethanol are, in fact, changes made to base gasoline. Splash blending ethanol always improves gasoline quality and EPA’s outdated models simply need to be updated. Why is this so important? Gasoline is the source of some of the most dangerous and harmful pollutants linked to a range of health and respiratory ailments, including lung disease and even neurological disorders. Infants, the elderly and expectant mothers are particularly at risk.
The RFS is the platform to launch and engage the environmental and health communities in this discussion. Let’s get past the RFS numbers game—as important as it is—and look at additional ways to reduce carbon and protect public health.
Read the original story here : Setting The Table For The Big Score
April 7, 2015
As world food prices hit a near five-year low, dropping 1.5% last month according to the United Nations' Food and Agriculture Organization's most recent price report, Growth Energy said this is proof that " claims of ethanol increasing food prices do not hold any merit."
According to the FAO, the global food price has been on a downward path since April 2014. It tracks five major food commodity groups internationally: cereals, meat, dairy products, vegetable oils and sugar.
In the latest report comparing February 2015 to March 2015, sugar was down significantly, charting a 9.2% drop; vegetable oil a 3.1% drop; cereal and meat about a 1% drop; and dairy was the only gain, with a 1.7% increase.
Tom Buis, CEO of Growth Energy, said the report shows the U.S. and other nations are "capable of producing increased quantities of food, feed, fiber and fuel."
He noted that global grain stocks increased between 2006-07 marketing year and the 2013-14 marketing year by 160 million metric tons, or 47%. Those dates correspond with the enactment of the Renewable Fuel Standard, he said.
The RFS is a policy that sets the amount of renewable fuels to be blended in the domestic fuel supplies.
Buis said global crop prices have strengthened also, helping farmers invest in new production practices that improve sustainability and productivity.
Read the original story here : FAO's Latest Food Price Report Good News For Ethanol
April 5, 2015
By Ryan Koopman
Chicken Little ran nervously through the barnyard, warning that "the sky is falling, the sky is falling."
For the last decade, Big Oil has been running nervously through the halls of the U.S. Capitol and the EPA, screaming — to anyone who will listen — that the Renewable Fuel Standard is an "unworkable," "infeasible," "unsustainable," rule that will create a "death spiral" in the fuels market.
The stories are similar, with one difference: Chicken Little believed his tale.
A new study published this week by University of Calgary professor (and one-time Iowan) James Coleman shows that for years, Big Oil hasn't been completely honest about the RFS. They've been telling the EPA one thing (that the RFS is a horrible, economy-killing law) and telling their shareholders another thing (that it's no big deal). That general concept — that Big Oil has been misrepresenting the effects of the RFS — is something Iowans have been saying for years. But until now, no one has realized that Big Oil has effectively admitted as much.
Each year, the EPA proposes a new RFS — a rule that governs how much biofuel must be sold — and solicits comments on that proposed rule. These comments aren't supposed to be a joke. The EPA is required to consider them, and it's important that it does. When a regulatory body makes law, it needs input from stakeholders; they're the ones on the ground, after all. So it's important that those stakeholders be honest in their assessments.
As you might expect, oil companies — Chevron, ExxonMobil, Marathon, Shell, and others — take the opportunity to tell the EPA what they think of the proposed RFS standard. And as you might expect, they don't have good things to say. Shell told the EPA in 2013 that the proposed RFS would "limit the supply of gasoline," which would hurt its business and cause "severe economic harm." Even more forceful, the American Petroleum Institute — which boasts that it is the only "association that represents all aspects of America's oil and natural gas industry" — recently told the EPA that its 2013 RFS proposal could cause "large increases in transportation fuel costs" that "would ripple through the economy imposing significant costs on society" that would eventually push the fuel markets into a "death spiral."
That seems pretty bad. And it would be, if it were true. But it's not, and we know because Big Oil has told us.
Each year, publicly traded companies must file what's called a Form 10-K. The purpose (and the legal requirement) is to tell shareholders how the company is doing and to warn them about significant bumps in the road ahead. So if the proposed RFS is really such a problem — if there really is a risk that it will create a death spiral in the fuel markets — then Shell, ExxonMobil, Chevron, and other oil companies should be telling their investors in the 10-K.
They're not. Professor Coleman collected the comments that publicly trade oil companies made to the EPA on the RFS from 2009 to 2013 and compared those comments to those company's 10-K filings. He found that oil companies tell the EPA that the RFS could create significant financial hardship for them and the country, and at the same time they assure their shareholders that everything is OK. Indeed, Shell — the company that said that the RFS could limit the gasoline supply and cause "severe economic harm" — suggested in its securities filing that the RFS was a boon for its bottom line.
The EPA should take note, and it should review the oil companies' comments with the appropriate skepticism.
Of course, maybe the oil companies think that their sky-is-falling assessments of the RFS are accurate; maybe it's the shareholder disclosures that are the fib.
Probably not. The failure to make full disclosure to shareholders is against the law and can lead to costly lawsuits. Oil companies and their lawyers know that. Exaggerating to the EPA, on the other hand, doesn't come with legal consequences.
Professor Coleman has a simple solution for this problem: If a publicly traded oil company (or any public company, for that matter), comments on the EPA's proposed rules, it should attach its 10-K. That way, it can't tell the EPA one thing and its shareholders another. We'll get the truth — at least as Big Oil sees it.
Read the original story here : Study Shows : Big Oil Is Chicken Little Over Ethanol
April 3, 2015
By Kim Ukura
MORRIS — Local business leaders helped share the story of ethanol and its importance to the rural economy during a meeting with members of the Minnesota House of Representatives last week.
On Friday, March 27, House Majority Leader Joyce Peppin and Rep. Jeff Backer visited the Morris area to tour Denco II and, later, meet with constituents at the annual Wulf Cattle Opportunity Sale.
Backer said he invited Peppin to tour the district to better understand how ethanol works and its impact on different aspects of the agricultural economy.
"Ethanol is extremely important to the U.S. economy and our local area," said Backer. "Ag, even though it's a very small percentage of the budget, brings a lot of money into the economy and so forth."
General Manager Mick Miller said the ethanol industry's current challenge is the Renewable Fuel Standard, a federal program that requires transportation fuel to contain a certain percentage of renewable fuels like ethanol.
Without a requirement to include renewable fuels, the oil industry would force ethanol producers out of the fuel market.
"That takes consumer choice away, that's going to raise pump prices — all that we're asking for is stabilization in Congress to make sure that we have a renewable fuel standard that allows us access to the market so we can grow and continue to show the impacts ethanol is having on America," Miller said.
Miller added that the food versus fuel debate over the use of corn is also misleading. Ethanol production uses about 30 to 35 percent of corn produced in the United States, while the rest is either fed to cattle or exported.
"We're not tilling up more ground to make more corn for ethanol demand — our farmers are becoming more and more efficient," said Miller.
Board member Lowell Nelson told Peppin that without ethanol, "agriculture would go in the tank."
"Agriculture is so unbelievably dependent on ethanol at this point, it's scary to think about it without it," he said.
Miller also highlighted the ways that Denco II's production process works throughout economy. Denco II was formed in 1998 and is owned by local shareholders. The plant works directly with about 275 producers to procure corn for the facility.
During the ethanol production process, about 33 percent is turned into ethanol, while another 33 percent is converted into distillers grain. This is a high protein feed that can, in turn, be fed to cattle. Approximately 65,000 tons of distillers grain is eaten by cattle in the region, Miller said.
City Manager Blaine Hill also noted the impact that Denco II has on the local community. Hill said the plant helps create jobs in the community and offers other benefits and support for local producers.
"Our county, this area, is doing very, very well in the overall scope of the economy," said Hill. "The future looks really bright, but this is a very important thing to the community.
Denco II has also partnered with local gas retailers to build the local market for E85, a fuel mixture that is 85 percent ethanol and 15 percent gasoline. Miller said that despite misinformation distributed by big oil companies, E85 is safe for and effective for vehicles.
The plant devotes about 10 percent of their production to direct sales of E85 to about 45 gas stations in the region. Thirteen of those stations close to the plant are part of a price promotion program that started in 2013. Those stations receive the ethanol at a discount from Denco II, then sell it to customers for $1 less than regular E10 fuel.
Miller said vehicles using E85 do show about 30 percent reduction in miles per gallon, but if E85 is priced competitively consumers will see a savings.
"Traditionally, they say if you're saving 30 percent at the pump, you're better off using E85," said Miller.
Read the original story here : Local Business Leaders Share Story Of Ethanol With Legislators
March 27, 2015
WASHINGTON — Science Magazine has published yet another study from environmental activist and attorney Timothy Searchinger today that re-packages his already disproven theory of food vs. fuel. His assertions about the impact of biofuels on food markets run counter to the facts on the ground and have been debunked time and time again. The Renewable Fuels Association (RFA) once again exposes the holes in Searchinger’s theory as Bob Dinneen, president and CEO of the RFA, released the following statement:
“Economic models are one thing — reality is another. Data from the last decade clearly show that feed grains (like corn) used to produce meat have not been ‘diverted’ away from animal feed markets to make biofuels. In fact, even after accounting for the grain used for ethanol, more grain is available for feed and food use today than at any time in history. If biofuels were truly diverting grain away from food and feed production and causing scarcity, we would expect to see food prices rising abnormally — but this clearly isn’t happening. The United Nations food price index is at its lowest point since the global recession in 2009, and in real terms today’s food prices are lower than in the 1960s and 1970s.
“What’s more, the UN says per capita food supply and protein supply are both at record levels globally — in other words, there is more food available per person today than ever before. Global hunger has fallen 21 percent since 1992 and undernourishment is also at all-time lows, according to the UN. Indeed, ‘scarcity’ isn’t the problem facing the world’s undernourished and hungry — rather, the incredulous amount of food wasted is the largest nutrition-related challenge facing our world. The UN shows that ‘roughly one-third of food produced for human consumption is lost or wasted globally, which amounts to about 1.3 billion tons per year.’ For context, that amount of wasted food is almost equivalent to the global supply of coarse grains (corn, oats, barley, sorghum, rye, and millet). Or, in other words, the amount of food wasted is 15 times larger than the net amount of feed grains used by the U.S. ethanol industry.
“Let’s not forget that ethanol producers make both fuel and feed. Only the starch in the grain feedstock is converted to ethanol, while 100 percent of protein, fat, and fiber remain available to the feed market in the form of distillers grains or other co-products. The world wants more protein — not more carbohydrates — and using grain for ethanol has absolutely no impact on global protein supplies.”
Read the original story here : Economic Models Are One Thing - Reality Is Another
The Washington Post With Bloomberg
March 24, 2015
By Mario Parker
The Environmental Protection Agency moved Tuesday to gather output data from cellulosic ethanol producers to help it determine the consumption targets. That form of the biofuel is produced from non-edible sources, compared with first-generation grain-based ethanol.
EPA’s request for the data comes as it’s more than 15 months behind a statutory deadline to issue requirements under the Renewable Fuels Standard for how much biofuels refiners should have used in 2014, and four months late in releasing targets for this year.
“At a minimum, that could portend delays to the finalization of cellulosic targets,” Timothy Cheung, vice president and research analyst a ClearView Energy Partners LLC, a Washington-based policy analytical firm, wrote in a note Tuesday.
Biofuel and petroleum interests have battled on whether the 2007 energy law is tenable.
Last November, EPA decided to put off setting 2014 quotas, saying it would issue rules for last year, 2015 and 2016, this year.
In February, EPA Administrator Gina McCarthy said the rules would be issued “very soon.”
Public Comments
Today’s notice asks for public comments on the possible request to collect information from the cellulosic producers. The responses are due by May 26, leaving a scarce amount of time for the agency to meet its “self-imposed June 20 deadline to propose the multiyear RFS package,” Cheung wrote.
“This does not impact the volume rule in terms of timing, numbers or policy,” EPA said in an e-mailed statement. “It is simply a step to stay in compliance with the paperwork reduction act.”
Compliance with the standard is tracked by Renewable Identification Numbers, or RINs, certificates attached to each gallon of biofuel. Once a refiner blends biofuel into petroleum, they can keep the RINs or trade them to another party.
Advanced biofuel RINs for 2015 jumped 2 percent to 75.5 cents, while 2015 corn-based ethanol RINs increased 1.1 percent to 67.25 cents, according to data compiled by Bloomberg.
In deciding the consumption mandates, EPA is likely to align 2014’s requirement with how much biofuel refiners used and base 2015 and 2016 on gasoline consumption and biofuel production, Aakash Doshi, an analyst at Citigroup Inc. in New York, said in a report earlier this month.
Read the original story here : EPA Request For Biofuel Data Signals Renewable Fuel Delays
March 24, 2015
By Robert White
RFA talks with thousands of fuel retailers at petroleum marketer meetings, conferences, webinars, and one-on-one meetings. Over the course of these meetings it quickly becomes clear that every decision made by fuel retailers is based on return on investment (ROI) and the outcome of every decision is compounded exponentially for the 60% that are single station owners. Today, nearly all of these stations offer premium fuel, but should they?
Until this year, the business case for E15 hinged on what vehicles the EPA had approved: 2001 & newer light duty cars, trucks and SUVs. These vehicles tally over 203 million, or 83% of the U.S. fleet. That is more than enough to justify the infrastructure to support them. But that has not happened and we must ask why not. The reason most often given is that while the Environmental Protection Agency (EPA) has approved the use of E15 in these vehicles, the auto manufacturers have not.
So what do the facts say? RFA recently found that 70% of MY15 vehicles are explicitly warranted for E15 — a trend that has been moving upward since MY12. So, just how many vehicles are now explicitly warranted for E15? More than 41 million! Add to that the 18 million FFVs that are also approved for E15, and there are 59 million E15 warranted cars on the road today. For comparison, there are just 15 million cars requiring premium gas today. But, no high performance automobile owner has trouble finding premium fuel!
Here is the breakdown:
- ~ 244,000,000 light duty vehicles on the road today
- ~ 15,000,000 require premium fuel
- ~ 203,000,000 are 2001 & newer and approved by EPA to use E15
- ~ 41,000,000 are explicitly warranted for E15
- ~18,000,000 are FFVs (also warranted for E15)
- ~ 41,000,000vehicles are 2000 & older
The fact that there are four times as many vehicles fully warranted for the use of E15 than those requiring premium gas today should be a compelling consideration for retailers considering the switch to E15 and E85. Many retailers are shocked to find that they are dedicating an entire fuel tank to premium fuel, which allows them to service fewer vehicles than if they sold E15 and E85. If retailers would consider converting their premium tank to E85 and installing a blender pump to allow for E15, they would gain both segments from one existing underground storage tank. The potential consumer fleet would jump from just 15 million vehicles to 59 million vehicles. Moreover, premium sales have been dropping. Most retailers will concede that premium sales are between 1–4% of their total volume, while stations making the conversion to E85 — and adding E15 — have demonstrated that they can turn that 1–4% into 20–30%.
The business case for higher blends of ethanol is actually quite simple. If retailers want to differentiate themselves, lower their consumer price at the pump, increase their overall fuel volumes, boost their in store sales, and ultimately increase their profits … premium might not be the wisest fuel choice. Success will come in the form of higher-level ethanol blends.
Read the original story here : Should Premium Fuel Still Warrant A Tank?
RFA talks with thousands of fuel retailers at petroleum marketer meetings, conferences, webinars, and one-on-one meetings. Over the course of these meetings it quickly becomes clear that every decision made by fuel retailers is based on return on investment (ROI) and the outcome of every decision is compounded exponentially for the 60% that are single station owners. Today, nearly all of these stations offer premium fuel, but should they?
Until this year, the business case for E15 hinged on what vehicles the EPA had approved: 2001 & newer light duty cars, trucks and SUVs. These vehicles tally over 203 million, or 83% of the U.S. fleet. That is more than enough to justify the infrastructure to support them. But that has not happened and we must ask why not. The reason most often given is that while the Environmental Protection Agency (EPA) has approved the use of E15 in these vehicles, the auto manufacturers have not.
So what do the facts say? RFA recently found that 70% of MY15 vehicles are explicitly warranted for E15 — a trend that has been moving upward since MY12. So, just how many vehicles are now explicitly warranted for E15? More than 41 million! Add to that the 18 million FFVs that are also approved for E15, and there are 59 million E15 warranted cars on the road today. For comparison, there are just 15 million cars requiring premium gas today. But, no high performance automobile owner has trouble finding premium fuel!
- See more at: http://www.ethanolrfa.org/exchange/entry/should-premium-fuel-still-warrant-a-tank/#sthash.Va5dzaeo.dpuf
This month, we spotlight Christianson & Associates, PLLP. We spoke to John Christianson, the founding partner at Christianson & Associates, about the firm’s history and its involvement with the ethanol industry.
John Christianson, founding partner
Please tell us about Christianson & Associates.
Christianson & Associates, PLLP (C&A) is a full service Certified Public Accounting firm established over 28 years ago, with offices in Willmar and Litchfield, MN. C&A has deep roots in the agricultural industry; the partners and many of the staff have farming backgrounds. Our clients include ag producers, cooperatives, ag elevators, ag supply companies, feed mills, ag processing, and renewable energy.
With a strong tradition of client service for the ag industry, C&A has grown by developing services and products based upon the needs of these clients. With over 50 staff members, C&A is ready to meet ag industry needs such as forecasting, development-stage accounting services, unique tax planning strategies, auditing, RIN consulting and attestation services, and other consulting services including performance analysis and government grant writing and consulting.
The firm has developed deep expertise in the EPA and regulator reporting for producers. C&A has had the opportunity to develop the Biofuels Benchmarking service, which is a confidential analytical tool and provides over 65 ethanol production facilities a means by which to compare themselves to their peers in the industry and query unique groups or time periods to run additional reports and graphs. The firm has also funded the development of a commodity processing software, “Intellego,” which is integrated with Microsoft Dynamic GP. Over 75 plants operate on the C&A platform which gives them maximum flexibility to monitor their operational and financial activity through a multitude or reports.
Please tell us about Christianson & Associates’ role within the ethanol industry in Minnesota and why the company is committed to supporting the ethanol industry now and in the future?
C&A has been fortunate to be involved from the early stages of the development and growth of the ethanol industry. Working with the early industry leaders and trade organizations for over 20 years, the firm had the opportunity to work on changing federal legislation related to tax credits in the ethanol industry. C&A has been committed to providing unique solutions for our clients to solve their needs. The deep roots of our ag backgrounds are demonstrated by our commitment to the ethanol industry. We support the industry through the trade organizations and support and participate in the industry events. Our goals is to be the financial resource to the industry with our products, services, and expertise.
From your perspective, what would you like consumers to know about the ethanol industry and the fuel it produces?
Consumers need to understand a number of things about ethanol:
1. Ethanol is not subsidized by the government like petroleum.
2. Ethanol will not cause our young men and women to be sent to war in the Middle East.
3. Ethanol is the cheapest octane in the market.
4. Ethanol reduces the price of gasoline for the consumer.
5. Ethanol is clean and reduces GHG emissions.
6. Ethanol improves our energy security by reducing oil imports required.
7. Ethanol creates jobs in rural areas where jobs are scarce.
8. The ethanol industry produces fuel and food.
What do you think is needed for the availability of E15 to grow?
For E15 to grow, consumers need to be educated and understand the impact ethanol has on the economy and environment. The work the industry is doing by developing the blender pump build-out will need to continue and expand. Ultimately the ethanol industry will need access to the market to allow the consumer to choose. Members of the industry are confident that consumers will choose ethanol if they are educated and have access to the consumer choice of fuel blends.
What do you see as the ethanol industry’s biggest challenge?
The biggest challenge the industry faces is market demand. We must have demand for ethanol in order for the industry to grow. Demand will be created by consumer education and access to the market. The blender pump build-out within the retail petroleum market is critical for access to the motor fuel market to be obtained. Maintaining the status of the Renewable Fuels Standard II is important for short-term demand. Long-term, ethanol will need to be sold as a less expensive high-quality octane source.
What does your company see for the future of ethanol and advanced biofuels?
C&A hopes to assist the industry to grow beyond the E10 market. We see the ethanol market evolving to higher blends beginning with E15 and eventually beyond. In addition to higher blends in the market, the ethanol plants will continue to evolve into biorefineries that produce a wide range of renewable fuel and food products. Many producers will have components of advanced biofuels as part of their product mix in the future. I sincerely hope the ethanol industry will grow beyond the E10 levels we are producing now for the benefit of our country, economy, and future generations.