In the News
July 7, 2014
By Christopher Doering
The ethanol industry Monday urged a federal regulator overseeing the nation's railroads to provide relief for shippers of the renewable fuel who have faced delays.
Growth Energy, which represents ethanol manufacturers, told the Surface Transportation Board that producers of the renewable fuel should be given the same relief that the agency provided to grain shippers in June.
Last month, the STB ordered Canadian Pacific Railway and BNSF Railway to provide the agency an update on their plans to reduce the backlog of grain cars across their networks -- a step welcomed by agricultural groups concerned that farmers could struggle to get their crops to market this fall.
In a letter sent Monday to the STB, Tom Buis, chief executive with Growth Energy, said with more than 61 percent of all ethanol delivered by rail, it is "imperative that these issues be directly addressed and given the same priority as grain shipments."
Buis said immediate action was necessary to "ensure that railroads improve their service." Ethanol supplies were squeezed and prices soared earlier this year, he noted, because of the inability to get rail cars to ship their product. Many ethanol producers were forced to reduce production because they had no place to store the fuel.
Dennis Watson, a spokesman with the STB, said the agency had received the letter but had no comment on it. The agency, he said, is constantly reviewing all commodities shipped by train and the service the rail companies are providing.
In recent months, BNSF and Canadian Pacific have come under fire from shippers, Washington lawmakers and the STB itself for shortages and delays in delivering rail cars to farmers, ethanol plants and grain elevator operators. The rail system in much of the western Corn Belt has been slowed by a plentiful 2013 harvest, higher coal and oil volumes, and the extraordinarily long, cold winter that reduced the size and speed of trains that operated.
Ethanol cannot be shipped through gasoline pipelines because of its corrosive properties, leaving movement of the flammable liquid to trains and trucks, often through densely populated residential areas. As ethanol production has grown, more of it must be shipped outside of the Midwest where much of it is produced, forcing makers of the renewable fuel to depend more heavily on railroads.
The corn-based fuel is a small but growing commodity for railroads, with ethanol shipments commanding just over 1 percent of total carloads moved by train annually, according to the STB. In 2011, 32 percent of U.S. ethanol shipments originated from Iowa, the country's biggest producer of the corn-based fuel.
Read the original story here : Ethanol Industry Asks For Relief From Rail Delays
On July 2, 2014, the Star Tribune ran a story titled, "Marine Engines Balk At Ethanol." Below is our response to that story.
With regards to E15 and its use in marine engines, we would like to inform you that E15 is currently only available in seven stations in Minnesota and all E15 pumps carry a disclaimer that specifically states that it is only intended for passenger cars 2001 and newer or flex fuel vehicles and not for other vehicles, boats or gasoline-powered equipment. As such, there shouldn’t be any confusion for marine engine owners.
As for E10, we would like to point out to you that both Mercury Marine and Yamaha (which were both cited in your story) state that E10 can be used in their engines. Mercury Marine states on its website, “The fuel-system components of Mercury engines will withstand up to 10 percent ethanol in gasoline” while Yamaha says on its website, “All current models as well as most engines built since the late 1980s have been designed with fuel components that are tolerant to fresh fuel containing ethanol up to 10% (E10).” Owners should always consult with their owner’s manual or with their manufacturer on the proper fuel requirements for their boats.
By Geoff Cooper
June 27, 2014
A new report from the Congressional Budget Office (CBO) suggests that full compliance with RFS requirements “poses significant challenges” and could increase fuel prices. The CBO’s conclusions are largely based on a careless analysis that relies on unsupported assumptions. Further, the report blatantly acknowledges that the economic impact of substituting biofuels for gasoline and diesel (i.e., downward pressure on crude oil prices) has been purposely omitted. Finally, the CBO results contradict the findings of more credible research from independent university economists. Key flaws in the report are detailed below.
1. The report’s main scenario contains a number of erroneous assumptions and fundamental errors that render the conclusions meaningless in the context of the ongoing debate over RFS implementation.
The exaggerated economic impacts discussed in the CBO report result primarily from the “EISA Volume Scenario,” in which the EISA statutory volumes of advanced biofuel (9 bg) and conventional renewable fuel (15 bg) are consumed in 2017. This scenario is based on the faulty assumptions below (among others):
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Most important, CBO improperly assumes EPA will require waivered cellulosic biofuel volumes to be entirely offset by other advanced biofuels. EPA has the statutory authority to waive the advanced biofuel standard and total RFS by the same, or lesser, amount as the waiver of the cellulosic biofuel standard. Thus, for example, if only 300 mg of cellulosic biofuel are available in 2017, EPA could (and likely would) reduce the cellulosic biofuel standard from 5.5 bg to 300 mg, reduce the advanced biofuel standard from 9.0 bg to 3.8 bg, and reduce the total RFS from 24 bg to 18.8 bg. Biodiesel and renewable diesel could very likely account for most of the 3.8 bg advanced biofuel requirement, while primarily ethanol would be used to fulfill the statutory 15.0 bg requirement for renewable fuel. In this example, which entirely comports with EPA’s statutory authority, required renewable fuel blending would be 5.2 bg lower (-22%) than the extreme scenario used by CBO.
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CBO somehow arrives at a total renewable fuel blend percentage of 14.5% in the 2017 “EISA Volume Scenario” (Table 1 of the report). However, EIA projects gasoline and diesel consumption of 191.7 bg in 2017, meaning the blend percentage from the “EISA Volume Scenario” would actually be 12.5%. But, as described above, CBO mistakenly assumes EPA will not exercise its authority to lower the advanced biofuel standard and total RFS by the same amount of the cellulosic waiver. If EPA were to use this discretion, as in the example above (i.e., total RFS of 18.8 bg), the total blend percentage for 2017 would be 9.8%.
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CBO assumes only 1.5 bg of biodiesel (2.0 billion RINs) will be used toward the advanced biofuel standard in 2017. EPA data show that 1.57 bg of biodiesel was produced in 2013, generating 2.36 billion RINs. In addition, 386 million gallons of renewable diesel were produced, generating another 657 million RINs. Thus, biodiesel and renewable diesel generated more than 3 billion RINs in 2013—50% more than CBO assumes will occur in 2017.
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CBO assumes ONLY corn ethanol is used to meet the statutory requirement for 15.0 bg of renewable fuel in 2017. EPA data shows this to be an erroneous assumption. More than 250 million (2% of the total) renewable fuel (“D6”) RINs generated in 2013 came from non-ethanol biofuels, including renewable diesel, biodiesel, and butanol. The share of non-ethanol fuels generating renewable fuel RINs is expected to grow slightly—particularly if EPA limits the advanced biofuel standard.
Because the CBO “EISA Volume Scenario” is based on these fatal flaws, the report’s discussion on RIN price impacts and transportation fuel price effects should be rejected out of hand. CBO should re-evaluate the “EISA Volume Scenario” and consider a case where EPA uses its statutory authority to lower the advanced biofuel standard and total RFS by the same amount as the cellulosic biofuel waiver.
2. The analysis adopts the oil industry’s “blend wall” argument and grossly underestimates the ability of E15 and E85 to aid in compliance with future RFS requirements.
CBO has apparently fallen victim to the same unclear thinking displayed by the oil industry with regard to the so-called “blend wall.” The report effectively dismisses E15 outright as a potential RFS compliance option moving forward, citing the same myths and misinformation propagated by the oil industry. Further, the report’s discussion of E85 ignores real-world evidence from 2013 showing that higher RIN prices drove dramatically increased consumption of E85. Data from the state governments of Minnesota and Iowa showed a tripling and doubling, respectively, in E85 consumption over the period in which RIN prices increased. Meanwhile, retail gasoline (E10) prices were unaffected by the rise in RIN prices.
3. CBO’s outlandish predictions regarding the impact of the RFS and RINs on gasoline prices contradict the observed real-world experience.
The report adopts yet another of the oil industry’s talking points—that the RFS, through higher RIN prices, will cause retail gasoline prices to increase. Such an assertion not only misunderstands how RINs are transferred and traded, but it also runs contrary to the observed experience of 2013. Retail gasoline prices were not correlated in any way with changes in RIN prices in 2013, and there is absolutely no evidence that pump prices were affected by RINs.
4. Unbelievably, CBO completely ignores the aggregate effect that using more renewable fuels would have on crude oil demand and prices.
In its haste to pin higher gasoline and diesel prices on the RFS, CBO admittedly makes a grave omission. According to the report, “Because renewable fuels substitute for gasoline and diesel, they reduce consumptions of those fuels…which could lower the world price of crude oil and thus the price that fuel suppliers pay for petroleum-based fuels. CBO did not account for that effect in this analysis…” The authors attempt to justify this omission by speculating that the effects would be small. However, renowned energy economists believe otherwise. According to recent analysis by energy economist Philip K. Verleger, a former energy advisor to Presidents Ford and Carter, “…the U.S. renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion. This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.”[1] Economic analyses from Iowa State University and the University of Wisconsin, Louisiana State University, Duke University, Merrill Lynch, the U.S. Department of Energy’s National Renewable Energy Laboratory, and others have also concluded that increased substitution of ethanol for gasoline substantially reduces retail gas prices.[2]
5. CBO’s findings on potential economic impacts of RFS implementation contradict results from University of Missouri and Iowa State University.
The report’s doomsday findings about the potential economic effects of the RFS are contrary to the conclusions from respected economists who have conducted more detailed and comprehensive analysis. A recent analysis by FAPRI at the University of Missouri, for instance, analyzed a case in which EPA would reduce the advanced biofuel standard and total RFS by the same amount of cellulosic biofuel waivers (as noted above, CBO failed to examine such a case). In this case, gas prices were 0-2% higher than in the case where EPA froze the RFS at 2014 proposed levels (similar to CBO’s “2014 Volumes Scenario”). Ethanol prices in this case are just 53-60% the price of retail gasoline, which would encourage wider usage. Similarly, extensive analysis by Iowa State University has convincingly demonstrated that near-term statutory RFS requirements can in fact be satisfied without meaningfully affecting retail gas prices for consumers.[3] CBO failed to discuss the other literature in this area and neglected to include reviewers from MO-FAPRI and ISU.
6. On the bright side, the CBO report gets two things right: 1) changes to the RFS would not have any effect on food prices, and 2) EPA’s recent management of the RFS program has significantly discouraged investment in next generation biofuels and retail infrastructure to dispense higher volumes of renewable fuels.
CBO recognizes that “…differences in food prices and spending under the agency’s three scenarios for the RFS would probably be small.” The report suggests that strong demand for ethanol even in the absence of RFS requirements means the program itself “will have no effect on food prices.” In addition, CBO rightly acknowledges that EPA’s recent proposals regarding implementation of the RFS “…reduces incentives for companies to invest in production capacity for cellulosic and other advanced biofuels and to expand the availability of high-ethanol blends.” This statement precisely underscores the importance of maintaining meaningful RFS requirements that are consistent with Congress’ intent and EPA’s statutory authority.
Read the original story here : Response to CBO Study - the Renewable Fuel Standard: Issues for 2014 and Beyond
By Christopher Doering
June 27, 2014
WASHINGTON – Nearly six full months into 2014, the amount of ethanol that is supposed to be blended into the gasoline supply this year still has not been announced — and is not expected to be for several more weeks.
The Environmental Protection Agency is required by law to finalize the blending requirements for the Renewable Fuel Standard for the following year by Nov. 30, a deadline an oil trade group said the agency hasn't met since 2011. EPA Administrator Gina McCarthy said in May the agency was reviewing more than 200,000 comments on its November proposal for 2014 that would cut the mandate from the level set out in a 2007 law, and was expecting to issue the final rule in "late spring or early summer."
But the EPA has yet to send the proposed 2014 blending requirements to the Office of Management and Budget, the agency tasked with vetting proposed regulations. An EPA spokesperson said that submission should occur "soon."
In November, the EPA proposed reducing ethanol produced from corn in 2014 to 13.01 billion gallons from 14.4 billion gallons initially required by Congress in the 2007 Renewable Fuel Standard, a law that requires refiners to buy alternative fuels made from corn, soybeans and other products to reduce the country's dependence on foreign energy.
McCarthy told farm broadcasters last month that the EPA believes Congress gave it the authority to make changes to the Renewable Fuel Standard in certain cases, such as the looming blend wall — a level where refiners must include more ethanol into the country's fuel mix than can be blended in at a 10 percent threshold accepted in all cars and trucks. "I get how important our proposal is — and the longevity of the RFS program itself," McCarthy said.
While those who follow the ethanol debate expect the EPA will increase the Renewable Fuel Standard blending level from the November estimate, it remains to be seen whether it will be enough to please ethanol industry officials. They have warned a cut could slow growth, especially in the nascent cellulosic industry that uses crop residue, grasses or wood chips to produce ethanol.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, acknowledged that whatever the EPA announces is "going to be heavily scrutinized" and likely be fought in court by the oil or ethanol industry depending on the outcome.
"Once it goes to OMB you're still probably weeks away from a final announcement," Shaw said. "There's no use holding your breath right now because we're not even close."
The American Petroleum Institute, which represents 550 oil and natural gas companies, said the EPA's delay in finalizing the 2014 levels has increased uncertainty for those who must comply with the controversial requirement. In a letter to the EPA's McCarthy sent last week, Bob Greco, API's downstream director, said the delays in implementing the Renewable Fuel Standard "are unacceptable, fundamentally unfair" and show a disregard for a deadline put in place by Congress.
Earlier this month, the EPA extended the deadline for complying with the 2013 blending level requirements through Sept. 30. The agency said the extra time was necessary because of the delay in finalizing the 2014 figures. The change was widely seen by those who follow the Renewable Fuel Standard as further evidence that the EPA wasn't close to announcing figures for this year.
Read the original story here : EPA's Ethanol Mandate For 2014 Behind Schedule
June 23, 2014
By Erin Voegele
The U.S. EPA has published renewable identification number (RIN) data for May. While overall RIN generation reached nearly 1.48 billion for month, up from nearly 1.45 billion in April, May marked the first month of 2014 during which no cellulosic RINs were generated.
According to the EPA, more than 27.4 million D5 advanced biofuel RINs were generated during the month, bringing the total for the first five months of the year to 79.93 million D5 RINs. The majority, 52.73 million, were generated for ethanol. More than 11.95 million D5 RINs were generated for biogas, along with 6.93 million for naptha. In addition, 5.4 million D5 RINs were generated for non-ester renewable diesel. Approximately 34.83 million D5 RINs have been generated by domestic producers, with nearly 42.18 million generated by importers.
More than 1.22 billion D6 renewable fuel RINs were generated in May, bringing the year-to-date total to more than 5.81 billion. Approximately 5.69 billion D6 RINs have been generated for ethanol this year, with 5.41 million generated for biodiesel. In addition, 120.22 million D6 RINs have been generated for non-ester renewable diesel. Most, 5.69 billion, have been generated by domestic producers, with 4.57 million generated by importers. More than 120.22 million D6 RINs were generated by foreign entities.
Nearly 230.46 million D4 biomass-based diesel RINs were generated in May, bringing the total for the first five months of the year to 970.06 million. Approximately 689.42 million D4 RINs have been generated for biodiesel this year, with an estimated 282.43 million generated for non-ester renewable diesel. The majority, 753.99 million D4 RINs, have been generated by domestic producers. Approximately 53.74 million and 164.12 million were generated by importers and foreign entities, respectively.
While no cellulosic RINs were generated in May, a total of 72,754 D3 cellulosic RINs were generated during the first five months of the year, along with 11,213 D7 cellulosic diesel RINs. All D3 RINs were generated by domestic producers. According in the EPA, 2,563 D7 RINs were generated by importers, with the remaining 8,859 generated by domestic producers.
As of the close of May, the EPA estimates nearly 6.87 billion RINs have been generated this year. Approximately 177.6 million have been retired. Nearly 271.68 million are locked and available, along with nearly 6.42 billion unlocked and available.
Read the original story here : May Rin Data Shows Increased Biofuel Production
June 18, 2014
By Michael Hirtzer
U.S. ethanol production increased for the sixth week in a row to a record high, government data showed on Wednesday, as rising gasoline prices helped boost demand for the grain-based biofuel.
Ethanol production surged 28,000 barrels per day, or about 3 percent, to an average of 972,000 bpd in the week ending June 13, according to the U.S. Energy Information Administration. Production surpassed the previous record of 963,000 bpd reached in the last week of 2011.
Despite the higher output, strong demand squeezed stocks of ethanol, which fell 572,000 barrels to 17.85 million barrels, a three-week low.
Makers of the biofuel are earning near-record profits as prices for corn, the main feedstock used in ethanol production, hovered near a four-month low. Meanwhile, gasoline futures have maintained roughly a $1-per-gallon premium over ethanol futures throughout June, making ethanol attractive for fuel blenders during the early days of the summer driving season.
Read the original story here : U.S. Ethanol Output Surges To Record High As Gasoline Costs Rise
By Geoff Cooper
June 12, 2014
Lifecycle analysis experts and economists from Argonne National Laboratory and three leading universities blasted a recent Environmental Working Group (EWG) report that made audacious claims and arrived at “erroneous conclusions” about corn ethanol’s greenhouse gas impacts.
The experts issued a scathing 13-page response today to EWG’s May report titled “Ethanol’s Broken Promise.” EWG “confused parameters” and “misunderstood” previous modeling results, according to experts from Argonne, North Carolina State University, Purdue University and University of Illinois-Chicago. “…based on an analysis of the methodology EWG used and a comparison of their results to those in the literature, from models, and from other data sets, EWG appears to have overestimated the amount of land converted for corn farming between 2008 and 2012. Second, EWG used emission factors that appear too high.”
More specifically, the experts found the following problems—among many others—with EWG’s report:
- “EWG confused parameters in GREET with those in an economic model, the Global Trade Analysis Project (GTAP).”
- “EWG misunderstood EPA’s GHG emissions for years 2012 and 2017.”
- “In their report, EWG picked the EPA 2012 GHG emissions for corn ethanol and applied them to the EPA-proposed reduced volume for corn ethanol in 2014 to make the erroneous conclusion that the proposal resulted in 3 million tonnes of CO2 reduction in 2014.”
- “…the emission factors they applied are high compared to those in other reports and studies that take into account important variations in initial and final land states.”
- The satellite data set used by EWG is “…explicitly not designed to be used for pixel-by-pixel or localized analyses.”
- The land use change data used by EWG is “…based on data that is decades old, reflecting wetland conversion over a much longer time horizon.”
- The report “…overestimated wetland conversion, especially for the conversion of wetlands to corn farms.” Wetlands and grasslands conversion estimates are “…too high when compared with estimates in other studies and data sources.”
Finally, the authors point out that EWG is stuck in the past when it comes to lifecycle analysis. They write, “Since 2009, when EPA conducted corn ethanol LUC GHG modeling…, significant efforts have been made to improve economic models and soil carbon models to better estimate biofuel LUC GHG emissions. EPA and other federal agencies should consider updating RFS LUC modeling so that up-to-date LUC results can be used for biofuel policy making.”
Read the original story here : Government and University Experts Blast EWG Corn Ethanol Report
Download the response from Argonne National Laboratory here.
Lifecycle analysis experts and economists from Argonne National Laboratory and three leading universities blasted a recent Environmental Working Group (EWG) report that made audacious claims and arrived at “erroneous conclusions” about corn ethanol’s greenhouse gas impacts.
The experts issued a scathing 13-page response today to EWG’s May report titled “Ethanol’s Broken Promise.” EWG “confused parameters” and “misunderstood” previous modeling results, according to experts from Argonne, North Carolina State University, Purdue University and University of Illinois-Chicago. “…based on an analysis of the methodology EWG used and a comparison of their results to those in the literature, from models, and from other data sets, EWG appears to have overestimated the amount of land converted for corn farming between 2008 and 2012. Second, EWG used emission factors that appear too high.”
More specifically, the experts found the following problems—among many others—with EWG’s report:
- “EWG confused parameters in GREET with those in an economic model, the Global Trade Analysis Project (GTAP).”
- “EWG misunderstood EPA’s GHG emissions for years 2012 and 2017.”
- “In their report, EWG picked the EPA 2012 GHG emissions for corn ethanol and applied them to the EPA-proposed reduced volume for corn ethanol in 2014 to make the erroneous conclusion that the proposal resulted in 3 million tonnes of CO2 reduction in 2014.”
- “…the emission factors they applied are high compared to those in other reports and studies that take into account important variations in initial and final land states.”
- The satellite data set used by EWG is “…explicitly not designed to be used for pixel-by-pixel or localized analyses.”
- The land use change data used by EWG is “…based on data that is decades old, reflecting wetland conversion over a much longer time horizon.”
- The report “…overestimated wetland conversion, especially for the conversion of wetlands to corn farms.” Wetlands and grasslands conversion estimates are “…too high when compared with estimates in other studies and data sources.”
Finally, the authors point out that EWG is stuck in the past when it comes to lifecycle analysis. They write, “Since 2009, when EPA conducted corn ethanol LUC GHG modeling…, significant efforts have been made to improve economic models and soil carbon models to better estimate biofuel LUC GHG emissions. EPA and other federal agencies should consider updating RFS LUC modeling so that up-to-date LUC results can be used for biofuel policy making.”
- See more at: http://www.ethanolrfa.org/exchange/entry/government-and-university-experts-blast-ewg-corn-ethanol-report/#sthash.ncL2zyhW.dpufJune 2, 2014
By Geoff Cooper
If the Environmental Working Group’s PR hacks are truly interested in combating global climate change, they ought to start by curbing their own noxious emissions of hot air. Last week, EWG released a sham “study” claiming that corn ethanol is somehow worse for the climate than gasoline, despite the fact that a number of recent peer-reviewed studies by government, academia, and private analysts clearly show first-generation ethanol significantly reduces GHG emissions relative to gasoline.
EWG apparently doesn’t debate the fact that corn ethanol reduces GHG emissions when compared directly to gasoline. Indeed, it’s only when hypothetical, unverifiable indirect emissions are added into the equation that EWG suggests corn ethanol is no better than gasoline. In an attempt to make their case, EWG cherry picks questionable data points from EPA’s flawed and outdated “indirect land use change” analysis from five years ago. And where EPA data doesn’t exist to support their bias, EWG simply makes things up (e.g., there is no support for the claim that 8 million acres of “native” grassland and wetlands were converted to corn production between 2008 and 2011).
EWG’s bogus study is at odds with a growing body of science. Numerous analyses conducted since EPA published the RFS2 final rule in 2010 show that corn ethanol reduces GHG emissions by 30–40% compared to the gasoline it is replacing—even when speculative land use change emissions are included. These peer-reviewed and published studies have been conducted by the likes of Purdue University, Argonne National Laboratory, Oak Ridge National Laboratory, University of Illinois, Michigan State University, the International Food Policy Research Institute, Life Cycle Associates and others. Even the California Air Resources Board (CARB) disagrees with EWG—CARB says more than two-thirds of the GHG reductions achieved under Low Carbon Fuel Standard to date have come from conventional ethanol (despite the fact that CARB’s current framework significantly underestimates corn ethanol’s GHG benefits).
Not only does EWG’s report contradict the state of the art in lifecycle analysis, but it also contradicts data from the real world. Imagine that…EWG being out of touch with reality. Beyond the seemingly endless debate about economic models, hypothetical scenarios, and input assumptions lies an indisputable set of facts and real-world data that shows the utter fallacy of the indirect land use change hypothesis.
USDA’s newly published 2012 Agriculture Census, which is based on collection of empirical data and surveys of real farmers (not mysterious and uncertain satellite images), reveals the truth about how land is being used in the U.S. It demonstrates—quite compellingly—that long-term land use trends have not been interrupted in any meaningful way since the emergence of biofuels and passage of the RFS.
• The amount of land in farms declined 0.8% from 922.1 million acres in 2007 to 914.5 million acres in 2012. Land in farms in the 2002 Ag Census was 938.3 million acres.
• Total cropland fell 4.1% from 406.4 million acres in 2007 to 389.7 million acres in 2012. Total cropland in 2012 was a whopping 44.5 million acres lower (10% less) than the 434.2 million acres of cropland in 2002. If the RFS is causing cropland expansion and land use change, as EWG ridiculously claims, why does USDA data continue to show fewer acres dedicated to crops?
• Idle cropland and summer fallow both decreased slightly from 2007 to 2012, indicating that any “new” land coming into cultivation likely came from lands that were previously cropped—not from “pristine prairie” and “native grasslands.” Meanwhile, permanent pasture and rangeland increased 1.6% from 408.8 million acres in 2007 to 415.3 million acres in 2012.
• Contrary to EWG’s doomsday rhetoric that “forests are being chopped down” as a result of the RFS, total woodland increased 2.5% from 75.1 million acres in 2007 to 77 million acres in 2012.
• Another favorite fib some of the environmental NGOs like to tell is that corn ethanol growth has driven expansion of irrigated acres. Once again, the Ag Census shows otherwise. Irrigated acres fell 1.4% from 56.6 million to 55.8 million between 2007 and 2012, according to USDA. (Incidentally, government data also show steadily declining deforestation rates in the Amazon and a shrinking hypoxic “dead zone” in the Gulf of Mexico since the RFS2 was enacted—so we can toss those canards out too while we’re cleaning house).
As EPA and the White House prepare to release the final 2014 RFS requirements, let’s hope they are looking at the recent Ag Census data and the most current lifecycle analyses from reputable sources—not the latest spew from EWG.
Read the original story here : Ag Census Data Shows EWG Is Full of Hot Air
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May 23, 2014
By Holly Jessen
Last weekend, we had a special dedication ceremony for my daughter at our church. (It’s like a baby baptism, but without the water.) Afterward, family and friends gathered in the park for lunch.
That’s when one of my friends started asking me questions about the ethanol industry. She’s a graduate student, something in political studies I believe, and was clear that she had heard negative things about corn ethanol. Basically, her impression was that corn ethanol is no good and we’re just waiting on next generation fuels. I was happy to explain to her that, No. 1, corn ethanol isn’t the villain she may have been led to believe and No. 2, cellulosic ethanol is a lot closer than she realized.
One of my main points to her was that advanced biofuels wouldn’t be an option if it wasn’t for the first generation industry. I’ve said it before and I’ll say it again, many of the same companies that now produce corn ethanol are also working to produce cellulosic ethanol. One example is a small plant in Galva, Ill., that is working to start up a bolt on technology that will produce ethanol from the cellulosic material in a corn kernel. Other current corn ethanol producing companies are targeting corn stover for cellulosic ethanol production. My friend was surprised to hear how close some of these companies are to completing construction and producing commercial-scale volumes of advanced biofuels.
I then addressed the “corn-ethanol is bad” impression she had, with analogy I’ve used before. We’re both mothers of young daughters so it’s one that makes sense to both of us. Children don’t come out of the womb walking. They must first master some basic skills like sitting up and rolling over. And then, once they do walk, it’s not like they abandon sitting up and rolling over because they are “bad” skills or things only babies do. The U.S. corn ethanol industry has already done a lot of good for this country, by reducing oil imports and providing jobs, for example, and it will continue to contribute positively in the future.
Another question she had was about the efficiency of the corn ethanol industry. Has that improved over time? Again, I was glad to be able to say the answer was yes. First generation ethanol plants are, today, producing more ethanol using less thermal energy, electricity and water. We wrote about that back in spring of last year. And, keep in mind that the numbers in that story are averages. Certain leading ethanol facilities have improved on those numbers even further. Another important point is that corn ethanol facilities are installing or considering advanced technologies like anaerobic digesters, combined heat and power, fractionation and more. The same is probably true for a lot of industries. Production of products such as food, fabric or tires is much more advanced today than it was when the industries first started up. It's the natural progression of things.
It’s always nice when I can talk to someone that is open to learning more about the ethanol industry. Some people have so deeply swallowed the negative propaganda against the industry, that it’s pretty much not worth the time to tell them anything different. My friend may still have reservations about corn ethanol but she certainly knows more about it than before we had our conversation.
Read original story here : Defending Corn Ethanol Around A Picnic Table
May 23, 2014
By Anna Simet
The Minnesota Department of Agriculture has named five in-state bioenergy projects as recipients of NextGen Energy grants.
The five projects were selected out of a pool of 35, according to MDA Commissioner Dave Frederickson. All projects underwent consideration by a technical team made up of members from five state departments – agriculture, commerce, natural Resources, pollution control, and employment and economic development. Projects were scored separately according to NextGen grant guidelines, and all are required at least a 50 percent match from the grantee.
Grant recipients include:
-Easy Energy Systems, Welcome, Minn. - $500,000
The project builds a showplace biofuel production facility capable of testing multiple feedstocks, verifying economic data, and confirming conversion rates in Welcome.
-Central Minnesota Renewables LLC, Little Falls, Minn. - $500,000
This project will receive funding for final engineering work needed to convert the existing 20 million gallon per year ethanol facility, Central Minnesota Ethanol Cooperative, to n-butanol production for the chemical industry.
-Segetis Inc., Golden Valley, Minn. - $325,000
Grant amount is to be used for equipment, capital construction and materials for operation of a pilot plant for process development required to commercialize their biobased non-phthalate plasticizer.
-University of Minnesota, Natural Resources Research Institute, Duluth, Minn. - $217,500
In collaboration with Syngas Technologies, Elk River, this project will develop a more efficient biomass fuel pretreatment process for putting feedstock into a high-pressure gasifier, which produces drop-in biofuels.
-Duluth Steam, Duluth, Minn. - $150,000
Funds will help facilitate the detailed design, procurement and installation of an on-site biomass receiving, storage, and feed system. It utilizes up to 25 percent biomass feedstocks from local forestry operations and will displace the current use of western coal.
The MDA said that in addition to the $1.7 million granted to these projects, nearly half a million dollars has been set aside for a separate request for biomass thermal projects, targeting overall project sizes of $200,000 to $300,000. This RFP is due to be released early this summer.
Read the original story here : Minn. Funds 5 Biofuel And Bioenergy Projects, Thermal RFP Soon
May 23, 2014
By Ayesha Rascoe
The Obama administration is likely to partly backtrack on proposed steep cuts to renewable fuel targets for 2014 when it finalizes a rule due out in June, industry sources said.
Biofuel groups expect the Environmental Protection Agency to send the final proposed targets to the White House as soon as Friday.
The EPA shocked biofuel supporters in November with a draft rule that slashed federal requirements for biofuel use in gasoline and diesel. The agency argued that U.S. energy markets could not absorb the levels of renewable fuels that would be required by a 2007 law.
Since then, though, rising projections for gasoline consumption give the agency leeway to raise its corn ethanol target from November's proposal of about 13 billion gallons to about 13.6 billion, a biofuel industry source said.
The more gasoline consumed, the more ethanol that can be absorbed before hitting the "blend wall," the point at which the law would require more ethanol to be used than the 10 percent blend found at most U.S. gas stations.
The rumored adjustment would still leave the corn ethanol target for 2014 far below the 14.4 billion gallons called for by law, and will likely enrage oil companies who lobbied hard for cuts to the targets.
The industry source said administration officials have told stakeholders that "no one is going to be happy" regarding the final rule.
The Renewable Fuel Standard requires increasing amounts of various types of biofuels to be blended into U.S. gasoline and diesel supplies each year through 2022.
Citing the looming blend wall, the EPA issued a proposal last year to cut the overall biofuel use target from 18.15 billion gallons to 15.21 billion gallons, the first overall cut in the program's history.
Refiners said the reductions were necessary to prevent crippling compliance costs for their industry and possible fuel shortages.
Tim Cheung, an energy analyst for ClearView Energy, also predicted an ethanol requirement of 13.6 billion gallons. He noted the targets could be raised higher if EPA estimates there will be more consumption of the 85 percent ethanol blend, known as E-85, used in flex-fuel vehicles. An estimated 10.6 million such vehicles are now on U.S. roads.
Biodiesel producers said Wednesday the administration has hinted that it plans to leave the biodiesel target at the proposed 1.28 billion gallons, while slightly raising the overall target for advanced biofuels from 2.2 billion gallons.
"This decision would have lasting, damaging consequences for the jobs and economic activity supported by the U.S. biodiesel industry, while undermining your efforts to boost U.S. energy security through clean, domestic energy production," Joe Jobe, chief executive of the National Biodiesel Board, said in a letter to President Barack Obama.
Jobe said raising the advanced biofuel target, without increasing the biodiesel requirement, would merely encourage large amounts of imports of Brazilian sugarcane ethanol.
Read the original story here : U.S. may adjust 2014 corn ethanol target after outcry: sources
Global Renewable Fuels Alliance
May 21, 2014
TORONTO, Canada – Today, as the International Transport Forum Summit gets under way in Leipzig, Germany, the Global Renewable Fuels Alliance (GRFA) in cooperation with (S&T)2 Consultants Inc. released their Global Green House Gas (GHG) Emissions Reduction Forecast for 2014. The GRFA is forecasting global ethanol production and use in 2014 to reduce GHG emissions by over 106 million tonnes.
(S&T)2 Consultants Inc., an internationally renowned energy and environmental consulting firm, in partnership with the GRFA have produced data that shows that year after year the reduction in global GHG emissions from global ethanol production is increasing. This year’s figure reveals that 90.38 billion litres of global ethanol production and use in 2014 will reduce global GHG emissions by over 291,000 tonnes per day. Compared to 2013, this is an increase of over 7000 tonnes per day in GHG emission savings.
“This data is good news for the environment,” said Bliss Baker, spokesperson for the GRFA. “Ethanol consumption is the largest single contributor to GHG reductions in the transportation space,” added Mr. Baker.
This year’s theme for the International Transport Forum Summit is “Transport for a Changing World”. As attendees discuss clean and sustainable transport for the future they should recognize that global ethanol production is reducing GHG emissions from the transportation sector today. In fact, the projected GHG reductions from ethanol this year alone is equivalent to removing over 21 million vehicles from the road each year.
106.4 million tonnes in Green House Gas emissions reduction is equal to:
• 21,279,808 cars being removed from the world’s roads in 2014 OR removing more than all of the vehicles registered in Malaysia off the road annually.
• 58,300 cars being removed from the world’s roads daily OR removing more than all the vehicles registered in Saint Lucia off the road daily.
• Removing the annual emissions from 14 average-sized coal-fired power plants.
“Biofuels like ethanol are the only cost-effective and commercially available alternative to crude oil and are proven to reduce harmful GHG emissions and help in the fight against climate change,” stated Baker.
“We believe International Transport Forum Summit participants should call for an increase in ethanol production and use given the significant contribution ethanol is making to reducing global GHG emissions today,” concluded Baker.
Read the original story here : Global Ethanol Consumption To Reduce GHGs By Over 106 Million Tonnes In 2014
April 8, 2014
By Christopher Doering
The Obama administration has halted investments in advanced biofuels plants following its proposal last year to reduce how much renewable fuels must be blended into the country's fuel supply in 2014, an executive representing the industry told Senate lawmakers Tuesday.
"What the (Environmental Protection Agency) proposal did, first the leaked version in October and then in November is frozen everything," Brooke Coleman, executive director of the Advanced Ethanol Council, told sympathetic lawmakers on the Senate Agriculture Committee. "Every single one of my companies. There are no exceptions."
The EPA, which oversees the country's Renewable Fuel Standard, proposed in November cutting the fuel requirement in 2014 to 15.2 billion gallons of ethanol and other biofuels, 3 billion gallons less than Congress required in a 2007 law. As part of that, EPA proposed requiring 2.2 billion gallons of advanced biofuels, including agricultural waste, wood and grass, to be used in 2014, far below the 3.75 billion outlined in federal law.
Coleman said if the EPA raises the levels in its final 2014 rule, the advanced biofuel industry would benefit. "If that's done we will recover and we will recover well," he said.
The final rule is expected to be issued by the EPA in late spring or early summer.
After years of delays and millions of dollars spent ramping up production, three large-scale U.S. cellulosic plants will open this year. DuPont Cellulosic Ethanol, which is building a 30 million gallon per year cellulosic ethanol plant near Nevada, Iowa, will use corn stover as its feedstock when it ramps up production.
Jan Koninckx, DuPont's chief on cellulosic renewable fuel, told lawmakers the fuel will initially cost more before the price comes down.
"The product will at first . . . be more expensive than corn ethanol and more expensive than fossil fuel but over time this will come down," Koninckx said. "We continue to anticipate to be competitive with oil at about $80 per barrel."
Lawmakers outside of ethanol producing states have proposed to end or significantly overhaul the Renewable Fuel Standard.
"I don't know what would happen if you put the Renewable Fuel Standard to a vote today in the United States Congress," Sen. Heidi Heitkamp, D-N.D. "We'd like to think we'd maintain it. . . but that may not be factual."
One measure, introduced by Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R-Okla., would greatly diminish the importance of the Renewable Fuel Standard by removing the component that requires fuel to be made from corn. Smaller mandates for advanced biofuels such as cellulosic would remain in place. Others would cap how much ethanol could be blended into gasoline at 10 percent.
Iowa, the country's largest ethanol producer, has 42 refineries capable of producing over 3.8 billion gallons annually, with three cellulosic ethanol facilities under construction.
Read the original story here : Ethanol Proposal Has Stopped Investments In Advanced Biofuels, Industry Tells Senators
April 9, 2014
WASHINGTON — For the third year in a row, Americans, by an overwhelming majority, consistently support the Renewable Fuel Standard (RFS) and other key federal initiatives supporting the expanded use of ethanol. A new national poll conducted by American Viewpoint found 65 percent of adults support the RFS, while just 26 percent are opposed. Support for the RFS has been steadily rising. In 2013, 64 percent polled supported the policy, up from 61 percent in 2012.
As you may know, there is currently a renewable fuels standard that requires a certain amount of the fuel produced each year to come from ethanol, bio-diesel and other renewable sources that aren’t fossil fuels to reduce foreign oil dependence and greenhouse gas emissions. Do you favor or oppose this requirement?
Favor: 65%
Oppose: 26%
Don’t Know: 8%
RFA’s President and CEO Bob Dinneen commented, “It is telling that support for the RFS continues to grow in spite of the relentless attacks on ethanol and the RFS financed by Big Oil’s deep pockets. Repeatedly Americans have decisively said they place a premium on energy independence, job creation, and a cleaner environment. For these reasons and more, Americans overwhelmingly support the RFS for its ability to strengthen this great nation. Members of Congress and the Obama Administration should review this data before taking action to reduce or eliminate a program with broad national appeal and tangible energy and environmental benefits.”
Expanding on the polling results, Dinneen continued, “Americans see great value in investing in the next generation of fuel, cellulosic ethanol, and they support the idea of an open fuel standard which encourages the manufacturing of cars that run on any number of alternatives to petroleum. In fact, Americans appear to have a visceral dislike for the billions and billions of dollars in government subsidies and special tax treatment that Big Oil has enjoyed for 100 years.”
The government has considered giving incentives to help fund the expansion of a new fuel known as Cellulosic ethanol, which is a biofuel produced from wood, grasses and other non-edible parts of plants. Do you favor or oppose these incentives?
Favor: 66%
Oppose: 24%
Don’t Know: 9%
Do you favor or oppose requiring automobile manufacturers to build cars that will run on fuel sources other than oil, such as electricity, natural gas and bio-fuels?
Favor: 78%
Oppose: 19%
Don’t Know: 3%
As you may know, oil companies receive four to five billion dollars in government subsidies and special tax treatment and incentives for things like equipment depreciation, oil depletion allowances, and foreign investment tax credits for taxes they pay in foreign countries. Do you favor or oppose these tax incentives?
Favor: 22%
Oppose: 66%
Don’t know: 11%
The new poll was commissioned by RFA and conducted by American Viewpoint. The poll was conducted via phone with a sample size of 1,000 adults. Margin of error in the poll is +/- 3.1 percent. Approximately 40 percent of respondents were contacted by cell phone.
Linda DiVall, President of American Viewpoint, analyzed several keys themes from the polling results:
“Despite the barrage of negative advertising targeting ethanol recently, ethanol’s image has held strong, largely unchanged from last year. More telling is the fact that the unfavorable rating of oil companies has climbed five percentage points to 47 percent, with a plurality of Americans rating oil companies unfavorably.”
“That rise in negative opinion of oil companies certainly manifests itself in the 66 percent of adults polled who desire a level playing field among fuels and resent the subsidies and special treatment oil companies have held onto at the expense of the American taxpayer.”
DiVall concluded, “The ethanol industry must not be deterred from telling its story. It should stand proudly and champion its ability to significantly reduce greenhouse gases, lower our dependence on foreign oil, create quality jobs, and reduce fuel costs for American drivers. Ethanol, thanks in large part to the RFS, is a fuel with a proven track record of success and a promising future.”
Read the original story here : New Poll : For 3rd Year In a Row, Americans Overwhelmingly Support The RFS
April 15, 2014
By Susanne Retka Schill
The continuing shifting relationships between ethanol, corn and gasoline are the subject of two analyses done by Iowa agricultural economists for the AgMarketing Resource Center newsletter.
Don Hofstrand takes a look at the increase in corn production cost and how the saturation of the ethanol market may impact the profitability of the ethanol supply chain, and how these profits may be distributed between corn farmer and ethanol producer.
Robert Wisner examines the question of the changing relationships among ethanol, gasoline, crude oil and corn prices. “Corn supplies, barring another period of adverse weather, appear ample for both feed and fuel needs for the next few years if the corn-starch ethanol industry capacity remains near the current level,” he writes.
In a series of charts, Wisner compares corn prices to crude oil since 2003 as well as gasoline, diesel and jet fuel prices versus crude prices. In the case of gasoline and ethanol prices, the higher cost of transporting ethanol by rail or truck compared to pipeline for gasoline has widened the spread between the two. “Also, as supplies increased, ethanol prices tended to more fully reflect ethanol’s lower energy content than gasoline. The energy content of ethanol is about two-thirds that of gasoline, although part of the value difference is offset by ethanol’s higher octane content and the ability of refiners to produce cheaper low-octane gasoline and upgrade the octane level with ethanol. In early 2006, ethanol prices were about 80 percent of the price of gasoline. By early 2014, with the domestic ethanol market nearly saturated, ethanol prices at Iowa plants were about 58 percent of retail gasoline prices.”
While serious rail transportation impediments have moved wholesale ethanol prices higher, he continued, that is expected to be temporary. “Whether ethanol prices will weaken relative to gasoline in the next few years will depend heavily on whether the domestic market can be expanded beyond the current blend-wall saturation level.”
Hofstrand refers to an analysis for a hypothetical Iowa corn farmer looking at revenue, costs and net returns since 2000. While corn prices have shown significant volatility, product costs have gone up at an increasing rate over this time, and essentially doubled since 2000. “The trend has been relatively stable except for 2009 where cost increased substantially but then fell back in 2010. Seed, fertilizer, diesel fuel, machinery repairs, etc. have all increased substantially over the 15 year period. Only herbicide cost has bucked the trend,” Hofstrand writes.
In his discussion of the historical trends and projections for the future, Hofstrand adds that if lagging ethanol demand “cannot continue to mop up excess corn supplies, corn prices may drop below the cost of production. If this happens, there will be considerable downward pressure on production costs.”
Hofstrand also briefly reviews the potential for ethanol prices to weaken relative to gasoline. “With the expected emergence of cellulosic ethanol production and increasing government mandates for its use, shrinkage of the corn starch ethanol market is an additional factor that may affect total returns and profits shown here.”
Read the original story here : Iowa Economists : 2014 Ethanol Prices Drop To 58% Of Retail Gas
April 21, 2014
By Donnelle Eller
Experts on Monday criticized a new University of Nebraska-Lincoln study, saying it used “worst-case” assumptions to determine that cellulosic ethanol creates more carbon emissions than gasoline.
The report from Adam Liska, an associate professor at Nebraska, says crop residue used to make cellulosic ethanol creates 7 percent more greenhouse gas emissions in the short-run than gasoline emissions and are “above the 60 percent reduction in greenhouse gas emissions” required by the federal government.
Tom Vilsack, the U.S. secretary of agriculture, said the study makes “certain assumptions about farming operations” that “aren’t a reality. It’s not what’s happening on the ground.
“If you make the wrong assumption, you’re going to come up with the wrong conclusions,” said Iowa’s former governor, who was in Des Moines on Monday. “It’s unfortunate.”
The U.S. Department of Energy provided a $500,000 grant over three years for the study, published Sunday in a peer-reviewed journal, Nature Climate Change. The research attempts to quantify, over 12 Corn Belt states, how much carbon is lost to the atmosphere when the stalks, leaves and cobs that make up residue are removed and used to make biofuel, instead of left to naturally replenish the soil with carbon.
The university said the study “casts doubt on whether corn residue can be used to meet federal mandates to ramp up ethanol production and reduce greenhouse gas emissions.” The federal government has provided more than $1 billion in funding to support what it believes is greener cellulosic ethanol development.
In November, the U.S. Environmental Protection Agency proposed pulling back how much renewable fuels — including corn-based and cellulosic ethanol and biodiesel — must be used in the U.S. fuel supply. EPA has reduced the target for the cellulosic industry five times, given the industry’s difficulty in meeting the volumes.
Jennifer Dunn, an environmental team leader at the Argonne National Laboratory, said the study looked at “extreme levels of corn stover removal — up to 100 percent.”
A study from Dunn and others in 2012 found that biofuels made with corn residue were 95 percent better than gasoline in greenhouse gas emissions. That study assumed some of the corn stover harvested would be used to create energy and replace power produced from coal.
“The general consensus has been that we would manage corn stover removal to avoid adverse impacts to soil health, including a decline in soil organic carbon,” Dunn said.
Dunn said several plants are creating energy to power their own cellulosic plants, a fact not factored into the Nebraska study. That includes Poet-DSM, which is building a $250 million cellulosic plant in Emmetsburg.
Another Iowa plant, DuPont Nevada, says its $225 million facility has the potential to reduce greenhouse emissions by more than 100 percent. It’s under construction west of the Story County town.
“The companies behind these plants have really striven to emphasize the sustainability of their feedstock, including the soil carbon aspect. It’s why there is only a certain level of stover that can be removed from the field.
“Everyone knows that if you take the whole thing off, it’s going to cause problems,” she said. “That’s not even debated. ... Nobody wants to damage their soil health.”
Dunn and others say farmers look at soil carbon on a “sub-field level” to determine how much stover can be sustainably removed.
Liska said in an email that his study looked at stover removal at 25 percent, 50 percent and 75-100 percent, and the rate of carbon emissions was constant. “It is likely that no matter what level of residue is removed, the carbon intensity stays the same,” he said.
Douglas Karlen, a research soil scientist with USDA’s Agriculture Research Service, said the amount of stover removal used in the model isn’t physically possible. “If you could take off 75 percent of the corn stover, I’m not sure where you would put it,” he said.
Karlen said Iowa farmers would take off 1 to 1.5 tons per acre of stover from their fields. The study model would remove 2.68 tons per acre.
“You’d be stacked up with corn bales that are miles long,” said Karlen, who has worked with both Poet and DuPont in Iowa, among other companies, on ensuring sustainable amounts of stover are removed. “The machinery can’t take off 75 percent of the material, even with a vacuum system.”
Read the original story here : Experts Say Ethanol Study Used Bad Model