Justice Cracks Down on Biodiesel RIN Defrauders

scalesofjustice1To maintain the integrity of government incentives for biodiesel, the feds are cracking down on defrauders. This news release from the U.S. Department of Justice says four individuals have been sentenced for their part in the $23 million scheme.

Dean Daniels, 52, Richard Smith, 57, Brenda Daniels, 45 and William Bradley, 58, all of Florida, pleaded guilty and were sentenced today in U.S. district court for charges related to a scheme involving the false production of biodiesel.

Dean Daniels was sentenced to 63 months incarceration, Bradley was sentenced to 51 months incarceration, Smith was sentenced to 41 months incarceration and Brenda Daniels was sentenced to 366 days incarceration.

According to court documents, the defendants profited by unjustly generating and selling biodiesel credits (RINs) and unjustly claiming biodiesel tax credits for the production and blending of fuel that was not actually biodiesel.

“Congress enacted incentives for the production of biofuels to make the United States stronger and more energy independent and to move our energy economy into the 21st century,” said Assistant Attorney General Cruden. “The fraud perpetrated by the defendants threatens these important public policies. The Justice Department will vigorously prosecute those seeking to line their pockets using scams like this one.”

The defendants were all employees and officers of New Energy Fuels LLC, a business in Waller, Texas, that claimed to process animal fats and vegetable oils into biodiesel. The defendants subsequently relocated, operating a similar scheme at Chieftain Biofuels LLC in Logan, Ohio.

The defendants produced a low-grade fuel that was not biodiesel, however, the defendants would represent to the EPA that they had produced biodiesel. They would generate fraudulent biodiesel RINs and sell them to various third parties.

Olleco Acquisition Expands Biodiesel Abilities

ollecoc2gUK-based Olleco has acquired another company that also converts used cooking oil and food waste into biodiesel. This company news release says it bought Convert2Green Ltd.

Bringing together Convert2Green and Olleco increases our number of depots to 17 across the UK and enables us to improve efficiencies and coverage to enhance the used cooking oil collection service offered to our customers. The work done by Convert2Green on producing carbon efficient fuels is an exciting addition to Olleco’s range of low carbon bio-liquid fuels and they look forward to developing the possibilities of these fuels in the future.

Commercial Director Adam Baisley said: “We are delighted to welcome Convert2Green customers and staff to Olleco. We aim to build on the strong foundation they have established and extend our reliable and award winning services to our new customers.”

Olleco is fully committed to helping its customers waste nothing from their foodservice business. Olleco ensures that all of the organic waste it collects is converted into renewable energy and compost; nothing goes to landfill.

RINS, Tax Credit Good Drivers of Biodiesel

John Wenzel, with FC Stone, is a large energy dealer and works primarily with large fuel dealers and end users. He spoke during the Biodiesel/Bioheat Forum in Mankato, Minnesota last week. He recently moved to Kansas City from Minnesota and said it was good to be be back.

biodiesel-bioheat-15-wenzelWhen asked what he was hoping to convey to attendees he answered, “I wanted to show how the current oil market is oversupplied but at some point we think it will balance out. I also took a good look at some of the cost drivers around biodiesel and there still is a good opportunity for fuel dealers, I think, to blend biodiesel and for it to be really profitable. It goes back to where are some of the RIN values and also with the tax credit coming up, that’s a big driver and will help fuel dealers blend more biodiesel.”

Wenzel said that it was good to be at an event where he could see biodiesel used in different ways such as with Bioheat. He also noted that Minnesota has a B10 mandate while New York is marketing biodiesel through Bioheat and he thought these are good examples for other states. Ultimately though, he said the biodiesel industry will need to work closely with the oil heating industry to ensure that Bioheat is affordable for consumers who are considering a move to natural gas to meet statewide emission goals.

Learn more about by listening to Chuck Zimmerman’s interview with John Wenzel: John Wenzel, FC Stone

Biodiesel/Bioheat Forum Photo Album

Clinton Voices Support for Renewable Energy

clinton-iowaWith a John Deere tractor as a backdrop, Democratic presidential candidate Hillary Clinton voiced her strong support for the Renewable Fuel Standard (RFS), solar and wind energy during a visit to Iowa this week.

“We need to capitalize on rural America’s strength as a producer of clean, renewable energy,” said Mrs. Clinton during a speech in Ankeny, adding that she has two main goals in that area. “Half a billion solar panels within four years and enough energy production from renewables to power every home in America within 10 years.”

Noting that Iowa produces a third of its total energy from renewables, especially wind and biofuels. “If Iowa can do it…so can the rest of America,” she said.

“We need to strengthen the Renewable Fuel Standard,” Mrs. Clinton continued to applause. “So that it drives the development of advanced biofuels and expand the overall contribution that renewable fuels make to our overall fuel supply.”

Introduced by former Iowa governor and current Secretary of Agriculture Tom Vilsack, Clinton discussed her plan to support rural America which includes investments in rural areas and rural transportation, making the production of agricultural products more profitable for farmers, and promoting the use of clean energy and renewable energy sources.

Listen to Vilsack’s introduction and Clinton’s speech here: Hillary Clinton on Ag in Iowa

Scottish Whisky Used to Power Homes

Scottish Whisky is being used to power homes. Well, not exactly the whisky, but the by-products, such as energy, as being used to power communities. The project, The Rothes CoRDe, part-owned by The Combination of Rothes Distillers, is leading the distilleries program.

“A number of whisky companies are part of an industry consortium looking at sustainable ways of processing by-products from our distilleries,” explained Iain Lochhead, Operations Director for John Dewar & Sons Ltd., part of the Bacardi group of companies.  “We believe we are doing our part in protecting the environment of Scotland. Since we use natural ingredients to make our whisky, we want to leave our surroundings in the same pristine condition as we find them.”

draff from whisky production

The plant utilises draff which is a by-product of whisky production. This comes from 17 different distilleries and is mixed 50/50 with wood chips.

The Speyside area of the Scottish Highlands is home to around 50 whisky distilleries. Rothes, in the heart of that region, is the site of a new, blended-biomass plant that generates heat and power for local communities. It works by burning draff (the spent grains used in the distilling process) with woodchips to create steam-generating electricity.

“We generate 8.3 megawatts of electricity every hour of every day. We use some onsite and export the rest – enough for 20,000 people in 8,000 homes,” said Frank Burns, Managing Director, Rothes CoRDe. “We are powering all of the local communities.”

Another innovation is converting pot ale – the residue from copper whisky stills – into organic feedstock that local farmers use for their animals. “By recovering by-products from our distilleries, we turn them into material of purpose and value,” Burns said. “Ultimately, everything we make, whether it’s animal feed – or even the ash from our boiler process – goes back to the land or to the farm.”

David Williamson of the Scotch Whisky Association, added, “In the end, we want to take this industry forward, to invest and grow, but also make sure we preserve the natural environment we rely on to support Scotch whisky for many years to come.”

BioEnergy Bytes

  • BioEnergyBytesDF1The Public Utilities Commission voted to keep solar net metered customers on existing rates until the Commissioners determine long-term rules by December 31. The Commission’s decision allows Nevadans to go back to work. The solar market shut down last Thursday when NV Energy declared that the previous cap had been hit. Hundreds of solar workers appeared before the Commission during several hearings over the last month to tell their personal stories about the impact of NV Energy’s attempt to stop solar competition.
  • The World Wildlife Fund and ICLEI Local Governments for Sustainability USA recently highlighted the Property Assessed Clean Energy (PACE) financing model as one of five top priorities to be addressed at the state and national levels, in order to support cities in their fight against climate change. PACE programs provide financing for energy- and water-efficiency improvements and enable property owners to pay for them over time through their property taxes. Meanwhile owners see immediate savings on their utility bills, while reducing their greenhouse gas footprint or their water use.
  • Marathon Capital has announced the successful sale of OwnEnergy, a leader in locally-owned renewable energy systems, to EDF Renewable Energy. The acquisition of OwnEnergy’s team, development platform, and pipeline of wind projects will add to EDF RE’s already extensive North American portfolio containing 3.2 gigawatts (GW) of wind, solar, biomass, and biogas projects.
  • PosiGen Solar Solutions, marked the 10th anniversary of Hurricane Katrina by making a clean energy contribution to the City of New Orleans to help create a resilient City Hall. PosiGen, with partners SimpliPhi Power and Schneider Electric, is providing 25 kW of solar PV panels, energy storage and an educational monitoring display for the public. The rooftop solar installation will deliver clean power for City Hall to reduce energy costs, as well as provide backup power in the event of power disruptions or a future natural disaster.

#ACE15 President’s and Media Awards

ace15-presidentsAmerican Coalition for Ethanol (ACE) president Ron Alverson of Dakota Energy surprised his friend Steve Roe with Little Sioux Corn Processors in Marcus, Iowa with this year’s President’s Award. This honor is awarded to individuals or organizations who display principled dedication and support to ACE and to the U.S. ethanol industry.

Little Sioux is a grassroots ethanol plant started in 2003 with local community investors. The company has grown to include over 800 investors and is currently undertaking its third expansion which will bring its capacity to over 135 million gallons per year.

ace15-riterACE Director of Communications Chuck Beck awarded the Excellence in Media award this year to Tom Riter of WNAX in Yankton, SD.

Riter is a veteran farm broadcaster and a native of Rock Rapids, Iowa. He is a regular contributor to the National Association of Farm Broadcasting news service on issues pertaining to the ethanol industry.

2015 ACE Annual Meeting Photos

First Power by People Award at #ACE15

ace15-power-awardIn honor of its successful photo campaign featuring the people of the ethanol industry, the American Coalition for Ethanol awarded its first “Power by People” award at last week’s annual meeting.

The award was presented to Husker Ag of Plainview, Nebraska for the plant’s continued efforts to provide consumers access to higher ethanol blends. The new award was created to recognize a plant or an individual who has gone the extra mile to help get ethanol’s message out to the public.

“Everyone is very proud to have worked together to receive this prestigious award,” said Seth Harder, Husker Ag general manager. “We are proud to be members of Husker Ag.”

ACE Executive Director Brian Jennings said Husker Ag’s recent response to a Renewable Fuels Standard (RFS) public hearing made them a perfect fit for the inaugural Power by People Award. According to Jennings, when the RFS hearing was announced, Harder and his team immediately stepped forward with a group of employees, shareholders, investors and a fuel retailer to testify in Kansas City despite short notice.

In addition to addressing policy issues, Husker Ag provides support for flex fuel infrastructure throughout northeast Nebraska. In 2012, Husker Ag passed a resolution to promote higher ethanol fuel blends at the retail level. Since then, the Plainview ethanol plant has provided grant money and ethanol for several retail locations including Creighton, Crofton, Hartington, Osmond, and Pierce at two locations. Plainview and Norfolk locations are in various stages of flex fuel pump installation, and equipment is ready for installation at possibly four more locations.

2015 ACE Annual Meeting Photos

Michigan State IDs Water Usage by Biomass Crops

Researchers at Michigan State University have identified the amount of water used by some key biomass crops. This article from the school says the study, titled, “Comparative water use by maize, perennial crops, restored prairie and poplar trees in the U.S. Midwest,” recently published by Great Lakes Bioenergy Research Center (GLBRC), lead authored by Michigan State University professor Steve Hamilton, provides a new perspective on how planting different biomass crop species might impact terrestrial water balances.
WaterUseGraph
There were six biofuel species in this study including corn, switchgrass, miscanthus, a five species grass mix, an 18 species restored prairie mix and hybrid poplar. Four years of data are reported, which include a drought year (2012) and three years of near normal rainfall.

The climate and soils of rain-fed systems in the upper Midwest may limit crop productivity based on water availability. Two key questions were answered with this study:

How much water does each crop use?
Which crops are most efficient in converting water to biomass?

Water use

Average [evapotranspiration] (ET) over the four-year period showed the perennial cropping systems were not much different from the annual crop of corn. Mean growing-season ET increased in the following order: miscanthus < poplar < corn < prairie < switchgrass < native grass (Table 1), although the range of values was only about 4.5 inches. Notice that miscanthus and poplar trees had the lowest ET during the drought year of 2012. Previously, it was expected that perennial crops would require significantly more water, which could have deleterious effects at the watershed scale. This data disputes that theory and shows that planting perennial crops in the landscape with our climate and soils would not have significant adverse impacts.

#ACE15 Success, Jennings Highlights What’s Next

The 28th Annual American Coalition for Ethanol’s (ACE) Ethanol Conference was a huge success. At times the room was stand-up only and the content was engaging and informational for attendees. I had a chance to sit down with Executive Vice President Brian Jennings who kicked off the conference and closed the conference and he said that there were a few presentations that really stood out.

The first was the retailer panel that featured Kum & Go and what they are doing to promote the use of E15 and other ethanol blends to consumers in the Midwest, along with Protec and what they are doing in a totally different way and different part of the country (South/Southwest) to bring ethanol to consumers.

Brian Jennings EVP of ACE“There are a lot of smart, progressive companies out there that see the advantage, that see the price advantage, see the other advantages that E15 and higher blends bring to the table,” said Jennings. “I know it’s frustrating for some in our industry because the progress of E15 is going as quickly as any of us like but progress indeed is being made and it’s a testament to the work that ACE and others are doing with the Kum & Gos in the world and the Protecs of the world.”

Another panel that was very informative, noted Jennings, was the panel of ethanol producers who are adopting new technologies and becoming pioneers of emerging technologies. These plants, he said, are leading the way in production improvements, in new product developments, bring in new revenues and help them diversify. Jennings hopes that other ethanol producers both at their conference and not, will look to these plants as examples and also embrace these new technologies and co-products.

The conference really focused on emerging technologies and wins in the industry but none the less talk of the Renewable Fuel Standard (RFS) was common among attendees. I asked Jennings what the next step was for ACE, on behalf of the industry, to keep the fight for the RFS front and center. He said that the industry has until November 30th to continue engaging with the Environmental Protection Agency (EPA) and they will continue to do just that. “They have mountains of comments they have to sift through and we’re proud of ACE and the ethanol industry on how many comments were submitted.”

“I am enormously frustrated with the EPA,” said Jennings. “I have to be honest. We try to be constructive, we try to be helpful, and they just really want to continue to base this thing on the blend wall. So we have our work cut out for us.”

ACE hopes to engage in a Power to the People campaign this fall in the beltway and around the country to educate consumers about the benefits of ethanol.

To learn more about the Ethanol Conference and what’s next for ACE, listen to my interview with Brian Jennings here: ACE's Brian Jennings Conference Review

2015 ACE Annual Meeting Photos