BIO to EPA: Issue RFS Rule Consistent with Statute

biologoThe Biotechnology Industry Organization (BIO) today issued comments on the proposed consent decree to resolve oil industry lawsuits against the Environmental Protection Agency over delays in promulgating final rules for annual biofuel volume obligations.

“BIO is supportive of EPA’s commitments contained in the proposed consent decree, which would establish definitive deadlines this year for EPA to take final action on the 2014 RFS rule and proposed and final action on the 2015 RFS rule,” Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, wrote in the official comments. “EPA should withdraw its proposed 2014 RFS rule and reissue it by June 1, 2015, to include advanced and total renewable biofuel volumes that are consistent with the RFS statute.”

BIO recently released an analysis showing that instability in EPA’s administration of the RFS is responsible for chilling as much as $13.7 billion in investments that the advanced biofuel industry needed to build capacity to meet the RFS goals. The delays in rulemaking have also undercut the industry’s ability to create new employment opportunities, resulting in the loss of more than 80,000 direct jobs.

Corn Ethanol Yields Improve

corn-ethanol-3A new brief from the U.S. Energy Information (EIA) illustrates just how dramatically corn ethanol efficiency has increased in a very short time.

Today in Energy notes that last year fuel ethanol production in the United States reached an all-time high of 14.3 billion gallons of ethanol fuel. “The growth in U.S. fuel ethanol production has outpaced growth in corn consumed as feedstock—as the industry has grown, it has become more efficient, using fewer bushels of corn to produce a gallon of ethanol.”

If ethanol plant yields per bushel of corn in 2014 had remained at 1997 levels (when ethanol made up just 1% of the total U.S. motor gasoline supply), the ethanol industry would have needed to grind an additional 343 million bushels, or 7% more corn, to produce the same volume of fuel. To supply this incremental quantity of corn without withdrawing bushels from other uses would have required 2.2 million additional acres of corn to be cultivated, an area roughly equivalent to half the land area of New Jersey.

The article credits the yield increases to several factors including increased plant scale which has allowed producers to incorporate better process technology, such as finer grinding of corn to increase starch conversion and improved temperature control of fermentation to optimize yeast productivity. Additionally, the development of better enzymes and yeast strains has led to improved output per bushel of corn.

Ethanol Industry Launches RFS Campaign

fuels-rfs-adThe ethanol industry through Fuels America is launching a major advertising campaign in the nation’s capitol this week urging support for the Renewable Fuel Standard (RFS).

Renewable Fuels Association (RFA) president and CEO Bob Dinneen says the campaign asks the EPA to choose whether to reward the oil industry for refusing to fulfill its obligations under the law, or to get the RFS back on track by proposing adequate Renewable Volume Obligation (RVO) levels. “We intend to make sure that the (EPA) administrator, members of Congress, and the president himself understand the very clear choice that will be made with this impending RVO decision,” said Dinneen during a morning press conference announcing the new campaign.

The campaign includes television advertising during morning news, Sunday morning talk shows, and cable television, as well as a digital campaign that includes a Politico homepage takeover, a Real Clear Politics Energy takeover, and banner ads on Roll Call’s Energy page.

“The question is, is EPA going to – for the first time – waive the RFS if the oil industry refuses to distribute renewable fuels?” said Advanced Ethanol Council executive director Brooke Coleman.

The campaign is in response to a letter from oil industry organizations to the EPA, and a responsive letter from biofuels industry leaders to the EPA last week. The letters agree on one thing: the EPA has a choice to make. Either choose to reward the oil industry for refusing to fulfill its obligations under the law, or choose to get the Renewable Fuel Standard (RFS) back on track by proposing Renewable Volume Obligation (RVO) levels that comport with the spirit and intent of the law.

Fuels America Campaign Launch

Senators Show Support for Biodiesel Industry

durbin-heidiSenator Heidi Heitkamp (D-ND) led a number of her Democratic colleagues in calling on Environmental Protection Agency (EPA) to stop the continued delays of the Renewable Fuel Standard (RFS) rule and highlighted the impact that the uncertainty of the past two years has had on biodiesel industry.

“We stand together as Democratic Senators who care about this industry, care about energy independence, care about farm country, and care about the diversity of our energy sources to plead with the President of the United States to participate in this discussion,” said Sen. Heitkamp. “If you really are serious about a diverse energy mix, why do what we’re doing to the biodiesel industry?”

Joining Sen. Heitkamp were Sens. Dick Durbin (D-IL), Maria Cantwell (D-WA), Amy Klobuchar (D-MN), Jeanne Shaheen (D-NH) and Al Franken (D-MN), as well as biodiesel producers, who also stressed how the uncertainty caused by EPA’s misguided 2013 rule and delays on farmers and biodiesel workers.

adm-biodieselKent Engelbrecht, the manager of the biodiesel division at ADM, which has a biodiesel plant in Velva, North Dakota and is headquartered in Illinois, as well as Todd Ellis, vice president at Imperium Renewables near Seattle, Washington, discussed how the delays have impacted their own operations and others.

“2014 was poised to be a breakout year for biodiesel, until the 2014 RVO proposal intervened,” said Engelbrecht. “With the subsequent expiration of the biodiesel tax credit, we were forced to cease or slow production at all of our facilities.”

Listen to or download audio here: Comments from Senators and Biodiesel Industry on RFS Delays

The senators’ press conference was held as word came out Thursday that EPA has sent its new RFS volume obligation proposal, which is due to be released on June 1, on to the Office of Management and Budget for review.

National Biodiesel Board Vice President of Federal Affairs Anne Steckel thanked the senators for their support and was optimistic about news that EPA may be getting the RFS back on track. “What’s most important, however, is that we see volume growth in this pending proposal,” said Steckel. “The Obama Administration says regularly that it supports renewable fuels and wants America to lead, particularly in the development of Advanced Biofuels like biodiesel. This proposal will show if that’s true. The proof will be in the numbers.”

DDGS Exports to China Returning to Normal

Exports of U.S. distillers dried grains with solubles (DDGS) are starting to return to normal levels, according to the latest numbers for March.

Patriot Renewable Fuels DDGsThe Renewable Fuels Association reports that exports of the animal feed ethanol co-product rose in March for the fourth consecutive month, at 923,515 metric tons (mt), up 15% from February, with half of those shipments going to China. Exports of DDGS to China have been increasing this year after falling off last year due to a biotech trait issue. If normal shipments to China resume on an ongoing basis, 2015 theoretically could see total exports reach the 11 million mt mark. Mexico, Canada, Vietnam, and Thailand account for most of the remaining global market.

U.S. exports of ethanol in March were down slightly from February at 83.8 million gallons (mg), but that still represents the third-highest monthly volume in the last 12 months. Brazil and Canada accounted for half of total U.S. ethanol exports in March, followed by Oman and South Korea. The Netherlands, Tunisia and Nigeria were other key destinations in March.

Biofuels Leaders Ask President for Meeting

A dozen organizations and companies representing biofuels interests this week sent a letter to President Obama asking for a meeting on proposed rules under the Renewable Fuel Standard (RFS) due to come out next month.

fuels-americaThe letter comes on the heels of an analysis from the Biotechnology Industry Organization (BIO) showing how EPA delays in setting volume requirements (RVOs) under the RFS have resulted in the loss of some $13.7 billion in investment in advanced biofuels like cellulosic ethanol. The letter was signed by BIO, the Renewable Fuels Association, Growth Energy, Advanced Ethanol Coalition, National Corn Growers Association, Association of Equipment Manufacturers, POET, DSM, Novozymes, and Abengoa.

“The EPA’s proposal in 2013 was an enormous disservice to you and your legacy, Mr. President,” the letter states. “Prior to the release of that proposal, we had asked to meet with the EPA, but were rebuffed. We would like to work with you to ensure that the mistake is not repeated.”

In addition to the letter and the analysis from BIO, the Fuels America coalition is running digital ads this week on Politico’s Environment & Energy section that say, “Will the next generation of biofuels be created in the United States or China? It’s up to you, Mr. President. Support the Renewable Fuel Standard.”

RFS Uncertainty Chills Advanced Biofuel Funding

biologoA new analysis from the Biotechnology Industry Organization (BIO) finds delays in rulemaking for the Renewable Fuel Standard (RFS) have chilled necessary investment in advanced and cellulosic biofuels.

According to the analysis, the industry has experienced an estimated $13.7 billion shortfall in investment over the past two years as the Environmental Protection Agency has delayed setting volume obligations for biofuels under the RFS.

(EPA) was nine months late issuing the 2013 RVOs and is more than 17 months late in issuing the 2014 rule. Further, the agency has made cellulosic biofuel producers wait an average of 29 months (more than two years) for approval of production pathways. Currently, 29 companies have unresolved petitions filed with EPA and they have been waiting on average more than 32 months for resolution. A majority of an estimated $13.7 billion shortfall in investment for cellulosic and new advanced technologies should therefore be attributed to EPA’s delays in issuing timely rules.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, notes that the situation came about just as plants were beginning to reach the commercial stage. “The chill in investment has had the heaviest impact on cellulosic biofuel developers,” said Erickson. “The delays in rulemaking have also undercut the industry’s ability to create new employment opportunities, resulting in the loss of more than 80,000 direct jobs.”

According to BIO, the industry has invested more than $5 billion in first-of-a-kind demonstration and commercial-scale biorefineries around the world. The analysis finds that as of April 2015, there are five commercial cellulosic biorefineries with a combined capacity of more than 50 million gallons within the United States and registered to meet the goals of the RFS, along with several pilot and demonstration plants. Additional commercial biorefineries are under construction.

DOT Announces New Rail Car Standards

rfa-railcarU.S. Department of Transportation (DOT) today announced a final rule for the safe transportation of flammable liquids by rail.

The final rule, developed in coordination with Canada, focuses on “safety improvements that are designed to prevent accidents, mitigate consequences in the event of an accident, and support emergency response.”

“Safety has been our top priority at every step in the process for finalizing this rule, which is a significant improvement over the current regulations and requirements and will make transporting flammable liquids safer,” said U.S. Transportation Secretary Anthony Foxx.

Bob Dinneen, president and CEO of the Renewable Fuels Association, believes the new rule strikes “a fair balance in setting comprehensive standards while at the same time being sensitive to the limitation of retrofit capacity by giving less hazardous flammables — like ethanol — additional time to retrofit railcars.”

“We applaud the Department of Transportation for working to harmonize these regulations with Canada; for adopting a risk-based approach that prioritizes the most dangerous and highly-volatile flammables like crude oil while giving medium hazard liquids like ethanol additional time to come into compliance, for recognizing the limitations of the retrofit capacity, and, for establishing a regular reporting process for the retrofit schedule,” added Dinneen.

Growth Energy CEO Tom Buis, however, expressed disappointment with the new rule. “Although we are pleased that this rule begins to acknowledge the difference between cars in ethanol and crude service, we are extremely disappointed that regulators are requiring extensive changes to the ethanol rail fleet, while seemingly ignoring the number one cause of these accidents – broken rails and poor track condition,” said Buis.

The new rule requires a phase out or retrofit of all DOT-111 railcars transporting crude oil and ethanol by May 2023. Specifically, the rule requires a phase out or retrofit of all unjacketed CPC-1232 railcars used to ship ethanol by July 2023. Additionally, a new tank car standard has been put in place that establishes the DOT-117 as the new railcar to ship oil and ethanol. The DOT-117 includes a 9/16 inch steel hull, roll over protection, full height head shields, top fitting protection, and jacketing with thermal protection.

U.S. Ethanol Exports Rebound in 2014

usda-fasUSDA’s Foreign Agriculture Service reports that exports of U.S. ethanol exports rebounded last year after two years of declines. It was the second highest level of ethanol exports in history, making the United States the largest exporter of ethanol in the world, surpassing Brazil for the second time.

Value and volume of ethanol exports were both up approximately 35 percent from 2013, although still below the record set in 2011. At nearly 3.2 billion liters (836 million gallons), U.S. ethanol exports were worth more than $2 billion dollars. Six percent of ethanol produced in the United States was exported last year, shipped to a more diverse range of markets. Exports to Canada accounted for 40% of the total and while exports to Brazil and Europe dropped, dramatic increases were seen in markets such as the Philippines, South Korea, and the United Arab Emirates.

On the other side, U.S. ethanol imports (including both fuel and non-fuel ethanol) dropped by more than half in 2014, to less than 900 million liters, the lowest level since 2010. At the same time, domestic ethanol production jumped nearly eight percent in 2014, reaching a record 54 billion liters (14.3 billion gallons).

Read the entire FAS report here.

NBB Talks Biodiesel Issues with NAFB

ww15-nbbThe National Biodiesel Board (NBB) took part in the annual National Association of Farm Broadcasting Washington Watch this week to talk with reporters from around the country about issues important to the industry, number one being get the Renewable Fuel Standard (RFS) back on track.

“We hope that they not only get it back on track but get those volumes out there, they need to be higher,” said NBB Vice President of Federal Affairs Anne Steckel, speaking about EPA’s plan to release overdue volume obligations under the law by June. “EPA has said they want 2014 volumes to be actual production, so for our industry that would be about 1.75 billion gallons.”

Steckel says they hope EPA will add several hundred million gallons to that each year going forward to support industry growth.

In this interview with Agri-Pulse reporter Spencer Chase, Steckel also talks about the status of the biodiesel tax incentive. Interview with Anne Steckel, NBB