USDA Report Shows Importance of Int’l Biofuel Trade

USDA logoA new government report says that while the U.S. is a major exporter of biofuels, it still imports biofuels in order to meet government mandates. The study from the U.S. Department of Agriculture’s Economic Research Service says some other countries are major exporters and domestic users, thanks to laws there that allow greater blending amounts.

The ethanol blend wall in the United States, and an increase in demand for biofuels from other countries, helped the United States emerge as a net exporter of ethanol for the first time in 2010, with net exports positive each year since. Indeed, the United States has become the world’s largest exporter of ethanol. U.S. ethanol production and exports both remained strong in the face of falling gasoline prices in 2014 due to interactions of supply- and demand-side factors; production capacity beyond domestic policy requirements and strong export markets helped make high exports possible. In addition, U.S. imports of ethanol in 2014 fell to their lowest amounts in years.

Along with market forces, policies can affect future U.S. biofuel trade. If the blending rate in Brazil continues to increase (as it has recently), less Brazilian ethanol will be available to compete with the United States on the global market. At the same time, Brazil could continue to import U.S. ethanol to help meet its mandate. In addition, U.S. biofuel policies could affect the future of U.S. biofuel trade. For example, reducing the amount of ethanol that can be derived from corn in the U.S. renewal fuel mandate could potentially lead to reduction in U.S. ethanol production infrastructure in the long run, which could limit the availability of ethanol for exports.

The study also indicates some grave implications for the U.S.’ biofuel producers if the federal government continues to ignore the requirements under the law that created the Renewable Fuel Standard.

If the scheduled future increases in the U.S. mandate for advanced biofuel are not met by increased domestic production of advanced biofuels (and are not waived), the increase in the mandate amounts will need to be met with imports, such as sugarcane-based ethanol from Brazil.

East Kansas Agri-Energy Hosts Congressman Yoder

Renew Kansas hosted Congressman Kevin Yoder‘s tour of East Kansas Agri-Energy (EKAE) located in Garnett, Kansas. While touring the facility, the Congressman and his staff heard from EKAE’s President and CEO Jeff Oestmann about the many opportunities and challenges facing the industry. Last month, EKAE celebrated its 10 year anniversary.

(l-r) Ron Seeber, Renew Kansas; Jeff Oestmann, EKAE President and CEO; Jacob DeBolt, EKAE Plant Manager; Congressman Kevin Yoder; and Greg Krissek, Kansas Corn.

(l-r) Ron Seeber, Renew Kansas; Jeff Oestmann, EKAE President and CEO; Jacob DeBolt, EKAE Plant Manager; Congressman Kevin Yoder; and Greg Krissek, Kansas Corn.

Congressman Yoder learned that the plant produces more than 40 million gallons of renewable, clean-burning ethanol, 200,000 tons of livestock feed distillers grains and 5 million pounds of corn oil each year from more than 16 million bushels of locally-sourced corn. The Congressman was informed of the many positive impacts the ethanol industry has on the local, state, and national economies and was briefed on and witnessed the progress of the renewable diesel plant now under construction at the EKAE facility. Additionally, he also learned of their stellar work place safety with over 750,000 hours of operation without a lost time accident.

Renew Kansas thanked Congressman Yoder for taking the time to travel to Garnett and participate in a hands-on ethanol education. The Congressman is currently serving as Vice Chair of the House Appropriations Subcommittee on Agriculture.

ACE Elects Board Representatives

aceDuring the recent American Coalition for Ethanol’s conference in Omaha, Nebraska, members elected directors to serve on their governing board. Four individuals re-elected to the ACE Board of Directors:

  • Ron Alverson, representing Dakota Ethanol, LLC, an ethanol plant in Wentworth, South Dakota, which produces 50 million gallons of ethanol per year (MGY).  Alverson currently serves as the President of the ACE Board of Directors.
  • John Christianson, on behalf of Christianson and Associates, a Wilmar, Minnesota based accounting and consulting firm.
  • Doug Punke, CEO of the Renewable Products Marketing Group (RPMG), an ethanol marketing company in Shakopee, Minnesota.
  • Brian Wilcox, from the Nebraska Public Power District, an electric utility company in Columbus, Nebraska which serves 87 out of the 93 counties in the state.

ACE members also elected two individuals to serve as new board directors.  Kenton Johnson was elected to represent Granite Falls Energy, LLC, a 62 mgy ethanol plant located near Granite Falls, Minnesota, and Mike Clemens, a farmer from Wimbledon, North Dakota, was elected to represent the North Dakota Corn Growers Association.

The full list of the ACE Broad of Directors is available here.

Ethanol Rail Opportunities & Challenges

hyderThis past winter was a tough one on the rail industry with lots of cold and snow. Among industries affected was the biofuel industry including ethanol transportation. During the ACE Ethanol Conference, Hasan Hyder, assistant vice president grain and grain products for Union Pacific, addressed some of these issues and discussed new opportunities.

Hyder gave a brief history of the rail industry with a focus on safety, service and supply chain efficiency. He also discussed longer-term opportunities and challenges ethanol and the rail industry face together. One great opportunity and challenge- transporting the growing amount of American made biofuels around the country.

To learn more about Union Pacific, and their commitment to the ethanol industry, listen to Hasan Hyder’s presentation: Hasan Hyder, Union Pacific

2015 ACE Annual Meeting Photos

ARF Reacts to Hillary Clinton’s Ag, Energy Plan

Presidential candidate Sec. Hillary Clinton (D) made another visit to Iowa this week where she unveiled her agriculture and rural policy plan. She called for strengthening the Renewable Fuel Standard (RFS) so that it continues to drive the development of advanced cellulosic and other advanced biofuels. Clinton called for more consumer choice at the pump with better access to ethanol blends such as E15 and E85 as well as biodiesel. She also called for more renewable energy to be phased into the electricity sector.

Sec Hillary ClintonAmerica’s Renewable Future (ARF), who is meeting with candidates to discuss the benefits of biofuels, released the following statement in response to the plan.

“We thank Sec. Clinton for her commitment to Iowa’s farmers, consumers, and investors with her call of a strengthened RFS. We enthusiastically echo that call, especially in light of President Obama’s Environmental Protection Agency’s (EPA) disastrous Renewable Volume Obligation (RVO) proposal. The EPA’s proposal is another example of conceding to the oil industry’s demands at the expense of clean, domestic renewable fuels and American jobs.

Billions of dollars were invested by famers and local investors to produce biofuels with the promise of a strong RFS. Reducing the RVO will strand capitol and punish the pioneers who invested in clean, homegrown renewable energy. The RFS has created 73,000 jobs here in Iowa and hundreds of thousands more around the country that cannot be outsourced, reduced our dependence on foreign oil, helped clean our air, and provided consumers savings at the pump.

Iowa’s rural communities and economy depend on the RFS for stability and growth and the EPA must get it back on track and focus on protecting the jobs and economic progress it has yielded.”

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.
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

Protec Takes Unique E15, E85 Approach

Todd Garner, CEO of Protec Fuel, has more than 30 years in the fuel business. As such, he has been able to launch an interesting model in how they bring more choice at the pump by helping retail stations offer E15 and E85. The company started offering E85 in 2006 and has made incredible strides in getting more ethanol into the marketplace. But they do more than just distribute biofuels. They are also a large fuel logistics provider, basically, they do all of the aspects that any oil company might do but work primarily with small to midsize retailers and companies. Attendees were able to learn about their business model during the ACE Ethanol Conference last week in Omaha, Nebraska.

Todd Garner ProtecProtec is the largest supplier of ethanol to the military in the U.S. and has E85 stations on nearly every naval base in the country. And for the first time, they have begun to supply the rental car companies at the Nashville, TN and Charlotte, North Carolina airports. Garner said rental car companies used to buy their own fuel. Today it’s all done together and outsourced. So Protec has convinced these rental car operations to change to E15 because nearly all cars on the road can use this ethanol blend. Gardner said that they will continue to push this program with other rental car agencies located at airports across the country.

To learn more about how Protec is promoting/selling E15 and E15 listen to Todd Garner’s remarks here: Todd Garner, Protec

2015 ACE Annual Meeting Photos

Fuels America Ad Targets President Obama

Screen Shot 2015-08-26 at 8.04.06 AMIn conjunction with the National Clean Energy Summit that took place in Las Vegas, Fuels America published a full-page ad in the Las Vegas Review-Journal aimed at President Obama. The theme of the ad is the Renewable Fuel Standard (RFS) and a call to action to uphold the law as signed in 2007 by then President Bush. Obama was a keynote speaker at the event and the ad was accompanied by a Review Journal homepage takeover, as well as banner ads geotargeted at the conference.

The ad touts the progress under the Renewable Fuel Standard (RFS) – passed 10 years ago this month by Senator Reid and a bipartisan coalition – including the creation of more than 850,000 American jobs and the reduction of America’s oil imports by nearly two-thirds.

The ad describes how the EPA caved to pressure from the oil industry and changed the law midstream with its latest proposal that would let oil companies continue to ignore their obligations under the law and block market access to renewable fuel for American consumers.

Fuels America notes in the ad that American biofuel innovators have invested billions of dollars in the next generation of biofuels – fuels that is cleaner and helps curb climate change, cutting carbon emissions by 88-108% compared to petroleum – under the promise of the RFS that it would end the oil industry’s chokehold on fuel distribution and market access, create American jobs, and give consumers a choice at the pump.

Kum & Go, E15 Leader #ACE Award Honoree

Jim Pirolli Kum and GoKum & Go is well known in the Midwest, especially in states like Iowa and Nebraska where this year’s #ACE annual Ethanol Conference took place (Omaha). During the event, Jim Pirolli, Vice President of Fuels for Kum & Go talked about his company’s commitment to rolling out E15 stations as well as their efforts to continue to sell more E85. The retailer opened their first E15 station in Des Moines, Iowa recently with 6 more planned over the coming months.

How are they successful? Well, for starters they are price competitive at the pump. Pirolli said that Kum & Go recognizes that alternative fuels such as ethanol support local economies, better for the environment and help them deliver more to the customer than they might expect via an expanded product portfolio and also offering the economic and performance benefits. This summer they have done a very aggressive promotion campaign for E85 in Omaha and also for E15 in Des Moines. He did ask for help in helping to educate consumers about E15.

Listen to Jim Pirolli’s presentation here: Jim Pirolli, Kum & Go

Paul Dana Marketing Vision Award

American Coalition for Ethanol’s (ACE) Ron Lamberty (left) awards Jim Pirolli with Kum & Go the Paul Dana Marketing Vision Award.

Also during the event, Kum & Go was awarded the Paul Dana Marketing Vision Award, to honor a retailer who is supportive of ethanol. Ron Lamberty with ACE noted that the retailer has been an ongoing leader in ethanol selling E10 back in 1979, today as 170 E85 stations in 11 states. He praised them for stepping up for ethanol and for marketing the fuel aggressively and for being a leader in offering E15 to consumers.

Listen to Ron Lamberty’s remarks about Kum and Go here: Kum & Go Honored with Paul Dana Marketing Vision Award

2015 ACE Annual Meeting Photos