DOC Partners With NEC to Increase Ethanol Exports

Despite low crude oil prices, 2015 was still a robust export year for the ethanol industry according to Kenneth Hyatt, deputy under secretary for International Trade with the U.S. Department of Commerce (DOC). The DOC partnered with the Renewable Fuels Association, the host of the 21st Annual National Ethanol Conference (#RFANEC) where delegates from several countries were on hand to discuss export opportunities.

nec16-hyattHyatt said his organization has four key areas of focus in which they can assist the ethanol industry: promotion of U.S. exports; aid in opening global markets; assist investors in increasing direct foreign investment; and enforce U.S. trade laws and international trade agreements. However, the focus of his presentation was on exports.

“I would think about us as doing anything that would help you figure out whether to export, figure out to where to export. If you want to find a buyer in one of those countries, to help find a buyer in those countries. If it’s to help find a distributor in a country, we help find that distributor. It can also be if you have a problem in a country,” remarked Hyatt.

Hyatt also gave an overview on the top destinations of the export markets (Canada, Brazil and Phillipines), and also discussed the updates on the horizon of its Renewable Fuels Top Markets Report 2016. It covers both ethanol and biomass woodpellets and includes case studies, contact information and ranks them on strength of prospects.

Listen to Kenneth Hyatt’s presentation here: Kenneth Hyatt's Presentation

Kenneth Hyatt’s PowerPoint presentation

2016 National Ethanol Conference Photo Album

Ethanol Evolution Sees Industry Consolidation

This week in New Orleans, “Ethanol Evolution: The Data and Deals Driving the Future,” was a topic during the 21st Annual National Ethanol Conference (#RFANEC). The panel was moderated by Mike Jerke, CEO, Guardian Energy; and included Mark Fisler, Managing Director, Ocean Park Advisors; and John Christianson, Primary Partner, Christianson & Associates, PLLP.

nec16-evolutionDuring the discussion, Fisler said that the North American biofuels industry saw a major consolidation of players last year and this year is pointing to the same trend.

“Our experience leads us to believe there will be an increased number of owners and boards of renewable fuel companies evaluating their options in 2016, if not testing the market for reasonable assessments of the value of their plants,” noted Fisler. He added that the ethanol industry in particular is ripe for consolidation although there are still 94 standalone ethanol plants that have annual production capacity of 5.3 billion gallons, or about 36 percent all North American ethanol production volumes.

To learn about about this trend as well as how the ethanol industry is faring financially, listen to the Ethanol Evolution panel discussion: Ethanol Evolution Panel

View Power Point presentation.

2016 National Ethanol Conference Photo Album

OPIS’ Tom Kloza Discusses Energy Markets

nec16-klozaDuring the 21st Annual National Ethanol Conference (#RFANEC) this week, one of the hot topics was the energy and ethanol market outlooks especially with the low oil prices the globe is currently experiencing. Tom Kloza with the Oil Price Information Service (OPIS) offered attendees the outlook for ethanol, oil and natural gas markets in his presentation, “Wronger for Longer – sideways look at North American Energy Supply.”

“What would you have imagined would be more unlikely 3 or 4 years ago?” Kloza asked in his introduction. “That a hip-hop version of Alexander Hamilton would win the Tonys on Broadway? That America’s Dad Bill Cosby would be America’s serial rapist? Or that the person who was the greatest athlete in the world in 1976 Bruce Jenner was now a woman? Or that oil prices were a $110 a few years ago and now are struggling to get out of the 20s?”

Your answer may change after you listen to Kloza’s remarks here: Tom Kloza, OPIS, Energy Markets Outlook Remarks View Power Point presentation.

2016 National Ethanol Conference Photo Album

Abigail Fisler Shares Her #RFANEC Experience

nec16-scholarshipAbigail Fisler was the recipient of this year’s National Ethanol Conference (NEC) scholarship awarded by the Renewable Fuels Foundation. She is a junior at Dickinson College in Carlislie, PA studying environmental studies with a focus on renewable energy and climate change. Last year she attended her first NEC show and wanted to attend again because of all the great educational and networking opportunities.

Before she headed back to the books, she spoke with Cindy Zimmerman about some of the highlights of her time at the ethanol conference. She prefaced her answer with “that’s a tough one” but noted she really enjoyed the panel that included Alicia Lindauer with the U.S. Department of Energy (DOE). “I grabbed her at the networking reception and talked with her about what her career path has been and about her education path that led her there, and I thought it was really interesting to talk with her.”

Other areas that particularly interested her were discussions around why some areas are implementing E15 and other areas are not, and why some places have lots of flex fuel vehicles while others don’t.

To learn more about Abigail’s growing interest in renewable fuels (she’s been a fan since 4th grade) and to hear more about her NEC experience, listen to Cindy Zimmerman’s interview with NEC Scholarship winner Abigail Fisler: Interview with Abigail Fisler

2016 National Ethanol Conference Photo Album

RFA Releases 2016 Ethanol Industry Pocket Guide

nec16-pocket-guideDuring the 21 Annual National Ethanol Conference (NEC) this week in New Orleans, the Renewable Fuels Association (RFA) released the 2016 Ethanol Industry Outlook and the Pocket Guide to Ethanol. Both resources provide up-to-date statistics, insights and analysis on the critical issues affecting the U.S. ethanol industry. Topics found in the guides include the Renewable Fuel Standard (RFS), background information on market activity, and the latest facts and figures regarding energy security, the environment, the economy, agriculture and trade.

“As the information contained in these editions show, 2015 proved to be a banner year for the ethanol industry,” said RFA President and CEO Bob Dinneen. “These publications are meant to give readers the best overview possible of the industry so that they get a true sense of how far this industry has come and where it is expected to head next. With so much misinformation clouding the reality about ethanol, it is important for consumers, investors, and policymakers to be armed with the facts contained in these publications.”

New this year is a series of downloadable two-page issue briefs based on the Ethanol Industry Outlook, and offers a complete overview of each topic, along with detailed charts and graphs. The Pocket Guide to Ethanol contains the same information as the Outlook, but in a simpler, portable format that includes many myth-busting factoids about ethanol.

2016 National Ethanol Conference Photo Album

Iowa Biodiesel Day on the Hill

Chad Stone/IBB Chair/REG (far right), Grant Kimberley/IBB exec dir (Center) speak with Mark Smith (head of table), Iowa House Democratic Leader

Chad Stone/IBB Chair/REG (far right), Grant Kimberley/IBB exec dir (Center) speak with Mark Smith (head of table), Iowa House Democratic Leader

“Iowa Biodiesel Day on the Hill” recently took place hosted by the Iowa Biodiesel Board (IBB). During the event, members called on state legislators to extend and expand biodiesel incentives that are set to expire. IBB notes these incentives help Iowa’s 13 biodiesel producers make the state the top in the country for production. In 2015, 12 of these biodiesel facilities produced a record 242 million gallons of biodiesel. There is also a retailers credit that encourages fuel retailers to carry biodiesel blends, and according to the Iowa Department of Revenue, biodiesel-blended gasoline accounted for 48.9 percent of diesel gallons sold in 2014.

The event included pubic education and a luncheon where IBB members met with legislators to discuss 2016 legislative priorities. These include:

  • Extending the Biodiesel Production Credit, set to expire at the end of next year. The credit is 2 cents per gallon on the first 25 million gallons of production per biodiesel plant, and helps keep biodiesel production and economic activity in Iowa.
  • Extending the Biodiesel Promotion Retail Tax Credit, which provides petroleum retailers 4.5 cents a gallon on blends of at least 5 percent biodiesel (B5), set to expire at the end of next year. Market competition encourages this savings to be passed on to motorists.
  • Enhancing the Retail Tax Credit by adding a 2.5 cent credit (7 cents total) for blends of B11 and higher. This will encourage higher blends of biodiesel to be distributed in the state.
  • Supporting Governor Terry Branstad’s recommended appropriation to continue the successful Renewable Fuels Infrastructure Program, which helps fuel distributors and retailers update equipment to include biofuels.
  • Supporting the Biochemical Tax Credit legislation, which would stimulate more demand for biochemical production.

The state biodiesel policies in place have been effective in increasing production and consumption in Iowa, said Grant Kimberley, Iowa Biodiesel Board executive director.
“It makes sense that the majority of Iowa’s diesel fuel should contain at least some biodiesel, and we’re very interested in encouraging higher blends. Common sense would say we use our own fuel product rather than foreign oil. Expanding the retail tax credit for blends of B11 and higher would resoundingly help us accomplish that.”

GFRA Calls to End Fossil Fuel Subsidies

Global Renewable Fuels Alliance (GRFA) President Bliss Baker is calling on national leaders to eliminate all fossil fuel subsides, especially in light of the current low price per barrel costs. According to the International Energy Agency (IEA), the estimated global fossil fuel subsidies are worth $490 billion. IEA is also predicting global oil demand will drop 25 percent in 2016 to 1.2 million barrels per day. Theoretically fossil fuel subsidies are supposed to increase energy access during periods of high prices; however, with the current state of global energy markets these subsidies, says Baker, are only succeeding in discouraging investment in energy efficiencies and renewables.

GRFA logo“The persistent oversupply of oil, and the resulting low prices, gives countries an opportunity not seen in recent memory to eliminate fossil fuel subsidies and encourage a transition to viable low-carbon energy sources like ethanol,” Baker said. “World leaders couldn’t ask for better circumstances to take action.”

A landmark agreement on combating climate was reached in Paris last December during COP21. The goal is to keep the global temperature rise from exceeding 2°C above pre-industrial levels in this century. This is to be achieved by shifting to a global low carbon economy and encouraging the development of clean technologies as the basis for future development.

Baker notes that over the past year 30 countries have reduced their fossil fuel subsidy programs (the U.S. is not included in this number) in recognition of the fact that current low oil prices reduces the impact of eliminating consumer fossil fuel subsidies. Baker adds that these subsidy reductions also results in lower domestic national emissions of greenhouse gases.

“It is blatantly counter productive for governments to continue to subsidize the industry that contributes the majority of global greenhouse gas emissions, especially after 195 countries agreed that drastically cutting back GHG emissions was necessary to combat climate change.” Baker concluded, “It’s time to take the brakes off of clean technology development and meaningfully begin the transition to a sustainable future.”

Reports Find Increasing Ethanol Efficiency

Two recent reports have found that ethanol production continues to become even more efficient. The U.S. Department of Agriculture’s (USDA) Office of Chief Economist and titled, “2015 Energy Balance for the Corn Ethanol Industry“. The second report titled, “Literature Review of Estimated Market Effects of U.S. Corn Starch Ethanol,” was published by the University of Missouri, Food and Agricultural Policy Institute (FAPRI).

Corn field on BJ and Bob Funke's Iowa farm.  Photo Credit: Joanna Schroeder

Corn field on BJ and Bob Funke’s Iowa farm. Photo Credit: Joanna Schroeder

Both studies reported that ethanol production continues to be increasingly energy efficient, and that increased production would continue to benefit the farm economy by increasing corn prices. Both reports also find that even with increased corn ethanol production, there would be more than enough corn to meet the needs of animal producers such as livestock.

USDA Ag Secretary Tom Vilsack said in a statement regarding the report findings, “Between 1991 and 2010, direct energy use in corn production has dropped by 46 percent per bushel of corn produced and total energy use per bushel of corn by 35 percent. Moreover, between 2005 and 2010, direct energy use fell by 25 percent and the total energy use by 8.2 percent per bushel—meaning that between 2005 and 2010, the energy required per bushel of corn produced dropped by about 5 percent. The bottom line is, today, more energy is being produced from ethanol than is used to produce it, by factors of 2 to 1 nationally and by factors of 4 to 1 in the Midwest. ”

In response to the reports, Growth Energy Co-Chair Tom Buis stated, “The USDA report confirms several things the ethanol industry has been saying for years – efficiency in ethanol production is on the rise.” Buis continued by noting for years Big Oil and special interests have been attempting to drive a narrative that is false and an effort to maintain their fuel transportation fuel monopoly. He also pointed out that the FAPRI study found there was no definitive impact on global land use.

“These reports definitively prove that the misinformation and lies being spread by Big Oil and special interests hold absolutely no merit. Ethanol production has become, and continues to be more efficient,” Buis added, “Furthermore, Secretary Vilsack was spot on when he noted that, ‘there are many reasons to be optimistic about the future of the bio-economy and the role biofuels and advanced biofuels will play in the future.’”

State of the Ethanol Industry at #RFANEC

Bob DinneenThis morning at the National Ethanol Conference, Bob Dinneen, Renewable Fuels Association, gave his annual State of the Ethanol Industry Speech in front of over 1,000 attendees. He said that the domestic ethanol industry remains strong and touted its ability to successfully navigate the vagaries of the markets and overcome the perils of policy uncertainty.

“The strength of the U.S. ethanol industry is seen in its record production – 14.7 billion gallons, its record blending demand – 13.75 billion gallons, record feed production – 40 million metric tons, and record greenhouse gas reductions – 41.2 metric tons,” said Dinneen. “Those aren’t the stats of an industry in retreat, that’s an industry confident, defiant, and prepared to weather any storm.”

Dinneen called the U.S. ethanol industry the “cornerstone” of the rural economy, noting that it added $44 billion to the nation’s Gross Domestic Product and paid $10 billion in taxes last year. He drew a sharp contrast with what he characterized as the “boom and bust cycles” of oil extraction which, he said, can wreak havoc on economically-vulnerable communities.

You can read his full speech here.

You can listen to Bob’s speech here:

Speech on State of Ethanol Industry - Bob Dinneen, RFA

2016 National Ethanol Conference Photo Album

Preview of National Ethanol Conference

Bob DinneenThe Reverend of Renewable Energy, Mr. Bob Dinneen, Renewable Fuels Association, in traditional fashion, provides us with a preview of the 21st National Ethanol Conference. The Conference kicked off this morning at English Turn Golf & Country Club with the annual NEC tournament. The weather threatened but held off for a beautiful day.

Bob says the agenda includes some great speakers including John Hofmeister, former president of Shell Oil Company and Founder/CEO, Citizens for Affordable Energy and our U.S. Secretary of Agriculture Tom Vilsack. It’s a very political year which he says is going to keep things interesting. In fact, we will also hear from Mike Murphy, Political Analyst, NBC News and Paul Begala, Political Analyst, CNN. That might even be entertaining.

Bob says that after the death of Supreme Court Justice Antonin Scalia the whole tone in Washington, DC changed. Between that tragedy and a shortened Congressional season due to the political conventions it will make it very hard for much action to be taken.

Here at the conference Bob says he wants to encourage members to look ahead, find and build new markets, feel proud of their industry. We’re also going to have a session on how to communicate with the consumers of today.

You can listen to my interview with Bob here: Interview with Bob Dinneen, RFA