Senators Urged to Extend Advanced Ethanol Initiatives

Advanced ethanol producers are urging a Senate subcommittee to extend key cellulosic ethanol tax provisions set to expire at the end of 2012.

RFA AECWith the Senate Finance Subcommittee on Energy, Natural Resources, and Infrastructure holding a hearing this week on expired and expiring energy tax incentives, the Advanced Ethanol Council (AEC) sent a letter to Chairman Jeff Bingaman (D-NM) and Ranking Member John Cornyn (R-TX) outlining the importance of two critical tax incentives.

“The Cellulosic Biofuels Producer Tax Credit (PTC) and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property are vital to the ongoing development of the domestic advanced ethanol industry,” wrote Brooke Coleman, Executive Director of the AEC. “With gas prices soaring, it is increasingly important to diversify U.S. motor fuel markets with viable and competitive alternatives to gasoline, such as advanced ethanol, that will offer American consumers greater choice at the pump.”

Coleman notes that several billion dollars have already been invested in the development of advanced biofuels “with the expectation that Congress will stay the course with regard to its commitment to the industry” and that “allowing the PTC and accelerated depreciation allowance to expire runs counter to the goals set forth by Congress to foster the development of advanced biofuels under the Renewable Fuels Standard.”

Low Carbon Fuel Standard Could Double Gas Prices

A new study released today by the Consumer Energy Alliance (CEA) indicates that a low carbon fuel standard (LCFS) in Northeast and Mid-Atlantic states could result in doubling gasoline prices and other negative economic impacts.

The study, “Analysis of the Economic Impact of a Regional Low Carbon Fuel Standard on Northeast/Mid-Atlantic States,” estimates that an LCFS over ten years would result in the loss of 147,000 jobs, decrease disposable income by $28.8 billion, and result in a combined negative economic impact of $306 billion.

Eleven Northeast and Mid-Atlantic (NE/MA) states have been evaluating the implementation of a LCFS through an initiative coordinated by the Northeast States for Coordinated Air Use Management (NESCAUM), which released a final report in August of last year – an analysis that CEA believes was “lacking in depth, methodology and analysis, and failed to account for the region’s energy needs.”

CEA Executive Vice President Michael Whatley said their study found that “NESCAUM relied on flawed assumptions about the market’s ability to secure an adequate supply of biofuels, the infrastructure needed to support that demand, and the projected replacement of existing vehicles. These findings further support an analysis conducted by IHS-CERA in October 2011 that found NESCAUM’s economic analysis to be deeply flawed and riddled with unrealistic assumptions regarding the availability and price of advanced biofuels, electric and natural gas powered vehicles during the timeframe of the potential LCFS mandate.”

Listen to or download comments from Whatley during a press conference this morning: CEA's Michael Whatley
Read the study here.

All-Florida Ag Show Announced

April 25-26, 2012 is the date for the new All-Florida Ag Show sponsored by Florida Grower and the Highland County Farm Bureau. The event will take place at the Highlands County Fair Convention Center in Sebring, Florida and will bring together a diverse group of agribusiness leaders ranging from fruits to vegetables to livestock to biofuels. There will also be a wide array of topics discussed during the show including labor, water, alternative energy, crop opportunities and more.

“The All Florida Ag Show is an important event to support as it provides a unique opportunity to anyone who has interest in Florida’s agriculture to meet under one roof and learn about new opportunities, as well as common challenges that our industry faces today and in the future,” stated Scott Kirouac, president of Highlands County Farm Bureau.

Several speakers have confirmed including Rich Budell, FDACS Water Policy Chief and Jack Payne, senior vice-president, UF/IFAS, John Hoblick, president, Florida Farm Bureau. In addition, Adam Putnam, Florida Agriculture Commissioner has been invited along with many other agricultural experts. There is also an expansive trade show area planned for the event.

For more information visit: www.allfloridaag.com.

More Dairy Production Benefits Ethanol Industry

Like a rising tide that floats all boats, rising milk production helps many sectors of agriculture, including ethanol, according to the National Corn Growers Association (NCGA).

The latest USDA estimate released earlier this week shows milk production in the United States continues to expand, with February 2012 production up 8% compared to a year ago thanks to a one percent expansion in the dairy cow herd and a seven percent productivity increase, as measured by milk produced per cow.

“As an agricultural community, we certainly look at growth and gains across the industry favorably,” said NCGA President Garry Niemeyer. “This trend benefits corn farmers, like myself, directly also though as increased milk production often translates into increased demand for feed, including corn and ethanol co-product distillers dried grains. I see it as a win-win-win as consumers benefit from a larger milk supply, dairy and corn farmers benefit from increased production and the ethanol industry benefits from the increased demand for the high quality feed ingredients produced along with fuel.”

During the current corn marketing year, estimates are that the nation’s dairy cattle will consume nearly 800 million bushels of corn, or about six percent of total corn usage. The market for DDGs also continues to expand as demand from the dairy sector rises due to increasing awareness and understanding of their quality, affordability and other benefits.

Ethanol Stocks Hit Record High

eiaAccording to the latest figures from the Energy Information Administration, ethanol stocks hit an all-time record last week of 22.7 million barrels, equivalent to a 27-day supply.

Ethanol production for the week ending 3/16/12 averaged 893,000 barrels per day (b/d) – or 37.51 million gallons daily. That is up slightly from the previous week and makes the 4-week average for ethanol production so far this year total 897,000 b/d for an annualized rate of 13.75 billion gallons.

Meanwhile, gasoline demand for the same week averaged 351.9 million gallons daily. Expressed as a percentage of daily gasoline demand, daily ethanol production was 10.66%. Since the beginning of the year, weekly gasoline demand has averaged 345.7 million gallons daily, meaning the annualized E10 blend wall is 12.6 billion gallons.

On the co-products side, ethanol producers were using 13.540 million bushels of corn daily to produce ethanol and 100,506 metric tons of livestock feed, 90,677 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 4.1 million pounds of corn oil daily.

Agriculture Secretary Encourages E15 Adoption

vilsack at national ethanol conferenceThe best way to help the U.S. ethanol industry right now is to encourage the adoption of E15 by fuel retailers, according to Agriculture Secretary Tom Vilsack.

During a telephone press conference on Tuesday promoting USDA’s Rural Energy for America Program (REAP), Vilsack was asked by a reporter what can be done to help the struggling ethanol sector right now.

“If you take a look at the long term history of ethanol, you’ll see that there are peaks and valleys in this commodity,” Vilsack noted. “Our focus is primarily on encouraging blenders to embrace E15. EPA has authorized the use of E15 and this obviously would be a God send.”

Vilsack added that they want blenders to register with EPA to get E15 in the market and they are looking for ways to encourage distribution. “At the same time, we’re also looking at alternative ways to produce ethanol through non-food feedstocks so we can spread the good work this industry’s doing in keeping gas prices down further than they would otherwise be.”

The secretary referenced an Iowa State University study that concluded ethanol helps save motorists up to $1.30 per gallon. “So we obviously need a robust biofuel industry,” he said.

Listen to or download Vilsack’s comments here: Secretary Vilsack on E15

USDA Plays Biofuels “Matchmaker”

USDAThe U.S. Department of Agriculture will be hosting a “match making day” later this month to promote connections between agricultural producers of energy feedstocks with biorefiners seeking to produce biofuels for commercial sale and consumption.

Officials from the U.S. Department of Navy, U.S. Department of Energy, and the Federal Aviation Administration will also attend the March 30 event at USDA headquarters with the goal being to improve awareness and increase understanding of the biofuels supply-chain links between those involved in feedstock production and the processors of that feedstock into biofuels, including logistical challenges, potential roles of service providers, and potential pitfalls.

At this meeting, federal officials will provide a short profile of each section of the supply chain and representatives from the participating stakeholders will respond with brief presentations that outline their experiences in that respective supply chain sector, barriers encountered and lessons learned. They will outline potential growth and opportunities.
Short presentations will be made at the top of each hour leaving time for discussion at each table, at which a representative from each of the sectors of the biofuels supply chain should be seated, as well as one or more government official.

The event is free but participants must register by sending an email to: OSEC-RESupplyChain@osec.usda.gov with information on company, names and titles of attendees and position on the biofuels production value chain (i.e., feedstock seed developer or provider, feedstock grower or harvester, feedstock processor, feedstock transporter, feedstock storer, bio-refiner, feedstock machinery manufacturer/provider, other). More information is available by calling 202-401-0461.

Ethanol Report on E15 Plan

RFA retailer handbookAfter more than a year of waiting since EPA approved its use for 2001 and newer vehicles, 15% ethanol blended motor fuel could be hitting the streets by this summer.

In January 2011, EPA approved a waiver for the use of E15 in 2001 and newer vehicles. Since then, a pump label has been finalized, health effects testing approved and finally, last week, the approval of the Misfueling Mitigation Plan developed by the Renewable Fuels Association.

Ethanol Report PodcastThis edition of “The Ethanol Report” includes comments from RFA president and CEO Bob Dinneen, Vice President of Technical Services Kristy Moore, and Director of Market Development Robert White about the MMP, as well as RFA’s E15 Retailer Handbook, and the E15 Education and Outreach plan for consumers. More information on RFA’s education and outreach plan can be found at e15fuel.org.

Listen to or download the Ethanol Report here: Ethanol Report on E15 Plan

Subscribe to the Ethanol Report here.

RFA Ready for 15% Ethanol to be Legal

RFAThe Renewable Fuels Association (RFA) is ready for 15% ethanol (E15) to become street legal – something that could happen at any moment.

RFA president and CEO Bob Dinneen, Vice President of Technical Services Kristy Moore, and Director of Market Development Robert White gave an overview of the most recent developments in the commercialization of E15 ethanol blends. Specifically, they discussed EPA’s acceptance of the RFA’s Misfueling Mitigation Plan (MMP) and the release of its E15 Retailer Handbook.

“The job now is largely the industry’s to make E15 a commercial reality and we are working hard to make sure that happens,” said Dinneen.

“RFA has been working on our plan for months,” said Moore. “The (MMP) plan includes not only requirements for the label and appropriate use, it also includes tools and resources to insure that proper wording appears on shipping and product transfer documents and the development of a fuel survey.”

“The exciting time of educating retailers and ultimately consumers is upon us,” said White. “As of today, we will have the new E15 retailer handbook in the hands of more than 13,000 retailers.”

Read RFA’s Misfueling Mitigation Plan.

Read RFA’s E15 Retailer Handbook

Listen to of download all comments from Dinneen, Moore and White here: RFA Media Call on E15 Developments

EPA Readies for 15% Ethanol Rollout

The Environmental Protection Agency (EPA) is getting even closer to letting 15% ethanol blended gasoline (E15) make its debut in the marketplace.

This week, EPA notified the Renewable Fuels Association (RFA) that the model Misfueling Mitigation Plan for E15 the organization submitted meets the requirements of EPA’s waiver decision. In January 2011, EPA expanded upon its October 2010 decision and approved the use of E15 for light duty passenger vehicles Model Year (MY) 2001 and newer.

In a letter to RFA President and CEO Bob Dinneen, EPA’s Compliance Division acting director stated that the RFA Misfueling Mitigation Plan “would generally be sufficient to satisfy the partial waivers’ requirements.”

RFA“Americans will soon have a safe and effective new fuel option at the pump that is domestically-made and significantly cheaper than gasoline,” said Dinneen. “EPA is clearing the way for E15 and allowing America’s ethanol industry to turn its full attention to educating retailers and consumers on the benefits of higher level ethanol blends and ensuring that state fuel regulations allow for their sale.”

The next steps will include ensuring companies seeking to offer E15 are registered with EPA, they have submitted the Misfueling Mitigation plan, and are addressing lingering fuel regulatory requirements at the state level. Some states, including Iowa, Illinois, and Kansas, are prepared to welcome E15 and drivers in those states will be among the first to see E15 at the pump.

Coinciding with EPA’s approval of RFA’s Misfueling Mitigation Plan, the RFA released the E15 Retailer Handbook. This Handbook provides guidance for retailers in evaluating existing infrastructure compatibility, safety and conversion practices and state specific regulatory requirements.