IBISWorld Offers Buying Strategies for Ethanol

ibisworldThe ethanol market can be a pretty volatile place when it comes to pricing. IBISWorld is offering a report on how to identify where volatility exists, not just in ethanol, and how to reduce risks in price instability.

Because of fluctuating key input costs, prices of diesel and ethanol have displayed a high level of price volatility. While diesel and ethanol are both used for fuel, they do not share the same production process because diesel fuel comes from crude oil and ethanol comes primarily from corn…

Meanwhile, the price of corn is estimated to fall 21.7% in 2015, which will play a large part in the 29.2% drop in ethanol prices expected this year. Similar to diesel, ethanol prices are forecast to reverse and then stabilize at mild growth in the coming years.

The fuel market is known for its booms and busts, which can foster a hectic procurement environment. As such, buyers are encouraged to engage in long-term contracts with their fuel suppliers to reduce their exposure to price fluctuations. By locking in favorable rates now while prices are low, buyers can avoid the risk of anticipated prices rises in the future.

More information is available here.

North Dakota Firefighters to Get Ethanol Training

rfalogo1Firefighters in North Dakota will get some training on ethanol safety. The Renewable Fuels Association (RFA) and North Dakota Firefighter’s Association will co-host seven free Ethanol Safety Seminars this month across the state, focusing on numerous areas of ethanol safety to target first responders, hazmat teams, safety managers, and local emergency planning committees, as well as the general public.

Starting Aug. 17, Ethanol Safety Seminars will be held in the following locations:

Aug. 17: Bowman Fire Department in Bowman | 5:30–10 p.m.
Aug. 18: Dickinson Fire Department in Dickinson | 9 a.m.–2 p.m.
Aug. 18: Richardton Fire Department in Richardton | 5:30–10 p.m.
Aug. 19: Washburn Fire Department in Washburn | 5:30–10 p.m.
Aug. 24: Stutsman County Law Emergency Center in Jamestown | 9 a.m.–2 p.m. & 5:30–10 p.m.
Aug. 26: Hankinson Fire Department in Hankinson | 5:30–10 p.m.
Aug. 27: Larimore Fire Department in Larimore | 5:30–10 p.m.

The goal of these seminars is for attendees to gain a complete ethanol emergency response training experience that they can put to use immediately in the field and pass along to other first response teams. A majority of this training is based on the “Training Guide to Ethanol Emergency Response,” a training package created by the Ethanol Emergency Response Coalition (EERC) that has been distributed throughout the United States and to several countries worldwide. These seminars are funded through a grant from the Department of Transportation’s Hazardous Materials Safety Administration.

“The North Dakota Firefighter’s Association is honored to partner with the Renewable Fuels Association to provide the Ethanol Safety Seminars to seven different locations throughout North Dakota,” said Renee Loh, executive director of the North Dakota Firefighter’s Association. “NDFA is grateful that this training can be offered to the first responders of North Dakota! We encourage all first responders to register for this important class.”

RFA officials say it is important that communities have the know-how to respond to ethanol emergencies quickly and effectively. Incidents are rare, but should they occur, these seminars will give first responders the necessary training they need to keep the public safe.

To register for a session, go to www.rfa.traincaster.com.

Celebrating a Decade of Success with the RFS

2005-energy-billAugust 8, 2015 marks the 10th anniversary of the Energy Policy Act of 2005 (EPAct) containing the original Renewable Fuel Standard (RFS) being signed into law by President George W. Bush.

The signing ceremony took place at the Sandia National Laboratories in Albuquerque, New Mexico, where President Bush noted that the bill he was signing into law would “…lead to greater diversity of fuels for cars and trucks. The bill includes tax incentives for producers of ethanol and biodiesel. The bill includes a flexible, cost-effective renewable fuel standard that will double the amount of ethanol and biodiesel in our fuel supply over the next seven years. Using ethanol and biodiesel will leave our air cleaner. And every time we use home-grown fuel, particularly these, we’re going to be helping our farmers, and at the same time, be less dependent on foreign sources of energy.”

ethanol-report-adRenewable Fuels Association (RFA) president and CEO Bob Dinneen remembers that day very well, particularly the support that the new law had from the oil industry. “It would not have happened without the support of the American Petroleum Institute,” said Dinneen. “They wanted out of MTBE, they wanted to have an argument in court that would protect them from the lawsuits against MTBE, so they were supportive of a growing market for renewable fuels.”

However, Dinneen notes that the oil industry underestimated the ability of farmers and the ethanol industry to gear up and produce such significant quantities of the domestic fuel that they surpassed the original goal of 7.5 billion gallons for 2012 six years early. “The program was an immediate and overwhelming success … and it led to RFS2 being passed in 2007,” said Dinneen.

Dinneen recounts the success of the RFS over the past decade and how it has changed energy, economic, and rural policy in this edition of The Ethanol Report. Ethanol Report on RFS 10th Anniversary

Bikers Line Up for Free 10% Ethanol

sturgis-15-bikersFrom the Midwest to Mexico, the west coast to the east coast, every state and various countries – bikers of all stars and stripes love the word free, especially when it comes to fuel for their rides. That made the fourth annual Renewable Fuels Association (RFA) “Free Fuel Happy Hours” a big draw at the Sturgis Buffalo Chip Campground this week.

RFA pumped 1,872 gallons of 93 octane, 10 percent ethanol in four days this week for bikers in town for the 75th annual Sturgis Motorcycle Rally. Many bikers came back every day to fill their tanks, as they spent their days traveling through the beautiful Black Hills. RFA also gave away lots of free t-shirts, coozies, and information about how E10 is approved for use in any motorcycle – not any higher blends.

We talked to a few of the bikers who came through to fill up, including a guy from Mexico City, a farmer from Wisconsin, and others from Iowa, New York, Ohio, and Pennsylvania.

Interviews with bikers filling up with E10

2015 Sturgis Motorcycle Rally with RFA at the Buffalo Chip Photos

Ethanol Exports Down, DDGS Exports Hit Records

A new analysis from the Renewable Fuels Association shows that while ethanol exports dropped in June, the export of dried distillers grains (DDGS), a by-product of ethanol production, set an all-time record.

juneethanolexports
U.S. ethanol exports retreated for the third month in a row in June, according to RFA analysis of government data released today, dropping 7% from May to 60.2 million gallons (mg). Canada (22.9 mg, or 38%), the United Arab Emirates (12.7 mg, or 21%) and the Philippines (7.4 mg, or 12%) accounted for the bulk of exports in June, followed by South Korea (4.2 mg) and the Netherlands (4.2 mg). No ethanol exports were shipped to Brazil in June. Outside of Canada, Brazil has been the largest customer for U.S. ethanol exports, averaging 12.3 mg per month over the past five years. Through the first half of the year, exports stood at 437 mg, indicating an annualized rate of 874 mg.

June exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants—bounded 12% higher to 1,306,623 metric tons (mt), breaking the previous monthly record set in July 2014. Monthly exports to China reached an historic high of 967,529 mt in June—with China maintaining a 74% market share for the second month in a row. Exports to the rest of the world in June reversed a 7-month decline as monthly export volumes increased 10%. Mexico (76,784 mt, or 6% of exports), Canada (38,501 mt), Egypt (35,197 mt), Thailand (23,982 mt) and Ireland (22,700 mt) captured most of the remaining global market for U.S. DDGS in June. Year-to-date exports for 2015 are 5.8 million mt, implying an annualized total 11.6 million mt—almost one-third of projected domestic production.

Meanwhile, ethanol imports also fell again in June to just 717,320 gallons of denatured product. Almost all of that imported ethanol (99 percent) came from Spain.

Alliance Bioenergy+ to Build 56 Cell. Ethanol Plants

alliance-bioA Florida company is going to build 56 cellulosic ethanol plants. Alliance BioEnergy Plus, Inc. struck the deal with construction company Renewable Resources Development of America, LLC (“RRDA”) to build the plants both domestically and abroad using Alliance’s patented CTS technology.

It is anticipated that the first CTS plant, under the agreement, will be located in central Georgia, breaking ground this fall and will process up to one thousand metric tons a day of agriculture and forestry waste. RRDA is in advanced negotiations with local municipalities and expects to be fully operational by the second quarter of 2016.

In addition, RRDA and the Company have entered into an agreement whereas RRDA will invest $4 million into the Company in exchange for a 10% ownership stake in the Company, 2 million warrants and a license to the first commercial plant to be built by RRDA in Vidalia, Georgia.

Alliance officials say the first commercial plant is being designed and will be up and running early next year.

Syngenta, Quad County Join Biofuels Biz Council

advancedbiofuelsAg company Syngenta and ethanol producer Quad County Corn Processors have joined the Advanced Biofuels Business Council, formerly known as the Advanced Ethanol Council. The group’s mission is to help its members speak with one voice to put the advanced bio-refining industry in the best position to succeed.

Syngenta and Quad County Corn Processors (QCCP) are engaged in a collaboration to license Cellerate, a revolutionary, new enhancing technology that can help ethanol plants convert corn kernel fiber into cellulosic ethanol. The corn fiber ethanol pathway is approved by U.S. EPA as an RFS-eligible cellulosic biofuel. QCCP owns and operates an ethanol plant in Galva, Iowa, and is one of the leading developers of cellulosic ethanol production technology through its wholly-owned subsidiary Cellulosic Ethanol Technologies, LLC.

“The cellulosic biofuels industry is breaking through at commercial scale, and it is critical for the industry to remain unified when it comes to how we engage on policy and regulatory matters,” said Brooke Coleman, executive director of the ABBC. “Syngenta and QCCP are highly engaged on both the business and political fronts, and we look forward to working with them on strategies that will help the industry succeed in 2015 and beyond.”

In addition to enabling plants to increase production by up to 6 percent, Cellerate can help ethanol producers increase the protein content of dried distillers grains to as much as 40 percent and increase total yield of distillers corn oil up to 1.2 pounds per bushel. QCCP is currently on track to annually produce 2 million gallons of cellulosic ethanol via the Cellerate process.

“We are very excited about our ability to develop a cellulosic biofuel technology that increases ethanol throughput and corn oil extraction while reducing energy input and carbon emissions,” said Delayne Johnson, chief executive officer of QCCP. “It is this type of value proposition that makes the future of cellulosic ethanol so bright.”

RFA Intern Pumps Ethanol for Bikers

sturgis-15-austinAustin Ludowese is a Minnesota farm boy majoring in business education at the University of Wisconsin-Stout but this week he is pumping E10 at the Sturgis Buffalo Chip Campground to help educate bikers about ethanol.

This is Ludowese’s last week of a two month internship with the Renewable Fuels Association (RFA) which he says has been a great experience. “Working with RFA has been great,” he said. “It’s good to see how passionate people are in the industry and the kind of work they put in to promote not only using ethanol but educating as well, which is what we’re doing here in Sturgis.”

During his time with RFA this summer, Ludowese has traveled to Washington DC and to the EPA hearing in Kansas City where he testified about the importance of ethanol to his family farm in Minnesota. “Ethanol has always been a huge part of my family, as far as farming, we deliver all of our corn to ethanol plants,” he said, adding that learning more about the policy side of the industry will help him when he returns to farming after graduating from college. His brother Evan interned with RFA last year.

RFA will be continuing “Free Fuel Happy Hours” at the Sturgis Buffalo Chip Campground where Ludowese will be filling motorcycle tanks with 93 octane E10 from 1-4 pm today and tomorrow.

Listen to an interview with Austin here: Interview with Austin Ludowese, RFA intern

2015 Sturgis Motorcycle Rally with RFA at the Buffalo Chip Photos

EPA Recalculates 2014 Ethanol Export Estimates

rfalogo1The Environmental Protection Agency (EPA) has recalculated its ethanol export estimates for 2014. The EPA’s acknowledgement that it made an error in determining the 2014 available supply of Renewable Identification Numbers (RINs) drew praise from Renewable Fuels Association (RFA) President and CEO Bob Dinneen.

“Kudos to the EPA for recognizing this important error and reassessing the 2014 ethanol export data,” said Dinneen. “This is a critical issue because it affects the estimate of how many RINs generated in 2014 will remain available for compliance with biofuel obligations required by the Renewable Fuel Standard (RFS). It also has implications for estimates of RIN carryover stocks.”

The memo comes after RFA and member biofuel companies raised the issue in correspondence with the EPA in early June and again at a public hearing on June 25 on the RFS in which dozens of commenters took issue with the agency’s proposal to slash the renewable blending volume obligations (RVOs) for 2014–2016.

According to the memo, “… public commenters indicated that they believed it was an error to treat the reported amounts of undenatured ethanol as being part of the 2014 supply of RINs. Ethanol that is exported in undenatured form would not have generated RINs, and thus should not have been subtracted from the total number of RINs generated for fuel ethanol in 2014 for purposes of calculating the available supply of RINs for 2014 in the proposal. EPA intends to account for this…in the determination of the appropriate volume requirements in the final rulemaking.”

The RFA says the recalculation could increase the blending obligation for renewable fuel from a proposed level of 13.25 billion gallons to more than 13.6 billion gallons.

RFA Promotes Ethanol Safety with Illinois Seminars

rfalogo1The Renewable Fuels Association (RFA) is offering some seminars on ethanol safety. This news release from the RFA says the group is partnering with the Sangamon Valley Local Emergency Planning Committee as well as the Springfield and Taylorville Fire Departments in Illinois to hold two free Ethanol Safety Seminars on Aug. 10.

The first seminar is only open to Springfield Hazmat personnel and will take place from 8 a.m. to 11:30 a.m. at the Springfield Fire Department in Springfield; the second seminar is open to the public and will be held from 6 p.m. to 10 p.m. at the Taylorville Fire Department in Taylorville.

The seminars, which RFA has co-sponsored since 2010, are designed to educate first responders, hazmat teams, safety managers, and local emergency planning committees on proper ethanol emergency response training techniques that they can immediately put to use in the field and pass along to other first response teams. Seminar materials are largely based on the “Training Guide to Ethanol Emergency Response,” which was created by the Ethanol Emergency Response Coalition (EERC) and has been distributed throughout the United States and to several countries worldwide.

“Ethanol is the number one fuel commodity transported by rail in our district each year,” said David Butt, chairman of Sangamon Valley LEPC. “We want to be certain that on those rare occasions that our men and women are called on to respond to ethanol emergencies, they are fully prepared to tackle the challenges that come with them. Providing this training is part of our committee’s effort to ensure they are.”

“Focusing on emergency measures in the event of an ethanol-related incident is an important part of pre-planning,” added Mike Crews, chief of the Taylorville Fire Department. “We are happy to be able to help provide this training to those responsible for the safety of our community so they can be prepared should an incident occur.”

More information is available at www.EthanolResponse.com.