EIA: Outage Increased Midwest Gas Prices

eia-outageNew data from the Energy Information Administration (EIA) confirms that the unplanned outage earlier this month of a 240,000-barrels-per-day unit at a refinery in Whiting, Indiana, caused gas prices to spike throughout the Midwest.

The outage occurred on August 8 and EIA notes that regular gasoline prices in the Midwest increased by 32 cents a gallon within the following week, from $2.47 the week of the outage to $2.79 a gallon on August 17. EIA says it was “the largest weekly increase for Midwest gasoline prices since the aftermath of Hurricane Katrina in 2005.”

“The EIA data show that the refinery outage made a serious dent in the wallets of consumers,” said Bob Dinneen, President and CEO of the Renewable Fuels Association, which released a statement in response to the unplanned shutdown. “The Environmental Protection Agency and the Obama Administration have all the tools they need at their disposal to assist in blunting the consumer impacts of the refinery outage. We, once again, call on EPA to immediately waive RVP requirements for E15 and also allow E12 blending in the Midwest region.”

According to EIA, it can take markets days or weeks to adjust to the sudden loss of production during unplanned outages, often resulting in sudden price increases. The severity and duration of the higher prices depend on how quickly the refinery problem can be resolved, how soon alternative sources of supply can arrive, and the marginal cost to bring alternative supply to the region.

Ethanol Industry Asks Walker to Clarify RFS Stance

America’s Renewable Future (ARF) is asking Governor Walker to clarify his position on the Renewable Fuel Standard after his remarks at the Iowa State Fair on the Des Moines Register Soapbox. Walker called for ethanol mandates to be phased out; yet acknowledge that the industry created around the RFS must stay in place. Click here to read about his speech.

Listen to why Wisconsin Governor Scott Walker said about ethanol and the RFS:Scott Walker on the RFS

Scott Walker-1In response, ARF responded in a statement, “Gov. Walker’s intention to phase out the RFS over the next couple of years needs clarification. It is unclear whether the governor’s time frame would mean an immediate repeal upon entering office, if elected president, whether it might mean two years from the current date, or two years from achieving full market access.

Anything short of full market access being achieved would be a catastrophic blow to America’s farmers and rural economies. It is also a blow to those who have invested into the renewable fuel industry. Billions of dollars were invested by famers and local investors to produce biofuels with the promise of an RFS that lasts at least until 2022. Ending the RFS prematurely will only strand capitol and punish the pioneers who invested in clean, home grown renewable energy. The RFS has created jobs here in Iowa and around the country that cannot be outsourced, reduced our dependence on foreign oil, helped clean our air, and provided consumers savings at the pump.

America's Renewable Future logoIf we are to take Gov. Walker’s comments to mean a two year phase out upon entering the White House, then he is opening the door to an immediate repeal and that means putting an end to over 73,000 Iowa jobs. Keeping in mind what’s already happened just this year due to the uncertainty surrounding the RFS—from over 800 layoffs at John Deere, to $13.8 billion in investment shortfalls, to lower corn prices and farmland values—such a position would be devastating.

While the governor’s position is murky, it is absolutely clear that a phase out anytime before full market access is realized would be disastrous for farmers and rural communities in Iowa and all over the United States, which were hit hardest during the recession and are finally starting to get back on their feet.

We urge Gov. Walker to clarify his position regarding the RFS and stand with our nation’s farmers for a strong RFS until full market access is a reality.”

Click here to read our coverage of the Des Moines Register Presidential Soapbox series at the Iowa State Fair.

ICM Completes Cellulose Ethanol Performance Runs

icm-20ICM Inc. has successfully completed two 1,000-hour performance runs of its patent-pending Generation 2.0 Co-Located Cellulose Ethanol process at the company’s pilot plant in St. Joseph, Missouri.

The runs were designed to prove performance of the co-located technology design for the conversion of cellulosic biomass feedstocks, including energy crops such as switchgrass and energy sorghum, agricultural crop residues, and forestry residues, to cellulosic ethanol and co-products.

The first performance run, which ran from March to late April, focused on switchgrass while the second run from early June to late July, focused on energy sorghum. Both runs were similar in nature, but with a few minor operational modifications included to allow for smoother operation between the two runs. The 1,000+ hours of continuous production in each run are a significant achievement, as it qualifies these data sets for federal loan guarantee programs.

“This achievement is important because it provides operational confidence at a commercially relevant scale. We used all commercial-type equipment for these performance runs that processed 10 dry tons of feedstock per day. At that scale, we were able to achieve continuous operations throughout both performance runs to generate key data required to move forward to commercialization as the market provides demand for Gen. 2.0 Cellulosic Ethanol and co-products.” said Dr. Doug Rivers, ICM’s Director of Research and Development.

ICM believes that the success with each of these three 1,000-hour runs comes from the dedicated individuals and extensive testing of various feedstocks at the pilot scale for next generation conversion technology to produce renewable fuels that meet low carbon fuel standards.

Republican Candidates: ‘We Can Fix America’

The battle cry of the presidential Republican candidates is to fix America through debt elimination, military strength and cooperation. Wisconsin Governor Scott Walker, Hewlett-Packard CEO Carly Fiorina and Senator from South Carolina Lindsey Graham took the stage during the Des Moines Register’s Soapbox and spoke to thousands of people at the Iowa State Fair. While the crowd is supposed to be polite, manners took a back stage during Walker’s remarks especially when he said, “If we can fix a state like Wisconsin we can fix America.”

The candidates want to take the power out of Washington, D.C. and bring it back to the state houses and to the hard working people. Walker, somewhat in jest, said Washington is 68 square miles surrounded by reality. Let’s take a look at what the candidates believe is reality.

Scott WalkerScott Walker is calling for the Environmental Protection Agency (EPA) to be reigned in. He said they are killing the farmers (he was referring to WOTUS, or the Waters of the U.S.) and is pushing for an all above energy strategy. He approved the Keystone Pipeline on the first vote and continues to do so. In terms of climate change he said that there needs to be a balance between sustainable environment and a sustainable economy. He does not support the “ethanol mandate” or the Renewable Fuel Standard (RFS) but because it is in place and there is an industry based on the legislation the country needs to support the bill. However, he is pushing for consumer choice at the pump through market access and availability at the pump for higher blends of ethanol. His state has offered grants for retail stations, especially those independently owned, to be able to put flex fuel pumps and offer additional ethanol blends.

Listen to why Wisconsin Governor wants to be president here:Scott Walker at the Iowa State Fair

Lindsey GrahamLindsey Graham spent the majority of his time discussing his military strategy. He said there are, “Too many terrorists. Too much debt. Too few jobs.” He has been in the Air Force for 33 years and spent time in Iraq and Afghanistan while he was in the reserves. He stressed that he is the first candidate to push to go back to war not end war. “If I’m elected we going to go back and pound them into the sand,” he said of Iraq. He did not address energy, environment or agriculture so we’ll have to continue to follow his campaign to see if and what his stance is on these issues.

Listen to why Senator Lindsey Graham wants to be president here:Lindsey Graham at the Iowa State Fair

Carly FiorinaWhile some candidates didn’t use any of their time to take questions, Carly Fiorina dedicated the majority of her time in answering questions. Like others, she believes the minimum wage should be increased but not uniformly; rather, the pay should be comparable to the cost of living which is different not only from state to state but from city to city. She too took aim at the EPA and stressed innovation rather than regulation will be more effective. And like Walker, she too doesn’t support ethanol mandates and believes they should be phased out. Needless to say, this position is not too popular in country’s largest ethanol producing state. Similar to Graham, she did not directly address agriculture or the environment.

Listen to why Carly Fiorina wants to be president here:Carly Fiorina at the Iowa State Fair

Click here to read our coverage of the Des Moines Register Presidential Soapbox series at the Iowa State Fair.

Republicans Carson, Pataki on the Soapbox

Republican presidential hopefuls Dr. Ben Carson and former New York Governor George Pataki took the Des Moines Register Soapbox during the Iowa State Fair this weekend with a common message of reducing America’s debt.

Ben CarsonDr. Carson, a retired neurosurgeon, focused much of his remarks on personal stories yet engaged the crowd with lessons learned. For example, he said, “The person who has the most to do with what happens in life is you.” Smart words from a smart man. His big campaign focus, though, is that the country is in the process of destroying the future of the next generation in part because both Democrats and Republicans are “blowing up the budget”. He stressed the real problem is the fiscal gap – program needs that don’t meet needed funding – or unfunded liabilities (Medicare, Social Security).

The closest he came to addressing energy was when he spoke about the importance of the arts in education and when he was growing up if he said Van Gogh, the response was, ‘add gas and the van will go’. All joking aside, in the first Republican debate he said, “I would probably be in favor of taking that $4 billion a year we spend on oil subsidies and using that in new fueling stations’ for 30 percent ethanol blends.”

Listen to why Ben Carson wants to be president here:Ben Carson at the Iowa State Fair

George PatakiPataki stood strong on both economy and the military. He was the NY Governor during 9-11 and said “we must shut down ISIS”. He wants to give “the power back to the people”. He wants to throw-out the corrupt tax codes, reduce the government workforce by 15 percent and lower tax rates for small business and families.

He also said he is the only candidate that grew up on a farm. “I don’t have a plane. I have three tractors. In fact, I was out on a tractor last week moving hay.” He spent most of his life living on a farm and he, his wife and family farm today in upstate New York. “Great, but what does that does it mean? It teaches you values,” stressed Pataki.

Pataki didn’t discuss energy so voters who care about the issue will need to keep an ear to the ground in future months to learn more about his stance on renewable energy in America.

Listen to why George Pataki wants to be president here:George Pataki at the Iowa State Fair

Click here to read our coverage of the Des Moines Register Presidential Soapbox series at the Iowa State Fair.

RFA to EPA: Provide Consumers Relief at Pump

In light of a refinery shutdown of the BP plant in Whiting, Indiana that produces 240,000-barrels-per-day, the Renewable Fuels Association President and CEO Bob Dinneen is asking the Environmental Protection Agency (EPA) to provide consumers relief at the pump. Late last week, gas prices jumped an average of 80 cents per gallon overnight in several states including Illinois, Michigan Indiana, Ohio, Missouri and Wisconsin as well as other states including Iowa.

BP refinery in Whiting, Indiana. Photo Credit: GasBuddy.com

BP refinery in Whiting, Indiana. Photo Credit: GasBuddy.com

“The Whiting refinery outage demonstrates, once again, the folly of relying too heavily on one source of motor fuel. It’s worth noting that the refinery represents just 6 percent of the Midwest region’s refining capacity (and just 1 percent of national refining capacity); yet retail gas prices in some Midwest markets have spiked by 50 cents per gallon or more,” said Dinneen. “This is exactly why we need to further diversify our nation’s fuel supply and allow more renewable fuels by removing arcane barriers erected by the oil companies and the Environmental Protection Agency (EPA). Using more low-cost ethanol would absolutely help insulate consumers from these kinds of price shocks.”

Dinneen said that the total lost gasoline output, nearly 120,000 barrels per day, could be offset by increasing ethanol blends from E10 to E15. He sourced ethanol prices in the Chicago wholesale market as around $1 per gallon lower than gas. It should be noted that during the summer months, E15 is only allowed to be used by flex fuel vehicles although the rest of the year the ethanol blend can be used by all vehicles manufactured in 2001 or newer.

“That means, Dinneen said, “if refiners and blenders serving the Midwest market immediately switched to producing E15 to blunt the impacts of this refinery outage, gas prices would instantly fall by at least 5 cents per gallon and drivers in the Midwest would save about $6 million per day. In reality, the price impacts would likely be even more significant, as ramping up ethanol blending would immediately take the pressure off tightening gasoline stocks and ease wholesale gasoline prices.”

Dinned added, “EPA and the Obama Administration have all the tools they need to help alleviate this situation quickly. We call on EPA to immediately waive RVP requirements for E15 and also allow E12 blending—based on the fact that it is substantially similar to E10—in the Midwest region to facilitate expanded ethanol blending and blunt the consumer impacts of this refinery outage.”

API Releases “Flawed Study”

A new published study from the University of Michigan and funded by the American Petroleum Institute (API) finds that when using annual basis carbon (ABC) accounting, corn-ethanol is not better than its petroleum counterpart. ABC accounting uses spatially and temporally explicit analysis of the direct greenhouse gas emissions (GHGs) exchanges between the atmosphere and a physical vehicle-fuel system. LCA is the analysis of the environmental impact of a product from cradle to grave, or in the case of liquid transportation fuels, “well to wheel”.

Michigan-API biofuels studyThe study abstract states that using an ABC case study of a corn ethanol biorefinery and the farmland that supplies it shows that using the ethanol it produced instead of gasoline provided no significant reduction in GHG emissions, in contrast to an LCA result that found a 40% GHG reduction for the same facility.

In response to the recent study Tom Buis, CEO of Growth Energy, said, “We can add this study to the ever growing pile of flawed research funded by Big Oil, who has a vested interest in protecting its monopoly on our nation’s fuel and ensuring that America stays addicted to oil. The standard life-cycle assessment tool accepted by the scientific community, Argonne National Laboratory’s GREET model, shows that ethanol reduces greenhouse gas (GHG) emissions by 34 percent compared to gasoline. No amount of self-serving science will change the fact that in addition to reducing GHG emissions, ethanol also reduces our nation’s dependence on foreign oil and the price of gasoline for America’s drivers.”

Dems Webb & O’Malley Take the Soapbox

Democratic hopeful presidential candidates Jim Webb and Martin O’Malley both appeared on the Des Moines Register’s Presidential Soapbox yesterday afternoon speaking to hundreds of Iowans attending the Iowa State Fair. They have some fundamental issues in common, including both the need for better education and to bring the American dream, aka the economy, back to Americans. While Webb’s plans to do so were a bit more fluid, O’Malley pitched his 15 point plan to American prosperity. This includes tackling climate change and fostering global sustainably development.

Jim Webb at Presidential SoapboxIn terms of energy Jim Webb supports agriculture and renewable energy. He supports the pipeline and says that reports show environmentally the pipeline is neutral. He said he supports an “all above” energy strategy and that includes nuclear energy. He noted America has the safest, best managed nuclear program in the world and it is “totally” clean.

When asked if he supported the Renewable Fuel Standard (RFS) he replied that he supported renewable energy. He said Iowa is the perfect example of a place where it can work. He has visited a wind farm and an ethanol plant and said he was impressed with the technological advancements seen in the ethanol industry.

To learn more about why Jim Webb wants to be our next president listen to his speech here: Jim Webb at the Iowa State Fair

Martin O'Malley at Presidential SoapboxDuring the question and answer portion of the speech, O’Malley was asked about renewable energy, in particular the Environmental Protection Agency’s (EPA) Clean Power Plan. He advocates for a clean energy grid by 2050 that he says will be “just in the nick of time”. He noted that in Iowa, 30 percent of electricity not only comes from wind energy, but highlighted the fact that multiple wind turbine components are manufactured in the state as well. He touted Hawaii’s goal of 100 percent renewable electricity and California’s 50 percent goal.

O’Malley also stressed that Renewable Energy Portfolios (REPs/RES) and the RFS should not only stay in place, but they should be expanded. He stressed that these are the drivers of American ingenuity in technology development and the next generation of clean energy technologies.

To learn more about why Martin O’Malley wants to be our next president listen to his speech here: Martin O'Malley at the Iowa State Fair

East Kansas Agri-Energy Celebrates 10th Anniversary

East Kansas Agri-Energy (EKAE) is celebrating its 10th anniversary of operations. The Garnett, Kansas ethanol biorefinery is hosting an event on Saturday, August 15th and the Renewable Fuels Association (RFA) will be onsite to share in the plant’s success along with government and industry officials and featuring a keynote speech from Sen. Jerry Moran (R-Kan). Attendees can also tour the facility.

EKAE_Logo_235Since opening in 2005, EKAE has produced and sold more than 376 million gallons of ethanol, more than 2 million tons of wet and dried distillers grains animal feed, and nearly 35 million pounds of corn distillers oil. The plant has processed more than 137 million bushels of corn since opening, creating an important new market for local farmers and adding value to East Kansas crops.

Following a plant expansion, EKAE can now produce 48 million gallons of ethanol each year. Construction is also underway for a co-located renewable diesel facility that will convert corn distillers oil into low-carbon advanced biofuel. Other accomplishments include the Environmental Protection Agency (EPA) certifying the ethanol plant as an efficient producer. The EPA determined that the plant’s corn ethanol reduces greenhouse gas emissions by 27.2 percent as compared to petroleum even when the elusive “land use change” calculations are included.

“We’ve come a long way since that first gallon of ethanol in 2005. What started as an idea at a local coffee shop is now a multi-million dollar advanced biofuel refinery,” said EKAE Chairman Bill Pracht. “Our company has evolved to become a leading driver of economic growth in our community, and we’re very proud of that fact. Once our renewable diesel project launches, we will employ more than 50 hard-working men and women at our facility. We’re also proud of our safety record and the fact that we have had no lost-time accidents since day one.”

“The entire EKAE family should be congratulated for this remarkable achievement,” noted RFA Senior Vice President Geoff Cooper. “The EKAE facility has made an indelible mark on the Garnett community, and for that the company’s board, staff, and investors should be very proud. But they should also be proud of the fact that the positive impacts of this plant—including lower gas prices, reduced dependence on foreign oil, and cleaner air—extend well past the borders of Anderson County.”

Jeff Oestmann, EKAE President and CEO, explained that the ethanol plant has experienced a tremendous level of success in an industry that is often known for its unpredictability. “East Kansas Agri-Energy has had an unquestionably positive economic impact on Garnett, helping to revitalize the community by creating demand for local producers and saving consumers cash at the pump.” Continue reading

POET Shows Economic Impact of Its Ethanol

POETEthanol made by POET is big in U.S. economic growth, cutting dependence on foreign oil, and reducing greenhouse gases. The South Dakota-based ethanol maker has released its first-ever economic impact study that shows the company made significant contributions, including:

– Generating a total of $13.5 billion in sales for U.S. businesses;
– Adding $5.4 billion in national gross domestic product;
– Supporting an estimated 39,978 full time jobs; and
– Contributing $3.1 billion in income for American families.

The report further details POET’s contribution to the economic prosperity in each of the seven states where it operates – South Dakota, Minnesota, Iowa, Missouri, Indiana, Ohio and Michigan. POET, which is headquartered in Sioux Falls, S.D., operates a total of 27 dry mill corn ethanol plants with an annual capacity of 1.7 billion gallons – more than 11 percent of the total U.S. ethanol output.

“Ethanol provides us the means to produce our own clean fuel and keep the enormous economic benefits within America’s borders,” POET CEO Jeff Lautt said. “The impact flows from the plants to farmers, communities, throughout the states in which they operate and across the nation.”

In addition, the report cites POET’s impact on reducing foreign oil dependence. According to the study, POET’s production of 1.7 billion gallons of ethanol displaces nearly 1.2 billion gallons of gasoline, which requires 61 million barrels of crude oil to produce. This displacement potentially reduces the outflow of money to foreign producers of oil by nearly $5.5 billion.

The use of POET ethanol also reduces greenhouse gas emissions relative to gasoline. Burning a gallon of ethanol opposed to gasoline results in a 35 percent reduction of carbon dioxide (CO2) emissions. Reflecting this, the production of 1.7 billion gallons of POET ethanol cuts CO2 emissions by approximately 874,000 metric tons.

The full report is available here.