Cause of Ethanol Train Derailment Probed

train-derailFederal investigators are looking into why seven ethanol tanker cars derailed in South Dakota over the weekend. No one was injured in the derailment that occurred early Saturday morning, but at least one of the cars caught fire in the accident involving a 98-car Burlington Northern Santa Fe Railroad train.

Senate Transportation Committee chairman John Thune (R-SD) is watching the investigation closely and says they believe the derailment was caused by a broken rail or structural failure in the small bridge where the incident occurred. “Safety has got to be the highest priority,” said Thune. “These were some of the older model cars that actually derailed and started a fire there.” The Department of Transportation has required updates to fuel transportation cars, including the unjacketed DOT-111 cars which commonly carry ethanol.

“Ethanol should have some different treatment with respect to these cars compared to oil tank cars,” Thune said. “Most of the seven cars that derailed were older models that will require upgrades under these new safety standards.” Five of the seven cars were the DOT-111 models and two were newer jacketed models that will still be required to have some upgrades under the new standards.

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.

Clinton Voices Support for Renewable Energy

clinton-iowaWith a John Deere tractor as a backdrop, Democratic presidential candidate Hillary Clinton voiced her strong support for the Renewable Fuel Standard (RFS), solar and wind energy during a visit to Iowa this week.

“We need to capitalize on rural America’s strength as a producer of clean, renewable energy,” said Mrs. Clinton during a speech in Ankeny, adding that she has two main goals in that area. “Half a billion solar panels within four years and enough energy production from renewables to power every home in America within 10 years.”

Noting that Iowa produces a third of its total energy from renewables, especially wind and biofuels. “If Iowa can do it…so can the rest of America,” she said.

“We need to strengthen the Renewable Fuel Standard,” Mrs. Clinton continued to applause. “So that it drives the development of advanced biofuels and expand the overall contribution that renewable fuels make to our overall fuel supply.”

Introduced by former Iowa governor and current Secretary of Agriculture Tom Vilsack, Clinton discussed her plan to support rural America which includes investments in rural areas and rural transportation, making the production of agricultural products more profitable for farmers, and promoting the use of clean energy and renewable energy sources.

Listen to Vilsack’s introduction and Clinton’s speech here: Hillary Clinton on Ag in Iowa

MO Lawmakers Support RFS

During a visit to the Missouri State Fair last week, two members of the state’s Congressional delegation were asked their opinions on the Environmental Protection Agency’s proposed volume obligations for biofuels under the Renewable Fuel Standard.

msf-15-72-editedSen. Roy Blunt (R-MO) hopes EPA will listen to the concerns of the industry. “I think it’s important that we become as energy self-sufficient as we can and renewables are an important part of that,” said Blunt during an interview at the fair. “We have great potential in more American energy of all kinds and the potential of how much we can add to that in renewables and what that does to the ag economy and production agriculture generally in terms of that product being available not just for fuel but for food is important.”

Sen. Blunt also comments on EPA’s Clean Water Rule and other issues in this interview: Interview with Senator Roy Blunt

msf-15-101-editedRep. Vicky Hartzler (R-MO) says EPA tried to come up with a compromise with the proposed rule. “It was better than we hoped in some ways, but it was worse than we had hoped,” said Hartzler. “I think they should have just followed the law and continued on allowing a greater percentage of our fuel to come through renewables. I’m hopeful that we’ll somehow be able to increase that level.”

In this interview, Hartzler also comments on other issues important to farmers in her state. Interview with Congresswomen Vicky Hartzler

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.

EPA’s Ethanol Rules Pollutes Air Equal to 1 Mil Cars

ERCThe government’s proposal to cut the amount of ethanol to be blended into the nation’s fuel supply would pollute the air equivalent to one million more vehicles on the road. The Energy Resources Center (ERC) at the University of Illinois at Chicago conducted the analysis on the U.S. Environmental Protection Agency’s proposed ethanol blending rules.

The findings come in the wake of proposed rules by the U.S. E.P.A. that call for a reduction of the volume of ethanol blended in gasoline as mandated by the Renewable Fuel Standard (RFS), a program of the Energy Policy Act of 2005 signed into law 10 years ago this month. If the rules are adopted as proposed, a total of 17.5 billion gallons of ethanol would be blended with gasoline by 2016, 3.75 billion fewer gallons than originally mandated by Congress.

“The RFS has been one of the most successful federal policies enacted in the United States because it achieved exactly what it was intended to do: spur research and investment, lower greenhouse gas emissions and reduce dependence on foreign oil. Our work has demonstrated that, over the last 10 years, steady reductions in greenhouse gas emissions have materialized as biofuels became a more efficient, high quality product,” said Dr. Steffen Mueller, principal economist at the Energy Resources Center.

The peer-reviewed analysis was conducted using the GREET Model (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) developed by Argonne National Laboratory which examines the full life cycle emissions impacts of energy sources. As part of the analysis, carbon emissions related to the planting, growing, harvesting, transportation and production of corn into ethanol were compared to that of oil recovery and production.

Under the EPA’s proposed rules, conventional starch ethanol would likely be reduced to 13.4 billion gallons from 15 billion gallons in 2015. In this scenario, the analysis found that 4,520,000 tonnes of additional CO2 emissions would be incurred in 2015.

Both the National Corn Growers Association and the Illinois Corn Growers Association expressed disappointment in the direction the EPA has taken.

“It is very curious that some vocal audiences known for touting job creation, a stronger domestic economy, and reduced air and water pollution were largely mute on this significant occasion,” said Chip Bowling, NCGA president and a farmer from Maryland. “It is pretty hard to miss the irony of this anniversary-related RFS assessment hitting while the Environmental Protection Agency is weakening the successful legislation.”

“We are disappointed that the same federal agency charged to protect human health and the environment is proposing a rule change that would directly lead to greater greenhouse gas emissions,” said Ken Hartman, president of the Illinois Corn Growers Association. “After 18 months of delay in proposing new rules, the EPA has chosen not only to shirk its legal obligation as set forth by Congress, but to lose sight of its own mission.”

The EPA is expected to release its final rule in November.

Iowa State Fair to Host Prez Soapbox

dms-register-soapboxIowa State Fair visitors have an opportunity to see what presidential candidates think about energy and agricultural issues compliments of the Des Moines Register’s Presidential Soapbox series.

A majority of the presidential candidates from both parties have confirmed they will speak from the soapbox during the fair. A total of 14 Republicans and four Democrats are on the soapbox schedule starting Thursday August 13 through Saturday August 22. Notably missing from the list are the frontrunners for both parties – Hillary Clinton and Donald Trump.

Check the schedule from the Des Moines Register for updates. Candidate speeches will be live-streamed at The ZimmComm blogging team will be following the Presidential Soapbox series as well and bring you news of relevant issues.

Senate Committee Advances Tax Credits Extension

The Senate Finance Committee Tuesday approved a two-year extension of various tax credits that expired at the end of 2014, including those for biodiesel, cellulosic ethanol, and wind energy.

The bill contains a two-year extension of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, and the Alternative Fuel Mixture Excise Tax Credit.

rfalogo1Renewable Fuels Association president and CEO Bob Dinneen commended the committee’s leadership for recognizing how important these tax credits are for the continued growth and innovation of the U.S. biofuels industry. “Stability in the marketplace is crucial to encouraging development in second-generation biofuels, like cellulosic ethanol,” said Dinneen. “By extending these incentives, the Committee has helped to provide that needed stability. We look forward to working with the Senate Finance Committee specifically and Congress generally on comprehensive tax reform.”

Dinneen says passage of the tax credit extensions, which will be retroactive, still has a long way to go. “Still needs to get through the floor of the Senate and be conferenced with a bill from the House side,” said Dinneen. “But it’s progress.”

Last year Congress passed retroactive tax credits for 2014 in December, two weeks before they expired again.

Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on tax credits progress

Bi-Partisan Group of Senators Want Biodiesel Growth

nBBThirty-six U.S. senators from both sides of the political aisle urged the Obama administration to strengthen biodiesel volumes in a pending Renewable Fuel Standard (RFS) proposal from the EPA. The National Biodiesel Board welcomed the call.

“While the proposal is a positive step for biodiesel, we remain concerned that the proposed biodiesel volumes for 2016 and 2017 fail to adequately recognize the domestic biodiesel industry’s production capacity and its ability to increase production,” the senators wrote in a letter to EPA Administrator Gina McCarthy and other administration officials. “Biodiesel is the first EPA-designated advanced biofuel under the RFS to reach commercial scale production nationwide. It is exceeding the goals that Congress envisioned when it created the RFS with bipartisan support in 2005, while creating jobs, generating tax revenues, reducing pollution, and improving energy security. We urge you to support continued growth in the domestic biodiesel industry by making reasonable and sustainable increases in the biodiesel volumes for 2016 and 2017 in the final rule.”

Sens. Chuck Grassley (R-Iowa), Patty Murray (D-Wash.), Roy Blunt (R-Mo.), and Heidi Heitkamp (D-N.D.) led the letter, which was signed by Democrats and Republicans from 24 states.

“We want to thank Sens. Grassley, Murray, Blunt and Heitkamp for their leadership on this effort, as well as all of the senators who supported it,” said Anne Steckel, vice president of federal affairs. “It’s not every day that you have Republicans and Democrats from such a diverse group of states uniting around an issue like this. We hope the EPA and the White House will listen and improve this proposal before it is finalized later this year.”

The current RFS proposal calls for a gradual rise in biodiesel volumes by about 100 million gallons per year to a standard of 1.9 billion gallons in 2017. NBB had requested more aggressive growth to a biodiesel standard of 2.7 billion gallons by 2017, along with additional growth in the overall Advanced Biofuel category.

Renewable Tax Credits Before Committee

grassley-head1A Senate committee will consider a package of tax credits for wind, biodiesel and cellulosic ethanol. Sen. Chuck Grassley of Iowa included the tax incentives in the bipartisan tax extenders bill the Finance Committee will consider today.

“Certainty and predictability in tax policy are both important for retaining and creating jobs,” Grassley said. “The Finance Committee leaders deserve credit for getting an early start on extending tax provisions. The energy items not only help support jobs. They also support the renewable energy that consumers want for a cleaner environment and energy independence. The higher education deduction helps families and students afford college.”

The inclusion of the wind energy provision comes after Grassley urged the committee chairman to include it, noting it deserves a fair shake compared to many long-standing tax provisions benefiting non-renewable energy sources. Grassley authored and won enactment of the first-ever wind energy production tax credit in 1992. The incentive was designed to give wind energy the ability to compete against coal-fired and nuclear energy and helped to launch the wind energy industry. He has worked to extend the credit ever since.

Renewable production tax credit. Under the provision, taxpayers can claim a 2.3 cent per kilowatt hour tax credit for wind and other renewable electricity produced for a 10-year period from a facility that has commenced construction by the end of 2014 (the production tax credit). They can also elect to take a 30 percent investment tax credit instead of the production tax credit. The bill extends these credits through December 31, 2016.

Cellulosic biofuels producer tax credit. Under the provision, facilities producing cellulosic biofuels can claim a $1.01 per gallon production tax credit on fuel produced before the end of 2014. The bill would extend this production tax credit for two additional years, for cellulosic biofuels produced through 2016.

Incentives for biodiesel and renewable diesel. The bill extends for two years, through 2016, the $1.00 per gallon tax credit for biodiesel, as well as the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2016 the $1.00 per gallon tax credit for diesel fuel created from biomass.