Final #RFS Numbers Disappoint @EthanolRFA

rfalogo1The Environmental Protection Agency’s final rule for volume obligations under the Renewable Fuel Standard (RFS) “puts the future of biofuels and climate policy in the hands of the oil industry,” according to Renewable Fuels Association (RFA) president and CEO Bob Dinneen.

“Let’s give EPA props, I guess, for recognizing that gasoline demand is increasing and that they needed to increase those numbers accordingly,” said Dinneen. “But they didn’t change anything with respect to the methodology … they still reduced the numbers from the statutory levels and embraced the notion of the blend wall … they are effectively turning the nation’s renewable energy program over to the oil companies.”

Dinneen says the ethanol industry will be evaluating its options when it comes to taking EPA to court over the final rule. “What EPA has done here is a dramatic departure from a program that was working,” he said. “I believe when we finish our review of the final rule that we will want to stand up for the program, stand up for consumers, stand up for carbon reduction, stand up for rural America and put this program back where it belongs.”

With President Obama in Paris this week for the COP21 climate change summit, Dinneen considers today’s announcement ironic. “How in the world can the president speak with any credibility on climate change when he is ripping the guts out of a climate change program in his own backyard?” Dinneen asked.

Listen to interview here: Interview with RFA CEO Bob Dinneen on final RFS rule

Iowa Biodiesel Makers Take to DC

nafb15-nbb-grantIowa Biodiesel Board (IBB) members joined their National Biodiesel Board colleagues in lobbying lawmakers to renew and restructure the federal $1-per-gallon credit for biodiesel and renewable diesel. IBB pointed to Iowa Sen. Chuck Grassley’s proposal that would correct a loophole in the existing program and save U.S. taxpayers $90 million.

“Nowhere is the success of the tax credit more evident than in Iowa. Our state’s 13 plants produced more than a quarter of a billion gallons of biodiesel last year, supporting jobs and economic development while replacing foreign oil and diversifying our fuel supply. The federal tax incentive has played a key role in enabling those plants to stay operating and profitable, benefiting all levels of our economy,” said Grant Kimberley, executive director of the Iowa Biodiesel Board.

But Kimberley isn’t just looking at the benefits for Iowa. During an interview with the recent National Association of Farm Broadcasting meeting in Kansas City, Missouri, he said that Iowa biodiesel can be a real help to California’s Low Carbon Fuel Standard (LCFS).

“California … wants to have all of their transportation fuels fit under the [LCFS], where it reduces greenhouse gas emissions and is better for the environment,” said Kimberley. “Renewable fuels, including biodiesel, can play a key role in that.”

He said biodiesel producers have had to educate California officials just how good biodiesel can be. Initially, California scored biodiesel just above conventional diesel. But education efforts improved that score.

“Now they’ve moved that score higher, so now it’s up to 50-80 percent better than petroleum-based diesel, which means biodiesel can play a really strong role in the [LCFS]. It could be up to 600 million gallons of biodiesel per year that could be utilized in California,” said Kimberley.

He also pointed out that since California doesn’t produce much of the green fuel, it opens up many possibilities for Midwest producers.

Listen to all of Cindy’s conversation with Kimberley here: Grant Kimberley, executive director of the Iowa Biodiesel Board

Ethanol Report on the RFS and COP21

ethanol-report-adThe Renewable Fuels Association sent a letter to Secretary of State John Kerry this week urging him to highlight the role of the Renewable Fuel Standard in reducing global greenhouse gas emissions as he prepares to head to the international climate conference COP21 in Paris.

nafb-rfa-cooperAt the National Association of Farm Broadcasting, RFA Senior Vice President Geoff Cooper talked about the importance of the United States promoting biofuels as a means of reducing greenhouse gas emissions at the conference, how successful the RFS has been, the U.S. corn crop, and much more.

Listen to this edition of the Ethanol Report here: Ethanol Report on the RFS and COP21

USDA Announces Biofuels Infrastructure Funds

vilsack-protecAgriculture Secretary Tom Vilsack was at a Citgo station in Kissimmee, Florida today to announce a USDA partnership to increase fueling pumps for biofuels in 21 states through the Biofuel Infrastructure Partnership (BIP).

The investment will nearly double the number of fueling pumps nationwide that supply renewable fuels to American motorists. “The Biofuel Infrastructure Partnership is one more example of how federal funds can be leveraged by state and private partners to deliver better and farther reaching outcomes for taxpayers,” said Vilsack.

The 21 states participating in the BIP include Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, Virginia, West Virginia, and Wisconsin. The final awards being announced today are estimated to expand infrastructure by nearly 5,000 pumps at over 1,400 fueling stations.

Vilsack was joined by representatives from Growth Energy and Florida-based Protec Fuel to make the announcement. “We’re very excited about this USDA program because we’re going to be opening up sites in other parts of Florida, as well as across the country,” said Protec Fuel VP of Operations and Business Development Steve Walk. “What this program is going to help us do is help speed up the growth” of stations offering higher ethanol blends.

Growth Energy CEO Tom Buis congratulated Protec Fuel and thanked Secretary Vilsack for his support of renewable fuels. “The Biofuel Infrastructure Partnership is helping us to further leverage industry funds to gain measurable market access in a far timelier manner than we could accomplish otherwise,” said Buis.”

Listen to remarks from Walk, Buis and Vilsack here: Secretary Vilsack announces biofuels infrastructure funding

Vilsack remarks to the media: Secretary Vilsack comments on Biofuel Infrastructure Partnership

USDA-Protec Fuel Biofuel Pump Funding Announcement photos

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.