Fuel retailers who have had to fight battles with big oil companies to offer higher ethanol blends were among those joining the American Coalition for Ethanol (ACE) Fly-in on Capitol Hill this week.
Charlie Good has been in the fuel retailing business for 35 years as a convenience store operator and auto mechanic and he started offering higher ethanol blends at his Good and Quick store in Nevada, Iowa about 18 months ago. “And it’s just been a big boom for me, it’s added new gallons, it’s increased my customer base,” said Good.
The Renewable Fuel Standard (RFS) was the main topic of ethanol supporter meetings with lawmakers and their staff this week and Good says even those they met with who have actively opposed the RFS are unlikely to vote for repeal. “The three of the five that we met with that were against it came out and said we’re not actually going to vote to repeal it…they’re just going to remain low key,” said Good.
Interview with Charlie Good, ethanol retailer
2015 ACE Fly-In Photo Album
While AAA may be an outspoken critic of ethanol blended gasoline and E15 in particular, some other motor clubs think differently, and one of them was on Capitol Hill this week with the American Coalition for Ethanol to tell his story to lawmakers.
Gene Hammond with Association Motor Club Marketing and Travelers Motor Club, which represent 50 years in the business and over 20 million members, says they studied their claims over the past several years to see if there were any related to ethanol. “And what we discovered is that we have not had one ethanol-related claim where we’ve had to go out and tow,” said Hammond. “In fact, the opposite is true.”
Hammond explains that claims related to gasoline freeze used to be common in the northern part of the country, “but that’s gone away, we don’t have that anymore with ethanol.”
Hammond was pleased to join ethanol supporters in Washington this week for the ACE Fly-in to tell members of Congress and their staff his experiences with ethanol from an automotive standpoint. Interview with Gene Hammond, AMCM and Travelers Motor Club
2015 ACE Fly-In Photo Album
The American Coalition for Ethanol (ACE) and more than 70 of its members have been in Washington, DC this week meeting with lawmakers, administration officials, and top staff members as part of the group’s “Biofuels Beltway March” annual fly-in.
The group had 160 meetings with lawmakers or their staff representing 43 states scheduled during the two day event with a primary focus on the Renewable Fuel Standard (RFS) and ACE President Ron Alverson of Dakota Ethanol was pleased with how the meetings went Tuesday. “It was really a stark contrast to the last few years we’ve been out here in that these folks really know the RFS now,” he said.
Alverson noted in particular meetings that he had with senators from Arkansas and Delaware who had concerns about poultry feed costs, but they were able to find areas of common ground. “One of them is energy security and the other is the low cost fuel we produce,” he said. “I thought we had really constructive conversations.”
Listen to Jamie Johansen’s interview with Alverson here: Interview with ACE president Ron Alverson
2015 ACE Fly-In Photo Album
As Texas Sen. Ted Cruz announces his candidacy for president, Growth Energy is reminding voters of what the ethanol group calls his “pro-fossil fuel, pro-drilling legislation attempts to kill the homegrown renewable fuels industry.” This news release points to Cruz’s American Energy Renaissance Act, which Tom Buis, CEO of Growth Energy, says will promotes Big Oil and deny consumer choice.
“The recent legislation introduced by Senator Cruz is not only shortsighted in terms of a comprehensive energy policy, but it seeks to stifle all production and growth of homegrown, sustainable biofuels that help create American jobs and reduce our dangerous dependence on fossil fuels. This legislation fails to factor in the important role biofuels play in reducing greenhouse gas emissions, while also providing consumers with a choice and savings at the pump.
“Senator Cruz seems to believe that he is exercising leadership by attacking the only energy policy that has contributed to our economic, energy and national security. Yet Senator Cruz fails to challenge or acknowledge the excessive subsidies oil companies have received for 102 years and counting at the expense of the American taxpayer. Let’s be clear – this is not ‘profiles in courage,’ this is pandering to Big Oil.
“He says there are no benefits from renewable fuels; however, the Renewable Fuel Standard has helped reduce our dependence on foreign oil by nearly 50 percent, from 60 to 33 percent, saved consumers at the pump, cleaned our air and revitalized our rural economy. Furthermore, his legislation is a direct attack on America’s farmers, the backbone of this nation, who are working overtime to feed the world and fuel America.”
Growth concludes that Cruz’s legislation would take away the freedom of choice for consumers to choose higher performing, less expensive fuel for which there is a demand.
The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) have reached a settlement with a Utah-based company that was alleged to have generated more than 7.2 million invalid renewable fuel credits worth more than $2 million. This news release from the EPA says Washakie Renewable Energy, LLC generated the Renewable Identification Numbers, or RINs, from the company’s Plymouth, Utah facility in 2010.
During that time, however, Washakie did not produce any biodiesel at the Plymouth facility. The biodiesel associated with the 7.2 million RINs would have accounted for a reduction of emissions equivalent to more than 30,000 metric tons of carbon dioxide. Washakie has purchased and retired from the market an equivalent number of RINs, which achieved this reduction of emissions.
Renewable fuel producers and importers generate RINs for each gallon of renewable fuel in the U.S. market that meets greenhouse gas emissions reduction standards established under the Renewable Fuel Standard. Washakie will pay a $3 million penalty under the settlement, which was lodged today in the U.S. District Court for the District of Columbia.
“This case is another example of EPA’s commitment to maintain the integrity of the Renewable Fuel Standard program,” said Cynthia Giles, EPA Assistant Administrator for Enforcement and Compliance Assurance. “Making sure producers are supporting their claims with production of actual renewable fuels is critical to reducing greenhouse gas emissions that are fueling climate change.”
“The defendant made quite a profit by failing to adhere to the requirements of the Renewable Fuel Program regulations,” said Assistant Attorney General Cruden. “The penalty here sends the message that renewable fuel producers will be held accountable for meeting all legal requirements. The Department of Justice remains committed to taking the profit out of illegal activity.”
The EPA says this is the first case under the second Renewable Fuels Standards in which, as a part of a settlement, EPA secured the replacement of invalid RINs by the producer of those RINs. That takes the burden off the buyers of the RINs who bought them to meet EPA compliance issues.
The amount of biodiesel and renewable diesel being imported into the U.S. dropped 36 percent in 2014 compared to the record-level year in 2013. This article from the Energy Information Administration says uncertainty about the Renewable Fuel Standard (RFS) and no late-year influx of volumes from Argentina were two main factors in this decline.
The strongest drivers of the resurgence in U.S. biomass-based diesel demand since 2012 have been increasing RFS targets and the on-again, off-again biodiesel tax credit. Biodiesel and renewable diesel are valuable because they qualify for the two major renewable fuel programs in the United States: the RFS applied at the national level, and California’s Low Carbon Fuel Standard (LCFS). Biomass-based diesel fuels have additional advantages over other renewable fuels because of their relatively high energy content and low carbon intensity, which allow them to qualify for higher credit values in both renewable fuel programs.
While the RFS is meant to encourage the production and consumption of renewable fuels, obligations for 2014 still have not been finalized and those for 2015 have not yet been proposed. The initial proposal for the 2014 RFS program year, released in November 2013, stated that the 2014 biomass-based diesel obligation would remain unchanged from its 2013 value at 1.28 billion gallons, while the advanced biofuels obligation would be reduced to 2.2 billion gallons, down from 2.75 billion gallons in 2013. The uncertainty and proposed lower target levels have made it difficult for refiners to comply with the RFS recently, but the flexibility and value of biomass-based diesel volumes towards all obligation levels make it a strong driver of biodiesel consumption as long as the RFS is still active.
Two other factors help explain lower biomass-based diesel imports in 2014. In late 2013, there was a surge of biodiesel imports from Argentina as a result of European Union (EU) antidumping duties placed on Argentine biodiesel. This action by the EU temporarily diverted large volumes of Argentine biomass-based diesel that were previously destined to be exported to Europe, Argentina’s largest biodiesel export market, to the United States. U.S. imports of biodiesel from Argentina fell by 57% from 2013 to 52 million gallons in 2014.
The EIA also cited the end of the $1-per-gallon federal biodiesel tax credit at the end of 2013, despite the retroactive reinstatement at the end of 2014, as another factor in the decline.
Nearly half of the biodiesel imports coming into the U.S. come from Canada.
A measure before the New York state legislature would require biodiesel to be mixed into every gallon of heating oil sold in the state. This article from The Legislative Gazette says the bill would set a 2 percent mandate and start no later than July 1, 2016 if it is passed.
Bill A.6070 is sponsored by Assemblyman Steven Englebright, D- Setauket, in the Assembly and has the support of environmental groups, consumer groups, labor unions and farmers.
“Clean air is really a birthright for New Yorkers and this will help underwrite that premise,” Englebright said. “We think it is part of a whole series of measures that we’re going to have to take to clean up our environment in the state.”
Kevin Rooney, CEO of the Oil Heating Institute of Long Island, supports the use of biodiesel because it provides many benefits.
“The use of biofuels blended with ultra-low sulfur heating oil provides unquestioned energy efficiency, it provides environmental benefits, it increases or enhances public health benefits at no cost whatsoever to the end-use consumer, the home owner,” Rooney said.
The Ways and Means Committee is currently considering the bill.
It won’t be long until presidential candidates invade Iowa once again (and some already have). So, Iowa-based America’s Renewable Future (ARF) has publically invited Sen. Ted Cruz and all potential 2016 presidential candidates to tour Iowa renewable fuel facilities across the state to learn more about the success of the industry.
“The goal of our organization is to educate candidates on the economic importance of the Renewable Fuel Standard (RFS) and its many advantages, not only locally, but nationally,” said former Lt. Gov. and ARF co-chair, Patty Judge, “the RFS sustains 73,000 jobs in Iowa and over 800,000 nationally. Iowa farmers epitomize hard work and are a beacon of rural America’s success and we hope that Sen. Cruz will stand with them.”
Following Sen. Ted Cruz’s opposition to the standard at the March 7 Iowa Ag Summit, the organization is especially interested in drawing the Texas senator to an ethanol plant tour on his upcoming trips in April. “Sen. Cruz’s remarks show that there is a chance to have important dialogue on this issue,” said ARF co-chair and Nevada, IA cattleman, Bill Couser, “I had a chance to personally invite Sen. Cruz at the Ag Summit in addition to the two formal invitations ARF has sent to his campaign and I hope that he will not miss this chance to see just what this policy means for real Iowans and their families.”
“This comes down to supporting independence from foreign oil while supporting American jobs or giving in to foreign interests and Big Oil,” added Couser, “We hope that Sen. Cruz we will make time to hear from folks who have seen the success in this industry and ask questions about his concerns.”
The Urban Air Initiative is challenging the federal government’s models on ethanol emissions from automobiles. This news release from the group says it has filed a new petition with the Environmental Protection Agency challenging the EPA’s Motor Fuel Emission Simulator model, which it says “wrongly blames ethanol for creating harmful tailpipe emissions.”
One of the biggest factors currently holding domestically produced ethanol back from reaching its full potential is bad information. This includes focused misinformation campaigns like the tactics used by big oil for years and bad computer modeling basing assessments on erroneous or inaccurate information.
“Many Americans are not aware of the very real and dangerous consequences of our dependence on foreign oil,” said Michigan farmer Jeff Sandborn, who is chairman of the NCGA Ethanol Committee. “Much of the time the focus has been on jobs and ethanol’s economic contributions, but increasingly the urban public is looking at the dangers related to the pollutants in gasoline. Ethanol reduces carbon and these toxic compounds while providing the higher octane modern engines need.”
The EPA’s study and resulting model obscures the fact that “blending ethanol into ordinary gasoline reduces harmful emissions produced when gasoline combusts in an engine,” according to the group’s petition.
EPA’s study, in an effort to look at optimal temperatures and a variety of blends, results in findings that increasing ethanol can be associated with increasing emissions, the petition said. “This conclusion is misleading at best,” the group said, arguing that it ignores real-world factors in burning fuel. Other studies have found that increasing the amount of ethanol in fuels reduces emissions.
The group says this model in question underlies a number of key issues regarding EPA and states’ treatment of ethanol, including state implementation plans to meet a variety of air quality standards.
An Iowa biodiesel plant is the latest victim of the government’s inaction on measures that are aimed to help the biofuels industry. This article from the Dubuque (IA) Telegraph Herald says the 30-million gallon nameplate Western Dubuque Biodiesel has had to stop production completely – just another of the too many biodiesel refiners that have had to shut down due to the federal government’s failure to give clear direction on the Renewable Fuel Standard (RFS) and the expiration of the $1-a-gallon federal biodiesel tax credit.
“All the tanks are full and no one is buying,” General Manager Tom Brooks said. “How do you sell product to a buyer who doesn’t know what he has to blend against? That’s the frustration.”
Across the U.S., biodiesel production fell from a high of 1.8 billion gallons in 2013 to 1.75 billion last year. In Iowa, production fell slightly, but it remains the nation’s leading producer, accounting for 16 percent of biodiesel output in 2014, according to the Iowa Renewable Fuels Association.
Uncertainty sent prices falling nearly 25 percent for all of 2014 and led to a 73 percent decline in industry profitability, Brooks said. The result: Dozens of biodiesel plants have stopped production or laid off workers in recent months.
“It creates doubt and uncertainty for investors and lenders, because they don’t know whether the industry is stable. Is the business growing or stagnating?” he said. “And when you’re running the plant at half capacity, your costs increase.”
The article goes on to say that state biodiesel tax credits have helped a little, but industry officials worry the same uncertainty in federal policy will continue to plague biodiesel in 2015.