RFA Urges Full Funding of Ethanol Fuel Research

The Renewable Fuels Association (RFA) is urging Congress to ensure full funding of fuels research programs to provide the necessary scientific basis for increasing ethanol blending.

Renewable Fuels Association LogoIn a letter this week to leaders of both the House and Senate Appropriations Subcommittees on Energy and Water Development, RFA President Bob Dinneen outlined concerns with the budget submitted by President Obama with respect to higher level ethanol testing. Specifically, Dinneen called on Congress to support full funding of the Biomass and Biorefinery Systems program’s Utilization of Platform Outputs R&D subprogram as well as funding for the Vehicle Technologies program’s Fuels Technology subprogram, which were cut or eliminated in the president’s budget.

“President Obama recently reaffirmed his commitment to both current ethanol technologies and next generation opportunities in his biofuels plan released in February,” said Dinneen. “Congress should take this opportunity to ensure these critical fuel research programs are fully funded and to allow America’s ethanol industry to reach its full potential to displace petroleum use in motor vehicles.”

The RFA is calling for the full $24 million for the Vehicle Technologies program’s Fuels Technology subprogram and for an additional $5 million appropriation for the Biomass and Biorefinery Systems R&D subprograms.

Read the letter here.

Iowa Biodiesel Mandate Dies, But Could Be Reborn

A proposal to mandate a 5 percent biodiesel blend in every gallon of diesel sold in Iowa has died in one legislative committee … but could be reborn in another.

The Fort Dodge (IA) Messenger reports that the House environmental protection committee’s ranking member, Rep. Steve Olson, R-DeWitt, declared the bill dead:

Olson said the GOP caucus was opposed to the bill because it opposed mandates. However, even though the bill died in one committee, it could be revived in another or amended into another bill before the session ends, he said.

Rep. Gary Worthan, R-Storm Lake, who is the ranking member of the House ag committee and also sits on the transportation committee, heard both days’ testimony and said that although he is opposed to mandates in general, Iowa may have to mandate 5 percent blended biodiesel in order to save the industry.

”Right now biodiesel is where ethanol was 15 years ago,” Worthan said. ”There’s no market access for it.” He said he fears that what happened in 2009 with petroleum refiners purchasing failing ethanol plants for pennies on the dollar, may happen soon with biodiesel plants unless they can get a strong financial footing.

Worthan added that biodiesel blends are more uniform than in the past to meet federal standards, and that should make the green fuel more attractive than years ago when standards were a bit looser.

Obama Changes Tune from Biodiesel to Biofuels

Some others have started to notice something I told you about back in January. It seems that while he campaigned on the word “biodiesel,” President Barack Obama is now talking “biofuels” … a more ambiguous term that is leaving some biodiesel producers scratching their heads wondering whether the president backs them.

This piece from Biodiesel Magazine points out that Stimulus Act monies seem to be going to too many unproven technologies, such as fuel cells, cellulosic ethanol and electric motors, instead of proven, reliable biodiesel:

The Obama administration coming out with billions of dollars from the American Recovery and Reinvestment Act to increase “clean energy manufacturing” could seem almost like a taunt to biodiesel producers.Obama announced “awardees” of the $2.3 billion clean energy manufacturing tax credits as existing biodiesel producers languish over the lapse of their specific federal blender tax credit. “Projects are assessed based on the following criteria: commercial viability, domestic job creation, technological innovation, speed to project completion, and potential for reducing air pollution and greenhouse gas emissions,” the White House stated on Jan. 8.

While the word “biofuels” was good to hear spoken by the president, there’s a word that describes the 2009 biodiesel year—idle. Huge plants sat quiet for months as vegetable oils were high and diesel prices were not. Imperium Renewables Inc., which suffered an explosion at its Grays Harbor plant in Washington State, said it was in no big hurry to make repairs while the tax credit is nonexistent.

“I don’t think this Obama administration is any different than any other—Republican or Democrat—in that often the right hand doesn’t know what the left is doing,” said Joe Gershen of Los Angeles’ Tellurian Biodiesel. “So it does hurt, but I will say that I don’t think they’re doing it on purpose.”

I think the fact that the biodiesel tax incentive was allowed to expire and the White House not pushing for renewal speaks volumes … actions always speak louder than words.

Grassley: Jobs Bill Forgot 23,000 Biodiesel Jobs

The latest jobs bill seems to be forgetting the 23,000 workers in the biodiesel industry who are at risk since the provision renewing the federal $1-a-gallon tax incentive was removed. That’s the opinion of Sen. Charles Grassley, a Republican from Iowa who saw his version of the jobs bill with the biodiesel provisions get scrapped for a pared down version from Senate Majority Leader Harry Reid (D-Nevada).

Now, it looks like Reid’s bill will come to a vote on Wednesday after passing an important procedural vote earlier this week. But before the cloture vote, Grassley took to the Senate floor to express his dismay at Reid’s jobs bill without the biodiesel-jobs-saving provisions (this excerpt from IowaPolitics.com):

Either the Democratic leaders are playing partisan politics with tax extenders, or they don’t understand the worth of the provisions to the economy, including job retention and creation. The biodiesel industry alone says 23,000 jobs are at risk due to the biodiesel tax credit being allowed to expire. Those workers are not fat cats.

And in case anyone thinks biodiesel is something only Iowans worry about, these green jobs are in forty-four of the fifty states.

The biodiesel tax incentive was allowed to expire at the end of 2009 while the Senate wrestled over health care reform.

EPA Official Explains RFS2 at Ethanol Conference

2010 National Ethanol Conference Photo Album

The new rule for the expanded Renewable Fuel Standard, fresh out of the box just two weeks ago, was the main topic of discussion at the Renewable Fuels Association’s 15th National Ethanol Conference in Orlando. Sarah Dunham, Transportation and Regional Programs Division Director with the U.S. Environmental Protection Agency, boiled down the guts of the new RFS2 in a 45 minute presentation that highlighted changes made in lifecycle analysis determinations from the rule as originally proposed.

“I can safely say that this is the area we got more comment than any other area in the rule,” Dunham said, calling it very constructive and helpful to get real data and science to apply to the rule. This led to “significant” decreases in estimates of international indirect land use change related to biofuels production, “more than 50-60-70 percent in some cases,” she added. Using corn ethanol as an example, she noted that the final rule factored in both increasing yields and the value of co-products, which had not been in the original model

Dunham also talked about how EPA addressed “uncertainty” in their analysis. “There is inherent uncertainty in these assessments,” she said. “And we thought it was important to try to formally recognize that uncertainty” and incorporate it into the analysis. The assessments will be updated over the next two years as more information becomes known.

The regulations for RFS2 are scheduled to go into effect on July 1 and between now and then EPA will be working with the Renewable Fuels Association and the biofuels industry in general to conduct workshops to help inform producers about the new rule and what it means to them.

If you are in the industry, it is worth listening to Sarah’s presentation, including answers to questions at the end asked by moderator Charles Knauss with Bingham McCutchen LLP. Listen to the audio in the player below and you can see screen shots of some of the slides she references in the NEC conference photo album.

Biodiesel Provisions Laid Off from Jobs Bill

So close … but yet so far. A provision in the U.S. Senate’s jobs bill that would have restored the $1-a-gallon biodiesel blending credit … and preserved about 23,000 jobs on its own … started the day in the employment measure. But it found itself in a position many looking for jobs are familiar with: last hired, first fired.

The Hill reports that the provision, sponsored by Iowa’s Sen. Charles Grassley, a Republican, didn’t make the cut as Senate Majority Leader Harry Reid, a Democrat from Nevada, pared-down the jobs package to omit several energy provisions:

“Clearly, the National Biodiesel Board is disappointed that Senate leadership decided to pull the biodiesel tax incentives from the current jobs bill,” said Michael Frohlich, a spokesman for the trade group. He added that leadership should recognize that “saving 23,000 jobs that are in immediate jeopardy is inextricably linked to a true job-saving and creation agenda.”

The trade group calls the credits vital to the battered industry. Frohlich said the producers will seek to have the Senate add extension of the credits – which lapsed at the end of 2009 – to the current package or another measure soon.

“This really is an immediate need to this industry,” he said.

Extension of the credits is a top priority for Grassley, the Finance Committee’s top Republican. Iowa has over a dozen biodiesel plants, according to the Iowa Renewable Fuels Association.

Jill Kozeny, a spokeswoman for Grassley, said there is biodiesel production in 44 states overall. “They are losing jobs since the credit expired at the end of the year, and restoring the credit as quickly as possible is essential to saving these renewable energy jobs,” she said.

The bottom line is Grassley will have to go back to work to find another way to get the renewal up for a vote, perhaps attached to another one of the many jobs bills Reid’s office is promising.

RFS-2 Importance To Biodiesel Industry

RFS-2 SessionThere have been three panels discussions on the new RFS-2 at the National Biodiesel Conference and they had to be moved to larger than scheduled rooms to handle all the people who wanted to hear about the new rules. The National Biodiesel Board is working on this issue and will be producing several webinars on the topic in the near future.

In the meantime, to learn more about it, I spoke with Paul Argyropoulos, EPA Senior Policy Advisor, Office of Transportation & Air Quality, who spoke at one of the sessions. I asked him what’s most important for the industry to know now. To start with he says, “We have a final rule which I think provides certainty to the market.” He then provides some additional points of importance specific to the biodiesel industry. I can’t figure out how to summarize them and they’re too long to translate so you’ll have to listen to the interview to hear them. That’s just the way it is with regulations this long and complicated. At this point he encourages you to dig into the regulations and understand what the reporting requirements are. He says they’re willing to work with you and they’re planning to produce some webinars as well. Paul says you can go to their website to get more information.

You can listen to my interview with Paul below.

National Biodiesel Conference Photo Album

Michigan Grants $1.7 Million for Offshore Wind Study

Two grants totaling $1.7 million have been approved for studying offshore wind technologies in Michigan.

The Chicago Tribune reports the grants come from the state’s Public Service Commission:

Grand Valley State University’s Michigan Alternative and Renewable Energy Center and the University of Michigan’s Memorial Phoenix Energy Institute are getting $1.3 million for jointly researching offshore wind and ice data on Lake Michigan.

The Superior Watershed Partnership is to receive $350,000 for researching sites’ wind energy potential on Lake Michigan. The organization also will assess public opinion on offshore wind development.

If the last post I had about an offshore wind energy project in Lake Michigan, where Scandia Wind was proposing a 1,000 megawatt Lake Michigan wind farm, is any indication, there should be plenty of discussion about this topic … on this site and elsewhere. Let’s see what people have to say.

Biodiesel Bill Tied to Jobs Bill, Delayed by Blizzard

As Congress debates (or tries to debate between blizzards) the jobs bill, the measure that would put lots biodiesel workers back on the job seems to be tied to that same bill’s fate.

This post on the Des Moines Register’s blog says Democrats had hoped to get the jobs bill to the floor today, but the 30+ inches of snow over the weekend plowed under that bill … and the renewal of the lapsed federal biodiesel tax subsidy:

Beth Pellett Levine, a spokeswoman for Sen. Charles Grassley, the senior Republican for the Senate Finance Committee, says he “has insisted that the biodiesel tax credit be a part of any discussions” on a jobs bill with the panel’s chairman, Montana Democrat Max Baucus. The $1-a-gallon tax credit for biodiesel “remains a top priority for Senator Grassley to extend the credit at the first available opportunity,” she added. Soybean growers are looking to Grassley to ensure that the biodiesel credit is part of any jobs bill to come out of the senate, according to John Gordley, a lobbyist for the American Soybean Association.

Renewal of the federal biodiesel tax incentive is seen as the last element to put the biodiesel industry back on track. The other two elements were the EPA’s decisions to consider biodiesel low enough in carbon footprint and mandate this year of 1.15 billion gallons of the green fuel.

Iowa Closer to Biodiesel Mandate

A 5 percent biodiesel mandate in Iowa is a bit closer to a reality.

This story from the Des Moines Register says the bill that would require all biodiesel sold in the Iowa contain at least 5 percent biodiesel passed a state legislative subcommittee … but not without some fiesty debate:

“The hog producers in this state are being ravaged right now, but we’re not in here mandating eating bacon,” [Republican Erik Helland of Grimes] said.

Helland said later that “I have nothing against biodiesel, but I just don’t like mandates.”

[Rep. Sharon Steckman (Dem., Mason City), chair of the committee,] said “we’re sending our young people over to the Middle East to get killed for oil when we could be making some of our own right here.”

Biodiesel has lagged behind ethanol in usage because unlike ethanol, it has never had a federal mandate. Truckers and gasoline retailers also have opposed the mandate.

The B5 bill passed the Iowa State Senate last year but didn’t advance in the House. Let’s hope for the best this year.