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.

DF Cast: Ethanol, Biodiesel Industries Welcome RFS-2

It’s been a long time in the making, but the Environmental Protection Agency has finally released the new Renewable Fuels Standard … better known as RFS-2.

The standard requires that biofuels will have to reduce greenhouse gas emissions compared to the gasoline and diesel fuels they displace and grow in production from last year’s 11.1 billion gallons to 36 billion by 2022, with 21 billion gallons to come from advanced biofuels. It’s expected to replace more than 328 million barrels of non-renewable petroleum a year and reduce greenhouse gas emissions more than 138 million metric tons annually when fully implemented.

While admitting it might not be perfect, RFS-2 is being welcomed by representatives of the ethanol and biodiesel industries.

In this edition of the Domestic Fuel Cast, we’ll here from EPA Administrator Lisa Jackson, Secretary of Agriculture Tom Vilsack, as well as Tom Buis with Growth Energy, the Renewable Fuels Association‘s Matt Hartwig, and the National Biodiesel Board‘s Michael Frohlich.

They all have interesting takes on what the new standard will bring in the short and long terms, and you can here what they have to say here: [audio:http://www.zimmcomm.biz/domesticfuel/DFCast-2-04-10.mp3]

Ethanol Report on RFS2 Rules

Ethanol Report PodcastIndustry reaction to the Environmental Protection Agency announcement today of much-delayed rules for the second phase of the Renewable Fuel Standard has come quickly and is mostly positive.

In this edition of “The Ethanol Report” podcast, Matt Hartwig with the Renewable Fuels Association talks about their reaction and what the rule means for the industry.

You can subscribe to this twice monthly podcast by following this link.

Listen to or download the podcast here:

E. coli to Help Brew Biodiesel

A group of federal researchers has figured out how to better extract biodiesel from biomass using a microbe that most of us try to avoid in our food.

The U.S. Department of Energy’s Joint BioEnergy Institute (JBEI) has announced that researchers have engineered a strain of E. coli bacteria that can extract an advanced biodiesel directly from biomass:

“The fact that our microbes can produce a diesel fuel directly from biomass with no additional chemical modifications is exciting and important,” says Jay Keasling, the Chief Executive Officer for JBEI, and a leading scientific authority on synthetic biology. “Given that the costs of recovering biodiesel are nowhere near the costs required to distill ethanol, we believe our results can significantly contribute to the ultimate goal of producing scalable and cost effective advanced biofuels and renewable chemicals.”

E. coli is a well-studied microorganism whose natural ability to synthesize fatty acids and exceptional amenability to genetic manipulation make it an ideal target for biofuels research. The combination of E. coli with new biochemical reactions realized through synthetic biology, enabled Keasling, [Eric Steen, a member of the team from JBEI’s Fuels Synthesis Division] and their colleagues to produce structurally tailored fatty esters (biodiesel), alcohols and waxes directly from simple sugars.

“Biosynthesis of microbial fatty acids produces fatty acids bound to a carrier protein, the accumulation of which inhibits the making of additional fatty acids,” Steen says. “Normally E. coli doesn’t waste energy making excess fat, but by cleaving fatty acids from their carrier proteins, we’re able to unlock the natural regulation and make an abundance of fatty acids that can be converted into a number of valuable products. Further, we engineered our E. coli to no longer eat fatty acids or use them for energy.”

The researchers point out that using E. coli to convert biomass into biodiesel will eliminate a food source from the fuel chain.

Grassley Looks for Biodiesel Credit Renewal in Feb.

One of the biggest advocates for renewal of the $1-a-gallon federal biodiesel blender’s tax incentive looks for renewal of the credit sometime next month.

Agriculture.com reports that Iowa Senator Chuck Grassley has been working with the Chairman of the Senate Finance Committee, Max Baucus to get it restored very soon:

“It would be my hope that we would have this to the president by the week we take off for town meeting recesses — president’s holiday,” he told Agriculture.com on Tuesday.

Late last year the House of Representatives passed a bill extending several tax credits, including the $1-a-gallon biodiesel credit that helps make the soybean-based fuel competitive with diesel. But the Senate, unable to reach an agreement on the federal estate tax, failed to renew the biodiesel tax credit which expired at the end of 2009.

Grassley, of Iowa, is the top ranking Republican on the Finance Committee and seems to have a good working relationship with Baucus, a conservative Democrat from Montana.

Later, Grassley’s press aide, Beth Levine, said in an e-mail message that “Senator Grassley had a long discussion with Senator Baucus about tax extenders, and in particular about the necessity of extending the biodiesel tax credit.

Fellow Iowan Senator Tom Harkin, a Democrat, blames the delay on the Republicans. However, most Washington observers agree that the Senate was too busy debating the unpopular health care bill to get to the biodiesel tax credit. Harkin thinks it could get done by the end of February, but he’s not sure.