Ethanol Issues Addressed at South Dakota Forum

Vilsack SandlinRep. Stephanie Herseth Sandlin (D-SD) hosted U.S. Secretary of Agriculture Tom Vilsack Monday for a Rural Issues Forum in Bath, South Dakota which was attended by an estimated 300 people who were able to ask questions about issues impacting the rural economy.

South Dakota’s contribution to biofuels production was discussed during the forum. Rep. Herseth Sandlin joined 28 members of Congress in sending a letter to the Environmental Protection Agency (EPA) requesting approval for allowing gasoline blends to contain up to 15 percent ethanol. A final rule is expected from the EPA by December 1 and Vilsack said he expects the agency to meet that deadline.

Rep. Herseth Sandlin also brought up her concerns with the EPA’s proposed rule for the implementation of the Renewable Fuels Standard (RFS) included in the Energy Bill passed in late 2007 and the proposed rule including indirect land use changes impacting lifecycle greenhouse gas emissions associated with biofuels production.

“Ultimately, if the EPA can’t get it right, I support requiring EPA to make the comparison of emissions from biofuels and gasoline the central issue, rather than the questionable science of indirect land use that would be devastating to the renewable fuels industry and our country’s energy independence,” Rep. Herseth Sandlin. “It’s vitally important for economic development in South Dakota and for our nation’s energy independent future that the EPA correctly implement the RFS – and bases its rule on fact, not fiction.”

BIO to Congress: Don’t Put Biofuels in Double Jeopardy

BIOThe Biotechnology Industry Organization (BIO) is trying to head off any possible efforts to subject biodiesel and ethanol to another set of greenhouse gas emission regulations that would effectively put the green fuels under a double jeopardy situation.

Arguing that biofuels are already regulated under the Renewable Fuels Standard, BIO has sent a letter to Sen. Barbara Boxer (D-Calif.), chair of the Senate Committee on Environment and Public Works, asking that recently drafted cap-and-trade legislation be amended to clearly state that biofuels, including the biofuel component of fuel blends, are not obligated under the emissions cap:

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, stated, “When it comes to climate change legislation, Congress has focused a great deal of attention on stationary emission sources, such as coal-fired power plants. We cannot, however, achieve a low-carbon future without biofuels, because biofuels can play a key role in reducing direct CO2 emissions from the transportation sector. While fossil fuels release carbon that has been stored deep underground for millions of years into the atmosphere, biofuels recycle atmospheric carbon. In some cases, biomass production can sequester more carbon in the soil than is released into the atmosphere through biofuel combustion. Biofuels should therefore not be treated in the same manner as fossil fuels under any climate change cap-and-trade legislation.

BIO goes on to point out that under the RFS, biofuels are already required to achieve substantial lifecycle greenhouse gas improvements compared to petroleum-based fuels.

Ethanol Production Up in July

U.S. ethanol producers continue to set new production records.

EIA According to the Energy Information Administration (EIA), American ethanol facilities produced 728,000 barrels per day in July 2009. That is up 114,000 barrels from a year ago. EIA also reports fuel ethanol imports of 42.4 million gallons in July.

Ethanol demand, as calculated by the Renewable Fuels Association, continues to outpace production. According to RFA calculations, demand was 748,000 b/d in July, up from 635,000 b/d a year ago.

GAO Report Gets Mixed Reviews from Ethanol Groups

Ethanol organizations received a Government Accounting Office report on biofuels this week with mixed reviews.

On the plus side, the GAO report indicated that using indirect land use change to evaluate the lifecycle greenhouse gas emissions for biofuels under the Renewable Fuel Standard may be difficult due to uncertainty in how that can accurately be measured. According to the report, “Many researchers told GAO there is general agreement on the approach for measuring the direct effects of biofuels production on lifecycle greenhouse gas emissions but disagreement about how to estimate the indirect effects on global land use change, which EPA is required to assess in determining RFS compliance. In particular, researchers disagree about what nonagricultural lands will be converted to sustain world food production to replace land used to grow biofuels crops.”

That pleased Growth Energy CEO Tom Buis. “On the unsettled science of International Indirect Land Use Change, the GAO has come down firmly on our side of the debate: there is no scientific consensus on ILUC,” Buis said in a statement. “As we’ve said all along, ILUC is a concept and a theory – it is not proven, and there is no agreement in the scientific community that if it exists, how it can be accurately measured. We agree completely with GAO’s assessment that the proposal to incorporate ILUC into RFS would greatly complicate the agency’s ability to complete writing this rule.”

On the downside, the report suggests elimination of the 45 cent per gallon blenders tax credit for mixing ethanol with gasoline. The GAO report says the Volumetric Ethanol Excise Tax Credit (VEETC) “may no longer be needed to stimulate conventional corn ethanol production because the domestic industry has matured, its processing is well understood, and its capacity is already near the effective RFS limit of 15 billion gallons per year for conventional ethanol.”

The Renewable Fuels Association disagrees. “The tax incentive has been instrumental in helping to build a renewable fuels industry in this country. It should remain,” the organization responded in a statement. “As long as petroleum and fossil fuel companies that dominate the energy market continue to receive preferential tax treatment and hidden subsidies, incentives are needed to develop renewable alternatives such as ethanol.”

Read the full GAO report here.

DF Cast: RFA, NBB Submit RFS-2 Comments

df-logoBack in May, the EPA put out its proposal for the new Renewable Fuels Standard… aka RFS-2… that got a lot of people talking about what is in the new standard.

Some of the biggest backers of some of the greenest fuels, ethanol and biodiesel, are worried RFS-2 will actually keep these mainstays of the renewables out of the program designed to promote those very same green energy sources.

NBB-logoDuring this edition of the Domestic Fuel Cast, we get comments from National Biodiesel Board CEO Joe Jobe and Renewable Fuels Association president and CEO Bob Dinneen about the comments they have just submitted to the EPA.

rfa-logo-09The biggest sticking point is the Indirect Land Use issue, which could charge American renewable fuels makers, especially biodiesel producers, with greenhouse gas emissions for something going on in another part of the world. Plus, Jobe and Dinneen say there are some issues with the baseline numbers and assumptions the EPA is using.

They believe that the RFS-2 can be corrected before it becomes law… if the EPA reads the thousands of comments the two organizations have submitted and heed what is being called common sense advice.

It’s a fascinating discussion, and you can hear more of it here:

You can also subscribe to the DomesticFuel Cast here.

Renewable Energy Interests Praise, Criticize Boxer-Kerry Climate Bill

BoxerKerryClimateBillBackers of weaning the U.S. off of non-renewable, foreign petroleum are giving mixed reviews to the latest climate bill introduced today in the U.S. Senate.

Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) debuted the “Clean Energy Jobs and American Power Act,” an 821-page bill designed to “create clean energy jobs, reduce pollution, and protect American security by enhancing domestic energy production and combating global climate change,” as well as creating millions of green energy jobs. Part of that includes reducing carbon emissions by 20 percent by the year 2020 and 80 percent by 2050 compared to 2005 levels:

This is a security bill that puts Americans back in charge of our energy future and makes it clear that we will combat global climate change with American ingenuity. It is our country’s defense against the harms of pollution and the security risks of global climate change,” said Kerry. “Our health, our security, our economy, our environment, all demand we reinvent the way America uses energy. Our addiction to foreign oil hurts our economy, helps our enemies and risks our security.”

Senator Boxer said, “We know clean energy is the ticket to strong, stable economic growth — it’s right here in front of us, in the ingenuity of our workers and the vision of our entrepreneurs. We must seize this opportunity, or others will move ahead.”

Reaction to the measure has been mixed. U.S. Senator Saxby Chambliss (R-Ga.), Ranking Republican Member of the Senate Agriculture Committee, is not a fan:

Chambliss“As I have stated many times before, I want to support legislation that addresses climate change and provides a more secure energy future for America. Unfortunately, the legislation introduced today by Senators Boxer and Kerry follows the House-passed bill down the path of higher energy costs, job losses and economic pain for no benefit. Further, it would only hurt farmers, ranchers and forest landowners and provide them no opportunity to recoup the higher costs they will pay for energy and the other inputs necessary to work the land. I cannot support this bill.”

But maker of algae-based renewable fuels, Sapphire Energy, sees great potential in the legislation: Continue reading

Ethanol Plants Left Out of Greenhouse Gas Reporting

The Environmental Protection Agency (EPA) issued final regulations for the nation’s first greenhouse gas reporting system to begin in 2010, but ethanol plants have been removed from the initial list of facilities required to report emissions.

EPAThe regulations require large emitters of heat-trapping emissions to begin collecting greenhouse gas (GHG) data under the new program which will cover approximately 85 percent of the nation’s GHG emissions and apply to roughly 10,000 facilities. Ethanol plants were on the list when it was first proposed in March.

According to EPA, the new reporting system will provide a better understanding of where GHGs are coming from and will guide development of the best possible policies and programs to reduce emissions. The data will also allow businesses to track their own emissions, compare them to similar facilities, and provide assistance in identifying cost effective ways to reduce emissions in the future. This comprehensive, nationwide emissions data will help in the fight against climate change.

Among the facilities that are included in the program are extractors of crude petroleum and natural gas, coal and oil refineries, industrial landfills, and wastewater treatment plants.

Ethanol Group Finalizing Comments to EPA

The Renewable Fuels Association today released comments to be filed with the Environmental Protection Agency regarding proposed regulations to implement the expanded renewable fuel standard (RFS) program enacted by Congress in the Energy Independence and Security Act (EISA) in 2007.

RFA“Reducing America’s dependence on foreign oil was part of the Energy Security Act, providing economic opportunity and job creation and supporting rural communities were all equally important goals,” said RFA president and CEO Bob Dinneen during a press conference to announce the organization’s comments. “We’re concerned that EPA appears to be ignoring those objectives as it pursues greenhouse gas reduction based on unproven theory.”

In specific comments to be submitted to EPA, Dinneen says they will stress that, “International indirect land use change simply should not be included,” Dinneen said. “Congress did not intend to penalize America’s ethanol producers for decisions made by farmers and governments in other countries.”

The RFA also released a report conducted by Informa Economics that will be included in comments submitted to the EPA. “It calculates that the land needed to meet the demands of the growing RFS mandate would be in the range of 2.2 million acres,” said Dinneen. “Put in perspective, that is one half of one percent of U.S. crop land, one tenth of one percent of world cropland, and six 100ths of a percent of world arable land – certainly not enough to have any meaningful impact on greenhouse gases across the globe.”

Dinneen says RFA is in the process of finalizing its comments to EPA, which will be submitted tomorrow on the final day of the comment period.

Listen to Dinneen’s opening comments here:

EPA Admits Uncertainty in Indirect Land Use

A group of Midwest senators led by Senator Tom Harkin (D-IA) dropped an amendment to appropriations legislation that would have prohibited the EPA from spending funds to include international indirect land use change (ILUC) emissions in the implementation of the Renewable Fuels Standard (RFS).

Sen. Harkin withdrew his amendment after receiving a letter from EPA Administrator Lisa Jackson that promised the agency would be taking a closer look at the proposed regulation regarding ILUC that would penalize biofuel production such as corn-ethanol.

Jackson said in her letter that it is “clear that there are significant uncertainties associated with these estimates and in particular, with the estimate of indirect land use change.”

“Therefore, I have asked my staff to quantify the uncertainty associated with specifically the international indirect land use change emissions. They are working closely with USDA as well as incorporating feedback from experts who are commenting on the rule. This analysis will allow us to quantify the impact of the uncertainty on the lifecycle emissions. We will present these estimates in the final rule, and I plan to incorporate those estimates of uncertainty in my regulatory decisions.”

Harkin was pleased with the EPA administrator’s admission and promise to address the issue. “I think our amendment got EPA’s attention,” Harkin said.

Renewable Energy One of Obama’s Pillars in UN Speech

ObamaUNRenewable energy was part of Barack Obama’s speech to the United Nations today, as the American president outlined his vision for the future before the world body.

Obama told delegates that the U.S. has spent $80 billion in clean energy. But the overall efforts of using renewable energy to save the climate are for the entire world:

We will move forward with investments to transform our energy economy, while providing incentives to make clean energy the profitable kind of energy. We will press ahead with deep cuts in emissions to reach the goals that we set for 2020, and eventually 2050. We will continue to promote renewable energy and efficiency, and share new technologies with countries around the world. And we will seize every opportunity for progress to address this threat in a cooperative effort with the entire world.

Another world leader made a more personal appeal for the world to address climate change. President Mohamed Nasheed of Maldives, an Indian Ocean island nation that could simply disappear if rising oceans were not checked, told the U.N. that more than speehes are needed to save his country from a watery fate.