December Ethanol Exports Surge

According to a blog from Geoff Cooper, senior vice president for the Renewable Fuel Association (RFA), U.S. ethanol exports did well in December 2015 with 81.7 million gallons (mg) of product exported, 39 percent higher than November 2015. Canada was the top destination receiving 21.3 mg followed by Oman (13.4 mg), China (10.6 mg), the Philippines (8.8 mg), and the Netherlands (8.8 mg). U.S. ethanol exports totaled 836 mg in 2015—identical to the 2014 final tally according to recent report from RFA that includes details on top export destinations, shifts in the marketplace, ethanol import volumes, the value of exports, and other key data regarding U.S. ethanol trade in 2015.

Monthly US Ethanol Exports and ImportsDenatured fuel ethanol exports totaled 50.3 mg in December, the highest monthly total of the year and up 57 percent from November. At 19.3 mg, Canada was again the leading importer of denatured product. December exports of undenatured fuel ethanol tallied at 28.6 mg, up 18 percent from November. The Philippines (8.8 mg), Brazil (6.4 mg), the Netherlands (4.5 mg), Belgium-Luxembourg (2.6 mg), and Mexico (2.2 mg) were the top five markets for undenatured product in December.

U.S. fuel ethanol imports fell to 9.4 mg in December, less than half of the November import volume. Total imports of fuel ethanol finished the year at 93.2 mg, up slightly from 2014. Brazil represented more than 99 percent of the December imports with the remaining imports coming from Germany.

Exports of U.S. distillers dried grains with solubles (DDGS)—the animal feed co-product manufactured by dry mill ethanol plants increased slightly in December, with 988,356 metric tons (mt) of outbound shipments. That was up 5 percent from November, but still well below monthly export levels recorded from May through October. DDGS exports finished the year at 12.55 million mt, a new annual record.

China remained as the top market for U.S. DDGS exports in December, despite setting an 11-month low. China received 226,049 mt, down 20 percent from November and less than one-quarter of the DDGS volume imported as recently as July. However, other markets saw big increases including Mexico, South Korea, Canada, and Vietnam. For the full calendar year, China was the top market followed by Mexico.

RFA: Cruz In But Ethanol Not Out

Sen. Ted Cruz (R-Texas) may have won in Iowa last night, but according to the Renewable Fuel Association (RFS), ethanol is not out. RFS President and CEO Bob Dinneen said that his win has created a narrative that presidential candidates campaigning in the state no longer have to voice support for ethanol or the Renewable Fuel Standard (RFS). Dinneen said this is not the case.

“The narrative comrfalogo1ing out after last night’s Iowa caucus that the domestic ethanol industry is somehow on the ropes is false,” said Dinneen. “Many people seem to have forgotten that, in the run-up to last night’s caucus vote, though Sen. Cruz stated he was opposed to the RFS he also expressed support for ethanol as a fuel. In fact the senator has discussed the need to provide American consumers better access to ethanol fuels like E25 or E30, stating that they could prove to be quite popular with American consumers who are increasingly concerned about fuel economy. The senator also called ethanol an effective additive because it increases octane and decreases harmful tailpipe emissions. That doesn’t sound like someone to me who is writing off the domestic ethanol industry. That sounds to me like someone who is just being true to his no-mandates of any kind philosophy.”

Dinneen added, “Moreover, pundits anxious to write off ethanol’s potential currency in Iowa should note that more than 85 percent of the votes cast in Iowa last night were in support of candidates who continue to champion the RFS.”

Ethanol Report on Media, Politics and the RFS

ethanol-report-adWith the Iowa caucuses coming up February 1, the Hawkeye State has been inundated with both candidates and reporters, and ethanol has become a topic for mainstream media to report about, often inaccurately. In this Ethanol Report, Renewable Fuels Association (RFA) president and CEO Bob Dinneen discusses the inaccurate terms being used to describe the RFS, urges the media and voters to do independent research, and gives his thoughts on the views of Republican candidate Sen. Ted Cruz of Texas.

Ethanol Report on Media, Politics and the RFS

#RFS Campaign Fact Checks from @EthanolRFA

rfalogo1Ethanol has been in the spotlight as a presidential campaign issue with the Iowa caucuses just around the corner, but the Renewable Fuels Association is concerned about some of the misconceptions that have been tossed around in the discussion so they have issued a one-page fact sheet to correct some of that with both candidates and the media.

First – there is no “corn ethanol subsidy.”The Volumetric Ethanol Excise Tax Credit (also known as the “blender’s tax credit”) expired five years ago in 2011. Further it was gasoline blenders — not ethanol producers — who received a 45 cent per gallon tax credit for each gallon of ethanol blended. The Small Ethanol Producer Tax Credit also expired in 2011.

The Renewable Fuel Standard (RFS) is not a “subsidy.”The RFS is not a tax incentive or subsidy in any way, shape, or form. The RFS has absolutely no impact on the federal budget or tax revenues. Rather, the RFS is a program that guarantees lower-carbon biofuels will have access to a fuel market that is overwhelmingly and unfairly dominated by petroleum.

There is also no such thing as an “ethanol mandate.”The RFS does not mandate the use of corn ethanol or any other type of ethanol for that matter. Rather, the RFS requires that oil companies blend increasing volumes of renewable fuels, without specifying the type of renewable fuel. In fact, oil companies may meet their RFS obligations by blending and marketing biogas, renewable diesel, renewable jet fuel, biobutanol, biodiesel, and a host of other renewable fuel options. While a wide variety of renewable fuels are being produced today, ethanol has been the highest-volume and lowest-cost renewable fuel available to meet RFS requirements.

Read more here.

RFA President and CEO Bob Dinneen urges members of the media to contact the RFA if they have questions about ethanol or the RFS. “Unfortunately the media has been perpetuating a lot of the misinformation about the ethanol industry as they cover the presidential candidates,” said Dinneen. “There are two sides to every story and if reporters have questions, or need further clarification on any ethanol-related issues, we are ready and available to assist them.”

Abigail Fisler Wins NEC Scholarship

Abigail FislerAbigail Fisler, a junior at Dickinson College in Carlislie, PA, has been awarded a student scholarship to attend the 21st Annual National Ethanol Conference (NEC) in February in New Orleans. The scholarship, awarded by the Renewable Fuels Association (RFA) and the Renewable Fuels Foundation, (RFF) provides a student studying renewable fuels with complimentary registration and an opportunity to network with industry members.

Abigail is pursuing two bachelor’s degrees in environmental studies — with a focus on renewable energy and climate change — and Italian studies, respectively. She was introduced to biofuels at a young age during a fourth-grade field trip to an ethanol plant in Lakota, Iowa. Last summer, she worked as an intern for California Ethanol and Power, where she assisted with investor presentations, developing marketing materials, and providing business plan updates. This summer Abagail intends to gain additional experience in the areas of sustainable energy and policy development. She ultimately plans to work globally in the field due to her affinity for foreign languages and cultures.

“On behalf of the RFA and RFF, I am proud to hand this year’s scholarship to a talented student with a promising career in the renewable fuels industry ahead of her,” said Mike Jerke, chairman of the RFF and CEO of Guardian Energy. “Abigail’s deep resume at such a young age is a testament to her commitment to energy in the 21st century, and the NEC is the perfect place for her to extend that background further. This scholarship will provide Abigail with exclusive access to the best in the industry who will deliver insight into the important issues facing the ethanol industry.”

The National Ethanol Conference will take place Feb. 15–17 at the New Orleans Hyatt Regency. Click here for more information and to register.

Groups Sue EPA Over RFS

A coalition has sued the Environmental Protection Agency (EPA), over the final rules of the Renewable Fuel Standard for 2014, 2015 and 2016 that were finalized near the end of last year. The current levels for fuels do not meet legislative mandates for those years regardless of the fact that the biofuels industry has shown they can meet fuel volumes.

rfs-mess-2A group that consists of seven industry associations including BIO, Americans for Clean Energy, American Coalition for Ethanol (ACE), Renewable Fuels Association (RFA), Growth Energy, National Corn Growers Association, the National Sorghum Producers, filed the suit on Friday, January 8, 2016 in the U.S. Court of Appeals for the District of Columbia Circuit (Case 16-1005).

According to a group statement, among other things, the petitioners intend to demonstrate that EPA’s interpretation of its general waiver authority is contrary to the statute. By focusing on fuel distribution capacity and demand rather than supply, and by failing to consider surplus RINs from prior years, the Agency erroneously concluded that there was an inadequate supply of renewable fuel to justify a waiver of the levels established by Congress. The petitioners also plan to point out other fundamental flaws and inconsistencies in the government’s rule.

A preliminary, non-binding listing of issues to be raised in the court of appeals will be filed by February 11. The statement concluded, “The petitioners look forward to presenting their arguments to the court of appeals to provide clarity and certainty to market participants concerning the requirements of the statute.”

EPA Study on Vehicle Emissions Raises Questions

A new study has raised questions about the veracity of the U.S Environmental Protection Agencies vehicle emissions modeling system. The third party report found it to be an inadequate and unreliable tool for estimating the exhaust of emissions of gasoline blends containing more than 10 percent ethanol. The evaluation of EPA’s latest Motor Vehicle Emissions Simulator (MOVES2014) model was conducted by scientists from Wyle Laboratories, Inc., and Volpe (part of the U.S. Department of Transportation), and commissioned by the Renewable Fuels Foundation.

rfalogo1“Overall, it was found that the predictive emissions results generated by MOVES2014 for mid-level ethanol blends were sometimes inconsistent with other emissions results from the scientific literature for both exhaust emissions and evaporative emissions,” according to the study. “…results and trends from MOVES2014 for certain pollutants are often contrary to the findings of other studies and reports in the literature.”

The study found that the MOVES2014 model predicts increased exhaust emissions of nitrogen components and particulate matter as the ethanol content in gasoline increases, even though real-world emissions testing based on mid-level ethanol blends has shown distinctly opposite trends. “The results from other researchers often show ethanol-related emissions trends that are different than the MOVES2014 results obtained for this study…” the study found. “In some cases not only were magnitudes different but different [directional] trends were presented.”

The study’s authors suggest the MOVES2014 model’s questionable predictions for certain emissions likely result from the use of data that misrepresents the actual parameters and composition of mid-level ethanol blends. Specifically, the default ethanol blend data in the model is based on arcane “match blending” methods intended to “match” specific fuel parameters, rather than “splash blending” methods that are used in the real world. According to the study, “…real-world splash blends may not have the same attributes as the modeled default match blends used in MOVES, and actual emissions may be different than the emissions predictions from MOVES.”

In an attempt to simulate the emissions of mid-level ethanol blends created using real-world “splash blending” practices, the Wyle and Volpe scientists performed an analysis where certain fuel parameters were modified. However, the model still produced questionable results that suggested increases in emissions of nitrogen components and PM as ethanol content increases.

To correct the deficiencies with the MOVES2014 model, the authors recommend obtaining new mid-level ethanol blend emissions data using blends that better represent real-world fuel properties and blending practices. They write that “…additional vehicle exhaust testing from mid-level ethanol blends with well-defined fuel properties is recommended.”

RFA Comments on DOE’s Innovative “Optima” Program

The Office of Energy Efficiency & Renewable Energy (EERE) had a call for information on Co-Optimization of Fuels and Engines (Optima). The Renewable Fuels Association (RFA) submitted comments stating that the Association agrees that “co-optimization of future fuels and engines is an essential strategy for achieving national objectives related to energy conservation, carbon emission reduction, and energy security.”

rfalogo1The comments were authored by RFA Senior Vice President Geoff Cooper who noted in the remarks that a significant amount of work is already underway that complements Optima’s goals including lifecycle energy and greenhouse gas analysis of ethanol and high octane fuels (HDFs); evaluation of tools to predict HOF exhaust emissions; infrastructure compatibility and cost analyses; development of standards and specifications; and other activities. The comments also pointed out several areas for further research and collaboration, including actual HOF emissions testing; refinery-level economic analysis; using flex-fuel vehicles as a “bridge” technology to HOFs; and further characterizing the properties of various octane sources.

RFA notes that existing regulatory barriers pose the most significant threat to the commercial introduction of HOFs. According to RFA, “Federal regulatory barriers that must be addressed include: fuel volatility (RVP) regulations; Tier 3 regulations regarding certification fuels; new fuel registration requirements; treatment of biofuels and FFVs in determining compliance with 2017-2025 CAFE/GHG standards (e.g. ‘R-factor’ and ‘F-factor’ values); inconsistent boundaries and approaches to regulatory lifecycle GHG accounting; and tailpipe pollutant (i.e., non-GHG) emissions estimation. In addition, a number of state regulatory barriers need to be addressed to facilitate introduction of HOFs.”

RFA stated the “chicken and egg” phenomenon was a substantial barrier to the deployment of co-optimized engines and HOFs, characterizing the phenomenon as one where “automakers are hesitant to invest in manufacturing HOF-optimized vehicles until HOFs are substantially available in the marketplace, and…fuel producers are reluctant to invest in infrastructure to produce and distribute HOFs until HOF-optimized vehicles are substantially available.” RFA said a primary objective of the Renewable Fuel Standard (RFS) was to “eliminate the ‘chicken or egg’ fuel/engine situation by specifying biofuel volumes that must be consumed far in advance, providing substantial lead time for affected industries to implement plans.” RFA stated that the EPA’s “unlawful reinterpretation of its statutory waiver authority and its reduction of RFS volume obligations has raised serious concerns about the future viability of the RFS as a tool for driving the transition to HOFs and optimized SI engines.”

2015 Sees Record Car Sales, Most Approved for E15

U.S. car sales in 2015 hit record sales according to statistics from Autodata. Increased sales have been spurred by cheap gasoline prices coupled with low interest rates. In total, 17.5 million cars and light trucks were sold last year to the tune of $570 billion.

According to the Renewable Fuels Association (RFA), a majority of these vehicles sold are approved for the use of E15 (15 percent ethanol; 85 percent gas). In 2016, an even more cars and light trucks are expected to be approved for E15 use by automakers.

E15 at the pump

Photo Credit: Joanna Schroeder

RFA estimates that E15 was identified by auto manufacturers as an approved fuel for slightly more than 60 percent of model year (MY) 2015 vehicles sold – nearly 10.7 million cars and light trucks. This number is expected to grow in 2016, as strong sales are expected to continue and more than 70 percent of MY2016 vehicles carry the manufacturers’ explicit endorsement of E15. Recent analysis by RFA showed that Fiat Chrylser, General Motors, Ford, Toyota/Lexus, Audi/Porsche/Volkswagen, Honda/Acura, Jaguar, and Land Rover all clearly identify E15 as an approved fuel for MY2016 vehicles.

“With each passing day, the number of automakers approving the use of E15 vehicles on U.S. roadways continues to grow,” said RFA President and CEO Bob Dinneen. “As we begin 2016 three important trends are worth noting: first, vehicle sales show no signs of slowing down; second, an even larger percentage of new cars, pickups, and SUVs are explicitly approved by their manufacturer for E15; and third, the oldest vehicles in the fleet— model years 2000 and older not EPA-approved for E15 use —are being scrapped at an accelerated rate. This means that someday in the not-so-distant future, nearly every car, truck, or SUV in the country will be unambiguously approved by the auto manufacturer for E15 and we can put to rest the false notion that carmakers don’t allow the use of E15.”

While automakers only began identifying E15 as an approved fuel for new vehicles following registration of E15 as a legal fuel in 2010, the Environmental Protection Agency (EPA) has approved the use of E15 in all vehicles built since 2001. This means more than 85 percent of the vehicles on the road today are legally approved to use E15.

Ethanol Industry Responds to API’s State of Energy

Yesterday American Petroleum Institute’s (API) Jack Gerard delivered the 2016 State of American Energy Address. During the presentation he made remarks about the Renewable Fuel Standard (RFS), federal energy legislation that API has been a vocal opponent of since it’s inception in 2007.

API Jack Gerard,jpgCiting impediment of environmental improvement and cost to consumer Gerard remarked, “For example, ignoring clear consumer preference and in spite of the current record levels of domestic crude oil production, EPA continues to push the Renewable Fuel Standard, a relic of our nation’s era of energy scarcity and uncertainty.

A 2014 Congressional Budget Office study projected that the RFS could raise the cost of fuel prices because “Given the design of the RFS, the cost of encouraging additional sales of high-ethanol fuel falls on the producers and consumers of gasoline and diesel.”

What’s more, there is very little consumer demand for high ethanol fuels….It is well past time that we end or significantly amend the RFS.”

The ethanol industry responding to API’s continued attack on the RFS. Tom Buis, Growth Energy co-chair said, “API’s ‘State of American Energy’ speech, brought to you by Big Oil, is nothing new. While oil companies talk about the future of energy in this country, they seem fixated on a finite resource and fail to acknowledge that renewable fuels play a critical role in meeting the nation’s growing energy needs.

growth-energy-logo1“Year after year, API attempts to drive the narrative that the Renewable Fuel Standard (RFS) must be reformed or repealed. This argument is fundamentally flawed. The claims that renewable fuels will increase the cost of energy or that they are worse for the environment are simply ridiculous. Countless independent studies have shown that renewable fuels like ethanol help drive down the cost of fuel. Furthermore, when it comes environmental damage, no one has a worse record than oil companies. Their record of ecological disasters is extensive and deeply troubling.Between 2008 and 2014, more than 25,000 oil spills accounted for more than 217 million gallons of oil and petroleum based products being dis­charged into U.S. navigable waterways, territorial waters, tributar­ies, the contiguous zone, onto shoreline, or into other waters and land that threaten the environment. That’s an average of more than 30 million gallons spilled a year. In contrast, ethanol is biodegradable and no beaches have ever been closed due to an ethanol spill…

API notes the importance of consumers in their speech, yet seems to believe the American consumer is best served by denying them a choice. Furthermore, they attempt to distort the truth saying there is no demand for renewable fuels. Yet major retail chains like Sheetz, Kum & Go, MAPCO and others are adopting higher blends and offering them to consumers and seeing tremendous success and growing demand.

The bottom line is that API wants to kill any competition that may threaten their bottom line and record profits….The RFS is a win-win for America, as it is an essential part of a true ‘all of the above’ energy strategy needed to meet the growing energy demands of the 21st century.” (Click here for Buis’ complete remarks.)

Renewable Fuels Association (RFA) President and CEO Bob Dinneen soundly rejected API’s claims. “I’m not sure what reality Jack is living in, but it is clear that he believes API’s actions and policies are making our nation more energy secure when nothing could be rfalogo1further from the truth. Perhaps he has convinced himself that fracking will provide the answer to all of our nation’s energy needs. What Jack conveniently failed to mention is that as oil prices have crashed, so has the rig count. The number of active U.S. oil rigs has plunged 67 percent from its peak in 2014. Last week’s rig count was actually the lowest since May 2010, according to the oil field services firm Baker Hughes. If Jack spent time living in the real world, instead of his revisionist reality, he would find himself whistling past the graveyards of shuttered wells that have been abandoned in the bust that inevitably follows a temporary boom of an oil well. Continue reading