Ethanol Report as Summer Begins

ethanol-report-adThe kickoff of summer this Memorial Day weekend finds beaches in Santa Barbara California closed as oil spreads off shore and workers try to clear up the mess left by the spill. Elsewhere, the oil industry continues to spread misinformation about ethanol, keeping RFA busy working to clear up misconceptions as fast as they happen.

In this Ethanol Report, Renewable Fuels Association president and CEO Bob Dinneen talks about a new report showing RIN credits have no impact on the price of gas, how E10 is safe for boaters, and when he expects to see the long overdue EPA proposal for volume obligations under the Renewable Fuel Standard (RFS). Ethanol Report as Summer Begins

Ethanol Trade Missions to Expand Markets

Representatives of the U.S. Grains Council (USGC), Renewable Fuels Association (RFA), and Growth Energy were in Tokyo this week for an industry market assessment of the potential to export U.S. ethanol to Japan.

growth-exports“The United States exported 900 million gallons of ethanol in 2014, supporting both U.S. farmers and the ethanol industry. We know that, going forward, ethanol exports have the potential to grow and become equally beneficial for our customers overseas,” said USGC president and CEO Tom Sleight. “USGC, Growth and RFA are committed to launching initiatives in 2015 and 2016 to build demand for U.S. ethanol and address barriers to ongoing imports.”

Over the next two years, the government of Japan will be undertaking a full review of its national energy policies, including biofuels, potentially opening up opportunities for additional ethanol exports there.

“The team came away with a much greater understanding of the current Japanese requirements and market conditions pertaining to ethanol and began the implementation of a strategy to help ensure that U.S. ethanol receives fair market access under the future energy policy that will be adopted when the current policy expires in 2017,” said Jim Miller, chief economist and vice president of Growth Energy.

“The team will continue examining the requirements of the Japanese sustainability standards, looking for ways to overcome infrastructure concerns, and compiling data responding to some of the misinformation government officials still hold regarding renewable fuels,” added RFA’s director of regulatory affairs, Kelly Davis.

Last week, the organizations were part of a mission with USDA’s Foreign Agriculture Service in Mexico to explore potential in that market. One mission member, Greg Krissek, CEO of Kansas Corn, reflected on the trip in this video from the USGC.


Ethanol Groups Promote Safe Boating on E10

With the Memorial Day weekend approaching fast, the ethanol industry is assuring boaters that 10% ethanol blended fuel is just fine for marine engines, despite what the American Petroleum Institute says.

In response to an API press call with the National Marine Manufacturers Association (NMMA) on Wednesday, Growth Energy CEO Tom Buis noted that “all major manufacturers of outboard and marine motors, as well as small engines, are approved for the use of gasoline blended with up to 10 percent ethanol.”

“What probably does concern boaters is the amount of time they spend dry docked as a result of oil spills, like the one that dumped 21,000 gallons of oil along four miles of coastline in Santa Barbara, California” this week,” said Buis.

rfa-nbra-3Renewable Fuels Association president and CEO Bob Dinneen adds that “E10 has been used successfully in marine engines for 30 years now” and that the higher octane in the fuel helps with summertime boating activities. “It’s gasoline on steroids, it doesn’t pollute, it’ll pull your jetskier, it’ll pull your tuber, it’ll get you to your favorite fishing hole, and you can know you’re supporting America’s farmers and clean water,” said Dinneen.

Dinneen’s simple advice to boaters concerned about using E10: “Take a look at your owner’s manual.” And check out RFA’s FAQs on ethanol and marine engines.

Listen to Dinneen’s comments about E10 and boating here: RFA CEO on E10 Safe for Boats

Study Shows No RINS Impact on Gas Prices

fuelsA new statistical analysis prepared for the Renewable Fuels Association shows that retail gas prices remain unaffected by the “RIN credit” system under the Renewable Fuel Standard (RFS).

According to the analysis, conducted by Informa Economics, Inc., prices for “RIN credits” (Renewable Identification Numbers) used to demonstrate compliance with the RFS had no impact on retail gasoline prices from 2013 through the first quarter of 2015.

Instead, the analysis shows that “…a majority of gasoline price movements can be explained by crude oil prices.” In fact, the study found that gas prices in recent years have been driven almost entirely by crude oil prices and vehicle miles traveled.

RFA President and CEO Bob Dinneen says the study “disproves the faulty assertion by oil industry trade groups that RINs somehow negatively influence consumer gas prices.”

“The bottom line is that RINs are free for refiners who purchase and blend required volumes of ethanol with gasoline,” said Dinneen. “Only those refiners who stubbornly refuse to blend required ethanol volumes have a need to buy separated RINs on the open market; and in the highly competitive gasoline marketplace, there is no way they can pass those costs on to consumers and remain competitive with refiners and blenders who are blending more ethanol than required.”

The new Informa analysis also supports the findings of an April study by former White House economic advisor James Stock, who concluded that “…there is negligible estimated effect of RIN prices on pump E10 prices.” Dinneen notes that Stock is a former Office of Management and Budget official who was involved with the approval of EPA’s proposal in November 2013 that called for scaling back the RFS. “I wish he had that revelation when he was at OMB,” said Dinneen.

Dinneen comments on the new analysis in this interview: RFA CEO on RINs/Gas Price Analysis

RFA Honored with 3rd TRANSCAER Award

rfa-transcaerFor the third year in a row the Renewable Fuels Association (RFA) was awarded the annual TRANSCAER® Achievement Award for its work training first responders for ethanol-related emergencies.

The award is given to “recognize the achievements of individuals, companies, and organizations which have gone beyond the normal call of duty to advocate, demonstrate and implement the principles of TRANSCAER®.” The volunteer coalition works to ensure the nation’s emergency responders are prepared and educated with the most up-to-date information to handle hazardous material disasters.

RFA established an “Ethanol Safety Seminar” program — in conjunction with TRANSCAER® — to educate emergency responders on the make-up and properties of ethanol as well as proper emergency techniques when responding to potentially harmful scenarios. The curriculum is centered on Ethanol Emergency Response Coalition’s (EERC) “Training Guide to Ethanol Emergency Response,” which has been used over the past five years to educate 4,600 first responders all across the country.

Missy Ruff, RFA’s technical services manager, was on hand to receive the award Tuesday at the AAR/BOE Hazardous Materials Seminar in Addison, Texas.

Ethanol Industry Launches RFS Campaign

fuels-rfs-adThe ethanol industry through Fuels America is launching a major advertising campaign in the nation’s capitol this week urging support for the Renewable Fuel Standard (RFS).

Renewable Fuels Association (RFA) president and CEO Bob Dinneen says the campaign asks the EPA to choose whether to reward the oil industry for refusing to fulfill its obligations under the law, or to get the RFS back on track by proposing adequate Renewable Volume Obligation (RVO) levels. “We intend to make sure that the (EPA) administrator, members of Congress, and the president himself understand the very clear choice that will be made with this impending RVO decision,” said Dinneen during a morning press conference announcing the new campaign.

The campaign includes television advertising during morning news, Sunday morning talk shows, and cable television, as well as a digital campaign that includes a Politico homepage takeover, a Real Clear Politics Energy takeover, and banner ads on Roll Call’s Energy page.

“The question is, is EPA going to – for the first time – waive the RFS if the oil industry refuses to distribute renewable fuels?” said Advanced Ethanol Council executive director Brooke Coleman.

The campaign is in response to a letter from oil industry organizations to the EPA, and a responsive letter from biofuels industry leaders to the EPA last week. The letters agree on one thing: the EPA has a choice to make. Either choose to reward the oil industry for refusing to fulfill its obligations under the law, or choose to get the Renewable Fuel Standard (RFS) back on track by proposing Renewable Volume Obligation (RVO) levels that comport with the spirit and intent of the law.

Fuels America Campaign Launch

DDGS Exports to China Returning to Normal

Exports of U.S. distillers dried grains with solubles (DDGS) are starting to return to normal levels, according to the latest numbers for March.

Patriot Renewable Fuels DDGsThe Renewable Fuels Association reports that exports of the animal feed ethanol co-product rose in March for the fourth consecutive month, at 923,515 metric tons (mt), up 15% from February, with half of those shipments going to China. Exports of DDGS to China have been increasing this year after falling off last year due to a biotech trait issue. If normal shipments to China resume on an ongoing basis, 2015 theoretically could see total exports reach the 11 million mt mark. Mexico, Canada, Vietnam, and Thailand account for most of the remaining global market.

U.S. exports of ethanol in March were down slightly from February at 83.8 million gallons (mg), but that still represents the third-highest monthly volume in the last 12 months. Brazil and Canada accounted for half of total U.S. ethanol exports in March, followed by Oman and South Korea. The Netherlands, Tunisia and Nigeria were other key destinations in March.

Biofuels Leaders Ask President for Meeting

A dozen organizations and companies representing biofuels interests this week sent a letter to President Obama asking for a meeting on proposed rules under the Renewable Fuel Standard (RFS) due to come out next month.

fuels-americaThe letter comes on the heels of an analysis from the Biotechnology Industry Organization (BIO) showing how EPA delays in setting volume requirements (RVOs) under the RFS have resulted in the loss of some $13.7 billion in investment in advanced biofuels like cellulosic ethanol. The letter was signed by BIO, the Renewable Fuels Association, Growth Energy, Advanced Ethanol Coalition, National Corn Growers Association, Association of Equipment Manufacturers, POET, DSM, Novozymes, and Abengoa.

“The EPA’s proposal in 2013 was an enormous disservice to you and your legacy, Mr. President,” the letter states. “Prior to the release of that proposal, we had asked to meet with the EPA, but were rebuffed. We would like to work with you to ensure that the mistake is not repeated.”

In addition to the letter and the analysis from BIO, the Fuels America coalition is running digital ads this week on Politico’s Environment & Energy section that say, “Will the next generation of biofuels be created in the United States or China? It’s up to you, Mr. President. Support the Renewable Fuel Standard.”

DOT Announces New Rail Car Standards

rfa-railcarU.S. Department of Transportation (DOT) today announced a final rule for the safe transportation of flammable liquids by rail.

The final rule, developed in coordination with Canada, focuses on “safety improvements that are designed to prevent accidents, mitigate consequences in the event of an accident, and support emergency response.”

“Safety has been our top priority at every step in the process for finalizing this rule, which is a significant improvement over the current regulations and requirements and will make transporting flammable liquids safer,” said U.S. Transportation Secretary Anthony Foxx.

Bob Dinneen, president and CEO of the Renewable Fuels Association, believes the new rule strikes “a fair balance in setting comprehensive standards while at the same time being sensitive to the limitation of retrofit capacity by giving less hazardous flammables — like ethanol — additional time to retrofit railcars.”

“We applaud the Department of Transportation for working to harmonize these regulations with Canada; for adopting a risk-based approach that prioritizes the most dangerous and highly-volatile flammables like crude oil while giving medium hazard liquids like ethanol additional time to come into compliance, for recognizing the limitations of the retrofit capacity, and, for establishing a regular reporting process for the retrofit schedule,” added Dinneen.

Growth Energy CEO Tom Buis, however, expressed disappointment with the new rule. “Although we are pleased that this rule begins to acknowledge the difference between cars in ethanol and crude service, we are extremely disappointed that regulators are requiring extensive changes to the ethanol rail fleet, while seemingly ignoring the number one cause of these accidents – broken rails and poor track condition,” said Buis.

The new rule requires a phase out or retrofit of all DOT-111 railcars transporting crude oil and ethanol by May 2023. Specifically, the rule requires a phase out or retrofit of all unjacketed CPC-1232 railcars used to ship ethanol by July 2023. Additionally, a new tank car standard has been put in place that establishes the DOT-117 as the new railcar to ship oil and ethanol. The DOT-117 includes a 9/16 inch steel hull, roll over protection, full height head shields, top fitting protection, and jacketing with thermal protection.

Ethanol Report from NAFB Washington Watch

ww15-dinneen-kenMembers of the National Association of Farm Broadcasting were on Capitol Hill this week for their annual Washington Watch, and the Renewable Fuels Association was once again pleased to participate. RFA president and CEO Bob Dinneen was interviewed by dozens of broadcasters from around the country addressing a number of different topics.

ethanol-report-adIn this edition of the Ethanol Report, Sabrina Hill of AgNet West in California talks with Bob about several issues, including the California Air Resources Board Low Carbon Fuel Standard, E15 legislation, and why RFA supports farm broadcasters.

Ethanol Report from NAFB Washington Watch