SAFE Vehicles Rule Misses High Octane Opportunity

Cindy Zimmerman Leave a Comment

Ethanol groups are calling the final Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule setting corporate average fuel economy (CAFE) and CO2 emissions standards for model years 2021-2026 passenger cars and light trucks a “missed opportunity to provide a pathway for high octane, low carbon fuel.”

American Coalition for Ethanol (ACE) CEO Brian Jennings said EPA specifically requested comments on the role 100 Research Octane Number (RON) E30 could play to help automakers meet fuel economy and emissions standards.

“There are a number of regulatory barriers restricting market access to high octane mid-level ethanol blends that we set forth in our comments in the fall of 2018 and it’s unfortunate that after requesting information from the public on the ‘ideal octane level,’ the ‘benefits of increasing fuel octane,’ and specifically how higher octane fuel will play a role in ‘engine technologies and product offerings’ and ‘improvements to fuel economy and CO2 reductions,’ EPA failed to incorporate what the Agency previously conceded: ‘higher octane fuel can provide auto manufacturers more flexibility to meet more stringent standards by enabling opportunities for use of lower CO2 emitting technologies.’”

EPA said in the final rule that “establishing a higher minimum octane for gasoline is a complex undertaking” and “the present rulemaking is not the appropriate vehicle to set octane levels.”

According to the Renewable Fuels Association (RFA), EPA also declined to adopt new incentives for flex-fueled vehicles (FFVs) because they are “outside the scope” of the vehicle fuel economy rule, despite the fact that the rule includes incentives for natural gas vehicles, electric vehicles, and other alternative fuel vehicles.

As an example, EPA’s rule assumes that electric vehicles have no “upstream” greenhouse gas emissions related to their use; in other words, the agency completely ignores emissions related to producing electricity from coal, natural gas, and other sources and distributing the electricity to the vehicle. This results in a significant fuel economy “credit” for electric vehicles that is not based on any real emissions reduction.

“Of all the stakeholders who provided input to EPA on the topic of octane, only the oil industry voiced opposition to EPA using its authority to set standards for higher-octane fuels,” said RFA President and CEO Geoff Cooper. “Once again, EPA has sided with the oil industry over automakers, biofuel producers, farmers, environmental advocates, and consumers.”

ACE, automotive, EPA, Ethanol, Ethanol News, Renewable Fuels Association, RFA

Lower Ethanol Demand Could Impact Planting Decisions

Cindy Zimmerman Leave a Comment

USDA’s 2020 Prospective Plantings report released Tuesday estimates planted acres for corn this year at 97.0 million acres, up 8 percent or 7.29 million acres from last year. But when farmers were surveyed a month ago, coronavirus had yet to have the impact it is now having on ethanol demand and prices thanks to a drastic cut in demand for gasoline with millions of Americans staying at home.

Top ethanol producer POET last week stopped buying corn at seven of its 27 plants and Renewable Fuels Association President and CEO Geoff Cooper says there are many more. “There are probably close to three dozen ethanol plants that have completely idled their capacity, we think there’s another two or three dozen facilities that have greatly reduced their output,” said Cooper. “If we get up close to three billion gallons of capacity that is coming off line, we’re talking about a billion bushels of corn.”

Listen to Cooper’s comments here:

RFA CEO Geoff Cooper discusses drop in ethanol demand (2:24)

Audio, corn, Ethanol, Ethanol News, RFA

Higher Corn and Soybean Acres Forecast

Cindy Zimmerman Leave a Comment

USDA’s 2020 Prospective Plantings report released Tuesday forecasts eight percent more corn acres this year compared to 2019 and ten percent more soybean acres.

Corn planted area for all purposes in 2020 is estimated at 97.0 million acres, up 8 percent or 7.29 million acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 38 of the 48 estimating States. Soybean planted area for 2020 is estimated at 83.5 million acres, up 10 percent from last year. Compared with last year, planted acreage is expected to be up or unchanged in 22 of the 29 estimating States.

The acreage estimates in the report are based on surveys conducted during the first two weeks of March, before the coronavirus impact on the economy really got serious. With ethanol plants idling and cutting back production, the question is how that will impact corn planting decisions.

Brian Basting of Advance Trading says USDA’s corn estimate was about three million acres higher than the average trade guess, and he says the impact of coronavirus on ethanol production may be offset by higher feed demand.

Listen to Basting’s analysis from the MGEX crop call on the plantings report.
Brian Basting, Advance Trading, MGEX Crop Call (3:38)

Audio, corn, Ethanol, Ethanol News, USDA

EPA COVID-19 Response Delays Waiver Changes

Cindy Zimmerman Leave a Comment

The U.S. Environmental Protection Agency (EPA) on Friday announced several steps being taken to protect the nation’s gasoline supply in response to the COVID-19 pandemic, including making any changes in its policy of granting small refinery waivers as a result of the recent 10th Circuit Court decision.

EPA does not intend to unilaterally revisit or rescind any previously granted small refinery exemptions issued for prior compliance years. As noted in the temporary policy on COVID-19 Implications for EPA’s Enforcement and Assurance Program, issued yesterday, EPA is focused on protecting our employees and ensuring continued protection of public health and the environment from acute or imminent threats during the COVID-19 pandemic. Therefore, investigating and initiating enforcement actions against small refineries that were previously subject to an exemption is a low priority for the agency. EPA intends to develop an appropriate implementation and enforcement response to the Tenth Circuit’s decision in RFA v. EPA once appeals have been resolved and the court’s mandate has been issued.

Last week, two refiners asked the Tenth Circuit for a rehearing en banc of the RFA v. EPA decision, in which the court struck down three small refinery exemptions and determined EPA had vastly exceeded its statutory authority.

“EPA’s attempt to kick the can on nationwide application of the Tenth Circuit Court decision has nothing to do with COVID-19 and everything to do with politics,” said Renewable Fuels Association (RFA) president and CEO Geoff Cooper. “There is absolutely no reasonable justification for delaying implementation of the court’s decision. The court has already ‘issued a mandate’ and remanded three improperly granted exemptions back to the agency to resolve. EPA correctly chose not to seek a rehearing of the Tenth Circuit decision this week, signaling that it will abide by the decision and move swiftly to implement it. What are they waiting for? There is no rationale for EPA to wait for the courts to respond to the refiners’ hollow request for a rehearing before moving forward with adoption of the decision. In any event, given the unanimous and thoughtful decision by the Tenth Circuit panel that heard the case, we are confident that the ruling is going to be upheld. As ethanol plants are shutting down across the country and farmers are experiencing substantial demand losses, now is not the time for EPA to slow-walk implementation of a court order that would begin to restore integrity to the RFS program.”

The American Coalition for Ethanol (ACE) was another of the four plaintiffs in the court case. “As our plaintiff group said on Wednesday of this week, we appreciate the Trump Administration’s decision not to appeal our victory regarding SREs under the RFS in the Tenth Circuit Court,” said ACE CEO Brian Jennings. “While we urge EPA to immediately announce it will apply the Tenth Circuit’s precedent nationwide, ensuring a more legally-sensible approach to SREs going forward, it’s disappointing to learn the Agency prefers to punt this decision until the Tenth Circuit has deliberated on the appeal by HollyFrontier and CVR. We continue to believe the appeal by HollyFrontier and CVR has no merit. We fully expect EPA to comply with the law and end the mismanagement of the RFS. The economic fall-out of COVID-19 is doing substantial damage to the ethanol industry and we expect the Trump Administration to leave no stone unturned in responding instead of only benefiting oil at the expense of rural America.”

ACE, EPA, Ethanol, Ethanol News, RFA

Energy Ag News 3-26-20

Cindy Zimmerman

  • The Nebraska Ethanol Board (NEB) and Renewable Fuels Nebraska (RFN) have rescheduled the Ethanol: Emerging Issues Forum 2020 for July 15-16. The Forum will be held at the La Vista Conference Center in Greater Omaha if the threat of COVID-19 has subsided.
  • The Renewable Fuels Association is pleased to welcome two new associate members, Barchart and Bion. Based in Chicago, Barchart is a global provider of market data and intelligence to the financial, media and commodity sectors. Bion, based in Sioux Falls, S.D., is a testing company that specializes in analytical standards, reference material, and proficiency testing programs.
  • According to EIA data analyzed by the Renewable Fuels Association for the week ending Mar. 20, ethanol production scaled back by 2.9%, or 30,000 barrels per day (b/d), to 1.005 million b/d—equivalent to 42.21 million gallons daily and the lowest volume since October. The four-week average ethanol production rate declined 1.1% to 1.041 million b/d, equivalent to an annualized rate of 15.96 billion gallons. Ethanol stocks diminished by 1.9% to 24.1 million barrels for a seven-week low.
  • Energy Ag News

    National Biodiesel Foundation Offers Student Scientist Grants

    Cindy Zimmerman

    Student scientists can qualify for an award of up to $2000 through the Beth Calabotta Sustainability Education Grant, established by the National Biodiesel Foundation in 2018 to help deserving full-time students interested in science, research, and biodiesel sustainability.

    “Beth Calabotta had a passion for student education and advanced biofuels,” NBF President Jeff Lynn shared. “The Foundation is honored to provide financial support in her honor to continue her legacy.”

    The grant was designed to provide financial aid to students studying initiatives that promote or support the use of biodiesel and renewable diesel. Based on Beth’s work, the Foundation and the National Biodiesel Board want to help the next generation who can produce environmental benefits with their work and research.

    Students can apply for the grant online. Applications are due May 31, 2020, and more information can be found on the grant homepage. The grant winner will be announced by August 30, 2020.

    Biodiesel, National Biodiesel Conference, NBB

    Administration Will Not Appeal Tenth Circuit SRE Ruling

    Cindy Zimmerman

    Biofuels stakeholders are celebrating some good news today with word that the Trump administration had made the decision not to request a rehearing of the recent unanimous ruling by the U.S. Court of Appeals for the Tenth Circuit that the EPA had “vastly exceeded its authority in granting exemptions from 2016 and 2017 RFS requirements to three refineries.”

    The challenge was brought against EPA in May 2018 by the Renewable Fuels Association, National Corn Growers Association, American Coalition for Ethanol and National Farmers Union in response to the massive demand destruction caused by the Agency’s illegal and indiscriminate use of SREs. In the wake of today’s decision not to seek a re-hearing of the Renewable Fuels Association et al. v. EPA decision, the four groups called upon the EPA to immediately apply the court decision nationwide.

    “We are pleased the Trump administration has decided not to side with oil refiners in seeking a re-hearing of this unambiguous and well-reasoned court decision in the Tenth Circuit. We trust this also means the administration does not plan to petition the Supreme Court for an appeal. Abiding by the court’s ruling is the right thing to do at a time when our industries and rural America are already suffering from the effects of COVID-19, the Saudi-Russia oil price war and ongoing trade disputes. We look to the RFS as a source of demand stability and certainty, especially in these troubling times. Requesting a re-hearing would have only prolonged uncertainty in the marketplace and exacerbated the pain and frustration already being experienced in the Heartland. With this key milestone now behind us, we look forward to EPA applying the Tenth Circuit decision nationwide to all SRE petitions, beginning with the 25 pending petitions for 2019 exemptions.”

    While the Trump Administration declined to participate, the two refineries involved in the case – Wynnewood Refining and HollyFrontier – are requesting a rehearing en banc.

    Listen to comments from representatives of the organizations who brought the lawsuit.
    ACE CEO Brian Jennings (2:05)

    NCGA president Kevin Ross (1:10)

    NFU Senior Advisor Anne Steckel (1:55)

    RFA President and CEO Geoff Cooper (1:58)

    ACE, Biodiesel, corn, Ethanol, Ethanol News, NCGA, NFU, RFA

    New Report Shows Ethanol Industry Fueled by Veterans

    Cindy Zimmerman

    A new study on employment in the U.S. energy sector shows that America’s ethanol industry employs a significantly larger share of military veterans than any other segment of the energy industry. Nearly one in five ethanol industry employees is a veteran (19%), compared to a national average of 6% across all sectors of the workforce, according to the 2020 U.S. Energy and Employment Report published by the National Association of State Energy Offices and Energy Futures Initiative.

    The results of this study come as no surprise to the Renewable Fuels Association (RFA), said president and CEO Geoff Cooper, an Army veteran who attained the rank of Captain.

    “The ethanol industry is a perfect fit for thousands of veterans across the country. After serving our country in uniform, we have chosen to work in the renewable fuels industry because it allows us to continue honoring a commitment to make America stronger and more independent,” said Cooper. “We take great pride in knowing we work in an industry that improves our nation’s energy security, economic vitality and environmental quality each and every day.”

    With ethanol jobs currently at risk due to the COVID-19 pandemic, oil price war, and EPA abuse of small refinery exemptions under the RFS, Cooper said the report serves as a timely reminder that the ethanol industry is a crucial employer of veterans.

    “As a veteran with multiple combat deployments, I am proud to say I have found a home in the ethanol industry making a product that I truly believe in,” said Tony Leiding, Director of Operations at RFA member company Trenton Agri Products LLC. “I would prefer to invest in the energy resources of the Midwest, not the Middle East.” Leiding served eight years on active duty in the U.S. Army, attained the rank of Captain, and was deployed to both Iraq and Afghanistan.

    Per 100 workers, the ethanol industry employs more than twice as many veterans as the petroleum, natural gas, nuclear, coal, and wind energy sectors. Across all energy segments, veterans comprise 9% of the U.S. energy sector’s workforce, slightly above the national average.

    Ethanol, Ethanol News, Renewable Fuels Association, RFA

    Senators Stress COVID-19 Relief for Agriculture

    Cindy Zimmerman

    Senator John Hoeven (R-ND) led a Senate colloquy Monday to outline the importance of supporting farmers, ranchers and rural America in legislation to provide relief from the impacts of COVID-19. Hoeven worked to include $50 billion in funding authority for the U.S. Department of Agriculture (USDA) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

    Several senators joined Hoeven, including Deb Fischer (R-NE) who spoke about about how the outbreak of coronavirus is hurting the agriculture economy by driving down crop and livestock prices.

    “This coronavirus is adding another dimension to an already battered agriculture economy and this disease has been driving down crop and livestock prices,” said Sen. Fischer. “Ag futures have been dipping since February, prices offered for ranchers’ cattle have been dropping, ethanol plants are starting to idle or close down across the country, and there’s a lot of unsold grain sitting around the countryside in on farm storage.”

    The $50 billion in funding authority sought would include replenishing $30 billion in Commodity Credit Corporation (CCC) funding authority for USDA; increasing the CCC borrowing authority an additional $20 billion for USDA to respond to COVID-19; and enabling USDA to utilize CCC funding to assist livestock producers, as well as other sectors of the agriculture economy.

    Listen to the senators here:
    Sen. Deb Fischer (R-NE) (10:12)

    Sen. John Hoeven (R-ND) (2:34)

    Audio, Ethanol, Ethanol News, Farming, Government, livestock

    Ankeny Casey’s Becomes 5,000th Station to Offer E85

    Cindy Zimmerman

    The number of fuel stations now offering Flex Fuel E85 has reached an important milestone this week as a Casey’s store in Ankeny, Iowa, became the 5,000th station nationwide to sell E85.

    “Reaching the 5,000-station mark is a significant achievement for the ethanol industry and our partner in the retail sector,” said Renewable Fuels Association President and CEO Geoff Cooper. “We’re especially happy to see that this notable landmark was reached by our friends at Casey’s, a company that has long been dedicated to making ethanol-blended fuels available to their customers.”

    “We are proud to be a part of this historic milestone as we continue bringing consumer-driven products like Unleaded 88 and E85 to the communities we serve,” said Jake Comer, Fuel Pricing Manager for Casey’s General Stores. “We are grateful for key industry partners like the Renewable Fuels Association that work hard to ensure the success of renewable fuels.”

    The website has a map of E85 locations nationwide and visitors also can share reviews and current prices.

    Ethanol, Ethanol News, Retailers, RFA