New Study Shows RFS Works for Economy

Cindy Zimmerman

A new economic modeling study being published in the American Journal of Agricultural Economics finds that the “Renewable Fuel Standard (RFS) has substantially benefited the U.S. economy by lowering gasoline and crude oil prices, cutting crude oil imports, adding value to U.S.-produced agricultural commodities, and reducing U.S. greenhouse gas (GHG) emissions.”

“The results confirm that the current RFS program considerably benefits the agriculture sector, but also leads to overall welfare gains for the United States,” according to the study’s authors, Iowa State University economists GianCarlo Moschini, Harvey Lapan, and Hyunseok Kim. “We find that the RFS has indeed proved to be a remarkably effective tool for farm support.”

The analysis found the RFS in 2015 saved the U.S. economy $17.8 billion in gasoline expenses, compared to a case where no RFS existed. That’s equivalent to $142 per American household. Gasoline prices were $0.18 per gallon, or 9.5%, lower because of the RFS. In addition, the RFS is responsible for increased federal tax revenues.

Further, the results highlight the impact of the RFS on domestic energy security, showing that “the RFS leads to a modest contraction in domestic crude oil production, and a larger decline in imports of crude oil.” According to the study, crude oil imports were nearly 200 million barrels lower in 2015 than if the RFS did not exist. Meanwhile, domestic crude oil production was only 0.3% lower in the “2015 RFS” case than in the “no RFS” case.

“The results that we have presented confirm that the current RFS program considerably benefits the agriculture sector,” write the authors.

Read the report here.

Ethanol, Ethanol News

Ethanol Production Could Outpace Demand

Cindy Zimmerman

A new report forecasts ethanol production is on pace to exceed domestic and export demand as producers continue to reinvest last year’s profits into facilities and additional production capacity.

The report from CoBank on “Ethanol’s Growth Path: Output and Export Uncertainties Both Rising” outlines predicts that the ethanol market will soon face worsening profit margins, which could potentially push the industry toward consolidation. However, producers that are well-capitalized with strong balance sheets and cash reserves will be in the best position to weather the softening market.

“Forecasts indicate that total ethanol production by 2020 will have increased by approximately 850 – 900 million gallons, compared to 2017 levels,” said Tanner Ehmke, CoBank senior economist. “Without a substantial increase in domestic demand or exports to clear excess supplies, ethanol producers are facing a downturn over the medium term. Those who have access to multiple transportation markets and have invested in new technology will be leaner and more cost efficient, enabling greater flexibility to endure prolonged periods of low prices.”

Read more from CoBank.

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Siouxland Ethanol Receives Grassroots Award

Cindy Zimmerman

The American Coalition for Ethanol (ACE) presented this year’s Grassroots Award to Siouxland Ethanol LLC of Jackson, Nebraska.

The award is given annually “to a devoted individual or organization that often perform “behind the scenes” to advance the cause of ethanol.” Siouxland Ethanol LLC was presented with this year’s award by Liz Bunkers, ACE director of member and industry relations, for the plant’s efforts to go above and beyond to cultivate interest in higher ethanol blends in their community and throughout the country.

“The efforts of this group provide a shining example to others who seek to replicate their success,” Bunkers said. “They have hosted E15 and E30 fuel promotion events and they have worked hard to educate their neighbors about the clean air benefits of our high-octane, low-carbon fuel.”

Siouxland ‎Director of Industry and Investor Relations Pam Miller also did one of the breakout session at the annual conference about promoting events such as grand openings. “We know it’s important for us to promote ethanol because it’s a great product but we need to get the word out … and we enjoy doing that.” she said. The plant just celebrated its 10th anniversary this year.

Audio file: Interview with Pam Miller, Siouxland Ethanol

2017 ACE Conference Photo Album

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Durante Honored With Merle Anderson Award

Cindy Zimmerman

Doug Durante (left), CFDC, receives award from Todd Sneller, NEB

Doug Durante, executive director of the Clean Fuels Development Coalition was presented with he American Coalition for Ethanol’s (ACE) most prestigious award during the 30th annual conference this week in Omaha.

The Merle Anderson Award is named after the founder of ACE and is given to individuals who “display unmatched support and dedication to ACE and the domestic ethanol industry.” Durante was presented with the award by Todd Sneller of the Nebraska Ethanol Board, who received the award himself in 2015.

“Like Merle Anderson and the many distinguished award recipients recognized by his namesake award, Doug Durante has worked for many years as a tireless champion for ethanol and clean fuels,” Sneller said. “We’ve been fortunate to have the partnership of Durante and his contributions to the ethanol industry over the past 35 years.”

Durante was surprised and humbled by the award. “These are real people and I’ve been fortunate to be able to work with them and see how the rubber meets the road,” he said.

Audio file: Interview with Doug Durante, CFDC

2017 ACE Conference Photo Album

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Tested, Proven and Driven – Ethanol Moving Forward

Cindy Zimmerman

The American Coalition for Ethanol celebrated its 30th annual conference this week by highlighting recent victories for the industry and embracing the challenges moving forward.

“We’re as close as we’ve ever been to getting Reid Vapor Pressure (RVP) relief for E15 and higher ethanol blends thanks to bipartisan leadership in Congress and a new way of thinking at EPA,” ACE executive vice president Brian Jennings said in his opening address to the membership, urging them to encourage their senators to be “creative and relentless in exploring ways to enact RVP legislation when they return to D.C. next month.”

Jennings also encouraged attendees to submit comments to EPA by the end of the month on the 2018 RFS by thanking EPA for proposing 15 billion gallons of conventional biofuel, but also conveying the agency needs to increase the cellulosic target in the final rule. Simply put, backpedaling on the RFS won’t make America great again….we all need to be vocal about the fact that a strong rural economy depends upon growing demand for renewable fuels.”

Audio file: Brian Jennings, ACE opening remarks

2017 ACE Conference Photo Album

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The Hill Op-Ed: RFS Helps US Economy

Cindy Zimmerman

In an op-ed for The Hill today, Renewable Fuels Association (RFA) president and CEO Bob Dinneen questions why EPA’s 2018 renewable fuel standard (RFS) blending requirements proposal includes a request for public comments on “whether the proposed biofuel volumes would somehow cause “severe harm” to the economy.”

“Of course, suggesting that ethanol and the RFS pose any “harm” at all—“severe” or otherwise—to the economy is completely preposterous,” Dinneen says, noting that an independent economic study will soon be published in the American Journal of Agricultural Economics that shows the benefits the RFS is contributing to the U.S. economy.

The analysis found the RFS in 2015 saved the U.S. economy $17.8 billion in gasoline expenses, compared to a case where no RFS existed. That’s equivalent to savings of $142 per American household, or $82 per licensed driver. Gasoline prices were $0.18 per gallon, or nearly 10 percent, lower because of the RFS.

Click to read the op-ed.

Ethanol, Ethanol News, RFA, RFS

Secretary Perdue in Florida

chuck zimmerman

U.S. Agriculture Secretary Sonny Perdue visited the Citrus Expo in Fort Myers, Florida this week to learn more about citrus greening and hold a farm bill listening session with Congressman Tom Rooney of the local district.

The only opportunity for reporters to ask questions of the secretary was a short, crowded, disorganized gaggle that covered a wide range of non-agricultural topics. But I did get to ask him the first question – when does he expect to have a full USDA in place?

“The president has put forth some tremendous nominations and we are hopeful that as soon as the Senate gets back in session in September the ag committee will take these up,” the secretary said. “I’m the only presidential-appointed, Senate-confirmed person at the USDA today.”

You can listen my press gaggle question here: Interview with Secretary Sonny Perdue

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#ACEConf17 Highlights Nebraska’s Ethanol Industry

Cindy Zimmerman

Duane Kristensen, general manager of Chief Ethanol Fuels in Lexington, Nebraska, had the opportunity this week to stand with the governor of his state and talk about the success story of ethanol at the annual American Coalition for Ethanol (ACE) conference in Omaha.

Kristensen, who serves as ACE board vice president, started the business session of the conference Wednesday by describing the evolution ethanol has had in the state of Nebraska and a snapshot of the state’s ethanol industry in 2017. The state currently has 25 ethanol plants constructed, with additional plant innovations underway, and production this year reached 2.2 billion gallons.

“I guarantee you the ethanol industry is poised to grow and will continue to grow,” Kristensen said. “You look at the investment that the industry is making not only in Nebraska but around this country.”

Kristensen was also able to tell reporters about the success of Nebraska’s ethanol industry during Gov. Pete Ricketts’ press conference about value-added agriculture.

Audio file: Duane Kristensen, Chief Ethanol Fuels, opening comments

2017 ACE Conference Photo Album

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Biodiesel Import Decision Delay Called Routine

Cindy Zimmerman

The U.S. Department of Commerce posted an announcement in the Federal Register this week announcing the postponement of issuing preliminary determinations on alleged dumping of Argentine and Indonesian biodiesel on the U.S. market.

National Biodiesel Board (NBB) Chief Operating Officer Doug Whitehead says the postponement is routine and was expected.

“In nearly all unfair trade cases investigated by the Department of Commerce, the agency extends deadlines for issuing decisions,” says Whitehead. “Our original timelines assumed cases would be postponed, with preliminary determinations in the anti-dumping cases in October and in the subsidy cases in August.”

Whitehead continued, “This in no way impacts the schedule or the fact that unfairly traded imports are hurting American companies and the employees who serve this industry. We remain confident that both the DOC and ITC will find in American biodiesel producers’ favor.”

NBB notes that the subsidy case announcement continues to be expected by August 22 (which was a previously extended deadline) and was not impacted by the most recent DOC notice in the Federal Register. The anti-dumping case announcement is expected, as it has been since the case was first filed, by October 20.

Biodiesel, NBB

NE Gov Highlights Value-Added Ag and Ethanol

cindy zimmerman

Duane Kristensen, Chief Ethanol; NE Gov. Ricketts; NDA Director Greg Ibach; Energy Office Director David Bracht

Nebraska Governor Pete Ricketts highlighted Nebraska value-added agriculture efforts during a press conference at the American Coalition for Ethanol (ACE) annual conference held in Omaha.

“The ethanol industry is a prime example of how we can add value to the agriculture commodities that we grow right here in Nebraska,” said Governor Ricketts. “Through the process of turning corn into ethanol, several other co-products are produced, including distillers grains, corn oil, corn syrup, and dry starch. This is the type of value-added agriculture that helps create jobs, increase demand of locally-grown commodities and attract new businesses which is all part of growing Nebraska.”

Governor Ricketts, chairman of the Governor’s Biofuels Coalition, is a strong advocate of the Renewable Fuels Standard (RFS) to help provide stability and certainty for partners in the ethanol industry.

Joining the governor were Duane Kristensen with Chief Ethanol Fuels, NE Agriculture Director Greg Ibach and Energy Office Director David Bracht. Watch the full press conference below.

2017 ACE Conference Photo Album

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