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Future of Ethanol Tax Policy

Cindy Zimmerman

2011 ethanol conferenceThe most important issue facing the ethanol industry this year on a policy level is the future of biofuels tax policy when the Volumetric Ethanol Excise Tax Credit (VEETC) expires at the end of this year.

Several experts in tax policy and economics took the stage during the general session of the 2011 National Ethanol Conference Monday to tackle that issue They included U.S. Senate Finance Committee tax counsel Ryan Abraham, economic consultant David DeRamus with Bates White, Iowa State professor Bruce Babcock and Purdue University professor Wally Tyner. The panel was moderated by Renewable Fuels Association VP of Research Geoff Cooper.

2011 ethanol conferenceBabcock tackled the challenge of how the industry might better sell the VEETC to a budget-conscious Congress. He suggested looking at the way the federal sugar program has survived for decades by positioning itself as a “no-cost” program.

“The sugar program has been around forever, and the same groups that are lined up against ethanol have been lining up against the sugar program and they’ve been completely ineffective in getting rid of that program,” Babcock said. “So, the first alternative in terms of VEETC is to make it a no-cost program.”

Babcock explained how the sugar program operates by using import quotas to control supply and places assessments on excess sugar to pay for storage. “The analogy for the ethanol industry would be to use domestic consumption quotas, rather than import quotas to put a floor under demand,” he said. “The sugar alternative would simply be to rely on the RFS for conventional biofuels.”

Interesting concept and you can listen to or download Babcock’s comments here: Bruce Babcock at NEC

2011 National Ethanol Conference Photo Album

Audio, biofuels, Ethanol, Ethanol News, RFA

Updated Algae 2020 Study Released

Joanna Schroeder

In a market research report released today, Algae 2020, Vol. 2, Emerging Markets Online highlights why some algae companies will be winners and some will be losers bringing their product from pilot to commercial scale from 2011-2020. The report concluded that of all the current algae production companies, R&D ventures and public-private partnerships currently in play, less than a dozen will graduate into pre-commercial, deployment-stage algae ventures using pond, photo-bioreactor and fermentation based production systems.

“For the Algae 2020 study, I did my research the old fashioned way, where you conduct an on site visit, you kick the tires, and you say I understand you’re producing algae and you have a pilot project. Show me,” said Thurmond. “While I was on site I conducted interviews with CEOs and various staff scientists, took pictures, analyzed the data, and determined three common strategies of companies that are attracting investment capital and scaling up.” Thurmond interviewed more than 200 algae related companies and visited 30 in person.

The study found three key strategies that determine which companies will attract capital and scale up their enterprises while others will be perpetually stuck in the laboratory or garage, many never even scaling up to small, test-pilot phase.

Strategy #1: Algae Long-Term Winners Focus on Drop-In Fuels and Biofuels. Thurmond notes there are about a dozen leading algae companies that have successfully progressed into pilot and demonstration scale projects. Why? In addition to being able to produce either ethanol or biodiesel, these organizations are also able to produce drop-in replacement fuels like biojet and renewable diesel that are in high demand today by various industries including oil and gas, aviation, petrochemical, and the U.S. military.

Strategy #2 Algae Short-Term Winners Target Diversified Markets. Algae 2020 discovered that most winning algae producers are diversifying their short-term focus on high-value products including: omega 3s, health products, cosmetic, pharmaceutical, and specialty chemical uses, and some mid-value markets like livestock and fish meal, renewable chemicals. This allows a company to bring in revenue to pay the bills and establish brand identity while scaling up their operations over time to commercial scale biofuel production.

Strategy # 3 Algae Winners Bring Together R&D Labs, Universities and Public-Private Partnerships. According to Thurmond, the third key finding from Algae 2020 study: among R&D and start-up related algae projects, the winners attracting government grants, funds, or private funds share the following in common. These winners bring together “collaborative clusters” of research labs, industry, government, academia, cleantech investors, and producers to share and collaborate on key technology challenges and market demand-based opportunities.

The report concludes that if algae companies and R&D ventures engage in the above strategies, as detailed in the Algae 2020 study, they are more likely to attract the needed investment dollars, and ultimately more likely to scale up from the R&D stage to demonstration and commercial scale, thus becoming an algae winner rather than an algae loser.

You can listen to my full interview with Will here: Interview with Will Thurmond, Author Algae 2020, Vol. 2

algae, Audio, Biodiesel, Research

Matalin and Carville Visit Ethanol Conference

Chuck Zimmerman

2011 ethanol conferenceAmerica’s most well-known political odd couple were the keynote speakers for the National Ethanol Conference luncheon on Monday.

James Carville and Mary Matalin gave their opposite views of the political landscape to a crowd of about 1300 ethanol supporters from around the country.

The couple are pictured here with Renewable Fuels Association chairman Chuck Woodside and RFA CEO Bob Dinneen.

Keep checking the photo album for more pictures!

2011 National Ethanol Conference Photo Album

Ethanol, Ethanol News, National Ethanol Conference, RFA

Celebrating 30 Years of Ethanol Advocacy

Cindy Zimmerman

There are some 1300 ethanol industry leaders gathered this week in Phoenix to celebrate 30 years of advocating for ethanol at the 2011 National Ethanol Conference.

2011 ethanol conferenceChuck Woodside, General Manager of farmer-owned KAAPA Ethanol in Minden, Nebraska is the current chairman of the Renewable Fuels Association (RFA). “I am fortunate to follow in the footsteps of great leaders in this industry that have helped shape the role and place of ethanol in America’s energy, economic and environmental future,” he said, noting that RFA has been present at every major turning point for ethanol over the past 30 years.

It was Woodside’s pleasure to recognize one of the pioneers of the ethanol industry as the recipient of the 2011 RFA Membership Award. Ron Miller was one of the founders of the RFA and served as chairman of RFA three times. “We’ve been successful because we as an industry have spoken with one voice,” he said. “Back in 1981, we were like a gnat buzzing around an 800 pound gorilla. Today, the 800 pound gorilla is still there, but we’re about an 80 pound gorilla and he’s taking us seriously.”

Pictured from left to right are Chuck Woodside, Ron Miller and RFA CEO Bob Dinneen

Listen to or download comments from Woodside and Miller here: Opening of National Ethanol Conference

2011 National Ethanol Conference Photo Album

Ethanol, Ethanol News, National Ethanol Conference, RFA

2011 State of the Ethanol Industry

Cindy Zimmerman

Bob Dinneen at 2011 NECThe Renewable Fuels Association (RFA) is celebrating 30 years of advocating for the ethanol industry, and while the industry has come a long way since that time, some things never change.

Giving the “State of the Ethanol Industry” address to some 1300 attendees at the National Ethanol Conference, RFA president and CEO Bob Dinneen started off quoting the organization’s first president, Dave Hallberg, in 1981 that sounded like it could have been written today. “Dave went on to cite the inimitable comic strip character Pogo, “We are faced with insurmountable opportunities,” concluding with a familiar sense of optimism that they would be realized,” Dinneen said, adding that, “This industry can and will meet today’s challenges as it has met every ‘insurmountable opportunity’ of the past, and that we will, once again prevail.”

Bob Dinneen at 2011 NECDinneen addressed the pivotal changes facing the ethanol industry, starting with expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of this year and the potential for complete reform of federal ethanol policy. “Congress does appear ready to end the ethanol tax incentive program, however. At least, end it in its current form and cost. Our industry needs to work with Congress and the Administration to reform the tax incentive moving forward.”

“One way or another, change is coming to this industry,” Dinneen concluded. “We need to do what the RFA has done for 30 years – build bridges. We need to build a bridge wide enough for the entire biofuels industry to cross to a more sustainable energy future. We need to build a bridge to our customers and consumers so the road to increased ethanol use is paved with understanding. We need to build a bridge to lawmakers so that we end up with a motor fuel policy befitting a 21st century energy industry. And we need to stride confidently across this bridge with enough vision, strength and innovation to conquer the insurmountable opportunities of our time.”

Listen to or download Dinneen’s remarks here: Bob Dinneen - 2011State of the Ethanol Industry

2011 National Ethanol Conference Photo Album

Audio, biofuels, Ethanol, Ethanol News, National Ethanol Conference, RFA

Live Feed of State of Ethanol Industry

Chuck Zimmerman

Good morning from Phoenix, AZ and the National Ethanol Conference. We’re going to stream the opening remarks and state of the industry speech for you starting at 8am MST. On the stage will be Renewable Fuels Association Chairman, Chuck Woodside and President/CEO Bob Dinneen. After their remarks I’ll post the audio and recorded video for you as soon as I can.

So, feel free to send a link to this post to your friends and neighbors who are interested in ethanol for a look at what’s ahead for the industry. Just click on the player below to begin the feed.

Post Update: Here’s the recorded version of our live feed from this morning.

2011 National Ethanol Conference Photo Album

Audio, Ethanol, Ethanol News, National Ethanol Conference, RFA, Video

Gaining A Better Understanding of the Ethanol Industry

Chuck Zimmerman

Chuck WoodsideThe Chairman of the Renewable Fuels Association is Chuck Woodside, KAAPA Ethanol, LLC. He gave everyone a welcoming speech prior to the start of today’s golf tournament. I spoke with him during breakfast.

Chuck says he brings a lot of people from his company to the conference to gain a broader understanding of what’s been accomplished over the last year and a look ahead at what’s coming. He wants his folks to go home with a better understanding of the issues and how they’ll affect them.

You can listen to my interview with Chuck here: Chuck Woodside Interview

2011 National Ethanol Conference Photo Album

Audio, Ethanol, Ethanol News, National Ethanol Conference, RFA

Preview of National Ethanol Conference

Chuck Zimmerman

Bob DinneenThe National Ethanol Conference in now underway in Phoenix, AZ. Cindy and I are here and will bringing you all the action. We started out cool and wet for this morning’s golf tournament. The course remains open all afternoon for those who want to complete their round.

I sat down with Bob Dinneen, CEO, Renewable Fuels Association for our annual preview of the conference. Bob says attendance is up and the networking opportunities like today’s activities provide are going to be used by those attending to get some work done. Featured speakers include James Carville and Mary Matalin who will provide their perspective on policy. He says this is going to be a pivotal year for the ethanol industry.

You can listen to my interview with Bob here: Bob Dinneen Interview

I’ve got a photo album started which you are free to view and download what you’d like. We’ll be adding to it over the next couple days: 2011 National Ethanol Conference Photo Album

Audio, Ethanol, Ethanol News, National Ethanol Conference, RFA

Oil Scores a Victory in House, Ethanol Continues Battle

Joanna Schroeder

In an update to a story posted earlier this week, in a late night vote the House of Representatives have approved provisions that would block the implementation of E15 into the marketplace. Rep. John Sullivan (R-OK) presented a provision to the House Continuing Resolution (a short-term resolution that would fund the government through the end of this year) that would block the EPA from its ability to roll out E15 and Rep. Jeff Flake (R-AZ) presented a provision that would disallow blender pumps and ethanol storage facilities. Both provisions were accepted into the resolution that was passed by the House.

“The Sullivan provision picks politics over science. EPA’s consideration of E15 was based on a more exhaustive study and collection of data than any of the 11 previously-approved petitions. No other fuel mix has been tested more,” said Tom Buis, CEO of Growth Energy, which filed the Green Jobs Waiver for E15 in March 2009. “With all the turmoil going on in the Middle East and elsewhere, the House of Representatives just voted to stop the only viable alternative to foreign oil: ethanol. It is the wrong move at the wrong time for the wrong reasons.”

Renewable Fuels President and CEO Bob Dinneen expressed his frustration with the action made by the House. “Last night, political science trumped physical science. The fact remains ethanol is a thoroughly tested, safe, and effective motor fuel. Americans spend nearly $1 billion a day importing oil, often from hostile regions of the world. If the chaos in the Middle East teaches us anything, it should be that America must forcefully begin down the path of energy self-reliance. Increasing the use of domestic renewable fuels like ethanol is the first, and arguably, the easiest step we can take.”

While at this point, these provisions are not law, the Senate must also pass an identical package and from there the president must also sign the bill. President Obama has indicated that he would veto a bill that contains provisions that blocks biofuels from entering the market. Not only will these provisions keep the country from meeting its renewable fuels goals set out in the Renewable Fuels Standard (RFS2) of 36 billion gallons of renewable fuels by 2022, but it keeps the country beholden to energy produced from oil produced in volatile regions.Read More

blends, Ethanol, Ethanol News, Growth Energy, Legislation, RFA

Fuel Marketer: Fed Tax Break Helps Biodiesel Price

John Davis

An Indiana-based oil exploration, production, refining and marketing company (including biodiesel) says reinstatement of the federal $1-a-gallon biodiesel blenders credit is helping make the green fuels competitive with non-renewable petroleum products.

CountryMark of Indianapolis says biodiesel blended fuel prices at the farmer-owned cooperative are reflecting the difference the credit is making:

“The biodiesel blender tax credit of a dollar per gallon has biodiesel blended fuels very competitive in the marketplace,” says Jon Lantz, CountryMark Vice President of Marketing. “In light of this change, we encourage fuel buyers to talk with their local cooperative about biodiesel-blended fuels.”

Biodiesel-blended fuels reduce dependency on foreign oil and are good for the environment. These are benefits and values consumers have been looking for and with the change in the tax credits, these fuels and associated benefits are available at a competitive price. We, in the CountryMark system, are looking forward to delivering these all-American biodiesel blended fuels, Lantz added.

CountryMark Member Cooperatives will be working diligently to reach out to school transportation directors, municipalities, county highway departments, fire departments and emergency vehicle managers in the coming weeks to talk about the benefits of B20 and the new prices which have been reduced by the passage of the biodiesel blenders tax credit.

Last year, CountryMark bought 750,000 gallons of biodiesel for blending and hopes to blend 3 million gallons of B100 into diesel fuel this year.

Biodiesel