USDA Undersecretary Censky to Return to ASA

Cindy Zimmerman

USDA Undersecretary Steve Censky gave one of his last addresses in his current role to the American Coalition for Ethanol virtual annual conference this week. It was announced this morning that Censky will be returning to his former job as CEO of the American Soybean Association in November as after serving with USDA since October 2017.

In his prerecorded remarks at the ACE conference this week, Censky accepted the organization’s Paul Dana Marketing Vision Award for his leadership on the Higher Blends Infrastructure Incentive Program (HBIIP).

“USDA received 121 applications from 27 different states for HBIIP,” said Censky. “We are reviewing those applications now and will be getting the money out the door starting (this month).”

Listen to his remarks here:
ACE 2020 USDA Deputy Secretary Steve Censky (7:42)

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Energy Bill Includes Renewable Fuel Standard Provisions

Cindy Zimmerman

The House Committee on Energy and Commerce this week introduced the Clean Economy Jobs and Innovation Act, which contains provisions requiring more transparency and accountability in EPA’s process for evaluating small refinery exemption requests under the Renewable Fuel Standard. The provisions are based on the Renewable Fuel Standard Integrity Act, introduced last year by House Agriculture Committee Chairman Collin Peterson.

“In recent years, the Environmental Protection Agency has granted dozens of small refinery exemptions, waiving billions of gallons of biofuel from RFS blending requirements,” said Rep. Peterson. “The provisions of my bill will require EPA to pull back the curtain and show the American people how they justify granting these waivers that have greatly impacted profitability for biofuels producers and farmers across the country.”

The provisions included in H.R. 4447, Clean Economy Jobs and Innovation Act would set an annual deadline for refiners to request exemptions from the Renewable Fuel Standard and require EPA to publicly release the name of refiners requesting a waiver, the number of gallons requested to be waived and the number of gallons of biofuel that will not be blended as a result of the waiver. These provisions mirror the provisions of H.R. 3006, the Renewable Fuel Standard Integrity Act, with adjustments to address business confidentiality concerns that were raised by members of the House Committee on Energy and Commerce.

“This provision would finally pull back the curtain on EPA’s secretive and obscure small refinery waiver program, and we are pleased to see its inclusion in the House energy package,” said Renewable Fuels Association President and CEO Geoff Cooper. “By setting a deadline for waiver petitions and requiring small refineries to publicly disclose their identities, this language brings badly needed transparency and structure to the program. This would prevent companies like ExxonMobil, Chevron, HollyFrontier, and CVR from hiding behind phony claims of confidentiality and stop them from further gaming the system.”

The House is expected to consider H.R. 4447 the week of September 21st.

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ACE Launches “Flex Check” Tool for E15 Compatibility

Cindy Zimmerman

During its virtual annual conference this week, the American Coalition for Ethanol (ACE) launched a tool on its fuel-marketer focused flexfuelforward.com website to provide retailers with a free way to check if their equipment is already E15 compatible. Available 24/7, the “Flex Check” E15 compatibility tool will arm retailers with the confidence and information they need to make a conversion all in one place.

With USDA set to announce Higher Blend Infrastructure Incentive Program (HBIIP) grant recipients any day now, Ron Lamberty, Senior Vice President of ACE, says their focus is now on marketers who may already have the right fueling equipment for E15.

“Adding new E15 and flex fuel locations with programs like HBIIP makes ethanol blended fuel more available and visible, but to move significant gallons, we need widespread conversions on top of new construction,” said Lamberty. “A huge number of retailers have E15 compatible equipment and could sell it tomorrow without a big investment. But they don’t know, because they’ve been told by their petroleum suppliers it’s impossible for most stations to offer E15, and very expensive for others. We just want them to check, because we know a lot of them will be very surprised.”

The Flex Check compatibility tool uses National Renewable Energy Lab (NREL) studies and ACE’s research with equipment companies to give retailers a place to enter the manufacturer or model of tanks, piping, and other equipment they have on site, and find out if they are already E15 compatible.

Listen as Lamberty explains Flex Check.
ACE 2020 Ron Lamberty, Flex Check tool (2:35)

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Ethanol Producers Provide Perspective on Panel

Cindy Zimmerman

As part of the virtual American Coalition for Ethanol annual conference this week, three ethanol producer members share their perspectives on major issues impacting them this year, including COVID-19 and RFS mismanagement, as well as their optimism for ethanol’s role in a low carbon fuel future.

Participating in the panel:
Duane Kristensen, General Manager, Chief Ethanol Fuels
Dave Sovereign, Chairman, Golden Grain Energy
Neil Koehler, Co-Founder, Director, and Co-CEO, Pacific Ethanol, Inc.

Learn more about their conversation and get reaction to the latest news this week about EPA denying retroactive refinery exemptions, potential relaxing barriers to E15 growth, and trade with Brazil in this interviews with Sovereign and Koehler.

ACE 2020 Interview, Neil Koehler, Pacific Ethanol (11:40)

ACE 2020 Interview Dave Sovereign, Golden Grain Energy (4:45)

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ACE Virtual Meeting Underway

Cindy Zimmerman

The virtual American Coalition for Ethanol (ACE) annual conference kicked off without a hitch this afternoon with opening remarks from Board President Duane Kristensen representing Chief Ethanol Fuels, followed by ACE CEO Brian Jennings reflecting on the struggles of the year so far and the opportunities for ethanol in a low carbon future.

“At the federal level, it is a matter of when, not if, Congress takes up sweeping climate legislation which will impact our industry and agriculture,” Jennings stated. “That’s why ACE has been going on offense to make a persuasive case that increasing the use of ethanol should be part of the climate solution, and consequently, there is a growing drumbeat in Congress for a new national Low Carbon Fuel Standard on top of the RFS to spur new ethanol demand.”

Jennings prerecorded his remarks for the virtual event, but ACE issued a written update including comments the EPA denying gap year small refinery waivers, and potential for more restrictions to the expansion of E15 being removed. He also comments on those issues in this interview about the conference.

ACE 2020 Interview, Brian Jennings, CEO (12:52)

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Preview of Virtual #ACECONF20

Cindy Zimmerman

The 33rd Annual American Coalition for Ethanol Conference taking place on Wednesday afternoon of the Fuel Ethanol Workshop will be a lot different from any of the 32 that came before, but the agenda offers the same great content it always does.

The popular retailers panel will kick the meeting into high gear as ACE Senior Vice President & Director of Market Development Ron Lamberty talks with higher blend pioneers Nathaniel Doddridge with Casey’s General Stores and Randy Gard, COO of Pump & Pantry/Bosselman. Gard represented retailers when President Trump visited SIRE ethanol plant in Iowa last year, and he talks about how the past year has been a pretty good one for selling higher blends in this interview.
ACE 2020 Interview with Randy Gard, Bosselman (8:35)

The ACE meeting will also feature a presentation by Tom Kloza, Global Head of Energy Analysis, Oil Price Information Service, on Fuel Marketing in the Time of Corona: A Look at Drastic and Not-So-Drastic Changes to Downstream Markets in the Next 15 Months. Listen to this interview with Kloza for a preview of his remarks.
ACE 2020 Interview with Tom Kloza, OPIS (11:35)

The meeting will wrap up with a Producer Perspectives panel featuring ACE Board President Duane Kristensen, Chief Ethanol Fuels; Dave Sovereign, Golden Grain Energy; and Neil Koehler, Pacific Ethanol. Sovereign says the conversation will include many important issues for producers.

Get a preview of that panel here:


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Biodiesel Producers Welcome Denial of Gap Year SREs

Cindy Zimmerman

Biodiesel producers are just as happy as ethanol producers with the EPA decision to deny retroactive small refinery exemption petitions.

National Biodiesel Board VP of Federal Affairs Kurt Kovarik says the move will restore integrity to the Renewable Fuel Standard and provide much-needed certainty for America’s biodiesel producers and soybean farmers. “The decision to deny these absurd petitions filed by refiners simply to skirt their obligations under the law is the right call. I am hopeful EPA will continue to apply this standard to the remaining gap exemptions and to future petitions. We look forward to working with the administration to restore growth in the biodiesel and renewable diesel industry and ensure that RFS volumes for biomass-based diesel are met.”

Kovarik added that the industry is particularly grateful to those who effectively sought a resolution to these unlawful waivers, including Sens. Joni Ernst (R-IA) and Chuck Grassley (R-IA), and Iowa Governor Kim Reynolds.

Grant Kimberley, executive director of the Iowa Biodiesel Board, said, “With those waivers denied, and assuming EPA applies the recent court ruling nationwide, the exemption issue we have battled for so long should significantly improve. This turnaround would set the RFS on the right track again.”

Biodiesel

RFA Pleased Gap Year Petitions Being Denied

Cindy Zimmerman

The ethanol industry was pleased to hear Monday that the Environmental Protection Agency (EPA) is denying petitions for retroactive small refinery waivers for the 2011-18 compliance years.

The Renewable Fuels Association welcomed the news that EPA is denying 54 “gap-year” small refinery exemption petitions and will deny the remaining 14 petitions once they are received from the Department of Energy. In announcing its decision, EPA acknowledged that it would be completely inappropriate to grant a waiver to a refinery for a compliance obligation from many years ago, especially when the refinery had already fully complied with the obligation.

EPA also cited the Tenth Circuit Court’s decision from January as an important consideration in rejecting the waiver petitions. Importantly, EPA is applying these petition denials nationally. RFA led the litigation in the Tenth Circuit, while the National Corn Growers Association, National Farmers Union, and American Coalition for Ethanol were co-petitioners.

“The petitions were never anything more than an absurd and bizarre attempt by the refineries to circumvent the Tenth Circuit Court’s decision in the Renewable Fuels Association v. EPA case,” said RFA President and CEO Geoff Cooper. “This should serve as the final nail in the coffin of these gap-year petitions, and we are eager to put this dark and sordid chapter in the history of the RFS behind us once and for all.”

Cooper also thanked President Trump for taking an active role in helping to restore integrity to the Renewable Fuel Standard (RFS).
RFA CEO statement on gap year waiver denials (1:20)

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EPA to Deny Gap-Year Refinery Waivers

Cindy Zimmerman

The U.S. Environmental Protection Agency (EPA) has announced it is denying petitions for small refinery exemptions for past compliance years, the so-called “gap-filling” petitions for the 2011-18 compliance years.

“This decision follows President Trump’s promise to promote domestic biofuel production, support our nation’s farmers, and in turn strengthen our energy independence,” said EPA Administrator Andrew Wheeler. “At the EPA, we are delivering on that promise by following the rule-of-law and ensuring 15 billion gallons are blended into the nation’s fuel supply.”

The EPA announcement also noted that the agency is “moving to update E15 labels to ensure consumers have informed choices at the pump and clarify the ability of existing fuel infrastructure to support expanded E15 use.”

However, much of the responsibility regarding labels falls to state agencies, EPA encourages they update them as well and stands ready to support them. EPA continues to actively engage with stakeholders to expand the number of approved fuel pathways, adding diversity to the biofuel mix in the United States.

EPA also cited the Tenth Circuit Court’s decision from January as an important consideration in rejecting the waiver petitions. Importantly, EPA is applying these petition denials nationally. The Renewable Fuels Association (RFA) led the litigation in the Tenth Circuit, while the National Corn Growers Association, National Farmers Union, and American Coalition for Ethanol were co-petitioners.

“The petitions were never anything more than an absurd and bizarre attempt by the refineries to circumvent the Tenth Circuit Court’s decision in the Renewable Fuels Association v. EPA case,” said RFA President and CEO Geoff Cooper. “This should serve as the final nail in the coffin of these gap-year petitions, and we are eager to put this dark and sordid chapter in the history of the RFS behind us once and for all.”

“Asking for waivers for nearly ten years ago was a new low by the oil industry to undermine the RFS and rewrite history,” said NCGA President Kevin Ross. “While denial of these past-year waivers is obviously positive news for farmers and biofuel producers, we’re never going to have the certainty we need until the underlying waiver issue is fully resolved.”

ACE CEO Brian Jennings added, “Simply put, these retroactive waivers ignored the RFS statute and the Tenth Circuit Court decision, so rejection of the gap-year requests is what the law and court precedent required of EPA…The next logical step is for EPA to once and for all nationally apply the precedent set by the Tenth Circuit Court, which likely means denying most of the pending refinery waivers for 2019 and 2020.”

EPA currently has 31 waivers under consideration for 2019 and 2020 Renewable Fuel Standard (RFS) compliance years.

NFU President Rob Larew also urged the administration to follow up by releasing the overdue Renewable Volume Obligations (RVOs) for 2021.

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Ethanol Industry Hopeful for US-Brazil Trade

Cindy Zimmerman

U.S. ethanol stakeholder organizations are less than thrilled that Brazil’s tariff-rate quota (TRQ) has been extended now for another 90 days, but they are hopeful continued discussions will lead to a resumed free trade situation with that country.

“The Renewable Fuels Association, U.S. Grains Council, Growth Energy, and the National Corn Growers Association believe the 90-day extension of the TRQ serves neither Brazil’s consumers nor the Brazilian government’s own decarbonization goals, especially while Brazil’s ethanol producers continue to be afforded virtually tariff-free access to the U.S. market. The extension falls during Brazil’s annual inter-harvest period when U.S. ethanol exports to Brazil are traditionally low, causing greater uncertainty for U.S. exporters looking to make selling decisions now for the traditionally higher Brazilian demand in the winter months. While the Brazilian ethanol market has not been fully reopened to imports, we appreciate the continued support and efforts of the U.S. government as we use this 90-day period to aggressively pursue an open and mutually beneficial ethanol trading relationship with Brazil.

“The U.S. ethanol industry actively sought, through repeated dialogue with local industry and government, to illustrate the negative impacts of tariffs on Brazilian consumers and the Brazilian government’s own decarbonization goals. However, it seems Brazil’s government has left its own consumers to pay the price through higher fuel costs once again. While we would have preferred Brazil abandon its ethanol import tariffs entirely and resume its free trade posture on ethanol, which it held for several years before the TRQ, we view its decision to temporarily extend the TRQ on ethanol at the current level as an opportunity to continue discussions toward that end.”

American Coalition for Ethanol (ACE) CEO Brian Jennings agrees. “While an extension is better than the flat 20 percent tariff on all U.S. exports, this merely kicks the can down the road past the election and can be added to the list of piling uncertainties facing our industry. We have been trying to restore demand at home and around the world and in a year like 2020, finding growth opportunities are of the utmost importance.” said Jennings. “The TRQ unnecessarily limits our export potential and we hope further negotiations will ultimately make it easier for producers to pursue free and fair trade for ethanol in the future.”

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