Sec. Perdue Comments on Ethanol and SREs

Chuck Zimmerman

U.S. Secretary of Agriculture, Sonny PerdueDuring a visit to the National Association of Farm Broadcasting (NAFB) annual convention on Friday, Secretary of Agriculture Sonny Perdue was asked about EPA’s supplemental proposal to account for small refinery exemptions and to address the concerns of the industry that it is insufficient.

“I want to put it really simple,” said Perdue. “The president expects, I expect, and we have communicated to Andrew Wheeler and the EPA, that 15 billion gallons equals 15 billion gallons.” The secretary says he thinks the industry’s concern is based on a “serious distrust” of EPA based on the agency’s past actions.

Secretary Perdue also added that he believes the current problems the ethanol industry is experiencing this year are based on lower exports, not small refinery waivers, and he’s “got the facts to prove it.”

Listen to the question from Lorrie Boyer of WSIR and Perdue’s answer here:
Interview with Sonny Perdue, U.S. Secretary of Agriculture

Full fireside chat with U.S. Secretary of Agriculture Sonny Perdue: Interview with Secretary of Agriculture Sonny Perdue

2019 NAFB Convention Photo Album

Audio, biofuels, Ethanol, Ethanol News, NAFB

Ethanol Report from #NAFB19

Cindy Zimmerman

The Renewable Fuels Association was pleased to be able to once again be a part of the National Association of Farm Broadcasting (NAFB) annual convention in Kansas City this past week. RFA President and CEO Geoff Cooper and Vice President of Industry Relations Robert White were interviewed by dozens of farm broadcast reporters from around the country about the latest ethanol news.

In this edition of The Ethanol Report podcast, we hear from both Cooper and White who discuss topics such as small refinery waivers, exports, and the new custom design Flex Fuel Jeep Wrangler being showcased in a new Hauk Machines Amazon Prime video series.

Ethanol Report from NAFB (20:29)

Subscribe to the podcast via iTunes

Audio, Ethanol, Ethanol News, Ethanol Report, NAFB, RFA

NCGA Participates in Ag-Auto-Ethanol Work Group

Cindy Zimmerman

Representatives from state and national corn growers’ associations were among those in attendance at the recently Ag-Auto-Ethanol Work Group Annual Forum in Detroit, Michigan. The forum took a deep dive into environmental issues, future engine technologies and the potential cost-benefit of high-octane low-carbon fuels at the pump.

“This forum is an opportunity to bring together a cross-section of groups which span the entire value chain to talk about the future and provide updates on current research and initiatives,” said National Corn Growers Association (NCGA) Renewable Fuels Director Mark Palmer, pictured here addressing the forum. “The collaboration and partnership with these groups continue to be important for the transition to high-octane low-carbon liquid transportation fuels.”

NCGA Renewable Fuels Public Policy Director Kathy Bergren and Julie Busse, NCGA senior communications manager, also presented updates at the meeting on current NCGA projects around high-octane low-carbon fuels and infrastructure. Nebraska farmer and NCGA Chairman Lynn Chrisp also attended the meeting, along with representatives from state corn grower organizations including: Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Nebraska, and Ohio.

automotive, corn, Ethanol, Ethanol News, NCGA

Report Shows Importance of Biodiesel Tax Credit

Cindy Zimmerman

The National Biodiesel Board (NBB) today released a new report on the “Importance of the Biodiesel Tax Credit” that highlights how uncertainty regarding extension of the biodiesel tax credit significantly increases business risks for biodiesel producers.

The report was written by John Urbanchuk, managing partner of ABF Economics. “The current uncertainty surrounding reinstatement and retroactivity of the tax credit is a significant disincentive for the U.S. biodiesel industry (blenders and producers) and has constrained industry expansion. Absence of a tax credit and uncertainty is one major reason the industry is operating at only 70 percent of industry production capacity,” according to the report.

Vice President of Federal Affairs Kurt Kovarik says the uncertainty has already forced some producers to slow or shut down production. “Nine biodiesel plants have already slashed production or closed up, laying off workers in Georgia, Iowa, Michigan, Mississippi and Pennsylvania. Dozens more could be forced to do the same in the next few months due to the instability in federal policy. Congress needs to act now to restore the biodiesel tax incentive and help the industry reopen plants and rehire workers.”

NBB CEO Donnell Rehagen, along with Kovarik and Urbanchuk, participated in a conference call with reporters to discuss the report.

NBB call on importance of biodiesel tax credit
Audio, Biodiesel, NBB

WASDE Lowers Corn Outlook

Cindy Zimmerman

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) 2019/20 U.S. corn outlook is for lower production, reduced use, and smaller ending stocks.

Corn production is forecast at 13.661 billion bushels, down 118 million from last month on a 1.4-bushel reduction in yield to 167.0 bushels per acre. Feed and residual use is down 25 million bushels based on a smaller crop and higher expected prices. Exports are reduced reflecting the slow pace of early-season sales and shipments. Corn used for ethanol is down 25 million bushels based on September data from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of October. With supply falling more than use, corn ending stocks are lowered 18 million bushels from last month.

The good news for growers is the season-average corn price received by producers is five cents higher now at $3.85 per bushel.

corn, Ethanol, Ethanol News, USDA

Rough Year for Pacific Ethanol Starting to Improve

Cindy Zimmerman

Pacific Ethanol, Inc. reported its financial results for the year so far last Friday and top executives expressed optimism for the future after a rough year.

“Positive ethanol production margins in the current market are supporting our efforts to conclude several strategic initiatives to strengthen our balance sheet and position the company to benefit from increased demand for low carbon, high octane ethanol,” said Pacific Ethanol CEO Neil Koehler during a third quarter results call for the company. “We are confident that the final rule for the 2020 Renewable Fuel Standard blending requirements will result in greater ethanol use in the domestic market, and resolution of trade disputes will bolster export demand, putting our company and the industry back on a growth trajectory.”

Pacific Ethanol’s operating loss for the first three quarters of the year is $36.8 million, compared to $21.3 million for the same period in 2018. “During the third quarter, the ethanol industry experienced some of the worst production margins in years, due in large part to EPA’s excessive granting of small refinery exemptions and the continuing trade dispute with China,” said Koehler, who currently serves as chairman of the Renewable Fuels Association.

However, Koehler says conditions are now starting to improve. “Starting at the end of the third quarter, and continuing in this quarter, production margins rebounded to levels better than any time in the last two years, resulting in positive margins,” he said.

Listen to Koehler’s statement on Pacific Ethanol third quarter results.

Pacific Ethanol CEO Neil Koehler (5:06)

Audio, Ethanol, Ethanol News

Senators Stand Up for RFS

Cindy Zimmerman

A group of Midwest state Senators submitted comments to the Environmental Protection Agency yesterday supporting the Renewable Fuel Standard. Sens. Deb Fischer (R-Neb.), Chuck Grassley (R-IA), Joni Ernst (R-IA), John Thune (R-S.D.), Mike Rounds (R-S.D.), Roy Blunt (R-Mo.), and Mike Braun (R-Ind.) each submitted comments regarding the EPA’s supplemental rule on the RFS and individual letters to EPA Administrator Andrew Wheeler, in which they expressed concerns about the way the agency would calculate the reallocation of renewable fuel gallons lost due to exemptions for oil refineries.

“It is time again for the EPA to get this policy right, respect the President’s intent, and uphold the law as it was written. This means providing certainty that they will ensure that 15 billion gallons of ethanol will be blended each year,” said Sen. Ernst.

Renewable Fuels Association president and CEO Geoff Cooper thanked the senators for their support, as news broke that Valero Energy this week temporarily halted production of ethanol at plants in Michigan and Indiana, bringing to 21 the number of plants that have been closed or idled this year. “The only path to restore credibility to this process is for the EPA to project SREs based on the actual exemptions granted in the past three years. Anything else is a broken promise that will kill more jobs and keep plants shuttered,” said Cooper.

The comment period on the EPA supplemental proposal will remain open until November 29.

EPA, Ethanol, Ethanol News

Flex Fuel Jeep Wrangler Debuts in Vegas

Cindy Zimmerman

The Renewable Fuels Association (RFA) and Kenny Hauk of Hauk Designs unveiled a new project at the 2019 SEMA Show in Las Vegas this week that highlights the benefits of higher ethanol blends in high performance vehicles – a Flex Fuel Jeep Wrangler with more than 1,000 horsepower using a high-octane, low-carbon fuel containing up to 85 percent ethanol (E85).

Fans can watch the Hauk team design and build the RFA flex-fuel Wrangler in a special “Hauk Machines” Amazon Prime video series now airing. Since August, a series of five-minute mini-episodes have been airing on RFA’s Facebook page as a preview.

“This project is all about educating different consumer groups in a fun and innovative way,” said RFA Vice President for Industry Relations Robert White. “At RFA, we want to push the boundaries to show the potential of ethanol as a fuel for a wide variety of vehicles and demographics, especially when special interests tell us it can’t be done. Ethanol is a high-powered fuel that is perfectly suited for on road and off-road applications. It also helps keep our air and water clean, something important to off-road enthusiasts and conservationists. Kenny Hauk is the perfect person to help us tell this story and educate consumers globally through social media, television and at future events.”

White says plans are underway to get the one-of-a-kind Wrangler on the road for special events and shows around the country, to showcase the power and opportunities behind ethanol. He talks about the project in this interview:

Interview with Robert White on Flex Fuel Jeep Wrangler (8:11)

Audio, E85, Ethanol, Ethanol News, Octane, RFA

Democrat Reps Urge Extension of Biofuels Tax Incentive

Cindy Zimmerman

Rep. Abby Finkenauer (D-IA) and Rep. Kendra Horn (D-OK) spearheaded a Democratic caucus letter to House leadership this week urging action on extension of the biodiesel tax credit. Specifically, the lawmakers are asking for extensions of the biodiesel, alternative fuel vehicle refueling property, and second generation biofuel producer tax credits.

“The biodiesel tax credit has become vital to Iowa’s economy by bringing down gas prices, creating opportunities for farmers and biofuel producers, and bringing down greenhouse gas emissions. Especially now, with farm income at its lowest point in more than a decade and our farmers caught in the cross-hairs of the President’s trade war with China, is not the time to walk away from tax credits that have become so important to Iowa’s soybean growers,” Congresswoman Finkenauer said.

The National Biodiesel Board (NBB) thanked the Democratic Representatives, especially the freshman members, and emphasized that renewing the biodiesel tax credits before the end of the year is crucial to reviving production, reopening production facilities, and saving jobs.

NBB Vice President of Federal Affairs Kurt Kovarik said, “Nine biodiesel producers – in Alabama, Connecticut, Georgia, Iowa, Michigan and Texas – have been forced to close, cut production, and lay off workers. That’s because blenders count on Congress to renew the tax credit and demand a discount on the price of biodiesel. As a result, producers have taken a loss for nearly two years now. The entire industry needs Congress to act before the end of the year and renew expired tax extenders.”

Biodiesel, NBB

Latest Ethanol Export and Production Numbers

Cindy Zimmerman

Ethanol production is recovering while ethanol exports are relaxing, according to the latest data available, as analyzed by the Renewable Fuels Association (RFA).

According to Energy Information Administration data for the week ending Nov. 1, ethanol production was 1.014 million barrels per day (b/d) or 42.59 million gallons daily. The previous week was the first time in six weeks that production got back up above 1 million b/d. But production is now more than 5% below the same week a year ago. The four-week average ethanol production rate increased 1.2% to an annualized rate of 15.27 billion gallons.

Ethanol stocks increased 3.7% to 21.9 million barrels following two weeks of declining volumes. However, inventories were 5.5% lower than the same week last year.

The latest U.S. ethanol export data is from September, showing a decrease of 18% to 100.3 million gallons (mg).

Canada was the top destination for the fifth consecutive month, scaling 4% higher to 32.4 mg. Exports to Brazil climbed 3% to a three-month high of 17.6 mg. In a departure from recent norms, sales to these two markets alone accounted for half of U.S. ethanol exports in September. U.S. sales were also strong in South Korea (8.9 mg, +55%), Peru (8.1 mg, +37%), the Philippines (6.9 mg, +224%), the United Arab Emirates (6.7 mg, +165%), the Netherlands (6.1 mg, +65%), and Norway (3.2 mg, a 70-month high). Total year-to-date exports of U.S. ethanol stand at 1.10 billion gallons. This implies an annualized export volume of 1.47 billion gallons which, if realized, would be the second-largest volume on record.

Ethanol, Ethanol News, Exports, Production, RFA