Biofuels Industry Still Awaits Waiver Package

Cindy Zimmerman

It’s been almost a month since President Donald Trump tweeted that “Farmers are going to be so happy when they see what we are doing for Ethanol” and USDA Secretary Sonny Perdue told crowds at Farm Progress Show about “small refinery waiver mitigation efforts” underway that President Trump “really wants to announce himself.”

Secretary Perdue expressed the frustration that many biofuels industry stakeholders are feeling answering a reporter last Thursday about when the promised “giant package” will be ready for release. “For the president and myself, sooner rather than later,” said Perdue. “He and I have probably spent more time on this one issue than almost anything else and I know he’s ready to get a decision and move forward.”

Perdue made those comments at the same time President Trump was meeting with oil state senators who are fighting against any effort to increase the Renewable Fuel Standard to make up for gallons waived under small refinery exemptions granted by EPA.

Sec. Perdue on refinery waiver package timing
Audio, Biodiesel, biofuels, corn, Ethanol, Ethanol News, USDA

Davis Introduces Small Refinery Exemption Fairness Act

Cindy Zimmerman

As farmers and biofuel producers continue to wait for a promised “small refinery waiver mitigation efforts” from the administration, U.S. Rep. Rodney Davis (R-Ill.) this week introduced the Small Refinery Exemption Fairness Act of 2019, which would require the EPA Administrator to use the average number of Small Refinery Exemptions (SREs) granted in the previous three calendar years when formulating the Renewable Volumes Obligations (SVO) for an upcoming year.

“I’ve heard from many farmers in my district, and this is top of mind for them and it’s top of mind for me,” said Davis. “We need certainty in an uncertain farm economy and the Small Refinery Exemption Fairness Act will put us on the right path to move forward. This bill should be passed immediately, and I hope that any final package proposed by President Trump will include the provisions in my bill.”

Requiring the EPA to use realistic estimates of the number of SREs they will grant rather than stating they plan to grant zero when calculating their annual RVO will give industry some degree of certainty and effectively relocate some of the lost gallons that were detrimental to the renewable fuels industry when, most recently, the EPA announced that they had granted 31 SREs. In an effort to incentivize the agency to issue fewer exemptions, his bill does not set a minimum number of waivers that the EPA should grant.

Rep. Davis talked about the waiver issue during an interview at the Farm Progress Show: Interview with Rep. Rodney Davis, R-IL 13th District

Audio, Biodiesel, biofuels, Ethanol, Ethanol News

Clariant Signs 2nd License for Cellulosic Ethanol Technology

Cindy Zimmerman

Clariant and ORLEN Południe have signed a license agreement on sunliquid® cellulosic ethanol technology.

The announcement represents a significant strategic milestone for Clariant as this second license agreement for its sunliquid technology is another successful step to commercialize its highly innovative and sustainable technology. For ORLEN Południe, the agreement supports the intention to realize a full scale commercial plant for the production of cellulosic ethanol from agricultural residues, which will further solidify the company’s position as a forerunner in the Polish biofuels and bio-component technologies.

Clariant is a specialty chemical company headquartered in Switzerland, and ORLEN Południe is a leader in the fuels and energy markets. The license agreement enables ORLEN Południe to use Clariant’s sunliquid technology for planned project development and plant operation at its Jedlicze site in southeastern Poland with the potential to integrate with the existing petroleum refinery.

Cellulosic, Ethanol, Ethanol News

Ethanol Report on Energy Security

Cindy Zimmerman

The Renewable Fuels Association (RFA) has released a new study that shows the Renewable Fuel Standard saves drivers money at the gas pump every day and also enhances energy security by greatly reducing or even eliminating the blow to our nation’s drivers when global oil production is disrupted.

The analysis, by independent economist and energy expert Dr. Philip K. Verleger, Jr., looks at oil market disruptions over nearly 50 years and provides an example in which the availability of ethanol avoids a significant impact to U.S. gasoline prices from a supply disruption like we have seen with the attacks on Saudi oilfields..

In this Ethanol Report interview, RFA’s Chief economist Scott Richman talks about this timely study’s findings.

Ethanol Report 9-19-19

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Audio, Ethanol, Ethanol News, Ethanol Report, RFA

Sen. Grassley Hopes Trump Biofuels Plan Coming Soon

Cindy Zimmerman

Sen. Chuck Grassley (R-IA) believes President Trump is getting tired of dealing with the biofuels small refinery waiver issue and he expects a plan will be announced soon.

During a call with reporters, Sen. Grassley said the biofuel industry demands are very simple. “We want 15 billion gallons to be 15 billion gallons…so that means basically you can waive all you want to waive for small refineries, just make sure we get 15 billion gallons.”

Grassley talked about meeting with President Trump last week along with other Midwest lawmakers to discuss a fix for the problems that an additional 31 small refinery waivers have caused for the biofuels industry. Grassley believes EPA is getting details of a plan on paper but he won’t “cheer it until he sees it.”

Reports this week indicate the administration proposal currently being hammered out would increase the proposed 2020 renewable volume obligation under the Renewable Fuel Standard from its current 20.04 billion gallons to 22.386 billion gallons to include a 500 million gallon boost for D5 advanced biofuel, a 500 million gallon boost for conventional biofuel and an adjustment of over 1.3 billion gallons to account for SREs already approved.

Listen to Grassley answer reporters’ questions about the issue.
Sen. Grassley press call 9-17-19

Audio, Biodiesel, Ethanol, Ethanol News

Farmer-Owned Iowa Ethanol Plant Idled

Cindy Zimmerman

Siouxland Energy Cooperative has idled production at its ethanol production facility in Sioux Center, Iowa.

The Board decided to halt production due to the Administration’s recent grant of small-refinery exemptions (SREs) to many large oil refineries, which has undermined the Renewable Fuel Standard and reduced ethanol demand by 4 billion gallons.

Kelly Nieuwenhuis, President of the Board, said: “The Administration’s actions unfairly benefit the oil industry at the expense of our local farmers and, if not addressed soon, will impact the livelihoods of many. We look forward to the Administration properly addressing these issues, so that Siouxland Energy can resume ethanol production and its purchase of corn from local farmers, and generally contribute to the local and global economy.”

This is the second plant closing in Iowa. The first was Plymouth Energy in Merrill.

Ethanol, Ethanol News

RFA CEO Says Saudi Attack Shows Need for Ethanol

Cindy Zimmerman

Drone attacks on Saturday in Saudi Arabia that knocked out more than 5 percent of global oil supply and caused a major spike in oil prices on Monday spotlight the need for real energy security by diversification of the liquid fuel supply, according to Renewable Fuels Association President and CEO Geoff Cooper.

“The crude oil and gasoline price spikes following the attacks on Saudi Arabia show once again that the Unites States cannot simply frack its way to energy independence,” said Cooper. “Even with growth in domestic oil production, $18 billion flowed out of the U.S. economy to Saudi Arabia last year in return for 330 million barrels of petroleum. What the oil industry doesn’t want you to know is that the United States imported 2.8 billion barrels of crude oil last year, equivalent to 45 percent of the oil processed by U.S. refineries.”

“Diversification of our liquid fuel supply is the only way to truly insulate American consumers from the volatility and price shocks that plague the global petroleum market,” Cooper continued. “The good news is we have a solution right here in America’s farm fields and rural communities. Our nation’s ethanol industry produced more than 380 million barrels of lower-cost, cleaner-burning renewable fuel last year—more barrels than we imported from Saudi Arabia.”

President Donald Trump approved the release of oil from the U.S. Strategic Petroleum Reserve in response to the attacks, which are being blamed on Iran. It is being called the worst disruption to world supplies on record.

Ethanol, Ethanol News, Oil, RFA

GROWMARK Urges Congress to Ratify USMCA

Because GROWMARK is a farmer-owned cooperative, its priorities reflect the interests of its farmer members, and right now that number one priority is trade in general and the U.S. Mexico Canada Agreement (USMCA) in particular.

“Having the assurance of the United States Mexico Canada trade agreement passed will be an ultimate priority, hopefully it won’t go much past October,” said Chuck Spencer, GROWMARK/FS Executive Director of Government Relations. “We obviously need to make sure that we do whatever we can to keep the farm economy moving in a very positive direction.”

Spencer says it’s been a rough year for agriculture and getting USMCA passed sooner rather than later will help. He also says that it is more important to work on USMCA than China right now because it is most achievable.

In this interview, Spencer talks about other key issues for agriculture in Congress, including rural broadband internet access and renewing the biodiesel tax incentive.

Interview with Chuck Spencer, GROWMARK government relations

AgWired Energy, AgWired Precision, Audio, FS System, Government, GROWMARK, Trade

Ethanol Production Holding On

Cindy Zimmerman

U.S. ethanol production continues to stay above one million barrels per day on average this year, but just barely.

According to EIA data analyzed by the Renewable Fuels Association for the week ending Sept. 6, ethanol production averaged 1.023 million barrels per day (b/d)— equivalent to 42.97 million gallons daily. Output expanded by 10,000 b/d, or 1.0%, from the previous week and was 0.3% above the same week last year. However, the four-week average ethanol production rate slowed 0.6% to 1.024 million b/d, equivalent to an annualized rate of 15.70 billion gallons. This was the lowest level since April and was 3.6% below the average at the same time last year.

RFA notes that daily ethanol production as a percentage of daily gasoline demand decreased to 10.43%. In addition, ethanol stocks dropped 5.5% to 22.5 million barrels, reflecting an eleven-week low and 1.7% below the same week last year.

Ethanol, Ethanol News, RFA

USDA Lowers Corn Use for Ethanol

Cindy Zimmerman

The September World Agricultural Supply and Demand Estimates out Thursday from USDA reduced the outlook for U.S. corn production and for the amount of corn used to produce ethanol.

This month’s 2019/20 U.S. corn outlook is for reduced production, lower corn used for ethanol, and slightly higher ending stocks. Corn production is forecast at 13.799 billion bushels, down 102 million from last month on a lower yield forecast. Corn supplies are down from last month, as a smaller crop more than offsets larger beginning stocks due to lower estimated exports and corn used for ethanol for 2018/19. Corn used for ethanol for 2019/20 is lowered 25 million bushels.With use falling more than supply, corn ending stocks are up 9 million bushels from last month. The season-average corn price received by producers is unchanged at $3.60 per bushel.

corn, Ethanol, Ethanol News, USDA