Role of Corn Farmers in High Octane Fuel Future

Cindy Zimmerman

During a House Committee on Energy and Commerce subcommittee hearing on “High Octane Fuels and High Efficiency Vehicles” Friday, an Illinois corn grower outlined how farmers are now growing what can be the the high-octane fuel of the near future.

Illinois farmer Paul Jeschke testified that high-octane midlevel ethanol blends would “benefit society and rural communities by lowering prices at the pump and reducing pollution while increasing farm income.”

“I’m proud of what we do on my family’s farm,” said Jeschke. “I’m proud that our corn crop can have a part to play in the high-octane future that’s heading our way.” Read Jeschke’s written testimony.
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Listen to Jeschke’s opening statement here: Illinois farmer Paul Jeschke at hearing

Audio, corn, Ethanol, Ethanol News

AEM Releases First-Quarter Sales Data

The latest sales data from the Association of Equipment Manufacturers (AEM) shows total U.S. 2-wheel drive tractor sales gained four percent for March compared to last year, while 4-wheel drive tractors sales dropped five percent. Self-propelled combine sales declined 20 percent.

First-quarter 2018 U.S. sales were essentially flat for the smaller-size tractors and 100-plus HP 2-wheel drive tractors declined about five percent for January-March compared to the same quarter in 2017. U.S. 4-wheel drive tractor sales gained about five percent for the first quarter, and U.S. sales of self-propelled combines gained four percent for January-March compared to those months in 2017.

“As we close the first quarter of 2018, we are still cautiously optimistic for continued growth this year, but it’s tempered by uncertainty in the farm economy,” said Curt Blades, senior vice president, AG services. “We are still contending with diplomatic jockeying over steel tariffs and China trade that is causing concern for the agriculture and manufacturing communities. Headwinds also include potential negative changes to the Renewable Fuel Standard (RFS). And, overall, we’re looking at the USDA forecast of a decline in 2018 net farm profits. Many farmers will still need to replace equipment at some point for longer term efficiencies, and we are still hopeful that tax reform could provide a positive stimulus.”

Read the full report online: https://www.aem.org/market-data/statistics/us-ag-tractor-and-combine-reports/.

John Deere at 2018 Commodity Classic Photo Album

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Evidence Shows Waivers Reducing Ethanol Demand

Cindy Zimmerman

Evidence is mounting that the Environmental Protection Agency’s granting of numerous “small refiner exemptions” from blending obligations under the Renewable Fuel Standard is indeed working to destroy demand for both ethanol and corn.

Renewable Fuels Association (RFA) Executive Vice President Geoff Cooper lays out the evidence in a column on the E-Blog detailing the reduction in ethanol blending over recent months and a sharp drop in the price for Renewable Identification Numbers (RINs).

“The small refiner exemptions, the PES settlement, and EPA’s failure to enforce the statutory 2016 RFS requirement (as ordered by the courts) have effectively reduced the 2016 and 2017 RFS volumes each by 1 billion gallons or more. The result has been a glut of unneeded RIN credits and sharply lower RIN prices,” says Cooper.

RIN prices were around 90 cents in late November 2017 when the ethanol blend rate hit a record high. But secret small refiner waivers, the bankruptcy bailout, White House discussions of a RIN price cap, and other actions have torpedoed the RIN market, leaving prices at a three-year low near 30 cents.

Cooper says RINs are now cheap enough that refiners would opt to comply by purchasing RINs rather than taking steps to expand ethanol blending, which has already been reflected in recent lower blend rates. In addition, lower RIN prices mean the retail discount for blends like E15 and E85 is shrinking, potentially decreasing consumer demand and reducing retail station throughput of higher blends.

This is why RINs matter. And this is exactly why recent EPA actions to artificially inflate RIN stocks and sink RIN prices are already affecting the ethanol market and destructing demand.

Read the whole column.

Ethanol, Ethanol News, RFA, RFS, RINS

Ethanol Focus of High Octane Hearing

Cindy Zimmerman

Ethanol and the Renewable Fuel Standard (RFS) were the main focus of a House Committee on Energy and Commerce subcommittee hearing on “High Octane Fuels and High Efficiency Vehicles” on Friday.

Growth Energy CEO Emily Skor testified before the panel that ethanol is a ready solution for more efficient engines that require high octane fuels to operate effectively and lower greenhouse gases.

“With a natural 113 octane, ethanol has a lower carbon content than the gasoline components it replaces and provides increased engine efficiency to reduce both tailpipe, greenhouse gas, and criteria pollutant emissions,” said Skor.

Listen to Skor’s opening statement to the committee – Growth Energy CEO Emily Skor at hearing

In this interview, Skor talks about the hearing and other ethanol-related news this week. Growth Energy CEO Emily Skor interview 4-13-18

Audio, Energy, Ethanol, Government, Growth Energy

House Hearing to Focus on High Octane Fuels

Cindy Zimmerman

The House Energy and Commerce Subcommittee on Environment will be holding a hearing this morning on “High Octane Fuels and High Efficiency Vehicles: Challenges and Opportunities.” The hearing will take a look at the potential for high octane fuels and the vehicles designed for them to further the goals of the Renewable Fuel Standard and Corporate Average Fuel Economy/Greenhouse Gas programs. Members will also examine the impact a potential transition to high octane fuels and vehicles could have on refiners, biofuel producers, automakers, fuel retailers, and consumers.

“High octane fuels have the potential to allow for the greater use of ethanol and other octane enhancers in the gasoline supply while increasing the miles per gallon in new cars,” said Chairman John Shimkus of Illinois.

Growth Energy CEO Emily Skor will testify at the hearing today and will stress the benefits of higher octane, mid-level ethanol blends and the need for a stable RFS to maintain market access. “Biofuels must be part of any long-term plan for engine efficiency and greenhouse gas reduction. However, any discussion of our future fuel mix cannot turn back the clock on the RFS,” says Skor.

Renewable Fuels Association (RFA) CEO Bob Dinneen submitted written comments yesterday to the subcommittee, noting that the oil industry supports moving to a higher-octane standard, but only to the degree the standard can be met with petroleum. “This stance taken by the oil industry underscores precisely why we need the RFS in the first place—left to their own devices, refiners would meet a new octane standard not by increasing the use of low-cost, low-carbon ethanol, but by cramming more dirty and costly aromatic hydrocarbons into our gasoline,” added Dinneen.

The hearing begins at 9:00 a.m. EST in 2123 Rayburn House Office Building and webcast live at energycommerce.house.gov.

Energy, Ethanol, Ethanol News, Government, Growth Energy, RFA, RFS

Ethanol Industry Pleased with POTUS Support of E15

Cindy Zimmerman

President Trump’s comments Thursday confirming that the administration is working on allowing year-round sales of 15% ethanol blends (E15) sparked a flurry of press releases from ethanol supporters.

Renewable Fuels Association president and CEO Bob Dinneen called it “welcome news to consumers across the country, farmers who have worked to build value-added markets here at home in the face of increased uncertainty in export markets, and the investment community that has received conflicting signals regarding future markets for next generation biofuels.”

Growth Energy CEO Emily Skor applauded President Trump “for embracing a common-sense fix to create a level playing field for cleaner, more affordable fuel options during the summer driving season. The White House clearly understands that RVP relief will expand a growing market for America’s farmers while letting consumers pick the fuel of their choice.”

American Coalition for Ethanol (ACE) CEO Brian Jennings says allowing year-round sales of E15 is also “the quickest way to take pressure off (Renewable Identification Number) RIN prices. E15 blending nationwide will increase ethanol blending which will increase the supply of RIN credits and help bring down their price.”

RIN prices have dropped nearly 50 percent so far this year to a low of 40 cents, but refiners are still asking for waivers from their obligations to blend ethanol into their fuel. There were new reports this week that the country’s two largest oil companies, Chevron and Exxon, are seeking small refinery waivers, which RFA’s Dinneen calls “extremely troubling.”

National Corn Growers Association (NCGA) president Kevin Skunes says they appreciate the president’s support, but says EPA still needs to “stop granting small refinery exemptions, giving extremely profitable refiners a pass on meeting their RFS obligations and destroying demand. We remain opposed to further demand destruction through a RIN price cap or other policies that undermine the RFS.”
Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw says “Since the end of last year, the EPA has eliminated over a billion gallons of ethanol demand through black box exemptions and RIN prices have dropped by two-thirds. Meanwhile, most refineries are enjoying record profits…It’s time to help farm country.:

ACE, corn, E15, Ethanol, Ethanol News, Government, Growth Energy, Iowa RFA, NCGA, RFA, RFS

President Trump Supports Year Round E15 Sales

Cindy Zimmerman

At a White House meeting with governors and members of Congress Thursday, President Donald Trump said he supported allowing the year-round use of 15% ethanol blended fuel (E15).

“This is no guarantee, but we’re going to raise it up to 15 percent, which makes a lot of people happy,” said the president prior to a meeting with lawmakers on agricultural trade issues. “We’re going to go to 12 months, which makes a lot of farmers very happy.”

Trump called the current situation where retailers are unable to sell E15 in the summer months “unnecessary and ridiculous” but said there will be a “transition period” which will be “complicated.”

“It’s going to solve a problem and we’re going to be also helping the refineries,” Trump said. “We’re very close to getting that done.”

Listen to Trump’s E15 comments here: Trump comments on E15

Senators and governors from states including Iowa, Nebraska, Kansas, North and South Dakota were in that meeting with President Trump and U.S. Trade Representative Robert Lighthizer to discuss recent trade actions and how farmers may be impacted.

President Trump talked about NAFTA, China, the European Union, and his philosophy on tariffs in his full remarks prior to the start of the meeting: Trump talks farm trade issues

Audio, E15, Ethanol, Ethanol News, Government

House Ag Committee Unveils Agriculture and Nutrition Act

House Agriculture Committee Chairman Mike Conaway (R-TX) today introduced the first draft of a new farm bill, the Agriculture and Nutrition Act of 2018 (H.R. 2).

““The farm bill keeps faith with our nation’s farmers and ranchers through the current agriculture recession by providing certainty and helping producers manage the enormous risks that are inherent in agriculture,” said Rep. Conaway. “The farm bill also keeps faith with these families by not only maintaining SNAP benefits but by offering SNAP beneficiaries a springboard out of poverty to a good paying job, and opportunity for a better way of life for themselves and their families.”

Conaway introduced the bill along with House Ag Committee Vice Chair Glenn Thompson (R-PA).

Listen to the press conference: House Ag farm bill introduction

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Biodiesel Board Wants EPA Records

Cindy Zimmerman

The National Biodiesel Board (NBB) is calling on the Environmental Protection Agency to end the “secrecy” surrounding small refiner exemptions requested and issued under the Renewable Fuel Standard (RFS) and has filed a Freedom of Information Act (FOIA) request to find out more.

“The EPA’s decision to grant upwards of 25 exemptions, with at least one significant waiver in the dark of night to a large and profitable refiner, raises urgent questions as to what else might be going on behind closed doors,” said Kurt Kovarik, NBB’s vice president of federal affairs. “Transparency and certainty are key to maintaining a competitive market for biodiesel, and it is critical we understand the impact any waivers could have on the industry and fuel choice for consumers.”

NBB is asking for specific information regarding the waivers, including the number of petitions for small refinery waivers received and granted going back to 2015, as well as the total volume of renewable fuel involved in those, and the names of all refineries that have submitted and granted exemptions.

The Renewable Fuels Association (RFA) submitted a FOIA request to EPA last week asking for the same information, following news reports that the agency has granted small refinery waivers to large companies.

“Large, profitable companies were not intended to be protected through the small refinery exemption. The current absence of transparency is undermining both the intent and benefits, including jobs and rural economic investments, of the effective program,” Kovarik said.

Biodiesel, EPA, Ethanol, Ethanol News, NBB

Ag Secretary Says RFS Waivers Create Demand Destruction

Cindy Zimmerman

Agriculture Secretary Sonny Perdue had the opportunity to give his opinion about the EPA granting numerous Renewable Fuel Standard (RFS) waivers to refiners during a Senate Agricultural Appropriations subcommittee hearing on Wednesday.

While the purpose of the hearing was to review USDA’s FY2019 budget request, Sen. Roy Blunt (R-MO) brought up the RFS waiver issue and pointed out that he and several other farm state senators sent a letter this week to the president asking that EPA cease granting waivers. Sec. Perdue said he agrees.

“As you know, we have a statutory volume of 15 billion gallons, and those waivers reduce that gallon for gallon,” said Perdue. “That is demand destruction.”

The secretary says USDA has requested information from EPA about the waivers granted and “the administrator has promised to have that as soon as they can gather that information.”

Listen here: Blunt/Perdue - RFS waivers

Industry organizations were pleased to hear Sec. Perdue’s words and thanked him for his support. “President Trump and EPA Administrator Pruitt would be wise to listen to Secretary Perdue because he’s right about the fact that EPA’s so-called “hardship” waivers to wealthy refiners destruct demand for ethanol and break the president’s promise to maintain the RFS,” said American Coalition for Ethanol (ACE) CEO Brian Jennings. “Secretary Perdue is demonstrating the kind of leadership rural America expects from the administration so we express our sincere thanks for speaking out and standing up.”

Renewable Fuels Association (RFA) CEO Bob Dinneen (@ethanolBob) tweeted his thanks to Sec. Perdue. “Thank you, @SecretarySonny for fighting for value added agriculture and farmers by strongly advocating for a 15 billion gallon #RFS. @EPAScottPruitt needs to stop the demand destruction and work with you to assure the year round use of E15. #RFSWorks”

ACE, Audio, Ethanol, Ethanol News, Government, RFA, RFS, USDA