Ethanol and Biodiesel Groups Oppose PES Settlement

Cindy Zimmerman

The Renewable Fuels Association (RFA) and the National Biodiesel Board (NBB) both submitted comments to the Department of Justice yesterday opposing the proposed bankruptcy settlement agreement with Philadelphia Energy Solutions (PES).

RFA commented that the proposed settlement agreement, which covers the refiner’s Renewable Volume Obligations (RVOs) for January 2016-April 2018, should be rejected “because the terms are patently unfair, unreasonable, and inconsistent with the purposes of the RFS program.”

“By allowing PES to retire only 138 million RINs for its pre-effective date obligation of more than 500 RINs, DOJ and EPA have effectively waived approximately three-quarters of PES’s RVOs for this period….Exacerbating its noncompliance, PES reportedly had been also selling roughly 40 million RINs in the fall of 2017, even as the March 2018 RVO compliance deadline approached. This is a classic case of a regulated entity being allowed to have its cake and sell it, too—while PES seeks to escape from its financial responsibilities under the RFS program, it embraces that same program for the limited purpose of profiting from it,” RFA added.

NBB similarly commented that the proposed settlement would harm the renewable fuels industry and undermine the intent of the RFS program by excusing more than 70 percent of the company’s compliance obligations for the two-year period.

“While PES continues to blame the RFS for their woes, the fact is, the bankruptcy is a mess of their own making. Poor management and a failure to respond to changes in the crude oil market is to blame,” said Kurt Kovarik, NBB’s vice president of federal affairs. “PES should not be rewarded for deliberately failing to comply with the decade-old Renewable Fuel Standard. Doing so is akin to rewarding a toddler in the midst of a temper tantrum. Instead, the government should hold PES to the same renewable volume obligation as all other refiners. Not doing so could severely hinder the RFS’s goals of enhancing energy security, protecting the environment, and building our nation’s rural economy.”

The U.S. Bankruptcy Court of Delaware has to approve PES’ proposed settlement agreement on April 4.

Biodiesel, Ethanol, Ethanol News, NBB, RFA, RFS

Ethanol Report on Custom Ethanol Chopper

Cindy Zimmerman

Several hundred lucky motorcycle lovers got the chance to see a brand new, E85-capable American Chopper designed by Paul Teutul, Jr. when it was unveiled at East Kansas Agri-Energy on Saturday. The rest of the world will have to wait until the sweet ride officially debuts on the new season of the Discovery Channel’s American Chopper this summer.

Discovery Channel crews filmed the unveiling of the Renewable Fuels Association custom motorcycle at the plant in Garnett, Kansas and a crowd of more than 500, mostly on motorcycles, were part of the show. The price of admission was the promise to keep any photos of the bike private until after the episode airs.

In this edition of The Ethanol Report, RFA Vice President of Industry Relations Robert White talks about the collaboration with Paul Jr. and how the custom build will take RFA’s message to motorcyclists to the next level.

Ethanol Report on Custom Ethanol Chopper

Click on the photo for a larger version, and see more photos on the RFA Facebook page.

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Audio, Ethanol, Ethanol News, Ethanol Report, Motorcycle, RFA

Growth Energy Formally Protests PES Settlement

Cindy Zimmerman

Growth Energy has filed comments with the Department of Justice formally objecting to a proposed bankruptcy settlement between the Carlyle Group’s Philadelphia Energy Solutions (PES) and the U.S. Environmental Protection Agency (EPA) that would absolve the refinery of key obligations under the Renewable Fuel Standard (RFS).

“The proposed settlement sends the wrong message to industry stakeholders, implying that there are no consequences for violating the law,” said Growth Energy CEO Emily Skor. “The Carlyle Group pulled hundreds of millions of dollars out of the company and failed to make the clean energy investments that have allowed other refiners to thrive. The EPA should not reward the Carlyle Group by allowing PES to escape more than 70 percent of its obligations under the Clean Air Act. If this sue-and-settle-style settlement is approved, it sends a terrible message to investors who have played by the rules. With farm income at a 12-year low, rural America can’t afford another handout to refinery owners.”

Among Growth Energy’s objections to the settlement is that it unjustifiably permits the retirement of 138 million Renewable Identification Number (RIN) credits for the 2016 and 2017 compliance periods and the first quarter of 2018 against a Renewable Volume Obligation (RVO) of 467 million RINs plus the obligation PES incurs in the first quarter of 2018, likely totaling well over 500 million RINs – a discount of more than 70 percent.

Ethanol, Ethanol News, Growth Energy, RFS, RINS

ACE 10th Fly-in Conquers the Hill in the Snow

Cindy Zimmerman

Neither snow nor rain kept the American Coalition for Ethanol fly-in teams from completing their appointed rounds last week on Capitol Hill. While the federal government was shut down for the snow, Congress was still open and surprisingly few pre-arranged meetings were cancelled. ACE members were even able to sit down with several members of Congress, including Sen. Heidi Heitkamp (D-ND) Rep. Adrian Smith (R-NE) and Rep. Collin Peterson (D-MN), and the entire group heard from Sen. Joni Ernst (R-IA).

ACE Fly-in participants Rick Schwarck, Dave Sovereign, and Jerry Calease

This event has been getting real people from all segments of the ethanol industry into Congressional offices for a decade now, and several ACE members have attended every year. Among them is Dave Sovereign who serves as vice president for the organization and is a farmer who sits on the board of two ethanol plants and owns part of a retail fuel outlet. “We’re here to bring the entire picture together,” said Sovereign. “If it’s good for farmers, it’s good for the local community, it’s good for the state, and it’s good for the entire nation.”

Rick Schwarck of Absolute Energy has also attended all ten years. “Bringing this grassroots effort to Washington D.C. pays dividends,” Schwarck said. “We’re not just going to see our friends. We’re visiting with folks from oil producing states and others.” Schwarck was one of the industry representatives chosen to meet with the president earlier this month to explain why a waiver to allow 15% ethanol to be sold year round will bring down the price of Renewable Identification Numbers (RINs).

The early Spring snowfall in D.C. last week was probably the worst weather the fly-in has seen in ten years, but Jerry Calease of Golden Grain Energy says it was nothing to most of the attendees. “Growing up in Iowa, and I was with a team from Minnesota, and we know what 4 or 6 inches of snow is, so that was no big deal,” he said.

Listen to interviews with Dave, Rick and Jerry below:

Interview with Dave Sovereign, Golden Grain Energy

Interview with Rick Schwarck, Absolute Energy

Interview with Jerry Calease, Golden Grain Energy

2018 ACE DC Fly-in Photo Album

ACE, Audio, Ethanol, Ethanol News

Ethanol on China’s Draft Retaliation List

Cindy Zimmerman

Following action by President Trump yesterday to impose tariffs on up to $60 billion in Chinese imports, China is making its list of what U.S. products will be the target of retaliation. The list reportedly includes agricultural products such as U.S. pork, modified ethanol, wine, fruits and nuts, and soybeans are expected to be as well.

“We’re disappointed that China is seeking additional tariffs on U.S. ethanol exports,” said Growth Energy CEO Emily Skor said. “These actions could undercut our potential to increase exports to China following the country’s stated goal to move to a 10 percent ethanol blend by 2020, and would be a major barrier to increased trade.”

Renewable Fuels Association President and CEO Bob Dinneen says they expected ethanol would be on the list. “China’s response was entirely predictable, given recent actions by our administration to implement new tariffs. It is my fervent hope that the White House now fully understands the impact these actions will have on America’s ethanol industry and farmers, and we urge the administration to redouble its efforts to expand demand for ethanol here at home.”

China was the third-largest market for U.S. ethanol exports in 2016, accounting for almost 20% of total exports, but Dinneen says the country imposed a 30% tariff on U.S. ethanol last year, bringing sales down to almost nothing until recently when they have started to tick back up despite the tariff. “But a 15% additional tariff, on top of the 30 percent that’s already there will clearly prohibit any sales to that country,” Dinneen says.

Audio file – RFA CEO Bob Dinneen reacts to potential China retaliation tariffs

Audio, Ethanol, Ethanol News, Exports, International, Trade

No 2018 Tax Credit for Biodiesel

Cindy Zimmerman

The omnibus spending bill agreed to in Congress to fund the government leaves the biodiesel industry in the lurch again by failing to include a reinstatement of the biodiesel tax credit.

“The lack of urgency by Congress to extend this expired tax credit continues to frustrate the producers, blenders and marketers of biodiesel,” said Kurt Kovarik, vice president of federal affairs for the National Biodiesel Board (NBB). “We will work to educate members of the economic and environmental benefits of increased use of biodiesel, so that Congress is poised to drive investments in this American energy industry.”

Last month, Congress passed a retroactive extension of the biodiesel tax incentive for 2017 only. But producers continue to operate in 2018 without a tax credit, as they have for the past several years, waiting for a retroactive extension. NBB has engaged in aggressive legislative outreach on this issue, participating in a recent Congressional hearing on the issue and sending multiple letters to Congressional leaders making the case for renewal of the biodiesel tax incentive so the industry can operate with more certainty going forward.

Biodiesel, NBB

Sen. Ernst Visits ACE Ethanol Champions

Cindy Zimmerman

Senator Joni Ernst has earned the title of “ethanol champion” for her work on behalf of the industry to protect the Renewable Fuel Standard (RFS), but she took the time today to visit with people she thinks are the real champions – the grassroots farmers, producers, retailers and investors who make up the American Coalition for Ethanol (ACE).

“You are all out there making a difference,” said Sen. Ernst in her address to ACE members in Washington DC.

Her main remarks centered around the continuing debate over the RFS and Renewable Identification Number prices and her own discussions with Sen. Ted Cruz and others on the idea of a “win-win” solution for both ethanol and refiners. “Their ‘win-win’ is to cap RINs. That’s not a win for us,” said Ernst. “For us the “win-win” is the RVP waiver and going to E-15 year-round….The president thought that was a brilliant idea.”

During an interview, Sen. Ernst says she believes the White House is “backing away” from the RIN cap idea and leaning toward sending the whole issue to Congress to resolve. “We have had a strong coalition in Congress as well that pushes back against any efforts to weaken the RFS,” she said.

Listen to her remarks and my interview below:

Sen. Joni Ernst remarks to ACE

Interview with Sen. Joni Ernst

2018 ACE DC Fly-in Photo Album

ACE, Audio, Ethanol, Ethanol News

Sen. Heitkamp Opposes RIN Price Cap

Sen. Heidi Heitkamp (D-ND) is one of several lawmakers on Capitol Hill who received a visit from a team of American Coalition for Ethanol (ACE) members in DC for their annual fly-in, and she was overjoyed to be presented with one of the organization’s special corn kernel cracking display for her office.

Sen. Heitkamp is obviously a friend of ethanol, speaking out this week against the idea of a cap on Renewable Identification Number (RIN) prices. “If the administration takes this action, it would undercut our farmers and biofuel producers at a time we should be bolstering our renewable fuel industry – not sabotaging it,” Heitkamp said. “While I’ve long pushed for the year-round sale of E15 to support biofuels, the artificial RIN cap reportedly being considered by the administration could tank biofuel prices and cost North Dakota jobs. We must keep fighting for our rural communities and farmers, and I urge the administration to reject a RIN price cap.”

Listen to the senator explain why a RIN cap is a bad deal:
Interview with Sen. Heidi Heitkamp

2018 ACE DC Fly-in Photo Album

ACE, AgWired Energy, Audio, Ethanol, Government

ACE Fly-in Takes Off Despite Bad Weather

Cindy Zimmerman

Nearly all of the members registered to attend the 10th annual American Coalition for Ethanol (ACE) Fly-in are here and ready to hit The Hill in D.C. despite very inclement weather that has shut down the government.

ACE CEO Brian Jennings says this year is the most critical for the industry in all the ten years they have been coming to Washington D.C. to talk ethanol with lawmakers and they have a pretty direct message. “Don’t mess with the RFS, and call the president and call EPA and tell them we do not want any damage done to the RFS,” Jennings said.

He says the whole RIN price issue is so fluid at this point, it is hard to know what is happening from day to day. “It’s a challenge to get ready for an event like this when things are changing so rapidly.”

ACE members already heard this morning from Bill Wehrum, EPA Assistant Administrator for Air & Radiation, who was gracious enough to brave the weather and answer some tough questions.

Listen to my interview with Brian here:
Interview with Brian Jennings, ACE CEO

2018 ACE DC Fly-in Photo Album

ACE, Audio, Ethanol, Ethanol News

Sec. Perdue Comments on RFS and RINS

Cindy Zimmerman

Not much was said publicly during National Ag Day on Tuesday about the continuing RFS/RIN price dispute which is still being discussed at the very highest levels of government. But Agriculture Secretary Sonny Perdue did give an update during his remarks at the National Press Club Ag Day event.

“We’ve been in fairly intense discussions about the solution,” said Perdue. “The president has been involved in those and his commitment to the corn producers, biodiesel, biofuels industry is still solid.”

However, Perdue says the president has to consider the allegations of job loss in the refinery sector so the challenge is to reduce the Renewable Identification Numbers without hurting the renewable fuel volume,” he said. “We are hoping that we can resolve it where we will not see RINs capped.”

Perdue noted that when the RINs issue first started in October, the RIN price was 98 cents. “They were 38 as of last Friday so the conversation itself has already been helpful in driving RIN prices down.”

Reports were circulating that Perdue was going to meet Tuesday with EPA Administrator Scott Pruitt to discuss options to present to the president.

Listen to Perdue’s comments on RINs here: Secy Perdue comments on RFS/RIN price issue

2018 National Ag Day Photo Album

Audio, Ethanol, Ethanol News, RFS, RINS, USDA