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The last but certainly not least panel at the 2015 National Ethanol Conference dealt with the timely issue of rail transportation and how safety and congestion are impacting the marketplace.

Renewable Fuels Association Director of Regulatory Affairs Kelly Davis moderated the panel which featured Dana Lewis with Redfield Energy, Todd Tranausky with Argus Media, and Rail Supply Institute president Tom Simpson.

Davis told those gathered for the session that railroad are critical for the ethanol industry, moving 70 percent of all ethanol to its customers. It’s also a safe way to ship the renewable fuel, with 99.94 percent arriving to their destinations safely. But if rail cars aren’t available, there are consequences for the entire industry.

Lewis said her South Dakota-based company was one of those who felt those consequences of not having returning rail cars. That served as an unwelcome driver for Redfield, ultimately deciding how much ethanol they could produce because of the shipping issues, cutting into the company’s income and not being able to sell ethanol ahead of time because they couldn’t rely on being able to ship the green fuel. Adding insult to injury, many rail cars were siphoned off to the non-renewable petroleum industry in neighboring North Dakota. “Ethanol producers were further down the totem pole.”

Tranausky said that ethanol seems to be treated as a second class citizen when compared to other commodities, including oil. Ethanol-loaded cars wait longer and are relegated to older tankers that might not hold the volume that would keep more ethanol in the supply chain. Simpson explained that the rail industry has issues of its own, with a backlog of freight cars equivalent to nearly 10 percent of the fleet and more awaiting safety re-certifications.

Listen to the entire panel session here: NEC15 Rail Transportation Panel

2015 National Ethanol Conference Photo Album

The National Ethanol Conference featured a panel addressing the road ahead for higher blends.

Renewable Fuels Association (RFA) vice president for industry relations Robert White moderated the panel, which included Kristi Moriarty, National Renewable Energy Laboratory; John Eichberger, National Association of Convenience Stores; and Brian West with Oak Ridge National Laboratory.

“In the past, there was a lot of interest in the number of stations that offered E85 versus the volume. The number we’re looking for today is much different. It’s how many gallons are sold,” said White, pointing out that while some stations in lower populations might be going away, there are more stations going up in higher populations area, where more flex-fuel vehicles are available, pushing up the overall amount of higher blends sold.

Moriarty said their long-term studies on E10 show how the green fuel has not damaged equipment and should serve as an example of how E15 would also be fine. She also encouraged those in attendance to have some empathy for retailers, some who still have to meet the oil companies’ gasoline sales requirements, which ethanol can cut into. Eichberger, who comes from that retail perspective, said his group found the number of E85 pumps in the U.S. has increased 14 percent annually every year since 2007. And he said with fewer flex-fuel friendly stations available per each flex-fuel vehicle (FFV) as compared to those for regular fueled vehicles, more E85 pumps are certainly in the picture.

“There’s a lot of room for growth,” pointing out that while there is a 32-billion-gallon potential market for E85 (if all FFVs fueled at 100 percent), a more realistic goal is getting all the E85 stations by 2025 to sell at what the top 10 percent is selling now, making for a 4.5-billion-gallon E85 market.

West pointed out how good of an octane booster ethanol is and added that it is easier to get in a mid-level blend pump, such as E25, than it is to put in the infrastructure for a hydrogen-based pump.

White sent attendees off with a little job to do: talk to retailers about the benefits of selling ethanol, especially the higher blends.

“Talk to one retailer and ask them [to sell a higher blend],” said White. “Everyone in this industry needs to help the growth of this industry.”

Listen to more of this conversation here: NEC 15 Higher Blends panel

2015 National Ethanol Conference Photo Album

At the 2015 National Ethanol Conference last week, the senior economist with a leading global agribusiness consultancy gave his competitive outlook of the Brazilian ethanol sector relative to the United States.

Owen Wagner with LMC International told the group gathered that while the last 40 years in general have been good to Brazilian ethanol, the industry there has had a sharp reversal of fortune the last couple of years. While in the early part of the 2000s, a favorable market led to 65 new mills being put into commission, flat prices for Brazilian ethanol and lower gasoline prices the last couple of years, led to 27 of those 65 plants shuttering between 2012 and 2014. In addition, with fewer exports going to the U.S. (dropping from 75 percent of Brazil’s exports to less than half now), partially due to the uncertainty with the Renewable Fuels Standard and cheaper corn ethanol in America, have really hit the industry hard. But what’s bad for Brazil seems to be helping producers in the U.S.

“The obvious move for refiners is to go with the cheaper product – corn ethanol from the U.S. What we’re forecasting [considering a poor sugarcane crop this year and tight ethanol supplies there], we see something like 220 million gallons per year [being exported from the U.S. to Brazil],” he said.

But Wagner said U.S. producers must be cautious because any higher amounts of exports of U.S. ethanol to Brazil could force that country’s government to take corrective action.

Listen to Wagner’s complete analysis here: Owen Wagner, LMC International

2015 National Ethanol Conference Photo Album