EPA’s RFS Action Hurts Investments, Puts US Behind

John Davis

CorleA few years ago, the U.S. was considered the most promising biofuels market in the world. But recent policy changes, including the latest from the Environmental Protection Agency (EPA) to roll back ethanol and biodiesel blend amounts to lower than what was scheduled in the Renewable Fuel Standard, is allowing the American biofuels market to be outpaced by competitors in Asia and South America. In addition, Thomas Corle with DONG Energy told the panel at yesterday’s hearing on the subject in Arlington, Va. that investors are now more nervous to put money into the U.S. system.

“Financial institutions will base their investment risks on this historical event,” adding that this proposal goes from a policy of encouraging the RFS to discouraging its implementation. Corle said that in 2008, the U.S. was seen as the most promising market for cellulosic ethanol in the world. “But it has now been replaced or outpaced by other markets that are moving faster, especially China and Brazil. We could be driving by biomass refineries in China before we get our first commercial project commissioned here in the U.S. because the policy risk in the U.S. is greater than even China.”

He cited several other projects where the actions of the EPA are stalling projects in the U.S., costing the country jobs and energy security.

More of Thomas’ testimony can be heard here: Thomas Corle, DONG Energy comments to EPA hearing

Audio, biofuels, EPA, Government, RFA, RFS

Reaction to RFS Strong at EPA Hearing

Joanna Schroeder

Reporters during EPA TestimonyThe Environmental Protection Agency (EPA hearing yesterday drew more than a hundred people from across the country that spoke on behalf of the Renewable Fuel Standard (RFS). There is alarm among the biofuels and agricultural industry with EPA’s proposed RFS rule to lower the renewable fuel volumes in 2014 from 2013. These volumes are even lower when compared to the volume ramp up as outlined in statute.

Here are just several of the comments made to the EPA yesterday.

POET DMS’s Business Development Manager Kevin Potas message to the EPA: “The cellulosic biofuels industry needs stable policy and a firm base of grain ethanol production in order to reach its potential. The low-hanging fruit of cellulosic biofuel production is the existing network of corn ethanol producers and their access to plentiful crop residue. When you weaken that industry, you weaken the opportunity for cellulosic ethanol expansion.”

Rick Hansen, a cattle feeder and crop farmer from Hinton, Iowa, told the EPA: “I could stand up here and tell you that the co-products from ethanol plants have been great for our business, and that for the first time I see a renewed optimism from the Midwest cattle feeder.  Or I could mention how for the first time in decades farmers are making a living without the help from government farm programs.  Or I could tout the number of young farmers and cattle feeders returning to their home place to follow their dreams and make a living. These are just a few of the reasons why an Iowa cattleman like me loves ethanol and the RFS, and there’s many more.”

Mark Wigans, a livestock producer from Renwick, Iowa, told the EPA: “Livestock producers in the Midwest have embraced distillers grains as a favored feed ingredient. Customers of mine who buy calves from our ranch, and feed them out, depend on a reliable consistent supply of distillers co-products for their business success. The Iowa ethanol plant near me sells over 500 tons of dried distillers products every day into local feed markets. Those hog and layer operations in the area won’t allow a ton of them to be shipped elsewhere, as they know the value of them in their feed rations and buy all they can get their hands on.”

Growth Energy’s Director of Regulatory Affairs, Chris Bliley testified: “The RFS was approved by a bipartisan majority in Congress and enacted into law nearly six years ago….oil industry has used its considerable power to delay, litigate, and undercut the RFS. The program was designed to spur investment in renewable fuels, not to punish those who have invested while rewarding those who have impeded development.”

EPA Hearing Dec 5-2013Randy Olson, executive director of the Iowa Biodiesel Board told the EPA: “I’m proud to say that our members are shining examples of what this policy was intended to create. I’m here to ask that you reconsider the proposed rule for Biomass-based diesel and Advanced Biofuels for 2014. Quite simply, the 1.28 Billion gallon Biomass-based diesel target as proposed will likely mean a reduction in biodiesel volumes for 2014 versus this year’s production, and, importantly, signal to a growing industry that the hurdles to compete with entrenched petroleum interests are even higher than we previously thought.”

Jeff Johannesmyer, president and general manager of Western Iowa Energy in Wall Lake testified: “In a town of 850 people, our plant provides 30 well-paying jobs, and supports over 100 indirect jobs. Our community needs it. Also, based on clear policy signals from the Administration, since 2011 Western Iowa Energy has invested over $2 million to upgrade infrastructure and increase our process efficiency.”

advanced biofuels, Biodiesel, biofuels, EPA, Ethanol, RFS

BioEnergy Bytes

Joanna Schroeder

  • BioEnergyBytesDFAmyris, Inc. and Total announced the formation of Total Amyris BioSolutions B.V., a 50-50 joint venture that now holds exclusive rights and a license under Amyris’s intellectual property to produce and market renewable diesel and jet fuel from Amyris’s renewable farnesene. TOTAL is Amyris’s largest investor, holding approximately 18% of its outstanding common stock, and is deeply committed to the development of next-generation renewable fuels from biomass.
  • New speakers have been announced for the European Biomass to Power conference taking place April 1-2, 2014 in Copenhagen, Denmark. Frank Scholdann Lund, area sales manager for Aalborg Energie Technik a/s will speak on ‘Multi-Fuel Fired Biomass Cogeneration Plant’ focusing on how Zignago Power provides high fuel flexibility, high availability, high performance and low emissions. Early Bird rates are still available.
  • Just Energy has announced the establishment of a new charitable initiative, the Just Energy Foundation. The Foundation is a realization of the company’s vision to establish a dedicated entity to give back to the communities it serves, and supports charities in Canada and the United States that work to enhance the lives of local residents in need. The Foundation is funded by Just Energy, a leading North American retailer of electricity, natural gas and green energy.
  • Alterra Power Corp. has announced the sale of its 10% stake in the 50 MW ABW Solar project to a consortium led by Fiera Axium Infrastructure, Inc.
Bioenergy Bytes

PPL Doubles Capacity of Hydroelectric Facility

Joanna Schroeder

PPL Holtwood has announced completion of a new, 125-megawatt powerhouse at its Holtwood hydroelectric facility along the Susquehanna River in south-central Pennsylvania. The powerhouse is part of a $440 million expansion project to boost the plant’s generating capacity and improve fish passage over the century-old dam. The integrated improvements to the fish lifts and water flows are expected to better attract fish into the lifts and ease their migration along the Susquehanna River and its tributaries.

The new powerhouse sits adjacent to the century-old powerhouse and more than doubles the plant’s generating capacity from about 108 megawatts to more than 230 megawatts. The additional capacity is enough to power about 100,000 homes.

PPL GENERATION HOLTWOOD PLANT NEW POWERHOUSE“This project, one of the largest expansions of its kind in the U.S., represents a major investment in clean, reliable, renewable energy,” said Victor Lopiano, senior vice president of Fossil & Hydro Generation for PPL. “I thank everyone who was involved in design and construction of the new powerhouse. This project highlights the potential to upgrade existing hydroelectric facilities and expand capacity without the need to build new dams. The new facility’s two 62.5-megawatt turbines are capable of generating more electricity than the 12 existing turbines, combined.”

Lopiano said the hydroelectric expansion further strengthens the diversity of PPL’s competitive generation fleet within the mid-Atlantic. The fleet includes hydroelectric power, nuclear power, natural gas and coal-fired power plants, along with other forms of renewable energy.

Alternative energy, Electricity, Hydro

Success of RFS is Ag Issue Felt All Over the World

John Davis

schwark1Nearly 30 years ago this Christmas time, the world saw one of the greatest human sufferings ever unfold before its eyes, as a million people starved to death in Ethiopia. In a particularly poignant moment during yesterday’s Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) hearing, Rick Schwarck, the president and CEO of Absolute Energy, an ethanol producer on the Iowa-Minnesota border, reminded the audience why that tragedy happened.

“It’s hard to talk about because it is so perverted. It was caused by low ag prices.”

Rick went on to point out that Ethiopia’s economy has dramatically rebounded, especially in the last few years, as commodity prices worldwide have risen and raised the fortunes of the 80 percent of the population in Ethiopia that relies on a rural, ag-based economy. He added this is being repeated all over the world, throwing cold water on much of the food-versus-fuel argument.

“Google any ag country, and take a look at the growth curves in their economies; it’s been staggering,” Rick said.

This is a pretty busy time of year for Rick, as he is president of the Iowa Renewable Fuels Association (IRFA) and a member of the national Renewable Fuel Association (RFA). Plus, his family has a choose-and-cut Christmas tree farm back home, so he felt pretty lucky to be able to make the trip. But he also knows how important it is for the RFS to be enforced, in his words, “just as it was written and just as it was intended.”

Listen to Rick’s testimony here: Rick Schwarck, President and CEO of Absolute Energy comments to EPA hearing

Audio, biofuels, EPA, Ethanol, Ethanol News, Government, Iowa RFA, RFA, RFS

Real Jobs on the Line with EPA’s Changes to RFS

John Davis

beemer1One of the country’s oldest ethanol producers says it could generate a lot of economic activity for the rural communities where it has had to idle some plants, if the Renewable Fuel Standard (RFS) wasn’t being tinkered with. Speaking at yesterday’s Environmental Protection Agency (EPA) hearing on the agency’s proposed changes to the RFS, Mark Beemer, President of Aventine Renewable Energy, said the potential money that could come into just one rural community is staggering.

He said if they were able to re-open their two Aurora, Nebraska ethanol facilities, they would be adding $5 million of payroll to the local community (of 4,500 residents) with 65-70 jobs, paying for $5 million worth of millwright activities to repair and maintain these two ethanol facilities, plus another $85 million for other spare parts and supplies, and the biggest purchase of all – nearly $300 million in local corn purchases, for a total benefit to the local community of about $400 million. “That’s why ethanol has been so successful, because of the impacts in rural America.”

Mark also expressed frustration over possible wavering by the EPA over the Renewable Identification Numbers (RINs) issue and feared that if the agency doesn’t make the obligated parties follow through, those obligated know they’ll have found a way to end-run the law.

“Congress was fully informed of the blend-wall issue with RFS2 when it was established, and rising RIN values would be the stick, not the carrot, imbedded in the legislation that would incentivize the distribution of E85 and E15,” he said.

Mark said American agriculture has come through on its end of the RFS deal; now it’s time for the government to do its part.

“I ask the EPA to reconsider your changes to the mandate and restore the RFS2 to the original Congressionally mandated target levels.”

Listen to all of Mark’s testimony here: Mark Beemer, President of Aventine Renewable Energy comments to EPA hearing

Audio, biofuels, EPA, Ethanol, Ethanol News, Government, RFA, RFS

RFS is Working… Why Are We Here?

John Davis

oestmann1So the Renewable Fuel Standard (RFS) should certainly be considered a success since it is doing many of the things it was projected to do:
– A capacity that is greater than 10 percent of the total fuel supply (that amount was expected right in the original bill)
– An alternative to foreign-based fuels
– A growing renewable fuels industry
– Adding to farm incomes in rural America

Plus, a lot more. So that led to this question during the Environmental Protection Agency’s hearing on the RFS in Arlington, Va.:

“So why are we even here?” asked Jeff Oestmann with East Kansas Agri-Energy LLC, an ethanol producer with an approximately 45 million gallon per year operation in Garnett, Kansas. “It boggles the mind to understand why we have a completely successful program by any measure, all targets are being met, and we have compliance by all [Renewable Volume Obligations (RVO)] parties.”

One of the most frustrating things Jeff cited was the fact that the EPA proposed lower amounts of ethanol and biodiesel that could be mixed into this country’s fuel supply than what the law intended, and that could destabilize the biofuels industry and the rural economy. He said all this turmoil is already stalling future work as investors are hesitant to put money into an industry they’re not sure will get the support required by the law. And Jeff said he just doesn’t have time to come to debate what is a successful program and was supposed to be the law of the land.

“It’s hard to come to Washington today, as our company is small and really cannot afford my time to be spent here today. Congress has created the RVO. It is EPA’s job to implement the will of Congress… not the will of the auto or petroleum industries.”

Listen to Jeff’s full testimony here: Jeff Oestmann, East Kansas Agri-Energy LLC comments to EPA hearing

Audio, biofuels, EPA, Ethanol, Ethanol News, Government, RFA, RFS

AEC’s Coleman: RFS Proposal “Off Track”

John Davis

coleman1The executive director of the Renewable Fuel Association’s (RFA) Advanced Ethanol Council (AEC) says what the government is proposing when it comes to the amount of ethanol and biodiesel to be blended into fuels is “off track.” Speaking today at the Environmental Protection Agency’s (EPA) hearing on the Renewable Fuel Standard (RFS), in Arlington, Va., just across the river from the Nation’s capital, Brooke Coleman said the proposed changes to the RFS is causing some real problems.

“The new proposal is off track, and we’ve recoiled far too much,” he told the roomfull of biofuels advocates and foes. Brooke pointed out that the EPA’s E85 data is “woefully pessimistic” and needs to be updated.

The heart of the issue is the problems the proposal will cause with Renewable Identification Numbers (RINs). “For our investors to believe in this program and want to enter into this marketplace, they have to believe in RINs. That’s the game-changer,” going on to explain that the RIN program forces the Exxons of the world to buy RINs and forces non-compliant entities to play by the same rules. “It puts the Cumberland Farms and Gulfs of this world on equal footing with Exxon, and they are actually rewarded for complying with the rule.”

He concluded saying the biggest issue with the proposal is it depressurizes the RIN program to the point that investors don’t have confidence they will be able to drive change.

“So we have got to move those numbers up significantly, not unreasonably, to put the pressure back in the program, or the advanced biofuels industry is going to have a very, very, very difficult time surviving.”

Hear Brooke’s full testimony here: Advanced Ethanol Council Executive Director Brooke Coleman comments to EPA hearing

AEC, Audio, biofuels, EPA, Government, RFA, RFS

Branstad Makes Impassioned Plea for RFS

John Davis

branstad1Iowa Gov. Terry Branstad made an impassioned plea in favor of the current Renewable Fuel Standard (RFS) and showed no love for what the Environmental Protection Agency (EPA) is proposing for reducing the amount of ethanol and biodiesel to be put into gasoline as originally mandated in the 2007 law.

“After decades of efforts to reduce our dependency on foreign oil and increase farm income with policies like the RFS, the EPA is now caving in to Big Oil!” Branstad thundered, pointing out that since Big Oil doesn’t control renewable fuels, it doesn’t want to see the green fuels grow. And the governor dismissed claims that vehicles can’t handle higher blends, pounding on the table as he said, “If you don’t believe it can be done, go to Brazil! Go to Brazil where they are making ethanol out of sugarcane and soon going to be doing it out of corn, and they have virtually all flexible-fuel vehicles in their fleets!”

Branstad continued his passionate speech, recalling the farm crisis of the 1980s when he was governor the first time around and how the proposed cuts in the RFS could cause another crisis, especially when you consider that there’s still no farm bill. And he said the problems could spread beyond Iowa’s borders.

“This EPA proposal will cost 45 thousand jobs in this nation. We don’t need to drive the number of people employed down,” simply to cater to the petroleum industry. Branstad added Iowans, who supported Obama during each of his campaigns, including his historic election in 2008, because he promised to support renewable fuels, now feel betrayed.

Moving forward, he wants the EPA to come to his state to hear from the people most directly affected by the proposed change, “where people know about the impact this has and know the truth and the facts!”

Listen to the entirety of Gov. Branstad’s testimony here: Iowa Gov. Terry Branstad comments to EPA hearing

Audio, Biodiesel, biofuels, EPA, Ethanol, Ethanol News, Government, RFA, RFS

Patriot’s Hulting Tells Rural Businesses’ Side of RFS

John Davis

hulting1A change in the Renewable Fuels Standard (RFS) will have dramatic impacts for the small businesses that have cropped up in rural America. That was the message Patriot Renewable Fuels‘ Judd Hulting made to the Environmental Protection Agency’s hearing on its proposal to reduce the amount of ethanol and biodiesel to be mixed into gasoline.

“We believe what is being proposed is a step backwards and really not what Congress envisioned back in 2005 and 2007,” he told the panel in Arlington, Va., today. He says small, rural companies, such as his, have been on a positive roll the last few years, thanks to the market the RFS has helped nurture. Judd also alluded to the fact that changing the RFS also puts too much uncertainty into investors’ minds and keeps them from putting more into the rural communities where these biofuels refineries have thrived. “What our investors envisioned was a long-term program.”

Judd pointed out that his plant is hiring more workers, as Patriot Renewable Fuels adds a refinery turning the corn oil from the plant’s ethanol operation into biodiesel. Plus, he said the industry is not getting enough credit for producing several products from that same bushel of corn.

“Over 5 years, we’ve produced half a billion gallons of ethanol; every day we produced a 1,000 tons of feed,” pointing out that his own livestock-producing family is benefiting from these biofuels co-products.

Listen to all of Judd’s testimony here: Judd Hulting, Patriot Renewable Fuels comments to EPA hearing

Audio, Biodiesel, biofuels, EPA, Ethanol, Ethanol News, Government, RFA, RFS