Ethanol Blend Rates Hit Record Levels in Summer 2022

Cindy Zimmerman

The Energy Information Administration reports that this past summer, the price of fuel ethanol was lower than the price of the petroleum component of gasoline, which led to record-high fuel ethanol levels in gasoline sold in the country.

“The fuel ethanol blend rate, based on our data going back to 2007, established a new record summer average of 10.5% in 2022,” EIA reports. “Last year, the average summer blend rate was 10.3%. In 2020, the EPA also issued a summertime E15 fuel waiver, bringing the average summer blend rate to 10.4%. The summer blend rate was 10.0% in 2019 and 10.1% in 2018, and it averaged lower percentages in all previous years.”

EIA says ethanol’s price discount to gasoline was one factor that led to the higher summer blend rate in 2022. “Although ethanol prices have been high in 2022, they have been low relative to gasoline prices, which were at their highest since 2014 this summer because of low domestic inventories and constraints on refining capacity. When factoring in the renewable identification number (RIN) credit for blending ethanol with gasoline, ethanol’s discount to gasoline has been especially strong.”

Renewable Fuels Association President and CEO Geoff Cooper says the EIA analysis confirms that American drivers gravitated toward lower-cost E15 and E85 this summer as war in Ukraine drove pump prices to record heights. “The report also demonstrates that President Biden made the right call by issuing emergency waivers to allow the continued sales of E15 through the summer months,” said Cooper. “The Biden administration’s emergency waivers helped stave off fuel shortages and ensured consumers had uninterrupted access to E15, which was typically priced 20-40 cents per gallon lower than regular gasoline. EIA’s analysis also shows that consumption of lower-carbon renewable fuels increases, as expected, when the Renewable Fuel Standard and its RIN market mechanism are allowed to work as intended. This report comes at a critical time and underscores the importance of permanently removing the summertime barrier to E15 sales and implementing robust RFS volume requirements for 2023 and beyond.”

Cooper notes that the report matches a recent analysis by RFA Chief Economist Scott Richman, which found an additional 194 million gallons of E15 were sold during the summer as a result of the Biden administration’s RVP waivers, saving American consumers $57 million.

Ethanol, Ethanol News, Renewable Fuels Association, RFA, RFS

RFA Joins Ag Bioeconomy Coalition

Cindy Zimmerman

The Renewable Fuels Association has joined the Ag Bioeconomy Coalition, a group founded earlier this year to advance federal policy initiatives that “foster growth toward an economy based on innovative bio-based products derived from agricultural commodities, including ethanol and other renewable fuels.”

“With smart policy and targeted investment, the U.S. agriculture and bio-manufacturing sectors can provide practical solutions to today’s most pressing challenges, including energy market volatility, climate change, food insecurity, and underdevelopment in rural areas,” said RFA President and CEO Geoff Cooper. “RFA is pleased to join with other leaders in the bioeconomy to advocate for policies that seize on the enormous potential of bio-manufacturing to help solve these complex problems and improve the quality of life for all Americans.”

Other coalition members include American Farm Bureau Federation, American Soybean Association, Corn Refiners Association, Growth Energy, National Association of State Departments of Agriculture, National Corn Growers Association, and National Hemp Association and Plant Based Products Council.

Cooper notes that ethanol is poised to play a leading role in the energy transition, both as a transportation fuel and as a building block for advanced bio-products and chemicals. According to USDA, biobased products already displace approximately 9.4 million barrels of oil annually and have the potential to reduce greenhouse gas emissions by an estimated 12.7 million metric tons of CO2 equivalents per year. These GHG benefits will grow in the future, as the carbon footprint of ethanol and other bioproducts continues to shrink. In 2021, RFA’s producer members unanimously pledged to reach net-zero carbon emissions by 2050 or sooner.

biofuels, Carbon, Energy, Ethanol, Ethanol News, Renewable Fuels Association, RFA

New Grants Support RFA Ethanol Safety Programs

Cindy Zimmerman

The Renewable Fuels Association has again received grant funding to continue to support its safety education program through its work with TRANSCAER, a voluntary national outreach program that focuses on community preparedness for possible hazardous material transportation incidents.

A $25,000 grant from the Federal Railroad Administration will support eight ethanol safety seminars and four “train the trainer” webinars for first responders, and a $40,432 Community Safety Grant from the Pipeline and Hazardous Materials Safety Administration (PHMSA) will fund four Ethanol & Steel Drum Safety seminars in conjunction with the Industrial Steel Drum Institute.

“These federal funds will provide the Renewable Fuels Association with the opportunity to further their training and outreach initiatives to emergency responders in communities across the United States. Through federal grant funding the RFA has already updated their Ethanol Safety Training program, made their ethanol program available online in Spanish, and offered numerous in-person and virtual learning opportunities,” said Erica Bernstein, Director of Outreach, CHEMTREC and TRANSCAER.

Over 1200 individuals were trained this year through 34 training opportunities supported by RFA’s safety program, which has trained over 15,000 in 400 training sessions and events since 2010. For more information on RFA’s work in this area, visit the Ethanol Emergency Response website at www.ethanolresponse.com, where the training programs conducted in the seminars and webinars can be seen.

Ethanol, Ethanol News, Renewable Fuels Association, RFA, safety

Western Plains Moving to Carbon Neutral Ethanol Production

Cindy Zimmerman

Western Plains Energy LLC in Oakley, Kansas is on a mission to become the first zero emissions U.S. ethanol producer with the installation of the first Whitefox ICE®-XL system in the country.

“Our quest to achieve net-zero emissions is something that we are passionate about, and we are excited to partner with Whitefox to help us achieve our goal,” said Western Plains CEO Derek Peine. “Since beginning operations in 2004, Western Plains has always been on the forefront of innovation and an early adopter of technologies that deliver step-changes in energy efficiency and operational yield. In our discussion with Whitefox we found that its ICE-XL integrated membrane solution would serve as a cornerstone in fully decarbonizing our production process.”

Tony Short, Head of Global Sales at Whitefox said, “Whitefox ICE-XL is an evolution of the Whitefox ICE® which we have installations in 9 US ethanol plants. ICE-XL fully replaces existing molecular sieves and delivers exceptional operational benefits such as up to 50% capacity increase across distillation and dehydration and 50% steam reduction when fully integrated.”

The companies report that the initial engineering phase is already in progress and the project has an estimated start-up and commissioning date towards the end of next year.

Carbon, Ethanol, Ethanol News

Summit Carbon Solutions Hits Project Milestone

Cindy Zimmerman

Summit Carbon Solutions announced a major milestone this week in its carbon capture, transportation, and storage project, securing agreements for more than half of the proposed pipeline route project wide. the company has now secured approximately 3,400 easement agreements totaling 1,030 miles across Iowa, Minnesota, Nebraska, South Dakota and North Dakota.

Summit Carbon Solutions is partnering with dozens of ethanol plants across the Midwest to develop the largest carbon capture and storage project in the world. Through a multi-billion-dollar private investment, these partners will be able to sell their product in the growing number of markets that pay more for low carbon fuels. California, the largest ethanol consuming state, and Canada, the largest U.S. ethanol importer, have both adopted policies that incentivize the use of low carbon fuels. Access to these markets is essential to the long-term viability of the ethanol industry that today purchases approximately 40% of all the corn grown in the United States and remains a key driver of commodity prices and land values.

In addition to driving growth in the ethanol and agricultural industries, Summit Carbon Solutions will support local economies across the Midwest by investing an average of $45 million in each of the 82 counties where the project is located during construction, which are dollars that will flow back to hotels, restaurants, hardware stores and other local businesses to generate ongoing economic growth. After construction, according to a study by global accounting leader Ernst & Young, Summit Carbon Solutions will pay an average of $930,000 in new property taxes annually to every county where the project is located, helping communities support key local priorities such as schools, road construction, public safety, and more.

carbon capture, Ethanol, Ethanol News

Export Exchange 2022 Leads to $225 Million in Sales

Cindy Zimmerman

Export Exchange 2022 last month in Minneapolis is already making bank for participants, according to surveys of overseas grain buyers who attended saying they purchased at least $225 million worth of grain and ethanol co-product.

Buyers and end-users were surveyed after the conference to see if they had made any purchase agreements with sellers and if so, how much was purchased. In total, attendees reported sales of just over $225 million with another $128 million under negotiation. That equates to 514,850 metric tons of grains and co-products traded either at the conference or immediately before or after. The top grain traded during the two-day conference was corn, with 208,800 metric tons collectively purchased, followed by distillers dried grains with solubles (DDGS), with 156,400 metric tons purchased.

“Once again, these numbers show that Export Exchange is where international buyers and sellers go to do business,” said Renewable Fuels Association President and CEO Geoff Cooper. “In just three days, buyers purchased enough DDGS to fill three Panamax vessels. We are proud to offer this excellent deal-making opportunity every two years.” RFA has co-sponsored the Export Exchange since 2010.

corn, Distillers Grains, Ethanol, Ethanol News, Export Exchange, Exports, Renewable Fuels Association, RFA

RFA Spotlights Ethanol’s Carbon Reduction Benefits

Cindy Zimmerman

The Renewable Fuels Association is leading the charge on a national and global basis to spotlight ethanol’s carbon reduction benefits and how it can play an even greater role going forward in the fight against climate change.

As leaders from around the world are gathering in Egypt for the 2022 United Nations Climate Change Conference, better known as COP27, RFA sent the simple message that ethanol is a low-carbon renewable fuel available today to help meet climate goals and it’s well on its way to net-zero carbon emissions.

RFA also released an updated one-page fact sheet about ethanol’s carbon benefits. “It is our hope that U.S. policymakers ensure ethanol and other renewable fuels are an important part of the discussions at COP27,” said RFA President and CEO Geoff Cooper. “More and more national capitals across the globe are rightfully looking at the value of renewables like ethanol to sustainably fuel their vehicles and power their green economies.”

Meanwhile, RFA laid out the ethanol industry’s priorities in separate comments and testimony to the U.S. Department of Treasury, Internal Revenue Service and the U.S. Department of Agriculture as the agencies prepare to implement the Inflation Reduction Act’s renewable energy tax and grant programs.

“The energy provisions in the Inflation Reduction Act represent the most significant federal commitment to low-carbon biofuels since the Renewable Fuel Standard was expanded by Congress in 2007,” said Cooper. “If implemented correctly, the IRA’s clean energy measures will stimulate unprecedented investment and decarbonization in the ethanol sector. But if the federal government gets implementation wrong, it will be an enormous missed opportunity for ethanol and other renewable fuels to play a leading role in the fight against climate change.”

Ethanol, Ethanol News, Renewable Fuels Association, RFA

Biofuel Groups Urge Congress to Avoid Rail Strike

Cindy Zimmerman

The Renewable Fuels Association (RFA) joined nearly 200 organizations representing agricultural, food and renewable fuels industries last week in a letter urging Congress to act quickly to prevent a rail strike and service shutdown on November 19, the deadline for unions and railroads to finalize an agreement.

“A strike or lockout combined with existing challenges in the rail system, at our ports, with trucking and with record low water levels on the Mississippi River impacting numerous barge shipments would be catastrophic for the agricultural and broader U.S. economies,” wrote the Agricultural Transportation Working Group in a letter to congressional leadership. “Congress must act to prevent this from occurring if the parties cannot reach agreement.” The group pointed out that critical inputs and agricultural products such as ammonia shipments could be embargoed as early as November 14, the day Congress returns to session.

More than 70 percent of the ethanol produced in the United States is transported by rail across the lower 48 states as well as into Canada and Mexico. Over the last five years, U.S. railroads have transported an average of nearly 395,000 carloads of ethanol per year.

“The U.S. ethanol industry is highly reliant on the rail system to get our products to market,” said RFA President and CEO Geoff Cooper. “More than 400,000 workers whose jobs are supported by the ethanol industry are depending on Congress, the Biden administration, the railroads, and the unions to work this out as quickly as possible. If the nation’s trains stop running, the nation’s ethanol biorefineries stop running too.”

The administration brokered an agreement between the National Railway Labor Conference (NRLC) and twelve unions on September 15 but two unions have voted to not
ratify and congressional action will be necessary if the parties fail to reach agreement.

Ag group, biofuels, Ethanol, Ethanol News, Renewable Fuels Association, RFA, transportation

EPA Biofuel Proposal Deadline Extended to Nov 30

Cindy Zimmerman

On Friday, the U.S. Environmental Protection Agency (EPA) and Growth Energy agreed under their consent decree to delay issuance of the proposed 2023 Renewable Volume Obligation (RVO) under the Renewable Fuel Standard (RFS) by two weeks to no later than November 30, 2022. EPA is still required to adhere to the consent decree deadline for finalizing the RVOs by no later than June 14, 2023.

“We agreed to EPA’s request for a two-week extension on the condition that November 30 will be the final deadline and there will be no further extensions of any deadline for action, as underscored in the stipulation document filed today,” said Growth Energy CEO Emily Skor.

The consent decree agreement followed Growth Energy’s notice of intent to sue and filing of a complaint in federal district court in response to the agency’s violation of the statutory deadlines to issue renewable fuel volume requirements for the RFS program.

EPA, Ethanol, RFS

RFA Calls GAO Report on SREs “Flawed and Obsolete”

Cindy Zimmerman

The head of the Renewable Fuels Association slammed a report from the General Accounting Office on small refinery waivers (SREs) released this week that was requested over three years ago as both flawed and obsolete.

“You simply can’t make this stuff up,” said RFA President and CEO Geoff Cooper. “In the summer of 2019, a bipartisan group of renewable fuel supporters in both the House and Senate asked the GAO to investigate the gross mismanagement of the small refinery exemption program by former EPA Administrators Scott Pruitt and Andy Wheeler. Now, more than three years later—and less than one week before the mid-term elections—GAO puts out a shoddy report that is friendly to oil refiners and purports to answer questions no one ever asked.”

The GAO report found, “The U.S. Environmental Protection Agency (EPA) does not have assurance that its decisions about small refinery exemptions under the Renewable Fuel Standard (RFS) are based on valid information. In addition, EPA and the Department of Energy (DOE) do not have policies and procedures specifying how they are to consult about and make exemption decisions.”

The report claims EPA’s conclusion that small refineries do not experience disproportionate economic hardship from the RFS “relies on a potentially flawed assumption—that all parties pay and receive one price for the tradeable credits used to demonstrate compliance with the RFS. GAO found that EPA has not analyzed whether this assumption is valid.”

Cooper argues, “The bottom line is there is no such thing as ‘disproportionate economic hardship’ under the RFS. All refiners—large or small, merchant or integrated—face the same compliance obligations and they all pass their RIN costs on to fuel blenders at the terminal. Period. There is a mountain of evidence confirming this fact, and GAO’s new report will just be thrown on the growing scrap heap of refiner disinformation meant to undermine the success of the RFS.”

Cooper said the only thing GAO got right in its report was the fact that SREs reduce demand for renewable fuel, causing harm to ethanol producers.

EPA, Ethanol, Ethanol News, Renewable Fuels Association, RFA