Advanced Ethanol Council (AEC) executive director Brooke Coleman commented last week on a new Congressional Budget Office (CBO) report on the impacts of the Renewable Fuel Standard (RFS) so we got him on the phone for this edition of “The Ethanol Report.”
In this interview, Coleman talks about his take on the CBO report, as well as Phantom Fuels legislation in Congress, and the delay on EPA issuing a final rule for 2014 volume obligations under the RFS.
You may recall that EPA officials said earlier this year that they expected to have a final rule by the end of spring, or at least the end of June, but that has not happened yet and Coleman explains they now have until the end of September. “They were saying the end of June because they had to get it done by July 1st because they had extended the RFS compliance year through June,” he said. “They then extended it again through September.”
Ethanol Report with Brooke Coleman, Advanced Ethanol Council
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In the flurry of decisions by the Supreme Court released the morning, justices declined to review California’s low-carbon fuel standard (LCFS) decision.
A federal trial judge ruled against the LCFS in 2011 but the Ninth U.S. Circuit Court of Appeals reversed that ruling last year and denied rehearing the case in January.
The Renewable Fuels Association (RFA) and Growth Energy issued a joint statement regarding the decision.
“We are extremely disappointed that the Supreme Court has declined to review the Ninth Circuit’s decision, despite the broad support for the petition – including 21 states. We will continue our efforts to protect the American biofuel industry and the national interest and will continue to ensure that all consumers have access to low-priced, American-made biofuels.”
The ethanol industry was joined in challenging the California law by the American Fuel & Petrochemical Manufacturers (AFPM). “The Supreme Court’s decision not to review this case is disappointing and leaves in place a state regulation that discriminates against fuels and other products produced outside of California,” said AFPM General Counsel Richard Moskowitz. “California’s efforts to dictate how fuel is produced outside of its borders ignores Constitutional safeguards that have long protected against one state controlling the conduct of private parties beyond their borders.”
Congressman Bruce Braley (D-IA) visited the REG biodiesel plant in Mason City, Iowa on Friday to meet with members of the state’s biodiesel industry concerned about the proposed lowering of volume requirements under the Renewable Fuel Standard (RFS).
The current RFS proposal would set biodiesel volumes at 1.28 billion gallons, a sharp cut from last year’s actual production of nearly 1.8 billion gallons. “We’re grateful to Rep. Braley for his support on renewable fuels, and we’re asking for his help specifically in increasing the proposed biodiesel volume to at least 1.7 billion gallons,” said Grant Kimberley, executive director of the Iowa Biodiesel Board.
A recent national survey of producers conducted by the National Biodiesel Board found that more than half have idled a plant this year and 78 percent have reduced production from last year. Nearly two-thirds have already laid off employees or anticipate doing so. “Iowa is the leading biodiesel state, which generates jobs and economic advancement,” Kimberly said. “The future of these promising businesses is threatened.”
Braley, who is running for the U.S. Senate seat being vacated by Tom Harkin promised that he will “continue to reach out with strong voice and talk about importance of biofuels for Iowa and nation.”
Environmental Protection Agency administrator Gina McCarthy said earlier this year that they planned to issue a final rule on the proposed volume requirements under the Renewable Fuel Standard (RFS) in “late spring or early summer” but spring is gone and summer is here and there’s been no word yet.
Senator Chuck Grassley (R-IA) said last week that he thought the decision was delayed now until fall. “The fact that they’ve delayed it is a little bit of good news,” he said during an interview on June 19. “The bad aspect of it is that it retards investment in ethanol … and it doesn’t just effect ethanol but biodiesel too.” Grassley said he really doesn’t know when the EPA will announce the final rule, although he does believe it will be better than the proposal released in November. “I don’t think they’ll be that bad, but whatever is less than present law is going to be bad anyway, maybe just less bad.”
Meanwhile, Grassley says the wind energy industry, which is huge in Iowa, is still waiting on Congressional action to extend tax credits. “As a father of the wind energy tax credit, I want to get it renewed,” he said. “It’s part of a package of 53 renewals that have to be passed by the Senate and it’s up to Reid when he brings it up … we don’t get any indication from him on it.” Grassley says he will continue to push to make that happen.
Biofuels veteran and former Deputy Undersecretary of Agriculture John Campbell has joined Ocean Park Advisors (OPA), a corporate finance advisory firm for biofuels and other agribusiness companies. Campbell will serve as managing director based in Omaha, Nebraska and will serve to broaden the company’s relationships, develop new business and help execute transactions.
“I am thrilled to have the opportunity to work with the principals at Ocean Park,” said Campbell. “This is a unique firm that brings senior-level attention to transactions in renewable energy, food processing and other agriculture sectors.”
Campbell spent 21 years with Ag Processing Inc (AGP), a $5 billion cooperative, where he was an executive vice president responsible for leading the industrial products division. He launched it with biofuels and later expanded it to include green chemistry applications of soy oil products to plant protection, industrial cleaning, personal care and environmental remediation sectors. He is credited as being one of the driving forces behind the creation of the U.S. biodiesel industry. Under Campbell’s leadership, AGP constructed the first commercial scale biodiesel plant in North America followed by numerous other expansions, projects and acquisitions. He was also engaged in the ethanol industry starting in the 1990s, and served as president of the Nebraska Association of Ethanol Producers.
Campbell served as Deputy Undersecretary of Agriculture in 1988, engaged in legislative and regulatory activities related to commodity programs, conservation efforts and trade.
Congressman James Lankford (R-OK) this week introduced legislation called the “Phantom Fuels Elimination Act” that seeks to eliminate the so-called “corn ethanol mandate” and require domestic production of all other Renewable Fuel Standard (RFS) blending requirements.
Response from the Renewable Fuels Association (RFA) on the proposed legislation was dismissive.
“Congressman Lankford should get his facts straight,” said RFA president and CEO Bob Dinneen. “In dropping this bill, Rep. Lankford suggests ethanol is a ‘phantom fuel.’ Wrong! There is more than enough ethanol to meet the RFS. If it didn’t exist, the oil companies wouldn’t be fighting so hard to protect their monopoly over the nation’s fuel supply.”
Dinneen added that it is incomprehensible that Rep. Lankford would say his bill is needed to reduce consumer gasoline prices. “Ethanol is the cheapest transportation fuel in the world. Ethanol today is 50–60 cents cheaper than wholesale gasoline, lowering the price at the pump,” he said. “Moreover, ethanol stretches the domestic fuel supply and reduces the amount of petroleum needed in our gasoline, ultimately lowering the cost of crude oil.”
National Corn Growers Association CEO Rick Tolman took the podium to address the general session at the Fuel Ethanol Workshop in Indianapolis this week. It’s the 30th year for the workshop and during his remarks he commented on how things have changed in the past 30 years – from the acres of corn planted and bushels harvested to the gallons of ethanol produced and where things are headed in the future of the industry.
“It’s so exciting to see the tremendous growth the industry has made,” said Tolman. “We have so many ethanol plants now and it’s part of the mainstream, it’s in almost every gallon of gasoline across the country … and ten years ago that wasn’t the case … we’ve made tremendous progress.”
In an interview after his address at FEW, Tolman talked about this year’s corn crop, which is expected to be another record. Emergence pushed past the five-year average last week, according to the latest USDA report, and 75 percent of all acres are rated in good to excellent condition as of June 8.
Tolman says while we have planted a few less acres this year we continue to push through the 10-million bushel barrier that was so difficult to reach early in his 14-year tenure as NCGA CEO. He will be stepping down from that position at the end of September. Interview with NCGA CEO Rick Tolman
2014 Fuel Ethanol Workshop Photo Album
At the Corn Utilization and Technology Conference last week, Steve Rust with Edeniq talked about new processing technology and products taking ethanol to the next level.
“Cellulosic ethanol is for real now,” says Rust. “People need to know that because this is key right now with discussions on the Renewable Fuel Standard.”
Rust says new technology like Edeniq’s PATHWAY Platform is helping to make cellulosic ethanol a reality. “We have a piece of equipment that pre-treats the slurry in a corn ethanol plant and then we add a helper enzyme in it that we co-fermentate cellulosic and corn ethanol in the same fermenter,” he explained. “The nice thing about our technology is that it can be used in any dry mill ethanol plant for them to be able to get cellulosic gallons for a small capitol investment.”
Interview with Steve Rust, Edeniq
2014 CUTC Photo Album
The Environmental Protection Agency announced Friday that the compliance deadline for the 2013 Renewable Fuel Standard is being extended from June 30 to September 30. The EPA intends to finalize the remaining portion of its rulemaking to establish the 2014 renewable fuel standards shortly.
EPA said the extension is warranted because they have not yet issued the 2014 annual standards rule. The agency received comments on the proposed rule “emphasizing the need for the EPA to promulgate the 2014 RFS standards quickly and the need for obligated parties to know their obligations for the following year when finalizing their 2013 compliance demonstrations.”
The American Fuel & Petrochemical Manufacturers (AFPM) was among those requesting the extension and President Charles Drevna says it was the right decision. “While we do not believe that delaying the compliance date eliminates the injury caused by the late promulgation of the rule, it will provide obligated parties with a degree of certainty by knowing their blending obligations,” said Drevna in a statement. “Now more than six months late, the agency’s inability to recognize the impact of continued delays is yet another reason that Congress must address this set of mandates whose very premise has proven obsolete.”
The 2013 RFS mandated 16.55 billion gallons of biofuels be blended into US transportation fuels, including 2.75 billion gallons of advanced biofuels.
If the administration wants to make changes in the Renewable Fuel Standard (RFS) they should follow the law, according to Rep. Steve King (R-IA).
“The RFS is in statute and there are waiver provisions in there for the EPA, but they need to comply with the waiver provisions,” said King during an interview.
King notes that EPA used 2011 data in proposing volume requirements for this year under the RFS. “So we’ve asked them in hearings, discussions, pleadings, every way that we can … that we want them to go back and look at the 2013 data and go back and re-read the law,” he said. “If they make those adjustments appropriately, they’ll come back to what the law says.”
King made those comments during an interview at World Pork Expo in Des Moines last week.
Rep. Steve King (R-IA) RFS comments
Somewhere between corn ethanol and cellulosic ethanol is a midpoint that can be found in the corn kernel.
“Generation one is starch to ethanol and generation two is corn stover and grasses but there is cellulose in the corn kernel,” explained ICM, Inc. technical director Scott Kohl during a session last week at the Corn Utilization and Technology Conference. “That’s the Generation 1.5 – the fiber in the corn kernel.”
Kohl says ICM is developing processes to separate that fiber from the rest of the kernel to make more ethanol so that the yield from a single bushel of corn will increase. “We’ve run nearly 2,000 hours of pilot runs on that system,” he said. “We are now in the process of getting the financing arranged to have the first plant running by the middle of 2015.” Interview with Scott Kohl, ICM
It was just announced last week that Patriot Renewable Fuels of Annawan, Illinois will be one of the first to use Gen 1.5 with ICM’s patent-pending Fiber Separation Technology (FST). “ICM’s ethanol technology is a logical platform on which to build our business as a bio refinery” said Patriot’s VP/GM Rick Vondra. “There are many new product and growth possibilities using corn as our feedstock, and we have identified these as two high potential processes that we can adopt now.”
2014 CUTC Photo Album
It’s summer vacation time for 15% ethanol blends but not by choice.
“The Environmental Protection Agency’s outdated interpretation of Reid Vapor Pressure (RVP) regulations is preventing the sale of E15 in most of the country during the busy summer driving season, adding billions to travelers’ fuel costs,” said American Coalition for Ethanol senior vice president Ron Lamberty. By unnecessarily limiting the sale of E15 to only flex-fuel vehicle (FFV) owners from June 1 to September 15
in areas where most gasoline is used, Lamberty says EPA is effectively requiring drivers to purchase lower octane fuel for 5 to 40 cents.
Iowa leads the nation with 20 registered E15 stations and Iowa Renewable Fuels Association Managing Director Lucy Norton says they have to shut down the pumps in the summertime. “If oil refiners chose to ship gasoline with the proper vapor pressure into our state, Iowa motorists could have expanded access to cleaner-burning, lower-cost E15 year-round, instead of it being temporarily restricted to only flex-fuel vehicles during the summer,” said Norton.
The Iowa legislature passed legislation to help ease costs Iowa retailers may incur when obtaining gasoline suitable for blending with 15 percent ethanol during the summer months. Under the legislation, Iowa’s E15 retailer tax credit to 10 cents from June 1 to September 15, up from the three cents it is the rest of the year.
“Ironically, E15 has a lower RVP than the fuel 95% of drivers are using, so EPA’s unwillingness to change a 25 year-old regulation effectively mandates higher evaporative emissions and higher prices during the busiest driving season of the year,” said Lamberty.
The 2014 Corn Utilization and Technology Conference is underway in Louisville, Kentucky and this year the focus is on wet and dry milling technologies and new uses.
National Corn Growers Association (NCGA) president Martin Barbre says the event brings together researchers with the common goal of facilitating the next ground-breaking technologies and corn-based products of the future. “It’s a great place for researchers to see what others are doing,” he said. “We also have a very good international focus with visitors and attendees from all four corners of the world.”
As corn growers are just about finished planting what is expected to be another record crop this year, Barbre says they are happy to see increased export demand for corn and the ethanol co-product distillers grains. “When you put an ethanol plant in, it doesn’t change the market (for corn),” he said. “Really there’s only two things that change the market – weather and exports. We’re working hard to increase corn exports worldwide and we’re even working with other countries to open up new markets.” Interview with NCGA president Martin Barbre
2014 CUTC Photo Album
American Ethanol “Troops to the Track” program welcomed members of the Armed Forces to the “Monster Mile” at Dover International Speedway this past weekend.
The program, which is administered by the Armed Forces Foundation, welcomed service members and their families from Dover Air Force Base (AFB) to the Sprint Cup Series race that was won by Jimmie Johnson on Sunday. American Ethanol partner Growth Energy is a supporter of the Armed Forces Foundation. Through the Fueling Our Forces program, Growth Energy raises more than $100,000 annually for the organization and programs that go to support this generation of servicemen and women.
“Support of our service members is a key goal for American Ethanol,” said Growth Energy CEO Tom Buis. “We recognize their sacrifice and work, and we will continue to expanded ethanol choices for consumers, which will take more of our troops out of harm’s way in the future.”
A coalition of U.S. House of Representatives member opposed to the Renewable Fuel Standard (RFS) claim that a bipartisan majority of members “have expressed concerns regarding the current ethanol mandate.”
In a press release, Reps. Bob Goodlatte (R-Va.), Jim Costa (D-Calif.), Steve Womack (R-Ark.), and Peter Welch (D-Vt.) announced that 218 Members of the House agree “there is a serious problem with the RFS.”
“It is telling that 218 members from both sides of the aisle, representing communities across the nation, have spoken out against the current RFS and called for reform. The flawed ethanol mandate has a real impact on the American economy, and legislation in the House to reform the RFS has drawn the support of more the 50 organizations representing a diverse range of issues. There is clearly a growing appetite to reform the ethanol mandate, and it is time for the EPA to address lawmakers’ concerns. Any day now, the EPA is expected to announce the final rule governing 2014 RFS levels. As the final rule is written, we urge Administrator McCarthy to carefully consider the concerns of a majority of House lawmakers in any decision and take action to reduce the burden of the RFS for 2014.”
A spokesperson for Goodlatte’s office says the 218 members of Congress referenced in the release is “a culmination of Members who have either cosponsored H.R. 1462 or H.R. 1461 or signed onto one of the many letters sent on the topic.” The office did not provide a list of members they say have “recognized there is a problem with the current RFS.”