Biodiesel, RINs and RFS2

The Environmental Protection Agency (EPA) is looking into the fraudulent sale of Renewable Identification Numbers (RINs). These are generated when a gallon of biofuel is produced and most often “sold” with the gallon of biofuel. But is some cases RINs can be sold and bought without the biofuel attached.

What’s the big deal? RINs are used by the EPA to track compliance of biofuel use as part of the Renewable Fuel Standard (RFS2). The sale of fake RINs hurt the biofuel companies who are producing the fuel and if enough are sold, would keep obligated parties from legally achieving compliance.

According to OPIS who is hosting the 4th Annual RFS2, RINs & Biodiesel Forum being held October 18-19, 2012 in Chicago:

  • Obligated parties have had to pay approximately $200 million in fines so far as a result of EPA’s “buyer beware” enforcement policy.
  • A Maryland man now faces 32 years in prison for selling more than 32 million fraudulent biodiesel RINs.
  • Marketers across the country are worried that there is no good way to make sure their RINs are “clean.”

EPA regulations and RIN compliance are just a few of the topics that will be discussed during the conference. Click here to learn more and to register.

CARD: Reducing RFS Would Not Achieve Goals

According to the Center for Agriculture and Rural Development (CARD) located at Iowa State, calls to reduce, revise or repeal the Renewable Fuel Standard (RFS) would not achieve the goals of the industries who are demanding the action.

“The desire by livestock groups to see additional flexibility in ethanol mandates may not result in as large a drop in feed costs as hoped,” said Iowa State Professor Bruce Babcock, author a new research brief, “Preliminary Assessment of the Drought’s Impacts on Crop Prices and Biofuel Production.”

As part of the research, Babcock analyzed 500 different scenarios using various levels of corn yield for the 2012 crop.  He then determined that a total waiver of the RFS would reduce corn prices less than 5 percent and cause less than a 5 percent reduction in ethanol production.

At first glance this seems like a mistake. But Babcock says the lower than expected results are due to the flexibility in complying with the RFS in 2012 and 2013. For example, during this timeframe, an estimated 2.4 billion excess Renewable Identification Numbers (RINs) can be used in place of purchasing actual gallons of a renewable fuel to demonstrate compliance. This allows obligated parties to carry over RINs and lowers the economic impact of a short crop such as what we are expecting this year due to excessive drought conditions affecting nearly 75 percent of crops across the country.

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Raise Carbon Price

The European wind power industry is backing a proposal submitted by the European Commission to increase the price of carbon. This would be accomplished by delaying the auctioning of carbon allowances through the Emission Trading System (ETS). This action must be approved by Member States and the European Parliament.

“The European Commission has finally taken the first step towards boosting the carbon price in the short term,” said Rémi Gruet, Senior Regulatory Affairs Advisor for Environment and Climate Change at the European Wind Energy Association (EWEA). As a second step a permanent solution to the current and future oversupply of carbon allowances needs to be found to ensure a high and stable future price: the amount of allowances put on the market up until 2020 needs to be reduced by 2.6 billion.”

Gruet also said that increasing carbon prices will help both the climate and economic recovery. “The wind industry is one of the most dynamic and globally competitive, in 2010 contributing 32.4 billion Euros to the EU’s GDP, 8.8bn Euros in exports, and supporting 238,000 EU jobs.

KiOR Receives Approval to Sell Cellulosic Fuel

KiOR has been granted Part 79 registration by the Environmental Protection Agency (EPA) for its renewable gasoline blendstock 5, or cellulosic gasoline. This step is required before the sale of the fuel to be used in motor vehicles becomes legal.

“Part 79 registration is a landmark for KiOR and the renewable sector, as KiOR’s gasoline is the first renewable cellulosic gasoline that the EPA has registered for sale in the United States,” said Fred Cannon, KiOR’s President and Chief Executive Officer. “With this registration, KiOR’s breakthrough cellulosic gasoline will be fueling cars of American consumers this year, providing a truly renewable fuel option that uses only sustainable non-food feedstock, reduces greenhouse gases, creates American jobs, and reduces our dependence on imported oil.”

The company’s first production facility is scheduled to begin production later this year in Columbus, Mississippi. Cannon says that the facility will provide 150 new jobs and produce enough fuel to meet the transportation needs to 20,000 area families.

Cannon added, “This facility demonstrates how the Renewable Fuels Standard and forward-thinking states like Mississippi can combine to make a positive impact on both domestic energy policy and local rural economies.”

Ethanol Safety Seminars Stop in Idaho

Idaho is the next stop on the tracks for the Ethanol Safety Seminar series hosted by the Renewable Fuels Association (RFA), Federal Railroad Association TRANSCAER and Eastern Idaho Railroad. The first FREE seminar will take place on August 7, 2012 at the College of Southern Idaho in the Taylor Building located in Twin Falls. The second FREE seminar will be held on August 9, 2012 at the Eastern Idaho Technical College in the Alex D. Creek Building in Idaho Falls.

There will be both morning and evening sessions at both locations. The early seminar begins at 9 am and ends at 2 pm and the evening session begins at 5:30 pm and ends at 10 pm.

This course was developed to give first responders, hazmat teams, and safety personnel an in-depth look at proper training techniques needed when responding to an ethanol-related emergency. Lunch and dinner will be provided. Click here to register.

DHL Express Integrates Propane Into Fleet

DHL Express is adding 100 propane autogas vans into its fleet. The Ford E-250 cargo vans will be on the road by the end of August 2012 and were outfitted with ROUSH CleanTech liquid propane autogas fuel systems. The vans will be operating in California, Florida, Georgia, Missouri and Texas.

“Customers in the U.S. and worldwide are increasingly demanding greener logistics and sustainable business procedures,” said Ian Clough, CEO of DHL Express U.S. “Initiatives like our all ‘green’ fleet in Manhattan and this propane autogas fleet not only lower our DHL carbon footprint, but are a smart, clean and cost-effective choice for our business.”

“Greener” vehicles are not new to DHL Express. As part of its GOREEN program, they are currently operating propane vehicles in Ohio, Tennessee and Louisiana. The goal of the program is to improve the company’s worldwide carbon efficiency 30 percent by 2020 using 2007 emissions as its baseline. According to ROUSH, the use of propane autogas in each van saves nearly 22,587 pounds of CO2 emission each year.

DHL Express will both use current propane infrastructure as well as add additional infrastructure to meet its needs. ROUSH says that the infrastructure for propane autogas is less expensive than any other alternative fuel, and propane autogas has the largest alternative public refueling infrastructure.

EM Biofuels Rolls Out RINPlus

EM Biofuels LLC is rolling out RINPlus, a web-based platform that tracks the origin of Renewable Identification Numbers (RIN). The company says the platform will enable obligated parties to verify the genealogy of all RINs from feedstock to RIN generation and separation. RINPlus will document many areas including:

  • Facility’s engineering review
  • Corporate formation documents and operating permits
  • Validity checks including co-product monitoring, site audits and spot product testing

The system, according to EM Biofuels, will give obligated parties the due diligence and supporting documentation needed to ensure RINS are valid and meet RFS2 requirements.

“We began working with both producers and obligated parties in 2011, listening to their concerns and incorporating their ideas regarding the specific aspects a RIN assurance platform needed to address. The end result is a platform that has the capacity to become a secure and efficient marketplace for RINs,” said Ken Nelson, Senior Vice President of EM Biofuels.

The tool integrates real-time with a fuel producers’ facility operations. In addition, it allows the user to create reports summarizing their RIN portfolio and includes supporting documentation. EM Biofuels plans to launch additional functionality to the RINPlus platform in early 2013.

U.S. Court of Appeals Rules in Favor of RFS

The U.S. Court of Appeals for the District of Columbia Circuit has rejected a petition by the Chicken Council challenging the rule making of the Environmental Protection Agency (EPA) regarding the Renewable Fuels Standard (RFS2). Upon filing of the petition, the ethanol industry took action. Today, Growth Energy CEO Tom Buis along with Renewable Fuels Association (RFA) President and CEO Bob Dinneen issued a joint statement on behalf of the industry.

“Today’s decision is nothing short of a victory for American ethanol producers and renewable fuel advocates. This was the last of many challenges to the RFS2 rulemaking and each one was rejected. With the Court denying this latest challenge, they have vindicated the rulemaking process of the RFS2.  The RFS is arguably the nation’s most effective energy policy.  It has spurred the development of a domestic biofuels industry that is creating hundreds of thousands of jobs that cannot be outsourced.  In addition, it is helping to decrease the nation’s reliance on imported oil and thus reducing prices at the pump. 

Moreover, the RFS is the nation’s first effort at meaningfully reducing harmful greenhouse gas emissions from motor vehicles.  As the Court ruling demonstrates, the charges that anti-biofuel lobbies are leveling against ethanol simply do not hold up under scrutiny.  We look forward to working with EPA, the Department of Agriculture, and Congress to ensure the integrity of the RFS is maintained and the ambitious goals set within are achieved.”

Ball State Begins Final Phase of Geothermal System

Ball State is the home of the country’s largest geothermal system. This week the university began the second and final phase of converting to a geothermal ground-source heat pump system. The project began in 2009 and the first phase was completed earlier this year and now provides heating and cooling to nearly half the campus. Upon completion, the conversion should save Ball State $2 million a year.

The geothermal system is a vertical, closed-loop district system that uses only fresh water. It works by using the heat stored in ground water and thermal masses. A geothermal heat pump uses the Earth as either a heat source, when operating in heating mode, or a heat sink, when operating in cooling mode.

“When costs began to escalate for the installation of a new fossil fuel burning boiler, the university began to evaluate other renewable energy options,” said Jim Lowe, director of engineering, construction and operations. “This led to the decision to convert the campus to a more efficient geothermal-based heating and cooling system.”

Phase 2 includes installation of 780 of the remaining 1,800 boreholes in a field on the south area of campus. Construction will continue throughout 2013-2014 and will include a new District Energy Station South containing two 2,500-ton heat pump chillers and a hot water loop around the south portion of campus. The system will then connect to all buildings on campus — eventually providing heating and cooling to 5.5 million square feet.

Wind O&M Market Forecast to Double

The wind operations and maintenance services (O&M) market is forecast to nearly double by 2025 from approximately $3 billion in 2012 to nearly $6 billion in 2025. Also according to a recent report from IHS Emerging Energy Research on U.S. Wind O&M Strategies, O&M is expected to account for over one-third of total capital expenditures over the next decade.

In March, the U.S. Senate voted against extending the wind Production Tax Credit (PTC) beyond 2012. This has caused uncertainty in the market and prospects for new wind farms are uncertain. This also has an impact on operational wind farms and owners are now putting more focus on increasing revenue.

The study focuses on four O&M areas: market player profiles; market environment; service segmentation and costs analysis; and market forecasts.

These areas, along with other key issues in the wind industry, will be addressed during the 4th Annual Optimizing Wind Power O&M conference slated for September 25-26, 2012 in Chicago. The event has been updated based on attendee feedback and this year there will be case studies and interactive roundtable discussions.

Consumers in Kansas Embrace E15

Consumers in Kansas have embraced E15. The Zarco 66 “Oasis” station in Lawrence became the first retail gas station in the country to offer E15 under the waiver granted by the U.S. Environmental Protection Agency (EPA), and consumers are buying the renewable fuel blend.

On July 18, 2012, Zarco 66 Station owner Scott Zaremba held a pump promotion for two hours where E15 was sold for $1.15 per gallon. During the promotion, 3,000 gallons of E15 were sold. The ethanol blend can be used in vehicles and light duty trucks beginning with the manufacturer year of 2001. In the U.S., nearly 60 percent of the cars and trucks on the road can use E15.

Bob Dinneen, President and CEO of RFA noted that E15 represents a new choice at the pump introducing additional competition in the fuel market. “As a result of increased ethanol use, drivers are paying less at the pump, rural America is seeing better economic opportunities, and the nation is weakening its dependence on imported oil.”

Given current market conditions, E15 will sell less than E10 and gasoline not containing ethanol. The Zarco 66 “Oasis” is selling E15 for two cents less than E10.

Dinneen added, “Anti-biofuel critics can scream until they are blue in the face, but as the drivers in Lawrence are learning, E15 is safe and viable fuel choice.

Ethanol Detractors Call for End of RFS

A coalition of livestock and poultry groups continue to attack the veracity of the Renewable Fuels Standard (RFS) that mandates the amount of renewable fuels that must be used each year in the transportation fuel supply. The new campaign has been launched in tandem with a new economic study conducted by Farm Econ LLC focusing on the impact of corn ethanol production on food prices as well as the commodity price volatility.

Ironically, the study was released at the same time that the U.S. Department of Agriculture (UDSA) released a new corn harvest report estimating that at least 75 percent of the corn crop is growing in drought conditions.

“While the groups paying for this study feel entitled to cheap corn forever and are shamelessly exploiting the drought as an excuse to roll back the RFS, there is no credible evidence to justify reducing or waiving it,” said Brian Jennings, Executive Vice President of the American Coalition for Ethanol (ACE).

“The fact is the RFS is helping reduce dependence on foreign oil, moderating gas prices, and securing jobs in rural America. Both USDA Secretary Vilsack and U.S. Senator Stabenow, chair of the Senate Agriculture Committee have indicated the drought is not an excuse to waive or repeal the RFS,” added Jennings.

USDA Secretary Tom Vilsack said in a press conference earlier this week that what really drives food prices are energy costs. He also stressed the importance of ethanol production and the need to continue to focus on the “all of the above” approach to producing more energy.

Tom Buis, CEO of Growth Energy noted that ethanol detractors are “conveniently ignoring that in 2011 ethanol used only 3 percent of the global grain supply.” He added, “…the cost of energy plays a substantial role in food prices. Factors related to energy, and in particular, oil prices, such as the transportation, storage, processing and packaging of goods are the true culprits of rising food costs. Additionally, marketing expenses add to the rising costs of food. For every dollar spent at the grocery store, $.84 cents can be attributed to marketing, with a mere $.03 cents representing the corn value.

Despite the lobbying against the RFS, ethanol industry supporters maintain that they can both feed the world and fuel America.

Researchers: LCFS Would Help America

During a bipartisan briefing on Capitol Hill, researchers from six institutions advocated that adopting a national Low Carbon Fuel Standard (LCFS) would be a positive step for America. Renewable fuels, they said, will be cleaner, cheaper and “Made in America”. This consensus by the group of researchers was met after conducting an extensive series of peer-reviewed LCFS studies. The research will be published in The Energy Policy Journal’s special issue on Low Carbon Fuel Policy over the next several months.

“A national Low Carbon Fuel Standard is a promising framework to help solve the transportation energy challenges that have eluded us for several decades,” said Dr. Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis, one of the participating institutions of the National Low Carbon Fuel Standard Project. “Technologically, an LCFS is very doable. And it can help us address the complex choices with conventional oil, shale gas, oil sands, biofuels, and electric vehicles.”

The way that a LCFS would work is through setting a common target for carbon intensity, which would reduce the amount of carbon in transportation fuels. Energy companies would have to meet the carbon intensity level but could individually decide how to meet that goal. Companies could explore such things as biofuels or hydrogen fuels. In addition, companies could buy and sell carbon credits from companies producing low-carbon fuels.

Dr. Jonathan Rubin, professor of Economics at the University of Maine said, “An LCFS encourages innovation and diversity by harnessing market forces. “These reports provide practical policy recommendations, and are designed to inject scientific information into the national conversation on a Low Carbon Fuel Standard.”

Yet not everyone agrees that an LCFS would be a positive move for the country. The Consumer Energy Alliance (CEA) has publicly come out against any national LCFS policies citing other studies that found such a move would cost millions of Americans to lose jobs, double gasoline prices and raise greenhouse gas emissions. Continue reading

RFA Continues Sturgis Sponsorship

The 72nd Annual Sturgis Motorcycle Rally in Sturgis, SD is August 6-12 and the Renewable Fuels Association (RFA) is continuing its partnership with the Legendary Buffalo Chip. This is an opportunity for the organization to promote the use of ethanol to motorcyclists around the country. Often ethanol is mischaracterized as a problem for motorcycle engines.

During the event, RFA staff and volunteers wearing “Ethanol: Fueled with Pride” t-shirts will hand out educational and promotional materials. A promotional trailer will be located inside the Legendary Buffalo Chip amphitheater where nearly 100,000 people attend concerts each night.

For the first time this year attendees will have the opportunity to fuel their bikes for free during two events. The “Free Fuel Happy Hours” are sponsored by RFA, Kansas Corn Commission and the South Dakota Corn Growers. Motorcyclists will be able to fill their tank, free of charge, if they have a Buffalo Chip wrist band. The Free Fuel Happy Hours will be on Wednesday, August 8th and Thursday, August 9th next to The Crossroads at the Buffalo Chip from 4 pm – 6 pm CDT.

“The Chip is excited to once again partner with RFA to highlight the benefits of using ethanol fuel,” said Rod Woodruff, Owner of the Legendary Buffalo Chip. “The Buffalo Chip leads by example; every drop of unleaded fuel we use here contains ethanol. With events like the ‘Free Fuel Happy Hour’ and Fueled with Pride give-away items, thousands of attendees who travel cross country to be at Sturgis will leave knowing that ethanol is a safe option for their motorcycles and they have a choice in the fuel they put in their engines.”

There will be more events to attend as part of the promotion. To learn more visit ChooseEthanol.com.

Using Bacteria for Good

Researchers at Michigan State University (MSU) are using the power of microbes from agricultural waste to create ethanol and hydrogen for fuel cells. The technology was developed by MSU microbiologist Gemma Reguera, who created bioelectrochemical systems known as microbial electrolysis cells or MECs. The process uses bacteria to break down and ferment ag waste into ethanol. The process produces 20 times more energy than existing methods.

According to communication from MSU, the process is unique because it uses a second bacterium. When added to the mix, it removes all waste fermentation byproducts or nonethanol materials, while generating electricity. The results of the research were recently published by Reguera along with co-author and graduate student Allison Spears, in Environmental Science and Technology

The research is important because in lab tests have significantly improved energy recovery from corn stover, a budding feedstock for biofuel production, that today hovers around 3.5 percent. However, Reguera’s process averages 35-40 percent energy recovery after factoring in the energy required during the pretreatment phase. What might be even more promising about the platform is that the significant energy recovery is just from the fermentation process.

“This is because the fermentative bacterium was carefully selected to degrade and ferment agricultural wastes into ethanol efficiently and to produce byproducts that could be metabolized by the electricity-producing bacterium,” explained Reguera. Continue reading