Domestic Fuel

The U.S. Senate today confirmed Ernest Moniz to replace Steven Chu as the Nation’s Secretary of Energy. The 96-0 vote was welcomed by biodiesel and ethanol groups:

“Throughout his career, Ernest Moniz has supported efforts to move beyond fossil fuels to a cleaner, more secure energy future in which renewable sources play a prominent role,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “He knows that advanced biofuels like biodiesel are critical to our long-term energy and environmental security, and he has supported practical policies aimed at developing renewables in order to reduce our dependence on petroleum, create jobs and reduce harmful emissions.”

Michael McAdams, president of the Advanced Biofuels Association, issued a statement in support of the confirmation. “We are pleased that President Obama tapped such a strong advocate for policy that supports solid energy growth and is a friend of the advanced biofuels community.”

“I would like to congratulate Ernest Moniz on his confirmation as the Secretary of Energy. President Obama has chosen an excellent and well-qualified individual to lead the Department of Energy and I look forward to working with Secretary Moniz to continue to advance the growth and development of sustainable biofuels,” said Tom Buis, CEO of Growth Energy.

The Renewable Fuels Association also congratulated Moniz. “Given his background and expertise in energy, we look forward to the secretary’s first visit to an ethanol plant. We are eager for him to see firsthand the positive economic impact the renewable fuel standard has had in creating new jobs and revitalizing rural economies,” said Bob Dinneen, president and CEO of the RFA.

Brooke Coleman, executive director of the Advanced Ethanol Council, added his praise of the pick. “Secretary Moniz has just the right combination of technical expertise and political experience to be very effective as the new Secretary of Energy. He clearly understands what it takes to commercialize new energy technologies, and we look forward to working with the Secretary and his colleagues going forward as the advanced ethanol industry deploys commercially in the United States and abroad.”

The Advanced Ethanol Council (AEC) has sent a letter to the White House expressing concern about ongoing delays in the approval process for advanced biofuel pathways pursuant to the implementation of the federal Renewable Fuel Standard (RFS). The letter calls for the White House Office of Management and Budget (OMB) to prioritize and approve a number of these pathways to facilitate the program.

“While we understand that the White House and U.S. EPA must be thorough in their analysis when it comes to which advanced biofuels qualify for the RFS, we have gotten to the point where administrative delays are causing project developers to look to other countries to build their facilities,” said AEC Executive Director Brooke Coleman. “The private sector has stepped up to the plate when it comes to advanced biofuels and the RFS, but developers rightly expect resolution on the pathways to start construction on these projects. There is a point where too much delay and uncertainty drives these innovative projects to Brazil and China, and that’s where we are for some of the more critical pathways.”

The AEC points out that some pathway deliberations have been ongoing for three years without any clear timeframe for resolution. “It is absolutely critical for the private investment marketplace to have a transparent, expeditious and predictable resolution process for all proposed pathways, or we face the prospect of losing these projects to other countries, ” the letter states.

How can we tell the Renewable Fuels Standard (RFS) is working? By how nervous it’s making the big oil companies. That was the message attendees at the Advanced Biofuels Leadership Conference near Washington, D.C. heard.

“We are disrupting an existing marketplace,” says Brooke Coleman, Executive Director of the Advanced Ethanol Council. “We are not social media. We are not creating a new search engine. We are not doing something new… we just happen to be doing what other people are doing, better.”

Brooke says that has made some pretty powerful enemies of biofuels, who are spending a lot of money to destroy the biofuel brand … from corn ethanol to biodiesel to cellulosic biofuels. But he’s confident their attempt to change the Clean Air Act, and thus the RFS, will fail, ultimately because of the political allies biofuels have made.

“You’ve got Republicans and Democrats who see this thing [RFS] work, create jobs … just shy of 400,000 … and it’s just hard to change,” adding the political environment is not conducive to wholesale changes to either the Clean Air Act or the RFS.

Brooke says the diverse group that makes up the biofuels coalition is more together than ever, with efforts like Fuels America, a coalition to protect the RFS and the renewable fuels industry, and more collaboration than ever … without getting hung up on differences within the biofuels sector.

“We don’t agree on everything, [but] the trick is not to get so focused on the one or two things we don’t agree on … and focus on what we DO agree on.”

Listen to more of my interview with Brooke here: Brooke Coleman, AEC

Hello from the Advanced Biofuels Leadership Conference, just a few miles south of the Nation’s capital at the Gaylord National Resort & Convention Center! A lot has been going on already this morning, but before it all got started, I caught up with Jim Lane, the editor for Biofuels Digest, who is putting on this event.

He told me that today will feature the signing of the “Farm to Fly” agreement between Secretary of Agriculture Tom Vilsack and Transportation Secretary Ray LaHood … an agreement that will extend helping develop viable renewable fuels for the aviation industry.

In addition, there are obviously lots of stakeholders from the biofuels industry, including ethanol and biodiesel makers, as well as the big oil companies which have to blend the green fuel into their non-renewable products and the folks from the finance industry who put the money into so many of these ventures. Jim said it’s important to get a diverse group of interests such as these together in one forum to talk about the way forward.

“You don’t have to reach out too hard [to get them together], because they all want to know each other and network like crazy,” he said. He added that policy, finance, production, research … they all come together in this forum.

If you’re not already here, you should try to make it down to the Advanced Biofuels Leadership Conference, going on today, tomorrow and Wednesday (April 15-17). Hope to see you around!

Listen to my interview with Jim here: Jim Lane, Biofuels Digest

We’ll have more later!

Leaders of Fuels America held a press conference this morning to “preemptively answer misinformation on renewable fuel blends and gasoline prices” in a new report by the American Petroleum Institute.

Speaking in defense of the renewable fuels industry were the heads of several industry organizations and companies, including Growth Energy CEO Tom Buis, Renewable Fuels Association CEO Bob Dinneen, Advanced Ethanol Council Executive Director Brooke Coleman, Biotechnology Industry Organization CEO Jim Greenwood, Adam Monroe with Novozymes and Chris Standlee with Abengoa.

Listen to the entire press conference here: Fuels America Press Conference

Cellulosic ethanol got a little closer to commercialization with an announcement today from ZeaChem, Inc.

ZeaChem officials report they have produced commercial-grade cellulosic chemicals and ethanol at their 250,000 gallons per year (GPY) biorefinery in Boardman, Ore.

“ZeaChem is developing the first truly-integrated biorefineries for the production of a broad portfolio of economical and sustainable biofuels and bio-based chemicals,” said Jim Imbler, president and chief executive officer of ZeaChem. “The demonstration plant is fully integrated and operating as we ramp up to full capacity. The start of cellulosic production is a significant milestone for ZeaChem as we demonstrate our highly efficient biorefining technology, develop the first commercial biorefinery project, and expand global development opportunities.”

Similar to a petrochemical refinery that makes multiple fuels and chemicals, ZeaChem’s demonstration facility is employing its C2 (two-carbon atom) platform to produce cellulose-based ethanol and intermediate chemicals such as acetic acid and ethyl acetate. Unlike conventional biorefineries, ZeaChem can convert nearly any non-food biomass into fuels and chemicals. This provides ZeaChem with the opportunity to source feedstock locally and inexpensively. The demonstration facility will receive its feedstock from nearby-GreenWood Resources’ tree farms and other local agricultural residue processors.

Read more here.

President Obama has announced his picks for Secretary of Energy and Environmental Protection Agency administrator. The President nominated MIT professor Ernest Moniz as energy secretary and EPA official Gina McCarthy as administrator for the agency.

Renewable Fuels Association president Bob Dinneen welcomed the nomination of McCarthy as a solid choice and is interested in getting to know Moniz. “(McCarthy) is knowledgeable, willing to listen, and straight-forward. She knows the EPA inside and out and has typically approached challenges with a common-sense determination to resolve them in a timely manner,” said Dinneen. “(We) look forward to meeting with Secretary-designee Moniz to update him on the state of the U.S. ethanol industry, our track record of success in fostering greater energy independence, and the exciting results of ongoing investment in next generation biofuels.”

Growth Energy CEO Tom Buis added that “McCarty has been a strong supporter of biofuels and we look forward to working with her to bring sustainable, clean, homegrown American fuels to the consumer.” Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC), said McCarthy is “the perfect choice” because she has been “very engaged on the development of the cellulosic biofuels industry and the administration of the Renewable Fuel Standard (RFS).”

Back in 2009, McCarthy was one of two high-ranking EPA officials to visit farm operations and biofuel facilities in Iowa, including Renewable Energy Group‘s (REG) Central Iowa Energy biodiesel plant in Newton.

The American Petroleum Institute (API) is currently engaging in an all-out attack on the Renewable Fuel Standard (RFS) and the advanced biofuel industry is continuing to fight back. Last month, the Court ordered the Environmental Protection Agency (EPA) to reconsider the cellulosic biofuels obligations. In response, API is pressuring the EPA to actually zero out the 2012 obligation, according to a letter sent to EPA Assistant Administrator Gina McCarthy.

This is in odds with what API send in its brief to the Court, that the number should not be zero. “EPA’s projection should not be unrealistically low, but it also may not be unrealistically high.” API also claimed to the Court that its members paid $17 million in compliance costs for the RFS, when public records available at the time showed the true cost to be a fraction of that amount.

In response to the letter, Brooke Coleman, executive director of the Advanced Ethanol Council (AEC) said the cellulosic biofuel industry has facilities under construction or starting up in 20 states. “API’s strategy on the RFS is simple: create as much uncertainty and doubt around the program as possible to scare off investors from advanced biofuels. They have lost 10 percent of their market share to domestically produced renewable fuels to date, and they are not going to let the truth stand in the way of their efforts to short-circuit this incredibly successful program.”

According to a statement from the biofuels industry, API is decrying the new EPA proposal to blend 14 million gallons of cellulosic biofuels in 2013, saying the fuel does not exist. In reality, the industry says, EPA’s targets are based on production capacities of plants that are already built. The advanced biofuel industry is asking the EPA to follow the Court’s direction and remain consistent in its implementation of the program’s rules.

Brent Erickson, executive vice president of the Biotechnology Industry Organization’s Industrial & Environmental Section, added, “API is trying to re-litigate in the press the issues it lost in court. The Court recognized EPA’s authority to administer the rules for the RFS, and EPA should reject this attempt to spin that decision.”

“It is interesting that just as reputable companies such as DuPont, INEOS, POET-DSM, and Abengoa are actually getting steel in the ground and building commercial cellulosic biorefineries, API is turning on the crocodile tears and ramping up gross distortions in a desperate and foolish effort to derail American biotech innovation for new and cleaner transportation fuels. They want to strangle the infant cellulosic biofuel industry in the cradle in order to keep Americans captive consumers of high-priced foreign oil,” concluded Erickson.

It’s ironic that the “Phantom Fuels Reform Act of 2013″ was introduced in the Senate on Thursday at the same time a panel discussion on “Dispelling the Myth of the Phantom Fuel” was going on at the National Ethanol Conference where four different cellulosic biofuels companies talked about how they will be making commercial quantities of the fuel this year.

The legislation, which would have an impact on the Renewable Fuel Standard (RFS), was introduced by Sens. Jeff Flake (R-Ariz.), David Vitter (R-La.) and Michael Crapo (R-Idaho), following the introduction of its House companion yesterday by Reps. Gregg Harper (R-Miss.) and Jim Matheson (D-Utah).

“The legislation wants to make the RFS reflect the marketplace instead of push the marketplace, which is what the oil industry wants because that would short circuit the RFS,” said Brooke Coleman, executive director of the Advanced Ethanol Council.

Listen to an interview with Brooke here: AEC's Brooke Coleman

One company that expects to be producing cellulosic ethanol very soon is INEOS Bio, according to vice president Dan Cummings. “We finished construction on our first facility in Vero Beach, Florida, have commissioned it and now we’re in the final start up phase moving towards making cellulosic bio-ethanol,” said Cummings. “We’re making it out of waste – agricultural, yard waste and vegetative waste.”

Target date to be on line is this quarter, moving toward full production this year with a capacity of eight million gallons. “It’s a first of a kind technology in the world and we look to license and build other plants globally,” Cummings said.

Listen to my interview with Dan here: INEOS Bio VP Dan Cummings

Others on the “Phantom Fuel” panel included Beta Renewables CEO Guido Ghisolfi, Poul Ruben Andersen with Novozymes North America, and Martin Mitchell of Clariant.

Listen to the whole panel here: NEC Phantom Fuel Panel

2013 National Ethanol Conference Photo Album

2013 NEC Golf Tournament Photo Album

The Environmental Protection Agency (EPA) has released it proposed rules today for the 2013 Renewable Fuel Standard (RFS) volumetric requirements. Public comment is open until March 19, 2013. The proposal waives the cellulosic biofuel requirement from one billion gallons to 14 million gallons, but retains overall advanced and renewable fuel requirements.

The ethanol industry responded today with statements and Bob Dinneen, the president and CEO of the Renewable Fuels Association said, “The 2013 RFS requirements will be the catalyst that finally compels oil companies to get serious about breaching the so-called blend wall. This year’s RFS requirements will necessitate the use of more E15, E85 and other higher-level blends. Injecting larger volumes of biofuels into the U.S. fuel supply and spurring a more rapid transition to domestically produced renewables is exactly what the RFS was intended to do. The program is working as envisioned by Congress.”

Brian Jennings, Executive Vice President of the American Coalition for Ethanol (ACE) noted that his organization is concerned, as our other ethanol organizations, about the way the advanced biofuel pool serves as a magnet for imports of Brazilian ethanol. “We appreciate EPA providing us the opportunity to elaborate on this concern and look forward to continuing the dialogue on how to ensure Brazilian imports don’t displace domestic ethanol. The RFS is a catalyst for technology innovation and we believe 2013 will deliver key breakthroughs for U.S. grain sorghum based advanced biofuel and cellulosic biofuel. We look forward to providing additional comments during the 45 day comment period,” said Jennings.

Growth Energy CEO Tom Buis said there are a number of issues that should be considered, which could have serious impacts on the U.S. production of biofuels. “The RFS has been a resounding success, helping create jobs in America that cannot be outsourced, revitalizing rural economies across the country in addition to reducing our dependence on foreign oil and providing consumers with a choice and savings at the pump,” he added.

One of the elements of the proposal waives the cellulosic biofuel requirement from one billion gallons to 14 million gallons. Brooke Coleman, executive director of the Advanced Ethanol Council said that the EPA’s is getting to right number on cellulosic biofuels and noted that the industry is just breaking through at commercial scale. ” U.S. EPA worked hard to ensure that the cellulosic biofuels volume standard for 2013 would be tied directly to the commercial production of cellulosic biofuels expected to come online this year. While weaning the United States off of its addiction to foreign oil is not easy, the volume standards proposed today will continue to provide advanced biofuel investors and innovators with a predictable and durable path forward in that effort.”

In conclusion, the industry representatives said they look forward to working together to finalize the targets.

The Wall Street Journal editorial board is attacking biofuels, again. In their opinion piece, “Zero Dark Ethanol,“  they write that advanced biofuels have not made much progress in the past six years and the cellulosic ethanol mandate, that was vacated last week by the U.S. Court of Appeals is “only a fantasy mandate will motivate the industry to make enough of a fantasy fuel.”

In response to the article, the Advanced Ethanol Council (AEC) says the Journal seems to think that motor fuel markets are free and competitive, and that in the absence of government intervention, fuels like cellulosic biofuels would succeed if worthy. Unfortunately, says AEC, 100 years of direct and indirect subsidies to the oil industry, coming at a time when the U.S. taxpayer also built out most of the large scale infrastructure that the oil industry relies on today to move its product, has largely suffocated the free market principles that would otherwise reward innovation.

AEC continues by saying that in order to fix a broken marketplace, Congress decided in 2007 to forceably diversify the motor fuel marketplace with renewable fuels. And much to the dismay of the oil industry and those who carry their water like the Journal’s editorial board, the program is working. The domestic renewable fuels industry has grown exponentially, despite the global recession, in less than 10 years.

The Journal, adds AEC, is also wrong to assert that “nothing has changed” in the cellulosic biofuels industry. AEC cites their recent progress report released last month, where they say the cellulosic biofuels industry is breaking through at commercial scale.

AEC posits that you would think that a newspaper with the ideals espoused by The Wall Street Journal would celebrate the reintroduction of U.S.-branded competition into a broken marketplace. “You would think they would lament the distortive effects of oil subsidies and question why cheaper alternatives to oil cannot seem to break into the marketplace. In that world, the Journal would be calling for the comprehensive energy tax reform we so badly need to ensure that the next generation of motor fuels are produced by Americans instead of China, India or Brazil. What we do not need is more yellow journalism about ethanol from The Wall Street Journal editorial board.”

Very early this morning the American Taxpayer Relief Act of 2012 was passed that included several one-year biofuel tax extensions including the Cellulosic Producer Tax Credit. While the ethanol industry was pleased with the bill, they remain outspoken that the biofuel industry needs a long-term federal commitment – not just one year.

Brooke Coleman, Executive Director of Advanced Ethanol Council responded to the passage of the bill. “The advanced ethanol industry commends President Obama and the 112th Congress for extending the cellulosic producer tax credit and accelerated depreciation allowance as part of the American Taxpayer Relief Act of 2012. Just five years after the passage of the amended Renewable Fuel Standard (RFS), the cellulosic biofuels industry is breaking through at commercial scale.”

Coleman continued, “The one year extension will allow those projects coming online to continue development while Congress acts more broadly to reform the U.S. tax code to allow new players in the energy space to compete on a level playing field with oil and gas. We look forward to working with the Obama Administration and the next Congress to ensure that we continue to grow the next generation of biofuels right here in the United States.”

In addition to the Cellulosic Producer Tax Credit, the package included the Alternative Fuel Infrastructure Tax Credit. Tom Buis CEO of Growth Energy noted that by extending the Alternative Fuel Infrastructure Tax Credit to retailers through 2013, “Congress has also taken a critical step to bring E15 to the marketplace, “providing a choice and savings to the consumer. Furthermore, this provision will help decrease our addiction to foreign oil and help the renewable fuels industry break through the blend wall.”

“However,” added Buis, ” by only extending them for one year, Congress failed to provide the necessary certainty for investors and businesses to plan for the long term, which is imperative for continued stability and growth.”

Despite extension of one-year only, there were still some achievements with the second generation biofuel producer tax credit and the special allowance for second generation biofuel plant property. The Act, says the Biotechnology Industry Organization (BIO), will incentivize both cellulosic and algae biofuel production with the renewal of the $1.01 per gallon tax credit for producers, accelerated depreciation for newly constructed facilities during 2013 and modifying these credits to include algae.
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The Advanced Ethanol Council has just released a detailed look at the progress made towards the commercial deployment of advanced cellulosic biofuels.

The Cellulosic Biofuels Industry Progress Report profiles production facilities and projects across the country and producing nations around the world. According to the report, all countries that were profiled are working toward developing production capacity in the U.S. to meet the Renewable Fuel Standard (RFS).

The new data includes each facility’s path to commercial deployment, capacity, feedstock and more, demonstrating that notwithstanding the global recession, the cellulosic biofuel industry is coming on line.

The report points to the industry’s enormous potential. According to the Sandia National Lab, the U.S. could produce 75 billion gallons per year of cellulosic biofuels without displacing food and feed crops, or more than half of the 134 billion gallons of gasoline consumed by the U.S. in 2011.
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BP is continuing its biofuels backout with the announcement that it is abandoning its $300 million cellulosic project in Highlands County, Florida. This is the second major announcement of the company moving away from the production of renewable energy. Last December, the company exited the solar business. According to an interview with Matt Hartwig in the Washington Post, the company will continue to focus its U.S. efforts on research and development and licensing its technology.

“Ethanol is not something a lot of people are interested in investing money in,” said Mark Schultz, an analyst at Northstar Commodity Investment Co. in Minneapolis, to the Post. “Corn-based ethanol hasn’t been profitable for about a year. BP is seeing that this isn’t the right street to go down anymore.”

Many advanced biofuels players responded to the news today including Brooke Coleman, the executive director of the Advanced Ethanol Council. “BP has been reallocating its resources when it comes to biofuels for some time. BPs’ decision today signals a move by that company away from that particular project. This happens all the time in the oil, gas, and biofuel industries. As BP pulls back in Florida, the first movers in the space continue to move forward with commercial projects in more than 20 U.S. states. We are expecting first commercial gallons of cellulosic ethanol to come online by the end of the year, which is a tremendous accomplishment in this economic climate.”

Many of the 20 companies mentioned by Coleman are members of the Biotechnology Industry Organization (BIO)
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A global specialty chemicals company headquartered in Switzerland with operations in the United States is the newest member of the Advanced Ethanol Council, a coalition of companies formed last year to promote advanced ethanol fuels and technologies.

Clariant Corporation recently acquired Süd-Chemie, which has been developing its proprietary sunliquid® process since 2006, including the successful operation of a pilot plant since 2009. Clariant started operation of the largest cellulosic ethanol production facility in Germany in July 2012.

“Clariant is pleased to join the Advanced Ethanol Council, which has emerged very quickly as a leading voice for the advanced ethanol industry in the United States,” said Prof. Andre Koltermann, Group Vice-President of the Clariant Biotech & Renewables Center. “With our demonstration plant now operating, we are taking a major step towards the commercialization of our sunliquid® process and the deployment of climate-friendly cellulosic biofuels into the global liquid fuels marketplace including the United States.”

Clariant has recently started plans to commercialize the sunliquid® process in the United States and has opened an office in Des Moines, Iowa.

Read more from AEC.