Advanced Biofuels Industry Comments on 2014 RFS

The advanced biofuels community is responding this week to the Environmental Protection Agency’s (EPA) submission of the final 2014 Renewable Fuel Standard (RFS) to the White House Office of Management and Budget (OMB) where it will be reviewed. Although the rule is not public, groups are speculating on what the final rule entails with hope still that advanced biofuels will not see a reversal in volumes.

“A little less than a year ago, press leaks first suggested that EPA might reduce the 2014 renewable fuel standard (RFS) for advanced biofuels to as little as 2.2 billion gallons, which is substantially lower than current production,” said Advanced Biofuels Association (ABFA) President Michael McAdams when hearing the rule had been sent to OMB.

“Since that time, ABFA members and our many allies have clearly demonstrated that such reductions would fall disproportionately on advanced biofuels and represent a significant reversal of the Obama administration’s previous support for our industry. We hope the final rule will be a major improvement and encourage the White House to set RFS volume obligations at levels that are consistent with our industry’s current and projected production capacity for advanced and cellulosic biofuels,” McAdams added.

Joe Jobe NBBNational Biodiesel Board (NBB) CEO Joe Jobe is hoping to see an increase in biodiesel from the proposal released last year. Joe explained the the proposed rule would cap out biodiesel and cause a dramatic reduction in production.

“This is a cornerstone energy policy that has demonstrated that it works,” said Jobe. “Last year we were able to demonstrate that the program works. We grew from a little over 1 billion gallon in 2012 to just 2 billion gallons in 2013.” Jobe continued by stressing this allowed for investment and growth – all elements of a successful energy policy.

Jobe noted that biodiesel has allowed the advanced biofuel category to be met every year. While OMB has 90 days to review the rule, Jobe hope it will go faster.

Interview with Joe Jobe, National Biodiesel Board

Economist Still Opposes RFS Despite Livestock Recovery

bivi-nc-meyerDespite the fact that livestock margins have made a dramatic recovery in the past few years as availability of feed has increased and prices have decreased, a leading livestock economist still opposes the Renewable Fuel Standard (RFS).

“We’ve thrown billions of dollars at this industry already and it ought to have to stand on its own,” said Steve Meyer, Paragon Economics, during an interview last week at an event for pork producers. “It has a place in the fuel business as an oxygenate and as an octane enhancer, it’s not going away from there.”

Meyer, who has always been an outspoken critic of U.S. energy policy, says his beef with the RFS is that it caused ethanol production to increase too much too quickly. “The trend yield on corn is up about two bushels per year. If you had grown the ethanol business at a rate equivalent to that, I wouldn’t have been able to gripe too much about it,” he said. “But it was far faster than that …. and the economic impact of that was very negative for (livestock) producers.”

However, the tide has turned dramatically to the point where demand and prices for livestock and poultry are riding high and there is almost record high feed availability with manageable prices. “We’re not going back to $2 corn and $180 bean meal but we’re at the lowest levels on costs in five years,” said Meyer. “We’re not increasing corn usage for ethanol every year like we were, it’s pretty much flat. It’ll grow a little bit but not much and we can probably keep up with that with trend yield growth on corn.”

Despite that, Meyer thinks the RFS needs to go away. “I don’t hate ethanol,” he says he tells corn producers. “I just don’t like subsidized, mandated ethanol when I’m the alternative user of the input.”

Interview with Steve Meyer, Paragon Economics

RFA Making Inroads in Motorcycle Education

rfa-biker-bobbyConcluding the sixth year of sponsorship at the Sturgis Motorcycle Rally and the Buffalo Chip Campground, Robert White with the Renewable Fuels Association (RFA) believes they are making some real headway in getting the true story about ethanol to motorcycle riders.

“The education to the riders is actually taking on a new life,” said White. “We’re seeing riders talking to riders.”

ethanol-report-adIn this edition of the Ethanol Report, White talks about a rider who pulled up for the Free Fuel Happy Hours who said he defended ethanol to his friends at the rally who told him it was a bad for his motorcycle. “He said ‘I kinda came unglued on them’,” he related. The biker told him that he had been talked in to using it at the rally the year before, and he’s “been using it this entire last year without any issue.”

In another case, White said a guy with a brand new Harley said he had been told by the dealer not to use ethanol and he wanted to get a response to that. “And I said why would you believe me?” White said. “I didn’t engineer your motorcycle, I didn’t put the parts together, I’m not providing a warranty for that motorcycle.” The man agreed, noting that neither did the dealership, but his owners manual from Harley in fact said he could use 10% ethanol. “Harley’s been doing this a long time, as have (other motorcycle manufacturers) they know what fuel is going to be most prominent, least expensive, highest octane option for these motorcycles, and it’s going to be ethanol.”

White says they are looking forward to next year, which will be the 75th annual Sturgis Motorcycle Rally, where RFA will having an even bigger presence with an even bigger crowd.

Find our more about RFA making inroads in motorcycle education here:
Ethanol Report on Motorcycle Education

Subscribe to “The Ethanol Report” with this link.

2014 Sturgis Motorcycle Rally Photo Album

Listen below to White’s interview with automotive expert Bobby Likis from Sturgis:

Another Successful ACE Conference

ace14-brianAmerican Coalition for Ethanol Executive Vice President Brian Jennings was pleased with the 27th annual ACE conference held last week in Minneapolis.

“It was another great conference, we covered a lot of important topics,” said Jennings as the conference concluded. “We try to feature our members as much as we can, whether it’s technology they’re implementing at their plant or they’re working on exporting ethanol or distillers grains – we try to give our members the spotlight and I think we did that once again.”

Jennings said one of his favorite sessions during the conference was the Ethanol Innovators panel. “It shows everyone these producers are not relying on the past, they’re looking to the future … they want to reduce their expenses, increase their efficiency and position themselves to be competitive for the long run.”

While Jennings says there is little time left in this year’s Congressional Session to worry about any anti-ethanol legislation being past, he is concerned about the elections and he encouraged his members to exercise their right to be an informed voter. “Talk to these candidates and find out their positions on ethanol and hold them accountable,” he said.

Finally, Jennings adds that next year’s conference will be in Omaha – see you then! Interview with Brian Jennings, ACE Executive Vice President

27th Annual Ethanol Conference photo album

ACE Retailer Roundtable

ace14-retailersTwo fuel retailers took the stage at the American Coalition for Ethanol conference last week in Minneapolis to talk about the trials and rewards of offering their customers a real choice at the pump.

Bruce Vollan (left) of Midway Service in Baltic, SD and Kent Satrang, CEO of Petro Serve USA in North Dakota, shared their stories of why they installed blender pumps at their locations.

“We’re about seven years of having our blender pumps in place,” said Vollan. “It was an ideal time for us to make a change as a small town business.” And, he added, it has grown that business exponentially.

“We’re a Farmers Union oil company,” Satrang said. “We are owned by farmers, so they would like us to sell their fuel.” Beyond that, he just wants to offer his customers a choice.

Both of them also talked about the costs involved in putting in the pumps and offering higher blends and what it has ultimately meant to their communities. Listen to their conversation here: ACE Retailer Roundtable

27th Annual Ethanol Conference photo album

ACE Awards Celebrate Power by People

Recipients of the annual awards presented last week by the American Coalition for Ethanol (ACE) exemplified the organization’s new theme of “Power by People.”

ace14-gene-lacyGene Griffith of Patriot Renewable Fuels received the organization’s Grassroots Award from ACE Director of Member and Industry Relations Lacy Dixon. Griffith was recognized for the many ways Patriot has promoted ethanol to the public, including an electronic sign on the highway near the plant in Annawan, Illinois that features revolving messages about the benefits of ethanol. They also have been very active on social media with Facebook and Twitter accounts.

“Producers also have to help educate the public, as well as the industry associations,” said Griffith. Interview with Gene Griffith, Patriot Renewable Fuels

ace14-jerryRecognized for excellence in journalism was Jerry Perkins, editor with Biofuels Journal. Perkins was Farm Editor with the Des Moines Register for more than 15 years and says there is no conflict between him being a journalist and his support of ethanol.

This year’s Paul Dana Award went to Charlie Good, owner of the Good and Quick store in Nevada, Iowa. Good had a conflict and was unable to attend the ACE conference but I interviewed him in March at the ACE Fly-in where he told his story about deciding to offer higher blends at his store over his suppliers objections. “I had to de-brand because the oil company didn’t want that under their canopy,” said Good. “My sales are up 20-25% a month and of the gallons that they’re up, virtually all of it is the ethanol fuels.” Interview with Charlie Good, Iowa fuel retailer

As already noted, Rep. Collin Peterson (D-MN) received the Merle Anderson Award this year, presented by Merle himself. The Father of Ethanol was in rare form as he presented the award to his congressman, as you can hear all of in the audio file and see a portion in the video below. Merle Anderson Presents Award to Rep. Collin Peterson

27th Annual Ethanol Conference photo album

Increasing Ethanol Plant Throughput

ace14-enogen-lopezSyngenta’s Enogen corn trait technology is the first genetically modified output trait in corn specifically for the ethanol industry and in the past two years since it has been released the industry has seen increasing adoption.

“We’re a new product that’s been adopted by 6-8 plants already,” said Paul Lopez with Syngenta who gave a break out session at the American Coalition for Ethanol conference on how Enogen is helping plants increase throughput. Giving the presentation with him was Tory Kort with Chief Ethanol Fuels in Nebraska, which uses Enogen corn, who shared the results they have seen. “Our enzyme is pretty unique in terms of how it works … it really reduces starches down, making more sugars available, increasing the plant’s efficiencies, so increasing yield and increasing throughput,” added Lopez.

The first plant to adopt Enogen was Quad County Corn Processors, which produced the first gallons of cellulosic ethanol just last month. “They’ve been using our product for two years now,” said Lopez. “This is a win-win. The ethanol plant wins, the local grower wins, the local community wins.”Interview with Paul Lopez, Syngenta Enogen

27th Annual Ethanol Conference photo album

RFS Update from EPA at ACE Meeting

ace14-epaEnvironmental Protection Agency official Paul Machiele visited the American Coalition for Ethanol conference this week in Minneapolis to discuss various issues, including plans for the 2014 volume obligations under the Renewable Fuel Standard (RFS).

Machiele, who is director for Fuel Programs in EPA’s Assessment and Standards Division, said they understand the rule is very important and they are working very hard to get it finalized as soon as possible. “I can’t say when it’s going to come out because that will depend in a large part on the review time when it gets into the interagency review process,” he said. “That review can take anywhere from 30-90 days,” he continued, saying he hopes it will be expedited.

“We were blessed with 300,000 comments on this rule-making and not only do we have to finalize the rule-making but we have to respond to the comments that we receive,” said Machiele, adding that his staff is working on that project right now.

As it stands, Machiele says EPA has extended the compliance deadline for obligated parties so “they know what the standards will be for 2014 before they make their final decisions on buying, selling, trading, holding RINs for 2013.” Meanwhile, he acknowledged that the 2015 standards should already be proposed by now, but they expect to get that done shortly after the 2014 rule is finalized and “hoping that we can move that to final rule a little faster.”

Machiele also discussed final rules for new pathways, cellulosic feedstocks, and RINs, as well as Tier 3 regulations, and frankly answered several questions from producers at the conference. Comments from Paul Machiele, EPA

27th Annual Ethanol Conference photo album

Future for Ethanol Blends

ace14-lambertyGetting higher blends of ethanol in the marketplace continues to be frustrating, even with the approval of E15 (15% ethanol).

The biggest problem continues to be roadblocks by oil companies, according to American Coalition for Ethanol Senior Vice President Ron Lamberty, who compared the sale and use of E15 to premium gasoline. “If you total (all the) vehicles that could use E15, we’re closing in on 15 million vehicles,” said Lamberty, which is 20% of the vehicles on the road. In contrast, about 12% of total cars are supposed to use premium gas, according to their owners manuals, but only 3% of the gas sold is premium. “Oil companies demand that marketers put premium in their stations … oil companies ban E15 sales,” said Lamberty. Ron Lamberty, ACE Senior VP

ace14-drakeFollowing Lamberty at the ACE annual conference this week, Dean Drake of the DeFour Group talked about the next chapter for ethanol blend fuels.

Drake, who spent 34 years with General Motors, says increasing ethanol blends will require significant cooperation between automakers, government, and the ethanol industry. “Neither oil nor ethanol by themselves are a perfect transportation fuel, largely because of octane,” said Drake. “Gasoline is the king when it comes to energy density, but it also has a fairly low octane rating. Ethanol, while having less energy, has a very high octane rating.”

He talked about the potential for what he calls “eco-performance” fuels. “What we’re talking about here is a fuel that would be widely available that would allow auto manufacturers to build advanced vehicles,” he said.

Learn more here: Dean Drake, DeFour Group

27th Annual Ethanol Conference photo album

Motorcycles Fill up on Free E10 at Sturgis

rfa-sturgis14-fuelThe third annual “Free Fuel Happy Hours” sponsored by the Renewable Fuels Association at the Buffalo Chip Campground for the Sturgis Motorcyle Rally was once again a rousing success.

“Obviously everyone has a motorcycle here, but they also have other engines at home, whether it be car, truck, SUV, lawnmower, you name it,” said RFA Director of Market Development Robert White. “The point is we want to talk to them about ethanol and make sure all their questions are answered.”

rfa-sturgis14-whiteWhite says they offered free 10% ethanol blended fuel for a total of nine hours this week over three days, allowing bikers to fill up, get a free Ethanol Fueled With Pride t-shirt, and get their questions about ethanol answered. “We even have people who don’t fuel up because their tank’s already full, but they stop by and talk to us,” White added.

RFA has had a presence at Sturgis for six years now, with the last three offering the free fill ups, and White says word has definitely spread. “They were talking about it on the radio, there’s banners and announcements throughout the campground, and a lot of people say their neighbor camping told them about it,” he said.

White says talking one on one with people allows them to correct lots of misinformation about ethanol out there. “This fuel has been proven for well over 30 years,” he said. “Every engine here in the United States has been built for it, its warranty is covered, and we’re just here to explain the details.”

Listen to Robert talk with Domestic Fuel reporter Leah Guffey who was at the rally this year: Interview with Robert White, RFA, at 2014 Sturgis Motorcycle Rally

See all the photos from the rally and RFA’s involvement in the 2014 Sturgis Motorcycle Rally Photo Album

Export Opportunities for Ethanol and DDGs

U.S. exports of ethanol totaled 59.9 million gallons (mg) in June, up 13% from the seven-month low in May, according to a Renewable Fuels Association (RFA) analysis of government data, and the opportunities are expanding.

ace14-geneThat was the topic for the last session at the American Coalition for Ethanol conference this week in Minneapolis and one of the speakers was Gene Griffith of Patriot Renewable Fuels in Annawan, Illinois.

“U.S. ethanol is the cheapest motor fuel in the world, it’s needed and it can be blended in any country for clean air,” said Griffith, noting that the industry will continue to grow and produce more than we need in the country. “We must develop these worldwide markets. It’s not just Brazil, it’s not just the United States, there’s a lot of countries around the world that need our DDGs and our low cost, clean burning fuel.”

Listen to Gene explain in detail here: Gene Griffith, Patriot Holdings, on ethanol exports

ace14-chsClayton Haupt with CHS Renewable Fuels Marketing discussed China import issues with distillers grains, noting that the game has changed considerably since he was asked to do this talk in June.

July 24, it was announced you have to have a government stamp that has to say (DDGS imports are) clean of all GMO traits not approved in China,” said Haupt, noting that the U.S. Grains Council responded that simply cannot be done. “You’re kind of put in an environment today that you’re probably not going into China.”

Listen to Haupt’s presentation here: Clayton Haupt, CHS Renewable Fuels Marketing

ace14-ecoenergyLastly, Chad Martin with Eco-Energy wrapped up with an overall look at export markets.

“Ethanol demand is no longer driven solely by the U.S. blender,” said Martin. “That’s obviously a good thing but it comes with some complexities in terms of import quotas, different specs, different market factors to be considered…things our industry has never really had to focus on until we started exporting both distillers grains and ethanol.” Chad Martin, Eco-Energy

27th Annual Ethanol Conference photo album

Collin Peterson Honored for Ethanol Support

ace14-merle-collinThe American Coalition for Ethanol meeting in Minneapolis this week honored Congressman Collin Peterson of Minnesota with its highest award for supporters of ethanol, the Merle Anderson award. Anderson himself presented Peterson with the award, as well as an ethanol lapel pin and five dollars for his campaign.

Peterson says ethanol has been great for agriculture and he continues to fight for it in Congress. “It’s just been a tremendous success story in agriculture because it’s changed the marketplace so farmers can get a decent price for their corn,” he said. “We do have our opponents and they are still working to undermine things,” he continued, noting that just last week Rep. Bob Goodlatte (R-VA) attempted to bring up a bill to get rid of the RFS. “They want to go back to $1.85 corn and I tell them if they are successful they will rue the day because nobody can grow corn for $1.85.” Peterson says the only way farmers survived when prices were $1.85 a bushel was because of the government subsidy “and that’s gone.”

Peterson remains hopeful that the EPA will eventually come out with a better final rule on the 2014 volume obligations for the RFS. “I think the fact that they delayed this for now a third time shows they are listening,” he said. “It appears to me that they realize they made a mistake here and they’re trying to figure out how to undo it.” He thinks it could be next year before the rule is final, but “a delayed decision is better than a bad decision.” Interview with Rep. Collin Peterson (D-MN) at ACE Conference

27th Annual Ethanol Conference photo album

ACE President Optimistic About Ethanol Industry

ace14-alversonAmerican Coalition for Ethanol president Ron Alverson of Dakota Ethanol says there are lots of reasons to excited about the ethanol industry right now.

“We’re just super competitive,” Alverson said in his opening comments at the 27th annual ACE conference, showing a graph indicating the positive price spread between ethanol and gasoline. “I think we’re building new markets because of that.”

ace14-ron-billThe new theme for ACE is Power by People and Alverson kicked off the conference by presenting the President’s Award to someone he believes is “one of the finest ethanol advocates” in the industry. That award was given to Bill Couser of Couser Cattle Company in Nevada, Iowa. “He immediately struck me as a very passionate advocate for agriculture and ethanol both,” said Alverson. Interview with ACE president Ron Alverson, Dakota Ethanol

27th Annual Ethanol Conference photo album

ACE Celebrates “Power by People”

This morning during the opening session of the 27th Annual Ethanol Conference, the American Coalition for Ethanol (ACE) launched a new campaign featuring the people of ethanol. Their redesigned website features personal and authentic stories of the people who built and continue to innovate the ethanol industry. In addition, ACE released a new video, “The Home Place”.

ace14-jennings“Instead of keeping the industry’s most valuable players on the bench and pouring all our trust and money into playing defense with facts-alone, ACE’s Power by People campaign features the compelling and positive stories of the individuals and families who built the ethanol industry and those who support and continue to benefit from ethanol,” said ACE Executive Vice President Brian Jennings during his state of the union address this morning.

“The story of ethanol is a profile in courage about grassroots people who, without any precedent to guide them, set out with their families and neighbors to rescue their communities from economic disaster by building ethanol plants,” continued Jennings. “For far too long the stories of these people have gone untold, and that’s why ACE is launching the new Power by People campaign.”

Jennings said the organization has produced several video testimonials from people of all walks of life that ACE members can use to promote ethanol on their websites, through social media, and in meetings with the public. He also noted the group plans to continue and expand the campaign in the months ahead.

Listen to Jennings’ opening comments at the ACE conference: Brian Jennings, ACE Executive VP

View the 27th Annual Ethanol Conference photo album.

Students Present Research at Ethanol Conference

Several University of Minnesota students are giving the ethanol industry a preview of their cutting-edge research in biofuels, biochemicals and bioproducts during the 27th Annual Ethanol Conference in Minneapolis. One such student is Sahana Ramanna who is a PhD student who is working on improving the pre-treatment technologies used for biomass, specifically Aspen.

Sahana RammanaRamanna explained that one of the most difficult and energy intensive parts of converting biomass (aka cellulose) to sugar is in the initial phase. Using 3D imaging, similar to the technology used for brain scans, she and her team are able to test “pre-treatment” strategies and see how it affects the structure of the biomass.

Ultimately, Ramanna said they are looking to increase the amount of biomass that can be converted into biofuels and other biochemicals and products, thus increasing the amount of biofuels. In addition, the processes they are looking at would significantly improve the energy efficiency during this process. Next steps – refining the process for Aspen and then testing it on other forms of biomass.

Listen to Sahana Ramanna discuss her research here: Interview with Sahana Ramanna

Another student I spoke with is just beginning his PhD studies and has spent the last year working on an interesting biofuels project. Joseph Molde works in the BioTechnology Institute and he and his team are working on a process called hydrothernmal carbinization using distillers grains (DDGs), a bi-product of ethanol production.

Joseph Molde U of MWhat is really neat is the process is producing two new possible co-products: liquid carbon and biochar. The liquid carbon can be used as an organic fertilizer on fields, while the biochar can be used in various applications including biomaterials and biochemicals. Molde said that similar research has been taking place in Europe, but not much has been done with biochar here in the states.

Molde also noted that the process improves efficiency throughout the production process – just one more way the ethanol industry is working to improve its technology and environmental footprint – while also adding valuable additional co-products to an ethanol plant’s portfolio. He said they are scaling up the technology now and that he hopes to see it in commercial scale application in the next five to 10 years.

Listen to Joseph Molde discuss his research here: Interview with Joseph Molde

View the 27th Annual Ethanol Conference photo album.