In this edition of the Ethanol Report, Renewable Fuels Association (RFA) president and CEO Bob Dinneen discusses ethanol production for the year so far, new Renewable Fuel Standard (RFS) ad campaigns and gives his thoughts on the Environmental Protection Agency’s 2014 Renewable Volume Obligations that are under Office of Management and Budget (OMB) review.Ethanol Report on Ethanol Production, RFS Food EPA
Solar power can be a great, clean choice of energy. But in some places, people, because they live in a shady area or an apartment, just don’t have a good, unshaded roof to have a solar panel. And in those situations, even with utility companies using some solar, it might not be at the level a consumer would like to see. Enter SunShare, who is creating community solar gardens without the rooftops.
In this edition of the Domestic Fuel Cast, we talk with David Amster-Olzewski, founder of SunShare, a community solar projects company based in Colorado, and Nick Kittle, the Performance and Innovation Manager for Adams County, Colorado, just east of Denver, who uses SunShare for his county’s power needs and his own personal living space. They talk about the flexibility SunShare offers to its customers, as well as the savings they see.
It’s a fascinating concept that is working now, and you can hear more about it here: Domestic Fuel Cast - Building Community Solar with No Rooftops
President Obama needs to overrule this misguided proposal from the EPA before it is too late and these new technologies move overseas. The fate of America’s advanced biofuel industry, along with the President’s clean energy legacy, are resting on his decision. Fuels America USA Today print ad
“Tell President Obama, stop playing politics – fix the RFS.” American Petroleum Institute TV ad
Both the American Petroleum Institute and Fuels America unveiled new media campaigns this week targeted at telling the White House what to do when it comes to volume obligations under the Renewable Fuel Standard (RFS). Both organizations held conference calls with reporters to announce the new campaigns.
The single, full page, USA Today ad that will run during Climate Week September 19-21 is a sharp contrast to the oil industry’s multi-million dollar television, radio, and online advertising campaign. “This has been a David and Goliath struggle all along,” said Brent Erickson with the Biotechnology Industry Organization on behalf of Fuels America. “The biofuels industry has been struggling against this Goliath oil industry that has spent millions and millions of dollars on ads.”
The biofuels industry ad stresses the opening of the first large, commercial-scale cellulosic ethanol plants this year and warns that “the companies and investors looking to deploy the next wave of cellulosic ethanol facilities have put U.S. investment on hold” until a decision on the future of the RFS is made. The API ad calls the RFS “Washington red tape” and blames ethanol for raising food prices and contributing to hunger, even though corn prices are lower than breakeven for farmers this year, according to National Corn Growers Association Vice President of Public Policy Jon Doggett. “We are selling corn today at about 35% of what we did just a couple of years ago, certainly below the cost of production for many of our growers,” he said.
API’s Bob Greco says they launched their campaign in part because of recent statements from EPA Administrator Gina McCarthy that the agency will raise ethanol requirements based on the latest gasoline demand figures for 2014. “Unfortunately, the administration seems to be playing politics with the RFS rule instead of doing what’s best for consumers,” Greco said. “You don’t have to be a political insider to see how the Iowa Senate race—and the White House fear of losing control of the Senate—plays into this decision.”
“Politics are being played on this issue by both sides,” said Doggett. “I don’t think anyone should be surprised.”
Fuels America is a “coalition of organizations committed to protecting America’s Renewable Fuel Standard and promoting the benefits of all types of renewable fuel already growing in America.” API is the “only national trade association that represents all aspects of America’s oil and natural gas industry.”
Listen to the Fuels America call, which also includes comments from POET-DSM’s Steve Hartig: Fuels America RFS Campaign call
Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA) is speaking out again on the problems of rail congestion that is slowing down the delivery of ethanol and ethanol byproducts across the country. He submitted written testimony to the U.S. Senate Committee on Commerce, Science and Transportation that held a hearing yesterday to examine rail congestion and the harmful impact it has had on agriculture and other commodities.
Dinneen stressed the role that Bakken Crude rail shipments have played in increasing dwell times and decreasing train speeds and pointed toward the negative impact these delays are having on ethanol producers. “The rail system didn’t collapse last winter because of a snow drift in North Dakota,” he said. “It was because of a 400% increase in oil shipments from the Bakkens.”
In the written testimony Dinneen said, “The recent crisis of congestion that has seemingly overtaken the rail industry has become a huge and costly problem … This crisis is one that is causing significant harm to the economic health and well-being of our nation’s economy, as well as driving up costs for a wide array of commodities that rely on the rail for transportation…it is becoming more and more apparent that surging crude oil shipments are coming at the expense of other goods and commodities.”
Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on rail situation
In this edition of the Ethanol Report, Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper talks about how corn prices have fallen but food prices continue to rise, and how that shows the “food versus fuel” argument is false.
A new report from RFA compares corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014.Ethanol Report on Corn and Food Prices
Have you had the opportunity to participate in the biomass experience from New Holland? Thousands of farmers from around the country were able to do just this during the Farm Progress Show. In addition, attendees of the Project LIBERTY grand opening were also able to experience all things biomass. But for those who were unable to attend, Chuck Zimmerman is bringing the biomass experience to you.
Zimmerman spoke with Jarrod Angstadt, manager growth initiatives biomass and specialty products, who said New Holland is working with various biomass projects and research institutions across the country to work on the biomass industry and get a better handle on what’s going on and move it forward. “We want to be prepared to help their customers. Obviously they have needs and we have solutions,” Angstadt told Zimmerman.
He pointed out some new and current products that are available for growers looking at providing biomass to the biofuels industry. They have new round balers launched this year. In addition there are products growers have been using already including the BigBaler and the combine with the corn rower and forage harvester as well.
Zimmerman asked Angstadt was the future of biomass looked like. “The whole biomass market is wide open right now. There are a lot of people getting in to it and it is forging forward. Exactly where the end is is really unknown but that is what is really exciting about the industry,” answered Angstadt.
To learn more about the full biomass experience, listen to Chuck’s interview with Jarrod Angstadt: Interview with Jarrod Angstadt, New Holland
View the Farm Progress 2014 Flicker photo album.
Alden, Iowa-based Summit Group announced a project to build the first modern corn ethanol plant in Brazil during the 2014 Farm Progress Show. The project will consist of a US$140 million ethanol plant near Lucas do Rio Verde in Mato Grosso, a leading agricultural state in west central Brazil and the country’s largest producer of corn and soybeans. The project is being financed by Summit Group’s private equity group U.S. Farmland Fund and the company partnering with Fiagril and will be developed by ethanol technology company ICM and built by agribusiness company Marino Franz.
I asked Rastetter “Why Brazil” and he answered that outside of the U.S. they believe this country will play the biggest role in feeding the world. “One of the interesting parts in particular about Mato Grosso is because of improved genetics they’re able to double crop. So they are able to raise the first crop of soybeans and the second crop of corn or cotton so they have increasing corn production in the middle of the continent where it is difficult to get it out. So they are embracing value-added agriculture,” explained Rastetter.
So what is the difference between the early U.S. ethanol plants and the modern corn ethanol plant that will be based in Brail? Rastetter said they are partnering with Colwich,Kansas-based ICM and CEO Dave Vander Griend has been traveling to Brazil with Rastetter and his team for a few years. While the majority of the technology will be the same with an improvement on high protein low fiber DDGs (dried distillers grains) – a just patented process for livestock feed.
The ethanol will stay in Brazil since the Government in Brazil wants to increase the ethanol blend from 25 percent to 27 percent. I also asked him about the environmental footprint of growing corn in Brazil and Rastetter said the country is very sustainable and the farms they are purchasing from have a large percentage of trees, and if they don’t, they are planting trees.
To learn more about Summit Group’s corn ethanol plant in Brazil, listen to my interview with Bruce Rastetter: Interview with Bruce Rastetter
I also had the opportunity to speak with Eric Peterson who is the president of Summit Group who talked more specifically about the value-added opportunities the corn ethanol plant will provide the community of Mato Grosso. Peterson explained the area has difficulty getting corn exports out of the region and ethanol into the region. With the new ethanol plant, the corn will be purchased locally and the ethanol and DDGs produced will then stay local – overcoming the export/import barriers of the region. This has made the project and partners very accepted in the community.
Since the technology will provide a different type of DDGs than used in the U.S. a part of the project and because Brazilians are very used to using soy meal, they will be able to complement the soy meal with a high protein product. In addition, with the high fiber feed product they are going to run feed trials with a University of Nebraska nutritionist to learn how to best utilize the co-product.
Peterson believes there is a great opportunity to create synergistic relationships between U.S. farmers and Brazilian farmers. “When we go there we are impressed with some of their technology and how they adapt to large scale agriculture and they are quickly adopting precision technologies that we have here in the U.S. and there is no better place for people to assimilate technology than in Brazil and so I think we can learn a lot from each other.”
The plant is to break ground the next six months and to be operational 16 months from groundbreaking which will occur before the rainy season in Feb/March and will produce 50 million gallons of ethanol per year.
To learn more about the agribusiness aspect of the Summit Group’s Brazilian ethanol plant by listening to my interview with Eric Peterson: Interview with Eric Peterson
View the Farm Progress 2014 Flicker photo album.
NCGA incoming Vice President Rob Elliott of Illinois says American Ethanol began its partnership with NASCAR in 2011 supporting the transition to 15% ethanol. “NASCAR in its three levels has run over six million miles (on E15) which is the same number of miles EPA drove to prove E15 to be a good fuel,” Elliott said during an interview at Farm Progress Show this week. “The feedback we get is that 80% of NASCAR fans are now more likely to be very supportive of the use of ethanol in their own cars.”
The challenge still remains in getting more E15 into the market. “The ready availability of E15 at a broad number of stations, we’re just not there yet,” said Elliott, but he believes promoting through NASCAR is having an impact for the long term. “We’re moving the needle with 100 million NASCAR fans and we’ve seen the great benefit in the synergy created with NASCAR itself at a high level.”
American Ethanol is a partnership between NASCAR, NCGA, Growth Energy, New Holland with a number of individual ethanol producers and state corn grower groups.
Listen to an interview with Rob here: Interview with Rob Elliott, NCGA
Corn farmers are concerned about the impact lower volume requirements under the Renewable Fuel Standard (RFS) could have on growers ready to harvest a record corn crop this year.
“We’re keeping a close eye on corn prices and are greatly concerned about efforts in Washington that may reduce or stifle demand for corn and raise the cost of production,” said National Corn Growers Association First Vice President Chip Bowling during the Farm Progress Show in Boone, Iowa this week. “As thrilled as we are with a record crop, we know it has its challenges.”
Bowling says it will be detrimental if the EPA moves forward with its proposal to lower volume requirements for corn ethanol to be blended into the nation’s fuel supply. “Reducing the demand of corn for ethanol will significantly impact corn prices – at a time when prices are already too low,” said the corn farmer from Maryland. “We need stability and we need EPA to stick to the statutory amount of corn ethanol in the RFS.” Chip Bowling, NCGA comments on record corn crop
Interview with Chip Bowling, NCGA
In this edition of the Domestic Fuel Cast, we hear from four innovators who talked about their operations and how they are on the cutting edge of biofuel producing technologies during the recent at the American Coalition for Ethanol conference. Among those who spoke were ACE president Ron Alverson of Dakota Ethanol; Ray Baker, general manager of Adkins Energy in northwest Illinois; Mike Erhart, CEO of Prairie Horizon Agri Energy in Kansas; and Delayne Johnson with Quad County Corn Processors.Domestic Fuel Cast - Increasing Ethanol Blends
In one year the acres planted in Enogen corn will expand from 100,000 acres in 2014 to more than 300,000 acres in 2015 and that means that ethanol production will be expanding too. To learn more about how Syngenta achieved this feat, I spoke with David Witherspoon, head of renewable fuels for Syngenta during Farm Progress. Not only are ethanol plants excited about Enogen corn (Syngenta donates $1 per acre planted to the renewable fuels industry), but corn farmers are excited about it as well – they receive a 40 cent premium. So assuming an average yield of 165 bushels an acre, Enogen corn will generate approximately $6.6 million of additional revenue for the local growers who have signed contracts in 2014.
What is interesting is that only 15 percent of a farmer’s acre is planted with Enogen corn because the “sweet” spot for ethanol production is 15 percent. So how is Enogen different? As Witherspoon explained, the Enogen corn enzyme technology offers ethanol plants an opportunity to increase their per bushel ethanol production as well as improve energy efficiency during the production process.
“The ethanol plant needs an enzyme for ethanol production at 15 percent and then this corn is mixed with the other corn that comes into the plant,” explained Witherspoon. “And the way we found this out is that we tested plants in the lab and looked at what the optimal dosage at that plant to get the maximum performance enzyme. And if we go higher than that, we found that we don’t need anymore.”
When you look at a farmer’s field growing Enogen corn you can’t tell the difference. The corn has the exact same benefits (pest control, disease control, etc.) that other Syngenta hybrids have.
Another application that Witherspoon said that Enogen corn is really excelling in is when used with the “ACE” technology, or Adding Cellulosic Ethanol, that separates the fiber from the corn kernel and produces cellulosic ethanol. It’s the first technology of its kind in the world and the Galva, Iowa plant went online with commercial scale cellulosic ethanol production this summer. Syngenta was so impressed with the technology that they have partnered with the plant to sell the technology.
So here’s the scoop. Several ethanol plants who are buying the Enogen corn have sold out their acres for the 2015 growing season but there are still a few acres left for some other ethanol plants. In addition, Witherspoon said there are quite a few farmers who would like to plant Enogen corn but need to partner with their local ethanol plant to implement the program. So, all ethanol plants that would like to pursue the program need to contact Syngenta soon to get in the program before it sells out this year. And if you are interested in seeing first-hand how Enogen corn performs, then come to the Quad County Corn Processors grand opening on September 9, 2014.
To learn more about Enogen corn and its benefits for farmers and for ethanol plants, listen to my interview with David Witherspoon: Interview with David Witherspoon
View the Farm Progress 2014 Flicker photo album.
There are two big topics during the Farm Progress Show this year: the corn crop and the Renewable Fuel Standard (RFS). During the show, I had the opportunity to speak with Iowa Ag Secretary Bill Northey who is a corn farmer and also a huge supporter of biofuels. I first asked him how the corn crop was looking with all the August rain.
Northey said that for the most part, Iowa is going to have a great corn crop. He said that there are some pockets that had too much rain and hail in June (this affected his farm) but overall, the corn crop is going to offset some of the below average acres and Iowa should see a record crop.
I asked Northey how the record corn crop would positively affect biofuels, such as the Project Liberty cellulosic ethanol plant and the Quad County Corn ethanol/cellulosic plants that are celebrating grand openings this year.
“Well certainly we have enough corn to be able to fuel our biofuel plants, to be able to have exports and to be able to feed the livestock we have in this country,” said Northey. He said it is exciting to see the next generation come, “and it makes us think of the Renewable Fuel Standard and the Environmental Protection Agency not coming forward with a target this year. It’s frustrating to have it already be August and have it go to OMB now [Office of Management and Budget] and it could be another 90 days until it comes out of there and the year will be darn near over by the time we find out how much we should blend this year.”
“It’s too bad its gotten to this point,” Northey continued. “What we need is a big green light from the EPA [Environmental Protection Agency] that ethanol will expand from the 10 percent blend to E15 blends and we can get our 85 percent blends in that cellulosic will be supported so we can see more investment, more jobs and certainly more demand from our corn crop and our cellulosic opportunities which includes corn stover but it will be other things in other places.”
Learn more about the corn crop and RFS by listening to my interview with Bill Northey: Interview with Bill Northey
View the Farm Progress 2014 Flicker photo album.
Iowa Governor Terry Branstad paid a visit to the 2014 Farm Progress Show Tuesday and had some harsh words for the Environmental Protection Agency, which just last week sent a final version of the 2014 volume requirements under the Renewable Fuel Standard to the White House for review. He blames uncertainty created by the proposed rule for the recent layoffs at Deere and Company. “The result is the price of corn has dropped so much that farmers are not buying equipment,” he said. “What the EPA has done is not only damaging farm income, but it’s costing us jobs in farm machinery and manufacturing.” Deere announced more than 100 people will be laid off indefinitely from its plant in Ankeny and 460 people will be laid off at its tractor factory in Waterloo.
Branstad also notes that cellulosic and other advanced biofuels production is moving forward with the first gallons produced this summer by Quad county corn processors and two more plants opening soon. “I’m going to the POET grand opening of their new cellulosic ethanol plant and then we have DuPont Pioneer that’s also opening one in Nevada,” he said. “The problem is the oil companies control the distribution and they’ve done everything they can to discourage retailers from offering blender pumps and E15 because ethanol is a lot cheaper than gasoline.”
Listen to my interview with the Governor here: Interview with Iowa Governor Terry Branstad
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.
National 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
Despite 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