Advanced Biofuels Industry: Obama Please Reconsider RFS

More than two dozen advanced biofuel producers have submitted a letter to President Obama today calling on him to reconsider the proposed Renewable Fuel Standard (RFS) rule for 2014. Led by the Advanced Ethanol Council and the Biotechnology Industry Organization (BIO), the groups write: “The RFS is necessary because the highly consolidated, President Obamavertically integrated oil industry is not otherwise going to allow market access for renewable fuels”.

The letter continues, “To reduce the 2014 blending requirements and volumes in future years, EPA is proposing to use its general waiver authority based on ‘inadequate domestic supply.’ But EPA is putting forward a novel interpretation of the word ‘supply’ to mean the ability of current infrastructure to deliver renewable fuel blends to consumers, instead of the available supply of renewable fuel to obligated parties. We believe that this new interpretation is inconsistent with the plain meaning of the statute and its legislative history. But the bigger issue is that this interpretation has the practical effect of handing the future trajectory of the RFS to the oil industry by virtue of the fact that the oil industry itself controls the distribution of fuel to consumers.

The threat that oil companies could simply lie down on the RFS to avoid obligations vastly increases supply-chain risk for new projects, as opposed to those already in the ground. Given that more than 90 percent of future blending obligations under the RFS are for advanced biofuels, the Administration’s new methodology would actually scuttle U.S. investment in advanced, low-carbon biofuels in direct conflict with the Climate Action Plan and your Administration’s goals with regard to reducing oil dependence and promoting advanced biorefineries via USDA and DOE programs.

“We are most concerned about the current proposal’s impact on climate change. Our industry has invested billions of dollars in the development and commercial deployment of ultra-low carbon biofuels during your Administration alone. These investments were made based on the expectation that when we succeed, the RFS will be maintained as a mechanism to create a market for our fuels. The current proposal would break that promise by handing the RFS to incumbent industries that want to see it fail. And by any account, the real world alternative to renewable fuels is marginal, high carbon intensity oil,” the letter concludes.

DuPont CEO Calls for Supporting RFS

dupont-kullmanThe CEO of DuPont today called on Congress and the administration to preserve Renewable Fuel Standard (RFS).

In a keynote speech at the 11th Annual World Congress on Industrial Biotechnology, DuPont Chair and CEO Ellen Kullman said preserving the RFS would ensure regulatory stability for the renewable fuel industry and continue to encourage “private investment from companies like DuPont to create a sustainable bio-based economy.”

“Legislative and regulatory uncertainty has a direct impact on the growth of this industry,” Kullman said. “If the EPA issues an RFS rule with increasing biofuels volumes, supporting a stable regulatory environment, our industry can thrive.”

DuPont has invested heavily in the future of renewable fuels and will soon complete one of the world’s largest commercial-scale cellulosic ethanol biorefineries, set to open in Iowa later this year. DuPont committed over $200 million to the project, which will yield 30 million gallons of cellulosic ethanol per year, produced from corn stalks, leaves and cobs left in fields after harvest.

Kullman attended the BIO World Congress to accept the 2014 George Washington Carver Award, which each year honors one individual in the private sector, government or academia for leadership in using industrial biotechnology innovation.

Biofuel Groups Welcome Court’s RFS Decision

Biofuel groups are happy today with the decision handed down by the District of Columbia Circuit Court rejecting a petition filed by Monroe Energy, LLC that challenged the Environmental Protection Agency’s (EPA) 2013 Renewable Fuel Standards (RFS). Several biofuel organizations intervened in the case including the Renewable Fuels Association, Growth Energy and the Biotechnology Industry Organization.

logo-dc-circuit-of-appealsAfter EPA reduced the cellulosic biofuel volume for 2013, Monroe Energy challenged EPA’s decision not to reduce the renewable fuel and advanced biofuel volumes by the same or a lesser amount. The Court rejected Monroe Energy’s argument that EPA’s decision served no “statutory purpose,” and reaffirmed Congress’s directive that EPA ensure that U.S. transportation fuel contains at least the volumes provided in the statute. The Court also rejected Monroe Energy’s attempts to revisit decisions about the RFS program that EPA made in earlier years, stating that “the time to challenge that decision has passed.”

The biofuel groups said that today’s decision is a victory for American consumers, renewable fuel advocates, and the RFS program. Once again, they note, the Court has rejected attempts of the anti-biofuel parties to undermine the RFS in court. 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 providing environmental benefits, helping to decrease the nation’s reliance on imported oil, and reducing prices at the pump, as Congress intended.

DF Cast: Fuels America Fights Back with “Oil Rigged”

Backers of renewable fuels say when it comes to the fight against Big Oil, the fight is rigged… oil rigged.

Recently, Fuels America held a pair of news conferences. The first was to announce the launch of its “Oil Rigged” television and digital ad campaign and OilRigged.com, designed to “expose the many ways the oil industry is rigging the system to protect their profits and block the transition to clean, American renewable fuels.” In addition, Fuels America is backing up its claims with more than just talk, unveiling a new survey showing how renewable fuels have added significantly to the country’s economy, especially in rural areas.

In this edition of the Domestic Fuel Cast, we hear from Growth Energy CEO Tom Buis, Renewable Fuels Association (RFA) president Bob Dinneen, Biotechnology Industry Organization (BIO) Executive Vice President Brent Erickson, and Jon Doggett with the National Corn Growers Association, talking about how they want to rig the debate back to the facts.

Listen to what they had to say after they listened to ACE: Domestic Fuel Cast - Oil Rigged

You can also subscribe to the DomesticFuel Cast here.

Biofuel Groups Oppose RFS Delay Request

Leading biofuel industry groups are opposing a delay requested by petroleum industry in a 2013 Renewable Fuel Standard case.

Dont Mess with RFSThe Renewable Fuels Association (RFA), Biotechnology Industry Organization (BIO) and Growth Energy together filed a joint response yesterday in the U.S. Court of Appeals for the District of Columbia Circuit in opposition to the American Petroleum Institute’s and American Fuel & Petrochemical Manufacturers’ motion to “sever and hold in abeyance their challenge to the 2013 Renewable Fuel Standard” that was filed on Friday. The case is Monroe Energy, LLC v. United States Environmental Protection Agency, which was argued before the Court on April 7.

As the groups explained in their response to the motion, “Respondent-Intervenors Biotechnology Industry Organization, Growth Energy, and Renewable Fuels Association oppose the motion to sever API and AFPM’s petitions and place them in abeyance. The petitions have been fully briefed, responded to, and argued. No purpose is served by pulling API and AFPM’s petitions back a week after argument, to hold them indefinitely and consolidate them with hypothetical later-filed petitions.”

BIO Calls on EPA to Approve New Biofuel Pathways

The Environmental Protection Agency has announced it will halt new petitions for renewable fuel pathways for six months or so. In response, the Biotechnology Industry Organization (BIO) urged the agency to speed up rather than slow down the Petition Process for New Renewable Fuel Pathways under the Renewable Fuel Standard (RFS). The petition process was established in March of 2010 during the process of finalizing the rules for the Renewable Fuel Standard (RFS).

“EPA’s effort to improve the petition process for new renewable fuel pathways under the RFS is welcome. But the agency should aim to complete this review process in a more timely manner,” said Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section. “Advanced biofuel companies need a pathway to the fuel market in order to attract necessary investment to build and start up new production facilities that create new jobs. The lengthy wait for approval of new pathways chills job creation and investment in the sector.”

alamo_switchgrass_2Erickson noted that in the last four years, the EPA has completed less than half of the 62 petitions it has received for approvals for new renewable fuel pathways. In fact, he said there are 36 petitions are still waiting action with an average wait time of nearly 17 months. Companies filing cellulosic biofuel pathway petitions have faced the longest wait times, an average of 24 months. Erickson said this delay has slowed deployment of new advanced biofuel technologies.

Erickson concluded, “Combined with the proposed rule the proposed delay of the petition process may further undermine the development of advanced and cellulosic biofuels just as they are set to produce millions of commercial gallons and launch a rapid scale up.”

BIO Report Says Lowering RFS Will Increase GHG

biologo2A new white paper from the Biotechnology Industry Organization (BIO) finds that lowering the volume requirements for biofuels under the Renewable Fuels Standard (RFS) as proposed by the administration will lead to an increase in emissions of greenhouse gases next year.

According to Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section and lead author of the special report, the proposal from the Environmental Protection Agency could “reverse progress on one of the central goals of the law – reducing climate-changing emissions from the U.S. transportation sector.”

The paper utilizes Energy Information Administration projections of fuel use from 2014 to 2022 to estimate volumes of petroleum and biofuel use for each year. The authors then assigned estimates of greenhouse gas emissions from the GREET1.2013 model to the volumes and added up year-by-year emissions. Based on EPA’s proposed requirements for 2014, the United States would emit 6.6 million more metric tons of CO2 equivalent greenhouse gases than it did in 2013. If EPA followed past practice, allowing the overall requirements to remain at the statutory level, the achieved reduction in GHG emissions would be 21.6 million metric tons CO2e. The difference between the increase and the achievable decrease is equivalent to putting 5.9 million additional cars on the road next year. Under other available options for setting the RFS volume requirements, the United States could still achieve carbon emission reductions, the paper finds.

Read the report here.

Biofuel Organizations Call for Tax Credits Extensions

US Capitol at dusk photo Joanna SchroederLeaders from several biofuel trade organizations are calling for the extension of some federal advanced biofuel tax credits. The Advanced Ethanol Council, Advanced Biofuels Association, Algae Biomass Organization, Biotechnology Industry Organization, Growth Energy, National Biodiesel Board, and Renewable Fuels Association have sent a letter to the Senate calling for the restoration of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit.

The letter reads, in part, “The advanced biofuels industry is at a critical stage of development. Despite a difficult financial market, we are now operating commercial plants across the country and continue to make progress on dozens of additional projects in the final stages of development. Advanced biofuel tax credits have allowed the biofuels industry to make great strides in reducing the cost of production and developing first-of-kind technologies to deploy the most innovative fuel in the world.

“As leaders in a critical innovation sector in the United States, we are well aware of the financial constraints facing this country. However, the United States’ global competitors are offering tax incentives for advanced biofuels and in fact are attracting construction of new facilities – and associated high skilled jobs. If Congress wants American companies to continue developing these homegrown technologies in the United States, it must extend these credits. Biofuel producers are also competing with incumbent fossil energy industries who continue to enjoy tax incentives on a permanent basis.”

The letter marks the latest effort by biodiesel and ethanol producers and their backers to get better federal government support for their green fuels. Late last year, the Environmental Protection Agency undercut the industries when it proposed drastic reductions in the amount of biodiesel and ethanol to be mixed into the Nation’s fuel supply. In addition, Washington also let these vital federal tax credits expire at the end of the year.

Both Farm Bill and RFS Important

Signing the new farm bill into law on Friday, President Obama commented that the legislation “supports businesses working to develop cutting edge biofuels” which have the “potential to create jobs and reduce our dependence on foreign oil.” The president also announced a new “Made in Rural America” export and investment initiative “to help more rural businesses expand and hire and sell more products.”

RFA-logo-13In response, Renewable Fuels Association (RFA) president Bob Dinneen noted the great economic benefit biofuels production has brought to rural America. “Under the Renewable Fuel Standard, the U.S. ethanol industry created and supported over 386,000 jobs in the past year,” said Dinneen. “To build on the success of the Farm Bill, we call on President Obama and the Environmental Protection Agency to protect the RFS and restore the 2014 conventional ethanol requirement to its statutory level.”

During a press call about the benefits of the farm bill for bioenergy, Matt Carr with the Biotechnology Industry Organization (BIO), also pointed out the importance of the RFS. “The Renewable Fuel Standard is really the fundamental policy foundation for the growth of the advanced biofuels industry,” said Carr, noting that BIO submitted comments to EPA regarding the proposal to lower the volume requirements under the law. “That proposal puts at serious risk the investment (our members) have made in advanced biofuels projects.”

“We like to say that the farm bill policy as well as the tax code work hand in hand with the RFS to help accelerate the adoption and deployment of advanced biofuels,” Carr added.

Farm Bill Biofuel Benefits

BIOlogoJust as President Obama was preparing to sign the Agricultural Act of 2014 into law today, the Biotechnology Industry Organization (BIO) held a media conference to highlight how expansion of the new farm bill’s energy programs to include renewable chemical technologies can help advanced biofuel producers.

“Renewable chemicals are now defined in the farm bill, an important and long overdue change,” said Matt Carr, BIO Industrial and Environmental Director about that inclusion in the Biorefinery Assistance Program and Biomass Research and Development Program, which had been primarily for advanced biofuel projects.

dsm-welshOne of the participants in the call was Hugh Welsh, President of DSM North America, the Netherlands-based company that partnered with POET two years ago on cellulosic ethanol production. “We’ve made significant investments in the United States over the past three years,” said Welsh. “Some of that, in excess of $150 million, has been directly into the biofuels base and we’re encouraged by the inclusion of biochemicals in the farm bill.”

While DSM used its own funds for investment rather than taking advantage of the program, Welsh says it will help others. “We see the loan guarantee program now extended to biochemicals as something that offers greater opportunity for the development of this technology going forward,” in licensing the technology to others and “ultimately creating a true biorefinery.”

Welsh noted that the two technologies will work together. “We’re looking to grow both the advanced biofuels business and the biochemistry business,” he said.

Also participating in the call were Agriculture Energy Coalition co-director Lloyd Ritter, and Renmatix Senior VP Mark Schweiker.

Listen to or download the call here: BIO farm bill call

Biofuel Groups Ask to Intervene in RFS Case

Three organizations that represent biofuel producers have asked to intervene in the latest legal challenge to Renewable Fuel Standard (RFS).

mess-rfsThe Renewable Fuels Association (RFA), Growth Energy, and the Biotechnology Industry Organization (BIO), filed a motion Friday with the U.S. Court of Appeals for the District of Columbia Circuit to intervene in the challenge against the RFS by Monroe Energy, the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM). The lawsuit seeks a reduction of the 2013 volume obligations for all renewable fuels.

The groups are asking the Court’s permission to intervene in this lawsuit on behalf of member companies which would be directly impacted by that action. “Moreover, a reduction in the volumetric requirement for any one type of renewable fuel under the RFS could affect the demand for other types of renewable fuels,” the groups stated in the filing.

In January, the same court upheld EPA’s authority to set advanced and cellulosic biofuel volume obligations at the maximum achievable level, in order to achieve Congress’ intent to promote production and use of renewable fuels. The trade groups will ask the Court to reaffirm this finding.

BIO Tells EPA to Just Say No to Big Oil’s RFS Waiver

biologo2Big Oil is trying to get out of its obligations under the Renewable Fuels Standard (RFS), but an organization with close ties to the biofuels industry is calling on the government to stand its ground. The Biotechnology Industry Organization (BIO) is asking Environmental Protection Agency (EPA) Administrator Gina McCarthy to reject the recent petition from American Petroleum Institute and American Fuel and Petrochemical Manufacturers for a waiver of the 2014 volume obligations under the RFS. In an 11-page letter to the EPA, Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section said that Big Oil already enjoys great flexibility in planning and choosing how it will comply with the RFS, shooting holes in the petroleum industry’s argument that compliance would hurt the U.S. economy.

“BIO urges the EPA to deny the joint petition for several reasons. First, the petitioners do not meet the requirements to file the joint petition. The joint petition is also premature. The petitioners cannot demonstrate harm when the 2014 renewable volume obligations (RVOs) have not even been formally proposed.”

Erickson continues the 11-page letter, writing:

“The reality is that because they have blocked investment in infrastructure and created marketing challenges for higher blends of biofuels, the petitioners are now requesting the Administrator waive the 2014 RVOs to 9.7 percent of the domestic fuel supply. They created the very situation from which they are requesting relief.”

Erickson outlined the options Big Oil has, including accumulating Renewable Identification Numbers (RINs) to meet its 2014 RFS RVOs. And he says “while some individual refiners may choose to restrict U.S. fuel supply as a compliance strategy, market competition and the increasing production of biofuels will work in tandem so such a restriction will not harm the U.S. economy or consumers.”

Erickson concludes saying that the oil companies have had five years to prepare for the 2014 obligations but chose not to, mostly to protect their monopoly on energy.

“The petitioners and their members should not be rewarded for these efforts.”

EPA Proposes RFS Amendments

The Environmental Protection Agency has announced proposed Renewable Fuel Standard (RFS2) amendments and clarifications, which include new pathway determinations for advanced biofuels such as isobutanol and ethanol from crop residues.

epaThe EPA proposal also includes “various changes to the E15 misfueling mitigation regulations (E15 MMR) which are minor technical corrections and amendments to sections dealing with labeling, E15 surveys, product transfer documents, and prohibited acts” as well as changes to the survey requirements associated with the ultra-low sulfur diesel (ULSD) program.

EPA is proposing to allow renewable diesel, renewable naphtha, and renewable electricity (used in electric vehicles) produced from landll biogas to generate cellulosic or advanced biofuel RINs. Renewable compressed natural gas (CNG)/liquified natural gas (LNG) produced from landfill biogas are also proposed to generate cellulosic RINs. EPA is also proposing to allow butanol that meets the 50% GHG emission reduction threshold to qualify as advanced biofuel. The rulemaking also proposes a clarication regarding the definition of crop residue to include corn kernel ber and proposes an approach to determining the volume of cellulosic renewable identication numbers (RINs) produced from various cellulosic feedstocks. Further, this proposal discusses and seeks comment on the potential to allow for commingling of compliant products at the retail facility level as long as the environmental perfor­mance of the commingled fuels would not be detrimental. The action also addresses “nameplate capacity” issues for certain production facilities that do not claim ex­emption from the 20% GHG reduction threshold. Several other amendments to the RFS program are included.

“This proposed rulemaking package is essentially a collection of ‘housekeeping amendments’ that will address several odds and ends that needed to be addressed in the regulatory text,” commented Renewable Fuels Association president and CEO Bob Dinneen. “We are pleased that among these proposed amendments is a provision clarifying that ethanol produced from the cellulosic portions of the corn kernel can qualify as cellulosic biofuel under the RFS2.”

“Companies continue to make investments, put steel in the ground, create jobs and develop technologies that reduce dependence on foreign oil and contribute to a cleaner environment,” said Brent Erickson, executive vice president of the Biotechnology Industry Organization’s (BIO) Industrial & Environmental Section. “They are preparing to make additional investments with assurance that U.S. policy is committed to energy security and production of biofuels.”

The proposal has been submitted to the Federal Register for public comment.

Industry Supports Reconsidering Cellulosic Target

A coalition of biofuel producer organizations the reconsideration of the 2011 cellulosic obligation under the Renewable Fuel Standard (RFS).

In January 2013, the U.S. Court of Appeals for the D.C. Circuit ordered the Environmental Protection Agency (EPA) to reconsider the 2012 Renewable Fuel Standard obligation for cellulosic biofuels. EPA has implemented the Court’s order and is now voluntarily reconsidering the 2011 obligation for cellulosic biofuels, which is the subject of a separate lawsuit before the Court.

In a joint statement, organizations that make up the Biofuel Producers Coordinating Council, noted that the “RFS was established to open the U.S. transportation fuel market to renewable fuels, and it ensures that the market remains open as cellulosic biofuel production starts up. The program has worked. Advanced biofuel companies across the United States have invested in technology development and construction of first-of-a-kind commercial scale refineries for cellulosic and other advanced biofuels. EPA’s implementation of the Court order does not impact the industry’s progress in developing technologies that reduce dependence on foreign oil and contribute to a cleaner environment.

The industry remains focused on starting up production this year and increasing it in years to come. We look forward to working with EPA to establish 2013 targets that are consistent with expected production volumes this year from the facilities that have already been built.”

Intervenors in the case included the Advanced Biofuels Association (ABFA), Advanced Ethanol Council (AEC), American Coalition for Ethanol (ACE), Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA).

Advanced Biofuel Orgs Set Record Straight

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.

feb 2013 gas prices copy Photo Greg BollThis 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.