Domestic Fuel

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).

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.

As the ethanol industry awaits what the U.S. Environmental Protection Agency (EPA) will release for targets for this year’s Renewable Fuels Standard, members of the Biotechnology Industry Organization (BIO) and Fuels America expressed their support for the green fuel.

BIO‘s Executive Vice President, Brent Erickson, said today in a news conference that they are expecting EPA’s release of the 2013 renewable volume obligations, very soon, calling them “vitally important to companies commercializing advanced biofuels,” and this is expected to be a pivotal year for cellulosic and advanced biofuels.

“Stability in the RFS is crucial to investment [in the advanced biofuels sector],” Erickson explained, adding that “competing industries” would like to preserve their long-standing choke-hold on the fuel market in this country. “While other industry groups are spending large amounts of money to undermine or destabilize the RFS, it’s time for Congress to reaffirm its commitments to this successful policy.”

Christopher G. Standlee, Executive Vice President, Abengoa Bioenergy, said that the road to commercialization of any new technology is not short or inexpensive, but the RFS “provides a roadmap to increased energy independence and national security, with a long-term vision for the U.S. fuel industry through 2022.” He also highlighted Abengoa’s efforts in the Midwest to be on the leading edge of the new technology, citing its 25 million gallon cellulosic ethanol plant in Kansas under construction and expected to be running by the end of the year.

Others on the news conference called the RFS a bold, aggressive vision, with Wade Robey, a board member of POET-DSM Advanced Biofuels, saying Congress took the leap of faith without having the commercialization of cellulosic ethanol in place when it was passed. “It is clear [the EPA's] volume targets have been optimistic; however, it is that optimism that has spurred many projects to be under construction and coming online soon across the United States. It has sped the development of this clean, domestic energy source,” prompting even foreign investors to jump into U.S. production, Robey said.

Jan Koninckx, Global Business Director for Biorefineries, DuPont Industrial Biosciences, said America is now leading the world in renewable fuels because of the RFS. And he warns that abandoning this successful policy is not the way to go. “When we listen to those who want to repeal the RFS, what we hear is essentially an industry organization that wants the United States to turn its back on new technology … and keep the [U.S.] dependent on a 20th century technology. Turning our backs on innovation is certainly not in the tradition of the U.S. or the company that I am with.”

Listen to all of their opening remarks here: BIO/Fuels America News Conference

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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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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This week, the National Research Council (NRC) released a new report, “Sustainable Development of Algal Biofuels in the United States.” The report was a result of a request from the Department of Energy, Office of Energy Efficiency and Renewable Energy’s (DOE-EERE) Biomass Program.

The purpose of this study was to identify and anticipate potential sustainability concerns associated with a selected number of pathways for large-scale deployment of algal biofuels; discuss potential strategies for mitigating those concerns; and suggest indicators and metrics that could be used and data to be collected for assessing sustainability across the biofuel supply chain to monitor progress as the industry develops. In addition, NRC was asked to identify indicators that are most critical to address or have the greatest potential for improvement through DOE intervention as well as to suggest preferred cost and benefit analyses that could best aid in the decision-making process.

Ultimately, the report found that scaling up the production of biofuels made from algae to meet at least 5 percent, or approximately 39 billion liters, of U.S. transportation fuel needs would place unsustainable demands on energy, water, and nutrients. However, these concerns are not a definitive barrier for future production, and innovations that require research and development could help realize algal biofuels’ full potential.

The Biotechnology Industry Organization (BIO) today welcomed the report and noted that mitigation strategies are currently being developed to reduce energy, water and nutrients needed to convert algae to biofuels.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, said, “While the National Research Council catalogued and prioritized every potential environmental and resource challenge for the development of algae biofuels, their report correctly concludes that the industry has developed or is developing sustainable strategies to overcome these challenges. Biotechnology will continue to play a crucial role in the improvement of the productivity and economic viability of algae biofuels and other advanced biofuels that are cleaner, safer and healthier than petroleum-based fuels.”

Erickson added, “The potential benefits of developing algae biofuels – which include reducing reliance on foreign oil and contributing to a healthier economy by deploying U.S. technology – warrant continued research, development and commercial development of algae biofuels.”

A new coalition forms to fight back against the push against the Renewable Fuels Standard… a fight prompted by the drought and the pressure the drought is causing on the most common feedstock for ethanol, corn. During a recent news conference, former congressman and now CEO of the Biotechnology Industry Organization… or BIO… Jim Greenwood was one of the leaders of the new coalition dubbed Fuels America, a diverse group of interests, including renewable fuels, national security, renewable energy and other stakeholders. Growth Energy, the Renewable Fuels Association, the American Coalition for Ethanol, the National Corn Growers Association, BIO and the Advanced Ethanol Council are part of Fuels America, as well as several biofuel companies, such as DuPont, POET and Novozymes.

In this edition of the Domestic Fuel Cast, listen in as Greenwood is joined by Novozymes president Adam Monroe, Marion (Ohio) Chamber of Commerce president Pam Hall, and ZeaChem president and CEO Jim Imbler who make the case for preserving the RFS.

You can listen to the Domestic Fuel Cast here: Domestic Fuel Cast

You can also subscribe to the DomesticFuel Cast here.

According to an analysis by the Biotechnology Industry Organization (BIO), “food before fuel” is a fight between states. After reviewing eight waiver requests from governors submitted to the U.S. Environmental Protection Agency (EPA), a common argument was farmers in other states have to provide their states’ livestock industries corn. The waivers request a halt, or lowering, of the amount of ethanol that should be blended into fuel as mandated by the Renewable Fuel Standard (RFS). The current drought that has impacted the majority of the U.S. is causing heated discussions about who should get the corn.

It wasn’t until recent years that farmers in the U.S. could grow corn at a profit. Instead, most had to rely on federal payments or subsidies. Interestingly, while corn farmers in the Midwest created a new and growing market with ethanol and its by-products, those in Southern states where the waivers were primarily filed, lagged behind the U.S. average in achieving profitability. The core reason: growers were focused on only one market, the livestock industry.

It should be stressed that the corn used for livestock feed and ethanol is NOT the corn used in your corn tortilla. That said, yes, humans are indirectly eating the corn when eating meat (unless the animal was grass fed). But what many don’t understand or choose not to acknowledge, is that one by-product of ethanol production is a high protein based distillers grain, or high-protein animal feed. So you are not losing the entirety of the corn bushel to produce ethanol – that same bushel is also producing feed. In otherwords, a bushel of corn produces food AND feed AND fiber.

The analysis points out, rightly so, that what the growers in the Southeastern states should be looking for ways to increase their profitability. “Additional markets for corn – such as conventional biofuel production – could add value to corn grown in Southern Seaboard states.”

The wonderful thing about market dynamics, and the way the RFS was written, is that they are working. The marketplace is sorting out the difference between supply and demand and to intervene would only create a more negative impact than the drought has already.

Click here to read BIO’s RFA Waiver Analysis.

The ethanol industry is disputing the conclusions of a report titled “Ethanol’s Lost Promise” released this week by EPRINC, an oil industry-funded research group.

The report suggests a multi-year suspension of the Renewable Fuel Standard (RFS) could reduce U.S. ethanol use by more than half. To offset this loss in ethanol supplies, officials with the Renewable Fuels Association (RFA) note that the report recommend “a variety of economically impractical and politically infeasible options could be pursued—ranging from ramping up gasoline imports to reducing diesel fuel and heating oil production in an attempt to extract more gasoline from crude oil.”

RFA President and CEO Bob Dinneen pointed out that in attempting to tear down the RFS, the EPRINC report actually underscores the importance of the program and highlights the lack of sensible or economic options available to refiners if ethanol use is severely curtailed.

“If you do away with the RFS over the long term and less ethanol is available, as EPRINC is suggesting, you leave a gaping hole in the gasoline supply,” said Dinneen. “The options available to fill that hole just don’t make economic sense and would further increase fuel prices for consumers. Ironically, the EPRINC report actually underscores why the RFS is so important; it highlights the fact that cutting ethanol out of our gasoline supply would result in increased dependence on imported oil and refined products, or would force refiners to make a choice between maximizing gasoline or diesel production. Consumers lose in either case. Clearly, the best option is not to tinker with the RFS and let it continue to work as intended.”

Both Dinneen and Brent Erickson of the Biotechnology Industry Organization (BIO) point to multiple flaws in the EPRINC study. “Not least of which is the fact that EPA’s authority allows only a one-year waiver of the RFS,” said Erickson. “Moreover, the study assumes a scenario in which the petroleum refining industry circumvents the law’s intent to increase domestic production and use of renewable fuels by gaming the RFS’ system of Renewable Identification Numbers.”

Dinneen says there are internal inconsistencies regarding the report’s characterization of the flexibility of the RFS. On one hand, the report states that the RFS has “created inelastic demand for ethanol,” but then on the other hand, it acknowledges that ethanol production has plummeted by about 15% since the beginning of the year “…as high corn prices have caused many ethanol producers to idle production.”

Read the EPRINC report here.

As the EPA considers a waiver of the Renewable Fuels Standard (RFS) due to the impact the drought is having on corn supplies, members of the Biotechnology Industry Organization, BIO, are urging the agency to preserve the standard. During a news conference today, BIO provided a progress report on advanced biofuels to make the case in favor of the RFS, pointing out how the standard helped reduce dependence on foreign oil while growing jobs here in the U.S.

Several officials from companies involved in biotech and how it applies to renewable energy, including Christopher G. Standlee, Executive Vice President, Abengoa Bioenergy; James C. Collins, President, DuPont Industrial Biosciences; Pat Gruber, CEO, Gevo; Adam Monroe, President, Novozymes North America; Dan Cummings, Business Manager for Florida cellulosic ethanol producer INEOS New Planet Energy; and Doug Berven, Vice President of Corporate Affairs, POET-DSM Advanced Biofuels, highlighted how their companies have thrived with the RFS.

Standlee, who also serves as the Vice Chairman of the Advanced Ethanol Council, said cellulosic ethanol development is something his company has been working on for 10 years and believes the advancements Abengoa and other advanced biofuel makers have made are because of the RFS. “The overall development of this industry is driven primarily driven by the [RFS] and is the primary driver of second-generation technology and the ability to develop new sources of fuel to reduce our dependence on foreign oil.”

Berven said that the RFS gives farmers the confidence to move forward in “changing our energy landscape from one dependent on foreign oil to one based on domestic, renewable resources.” He also pointed out that for every one billion gallons of ethanol to be produced, there are an expected 10,000 to 20,000 jobs to be created. And the RFS calls for an additional 16 billion gallons of biofuels produced by 2022. “That’s a lot of jobs,” Berven said

BIO concluded saying that the country is at a vital point for advanced biofuels and is encouraged by this show of support from companies who are putting steel in the ground and Americans on their payrolls and what could be done in the future.

Listen to the full news conference here: BIO News Conference on RFS

Seven biofuel organizations filed a brief Tuesday in a case by the American Petroleum Institute challenging the 2012 cellulosic and advanced biofuel requirements under the Renewable Fuel Standard (RFS). The groups include the Advanced Biofuels Association, the Advanced Ethanol Council, the American Coalition for Ethanol, the Biotechnology Industry Organization, Growth Energy, the National Biodiesel Board, and the Renewable Fuels Association.

The intervenor’s brief defends the Environmental Protection Agency’s ability to set cellulosic and advance biofuels targets that are based on market data and seek to spur development, as consistent with the RFS as passed by Congress.

In the brief, the groups argued that “[f]or the 2012 cellulosic biofuel requirement, EPA reasonably based its analysis on EIA’s projection, but then took into account more specific information it had from individual facilities. Precedent makes clear that EPA can adopt standards calculated to spur development, consistent with Congress’s express statutory objectives.” Ultimately it is EPA who “is charged with judging credibility and weighing the record evidence.”

The case will be heard before the United States Court of Appeals for the District of Columbia Circuit. No oral arguments have been scheduled.

Eight biofuel industry organizations today announced the formation of the Biofuels Producers Coordinating Council to jointly advocate for national policy for increased energy security through domestic biofuel production.

The new Council will include Michael McAdams from the Advanced Biofuels Association; Brooke Coleman from the Advanced Ethanol Council; Mary Rosenthal from the Algal Biomass Organization; Brian Jennings from the American Coalition for Ethanol; Brent Erickson from the Biotechnology Industry Organization; Tom Buis from Growth Energy; Anne Steckel from the National Biodiesel Board; and Bob Dinneen from the Renewable Fuels Association.

The Renewable Fuel Standard sets a path for energy security, reduced reliance on foreign oil, and a cleaner, healthier environment by setting annual standards to increase production and use of biofuels in the United States. The members of the Council jointly pledged support for maintaining this policy and continuing to achieve its goals. Since adoption of the Renewable Fuel Standard, U.S. production of biofuels has tripled and reliance on foreign oil has been cut by nearly one-third. The RFS is producing demonstrable results for U.S. energy security.

A coalition of trade groups and organizations representing renewable energy, energy efficiency, farm and environmental interests is disappointed in a 2012 Farm Bill draft out of the Senate Agriculture Committee that they say provides “no real funding for energy programs.”

“The Committee draft bill moves the process forward, thankfully, and we support getting a bill done this year,” said Ag Energy Coalition Co-director Lloyd Ritter in a statement. “However, the core energy title programs that are necessary to move the country toward greater energy security, increase jobs, revitalize manufacturing, and improve environmental quality require mandatory funding. REAP, BCAP, Biorefinery Assistance and BioPreferred, among others, have produced results across the country, especially in rural America where jobs are dwindling.”

Coalition member Brent Erickson of the Biotechnology Industry Organization (BIO) noted that the Farm Bill’s energy programs have helped revitalize rural America, allow new agricultural markets emerge, and reduce the need for direct payments to farmers. “These programs have unlocked private capital for construction of biorefineries, put more than 150,000 acres of underutilized farmland into production of next-generation energy crops, and ignited an explosion of biomanufacturing innovation, demonstration and early commercialization,” said Erickson. “In the short time that these programs have operated, they’ve achieved a high rate of return in supporting the start up of renewable chemical, advanced biofuel and biomanufacturing companies, as a timeline of the programs demonstrates.”

The Senate Agriculture Committee is scheduled to begin markup on the Farm Bill this week and the House Ag Committee will also be working on the legislation.

The Biotechnology Industry Organization (BIO) has named Novozymes President and CEO Steen Riisgaard as the recipient of its 2012 George Washington Carver Award for innovation in industrial biotechnology.

A panel selected Riisgaard as this year’s winner “to recognize his significant contributions to the industrial biotechnology field.”

Under Riisgaard’s leadership, Novozymes is creating tomorrow’s industrial biotechnology solutions and improving the use of our planet’s resources, while reducing reliance on fossil fuels. Riisgaard will receive the award and also deliver a short address during a May 1, 2012 plenary lunch session at the BIO World Congress on Industrial Biotechnology & Bioprocessing. The conference is being held at the Gaylord Palms Resort & Convention Center in Orlando April 29-May 2.
Washington Carver Award Recipient

The award honors the original vision of George Washington Carver, an originator of the “chemurgy” movement who, more than a century ago, achieved world renown by combining agriculture and science to produce everyday biobased products, changing the nature of farm economics and sustainability. Industrial biotechnology is the modern-day equivalent, combining biotech innovations with renewable biomass to create solutions that can revitalize manufacturing and energy.

Eight ethanol-advocating organizations joined together to champion the success of the Renewable Fuels Standard (RFS) in a letter to Congressional leaders this week.

The letter addressed to Senate Majority Leader Harry Reid (D-NV), Senator Minority Leader Mitch McConnell (R-KY), House Speaker John Boehner(R-OH) and House Minority Leader Nancy Pelosi (D-CA) highlighted “ethanol’s proven ability to lower gas prices and reduce this country’s dependence upon foreign oil” and pointed out that any changes to the RFS “could dampen investment in the development of next generation biofuels.”

The groups signing the letter were the American Coalition for Ethanol (ACE), the Advanced Ethanol Council (AEC), Biotechnology Industry Organization (BIO), the Energy Future Coalition, Growth Energy, the National Corn Growers Association (NCGA), the Renewable Fuels Association (RFA), and the 25×25 Alliance.

“Today, ethanol is approximately $1 cheaper than gasoline and blending ethanol into U.S. gasoline saves consumers at the pump,” the letter noted. “Thanks in part to the RFS, U.S. oil imports fell below 50 percent in 2010 for the first time since 1997, and, oil imports stand at just 45 percent today. Ethanol accounts for 81 percent of all new domestic fuel production since 2005.”

Ethanol advocates are also meeting with Congressional representatives this week on Capitol Hill to talk about the importance of renewable, domestic fuels. “This week, I am with a number of other corn growers and leaders in the biofuels industry in Washington to drive home the message that the ethanol industry is an important part of the rural economy and that it plays an important role in moving our nation’s energy independence forward,” said NCGA President Garry Niemeyer, a corn grower from Illinois. “The Renewable Fuel Standard is an important tool to help decrease our reliance on foreign oil by supporting jobs here at home.”

More than 60 grassroots members of the American Coalition for Ethanol are in Washington this week for the annual “Biofuels Beltway March.”