Iowa Secretary of Agriculture Bill Northey said while he’s glad the EPA seems to be responding to public sentiment against what was proposed, he’s also worried about the uncertainty the renewable fuels industry in the state face:
“The past year has been an exciting time in the renewable fuels industry with the first commercial scale cellulosic ethanol plants coming online. However, we have missed opportunities for even more growth in the industry due to the uncertainty created by EPA’s initial RFS proposal. Hopefully the withdrawal of this rule signals a larger change in course within EPA where they will be less adversarial and more responsive to the concerns of rural America.”
Grant Kimberley, executive director of the Iowa Biodiesel Board, is also optimistic the delay means the proposal will be revised more favorably to his group’s fuel, he shares Northey’s concerns over uncertainty:
“An increased RVO for biomass-based diesel would mean good news for Iowa, the number one biodiesel-producing state. Uncertainty has hurt the biodiesel industry and created a ripple effect through the farming community, major ag suppliers and equipment companies. But the EPA has the chance to reverse this.
“The Proposed Rule as it stood would have taken biodiesel backwards from the volumes produced in 2013. The Administration has a chance to make it right by finalizing a 2014 rule that sets the Renewable Fuel Standard’s biomass-based diesel volumes at or above the nearly 1.8 billion gallons consumed in 2013. We also urge them to fix the RVO process so we don’t have to face this disruptive uncertainty every year. We need to put biodiesel back on the course of diversifying America’s fuel supply, supporting green jobs and boosting economic development.”
On Monday, biofuels industry leaders will hold briefings for Capitol Hill staff and the media to discuss the implications of the decision and where we go from here. The Fuels America briefing will feature Buis, Dinneen, Advanced Ethanol Council (AEC) Executive Director Brooke Coleman, and Brent Erickson with the Biotechnology Industry Organization (BIO).
The Environmental Protection Agency’s decision to hold off on issuing a final rule for 2014 volume obligations under the Renewable Fuel Standard (RFS) continues the atmosphere of uncertainty for the advanced biofuel industry, according to the Biotechnology Industry Organization (BIO).
“We appreciate that EPA will not be finalizing a proposed 2014 RFS rule containing a flawed methodology for setting the renewable fuel volumes,” said BIO President & CEO Jim Greenwood. “Unfortunately, the delay in this year’s rule already has chilled investment and financing of future projects, even as first-of-a-kind cellulosic biofuel plants are right now starting up operations. The industry needs a final rule that is legally appropriate and continues to support our efforts.”
Advanced Ethanol Council (AEC) Executive Director Brooke Coleman says that pulling back on the 2014 RFS rule is “the right thing to do at this stage in the game when it comes to preserving the integrity of the program.”
“While the cellulosic biofuel industry will not get the policy certainty it needs from this decision, it does suggest that the Administration is listening when it comes to our concerns about giving oil companies too much power to avoid its obligations under the RFS going forward,” Coleman added. “This battle was never about the 2014 volumes for the oil industry, and we appreciate the Administration’s willingness to pivot in the right direction this late in the game. The key now for advanced biofuel investment is to move quickly to fix what needs to be fixed administratively so we can reestablish the RFS as the global gold standard for advanced biofuel policy.”
EPA hit the big reset button. Given the fact that we are already at the end of 2014, we appreciate EPA’s recognition that the real importance is to set the program on a clear glide path for 2015 and 2016. The numbers do matter, and utilizing the actual production will be a positive step from what was a proposed. We appreciate how EPA recognized that cutting requirements for advanced biofuels would be a mistake. This emerging industry deserves better considering it has already demonstrated the capacity to generate 3.2 billion gallons of advanced biofuel annually. But, at least EPA’s decision leaves the glass more than half full and allow us to get back on track next year.
The Environmental Protection Agency (EPA) signed a Notice of Delay today to be published in the Federal Register announcing they will not be finalizing the the 2014 applicable percentage of standards under the 2014 Renewable Fuel Standard (RFS) until next year.
“The proposed rule, issued in November 2013, generated a significant number of comments, particularly on the proposal’s ability to ensure continued progress toward achieving the law’s renewable fuel targets,” said the EPA statement. “Due to the delay in finalizing the standards for 2014, and given ongoing consideration of the issues presented by the commenters, the agency intends to take action on the 2014 standards rule in 2015. Looking forward, one of EPA’s objectives is to get back on the annual statutory timeline by addressing 2014, 2015, and 2016 standards in the next calendar year.”
“The proposal has generated significant comment and controversy, particularly about how volumes should be set in light of lower gasoline consumption than had been forecast at the time that the Energy Independence and Security Act was enacted, and whether and on what basis the statutory volumes should be waived. Most notably, commenters expressed concerns regarding the proposal’s ability to ensure continued progress towards achieving the volumes of renewable fuel targeted by the statute. EPA has been evaluating these issues in light of the purposes of the statute and the Administration’s commitment to the goals of the statute to increase the use of renewable fuels, particularly cellulosic biofuels, which will reduce the greenhouse gases emitted from the consumption of transportation fuels and diversify the nation’s fuel supply.”
The agency will also be making modifications to the EPA Moderated Transaction System (EMTS) to endure that Renewable Identification Numbers (RINS) generated in 2012 are valid for demonstrating compliance in 2013.
Ethanol and biodiesel producers in Iowa are joining in the growing chorus calling on Congress to extend some important tax credits. This news release from the Iowa Renewable Fuels Association (IRFA) says nine of the state’s advanced biofuel producers sent a letter to the entire Iowa Congressional Delegation encouraging the swift passage of a tax extenders package which includes provisions for biodiesel blending, cellulosic production, and accelerated depreciation, prior to final adjournment of the 113th Congress.
“Iowa’s entire congressional delegation has shown steadfast support for these important policies, and today we’re calling on them to take concrete steps to advance legislation extending these vital provisions that support energy security, American jobs, and a cleaner environment,” stated Western Iowa Energy Board Member Denny Mauser. “In the face of more than 100 years of preferential tax treatment for petroleum—a literal Century of Subsidies—these incentives keep advanced biofuel projects moving forward to the benefit of all Americans.”
The letter states, “It is absolutely critical to our industry that this Congress pass a tax extenders package, which includes provisions for biodiesel blending, cellulosic production and accelerated depreciation, prior to final adjournment.”
The letter goes on to point out the advantages the petroleum industry continues to enjoy in tax subsidies and says if Congress does nothing on the extenders package, the “U.S. will be left with a defacto petroleum mandate.”
A proprietary variety of grass could be providing fuel for vehicles and feed for animals in the desert southwest. Biomass grower VIASPACE, Inc. says the results of the first two harvests of Giant King Grass grown at the University of California Desert Research Center (DREC) in Holtville, Imperial County, California are showing good signs as a viable biofuel feedstock and animal feed.
The results reported were for Giant King Grass harvested at approximately 8 feet tall for animal feed. Four representative sections of each planting type (replicates) were harvested by hand and fully characterized. Samples were also sent to Dairy One Forage Laboratory in Ithaca, New York for nutritional analysis.
The single node planting yield for the first harvest on September 2, 2014 was 37.4 fresh tons per acre (7.2 dry tons) and 58 days later, on October 30, 2014, the yield for the second harvest was 31.4 fresh tons per acre (5.4 dry tons). The crude protein level for the second harvest was 17.3% of dry matter. The whole stalk planting yield was about 27% lower with a crude protein level of 14.7%.
[Dr. Oli Bachie, Agronomy Crop Advisor, University of California Cooperative Extension] stated during the presentation, “This is the most giant grass I have ever seen. It is truly gigantic in terms of the biomass crops we are growing in the Imperial Valley.” Dr. Bachie emphasized that although the first two harvests were very impressive, the research program will continue for at least one year and the overall results will be compiled and published in the future.
VIASPACE is growing Giant King Grass in 11 locations in eight countries around the world for electricity production, biogas, biofuel, pellet and animal feed applications.
The folks representing America’s ethanol industry are taking a shot at a campaign by livestock producers and fast food companies that takes its own shot at biofuels. The Renewable Fuels Association (RFA) says the Feed Food Fairness Campaign ran a one-sided advertisement in the popular Beltway publication “Politico” inaccurately blaming the Renewable Fuel Standard (RFS) for rising food prices.
“Never before in the history of misleading advertising has so much bull been slung in defense of chickens, hamburgers, and even potatoes. The ad is replete with misinformation. One would have to be awfully creative, for example, to draw any connection between biofuels and potatoes!” said Bob Dinneen, president and CEO of the RFA.
“Apparently, the Feed Food Fairness campaign is not big on facts or transparency. Their ad conveniently leaves out the key fact that their numbers come from a 2012 study on commodity costs during the worst drought in 50 years.”
“Simply put, the information is outdated and misleading. We are now well into 2014 and that drought has long since subsided. Farmers are harvesting the largest corn crop in history. Corn prices have plummeted with this record crop and yet as a recent RFA study demonstrates, food prices continue to rise. They should take an ad out to explain that!”
Dinneen also said that numerous independent analyses have concluded energy prices, not the RFS, drives food prices, citing the World Bank finding that “most of the food price increases are accounted for by crude oil prices.”
It might be the scourge of the south, but kudzu could become the next feedstock for biofuels.
“When life gives you lemons, you make lemonade,” says Lewis Ziska with the U.S. Department of Agriculture’s (USDA) Agricultural Research Service (ARS). “One of the possible potential benefits of kudzu is the roots are high in starch, and it may be a potential biofuel.”
Ziska says the USDA is working with the University of Toronto and Auburn University to look at the potential of kudzu roots. Since the USDA certainly doesn’t want to promote the growing of the weed that has overrun so many places in the south, he believes harvesting kudzu from abandoned farmland and other areas where it’s growing unchecked and easily harvested could end up producing as much, or even more, ethanol from an acre of the weed they want to eliminate as would be produced from an acre of corn.
“What we think we could do is to take the existing kudzu and convert into a biofuel for a win-win,” Ziska says.
Two Midwest governors might be from other sides of the political aisle, but they are on the same page when it comes to ethanol and biodiesel. Republican Iowa Governor Terry Branstad and Democrat Missouri Governor Jay Nixon will lead the Governors’ Biofuels Coalition beginning in January 2015 as chairman and vice chairman, respectively.
“I look forward to working with Governor Nixon to advance the bipartisan work of the Governors’ Biofuels Coalition, as the production and use of biofuels increases family incomes in rural America, diversifies our nation’s energy portfolio, and enables consumer choice at the fuel pump, ” Governor Branstad said.
“Thanks to our corn and soybean farmers, Missouri has long played a leadership role in the development and production of biofuels,” Governor Nixon said. “Missouri was one of the founding members of the Governors’ Biofuels Coalition, and the Coalition has played a major role in our nation’s energy policies, including the drafting and passage of the renewable fuel standards. I’m honored to serve as the next vice chairman of this organization, and will continue working to strengthen the energy independence of Missouri and our country.”
Outgoing chairman Gov. Pat Quinn, a Democrat from Illinois, says everyone has a stake in the game, from farmers to energy consumers.
More than half a trillion dollars in subsidies for fossil fuels are discouraging energy efficiencies and renewable alternatives. This news release from the Global Renewable Fuels Alliance (GRFA) cites an International Energy Agency (IEA) report that shows worldwide fossil fuel consumption subsidies reached $550 billion in 2013, keeping down investments to make energy more efficient and renewable.
“Fossil fuel subsidies are theoretically intended to increase energy access, but according to the IEA these subsidies are failing while discouraging investment in energy efficiencies and renewables. This raises a glaring question; who’s the $550 billion benefiting?” asked Bliss Baker, spokesperson for the GRFA.
Despite falling oil prices, fossil fuel consumption subsidies rose by $6 billion, to $550 billion in 2013, up from $544 billion in 2012. By comparison, all global renewable energy sources received less than a quarter of that amount in subsidies.
“It seems counter productive to subsidize the most profitable industry on Earth that contributes the majority of global greenhouse gas emissions, especially when biofuels are growing and are the only commercial alternative to transport fossil fuels,” stated Baker.
GRFA also says that by 2040, biofuels use will more than triple, rising from 1.3 million barrels of oil equivalent per day in 2012 to 4.6 million barrels per day in 2040, about 8 percent of road-transport fuel demand.
California-based ethanol producer Trestle Energy gets the green light to produce its advanced biofuel in British Columbia, Canada. Trestle, with production facilities in Iowa, can now start producing and selling its low-emissions biofuel in the province, as BC recognized the company as the lowest emissions ethanol producer in America.
Trestle Energy will now begin partnering with existing ethanol plants in Iowa, Minnesota, and across the Midwest to ramp up production of its low carbon biofuels and make the fuel available to BC consumers. Trestle’s method of production will strengthen export markets for American companies and help them effectively compete with overseas biofuel producers, while also helping advance important climate and energy security objectives.
“We are thrilled that British Columbia has moved quickly to approve our fuel pathways, so that we can begin to get our advanced biofuels to market,” said James Rhodes, co-founder and president of Trestle Energy. “We look forward to partnering with ethanol plants to supply Canada with low carbon biofuels, and we hope to bring them to the United States as soon as possible so that we can provide Americans with clean, affordable, low carbon energy.”
Trestle Energy also has petitions currently pending with the Environmental Protection Agency (EPA)—filed in November 2013—and with the California Air Resources Board (CARB)—filed in May 2014.
A group representing ethanol interests is calling on Oregon to treat ethanol the same as other clean fuels in the state. The Renewable Fuels Association (RFA) sent in comments to the Oregon Department of Environmental Quality (DEQ) detailing a number of requested changes to the proposed rule for Phase 2 of the Oregon Clean Fuels Program (CFP), including the recommendation that indirect effects be withheld from the program’s lifecycle carbon intensity analyses for various fuel pathways.
Phase 1 of the Oregon CFP, which is structured similarly to California’s Low Carbon Fuel Standard (LCFS), included carbon intensity scores for ethanol and all other fuel pathways that were based strictly on verifiable direct emissions. However, for Phase 2 of the program, Oregon DEQ is proposing to introduce subjective and uncertain penalty factors for hypothetical indirect land use changes (ILUC) for select biofuels, but no indirect effect penalty factors for any other fuel types. RFA’s comments underscore the fact that “Inclusion of highly uncertain and prescriptive ILUC factors creates an asymmetrical and discriminatory framework for the CFP.”
RFA urged that DEQ remove ILUC from the proposed rule “…until such time as there is broad scientific agreement on the best methodology for estimating the indirect effects for all fuels” and that “If DEQ includes ILUC for biofuels, it must also include indirect emissions associated with all other regulated fuels (including baseline petroleum).”
Even if DEQ’s proposal to include ILUC was justified, the letter points out that “…DEQ is proposing to use factors that have been shown to be grossly exaggerated and based on outdated information and data.” In fact, DEQ is planning to adopt ILUC penalties developed by the California Air Resources Board (CARB) in 2009 for that state’s LCFS. Even CARB has recognized that its 2009 ILUC factors are flawed and is planning to propose revisions to those values.
RFA added that it will support “performance-based low carbon fuel programs that are grounded in the principles of fairness, sound science, and consistent analytical boundaries.” The group continued that introducing into the regulatory framework concepts without scientific integrity and balance “only creates stakeholder division and controversy.”
The National Corn Growers Association (NCGA) and several other agricultural sent a letter to President Obama this week asking him to intervene with the Environmental Protection Agency regarding its proposed cuts in the 2014 volume obligations for the Renewable Fuel Standard.
“The blending targets and the methodology in your administration’s proposed rule are already causing significant harm to the biofuel sector,” the letter states. “These impacts are reverberating throughout the U.S. agriculture economy, and we expect this trend to continue if the targets and the methodology in the rule are not corrected.”
The letter discusses how the ag sector has met its responsibility in growing sufficient feedstock for biofuels, but is also working with the ethanol industry on infrastructure and advanced fuels. The letter concludes: “The EPA’s proposed policy decision is driving one of our key economic engines – the biofuel sector -¬‐ overseas. We have invested in response to the signals in the RFS and are poised to deliver the very low carbon fuels you have sought for so long. Instead of reaping the economic benefits of this investment with a build-¬‐out of a domestic biofuel industry, the methodology proposed by EPA is offshoring the industry – and our market. This is a decision we cannot afford in America’s heartland.”
In addition to NCGA, organizations sending the letter included the Agricultural Retailers Association, American Farm Bureau Federation, Association of Equipment Manufacturers, National Association of Wheat Growers, the National Farmers Union and National Sorghum Producers.
A new study from the Society of Automotive Engineers (SAE) has called the Environmental Protection Agency’s (EPA) E15 emission testing “flawed”. Others agree with the findings including the Urban Air Initiative (UAI) and the Energy Future Coalition (EFC). The SAE reviewed EPA models that are used to determine emissions from various fuel blends, known as “match blending”. The procedures were found by the SAE to show skewed results and the authors state has produced emission increases that are “incorrectly attributed to ethanol”.
The paper focuses on the fact that modification of gasoline blendstock composition in preparing ethanol-gasoline blends has a significant impact on vehicle exhaust emissions. In “splash” blending the blendstock is fixed, ethanol-gasoline blend compositions are clearly defined, and effects on emissions are relatively straightforward to interpret. In “match” blending the blendstock composition is modified for each ethanol-gasoline blend to match one or more fuel properties. The effects on emissions depend on which fuel properties are matched and what modifications are made, making trends difficult to interpret.
According to Steven VanderGriend, Urban Air Initiative Technical Director, the SAE paper helps make the argument UAI has made that splash blending higher volumes of ethanol on to finished E10 not only fails to raise any emissions but serves to improve emissions by diluting sulfur and aromatics, along with reducing the current non-regulated ultrafine particulates emissions. Also, by using ethanol’s octane potential, the greatest CO2 and mileage benefits can be achieved by the auto industry.
“This paper can serve as an important tool to correct the MOVES (Motor Vehicle Emissions Simulator) model that EPA requires states to use when estimating air quality impacts of motor fuels,” said VanderGriend. “As an independent source, the auto industry experts who were involved in this study are validating the concerns we have had for quite some time now.”
“In fact,” VanderGriend continued, “we are very excited with regard to the conclusion they reached that studies to evaluate the effects of ethanol should be conducted by adjusting the blendstock only as necessary to satisfy ASTM requirements. Blending ethanol at up to 30% volume with an E10 blendstock should generally require no change in composition to meet ASTM D4814.”
Registration is now open for the 9th annual Iowa Renewable Fuels Summit and Trade Show. The event will take place January 27, 2015 at The Meadows Conference Center located at Prairie Meadows in Altoona, Iowa and is free and open to the public. Click here for registration and sponsorship information.
With ongoing discussion over renewable fuels policy, the 2015 Iowa Renewable Fuels Summit will discuss state and national issues impacting the renewable fuels industry, including the future of the federal Renewable Fuel Standard (RFS), the impacts of the mid-term elections on U.S. energy policy, and emerging opportunities for cellulosic ethanol, E15, and biodiesel. Featured speakers will be announced leading up to the Summit.
“The Iowa Renewable Fuels Summit provides a great opportunity to listen to experts address state and national issues impacting the future of renewable fuels, as well as network with biofuels professionals and business leaders from throughout the Midwest,” said Iowa Renewable Fuels Association Executive Director Monte Shaw. “Taking into account the unclear impacts of mid-term elections and the uncertain future of the RFS, there’s a no shortage of interest in the 2015 Summit that will bring together industry leaders, decision makers and the general public to shape Iowa’s energy future.”