USDA Rural Development Supports Biofuel Investment

USDA Rural Business-Cooperative Service Administrator Lillian Salerno went on a three-state Midwest tour last week to highlight USDA investments that are helping expand business opportunities in the bio-economy, including biofuels.

usda-salerno“Creating jobs and expanding economic opportunity for rural small businesses are top priorities for the Obama Administration,” said Salerno, who visited companies in Iowa, Nebraska and South Dakota. “The new Farm Bill expands the potential for economic growth in rural America by maintaining momentum for the emerging bio-based industry and the more than 3,000 bio-based companies across the country.”

Salerno’s tour started with a visit to Quad County Corn Processors near Galva, Iowa where they are working on a process to turn corn kernel fibers into cellulosic ethanol and as a result boost the plant’s ethanol production. “It’s a co-op, so all the farmers around there have a vested interest in making this processing unit work,” she said. The company has received nearly $22 million in USDA Rural Development loan guarantees since it opened 13 years ago.

Salerno noted that the United States has the capacity to provide one billion tons of biomass per year by 2030. “This has a possibility of hundreds of thousands of jobs – actually 1.7 million estimated,” she said.

RFA: CARB’s ILUC Analysis Out of Date, Out of Step

rfa-logo-09A biofuels advocate is taking exception with one state’s evaluation of indirect land use change associated with the green fuels. The Renewable Fuels Association (RFA) says the California Air Resources Board’s (CARB) draft indirect land use change (ILUC) analysis is not in step with current ILUC science.

Geoff Cooper, RFA’s senior vice president, notes in his submission that RFA is greatly concerned by many aspects of the draft.

Cooper writes, “….several of the assumptions and methodological approaches chosen for CARB’s draft analysis run counter to the recommendations of the Expert Work Group (EWG). In particular, the values selected by CARB for key GTAP elasticities are in conflict with values recommended by EWG and well-known agricultural economists. More generally, CARB’s draft analysis lacks sufficient justification for certain judgment calls made by staff with regard to important model parameters.

“… the results of CARB’s draft analysis are in conflict with the results of recent independent ILUC studies. As described in a recent letter to CARB Chair Mary Nichols from 14 scientists and researchers (including CARB-appointed Expert Work Group members), the corn ethanol ILUC results from CARB’s draft analysis are significantly higher than estimates from recent peer-reviewed scientific analyses…. We believe CARB should explain and justify the divergence of its draft results with estimates from other recent studies.”

RFA addresses key modeling parameters in CARB’s analysis, such as crop yield elasticities and emissions factors, which RFA believes are not in line with what current ILUC science says. In addition, the group says CARB needs to correct in its draft price yield elasticity, what RFA considers to be the single more important factor in the analysis. You can read RFA’s full comment letter here.

Corn Oil Gains in Popularity as Biodiesel Feedstock

cornoilbiodiesel1Corn oil, squeezed from the seeds at the Nation’s many ethanol plants, has seen a meteoric rise in popularity as a feedstock for biodiesel. This article from Ethanol Producer Magazine says use of corn oil as a biodiesel feedstock grew by an impressive 245 percent between 2011 and 2013.

Corn oil’s role as a popular feedstock choice in the biodiesel arena is quite apparent and growing, which made 2013 a great year for corn oil-derived biodiesel. More than 1.04 billion pounds of corn oil were utilized for biodiesel production by the end of 2013, an EIA biodiesel production report showed, making it the second most popular feedstock choice. During the second half of 2013, corn oil finally broke the 100 million pound mark not once, but on three separate occasions.

Corn oil producers have options to sell within local markets, as well as destination markets, says [Joseph Riley, general manager of FEC Solutions]. Locally, the oil can be transported via truck to nearby biodiesel plants or feed producers. In the case of Marquis Energy, the company is located relatively close to one of Renewable Energy Group’s biodiesel plants, says Tom Marquis, director of marketing at Marquis Energy LLC, which installed corn oil separation units in 2008. REG is one of the leading North American biodiesel producers with a 257 MMgy capacity and has been using the feedstock since 2007. “Our freight to their facility is pretty reasonable, so that has been the best market for our plant,” Marquis added.

The article goes on to say that growing markets for corn oil include plants in Louisiana, which use a variety of feedstocks for renewable diesel and California, which likes corn oil’s carbon-related benefits.

NASCAR Leader Testifies for Biofuels

The Senate Agriculture Committee held a hearing this week on advanced biofuels. Chairwoman Debbie Stabenow of Michigan says advanced biofuels are here now, and they are an important part of the energy title in the recently passed farm bill.

“The Energy Title funds critical programs that helps our farmers produce energy from non-food sources and helps companies get low-interest loans for those facilities, and of course, all that creates jobs,” Stabenow said, adding that to continue to grow the industry, there needs to be policies that support it. She said passing the Farm Bill was a strong first step toward to that goal. “Now we need to provide certainty through a strong Renewable Fuels Standard and tax credits to support long-term investments in our energy future.” Sen. Debbie Stabenow (D-MI), Senate Agriculture Committee

childress-testOne of the witnesses at the hearing was NASCAR team owner Richard Childress who talked about the many benefits of corn-based biofuels, such as the higher fuel performance he has seen in more than five million miles of racing since the E15 ethanol blend was introduced in the 2011 racing season.

“When they decided to go with an ethanol-blend of fuel, in 2010, NASCAR started looking at what was the correct blend to use. After many tests, they came up with E15,” Childress said, pointing out that his own racing team tested up to E30 blends, which he believes would be even better. “Nothing but positive results came out of our tests. Engines ran cooler, ethanol makes more octane so it makes more horsepower, less carbon buildup, better emissions, and our parts when we tore the engines down looked much better.” NASCAR team owner Richard Childress at biofuels hearing

EPA Chief Discusses RFS With Ag Journalists

epa-mccarthyEnvironmental Protection Agency Administrator Gina McCarthy spoke to the North American Agricultural Journalists meeting in Washington DC on Monday and expressed confidence that the final rule for the Renewable Fuel Standard (RFS) will be different than the proposed rule that reduces volume requirements for biofuels in 2014.

According to Agri-Pulse McCarthy said EPA is in the process of reviewing more than 200,000 comments on the RFS proposal and plans to issue a final rule in late spring or early summer.

She stressed that EPA has to make sure the final rule is implementable. “And that means taking into realities of the fuel market. One of those realities is the fuel blend wall.”

Agri-Pulse reports that McCarthy expects the final rule will “almost certainly” be different than the one that was proposed. “Gasoline demand had an impact in the proposal and it will also be reflected in the final rule,” she said.

She also said that EPA expects legal challenges to any RFS standards. “We need to be able to justify it in court,” McCarthy said. With current the current infrastructure, the industry this year would not be able to “get anywhere near” the levels required in the original RFS. “But we think that the industry is stepping up to that challenge,” she said. “We’re going to try to work toward these goals the best we can, but we need to be realistic.”

Read the entire article from Agri-Pulse here.

Advanced Biofuels in Tax Extenders Bill

aeclogoThe cellulosic biofuels industry was very pleased to see the Senate Finance Committee markup of a package of tax extenders that includes the Producer Tax Credit (PTC) and the special depreciation allowance for advanced biofuels.

“The cellulosic biofuel industry is just breaking through at commercial scale. Today’s markup sends a clear signal to the marketplace that Congress is making progress on extending its support for one of the most innovative, low carbon industries in the world,” said Brooke Coleman, Executive Director of the Advanced Ethanol Council (AEC). “It will be very important to move this package along quickly, as executives in our industry are weighing the pros and cons of developing the next wave of projects here or abroad.”

Advanced-Biofuels-Association-Logo“We applaud the Finance Committee and Chairman Wyden for supporting the advanced biofuels tax incentives included in the extenders legislation,” added Advanced Biofuels Association president Michael McAdams. “These extenders send a significant signal to the advanced and cellulosic industry and to the markets regarding the sustained support at the federal level, and our members appreciate the certainty of a two-year extension.”

Companies like Novozymes that are members of these organizations are very happy with the action. “When you’re on a road trip, you don’t stop every 10 minutes to put in one gallon—you fill up for the long haul. That’s what these tax credits and renewable fuel policies like the RFS need too: Fuel for the long haul to drive investment, create jobs and move our economy forward.” said Adam Monroe, Novozymes President, Americas.

The Second Generation Biofuel Producer Tax Credit, Special Depreciation Allowance for Second Generation Biofuel Plant Property, Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit all expired at the end of 2013. This package extends them through 2015 adding certainty for the advanced biofuel industry and its investors.

Corn Growers at Biofuels Beltway March

ace14-dc-corn-teamMore than 80 people turned out for the American Coalition for Ethanol Biofuels Beltway March this year, the most ever, and the diverse group included ethanol producers, retailers, bankers, truckers, cattle ranchers, students – and a whole bunch of corn farmers. The team here consisted of (LtoR) Missouri farmer Gary Porter, Missouri Corn Growers public policy director Shane Kinne, and Minnesota farmers on the board of Chippewa Valley Ethanol Dale Tolifson and Dave Thompson.

Cindy caught up with them as they were heading out of the Capitol after making their rounds and asked them each to give a brief impression of their visits.

Shane said the highlight of the trip was getting folks into meet with their lawmakers, telling the personal stories of farmers and fuel retailers and how ethanol is making a difference.

“They have a great story to tell, and it makes a huge difference when [lawmakers] hear it firsthand.” Shane said.

Gary said he appreciated the different points of view that he heard, such as viewpoints from folks not from the Midwest who aren’t involved in ag or ethanol.

“It’s interesting for me to talk to them and listen to what they say, and also for me to share with them the way I see it,” adding that since he’s a corn grower, cattle feeder and fuel retailer, he has a pretty well-rounded view and is willing to talk to even those he doesn’t agree with.

“That’s the ones we need to talk to,” Dave pointed out. “Even though they didn’t agree with us, they were very receptive to listening, they had good questions, and I think we have a great story to tell.”

Dale echoed those sentiments and was glad to tell his personal story.

“We tell about our experiences on the farm, how we helped grow the ethanol industry, and how that industry is not only important for clean air, but it’s important for jobs and the ag community,” as well as advancements in agriculture that wouldn’t have happened if it wasn’t for ethanol, including boosting yields to meet all demands.

Listen to what they said here: Interview with Biofuels March team


2014 ACE Biofuels Beltway March photo album

Prospective Plantings Down, But Corn Stocks High

ncga-logo-newThis year’s corn plantings are expected to be down this year, but growers say there will be plenty of stockpiles for all needs, including ethanol. The latest U.S. Department of Agriculture figures show that American farmers expect to plant 3.7 million fewer acres of corn this year, down four percent from 2013. But the National Corn Growers Association says, don’t worry, there are plenty of stocks going into the year, and it would still be the fifth-largest U.S. corn acreage planted.

“In 2013, U.S. farmers produced a record crop abundant enough to meet all needs and provide an ample carry over into 2014,” National Corn Growers Association President Martin Barbre said. “While it is still early in the season and many factors may change the reality on the ground as planting progresses, the public can rest assured that bountiful stockpiles and adequate plantings will ensure our corn security for the year to come.”

NCGA says the plantings will yield 13.37 billion bushels, and corn stocks stand at more than 7 billion bushels, up 30 percent from the same time last year.

Retailers Tell Ethanol Story at ACE Fly-in

Fuel retailers in ethanol producing states had compelling stories to tell at the American Coalition for Ethanol Biofuels Beltway March last week in Washington DC. Several of them sat down with reporters during the event to talk about their success selling higher ethanol blends, as well as the hurdles they had to overcome to do so.

ace14-dc-badenhopGlenn Bedanhop is a third generation farmer who is also president and CEO of American Freedom Energy in the small town of Liberty Center, about 30 miles west of Toledo, Ohio. “It’s rewarding knowing the value you’re putting back in your local community,” said Badenhop, who became the first retailer in Ohio to offer E15 in January because he believes in consumer choice. “It’s their choice,” he said. “We’re not mandating that they buy Coke, Pepsi, Dr. Pepper – it’s just like the fuels.” Interview with Glenn Badenhop, Ohio fuel retailer

ace14-dc-goodCharlie Good has been in the fuel retailing business for 34 years as a convenience store operator and auto mechanic and he started offering higher ethanol blends at his Good and Quick store in Nevada, Iowa last August despite his supplier’s objections. “I had to de-brand because the oil company didn’t want that under their canopy,” said Good. “My sales are up 20-25% a month and of the gallons that they’re up, virtually all of it is the ethanol fuels.” Interview with Charlie Good, Iowa fuel retailer

ace14-dc-vollanBruce Vollan started using blender pumps at his rural Baltic, South Dakota convenience store six years ago. “My experience has been pretty incredible,” he said. “You see a lot of people actively seeking out blends.” Vollan has seen his small business has grown to 13 full and part time employees and he says the negative publicity about ethanol doesn’t bother him because he believes he’s on the right team. He was happy to take time away from his business to take his story to Washington DC and let lawmakers and bureaucrats know what is really happening. “That’s what the ethanol industry is all about,” he said. “It’s about telling the truth.” Interview with Bruce Vollan, South Dakota fuel retailer


2014 ACE Biofuels Beltway March photo album

Coverage is sponsored in part by Patriot Renewable Fuels

IRFA: Strong Plantings Report Calls for Strong RFS

IowaRFAlogoExpected big plantings of corn and soybeans underscore the need for a strong Renewable Fuels Standard (RFS). New estimates from the U.S. Department of Agriculture (USDA) show a possible record amount of soybeans expected to be planted this year and the fifth largest corn acreage to be planted as well. The Iowa Renewable Fuels Association (IRFA) says these factors show why a strong and growing RFS is needed this year.

“The past eight years were prosperous for agriculture because the RFS was allowed to act as a sponge, soaking up additional corn and soybeans when needed,” stated IRFA Executive Director Monte Shaw. “The vast amount of corn and soybeans expected to be planted in 2014 demonstrates the importance of a strong and growing RFS. If the EPA’s proposal to essentially gut the RFS is allowed to become final, we could see huge carryovers, crop prices plummet below the cost of production, and family farms placed in jeopardy.”

Nearly 92 million acres is expected to be dedicated to corn this year and a record 81.5 million acres for soybeans, a six percent increase from last year.

EPA’s Feeling About RFS? Depends Who’s Asking

epa-logoHow does the Environmental Protection Agency (EPA) feel about its proposal to cut the amount of ethanol and biodiesel to be blended into the Nation’s fuel supply? Well, that depends on who the folks at the agency are talking to.

Speaking before the House Appropriations Committee last week, EPA Administrator Gina McCarthy seemed to backtrack on last January’s statements before biofuels advocates when she told them that her agency “heard loud and clear that we didn’t hit that right,” indicating the EPA could be changing its stance. But when grilled by Congressman David Valadao (R-CA) who represents California agriculture and oil interests, McCarthy had a different response.

“We’re going to make sure to take a reasonable approach that recognizes the infrastructure challenges and the inability at this point to achieve the levels of ethanol that are in the law,” she said.

It’s also interesting that McCarthy did not challenge part of the premise in Valadao’s original question that stated how consumers’ vehicles could not handle higher blends than being offered right now, specifically E10. Biofuels advocates have long made the claim that most vehicles can handle at least 15 percent ethanol blends (E15), and two years ago the EPA approved E15 for use in 2001 and newer vehicles.

You can hear for yourself what McCarthy said here: EPA Administrator Gina McCarthy Before House Appropriations Committee

Sen. Thune Meets with Ethanol Supporters

ace14-dc-thune-groupA team of four biofuels supporters had the chance to meet with Sen. John Thune (R-SD) last week while in Washington DC for the American Coalition for Ethanol (ACE) Biofuels Beltway March.

In an interview following that meeting, Thune talked about some of the issues facing the biofuels industry, in particular the EPA proposal to lower volume requirements under the Renewable Fuel Standard. “Trying to reverse the EPA’s decision on this is what we’ve been focused on since it came out,” said Sen. Thune.”Going down to 13.1 gallons is horrible for the industry so we hope they make some accommodation for getting beyond the blend wall.”

Thune says he expects to Congress to get a package of expired tax credit extensions passed soon, including renewable energy credits for wind, advanced biofuels, and biodiesel. “It’s very hard for people to plan to invest when they don’t know what the rules are going to be,” he said.

The senator also talked about the rail delays that have been impacting shipments of ethanol and grain. “The railroads are going to have to do a better job,” he said, noting that the problem has been caused by both the long, cold winter and increased shipping of crude oil from North Dakota. “It’s important that the railroads recognize that agricultural commodities need to be shipped too.” Interview with Senator John Thune (R-SD)

2014 ACE Biofuels Beltway March photo album

Coverage is sponsored in part by Patriot Renewable Fuels

DF Cast: Lawmakers Listening to Ethanol Advocates

Ethanol backers got their voices heard during the recent American Coalition for Ethanol (ACE) Biofuels Beltway March in Washington, D.C. And at least some lawmakers were listening.

In this edition of the Domestic Fuel Cast, we talk to Rep. Rodney Davis (R-IL), Sen. Mike Johanns (R-NE), and Sen. John Thune (R-SD), who met with ACE and its supporters and all expressed their backing of efforts to keep renewable fuels, especially ethanol, in the forefront of federal policies.

Listen to what they had to say after they listened to ACE: Domestic Fuel Cast - Lawmakers Meet with Ethanol Advocates

You can also subscribe to the DomesticFuel Cast here.

2014 ACE Biofuels Beltway March photo album

Coverage is sponsored in part by Patriot Renewable Fuels

Shaw has Ethanol Support for Congress

A candidate for Congress believes his background in ethanol will help him in the upcoming primary and general election. And for Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw, who has served in that role for nearly 10 years and now is running for the 3rd Congressional District seat, that background runs pretty deep.

Growth Energy CEO Tom Buis and Renewable Fuels Association CEO Bob Dinneen both on the side of Monte Shaw for Congress

Growth Energy CEO Tom Buis and Renewable Fuels Association CEO Bob Dinneen both on the side of Monte Shaw for Congress

“This is Iowa. If agriculture does well, Iowa does well,” said Shaw during an interview in Washington DC last week, pointing out how the renewable fuels has helped power the ag industry and the overall economy in the Hawkeye State. “So when people talk about how we need to get the economy going a bit more, we need more jobs, we need more robust economic growth, I have been part of that. And that’s something I want to put to work in Congress.”

Shaw says Big Oil has been fighting the Renewable Fuels Standard (RFS) hard, and Iowans need a representative on the inside in Washington who will fight for the economic interests that alternative energy brings.

“I think it would be good for the industry to have someone like me in the House Republican Caucus. There’s a lot of petroleum folks in there, and sometimes they like to forget all the tax credits and mandates and loan guarantees that petroleum gets, and I’d be happy to go there and point those things out out,” he said.

Shaw is facing five other Republicans in the June 3rd primary, so he is hitting the campaign trail as hard as he can while still working full time for Iowa RFA, with the flexibility granted to him by the association board of directors. If elected to Congress, he feels confident in the many renewable energy leaders back in Iowa who can step up in his place.

“As one of my board members is fond of pointing out to me, the graveyard is full of indispensable men,” he said, laughing.

You can read more about his campaign here.

And you can hear all of Cindy’s interview with Monte here: Interview with Monte Shaw, Iowa Congressional Candidate

Global Ethanol Output to Exceed 90 Billion Litres

The latest forecast calls for global ethanol production to exceed 90 billion litres, or about 24 billion gallons, in 2014.

GRFA1The Global Annual Ethanol Production Forecast from the Global Renewable Fuels Alliance (GRFA), in cooperation with F.O. Licht, estimates the world’s ethanol output will peak at 90.38 billion litres this year.

That amounts to an increase of almost 2.7% growth in production, up from 88 billion litres in 2013, according to GRFA spokesman Bliss Baker. “While forecasts of global economic growth remain sluggish, the global ethanol industry continues to increase its production and contribution to the global economy,” said Baker.

The latest data from F.O. Licht shows significant growth in most major ethanol producing regions in 2014. The world’s two largest producers, Brazil and the United States, are forecasted to maintain and increase their production by almost 2.5% respectively. Another major producing region, the European Union, is forecasted to see ethanol production jump over 8% this year. Africa, an emerging region with huge biofuel production potential is forecasted to see a growth of more than 136% in ethanol production in 2014.

“Although total volumes of ethanol produced in emerging regions like Africa are lower in comparison to more established producers, a production increase of over 130% is incredible because we know that these production increases will drive new investment in agricultural and job creation while reducing Africa’s reliance on imported oil,” stated Baker.