Lawmakers to Introduce Extension of Ethanol Tax Incentives

Representatives Earl Pomeroy (D-ND) and John Shimkus (R-IL) have called a press conference today to introduce the Renewable Fuels Reinvestment Act (RFRA). The bill would extend the $0.45 Volumetric Ethanol Excise Tax Credit (VEETC), commonly called the blenders’ credit, and the secondary tariff on imported ethanol, as well as the Small Producers Tax Credit and the Cellulosic Ethanol Production Tax Credit.

The two lawmakers circulated a letter this week to their colleagues seeking co-sponsors. “Our legislation will provide meaningful long-term extensions of these tax credits, giving the industry the certainty it needs to maintain current production and continue to invest and develop the next generation of biofuels,” they wrote.

Representatives from the ethanol industry, including both the Renewable Fuels Association and Growth Energy, will also be participating in the press conference, scheduled for 1:30 pm Eastern time today.

Green Rest Stops Planned in Ohio

According to the Associated Press, the Ohio Turnpike Commission has announced plans to open up two “green” rest areas, powered by renewable energy such as wind or solar power and they will carry E85.

The new service plazas will be built on both sides of the turnpike in Ohio’s Williams County. Along with E85, the facilities will allow for recharging of electric cars and cable and Internet hookups for parked trucks. The stops will also feature gas pumps, restrooms, restaurants and gift shops. The new facilities should open next year.

Currently, Ohio has 64 E85 locations throughout the state. Although details have not yet been released, the Ohio Department of Development will be offering grants to assist with additional E85 retail infrastructure. These funds are allocated for the current state budget ending in July 2011.

TN Government FFVs Now Running on E85

Nearly 225 Tennessee Department of Transportation (TDOT) flexible fuel vehicles now are using E85. TDOT’s Region One Complex Office now offers the clean burning product.

According to the TDOT website, the group has been using biodiesel in heavy duty state vehicles since 2005 as part of a continued initiative to reduce petroleum use. As in an earlier post, TDOT missed their goal of reducing their petroleum use by 20 percent by Jan. 1 of this year.

“A major strategy for meeting TDOT’s petroleum reduction goals is increased availability and use of biofuels,” said Commissioner Gerald Nicely. “This is an important step in achieving a 20 percent reduction in fuel use and I’ve encouraged all TDOT employees who operate flex fuel and diesel vehicles to use the cleaner burning biofuels whenever they travel.”

“This is an exciting time for our region, as we continue to explore new ways to decrease our dependency on oil and reduce our carbon footprint,” Region One Director Steve Borden said as he pumped E85 fuel into a state vehicle. “We are using significantly less petroleum every time we fill up our gas tanks.”

NY Senator Supports Biodiesel Not Ethanol

U.S. Senator Chuck Schumer (NY-D) visited New York’s only commercial biodiesel producer last month to assure them of his support for the federal tax incentive for biodiesel.

“The dollar tax incentive assures us that we are competitive with regular diesel fuel right now. The federal government subsidizes the petroleum industry as well, so if we lose our incentive, we lose our competitive advantage over the regular fuel,” said Schumer during a stop at Northern Biodiesel on February 19.

However, while Sen. Schumer supports biodiesel, he opposes corn ethanol. Informa Economics reports that Schumer sent a letter to a constituent outlining his concerns, saying that “corn ethanol provides no environmental, economic, or security benefit over petroleum, and it raises serious ethical concerns about our obligations towards our neighbors.” At the same time, Schumer does support the development of cellulosic ethanol, saying production does “have the potential to protect the environment and reduce America’s dependence on foreign oil, without putting strains on American agriculture or other countries’ food supplies.”

Schumer’s letter prompted officials with Western New York Energy (WNYE) to write him a letter and set the record on corn ethanol straight.

“Rather than pointing out the inconsistency in your ethanol and biodiesel positions, we wanted to take this opportunity to provide you with more current information about America’s ethanol industry in the hopes that you will revisit your position,” wrote plant owners John and Michael Sawyer. They are planning to contact the senator’s office to set up a tour of their 55 million gallon per year plant located in Medina, NY which was the first ethanol plant built in the northeast United States and is a member of the Renewable Fuels Association.

Acres for Biodiesel, Ethanol Feedstocks to be Big

If the biodiesel makers ever get the $1-a-gallon federal tax credit back, the industry could have plenty of feedstock for the green fuel come fall.

This Bloomberg article posted in the Wichita (KS) Eagle
says U.S. farmers are expected to plant their largest soybean crop this year:

Soybean plantings will rise 2.1 percent to 79.111 million acres from a record 77.451 million last year, Allendale said today in its 21st annual survey of farmers. Production will total 3.338 billion bushels, down from 3.359 billion last year, the biggest crop ever, based on a projected national yield of 42.7 bushels an acre.

With a little luck, those biodiesel brewers will be able to take advantage of the big crop (despite it being a bit lower than last year) with lower commodity prices.

Another biofuel that could end up benefiting from farmers’ efforts would be ethanol. Bloomberg is expecting that green fuel’s main feedstock, corn, to have the second-biggest area planted since World War II and a projected record yield of 13.243 billion bushels.

DF Cast: Ethanol & Biodiesel Talk of Commodity Classic

Since it was the biggest gathering of the year for corn and soybean growers, it’s only natural that Commodity Classic was also a good place to talk about the state of the ethanol and biodiesel industries, especially when you consider the two grains are still the biggest feedstocks for the biofuels.

In this edition, we listen in on the conversation about ethanol and biodiesel at Commodity Classic with Secretary of Agriculture Tom Vilsack; Brian Jennings, the Executive Director of the American Coalition for Ethanol; Robert White with the Renewable Fuels Association; National Corn Growers Association president Darrin Ihnen; and American Soybean Association president Rob Joslin.

They talk about the E15 blend wall, the state of biofuels infrastructure, and the prospect of getting the federal $1-a-gallon biodiesel tax incentive passed through Congress.

It’s an interesting conversation, and you can hear it below.

You can also subscribe to the DomesticFuel Cast here.

Ethanol Producer Emerges From Bankruptcy

Aventine Renewable Energy officials expressed optimism about the future for ethanol this week as they emerged triumphant from bankruptcy.

AventineThe Pekin, Illinois-based ethanol producer announced its successful emergence from Chapter 11 restructuring on March 15, naming Thomas Manuel as the company’s new Chief Executive Officer and Chief Operating Officer.

“Emerging from bankruptcy with good liquidity, modest debt and lower overhead costs, Aventine is well positioned to be one of the low cost providers of ethanol on a national basis,” said Manuel. “I am very optimistic about the ethanol industry and our success going forward. We have put in place a strong leadership team with decades of experience.”

In February 2009, Aventine and its subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware due to tough economic conditions for the ethanol industry had with soaring corn prices and lower petroleum costs.

“The ethanol industry has sound long-term prospects, and we anticipate a strong rebound as the biofuels mandate continues to increase,” Manuel said. “Aventine will emerge as a much stronger business with all the key pieces: a restructured balance sheet, excellent liquidity, and a committed group of employees led by a new senior management team.”

Aventine’s strategy is to be a low-cost, focused ethanol producer. The company also plans to resume as soon as possible the construction of its two partially completed 108 million gallon bio-refineries in Aurora, Neb. and Mt. Vernon, Ind. Both construction projects were within months of completion when work was suspended prior to Aventine’s filing for bankruptcy protection.

Ethanol Tax Incentive Loss Would Mean Lost Jobs

RFA DinneenAccording to a report out today from the Renewable Fuels Association (RFA), failure to extend the Volumetric Ethanol Excise Tax Credit (VEETC) would reduce U.S. ethanol production capacity by 38% and eliminate 112,000 jobs in rural communities already hemorrhaging employment opportunities.

“Ethanol has provided an unparalleled, value-added opportunity for agriculture and rural America,” said RFA President Bob Dinneen. “Supporting nearly 400,000 jobs, America’s ethanol industry is building a strong foundation for a robust renewable fuels industry in this country. Failure to provide the kind of assurance investors require to continue building out this industry by extending the tax incentives would be shortsighted, relegating future generations to a reliance on both foreign oil and foreign renewable fuels.”

Ethanol Report PodcastThe RFA is advocating for a long term extension of VEETC, the Small Producers Tax Credit, the Cellulosic Ethanol Tax Credit, and the offsetting tariff on imports. According to the study “Importance of the VEETC to the U.S. Economy and the Ethanol industry,” failing to extend the tax incentive would idle an additional 4.56 billion gallons of production, based upon the 2010 expectation of 12 billion gallons of domestic ethanol production.

Listen to or download a special Ethanol Report interview with Bob Dinneen on the study here:

RFA to Release Report on Cost of Ethanol Blenders Incentive Loss

Renewable Fuels Association LogoThe Renewable Fuels Association (RFA) is set to release a new report today warning about the economic ramifications of allowing the tax incentive for ethanol blending to expire at the end of the year.

In a preview obtained by Domestic Fuel, allowing the Volumetric Ethanol Excise Tax Credit (VEETC) to expire would cost the country more than 100,000 jobs and cut U.S. domestic production by more than a third. According to RFA president Bob Dinneen, the report shows that failure to extend the tax incentives would result in “relegating future generations to a reliance on both foreign oil and foreign renewable fuels.”

The report is scheduled to be released by RFA later this morning.

Canadian Government Invests in GreenField Ethanol

According to a recent article in Ethanol Producer Magazine, Canada’s largest ethanol company, GreenField Ethanol located in Varennes, Quebec, will be receiving up to $79.75 million from the Canadian government. The funds are being distributed as part of the ecoENERGY for Biofuels program. The funds will be used to help the plant engage in future research and invest in additional investment projects.

The ecoENERGY program was a result of monitoring similar programs in the United States that support the development of biofuels. “By investing in this project,” said Steven Blaney, a Canadian member of parliament, “we are helping to create and sustain local jobs and economic opportunities while encouraging a healthier environment for all Canadians.”

Greenfield Ethanol has three additional corn-to-ethanol plants located in Chatham, Johnstown and Tiverton, Ontario with a fifth plant under construction. Once the plants are complete the company will have nearly 660 million gallons per year of production.

Last April, the Greenfield Ethanol plant received funding from Sustainable Development Technology Canada and the Johnston plant was awarded $117.5 million last June.

Sorghum Poised for Bigger Role in Ethanol Production

Today, about 1/3 of the sorghum crop goes into ethanol production. An interesting little piece of information I picked up when I spoke with Gerald Simonsen, the Chairman of the National Sorghum Producers during Commodity Classic. Sorghum is a good feedstock for ethanol production for several reasons. First, it uses half the amount of water used in corn production and second, the sugar-based sorghums, like sweet sorghum and energy sorghums produce more ethanol per acre than other starch-based feedstocks.

Simonsen told me that his organization is very focused on the ethanol industry not only from a research, development and marketing standpoint, but also policy. The RFS2 rules were recently announced and Simonsen said that while they were happy to be included, they do have a few issues with some of the things said about sorghum. Therefore, his organization is working with the USDA and EPA to “iron out some of the rough edges and make sure sorghum has a viable future in ethanol.”

Currently, you can produce the same amount of ethanol from a bushel of corn or ethanol. However, Simonsen noted, you can also make sugar-based ethanol out of sweet sorghum and in terms of cellulosic ethanol, energy sorghum and forage sorghum are feedstocks that the US Department of Energy is excited about. These types of feedstocks produce more ethanol from a bushel of sorghum than what we’re seeing today.

“We have a three-way punch. We’ve got the whole ethanol thing surrounded. We just have to bring it together and move forward,” concluded Simonsen.

You can listen to my interview with Gerald below.

“Baby Girl” Wins Cutest Kid Photo Contest

The winner for the Renewable Fuels Association’s (RFA) E85 Flex-Fuel Challenge Cutest Kid Photo Contest is in – Latisha Martinex of Virgina Beach. Ms. Martinex will receive free ethanol for one year and her photo was selected by the judges based on creativity and quality.

More than 1,000 photos were submitted and of those, “Amira and her Snow Love,” submitted by Megan Pomeroy of Le Mars, Iowa, is the winner of a $500 ethanol fuel card after receiving the Most Voted award from daily votes on the E85 Challenge website.

“The Cutest Kid contest is the E85 Flex Fuel Challenge’s most successful marketing effort to date, reaching more than 1,000 families nationwide, said RFA Market Development Director, Robert White. “Contests such as this allow us to reach out to non traditional groups, like mothers, to introduce ourselves and better educate them on the value of renewable fuels. Congratulations to all the winners.”

The first 1,000 entrants for the Cutest Kid Photo Contest received a free eco-friendly reusable shopping bag filled with consumer information about Flex-Fuel Vehicles (FFVs), ethanol facts and a reusable bag fact sheet. The Cutest Kid Photo Contest was the 4th E85 Flex-Fuel Challenge Contest.

Actress Daryl Hannah Speaks Out for Ethanol Blends

Daryl Hannah has changed her hat, per se, and along with the promotion of biodiesel, she is now promoting higher blends of ethanol. On Tuesday, March 23, 2010 Hannah’s ’79 Pontiac Trans-Am, that was featured in the movie “Kill Bill,” will be featured in the TV show EcoReview. The Topic is The Greening of the Auto Industry: from Paint to Fuel and the host of the program is Tom Harvey. The show will take viewers though how alcohol fuel is produced and used around the world for transportation, cooking and heating. In addition, the program will highlight a new California certified smog station test that recently compared unleaded gas emissions to those of E10, E15 and E85. For those unable to get the show, you can watch it here.

Hannah’s next appearance will be during a press conference in Sacramento on March 24, 2010 to promote the E15 waiver. She along with David Blume, author of Alcohol Can Be a Gas, will present the Environmental Protection Agency with more research to substantiate the benefits of using E15 and higher blends of ethanol as a gas additive – information the EPA claims is lacking. The research presented will include the “Kill Bill” Trans-Am which was converted to run on ethanol last year and tested using the California certified smog test for E10, E15 and E85. The test shows that all blends not only meet but exceed the standards set out in the Clean Air Act. The event is being hosted at Sacramento’s “Flyer” E85 station located at 4250 John Madison Avenue, Sacramento California, beginning at 2:30 pm Pacific Time. For those that are interested but can’t make the event, it will be streamed live here.

Delay on E15 Waiver “Troubling”

The E15 waiver was a hot topic during Commodity Classic and for good reason: EPA administrator Lisa Jackson, in response to a question asked during a Congressional hearing, said she felt they’d be ready to make a decision late summer. Originally, the EPA was to have ruled on the E15 waiver, that would waive the Clean Air Act to allow up to 15 percent ethanol in motor vehicles, by the beginning of last December. At that time, they deferred to mid-summer – now they are saying possibly by end of summer.

“Though without giving a date, clearly that date has passed and that’s troubling I think, and we’ve got to keep the pressure on,” said Brian Jennings, the Executive Director of the American Coalition for Ethanol (ACE) during an interview with DomesticFuel during Commodity Classic.

According to Jennings, Robert White with the Renewable Fuels Association (RFA), and Secretary of Agriculture Tom Vilsack, the EPA is doing more work on small engines and the effect of ethanol blends on catalytic converters. This despite the large number of research already available.

“But it does seem frustrating to us that they keep looking for some sort of excuse to delay or not to make the decision when we feel the preponderance of evidence, so far, and as it continues to come in, is going to justify this,” continued Jennings.

Both Vilsack and White agree and feel that the E15 waiver will pass – especially since the Renewable Fuels Standard mandates 36 billion gallons of ethanol by 2022 and the E10 blend wall is approximately 14 billion gallons and White notes that there are 22 billions gallons above the blend wall that need to find a home.

“E15 is great, but it’s still a band aid for the real issue and the sticking point is going to come very soon and the problem we’ve been facing for well over a decade is you simply can’t flip a light switch for this infrastructure to be there,” explained White.

You can download (mp3 file) or listen to a Robert’s interview here:

You can download (mp3 file) or listen to Brian’s interview here:

Ethanol Report on What’s Wrong With RFS2

In this edition of “The Ethanol Report,” we hear from Geoff Cooper, Vice President of Research and Analysis for the Renewable Fuels Association, about what is right and what is wrong with the rule for the expanded Renewable Fuel Standard released early last month by the Environmental Protection Agency.

Ethanol Report PodcastThe good news is that the RFS2 improves upon the rule EPA proposed last year, and that it is much better than what California is using to determine lifecycle greenhouse gas emissions. The bad news is the continued reliance on the non-scientific indirect land use change. EPA’s new calculations determined that corn ethanol was better than they first thought when it comes to indirect land use change, so they cut that penalty in half, while they totally eliminated it for sugarcane ethanol – a move that has RFA mystified.

This podcast was recorded at the recent National Ethanol Conference, where RFS2 was the main topic of discussion. We reference a presentation done at the conference by EPA’s Sarah Dunham, which you can find in a previous post here on Domestic Fuel.

You can subscribe to this twice monthly podcast by following this link.

Listen to or download the podcast here: