After the ACE Biofuels Beltway March, I was able to stop by and visit with Renewable Fuels Association president and CEO Bob Dinneen in his Washington DC office and we covered the waterfront on issues currently facing the ethanol industry.
In this Ethanol Report, Dinneen discusses what he’s hearing about the EPA proposal to lower the RFS, the latest anti-RFS ad campaign from Big Oil, rail delays impacting ethanol shipments, getting the tax credits for advanced biofuels reinstated, USDA plans to continue to support ethanol, and enthusiasm in the industry.
Ethanol Report with RFA president Bob Dinneen from DC
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A new white paper from the Biotechnology Industry Organization (BIO) finds that lowering the volume requirements for biofuels under the Renewable Fuels Standard (RFS) as proposed by the administration will lead to an increase in emissions of greenhouse gases next year.
According to Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section and lead author of the special report, the proposal from the Environmental Protection Agency could “reverse progress on one of the central goals of the law – reducing climate-changing emissions from the U.S. transportation sector.”
The paper utilizes Energy Information Administration projections of fuel use from 2014 to 2022 to estimate volumes of petroleum and biofuel use for each year. The authors then assigned estimates of greenhouse gas emissions from the GREET1.2013 model to the volumes and added up year-by-year emissions. Based on EPA’s proposed requirements for 2014, the United States would emit 6.6 million more metric tons of CO2 equivalent greenhouse gases than it did in 2013. If EPA followed past practice, allowing the overall requirements to remain at the statutory level, the achieved reduction in GHG emissions would be 21.6 million metric tons CO2e. The difference between the increase and the achievable decrease is equivalent to putting 5.9 million additional cars on the road next year. Under other available options for setting the RFS volume requirements, the United States could still achieve carbon emission reductions, the paper finds.
Read the report here.
The scientific world today is all a-buzz about the world’s first yeast synthetic chromosome, and the discovery could help the biodiesel and ethanol industries. This article from the Christian Science Monitor says researchers have put together man-made DNA into the synthetic version of a chromosome, a development expected to have implications for the green fuels.
“For me, one of most exciting aspects is the fact that we’ve so extensively edited the sequence of natural chromosome and then synthesized the entire thing from scratch,” said study leader Jef Boeke, a synthetic biologist at NYU Langone Medical Center, who was previously at Johns Hopkins University.
Using a technique known as “scrambling,” the scientists can shuffle the yeast genes like a deck of cards. The researchers could make millions and millions of different decks of genetic cards, which could give yeast totally new properties.
For example, researchers could make synthetic strains of yeast to produce rare medicines such as the malarial drug artemisinin, or vaccines like the hepatitis B vaccine. Synthetic yeast could also churn out more efficient biofuels, such as alcohol, butanol or biodiesel, which could enable humanity to transition off of a petroleum economy, Boeke said.
For now, the costs are prohibitive for the biofuels industry, or any industry for that matter, to use. But the scientists are hopeful they’ll be able to get the costs down as the technology improves.
Wearing a tie and sporting a “Don’t Mess with the RFS” button, 10-year-old Ethan Fagen was the youngest of the American Coalition for Ethanol (ACE) Biofuels Beltway marchers this week on Capitol Hill.
Ethan came along with his grandfather, Ron Fagen of Fagen, Inc., and was right in the trenches handing out materials and talking about the benefits of ethanol, like how good it is for the environment compared to fossil fuels. “Think in 200 years if you run ethanol there will be cleaner air for the next generation,” said Ethan, who is part of that next generation.
Sitting in the front as the ACE Fly-in participants heard from government officials, Ethan caught the attention of Secretary of Agriculture Tom Vilsack, who thought it was “pretty cool” he was there for the event.
In my interview with Ethan, he told me that he would like to be a farmer someday and grow corn and have cattle. It’s interesting that if you add two letters to Ethan’s name, it becomes ethanol. Interview with Ethan Fagen, ACE Fly-in Participant
2014 ACE Biofuels Beltway March photo album
There were over 25 battalions of ethanol troops on Capitol Hill this week to fight for the honor of biofuels, bringing the message to both friends and foes in Congress.
American Coalition for Ethanol president Ron Alverson, a South Dakota farmer and board member for Dakota Ethanol, says the teams had appointments with the offices of more than 130 senators and representatives, and he thought they were well received, even in enemy territory. “We went into what we thought were going to be some pretty hard places – representatives from Alabama, Pennsylvania, Rhode Island,” he said. “They were very cordial and they listened well … we were really pleased.”
When meeting with friends like Senator Mike Johanns (R-NE), the ethanol supporters delivered messages of gratitude and asked advice for approaching less friendly lawmakers. They also provided “ammunition” for allies in the form of the packets of the latest information to defend against some of the more popular arguments against ethanol, such as food versus fuel and engine issues with higher blends. “We’ve got some really good arguments and good data…all we can do is go out and tell our story,” said Alverson.
Listen to an interview with Alverson here: Interview with Ron Alverson, South Dakota farmer and American Coalition for Ethanol president
2014 ACE Biofuels Beltway March photo album
There are lots of activities for National Agriculture Day going on today in Washington DC, including a big celebration unveiling a statue of Dr. Norman Borlaug in the Capitol, but Agriculture Secretary Tom Vilsack still took time to meet with members of the American Coalition for Ethanol in town this week to visit Congressional offices
“The country needs a robust renewable fuel industry,” said Vilsack. “It provides choice for consumers and less cost gas at the pump. It helps to create hundreds of thousands of jobs which is important for the economy. It stabilizes farm income, it’s better for the environment, and it makes us a safer nation because we’re less reliant on others for our energy and fuel sources. So we need to continue to have a robust commitment to this industry, we need to expand it and grow it.” Brief interview with Secretary Vilsack after ACE visit
The secretary spoke to the more than 80 ethanol industry about what USDA is doing to achieve that goal, including finding creative ways to increase higher ethanol blend pumps, promoting exports of ethanol to Japan, India and China, and continuing to work towards encouraging use of higher blends in this country.
2014 ACE Biofuels Beltway March photo album
An enthusiastic crowd of more than 80 ethanol supporters from 15 states are chomping at the bit to be set loose on Capitol Hill to visit the offices of Congress members and educate them about the importance of biofuels during the American Coalition for Ethanol (ACE) Biofuels Beltway March.
“We’ve got people from all walks of life here,” said ACE Executive Vice President Brian Jennings. That includes not just ethanol producers and corn farmers, but bankers, truckers, cattle ranchers and students. “It shows the diversity of this industry, the breadth and depth of support we have out there in the grassroots for ethanol.”
Jennings says 40 percent of the group gathered for this sixth annual DC event have never visited the office of a Congressional representative before. “We try to give them some advice,” he said. “Most importantly, tell your story.”
The ACE group is hearing this morning from the Assistant Administrator of the Environmental Protection Agency, the Secretary of Agriculture, and the Special Assistant to the president for Energy and Climate Change before heading to the Hill to meet with congressional representatives.
Listen to my interview with Brian here: Interview with Brian Jennings, ACE
2014 ACE Biofuels Beltway March photo album
Ethanol advocates from around the country are marching on Capitol Hill this week with the message that the Renewable Fuel Standard (RFS) is working.
It’s the 6th annual Biofuels Beltway March organized by the American Coalition for Ethanol (ACE). “We have more than 80 people registered to attend, which is our highest attendance yet,” said Director of Strategic Projects Shannon Gustafson. “Those attending the event are fuel retailers, farmers, ethanol producers, bankers, and business owners representing 15 different states.”
The event officially kicks off on Tuesday when attendees will hear from representatives of the Environmental Protection Agency, USDA, and the White House. After that, the marchers will be split into groups to attend meetings on Capitol Hill Tuesday afternoon and Wednesday. “So far we have meetings scheduled with more than 130 offices on Capitol Hill,” said Gustafson, who anticipates they will have even more before they begin.
In addition to carrying the message that the RFS is working, supporters will also be telling lawmakers how ethanol benefits consumers, decreases our dependence on foreign oil, and plays a critical role in the future of our nation’s energy independence.
Domestic Fuel will be there to bring it home to those of you who are unable to attend. Thanks to ACE and Patriot Renewable Fuels for making that possible.
Iowa Renewable Fuels Association Executive Director Monte Shaw is one of several Republican candidates vying to replace the retiring Tom Latham as Iowa’s representative in the Third Congressional District, but he may have more grassroots agricultural support than most of them.
Shaw has just announced the formation of his Iowa Agriculture Team, which includes key ag leaders from across the district. “It takes more than just great land and good weather to make Iowa the leading agricultural state – it takes great leaders,” Shaw said. “As a farm boy, I’ve still got the dirt under my fingernails and with the help of these experts I will be up to speed on the challenges facing Iowa’s farmers. I also appreciate their willingness to take our message out to the countryside and the city. Folks connected to and interested in agriculture will play key roles on our path to victory in June and November.”
Among the members of his team are Grant Kimberley of Ankeny, a 6th generation corn and soybean farmer who was just named executive director of the Iowa Biodiesel Board, and Julius Schaaf of Randolph, chairman of the United States Grain Council and a 4th generation farmer.
Shaw officially launched his campaign for Iowa’s 3rd Congressional District last month. He intends to remain in his position with Iowa RFA during the campaign with the full support of the organization’s board of ethanol producers.
Watch his campaign announcement below.
The nation’s ethanol industry has decided to take its fight against the California Low Carbon Fuel Standard (LCFS) to United States Supreme Court.
The Renewable Fuels Association (RFA) and Growth Energy today filed a joint petition with the U.S. Supreme Court for “certiorari to make a final determination relating to the constitutionally flawed LCFS.” The action follows a decision by the Ninth U.S. Circuit Court of Appeals in January to deny rehearing en banc in the litigation regarding the California law.
A joint release from the two ethanol groups stated, “California, through adoption of the LCFS, has violated the most basic, structural features of interstate federalism. LCFS not only discriminates against out-of-state commerce, but it seeks to regulate conduct in other States in direct contravention of our constitutional structure and at the direct expense of Midwestern farmers and ethanol producers.”
The January decision by a divided panel of the the Ninth Circuit Court reversed a previous District Court finding that the California LCFS violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional. The ethanol groups note that California officials admit the LCFS seeks to regulate greenhouse gas emissions occurring in other states “by rewarding and punishing industrial and agricultural activity taking place outside California” and in doing so systematically favors California, which they contend is unconstitutional.
The Brazilian sugarcane ethanol industry is pleased with the California Air Resources Board (CARB) proposal last week to revise Indirect Land Use Change (iLUC) numbers for biofuels.
Brazilian Sugarcane Industry Association UNICA applauded CARB for “once again declaring that sugarcane ethanol is one of the most environmentally friendly biofuels supplying today’s market.”
UNICA North America Representative Leticia Phillips notes that the CARB staff proposal to revise ILUC estimates under the state’s Low Carbon Fuel Standard shows the Brazilian sugarcane biofuel generates about half the indirect emissions that CARB originally suggested during its rulemaking process in 2009. “If implemented, these revised ILUC estimates will confirm what numerous other studies have shown: sugarcane ethanol is one of the most environmentally friendly biofuels supplying today’s market,” she said in a statement.
Phillips adds that UNICA looks forward to providing detailed comments to this CARB proposal as they have done in the past.
While most of the news around ethanol seems to focus on its issues with the government, a new analysis shows that the green fuel is in one of its longest profitability runs ever. This analysis from the University of Illinois shows that despite more recent news about troubles with the Environmental Protection Agency (EPA) and its proposal to cut the amount of ethanol in the Nation’s fuel supply, things have been pretty positive for the ethanol industry lately.
There have been basically four sub-periods in terms of net profits: i) high profits from 2007 through mid-2008, ii) breakeven from mid-2008 through the end of 2011, iii) losses for 2012 through early 2013, and iv) high profits again from spring 2013 through the present. The most recent period is the longest run of uninterrupted profits since the series began in early 2007. During this one-year run, profits averaged $0.93 per bushel of corn processed and reached a new high of $2.55 per bushel in early December 2013. The picture presented here is certainly not one of an industry that has suffered because of recent policy proposals.
The author cites several factors that could keep the recent run of profits from continuing for a longer period of time, including DDGS prices at unprecedented high levels, as well as documented “co-integrating” relationship between ethanol and corn prices, simply, if the ethanol price is too high relative to corn prices, then either the ethanol price must fall or the corn price must rise.
One impact of the long, cold winter across the nation has been weather-related rail disruptions that are taking a toll on ethanol supplies and production.
The record winter weather patterns that have caused repeated snowstorms have resulted in stalled trains, frozen controls and increased demand for rail cars. All that has made it difficult to move ethanol to the Northeast.
The Energy Information Administration reported last week that stocks of ethanol stood at 15.9, down 2.4% from the previous week, the lowest level of the year so far. Stocks are well below the 20-day supply mark for the second week in a row and on the East Coast stocks of ethanol fell to their lowest level on record last week, at 4.6 million barrels compared to 6.4 million this time last year.
“Naturally, limited regional mobility leads to limited regional supply which can impact prices, but market observers believe this is a temporary situation that will soon be corrected,” said Renewable Fuels Association Executive Vice President Christina Martin.
The backlog in transportation is causing ethanol plants to slow production somewhat. According to EIA data, ethanol production averaged 869,000 barrels per day (36.50 million gallons), down 25,000 barrels from the previous week and the lowest in eight weeks.
The backups have also been delaying grain shipments from last year’s record crop but rail company officials, including BNSF and CSX, say they are working hard to get everything back to normal.
The recently proposed Obama administration Fiscal Year 2015 Budget includes $4 billion a year in cuts to oil industry subsidies, notes Americans United for Change (AUFC), which calls that “a big win for taxpayers and consumers.”
Under the Department of Energy section, the budget calls for elimination of “Unnecessary Fossil Fuel Subsidies” stating that as “the Nation continues to pursue clean energy technologies that will support future economic growth, it should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world.” The proposed budget would repeal “over $4 billion per year in tax subsidies to oil, gas, and other fossil fuel producers.”
“We are elated that the President has renewed his commitment to doing away with billions of dollars in pointless subsidies for big oil that shortchange investment in cleaner burning, cheaper renewable fuels of the future,” says AUFC executive director Caren Benjamin, adding however that the EPA proposal to cut the Renewable Fuel Standard (RFS) at the same time is inconsistent. “It’s a proposal that runs totally counter to the President’s strategy to address climate change by supporting clean energy — because a weak RFS means less incentive for innovation in cleaner burning, next generation renewable fuels and guarantees a greater use of dirty fossil fuels.”
AUFC also points out that there seems to be some bipartisan consensus building in Congress against special tax treatment for the oil industry. The draft tax reform proposal circulated by Republican House Ways and Means Committee Chairman Dave Camp (R-MI), for example, would eliminate some of the accounting tactics that allow oil companies to report lower net profits and pay less taxes.
AUFC encourages House Budget Committee Chairman Paul Ryan to follow that lead and hold a hearing on “why an industry that made $100 billion in profits last year can’t do without billions of dollars in subsidies every year courtesy of the taxpayers.”
The man who is known as the “Father of Ethanol” in the United States is still busy advocating for the industry at the well-seasoned age of 93.
Merle Anderson, one of the founding members of the American Coalition for Ethanol (ACE), just recently penned an excellent editorial for the Grand Forks Herald about his favorite subject and his observations are just as sharp as ever when it comes to the fuel he has been promoting for decades. Here’s some excerpts his letter entitled “Government ‘myths’ limit ethanol’s full use” that he wrote with input from his friend and fellow ethanol advocate Orrie Swayze from Watertown, S.D.:
First, we must remember that Henry Ford favored E30 for his Model T. After that, what could go wrong, did go wrong as government teamed with oil, and — in a joint effort to keep ethanol out of gasoline markets — created misleading myths that E30 was illegal and would ruin engines…
Merle debunks several of those myths, including that higher ethanol blends void car warranties and that gas station pumps are unable to handle higher blends such as E30. “I really chuckle at that one, because standard gas station pumps were the only pumps available when E85 was introduced nearly 20 years ago, and they still are safely pumping E85.”
Merle concludes – My dream is every American and all of agriculture — including our sugar beet industry — would have access to an ethanol market that is not limited by EPA and big oil’s nonsense or the ethanol blend wall that has been in place since the first Model T was built.
Read Merle Anderson’s entire editorial here.