EPA Sets Timeline for RFS Volume Requirements

epa-150Under a court settlement with the oil industry, the Environmental Protection Agency today announced they will propose the 2015 Renewable Fuel Standard (RFS) renewable volume obligations by June 1, 2015, and issue the final 2014 and 2015 RFS blending targets by November 30, 2015. In addition, EPA will also release the proposed 2016 RFS RVOs by June 1 and the 2016 numbers will be finalized by Nov. 30.

The biofuels industry reacted immediately to the announcement. “This consent agreement is a good start,” said Renewable Fuels Association president and CEO Bob Dinneen. “We are particularly pleased that the Agency has committed to addressing the 2016 RVO in the same time frame even though that is outside the scope of the consent agreement.”

“By taking this action, they are ensuring that the RFS is back on a path to certainty for the biofuels industry, providing the necessary guidance for the industry to continue to thrive and advance alternative fuel options for American consumers,” Growth Energy CEO Tom Buis said.

“ACE has consistently said it is much more important for EPA to get the RFS done right than it is for them to get the RFS done quickly, and that bears repeating given today’s announcement that the RFS will be getting back on track for implementation,” said American Coalition for Ethanol (ACE) Executive VP Brian Jennings.

National Biodiesel Board is pleased the EPA announcement said they would “re-propose volume requirements for 2014, by June 1, that reflect the volumes of renewable fuel that were actually used in 2014.”

“The volumes for Biomass-based Diesel in 2014 were approximately 1.75 billion gallons so EPA reaffirming its commitment to “actual use” appears to be a step in the right direction,” said NBB Vice President of Federal Affairs Anne Steckel.

Advanced Ethanol Council (AEC) executive director Brooke Coleman says the announcement sends a good signal to the advanced biofuels industry. “Now that we have a better idea of when it will happen, we look forward to working with EPA to make sure that the new RFS proposal supports the commercial deployment of advanced biofuels as called for by Congress.”

EPA intends to issue a Federal Register Notice allowing the public an opportunity to comment on the proposed consent decree.

ARF Challenges Confirmed Candidates

ARF-LogoThe America’s Renewable Future campaign is challenging the two confirmed Republican presidential candidates to take a stand for renewable fuels.

In a letter to Sen. Ted Cruz (R-TX), who has been forthcoming about his opposition to the Renewable Fuel Standard (RFS), ARF questioned his recent reported comment that the oil industry “doesn’t get subsidized.” The letter, with the message that “Oil Subsidies Are Real,” details $165 billion in subsidies and tax breaks the oil industry is poised to receive over the next ten years.

With Sen. Rand Paul (R-KY) officially declaring his candidacy this week, ARF recognized his introduction of the Fuel Choice and Deregulation Act as “a step in the right direction” but urged him to commit to supporting the Renewable Fuel Standard. “Sen. Paul has an opportunity to stand up for a commonsense, bipartisan policy that provides access to the marketplace for a clean, domestic alternative to foreign oil and we hope that he will,” said the campaign in a statement.

Another potential presidential candidate, Donald Trump, was in Iowa on Wednesday and took the time to meet with ARF co-chair Annette Sweeney “to discuss the importance of the ‪#‎RFS‬ to America and our rural communities.”

America’s Renewable Future is an Iowa-based coalition formed with the goal of educating presidential candidates about the RFS and urging their support.

Can Rand Paul Pass the RFS Test?

Kentucky Senator Rand Paul officially threw his hat in the ring for the Republican presidential nomination Tuesday, just a week after co-sponsoring the Fuel Choice and Deregulation Act of 2015 with Iowa Senator Chuck Grassley. The legislation would allow 15% ethanol blends to be sold year round by requiring EPA to grant a Reid Vapor Pressure (RVP) volatility waiver for E15 in the summer months.

paul-energy“The EPA’s onerous regulation of fuels is artificially limiting options for consumers and producers and preventing the adoption of new fuel options that could benefit our environment, our economy, and our energy security,” said Sen. Paul in a press release about the Act. “Through competition and consumer choice, my bill will free fuel producers and automobile manufacturers to innovate and bring new products to market that can lower costs to consumers, increase domestic energy production, and benefit the environment.”

The official candidate’s new campaign website says nothing specific about biofuels in the Energy section beyond “encouraging energy freedom, new technologies, and discoveries” but does mention support for the Keystone XL pipeline.

Sen. Paul did not participate in the recent Iowa Ag Summit where potential candidates were asked specifically about their stance on the Renewable Fuel Standard (RFS) but an aide last week confirmed that he is opposed to “the government telling consumers or businesses what type of fuel they must use or sell.”

“Sen. Paul supports removing regulatory barriers to the use of ethanol and other renewable fuels, which would likely have the effect of growing the use of these environmentally friendly fuels,” said the aide quoted in the National Journal.

Ethanol industry leaders have applauded Sen. Paul for his co-sponsorship of the E15 bill, but all say that support of the RFS is what they really want to see in a presidential candidate.

Nebraska Ethanol Producer Helps Retailers

NEB logoA northeast Nebraska ethanol producer has been working with retailers in that area to provide additional fuel choice for consumers.

According to the Nebraska Ethanol Board
, Husker Ag LLC in Plainview has provided grant money and ethanol for several retail locations in northeast Nebraska including Creighton, Crofton, Hartington, Osmond, Pierce at two locations, and Valentine.

“Many Nebraska ethanol producers work directly with retailers to expand availability of American Ethanol blends like E15 and E85,” said Todd Sneller, Nebraska Ethanol Board administrator. “This strategic partnership provides consumers with additional choices at the pump, and makes clear to consumers the value of choosing fuels produced locally from renewable sources.”

husker-ag“We are very excited to see the works of many coming together to expand ethanol usage in Nebraska – the second largest producer of ethanol,” said Seth Harder, Husker Ag general manager. “Partnerships are key to moving the needle on ethanol fuel usage.”

The flex fuel pumps were also paid for in part by the Nebraska Corn Board’s flex fuel infrastructure grant program on behalf of Nebraska’s 23,000 corn producers through their checkoff program.

CARB Holds LCFS Workshop Update

carb-14-2The California Air Resources Board (ARB) held a public workshop on Friday to discuss updates to the recently modified Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (CA-GREET 2.0) Model under the Low Carbon Fuel Standard (LCFS). Stakeholder input was received at the workshop on the new model which made some changes to the Indirect Land Use Change (ILUC) component.

RFA-logo-13Renewable Fuels Association (RFA) Vice President Geoff Cooper said that while they are pleased that CARB made some updates to the CA-GREET model that were recommended by stakeholders, certain elements remain problematic, such as the model’s handling of emissions related to denaturant. “Our larger concern, however, continues to be CARB’s gross overestimation of indirect land use change (ILUC) emissions,” said Cooper. “While CARB is proposing to lower ILUC emissions somewhat, the Agency’s newest estimates are still far above the estimates coming from the rest of the scientific community. Further, CARB continues to rely on speculative and hypothetical scenarios to derive ILUC penalties, rather than using real-world land use data to inform the program. Empirical data from the past 10 years clearly show that farmers have responded to higher crop prices by using existing cropland more efficiently, not by converting non-agricultural lands to cropland. We will continue to encourage CARB to consider the most recent data and best available science on ILUC.”

unica1On the other hand, the Brazilian Sugarcane Industry Association (UNICA) is pleased with the ILUC changes but has other concerns. “CARB’s revision of indirect land-use change (ILUC) modeling resulted in reduced penalties for Brazilian sugarcane ethanol and the lowest overall number in the LCFS, confirming it as the lowest-carbon biofuel available at commercial scale today,” said UNICA’s North American Representative Leticia Phillips.

However, Phillips says the environmental benefits of sugarcane ethanol in the LCFS would be even more significant if CARB included the emissions benefits of electricity co-generation in sugarcane mills using leftover plant material. “We are disappointed CARB has chosen to apply a U.S.-style average electricity mix to Brazil rather than crediting sugarcane biofuel producers for this marginal displacement of fossil energy.”

CARB will be considering re-adoption of the California LCFS at its July 2015 hearing,

RFA Reports February Ethanol Export Record

The Renewable Fuels Association reports that U.S. ethanol exports reached a new record in February, based on an analysis of the latest government data.

RFANewlogoAccording to RFA Research Analyst Ann Lewis, U.S. exports of denatured and undenatured ethanol in February totaled 85.2 million gallons, up 24% from January, the highest February export volume on record. Year-to-date exports at 153.9 million gallons are in line with exports during the same period last year.

The biggest customer for U.S. ethanol remains Brazil, which received about one quarter (28%) of total U.S. ethanol exports in February, followed by India (20%), Canada (17%), and the United Arab Emirates (12%). The Philippines, South Korea, the Netherlands and Peru were other key destinations in February.

In addition, exports of the ethanol co-product distillers dried grains with solubles (DDGS) rose 13% to the highest monthly level in 5 months, as the Chinese market continues to recover. “However, exports to China remain at about half the level enjoyed prior to the market collapse,” said Lewis.

Think Tank Ponders Cellulosic Ethanol Link

3rd-wayA new report from centrist think tank Third Way ponders the quest for cellulosic biofuels and concludes that the pathway is via corn ethanol.

This report confirms what the biofuels industry has been saying for some time now – that you cannot have cellulosic ethanol without the continued production and support of grain-based ethanol,” said Growth Energy CEO Tom Buis.

One of the takeaways from the Third Way report is that, “proposals to reform the Renewable Fuel Standard (RFS) would discourage engagement from the corn ethanol industry” and thus delay commercialization of cellulosic ethanol and steer investment overseas.

Renewable Fuels Association (RFA) president Bob Dinneen says the report highlights the importance of consistent policy for the continued evolution of biofuels. “Legislative efforts to undermine either will set the nation’s energy and economic future back generations,” said Dinneen. “Third Way should be commended for adding a thoughtful component to this ongoing discussion and I can only hope that it is read with interest by Senators Feinstein and Toomey.

“(T)he biggest point, coming from a thought leader in the space like Third Way, is that Congressional intervention on the RFS would be highly detrimental to the deployment of cellulosic biofuel,” said Brooke Coleman of the Advanced Ethanol Council.

“The success of the conventional ethanol industry has driven serious investment in the cellulosic industry and there is an important linkage between them,” says Adam Monroe, President Americas for Novozymes which produces enzymes used for cellulosic ethanol production. “Tinkering with the corn portion of the RFS now will only hurt both industries.”

The report also concludes that “companies with an extensive background in the corn ethanol industry are cracking the cellulosic code,” and continued investment from these companies in facilities and innovation is critical to growing U.S. cellulosic capacity.”

Ethanol-Gas Price Difference Back to Normal

Ethanol and gas have settled back into a more normal price differential after three months of being nearly the same once gas prices started to plummet late last year.

RBOB - Reformulated Blendstock for Oxygen Blending

RBOB – Reformulated Blendstock for Oxygen Blending

Renewable Fuels Association president and CEO Bob Dinneen notes that “wholesale ethanol prices traded near parity with—or even above—gasoline prices intermittently in November, December, and January,” but since the end of January, ethanol prices “have been below gasoline prices every day.”

Dinneen refuted a statement by the Petroleum Marketers Association of America that ethanol was “taking a hit” because of the price parity noting that “since January 1, 2011, daily ethanol prices have been below gasoline prices 91% of the time” averaging about 50 cents per gallon. Since January 30, 2015, ethanol has averaged 26 cents less than gasoline.

Market analyst Randy Martinson with Progressive Ag says there was definitely a concern when ethanol prices were higher than gasoline in December. “But the price of corn has dropped and we’ve gotten ethanol back in line and the profitability is improving for ethanol plants,” said Martinson, who adds that the bigger concern for ethanol declining gasoline use.

Growth Energy Applauds E15 Bill

growth-energy-logoGrowth Energy is applauding new legislation seen as favorable for E15 ethanol. This news release from the group says the Fuel Choice and Deregulation Act sponsored by Senators Rand Paul (R-KY) and Chuck Grassley (R-IA) contains a provision to extend the Reid Vapor Pressure (RVP) volatility waiver to E15, a moved welcomed by Tom Buis, CEO of Growth Energy:

“We certainly support efforts by Senator Paul and Senator Grassley to remove a major hurdle preventing consumers the opportunity to purchase higher blends such as E15. This has been a major obstacle ever since Growth Energy led the successful effort to get E15 approved for commercial use.

“We are hopeful that Senators Paul and Grassley’s legislative efforts are successful in granting this much needed waiver to overcome the single largest regulatory hurdle to ensuring consumers have access to higher blends such as E15.”

Another Successful ACE Fly-in

ACE executive VP Brian Jennings smiles as Sen. John Thune (R-SD) speaks at fly-in reception.

ACE executive VP Brian Jennings smiles as Sen. John Thune (R-SD) speaks at fly-in reception.

The seventh annual American Coalition for Ethanol Fly-in, which included an appearance by Sen. John Thune (R-SD), was another success for the organization, according to Executive Vice President Brian Jennings.

“We do this because we know lawmakers and their staff want to meet with people with a little dirt or grease under their fingernails who are doing things out in the country that really matter,” said Jennings. The group of 70-plus ethanol supporters who attended the event included students, producers, farmers, accountants, bankers, seed and technology companies, and advanced biofuels supporters.

“We’ve always received good feedback from members of Congress,” Jennings added, noting that their main message was to keep the Renewable Fuel Standard (RFS) on track, “This program is working despite what detractors might say,” he said. “I think members of Congress are starting to see that.”

Interview with Brian Jennings, American Coalition for Ethanol


2015 ACE Fly-In Photo Album

Ethanol Supporters Counter Funding Request

houseEthanol and agriculture industry groups sent their own letter to House Appropriations leadership in response to a group of lawmakers calling for the elimination of funding for blender pumps or corn ethanol export promotion.

The letter signed by the Renewable Fuels Association, American Coalition for Ethanol, National Farmers Union, National Corn Growers Association, and Growth Energy calls on the subcommittee to “vehemently oppose and reject any efforts to include such limiting language” in FY 2016 appropriations for USDA.

It is important to note at the outset that there already exists a prohibition on the US Department of Agriculture using grant funds for the installation of blender pumps, which was included in the recently passed Farm Bill. Now, in a blatant effort to shelter the oil and gas industry from any further competition from ethanol, Representatives Goodlatte, et al. are seeking to place limitations on the U.S. Department of Agriculture’s efforts to help promote the consumption of American made ethanol at home and abroad; something that agency has been successfully doing with other agriculture and livestock products for decades.

Reps. Bob Goodlatte (R-VA), Peter Welch (D-VT), and Jim Costa (R-CA), claim in their letter that the government has created an “artificial market” for ethanol that is “negatively impacting American consumers, livestock farmers, food producers, retailers, air and water quality, and the ability to feed our nation’s hungry.” The ag and ethanol groups responded that “corn prices today are below the prices witnessed in 2007 when the Renewable Fuel Standard was expanded and livestock feed costs are at their lowest levels in more than five years…Meanwhile, consumer food prices have advanced more slowly since passage of the RFS than in the 25 years prior to its enactment.”

Read the letter here.

Retailer Takes Ethanol Story to Hill

ace15-goodFuel retailers who have had to fight battles with big oil companies to offer higher ethanol blends were among those joining the American Coalition for Ethanol (ACE) Fly-in on Capitol Hill this week.

Charlie Good has been in the fuel retailing business for 35 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 about 18 months ago. “And it’s just been a big boom for me, it’s added new gallons, it’s increased my customer base,” said Good.

The Renewable Fuel Standard (RFS) was the main topic of ethanol supporter meetings with lawmakers and their staff this week and Good says even those they met with who have actively opposed the RFS are unlikely to vote for repeal. “The three of the five that we met with that were against it came out and said we’re not actually going to vote to repeal it…they’re just going to remain low key,” said Good.

Interview with Charlie Good, ethanol retailer


2015 ACE Fly-In Photo Album

Motor Club Rep: No Ethanol-Related Claims

ace-flyin-15-hammondWhile AAA may be an outspoken critic of ethanol blended gasoline and E15 in particular, some other motor clubs think differently, and one of them was on Capitol Hill this week with the American Coalition for Ethanol to tell his story to lawmakers.

Gene Hammond with Association Motor Club Marketing and Travelers Motor Club, which represent 50 years in the business and over 20 million members, says they studied their claims over the past several years to see if there were any related to ethanol. “And what we discovered is that we have not had one ethanol-related claim where we’ve had to go out and tow,” said Hammond. “In fact, the opposite is true.”

Hammond explains that claims related to gasoline freeze used to be common in the northern part of the country, “but that’s gone away, we don’t have that anymore with ethanol.”

Hammond was pleased to join ethanol supporters in Washington this week for the ACE Fly-in to tell members of Congress and their staff his experiences with ethanol from an automotive standpoint. Interview with Gene Hammond, AMCM and Travelers Motor Club


2015 ACE Fly-In Photo Album

EPA Changes Cellulosic Waiver Credit Provisions

epa-150The Environmental Protection Agency (EPA) issued final rulemaking this week to clarify the data sources and methodology used to calculate the Cellulosic Waiver Credit (CWC) price.

Under the rule, EPA has calculated the CWC prices for 2014 at $0.49 and for 2015 at $0.64. According to the EPA document, “The price of CWCs are determined using a formula specified in the Clean Air Act (CAA). The cellulosic waiver credit price is the greater of $0.25 or $3.00 minus the wholesale price of gasoline, where both the $0.25 and $3.00 are adjusted for inflation.”

The direct final rule also amends the regulations to remove the CWC prices from the code of federal regulations allowing them to be announced in a more timely fashion on EPA’s website.

Ethanol Advocate on a Mission

ace-flyin-15-couserIowa cattle producer and ethanol advocate Bill Couser was a man on a mission this week in Washington DC with the American Coalition for Ethanol (ACE) Fly-In.

Couser finally got a sit down with Environmental Protection Agency Administrator Gina McCarthy to talk about the Renewable Fuel Standard (RFS) and other issues. “I was able to schedule a half hour with her and I took the cattle industry and the ethanol industry in there and we sat down there as one,” said Couser. “The impression we got from Gina is that she’s there to work with us.”

Couser is co-chair of the Iowa-based America’s Renewable Future, which recently helped to sponsor the Iowa Ag Summit where potential presidential candidates were interviewed live about their views on important agricultural issues, including the RFS. At that event, Sen. Ted Cruz (R-TX), who just became the first to officially throw his hat in the ring for the Republican presidential race, stated his opposition to the RFS and Couser had a chance to speak with him about it. “He’s a man from Texas who is set in his ways,” said Couser. “We’re looking forward to the future and visiting with him more.”

Listen to an interview with Bill from the ACE fly-in here: Interview with Bill Couser, America's Renewable Future


2015 ACE Fly-In Photo Album