President Barack Obama traveled to Michigan State University to sign the Agricultural Act of 2014 at the alma mater of Senate Agriculture Committee chair Debbie Stabenow (D-MI).
“Despite its name, the farm bill is not just about helping farmers,” President Obama told the small crowd invited for the signing. “Secretary Vilsack calls it a jobs bill, an innovation bill, an infrastructure bill, a research bill, a conservation bill. It’s like a Swiss Army knife.”
The president also gave a shout out to biofuels production in Michigan in his address prior to the bill signing. “I just got a tour of a facility where you’re working with local businesses to produce renewable fuels,” said Obama. “This bill supports businesses working to develop cutting edge biofuels, like some of the work being done here at Michigan State.”
Listen to the president’s speech here: President Obama farm bill signing
What do you think of the new farm bill? Which part is most important to you? Tell us in this week’s ZimmPoll.
The comment period is now over for the EPA proposal that would lower the volume requirements under the Renewable Fuel Standard this year, but it will be some time yet before a decision is made since the agency likely has tens of thousands of comments to read.
In this Ethanol Report, several representatives of the cellulosic ethanol and advanced biofuels industry comment on how the proposal would impact them. The report includes comments from:
Chris Standlee, Executive Vice President, Abengoa Bioenergy U.S. Institutional Affairs
Brian Foody, President and CEO, Iogen Corporation
Delayne Johnson, General Manager, Quad County Corn Processors
Brooke Coleman, Executive Director, Advanced Ethanol Council
Bob Dinneen, Renewable Fuels Association President and CEO
Listen to or download the podcast here: Ethanol Report with Advanced Biofuels Producers
Subscribe to “The Ethanol Report” with this link.
Corn farmers and biofuels producers are questioning President Obama’s commitment to an “all of the above” energy strategy mentioned in the State of the Union address, considering the administration’s proposal to cut the Renewable Fuel Standard (RFS) this year. The address Tuesday evening came just hours before the comment period on the EPA proposal ended.
“It was great to hear President Obama talk about the importance of an ‘all-of-the-above’ energy policy,” commented National Corn Growers President Martin Barbre. “And you can’t have such a policy without biofuels. So, we call on his Administration to back away from its irresponsible proposal to reduce the Renewable Fuel Standard.”
Fuels America released a statement echoing a similar sentiment, adding that they hope EPA will listen to those who will be impacted by changes in the RFS. “We hope the agency considers the thousands of comments from farm families, small business owners, labor groups and environmental advocates. These are the real people who will lose their livelihoods and their faith in this Administration’s commitment to a clean energy future if the EPA proceeds down its current path.”
The president mentioned agriculture in the opening minute of his speech, with an image of a farmer in a corn field as an example of the “citizens, who make the state of our union strong.”
President Obama did make note of progress made in solar energy during his address and called for an end to tax breaks for the oil industry. “Every four minutes, another American home or business goes solar,” said the president. “Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.”
The Nebraska Corn Board has received over 5,000 letters expressing opposition on the Environmental Protection Agency (EPA) proposal to lower 2014 volume requirements for biofuels under the Renewable Fuel Standard (RFS).
In early January, the Nebraska Corn Board sent out letters to Nebraska farmers alerting them of EPA’s actions and included a letter to EPA that farmers could sign. These letters were returned to the Corn Board and the Board will forward the entire stack of letters to EPA before the comment period deadline of January 28. To date, just over 5,000 letters have been returned, many with personal messages expressing the need to keep a strong renewable fuel industry and stating corn farmers can provide enough food, feed and fuel to help America be less dependent on imported oil.
“This is the greatest grassroots response in the history of the corn checkoff program since its implementation in 1978,” said Nebraska Corn Board Executive Director Don Hutchens.
The Board also distributed nearly 10,000 postcards throughout Nebraska where the recipient was asked to write a personal message and mail to EPA. They also offered the option of commenting online through a link on the Nebraska Corn Board website.
Nebraska Corn Board chairman and farmer Tim Scheer said the letters are being sent to EPA today. “Other states have mounted similar efforts to send letters to EPA,” said Scheer, noting that 4,000 letters are being sent in from Minnesota Corn and over 1,000 from Missouri Corn.
A new independent analysis from the Center for Agricultural and Rural Development (CARD) at Iowa State University has found that increased ethanol production under the Renewable Fuel Standard (RFS) program has reduced gas prices, not increased them as opponents of the RFS claim.
“Our results should reassure those in Congress and the Administration who are worried that following the RFS commitment to expanding the use of renewable fuels will result in sharply higher fuel prices for consumers,” concludes the report, authored by economists Sebastien Pouliot and Bruce Babcock.
The Environmental Protection Agency proposal to lower the 2014 RFS volume obligations was based in part on concerns that volatile Renewable Identification Number (RIN) prices last year led to higher gas prices. However, the analysis found that higher RIN prices provide incentive to offer higher ethanol blends, which lowers the price of fuel by lowering the price of ethanol. “We find that feasible increases in the ethanol mandate in 2014 will cause a small decline in the price of E10. That is, even though increased mandates increase gasoline prices, the offsetting effects from a decline in ethanol price and movement by motorists to E85 from E10 are enough to result in a net decrease in the price of E10.”
Renewable Fuels Association president and CEO Bob Dinneen says the analysis shows that the RFS is working as intended. “Many ethanol opponents have used higher RIN prices to scare people into believing that gas prices will rise if the RFS remains in place,” said Dinneen. “The new CARD analysis takes the gas price fear out of the equation.”
Read the analysis here.
The Ninth U.S. Circuit Court of Appeals has denied rehearing en banc a ruling last year which upheld California’s Low Carbon Fuel Standard (LCFS), leaving the ethanol industry and others challenging the law to consider the next move.
In a joint statement, ethanol producer groups Growth Energy and the Renewable Fuels Association (RFA) called the decision “a blow to California consumers” and said they will continue to evaluate all options moving forward “to assure that sound science and fair play ultimately prevail in this case.”
The two groups were pleased to note that seven judges strongly dissented from the Court’s decision believing it merited further review, stating that the majority opinion “upholds a regulatory scheme that, on its face, promotes California industry at the expense of out-of-state interests.”
Challenging the law with the ethanol industry is the American Fuel & Petrochemical Manufacturers (AFPM) and General Counsel Richard Moskowitz says the decision will “have adverse consequences throughout the nation’s fuel supply chain far beyond California’s borders, and ultimately a negative impact on consumers.”
The ruling could be appealed to the US Supreme Court.
Cellulosic and advanced biofuels producers are very concerned that the EPA proposal to lower 2014 Renewable Fuel Standard (RFS) targets will have a chilling effect on investment in the next generation of renewable fuels.
“Frankly, we have decided that we are placing a hold on our evaluations of future investment in bioenergy in the United States until we see what the final rule is and what impact it does have on the market,” said Chris Standlee with Abengoa Bioenergy during a media call today organized by the Renewable Fuels Association (RFA). Standlee added that the proposal has forced them to reconsider their business plan to license technology to other producers and look for “potential investments in other countries.”
Iogen Corporation president and CEO Brian Foody said RFS is the single most important driver of investment in advanced biofuels. “Cellulosic biofuel has the promise to deliver tens of billions of gallons of ethanol to the United States, but there needs to be a market for that,” he said. Iogen is building a cellulosic plant in Brazil using sugarcane bagasse and they are “actively seeking to develop projects in America” but that will depend on the future of the RFS.
Delayne Johnson, General Manager of the farmer-owned Quad County Corn Processors ethanol plant which broke ground in July on a bolt-on cellulosic ethanol technology, said that changing the RFS at this point is “going to create uncertainty” for other plants looking at adopting that technology. “We’re hopeful the EPA will consider getting back on course,” he said.
Listen to comments from Standlee, Foody, and Johnson, as well as RFA president and CEO Bob Dinneen and Advanced Ethanol Council Executive Director Brooke Coleman. RFS impact on Advanced Biofuels media call
Media questions and answers
Researchers at the University of Wisconsin-Madison have found a way to get more ethanol out of sugars used in the refining process. This university article says they’re using a plant-derived chemical, gamma valerolactone, or GVL.
“With the sugar platform, you have possibilities,” says Jeremy Luterbacher, a postdoctoral researcher and the paper’s lead author. “You’ve taken fewer forks down the conversion road, which leaves you with more end destinations, such as cellulosic ethanol and drop-in biofuels.”
Funded by the National Science Foundation and the U.S. Department of Energy’s Great Lakes Bioenergy Research Center (GLBRC), the research team has published its findings in the Jan. 17, 2014 issue of the journal Science, explaining how they use gamma valerolactone, or GVL, to deconstruct plants and produce sugars that can be chemically or biologically upgraded into biofuels. With support from the Wisconsin Alumni Research Foundation (WARF), the team will begin scaling up the process later this year.
Because GVL is created from the plant material, it’s both renewable and more affordable than conversion methods requiring expensive chemicals or enzymes. The process also converts 85 to 95 percent of the starting material to sugars that can be fed to yeast for fermentation into ethanol, or chemically upgraded furans to create drop-in biofuels.
The researchers are adding liquid carbon dioxide to the mix and could reduce the cost to produce ethanol by 10 percent.
A bi-partisan group of lawmakers is calling on the government to end its proposal to reduce the amount of ethanol and biodiesel that will be blended into the Nation’s fuel supply. Led by Democratic Congresswoman Cheri Bustos (IL-17) and Republican Congresswoman Kristi Noem (SD-AL), the group has sent a letter to the Environmental Protection Agency (EPA) over the agency’s proposal to reduce the renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS).
In a letter to EPA Administrator Gina McCarthy, the Members of Congress said that reducing the amount of renewable fuels in gasoline could hurt rural economies, jeopardize American jobs, raise prices at the pump and deter investment in biofuels and biofuel infrastructure. They asked that the EPA revise their proposal before the 60 day comment period ends on January 28th.
“We are writing to express our concern regarding the Environmental Protection Agency’s (EPA) proposed rule for the 2014 renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) program,” the Congresswomen said in their letter. “The significant reduction in renewable volume obligations under this proposed rule could destabilize the renewable fuel industry and send the wrong message to investors. This risks jobs and threatens the development of advanced and cellulosic biofuels that bring higher-level ethanol and biodiesel blends to consumers.”
The effort is seen as part of a full-court press by biofuels advocates to reverse the proposal, which ends its comment period in about a week.
As the U.S. Environmental Protection Agency (EPA) considers its proposal that would, in effect, slash the amount of ethanol and biodiesel to be blended into the Nation’s fuel supply, the American Farm Bureau Federation (AFBF) is telling the government to leave the Renewable Fuel Standard (RFS) alone. During their policy session at the recent AFBF annual meeting in San Antonio, Texas, delegates voted to reaffirm “their support for the renewable fuels standard and approved a policy supporting renewable fuels tax incentives for the production of biodiesel and cellulosic ethanol and installation of blender pumps.”
As we reported earlier this week, the new president of the Illinois Farm Bureau, Richard Guebert, told us RFS remains the top priority for farmers in his state and the region.
“Midwest farmers have worked so hard and so long to get those standards where they are today,” he told Chuck right before heading into a policy session at the meeting. Richard added they have even overcome some of the price spikes for commodities that go into the green fuel, so other sectors aren’t hurt by high prices for someone else’s feedstocks. “It’s just difficult for us to understand why we’re being forced to rollback those standards.”
The EPA has proposed to set the cellulosic biofuel category at 17 million gallons, biomass-based diesel at 1.28 billion gallons, advanced biofuel at 2.20 billion gallons and renewable fuel at 15.21 billion. The comment period on the proposal ends in the next two weeks.
A record corn crop usually means falling prices at market for U.S. farmers. But this article from BioFuels Journal says a new report from a Kansas State University agricultural economist says high demand from ethanol producers is supporting the prices despite the record-high 13.9 billion bushels of corn last year.
“The markets responded positively to the corn data,” said Dan O’Brien, crops marketing specialist with K-State Research and Extension, referring to gains posted in corn futures after the Jan. 10 release of the U.S. Department of Agriculture’s Crop Production 2013 Summary.
“The corn production number (at 13.9 billion bushels) came in at the low end of market analysts’ estimates.
“That coupled with (USDA’s estimated) increases in feed and ethanol usage had the effect of lowering projected carryout stocks.”
“We still have a very large crop, but this demand adds a bit of support and might give producers at least marginally attractive selling opportunities,” said O’Brien, who is based at K-State’s Northwest Research-Extension Center in Colby.
News of the report on Jan. 10 immediately helped push corn prices 17 to nearly 20 cents higher per bushel.
Corn carryout was at 1.631 billion bushels, which was also below analysts’ expectations.
Considering the state’s significant role in biofuels and renewable energy, there’s little surprise that primary candidates for the Iowa U.S. Senate seat are expressing their support of the green fuels. The Iowa Renewable Fuels Association (IRFA) says its 2014 Iowa U.S. Senate Primary Candidate Renewable Fuels Survey shows there’s strong, bipartisan support for renewable fuels among the state’s top candidates.
The full results and responses from candidates U.S. Rep. Bruce Braley, Sam Clovis, state Sen. Joni Ernst, and Mark Jacobs can be found here: http://www.iowarfa.org/2014IRFACandidateSurveys.php. Matt Whitaker informed IRFA he would not be returning the survey.
“Literally tens of thousands of Iowans are invested in or directly employed by the renewable fuels industry, and they deserve to know where the candidates stand on these important issues,” stated IRFA Policy Director Grant Menke. “It’s great to see every candidate who responded showed strong support for ethanol and biodiesel, demonstrating renewable fuels issues are important to Iowa’s future.”
In December, the IRFA held an Iowa GOP U.S. Senate Primary Candidate Renewable Fuels Forum where candidates Sam Clovis and Mark Jacobs answered questions on specific renewable fuels issues. Video of that forum is available here.
The man in charge of Marathon Petroleum Company‘s biofuels supply chain will deliver the keynote address for next month’s National Ethanol Conference in Orlando, Fla. The Renewable Fuels Association announced David Whikehart, Director of Product Supply and Optimization at Marathon, will speak at the conference on Tuesday, Feb. 18 at 8:45 a.m. EST.
“David will be able to provide the NEC audience with a very unique perspective of the policy and marketing forces affecting the ethanol industry today. His responsibilities at Marathon place him at the nexus of ethanol production and gasoline refining. He understands the value of ethanol to refiners and the role of consumers in determining fuel choices at the pump,” said Bob Dinneen, President and CEO of the Renewable Fuels Association. “I think it is critical that we be open to the message of our customer, and I am very grateful to have David join us and look forward to hearing his thoughts on future trends and policies affecting the U.S. gasoline market.”
You can still register for the RFA’s 19th annual National Ethanol Conference, where the theme is “Falling Walls, Rising Tides.” Early bird discounts apply through Jan. 24. Click here for registration and more information.
The newest supply and demand estimate from the U.S. Department of Agriculture confirms a record corn harvest in 2013 of just under 14 billion bushels and an increased in usage of corn for ethanol.
USDA’s World Agricultural Supply Demand Estimate for January 10 projects corn use for 2013/14 higher with feed and residual use projected up 100 million bushels based on September-November disappearance as indicated by the December 1 stocks estimate. “Corn used to produce ethanol is raised 50 million bushels reflecting continued strong weekly ethanol production, a reduction in expected sorghum use for ethanol, and higher forecast 2014 gasoline consumption in the latest projections from the Energy Information Administration.”
Renewable Fuels Association (RFA) president and CEO Bob Dinneen says the report’s numbers indicate that now is a bad time to reduce volume requirements under the Renewable Fuel Standard (RFS). “Due to the expected corn surplus, corn prices have already dropped to nearly $4.00/bushel – half the price of corn in late summer 2012, below the price of corn when EISA was signed into law in 2007, and below the farmer’s cost of production,” Dinneen said in a statement, adding that farmers, small businesses and innovation in next generation biofuels would be adversely impacted by lowering the RFS in 2014. “It doesn’t have to be this way, there is still time for the Obama White House and EPA to do the right thing and restore the numbers for ethanol to their statutory levels.”
Sen. John Thune (R-SD) is hopeful the Environmental Protection Agency will make some changes in the proposed volume requirements for biofuels under the Renewable Fuel Standard this year.
“I just hope that the EPA will work with us, work with the industry, in a way that is realistic and grounded in the view that this is an industry that’s here to stay and we ought to be looking at ways we can continue to grow it,” said Thune during a press call with reporters this week.
Thune was one of several lawmakers who met with EPA officials last month about the proposal to lower volume obligations for renewable fuels in 2014. “I think we’ll get some relief from the meeting we had, perhaps, with regard to the direction they were heading for this year,” he said. “I’m hoping that they will make a decision that … moves us back to what we think is a more realistic volume level for this year.”
Listen to Thune’s remarks in this audio provided courtesy of Agri-Pulse. Sen. Thune RFS comments