Dueling RFS Ads Have Same Tune

President Obama needs to overrule this misguided proposal from the EPA before it is too late and these new technologies move overseas. The fate of America’s advanced biofuel industry, along with the President’s clean energy legacy, are resting on his decision. Fuels America USA Today print ad

“Tell President Obama, stop playing politics – fix the RFS.”
American Petroleum Institute TV ad

fuels-americaBoth the American Petroleum Institute and Fuels America unveiled new media campaigns this week targeted at telling the White House what to do when it comes to volume obligations under the Renewable Fuel Standard (RFS). Both organizations held conference calls with reporters to announce the new campaigns.

The single, full page, USA Today ad that will run during Climate Week September 19-21 is a sharp contrast to the oil industry’s multi-million dollar television, radio, and online advertising campaign. “This has been a David and Goliath struggle all along,” said Brent Erickson with the Biotechnology Industry Organization on behalf of Fuels America. “The biofuels industry has been struggling against this Goliath oil industry that has spent millions and millions of dollars on ads.”

The biofuels industry ad stresses the opening of the first large, commercial-scale cellulosic ethanol plants this year and warns that “the companies and investors looking to deploy the next wave of cellulosic ethanol facilities have put U.S. investment on hold” until a decision on the future of the RFS is made. The API ad calls the RFS “Washington red tape” and blames ethanol for raising food prices and contributing to hunger, even though corn prices are lower than breakeven for farmers this year, according to National Corn Growers Association Vice President of Public Policy Jon Doggett. “We are selling corn today at about 35% of what we did just a couple of years ago, certainly below the cost of production for many of our growers,” he said.

API’s Bob Greco says they launched their campaign in part because of recent statements from EPA Administrator Gina McCarthy that the agency will raise ethanol requirements based on the latest gasoline demand figures for 2014. “Unfortunately, the administration seems to be playing politics with the RFS rule instead of doing what’s best for consumers,” Greco said. “You don’t have to be a political insider to see how the Iowa Senate race—and the White House fear of losing control of the Senate—plays into this decision.”

“Politics are being played on this issue by both sides,” said Doggett. “I don’t think anyone should be surprised.”

Fuels America is a “coalition of organizations committed to protecting America’s Renewable Fuel Standard and promoting the benefits of all types of renewable fuel already growing in America.” API is the “only national trade association that represents all aspects of America’s oil and natural gas industry.”

Listen to the Fuels America call, which also includes comments from POET-DSM’s Steve Hartig: Fuels America RFS Campaign call

RFA: Rail Congestion Must Get Resolved

Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA) is speaking out again on the problems of rail congestion that is slowing down the delivery of ethanol and ethanol byproducts across the country. He submitted written testimony to the U.S. Senate Committee on Commerce, Science and Transportation that held a hearing yesterday to examine rail congestion and the harmful impact it has had on agriculture and other commodities.

Dinneen stressed the role that Bakken Crude rail shipments have played in increasing dwell times and decreasing train speeds and pointed toward the negative impact these delays are having on ethanol producers. “The rail system didn’t collapse last winter because of a snow drift in North Dakota,” he said. “It was because of a 400% increase in oil shipments from the Bakkens.”

RailcarsIn the written testimony Dinneen said, “The recent crisis of congestion that has seemingly overtaken the rail industry has become a huge and costly problem … This crisis is one that is causing significant harm to the economic health and well-being of our nation’s economy, as well as driving up costs for a wide array of commodities that rely on the rail for transportation…it is becoming more and more apparent that surging crude oil shipments are coming at the expense of other goods and commodities.”

Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on rail situation

Iowa E85 Sales Strong

IowaRFAlogoIowa motorists purchased over 2.9 million gallons of E85 in the second quarter of 2014, the second most sales in any second quarter on record, and a more than 200,000 gallon increase over the first quarter of 2014, according to the Iowa Renewable Fuels Association (IRFA).

“Two strong quarters of E85 sales are now in the books, and Iowa is poised for another big year in E85 sales,” said IRFA Executive Director Monte Shaw. “As White House officials review the final RFS volume levels, they should take note that when given the choice, motorists firmly support lower-cost, higher-level ethanol blends.”

E85, a fuel blend containing between 70 and 85 percent ethanol, is currently sold at more than 200 fueling sites in Iowa, and can be used in all flex-fuel vehicles (FFV).

Ethanol Report on Corn and Food Prices

ethanol-report-adIn this edition of the Ethanol Report, Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper talks about how corn prices have fallen but food prices continue to rise, and how that shows the “food versus fuel” argument is false.

A new report from RFA compares corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014.

Ethanol Report on Corn and Food Prices

Michigan Next Stop for Ethanol Safety Seminars

Michigan is the next stop for the Ethanol Safety Seminars. Led by the Renewable Fuels Association (RFA) and in conjunction with the Michigan Department of Agriculture, there will be five training stops with the first on September 17 in Albion. Additional seminars will take place on September 18 in Lansing, September 19 in Grand Rapids, September 22 in Saginaw and September 24 in Warren. Each seminar is funded by a Promotion and Alternative Fuels Education grant from the Michigan Department of Agriculture.

Ethanol Safety SeminarAll seminars are free and feature a morning session from 9:00 a.m. to 2:00 p.m. and an evening session from 5:30 to 10:00 p.m. Certificates will be awarded to attendees at the completion of the course. While primarily targeting first responders, hazmat teams, safety managers, and local emergency planning committees, seminars are also open to the general public.

Ethanol Safety Seminars focus on numerous areas including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels, transportation and transfer of ethanol-blended fuels, storage and dispensing locations, firefighting foam principles and ethanol-blended fuel, health and safety considerations for ethanol-blended fuel emergencies and tank farm and bulk storage fire incidents.

“With nearly 14 billion gallons of ethanol flowing across our country via railroads, highway cargo tank trucks, and barges, it’s vital that our first responders know how to safely and effectively handle the situation should a spill occur,” said Craig VanBuren, consumer protection section director at the Michigan Department of Agriculture. “This grant allows the Renewable Fuels Association the opportunity to provide boots-on-the-ground training for our emergency responders if an ethanol spill were to happen.”

In addition to the seminars, RFA will also host five free retailer workshops throughout the state on how to market ethanol-blended fuels, including E15, E85, and all mid-level blends in between. The workshops will discuss economics, the process of capturing RINs, equipment options, buying fuel locally, and available incentives to offset investment. Workshops will take place on Sept. 16 in Warren and Flint, Sept. 17 in Grand Rapids and Kalamazoo, and Sept. 18 in Ann Arbor.

RFA Releases Report to Debunk ‘Food v Fuel’

The Renewable Fuels Association (RFA) has released a new report today in an effort to “debunk” what they call the “fictional” food versus fuel debate. The report finds that while corn prices have dropped dramatically over the past two years, retail food prices of key foods including eggs, beef, poultry and pork have remained steady or continue to increase. The report concludes, “… fluctuations in corn prices do not significantly affect consumer food prices.”

RFA Corn Prices are plungingThe report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food…” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”

The report also compared corn prices to the price of dairy products, pork products, beef products poultry products and egg products from January 2007 – July 2014. Report findings include:

Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.

  • Retail prices for items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
  • Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
  • Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.

“The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases,” said Bob Dinneen, RFA president and CEO. “However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them. The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”

FAPRI: Corn Prices Down, Ethanol Future Depends on EPA

FAPRI logoCorn prices are down, and the future of ethanol seems to hinge upon what the government does on the Renewable Fuels Standard (RFS). A new report from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri shows that there have been sharp declines in the price for grains and oilseeds used to make ethanol and biodiesel. But the green fuels’ futures seem to hang on what the U.S. Environmental Protection Agency (EPA) does with its much-anticipated decision on the RFS:

· The potential for record corn and soybean crops has weighed on prices for grains and oilseeds. Corn and soybean prices for the crops harvested this fall could be the lowest since 2009.

· Corn prices fall to $3.89 per bushel for the 2014 crop. Even with a projected decline in 2015 U.S. corn production, prices remain around $4 per bushel in 2015 and beyond.

· Ethanol production prospects depend, in part, on EPA decisions about how to implement the Renewable Fuel Standard (RFS). With lower prices, ethanol exports continue to increase in 2015.

You can read the entire FAPRI report here.

American Ethanol a Winner for Corn Growers

fps14-ncga-robThe American Ethanol NASCAR program is in its fourth year now and the National Corn Growers Association (NCGA) considers it to be a big success.

NCGA incoming Vice President Rob Elliott of Illinois says American Ethanol began its partnership with NASCAR in 2011 supporting the transition to 15% ethanol. “NASCAR in its three levels has run over six million miles (on E15) which is the same number of miles EPA drove to prove E15 to be a good fuel,” Elliott said during an interview at Farm Progress Show this week. “The feedback we get is that 80% of NASCAR fans are now more likely to be very supportive of the use of ethanol in their own cars.”

The challenge still remains in getting more E15 into the market. “The ready availability of E15 at a broad number of stations, we’re just not there yet,” said Elliott, but he believes promoting through NASCAR is having an impact for the long term. “We’re moving the needle with 100 million NASCAR fans and we’ve seen the great benefit in the synergy created with NASCAR itself at a high level.”

American Ethanol is a partnership between NASCAR, NCGA, Growth Energy, New Holland with a number of individual ethanol producers and state corn grower groups.

Listen to an interview with Rob here: Interview with Rob Elliott, NCGA

2014 Farm Progress Show photo album

Corn Farmers Concerned About RFS and Low Prices

gps14-ncga-chipCorn farmers are concerned about the impact lower volume requirements under the Renewable Fuel Standard (RFS) could have on growers ready to harvest a record corn crop this year.

“We’re keeping a close eye on corn prices and are greatly concerned about efforts in Washington that may reduce or stifle demand for corn and raise the cost of production,” said National Corn Growers Association First Vice President Chip Bowling during the Farm Progress Show in Boone, Iowa this week. “As thrilled as we are with a record crop, we know it has its challenges.”

Bowling says it will be detrimental if the EPA moves forward with its proposal to lower volume requirements for corn ethanol to be blended into the nation’s fuel supply. “Reducing the demand of corn for ethanol will significantly impact corn prices – at a time when prices are already too low,” said the corn farmer from Maryland. “We need stability and we need EPA to stick to the statutory amount of corn ethanol in the RFS.” Chip Bowling, NCGA comments on record corn crop
Interview with Chip Bowling, NCGA

2014 Farm Progress Show photo album

DF Cast: Ethanol Innovators Talk New Tech at ACE Conf.

Any manufacturer is looking to get more out of their operations, and it’s certainly no different for biofuel makers.

In this edition of the Domestic Fuel Cast, we hear from four innovators who talked about their operations and how they are on the cutting edge of biofuel producing technologies during the recent at the American Coalition for Ethanol conference. Among those who spoke were ACE president Ron Alverson of Dakota Ethanol; Ray Baker, general manager of Adkins Energy in northwest Illinois; Mike Erhart, CEO of Prairie Horizon Agri Energy in Kansas; and Delayne Johnson with Quad County Corn Processors.

Domestic Fuel Cast - Increasing Ethanol Blends

You can also subscribe to the DomesticFuel Cast here.

27th Annual Ethanol Conference photo album

Iowa Lawmakers Recognized for Renewable Fuel Support

IowaRFA logoSixteen state lawmakers in Iowa are being recognized for their support of renewable fuels, such as biodiesel and ethanol. The Iowa Renewable Fuels Association (IRFA) PAC announced the 16 recipients of its “Champion of Renewable Fuels” awards for state legislators, recognizing their voting records and leadership in support of the green fuels.

“The IRFA PAC is proud to support these ‘Champions of Renewable Fuels’ who’ve consistently supported and led on important renewable fuels issues,” stated IRFA PAC Treasurer Walt Wendland, President and CEO of Homeland Energy Solutions. “Iowa is number one in the nation when it comes to renewable fuels production, and that doesn’t happen without great leadership and forward-thinking policies from our elected officials. These award winners have demonstrated outstanding commitment to the renewable fuels industry and have worked tirelessly to strengthen Iowa’s economy by improving opportunities for ethanol and biodiesel.”

Recipients of the 2014 Champion of Renewable Fuels awards are:

Iowa Senators
Sen. Bill Anderson SD 3
Sen. Daryl Beall SD 5
Sen. Rick Bertrand SD 7
Sen. Bill Dix SD 25
Sen. Amanda Ragan SD 27
Sen. Rob Hogg SD 33
Sen. Joe Bolkcom SD 43

Iowa Representatives
Rep. Helen Miller HD 9
Rep. Jack Drake HD 21
Rep. Dan Kelley HD 29
Rep. Josh Byrnes HD 51
Rep. Linda Upmeyer HD 54
Rep. Brian Moore HD 58
Rep. Mark Smith HD 71
Rep. Tom Sands HD 88
Rep. Jim Lykam HD 89

This is the third election cycle that the IRFA PAC has given such recognition.

The state is the nation’s leader in renewable fuels production, with 42 ethanol refineries capable of producing more than 3.8 billion gallons annually, including 2 million gallons of cellulosic ethanol production and two more cellulosic ethanol facilities currently under construction, and 12 biodiesel facilities able to crank out nearly 315 million gallons annually.

Iowa Gov Blames EPA for Deere Layoffs

fps14-govIowa Governor Terry Branstad paid a visit to the 2014 Farm Progress Show Tuesday and had some harsh words for the Environmental Protection Agency, which just last week sent a final version of the 2014 volume requirements under the Renewable Fuel Standard to the White House for review. He blames uncertainty created by the proposed rule for the recent layoffs at Deere and Company. “The result is the price of corn has dropped so much that farmers are not buying equipment,” he said. “What the EPA has done is not only damaging farm income, but it’s costing us jobs in farm machinery and manufacturing.” Deere announced more than 100 people will be laid off indefinitely from its plant in Ankeny and 460 people will be laid off at its tractor factory in Waterloo.

Branstad also notes that cellulosic and other advanced biofuels production is moving forward with the first gallons produced this summer by Quad county corn processors and two more plants opening soon. “I’m going to the POET grand opening of their new cellulosic ethanol plant and then we have DuPont Pioneer that’s also opening one in Nevada,” he said. “The problem is the oil companies control the distribution and they’ve done everything they can to discourage retailers from offering blender pumps and E15 because ethanol is a lot cheaper than gasoline.”

Listen to my interview with the Governor here: Interview with Iowa Governor Terry Branstad

2014 Farm Progress photo album.

RFS Headed to OMB for Review

epaThe Environmental Protection Agency has sent its final rule on 2014 volume obligations under the Renewable Fuel Standard (RFS) to the White House Office of Management and Budget for review in a last step before public release. Renewable fuels groups responded to the news today.

“We’re pleased to see the process moving forward and hope the final rule will show that this Administration is standing behind our national goals for clean, domestic fuels that strengthen our economy and national security,” said National Biodiesel Board Vice President of Federal Affairs Anne Steckel. “The original EPA proposal and continued delays have severely disrupted the U.S. biodiesel industry this year. We can begin to reverse that damage with a meaningful increase in the biodiesel volume that is finalized as quickly as possible so that producers can ramp up production in a timely fashion.”

“While we have not seen the rule, we hold strong in our belief that EPA and OMB will fulfill President Obama’s commitment to biofuels as a means of greater energy independence, lower greenhouse gas emissions, and wider availability of cost-saving alternative fuels for American consumers,” said Renewable Fuels Association president and CEO Bob Dinneen. “This decision is about more than targets and gallons, it is about a rationale that places highest importance on the long term strength of this country and not the bottom line of oil companies.”

“While OMB has up to 90 days to review this rule, what is most important is the content of the final rule,” added Growth Energy CEO Tom Buis. “Ultimately, this final rule should promote the policy goals of the RFS and call for an increase in the production of renewable fuels, so we can continue to reduce our dependence on foreign oil, create jobs at home that cannot be outsourced and mitigate climate change, while we improve our environment.”

Brian Jennings, Executive Vice President of the American Coalition for Ethanol, says his members are pleased with the progress. “Anything short of that turns the keys to the RFS over to the oil companies and puts cellulosic biofuel at risk,” said Jennings. “While all stakeholders have waited a long time for the final rule, and it could take another 30 days or more for interagency review, getting the rule done right is far more important than getting it done quickly.”

Since the rule is not public yet, there is no word on whether the volume requirements were changed from the initial proposal, which reduced the amount of ethanol and kept the biodiesel requirement the same. Senator John Thune (R-SD) expects some middle ground. “I think we’ll see an upward change,” he says. “I hope it’s a significant upward change and I hope that in ’15 they look at this in a different way.”

Thune still expects it will be later in the fall before a final rule is announced. EPA received over 340,000 comments on the proposal.

USGC Lists Top 10 Markets for US Ethanol

The U.S. Grains Council (USGC) has compiled its top 10 list of potential U.S. ethanol markets for the upcoming 2014/2015 market year, starting September 1.

usgc-ethanol-mkts1

While Brazil and Canada remain the top two, the Council is assessing Japan and Korea, Latin America and Southeast Asia as potential markets for U.S. ethanol exports. In the number three spot, USGC believes Japan has the potential to import 459 million gallons of U.S. ethanol in the year ahead, which would account for 11 percent of global demand for U.S. ethanol. Seventh placed Mexico has the potential to import 236 million gallons of U.S. ethanol and the Philippines at number nine could import 90 million gallons. Those three markets combined could to represent almost 20 percent of global demand for U.S. ethanol.

Rounding out the top ten, USGC puts the United Kingdom in fourth place with nearly 305 million gallons, India and Nigeria ahead of Mexico in 5th and 6th place with 250 and 240 million gallons respectively. Australia is ranked in 8th place with 220 million gallons and the Netherlands completes the top 10 with just over 86 million.

Economist Still Opposes RFS Despite Livestock Recovery

bivi-nc-meyerDespite the fact that livestock margins have made a dramatic recovery in the past few years as availability of feed has increased and prices have decreased, a leading livestock economist still opposes the Renewable Fuel Standard (RFS).

“We’ve thrown billions of dollars at this industry already and it ought to have to stand on its own,” said Steve Meyer, Paragon Economics, during an interview last week at an event for pork producers. “It has a place in the fuel business as an oxygenate and as an octane enhancer, it’s not going away from there.”

Meyer, who has always been an outspoken critic of U.S. energy policy, says his beef with the RFS is that it caused ethanol production to increase too much too quickly. “The trend yield on corn is up about two bushels per year. If you had grown the ethanol business at a rate equivalent to that, I wouldn’t have been able to gripe too much about it,” he said. “But it was far faster than that …. and the economic impact of that was very negative for (livestock) producers.”

However, the tide has turned dramatically to the point where demand and prices for livestock and poultry are riding high and there is almost record high feed availability with manageable prices. “We’re not going back to $2 corn and $180 bean meal but we’re at the lowest levels on costs in five years,” said Meyer. “We’re not increasing corn usage for ethanol every year like we were, it’s pretty much flat. It’ll grow a little bit but not much and we can probably keep up with that with trend yield growth on corn.”

Despite that, Meyer thinks the RFS needs to go away. “I don’t hate ethanol,” he says he tells corn producers. “I just don’t like subsidized, mandated ethanol when I’m the alternative user of the input.”

Interview with Steve Meyer, Paragon Economics