Editorial from Father of Ethanol

merle-andersonThe 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
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CARB Stresses ILUC Update is Preliminary

carb-14-2California Air Resources Board (CARB) staff spent four hours on Tuesday afternoon detailing reviews made of Indirect Land Use Change (iLUC) models and analysis for the state’s Low Carbon Fuel Standard (LCFS), strongly stressing that their results are preliminary.

“This is a work in progress,” said Air Resources Engineer Anil Prabhu as he began his power point presentation detailing the history of the iLUC analysis used by the agency, recommendations by the Expert Work Group (EWG), and much technical scientific information. Staff also stressed repeatedly that CARB is seeking feedback from all stakeholders on the preliminary conclusions presented.

carb-workshopThe 84 slide presentation of details on how CARB arrived at the values they are proposing for corn ethanol, sugarcane ethanol, soy biodiesel, canola biodiesel and sorghum ethanol was interspersed with dozens of questions from stakeholders and scientists present or listening in on the webcast.

Among those challenging the CARB results several times was Steffen Mueller with the University of Illinois-Chicago and Genscape, a member of the original CARB EWG. “There’s a lot of basic information missing (here) to engage in a productive discussion,” Mueller said, noting that the Agro-Ecological Zone – Emissions Factor (AEZ-EF) model presented was from 2011 and wondering when they would be able to see the updates CARB made to the model. “There’s been a lot of republications since 2011,” he said, to which CARB staff responded it would be updated “probably within the next week or two.”

Much of CARB’s data was presented based on Purdue University’s GTAP (Global Trade Analysis Project) work, including some research done by agricultural economist Wally Tyner, who called in to set the record straight. “What’s been presented today is really CARB’s work and not Purdue’s work,” said Tyner, who mainly called to dispute the Yield Price Elasticity assumptions made in the CARB presentations, which he says is “basically incorrect.” Wally Tyner comments and CARB staff response

Tyner also noted that there “is a lot of uncertainty in emission factors” as well as a great deal in land use change, and that seemed to be the theme of the entire meeting with nearly a quarter of the power point presentation being devoted to “Evaluation of Uncertainty” and “Why Results Vary Between Studies.” While the CARB staff repeatedly reminded those present that they welcomed any new or updated data that could be supplied, it was overwhelmingly clear that there is no scientific consensus whatsoever on the topic of indirect land use change. Continue reading

Ethanol Exports Start 2014 Higher

Exports of U.S. ethanol started 2014 at the highest level seen in over two years.

rfa-annAccording to U.S. Census Bureau data, ethanol exports in January totaled 86 million gallons, which is the highest monthly volume since December 2011. “Exports were up a third from December 2013, while imports remained sparse, meaning the United States was a net ethanol exporter by the widest margin in over two years,” according to Renewable Fuels Association research analyst Ann Lewis, writing on the E-xchange blog.

Brazil was the top customer for U.S. ethanol, beating out Canada for the number one spot, importing nearly 23.9 million gallons, the largest monthly volume to Brazil in two years. Exports to Canada dropped 36% from December to 18.8 million gallons (mg). Rounding out the top destinations were the United Arab Emirates (12.4 mg), India (10.7 mg), the Philippines (5.5 mg), and Mexico (3.3 mg).

Meanwhile, exports of the ethanol co-product distillers dried grains (DDGs) were lower in January, down 9% to 903,827 metric tons (mt). Lewis notes that China was again the leading destination with 344,147 mt. “However, China’s market share scaled back to 38%, in contrast with its majority stake (56%) of U.S. DDGs exports averaged over the second half of 2013,” writes Lewis. Mexico (140,664 mt), South Korea (77,977 mt), Vietnam (48,514 mt), and Japan (44,505 mt) rounded out the top five DDGS markets in January.

POET-DSM Joins Advanced Ethanol Council

aeclogoPOET-DSM Advanced Biofuels is the newest member to join the Advanced Ethanol Council (AEC).

“As cellulosic ethanol becomes a growing force in fulfilling biofuel requirements in the U.S., it’s important for POET-DSM Advanced Biofuels to work with other industry leaders to help shape policies that ensure consumer understanding of – and access to – its environmental, economic and energy-security benefits,” said Steve Hartig, General Manager – Licensing for POET-DSM Advanced Biofuels.

The joint venture between ethanol production company POET and Royal DSM, a Netherlands-based bio science company, is nearing completion of a 25 million gallon per year cellulosic ethanol biorefinery called Project LIBERTY, located in Emmetsburg, Iowa. The technology developed for the facility is available for licensing to develop other low-carbon, cellulosic ethanol production plants.

“As a key player in the industry that has the proven know-how to scale up its advanced technology to commercial scale, POET-DSM is a strong, strategic addition to the Council’s ranks as cellulosic ethanol moves from the development stage to full-scale commercial production in 2014,” said Brooke Coleman, Executive Director of the AEC.

CARB Considers Small ILUC Change for Ethanol

carb-14-2The California Air Resources Board (CARB) today is proposing potential changes to indirect land use change (iLUC) penalties under the Low Carbon Fuel Standard (LCFS) which some scientists and the ethanol industry say are a start, but don’t go far enough.

Based on a review of materials made available by CARB prior to the workshop, Renewable Fuels Association (RFA) President and CEO Bob Dinneen said, “CARB appears to be taking a small step in the right direction, but the science shows a much larger reduction to the iLUC penalty for corn ethanol is warranted.”

RFA-logo-13Dinneen notes that a group of 14 well-known scientists, including five members of CARB’s own expert work group, sent a letter to CARB last week recommending that the penalty should be lowered by 50-80 percent, rather than the 20 percent CARB is proposing. “The larger issue here is that in the five years since the LCFS was adopted, there have been no indications that the policy has caused—or will cause—any kind of land use change,” said Dinneen. “Amazon deforestation has fallen to its lowest rate on record, U.S. cropland area continues to shrink, and U.S. forested area continues to increase. All of this suggests the iLUC hypothesis needs to be critically re-evaluated.”

Dinneen believes that California consumers will be negatively impacted if CARB maintains the iLUC penalty for corn ethanol. “Under CARB’s apparent proposal, grain ethanol—the lowest-cost renewable fuel used in the California market today—will ultimately be replaced with higher-priced imported fuel,” said Dinneen.

The CARB workshop on the proposed Indirect Land Use Change values and how they were determined by staff will be webcast today beginning at 1:00 pm Pacific time. During the webcasts, CARB will also be accepting feedback and questions sent via email to sierrarm@calepa.ca.gov.

Analysis: Export Market a Bright Spot for US Ethanol

Ethanol producers might be fretting about the government’s proposal to lower the amount of the green fuel to be mixed into the Nation’s fuel supply. But this analysis from the University of Illinois points out that those Renewable Fuel Standard (RFS) numbers don’t matter when it comes to ethanol going over the border and to foreign shores, a bright spot for the American industry.

An important point to note is that ethanol or other biofuels produced in the US and exported for consumption overseas do not count toward the blenders’ RFS obligations. The Renewable Identification Numbers (RINs) associated with exported biofuels are retired and no longer eligible for use towards RFS compliance. Thus, exports are not substituted for domestic consumption but rather represent additional demand. Ultimately, exports provide a path around, rather than through, the ethanol blend wall by allowing the domestic industry to produce greater volumes of ethanol than the blend wall limitation implies for domestic use.
ethanolexports
The analysis goes on to look at markets for American ethanol in Brazil, Canada, the European Union, Mexico and other foreign consumers and how it could take up the amount proposed to be lowered in the RFS.

Iowa AG: EPA Proposal on Ethanol Violates Law

tommillerThe proposed lowering of the amount of ethanol to be blended into the country’s fuel supply raises the possibility the U.S. government could face a lawsuit for breaking the law. In this article from Ethanol Producer Magazine, comments from Iowa Attorney General Tom Miller indicates the Environmental Protection Agency’s (EPA) to lower the Renewable Volume Obligations (RVOs) for ethanol violate Congress’ original intent.

Section 211(o)(2)(B) of the Clean Air Act expressly states the RFS mandated volume of renewable fuel to be included in gasoline: The total for 2014 is 18.15 billion gallons. However, section 211(o)(7)(A)(ii) provides a “general waiver” authority under which the EPA may modify these amounts if “there is an inadequate domestic supply.”

Iowa Attorney General Thomas J. Miller submitted comments to the proposal outlining several objections to EPA’s interpretation of the waiver authority, based on the well-known Chevron test used by the courts to assess a federal agency’s interpretation of a statute: 1) If the statute is clear, the court must enforce the law’s unambiguous language; and 2) If the statute is not clear, the agency’s interpretation must be permissible.

Miller argues that the statute unambiguously prohibits EPA from considering the distribution capacity of blended fuel. Under section 211(o)(7)(A)(ii), the term “supply” unambiguously refers to the “quantity of renewable fuel” required under section 211(o)(2). Therefore, in order to reduce the RFS for total renewable fuel, EPA must find that there is an “inadequate domestic supply” of “renewable fuel.”

Miller goes on to say the EPA’s interpretation of what it is allowed to do is not permissible, and he points out that Congress’ intent when passing the RFS was “to move the United States towards greater energy independence and security” and “to increase the production of clean renewable fuels.” The article also points out that Miller is pretty successful when leading multistate litigation.

Iowa Farmers Oppose RFS Changes

iowa-soyA vast majority of Iowa farmers in a recent poll oppose changes to the Renewable Fuel Standard (RFS).

agri-pulseThe Agri-Pulse Farm Opinion Poll, launched last month in partnership with the Iowa Soybean Association, found that 92% of farmers polled oppose the Environmental Protection Agency proposal to lower of the amount of corn-based ethanol and biodiesel required to be blended in the nation’s fuel as part of the RFS.

In addition, almost three out of five farmers responding (58 percent) said that, of several national issues including the Farm Bill, trade, tax codes and immigration, the RFS is most important to the future profitability of their farms.

The poll also found that farmers expect to see weaker financial returns in 2014 and will adjust their expenditures – spending less on fertilizer and equipment but more on crop insurance. The new poll was taken February 23 and included more than 130 Iowa farmers responding to 12 unaided questions.

Ethanol Advocate Honored by Corn Growers

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

The National Corn Growers Association (NCGA) celebrated the long and productive career of an ethanol advocate and industry leader during the recent Commodity Classic.

Jere White is retiring from the Kansas Corn Growers after leading that organization for a quarter of a century and was presented with the Meritorious Service Award from NCGA. He has been a strong supporter of the ethanol industry during that time and his son Robert is Director of Market Development for the Renewable Fuels Association (RFA).

An avid motorcyclist, White had a serious accident in September 2012, and while he has made a remarkable recovery from critical injuries, he recently decided it was time to pass the reins of the association on to someone else.

classic14-greg-jereThe new Kansas Corn CEO, pictured here with Jere, is Greg Krissek – also a long-time ethanol advocate and industry leader. In his career, Greg has served as Assistant Secretary at the Kansas Department of Agriculture; Director of Operations at Kansas Corn and Kansas Grain Sorghum; Director of Government Affairs for ICM Inc. and, most recently was a manager at Kennedy and Coe, LLC. He has also served on many ethanol and agricultural association boards and on seven ethanol plant boards of directors.

2014 Commodity Classic Photos

California to Consider Updating ILUC for Biofuels

carb-14The California Air Resources Board (ARB) is holding two public workshops regarding the Low Carbon Fuel Standard (LCFS) this week – one to discuss general updates to the LCFS regulation, and the second to discuss updates to the indirect land use change (iLUC) values. Stakeholder feedback is being solicited for both workshops.

The board will discuss a proposal to update iLUC values for corn ethanol, sugarcane ethanol, and soy biodiesel, as well as proposed iLUC values for canola biodiesel, sorghum ethanol, and palm biodiesel.

According to a staff concept paper released prior to the meeting, based on recommendations provided by an Expert Working Group, “(p)reliminary results indicate reductions in the iLUC values for soy biodiesel, sugarcane ethanol, and corn ethanol.” The paper states that ARB staff “contracted with experts to refine and improve the iLUC analysis” and as a result “has incorporated significant changes in the estimation of iLUC for biofuels.”

Among the model and data updates that were included in the new estimates are re-estimated energy sector demand and supply elasticity values; improved treatment of corn ethanol co-product (DDGS); improved treatment of soy meal, soy oil, and soy biodiesel; modified structure of the livestock sector;improved method of estimating the productivity of new cropland; adopting a consistent model version and set of model inputs for all biofuel pathways; and revised yield and demand responses to price.

The question is whether the reduction for corn ethanol will be significant enough to be what the industry believes is closer to reality. Some scientists consulted by CARB believe that they are still not using the most updated modeling methods to determine iLUC and that analyses conducted since the LCFS was adopted in 2009 show emissions for corn ethanol are less than half what was estimated at the time.

The adjustments will be presented by staff at the iLUC workshop, scheduled for Tuesday, March 11, from 1:00 – 5:00 pm.

Idea Leads to Cellulosic Ethanol, Scholarship

classic14-basf-soyAn idea that started back when he was just an elementary school student has led a Tennessee high schooler to picking up a substantial scholarship that he says will help him further his own energy business. Caleb Brannon of Puryear, Tenn. was selected as the recipient of the 2014-2015 ASA Secure Optimal Yield (SOY) Scholarship, a $5,000 award presented to an outstanding high school senior who has achieved high academic and leadership requirements, and is planning to pursue a degree in an agriculture-related field at an accredited college or university.

“I’m really thankful to the American Soybean Association and BASF who were so generous in this scholarship,” he says. Brannon, a senior at Calloway County High School, will pursue a degree in agricultural business at Murray State University, Murray, Ky. beginning this fall. He already has his very own business, Brannon Agri-Energy, a company focusing on cellulosic ethanol that he actually thought up way back in the fifth grade!

“Our family farm was in a partnership with the University of Tennessee to grow switchgrass in a pilot program to be bailed and put in a coal-fired plant [in Alabama].” While other area farmers gave up after a few years, it led Brannon to researching other crops for what is now his cellulosic ethanol business, finding his own markets.

He adds that the scholarship money will free up what he would have spent on college to invest back into his business. But he says this is more than just his future; it’s the Nation’s future.

“I want to help our country become just a little bit more energy independent. That’s really important to me.”

Listen to Cindy’s interview with Brannon here: Interview with BASF SOY Scholarship Winner


BASF at the 2014 Commodity Classic Photos

Advanced Ethanol Here at Last

nec14-cellulosic-panelDuring the National Ethanol Conference, representatives of four leading companies talked about how advanced ethanol is here at last. Moderated by Advanced Ethanol Council Executive Director Brooke Coleman, the panelists included Chris Standlee with Abengoa; Kenneth Hill with DuPont Cellulosic Ethanol; Delayne Johnson, CEO of Quad County Corn Processors; and Steve Hartig, Licensing General Manager for POET-DSM Advanced Biofuels, LLC.

nec14-standlee-2

“Ladies and gentlemen, I am thrilled to finally be able to say that this is the pivotal year for second generation ethanol for the United States and perhaps in the world,” said Chris Standlee with Abengoa Bioenergy, who talked about the upcoming launch of their 25 million gallon/year cellulosic ethanol facility in Hugoton, Kansas. The company has invested nearly 10 years into developing its own proprietary second-gen technology and the biorefinery in Kansas that will go online in 2014 is the fruition of this commitment. Learn more about Abengoa’s cellulosic refinery here: Remarks by Chris Standlee, Abengoa

Kenneth Hill with DuPontKenneth Hill with DuPont noted that his company is focused on bridging the gap between agriculture and advanced materials. This includes enzymes and cellulosic biofuels. DuPont is working with companies around the world to develop cellulosic biofuels, yet the project that may have the most attention is currently under construction in Nevada, Iowa. Learn about this project and others here: Remarks by Kenneth Hill, DuPont

Delayne Johnson Quad County Corn ProcessorsDelayne Johnson said that since Quad County Corn Processors went into production in 2002 they have continuously been looking for niche ways to add value to a kernel of corn. With the aid of R&D expert Travis Brotherson, five years ago he developed a now patented cellulosic process. The technology has added 6 percent to their yield, they are getting 2 1/2 times more corn oil than they had been getting, and are able to produce a higher protein feed product (DDG) than they had in the past. Quad County is currently in the process of building the technology out at full-scale and the cellulosic portion of their biorefinery is expected to begin production this summer. Learn more about Quad County’s cellulosic technology here: Remarks by Delayne Johnson, Quad Council Corn Processors

Steve Hartig with Poet DSMFor many years Poet has been talking about the future of cellulosic ethanol using corn residue – corn stover, corn cobs, etc. According to Steve Hartig, With major strides over the past few years and a key strategic partnership with DSM, Project Liberty is set to go into production later this summer. Project Liberty is co-located with a first generation ethanol plant in Emmetsburg, Iowa. Once in production, co-location will be their key strategy for several reasons included excess energy, infrastructure and personnel. Learn about Poet-DSM’s take on the advanced biofuels here: Remarks by Steve Hartig, POET-DSM

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

Cold Winter Challenges Ethanol Plant Logistics

nec14-rail-bobAt the National Ethanol Conference last week, Renewable Fuels Association president and CEO Bob Dinneen had a discussion with Ed Hamberger, President and CEO, Association of American Railroads, on Regulatory Crackdown on Rail Transport. They discussed current government proposals focused on rail cars.

Hamberger kicked off the discussion by noting that ethanol has been one of the fastest growing commodity segments for the railroads growing from 40,000 rail cars of ethanol in 2000 to 330,000 in 2011- an 800 percent increase. While he said there were some challenges, new routes, new track, new employees, he said that over the years, the ethanol industry and the rail industry have become good partners for America. Rail Transportation conversation

nec14-patriot-vondraOne ethanol plant of many that is using the railroads to transport its ethanol and byproducts such as dried distillers grains (DDGs) is Patriot Renewable Fuels, located just off I-80 in Annawan, Illinois.  Using rail and trucks involves a lot of logistics and Patriot’s Rick Vondra has noted that with the cold weather over the last couple months they, along with other ethanol plants, have had challenges in moving their product, in particular rail movement.

“It’s been a tremendous challenge and we’ve had to find alternative ways to move our product,” explained Vondra. He said they are using more trucks but so are other plants and on top of the increased demand from their plant and the ethanol industry, the trucks still have other products to deliver.

So how is the weather affecting the railroad industry? Vondra said snow and ice have been a big factor because rail workers have to go and move switches that can get frozen. They have to remove ice from lines and with temperatures getting as cold as 20 below zero, workers can’t be outside long.

With the goal of increased use of E15 and other higher blends of ethanol being a recurring theme during the conference, I asked Vondra what some of his takeaways of this conversation were. He noted that Patriot is working closely with retailers, wholesalers, distributors and car dealers in their local community to educate people on the benefits of ethanol, but also to encourage more adoption and use of ethanol in the community.

Listen to my interview with Rick where he talks about cold logistic challenges as well as their work on ethanol education. Interview with Rick Vondra, Patriot Renewable Fuels

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC

Social Media War Room for Ethanol

Make no mistake about it. The ethanol industry is engaged in a war of words with anti-ethanol forces and every weapon in the arsenal needs to be deployed to fight against these well-funded opponents.

Christina MartinCommunications and Social Media War Room was the title of one of the breakout sessions at last week’s 2014 National Ethanol Conference. Renewable Fuels Association executive vice president Christina Martin moderated the discussion which included comments from Anne O’Neil, Vice President of The Glover Park Group, which is working for Fuels America, and Michael Fleischer, Senior Vice President of marketing agency Direct Impact.

Martin says the purpose of the session was to “capture the momentum” that a lot of ethanol producers built during the EPA comment period for the proposed change in the Renewable Fuel Standard (RFS). “They reached out as they never have before to their employees, to their investors and local communities and general supporters,” said Martin. Many ventured into social media for the first time and she says they want to keep that momentum going regardless of where the EPA decision on the RFS ends up.

Find out more in Chuck’s weekly podcast, the ZimmCast: Social Media with Christina Martin

Driving Through the Blend Wall

nec14-autos-panelWe’ve heard a lot about how higher ethanol blends might affect the producers of the green fuel and the impacts to consumers on the other end. But what about the viewpoint of those who have to build the vehicles on which these higher blends would run? Representatives from General Motors and Mercedes-Benz were among the experts on a panel at the National Ethanol Conference discussing “Driving Through the Blend Wall” from the automotive perspective.

Renewable Fuels Association vice president for technical services Kristy Moore moderated the panel which included Bill Woebkenberg, U.S. Fuels Technical and Regulatory Affairs, Mercedes-Benz Research & Development North America; Coleman Jones, Biofuels Manager, General Motors; and Robert McCormick, Fuels Performance Platform Leader, National Renewable Energy Laboratory.

Woebkenberg pointed out that flex fuels are already here and should be attractive to consumers, considering the high-performance, high-octane features.

“It’s not a filler fuel; it’s a race fuel,” and he believes overcoming consumers’ misperceptions of poor performance is key. But he and his colleague from GM, said carmakers are worried less about the rhetoric that might be swirling around flex fuels and more about what the final rules coming out of Washington might say.

“Automakers are a regulated industry, and we pay a lot more attention to the regulations than we pay attention to the words, because these regulations are the deeds by which we have to live with our business and have to be distinguished from the words we hear,” said Jones.

McCormick offered some insight to their review of 43 studies about ethanol, which should give the rulemakers more information by which those automakers have to live. He said overall they found no failures of E15 in performance.

“The use of E15, in our opinion, is likely to have little impact on 2001 and newer model year vehicles,” he told the audience gathered.

McCormick concluded the panel saying there are paths forward with the higher ethanol blends in the market, for carmakers and consumers alike.

Check out the entire session here: NEC Auto Perspective Panel

2014 National Ethanol Conference Photo Album

NEC Coverage sponsored by Patriot Renewable Fuels LLC