Kansas Ethanol Plant to Add Renewable Diesel Ops

EKAEA Kansas ethanol maker is going to integrate a renewable diesel operation into its facility. East Kansas Agri-Energy LLC (EKAE) says it will soon start building and hopes to complete construction within about a year of the 3 million gallon per year facility at its ethanol plant in Garnett, Kansas that will make renewable diesel from the corn distillers oil (CDO) already produced at the plant.

“This is about maximizing revenue, leveraging activities that we already do every day, and enhancing the value of products we already produce now,” said EKAE President & CEO Jeff Oestmann. “Adding renewable diesel capability aligns perfectly with our business strategy of diversifying our energy portfolio and creating additional enterprises that are sustainable on their own.”

“The main driver is to create greater value for our unit holders,” said EKAE chairman Bill Pracht. “We’ll be taking advantage of our experience and current facilities to create two biofuels out of one kernel of corn. Furthermore, we’ll be adding value to the corn oil we already produce.”

Oestmann said that EKAE already has a receptive market for this new fuel. “We have positive relationships with customers and within the biofuels industry that have come to know EKAE as a reliable and trustworthy supplier,” he said. “By using corn distillers oil we produce as the primary feedstock, we will have quality control that will underscore our reputation for quality in the marketplace.”

Company officials hope to double the 3 million gallon per year capacity sometime after starting operations.

White House Gathers Senate Dems on RFS Proposal

nbb-senatorsIn what could be seen as a sign that an unpopular decision is about to be rendered by the Obama Administration on ethanol and biodiesel, a select group of Senate Democrats have met with the White House. The Hill reports White House adviser John Podesta met with the group on Thursday to discuss the Environmental Protection Agency’s (EPA) plans regarding the Renewable Fuel Standard (RFS).

The senators said they wanted to discuss “urgent concerns” with the RFS, which requires that diesel and gasoline refiners mix a certain amount of renewable fuels such as biodiesel and ethanol into their traditional fuels each year. The Environmental Protection Agency proposed last year to keep the biodiesel volume in 2014 at least year’s level, despite an increase in biodiesel production, and reduce the ethanol volume.

The EPA has not yet finalized its 2014 volumes for renewables.

[Minnesota Senator Al] Franken and his colleagues took particular issue with the biodiesel mandate.

“Such a decision would not only harm the economic growth surrounding biodiesel production in our states, but would be a setback in our national efforts to continue boosting U.S. energy security while also reducing greenhouse gas emissions,” they wrote.

The National Biodiesel Board (NBB) seems concerned about the meeting as well and issued a statement from from Vice President of Federal Affairs Anne Steckel:

“While we are encouraged by these discussions, the biodiesel industry remains concerned that the Administration still appears to be considering a proposal that would backtrack from last year’s proven production and that threatens biodiesel plants around the country. The fact is that biodiesel is the most successful Advanced Biofuel under the RFS, yet it could see its production cut significantly. This meeting, which was originally requested by a diverse group of 14 Democratic senators from across the country, makes clear that there are serious concerns about the impact that the proposal would have on jobs and economic growth nationwide, in states from Rhode Island to Minnesota to Washington state. This is a critical decision, not just for the biodiesel industry but for the future development of clean, American-made renewable fuels that will help us reduce our dangerous dependence on petroleum.”

Many of those senators participating in this week’s meeting were also critical back in May on the Obama Administration’s proposal to cut the amount of biodiesel and ethanol to be mixed into the nation’s fuel supply, with some of the President’s staunchest backers calling it “disastrous” and a miserable failure of policy.

Grains Council Working on Ethanol Exports

usgrainscouncil1The U.S. Grains Council (USGC) is working on promoting exports of U.S. ethanol through a partnership between USDA’s Foreign Agriculture Service, Growth Energy and the Renewable Fuels Association (RFA).

“We’ve been working since late March, early April to determine which markets we’re going to do market assessments in and then next year we’ll shift into market development activities,” said Ashley Kongs, USGC manager of ethanol export program. The Grains Council is planning three regional market assessment programs this year, going to Japan and Korea in September, Latin America in November, and southeast Asia in early December.

Earlier this year, USGC participated in a trade mission to China with USDA Undersecretary Michael Scuse where they were able to discuss the possibility of ethanol exports to that country. “They visited with a Chinese ethanol plant and they had meetings with the National Energy Administration in China,” said Kongs. “Currently ethanol can only be sold in six designated markets in China for blending with fuel, but the group had discussions about the possibility of expanding ethanol use nationwide.” Kongs says while there are challenges in the Chinese market, the Grains Council sees great potential for the future to open the door for U.S. ethanol exports.

USGC continues to build on its success in promoting exports of the ethanol co-product distillers grains and will be again this year joining RFA in hosting the Export Exchange, an international trade conference focused on the export of U.S. coarse grains and ethanol co-products held every two years. Early registration for the event is open until July 31 and USGC and RFA members are eligible for discounted pricing.

EPA Hears Corn Grower Concerns About RFS

Members of the National Corn Growers Association (NCGA) meeting in Washington DC were able to share their concerns about the delayed rule on 2014 volume obligations under the Renewable Fuel Standard with EPA Deputy Administrator Bob Perciasepe.

epa-ncga“The number needs to be out, it’s really ridiculous,” said NCGA president Martin Barbre, pictured here on the right with Perciasepe. “He said ‘we’re behind time frame’ and we had some delegates stand up and say ‘you’re not behind time frame, you’re way late.'” The final rule was expected by the end of June but EPA officials say it is being delayed because of the massive volume of comments that need to be studied in order to make a decision.

Barbre says while they appreciate the fact that EPA is taking the time to make sure they make the right decision, delaying it until almost the end of the year causes problems in the market. “Sort of what has created this issue with RINS and that run up in the RINS price is the lateness of the oil companies getting the numbers,” said Barbre. “They’re supposed to have these number in the spring, they get them in the fall, and by the end of the year they have got to have met their obligations. So it puts them in somewhat of a bind.”

“We’re not usually on the side of defending the oil companies, but in this case they just need to get the numbers faster so they can get themselves where they need to be,” Barbre added.

Listen to Barbre’s comments here: Interview with NCGA president Martin Barbre

“Climate of Opportunity” Theme for Biofuels Conference

Screen Shot 2014-07-18 at 12.23.20 PMSome biofuels producers have had some profitable times in the last couple of years, and an upcoming conference will give attendees information on how to take advantage of the opportunities put before them. Nationally known accounting and consulting firm Christianson & Associates will host its 10th annual Biofuels Financial Conference with the theme “Climate of Opportunity,” Aug. 27-28, 2014 in Minneapolis, Minn. at the Bloomington Embassy Suites.

This year’s Biofuels Financial Conference is focused on the best ways to take advantage of the many opportunities to optimize financial health and stability in today’s changing biofuels industry. By understanding current policy and knowing all available options for improving and diversifying production, attendees will learn how to capitalize on current strengths, identify and shore up any potential weaknesses, and create a strategic plan for growth creates an ongoing climate of opportunity.

“It’s important for board members and financial decision-makers to understand the opportunities in the current liquid fuels marketplace,” said [John Christianson, CPA and Partner at Christianson & Associates]. “What is the impact of the latest legislation changes, what are the marketplace opportunities, what are the technology investments that will bring a plant successfully into the next generation?”

Those attending the conference will be able to network with and learn from biofuels professionals from across the industry. More information is available here.

Ethanol Report on Cost Analysis

ethanol-report-adA new analysis by the Renewable Fuels Association (RFA) shows that over the past four years, ethanol has been the most economically competitive motor fuel and octane source in the world.

rfa-cooper-headIn this Ethanol Report, RFA Senior Vice President Geoff Cooper gives some of the major findings of the report, talks about why it has particular relevance in the California market, and how the study suggests that the cost of producing ethanol in the US will continue to fall.

Ethanol Report on Cost Analysis

Subscribe to “The Ethanol Report” with this link.

What is the Difference Between Crude Oil & Ethanol?

RFANewlogoThe U.S. Department of Transportation (DOT) has released a new tank car proposal that is designed to enhance the safe transportation of hazardous materials, including ethanol and crude oil. Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA) expressed concern over the rule’s same treatment of crude oil and ethanol when ethanol has a strong safety record while the high volatility of crude oil from the Bakken is not adequately addressed.

However, Dinneen did applaud the Administration for adopting a comprehensive approach to increasing concerns about rising shipments of highly volatile crude oil on the nation’s railways. He noted that the approach outlined today appears to address prevention, mitigation and response related to crude oil derailments.

“Ethanol is a low volatility, consistent commercial product with a 99.997 percent rail safety record,” said Dinneen. “Unlike oil from fracking, ethanol is not a highly volatile feedstock of unknown and differing quality and characteristics being shipped to a refinery for commercial use. Before this proposed rule is finalized, the RFA looks forward to engaging the Department of Transportation in a constructive dialogue about these differences, and the need to have a practical and effective phase-in of these new standards,” added Dinneen. “In the meanwhile, the U.S. ethanol industry will continue to work with all parties to assure the safe and effective transport of this low-cost, domestic renewable fuel to markets all across the country.”

Ethanol Revving up for Sturgis Rally

sturgis-rfaFor the sixth year in a row, motorcycle enthusiasts from around the world will be able to learn more about ethanol, courtesy of the Renewable Fuels Association, at the famous Sturgis Motorcycle Rally.

About a half million motorcyclists will be converging on Sturgis, S.D., August 4-7 for the 74th annual Sturgis Motorcycle Rally, presenting an ideal opportunity for RFA to dispel misinformation concerning ethanol use in motorcycles. Among the ways RFA does that is “Free Fuel Happy Hours,” offering a free tank of E10 93-octane fuel to riders at the Sturgis Buffalo Chip campground. RFA is a major sponsor at the popular campground where the message “Ride Safe, Fuel Right” will be seen everywhere, including the main stage where this year’s concert line up includes Lynyrd Skynyrd, Collective Soul, Zac Brown Band, John Mayall, Alice Cooper, ZZ Top and Cheap Trick.

RFA also proudly sponsors the annual “Legends Ride” where proceeds are donated to local charities, including the Black Hills Special Olympics. All “Legends Ride” participants receive free “Fueled with Pride” giveaways and informational materials on ethanol before they embark on the ride that originates in Deadwood, S.D.

DomesticFuel will once again be there to bring all the sights and sounds to you. Check out last year’s photo album here.

Analysis: Ethanol Most Competitive Motor Fuel

According to a new analysis released today, “The Economic Competitiveness of U.S. Ethanol,” U.S. produced ethanol has been the most economically competitive motor fuel in the world over the past four years. In addition, ethanol has played an important role in E-85 fill-up photo Joanna Schroederreducing consumer fuel costs. The analysis was conducted by ABF Economics and released by the Renewable Fuels Association (RFA).

The analysis reviewed actual wholesale prices paid for ethanol, gasoline and alternative octane source in several U.S. and world markets between 2010-2013. Based on the data, the report concluded, “…U.S.-produced ethanol is an exceptionally competitive additive and fuel source…” and that “…U.S. ethanol has emerged as the lowest cost transportation fuel and octane source in the world over the past several years.”

Commenting on the analysis, RFA President and CEO Bob Dinneen said, “As proven by the recent boom in exports, American-made ethanol has evolved into the most cost competitive transportation fuel and octane source in the world. Through rapid technology adoption and innovation, U.S. producers have proudly earned the distinction of being the global leader and low-cost producer of clean-burning, renewable ethanol.”

Dinneen continued, “Despite the fact that ethanol offers greater consumer choice at a lower cost, entrenched petroleum companies continue to erect barriers that deny access to larger volumes of renewable fuels,” Dinneen continued. “In a truly free market, consumers would always choose a fuel that is produced domestically, is better for the environment and climate, and costs much less than gasoline. Unfortunately, free markets only exist in text books, underscoring the need for monopoly-breaking policies like the Renewable Fuel Standard.”

The ABF Economics study found that even after accounting for transportation costs to the reference markets of Los Angeles, Chicago, and New York, “The ‘spread’ between ethanol and RBOB [gasoline] has averaged 30 to 40 cents per gallon over the past four years in these three key markets and the difference averaged more than 60 cents per gallon in 2012.

As a result of this cost differential, the analysis found “…ethanol blended with RBOB to produce reformulated gasoline at a 10 percent (E10) blend has reduced the cost of motor fuel to consumers.” The analysis found that ethanol’s impact on gas prices goes far beyond the wholesale price spread: “This does not include the additional downward impact ethanol has on gasoline prices as a result of extending supplies and reducing demand for crude oil.”

Economic Competitiveness of Ethanol reportAccording to the report, “…even with depreciation of the real, U.S. ethanol has been more cost competitive than Brazilian ethanol in key U.S. and world markets over the past several years.” This has particular relevance in the California market, according to the study, because that state’s fuel policies strongly compel fuel suppliers to import Brazilian ethanol in lieu of U.S. ethanol. “Use of Brazilian ethanol in place of U.S. ethanol theoretically raised the price of E10 for California consumers by 8 cents per gallon over the past four years,” the study found.

In closing, the study indicates that the competitiveness of U.S. ethanol will only improve in the future: “This competitive advantage is expected to increase further, as U.S. ethanol and feedstock producers adopt new technologies and crude oil prices continue to trend higher.”

EPA Issues New Rule for RINs Quality Assurance Program

epa-logoIn an effort to assure all parties of better control over possible fraud, the U.S. Environmental Protection Agency (EPA) has formally issued its new rule on a voluntary quality assurance program on Renewable Identification Numbers (RINs) used to track compliance with their renewable fuel volume obligations. The EPA proposed the rule earlier this month and issued it late last week that will elements designed to make it possible to verify the validity of RINs from the beginning of 2013 and going forward.

Today’s final action includes a voluntary third-party quality assurance program option for RINs that regulated parties may exercise as a supplement to the “buyer beware” liability as prescribed under existing regulations. The program provides a means for ensuring that RINs are properly generated through audits of renewable fuel production conducted by independent third-parties using quality assurance plans (QAPs), provides an affirmative defense for the transfer or use of invalid RINs that had been verified under an approved QAP, defines the conditions when RINs must be replaced, and a process for determining who will replace the RINs…

– Minimum requirements for a QAP, including such things as verification of feedstocks, verification that volumes produced are consistent with amount of feedstocks processed, and verification that RINs generated are appropriately categorized and match the volumes produced
– Qualifications for independent third-party auditors
– Requirements for audits of renewable fuel production facilities, including minimum frequency, site visits, review of records, and reporting
– Conditions under which a regulated party could assert an affirmative defense to civil liability for transferring or using an invalid RIN
– Identification of the party or parties who are responsible for replacing invalid RINs with valid RINs and the timing of such replacement
– A two percent limited exemption for calendar years 2014, 2015, and 2016 that exempts a small fraction of a party’s Renewable Volume Obligation (RVO) from the requirement of replacement of invalid RINs used for compliance if they were RINs verified through a QAP
– Changes to the EPA Moderated Transaction System (EMTS) that would accommodate the quality assurance program

There’s an interim period that covers back to February 21, 2013 through the end of this year which will finalize two proposed QAP programs, QAP A and QAP B.

Beginning January 1, 2015, there will be a single QAP, and the associated verified RINs will be referred to as Q-RINs.

Corn Growers Keep Ethanol in Focus

Ethanol and the Renewable Fuel Standard (RFS) were big topics this week as members of the National Corn Growers Association met in Washington DC.

ncga-ethanolMichigan farmer Jeff Sandborn, chair of the Ethanol Committee, said they spent the week talking with administration officials and members of Congress after being updated on the issues. “Right now, Congress faces rapidly evolving issues crucial to our members. The information and understanding coming out of these meetings will help each of our delegations make the strongest case possible for farmers.”

During the Ethanol Committee meeting, staff from the U.S. Environmental Protection Agency’s Office of Transportation and Air Quality provided an update on the regulatory issues facing the ethanol industry. On Thursday, the entire NCGA delegation heard from EPA Deputy Administrator Bob Perciasepe about the status of the pending 2014 volume obligation rule under the RFS.

“We greatly appreciate the deputy administrator’s willingness to participate in an open, well-considered conversation,” said NCGA President Martin Barbre of Illinois. While Perciasepe mainly dealt with the proposed Waters of the United States rule, he also fielded questions from growers pertaining to both the reduction in volume, and the continued delays of final RFS rule.

Cellulosic Ethanol Poll

New Holland ZimmPollOur latest ZimmPoll asked the question, “How would the EPA water rule impact you?”

This is one of the hottest topics in the ag sector these days with a lot of uncertainty about what the future holds, especially when you see states starting to fine people for “wasteful use of water.” On the federal level the EPA says that under the proposed rules defining Waters of the United States (WOTUS) under the Clean Water Act (CWA) “all normal farming practices are exempt – period” but those in the agriculture community are questioning if that will hold true. Hopefully you’ve looked at how this will impact your farm or customers?

here are the poll results:

  • Just more govt. regulation – 38.9%
  • Permits for routine activities – 16.67%
  • Will regulate more of my property – 18.67%
  • Not sure but worried about it – 11.1%
  • Not worried about it – 11.1%
  • Don’t know or don’t care – 5.56%

Our new ZimmPoll is now live and asks the question, What are your thoughts on cellulosic ethanol? We just saw the first commercial production of cellulosic ethanol in Iowa from team work between Syngenta’s Enogen and the Quad County Corn Processors. Let us know what you think.

Congressman Seeks Country Labeling for Fuel

braley-headshotCongressman Bruce Braley (D-IA) has introduced a bill that would give consumers the ability to know where their fuel is produced.

“America has a decision to make about its energy future. We can gut the RFS and move toward further reliance on Saudi Arabia, Venezula, and Nigeria for our energy needs—or we can continue our path toward energy independence by making investments in ethanol and other domestic energy sources,” Braley said.

Braley’s Country of Origin Labeling for Fuels Act would require gas stations to post the country of origin of the fuel right on the pump, letting consumers “know whether their fuel is coming from Saudi Arabia or from ethanol produced right down the road.”

The U.S. consumes more than 15 million barrels of oil each day, with nearly half of that total coming from other countries, including Canada, Saudi Arabia, Iraq, Kuwait, Venezuela, Mexico, and Nigeria. Since the creation of the RFS in 2005, nearly 10 billion gallons of foreign oil per year have been replaced by renewable ethanol.

Ethanol Safety Seminars Head to Oklahoma & Missouri

The Ethanol Safety seminars are heading to Oklahoma and Missouri this month with all seminars hosted by the Renewable Fuels Association (RFA). The first seminar will be held on July 21, 2014 at the Western Technology Center in Weatherford and is co-hosted by Oklahoma Emergency Management/LEPC. The second seminar will be held on July 22, 2014 at the Oklahoma City Fire Training Academy and is co-hosted by Stillwater Central Railroad. The third seminar will be held on July 24, 2014 at the Case Community Center in Tulsa and is Ethanol Safety Seminarco-hosted by South Kansas & Ohio Railroad. The final seminar will be held on July 25, 2014 at the Mid America Industrial Park Expo Center in Port of Catoosa and is also co-hosted by Oklahoma Emergency Management/LEPC. The seminars in Weatherford and Port of Catoosa are funded by an Oklahoma Hazardous Materials Emergency Preparedness grant while the Oklahoma City and Tulsa seminars are funded by a Federal Railroad Administration grant through TRANSCAER.

The other two seminars will occur in Missouri, with the first to be held on July 22, 2014 at the Public Safety Training Center in Joplin and is co-hosted by Missouri & Northern Arkansas Railroad. The second will take place on July 24, 2014 at the St. Louis Fire Academy and is co-hosted by Alton Southern Railroad. Both seminars are funded by a Federal Railroad Administration grant through TRANSCAER.

All seminars will have morning sessions from 9 a.m. to 2 p.m. and evening sessions from 5:30 to 10 p.m. While registration is free it is limited. Lunch and dinner will be provided. 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, it is also open to the general public.

“With the heightened awareness of hazmat traveling throughout the United States on our railway systems, these types of training seminars are a very useful tool,” said Pat Foster, general manager at Stillwater Central Railroad. “This gives the railroads the opportunity to work with first responders in a positive atmosphere and to open a line of communication that sometimes may not have been there in the event of an incident.”

The goal of these seminars is for attendees to gain full ethanol emergency response training experience that they can put to use immediately in the field and pass along to other first response teams. A majority of this training is based on the “Training Guide to Ethanol Emergency Response,” a training package created by the Ethanol Emergency Response Coalition (EERC) that has been distributed throughout the United States and to several countries worldwide.

“The use of ethanol and ethanol-blended products continues to increase each year. With this growth comes the heightened risk of encountering ethanol emergencies on the highways, rail systems, and at transfer and storage facilities,” said Jon Hall, member of the Oklahoma County Local Emergency Planning Committee. “Our first responders must be aware of the unique challenges inherent in such emergencies. The Ethanol Safety Seminar is designed to provide an avenue for educating our responder community on the most current and effective tactics and techniques to safely react to ethanol emergencies and mitigate the hazards associated with such events.”

Click here to register.

Lincolnland Agri-Energy Celebrates 10 Years

Lincolnland Agri-Energy is celebrating its 10th anniversary this year. The Palestine, Illinois-based ethanol plant is now producing 57 million gallons of ethanol per year and employs 41 local residents. In 10 years, the ethanol plant has produced 470 million gallons of ethanol. Over the weekend, Lincolnland Agri-Energy hosted an open house for the community to celebrate its milestone.

Since they began operating in 2004, Lincolnland has actively taken steps to develop and expand their facilities. They broadened into corn oil extraction, added a fermenter, and implemented selective milling technology.

Lincolnland Agri-Energy“We are proud to produce cost-saving, renewable ethanol that furthers America’s energy independence. Lincolnland’s ethanol production facility has helped revitalize the community, create demand for our local farmers, and save Illinois drivers money at the pump,” said Eric Mosbey, general manager of Lincolnland Agri-Energy. “This is an exciting day for everyone involved in making Lincolnland a success. The past 10 years of production would not have been possible without the support of our stakeholders, the dedication of our employees, and the cooperation of the local community. We look forward to another 10 years.”

The ethanol plant has fostered an active presence in the local community by hosting elected officials including then-Senator Barack Obama (D-Ill.) and Congressman John Shimkus (R-Ill.). Both elected officials were given a warm welcome as they learned more about ethanol production and the impact it has on the local community. The company also partners with the local junior college to offer internships and donate equipment so students can learn more about the ethanol production process. Lincolnland supports many local programs and is a long-time sponsor of the annual Labor Day rodeo in Palestine, Ill.

“What started as an idea by a group of local farmers has turned into a successful ethanol plant that is run with integrity and gives back to the local community. The hours, days, and years of dedication can be seen in every aspect of this business today,” said Bob Dinneen, president and CEO of the Renewable Fuels Association. “This truly is a day to celebrate and honor the 10 years of hard work that has gone into making this business a success.”