Small Biodiesel Maker Closing Indicative of RFS Problem

yokayo1While the closing of one small biodiesel maker in California might not seem like big news, it’s certainly indicative of the problems facing the industry, big and small producers alike. This story from the Ukiah (CA) Daily Journal says that Yokayo Biofuels, which turned waste cooking oil into biodiesel, has closed.

[Kumar Plocher, Yokayo Biofuels’ CEO] says the biggest reason for their closure was due to a lack of government support both at the state and federal levels. He explains that the carbon credit programs, those where petroleum companies are required to buy a certain amount of renewable fuels, allowed his company to bank carbon credits, normally valued high based on demand. This year state and federal value levels were very low: the state’s due to tampering by global companies that flooded the market and at the federal’s due to the Obama administration and the EPA. “Every year the federal government is supposed to raise the requirement of renewable fuel that should be purchased. At the beginning of 2014, they did not do that; they kept it static. They waited until September to announce a tiny increase, and by that time the damage was done and carbon credits were worthless all year. Every mid-term election year, the dollar per gallon subsidy that goes to biofuels has been absent; they wait until after the election.”

Plocher’s complaint is a common one among advanced biofuel makers and their advocates this year. In fact, at the recent National Advanced Biofuels Conference & Expo, Michael McAdams, founder and president of the Advanced Biofuels Association, said the partnership between the federal government and industry has to have clarity and certainty, but that’s not been the case lately.

“What we haven’t had in the last two years is certainty for the people I represent in the advanced and cellulosic sector,” McAdams said.

Similarly, Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA), pointed to the U.S. Department of Agriculture’s estimates that corn prices will hit an eight-year low because of the government’s failure to follow through on the promises made in the Renewable Fuel Standard (RFS).

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments.”

There is a little good news in all of this. Plocher was able to sell Yokayo Biofuels’ biodiesel assets to like-minded Simple Fuels.

East Kansas’ Jeff Oestmann Featured on Car Clinic

Bobby Likis Car ClinicThe ethanol industry was well represented on the nationally syndicated car-talk program “Bobby Likis Car Clinic” when Bobby Likis spoke with East Kansas Agri-Energy’s President and CEO Jeff Oestmann. The show aired Saturday, October 11, 2014 and the two ethanol advocates chatted about local, regional and national issues surrounding ethanol production.

Oestmann, whose career spans 20 years in the bioenergy and grain processing industries, currently serves on the Board of Directors of both the Renewable Fuels Association (RFA) & Kansas Association of Ethanol Producers. During the program, Oestmann discussed the consumer benefits of ethanol production and its impact on local communities and the U.S. economy. Oestmann is a non-commissioned officer who served in the U.S. Marine Corps for 11 years, including service in the USMC’s elite Embassy Guard.

Jeff Oestmann East Kansas Agri-Energy“I have a question slate lined up for Jeff that addresses ethanol and the Renewable Fuel Standard (RFS), the U.S economy, engine performance and national security. Consumers – and American citizens – need to hear the message,” said Likis.

Oestmann shared many facts during the program. “We use cutting edge technology at East Kansas Agri-Energy to produce high-quality ethanol that helps consumers save an average of $1.00 per gallon at the gas station and also benefits our environment by reducing greenhouse gas emissions. We put a high priority on innovation, and the biofuels we produce – including next generation renewable diesel – help reduce America’s dependence on foreign oil, which in turn bolsters America’s national security.”

Click here to listen to Oestmann’s interview.

RFA Brings Ethanol Safety Program to Canada

Ethanol safety has been shared with the Canadians. The Renewable Fuels Association (RFA) met with Transport Canada’s Emergency Response Action Plan (ERAP) Task Force to educated them on emergency preparedness.

Ethanol Safety SeminarRFA’s Vice President of Technical Services, Kristy Moore, spoke remotely to Transport Canada’s ERAP Task Force and detailed current RFA safety initiatives, outlined transportation methods available for ethanol distribution specifically focusing on rail, and delivered an overview of the U.S. ethanol industry.

“A solid emergency response program is vital to everyone — no matter the country — and I applaud Transport Canada for having the foresight to get ahead of the game and formulate a national emergency response program,” said Moore. “We are excited to begin working with them to translate RFA safety materials into French and help them develop an ethanol safety seminar program similar to the very successful RFA program here in the States.”

RFA has been involved in ethanol education around transportation safety and emergency response for many years. The Association is a founding member of the Ethanol Emergency Response Coalition (EERC) and joined TRANSCAER — a transportation safety initiative that focuses on community emergency response — in 2007. RFA worked with the EERC to establish an ethanol safety seminar program that goes around the country educating local firefighters and first responders on the best way to respond to a potential emergency situation. The seminars utilize the RFA’s “Training Guide to Ethanol Emergency Response”. Nearly 150 safety seminars have been held in 27 states.

USDA Increases Crop Forecast Again

il-harvest-14The harvest may be running a little slow right now, but the latest report from USDA’s National Agricultural Statistics Service is calling for a bit more corn than expected a month ago, adding to the already record forecasts.

Corn production is now forecast at 14.5 billion bushels, up almost one percent from the previous forecast and four percent more than last year. Corn yields are expected to average 174.2 bushels per acre, up 2.5 bushels from the September forecast and 15.4 bushels above the 2013 average.

The bigger crop mean lower prices and USDA’s latest World Agricultural Supply Demand Estimate also released today. Corn supplies for 2014/15 are now projected at 15,736 million bushels, up 129 million from last month, while season average prices were lowered 10 cents to $3.10 to $3.70 per bushel. Corn used to produce ethanol, distiller’s grains and other co-products is projected at 5.125 billion bushels, while corn consumption for feed is estimated at 5.375 billion bushels.

“PUMP” Movie Getting Good Reviews

pump-movieA new documentary film that explores the history of the American fueling infrastructure and how it has led to today’s oil-dominated market, which features some ethanol industry figures, is being well received by critics and viewers alike.

“PUMP” the movie, opened last month and has a rating of 71% fresh on Rotten Tomatoes, with an 82% audience approval rating. Big name reviewers like the New York Times and Variety have had very good things to says about the movie.

The film is the latest from Josh and Rebecca Tickell, who have done other documentaries on alternative fuels beginning with FUEL, released in 2009, that focused on biodiesel.

PUMP features several familiar faces of folks known in the renewable fuels industry, including “Energy Victory” author Dr. Robert Zubrin, Biofuels Digest Editor Jim Lane, and Renewable Fuels Association Vice President for Industry Relations Robert White.

“Not often do small town farm kids from Kansas make it to Hollywood’s big screen, but I am fortunate enough to be one of those, if even for just a few seconds,” writes White in a column today for the E-xchange Blog. “The opportunity to be a part of an educational effort of this scale is not only rewarding, it is exciting.”

To find out more about the movie and when it might be playing in your area – check out PumpTheMovie.com and like it on Facebook.

RFA Case Study: Evidence of E85 Price Gouging?

According to a new case study from the Renewable Fuels Association (RFA), E85 retailers in the St. Louis area may be intentionally price gouging consumers. According to the report, during the 2014 summer driver season, the average E85 price was 12 percent Evidence of Price Gouging RFA Case Studybelow gasoline prices at the wholesale level but one percent higher than gas prices at the retail level. The wholesale-to-retail markup on E85 was nearly twice the markup on gas. In addition, the study concluded that E85 retail prices were around $1 per gallon higher than was justified by wholesale prices for the locally available ethanol blendstock.

The study’s results offer “… clear support for the notion that some gasoline producers/suppliers and their franchised retailers purposely employ E85 pricing strategies meant to discourage E85 consumption and negatively influence consumer perceptions about the fuel.”

Bob Dinneen, president and CEO of the RFA, said of the case study, “It’s fairly obvious that the retailers examined in this study—all of whom are branded by one of the Big Five oil companies—don’t really want to sell E85. In many cases it appears they were pricing E85 above their branded gasoline for the sole purpose of making their gasoline prices look more attractive to the consumer. Sneaky E85 pricing strategies ultimately give oil refiners the opportunity to wrongly claim that consumers are ‘rejecting’ E85; and it gives them an opportunity to claim they can’t comply with Renewable Fuel Standard (RFS) requirements above the so-called ‘blend wall.’ This study exposes the utter hypocrisy of that argument.”

RFA tracked E85 and gasoline (E10) prices at all nine retail stations selling E85 in the St. Louis metro area. All nine stations carry the brand of one of the five largest integrated oil production and refining companies. This makes the St. Louis E85 market highly unusual because nationwide “…retail stations affiliated with a ‘Big Five’ oil company brand are four to six times less likely to offer E85 than independent or unbranded stations.”

Across more than 250 observations during the summer, the average E10 retail price was $3.45 per gallon and the average E85 retail price was $3.476 per gallon. Meanwhile, E85 was available at a local wholesale terminal for an average of $2.58 per gallon, while E10 averaged $2.93 per gallon at the wholesale level. Based on prices for locally available ethanol, hydrocarbon blendstock, RFS RIN (Renewable Identification Number) credits, and a typical markup, E85 could have been offered at retail for $2.44–2.55 per gallon. Continue reading

Ethanol Report with New RFA Chairman

ethanol-report-adRandall Doyal, General Manager and CEO of Minnesota-based Al-Corn Clean Fuel, is the new Chairman of the Board of Directors for the Renewable Fuels Association (RFA).

rfa-doyal-1Doyal’s plant located in Claremont, Minnesota opened in 1996 and now produces 50 million gallons annually. In this interview, he talks about some of the challenges and opportunities facing the ethanol industry in the immediate future. Challenges include the lack of certainty surrounding the Renewable Fuel Standard (RFS) and railway transportation problems, while the importance of ethanol as a higher octane fuel and increasing exports are rising opportunities.

Ethanol Report with New RFA Chairman

Registration Open for 20th NEC

rfa-nec-15“Going Global” is the theme for the 20th annual National Ethanol Conference (NEC) from the Renewable Fuels Association (RFA).

The event is being held February 18-20, 2015 at the Gaylord Texan Resort and Convention Center in Grapevine, Texas. With the U.S. leading the world in the production and exports of ethanol fuel and co-products, export markets are critical to the future of the industry. That will be explored in depth at the conference.

To find out more and get registered, go to NationalEthanolConference.com.

Tide Detergent Cleaning up with Cellulosic Ethanol

A new use for cellulosic ethanol has been announced by DuPont and Procter & Gamble.

tideThe two global leaders in science and consumer products are planning to a first-of-its-kind use of cellulosic ethanol in North American Tide® laundry detergent.

Tide Cold Water will be the first brand in the world to blend cellulosic ethanol in a scalable and commercial way. Ethanol has long been a key ingredient in the Tide® formulation, allowing for stability of the detergent formula and better washing performance. The substitution of the current corn based ethanol with cellulosic is the latest innovation in the companies’ 30-year partnership, making it easier for consumers to make sustainable choices in their everyday lives.

DuPont will produce this renewable, cellulosic ethanol at the company’s new biorefinery, currently under construction in Nevada, Iowa. Once completed, the plant will be the world’s largest bioethanol refinery, producing 30 million gallons of cellulosic ethanol per year – a process with zero net carbon emissions.

According to the companies,Tide® Cold Water “powered by nature” will re-purpose over 7000 tons of agricultural waste a year. “As one of the world’s largest laundry manufacturers, we have a responsibility to lead renewable sourcing in products,” said Gianni Ciserani, Procter & Gamble Group President of Global Fabric and Home Care. “We do this by ensuring consumers still get the great Tide® laundry performance they want, while further reducing the impact on the environment. In January, we committed to removing phosphates in our laundry products. This partnership on renewables is one more step in our journey.”

“With this collaboration, DuPont is also taking the first step to diversify its markets for cellulosic ethanol beyond fuels. As we build on our integrated science capabilities, we will continue to seek out new opportunities and new collaborations to transform value chains with more sustainable solutions,” said James Collins, Senior Vice President, DuPont.

Both Collins and Ciserani will be speaking at the World Conference on Fabric and Home Care in Montreux, Switzerland this week.

Randall Doyal Elected as Board Chairman of RFA

RFANewlogoThe new leadership of the Renewable Fuels Association has been elected. The Board selected Randall Doyal, General Manager and CEO of Al-Corn Clean Fuel, as the next Chairman of the Board of Directors. Doyal heads an ethanol facility in Claremont, Minnesota that produces 50 million gallons annually.

Doyal’s career in the ethanol industry began in 1982 at Mountain Development Corporation. In addition to Al-Corn Clean Fuel, he serves as Chairman of the Board of Guardian Energy, LLC and Renewable Products Marketing Group. Doyal previously served as Vice-Chairman and Treasurer of the RFA.

“It is truly an honor to be selected by my peers to head the Renewable Fuels Association. The RFA has the technical knowledge, political influence, and market acumen to positively impact today’s ethanol industry, which will in turn help bolster biofuels production and consumption across the nation,” said Doyal. “I am proud to take the helm and lead this great organization as ethanol is establishing itself as an indispensable part of this country’s motor fuel supply. We will work to protect the Renewable Fuel Standard and expand markets abroad. The future is bright and I look forward to this new challenge.”

Additionally, RFA elected:

  • Vice-Chairman Mick Henderson, General Manager of Commonwealth Agri-Energy in Hopkinsville, Ky.
  • Treasurer Walter Wendland of Golden Grain Energy, LLC in Mason City, Iowa.
  • President Bob Dinneen, CEO of the Renewable Fuels Association in Washington, D.C.

Ethanol Report on 2014 Export Exchange

ethanol-report-adComing up October 20-22 is the 2014 Export Exchange sponsored by the Renewable Fuels Association (RFA) and the U.S. Grains Council (USGC) to bring international coarse grain buyers and U.S. suppliers together, with a particular focus on the ethanol co-product distillers dried grains with solubles – better known as DDGS or distillers feed.

2014-export-exchangeThis edition of the Ethanol Report features comments from RFA president and CEO Bob Dinneen, USGC president and CEO Tom Sleight, and industry relations director Lyndsey Erb-Sharkey.

Ethanol Report on 2014 Export Exchange

Badger State Ethanol Hosts Foreign Ag Guests

wisconsin-tourBadger State Ethanol in Monroe, Wisconsin had the honor of hosting the 2014 Foreign Agricultural Attaché Tour this week.

The group is part of the USDA’s Foreign Agriculture Service and is made up of 26 representatives from more than a dozen countries including Japan, Korea, Malaysia, Spain, Switzerland, Finland, France, Angola, Canada, Germany, Mexico, Philippines, New Zealand, Nigeria, Ghana, United Kingdom of Great Britain and Northern Ireland.

The Wisconsin Department of Agriculture, Trade and Consumer Protection are playing host to the group for the week to educate them about the quality and diversity of Wisconsin agriculture. The group visited Badger State Ethanol on Monday to take a tour of the facility and learn about the importance of biofuels to the world economy.

Impact of Ethanol Mandates on Fuel Prices Nill

Professors Sebastien Pouliot and Bruce A. Babcock with Iowa State University’s Center for Agricultural and Rural Development (CARD) have released a new paper, “Impact of Ethanol Mandates on Fuel Prices When Ethanol and Gasoline are Imperfect Substitutes“. The authors note papers that consider the two transportation fuels “equal” have been of limited use in informing current policy debates because the short-to-medium-run reality is one of sets restrictions on how ethanol can be consumed in the U.S.

Mandate Impacts on GasThe authors’ objective of the paper was to improve understanding of how these restrictions change the findings of existing studies. The paper estimated the impacts of higher ethanol mandates using a open-economy, partial equilibrium model of gasoline, ethanol and blending whereby motorists buy one of two fuels: E10, which is a blend of 10 percent ethanol and 90 percent gasoline, or E85 which is a high ethanol blend. The model is calibrated to recent data to provide current estimates.

Mandate Impacts on EthanolThe authors find that the effects of increasing ethanol mandates that are physically feasible to meet on the price of E10 are close to zero. In other words, White House fears of higher RIN prices due to higher gas prices are unfounded. The report also shows the impact of the size of the corn harvest on E10 prices is much larger than the effects of mandates. However, increased mandates can have a large effect on the price of E85 if the mandates are increased to levels that approach consumption capacity. These findings show that concerns about the consumer price of fuel do not justify a reduction ethanol mandates under the Renewable Fuel Standard (RFS).

The 2014 RFS rule is currently under review with the Office of Management and Budget (OMB).

Cellulosic Making Progress Despite Uncertainty

Advanced and cellulosic biofuels producers continue to press the administration for certainty in the Renewable Fuel Standard (RFS) to continue making investments for future expansion.

“Today we’re at the start, like oil was 160 years ago, or corn ethanol was four years ago, said Steve Hartig with POET-DSM Advanced Biofuels during a teleconference organized by the Biotechnology Industry Organization (BIO) highlighting progress in the industry. His company just celebrated the grand opening of a cellulosic ethanol plant in Iowa. “We have invested hundreds of millions of dollars in this and are convinced cellulosic ethanol will be a key part of our future energy mix.”

Abengoa Bioenergy plant in Hugoton, KS

Abengoa Bioenergy plant in Hugoton, KS

Chris Standlee with Abengoa Bioenergy said his company is also invested substantially in commercializing cellulosic ethanol technology. “Abengoa’s been working on perfecting this technology for over 10 years,” said Standlee, adding that their plant will be holding a grand opening in Hugoton, Kansas next month.

Also participating in the teleconference was Vonnie Estes with GranBio, a plant being built in Brazil using sugarcane straw and bagasse as feedstocks. She noted that the uncertainty of the RFS is impacting their plans because they intend to export at least half of their plant’s production to the U.S. “The company has spent over $200 million in capital on this plant,” she said. “The plant (will be) really good for the U.S. in that it’s a source of low carbon fuels into the market.”

All three company representatives noted that they are postponing decisions to increase production of cellulosic biofuels due to the uncertainty created by EPA.

BIO teleconference on cellulosic ethanol advancements

Bobby Likis Car Clinic Globalcast Features Ethanol

likis-logoBobby Likis Car Clinic recent globalcast featured topic was ethanol with guest Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA). More specifically the two discussed issues around the Renewable Fuel Standard (RFS).

During the program, Dinneen explained that the RFS and ethanol production saves consumers money at the pump, decreases America’s foreign oil dependence, and helps rural America. He discussed the Environmental Protection Agency’s (EPA) proposed cuts to the RFS and the negative impact those cuts would have on consumers and investment in next-generation ethanol.

Dinneen said, “In today’s environment of misinformation and spin, it is absolutely vital that consumers know the truth about ethanol and understand the role the Renewable Fuel Standard plays in furthering America’s energy independence, reducing greenhouse gas emissions, and lowering the price of gasoline for drivers.” He adds, “I was proud to join Car Clinic’s Bobby Likis to give an overview of the political, regional, and agricultural factors that play into the future of ethanol production and explain the benefits of ethanol to drivers all across the country. Their votes of confidence in the RFS will count in the upcoming election.”

Likis, who is an automotive and ethanol expert, reflects, “When presented with facts – which Bob Dinneen delivers in easy-to-understand terms – American consumers and voters are smart enough to make the right decision at the polls in November. That’s how the RFS was passed in the first place. Clearly, the RFS has delivered to voters: lowering prices at the gas pump; reducing dependence on foreign oil; stimulating regional economies; giving the environment a fighting chance; and incenting investors to keep their money in the US as they research and develop new seed and other technologies to increase efficiencies and crop yields.”