It is often said that the goal of a keynote speaker is to set the tone for a conference but the goal of the address given by Dave Whikehart of Marathon Petroleum Company at the National Ethanol Conference was more to allow the ethanol industry to hear the perspective of a fuel refinery partner.
Whikehart tried to explain why the petroleum industry has problems with the Renewable Fuel Standard (RFS). “Marathon petroleum supports corn ethanol because it is a transportation fuel and we are in the transportation fuel business,” he stressed, noting that they have a history of investing in and marketing corn ethanol blends. “What we do not support is government intervention in our markets and mandates that attempt to force products on our customers.”
As director of Product Supply and Optimization for Marathon, Whikehart made quite a few comments that the ethanol industry disputes when it comes to refiners being able to comply with the RFS going forward. He stated that demand for E85 is “non-existant” and that “E85 sales have limited growth potential.” In addition, Whikehart called introduction of E15 a “non-starter” due primarily to liability issues.
The ethanol industry disagrees and the rest of the NEC program this week is dedicated to proving that the RFS is working and that refiners and retailers can do what is needed to meet the goals of the program.
Calling it a “mixed metaphor,” Renewable Fuels Association president and CEO Bob Dinneen said in his “State of the Ethanol Industry” address today that it is appropriate and will come to define the year ahead.
“2014 will be the year the blend wall comes crashing down. 2014 will be the year the cellulose wall is cracked.” said Dinneen. “And 2014 had better be the year we take the brick and mortar away from Big Oil and deny them their wall of ignorance and misinformation that undermines public support for ethanol.”
“How will these walls tumble? By reminding people time and again that ‘a rising tide lifts all boats.’”
Dinneen hammered home the simple message they will be delivering to Washington this year. “Keep. Your. Word.” when it comes to the Renewable Fuel Standard.
Hello from the National Ethanol Conference in Orlando, FL. This morning we’ll live stream Bob Dinneen’s, Renewable Fuels Association, annual state of the industry address. Introductions will start at 8am, est., with Bob scheduled at 8:15am. We’re also recording it to post afterward. When you click on the player below it will start with a short commercial before the live feed.
Post Update: You can now watch the recorded video of the live stream below.
Breaking news. Ethanol industry gets break from winter. How? By attending the 2014 National Ethanol Conference in Orlando. The Domestic Fuel team is on the scene.
It’s a beautiful sunny day to start things off with some fun activities like the annual golf tournament or an Everglades airboat ride. I took golf pictures while Cindy is checking out the Florida wildlife.
To kick off our coverage of this year’s conference I interviewed the Reverand of Renewable Fuels, Bob Dinneen, Renewable Fuels Association. As you might expect, Bob says they’ll be talking a lot about the EPA and the Renewable Fuels Standard. He likes the mood of attendees and says they’re optimistic. I personally think the sunshine and warm temps are helping!
Cellulosic ethanol is not just a fuel of the future; it’s here today. And at the recent 8th Annual Iowa Renewable Fuels Summit held in Altoona, Iowa, Steve Mirshak from DuPont’s cellulosic division talked with Joanna about what this fuel will soon bring.
“This is a real fuel,” Steve said, pointing out that DuPont is on track to commercializing the world’s largest cellulosic ethanol facility in Nevada, Iowa this summer… a project worked on for nearly 15 years and will produce 30 million gallons a year. He went on to say that cellulosic ethanol has zero net carbon emissions, contributes to energy independence, and is great for economic development. Plus, Renewable Fuel Standard (RFS) goals are being achieved today. “This is the second generation [of biofuels]. It’s here. We’ve been talking about it for a long time, and in 2014 it’s here.”
Steve said, though, the only thing that could stop the momentum now seems to be the Environmental Protection Agency’s (EPA) proposal to cut the amount of ethanol and biodiesel to be blended into the Nation’s fuel supply.
“Clearly the policy debate in the United States is dampening investors’ commitment to build out this industry. We don’t need [our leaders in Washington] to change anything. We need Washington to reinforce their commitment to the [RFS]. With stable policy, we’ll see rapid growth [in the advanced biofuels industry], and we’ll meet the bi-partisan goals Congress already passed,” Steve said.
U.S. exports of the ethanol co-product distillers grains set a new record last year and exports of ethanol were lower but still strong.
According to the latest government statistics, exports of distillers dried grains with solubles (DDGS) totaled a record 9.7 million metric tons (mmt) last year, up 31% from 2012 and well above the previous record of 9.0 mmt set in 2010. China was the leading destination for U.S. distillers grains, taking 46% of the total, with Mexico and Canada a distant second and third.
U.S. exports of ethanol totaled 621.5 million gallons in 2013, down from the previous year but still the third-highest annual total on record. Canada was by far the leading export market for the year, receiving 52% of the total. The Philippines ranked second, followed by Brazil, the United Arab Emirates, and Mexico. Meanwhile, U.S. ethanol imports were down 27% from 2012, making the United States a net exporter of 226.3 mg in 2013, roughly a 24% increase over 2012 net exports.
“U.S. produced ethanol is the world’s lowest cost liquid transportation fuel. As such, we anticipate that export opportunities will continue to grow as countries across the globe recognize the air quality, high octane and superior performance of renewable ethanol,” said Bob Dinneen, President and CEO of the Renewable Fuels Association.
Signing the new farm bill into law on Friday, President Obama commented that the legislation “supports businesses working to develop cutting edge biofuels” which have the “potential to create jobs and reduce our dependence on foreign oil.” The president also announced a new “Made in Rural America” export and investment initiative “to help more rural businesses expand and hire and sell more products.”
In response, Renewable Fuels Association (RFA) president Bob Dinneen noted the great economic benefit biofuels production has brought to rural America. “Under the Renewable Fuel Standard, the U.S. ethanol industry created and supported over 386,000 jobs in the past year,” said Dinneen. “To build on the success of the Farm Bill, we call on President Obama and the Environmental Protection Agency to protect the RFS and restore the 2014 conventional ethanol requirement to its statutory level.”
During a press call about the benefits of the farm bill for bioenergy, Matt Carr with the Biotechnology Industry Organization (BIO), also pointed out the importance of the RFS. “The Renewable Fuel Standard is really the fundamental policy foundation for the growth of the advanced biofuels industry,” said Carr, noting that BIO submitted comments to EPA regarding the proposal to lower the volume requirements under the law. “That proposal puts at serious risk the investment (our members) have made in advanced biofuels projects.”
“We like to say that the farm bill policy as well as the tax code work hand in hand with the RFS to help accelerate the adoption and deployment of advanced biofuels,” Carr added.
“Renewable chemicals are now defined in the farm bill, an important and long overdue change,” said Matt Carr, BIO Industrial and Environmental Director about that inclusion in the Biorefinery Assistance Program and Biomass Research and Development Program, which had been primarily for advanced biofuel projects.
One of the participants in the call was Hugh Welsh, President of DSM North America, the Netherlands-based company that partnered with POET two years ago on cellulosic ethanol production. “We’ve made significant investments in the United States over the past three years,” said Welsh. “Some of that, in excess of $150 million, has been directly into the biofuels base and we’re encouraged by the inclusion of biochemicals in the farm bill.”
While DSM used its own funds for investment rather than taking advantage of the program, Welsh says it will help others. “We see the loan guarantee program now extended to biochemicals as something that offers greater opportunity for the development of this technology going forward,” in licensing the technology to others and “ultimately creating a true biorefinery.”
Welsh noted that the two technologies will work together. “We’re looking to grow both the advanced biofuels business and the biochemistry business,” he said.
Also participating in the call were Agriculture Energy Coalition co-director Lloyd Ritter, and Renmatix Senior VP Mark Schweiker.
President Barack Obama traveled to Michigan State University to sign the Agricultural Act of 2014 at the alma mater of Senate Agriculture Committee chair Debbie Stabenow (D-MI).
“Despite its name, the farm bill is not just about helping farmers,” President Obama told the small crowd invited for the signing. “Secretary Vilsack calls it a jobs bill, an innovation bill, an infrastructure bill, a research bill, a conservation bill. It’s like a Swiss Army knife.”
The president also gave a shout out to biofuels production in Michigan in his address prior to the bill signing. “I just got a tour of a facility where you’re working with local businesses to produce renewable fuels,” said Obama. “This bill supports businesses working to develop cutting edge biofuels, like some of the work being done here at Michigan State.”
The comment period is now over for the EPA proposal that would lower the volume requirements under the Renewable Fuel Standard this year, but it will be some time yet before a decision is made since the agency likely has tens of thousands of comments to read.
In this Ethanol Report, several representatives of the cellulosic ethanol and advanced biofuels industry comment on how the proposal would impact them. The report includes comments from:
Chris Standlee, Executive Vice President, Abengoa Bioenergy U.S. Institutional Affairs
Brian Foody, President and CEO, Iogen Corporation
Delayne Johnson, General Manager, Quad County Corn Processors
Brooke Coleman, Executive Director, Advanced Ethanol Council
Bob Dinneen, Renewable Fuels Association President and CEO
Corn farmers and biofuels producers are questioning President Obama’s commitment to an “all of the above” energy strategy mentioned in the State of the Union address, considering the administration’s proposal to cut the Renewable Fuel Standard (RFS) this year. The address Tuesday evening came just hours before the comment period on the EPA proposal ended.
“It was great to hear President Obama talk about the importance of an ‘all-of-the-above’ energy policy,” commented National Corn Growers President Martin Barbre. “And you can’t have such a policy without biofuels. So, we call on his Administration to back away from its irresponsible proposal to reduce the Renewable Fuel Standard.”
Fuels America released a statement echoing a similar sentiment, adding that they hope EPA will listen to those who will be impacted by changes in the RFS. “We hope the agency considers the thousands of comments from farm families, small business owners, labor groups and environmental advocates. These are the real people who will lose their livelihoods and their faith in this Administration’s commitment to a clean energy future if the EPA proceeds down its current path.”
The president mentioned agriculture in the opening minute of his speech, with an image of a farmer in a corn field as an example of the “citizens, who make the state of our union strong.”
President Obama did make note of progress made in solar energy during his address and called for an end to tax breaks for the oil industry. “Every four minutes, another American home or business goes solar,” said the president. “Let’s continue that progress with a smarter tax policy that stops giving $4 billion a year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.”
The Nebraska Corn Board has received over 5,000 letters expressing opposition on the Environmental Protection Agency (EPA) proposal to lower 2014 volume requirements for biofuels under the Renewable Fuel Standard (RFS).
In early January, the Nebraska Corn Board sent out letters to Nebraska farmers alerting them of EPA’s actions and included a letter to EPA that farmers could sign. These letters were returned to the Corn Board and the Board will forward the entire stack of letters to EPA before the comment period deadline of January 28. To date, just over 5,000 letters have been returned, many with personal messages expressing the need to keep a strong renewable fuel industry and stating corn farmers can provide enough food, feed and fuel to help America be less dependent on imported oil.
“This is the greatest grassroots response in the history of the corn checkoff program since its implementation in 1978,” said Nebraska Corn Board Executive Director Don Hutchens.
The Board also distributed nearly 10,000 postcards throughout Nebraska where the recipient was asked to write a personal message and mail to EPA. They also offered the option of commenting online through a link on the Nebraska Corn Board website.
Nebraska Corn Board chairman and farmer Tim Scheer said the letters are being sent to EPA today. “Other states have mounted similar efforts to send letters to EPA,” said Scheer, noting that 4,000 letters are being sent in from Minnesota Corn and over 1,000 from Missouri Corn.
“Our results should reassure those in Congress and the Administration who are worried that following the RFS commitment to expanding the use of renewable fuels will result in sharply higher fuel prices for consumers,” concludes the report, authored by economists Sebastien Pouliot and Bruce Babcock.
The Environmental Protection Agency proposal to lower the 2014 RFS volume obligations was based in part on concerns that volatile Renewable Identification Number (RIN) prices last year led to higher gas prices. However, the analysis found that higher RIN prices provide incentive to offer higher ethanol blends, which lowers the price of fuel by lowering the price of ethanol. “We find that feasible increases in the ethanol mandate in 2014 will cause a small decline in the price of E10. That is, even though increased mandates increase gasoline prices, the offsetting effects from a decline in ethanol price and movement by motorists to E85 from E10 are enough to result in a net decrease in the price of E10.”
Renewable Fuels Association president and CEO Bob Dinneen says the analysis shows that the RFS is working as intended. “Many ethanol opponents have used higher RIN prices to scare people into believing that gas prices will rise if the RFS remains in place,” said Dinneen. “The new CARD analysis takes the gas price fear out of the equation.”
Read the analysis here.
The Ninth U.S. Circuit Court of Appeals has denied rehearing en banc a ruling last year which upheld California’s Low Carbon Fuel Standard (LCFS), leaving the ethanol industry and others challenging the law to consider the next move.
In a joint statement, ethanol producer groups Growth Energy and the Renewable Fuels Association (RFA) called the decision “a blow to California consumers” and said they will continue to evaluate all options moving forward “to assure that sound science and fair play ultimately prevail in this case.”
The two groups were pleased to note that seven judges strongly dissented from the Court’s decision believing it merited further review, stating that the majority opinion “upholds a regulatory scheme that, on its face, promotes California industry at the expense of out-of-state interests.”
Challenging the law with the ethanol industry is the American Fuel & Petrochemical Manufacturers (AFPM) and General Counsel Richard Moskowitz says the decision will “have adverse consequences throughout the nation’s fuel supply chain far beyond California’s borders, and ultimately a negative impact on consumers.”
The ruling could be appealed to the US Supreme Court.