Domestic Fuel

The American Petroleum Institute hailed today’s circuit court ruling to “vacate the 2012 cellulosic biofuel standard” as a “decision to end mandate for non-existent biofuels.” Renewable Fuels Association president and CEO Bob Dinneen says it is not.

“The mandate for cellulosic ethanol is not ended by this decision by any way shape or form,” said Dinneen, calling API’s characterization “the height of deception.”

Dinneen explains that the court decision simply means that EPA has to have better justification for cellulosic biofuel target numbers under the Renewable Fuel Standard (RFS). “They couldn’t create an incentive for investment,” he said. “All they can do is make a clear headed decision on what is likely to be produced.”

In this edition of the Ethanol Report, Dinneen talks about how the petroleum industry is very afraid of the potential of cellulosic biofuels to take over a greater percentage of the gasoline market. “They’re not happy about having lost 10% of the barrel,” Dinneen says. “They are apoplectic about the potential of losing even more of it to cellulosic ethanol and other biofuels.”

Listen to or download the Ethanol Report here: Ethanol Report on Cellulosic Court Ruling

Subscribe to “The Ethanol Report” with this link.

The ethanol by-product and livestock feed known as distillers dried grains with solubles (DDGS) is now officially recognized as a non-hazardous cargo by the International Maritime Organization (IMO).

The official IMO classification became final and mandatory under the code of the International Maritime Organization on Jan. 1, 2013, after action by the U.S. Grains Council on behalf of its member organizations like the National Corn Growers Association (NCGA).

“While DDGS have effectively been shipped as a non-hazardous cargo for years now, the final classification by the IMO is an important success which will benefit corn farmers across the country,” said NCGA President Pam Johnson. “This status provides additional assurance that DDGS buyers and producers can access the lower freight rates assessed for non-hazardous cargo. U.S. farmers work diligently to ensure at every point in the process that we continue to provide the stable, consistent, quality product that our export markets expect.”

The classification provides savings in the form of lower freight costs which, in turn, increase the return to ethanol plants producing the high quality feed ingredient. Exports of DDGS from the United States have increased tremendously in recent years.

If you want to spend a day next week with Iowa Gov. Terry Branstad, author and energy security expert Anne Korin, Growth Energy President Tom Buis and USDA Under Secretary Dallas Tonsager – today is the last day of pre-registration for the 7th Iowa Renewable Fuels Summit on January 30 in Altoona.

Registration is free and you can register on site, but Iowa Renewable Fuels Association Managing Director Lucy Norton says it’s good to know about how many people will be attending. “It’s open to the general public,” said Norton. “We encourage everyone to come out and hear more and learn more about renewable fuels.”

Much of the summit is focused on the importance of renewable fuels to Iowa, one of the leading states in the production of both ethanol and biodiesel. “The summit is the way that the renewable fuels industry gets the word out on renewable fuels and what it means to the state economy, for the federal economy,” Norton said, noting that both Gov. Branstad and Lt. Gov. Kim Reynolds will be at the event this year.

Norton says the Iowa RFA will be encouraging attendees to sign a letter to Chrysler. “We are asking Chrysler to follow suit with General Motors and Ford and approve their vehicles for the use of E15,” she said.

Find out more about what is in store at the 2013 Iowa Renewable Fuels Summit in this interview: Lucy Norton with Iowa RFA

Iowa Renewable Fuels Summit information and registration.

The Agriculture Energy Coalition (AgEC) today urged Congress to begin work on a new five-year Farm Bill with strong mandatory funding for energy programs.

The coalition notes that programs included in the farm bill Energy Title including the Rural Energy for America Program (REAP), Biomass Crop Assistance Program (BCAP), Biorefinery Assistance Program (BAP) and Biobased Markets Program (Biopreferred) have helped create jobs and economic growth in rural America, develop new agricultural markets, and improve farmers’ and ranchers’ energy self-sufficiency.

“Farm energy programs have paid a tremendous return for rural Americans, in terms of new jobs, investments in new energy efficiency and bioenergy technology, and new biobased products,” said Lloyd Ritter, Agriculture Energy Coalition co-director. “Economic growth and job opportunities in rural America are at risk without a renewal of funding for these effective programs.”

The American Taxpayer Relief Act of 2012 extended the 2008 Farm Bill without funding for energy title programs. Senate Majority Leader Harry Reid (D-NV) re-introduced the five-year farm bill passed by the Senate last year, calling it a “revolutionary piece of legislation.” The House failed to pass a farm bill last year.

Delegates for the American Farm Bureau Federation (AFBF) last week voted overwhelmingly to support continuation of the Renewable Fuels Standard (RFS), despite the fact that membership in the organization includes a substantial percentage of livestock producers.

“The livestock guys still have concerns about high feed costs, and I’m one of them, I’m a beef producer,” said AFBF president Bob Stallman. “On the other hand, we have this renewable fuels infrastructure that’s in place, a very large industry that employs lots of people and provides a market for a lot of products, so we need to be very careful not to have policies trying to dismantle that.”

There were 362 voting delegates at the 94th AFBF Annual meeting in Nashville last week representing every crop and livestock sector in the 50 states and Puerto Rico. The policies approved at the annual meeting will guide the nation’s largest general farm organization in its legislative and regulatory efforts throughout 2013.

The Iowa Renewable Fuels Association has joined forces with a group of Iowa businesses and organizations to form a coalition supporting the Renewable Fuel Standard (RFS).

Representatives of the newly-formed Iowa RFS Coalition sent a letter to President Obama today thanking him for his unwavering support of the RFS and asking him to continue supporting agriculture and renewable fuels throughout his second term.

“The Iowa RFS Coalition will stand with your Administration and the Iowa Congressional delegation to defend the RFS from false attacks,” the letter reads. “With your support, this vital policy will continue to thrive for the next decade unlocking cleaner, cheaper domestic fuel choices for American consumers.”

Iowa Renewable Fuels Association Policy Director Grant Menke stated, “With efforts to eliminate the RFS at peak intensity, the Iowa RFS Coalition looks forward to working with the President and the Iowa delegation to protect the RFS in 2013. Together, we will move forward for fuel choice.”

Current members of the Iowa RFS Coalition are DuPont, Iowa Biodiesel Board, Iowa Biotechnology Association, Iowa Corn Growers Association, Iowa Farm Bureau Federation, Iowa-Nebraska Equipment Dealers Association, Iowa Renewable Fuels Association, Iowa Soybean Association, Monsanto and Syngenta. The Iowa RFS Coalition will continue to welcome new members throughout 2013.

Read more from Iowa RFA.

It has been more than two years since the California Air Resources Board (CARB) committed to revise indirect land use change (ILUC) penalties assessed against certain biofuels as part of its Low Carbon Fuels Standard (LCFS). Since it went into effect, a federal district judge has ruled the LCFS unconstitutional; however, CARB was able to move forward with the law while litigation continues.

Since ILUC came to forefront, many peer-reviewed studies have been published that show CARB, along with other entities, have overstated the overall carbon intensity of corn ethanol. Despite the growing number of more accurate studies, CARB has yet to make any changes to the LCFS program’s indirect land use change estimates or direct carbon intensity values for corn ethanol. In response to the lack of action, the Renewable Fuels Association (RFA) sent a letter to Mary Nichols, CARB Chairwoman.

“I am writing to again encourage CARB to honor its commitments to expeditiously revise the ILUC penalty factor assessed against corn ethanol and to utilize the ‘best available science’ when determining direct [carbon intensity, or CI] values,” wrote RFA President and CEO Bob Dinneen. “Revising the direct and indirect CI values for corn ethanol would be much more than a mere academic exercise; rather, a continued failure to update these CI values will jeopardize the ability of regulated parties to reasonably comply with the LCFS program’s increasingly rigid CI standards in 2013, 2014 and beyond.”

Dinneen’s letter cites a number of reports and studies published in the past several years that demonstrate CARB’s corn ethanol carbon intensity estimates are “unjustifiably inflated.” The most recent study, conducted by GREET model creator Michael Wang at Argonne National Laboratory and published in Environmental Research Letters, found the carbon intensity of average corn ethanol to be 62 grams of CO2-equivalent per megajoule (g/MJ), including possible emissions from ILUC. That’s 38 percent lower than CARB’s current estimate of 99.4 g/MJ for average Midwest corn ethanol.
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As the ethanol industry awaits what the U.S. Environmental Protection Agency (EPA) will release for targets for this year’s Renewable Fuels Standard, members of the Biotechnology Industry Organization (BIO) and Fuels America expressed their support for the green fuel.

BIO‘s Executive Vice President, Brent Erickson, said today in a news conference that they are expecting EPA’s release of the 2013 renewable volume obligations, very soon, calling them “vitally important to companies commercializing advanced biofuels,” and this is expected to be a pivotal year for cellulosic and advanced biofuels.

“Stability in the RFS is crucial to investment [in the advanced biofuels sector],” Erickson explained, adding that “competing industries” would like to preserve their long-standing choke-hold on the fuel market in this country. “While other industry groups are spending large amounts of money to undermine or destabilize the RFS, it’s time for Congress to reaffirm its commitments to this successful policy.”

Christopher G. Standlee, Executive Vice President, Abengoa Bioenergy, said that the road to commercialization of any new technology is not short or inexpensive, but the RFS “provides a roadmap to increased energy independence and national security, with a long-term vision for the U.S. fuel industry through 2022.” He also highlighted Abengoa’s efforts in the Midwest to be on the leading edge of the new technology, citing its 25 million gallon cellulosic ethanol plant in Kansas under construction and expected to be running by the end of the year.

Others on the news conference called the RFS a bold, aggressive vision, with Wade Robey, a board member of POET-DSM Advanced Biofuels, saying Congress took the leap of faith without having the commercialization of cellulosic ethanol in place when it was passed. “It is clear [the EPA's] volume targets have been optimistic; however, it is that optimism that has spurred many projects to be under construction and coming online soon across the United States. It has sped the development of this clean, domestic energy source,” prompting even foreign investors to jump into U.S. production, Robey said.

Jan Koninckx, Global Business Director for Biorefineries, DuPont Industrial Biosciences, said America is now leading the world in renewable fuels because of the RFS. And he warns that abandoning this successful policy is not the way to go. “When we listen to those who want to repeal the RFS, what we hear is essentially an industry organization that wants the United States to turn its back on new technology … and keep the [U.S.] dependent on a 20th century technology. Turning our backs on innovation is certainly not in the tradition of the U.S. or the company that I am with.”

Listen to all of their opening remarks here: BIO/Fuels America News Conference

As the world’s Agriculture Minister’s gather in Berlin at the Global Forum for Food and Agriculture (GFFA), the Global Renewable Fuels Alliance (GRFA) is calling on ministers to include biofuels for agricultural investment and to improve food security in the world’s most impoverished areas.

“It has been shown that developing a biofuels industry can attract significant agricultural investment to the countries that need it most.” said Bliss Baker, spokesperson for the Global Renewable Fuels Alliance. “Unlike crude oil nations who are prosperous because of their geographic location, a biofuels industry can be developed anywhere because of the wide array of feedstocks. This means any state, especially developing countries, can advance their economy by becoming a biofuel capital.”

The GFFA is an international political event that includes high level discussions focused on the central issues regarding the future of the global agri-food industry. This year’s topic for the International GFFA Panel Discussion is “Responsible investment in the food and agriculture sectors – A key factor for food security and rural development.”

The ethanol industry will help Agriculture Secretary Tom Vilsack kick off his second term in the Obama administration when he visits the 18th Annual National Ethanol Conference of the Renewable Fuels Association (RFA) next month in Las Vegas. Vilsack was also the keynote speaker at the 2012 ethanol conference.

“We congratulate Secretary Vilsack as he begins his second term. He is a well-spoken, highly credible voice for the Obama Administration and for American renewable fuels. As only a former Governor and current Secretary could do, he speaks eloquently about the importance of energy independence from foreign oil, investment in the next generation of biofuels, and the powerful role the ethanol industry plays in rural economic development. We are honored to host him at the National Ethanol Conference,” said Bob Dinneen, RFA President and CEO.

The National Ethanol Conference will be held February 5-7 in Las Vegas and a $100 discount on early registration is still available until January 19.

The U.S. Court of Appeals for the District of Columbia Circuit today denied petitions for rehearing in the case of the Grocery Manufacturers Association, et al. v. EPA, which challenges the decision by the Environmental Protection Agency to allowing commercial sales of 15% ethanol (E15).

“Today’s order leaves in place an earlier decision by the Court denying challenges to the Environmental Protection Agency’s decision to allow for E15 to enter the U.S. market,” said Growth Energy CEO Tom Buis of the action, which he calls a “major victory for the renewable fuels industry and opens the door for further investment in new fueling technology to offer E15 to consumers.”

In January 2011, EPA approved E15 for use in cars and trucks made in 2001 or later. The Grocery Manufacturers and other groups, including the American Petroleum Institute (API), challenged the approval contending the E15 will cause harm to motor vehicle engines. The organizations also continue to challenge the Renewable Fuel Standard (RFS). During a media conference call today, officials with API called the RFS “unworkable” and said they would “like to see complete repeal” of the law.

Renewable Fuels Association president and CEO Bob Dinneen refuted those comments in a statement calling the RFS “a proven success.”

“It is a highly flexible, effective, proven energy policy,” said Dinneen. “API knows this to be a fact which is why they are continually running to the courts and Congress to kill it. The RFS is stimulating investment in next generation ethanol which is coming to fruition before our eyes. The RFS is also driving the marketplace beyond ethanol’s use as an ‘additive’, which was a fundamental objective of the program. Higher ethanol blends, from E15 to E85, will be key to providing consumers the choice at the pump they want and the relief for the wallet they need. E15 and E85 are available right here, right now and Big Oil doesn’t like it.”

Agriculture Secretary Tom Vilsack visited a state-of-the-art bioindustrial facility in Pennsylvania on Friday, where he announced $25 million to fund research and development of next-generation renewable energy and high-value biobased products from a variety of biomass sources.

“USDA’s continuing investments in research and development are proving a critical piece of President Obama’s strategy to spur innovation of clean bioenergy right here at home and reduce our dependence on foreign oil,” said Vilsack. “The advances made through this research will help to boost local economies throughout rural America, creating and sustaining good-paying jobs, while moving our nation toward a clean energy economy.”

Vilsack made the announcement while visiting Pennsylvania-based Renmatix, a leading manufacturer of cellulosic sugars for biobased chemical and fuel markets, for the commissioning of the company’s BioFlex Conversion Unit, a multiple-feedstock processing facility at the company’s King of Prussia headquarters.

The four projects approved for investment are:

Kansas State University – $5,078,932 The goal of this project is to make the oilseed crop camelina a cost-effective biofuel and bioproduct feedstock.

Ohio State University – $6,510,183 This project will result in an anaerobic digestion system for the production of liquid transportation fuels and electricity from animal manure, agricultural residues, woody biomass and energy crops.

Ceramatec, Inc., Salt Lake City, Utah – $6,599,304 This project will convert lignocellulosic biomass to infrastructure-compatible renewable diesel, biolubricants, animal feed and biopower. New hybrids of energy sorghum will be developed, and other biomass resources include switchgrass and forestry residues.

USDA-Agricultural Research Service, Eastern Regional Research Center, Wyndmoor, PA – $6,865,942 ARS scientists will develop an on-the-farm distributed technology for converting forest residues, horse manure, switchgrass and other perennial grasses into biofuels and high-value specialty chemicals.

A cellulosic sugar producer in New York has signed a deal with an ethanol plant in Wisconsin to begin commercial production of cellulosic ethanol.

Sweetwater Energy signed a long-term commercial agreement with Ace Ethanol to generate cellulosic ethanol at the ACE corn ethanol facility for up to 16 years.

According to Sweetwater officials, the company’s “patented, decentralized process will convert locally available cellulosic, non-food biomass, such as crop residues, energy crops, and woody biomass into highly fermentable sugar, which Ace will ferment into ethanol. The entire contract has a total potential value in excess of $100 million, and requires a minimal capital outlay by Ace Ethanol while stabilizing Ace’s feedstock cost over the life of the agreement.”

“Ace Ethanol has been bench testing Sweetwater’s cellulosic material for some time and we’re confident that this project will be commercially profitable,” says Neal Kemmet, President of Ace Ethanol. “With Sweetwater, we’ll move from 100% corn to a combination of corn starch and 7% cellulosic sugar as our feedstocks.”

“This is a very exciting time for the industry, and we couldn’t be more pleased to have aligned Sweetwater with Ace,” says Jack Baron, President and COO of Sweetwater. “Our patented, decentralized sugar-production model is designed to let us work in tandem with a refiner’s existing infrastructure, which fosters strong collaboration on both sides. Furthermore, our refined sugars can be used for biochemical or bioplastics production, giving Ace diversification options in the future. Ace is a progressive industry leader located near affordable biomass; they are financially successful and constantly incorporating proven new technologies to maintain their leadership position.”

Sweetwater also announced today that they have been issued a patent for the “manufacture and deployment of distributed pretreatment units designed for the extraction of sugars from any cellulosic feedstock for the production of ethanol.” Officials say the process allows Sweetwater to deploy its cellulosic sugar conversion facilities in a “hub and spoke” fashion, providing broad scale diversity for cellulosic ethanol production that takes full advantage of economic and capacity constraints surrounding cellulosic biomass. “This patent is a major breakthrough for the future of cellulosic ethanol,” says Arunas Chesonis, Chairman and CEO of Sweetwater. “The patent protects the first technology to support a viable economic model for scaling the conversion of cellulosic biomass into highly fermentable sugar and subsequently, ethanol. It will mean a great deal to the US corn ethanol industry, and the profitable future of biofuel production worldwide.”

The American Taxpayer Relief Act of 2012 passed by Congress on New Year’s Day includes the extension of three key ethanol related tax credits, which starts the new year off well for the ethanol industry.

“The one year extension of the cellulosic producer tax credit and accelerated depreciation provides some measure of certainty to ensure that 2013 will be a year of growth and milestones for the advanced ethanol industry,” said Bob Dinneen, President and CEO of the Renewable Fuels Association. “In addition, and equally significant, is the extension of the alternative fuel infrastructure tax credit which will accelerate E15’s entry into the marketplace this coming year.”

Dinneen says it would be better that the alternative energy provisions were extended for 5-7 years instead of just one, but it is certainly understandable. “Folks do understand that is all that was on the table and really it’s teeing up a longer conversation about what to do with our tax code,” he said. “We want to have that conversation because we want all energy tax incentives on the table” including those benefiting the oil industry.

In this edition of the Ethanol Report, Dinneen talks about the dysfunctional 112th Congress and his optimism that the 113th Congress will be better.

Listen to or download the Ethanol Report here: Ethanol Report on Congress in 2013

Subscribe to “The Ethanol Report” with this link.

Agriculture Secretary Tom Vilsack has had a good working relationship with EPA Administrator Lisa Jackson on various issues important to farmers, ranchers and renewable energy and he is sorry to hear about her resignation from the Obama cabinet.

“Lisa Jackson has served our country well as she balanced improving the environment and the health of the American people – while ensuring our country’s economic competitiveness – because they are intrinsically linked,” said Vilsack in a statement today. “Throughout her tenure, she listened to stakeholders, including farmers and ranchers, and took their concerns into account while considering policies that impacted rural America. She was a friend to me and to those who live and work in rural America and her leadership will be missed.”

Vilsack and Jackson met with representatives of the ethanol industry and toured Renewable Energy Group (REG) biodiesel plant in Newton, Iowa last year. Jackson was instrumental in deciding in favor of a waiver allowing the use of 15% ethanol and against a waiver of the Renewable Fuel Standard requested this year.