Ethanol Report on RFS Challenge

The Renewable Fuels Association is pleased with the action taken by environmental groups in withdrawing from a lawsuit brought by the National Chicken Council, National Meat Association, and National Turkey Federation challenging EPA’s Renewable Fuels Standard (RFS).

Ethanol Report PodcastIn this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen talks about what this means for the challenge to the RFS, which is vital to the expansion of renewable fuels for the transportation sector of the United States. “In the absence of the tax incentive, what is providing the foundational demand for the ethanol industry is the Renewable Fuel Standard,” says Dinneen. “We think that program has proven to be tremendously successful in reducing our nation’s reliance on imported oil.”

Dinneen says the environmental groups’ challenge to the RFS was much broader based than the poultry groups’ challenge, including that EPA had not taken into account the “global rebound effect” of ethanol driving down the price of oil which supposedly has led to third world countries using more oil. “That is how silly the environmental claims were,” he said. All that is left now, according to Dinneen, is a narrow issue regarding how EPA applied grandfathering provisions for addressing ethanol plants built in 2008 and 2009. “It says a lot about how far the angry birds are willing to go on this case,” he added, expressing optimism that the case will ultimately be thrown out.

Listen to or download the Ethanol Report here: Ethanol Report on RFS Challenge

Subscribe to the Ethanol Report here.

Top Ethanol Stories to Watch in 2012

RFAAt the end of 2011, the Renewable Fuels Association identified the top five stories of the year for the ethanol industry. With the new year now underway, the RFA has predicted the top stories to watch in 2012.

They are:

1. First commercial availability of E15 for use in 2001 and newer vehicles
2. Free and fair trade for ethanol
3. Legal battles over ethanol use, particularly the LCFS in California and E15
4. Challenges to the Renewable Fuels Standard (RFS2)
5. Answering the cellulosic ethanol challenge

Ethanol Report PodcastIn this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen comments on the year in preview and some of the top ethanol stories he expects to see in 2012.

Listen to or download the Ethanol Report here: Ethanol Report on 2012 Preview

Top Ethanol Stories of 2011

RFAEthanol industry developments in 2011 have set the stage for a new era. The Renewable Fuels Association has identified five top stories for the ethanol world from 2011 that will change the future.

They are:

1. EPA approval of 15 percent ethanol for use in 2001 and newer vehicles
2. The end of the blenders tax credit and secondary tariff on ethanol imports
3. Surge in U.S. ethanol exports
4. New strides in advanced and cellulosic ethanol development
5. Emergence of the integrated biorefinery model

Ethanol Report PodcastIn this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen comments on the year in review and some of the top ethanol stories of 2011.

Listen to or download the Ethanol Report here: Ethanol Report on 2011 in Review

Doing the Ethanol Shuffle

Ethanol Report PodcastThere’s a hot new craze called the “Ethanol Shuffle” that’s sweeping seaports from Sao Paulo to Los Angeles. No, it’s not a new dance, this shuffle is all about the “confounded realignment of the global ethanol trade.”

rfaRenewable Fuels Association (RFA) Vice President of Research and Analysis Geoff Cooper wrote about the “Ethanol Shuffle” this week on the RFA E-xchange Blog. Basically, it’s about the shuffling of sugarcane ethanol from Brazil to California to meet that state’s Low Carbon Fuels Standard (LCFS) – at the same time, Brazil is importing lower priced corn ethanol from the United States to make up for not only the ethanol it is exporting to California, but the shortfall that country has experienced in ethanol production recently.

So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route.

Cooper explains the sweet irony of it all in this edition of “The Ethanol Report.” Geoff Cooper on the Ethanol Shuffle

Ethanol Report from NAFB

Once again this year, the Renewable Fuels Association (RFA) took part in the National Association of Farm Broadcasting’s annual Trade Talk. This unique event allows over 100 agricultural companies and organizations to have access to the nation’s farm broadcast professionals all at the same time. It is what you can truly call a “win-win” situation as the exhibitors can get their message out to farmers and ranchers nationwide and the farm broadcasters can collect lots of content for the upcoming holiday season!

RFA president and CEO Bob Dinneen spoke with a number of broadcasters about important topics facing the ethanol industry, including the expiration of the VEETC at the end of this year and the ability of U.S. farmers to produce enough corn for food, feed and fuel. In our Domestic Fuel Ethanol Report from NAFB, we also talked with Dinneen about European ethanol producers charging the U.S. with unfair imports and Brazil’s increasing imports of ethanol from the U.S.

Listen to the Ethanol Report from NAFB with Bob Dinneen here: RFA CEO Bob Dinneen

RFA Chairman on Ethanol Issues

Chuck Woodside, General Manager of farmer-owned KAAPA Ethanol in Minden, Nebraska, was just re-elected for a second year as chairman of the Renewable Fuels Association (RFA).

I caught up with him this week for an update on the state of the industry, how this year has been, progress on implementing EPA’s E15 waiver, challenges to the RFS2, the importance of exports and distillers grains, and more.

Ethanol Report PodcastWoodside thinks 2011 has been a positive year for ethanol production, despite the policy challenges the industry continues to face, and he is optimistic about the future, even as they expect the Volumetric Ethanol Excise Tax Credit (VEETC) to expire at the end of the year for good. “There will be some transition, but I think the industry is confident we can compete with gasoline without the tax credit,” he said. “The VEETC was an incredibly successful program and we think there’s opportunities to build on that investment that the taxpayers made in our industry.”

Listen to Chuck Woodside’s comments in this edition of “The Ethanol Report”: RFA Chairman Chuck Woodside

Ethanol Industry Responds to Feed Availability Concerns

Representatives of the U.S. livestock and poultry industries testified before a House agriculture subcommittee today that changes in ethanol policy are necessary to ensure the availability of corn for animal feed, but the ethanol industry disagrees.

According to the Renewable Fuels Association, America’s ethanol producers are on pace to produce nearly 40 million metric tons of livestock feed in 2011 – a volume greater than all the corn used on cattle feedlots all across the country. “When a bushel of corn enters an ethanol plant, fully one third of that bushel gets returned to the livestock feed market in the form of distillers grains,” said RFA’s Matt Hartwig, who adds that the industry wants to work with livestock producers to increase efficiency and usage of distillers grains.

Ethanol Report PodcastThe hearing by the House Agriculture Subcommittee on Livestock, Dairy, and Poultry on Wednesday included no representatives from the corn or ethanol industries and raised the food versus fuel flag again, but Hartwig encourages lawmakers to look beyond the price of corn as the cause of higher food prices. “A pound of pork chops retails for around $3.50 and in that pound, there is roughly 30 cents worth of corn at today’s prices,” Hartwig says. “So there are other factors after that pig leaves the farm that influence the prices consumers pay at the retail level” like higher energy prices, labor and manufacturing.

Listen to Hartwig’s comments in this edition of “The Ethanol Report”: Ethanol Report on Feed Availability

RFA CEO Visits Farm Progress Show

farm progress show 2011The Renewable Fuels Association (RFA) president and CEO Bob Dinneen visited with farmers, friends and the farm media at the 2011 Farm Progress Show in Decatur, Illinois this week.

Dinneen has been traveling around the Midwest this month and says he is always amazed by the ability of the nation’s farmers to do their job, no matter what Mother Nature throws at them. “The fact of the matter is, the American farmer is the most productive and efficient in the world,” Bob says. “We will get through this and there will be enough supply to meet the needs for grain that exist.”

Ethanol Report PodcastOn the other hand, Dinneen is frustrated with the inability of Congress to do its job. “It’s got everything to do with a dysfunctional Congress that couldn’t agree on whether or not Mother’s Day was a good thing,” he said, adding that in terms of energy policy, nothing is happening right now. “They’re focused right now on this super committee which is a recipe for more gridlock. There’s no way those 12 members are going to be able to come up with a plan to address the country’s needs in terms of the budget and taxes.”

In this Ethanol Report interview with Dinneen from Farm Progress Show, he also talks about the Republican presidential candidates and what is happening with the 15% ethanol waiver.

Listen to or download the Ethanol Report here: RFA CEO Bob Dinneen at the 2011 Farm Progress Show

Ethanol and Motorcycles Mix it Up

Ethanol Report PodcastThe Renewable Fuels Association (RFA) proved once again this year that ethanol and motorcycles do mix well together.

This edition of “The Ethanol Report” features the 71st Annual Sturgis Motorcycle Rally held August 8-14 in Sturgis, SD.

RFA at SturgisRFA Director of Market Development Robert White and his father Jere White, Executive Director of the Kansas Corn Growers, talk about the importance of reaching motorcycle lovers with information about ethanol. You’ll also hear comments about ethanol from Buffalo Chip Campground owner Rod “Woody” Woodruff, Mrs. South Dakota Lori Visker, Survivor star Rupert and a biker from Australia.

Pictured here giving away ethanol “Fueled with Pride” tee shirts at Sturgis are – from right to left – are Robert White, his fiancee Denita Elliss, and Doug Brandmahl, a biker from Virginia. Lots more photos from Sturgis can be viewed in the 2011 Sturgis Motorcycle Rally Photo Album.

Listen to or download the Ethanol Report here: Ethanol Report on 2011 Sturgis Motorcycle Rally

Ethanol Report on Senate Compromise

Ethanol Report PodcastAn agreement was announced Thursday by U.S. Senators John Thune (R-S.D.) and Amy Klobuchar (D-Minn.) and Dianne Feinstein (D-CA) that would end the existing 45 cent per gallon Volumetric Ethanol Excise Tax Credit and associated import tariff at the end of this month, reducing the nation’s deficit by $1.3 billion while still providing $668 million for renewable fuel incentives such as blender pumps.

In this “Ethanol Report” interview, Matt Hartwig with the Renewable Fuels Association (RFA) explains what the compromise includes, why the industry supports it, concerns the industry has, and how and when it might become law.

Listen to or download the Ethanol Report here: Ethanol Report on Senate Compromise

Ethanol Report on Energy Independence for Boaters

The Independence Day holiday is one of the biggest boating days of the year so it’s a good time to remind boaters that ethanol is helping to make our nation more energy independent.

This edition of “The Ethanol Report” is about how ethanol producers and boat racers have teamed up to show that 10 percent ethanol runs perfectly well in marine engines. The Renewable Fuels Association (RFA) became a sponsor for the National Boat Racing Association this year and worked with them on the championship race held in Kansas June 25-26.

Ethanol Report PodcastThis report features comments from RFA board member Steve Gardner with East Kansas Agri-Energy, NBRA president Dan Crummett, and race organizer Vernon Barfield.

Listen to or download the latest Ethanol Report here: Ethanol Report on Boating with Ethanol

See photos from the race here: NBRA Ethanol Boat Race

Biofuels Benchmarking Annual Report Released

Christianson & Associates, a CPA and consulting firm for the ethanol, biodiesel and renewable energy industry, today released its 2nd Annual Biofuels Benchmarking Report. The report found several key findings: profitably increased for the industry on average 8 cents; equity to asset ratio increased more than 10 percent; and working capital improvements enabled plants to decrease long-term debt by an average of 20 cents per gallon. The report also found that despite higher corn prices in 2010, margin volatility has decreased.

In an interview with John Christianson, Partner, Christianson & Associates, he said that the past two years have been recovery years for the ethanol industry and plant management has focused on strengthening their balance sheets to prepare for future volatility. Christianson also noted that despite higher commodity prices, margin volatility has improved.

“There have been a lot of unique things happening in the industry and one of them is that we’ve seen a general rise in commodity prices,” said Christianson. “But even though there has been a sharp rise in commodity prices, so has the fuels. Oil price has risen which has brought up ethanol prices as well. So even though commodity prices have risen, we’ve actually had an improved margin ratio and so the margin volatility has been less.”

Other factors that have helped to improve margins include co-products such as distillers grains, corn oil and carbon dioxide.

Listen to my full interview with John Christianson here: Biofuels Benchmarking Report Highlights

This in-depth report analyzes the operational and financial performance of more than 60 ethanol plants in five major “benchmark” areas: overall ethanol industry analysis, regional ethanol plant analysis, production capacity analysis, plant production efficiency analysis, and balance sheet analysis. This year’s financial outlook is much improved and one reason is due to plants improving their risk management while they continue to improve their production efficiencies and energy costs. These two areas will be a focus on Christianson & Associates upcoming 7th Annual Biofuels Financial Conference next week.

As a veteran of the industry I asked John considering the results of the biofuels benchmarking study, what word of advice does he have for the industry to manage risk. “Looking at the operations of an ethanol plant today, one is you have to operate your business within the parameters that you can fundamentally handle the risk, recommended Christianson.

The report is available for free to all benchmarking participants and for a nominal fee for others. You can purchase the report here.

Ethanol Future Could be Headed to Senate Showdown

After the defeat Tuesday in the Senate of an amendment by Sen. Tom Coburn (R-OK) to immediately eliminate the Volumetric Ethanol Excise Tax Credit (VEETC), the ethanol industry is supporting another approach and the two concepts could be heading for a showdown in the Senate before the end of the month.

“That indeed has been teed up with a commitment by the majority leader for a vote on Coburn again in a couple of weeks and a vote on an alternative,” says Renewable Fuels Association CEO and President Bob Dinneen.

The alternative is the Ethanol Reform and Deficit Reduction Act introduced this week by Senators John Thune (R-SD) and Amy Klobuchar (D-MN) that would end the tax incentive this year while still helping the industry move forward. The legislation would provide tax incentives for infrastructure such as blender pumps, and for cellulosic biofuels development, as well as a variable safety-net determined by the price of oil. “It’s very fiscally responsible and makes sense as an insurance that the investment that the taxpayer has already made in this industry will be protected,” Dinneen said.

The ethanol industry and agriculture groups are supportive of the alternate approach, which would save about $1 billion toward deficit reduction and Dinneen hopes it will go head-to-head against the Coburn amendment. “I welcome that side-by-side comparison,” he says. “I think there would be a great deal of support for our vision.”

Ethanol Report PodcastIn this edition of “The Ethanol Report,” Dinneen talks about why ending the ethanol tax credit without a plan to move forward would be disastrous and how the ethanol industry is taking the initiative to work with Congress and develop a plan that cuts spending while continuing to move the country toward energy independence.

Listen to or download the interview with Dinneen here: Ethanol Report on Senate Legislation

Ethanol Faces Double Attack in Senate

The ethanol industry is facing a double pronged attack in the U.S. Senate.

Sen. Tom Coburn (R-OK) went to the floor last night with an amendment to eliminate the Volumetric Ethanol Excise Tax Credit (VEETC) immediately, while at the same time Sen. John McCain (R-AZ) is proposing to eliminate funding of ethanol infrastructure.

“It is a two-pronged attack, it is designed to stop the growth and evolution of the ethanol industry, it is decidedly anti-farmer, anti-consumer and really leads us down the path toward continued reliance on imported energy and higher prices at the pump,” said Renewable Fuels Association president and CEO Bob Dinneen.

The Coburn amendment is being added to an economic development bill and Dinneen says it has nothing to do with reducing the federal deficit. “This isn’t about fiscal responsibility or his amendment would have included the tens of billions of dollars that taxpayers continue to contribute to oil companies,” said Dinneen.

Dinneen urges ethanol producers, corn growers and anyone who buys gas to call their senators and encourage them to oppose the amendments. “It’s an attack on the nation’s rural economy, it’s an attack on our energy security and it’s an attack on consumers across this country,” he said.

The VEETC is scheduled to expire at the end of this year and the ethanol industry is already working with Congress to develop a phase-out plan that would allow the continued growth and development of the renewable fuel.

Listen to or download Dinneen’s comments here: RFA CEO Bob Dinneen

Ethanol Report on Domestic Energy Bill

Ethanol Report PodcastA bill was introduced today in the Senate that would modify the current ethanol blender’s tax credit set to expire at the end of this year.

Renewable Fuels Association
president and CEO Bob Dinneen says the bipartisan Domestic Energy Promotion Act of 2011 introduced by Sen. Chuck Grassley (R-IA) already has a number of co-sponsors. “Senators Conrad, Johanns, Klobuchar, Franken, Tim Johnson, Senator Harkin and Ben Nelson of Nebraska, so it is a bipartisan bill,” said Dinneen.

The bill modifies the current Volumetric Ethanol Excise Tax Credit (VEETC) by tying the tax incentive to the price of oil. “This proposal would continue to provide a demand driver for ethanol when oil prices are low, while not requiring the taxpayer to subsidize gasoline marketers when the marketplace is already providing an incentive to blend,” Dinneen said.

The bill includes two other provisions that would help increase ethanol infrastructure and investment in next generation technology. “The reform of the existing tax incentive to be a variable incentive, infrastructure tax incentives that will encourage marketers to invest in blender pumps, and cellulosic tax incentives to allow the industry to continue to evolve sets up a policy that we think is fiscally responsible and makes great sense for this nation’s energy and economic future.”

Listen to or download an interview with Dinneen about the bill here: Ethanol Report on Domestic Energy Promotion Act