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

RFA Says Ethanol Helps Gas Prices

RFAThe latest average cost for a gallon of gas nationwide, as reported by AAA, is $3.88, but it would already be $4.00 a gallon without ten percent ethanol.

According to the Renewable Fuels Association (RFA), based on current market conditions and federal renewable fuels policy, 10 percent ethanol blends (E10) are keeping gasoline prices $0.12 per gallon cheaper than they otherwise would be.

Ethanol Report PodcastI talked with RFA Association Vice President of Research and Analysis Geoff Cooper who explains the math behind that calculation (which you can also find on the RFA website) and how the 45 cent per gallon tax credit creates additional savings at the pump for consumers in this edition of “The Ethanol Report.”

Listen to or download the Ethanol Report on gas prices here: Ethanol Report on Gas Prices

Ethanol Report on Boat Racing

Fueled with PrideA new partnership between the ethanol industry and boat racers is hoping to dunk the image of ethanol as a bad fuel for boat engines.

Through the alliance between the Renewable Fuels Association (RFA) and the National Boat Racing Association (NBRA), the 2011 National Boat Racing Association Race Series will be “fueled with pride” and ten percent ethanol.

Ethanol Report PodcastThis edition of “The Ethanol Report” podcast features features comments from RFA Director of Market Development Robert White and NBRA president Dan Crummett about the new partnership and how it will demonstrate the safety and performance of ethanol-blended fuel in boat engines.

Listen to or download the Ethanol Report here: Ethanol Report on Boat Racing Partnership

National Ethanol Conference Wrap Up

Ethanol Report Podcast
The Renewable Fuels Association (RFA) celebrated 30 years of advocating for ethanol this week during the 16th annual National Ethanol Conference in Phoenix.

NEC 2011 Bob DinneenThis edition of “The Ethanol Report” podcast features an interview with RFA president and CEO Bob Dinneen on the conference, the state of the ethanol industry, the new Advanced Ethanol Council and recent developments in Congress regarding funding for ethanol expansion, as well as thoughts about higher oil prices.

The 2011 National Ethanol Conference Photo Album is up to date with all the conference photos and more posts will be added in the days to come. It was a great conference and we would just like to say “Happy Anniversary RFA!”

Listen to or download the Ethanol Report on the 2011 NEC here: Ethanol Report on National Ethanol Conference

Ethanol Report on New Advanced Ethanol Council

Ethanol Report PodcastIn this edition of “The Ethanol Report” podcast, we hear from the executive director of the newly formed Advanced Ethanol Council (AEC), Brooke Coleman.

Brooke ColemanColeman has been involved with the ethanol industry for over a decade, most recently as Executive Director of the New Fuels Alliance. He says that the new organization came together around a common theme. “The common theme is that both existing corn ethanol producers and tomorrow’s cellulose and advanced ethanol producers have a common interest – opening up U.S. fuel markets to the use of ethanol.”

“Advanced ethanol is truly on the cusp of commercialization,” he continued. “It’s a fuel that is not 15 years down the road, it’s a realistic option and there are plants in the ground already today producing advanced ethanol at demonstration and commercial scale.”

Coleman points out that the organization encompasses all types of advanced ethanol, not just cellulosic, which is a process that specifically uses cellulose to create ethanol. “At the end of the day, we want to make sure we develop market places for advanced ethanol – not just one type,” he said.

The AEC represents a wide range of advanced ethanol technologies utilizing feedstock from grasses and corn stalks to wood waste, municipal solid waste and algae to produce ethanol. The industry leaders founding the AEC include Abengoa Bioenergy , BlueFire Renewables, Coskata, Enerkem , Fulcrum BioEnergy, Inbicon, Iogen, Mascoma, Osage Bio Energy and Qteros, together with the Renewable Fuels Association.

Listen to or download the Ethanol Report on the new AEC here: Ethanol Report on Advanced Ethanol Council

Ethanol Report on World Supply Demand Estimates

Ethanol Report PodcastThe February USDA World Agriculture Supply and Demand Estimate (WASDE) report out today includes some revisions in grain use numbers. This edition of the Ethanol Report podcast with Renewable Fuels Association Vice President of Research Geoff Cooper takes a look at those numbers and provides some perspective from the ethanol industry standpoint.

For U.S. corn supplies, USDA lowered its forecast of marketing year ending stocks to 675 million bushels, down 70 million bushels from the January estimate. The change comes from slight increases in the estimates of corn for ethanol use and sweetener/starch use. Globally, USDA is estimating a slightly smaller grain (wheat, rice, corn, etc.) supply than last year’s record amount of more than 2.7 billion metric tons. “People lose sight of the global picture of the grain markets,” Cooper says. “The fact of the matter is, the global grain supply remains very strong.”

Cooper says RFA believes USDA may be slightly overestimating corn for ethanol use, even though export demand prospects remain strong. “Even if we do assume that we export 300 or 400 million gallons of ethanol in this marketing year, that still means the domestic market is going to need to absorb the remaining 13.3 or 13.4 billion gallons, which seems unlikely given the E10 blend wall and the fact that E15 hasn’t really penetrated the market yet.”

The estimates are likely to re-ignite the food versus fuel debate, but Cooper notes that higher prices will likely mean farmers will plant more corn this year. “It’s a basic concept that farmers respond to price signals,” he said.

Listen to the Ethanol Report here: Ethanol Report on February WASDE

Ethanol Report on the Year Ahead

Ethanol Report PodcastNow that 2010 is just a memory and Congressional leaders are returning to Washington this week to open the first session of the 112th Congress, what does the future hold for ethanol?

bob dinneen In this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen gets out his crystal ball and talks about the year ahead for the ethanol industry.

Dinneen discusses the future for ethanol policy in the new Congress, what the EPA needs to do yet as far as getting E15 on the road, the next step in the challenge to California’s Low Carbon Fuel Standard, and plans for the 16th annual National Ethanol Conference, February 20-22 in Phoenix.

Listen to the Ethanol Report here: Ethanol Report on 2011