RFA: Rail Congestion Must Get Resolved

Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA) is speaking out again on the problems of rail congestion that is slowing down the delivery of ethanol and ethanol byproducts across the country. He submitted written testimony to the U.S. Senate Committee on Commerce, Science and Transportation that held a hearing yesterday to examine rail congestion and the harmful impact it has had on agriculture and other commodities.

Dinneen stressed the role that Bakken Crude rail shipments have played in increasing dwell times and decreasing train speeds and pointed toward the negative impact these delays are having on ethanol producers. “The rail system didn’t collapse last winter because of a snow drift in North Dakota,” he said. “It was because of a 400% increase in oil shipments from the Bakkens.”

RailcarsIn the written testimony Dinneen said, “The recent crisis of congestion that has seemingly overtaken the rail industry has become a huge and costly problem … This crisis is one that is causing significant harm to the economic health and well-being of our nation’s economy, as well as driving up costs for a wide array of commodities that rely on the rail for transportation…it is becoming more and more apparent that surging crude oil shipments are coming at the expense of other goods and commodities.”

Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on rail situation

Iowa E85 Sales Strong

IowaRFAlogoIowa motorists purchased over 2.9 million gallons of E85 in the second quarter of 2014, the second most sales in any second quarter on record, and a more than 200,000 gallon increase over the first quarter of 2014, according to the Iowa Renewable Fuels Association (IRFA).

“Two strong quarters of E85 sales are now in the books, and Iowa is poised for another big year in E85 sales,” said IRFA Executive Director Monte Shaw. “As White House officials review the final RFS volume levels, they should take note that when given the choice, motorists firmly support lower-cost, higher-level ethanol blends.”

E85, a fuel blend containing between 70 and 85 percent ethanol, is currently sold at more than 200 fueling sites in Iowa, and can be used in all flex-fuel vehicles (FFV).

Ethanol Report on Corn and Food Prices

ethanol-report-adIn this edition of the Ethanol Report, Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper talks about how corn prices have fallen but food prices continue to rise, and how that shows the “food versus fuel” argument is false.

A new report from RFA compares corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014.

Ethanol Report on Corn and Food Prices

Introducing Cellulosic Technology Cellerate

During the cellulosic ethanol celebration event at Quad County Corn Processors ethanol plant in Galva, Iowa yesterday, Syngenta unveiled the new brand for the cellulosic ethanol technology: Cellerate™. Enhanced by Enogen® corn enzyme technology, Cellerate is a collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC.

Cellerate is unique in that it is designed to increase an ethanol plant’s production by Cellerate cellulosic ethanol technologyallowing the corn kernel fiber to be converted into cellulosic ethanol. Ethanol plants can easily integrate Cellerate process technology into their existing production process. Cellerate, in conjunction with Enogen corn, will deliver notable benefits to ethanol plants beyond what can be achieved through either technology alone.

“The combination of Cellerate and Enogen represents the next leap forward in ethanol production,” said Jack Bernens, head of marketing and stakeholder relations for Enogen corn enzyme technology at Syngenta. “Ethanol is helping America reduce its dependence on foreign oil, lower prices at the pump, improve the environment with lower emissions, and grow the economy with jobs that can’t be outsourced. Together, these technologies will make ethanol more sustainable.”

In July 2014, collaboration between Syngenta and Cellulosic Ethanol Technologies, LLC, a wholly owned subsidiary of Quad County Corn Processors (QCCP), produced the first commercial-scale cellulosic ethanol in Iowa.

“The synergy of Cellerate and Enogen will decrease natural gas usage and increase ethanol throughput, while reducing a plant’s carbon footprint,” said Delayne Johnson, chief executive officer of QCCP. “These advantages, combined with higher protein DDGs and increased corn oil production, make the technology package appealing for ethanol plants looking to improve their bottom line.”

Quad County Processors Host Grand Opening

The first refinery to produce cellulosic ethanol with a bolt-on process officially opened its doors today.

quad-open-group“This is a historic day not just for the ethanol plant, but for the entire region,” said Delayne Johnson, CEO of Quad County Corn Processors in Galva, Iowa. “This is a perfect example of cutting edge technology, right here in our backyard and we are thrilled to have our plant using this ingenuity.” The Adding Cellulosic Ethanol (ACE) project, newly re-named “Cellerate,” allows QCCP to produce 2 million gallons of cellulosic ethanol each year from corn kernel fiber at their plant in Galva, Iowa.

“Today’s grand opening is a direct result of the ingenuity and hard work of the employees and shareholders of QCCP, but it’s also a direct result of the kind of innovation that occurs when a policy like the Renewable Fuel Standard (RFS) is in place,” said American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings. “More than any other policy enacted by Congress, the RFS has been a catalyst for innovation, including the kind of technology advancement developed at QCCP to make cellulosic ethanol from corn kernel fiber.”

quad-open-bob-brianRenewable Fuels Association president and CEO Bob Dinneen participated in the grand opening ceremony and praised QCCP, noting, “To the management, staff and investors of Quad County Corn Processors I say a hearty congratulations on your vision and your commitment to seeing it through. To EPA I say get out of Washington and see what is happening in places like Galva, Iowa.”

Dinneen tweeted from the event, “Quad Co cellulosic plant can tell Big Oil “we told you so” and make them eat their words!”

Michigan Next Stop for Ethanol Safety Seminars

Michigan is the next stop for the Ethanol Safety Seminars. Led by the Renewable Fuels Association (RFA) and in conjunction with the Michigan Department of Agriculture, there will be five training stops with the first on September 17 in Albion. Additional seminars will take place on September 18 in Lansing, September 19 in Grand Rapids, September 22 in Saginaw and September 24 in Warren. Each seminar is funded by a Promotion and Alternative Fuels Education grant from the Michigan Department of Agriculture.

Ethanol Safety SeminarAll seminars are free and feature a morning session from 9:00 a.m. to 2:00 p.m. and an evening session from 5:30 to 10:00 p.m. Certificates will be awarded to attendees at the completion of the course. While primarily targeting first responders, hazmat teams, safety managers, and local emergency planning committees, seminars are also open to the general public.

Ethanol Safety Seminars focus on numerous areas including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels, transportation and transfer of ethanol-blended fuels, storage and dispensing locations, firefighting foam principles and ethanol-blended fuel, health and safety considerations for ethanol-blended fuel emergencies and tank farm and bulk storage fire incidents.

“With nearly 14 billion gallons of ethanol flowing across our country via railroads, highway cargo tank trucks, and barges, it’s vital that our first responders know how to safely and effectively handle the situation should a spill occur,” said Craig VanBuren, consumer protection section director at the Michigan Department of Agriculture. “This grant allows the Renewable Fuels Association the opportunity to provide boots-on-the-ground training for our emergency responders if an ethanol spill were to happen.”

In addition to the seminars, RFA will also host five free retailer workshops throughout the state on how to market ethanol-blended fuels, including E15, E85, and all mid-level blends in between. The workshops will discuss economics, the process of capturing RINs, equipment options, buying fuel locally, and available incentives to offset investment. Workshops will take place on Sept. 16 in Warren and Flint, Sept. 17 in Grand Rapids and Kalamazoo, and Sept. 18 in Ann Arbor.

Energy Management Solutions Signs New Agreements

Energy Management Solutions, Inc. (EMS), a subsidiary of ICM ,has signed two new plant management agreements with Red River Energy LLC, located in Rosholt, South Dakota and Midwest Renewable Energy LLC, located in Sutherland, Nebraska.

ICMlogo1The Red River Energy ethanol plant will come back online and into full production this week after sitting idle for the past 18 months. The plant has an operating capacity of 25 million gallons of ethanol per year. The Midwest Renewable Energy plant is currently operating at a capacity of 22 million gallons of ethanol per year.

Dave VanderGriend, CEO of ICM said, “We are excited about expanding our plant management efforts with the addition of these two facilities. We’re proud to be their operator of choice and we look forward to helping each plant run as efficiently as possible.”

In addition to these newly signed contracts, EMS provides plant management services for Tharaldson Ethanol, Casselton, North Dakota and Noble Americas South Bend Ethanol LLC, South Bend, Indiana., which is scheduled to come online in the 4th quarter of this year.

RFA Releases Report to Debunk ‘Food v Fuel’

The Renewable Fuels Association (RFA) has released a new report today in an effort to “debunk” what they call the “fictional” food versus fuel debate. The report finds that while corn prices have dropped dramatically over the past two years, retail food prices of key foods including eggs, beef, poultry and pork have remained steady or continue to increase. The report concludes, “… fluctuations in corn prices do not significantly affect consumer food prices.”

RFA Corn Prices are plungingThe report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food…” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”

The report also compared corn prices to the price of dairy products, pork products, beef products poultry products and egg products from January 2007 – July 2014. Report findings include:

Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.

  • Retail prices for items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
  • Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
  • Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.

“The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases,” said Bob Dinneen, RFA president and CEO. “However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them. The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”

Groups Congratulate Project LIBERTY’s Success

Groups from all around the country are congratulating POET-DSM Advanced Bioenergy on their successful start-up of Project LIBERTY, a 25 million per gallon per year cellulosic ethanol plant located in Emmetsburg, Iowa. This is the first commercial-scale biorefinery in the country that uses agricultural waste, such as residue from corn fields, to produce cellulosic ethanol.

Project Liberty Grand OpeningThe Department of Energy helped to support the project with approximately $100 million in investments and research. The Project LIBERTY ethanol plant uses biochemical conversion technologies such as yeast and enzymes to convert cellulosic biomass into transportation fuels.

“The Energy Department’s investments in projects like the LIBERTY biorefinery are helping to bring innovative, cost-cutting biofuel technologies online and diversify our transportation fueling options,” said DOE Secretary Ernest Moniz. “Home-grown biofuels have the potential to further increase our energy security, stimulate rural economic development, and help reduce greenhouse gas emissions from the transportation sector.”

The biofuels industry came out in force to congratulate POET-DSM for their achievement. Tom Buis, CEO of Growth Energy, of which POET is a member, said of the milestone, “Congratulations to POET-DSM. Growth Energy and the entire biofuels industry recognizes this massive achievement in the development and commercial scale production of cellulosic ethanol, as well as the steadfast determination of innovative thinkers and leaders like those at POET-DSM who have made it possible. Years of research, ingenuity, perseverance and sheer determination have built the game changing cellulosic ethanol plant we are celebrating today.”

Iowa Governor Terry Branstad, vice chairman of the Governors’ Biofuels Coalition, was at the event and while IA Gov Terry Branstad during Project Liberty Grand Openingonsite called on the nation to recognize the accomplishment of the Poet-DSM Advanced Biofuels cellulosic ethanol plant, and other plants that have now come into production, in helping transform the nation’s energy future.

“The cellulosic ethanol industry has arrived and is an important avenue for adding value to agricultural products and spurring economic and family income growth in rural America,” said Governor Branstad said. Companies such as Poet and DSM have invested more than $1 billion to build the next generation of ethanol plants that can make biofuels from non-grain feedstocks. In addition, companies like Poet-DSM, Abengoa, DuPont and others have constructed advanced biofuel plants, putting thousands of Americans to work in building these plants,” Governor Branstad remarked.

Attendees were able to tour the plant and Gov. Brandstad said of this experience, “Walking through this complex biorefinery today is inspiring. This plant demonstrates the innovative spirit and technological skill needed to meet the nation’s energy challenge. It’s an important milestone on the nation’s road to clean fuels, diversifying our nation’s energy portfolio, rural economic growth, giving consumers choices at the fuel pump.”

Project Liberty Opens Its Doors for Business

After years of hearing about the future of ethanol and Project LIBERTY, the first commercial cellulosic ethanol plant located in Emmetsburg, Iowa using corn stover and corn cobs is officially open for business and in production. The POET-DSM Advanced Biofuels project is a joint venture between POET and Royal DSM.

Project Liberty Grand OpeningProject LIBERTY, was formally opened in the presence of His Majesty Willem-Alexander, King of the Netherlands, U.S. Secretary of Agriculture Tom Vilsack, Deputy Under Secretary Michael Knotek of the Department of Energy, Governor Terry Branstad and Lieutenant Governor Kim Reynolds of Iowa, other dignitaries and thousands of guests.

“Some have called cellulosic ethanol a ‘fantasy fuel,’ but today it becomes a reality,” said Jeff Broin, POET Founder and Executive Chairman. “With access now to new sources for energy, Project LIBERTY can be the first step in transforming our economy, our environment and our national security.”

The cellulosic ethanol facility converts baled corn cobs, leaves, husk and stalk into renewable fuel. The plant has now officially started up, processing its first batch of biomass into cellulosic ethanol and is moving forward toward continuous operation. At full capacity, it will convert 770 tons of biomass per day to produce ethanol at a rate of 20 million gallons per year, later ramping up to 25 million gallons per year.

Agriculture Secretary Tom Vilsack said during the event, “The Project LIBERTY opening demonstrates that America is ready for advanced renewable energy production. USDA invested to help bring this facility online because it is boosting America’s energy independence, cutting carbon pollution, and holds great promise for our domestic agriculture and energy industries. This facility has already created local jobs and opportunities for farmers, and it will continue to spur local investment and open the door for new technology and job growth across rural America. I congratulate the POET-DSM Advanced Biofuels team on their grand opening and for all they have done and the opportunities they will continue to create for farmers and rural communities.”
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New Study: E15 Would Reduce Smog

According to a new study conducted by Life Cycle Associates, using E15 ethanol blends rather than regular gas will reduce cancer-causing pollutants and smog in Chicago’s air. The research examined and aggregated a wide range of research to assess changes in the emissions from E15 taChicago E15 logoilpipe and evaporative emissions, compared to regular gasoline. The following factors were considered for the study: ethanol blend composition; vehicle tailpipe emissions; storage and fueling with ethanol blends; changes in evaporative and exhaust emissions; human health impacts; ozone potential; and life cycle greenhouse gas emissions.

To determine how much E15 reduces the risk of cancer, the study looked at several cancer-causing pollutants found in vehicle exhaust and found that using E15 shows a projected reduction in cancer risk because the ethanol in E15 displaces carcinogens like benzene and 1,3 butadiene.

“The most significant changes from a change … to E15 include a reduction in cancer risk from vehicle exhaust and evaporative emissions, a reduction in the potential to form ozone or photochemical smog, and a reduction in greenhouse gas (GHG) emissions,” the study reported.

The study found:

  • The renewable fuel in E15 displaces cancer causing emissions from gasoline, resulting in a net decrease in cancer risk of 6.6% compared to regular gas.
  • The smog forming potential from E15 is lower than in regular gas.
  • Using E15 gasoline with 15 percent ethanol results in a 1.5% reduction in greenhouse gas emissions compared to regular gasoline which contains 10% ethanol.

Adding ethanol also displaces gasoline components with higher smog forming potential, resulting in a lower smog forming potential for E15 blends than regular gasoline, according to the paper. In addition, the study reviewed extensive research on E15’s influence on greenhouse gas emissions, finding a reduction of 1.5 percent in E15 gasoline compared to regular, E10 gasoline. However, E15 has had difficulty gaining traction in the marketplace due to infrastructure challenges.

Those discoveries have significant implications for Chicago, which suffers from poor air quality and increased risk from disease-causing pollutants, particularly on the South Side. This study shows how the availability of E15 gasoline could help to solve those problems.

The report was supported by the Department of Energy (DOE), National Renewable Energy Laboratory (NREL), California Air Resources Board (CARB), Coordinating Research Council, Oak Ridge National Laboratory, the University of Illinois and several other institutions.

AMRC Looks at Ethanol Plant Profitability Projections

Don Hofstrand, retired agriculture extension economist with the Agricultural Marketing Resource Center (AMRC) located at Iowa State University, has recently published projections for ethanol plant profitability over the next several years. When the ethanol boom really took off, Hofstrand noted that most farmers purchased shares in ethanol plants as a way to hedge against low corn prices. So AMRC began to look track the monthly profitability of ethanol plants.

hofstrandfigure5_E2C7BA3AB4D47“We track the monthly profitability by using the current ethanol prices, the current corn prices, distillers grains (DDGs) and natural gas. Each month we compute that and have a record going back to 2005 of how the profitability of those systems have changed over that period of time to give a indication of the current economic status of ethanol production and biodiesel production,” explained Hofstrand.

Today it appears that there is a saturated ethanol market that may cause an excess of corn supplies. However, Hofstrand said that over the past few years corn prices have been high taking a bite out of ethanol production profits. He finds there will be substantial uncertainly surrounding the ethanol selling price and net returns to the ethanol supply chain. This could be affected by rising corn production costs and where they will trend in the future is uncertain. He also finds that although energy prices may soften, interest rates are expected to strengthen, and with continued improvement in genetics, seed cost may continue to rise, but the rise may be offset by higher yields.

Ultimately, Hosftrand said that what is certain is that corn selling prices need to stay relatively strong in relation to historic levels to continue generating farm operator net returns from the marketplace.

Valero Restarts Mount Vernon, IN Ethanol Plant

Valero Renewable Fuels Company has restarted its recently purchased ethanol plant located in Mount Vernon, Indiana. On hand for the Port Appreciation and Welcome Ceremony was Lt. Gov. Sue Ellspermann and other state and local officials. The Mount Vernon plant is the 11th corn ethanol plant in Valero Renewables’ system and its second in Indiana. It has an annual production capacity of 110 million gallons and uses Delta-T technology, similar to the process already in use at Valero Renewables’ ethanol plant in Jefferson, Wisconsin.

“The opening of Valero’s ethanol facility at the Port of Indiana-Mount Vernon is another economic development win for the State of Indiana,” Ellspermann said during the ceremony. “When the tenth largest Valero renewables_logo smallcompany in the U.S. decides to make such a large investment right here in Indiana, the company is confirming that we have a great business climate that includes our strong agriculture industry and our multimodal transportation infrastructure. Not only is Valero developing a partnership with the Ports of Indiana on this project, but the company is also making a significant commitment to support Mount Vernon and the entire Southwest Indiana community.”

Adding the Mount Vernon location gives Valero more than 1.3 billion gallons per year in ethanol production. The plant had been shut down for approximately two years, but Valero Renewables resumed production at the site earlier in August and now employs approximately 65 full-time workers.

“We pride ourselves in our operations and being a positive impact to the community,” said Martin Parrish, senior vice president, Valero Renewable Fuels Company LLC. “I’m confident you will find that our actions back this up.” During the event Parrish presented a donation of $20,000 on behalf of the Valero Energy Foundation to the United Way of Posey County to mark the beginning of Valero’s impact in the area.

According to Valero, the Mount Vernon ethanol plant’s logistical advantages include ready access to corn suppliers as well as strong rail, truck and barge transportation. The plant is at the Port of Indiana-Mount Vernon on a location leased from Ports of Indiana, the state port authority.

Growth Energy’s Model Ethanol Plant

Growth Energy Model PlantDuring the Farm Progress Show last week several companies featured some cool technologies and displays featuring agriculture’s role in producing clean energy such as biofuels. One partnership that has been very successful is that between New Holland and Growth Energy. New Holland has very publicly shown its support for ethanol has developed equipment for farmers to more easily harvest their energy crops.

When visiting the New Holland booth not only could you see this amazing equipment, but you were able to see a model ethanol plant – thousands of Farm Progress attendees have never has the opportunity to visit an ethanol plant.

In this video with Kelly Manning, vice president of development for Growth Energy, you can get your own virtual tour of the ethanol plant. The educational display was under glass and the ethanol plant was built to scale demonstrating the role feedstocks play in the production process as well as how the products are delivered from the plant.

FAPRI: Corn Prices Down, Ethanol Future Depends on EPA

FAPRI logoCorn prices are down, and the future of ethanol seems to hinge upon what the government does on the Renewable Fuels Standard (RFS). A new report from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri shows that there have been sharp declines in the price for grains and oilseeds used to make ethanol and biodiesel. But the green fuels’ futures seem to hang on what the U.S. Environmental Protection Agency (EPA) does with its much-anticipated decision on the RFS:

· The potential for record corn and soybean crops has weighed on prices for grains and oilseeds. Corn and soybean prices for the crops harvested this fall could be the lowest since 2009.

· Corn prices fall to $3.89 per bushel for the 2014 crop. Even with a projected decline in 2015 U.S. corn production, prices remain around $4 per bushel in 2015 and beyond.

· Ethanol production prospects depend, in part, on EPA decisions about how to implement the Renewable Fuel Standard (RFS). With lower prices, ethanol exports continue to increase in 2015.

You can read the entire FAPRI report here.