Grains Council Working on Ethanol Exports

usgrainscouncil1The U.S. Grains Council (USGC) is working on promoting exports of U.S. ethanol through a partnership between USDA’s Foreign Agriculture Service, Growth Energy and the Renewable Fuels Association (RFA).

“We’ve been working since late March, early April to determine which markets we’re going to do market assessments in and then next year we’ll shift into market development activities,” said Ashley Kongs, USGC manager of ethanol export program. The Grains Council is planning three regional market assessment programs this year, going to Japan and Korea in September, Latin America in November, and southeast Asia in early December.

Earlier this year, USGC participated in a trade mission to China with USDA Undersecretary Michael Scuse where they were able to discuss the possibility of ethanol exports to that country. “They visited with a Chinese ethanol plant and they had meetings with the National Energy Administration in China,” said Kongs. “Currently ethanol can only be sold in six designated markets in China for blending with fuel, but the group had discussions about the possibility of expanding ethanol use nationwide.” Kongs says while there are challenges in the Chinese market, the Grains Council sees great potential for the future to open the door for U.S. ethanol exports.

USGC continues to build on its success in promoting exports of the ethanol co-product distillers grains and will be again this year joining RFA in hosting the Export Exchange, an international trade conference focused on the export of U.S. coarse grains and ethanol co-products held every two years. Early registration for the event is open until July 31 and USGC and RFA members are eligible for discounted pricing.

EPA Hears Corn Grower Concerns About RFS

Members of the National Corn Growers Association (NCGA) meeting in Washington DC were able to share their concerns about the delayed rule on 2014 volume obligations under the Renewable Fuel Standard with EPA Deputy Administrator Bob Perciasepe.

epa-ncga“The number needs to be out, it’s really ridiculous,” said NCGA president Martin Barbre, pictured here on the right with Perciasepe. “He said ‘we’re behind time frame’ and we had some delegates stand up and say ‘you’re not behind time frame, you’re way late.’” The final rule was expected by the end of June but EPA officials say it is being delayed because of the massive volume of comments that need to be studied in order to make a decision.

Barbre says while they appreciate the fact that EPA is taking the time to make sure they make the right decision, delaying it until almost the end of the year causes problems in the market. “Sort of what has created this issue with RINS and that run up in the RINS price is the lateness of the oil companies getting the numbers,” said Barbre. “They’re supposed to have these number in the spring, they get them in the fall, and by the end of the year they have got to have met their obligations. So it puts them in somewhat of a bind.”

“We’re not usually on the side of defending the oil companies, but in this case they just need to get the numbers faster so they can get themselves where they need to be,” Barbre added.

Listen to Barbre’s comments here: Interview with NCGA president Martin Barbre

“Climate of Opportunity” Theme for Biofuels Conference

Screen Shot 2014-07-18 at 12.23.20 PMSome biofuels producers have had some profitable times in the last couple of years, and an upcoming conference will give attendees information on how to take advantage of the opportunities put before them. Nationally known accounting and consulting firm Christianson & Associates will host its 10th annual Biofuels Financial Conference with the theme “Climate of Opportunity,” Aug. 27-28, 2014 in Minneapolis, Minn. at the Bloomington Embassy Suites.

This year’s Biofuels Financial Conference is focused on the best ways to take advantage of the many opportunities to optimize financial health and stability in today’s changing biofuels industry. By understanding current policy and knowing all available options for improving and diversifying production, attendees will learn how to capitalize on current strengths, identify and shore up any potential weaknesses, and create a strategic plan for growth creates an ongoing climate of opportunity.

“It’s important for board members and financial decision-makers to understand the opportunities in the current liquid fuels marketplace,” said [John Christianson, CPA and Partner at Christianson & Associates]. “What is the impact of the latest legislation changes, what are the marketplace opportunities, what are the technology investments that will bring a plant successfully into the next generation?”

Those attending the conference will be able to network with and learn from biofuels professionals from across the industry. More information is available here.

Ethanol Report on Cost Analysis

ethanol-report-adA new analysis by the Renewable Fuels Association (RFA) shows that over the past four years, ethanol has been the most economically competitive motor fuel and octane source in the world.

rfa-cooper-headIn this Ethanol Report, RFA Senior Vice President Geoff Cooper gives some of the major findings of the report, talks about why it has particular relevance in the California market, and how the study suggests that the cost of producing ethanol in the US will continue to fall.

Ethanol Report on Cost Analysis

Subscribe to “The Ethanol Report” with this link.

What is the Difference Between Crude Oil & Ethanol?

RFANewlogoThe U.S. Department of Transportation (DOT) has released a new tank car proposal that is designed to enhance the safe transportation of hazardous materials, including ethanol and crude oil. Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA) expressed concern over the rule’s same treatment of crude oil and ethanol when ethanol has a strong safety record while the high volatility of crude oil from the Bakken is not adequately addressed.

However, Dinneen did applaud the Administration for adopting a comprehensive approach to increasing concerns about rising shipments of highly volatile crude oil on the nation’s railways. He noted that the approach outlined today appears to address prevention, mitigation and response related to crude oil derailments.

“Ethanol is a low volatility, consistent commercial product with a 99.997 percent rail safety record,” said Dinneen. “Unlike oil from fracking, ethanol is not a highly volatile feedstock of unknown and differing quality and characteristics being shipped to a refinery for commercial use. Before this proposed rule is finalized, the RFA looks forward to engaging the Department of Transportation in a constructive dialogue about these differences, and the need to have a practical and effective phase-in of these new standards,” added Dinneen. “In the meanwhile, the U.S. ethanol industry will continue to work with all parties to assure the safe and effective transport of this low-cost, domestic renewable fuel to markets all across the country.”

Mudsummer Classic Features American Ethanol

dillon-ethanolAmerican Ethanol will be in the spotlight today as driver Austin Dillon will be defending his crown at Eldora Speedway for NASCAR’s Mudsummer Classic World Truck series race in Ohio.

Last year, Dillon won the historic race driving his American Ethanol branded truck, his first truck race since winning NASCAR’s Camping World Truck Series championship in 2011.

“Eldora is always an exciting race for NASCAR fans, but it is an exciting opportunity for corn farmers too,” said National Corn Growers Association (NCGA) NASCAR Advisory Committee Chair Jon Holzfaster. “With American Ethanol spokesman Austin Dillon firmly in the spotlight, Eldora provides a great platform to get our message about the environmental and economic benefits ethanol offers all Americans to a broader audience. The buzz continues to grow. Ethanol helps clean our air, improve our economic independence and benefits American consumers and farmers alike.”

American Ethanol is a partnership of Growth Energy and the National Corn Growers Association.

Ethanol Revving up for Sturgis Rally

sturgis-rfaFor the sixth year in a row, motorcycle enthusiasts from around the world will be able to learn more about ethanol, courtesy of the Renewable Fuels Association, at the famous Sturgis Motorcycle Rally.

About a half million motorcyclists will be converging on Sturgis, S.D., August 4-7 for the 74th annual Sturgis Motorcycle Rally, presenting an ideal opportunity for RFA to dispel misinformation concerning ethanol use in motorcycles. Among the ways RFA does that is “Free Fuel Happy Hours,” offering a free tank of E10 93-octane fuel to riders at the Sturgis Buffalo Chip campground. RFA is a major sponsor at the popular campground where the message “Ride Safe, Fuel Right” will be seen everywhere, including the main stage where this year’s concert line up includes Lynyrd Skynyrd, Collective Soul, Zac Brown Band, John Mayall, Alice Cooper, ZZ Top and Cheap Trick.

RFA also proudly sponsors the annual “Legends Ride” where proceeds are donated to local charities, including the Black Hills Special Olympics. All “Legends Ride” participants receive free “Fueled with Pride” giveaways and informational materials on ethanol before they embark on the ride that originates in Deadwood, S.D.

DomesticFuel will once again be there to bring all the sights and sounds to you. Check out last year’s photo album here.

Analysis: Ethanol Most Competitive Motor Fuel

According to a new analysis released today, “The Economic Competitiveness of U.S. Ethanol,” U.S. produced ethanol has been the most economically competitive motor fuel in the world over the past four years. In addition, ethanol has played an important role in E-85 fill-up photo Joanna Schroederreducing consumer fuel costs. The analysis was conducted by ABF Economics and released by the Renewable Fuels Association (RFA).

The analysis reviewed actual wholesale prices paid for ethanol, gasoline and alternative octane source in several U.S. and world markets between 2010-2013. Based on the data, the report concluded, “…U.S.-produced ethanol is an exceptionally competitive additive and fuel source…” and that “…U.S. ethanol has emerged as the lowest cost transportation fuel and octane source in the world over the past several years.”

Commenting on the analysis, RFA President and CEO Bob Dinneen said, “As proven by the recent boom in exports, American-made ethanol has evolved into the most cost competitive transportation fuel and octane source in the world. Through rapid technology adoption and innovation, U.S. producers have proudly earned the distinction of being the global leader and low-cost producer of clean-burning, renewable ethanol.”

Dinneen continued, “Despite the fact that ethanol offers greater consumer choice at a lower cost, entrenched petroleum companies continue to erect barriers that deny access to larger volumes of renewable fuels,” Dinneen continued. “In a truly free market, consumers would always choose a fuel that is produced domestically, is better for the environment and climate, and costs much less than gasoline. Unfortunately, free markets only exist in text books, underscoring the need for monopoly-breaking policies like the Renewable Fuel Standard.”

The ABF Economics study found that even after accounting for transportation costs to the reference markets of Los Angeles, Chicago, and New York, “The ‘spread’ between ethanol and RBOB [gasoline] has averaged 30 to 40 cents per gallon over the past four years in these three key markets and the difference averaged more than 60 cents per gallon in 2012.

As a result of this cost differential, the analysis found “…ethanol blended with RBOB to produce reformulated gasoline at a 10 percent (E10) blend has reduced the cost of motor fuel to consumers.” The analysis found that ethanol’s impact on gas prices goes far beyond the wholesale price spread: “This does not include the additional downward impact ethanol has on gasoline prices as a result of extending supplies and reducing demand for crude oil.”

Economic Competitiveness of Ethanol reportAccording to the report, “…even with depreciation of the real, U.S. ethanol has been more cost competitive than Brazilian ethanol in key U.S. and world markets over the past several years.” This has particular relevance in the California market, according to the study, because that state’s fuel policies strongly compel fuel suppliers to import Brazilian ethanol in lieu of U.S. ethanol. “Use of Brazilian ethanol in place of U.S. ethanol theoretically raised the price of E10 for California consumers by 8 cents per gallon over the past four years,” the study found.

In closing, the study indicates that the competitiveness of U.S. ethanol will only improve in the future: “This competitive advantage is expected to increase further, as U.S. ethanol and feedstock producers adopt new technologies and crude oil prices continue to trend higher.”

Crop Residues, Manure Hold Great Potential for Bioenergy

Crop residues and manure hold great potential as bioenergy sources, especially in areas such as the Midwest where row crops and livestock provide all the ingredients. This report from the Union of Concerned Scientists (UCS) says those resources will need some help, though, from the right policies, practices, and investments.
UCSreport
UCS analysis finds that by 2030, U.S. farmers could sustainably produce up to 155 million tons of crop residues, many times the current level of production. U.S. livestock could produce another 60 million tons of manure, to be turned into clean-burning biogas.

The right policies, practices, and investments will help these clean energy sources realize their potential—with huge benefits for farmers, communities, and the environment…

Fuel and electricity made from agricultural biomass is potentially clean too. With the right practices, ethanol made from crop residues can produce 90 percent fewer lifecycle emissions, compared to gasoline.

Many states could significantly scale up their use of crop residues and manure. The largest include Iowa, a leading producer of corn ethanol, and Arkansas, the nation’s top rice producer.

Texas and California offer a lot of potential as well because of those states’ large agricultural outputs.

EPA Issues New Rule for RINs Quality Assurance Program

epa-logoIn an effort to assure all parties of better control over possible fraud, the U.S. Environmental Protection Agency (EPA) has formally issued its new rule on a voluntary quality assurance program on Renewable Identification Numbers (RINs) used to track compliance with their renewable fuel volume obligations. The EPA proposed the rule earlier this month and issued it late last week that will elements designed to make it possible to verify the validity of RINs from the beginning of 2013 and going forward.

Today’s final action includes a voluntary third-party quality assurance program option for RINs that regulated parties may exercise as a supplement to the “buyer beware” liability as prescribed under existing regulations. The program provides a means for ensuring that RINs are properly generated through audits of renewable fuel production conducted by independent third-parties using quality assurance plans (QAPs), provides an affirmative defense for the transfer or use of invalid RINs that had been verified under an approved QAP, defines the conditions when RINs must be replaced, and a process for determining who will replace the RINs…

- Minimum requirements for a QAP, including such things as verification of feedstocks, verification that volumes produced are consistent with amount of feedstocks processed, and verification that RINs generated are appropriately categorized and match the volumes produced
- Qualifications for independent third-party auditors
- Requirements for audits of renewable fuel production facilities, including minimum frequency, site visits, review of records, and reporting
- Conditions under which a regulated party could assert an affirmative defense to civil liability for transferring or using an invalid RIN
- Identification of the party or parties who are responsible for replacing invalid RINs with valid RINs and the timing of such replacement
- A two percent limited exemption for calendar years 2014, 2015, and 2016 that exempts a small fraction of a party’s Renewable Volume Obligation (RVO) from the requirement of replacement of invalid RINs used for compliance if they were RINs verified through a QAP
- Changes to the EPA Moderated Transaction System (EMTS) that would accommodate the quality assurance program

There’s an interim period that covers back to February 21, 2013 through the end of this year which will finalize two proposed QAP programs, QAP A and QAP B.

Beginning January 1, 2015, there will be a single QAP, and the associated verified RINs will be referred to as Q-RINs.

Nebraska Corn Farmers, Aventine In Sugar Fight

According to a Reuters article, the corn-based ethanol industry in Nebraska is fighting an ethanol sugar-based ethanol plant over its feedstock. The Aventine Renewable Energy Holdings plant re-opened its Aurora, Nebraska ethanol plant back in May 2014. However, the plant, located in corn country, is reportedly using sugar from sugar beets to produce ethanol.

The United States Agricultural Department (USDA) has as program where ethanol plants can purchase cheap beet sugar for use in producing biofuels or biochemicals and Aventine is producing ethanol from this sugar source. Aventine’ use of sugar is the first large-scale production of sugar alcohol in Nebraska since the Prohibition.

sugar beetHowever, local corn farmers have sued Aventine claiming their use of sugar violates an agreement to use their grain exclusively as a feedstock for ethanol production. Aventine denies any wrongdoing, saying it has abided by its contract.

George Hohwieler, president and chief executive of the Aurora Cooperative Elevator Co., was quoted in the article as saying, “Hamilton County, Nebraska, by any measure is one of the most productive corn-producing counties in the world,” he said. “The message being sent to the marketplace is that they’re making ethanol out of sugar.”

Aventine chief executive Mark Beemer was quoted as saying the farmers’ coop was being short sighted in suing the company. “We’ve been very blunt. This is just a very short-term pathway to get the plant open and then convert back to corn ethanol,” he said.

There has been a long-running dispute between Aventine and the Nebraska farmers’ coop. In February, when Aventine received delivery via rail of the sugar, the coop filed suit claiming they were not allowed to use the rail line to receive any feedstock other than corn. The coop also filed suit in 2012 when the plant did not produce its nameplate capacity of 110 million gallons of ethanol per year, costing them $1.7 million.

As the lawsuits and harsh words continue to fly, Aventine argues that using sugar allowed them to re-open the plant, that had been idled for nearly 5 years and bringing jobs back to the area. At this point, Aventine says they have begun bidding to buy corn as an ethanol feedstock but because of the lawsuits, they are not negotiating to buy corn from the Aurora Cooperating Elevator.

As the lawsuits continue, it can only be said in a fight between corn and sugar, no one wins.

Twin Cedars FFA Raises Money for Ethanol Infrastructure

Josh Lopez is a sophomore at Twin Cedars high school (Bussey, Iowa) and he is already an ethanol advocate. During the American Ethanol 200 presented by Enogen, Josh who is a member of FFA, along with several other FFA members from his high school, walked around Iowa Speedway talking to NASCAR fans about the benefits of ethanol. But they didn’t stop there.

Josh LopezJosh and his team also raised money for ethanol infrastructure and Syngenta matched the funds raised – dollar-for-dollar- and donated the money plus the $1 per acre funds to Growth Energy. The $1 per acre program is one that donates $1 dollar per acre of Engoen corn grown to the renewable fuels industry. In total, more than $108K was donated this year.

I asked Josh why he came out to the races to talk about ethanol. “I love racing and our school has a strong agricultural program,” so he said it was a good fit. I also asked him what he thought about ethanol and he said his dad works for Syngenta so he grew up knowing that ethanol is better for the environment, a lot cheaper and reduces America’s need for foreign oil.

Josh said the most common question he is asked is what is ethanol? He noted that after talking with most consumers, and mentioning the NASCAR drivers are racing on the same E15 fuel that consumers can use, most of them become excited about ethanol.

Listen to my interview with Josh Lopez here: Josh Lopez interview

Visit the 2014 American Ethanol 200 presented by Enogen photo album.


Corn Growers Keep Ethanol in Focus

Ethanol and the Renewable Fuel Standard (RFS) were big topics this week as members of the National Corn Growers Association met in Washington DC.

ncga-ethanolMichigan farmer Jeff Sandborn, chair of the Ethanol Committee, said they spent the week talking with administration officials and members of Congress after being updated on the issues. “Right now, Congress faces rapidly evolving issues crucial to our members. The information and understanding coming out of these meetings will help each of our delegations make the strongest case possible for farmers.”

During the Ethanol Committee meeting, staff from the U.S. Environmental Protection Agency’s Office of Transportation and Air Quality provided an update on the regulatory issues facing the ethanol industry. On Thursday, the entire NCGA delegation heard from EPA Deputy Administrator Bob Perciasepe about the status of the pending 2014 volume obligation rule under the RFS.

“We greatly appreciate the deputy administrator’s willingness to participate in an open, well-considered conversation,” said NCGA President Martin Barbre of Illinois. While Perciasepe mainly dealt with the proposed Waters of the United States rule, he also fielded questions from growers pertaining to both the reduction in volume, and the continued delays of final RFS rule.

Cellulosic Ethanol Poll

New Holland ZimmPollOur latest ZimmPoll asked the question, “How would the EPA water rule impact you?”

This is one of the hottest topics in the ag sector these days with a lot of uncertainty about what the future holds, especially when you see states starting to fine people for “wasteful use of water.” On the federal level the EPA says that under the proposed rules defining Waters of the United States (WOTUS) under the Clean Water Act (CWA) “all normal farming practices are exempt – period” but those in the agriculture community are questioning if that will hold true. Hopefully you’ve looked at how this will impact your farm or customers?

here are the poll results:

  • Just more govt. regulation – 38.9%
  • Permits for routine activities – 16.67%
  • Will regulate more of my property – 18.67%
  • Not sure but worried about it – 11.1%
  • Not worried about it – 11.1%
  • Don’t know or don’t care – 5.56%

Our new ZimmPoll is now live and asks the question, What are your thoughts on cellulosic ethanol? We just saw the first commercial production of cellulosic ethanol in Iowa from team work between Syngenta’s Enogen and the Quad County Corn Processors. Let us know what you think.

Don’t Miss the Biofuels Financial Conference

Screen Shot 2014-07-18 at 12.23.20 PMDon’t miss the annual Biofuels Financial Conference: Climate of Opportunity hosted by Christianson & Associates. This year’s event takes place August 27-28, 2014 in Bloomington, Minnesota. The conference is aimed at plant managers, board members, plant CFO’s and more.

This year’s featured session is Expanding Beyond the Baseline. Industry experts will provide critical information about financial opportunities and options available for ensuring that your organization explores all avenues for maximizing the value of your plant’s production capabilities. Topics will cover:

  • Jonathan Olmscheid of Christianson & Associates will provide background on grandfathered volume and on the valid pathways to maximize RIN value beyond your plant’s grandfathered production volume. Since the export market provides another avenue for ethanol sales and thus increased production, Olmscheid will also touch on some key points about the export market and Canadian RINs.
  • Experts from plants and from Merjent will describe in detail the process of petitioning for pathways using two advanced technologies, from an engineering perspective as well as a general plant management perspective.
  • Paula Emberland of Christianson & Associates will review best practices and formulas for evaluating such improvement projects including diversifying co-products and improving processes, to calculate ROI, and an expert from Hydrodynamics will discuss, as an example, their bolt-on biodiesel production technology.

Early bird registration ends July 21. Click here to learn more about the Biofuels Financial Conference and to register online.