CARB Stresses ILUC Update is Preliminary

carb-14-2California Air Resources Board (CARB) staff spent four hours on Tuesday afternoon detailing reviews made of Indirect Land Use Change (iLUC) models and analysis for the state’s Low Carbon Fuel Standard (LCFS), strongly stressing that their results are preliminary.

“This is a work in progress,” said Air Resources Engineer Anil Prabhu as he began his power point presentation detailing the history of the iLUC analysis used by the agency, recommendations by the Expert Work Group (EWG), and much technical scientific information. Staff also stressed repeatedly that CARB is seeking feedback from all stakeholders on the preliminary conclusions presented.

carb-workshopThe 84 slide presentation of details on how CARB arrived at the values they are proposing for corn ethanol, sugarcane ethanol, soy biodiesel, canola biodiesel and sorghum ethanol was interspersed with dozens of questions from stakeholders and scientists present or listening in on the webcast.

Among those challenging the CARB results several times was Steffen Mueller with the University of Illinois-Chicago and Genscape, a member of the original CARB EWG. “There’s a lot of basic information missing (here) to engage in a productive discussion,” Mueller said, noting that the Agro-Ecological Zone – Emissions Factor (AEZ-EF) model presented was from 2011 and wondering when they would be able to see the updates CARB made to the model. “There’s been a lot of republications since 2011,” he said, to which CARB staff responded it would be updated “probably within the next week or two.”

Much of CARB’s data was presented based on Purdue University’s GTAP (Global Trade Analysis Project) work, including some research done by agricultural economist Wally Tyner, who called in to set the record straight. “What’s been presented today is really CARB’s work and not Purdue’s work,” said Tyner, who mainly called to dispute the Yield Price Elasticity assumptions made in the CARB presentations, which he says is “basically incorrect.” Wally Tyner comments and CARB staff response

Tyner also noted that there “is a lot of uncertainty in emission factors” as well as a great deal in land use change, and that seemed to be the theme of the entire meeting with nearly a quarter of the power point presentation being devoted to “Evaluation of Uncertainty” and “Why Results Vary Between Studies.” While the CARB staff repeatedly reminded those present that they welcomed any new or updated data that could be supplied, it was overwhelmingly clear that there is no scientific consensus whatsoever on the topic of indirect land use change. Continue reading

Ethanol Exports Start 2014 Higher

Exports of U.S. ethanol started 2014 at the highest level seen in over two years.

rfa-annAccording to U.S. Census Bureau data, ethanol exports in January totaled 86 million gallons, which is the highest monthly volume since December 2011. “Exports were up a third from December 2013, while imports remained sparse, meaning the United States was a net ethanol exporter by the widest margin in over two years,” according to Renewable Fuels Association research analyst Ann Lewis, writing on the E-xchange blog.

Brazil was the top customer for U.S. ethanol, beating out Canada for the number one spot, importing nearly 23.9 million gallons, the largest monthly volume to Brazil in two years. Exports to Canada dropped 36% from December to 18.8 million gallons (mg). Rounding out the top destinations were the United Arab Emirates (12.4 mg), India (10.7 mg), the Philippines (5.5 mg), and Mexico (3.3 mg).

Meanwhile, exports of the ethanol co-product distillers dried grains (DDGs) were lower in January, down 9% to 903,827 metric tons (mt). Lewis notes that China was again the leading destination with 344,147 mt. “However, China’s market share scaled back to 38%, in contrast with its majority stake (56%) of U.S. DDGs exports averaged over the second half of 2013,” writes Lewis. Mexico (140,664 mt), South Korea (77,977 mt), Vietnam (48,514 mt), and Japan (44,505 mt) rounded out the top five DDGS markets in January.

POET-DSM Joins Advanced Ethanol Council

aeclogoPOET-DSM Advanced Biofuels is the newest member to join the Advanced Ethanol Council (AEC).

“As cellulosic ethanol becomes a growing force in fulfilling biofuel requirements in the U.S., it’s important for POET-DSM Advanced Biofuels to work with other industry leaders to help shape policies that ensure consumer understanding of – and access to – its environmental, economic and energy-security benefits,” said Steve Hartig, General Manager – Licensing for POET-DSM Advanced Biofuels.

The joint venture between ethanol production company POET and Royal DSM, a Netherlands-based bio science company, is nearing completion of a 25 million gallon per year cellulosic ethanol biorefinery called Project LIBERTY, located in Emmetsburg, Iowa. The technology developed for the facility is available for licensing to develop other low-carbon, cellulosic ethanol production plants.

“As a key player in the industry that has the proven know-how to scale up its advanced technology to commercial scale, POET-DSM is a strong, strategic addition to the Council’s ranks as cellulosic ethanol moves from the development stage to full-scale commercial production in 2014,” said Brooke Coleman, Executive Director of the AEC.

CARB Considers Small ILUC Change for Ethanol

carb-14-2The California Air Resources Board (CARB) today is proposing potential changes to indirect land use change (iLUC) penalties under the Low Carbon Fuel Standard (LCFS) which some scientists and the ethanol industry say are a start, but don’t go far enough.

Based on a review of materials made available by CARB prior to the workshop, Renewable Fuels Association (RFA) President and CEO Bob Dinneen said, “CARB appears to be taking a small step in the right direction, but the science shows a much larger reduction to the iLUC penalty for corn ethanol is warranted.”

RFA-logo-13Dinneen notes that a group of 14 well-known scientists, including five members of CARB’s own expert work group, sent a letter to CARB last week recommending that the penalty should be lowered by 50-80 percent, rather than the 20 percent CARB is proposing. “The larger issue here is that in the five years since the LCFS was adopted, there have been no indications that the policy has caused—or will cause—any kind of land use change,” said Dinneen. “Amazon deforestation has fallen to its lowest rate on record, U.S. cropland area continues to shrink, and U.S. forested area continues to increase. All of this suggests the iLUC hypothesis needs to be critically re-evaluated.”

Dinneen believes that California consumers will be negatively impacted if CARB maintains the iLUC penalty for corn ethanol. “Under CARB’s apparent proposal, grain ethanol—the lowest-cost renewable fuel used in the California market today—will ultimately be replaced with higher-priced imported fuel,” said Dinneen.

The CARB workshop on the proposed Indirect Land Use Change values and how they were determined by staff will be webcast today beginning at 1:00 pm Pacific time. During the webcasts, CARB will also be accepting feedback and questions sent via email to sierrarm@calepa.ca.gov.

Analysis: Export Market a Bright Spot for US Ethanol

Ethanol producers might be fretting about the government’s proposal to lower the amount of the green fuel to be mixed into the Nation’s fuel supply. But this analysis from the University of Illinois points out that those Renewable Fuel Standard (RFS) numbers don’t matter when it comes to ethanol going over the border and to foreign shores, a bright spot for the American industry.

An important point to note is that ethanol or other biofuels produced in the US and exported for consumption overseas do not count toward the blenders’ RFS obligations. The Renewable Identification Numbers (RINs) associated with exported biofuels are retired and no longer eligible for use towards RFS compliance. Thus, exports are not substituted for domestic consumption but rather represent additional demand. Ultimately, exports provide a path around, rather than through, the ethanol blend wall by allowing the domestic industry to produce greater volumes of ethanol than the blend wall limitation implies for domestic use.
ethanolexports
The analysis goes on to look at markets for American ethanol in Brazil, Canada, the European Union, Mexico and other foreign consumers and how it could take up the amount proposed to be lowered in the RFS.

Biodiesel, Ethanol Educator Wins Ag Teaching Award

junco1A high school chemistry teacher is honored, in part, for his work to teach his students about biodiesel. This article from The Grower says Gustavo Junco, an advanced-placement chemistry teacher at West Broward High School in Pembroke Pines in south Florida, taught his class how to power a go-kart with biodiesel made from corn and sunflower seed oil and picked up the 2014 Excellence in Teaching about Agriculture Award.

The award is sponsored by the Florida Agriculture in the Classroom, a Gaineville-based non-profit group that promotes agricultural education to students ranging from kingergarten to high school.

Junco has been teaching agro-eco0logy and advanced-placement chemistry to 10th, 11th and 12th graders at West Broward High for 10 years.

His chemistry students grow sunflowers in the school garden, then extract oil from the seeds that is then converted to biodiesel.

In addition, Junco’s honors chemistry class is turning sugarcane juice into cellulosic ethanol.

He’ll join three other Florida teachers going to the 2014 National Agriculture in the Classroom conference this summer in Hershey, Pa.

Iowa AG: EPA Proposal on Ethanol Violates Law

tommillerThe proposed lowering of the amount of ethanol to be blended into the country’s fuel supply raises the possibility the U.S. government could face a lawsuit for breaking the law. In this article from Ethanol Producer Magazine, comments from Iowa Attorney General Tom Miller indicates the Environmental Protection Agency’s (EPA) to lower the Renewable Volume Obligations (RVOs) for ethanol violate Congress’ original intent.

Section 211(o)(2)(B) of the Clean Air Act expressly states the RFS mandated volume of renewable fuel to be included in gasoline: The total for 2014 is 18.15 billion gallons. However, section 211(o)(7)(A)(ii) provides a “general waiver” authority under which the EPA may modify these amounts if “there is an inadequate domestic supply.”

Iowa Attorney General Thomas J. Miller submitted comments to the proposal outlining several objections to EPA’s interpretation of the waiver authority, based on the well-known Chevron test used by the courts to assess a federal agency’s interpretation of a statute: 1) If the statute is clear, the court must enforce the law’s unambiguous language; and 2) If the statute is not clear, the agency’s interpretation must be permissible.

Miller argues that the statute unambiguously prohibits EPA from considering the distribution capacity of blended fuel. Under section 211(o)(7)(A)(ii), the term “supply” unambiguously refers to the “quantity of renewable fuel” required under section 211(o)(2). Therefore, in order to reduce the RFS for total renewable fuel, EPA must find that there is an “inadequate domestic supply” of “renewable fuel.”

Miller goes on to say the EPA’s interpretation of what it is allowed to do is not permissible, and he points out that Congress’ intent when passing the RFS was “to move the United States towards greater energy independence and security” and “to increase the production of clean renewable fuels.” The article also points out that Miller is pretty successful when leading multistate litigation.

Iowa Farmers Oppose RFS Changes

iowa-soyA vast majority of Iowa farmers in a recent poll oppose changes to the Renewable Fuel Standard (RFS).

agri-pulseThe Agri-Pulse Farm Opinion Poll, launched last month in partnership with the Iowa Soybean Association, found that 92% of farmers polled oppose the Environmental Protection Agency proposal to lower of the amount of corn-based ethanol and biodiesel required to be blended in the nation’s fuel as part of the RFS.

In addition, almost three out of five farmers responding (58 percent) said that, of several national issues including the Farm Bill, trade, tax codes and immigration, the RFS is most important to the future profitability of their farms.

The poll also found that farmers expect to see weaker financial returns in 2014 and will adjust their expenditures – spending less on fertilizer and equipment but more on crop insurance. The new poll was taken February 23 and included more than 130 Iowa farmers responding to 12 unaided questions.

Ethanol Advocate Honored by Corn Growers

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

Jere White (center) with his wife Linda and son Robert, honored by NCGA CEO Rick Tolman and president Martin Barbre

The National Corn Growers Association (NCGA) celebrated the long and productive career of an ethanol advocate and industry leader during the recent Commodity Classic.

Jere White is retiring from the Kansas Corn Growers after leading that organization for a quarter of a century and was presented with the Meritorious Service Award from NCGA. He has been a strong supporter of the ethanol industry during that time and his son Robert is Director of Market Development for the Renewable Fuels Association (RFA).

An avid motorcyclist, White had a serious accident in September 2012, and while he has made a remarkable recovery from critical injuries, he recently decided it was time to pass the reins of the association on to someone else.

classic14-greg-jereThe new Kansas Corn CEO, pictured here with Jere, is Greg Krissek – also a long-time ethanol advocate and industry leader. In his career, Greg has served as Assistant Secretary at the Kansas Department of Agriculture; Director of Operations at Kansas Corn and Kansas Grain Sorghum; Director of Government Affairs for ICM Inc. and, most recently was a manager at Kennedy and Coe, LLC. He has also served on many ethanol and agricultural association boards and on seven ethanol plant boards of directors.

2014 Commodity Classic Photos

California to Consider Updating ILUC for Biofuels

carb-14The California Air Resources Board (ARB) is holding two public workshops regarding the Low Carbon Fuel Standard (LCFS) this week – one to discuss general updates to the LCFS regulation, and the second to discuss updates to the indirect land use change (iLUC) values. Stakeholder feedback is being solicited for both workshops.

The board will discuss a proposal to update iLUC values for corn ethanol, sugarcane ethanol, and soy biodiesel, as well as proposed iLUC values for canola biodiesel, sorghum ethanol, and palm biodiesel.

According to a staff concept paper released prior to the meeting, based on recommendations provided by an Expert Working Group, “(p)reliminary results indicate reductions in the iLUC values for soy biodiesel, sugarcane ethanol, and corn ethanol.” The paper states that ARB staff “contracted with experts to refine and improve the iLUC analysis” and as a result “has incorporated significant changes in the estimation of iLUC for biofuels.”

Among the model and data updates that were included in the new estimates are re-estimated energy sector demand and supply elasticity values; improved treatment of corn ethanol co-product (DDGS); improved treatment of soy meal, soy oil, and soy biodiesel; modified structure of the livestock sector;improved method of estimating the productivity of new cropland; adopting a consistent model version and set of model inputs for all biofuel pathways; and revised yield and demand responses to price.

The question is whether the reduction for corn ethanol will be significant enough to be what the industry believes is closer to reality. Some scientists consulted by CARB believe that they are still not using the most updated modeling methods to determine iLUC and that analyses conducted since the LCFS was adopted in 2009 show emissions for corn ethanol are less than half what was estimated at the time.

The adjustments will be presented by staff at the iLUC workshop, scheduled for Tuesday, March 11, from 1:00 – 5:00 pm.

Ethanol’s Voice Heard at Commodity Classic

white1It might not be a biofuels convention per se, but the recently completed Commodity Classic in San Antonio attracted lots of producers and advocates for the green fuels. Previously, I talked to Joe Jobe from the National Biodiesel Board about his group’s participation in the annual meeting of corn, wheat, soybean and sorghum growers. At the booth next door was another group in the biofuels game, the Renewable Fuels Association, representing the ethanol industry. RFA’s Director of Market Development Robert White said that they’re glad to come out and talk with the thousands of corn farmers attending who are a big part of the main feedstock for ethanol and invest heavily themselves in the industry.

“It’s a good place for us to be. It’s actually nice to go into a friendly environment every once in a while,” he said.

Of course, the biggest thing they heard at the event was the concerns over the Environmental Protection Agency’s (EPA) proposal to cut a billion gallons of ethanol from the Renewable Volume Obligations, the amount of ethanol required to be blended into the Nation’s fuel supply. Robert said they need to counter some of the myths that petroleum companies are trying to spread with fact-based arguments in favor of ethanol.

“And it has to be strategic, because if the opposition to the [Renewable Fuels Standard] is a fire hose, we’re a dripping faucet, and we have to make sure it’s a strategic approach and it’s fact-based because if we got caught stretching the truth, they’d never forget it,” he said.

Robert went on to say that despite the comment period for the EPA being over, it’s important to keep letting Washington know where ethanol and all biofuels proponents stand.

“Don’t become complacent. Keep reaching out to elected officials, EPA and the White House to make sure they know how important this is to individual farming operations and rural America.”

Listen to my interview with Robert here: Robert White, RFA

2014 Commodity Classic Photos

EPA Releases Tier 3 Emission Standards

The Environmental Protection Agency (EPA) has released its Tier 3 Vehicle Emission and Fuel Standard Program rules. The purpose of the program is to reduce impacts of motor vehicles on air quality and public health. In addition to lower the gasoline sulfur standard, the program is supposed to reduce both tailpipe and evaporative emissions from passenger cars, light-duty truck, medium-duty passenger vehicles and some heavy-duty vehicles. The proposed rule was released on May 31, 2013 and the final rule was signed on March 3, 2014.

EPA_LOGOIn a nutshell, what does this mean for the alternative fuel industry? It means that in some circumstances alternative fuels such as higher blends of ethanol could emerge as next generation automotive fuels. Tier 3 fuels are considered fuels that the automotive industry can “test” to meet the emission standards. The EPA’s rule finalizes an ethanol content of 10 percent (E10) for emissions test gasoline. However, the biofuels industry was lobbying for higher ethanol blends to be approved as test fuels such as E15 and E30. This did not come to pass.

So in other words, an automotive company can test “E15″ and find positive emission reduction results, but since it is not considered a legal “test fuel,” the fuel can’t be considered meeting (or exceeding) the EPA’s emission standards.

“It’s not the greatest thing since sliced bread; but at least there’s dough in the machine,” said Advanced Biofuels USA’s vehicle emissions expert, Robert Kozak. “We didn’t get everything that we wanted but two items are important. 1) The new requirement that vehicles be tested and certified using E10 (10% ethanol blend that is standard fuel across the country); and 2) The opportunity for manufacturers to request approval of another new certification fuel such as high octane/high ethanol E30 (30% ethanol blend).”

The next step, says Kozak, is to begin working with the EPA immediately to approve the next round of text fuels such as E30. Others in the industry agree that E15 and E30 should be legal test fuels but some believe the next step is to sue the EPA because limiting the higher ethanol blends as test fuels will limit the automakers research and deployment of more and better optimized vehicles, such as flex fuel vehicles, designed to capitalize on ethanol fuel blends.

Arming for a Fact-Based Fight Over Ethanol

bernens1It’s not always fact-based arguments proponents of ethanol are up against when battling Big Oil. But that’s why it’s all more important to make sure you have good facts on your side in the fight. Farmers who attended the recent Commodity Classic in San Antonio were able to sit in on a session titled, “Biofuels and the Renewable Fuels Standard, A Farmer’s Avenue to American Energy Independence,” to make sure they can talk about the success stories and silence ethanol’s critics.

“Because of our success, we’ve had Big Oil really come after us and say, ‘We’re not going to lose anymore market share,’” says Jack Bernens, session moderator and marketer of Syngenta’s Enogen corn, specifically designed for ethanol production. “When monopolies get threatened, they like to push back hard.”

Hear more of what Jack had to say here: Jack Bernens, Syngenta

jennings1Jack was joined on the panel by Brian Jennings with the American Coalition for Ethanol, who echoed Jack’s view that you’re not necessarily battling facts when it comes to taking on some of the myths put out by the petroleum industry.

“The message I was trying to relay to the corn growers is stay involved, remain engaged, get your neighbors and friends involved, and know that this isn’t a fact-based fight. When the fight is about facts, we always win,” Brian says, adding that ethanol doesn’t have to stoop to the lies and scare tactics of Big Oil.

Listen to Brian’s interview here: Brian Jennings, American Coalition for Ethanol

doxtad1Another effective tool in the fight is showing the positive change ethanol has brought to Rural America, creating better markets for farmers’ corn, helping the country achieve energy independence, and building up communities, like the one that Northwest Iowa corn farmer James Doxtad comes from. He says while many folks back in his home state are aware of the good the renewable fuel has brought to the heartland, too many people in the country just don’t know. “It’s amazing how many people out there are unaware of the advantages of ethanol. Ethanol is a good thing, and we’re producing a good product, and we’re doing it for a good reason.” he says.

Check out James’ interview here: James Doxtad, Holstein, Iowa

Meanwhile, all three might get some help spreading the word as Syngenta released a new documentary video titled, “Ethanol: Fueling Rural America’s Future – One Community at a Time,” that provides a platform for farmers, ethanol producers and industry advocates to share their passion for an industry critical to the future of agriculture and rural America.

Documentary: How Ethanol Fuels America

Syngenta has released a new documentary video entitled “Ethanol: Fueling Rural America’s Future – One Community at a Time.” According to the company, the video provides a platform for farmers, ethanol producers and industry advocates to share their passion for an industry critical to the future of agriculture and rural America.

Syngenta developed the video to reinforce the ethanol industry’s positive impact on the U.S. economy and American energy independence. The company says ethanol production is a vital Screen Shot 2014-03-03 at 9.57.34 AMcontributor to the national Gross Domestic Product, federal tax revenues, and the creation and support of new jobs across the country.

“As ethanol plants have moved into small towns and established their businesses, they have provided well-paying jobs and stabilized the corn market price,” said Jack Bernens, head of marketing and stakeholder relations for Syngenta. “That income is circulating back through rural communities. With the Renewable Fuel Standard (RFS) under scrutiny, we wanted to help tell that story.”

Ethanol is also helping consumers. A University of Wisconsin/Iowa State University study found that in 2011 ethanol reduced wholesale gasoline prices by $1.09 per gallon nationally. Looking ahead to the adoption of blends with an ethanol level greater than E10, Growth Energy reports that the more than 170 million cars manufactured since 2001 are currently eligible to use E15, while more than 16 million flex-fuel vehicles are on the roads today.

“This demonstrates that there is a market ready for a less expensive, higher octane, more environmentally friendly alternative fuel,” added David Witherspoon, head of renewable fuels for Syngenta. “We have the vehicles capable of using blends higher than E10, but greater access to stations capable of providing it and the petroleum marketing industry’s support are needed to make that access a reality.”

It Pays to Shop for Ethanol

An informal survey of gasoline retail locations in greater Des Moines, Iowa, revealed that while 87-octane gasoline prices remain relatively uniform across several retail brands, the price a consumer pays for premium gasoline varies greatly depending on whether the retailer blends its premium gasoline with ethanol. The Iowa Renewable Fuels Association (IRFA) reports that using premium gasoline blended with E10 (10 percent ethanol) can save up to 25 cents.

IA-pump-photoIRFA says the savings of ethanol are so great that consumers can pay approximately the same price for E10 premium gasoline as they would for 87 octane gasoline with no ethanol.

Here at the IRFA, we support consumer fuel choice, and consumers can save 25 cents per gallon by shopping at retail locations that offer premium blended with 10 percent ethanol,” said IRFA Executive Director Monte Shaw. “Fuel blended with 10 percent ethanol is approved for use in all cars, trucks and off-road motors available today, and vehicles that carry a recommendation for premium gasoline use are no different. By simply shopping for ethanol blended premium gasoline, consumers can save a lot of money while supporting Iowa’s economy.”

Speaking of E10, the Iowa Department of Revenue published January data for gasoline use and IRFA said that Iowa motorists saved more than $23 million in January by filling up with E10 – 103 million gallons of E10.

Shaw noted, “Priced at least 23 cents less than its 87-octane no ethanol counterpart, E10 is providing Iowans with huge savings. And those savings add up for both consumers and Iowa’s economy. The use of E10 is keeping at least $23 million in Iowa instead of sending it out of state or out of the country for petroleum. In fact, the true savings is likely more than $30 million for the month. Simply using ethanol is not only saving consumers some of their hard earned money, it’s also cleaning up our air and supporting Iowa jobs.”

According to IRFA, actual savings are even greater than $23 million because the Iowa Department of Revenue data does not account for ethanol blending that occurs outside of pipeline fuel terminals. In addition, while the typical E10 savings in the Des Moines metro area is 23 cents per gallon, E10 is priced at a more than 30-cent discount to E0 in many parts of Iowa.