Domestic Fuel

The president of the Renewable Fuels Association (RFA) is calling a bill approved by a House subcommittee Tuesday yet another stall tactic to the use of higher ethanol blends in fuel.

RFA’s Bob Dinneen says the legislation sponsored by Congressman Jim Sensenbrenner (R-WI) injects “parochial politics into the scientifically established process of approving new fuels.”

“In approving E15, the Department of Energy tested vehicles over millions of driving miles – the equivalent of some 4,700 round trips from Washington to Milwaukee,” said Dinneen in a statement. “To suggest more testing is needed is nothing more than a stall tactic that has but one outcome – our continued addiction to oil.”

Dinneen adds that the concerns raised in the bill are “largely superficial and do not require the intervention of Congress to resolve. America’s ethanol industry has been working with auto companies and fuel suppliers for over a year to address any concerns and misconceptions that persist. This bill would reverse the progress private industry has already achieved and threaten the job creation that would stem from an increased use of domestic renewable fuels.”

Legislation sponsored by Rep. James Sensenbrenner (R-WI) could delay getting 15% ethanol blended fuel in the marketplace by requiring even more testing by the Environmental Protection Agency.

The bill out of the Science, Space, and Technology Committee’s Energy and Environment Subcommittee has the backing of numerous anti-ethanol organizations, including the including petroleum, livestock, environmental and food industry groups. It would require EPA to contract with the National Academy of Sciences to study the effects of E15 on vehicles and engines. “The EPA’s decision to rush introduction of E15 into the marketplace raised a red flag, and stakeholders are speaking out before it’s too late,” Sensenbrenner said.

Growth Energy CEO Tom Buis notes that E15 has been tested more than any other fuel in history. “This is a waste of time and a waste of taxpayer dollars,” Buis said. “No fuel blend has undergone the level of scrutiny E15 has – and passed the tests like E15 did. They’ve been looking at E15 for more than three years.”

The Green Jobs Waiver for E15 was accompanied with more independently-gathered data, science and research in its support than any of the other 11 Clean Air Act waivers previously approved by the U.S. EPA. The agency approved the use of E15 in vehicles newer than 2001 more than a year ago, but it has yet to reach the consumer marketplace.

Reaction to President Obama’s call for an “all-of-the-above energy strategy” in Tuesday’s State of the Union address was met with applause by many renewable energy interests, who at the same time hope his words will be backed with actions.

“We applaud the President’s announcement that he is going to push for homemade, U.S.-energy after 40 years of being addicted to foreign oil,” said Tom Buis, CEO of Growth Energy. “We have to move ahead with American ethanol as part of that solution.”

“The U.S. biodiesel industry is proving that we can accomplish the president’s goals of creating jobs while building a clean-energy economy,” said Anne Steckel with the National Biodiesel Board. “That’s why we’re calling on the Administration to quickly finalize the delayed EPA rule for boosting biodiesel use under the Renewable Fuel Standard in 2013.”

National Corn Growers Association Chairman Bart Schott said they were pleased to hear President Obama’s continued commitment to the nation’s energy independence. “As family corn farmers have risen to the challenge to meet our nation’s energy needs, we are hopeful the direction the President outlined offers similar opportunities for others to expand our energy independence,” he said.

“Working with the President, we can help America become less dependent on foreign oil and a smarter consumer of energy,” Adam Monroe, President of Novozymes North America, said. “Innovations like advanced biofuels can play a major role in the President’s vision but we need steady policies like the Renewable Fuel Standard – and we look forward to working Congress to preserve them.”

President Obama put a face on the wind energy industry during his State of the Union address on Tuesday. It was the face of Bryan Ritterby who “found work at Energetx, a wind turbine manufacturer in Michigan” after being laid off from a job making furniture and is “proud to be working in the industry of the future.”

However, the American Wind Energy Association (AWEA) warns that layoffs could be in the future without the continuation of tax credits for the industry.

“Wind energy is one of the few sources of agreement in a divided Washington. But with an expiration of wind’s key federal incentive, the Production Tax Credit (PTC), looming at the end of the year, these good manufacturing jobs are in peril,” said AWEA CEO Denise Bode in a statement after word got out that Ritterby would be highlighted in the speech. She noted that “with uncertainty over the PTC, layoffs have already begun and studies have forecast they will increase with each month we near expiration.”

Bipartisan legislation recently introduced by Representatives Dave Reichert (R, WA-08) and Earl Blumenauer (D, OR-03) seeks to grant a four-year extension to the existing Production Tax Credit (PTC) for wind energy. According to AWEA, the legislation recently received the endorsement of a broad, coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A four-year PTC extension also has the support of the bipartisan Governors’ Wind Energy Coalition comprised of 23 Republican and Democratic Governors from across the U.S.

The idea of turning oil into salt may sound like something that should be done in a science lab but Dr. Gal Luft says it’s something that Congress can do with a simple piece of legislation.

Luft, who is executive director of the Institute for Analysis of Global Security, explained his analogy between oil and salt at the 6th Annual Iowa Renewable Fuels Summit in Des Moines on Tuesday.

“Salt used to be the most strategic commodity of all because it was the only way to cure food,” said Luft. “That changed with the invention of canning and refrigeration. Those two simple technologies essentially stripped salt of its strategic status.”

“Just like salt dominated food preservation, oil today dominates transportation,” he continued. “And just like salt’s strategic status was diminished through those simple inventions, oil’s strategic status can be diminished through the technology of flexible fuel vehicles.”

That’s why Luft strongly advocates the simplest solution to diminishing the stranglehold oil has on the transportation industry, and that is requiring all new vehicles sold in the United States to be capable of running on a variety of fuels. “Whether it is ethanol or methanol or butanol, whatever it is, let’s give people choices,” he said, noting that there is just such a bill pending in Congress called the Open Fuel Standard Act.

Luft and co-author Anne Korin wrote a book about the analogy between salt and oil and the importance of fuel choice, called “Turning Oil into Salt”, which was reviewed here on Domestic Fuel in 2009.

Listen to Luft’s address to the 6th annual Iowa Renewable Fuels Summit here: Gal Luft address

Listen to a brief interview with Gal Luft here: Gal Luft interview

Photos from 2012 Iowa Renewable Fuels Summit

In his State of the Union address Tuesday night, President Obama voiced strong support for renewable energy and an end to oil subsidies.

“We have subsidized oil companies for a century. That’s long enough,” the president said. “It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.”

Mentioning natural gas, wind and solar specifically, Obama called for using various types of renewable energy solutions to make the country less dependent on oil alone. “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs,” he said.

U.S. Congressman Pete Olson (R-TX) has introduced a bill in the House that would allow ethanol “produced from domestic fossil fuels other than petroleum” to qualify under the Renewable Fuel Standard (RFS2).

The Domestic Alternative Fuels Act would amend the Renewable Fuel Program of the Clean Air Act “to allow domestic alternative fuel to be used to satisfy a portion of the required applicable volume of renewable fuel.”

If passed, it would allow ethanol produced from domestic hydrocarbons to satisfy the RFS requirement for using conventional biofuel, such as corn-based ethanol, to reduce the quantity of petroleum used in transportation fuel.

The provision would include ethanol made from coal, petroleum coke or natural gas, pioneered by technology developed by the Dallas-based company Celanese.

Steven Sterin, Celanese Corporation’s Chief Financial Officer and President of its Advanced Fuel Technologies business, issued the following endorsement of this significant legislative development.

“Our nation’s plentiful natural energy resources, such as natural gas, are a tremendous asset and can drive the economic growth of the United States for years to come,” said Celanese CEO Steven Sterin. “Rep. Olson’s bill creates conditions under which American innovation can achieve these goals without using valuable food resources for the production of liquid fuel.”

Rep. Olson’s bill, the Domestic Alternative Fuels Act of 2012, has bipartisan support in the House of Representatives, including cosponsors Rep. Joe R. Pitts (R-PA), Rep. David B. McKinley (R-WV), Rep. Gene Green (D-TX), Rep. Charles A. Gonzalez (D-TX), and Rep. Jim Costa (D-CA).

During a visit to highlight renewable energy use by the U.S. Navy at Pearl Harbor, Agriculture Secretary Tom Vilsack also spotlighted the Hawaii-based biodiesel producer that supplies much of the fuel used there.

Pacific Biodiesel “is the oldest biodiesel producer and refinery in the country, started in 1996,” said Vilsack during his remarks on Tuesday at the memorial, noting that USDA has provided assistance to help that company grow. “We provided recently a $5 million business and industry loan to Pacific Biodiesel to allow it to continue to expand its capacity.”

That loan, announced in February 2010, is being used to construct a $10 million, 5.5 million gallon per year biodiesel production plant in Kea’au on the Big Island. Pacific Biodiesel vice president and co-founder Kelly King says Big Island Biodiesel will be the companies 13th biodiesel plant. “We’ll be owning and operating five of them, the other ones we built for clients throughout the mainland, from the east coast to the west coast,” she says, with capacity ranging from a half million to six million gallons.

“We started in Maui, where we actually had the first available biodiesel pump for the public,” said King. “Back then, most of our customers were environmental hippies who would come and pay 70 cents a gallon more for fuel and thank us and tell us to keep the change!”

King says Pacific Biodiesel operates on a community-based sustainable model set up locally to benefit local communities. While all the plants can use any type of oil feedstocks, much of them operate on used cooking oil. “It can use the most degraded oils up to the purest oils,” she said. “The degraded oils make the best feedstock because it’s the cheapest!”

King and two of her Pacific Biodiesel team members were excited to be part of the secretary’s appearance at Pearl Harbor and to have him recognize the importance of renewable fuels in the Aloha State.

Listen to an interview with Kelly King here: Pacific Biodiesel VP Kelly King

Photos from Secretary’s visit to Pearl Harbor memorial to promote biofuels

The EPA has published a final rule approving camelina oil as a feedstock under the Renewable Fuel Standard (RFS2).

Today, the National Biodiesel Board (NBB) released the following statement in support of the ruling.

“Biodiesel’s evolving feedstock diversity is one of its greatest strengths, and we’re pleased to see the EPA recognizing camelina as yet another feedstock that meets the agency’s standards as an Advanced Biofuel,” said Anne Steckel, vice president of federal affairs at NBB. “As it has with other biodiesel feedstocks such as animal fats, recycled cooking oil, soybean oil and canola oil, the EPA’s proposal shows that biodiesel produced from camelina oil reduces greenhouse gas emissions by at least 50 percent compared with diesel fuel. This is good news for our industry and will give biodiesel plants another tool in the toolbox as they continue producing record quantities of America’s Advanced Biofuel.”

Corn growers are pleased with the ruling last week by a Federal District Court judge in Fresno, California that the state’s Low Carbon Fuel Standard (LCFS) violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional. The ruling is in response to a suit filed in December 2009 by the Renewable Fuels Association and Growth Energy asserting that the LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states.

“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “Corn farmers are good stewards and advocates for thoughtful, fair strategies that will improve our environment through the advancement of biofuels. We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”

The judge ruled that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct and that the California Air Resources Board (CARB) failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.

The two Republican presidential candidates who topped the Iowa Caucus in a virtual dead heat Tuesday night are both considered to be supporters of renewable fuels.

According to the Iowans Fueled with Pride Iowa Caucus Voters Guide, Mitt Romney and Rick Santorum were two of four candidates who expressed support for major renewable energy issues, including the Renewable Fuels Standard. The guide shows the winners also support a fair and equitable energy tax policy; the attempt to ban E15; and consumer fueling choice through programs to increase the number flexible fuel vehicles (FFVs)and blender pumps in the nation. The other two candidates who scored well in all those categories were Newt Gingrich and President Obama.

Ron Paul, Michelle Bachman and Rick Perry all were opposed to the RFS and increasing FFVs and blender pumps, while only Rick Perry was against E15 and a “fair and equitable energy tax policy” that would “create a level playing field for energy taxes” by revising the permanent tax benefits enjoyed by the petroleum industry.

The voter guide was mailed to approximately 10,000 Iowa households with residents who are directly involved in Iowa ethanol refineries and was also promoted to all of Iowa’s 250,000 agricultural households via email, the Internet and social media. An electronic version of the guide can be viewed at: www.IowansFueledwithPride.com.

After nearly a month delay, the Environmental Protection Agency (EPA) today released final Renewable Fuel Standard (RFS2) requirements for 2012.

The final 2012 overall volumes and standards are:

Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (8.65 million gallons; 0.006 percent)
Total renewable fuels (15.2 billion gallons; 9.23 percent)

The percentage standards for four fuel categories are required by the Energy Independence and Security Act of 2007 (EISA).

The amount of land in the United States devoted to growing crops declined between 2002 and 2007, which indicates that increased ethanol production is not using up more land.

According to the report, “Major Uses of Land in the United States 2007,” total cropland was down by 34 million acres in 2007 to its lowest level since 1945. Cropland accounted for 18 percent of the total land area in the country – the third largest land use behind forest (30%) and grassland (27%).

Renewable Fuels Association (RFA) president Bob Dinneen said the new report shows increased ethanol production has not resulted in expansion of total U.S. cropland or a decline in grassland and forest.

“Using real data from the real world, this report from USDA shows yet again that U.S. cropland is not expanding in response to increased ethanol demand,” said RFA President Bob Dinneen. “The report also shows that forest and grassland increased dramatically during a period when ethanol production more than tripled.”

The smallest total use of land in the U.S. is urban at 61 million or three percent. However, while urban land use accounts for the smallest percentage, the USDA report shows that it accounts for the biggest increase in land use, quadrupling between 1945 and 2007, increasing at about twice the rate of population growth over
this period. Urban land use increased almost 2 percent from 2002 to 2007.

“It is ironic that the land use debate has fixated on biofuels, when the actual culprit of land conversion has clearly been urban and suburban sprawl,” Dinneen said. “Subdivisions full of mini-mansions, big box stores, shopping malls, and parking lots are encroaching on productive farmland across the country.”

Read the USDA report here.

Congress has failed to renew the biodiesel tax incentive that will expire at the end of this year and the biodiesel industry is hoping they will turn it around and act quickly in 2012 to save thousands of jobs that have been created thanks to the initiative this year.

“We’re disappointed,” said Anne Steckel, vice president of federal affairs for the National Biodiesel Board. “Jobs and the economy are supposed to be the top priority in Washington, yet Congress has left thousands of workers in limbo heading into the holidays by failing to extend this tax incentive. It’s a missed opportunity, and we are urging Congress to pass an extension immediately next year to limit the economic damage.”

Through the end of October of this year, according to the latest EPA figures, the industry had set a new annual production record of more than 802 million gallons and could triple the 2010 production volume by the end of the year.

Advanced biofuel producers are calling on Congress to take action now to ensure that tax incentives for cellulosic ethanol continue past 2012.

In a letter to Congressional leaders, the Advanced Ethanol Council (AEC) asked for a multi-year extension of the Cellulosic Biofuels Producer Tax Credit (PTC) and the Special Depreciation Allowance for Cellulosic Biofuel Plant Property, both of which are set to expire December 31, 2012.

AEC Executive Director Brooke Coleman noted in the letter that the incentives “are vital to the ongoing development of the domestic advanced ethanol industry. To ensure stability in the marketplace, and prevent unnecessary job losses, Congress should provide long‐term extensions of these provisions (5+ years).”

As new ethanol biorefineries are beginning construction, the AEC emphasized the importance of consistent federal policy to this kind of multi-billion dollar investment.

The AEC is asking Congress to extend these important tax incentives this year as part of a final tax extenders package as they are set to expire next year. “As Congress considers the extension of a number of tax provisions for the clean energy sector, we would also like to highlight the importance of timing. The mere prospect of the expiration of the PTC and Special Depreciation Allowance for cellulosic biofuels in 2012 will start to affect projects that take 18 months to build, and could drive our industry into a series of ‘fits and starts’ that has dampened investment in other domestic clean energy sectors for decades.”