“I don’t expect to be allowed to offer my amendments because the Senate majority leader shuts out amendments from the Republican side,” Grassley said. “But I want to draw attention to the potential growth in a sector of the economy that’s right under our noses. This area could get a real boost if the majority in Congress chooses to act to restore these tax incentives.
“In fact, if the majority leader were really interested in jobs, he would devote floor time to debating and processing the pending bipartisan tax extenders legislation as it should be processed, in its entirety, to provide certainty to businesses and individuals alike. There’s no reason this tax relief legislation should be left to sit on the sidelines. Instead, it should be front and center in any effort to spur job-generating economic activity.”
Grassley had already secured renewal of the expired wind energy and biodiesel tax provisions, which expired at the beginning of this year, in a tax measure passed out of the Finance Committee back in April, but that bill is still awaiting action from the full Senate.
The latest government procurement report shows the U.S. Navy has for the first time put biofuels in the mix for requests for military-specification diesel fuel and jet fuel. This story from U.S. Energy Information Agency (EIA) says the request is for the eastern and inland United States and Gulf Coast and is expected to the Rocky Mountains and West Coast later this year.
The U.S. Navy’s interest in biofuels is part of its goal to generate 50% of its energy from alternative sources by 2020: nuclear energy, electricity from renewable sources, and biofuels. The Navy currently sources about 17% of its energy supplies from renewable and nuclear sources of electricity. No biofuels are currently included in that percentage.
The Navy’s interest in biofuels is limited to those fuels that can be used as direct replacements for petroleum-based gasoline and distillate fuels, also known as drop-in biofuels. These fuels require no modification or operational changes to distribution infrastructure, aircraft, or ships. Although biodiesel blends readily with diesel fuel or jet fuel, and is compatible with most diesel engines, it is not a drop-in fuel. Certain properties limit biodiesel blends from being used in some applications: potential fuel system clogging and poor performance at low temperatures prevent its use in jet fuel for civilian or military use, and water separation problems prevent its use as a marine diesel fuel. Drop-in biofuels are available today on a limited commercial basis, and operable U.S. production capacity is about 210 million gallons per year.
Companies wanting to make a bid to offer drop-in biofuels under the current solicitation can apply to the USDA Commodity Credit Corporation for grants to offset the cost of feedstocks used to produce the biofuels. Some drop-in biofuels might also qualify for Renewable Identification Numbers (RINs).
In what could be seen as a sign that an unpopular decision is about to be rendered by the Obama Administration on ethanol and biodiesel, a select group of Senate Democrats have met with the White House. The Hill reports White House adviser John Podesta met with the group on Thursday to discuss the Environmental Protection Agency’s (EPA) plans regarding the Renewable Fuel Standard (RFS).
The senators said they wanted to discuss “urgent concerns” with the RFS, which requires that diesel and gasoline refiners mix a certain amount of renewable fuels such as biodiesel and ethanol into their traditional fuels each year. The Environmental Protection Agency proposed last year to keep the biodiesel volume in 2014 at least year’s level, despite an increase in biodiesel production, and reduce the ethanol volume.
The EPA has not yet finalized its 2014 volumes for renewables.
[Minnesota Senator Al] Franken and his colleagues took particular issue with the biodiesel mandate.
“Such a decision would not only harm the economic growth surrounding biodiesel production in our states, but would be a setback in our national efforts to continue boosting U.S. energy security while also reducing greenhouse gas emissions,” they wrote.
The National Biodiesel Board (NBB) seems concerned about the meeting as well and issued a statement from from Vice President of Federal Affairs Anne Steckel:
“While we are encouraged by these discussions, the biodiesel industry remains concerned that the Administration still appears to be considering a proposal that would backtrack from last year’s proven production and that threatens biodiesel plants around the country. The fact is that biodiesel is the most successful Advanced Biofuel under the RFS, yet it could see its production cut significantly. This meeting, which was originally requested by a diverse group of 14 Democratic senators from across the country, makes clear that there are serious concerns about the impact that the proposal would have on jobs and economic growth nationwide, in states from Rhode Island to Minnesota to Washington state. This is a critical decision, not just for the biodiesel industry but for the future development of clean, American-made renewable fuels that will help us reduce our dangerous dependence on petroleum.”
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.
Michigan 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.”
“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.
“America has a decision to make about its energy future. We can gut the RFS and move toward further reliance on Saudi Arabia, Venezula, and Nigeria for our energy needs—or we can continue our path toward energy independence by making investments in ethanol and other domestic energy sources,” Braley said.
Braley’s Country of Origin Labeling for Fuels Act would require gas stations to post the country of origin of the fuel right on the pump, letting consumers “know whether their fuel is coming from Saudi Arabia or from ethanol produced right down the road.”
The U.S. consumes more than 15 million barrels of oil each day, with nearly half of that total coming from other countries, including Canada, Saudi Arabia, Iraq, Kuwait, Venezuela, Mexico, and Nigeria. Since the creation of the RFS in 2005, nearly 10 billion gallons of foreign oil per year have been replaced by renewable ethanol.
A new study by the Department of energy shows there’s great potential for hydroelectric power in the U.S., but the economics of the situation keeps more power from being added. This report from the U.S. Energy Information Agency (EIA) cites work by Oak Ridge National Laboratory (ORNL) that shows there are 61 gigawatts (GW) of hydroelectric power potential in waterways without existing dams or diversion facilities. However, the projected capacity to be added is only 2 GW through 2040. The report quantified the technical resource capacity available at more than three million U.S. streams, qualifying its findings by saying “the methodology alone does not produce estimates of generation, cost, or potential impacts of sufficient accuracy to determine project-specific feasibility or to justify investments.”
Although resource potential quantifies maximum feasible capacity additions, EIA’s AEO2014 Reference case also considers market and policy hurdles that can limit actual development of a new hydroelectric power plant. These include economic factors, performance characteristics, federal regulations, electricity demand, and the cost of competing sources for new generation. Because hydropower is a mature technology, most of the technically and economically superior sites have already been developed.
The report does provide new information to assess the technical potential of hydropower and improve the understanding of resources that can take advantage of new technologies such as in-stream turbines.
Hardware and software that bolt onto diesel truck engines and allow pure biodiesel to run through the system has gained some key approvals from the U.S. government. Optimus Technologies is the first to receive the Environmental Protection Agency’s (EPA) approval for an advanced biofuel conversion solution for existing medium‐ and heavy‐duty trucks. This company news release says that while the system can be used with a wide variety of fuels, this also marks the first time anyone has been able to be compliant with 100 percent biofuels, creating opportunities for ethanol refiners as well.
The solution is based on a combination of Optimus’ Vector bi‐fuel (diesel or biofuel) conversion system ‐‐ hardware and software that bolts‐on to existing diesel engines ‐‐ and certified, pure biofuel. Fuels tested were derived from a variety of bio‐sources including non‐food grade corn oil, recycled cooking oil, and pure biodiesel (B100). While Optimus may be first to the U.S. market, such solutions have been available in Europe for more than a decade.
“We’re very excited that the EPA has approved our technology,” said CEO Colin Huwyler, “Our solution represents a tangible opportunity for fleets to shrink their operating costs while improving the environment. And, our solution does not require multi‐million dollar start‐up costs like CNG does.” Fleet operators have been surprised to find that CNG solutions require capital‐intensive modifications to fueling stations and maintenance facilities, extending payback periods well beyond 5 years. Optimus’ solution can leverage current facilities with only minor modifications, offering paybacks as little as one year.
The news release goes on to point out that a network of biofuel suppliers are supplying the fuel at the standard Optimus needs.
“We are very glad that Optimus has secured EPA approval,” stated Rory Gaunt, CEO of Lifecycle Renewables, a leading renewable fuel provider based outside of Boston, MA. “We have been a strong supporter of Optimus’ efforts. Now, we will be able to expand our market reach and grow into servicing commercial and government fleets with our high quality, renewable fuels.”
Emissions testing shows that Optimus has a significant overall reduction in tailpipe emissions in comparison to diesel, with particulate matter reduced by about 40 percent.
Environmental Protection Agency Administrator Gina McCarthy held a conference call with media this morning in advance of her trip to Missouri this week to talk about the proposed Waters of the United States rule, or WOTUS.
I had the last question on the press conference and took the liberty of going off topic to ask about when the final rule on the volume obligations under the Renewable Fuel Standard (RFS) would be released. “I’m hoping it will come out soon,” she said. Explaining about the delay in releasing the final rule, which was expected by the end of June, McCarthy said it has become clear that there is concern “not only about what the volumes of the fuels are but the way in which we are adjusting those volumes.”
McCarthy stressed that the administration “continues to have a strong commitment to biofuels” and they want to make sure the final rule “clearly reflects that interest.”
“My goal is always to make sure we get it right,” she concluded.
As of July 1, Vermont has a new, low-sulfur requirement for all fuel oil in the state, and that could be a boon for biodiesel. In a news release from Gov. Peter Shumlin touting the new requirement of 500 parts per million on July 1, 2014, and 15 parts per million by 2018, along with a new Thermal Energy Finance Pilot Program to help Vermonters improve efficiency in their homes, the state says it is joining Massachusetts and New Jersey for such a requirement.
“Since more than half of all Vermont home owners currently choose oil heat, the low sulfur fuel mandate now in effect will greatly lower emissions and improve air quality,” said Matt Cota, Executive Director of the Vermont Fuel Dealers Association. “It will also maximize efficiency and reduce service calls on existing systems, while allowing more Vermonters to install high efficiency oil heat units that require low sulfur fuel.”
The Stowe (VT) Reporter says the governor got a chance to check out firsthand… and first-nose… just how much cleaner boidiesel will be in helping meet the low-sulfur requirement during a news conference at White Mountain Biodiesel.
[The goverrnor] took a big sniff of the new low-sulfur fuel — organizers encouraged people to stick their fingers in it and take a whiff; it’s nothing like the heating oil they’re used to.
Biodiesel heating fuel emits 89 percent less greenhouse gases than regular heating oil, said Bob Kuhsel, a managing member of White Mountain Biodiesel, LLC. The New Hampshire company supplies biodiesel created from leftover cooking oil to Bourne’s and other fuel dealers.
For more information on biodiesel-based heating oil, check out the National Biodiesel Board’s Bioheat website.
A biodiesel producer is disputing claims by a taxpayer watchdog group that says producers of biofuels shouldn’t still be getting government assistance. This article in the Dubuque (IA) Telegraph Herald says a report by Taxpayers for Common Sense shows that Western Dubuque Biodiesel in Farley, Iowa received more than $2.5 million in tax-funded assistance between 2009 and 2014, and the group pushes for the elimination of the bioenergy program in the federal farm bill. But Tom Brooks, general manager of Western Dubuque Biodiesel points to the good biodiesel has done in Iowa alone, producing 230 million gallons of fuel in 2013 and more than 7,000 jobs in the state.
Brooks said the government assistance is necessary to level the playing field with oil companies.
“Government has always had a hand in to help starting industries. Big Oil has had a hand up for over 100 years to the tune of several hundred billion dollars in tax supports that they still draw today,” Brooks said.
The watchdog report also makes a point of highlighting large agribusinesses that are benefiting from government assistance. Companies like Renewable Energy Group, Louis Dreyfus and Cargill received roughly $10 million each or more between 2009 and 2014, the report says.
Brooks said it is unfair to lump Western Dubuque Biodiesel in with those companies.
“I’m in the big, booming metropolis of Farley,” Brooks joked. “The (report) suggests we’re paying all these big companies. The vast majority of these producers are small.”
The article goes on to say that Brooks argues the report doesn’t take into account the savings for the country when biofuels reduce the dependence on foreign oil.
“What’s the cost to our taxpayers for those soldiers in Afghanistan and the Middle East? For every gallon of oil we buy not from the U.S., you’re giving to a foreign country’s economy and they may not exactly share our political values, let alone our moral values,” Brooks said.
“Minnesota has been a pioneer, first demonstrating success with a five percent biodiesel blend. Moving to B10 continues the state’s role as a leader for our energy future, a future that includes diverse options like America’s Advanced Biofuel, biodiesel” said Steven Levy, Chairman for the National Biodiesel Board.
According to the American Lung Association of Minnesota, the state’s current B5 standard reduces emissions equal to removing nearly 35,000 vehicles from the road, which equates to 644 million pounds of atmospheric carbon dioxide. Increasing the blend from B5 to B10 will mean an additional demand of 20 million gallons of biodiesel each year on top of the current usage of 40 million gallons. Minnesota’s current operating production capacity is over 60 million gallons per year. Plants are currently operating in Isanti, Brewster and Albert Lea.
“It is encouraging to see leaders implement consistently strong biofuels policy; this is obviously in sharp contrast to the mixed messages sent from Washington, DC,” said Levy. “Minnesota’s move to B10 shows the impressive potential for renewable energy when policy and entrepreneurship work hand in hand to support real benefits that impact us all. Hopefully those at the national level will see the success in Minnesota and follow up with a strong federal energy policy and strong renewable fuel standard.”
Minnesota was supposed to move to B10 two years ago, but delays to make sure adequate blending infrastructure was in place put it off until now. Starting next year, B10 will be sold from April through September. The rest of the time, a 5 percent blend requirement is in place.
Congressman Bruce Braley (D-IA) visited the REG biodiesel plant in Mason City, Iowa on Friday to meet with members of the state’s biodiesel industry concerned about the proposed lowering of volume requirements under the Renewable Fuel Standard (RFS).
The current RFS proposal would set biodiesel volumes at 1.28 billion gallons, a sharp cut from last year’s actual production of nearly 1.8 billion gallons. “We’re grateful to Rep. Braley for his support on renewable fuels, and we’re asking for his help specifically in increasing the proposed biodiesel volume to at least 1.7 billion gallons,” said Grant Kimberley, executive director of the Iowa Biodiesel Board.
A recent national survey of producers conducted by the National Biodiesel Board found that more than half have idled a plant this year and 78 percent have reduced production from last year. Nearly two-thirds have already laid off employees or anticipate doing so. “Iowa is the leading biodiesel state, which generates jobs and economic advancement,” Kimberly said. “The future of these promising businesses is threatened.”
Braley, who is running for the U.S. Senate seat being vacated by Tom Harkin promised that he will “continue to reach out with strong voice and talk about importance of biofuels for Iowa and nation.”
While the ethanol industry awaits the Environmental Protection Agency’s decision on the amount of ethanol to be blended into the nation’s fuel supply, ethanol producers are looking at other ways to make sure the green fuel increases its blend amounts.
In this edition of the Domestic Fuel Cast, we hear from Growth Energy CEO Tom Buis, Dean Drake with the consulting company the Defour Group, Scott Zaremba, president of Zarco Incorporated, and Ken Parrent, the ethanol director for the Indiana Corn Marketing Council, as they give their thoughts on how consumer demand will be a bigger driver for higher ethanol blends after attending an Indiana Corn Growers Association ethanol forum that focused on marketing mid-level ethanol blends and ran following the recent 2014 Fuel Ethanol Workshop in Indianapolis.
“During your time in office you have supported the development and growth of the biodiesel industry. Now, biodiesel producers around the nation have the ability to generate nearly two billion gallons a year of the only EPA-approved advanced biofuel, which is commercially available across the United States,” the lawmakers wrote in a letter to President Obama. “Therefore, we believe now is not the time for a critical shift in biodiesel policy. We urgently ask that you raise biodiesel’s RVO for 2014 above 1.28 billion gallons.”
The letter, which was led by Reps. Collin Peterson, D-Minn., and Adam Kinzinger, R-Ill., can be found here. The lawmakers signing the letter represent 22 states.
In a draft RFS rule released in November, the EPA proposed holding biodiesel volumes at 1.28 billion gallons – a sharp drop from last year’s actual production of nearly 1.8 billion gallons. Biodiesel producers around the country have warned that such a proposal will cause severe contraction in the industry. A nationwide survey of producers conducted by the National Biodiesel Board (NBB) in April found that more than half have already idled a plant this year and 78 percent have reduced production from last year. Nearly two-thirds – 66 percent – have already laid off employees or anticipate doing so.
NBB officials have previously expressed their shock and disappointment on the proposal because of the success biodiesel has already shown in exceeding the targeted amounts of renewable fuels. They call on the Obama Administration “to finalize a strong RFS volume as quickly as possible.”