House Members Claim Majority Want RFS Changed

A coalition of U.S. House of Representatives member opposed to the Renewable Fuel Standard (RFS) claim that a bipartisan majority of members “have expressed concerns regarding the current ethanol mandate.”

USCapitol22In a press release, Reps. Bob Goodlatte (R-Va.), Jim Costa (D-Calif.), Steve Womack (R-Ark.), and Peter Welch (D-Vt.) announced that 218 Members of the House agree “there is a serious problem with the RFS.”

“It is telling that 218 members from both sides of the aisle, representing communities across the nation, have spoken out against the current RFS and called for reform. The flawed ethanol mandate has a real impact on the American economy, and legislation in the House to reform the RFS has drawn the support of more the 50 organizations representing a diverse range of issues. There is clearly a growing appetite to reform the ethanol mandate, and it is time for the EPA to address lawmakers’ concerns. Any day now, the EPA is expected to announce the final rule governing 2014 RFS levels. As the final rule is written, we urge Administrator McCarthy to carefully consider the concerns of a majority of House lawmakers in any decision and take action to reduce the burden of the RFS for 2014.”

A spokesperson for Goodlatte’s office says the 218 members of Congress referenced in the release is “a culmination of Members who have either cosponsored H.R. 1462 or H.R. 1461 or signed onto one of the many letters sent on the topic.” The office did not provide a list of members they say have “recognized there is a problem with the current RFS.”

State Incentives, Grants Help Open VA Ethanol Plant

virginiaflagSome seed money and a few years of production incentives offered by the state are finally helping open an ethanol plant sitting dormant since its building completion in 2010. This article from Petersburg, Va.’s Progress-Index says the Vireol Bio Energy LLC plant is up and running, and most importantly, selling ethanol.

The company will receive subsidies to operate from the commonwealth, because the Biofuels Production Incentive Grant was approved by the General Assembly this session. The bill was supported by Delegate Riley Ingram, R-Hopewell, and Delegate Rosalyn Dance, D-Petersburg.

Gov. Terry McAuliffe made the announcement that he signed the bill in early April, a couple of weeks after Hopewell City Council agreed to match a $250,000 grant from the state. The money will be disbursed in equal portions over two years.

Because of the grant, Vireol can receive $0.04 cents for every gallon of ethanol they produce and sell this year. The amount decreases by one cent in 2015, then to $0.025 in 2016. The subsidies will end in June 2017 and are capped at $1.5 million each fiscal year. Subsidies will not apply to fuel made from corn in 2016 or 2017.

The plant is expected to produce 170 million gallons of ethanol over the next three years, as well as buying more than $100 million worth of grain from local farmers.

Iowa Gov Signs Biodiesel, Ethanol Measures into Law

irfa-poetIowa Governor Terry Branstad has signed into law measures seen as good for ethanol and biodiesel in his state, a move much welcomed in an area that is a major player in the renewable fuel market. Branstad was joined by other state dignitaries, as well as officials from the Iowa Renewable Fuels Association (IRFA) and ethanol producer POET, which hosted the signing of Senate File 2344 at its Coon Rapids, Iowa refinery today. The new law extends the state’s biodiesel production tax credit and enhances the state’s E15 retailer tax credit.

“I’m proud to sign this renewable fuels bill that received such wide, bipartisan support from the entire Iowa legislature and promotes E15, biodiesel and bio-butanol” stated Iowa Gov. Terry Branstad. “I have been a staunch supporter of protecting Iowa jobs and Iowa motorists’ access to cleaner, locally-produced renewable fuels, and this bill does exactly that.”

“Today is a great day for Iowa’s renewable fuels community,” stated IRFA Policy Director Grant Menke. “We commend Gov. Branstad, Lt. Gov. Reynolds, and the entire Iowa legislature for standing beside renewable fuels, protecting Iowa jobs, and safeguarding consumer access to low-cost, homegrown biofuels.”

“We are excited Gov. Branstad selected our facility to mark the officially signing of this important bill,” said Bill Howell, General Manager of POET Biorefining – Coon Rapids. “The state of Iowa continues to be very supportive of the biofuels industry and this bill is yet another example of that support. Here at POET, we look forward to continued expansion of E15 throughout the state and nation, which will allow consumers to enjoy additional options at the pump.”

The law also defines biobutanol as a renewable fuel option for Iowans.

Missouri to Allow E15 at the Gas Pumps

E15 signMissouri is the latest state to allow retailers to sell a 15 percent blend of ethanol, E15. This article from the St. Louis Post-Dispatch says a dozen other states allow, but don’t require, the higher blends.

Biofuel trade groups and state corn growing associations say E15 is just another blend of fuel that gas stations can offer price-conscious motorists. Despite auto industry groups warning of the fuel’s impact on engines, the Environmental Protection Agency has approved it for use in vehicle models 2001 and newer.

“It’s bringing in another low-cost fuel to consumers,” said Bradley Schad, director of market development with the Missouri Corn Growers Association. “It’s actually helping drive the economy here in Missouri because we produce ethanol in Missouri.”

Petroleum groups are still pushing back on the new option, trying to say that vehicle engines will be ruined by the higher blend, but with 12 other states already approving the higher blend, even with the small number of stations selling E15, wouldn’t we be hearing about all these cars stranded by the sides of roads? So far, I’m not hearing those kinds of stories.

Renewable Energy Takes Hit in Farm Bill Funding

USCapitolFunding for some rural renewable energy programs is taking a hit. Ethanol Producer Magazine reports the House Appropriations Committee cut the Biomass Crop Assistance Program (BCAP) down to just $15 million, down from last year’s levels of $25 million, and Rural Energy for America Program (REAP) for fiscal year 2015 is proposed to be funded at just $30 million, down for 2014′s $50 million in mandatory funding and $20 million in discretionary funding for FY 2015. Meanwhile, the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance program is cut to $22 million, a major drop from previous levels of $50 million in mandatory FY 2015 funding, with an additional $75 million in discretionary funding for FY 2015.

The Agriculture Energy Coalition (AgEC) has released a statement in response to the draft bill, vowing to fight the changes to the Farm Bill’s popular energy programs. “The renewable energy and energy efficiency programs in the Farm Bill help rural America create new biobased manufacturing opportunities and stable, well-paying jobs,” said Lloyd Ritter, codirect of the AgEC .”The Energy Title programs were reauthorized in the five-year Farm Bill adopted by Congress just months ago, in February 2014, and received mandatory funding to allow for program stability and business certainty. The modest investments made through that bill would pay major dividends for energy security, economic growth, and environmental gains across the United States.”

“Just today, however, the House Appropriations Committee sought to roll back the Farm Bill, by targeting the successful energy title programs for changes in mandatory spending and blocking the USDA’s ability to administer them,” Ritter continued. “The Agriculture Energy Coalition, which comprises a broad group of renewable energy, energy efficiency and agricultural groups, will continue to fight to ensure that these programs are implemented properly.”

You can read the full draft of the legislation here.

Ethanol Groups Participate in China Trade Mission

RFANewlogoU.S. Department of Agriculture (USDA) Under Secretary for Farm and Foreign Agricultural Services Michael Scuse led a mission to promote U.S. agricultural exports in northeast China May 5-13. The mission is part of President Obama’s “Made in Rural America” export and investment initiative, designed to help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad.

growth-energy-logoTaking part in the mission to promote U.S. biofuels and co-product exports was Renewable Fuels Association (RFA) Director of Regulatory Affairs Kelly Davis and Jim Miller with Growth Energy.

During a press conference Tuesday to talk about the trade mission, Davis said it was her first trip to China and she was astounded by the number of cars on the roads and sees a great need for both biofuels and distillers grains for livestock feed in that country. Miller added that China provides an excellent market opportunity for the U.S. ethanol industry.

Also taking part in the trip and the press conference was Roger Johnson, president of the National Farmer’s Union. Ethanol Press Conference Opening Remarks

Minnesota is First to Mandate B10 Biodiesel

mnstatelegis1The land of 10,000 lakes becomes the first for another 10… a 10 percent biodiesel mandate. The move from a B5 to B10 blending requirement for summer months starting this July 1st was welcomed by the growers of the most popular feedstock, soybeans.

“I’m very pleased that common sense is still alive and well and that our legislators voted for what was good for Minnesota,” says George Goblish, president of the Minnesota Soybean Growers Association (MSGA) and a farmer from Vesta, Minn. “The decision to continue moving forward is good for air quality in Minnesota, energy diversity and its good for the economy.”

The escalation to B10 was part of a bill passed in 2008 which called for the move to happen in 2013. Because of inadequate blending infrastructure in on area of the state and a regulatory concern, the move was pushed back to 2014. Legislation brought forward during the Minnesota legislative session that ended May 16, attempted to derail the bill but was unsuccessful. B10 will be available at the pump from April through September. Supplies will revert to a B5 blend the rest of the year.

“This sends a very important message that Minnesota remains a leader, because the state’s B2 mandate back in 2002 really jumpstarted the biodiesel industry nationwide,” says Ed Hegland, an Appleton, Minn. farmer and member of the National Biodiesel Board’s governing board. “Proving that a state can now go to B10 is a significant step in the right direction for renewable fuels.”

The move is expected to create an additional 20 million gallons of biodiesel demand each year, in addition to the current 40 million gallons used annually. It will help make the blue skies even cleaner, as the current B5 requirement is credited with reducing particulate and greenhouse gas emissions the equivalent of taking 35,000 vehicles off the road and removing an estimated 644 million pounds of carbon dioxide from the air annually.

Biodiesel Producer Certain Uncertainty Will End

christjansenThe manager of a biodiesel refinery from the Nation’s largest biodiesel producer believes the uncertainty in the green fuel’s future will disappear. I caught up with Bryan Christjansen, a general manager for Renewable Energy Group’s Albert Lea, Minn. and Mason City, Iowa plants, shortly after a news conference where several biodiesel producers joined with a group of U.S. senators to decry the uncertainty brought by the government’s proposal to lower the amount of biodiesel to be mixed into the fuel supply and Congress’ failure to renew the $1-a-gallon federal biodiesel tax incentive.

“Some of the things happening here on Capitol Hill, as well as in the White House, are not good for our industry. We are here, and [Congress and the Administration] have helped us get to this point, and we need to continue to grow this industry through what you guys have created already,” he said.

While Bryan said that the current Environmental Protection Agency (EPA) proposal on the Renewable Fuels Standard is hurting the biodiesel industry by causing so much uncertainty, he is certain that will change.

“With this [news] conference and the open comment period with the EPA, I think we’ve voiced our opinion that we need to reduce our dependence on foreign oil, and what better way to do it than by producing biodiesel.”

You can hear my conversation with Bryan here: Bryan Christjansen, REG manager

And you can hear what he and other producers said here: Biodiesel Industry Concerns
And what the U.S. senators attending the news conference said here: Senators Voice Biodiesel Concerns

Iowa Gov Says Biofuels Cure for Climate Change

IA Gov Branstad at Hearing in the Heartland Jan 23 2013As members of a federal task force visit Iowa and say that “climate change is here and now,” that state’s governor says biofuels, which are also here and now, are at least one way to fight the changes in climate. This article in the Waterloo Cedar Falls Courier says this is the third meeting of the White House task force and comes on the heels of the recent Obama Administration’s National Climate Assessment that says climate change could bring disastrous results for agricultural areas, such as Iowa, “including prolonged periods of heat, heavy downpours, and in some regions, floods and droughts.” Branstad makes the case that if the government followed the law on the Renewable Fuels Standard (RFS), many of these issues would be dealt with.

“Climate change is here and now,” said Mike Boots, acting chairman of the White House Council on Environmental Quality.

He ran down a list of some of the effects of climate change being experienced in the Midwest, such as poorer crop yields because of heat and torrential rains that overfill river banks and wash away topsoil.

Iowa Gov. Terry Branstad did not attend the event as he was traveling the state for a series of community tours, Branstad spokesman Jimmy Centers wrote in an e-mail.

“Gov. Branstad believes that as government officials travel to Des Moines they should focus on reducing transportation emissions and our dependence on overseas oil, diversifying our nation’s energy portfolio and supporting the growth of the Midwest economy through a strengthened Renewable Fuel Standard,” Centers wrote.

White House officials say the RFS was not discussed during the symposium. Recently, the U.S. Environmental Protection Agency recommended reducing the amount of ethanol and biodiesel to be mixed into the Nation’s fuel supply. Farm-state governors, such as Branstad, have blasted the agency for that recommendation and hope to get it reversed before it is due to be finalized within about a month.

Biodiesel Producers, Farmers Take to The Hill

goergerBiodiesel producers and farmers who raise the feedstocks for the biodiesel industry took to Capitol Hill this week, joining a group of U.S. Senate Democrats in their calls to end policy uncertainty that is hurting their industry.

“The uncertainty caused by these policy setbacks in Washington, with this proposed retreat on biodiesel volumes under the Renewable Fuels Standard (RFS) and the expiration of the [$1-a-gallon federal biodiesel] tax incentive is threatening to unravel [the good built up by the biodiesel industry],” said Terry Goerger, a third generation farmer from Mantador, North Dakota. He added that this is especially hard on the industry that took cues from Congress and the Obama Administration and took the risk to try to build up biodiesel. “We feel like the EPA (Environmental Protection Agency) and the Administration is pulling the rug out from underneath us.”

christjansenBryan Christjansen, who manages Renewable Energy Group biodiesel plants in Albert Lea, Minn. and Mason City, Iowa, echoed those sentiments, saying his company believes in the long-term future of biodiesel but wonders if Washington does.

“If the Administration chooses to go with a short-sighted EPA proposal, it does not just put domestic fuel into jeopardy, but it also harms the local economies and billions of dollars in investments,” he said.

haasJeff Haas, CEO of General Biodiesel in Seattle, said that while his company, as well as much of the biodiesel industry, wants to invest and grow, not knowing what the EPA or Congress will do next makes the industry feel like it is just floating adrift.

“We’re nearly halfway through the year, and we still don’t know what the RFS volume will be or whether the biodiesel tax incentive will be reinstated,” adding that the industry relies on these policies for direction. “It’s analogous to setting off across the ocean without a compass for six months.”

Haas also said that some of the best and brightest in biodiesel are losing confidence and leaving the industry because of the uncertainty, and the delays are just wins for opponents of renewable energy.

presbyWayne Presby, owner of White Mountain Biodiesel in North Haverhill, N.H., said his company was founded on the Obama Administration’s stated desire to lessen our dependence on foreign oil, reduce greenhouse gases, put more Americans to work, and increase our national security. But now, after investing millions in his plant alone, as well as hiring workers and buying supplies for a fledgling business in a community that desperately needed it, and making a successful biodiesel production facility, they can’t expand and grow that business because of the uncertainty in biodiesel policy.

“The industry is constantly taking two steps forward and two steps back because of the policy uncertainty.”

Listen to what the group had to say here: Biodiesel Industry Concerns

Senate Dems Against Obama on Biodiesel Proposal

nbb-senatorsNormally, they would be considered pretty staunch allies of President Obama. But a group of Democratic U.S. Senators have taken the Administration to task for its handling of the Environmental Protection Agency’s proposal to drastically reduce the amount of biodiesel required to be blended into the Nation’s fuel supply.

“The EPA’s preliminary November rule will be disastrous,” said Illinois Senator Dick Durbin, normally one of the president’s closest allies in the Senate, adding how the proposal is causing grave uncertainty in the biodiesel market. “We need more certainty of growth in this industry that is going to keep creating good paying jobs right here in America and serve the needs of America’s energy future.”

North Dakota Democratic Senator Heidi Heitkamp put the group together and echoed Durbin’s sentiments. She cited a new National Biodiesel Board survey that shows that nearly 80 percent of biodiesel operations have reduced production, nearly 60 percent idled production altogether or shut down a plant this year; two-thirds have reduced or is expecting to reduce their workforce, with 85 percent delaying or cancelling expansion plans. And just about every biodiesel producer surveyed blamed their reductions on the weak RFS and Congress’ inaction to extend the federal biodiesel tax credit.

“If you look at what this industry depends on from the U.S. Congress, it’s certainty, it is some measure of consistency in public policy. And I have to tell you, on that score, we have failed miserably,” Heitkamp said.

Minnesota’s Sen. Al Franken said he has talked to the President and EPA Gina McCarthy about this proposal and reiterated his belief that this is the wrong signal to investors… especially at a time when biodiesel’s sister fuel, cellulosic ethanol, is gaining support.

“This is not the time to tell investors that we’re backing off,” Franken said. Later on, Franken said his disappointment with the current RFS proposal is pretty obvious, while fellow Minnesotan, Sen. Amy Klobuchar said they were all stunned by the lowering of the amount of biodiesel to be blended.

“We knew they might make some changes, but it was fairly drastic when you look at the numbers,” pointing out that ethanol’s numbers are down 1.4 billion gallons below 2014′s target and only 1.28 billion for biodiesel this year… a drastic reduction from 2013′s approximately 1.7 billion gallons produced.

Indiana’s Sen. Joe Donnelly said it wasn’t the right move by EPA, but it could be fixed.

“They just made the wrong call. They have a chance to fix this and get it right. And what we want to do is make sure they have the right information, all the information they need, and if they do, then we’re expecting the right decision,” he said.

Sen. Maria Cantwell from Washington state said one way she believes they can help is to change the federal tax incentive from a blender’s to a producer’s credit.

“We hope this will also produce some more predictability and certainty in the industry.”

Listen to the senators’ opening statements here: Senators Voice Biodiesel Concerns

Rep Conaway Re-Introduces Anti-Biofuel Amendents

Rep. Mike Conaway (R-TX) has reintroduced his anti-biofuels amendments and they have been passed. The amendments have been included in the House version of the FY2015 National Defense Authorization Act. One amendment, H.R. 4435 prohibits the Department of Defense from purchasing biofuels unless the biofuels until certain date requirements are met:

Except as provided in subsection 3 (b), none of the amounts authorized to be appropriated by this Act or otherwise made available for the Department of Defense may be used to purchase or produce biofuels until the earlier of the following dates: ( 1) The elate on which the cost of the biofuel IS equal to the cost of conventional fuels purchased by the Department. (2) The date on which the Budget Control Act of 2011 (Public Law 112-25), and the sequestration in effect by reason of such Act, are no longer in effect. (b) EXCEPTIONS. the limitation under subsection (a) shall not apply to biofuels purchased ( 1) in limited quantities necessary to complete test and certification; or (2) for the biofuel research and development efforts of the Department.

Navy Blue Angels flying on biofuelsRep. Conaway said of the passage of his amendments, “It is foolish to require the military to purchase biofuels that are far more expensive than traditional petroleum products, which is why I offered an amendment that would allow the Department of Defense to only produce and procure biofuels if the cost is equal to conventional fuels or sequestration is replaced with an exemption for research and development.”

He continued, “I also offered an amendment that would prohibit the Department of Defense from developing their own biofuel refineries. Allowing the Pentagon to subsidize and develop its own biofuels industry is an abuse of the Defense Production Act. These amendments are necessary at a time when our military is already facing enormous budget constraints.

“It is not the job of the Department of Defense to develop the biofuel industry,” added Conaway. “As the bill moves forward, I will continue to fight to reverse these efforts to use the Department of Defense to prop up the biofuels industry.”

Truman National Security Project Executive Director Michael Breen responded to the amendments proposed by Rep. Conaway to the House’s version of the National Defense Authorization Act that would constrain the Department of Defense (DoD) from investing in energy security initiatives.

Breen, a former U.S. Army officer and leader of the clean energy campaign, Operation Free, said: “This is Déjà vu all over again. In what has become an annual tradition, Congressman Michael Conaway has proposed amendments that would limit the Pentagon’s use of advanced biofuels, directly affecting the mission capability of our deployed forces. Our military leaders have been crystal clear: developing next generation fuels and using energy smarter are national security imperatives.”

“The military is investing in renewable and energy efficient technologies that are promoting energy security for our troops abroad and here at home,” Breen added. “Congress needs to stop prioritizing politics over national security and listen to our military leaders who have stated over and over again that these investments are crucial for strengthening our national and economic security.”

DOE Announces Offshore Wind Energy Projects

The U.S. Department of Energy has announced funding for three offshore wind demonstrations. The projects will receive up to $47 million each over the next four years to deploy innovative, grid- connected systems in federal and state waters by 2017. The projects are located off the coast of New Jersey, Virginia and Oregon.

twisted jacket formation for offshore wind energyFishermen’s Energy will install five 5-megawatt direct-drive wind turbines approximately three miles off the coast of Atlantic City, New Jersey. This project will utilize an U.S.-developed twisted jacket foundation that is simpler and less expensive to manufacture and install than traditional offshore wind foundations.

Dominion Virginia Power will install two 6-megawatt direct-drive wind turbines 26 miles off the coast of Virginia Beach, utilizing a U.S.-designed twisted jacket foundation. Dominion’s project will demonstrate installation, operation and maintenance methods for wind turbines located far from shore. Additionally, the Dominion project will install and test a hurricane-resilient design.

Principle Power will install five 6-megawatt direct-drive wind turbines approximately 18 miles off the coast of Coos Bay, Oregon. The U.S.-developed WindFloat semi-submersible floating foundation will be installed in water more than 1,000 feet deep, demonstrating a solution for deep water wind turbine projects and lowering costs by simplifying installation and eliminating the need for highly specialized ships.

The Energy Department’s efforts to advance innovative offshore wind technologies support the Obama Administration’s comprehensive National Offshore Wind Strategy to develop a sustainable, world-class offshore wind industry. As part of that strategy, the Energy Department continues to work with partners across the government, including the Department of the Interior, to conduct resource assessments, streamline siting and permitting, and overcome technical and market challenges to installation, operations, and grid connection.

EIA Report: Solar Making Large Gains

eiaThe latest Short-Term Energy Outlook from the U.S. Energy Information Administration (EIA) shows that the growth of solar power will continue to make good gains. EIA Administrator Adam Sieminski made the following comments in the May report:

Renewables:“U.S. solar-electric generation capacity has increased significantly in the last four years. EIA expects continued robust growth in solar electricity generation. EIA currently expects that utility-scale solar capacity will increase by over 50% between 2013 and 2015, with utility-scale solar providing about one half of 1% of total electricity generation in 2015. Growth in customer-sited solar capacity is expected to exceed utility-scale solar growth over this same period. Customer-sited units provide most of the nation’s solar power.”

Meanwhile, underground storage of natural gas supplies remains well below average but is expected to rebound through the summer and fall.

The report has some good news for drivers as well. Record U.S. crude oil inventories are expected to help push down gasoline prices by as much as 20 cents per gallon by September.

EPA Chief Explains RFS Proposal

epa-mccarthyThe administrator of the Environmental Protection Agency explained her agency’s proposal to lower the volume requirements under the Renewable Fuel Standard (RFS) to members of the National Association of Farm Broadcasting meeting in Washington DC this week.

“Let me begin by reiterating that this administration sees renewable fuels as a big part of our way to adapt to climate change,” said Gina McCarthy. “I also know that it helps to provide some certainty in the rural economy and to create jobs.”

McCarthy explained that she went through the “gestation period” of renewable fuels. “It was my job to get the Renewable Fuel Standard originally done,” she said. “We were significantly challenged this year because of the high increase in the numbers in the statute and what we believed an inability to get all of the ethanol into the system and usable” which was why she said they “took a re-look at the numbers.”

She says they know “that re-look was not appreciated” by the agriculture community and others, but that’s why they are considering the comments received on the proposal very carefully. “I think you will see those comments reflected in the final rule,” she concluded.

Listen to McCarthy’s comments here: McCarthy RFS comments to farm broadcasters