Renewable Fuels Association (RFA) and CEO Bob Dinneen fears “the Obama Administration is about to make a huge mistake” in lowering the volume requirements for ethanol under the Renewable Fuel Standard (RFS).
In an interview for “The Ethanol Report,” Dinneen says it does appear that the Environmental Protection Agency is planning on changing the Renewable Volume Obligation (RVO) for 2014. “I find that hard to believe because this administration has been so strongly supportive of the RFS, of farmers, of a growing renewable fuels industry … this would be a reversal of stunning proportions,” he said. “It guts the program.”
Dinneen notes that EPA has not yet made the proposal for 2014 and once that happens there will be at least a 30 day comment period. “They’re supposed to have a final rule by November 30, but nobody in this town expects that to happen,” he said. “I do anticipate they will have the rule proposed sometime this month or early next.”
Dinneen also talks about the RFA response to AAA comments about the safety of E15 and how a recent NREL study proves it is safe in this Ethanol Report interview Ethanol Report with RFA's Bob Dinneen
Subscribe to “The Ethanol Report” with this link.
A hat tip to my friend Jessica Robinson over at the National Biodiesel Board for pointing out this great article from Biofuels Digest. As the U.S. Environmental Protection Agency (EPA) has proposed lower targets for the 2014 Renewable Fuel Standard, proponents of biodiesel are wondering why their green fuel is targeted a 20 percent reduction.
Let’s review the background on biodiesel and renewable diesel. There’s no blend wall in sight, production volumes have been growing fast, prices have been relatively stable, and because it provides a market for soybean oil, it reduces prices for ranchers and poultry farmers who use the soybean meal as animal feed.
Here are answers to your questions regarding biomass-based diesel and the proposed 2014 and 2015 standards.
Q: What is EPA’s stated method and target?
A: In the draft EPA document that is floating around the industry — which the Digest has reviewed — the EPA writes that it aims to “Base advanced volume on availability of advanced biofuels but considering the blendwall” by [setting} the advanced volume at the sum of the cellulosic standard, the BBD standard and all available volumes of non-ethanol advanced.” EPA adds that it intends to “Maintain biomass-based diesel std at 1.28 Bgal; since BBD is nested within the advanced biofuel standard, any excess volumes above 1.28 bill gal can compete with other advanced biofuels. There is limited availability of other advanced biofuels, which generates opportunities for biodiesel production above 1.28 bill gal to help meet the advanced biofuel standard.” Continue reading
Officials in Iowa are looking to up the choices consumers will have when filling up with ethanol and biodiesel. Gov. Terry Branstad announced a new public-private partnership called “Fueling Our Future” that will use state dollars to leverage investments in existing renewable fuel infrastructure to establish more blender pumps containing E-30 and biodiesel at gas retailers around the state.
“This pilot program will provide Iowans with additional access to higher blends of ethanol and biodiesel, which will help our farmers, communities and economy in producing, processing and profiting locally,” said Branstad.
The Fueling Our Future program will be supported by the Department of Agriculture and Land Stewardship, the Department of Transportation, Iowa State University and the Iowa Renewable Fuels Infrastructure Board.
The announcement was welcomed by the Iowa Renewable Fuels Association:
“Iowa leads the nation in renewable fuels production, and has led in developing markets for E10, E15, E85 and biodiesel over the last 30 years,” stated IRFA Executive Director Monte Shaw. “But never one to sit still, Governor Branstad is already looking down the road to the next five to ten years. I want to thank Gov. Branstad and his team for the new ‘Fueling Our Future’ program that will continue to build on the successes this state has had in renewable fuels, and will position Iowa to lead the way in E30 and biodiesel availability.”
More information on the state’s Renewable Fuels Infrastructure Program can be found here.
The U.S. Energy Information Administration (EIA) is shutdown due to the shutdown.
As a result of the lapse in appropriations for the U.S. Energy Information Administration, the EIA.gov website and our social media channels will not be updated after 1:00 p.m. Eastern Time on Friday, October 11, 2013. Transactions submitted via the website might not be processed until appropriations are enacted; databases might not be available; and we will not be able to respond to inquiries.
That means the release of all reports and data will cease until further notice. The last ethanol production data were released by EIA on October 4. For that week, ethanol production averaged 868,000 barrels per day (b/d) — or 36.46 million gallons daily. That is down 7,000 from the week before. The four-week average for ethanol production stood at 853,000 b/d for an annualized rate of 13.08 billion gallons. Stocks of ethanol stood at 15.4 million barrels. That is a 0.8% decrease from last week, and the lowest of the year.
There were no imports of ethanol that week, compared to the same week in 2012 when imports set a record of 122,000 b/d. Ethanol export data for August is unavailable due to the government shutdown.
The nation’s capitol is “so quiet you can hear a pin drop” but the American Petroleum Institute (API) is still working to beat the Renewable Fuel Standard (RFS), and the government shutdown means E15 retailers are unable to get approval.
“EPA right now is not answering the phones so they are not responding to marketers that are looking to offer E15,” says Renewable Fuels Association (RFA) president and CEO Bob Dinneen in this edition of The Ethanol Report. “I would hate to think that the political snit that is occurring in Washington today is going to throw up yet another barrier to expanding E15.”
Dinneen also talks about the API lawsuit filed this week over the volume requirements of the RFS and the possibility that the government shut down would dely EPA’s release of the 2014 Renewable Volume Obligation (RVO), due out next month. “But this year, EPA took far too long to get those out,” he said, noting the numbers were just released in August – nine months late without a government shut down. “You want those numbers out as early as possible so the marketplace can respond.”
Listen to Bob discuss these topics and optimism in the ethanol industry here: Ethanol Report with RFA's Bob Dinneen
Subscribe to “The Ethanol Report” with this link.
Numbers from the U.S. government show biodiesel imports, including all biomass-based diesel like renewable diesel, dropped sharply in July. This story in Biodiesel Magazine says the Energy Information Administration (EIA) showed imports of biomass-based diesel at about 14.2 million gallons in July, less than half of June’s 28.6 million gallons.
Indonesian biodiesel made up the majority of July’s imports, coming in at slightly more than 8.5 million gallons. Imports from Germany totaled 3.15 million gallons, while Norway and Canada together shipped about 2.5 million gallons to the U.S.
U.S. biodiesel exports also fell from June, although not by quite as much. The EIA data shows a total of 17.9 million gallons of exports in July, although the administration only explicitly lists roughly 16.4 million gallons of biomass-based diesel destined to specific countries. These figures are down from nearly 25 million gallons in June. More than 11 million gallons of U.S. exports went north to Canada, while close to 4.5 million gallons was shipped to Gibraltar. Taiwan received 630,000 gallons of U.S. biodiesel, while Australia was sent 168,000 gallons.
Other renewable diesel imports also fell in July, with 15.3 million gallons imported in July versus nearly 22 million gallons in June.
Some pretty ill winds are blowing around Washington, D.C. these days, and some of those are directed at the wind energy industry. As I told you yesterday about what would come, Republicans launched their attack in the House Oversight and Government Reform subcommittee on Energy Policy, arguing, according to this blog post from The Hill, that the production tax credit for wind farms is not worth the money being invested. They point to an analysis that shows a one-year extension of the tax credit would cost about $6.1 billion over 10 years. But Democrats on the committee argue it’s a bigger bargain than what we’re getting from the oil companies’ subsidies and tax credits.
“Big oil still gets subsidies even though just the biggest five oil companies … made a combined $118 billion in profits in 2012,” Rep. Jackie Speier (Calif.), the top Democrat on the subcommittee, said. “Oil and gas have received over $4.8 billion each year in government subsidies over 90 years.”
She added, “If you want to get rid of the PTC, then let’s get rid of all the subsidies for all the various forms of energy. We need to give as much support to clean renewable energy sources as we have provided and continue to provide for the fossil fuel industry.”
Rep. Steven Horsford (D-Nev.) said that “the detractors of the wind industry are asking the government to pick winners and losers by removing federal subsidies for only one particular sector of the energy capacity, which is wind energy, but leaving all the other subsidies intact.”
The credit was extended at the beginning of this year as part of the deal to avoid sending the country over the fiscal cliff. But wind energy backers say now is the time to extend the credit for years to give the industry better stability and encourage more private investment and growth.
Numbers from the government show ethanol production is down slightly during the first six months of the year, but consumption of the green fuel was up during the same period. Ethanol Producer Magazine reports U.S. Energy Information Administration (EIA) figures show production at 6.419 billion gallons of ethanol, slightly off from the 6.893 billion gallons for the same period a year earlier. The upside is consumers seem to be using more ethanol.
During the first half of the year, the U.S. consumed 6.482 billion gallons of ethanol, up from 6.407 billion gallons during the first six months of last year.
Net imports for June were -170,000 barrels, compared to -535,000 barrels in May. During the first half of 2013, net imports measured -2.801 million barrels, compared to -8.375 million barrels for the same period of 2012.
The most recent ethanol production numbers from Sept. 20 show an average of 832,000 barrels per day.
As lawmakers battle over the budget and Obamacare, the wind production tax credit could also come under fire. This blog posting from the political paper, The Hill, says House Republicans today are taking aim at the credits at a House Oversight and Government Reform Committee hearing.
“With the federal government currently at a standstill over budget negotiations, it is imperative for Congress to continue to root out and address wasteful spending of taxpayer dollars,” states an advisory for the Wednesday hearing on the production tax credit.
An IRS official is scheduled to speak, as well as those favoring and opposing the tax incentive. The hearing starts at 9:30 am EDT in room 2154 of the Rayburn House Office Building in Washington, D.C.
We’ll follow the develops and let you know if anything comes out of this hearing.
The federal government is considering leasing an area off the shore of Oregon for a floating wind energy project. This story from North American Windpower says the Bureau of Ocean Energy Management (BOEM) will determine the competitive interest in leasing the area for the proposed Principle Power Inc. project.
According to BOEM, Principle Power’s proposed WindFloat Pacific Project, which would be located about 16 nautical miles west of Coos Bay, Ore., in about 1,200 feet of water, is designed to generate 30 MW of electricity from five “WindFloat” units, each equipped with a 6 MW offshore wind turbine. The proposed lease area covers about 15 square miles.
BOEM says it must assess whether there are other parties interested in developing commercial wind facilities in the same area in order to determine whether it is appropriate to issue a lease on a non-competitive basis, or whether a competitive process is required.
In addition to inquiring about competitive interest, BOEM is seeking public comment on the proposal, its potential environmental consequences, and the use of the area in which the proposed project would be located.
Last year, Principle Power received a U.S. Department of Energy grant to explore offshore wind projects in state and federal waters.
Over the next year, BOEM expects to hold more competitive auctions for wind energy leases off the shores of Maryland, New Jersey and Massachusetts.
Farmers, ranchers and small businesses in rural areas of 22 states will benefit from projects designed to use renewable energy, as well as conserve power. The U.S. Department of Agriculture (USDA) announced the latest round of grants and loans being made available through the Rural Energy for America Program (REAP).
“REAP continues to help farmers and rural businesses reduce their energy consumption and by doing so, improve the bottom line of their operations,” [Acting Under Secretary for Rural Development Doug] O’Brien said. “This important Farm Bill program and others like it would not be available without a comprehensive Food, Farm and Jobs Bill.”
The dozens of projects across the country approved for the REAP funds include nearly $50,000 for two biodiesel blending and pumping stations in Georgia, more than $31,000 for some E85 and biodiesel blender dispensers in Iowa, almost $60,000 to purchase equipment to make biodiesel in Indiana, and a $41,000 grant to assist with the installation of ground-mounted solar panels at a bed and breakfast in Arizona.
You can see the entire list of projects here.
A congressman from Iowa makes the case that the Renewable Fuel Standard (RFS) is working and encourages his fellow lawmakers to support it. In an open letter titled “Dear Colleague: Why the last two months show the RFS is working,” Rep. Dave Loebsack points out that the recent flexibility in the RFS, the government looking into renewable fuel distribution barriers, and oil earnings not taking the bemoaned but not-to-fruition dips because of Renewable Identification Numbers (RINs) show a healthy RFS.
One of the important features of the RFS is that Congress provided significant flexibility to adjust targets based on anticipated production. On August 6, 2013, the EPA did just that, releasing the final 2013 RFS volumes at adjusted levels. The EPA decreased the required cellulosic biofuels amounts, as well as extended the deadline to comply with the 2013 standards by four months. This gives refiners additional time to blend renewable fuel or purchase RINs for 2013 compliance. Additionally, the EPA signaled it would remain flexible as it develops the 2014 RFS levels.
On August 22, 2013, the Federal Trade Commission (FTC) announced that it would look into anti-trust violations for limiting consumer choices at the pump. This comes as opponents of the RFS continue to talk about a hypothetical E10 blend wall that would allegedly create a barrier to using more biofuels in the domestic fuel supply. What’s clear is that these concerns are shortsighted. There are simple ways to eliminate any potential blend wall that include letting consumers dictate what fuel options they have at the pump. This market-based approach means consumers should have the option to put more biofuels into their gas tanks if they want.
And another strong quarter of earnings for the oil companies shows a pretty good Chicken Little impression when Big Oil tried to forecast “staggering” economic consequences of the RFS.
These recent events in regards to the RFS show that the law is working as intended. We must continue to support the RFS to spur continued development of homegrown fuels, lower gas prices, create good jobs, and promote economic development in our communities.
A new internal report recommends the Environmental Protection Agency improve its monitoring of the Renewable Fuel Standard (RFS) program. This article in Biodiesel Magazine reports the EPA’s own Inspector General conducted the audit and made the recommendation in response to the generation of millions of dollars of fraudulent renewable identification numbers (RINs).
According to the report, the EPA did not track submission of third-party engineering reviews or annual attest engagements because it does not have an electronic monitoring system for those reports. Until these materials are tracked, the Office of the Inspector General said the agency can’t be sure that program participants are complying with regulations. However the EPA recently implemented electronic reporting requirements for attest engagements and said it intends to do the same for engineering reviews by the end of the year.
The report also notes the investigation was unable to determine if there is overlap in parties completing the third-party engineering reviews and attest engagements. In addition, it specifies that regulations currently do not preclude the same third party from completing multiple requirements and other reporting responsibilities, allowing for potential overlap. This could result in a conflict of interest if the same third party reviews its own work.
The IG recommended that the agency modify existing reporting systems, as well as electronic submission of all reporting requirements for the RFS, including third-party engineering reviews and attest engagements. The EPA says it agrees and is already addressing these issues.
The U.S. Environmental Protection Agency (EPA) is expanding the definition of heating oil as part of the Renewable Fuel Standard (RFS) program. This means that renewable heating oil, such as bioheat, a mixture of biodiesel and heating oil, could fall under the category to allow for Renewable Identification Numbers (RINs).
The expanded definition of heating oil will encourage the growth of renewable fuel production in the heating oil market by adding value to renewable fuel oils through the generation of RINs. In particular, the expanded definition could spur the production of advanced or cellulosic biouel, providing additional opportunities for regulated parties to meet their annual RFS volume obligations.
EPA is also finalizing specific registration, reporting, product transfer document, and recordkeeping requirements applicable specifically to the new category of fuel oils, which are necessary to demonstrate that the fuel oil was or will be used to heat buildings for climate control for human comfort in order to generate RINs.
The news was welcomed by Michael McAdams, president of the Advanced Biofuels Association:
“The Advanced Biofuels Association applauds EPA for expanding the definition of heating oil to include renewable fuel oil used to warm buildings or other facilities where people live, work or recreate. This newly expanded definition will help sustain growing renewable fuel production, particularly of advanced or cellulosic biofuels, in the heating oil market.”
As the government considers the 2014 volume obligation for biodiesel under the Renewable Fuel Standard (RFS), the man in charge of the nation’s largest biodiesel producer says his green fuel is ready to meet the mandates. On the E&ETV show OnPoint, Dan Oh, CEO of the Renewable Energy Group (REG) said biodiesel can be relied upon to provide advanced biofuels.
“We’ve commercialized over 15 years. We have a large installed base. We now are able to produce from a wide variety of raw material. And that really matters when you are thinking about keeping costs down and having broad choices in terms of how you can produce. So the study on your production has been result of innovation.”
Oh just recently met with Office of Management and Budget officials on the RFS2 on the 2014 volume obligation for biodiesel and says the attitude toward biodiesel is very good in Washington, D.C.
I think the tone is favorable and supportive. You can look at the 13 final rule on the RVO that came out with EPA. They certainly highlighted in there how strong biodiesel is, and what a good position it’s in right now. It’s very much not part of the blend wall discussion because we don’t have a blend wall. You know, we can blend it at high levels in varying ways around the country, and it is such a good carbon intensity count that people really like it.
Oh says his industry is asking for a “robust increase” in biodiesel’s obligations, and biodiesel is ready to step in if other advanced biofuels can’t meet their obligations.