Lawmakers Ask Obama to Boost Biodiesel

epa-logoAs the Environmental Protection Agency (EPA) is poised to release its decision on the amount of biodiesel and ethanol to be mixed into the nation’s fuel supply (and we’re hearing word now that decision might be delayed until the Fall), a bi-partisan group of lawmakers is making its appeal to the White House to allow biodiesel to keep growing. This news release from the National Biodiesel Board cites the letter from 52 lawmakers who are concerned about the EPA’s current proposal to reduce the amount of biodiesel to be required for obligated parties under the Renewable Fuel Standard (RFS)

“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.”

Biofuels and Wind Waiting on Action

Environmental Protection Agency administrator Gina McCarthy said earlier this year that they planned to issue a final rule on the proposed volume requirements under the Renewable Fuel Standard (RFS) in “late spring or early summer” but spring is gone and summer is here and there’s been no word yet.

grassley-headSenator Chuck Grassley (R-IA) said last week that he thought the decision was delayed now until fall. “The fact that they’ve delayed it is a little bit of good news,” he said during an interview on June 19. “The bad aspect of it is that it retards investment in ethanol … and it doesn’t just effect ethanol but biodiesel too.” Grassley said he really doesn’t know when the EPA will announce the final rule, although he does believe it will be better than the proposal released in November. “I don’t think they’ll be that bad, but whatever is less than present law is going to be bad anyway, maybe just less bad.”

Meanwhile, Grassley says the wind energy industry, which is huge in Iowa, is still waiting on Congressional action to extend tax credits. “As a father of the wind energy tax credit, I want to get it renewed,” he said. “It’s part of a package of 53 renewals that have to be passed by the Senate and it’s up to Reid when he brings it up … we don’t get any indication from him on it.” Grassley says he will continue to push to make that happen.

Iowa’s Steve King Urges EPA to Follow Law on RFS

steve-kingIf the administration wants to make changes in the Renewable Fuel Standard (RFS) they should follow the law, according to Rep. Steve King (R-IA).

“The RFS is in statute and there are waiver provisions in there for the EPA, but they need to comply with the waiver provisions,” said King during an interview.

King notes that EPA used 2011 data in proposing volume requirements for this year under the RFS. “So we’ve asked them in hearings, discussions, pleadings, every way that we can … that we want them to go back and look at the 2013 data and go back and re-read the law,” he said. “If they make those adjustments appropriately, they’ll come back to what the law says.”

King made those comments during an interview at World Pork Expo in Des Moines last week.

Rep. Steve King (R-IA) RFS comments

Rural Wind Energy Development Act Introduced

capitol-buildingA bill to help rural areas get more power from the wind has been introduced. Representatives Earl Blumenauer (OR-03) and Tom Cole (OK-04) say their Rural Wind Energy Development Act will provide an investment tax credit to ranchers, farmers, and small businesses to offset the up-front costs of owning a distributed wind turbine.

Small wind turbines (generating up to 20 megawatts of clean energy) allow farmers, ranchers, and other consumers to cut their energy bills and, at times, sell power back into the grid. They also allow thousands of businesses—from “mom and pop” stores, to retailers, to ranches, and to breweries—to reduce their energy load, to help clean the environment, and to save money. The Department of Energy’s national laboratories estimate that community wind generates a strong economic multiplier for local communities, helping rural areas rebound from challenging economic times.

“Community wind energy not only creates American-produced electricity, but American jobs as well,” said Blumenauer. “Approximately 90% of distributed wind turbines sold in the U.S. are made here, according to domestic manufacturing content, creating non-exportable, family wage jobs.”

“I am pleased to once again work with my friend and colleague in furthering the success of the same credit we worked to create in 2008,” said Cole. “Not only does the credit play an important role in encouraging and developing an all-of-the-above energy approach for our nation, but it also ensures that America continues to be a leader in innovation. By modestly increasing this credit, we can continue to encourage economic development, especially in our rural communities.”

The bill is touted as taking away federal restrictions that work well for large-scale wind projects, but cause issues for the smaller producers.

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