Legislation introduced last week in the House would extend expiring tax incentives important to the development of next generation biofuels.
Rep. Scott Peters (D-CA) introduced the “Second Generation Biofuels Extension Act of 2013” (H.R. 3758) which would extend for one year the Second Generation Biofuel Producer Credit and the Special Allowance for Second Generation Biofuel Plant Property. Four fellow Democrats are co-sponsors of the bill, which is strongly supported by the biofuels industry.
Renewable Fuels Association (RFA) president and CEO Bob Dinneen commended Peters for taking a stand and fighting for the future of next generation biofuels. “Rep. Peters clearly understands the need to continue this successful program,” said Dinneen. “Investors need certainty and extending the tax credits for second generation biofuels will boost investment and innovation in cellulosic and advanced biofuels.”
This week RFA sent a letter to the leadership of the House Ways and Means committee and the Senate Finance Committee to request that key expiring biofuel tax incentives be extended. In addition to the two credits in the Peters bill, that would also include the Alternative Fuel Vehicle Refueling Property Credit.
The National Biodiesel Board’s (NBB) message to the Environmental Protection Agency (EPA) is pretty simple: You got it WRONG! During last week’s hearing on the EPA’s proposed reduction in the amount of biodiesel and ethanol that will be mixed into the country’s fuel supply, Vice President of Federal Affairs for NBB Anne Steckel told those at the hearing that the proposal could cost jobs and hurt an industry that thought it was on the right track.
“This is a very dramatic thing the EPA has done, and we’re trying to set the record straight,” Anne said in an interview with me, adding that more that two dozen biodiesel producers also made the trip to the Nation’s capital to make the case for the green fuel … a pretty strong one when you look at the facts. “Biodiesel is an advanced biofuel, so we’re lessening greenhouse gas emissions significantly, we’re helping out with the economy, we’re supporting more than 62,000 jobs across the country, we have diversified our feedstocks, and those feedstock prices are low. So for EPA to put this out is very shocking.”
Anne said it looks like EPA just cut-and-paste the data from 2011 and ignored the most recent updates the industry gave it. She stressed that this hearing isn’t the only opportunity to let the EPA know of its mistake. She’s encouraging all biodiesel advocates to contact officials and let them know the biomass-based diesel number should be at least 1.7 billion gallons. The NBB is even providing a template for a letter on its website to help make it easier to have more voices heard between now and the end of the comment period at the end of January.
“Every voice really counts.”
Listen to my interview with Anne here: Anne Steckel, Vice President of Federal Affairs for NBB
A few years ago, the U.S. was considered the most promising biofuels market in the world. But recent policy changes, including the latest from the Environmental Protection Agency (EPA) to roll back ethanol and biodiesel blend amounts to lower than what was scheduled in the Renewable Fuel Standard, is allowing the American biofuels market to be outpaced by competitors in Asia and South America. In addition, Thomas Corle with DONG Energy told the panel at yesterday’s hearing on the subject in Arlington, Va. that investors are now more nervous to put money into the U.S. system.
“Financial institutions will base their investment risks on this historical event,” adding that this proposal goes from a policy of encouraging the RFS to discouraging its implementation. Corle said that in 2008, the U.S. was seen as the most promising market for cellulosic ethanol in the world. “But it has now been replaced or outpaced by other markets that are moving faster, especially China and Brazil. We could be driving by biomass refineries in China before we get our first commercial project commissioned here in the U.S. because the policy risk in the U.S. is greater than even China.”
He cited several other projects where the actions of the EPA are stalling projects in the U.S., costing the country jobs and energy security.
More of Thomas’ testimony can be heard here: Thomas Corle, DONG Energy comments to EPA hearing
Nearly 30 years ago this Christmas time, the world saw one of the greatest human sufferings ever unfold before its eyes, as a million people starved to death in Ethiopia. In a particularly poignant moment during yesterday’s Environmental Protection Agency (EPA) Renewable Fuel Standard (RFS) hearing, Rick Schwarck, the president and CEO of Absolute Energy, an ethanol producer on the Iowa-Minnesota border, reminded the audience why that tragedy happened.
“It’s hard to talk about because it is so perverted. It was caused by low ag prices.”
Rick went on to point out that Ethiopia’s economy has dramatically rebounded, especially in the last few years, as commodity prices worldwide have risen and raised the fortunes of the 80 percent of the population in Ethiopia that relies on a rural, ag-based economy. He added this is being repeated all over the world, throwing cold water on much of the food-versus-fuel argument.
“Google any ag country, and take a look at the growth curves in their economies; it’s been staggering,” Rick said.
This is a pretty busy time of year for Rick, as he is president of the Iowa Renewable Fuels Association (IRFA) and a member of the national Renewable Fuel Association (RFA). Plus, his family has a choose-and-cut Christmas tree farm back home, so he felt pretty lucky to be able to make the trip. But he also knows how important it is for the RFS to be enforced, in his words, “just as it was written and just as it was intended.”
Listen to Rick’s testimony here: Rick Schwarck, President and CEO of Absolute Energy comments to EPA hearing
One of the country’s oldest ethanol producers says it could generate a lot of economic activity for the rural communities where it has had to idle some plants, if the Renewable Fuel Standard (RFS) wasn’t being tinkered with. Speaking at yesterday’s Environmental Protection Agency (EPA) hearing on the agency’s proposed changes to the RFS, Mark Beemer, President of Aventine Renewable Energy, said the potential money that could come into just one rural community is staggering.
He said if they were able to re-open their two Aurora, Nebraska ethanol facilities, they would be adding $5 million of payroll to the local community (of 4,500 residents) with 65-70 jobs, paying for $5 million worth of millwright activities to repair and maintain these two ethanol facilities, plus another $85 million for other spare parts and supplies, and the biggest purchase of all – nearly $300 million in local corn purchases, for a total benefit to the local community of about $400 million. “That’s why ethanol has been so successful, because of the impacts in rural America.”
Mark also expressed frustration over possible wavering by the EPA over the Renewable Identification Numbers (RINs) issue and feared that if the agency doesn’t make the obligated parties follow through, those obligated know they’ll have found a way to end-run the law.
“Congress was fully informed of the blend-wall issue with RFS2 when it was established, and rising RIN values would be the stick, not the carrot, imbedded in the legislation that would incentivize the distribution of E85 and E15,” he said.
Mark said American agriculture has come through on its end of the RFS deal; now it’s time for the government to do its part.
“I ask the EPA to reconsider your changes to the mandate and restore the RFS2 to the original Congressionally mandated target levels.”
Listen to all of Mark’s testimony here: Mark Beemer, President of Aventine Renewable Energy comments to EPA hearing
So the Renewable Fuel Standard (RFS) should certainly be considered a success since it is doing many of the things it was projected to do:
- A capacity that is greater than 10 percent of the total fuel supply (that amount was expected right in the original bill)
- An alternative to foreign-based fuels
- A growing renewable fuels industry
- Adding to farm incomes in rural America
Plus, a lot more. So that led to this question during the Environmental Protection Agency’s hearing on the RFS in Arlington, Va.:
“So why are we even here?” asked Jeff Oestmann with East Kansas Agri-Energy LLC, an ethanol producer with an approximately 45 million gallon per year operation in Garnett, Kansas. “It boggles the mind to understand why we have a completely successful program by any measure, all targets are being met, and we have compliance by all [Renewable Volume Obligations (RVO)] parties.”
One of the most frustrating things Jeff cited was the fact that the EPA proposed lower amounts of ethanol and biodiesel that could be mixed into this country’s fuel supply than what the law intended, and that could destabilize the biofuels industry and the rural economy. He said all this turmoil is already stalling future work as investors are hesitant to put money into an industry they’re not sure will get the support required by the law. And Jeff said he just doesn’t have time to come to debate what is a successful program and was supposed to be the law of the land.
“It’s hard to come to Washington today, as our company is small and really cannot afford my time to be spent here today. Congress has created the RVO. It is EPA’s job to implement the will of Congress… not the will of the auto or petroleum industries.”
Listen to Jeff’s full testimony here: Jeff Oestmann, East Kansas Agri-Energy LLC comments to EPA hearing
The executive director of the Renewable Fuel Association’s (RFA) Advanced Ethanol Council (AEC) says what the government is proposing when it comes to the amount of ethanol and biodiesel to be blended into fuels is “off track.” Speaking today at the Environmental Protection Agency’s (EPA) hearing on the Renewable Fuel Standard (RFS), in Arlington, Va., just across the river from the Nation’s capital, Brooke Coleman said the proposed changes to the RFS is causing some real problems.
“The new proposal is off track, and we’ve recoiled far too much,” he told the roomfull of biofuels advocates and foes. Brooke pointed out that the EPA’s E85 data is “woefully pessimistic” and needs to be updated.
The heart of the issue is the problems the proposal will cause with Renewable Identification Numbers (RINs). “For our investors to believe in this program and want to enter into this marketplace, they have to believe in RINs. That’s the game-changer,” going on to explain that the RIN program forces the Exxons of the world to buy RINs and forces non-compliant entities to play by the same rules. “It puts the Cumberland Farms and Gulfs of this world on equal footing with Exxon, and they are actually rewarded for complying with the rule.”
He concluded saying the biggest issue with the proposal is it depressurizes the RIN program to the point that investors don’t have confidence they will be able to drive change.
“So we have got to move those numbers up significantly, not unreasonably, to put the pressure back in the program, or the advanced biofuels industry is going to have a very, very, very difficult time surviving.”
Hear Brooke’s full testimony here: Advanced Ethanol Council Executive Director Brooke Coleman comments to EPA hearing
Iowa Gov. Terry Branstad made an impassioned plea in favor of the current Renewable Fuel Standard (RFS) and showed no love for what the Environmental Protection Agency (EPA) is proposing for reducing the amount of ethanol and biodiesel to be put into gasoline as originally mandated in the 2007 law.
“After decades of efforts to reduce our dependency on foreign oil and increase farm income with policies like the RFS, the EPA is now caving in to Big Oil!” Branstad thundered, pointing out that since Big Oil doesn’t control renewable fuels, it doesn’t want to see the green fuels grow. And the governor dismissed claims that vehicles can’t handle higher blends, pounding on the table as he said, “If you don’t believe it can be done, go to Brazil! Go to Brazil where they are making ethanol out of sugarcane and soon going to be doing it out of corn, and they have virtually all flexible-fuel vehicles in their fleets!”
Branstad continued his passionate speech, recalling the farm crisis of the 1980s when he was governor the first time around and how the proposed cuts in the RFS could cause another crisis, especially when you consider that there’s still no farm bill. And he said the problems could spread beyond Iowa’s borders.
“This EPA proposal will cost 45 thousand jobs in this nation. We don’t need to drive the number of people employed down,” simply to cater to the petroleum industry. Branstad added Iowans, who supported Obama during each of his campaigns, including his historic election in 2008, because he promised to support renewable fuels, now feel betrayed.
Moving forward, he wants the EPA to come to his state to hear from the people most directly affected by the proposed change, “where people know about the impact this has and know the truth and the facts!”
Listen to the entirety of Gov. Branstad’s testimony here: Iowa Gov. Terry Branstad comments to EPA hearing
A change in the Renewable Fuels Standard (RFS) will have dramatic impacts for the small businesses that have cropped up in rural America. That was the message Patriot Renewable Fuels‘ Judd Hulting made to the Environmental Protection Agency’s hearing on its proposal to reduce the amount of ethanol and biodiesel to be mixed into gasoline.
“We believe what is being proposed is a step backwards and really not what Congress envisioned back in 2005 and 2007,” he told the panel in Arlington, Va., today. He says small, rural companies, such as his, have been on a positive roll the last few years, thanks to the market the RFS has helped nurture. Judd also alluded to the fact that changing the RFS also puts too much uncertainty into investors’ minds and keeps them from putting more into the rural communities where these biofuels refineries have thrived. “What our investors envisioned was a long-term program.”
Judd pointed out that his plant is hiring more workers, as Patriot Renewable Fuels adds a refinery turning the corn oil from the plant’s ethanol operation into biodiesel. Plus, he said the industry is not getting enough credit for producing several products from that same bushel of corn.
“Over 5 years, we’ve produced half a billion gallons of ethanol; every day we produced a 1,000 tons of feed,” pointing out that his own livestock-producing family is benefiting from these biofuels co-products.
Listen to all of Judd’s testimony here: Judd Hulting, Patriot Renewable Fuels comments to EPA hearing
The case for keeping the Renewable Fuel Standard (RFS) as-is is being made today at an Environmental Protection Agency (EPA) hearing in Arlington, Va. Our friends from the Renewable Fuels Association (RFA) have shown up in force, making sure biofuels’ voices are being heard. Bob Dinneen, President and CEO of the RFA, told the EPA that they need to keep in mind why the RFS was set up in the first place.
“The RFS was designed to drive investment in new technologies, to drive innovations, to drive new market opportunities. It was NOT designed to be convenient for the oil companies,” he said, adding prices for Renewable Identification Numbers, or RINs, the currency on which the RFS relies, will be hurt by EPA’s proposal to lower the amount of ethanol and biodiesel to be blended into the Nation’s fuel supply. “What you’ve done with this proposal is rip this market-forcing mechanism [the RIN] away, returning us to more petroleum, fewer choices at the pump, more costly gasoline.”
Bob also made the case that rising RIN values don’t impact consumer gas prices. “There’s no correlation between rising RIN values and gasoline prices.”
He concluded by encouraging the EPA to listen to those making the case today for preserving the RFS as it was written and intended.
“Listen to those people that are concerned about what this program does for rural America, what this program does for consumers, what this program does for new technologies, and revise this [proposal].”
You can hear Bob’s testimony to the EPA here: Bob Dinneen, CEO RFA comments to EPA hearing
We are live from the Environmental Protection Agency (EPA) hearing on the Renewable Fuel Standard in Arlington, Va., just across the Potomac River from the Nation’s capital!
In less than an hour, we’ll start hearing from advocates and friends of the biofuels industry, in particular, our friends from the Renewable Fuels Association (RFA), who have come from across the country to explain the economic and environmental fallout from the EPA’s draft proposal to lower the amount of ethanol and biodiesel to be mixed into the country’s fuel supply. They’ll also be countering Big Oil’s arguments against the RFS, so it should be a lively hearing with dozens of folks from both sides of the issue taking part.
We seem to have a good Internet connection now, so I’ll try to update you as the day’s events unfold. Check back often here at DomesticFuel.com!
We will be at the Environmental Protection Agency (EPA) hearing on the Renewable Fuel Standard (RFS), ready to kick off in just a couple of hours in Arlington, Va., just across the river from the nation’s capital. Advocates and friends of biofuels are expected to turn out en masse, including our friends from the National Biodiesel Board, who plan to bring about two dozen representatives of the U.S. biodiesel industry to make the case that biodiesel is already an EPA-designated Advanced Biofuel produced at a commercial-scale and how the EPA’s proposal to reduce biodiesel production to 1.28 billion gallons will hurt the economy and the environment.
“This industry has been running at an annualized rate of about 2 billion gallons since July. That’s displacing 2 billion gallons of petroleum diesel,” said Anne Steckel, NBB’s vice president of federal affairs. “You can’t cut it almost in half and expect jobs and businesses to survive.”
“What’s so frustrating about the proposal is that biodiesel is an EPA-designated Advanced Biofuel that has exceeded RFS targets. It’s an RFS success story that is creating the clean-energy jobs that the Obama Administration has pushed so hard for in recent years,” Steckel added. “There is not a commercial-scale fuel on the planet that beats the environmental benefits that biodiesel delivers. By the EPA’s own calculations, biodiesel reduces greenhouse gas emission by 57 percent to 86 percent. So we will be looking for answers from the EPA and the Administration about why they are doing this. It is not consistent with the Administration’s stated policy.”
I’ll be there all day to follow the events and provide you updates, right here on Domestic Fuel.
A huge turnout is expected Thursday at a public hearing on the Environmental Protection Agency’s proposed Renewable Fuel Standard volume obligations for 2014. Literally busloads of stakeholders, both opposed to and in favor of cutting the requirements, are attending the hearing at the Hyatt in Crystal City, Virginia.
Iowa Governor Terry Branstad will be attending with several Iowa livestock producers, farmers and renewable fuels leaders. Branstad fears the EPA proposal could lead to another farm crisis. “I was governor during the farm crisis of the ‘80s when land values dropped 63 percent,” he said during a conference call on Wednesday. “I know what can happen when you have an agriculture depression, and we don’t want to go back and revisit that.”
Also attending the hearing will be corn farmers from a dozen other states in addition to Iowa. “It’s great to see so many people willing to leave their farms at this time of year for an important opportunity to give the EPA a piece of their mind,” said National Corn Growers Association First Vice President Chip Bowling of Maryland.
Advanced biofuels producers will be making the case that they would bear a disproportionate share of the proposed cuts. “They have proposed to cut volume requirements for advanced biofuels by more than 40 percent compared to requirements written into the statute,” said Advanced Biofuels Association President Michael McAdams. “In contrast, EPA has proposed to reduce volume requirements for conventional biofuels by less than 10 percent. We’re left scratching our head wondering why the EPA would deliver such a disproportionate large blow to the category of renewable fuels that reduces greenhouse gases the most.”
Nearly two dozen representatives of the U.S. biodiesel industry are slated to testify at the hearing, including Wayne Presby with White Mountain Biodiesel in New Hampshire, who says the proposal threatens the survival of his company. “We currently employ 20 people and have grown at an annual rate of 300 percent per year for the last two years,” he says. “We were intending to further increase our production this coming year and hire additional workers for a third shift, however, the current proposal by the EPA will halt our growth completely and may result in the closing of our business.”
The hearing is scheduled to begin at 9:00 am Eastern time and “end when all parties present who wish to speak have had the opportunity to do so.” Domestic Fuel reporter John Davis will be there to provide coverage here.
The latest numbers from the government show that biodiesel production is still on a record pace for the year. Meanwhile, the U.S. Energy Information Administration (EIA) says America is importing more of the green fuel while exporting less of it to other countries.
September’s figures put biodiesel production at 127 million gallons in September 2013, down just slightly fromm August’s numbers but still on a pace to reach about 1.7 billion gallons by year’s end, well above the Renewable Fuel Standard requirement of 1.28 billion gallons.
Biodiesel Magazine also reports that EIA numbers show the U.S, importing more biodiesel while sending less of it from our shores.
U.S. imports of biomass-based diesel in September nearly doubled August volumes, according to the latest figures from the U.S. Energy Information Administration. Imports for September totaled 28.7 million gallons, up from August import volumes of just more than 15 million gallons. U.S. exports of biomass-based diesel, however, fell significantly in September from August. The U.S. exported only 15.9 million gallons of biomass-based diesel in September compared to nearly 29 million gallons in August.
More than half the U.S. imports of biomass-based diesel for September came from Argentina (11.6 million gallons) and Indonesia (nearly 7.1 million gallons), with imports from Germany (4.7 million gallons), Panama (3.36 million gallons), Canada (1.3 million gallons) and South Korea (630,000 gallons) trailing.
September U.S. exports of biomass-based diesel totaling 15.9 million gallons went to Canada (6.6 million gallons), Gibraltar (5.7 million gallons), Spain (nearly 3 million gallons), Peru (420,000 gallons), Australia (252,000 gallons) and Malaysia (42,000 gallons).
The Environmental Protection Agency (EPA) has officially published the proposed 2014 renewable fuel standard in the Federal Register that starts a 60-day public comment period that runs until January 28, 2014. EPA’s proposal significantly lowers the levels of ethanol and biodiesel that must be blended in the nation’s fuel supply.
“It is unfortunate that the Obama administration has caved in to Big Oil rather than stand up for rural America and the environment,” said Iowa Secretary of Agriculture Bill Northey who participated in a Protect the RFS rally on November 22, 2013. “The renewable fuels standard needs to be protected as it has helped hold down prices at the pump, created thousands of jobs in rural Iowa, and benefited the environment. The President should be focused on jobs and the economy rather than looking for ways to hurt rural America.”
While comments to the EPA are an important part to restoring the RFS they don’t require President Obama to review them personally. Therefore, Patriot Renewable Fuels launched an online petition last week that needs 100,000 signatures by the end of December 26, 2013 for the President to review the 2014 RFS proposal. Take the time now to sign by clicking here.
Individuals interested in submitting comments to the EPA should reference Docket ID No. EPA-HQ-OAR-2013-0479. Comments can be submitted by any of the following methods:
- www.regulations.gov: Follow the on-line instructions for submitting comments.
- Email: firstname.lastname@example.org
- Mail: Air and Radiation Docket and Information Center, Environmental Protection Agency, Mailcode: 2822T, 1200 Pennsylvania Ave., NW., Washington, DC 20460.
- Hand Delivery: EPA Docket Center, EPA West Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC 20460. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information.