Domestic Fuel

Getting ready for the American Ethanol event at the Sprint Cup Series STP 400 race on the Kansas Speedway, some 1200 corn and ethanol supporters are gathering to watch.

Growth Energy CEO Tom Buis is busy doing media interviews this morning, including a live shot with Fox News. “There’s no sport more American than NASCAR, and no fuel more American than domestic ethanol,” said Tom Buis, CEO of Growth Energy. “People in Kansas know the benefits of using ethanol as a fuel – from cleaning the air to creating jobs to fostering national energy independence. We’re pleased to raise the green American Ethanol flag in the heartland of America.”

Listen to my interview with Tom here: Tom Buis at Kansas Speedway

While one biofuels group has expressed concern about Open Fuel Standard legislation, the three main ethanol organizations in the country are in favor of it.

Renewable Fuels Association President and CEO Bob Dinneen says they endorse the Open Fuel Standard Act introduced by Representatives John Shimkus and Elliot Engel. Additionally, the RFA has endorsed similar legislation offered by Senators Tom Harkin and Richard Lugar. “Ethanol remains the only proven, widely available alternative to gasoline today and will so for the foreseeable future,” Dinneen said. “Investments in vehicle technologies that can accommodate a wide range of ethanol blends will necessarily expand the market for ethanol and create new opportunities for developing and nearly commercial ethanol technologies. More ethanol-ready vehicles are a critical component to the nation’s strategy to end our addiction to oil.”

American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings says the legislation offers a wide range of fuel choices for both consumers and energy independence advocates. “ACE strongly supports the Open Fuels Standard because it provides consumers with meaningful fuel choices, including American-made ethanol. With gas prices hovering at four dollars a gallon, and with oil companies unapologetic about massive profits, and refusing to even consider changes to their favored tax status, it is time for us to create real competition in the fuel marketplace, and this legislation does just that,” he said.

“Each additional Flex Fuel vehicle on the road gives consumers a choice in their fuels, while lowering the price at the pump and strengthening our energy security,” said Growth Energy President Jim Nussle. “Our nation’s dependence on foreign oil is unsustainable and is hurting our economy and national security. It’s time to invest in smart policies like these that will create competition in the fuels market and break the stronghold that oil companies and Middle East cartels have on our nation.”

H.R. 1687, the Open Fuel Standard Act of 2011, would require that 50 percent of new automobiles in 2014, 80 percent in 2016, and 95 percent in 2017 would be warranted to operate on non-petroleum fuels in addition to, or instead of, petroleum based fuels.

Congressman Bruce Braley (D-Iowa) this week introduced legislation that would require all gasoline sold in the U.S. to carry country-of-origin labeling (COOL).

“I am introducing legislation in the House that would require a label that clearly states the nation of origin for the fuel you’re pumping,” Braley said in a Huffington Post op-ed yesterday, penned with retired General Wesley Clark of Growth Energy. “The legislation, dubbed “COOL for Fuels,” will require the Department of Energy to conduct a study and implement its recommendations to ensure American consumers have the ability to decide at the gas pump whether they want to purchase domestic fuel products or gas produced by potentially hostile oil-producing nations.”

Clark urged the public to sign on as a citizen co-sponsor of Congressman Braley’s country-of-origin labeling legislation. “Americans need to know what this addiction is costing us in real terms, and country-of-origin labeling is a commonsense way to get that message across,” said Clark.

Growth Energy president Jim Nussle says the law would create more market transparency for American consumers of foreign petroleum. “Congressman Braley’s bill would let U.S. drivers know where they are sending their dollars when they fill up at the pump. American motorists should know where their money is going – whether it is staying here or being sent overseas to the coffers of foreign nations,” said Nussle.

Growth Energy first introduced the concept of country of origin labeling for fuel during a press conference at the 2009 Farm Progress Show.

A new report, “Growing a Better Future,” has the ethanol industry up in arms over its accusation that U.S. biofuel policy is leading to world hunger. The report kicked off a new worldwide GROW campaign spearheaded by the organization. The report covers the symptoms of today’s broken food system: growing hunger, flat-lining yields, a scramble for fertile land and water, and rising food prices while the GROW campaign attempts to overcome these issues.

The report predicts that the price of food, already at a record high, will more than double in the next 20 years. In addition, by 2050, demand for food will rise 70 percent, yet the report says the world’s capacity to increase food production is declining. A contributor to these issues: global climate change and pro biofuel policies throughout the world.

“Our world is capable of feeding all of humanity yet one in seven of us are hungry today,” said Jeremy Hobbs, Executive Director of Oxfam. “In this new age of crisis, as climate change impacts become increasingly severe and fertile land and fresh water supplies become increasingly scarce, feeding the world will get harder still. Millions more men, women and children will go hungry unless we transform our broken food system.”

Both Growth Energy and the Renewable Fuels Association acknowledge that Oxfam is partially correct in their identifying the role that high oil prices and international trade have on the price of corn. However, they diverge with the report on biofuels being a cause of starving “millions of people” as the report purports.

“Oxfam is wrong to propose ending the Renewable Fuel Standard or the biofuels tax credit, as these are the most effective policies we have to displace oil – a primary driver of rising grocery prices,” said Jim Nussle, Growth Energy President. “It is unfair and erroneous to single out ethanol for high food prices, especially because the U.S. ethanol industry uses just three percent of the global grain supply on a net basis.”

RFA President Bob Dinneen highlighted the significant improvements in agriculture over the past few decades and called for more widespread adoption of improved agricultural practices worldwide. “The same opportunities at varying scales are available to farm communities in developing nations. Together with improved farming technologies, local biofuel production can provide developing rural economies with the kind of economic prosperity needed to become more food secure,” concluded Dinneen.

Growth Energy today welcomed ethanol supporters from Missouri, Minnesota and North Dakota to Washington, D.C. for a series of meetings with members of Congress to raise awareness about ethanol and its role in keeping gas prices down, strengthening our nation’s energy security and creating jobs in rural communities.

The Missouri delegation includes Greg Krissek and Monique Garcia from ICM and Lifeline Foods in St. Joseph, Steve Murphy and Grover Gamm of POET Biorefining in Macon and Richard Hanson of Show Me Ethanol in Carrolton. The Minnesota delegation includes Rick Mummert of POET Biorefining in Glenville, Richard Eichstadt of POET Biorefining in Preston, and Chris Oehler of POET Biorefining in Lake Crystal. Growth Energy also welcomed Russ Newman, the CEO of Tharaldson Ethanol in Casselton, N.D. All have plans to visit with representatives in Congress from their areas.

“Ethanol creates badly needed jobs in rural America, provides an excellent return on taxpayer investment by keeping gas prices down, and contributes to our rural economies, and it is crucial that our representatives in Washington understand that,” said Krissek, who adds that the meetings will focus on Growth Energy’s Fueling Freedom proposal.

It’s Friday and that means its time to fill the gas tank. Just in time for weekend fun, it always seems like gas prices go up. Here in California, prices are hovering near the $4.40 per gallon mark. But this week, oil prices dropped 15 percent from a two-year high of $114.83 on Monday and today prices closed at $97.18. Economists are predicting gas prices at the pump will fall and we’ll see a summer national average of $3.50, although last month the EIA predicted they would be closer to $3.79. But don’t hold your breath – prices won’t drop this weekend.

I’ve held this interview with Growth Energy CEO Tom Buis because I was waiting for prices to rise even higher (which they have). When we had this discussion, we were attending the event where BioProcess Algae commissioned its Grower Harvester bioreactors, the second phase in their commercialization strategy. The site is co-located with a first generation corn ethanol plant in Shenandoah, Iowa owned and operated by Green Plains Renewable Energy. This was the perfect backdrop to have the discussion about the role of biofuels in helping to lower prices at the pump.

Buis explained that for the past 40 years, our country has been addicted to foreign oil and the costs to our country have been astronomical. Every recession since World World II has been proceeded by high gas prices. As oil prices rise, it takes time for the increased price to be reflected at the pump. Yet we have a domestic solution available now – ethanol. “I don’t know how many times we have to have these wake-up calls, let’s move forward. We know we can do it. We’re sitting here at a plant today that’s living proof that we can create our own energy here in this country.”

Listen to my interview with Tom Buis here: Ethanol, Right Here, Right Now

Today, Buis said ethanol today is saving consumers at the low end 17 cents per gallon up to 50 cents per gallon on the high end. “If we shut off ethanol today, it would have a far greater impact than the turmoil in the Middle East or North Africa because we’re a bigger source,” said Buis. “Most people don’t understand that if the American ethanol industry were a country, we would be the second largest provider to the United States of transportation fuel. Second only to Canada. That would have a huge impact.”

One last fact. We spend $1 billion dollars a day to import foreign oil. This is more than $1,000 per year for every man, woman and child in this country. That means you.

Mull this over the next time you fill up.

Pennsylvania is the home of its first flex fuel pump. Rhoads Energy worked with Growth Energy to install the pump at its station located at 2176 Paxton Street, Harrisburg, PA. The pump was installed with assistance provided from Growth Energy’s 2010 E85 and Flex Fuel Pump Program.

“Providing consumers with greater access to ethanol will help reduce our dependence on foreign oil and strengthen our energy security. Growth Energy is pleased to have been able to assist in Rhoads Energy in their efforts and we hope that this Flex Fuel pump will be the first of many in the great state of Pennsylvania,” said Growth Energy CEO Tom Buis.

Earlier today a ribbon-cutting ceremony took place with the Harrisburg Chamber of Commerce. The event celebrated both the availability of the flex fuel pump as well as various enhancements and upgrades to the station itself during recent months.

“We greatly appreciate the support Growth Energy provided during installation of Pennsylvania’s very first Flex Fuel pump, which is located only two miles from the State Capitol,” said Michael DeBerdine, President and CEO of Rhoads Energy. “In addition to the grant, their team offered guidance that proved invaluable as we navigated the process.”

You can see a complete list of E85 and flex fuel pumps across the country by visiting www.E85Refueling.com.

U.S. Senator Chuck Grassley today introduced bi-partisan legislation to reform the current Volumetric Ethanol Excise Tax Credit (VEETC) while still supporting the domestic ethanol industry.

Introducing the bill, Grassley said the Domestic Energy Promotion Act of 2011 would reduce the VEETC for a two year period before transitioning to a tax credit that would adjust based on the price of oil. “When crude oil is more than $90 a barrel, there will be no blenders’ credit. When crude oil is $50 and below, the blenders’ credit will be 30 cents,” Grassley said. “When oil prices are high, a natural incentive should exist in the market to drive ethanol use.”

The bill would also improve upon current tax credits for the installation of blender pumps and ethanol fueling infrastructure as well as extend tax credits for small ethanol producers, advanced and cellulosic ethanol.

The American Coalition for Ethanol (ACE), Growth Energy, the National Corn Growers Association (NCGA), and the Renewable Fuels Association (RFA) issued a joint statement praising the legislation:

“This legislation rightfully recognizes budget constraints by reforming the ethanol tax credit and significantly reducing its cost. Additionally, this bill would improve current tax credits for the installation of blender pumps offering higher level ethanol blends and provide Americans more choice when they fill up. Critically, this legislation would also ensure progress made to commercialize advanced ethanol technologies utilizing new feedstocks such as grasses and municipal solid waste is accelerated. We thank these senators for their leadership in introducing this bill and look forward to working with them through the legislative process that ultimately ends with the President’s signature.”

The bill contrasts sharply with legislation introduced yesterday by Sens. Tom Coburn (R-OK) and Dianne Feinstein (D-CA) that would eliminate the U.S. tax credit for ethanol and the tariff on ethanol imports, a move that, based on a new report, the industry contends would result in significantly higher gasoline prices.

As gas prices go “up, up and away” once again oil companies are on the hot seat as they announced massive profits. And while the renewable energy industry continues to be attacked for its subsidies and incentives, no one mentions the billions of dollars of subsidies the oil companies receive each year and have been for over a hundred years. Meanwhile, consumers are pinching pennies to buy everything from groceries to gas and the fear is that the U.S. economy will slow once again.

The high gas prices and high oil company profits have President Obama saying that in light of federal budget deficits and public anger over oil profits (not a new phenomenon by the way), they will work with Congress to cut the subsidies, tax breaks and publicly-financed giveaways that global oil companies receive.

Yet this statement has the ethanol industry asking, “Is there hope for that?”

In response, Growth Energy’s CEO said, “Profits are one thing, but when these companies are also raking in billions of dollars in federal subsidies all while Americans are suffering at the pump, something’s got to give. High oil prices are driving up gas prices, grocery prices – everything. Many Americans don’t realize that they are underwriting these profits in the form of tax breaks and subsidies. Speaker Boehner has opened the door to talking to President Obama about ending these needless giveaways to global oil companies and we encourage the House to follow their lead. At a minimum, we need to have congressional hearings.

Buis concluded, “It’s time we end the handouts to big oil companies. It’s time we take what are the hidden costs and put them out in the sunlight – let’s see what it really costs the taxpayer for our addiction to foreign oil.”

You can listen to additional comments from Tom Buis here: Time to End Oil Subsidies & Taxes?

There have been numerous Senates hearings recently discussing elements of the country’s energy plan. A recent forum on Corn Ethanol Policy took place in the 112th Congress. While the forum was not broadcast, expected to give the opening remarks were Representative Jeff Flake (R-AZ), Representative Joe Crowley (D-NY) and Representative Earl Blumenauer. Flake’s aniti-ethanol amendment was passed in the House as part of the Continuing Resolution and if passes as part of the Senate Resolution, would prohibit government funds to be used to install blender pumps and ethanol storage facilities.

Also expected to speak were some of the organizations who have been outspoken for several years against the ethanol tax credit (VEETC) that actually goes to the blender of record, not to the ethanol industry, as well as the “food and fuel” debate. These groups included the International Food Policy Research Institute, Environmental Working Group and Taxpayers for Common Sense.

The ethanol industry responded to the forum with one voice. The Renewable Fuels Association, Growth Energy, the National Corn Growers Association and American Coalition for Ethanol released a statement. The organizations also noted that according to the Institute for Local Self Reliance, 75 cents of every dollar spent on biofuels re‐circulates through the local economy while 75 cents of every dollar spent on oil exits the local economy and, in most cases, the country.

“Any energy policy forum must include comprehensive and adult conversations about America’s entire energy agenda, including subsidies and other supportive policies for mature and aging technologies like petroleum. Unfortunately, it is unlikely this ‘forum’ will include any of those discussions. Rather, this is yet another example of defenders of the status quo wasting the time of Congress focusing on bogus claims against the ethanol industry instead of finding solutions to the real problems.

“Anyone who has filled a gas tank the last few months has unwittingly witnessed the prime cause of soaring prices for all consumer goods, especially food. The last time corn and food prices rose, the Congressional Budget Office found that factors other than biofuels were responsible for as much as 90 percent of the hike. The World Bank and the government of the United Kingdom have concluded that speculation and energy prices were chief drivers of the 2007-08 spikes in commodity and food prices. How anyone can point fingers at farmers for driving up food prices when they receive less than 12 cents of every food dollar defies common sense.

“Ethanol is the only viable solution we have today to help with our country’s energy security and independence. Today, when it can easily cost over $50 to fill a gas tank, critics would be wise to remember that domestic ethanol actually has helped motorists by lowering gas prices by estimates as high as 40 cents per gallon. To put it in even better perspective, the value of the crude oil displaced by U.S. ethanol amounted to $34 billion in 2010 – money that stayed in the American economy. In the end, that’s the best way to support food and energy security, not through holding make-believe one-sided policy forums.”

The USDA World Agricultural Supply and Demand Estimate (WASDE) released this morning that shows corn ending stocks unchanged despite a 50 million bushel increase in corn use for ethanol also shows a gain in global grain stocks.

According to the report, global coarse grain supplies for 2010/11 are projected 6.3 million tons higher this month with a 1.8-million-ton increase in beginning stocks and a 4.5-million-ton increase in production.

Renewable Fuels Association (RFA) VP of Research and Analysis Geoff Cooper says the report should ease some of the tension in the world corn market. “While stocks are still relatively tight, today’s report shows that the corn supply picture is not quite as bad as some were expecting. Corn stocks—both in the U.S. and globally—are a little more robust than the market was anticipating,” commented Cooper.

RFA CEO and President Bob Dinneen notes that global corn production is looking stronger than many were expecting. “In particular, production in South America and Africa has been robust. Farmers in countries like Uganda are responding to higher world prices by increasing production through the use of better technology and improved farming practices. Higher prices are allowing farmers in sub-Saharan Africa and other regions to participate in the world market and likely many of them are earning a profit on their crops for the first time in years,” he said.

Growth Energy CEO Tom Buis says the strong production in South America and elsewhere around the globe are disproving fears of food shortages. “Fear in the market that the carryout number would go down didn’t come to fruition,” said Growth Energy CEO Tom Buis. “Now there is still a lot of volatility in the market, based on rumors of increasing sales to China, excessive speculation and profiteering in the commodities market,” said Buis. “But this newest USDA report proves what we’ve been saying all along, which is that the productivity of American farmers and farmers worldwide will meet the challenge to provide more than enough corn to meet demand. American farmers are expected to produce the largest crop ever this year.”

Domestically, USDA left the estimate for the 2010-11 U.S. corn carry-out unchanged at 675 million bushels. The trade was expecting carry-out to be lowered to 595 million bushels (to reflect lower-than-expected March 1 stocks number). Some analysts were expecting a drop to as low as 515 million bushels.

A delegation of six Kansas ethanol supporters are in Washington D.C. this week for a series of meetings with members of Congress.

Growth Energy CEO Tom Buis welcomed the group’s visit. “Kansas is a crucial, steadfast ally for the American ethanol industry, and we are pleased that so many Kansans have made the trip to Washington to educate their members of Congress about the ways ethanol contributes to the state and our country,” said Buis.

The six member group includes Steve McNinch of Western Plains Energy, Greg Krissek of ICM, Inc., Tom Willis of Conestoga, Mike Erhart and Monte Abell of Prairie Horizon, and Mike Chisalm of Kansas Ethanol. “It’s crucial that our representatives in Washington understand the benefits of ethanol – that it creates badly needed jobs in Kansas, provides an excellent return on taxpayer investment by keeping gas prices down, and contributes to our rural economies,” said Greg Krissek, ICM Director of Governmental Affairs, and a member of the Growth Energy board of directors. “Ethanol is not a ‘someday’ fuel – it’s here today, making our nation and our economy stronger. We can do even more by opening up the fuels market and giving consumers access to more ethanol.”

During their visit, the group will meet with Sens. Jerry Moran (R-KS) and Pat Roberts (R-KS) and Reps. Lynn Jenkins (KS-2), Kevin Yoder (KS-3), Mike Pompeo (KS-4) and Tim Huelskamp (KS-1), to help raise awareness about ethanol and its role in reducing our nation’s dependence on foreign oil, creating jobs, keeping gas prices down and strengthening our economy. The meetings will focus on Growth Energy’s proposal to reform the transportation market by developing the infrastructure to deliver ethanol to consumers. During their visit, the delegation will also attend a Policy Issues briefing conducted by Growth Energy staff and meet with the Democratic and Republican staffs of the House Agriculture Committee.

It’s pretty much a badge of honor in the biofuels industry to be nominated by Friends of the Earth as “Biofool of the Year.”

Growth Energy is calling this year’s nominees “Bio-Heroes” in a blog post today.

“Critics of biofuels would go to great lengths to distort the truth and smear the records of supporters. One doesn’t have to look far to find the silliness to which some would stoop. Friends of the Earth, one such group determined to embarrass themselves into irrelevance, went so far as to try to attract media attention to their poorly uninformed and sadly named “Biofool of the Year” award,” reads the post. “At Growth Energy, instead of heaping ridicule on leaders that want to break our country’s addiction to foreign oil, we choose to laud them, and ask others to support their efforts.”

This year’s nominees are Senator Amy Klobuchar (D-Minn.), Senator Chuck Grassley (R-Iowa), General Wesley Clark, Secretary Tom Vilsack, and the editors of Domestic Fuel – Chuck and Cindy Zimmerman. Vote for your favorite here.

Sen. Chuck Grassley (R-IA) is hoping to avoid a vote in the Senate on the amendment introduced last week by Sen. Tom Coburn (R-OK) that would repeal the Volumetric Ethanol Excise Tax Credit (VEETC).

Grassley said today during his weekly agricultural media conference call that there are two ways the vote can be avoided. “Either talking him out of it, or denying unanimous consent to bring it up, and I think we can do the latter,” he said. Grassley say he is trying to “reason with” Coburn and urge him to take up the issue within the context of energy legislation so to “have ethanol be viewed as part of an overall energy program” instead of having it be part of the spending bill debate.

According to Grassley, Coburn says he has 55 votes. “He probably needs 60 votes. I think we can probably keep him from getting 60 votes. But, quite frankly, I don’t want anybody on record, if we can avoid it, on the ethanol issue until we get down to discussing it as part of the energy debate.”

Listen to Grassley’s comments in answer to a question by Dan Looker of Successful Farming. Sen. Grassley

Meanwhile, as the future of the VEETC remains unsure in Congress, ethanol interests are reportedly in negotiations on a proposal for moving beyond the VEETC. According to DTN/The Progressive Farmer, representatives from the American Coalition for Ethanol, Growth Energy, National Corn Growers Association and Renewable Fuels Association have been working on a compromise proposal this week, getting input from lawmakers in Washington.

Legislation that would immediately repeal the Volumetric Ethanol Excise Tax Credit, or VEETC, is drawing criticism from ethanol interests.

U.S. Senators Tom Coburn (R-OK) and Ben Cardin (D-MD) this week introduced the repeal as an amendment to the small business reauthorization bill, currently under consideration in the Senate. “The ethanol tax credit is bad economic policy, bad energy policy and bad environmental policy,” said Coburn in a release on the amendment. “I’m hopeful my colleagues on both sides of the aisle will take a stand against business-as-usual special interest giveaways and eliminate this wasteful and harmful subsidy.”

The Renewable Fuels Association (RFA), Growth Energy and the National Corn Growers Association (NCGA) are all hopeful they will not, issuing their own releases urging the defeat of the amendment unless oil subsidies are eliminated as well.

From RFA: “Given Senator Coburn’s interest in what he deems unnecessary subsidies, we would encourage him to offer an amendment that would eliminate subsidies to oil companies posting tens of billions of dollars in profit quarterly. In lieu of that, the RFA urges the Senate to ignore this frivolous amendment.”

“We urge defeat of Sen. Coburn’s amendment as it is inequitable to have a debate about tax policy for one energy source—homegrown renewable fuels –without having that same debate about tax breaks for other competitive energy sources, including oil and gas. While we welcome a debate about future energy tax policy it should go through the appropriate tax committees and not on the whims of a senator from a major oil producing state,” said Growth Energy CEO Tom Buis.

NCGA President Bart Schott said, “We are disappointed that Senator Coburn is singling out the ethanol industry in his amendment to immediately repeal the Volumetric Ethanol Excise Tax Credit (VEETC) while tax credits to the oil and gas industries remained untouched. The American ethanol industry provides and supports 400,000 jobs here in the United States during a time of economic uncertainty. In addition, in the past year alone, ethanol added more than $50 billion to the national Gross Domestic Product and displaced the need for more than 360 million barrels of imported oil, valued at $16 billion.”

There is currently no vote scheduled on the amendment. Last December, Congress extended the tax incentive for ethanol use until the end of this year.