News out this week that Chinese officials committed to Agriculture Secretary Vilsack that the ban on imports of U.S. distillers grains (DDGs) containing the MIR 162 trait will be dropped is being met with optimism by the ethanol industry.
“While we are still awaiting the official regulatory announcement from China regarding the approval of this policy, it is welcome news for America’s ethanol industry,” said Growth Energy CEO Tom Buis. “I would like to personally thank Secretary Vilsack for his leadership and steadfast commitment to ensuring a resolution to this issue. Additionally, the many hardworking professionals of the USDA and the USTR deserve praise for their dedicated work behind the scenes and for their persistence in working with their Chinese colleagues to re-establish market access for U.S. DDGs.”
“China has always been somewhat schizophrenic with our protein feed,” said Renewable Fuels Association (RFA) president and CEO Bob Dinneen in an interview today. “There are times when they desperately want it and can’t get enough of it, there are times when they will erect these mysterious trade barriers so that we can’t get our product in there … We think we may be getting through it now.”
According to the office of the U.S. Trade Representative, one of the outcomes of the U.S.-China Joint Commission on Commerce and Trade meetings was in the area of agricultural exports related to biotechnology traits. “China announced that it would approve the importation of new biotechnology varieties of U.S. soybeans and corn … and also that it would pursue a regular dialogue with the United States focused on the benefits of the increased use of innovative technologies in agriculture, for both the United States and China.”
Those who advocate for ethanol are refuting an academic report about the green fuel. The Renewable Fuels Association (RFA) is countering conclusions made by researchers at the University of Minnesota claiming that ethanol is more harmful to humans and the environment than gasoline. RFA examined the research, recently published in the “Proceedings of the National Academy of Sciences,” finding it ran counter to real-world data, contradicted current lifecycle modeling and research, and omitted key variables when determining the environmental impact of electric vehicles and gasoline, ultimately undermining the credibility of the study.
RFA notes that the paper’s conclusions “…stand at odds with real-world data showing decreases in ozone and PM2.5 concentrations…” and that “Data from 222 EPA sensing sites show that ozone and PM2.5 concentrations have trended downward during the period in which the use of ethanol-blended gasoline has dramatically increased.”
The RFA response goes on to show that “On a full lifecycle basis, the study’s results are contradictory to the results from the Department of Energy’s latest GREET model” and that “There is a substantial body of evidence proving that ethanol reduces both exhaust hydrocarbons and CO emissions, and thus can help reduce the formation of ground-level ozone.”
The study’s reliability is also called into question as it omitted key factors when reaching conclusions on the environmental impact of gasoline and electric vehicles. RFA points out that the University of Minnesota conclusion “…excludes NOx and SOx emissions associated with crude oil extraction, a decision that grossly underrepresents the actual lifecycle emissions impacts of gasoline.” RFA concluded, “Omitting key emissions sources from the lifecycle assessment of EVs and crude oil inappropriately skews the paper’s results for the overall emissions impacts of these fuels and vehicles.”
Among its findings, the report notes that “Renewable fuel production and consumption have grown dramatically. Dependence on petroleum—particularly imports—is down significantly. Greenhouse gas emissions from the transportation sector have fallen. The value of agricultural products is up appreciably. And communities across the country have benefited from the job creation, increased tax revenue, and heightened household income that stem from the construction and operation of a biorefinery.”
“The RFS was always intended to be a marathon and not a sprint. Results were never intended to come overnight, but over the past seven years America has reaped vast economic, environmental, and national security benefits due to the increased use of home-grown, renewable fuels,” noted RFA president and CEO Bob Dinneen. “The only hiccup in the unprecedented success of the program is a consequence of EPA’s recent failure to implement the program as designed by Congress. As we blow out the candle on the RFS’ seventh birthday cake, we do so with a wish that EPA would quickly restore the RFS to a trajectory that will enable continued investment in advanced biofuels, drive the market beyond the blend wall, and provide consumers with meaningful options and savings at the pump.”
RFA submitted comments earlier this year following the initial proposed rule noting that animal feed would be unnecessarily regulated in a similar fashion to human food. RFA praised the FDA for addressing this concern in its updated version, noting that the “revised CGMPs (current good manufacturing processes) in the supplemental proposed rule appear more applicable to the animal feed industry and appear to provide more flexibility for the wide variety of the animal feed facility processes covered.”
However, RFA raised concerns with additions to the rule that would implement “…product and environmental testing programs, supplier approval programs, and verification programs that were not in the initial proposed rule language.” The comments stress that an individual plant “…should be provided the flexibility to determine its own needs and compliance strategy.” RFA also noted that “If applied in a prescriptive and indiscriminate way, these programs can add unnecessary cost burdens and divert resources away from the effective practices that ethanol producers currently use to assure safe, high quality co-products.”
The Windy City moved another step closer to cleaner air with 15% ethanol as the City Council Finance Committee passed the Chicago Clean with E15 Ordinance on Monday. The ordinance would make E15 available as an option to Chicago drivers, and now moves to the full City Council for a hearing on Wednesday.
“I look forward to the full Council vote, and to giving Chicagoans a cleaner, less expensive option,” said co-sponsor Alderman Anthony Beale.
Among the organizations supporting the ordinance are the American Coalition for Ethanol (ACE), Growth Energy, and the Renewable Fuels Association (RFA). “The city of Chicago has always been a leader when it comes to fuel. It was the first city in the United States to ban lead in gasoline, the first to choose ethanol over MTBE in reformulated gas, and this ordinance would make Chicago the first major city to guarantee drivers the choice of a lower cost, higher octane, clean E15 fuel,” said ACE Senior Vice President Ron Lamberty.
Growth Energy CEO Tom Buis noted that approval of the ordinance will provide choice for consumers and jobs for the state. “(T)hey have displayed their resolve to ensure that Chicago motorists and other consumers have market access to a sustainable, cleaner burning, less expensive homegrown fuel that supports 73,156 Illinois jobs and generates $4.7 billion for the state’s economy,” said Buis. “By moving to E15, Chicago can help create an additional 12,000 Illinois jobs that can’t be outsourced.”
The ordinance would require all filling stations in the city to provide dispensing pumps and offer mid-grade E15 for sale, with a phase-in period of nearly a year and an exemption for filling stations selling less than 850,000 gallons of fuel per year.
The Renewable Fuels Association (RFA) is urging the California Air Resource Board (CARB) to adjust its current indirect land use change (ILUC) analysis to better reflect real-world land use patterns.
In written comments submitted on Friday, RFA’s Senior Vice President Geoff Cooper pointed to the recent study released by Iowa State University’s Center for Agricultural and Rural Development (CARD) raising concerns about CARB’s current ILUC predictions. Cooper called on CARB to “take into account the new CARD/ISU research and use it to immediately re-calibrate” the agency’s ILUC model.
Cooper calls the study a “remarkably important—and potentially gamechanging—contribution to the debate over ILUC modeling” which used empirical data to conclude that “…the primary land use change response of the world’s farmers in the last 10 years has been to use available land resources more efficiently rather than to expand the amount of land brought into production.”
RFA’s comments urged CARB to calibrate its ILUC model using the new CARD/ISU analysis as a guide before sending the proposed rule for Low Carbon Fuel Standard (LCFS) re-adoption to the Board for consideration. If adjustments are unable to be made before the final proposal is submitted, RFA calls on CARB to “…delay proposing new ILUC factors until such time as the calibration is completed and new ILUC results are generated.”
Some drivers in the Sunshine State will now have access to 15% ethanol fuel (E15), approved by the Environmental Protection Agency (EPA) for use in vehicles 2001 and newer.
In partnership with Protec Fuel, retail stations in Ft. Myers and Sarasota operated by Mid-State Energy are holding kickoff events with substantial discounts on E15 and E85 fuel today to celebrate the new fuel choice for consumers.
Florida-based Protec Fuel helped manage the ethanol blends installation and provide fuel for the locations. “We are proud to help introduce American-made ethanol into the fuel pool through E15 in Florida, especially as it’s a higher performance fuel at 88-octane,” said Protec vice president of business development Steve Walk. “It’s so convenient for drivers to make a difference – you can use E15 interchangeably with gas if you’re driving a 2001 or newer model.”
The Renewable Fuels Association has been working with the Florida Department of Agriculture and Consumer Services for more than two years to overcome regulatory barriers that hindered the sale of E15 in Florida. “It is exciting to see E15 continue its expansion to the East Coast and it is my hope that additional states in the South and East that don’t currently offer E15 will follow Florida’s example and begin offering low-cost E15 to their consumers,” said RFA vice president of industry relations Robert White.
The Tampa Bay Clean Cities Coalition is pleased to see the expansion of bio-based fuels in the region. “These fuels can provide a renewable and cleaner fuel option for us now with virtually no additional investment in vehicle modification or infrastructure,” said coordinator Steven Reich. “I hope that more retailers will take advantage of the availability of these fuels in their product mix.” Clean Cities coalitions throughout the nation are charged with reducing the nation’s petroleum usage by the U.S. DOE.
Ethanol producers in Oregon will be getting some safety help. The Renewable Fuels Association (RFA) is co-hosting free safety seminars Dec. 10–12 at the Portland Fire and Rescue Training Center in Portland, Oregon. The training is aimed toward first responders, hazmat teams, safety managers, and local emergency planning committees, as well as being open to the general public.
The goal of this seminar is for attendees to gain full ethanol emergency response training experience that they can put to use immediately in the field and pass along to other first response teams. A majority of this training is based on the “Training Guide to Ethanol Emergency Response,” a training package created by the Ethanol Emergency Response Coalition (EERC) that has been distributed throughout the United States and to several countries worldwide.
“The Office of State Fire Marshal is pleased to offer the Ethanol Safety Seminar, funded through the Hazardous Material Emergency Preparedness grant,” said Sue Otjen of Oregon’s State Emergency Response Commission. “This training will provide first responders with the knowledge and resources needed to be prepared to safely respond to ethanol and other fuel related incidents in their community.”
“2014 has been a very successful year for the RFA and its partners in educating and training communities across the nation on swift and efficient responses to ethanol emergencies,” said Kristy Moore, vice president of technical services at RFA. “We are proud to continue this indispensable program in Portland as the year comes to a close.”
The theme for the 2014 conference, which will be held February 18-20 in Grapevine, Texas is “Gowing Global” with a focus on the export markets that are critical to the future growth and financial health of the ethanol industry.
Among the program highlights:
• Going Global: Building Ethanol Demand Internationally
• RFS and LCFS: Driving Demand or Stuck in Neutral?
• Advanced Ethanol Industry Breaks Through; Now What?
• Global Energy Market Outlook
• Global Grain Market Outlook
• The Road Ahead for Higher Blends
• How Rail Safety and Congestion are Impacting the Marketplace
As always, the agenda also includes the annual State of the Industry address by Renewable Fuels Association president and CEO Bob Dinneen, as well as the popular Washington Insiders Panel.
On Monday, biofuels industry leaders will hold briefings for Capitol Hill staff and the media to discuss the implications of the decision and where we go from here. The Fuels America briefing will feature Buis, Dinneen, Advanced Ethanol Council (AEC) Executive Director Brooke Coleman, and Brent Erickson with the Biotechnology Industry Organization (BIO).
Deciding not to decide is not a decision. Unfortunately, the announcement today perpetuates the uncertainty that has plagued the continued evolution of biofuels production and marketing for a year. Nevertheless, the Administration has taken a major step by walking away from a proposed rule that was wrong on the law, wrong on the market impacts, wrong for innovation, and wrong for consumers.
Today’s announcement is a clear acknowledgement that the EPA’s proposed rule was flawed from the beginning. There was no way the methodology in the proposed rule would ever work, as it went against the very purpose and policy goals of the RFS. The EPA wisely decided not to finalize the rule so they could fix the flawed methodology. Their initial proposal over a year ago was unacceptable and simply acquiesced to the demands of Big Oil and their refusal to blend more renewable fuels into the marketplace.
American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings credits ethanol supporters for helping the EPA reconsider the 2014 RVO obligations under the Renewable Fuel Standard.
Big Oil came close to bullying the Administration to completely rewrite the RFS this year so oil companies could escape their legal responsibility to blend more ethanol in gasoline. But thanks to thousands of comments from ACE members and other biofuel supporters, EPA wisely chose to reconsider their ill-advised proposal which would have legitimized the so-called ‘blend wall’. While we will reserve full judgment until they finalize the 2014 targets next year, it certainly appears the Administration recognizes their proposed RFS changes were inconsistent with legislative history and the Clean Air Act.
Among the topics he addressed were the need for Congress to pass tax extenders for biofuels, first cellulosic ethanol plants going on line this year, how lower oil could be impacting domestic oil production, rail transportation issues, and of course, the Renewable Fuel Standard (RFS).
Regarding the lame duck session of Congress, Dinneen says it’s called lame for a reason but he does expect them to pass a tax extenders bill. “It will include the biodiesel tax credit and the cellulosic ethanol tax incentive, which will be good to have now that we finally have cellulosic ethanol production so they can take advantage of the tax incentive that has been there for them,” he said.
While the industry continues to expect a final decision from the EPA on the 2014 volume requirements any day, Dinneen says it could still be next week. “I fear for my Thanksgiving dinner because I suspect that the minute I carve into that turkey, I’m going to get an email that Gina McCarthy has just signed the rule,” he said. “I wish they’d get it out, let’s just be done with it.”
Seeing gas prices continue to drop nationwide, Dinneen agrees with some analysts that OPEC could be trying to cut U.S. oil production. “The Saudis, I think, have become annoyed that the U.S. is producing more (oil) and has decided that they want to try to break the back of these fracking operations,” said Dinneen, noting that those operations start losing money with prices below $80 a barrel. “Ethanol remains the lowest cost transportation fuel on the planet today and it’s unlikely that the Saudis will be able to break our back.”