DOT Announces New Rail Car Standards

rfa-railcarU.S. Department of Transportation (DOT) today announced a final rule for the safe transportation of flammable liquids by rail.

The final rule, developed in coordination with Canada, focuses on “safety improvements that are designed to prevent accidents, mitigate consequences in the event of an accident, and support emergency response.”

“Safety has been our top priority at every step in the process for finalizing this rule, which is a significant improvement over the current regulations and requirements and will make transporting flammable liquids safer,” said U.S. Transportation Secretary Anthony Foxx.

Bob Dinneen, president and CEO of the Renewable Fuels Association, believes the new rule strikes “a fair balance in setting comprehensive standards while at the same time being sensitive to the limitation of retrofit capacity by giving less hazardous flammables — like ethanol — additional time to retrofit railcars.”

“We applaud the Department of Transportation for working to harmonize these regulations with Canada; for adopting a risk-based approach that prioritizes the most dangerous and highly-volatile flammables like crude oil while giving medium hazard liquids like ethanol additional time to come into compliance, for recognizing the limitations of the retrofit capacity, and, for establishing a regular reporting process for the retrofit schedule,” added Dinneen.

Growth Energy CEO Tom Buis, however, expressed disappointment with the new rule. “Although we are pleased that this rule begins to acknowledge the difference between cars in ethanol and crude service, we are extremely disappointed that regulators are requiring extensive changes to the ethanol rail fleet, while seemingly ignoring the number one cause of these accidents – broken rails and poor track condition,” said Buis.

The new rule requires a phase out or retrofit of all DOT-111 railcars transporting crude oil and ethanol by May 2023. Specifically, the rule requires a phase out or retrofit of all unjacketed CPC-1232 railcars used to ship ethanol by July 2023. Additionally, a new tank car standard has been put in place that establishes the DOT-117 as the new railcar to ship oil and ethanol. The DOT-117 includes a 9/16 inch steel hull, roll over protection, full height head shields, top fitting protection, and jacketing with thermal protection.

Ethanol Report from NAFB Washington Watch

ww15-dinneen-kenMembers of the National Association of Farm Broadcasting were on Capitol Hill this week for their annual Washington Watch, and the Renewable Fuels Association was once again pleased to participate. RFA president and CEO Bob Dinneen was interviewed by dozens of broadcasters from around the country addressing a number of different topics.

ethanol-report-adIn this edition of the Ethanol Report, Sabrina Hill of AgNet West in California talks with Bob about several issues, including the California Air Resources Board Low Carbon Fuel Standard, E15 legislation, and why RFA supports farm broadcasters.

Ethanol Report from NAFB Washington Watch

EIA: Ethanol Production, Stocks Down

Weekly ethanol production numbers, as well as stocks are down. The U.S. Energy Information Administration (EIA) reports ethanol production averaged 921,000 barrels per day (b/d), about 38.68 million gallons daily. That is down 9,000 b/d from the week before. The four-week average for ethanol production stood at 928,000 b/d for an annualized rate of 14.23 billion gallons. Stocks of ethanol were down 2.6 percent from a week earlier at 20.8 million barrels.
ethanolsupply24apr1

The Renewable Fuels Association added that ethanol production is accounting for a good amount of corn usage in the country.

Ethanol producers were using 13.965 million bushels of corn to produce ethanol and 102,786 metric tons of livestock feed, 91,635 metric tons of which were distillers grains. The rest is comprised of corn gluten feed and corn gluten meal. Additionally, ethanol producers were providing 5.42 million pounds of corn distillers oil daily.

RFA CEO Talks RFS with NAFB

ww15-rfaMembers of the National Association of Farm Broadcasting (NAFB) are on Capitol Hill this week talking with lawmakers, administration officials, and industry organizations about topics important to agriculture, which include the Renewable Fuel Standard (RFS).

Renewable Fuels Association (RFA) president and CEO Bob Dinneen had some new information to share with broadcasters about support for the RFS among the general public. “We released a poll (Monday) that shows 62% of voters support the RFS, compared to only 18% that oppose it,” said Dinneen in an interview with Agri-Pulse reporter Spencer Chase. “I hope both EPA and the president and Congress are paying attention to what Joe Public wants.”

In this interview, Dinneen also discusses the proposed EPA timeline for releasing overdue volume requirements for the RFS. “Typically EPA doesn’t act until they absolutely have to so my expectation is that the clock will run until the very last second,” he said. Interview with Bob Dinneen, RFA CEO

Kum & Go to Offer E15

kum-and-go1Iowa-based convenience stores Kum & Go will begin offering E15 as a fuel option. The first station will be in Windsor Heights, Iowa on April 30 with 65 stores in Iowa, Nebraska, Arkansas, Colorado, Missouri, Oklahoma, and South Dakota planning to offer the higher blend within the next two years.

“We have a strong tradition in our company to implement sustainability within our business and at our locations. From our 100 LEED-certified stores, to our selection of alternative fuels, E15 was a natural addition to our fuel offering,” said Jim Pirolli, Vice President of Fuels, Kum & Go. “Having E15 in our portfolio allows Kum & Go to offer our customers a quality product at a great value.”

The news was welcomed by the ethanol industry.

Tom Buis, CEO of Growth Energy, issued the following statement:

growth-energy-logo1“We are thrilled to hear that Kum & Go will be offering E15, providing motorists with a choice and savings at the pump. Kum & Go prides themselves on their exemplary service and a drive to give the customer more than what they expect, and this latest announcement underscores their role as an innovator and leader in the convenience store marketplace. Furthermore, this announcement shows that customer demand for higher blends of homegrown, renewable fuels, such as E15, is growing and Kum & Go is taking the necessary steps to deliver what the marketplace demands and what the consumer wants.”

The Renewable Fuels Association (RFA) pointed out that that this action will bring the total number of states offering E15 to 20.

rfalogo1“RFA would like to thank Kum & Go for their continued leadership in ethanol,” said Robert White, vice president of industry relations at the Renewable Fuels Association. “They have been offering E85 to consumers for years, and this addition of E15 in these seven states just makes sense. These continued E15 announcements demonstrate that the business case is solid for higher blends, and should lead other retailers to explore their options.”

American Coalition for Ethanol (ACE) Senior Vice President Ron Lamberty offered congratulations and thanks to Kum & Go for making E15 more widely available.

ACElogo“Kum & Go has been a leader in offering E85 as a fuel choice at most of the locations they’ve built in the last several years – it seems fitting that they would now be the first large Midwest retailer to announce the addition of E15 as a fuel option. In the c-store business, everyone “wants to be first to be second,” so other retailers will take notice when a chain like Kum & Go is added to the list of E15 retailers that includes Mapco, Murphy Oil, Protec, Sheetz, and other smaller chains and single stores that have been offering E15 for two years or more. E15 is real, and with the number of vehicles built and warrantied for E15 growing by 10 million or more a year, it’s a smart option for stations to offer in the future,” said Lamberty.

Poll Says Americans Support RFS

More than six in 10 Americans support the Renewable Fuel Standard (RFS) according to a new national poll conducted by Morning Consult on behalf of the Renewable Fuels Association (RFA). The RFS mandates the amount of renewable fuels to be used in the U.S. transportation fuel supply.

The poll finds that the RFS garners broad, bipartisan support from Democrats (65%), Independents (61%) and Republicans (57%) alike. Nearly two in three registered voters overall (62%) support the RFS. Less than two in 10 voters (18%) oppose the standard and two in 10 have no opinion (20%).

Screen Shot 2015-04-27 at 10.34.07 AMOther key findings include that two-thirds of voters (65%) support Federal tax incentives on cellulosic ethanol expansion. Fifty-one percent Fifty-one percent of voters oppose tax incentives given by the federal government to oil companies in order to help pay for such things as equipment depreciation, oil depletion allowances, and foreign investment tax credits for taxes they pay in foreign countries. Only about one-third of voters (34%) support such government assistance to oil companies and 15 percent have no opinion.

In terms of mandating automakers to produce alternative vehicles, 69 percent of registered voters support requiring automakers to build cars that use “fuel” other than oil including electric vehicles, natural gas and biofuels.

“This poll clearly shows that the oil industry’s misinformation, hyperbole, and manufactured angst against the RFS is not resonating with an American public that wants competition for the pump, relief for their wallet, and lower carbon fuels for the planet,” said RFA President and CEO Bob Dinneen. “More than six in ten Americans understand the economic, environmental, and national security benefits of the RFS. Congress and the Environmental Protection Agency should take note of the high level of support for the program and allow the RFS to work at the levels Congress envisioned in 2007. Failure to do so only rewards the recalcitrant incumbent industry, jeopardizes investment in new innovative technologies, and ignores an American public intent upon moving our nation’s energy future forward.”

RFA Welcomes New California E85 Station

RFANewlogoCalifornia is getting its latest E85 station in Calimesa. The Renewable Fuels Association welcomed the partnership between Pearson Fuels and G&M Oil Company, a station that will be selling E85 for just 85 cents a gallon today (Wednesday, April 15).

Robert White, vice president of industry relations at the Renewable Fuels Association, commented, “It is great to see the second largest flex-fuel vehicle (FFV) market get more E85 stations. RFA congratulates Pearson Fuels and G&M Oil Company for identifying the need to bring this low-cost, cleaner-burning, alternative fuel throughout California. Consumers are searching for options, and many will now find E85.”

Pearson Fuels and G&M Oil Company have announced 13 new E85 stations slated for California.

EPA Sets Timeline for RFS Volume Requirements

epa-150Under a court settlement with the oil industry, the Environmental Protection Agency today announced they will propose the 2015 Renewable Fuel Standard (RFS) renewable volume obligations by June 1, 2015, and issue the final 2014 and 2015 RFS blending targets by November 30, 2015. In addition, EPA will also release the proposed 2016 RFS RVOs by June 1 and the 2016 numbers will be finalized by Nov. 30.

The biofuels industry reacted immediately to the announcement. “This consent agreement is a good start,” said Renewable Fuels Association president and CEO Bob Dinneen. “We are particularly pleased that the Agency has committed to addressing the 2016 RVO in the same time frame even though that is outside the scope of the consent agreement.”

“By taking this action, they are ensuring that the RFS is back on a path to certainty for the biofuels industry, providing the necessary guidance for the industry to continue to thrive and advance alternative fuel options for American consumers,” Growth Energy CEO Tom Buis said.

“ACE has consistently said it is much more important for EPA to get the RFS done right than it is for them to get the RFS done quickly, and that bears repeating given today’s announcement that the RFS will be getting back on track for implementation,” said American Coalition for Ethanol (ACE) Executive VP Brian Jennings.

National Biodiesel Board is pleased the EPA announcement said they would “re-propose volume requirements for 2014, by June 1, that reflect the volumes of renewable fuel that were actually used in 2014.”

“The volumes for Biomass-based Diesel in 2014 were approximately 1.75 billion gallons so EPA reaffirming its commitment to “actual use” appears to be a step in the right direction,” said NBB Vice President of Federal Affairs Anne Steckel.

Advanced Ethanol Council (AEC) executive director Brooke Coleman says the announcement sends a good signal to the advanced biofuels industry. “Now that we have a better idea of when it will happen, we look forward to working with EPA to make sure that the new RFS proposal supports the commercial deployment of advanced biofuels as called for by Congress.”

EPA intends to issue a Federal Register Notice allowing the public an opportunity to comment on the proposed consent decree.

CARB Holds LCFS Workshop Update

carb-14-2The California Air Resources Board (ARB) held a public workshop on Friday to discuss updates to the recently modified Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (CA-GREET 2.0) Model under the Low Carbon Fuel Standard (LCFS). Stakeholder input was received at the workshop on the new model which made some changes to the Indirect Land Use Change (ILUC) component.

RFA-logo-13Renewable Fuels Association (RFA) Vice President Geoff Cooper said that while they are pleased that CARB made some updates to the CA-GREET model that were recommended by stakeholders, certain elements remain problematic, such as the model’s handling of emissions related to denaturant. “Our larger concern, however, continues to be CARB’s gross overestimation of indirect land use change (ILUC) emissions,” said Cooper. “While CARB is proposing to lower ILUC emissions somewhat, the Agency’s newest estimates are still far above the estimates coming from the rest of the scientific community. Further, CARB continues to rely on speculative and hypothetical scenarios to derive ILUC penalties, rather than using real-world land use data to inform the program. Empirical data from the past 10 years clearly show that farmers have responded to higher crop prices by using existing cropland more efficiently, not by converting non-agricultural lands to cropland. We will continue to encourage CARB to consider the most recent data and best available science on ILUC.”

unica1On the other hand, the Brazilian Sugarcane Industry Association (UNICA) is pleased with the ILUC changes but has other concerns. “CARB’s revision of indirect land-use change (ILUC) modeling resulted in reduced penalties for Brazilian sugarcane ethanol and the lowest overall number in the LCFS, confirming it as the lowest-carbon biofuel available at commercial scale today,” said UNICA’s North American Representative Leticia Phillips.

However, Phillips says the environmental benefits of sugarcane ethanol in the LCFS would be even more significant if CARB included the emissions benefits of electricity co-generation in sugarcane mills using leftover plant material. “We are disappointed CARB has chosen to apply a U.S.-style average electricity mix to Brazil rather than crediting sugarcane biofuel producers for this marginal displacement of fossil energy.”

CARB will be considering re-adoption of the California LCFS at its July 2015 hearing,

RFA Reports February Ethanol Export Record

The Renewable Fuels Association reports that U.S. ethanol exports reached a new record in February, based on an analysis of the latest government data.

RFANewlogoAccording to RFA Research Analyst Ann Lewis, U.S. exports of denatured and undenatured ethanol in February totaled 85.2 million gallons, up 24% from January, the highest February export volume on record. Year-to-date exports at 153.9 million gallons are in line with exports during the same period last year.

The biggest customer for U.S. ethanol remains Brazil, which received about one quarter (28%) of total U.S. ethanol exports in February, followed by India (20%), Canada (17%), and the United Arab Emirates (12%). The Philippines, South Korea, the Netherlands and Peru were other key destinations in February.

In addition, exports of the ethanol co-product distillers dried grains with solubles (DDGS) rose 13% to the highest monthly level in 5 months, as the Chinese market continues to recover. “However, exports to China remain at about half the level enjoyed prior to the market collapse,” said Lewis.

Think Tank Ponders Cellulosic Ethanol Link

3rd-wayA new report from centrist think tank Third Way ponders the quest for cellulosic biofuels and concludes that the pathway is via corn ethanol.

This report confirms what the biofuels industry has been saying for some time now – that you cannot have cellulosic ethanol without the continued production and support of grain-based ethanol,” said Growth Energy CEO Tom Buis.

One of the takeaways from the Third Way report is that, “proposals to reform the Renewable Fuel Standard (RFS) would discourage engagement from the corn ethanol industry” and thus delay commercialization of cellulosic ethanol and steer investment overseas.

Renewable Fuels Association (RFA) president Bob Dinneen says the report highlights the importance of consistent policy for the continued evolution of biofuels. “Legislative efforts to undermine either will set the nation’s energy and economic future back generations,” said Dinneen. “Third Way should be commended for adding a thoughtful component to this ongoing discussion and I can only hope that it is read with interest by Senators Feinstein and Toomey.

“(T)he biggest point, coming from a thought leader in the space like Third Way, is that Congressional intervention on the RFS would be highly detrimental to the deployment of cellulosic biofuel,” said Brooke Coleman of the Advanced Ethanol Council.

“The success of the conventional ethanol industry has driven serious investment in the cellulosic industry and there is an important linkage between them,” says Adam Monroe, President Americas for Novozymes which produces enzymes used for cellulosic ethanol production. “Tinkering with the corn portion of the RFS now will only hurt both industries.”

The report also concludes that “companies with an extensive background in the corn ethanol industry are cracking the cellulosic code,” and continued investment from these companies in facilities and innovation is critical to growing U.S. cellulosic capacity.”

Happy April Fuels’ Day!

april-fuelsIn honor of April Fuels’ Day, National Corn Growers Association CEO Chris Novak and Renewable Fuels Association CEO Bob Dinneen penned the following letter to Congress about the dangers of America’s growing dependence on renewable fuels from the troubled Midwest region.

Dear Members of Congress:

In recent years, Americans have become increasingly reliant on renewable fuels produced in agricultural states in the Midwest.

Some argue that greater use of renewable fuels like ethanol is a good idea merely because it costs 60-80 cents less per gallon than regular gasoline, offers higher octane and better engine performance, has fewer toxic emissions, and creates hundreds of thousands of American jobs. Sure, but what about the national security implications?

The fact is, the Midwest is a virtual tinderbox of conflicting allegiances.

The region is deeply divided, with factions loyal to the Packers, Bears, Vikings, Lions and Colts frequently at odds with one another. (Some analysts have questioned whether the Vikings are too weak to pose a serious threat to their neighbors, but Teddy Bridgewater had decent numbers last year).

Any resolution to the argument about “Duck, Duck, Goose” has proved elusive, with intransigent Minnesotans continuing to insist upon “Duck, Duck, Gray Duck” – a stance that has isolated the regime against the rest of the country. Tragically, these disputes often divide members of the same family who have lived for many years in a neighboring state … pitting brother against brother, cousin against cousin, Swede against Swede, at many a family picnic. Even the individual states themselves are not unified, including the intractable Cardinals vs. Royals divide and decades old disputes in Wisconsin between the dominant “drinking fountain” faction and the smaller but fervent “bubbler” faction. Then there is the whole “hotdish” vs. “casserole” question.

What would happen if, for example, Minnesota were to invade northern Iowa, seizing key ethanol refineries along the border and demanding the Iowa legislature pass a resolution declaring “Duck, Duck Gray Duck” the official waterfowl game of the Hawkeye State? The nation might have to learn to do without cleaner, less expensive, less toxic, higher performance fuel. Continue reading

Ethanol-Gas Price Difference Back to Normal

Ethanol and gas have settled back into a more normal price differential after three months of being nearly the same once gas prices started to plummet late last year.

RBOB - Reformulated Blendstock for Oxygen Blending

RBOB – Reformulated Blendstock for Oxygen Blending

Renewable Fuels Association president and CEO Bob Dinneen notes that “wholesale ethanol prices traded near parity with—or even above—gasoline prices intermittently in November, December, and January,” but since the end of January, ethanol prices “have been below gasoline prices every day.”

Dinneen refuted a statement by the Petroleum Marketers Association of America that ethanol was “taking a hit” because of the price parity noting that “since January 1, 2011, daily ethanol prices have been below gasoline prices 91% of the time” averaging about 50 cents per gallon. Since January 30, 2015, ethanol has averaged 26 cents less than gasoline.

Market analyst Randy Martinson with Progressive Ag says there was definitely a concern when ethanol prices were higher than gasoline in December. “But the price of corn has dropped and we’ve gotten ethanol back in line and the profitability is improving for ethanol plants,” said Martinson, who adds that the bigger concern for ethanol declining gasoline use.

Ethanol Supporters Counter Funding Request

houseEthanol and agriculture industry groups sent their own letter to House Appropriations leadership in response to a group of lawmakers calling for the elimination of funding for blender pumps or corn ethanol export promotion.

The letter signed by the Renewable Fuels Association, American Coalition for Ethanol, National Farmers Union, National Corn Growers Association, and Growth Energy calls on the subcommittee to “vehemently oppose and reject any efforts to include such limiting language” in FY 2016 appropriations for USDA.

It is important to note at the outset that there already exists a prohibition on the US Department of Agriculture using grant funds for the installation of blender pumps, which was included in the recently passed Farm Bill. Now, in a blatant effort to shelter the oil and gas industry from any further competition from ethanol, Representatives Goodlatte, et al. are seeking to place limitations on the U.S. Department of Agriculture’s efforts to help promote the consumption of American made ethanol at home and abroad; something that agency has been successfully doing with other agriculture and livestock products for decades.

Reps. Bob Goodlatte (R-VA), Peter Welch (D-VT), and Jim Costa (R-CA), claim in their letter that the government has created an “artificial market” for ethanol that is “negatively impacting American consumers, livestock farmers, food producers, retailers, air and water quality, and the ability to feed our nation’s hungry.” The ag and ethanol groups responded that “corn prices today are below the prices witnessed in 2007 when the Renewable Fuel Standard was expanded and livestock feed costs are at their lowest levels in more than five years…Meanwhile, consumer food prices have advanced more slowly since passage of the RFS than in the 25 years prior to its enactment.”

Read the letter here.

Advanced Biofuels Group Would Reopen RFS

abfaAdvanced Biofuels Association President Michael McAdams today called on Congress to amend the Renewable Fuel Standard (RFS) to strengthen it for the “continued development of the advanced and cellulosic industry.”

In an address this morning to the 2015 Advanced Bioeconomy Leadership Conference, McAdams said the “RFS simply doesn’t work as well for companies trying to move cutting-edge technology from a demonstration plant to commercial scale.” He called for changes in several areas, including minimum RIN value for cellulosic fuels, extending the program beyond 2022, and removing “the loop hole that allows the oil industry to opt out from buying a cellulosic gallon.”

The idea of reopening the RFS even to make positive changes is opposed by other biofuels organizations. “By opening up the RFS for legislative changes, you are opening a can of worms that will only create further uncertainty for the industry, which is the last thing biofuel producers of any kind need,” said Growth Energy CEO Tom Buis in a statement.

“We seriously question who ABFA is representing these days,” said Renewable Fuels Association president Bob Dinneen in response to a reporter’s question on a conference call this morning. “There’s nothing ABFA has identified as needed improvements to the program that the agency already does not have the authority to address.”

Novozymes president Adam Monroe added that ABFA “does not represent even the majority of advanced biofuels producers” and doesn’t believe their position is representative of the industry. “It’s the politics that are broken not the legislation,” said Monroe.

RFA and Novozymes comment on ABFA call to open RFS