In this edition of the Ethanol Report, Renewable Fuels Association (RFA) president and CEO Bob Dinneen discusses ethanol production for the year so far, new Renewable Fuel Standard (RFS) ad campaigns and gives his thoughts on the Environmental Protection Agency’s 2014 Renewable Volume Obligations that are under Office of Management and Budget (OMB) review.Ethanol Report on Ethanol Production, RFS Food EPA
The Renewable Fuels Association (RFA) is calling on Environmental Protection Agency (EPA) Administrator Gina McCarthy to address the unfair fuel volatility regulations that keep the sale and expansion of E15 from occurring. Because E15 does not have the same 1 psi Reid Vapor Pressure (RVP) as E10, the ethanol fuel blend can not be sold during summer months. In a letter to McCarthy, Bob Dinneen, CEO and president of RFA writes that EPA’s failure to put E15 on the same footing as E10 has been a substantial roadblock to the rollout of E15.
According to the letter, “…faced with a hopeless decision every spring: stop selling E15 during the summer volatility control season, or secure the appropriate low-RVP gasoline blendstock. For most retailers, neither of these options are acceptable business decisions.”
Dinneen says the EPA continues to handicap market opportunities for E15 by effectively making it a seasonal fuel. This causes retailers and marketers to be hesitant to invest in a fuel that can only be offered part of the year. “Our biggest frustration is that there is simply no legal or environmental justification for EPA’s unequal volatility treatment of E10 and E15. If the Administration is serious about addressing greenhouse gas emissions and keeping gas prices in check, it should immediately correct this gross inequality,” said Dinneen.
RFA points to the larger implications of the RVP restriction in the letter writing, “Slow market adoption of E15 has unnecessarily complicated compliance with the Renewable Fuel Standard (RFS) and led the Agency to embrace the oil industry’s ‘blend wall’ concept in the proposed rule for 2014 Renewable Volume Obligations. The bottom line is that E10 and E15 should be treated consistently in the marketplace with regard to RVP….There is simply no sound technical justification, no air quality benefit, and no economic rationale for denying equal RVP treatment for E15 and E10.”
Bob Dinneen, president and CEO of the Renewable Fuels Association (RFA) is speaking out again on the problems of rail congestion that is slowing down the delivery of ethanol and ethanol byproducts across the country. He submitted written testimony to the U.S. Senate Committee on Commerce, Science and Transportation that held a hearing yesterday to examine rail congestion and the harmful impact it has had on agriculture and other commodities.
Dinneen stressed the role that Bakken Crude rail shipments have played in increasing dwell times and decreasing train speeds and pointed toward the negative impact these delays are having on ethanol producers. “The rail system didn’t collapse last winter because of a snow drift in North Dakota,” he said. “It was because of a 400% increase in oil shipments from the Bakkens.”
In the written testimony Dinneen said, “The recent crisis of congestion that has seemingly overtaken the rail industry has become a huge and costly problem … This crisis is one that is causing significant harm to the economic health and well-being of our nation’s economy, as well as driving up costs for a wide array of commodities that rely on the rail for transportation…it is becoming more and more apparent that surging crude oil shipments are coming at the expense of other goods and commodities.”
Listen to Dinneen’s comments here: RFA CEO Bob Dinneen comments on rail situation
In this edition of the Ethanol Report, Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper talks about how corn prices have fallen but food prices continue to rise, and how that shows the “food versus fuel” argument is false.
A new report from RFA compares corn prices to the price of dairy products, pork products, beef products, and poultry and egg products from January 2007 – July 2014.Ethanol Report on Corn and Food Prices
The first refinery to produce cellulosic ethanol with a bolt-on process officially opened its doors today.
“This is a historic day not just for the ethanol plant, but for the entire region,” said Delayne Johnson, CEO of Quad County Corn Processors in Galva, Iowa. “This is a perfect example of cutting edge technology, right here in our backyard and we are thrilled to have our plant using this ingenuity.” The Adding Cellulosic Ethanol (ACE) project, newly re-named “Cellerate,” allows QCCP to produce 2 million gallons of cellulosic ethanol each year from corn kernel fiber at their plant in Galva, Iowa.
“Today’s grand opening is a direct result of the ingenuity and hard work of the employees and shareholders of QCCP, but it’s also a direct result of the kind of innovation that occurs when a policy like the Renewable Fuel Standard (RFS) is in place,” said American Coalition for Ethanol (ACE) Executive Vice President Brian Jennings. “More than any other policy enacted by Congress, the RFS has been a catalyst for innovation, including the kind of technology advancement developed at QCCP to make cellulosic ethanol from corn kernel fiber.”
Renewable Fuels Association president and CEO Bob Dinneen participated in the grand opening ceremony and praised QCCP, noting, “To the management, staff and investors of Quad County Corn Processors I say a hearty congratulations on your vision and your commitment to seeing it through. To EPA I say get out of Washington and see what is happening in places like Galva, Iowa.”
Dinneen tweeted from the event, “Quad Co cellulosic plant can tell Big Oil “we told you so” and make them eat their words!”
Michigan is the next stop for the Ethanol Safety Seminars. Led by the Renewable Fuels Association (RFA) and in conjunction with the Michigan Department of Agriculture, there will be five training stops with the first on September 17 in Albion. Additional seminars will take place on September 18 in Lansing, September 19 in Grand Rapids, September 22 in Saginaw and September 24 in Warren. Each seminar is funded by a Promotion and Alternative Fuels Education grant from the Michigan Department of Agriculture.
All seminars are free and feature a morning session from 9:00 a.m. to 2:00 p.m. and an evening session from 5:30 to 10:00 p.m. Certificates will be awarded to attendees at the completion of the course. While primarily targeting first responders, hazmat teams, safety managers, and local emergency planning committees, seminars are also open to the general public.
Ethanol Safety Seminars focus on numerous areas including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels, transportation and transfer of ethanol-blended fuels, storage and dispensing locations, firefighting foam principles and ethanol-blended fuel, health and safety considerations for ethanol-blended fuel emergencies and tank farm and bulk storage fire incidents.
“With nearly 14 billion gallons of ethanol flowing across our country via railroads, highway cargo tank trucks, and barges, it’s vital that our first responders know how to safely and effectively handle the situation should a spill occur,” said Craig VanBuren, consumer protection section director at the Michigan Department of Agriculture. “This grant allows the Renewable Fuels Association the opportunity to provide boots-on-the-ground training for our emergency responders if an ethanol spill were to happen.”
In addition to the seminars, RFA will also host five free retailer workshops throughout the state on how to market ethanol-blended fuels, including E15, E85, and all mid-level blends in between. The workshops will discuss economics, the process of capturing RINs, equipment options, buying fuel locally, and available incentives to offset investment. Workshops will take place on Sept. 16 in Warren and Flint, Sept. 17 in Grand Rapids and Kalamazoo, and Sept. 18 in Ann Arbor.
The Renewable Fuels Association (RFA) has released a new report today in an effort to “debunk” what they call the “fictional” food versus fuel debate. The report finds that while corn prices have dropped dramatically over the past two years, retail food prices of key foods including eggs, beef, poultry and pork have remained steady or continue to increase. The report concludes, “… fluctuations in corn prices do not significantly affect consumer food prices.”
The report examined a number of factors that contribute to food prices including the cost of food production, pointing to Citibank’s Sterling Smith who stated, “Corn prices may have come down 50% (from their highs), but that doesn’t mean a box of corn flakes will fall 50% in price. Much of the price of food comes from the processing and movement of food…” Additionally, the report also highlighted the role of crude oil in retail food prices, finding that “…every step in the food supply chain is significantly affected by energy costs—especially crude oil.”
The report also compared corn prices to the price of dairy products, pork products, beef products poultry products and egg products from January 2007 – July 2014. Report findings include:
Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.
- Retail prices for items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.
- Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from Porcine Epidemic Diarrhea virus (PEDv). These retail price increases have occurred at a time when corn prices have been plunging.
- Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.
“The food vs. fuel folks screamed to high heaven when the price of corn rose during the drought and immediately blamed high corn prices and ethanol for food price increases,” said Bob Dinneen, RFA president and CEO. “However, these same critics remain suspiciously quiet now that corn prices have dropped, but retail food prices aren’t dropping along with them. The food vs. fuel argument is just another misguided attack on biofuels and the Renewable Fuel Standard, which is reducing foreign oil dependence, lowering gas prices for consumers, and revitalizing rural America.”
The Environmental Protection Agency has sent its final rule on 2014 volume obligations under the Renewable Fuel Standard (RFS) to the White House Office of Management and Budget for review in a last step before public release. Renewable fuels groups responded to the news today.
“We’re pleased to see the process moving forward and hope the final rule will show that this Administration is standing behind our national goals for clean, domestic fuels that strengthen our economy and national security,” said National Biodiesel Board Vice President of Federal Affairs Anne Steckel. “The original EPA proposal and continued delays have severely disrupted the U.S. biodiesel industry this year. We can begin to reverse that damage with a meaningful increase in the biodiesel volume that is finalized as quickly as possible so that producers can ramp up production in a timely fashion.”
“While we have not seen the rule, we hold strong in our belief that EPA and OMB will fulfill President Obama’s commitment to biofuels as a means of greater energy independence, lower greenhouse gas emissions, and wider availability of cost-saving alternative fuels for American consumers,” said Renewable Fuels Association president and CEO Bob Dinneen. “This decision is about more than targets and gallons, it is about a rationale that places highest importance on the long term strength of this country and not the bottom line of oil companies.”
“While OMB has up to 90 days to review this rule, what is most important is the content of the final rule,” added Growth Energy CEO Tom Buis. “Ultimately, this final rule should promote the policy goals of the RFS and call for an increase in the production of renewable fuels, so we can continue to reduce our dependence on foreign oil, create jobs at home that cannot be outsourced and mitigate climate change, while we improve our environment.”
Brian Jennings, Executive Vice President of the American Coalition for Ethanol, says his members are pleased with the progress. “Anything short of that turns the keys to the RFS over to the oil companies and puts cellulosic biofuel at risk,” said Jennings. “While all stakeholders have waited a long time for the final rule, and it could take another 30 days or more for interagency review, getting the rule done right is far more important than getting it done quickly.”
Since the rule is not public yet, there is no word on whether the volume requirements were changed from the initial proposal, which reduced the amount of ethanol and kept the biodiesel requirement the same. Senator John Thune (R-SD) expects some middle ground. “I think we’ll see an upward change,” he says. “I hope it’s a significant upward change and I hope that in ’15 they look at this in a different way.”
Thune still expects it will be later in the fall before a final rule is announced. EPA received over 340,000 comments on the proposal.
Exports of U.S.corn to Colombia have soared this year, thanks to bigger crops, lower prices, and a favorable free trade agreement. The U.S. Grains Council (USGC) also sees great potential for increasing exports of the ethanol co-product and livestock feed distillers grains (DDGS).
“We currently see about 90,000 metric tons of distillers grains moving into Colombia,” says USGC Director of Global Strategies Kurt Shultz. “We believe the market has the potential to easily exceed 700,000 tons, so there’s a lot of upward opportunity in Colombia for increased exports of distillers grains.”
Under the free trade agreement, there are no duties on distillers grains, so the Grains Council is actively working to bring technical knowledge on how to use the product to the region. “We had some feeding trials last year with the dairy industry which should good acceptance in the dairy sector,” said Shultz. Now they are looking at doing trials in swine and poultry as well.
This will likely be a topic of discussion at the 2014 Export Exchange coming up October 20-22 in Seattle. The event, co-sponsored by USGC and the Renewable Fuels Association, brings together buyers and sellers of distillers grains in an effort to expand established export markets and develop new markets. Discounted early registration for the event is available now through September 22.
There will be a free Ethanol Safety Seminar held on August 26-17, 2014 in Westfield, Massachusetts. Co-hosted by the Renewable Fuels Association (RFA) and Fore River Transportation Corporation there will be a session from 9:00 am to 2:00 pm on Aug. 26, followed by a 10:00 am to 3:00 pm session on Aug. 27. Certificates will be awarded to attendees at the completion of the course, although interested participants should note that registration is limited. This seminar is the last to be funded this season by a Federal Railroad Administration grant through TRANSCAER.
“I’m excited. The RFA seminars offer both rail and emergency response professionals a venue to meet and plan for future events together,” said Paul Ruscio, general manager at Fore River Transportation Corp. “Rail has proven to be a safe and efficient mode of transportation for renewable fuels in the States. Being prepared for potential rail incidents by engaging responders makes good sense for us and our communities. The dialogue that ensues from these seminars creates educated teams that have the means and know-how to handle potential incidents. In my experience, a little preparation and coordination before a team faces a task usually proves beneficial.”
The Ethanol Safety Seminar was developed to give first responders, emergency management agencies, and safety personnel an in-depth look at proper training techniques needed when responding to an ethanol-related emergency. 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 course focuses on numerous important areas of ethanol safety including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels, transportation and transfer of ethanol-blended fuels, storage and dispensing locations, firefighting foam principles and ethanol-blended fuel, health and safety considerations for ethanol-blended fuel emergencies and tank farm and bulk storage fire incidents.
Concluding the sixth year of sponsorship at the Sturgis Motorcycle Rally and the Buffalo Chip Campground, Robert White with the Renewable Fuels Association (RFA) believes they are making some real headway in getting the true story about ethanol to motorcycle riders.
“The education to the riders is actually taking on a new life,” said White. “We’re seeing riders talking to riders.”
In this edition of the Ethanol Report, White talks about a rider who pulled up for the Free Fuel Happy Hours who said he defended ethanol to his friends at the rally who told him it was a bad for his motorcycle. “He said ‘I kinda came unglued on them’,” he related. The biker told him that he had been talked in to using it at the rally the year before, and he’s “been using it this entire last year without any issue.”
In another case, White said a guy with a brand new Harley said he had been told by the dealer not to use ethanol and he wanted to get a response to that. “And I said why would you believe me?” White said. “I didn’t engineer your motorcycle, I didn’t put the parts together, I’m not providing a warranty for that motorcycle.” The man agreed, noting that neither did the dealership, but his owners manual from Harley in fact said he could use 10% ethanol. “Harley’s been doing this a long time, as have (other motorcycle manufacturers) they know what fuel is going to be most prominent, least expensive, highest octane option for these motorcycles, and it’s going to be ethanol.”
White says they are looking forward to next year, which will be the 75th annual Sturgis Motorcycle Rally, where RFA will having an even bigger presence with an even bigger crowd.
Find our more about RFA making inroads in motorcycle education here:
Ethanol Report on Motorcycle Education
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Listen below to White’s interview with automotive expert Bobby Likis from Sturgis:
The Renewable Fuels Association was once again a sponsor last week of the 7th annual Legends Ride, established by the Sturgis Buffalo Chip to raise money for local charities. Thanks to RFA and rider contributions, they raised $54,800 this year for the Special Olympics Black Hills and the Sturgis Motorcycle Museum & Hall of Fame.
The Legends Ride kicks off the Sturgis Rally with an escorted, scenic ride alongside hundreds of fellow Legends Riders through the beautiful Black Hills, ending up at the Sturgis Buffalo Chip for a special riders-only reception with complimentary food, drinks and special live memorabilia auction. To highlight the evening’s festivities, Legends Riders are treated to a double-headliner concert under the stars at the largest music festival in motorcycling.
At the Legends Ride party afterward, RFA was pleased to distribute Ethanol Fueled With Pride beer koozies and t-shirts to bikers. It was just another way that RFA was able to educate riders about the proper use of ethanol in their motorcycles.
Every year that the Renewable Fuels Association (RFA) has been a sponsor at the Buffalo Chip Campground for the annual Sturgis Motorcycle Rally we get the chance to visit with founder and president of The Chip Rod “Woody” Woodruff, and this year was no exception.
Woody is a laid back guy who founded the campground 33 years ago so people would have a place to stay and visit for the rally, at a time when some people in Sturgis wanted to get the bikers out of town. “So, a small group of us decided to look for a place to have a party outside of town,” he said. “This property kind of fit the bill.” After that, the party site grew into a campground and concert venue where thousands of rally attendees gather every year.
A few years ago, when RFA wanted to reach bikers with the positive message of ethanol, they decided to become a major sponsor at The Chip and Woody says it’s been great, especially when RFA started Free Fuel Happy Hours three years ago. “I have two motorcycles and I don’t know that I’ve ever used anything but ethanol (blended fuel),” he said. “There’s continuing to be more acceptance in using ethanol in your bike… and I don’t know why not. It’s higher octane than regular and less expensive. A cheap guy like me who gets a better product for less money, that’s my kind of tea.”
Listen to Leah’s interview with Woody here: Interview with Rod Woodruff, Buffalo Chip Campground
The third annual “Free Fuel Happy Hours” sponsored by the Renewable Fuels Association at the Buffalo Chip Campground for the Sturgis Motorcyle Rally was once again a rousing success.
“Obviously everyone has a motorcycle here, but they also have other engines at home, whether it be car, truck, SUV, lawnmower, you name it,” said RFA Director of Market Development Robert White. “The point is we want to talk to them about ethanol and make sure all their questions are answered.”
White says they offered free 10% ethanol blended fuel for a total of nine hours this week over three days, allowing bikers to fill up, get a free Ethanol Fueled With Pride t-shirt, and get their questions about ethanol answered. “We even have people who don’t fuel up because their tank’s already full, but they stop by and talk to us,” White added.
RFA has had a presence at Sturgis for six years now, with the last three offering the free fill ups, and White says word has definitely spread. “They were talking about it on the radio, there’s banners and announcements throughout the campground, and a lot of people say their neighbor camping told them about it,” he said.
White says talking one on one with people allows them to correct lots of misinformation about ethanol out there. “This fuel has been proven for well over 30 years,” he said. “Every engine here in the United States has been built for it, its warranty is covered, and we’re just here to explain the details.”
Listen to Robert talk with Domestic Fuel reporter Leah Guffey who was at the rally this year: Interview with Robert White, RFA, at 2014 Sturgis Motorcycle Rally
See all the photos from the rally and RFA’s involvement in the 2014 Sturgis Motorcycle Rally Photo Album
U.S. exports of ethanol totaled 59.9 million gallons (mg) in June, up 13% from the seven-month low in May, according to a Renewable Fuels Association (RFA) analysis of government data, and the opportunities are expanding.
That was the topic for the last session at the American Coalition for Ethanol conference this week in Minneapolis and one of the speakers was Gene Griffith of Patriot Renewable Fuels in Annawan, Illinois.
“U.S. ethanol is the cheapest motor fuel in the world, it’s needed and it can be blended in any country for clean air,” said Griffith, noting that the industry will continue to grow and produce more than we need in the country. “We must develop these worldwide markets. It’s not just Brazil, it’s not just the United States, there’s a lot of countries around the world that need our DDGs and our low cost, clean burning fuel.”
Listen to Gene explain in detail here: Gene Griffith, Patriot Holdings, on ethanol exports
Clayton Haupt with CHS Renewable Fuels Marketing discussed China import issues with distillers grains, noting that the game has changed considerably since he was asked to do this talk in June.
“July 24, it was announced you have to have a government stamp that has to say (DDGS imports are) clean of all GMO traits not approved in China,” said Haupt, noting that the U.S. Grains Council responded that simply cannot be done. “You’re kind of put in an environment today that you’re probably not going into China.”
Listen to Haupt’s presentation here: Clayton Haupt, CHS Renewable Fuels Marketing
Lastly, Chad Martin with Eco-Energy wrapped up with an overall look at export markets.
“Ethanol demand is no longer driven solely by the U.S. blender,” said Martin. “That’s obviously a good thing but it comes with some complexities in terms of import quotas, different specs, different market factors to be considered…things our industry has never really had to focus on until we started exporting both distillers grains and ethanol.” Chad Martin, Eco-Energy