Domestic Fuel

The 2012 National Ethanol Conference is ready to go at the Gaylord Palms near Orlando, FL. Your Domestic Fuel team will be on location once again. I got in this afternoon and Cindy gets in late tomorrow.

We’ll be bringing you the sights and sounds of the conference and stories where and when we find them. Right now we’re planning to live stream opening comments from Renewable Fuels Association President/CEO, Bob Dinneen on Thursday morning. More on that to come.

The The 17th annual National Ethanol Conference (NEC) is upon us already. It will be held this week, February 22-24, at the Gaylord Palms Convention Center in Orlando.

Last year, more than 1,250 industry leaders attended the NEC, representing 42 states and 19 countries and at least as many, likely more, will be there this year at the preeminent conference for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry.

In this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen gives us a preview of what to expect at the conference this year – including speakers, panels, topics and networking opportunities.

The event starts Tuesday with the annual golf tournament and a networking trip to Kennedy Space Center, with the welcome reception that evening. More information about the program can be found on-line at NationalEthanolConference.com. On-site registration for the event will be open starting Tuesday afternoon at 2 pm.

Domestic Fuel will be at the National Ethanol Conference providing start to finish coverage, including live webcast of Bob Dinneen’s State of the Industry address at 8:10 am Eastern on Thursday, February 23, and Secretary of Agriculture Tom Vilsack’s address at 8:20 am on Friday, February 24.

Listen to or download the Ethanol Report here: Ethanol Report on National Ethanol Conference

Subscribe to the Ethanol Report here.

Fifteen percent ethanol blended motor fuel has gotten one step closer to commercial availability with Environmental Protection Agency (EPA) approval of health effects testing submitted by the Renewable Fuels Association (RFA) and Growth Energy.

EPA concluded, “Our evaluation therefore concludes that RFA/Growth Energy has submitted data and analysis that would satisfy the Tier 1 and Tier 2 testing requirements for registration.”

“EPA’s action today puts E15 on the precipice of commercialization and means that consumers may be able to choose a more affordable E15 option in time for the expensive summer driving season,” RFA President and CEO Bob Dinneen. “This is huge step toward meaningful market expansion for domestically-produced ethanol.”

The acceptance of the health effects testing clears the way for the final steps in registering E15 as a fuel and offering it in the marketplace. With EPA’s acceptance of the results of the testing submitted by the ethanol groups, suppliers of ethanol and E15 are now able to register with EPA to offer the fuel.

“Now it is up to the retailers and individual fuel companies to register for approval to sell E15,” said Tom Buis, CEO of Growth Energy. “With ethanol selling an average of 76 cents a gallon cheaper than gasoline and $4 a gallon gasoline on the horizon, we’d encourage all Americans to ask their local filling station how soon they will see more-affordable E15.”

The next step in getting E15 to consumers is the formulation of a misfueling mitigation plan. As the E15 waiver extends only to MY2001 and newer vehicles, and excludes a number of non-road, marine, and vehicle engines, helping ensure consumers are legally and appropriately using E15 is critical. Once this plan is completed, and companies register with EPA, E15 can be sold to the EPA-approved vehicles in states and at stations that are prepared to do so.

The Renewable Fuels Association is pleased with the action taken by environmental groups in withdrawing from a lawsuit brought by the National Chicken Council, National Meat Association, and National Turkey Federation challenging EPA’s Renewable Fuels Standard (RFS).

In this edition of “The Ethanol Report,” Renewable Fuels Association president and CEO Bob Dinneen talks about what this means for the challenge to the RFS, which is vital to the expansion of renewable fuels for the transportation sector of the United States. “In the absence of the tax incentive, what is providing the foundational demand for the ethanol industry is the Renewable Fuel Standard,” says Dinneen. “We think that program has proven to be tremendously successful in reducing our nation’s reliance on imported oil.”

Dinneen says the environmental groups’ challenge to the RFS was much broader based than the poultry groups’ challenge, including that EPA had not taken into account the “global rebound effect” of ethanol driving down the price of oil which supposedly has led to third world countries using more oil. “That is how silly the environmental claims were,” he said. All that is left now, according to Dinneen, is a narrow issue regarding how EPA applied grandfathering provisions for addressing ethanol plants built in 2008 and 2009. “It says a lot about how far the angry birds are willing to go on this case,” he added, expressing optimism that the case will ultimately be thrown out.

Listen to or download the Ethanol Report here: Ethanol Report on RFS Challenge

Subscribe to the Ethanol Report here.

Environmental organizations have withdrawn their support of a challenge to the Renewable Fuel Standard (RFS) brought by the National Chicken Council, National Meat Association, and National Turkey Federation.

The U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments today in the lawsuit that challenges RFS regulations issued on March 26, 2010. The challenge is focused on a provision in the rules addressing ethanol plants built in 2008 and 2009 and the requirements that they must meet to generate trading credits under the program.

While the lawsuit is proceeding on this relatively narrow aspect of the regulations, a broad-based challenge that had been brought by environmental advocacy groups Friends of the Earth and National Wildlife Federation was dismissed by the Court of Appeals on the eve of argument. With just one business day before argument and after full briefing had been completed, the environmental advocacy groups filed a motion with the Court to voluntarily end their challenge. Their withdrawal from the case leaves only the limited challenge of the Meat/Poultry groups.

A major issue in the oral argument was whether these groups were properly before the Court. The ethanol industry through the Renewable Fuels Association (RFA) and Growth Energy intervened in the case to defend the rule and argued that the challenges must fail on both procedural and substantive grounds. “We are hopeful that the Court will act quickly to uphold this remaining element of the rules that is subject to legal challenge, given the policy underlying the provision to create a stable environment for investment in renewable fuel facilities,” said Growth Energy CEO Tom Buis.

“We are pleased that the environmental group petitioners realized that their challenges were so unlikely to succeed that they dismissed their case. We only wish that they had come to this conclusion before wasting the resources of the government and biofuels producers who had to defend the challenges in briefing,” added RFA President and CEO Bob Dinneen, who noted that the environmental groups decided to drop their claims on Friday.

“Quite frankly, had they prevailed, which we think is unlikely, they could potentially have taken down the entire Renewable Fuel Standard,” Dinneen said.

The 17th annual National Ethanol Conference is just around the corner, February 22-24 in Orlando, but those who are registered can start networking with fellow attendees now through the NEC mobile app.

NEC Connect provides access to the online social networking community designed specifically for the NEC, allowing attendees to design their own profile, link other social networking sites to their profile, communicate with other attendees via conversations and private messages, as well as see which attendees they have the most in common through categories and tags. NEC Connect also lets each attendee design their own session schedule and invite other attendees to private meetings.

NEC Connect provides a dashboard with updated information, organizes schedules with one click, allows attendees to receive instant communications if there are any changes in scheduling or updates, has a built-in Twitter feed and ways to share photos, and even has RSS feeds with industry news.

NEC Connect is available as a native app for iPhone and Android, and as a hybrid web-based app for Blackberry, and there’s also a web-based version of the application for all other web browser-enabled phones. Registered attendees should have received an email about the app, or it can be downloaded for free on the conference website.

The president of the Renewable Fuels Association (RFA) is calling a bill approved by a House subcommittee Tuesday yet another stall tactic to the use of higher ethanol blends in fuel.

RFA’s Bob Dinneen says the legislation sponsored by Congressman Jim Sensenbrenner (R-WI) injects “parochial politics into the scientifically established process of approving new fuels.”

“In approving E15, the Department of Energy tested vehicles over millions of driving miles – the equivalent of some 4,700 round trips from Washington to Milwaukee,” said Dinneen in a statement. “To suggest more testing is needed is nothing more than a stall tactic that has but one outcome – our continued addiction to oil.”

Dinneen adds that the concerns raised in the bill are “largely superficial and do not require the intervention of Congress to resolve. America’s ethanol industry has been working with auto companies and fuel suppliers for over a year to address any concerns and misconceptions that persist. This bill would reverse the progress private industry has already achieved and threaten the job creation that would stem from an increased use of domestic renewable fuels.”

*Updated with clarification comments from UNICA*

The president of the Renewable Fuels Association (RFA) this week wrote a letter to the U.S. Trade Ambassador asking for an investigation into news that the Brazilian state of Sao Paulo was imposing a 25% tax on all imported ethanol.

“Because ethanol produced in Sao Paulo is tax exempt, ethanol imported into Sao Paulo from the United States and other areas is at a substantial economic disadvantage,” wrote RFA President and CEO Bob Dinneen to Ambassador Ron Kirk. “We believe this action is discriminatory and may severely—and immediately—restrict the exportation of U.S. ethanol to Brazil.”

Dinneen is pictured here sharing a lighter moment with Marcos Jank, president and CEO of Brazil’s UNICA during a session at the 2011 National Ethanol Conference.

In early December, the nation of Brazil extended a temporary suspension of a 20% federal tariff on imported ethanol.
“This action not only effectively reinstates the tariff on U.S. exports, but increases it by 5%,” wrote Dinneen. “Moreover, we believe the action taken by the state of Sao Paulo is in violation of Article III:4 of the Generalized Agreement on Tariffs and Trade (GATT) and possibly Article 2.1 of the World Trade Organization’s (WTO) Technical Barriers to Trade Agreement.

Port Santos in Sao Paulo is the main port of entry for U.S. ethanol exports to Brazil, which accounted for an estimated 400 million gallons in 2011.

*In response to the RFA’s letter and resulting media reports, UNICA released a statement from president Marcos Jank noting that the Sao Paulo tax is a pre-existing value-added tax (VAT), known as ICMS (Goods and Services Tax), which is not equivalent to the return of Brazil’s tariff on imported ethanol.

According to UNICA, the deferment period started on October 1, 2011 and is now scheduled to end on March 1, 2011.

Eight students will receive a scholarship to attend the 17th Annual National Ethanol Conference: Accelerating Industry Innovation, according to the Renewable Fuels Association (RFA) and the Renewable Fuels Foundation (RFF).

This is the third year the scholarship has been available to students in higher education. Recipients receive complimentary registration to the conference and the opportunity to connect with hundreds of ethanol leaders, policy makers and experts in the renewable fuels industry.

The National Ethanol Conference (NEC) is one of the preeminent conferences for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry. This year’s program will highlight how the ethanol industry continues to evolve to meet the demands of a rapidly changing marketplace. With federal policy changing, the global, market-driven environment in which the industry must compete comes with new market challenges. Industry leaders and experts will address how we are meeting these new demands by accelerating innovation in technology, marketing, logistics and feedstocks for the production of advanced ethanol.

“It is very encouraging to see such high levels of interest in biofuels from students year after year through this program,” said Mike Jerke, RFF Chairman and General Manager for Chippewa Valley Ethanol Company. “Networking with experts in the U.S. ethanol industry gives these students a first-hand look behind an evolving industry and the direction it is heading. This is a chance for them to explore the opportunities the industry has to offer.”

Each scholarship recipient has focused their studies on renewable energy and biofuels and is interested in pursuing a career in the industry. Read more about the eight recipients of the NEC Scholarship.

Blender pumps give consumers flexibility and choice of ethanol blends when they are fueling up. Now, the USDA is accepting applications for REAP funds that can be used by retailers who want to install more blender pumps.

This is the second year that blender pumps have been authorized as part of the REAP program. Agriculture Secretary Tom Vilsack announced in 2011 that USDA had plans to install 10,000 blender pumps over the next five years.

That announcement and this year’s opening of the application process is welcome news to the Blend Your Own (BYO) Ethanol campaign, a joint educational effort by the American Coalition for Ethanol (ACE) and the Renewable Fuels Association (RFA). The campaign will again offer free grant writing services to those interested in applying.

“This program provided funding for more than 250 blender pumps last year, providing many consumers with the choice and flexibility they deserve to pick the ethanol blends that work for them based on their vehicle, their beliefs, and their budget,” said RFA Director of Market Development Robert White. “Through the BYO Ethanol Campaign, we have the ability to assist retailers in applying for these funds and help USDA and the Obama Administration achieve the renewable fuel goals they have put forward. With E15 fuel registration due any day, these blender pumps will help spread this new blend across the country.”

“We can break the stranglehold oil has over our nation’s economy and energy future by giving consumers the option to choose clean American fuels that are not petroleum,” said ACE Senior Vice President Ron Lamberty. “In just five years, growing ethanol use has helped us reduce our reliance on foreign oil by more than 10% – to a point where imports are less than half of total demand. We can continue that move toward greater energy independence by getting more ethanol in front of more consumers.”

This program is designed to help spur rural development. This program offers funding for grants, and loan guarantees, but certain restrictions will apply on the size of the local communities and the businesses applying for the funds. Applications for this program are due on March 30, 2012.

Agriculture Secretary Tom Vilsack will be a headline speaker on Friday, February 24th, at the 17th annual National Ethanol Conference, which is being held February 22-24 at the Gaylord Palms Resort and Convention Center in Orlando.

During his tenure, Secretary Vilsack has been a champion for all domestic renewable fuels, including ethanol. Secretary Vilsack has led the charge to modernize America’s fueling infrastructure through the installation of blender pumps. Under his leadership, USDA is investing in new ethanol technologies that will turn abundant materials like grasses, wood wastes, ag residues, and municipal solid waste into ethanol. And, Secretary Vilsack has been a steady voice is combating falsehoods about ethanol, including soundly refuting claims ethanol is the driving factor behind rising food prices.

Those interested in registering for the conference should do so by Thursday, January 25 to save $100 on the registration fee and ensure a room at the convention hotel. After Thursday, the room block will be released and the registration rate goes up. Registration information is available at nationalethanolconference.com.

The federal district court judge who ruled California’s Low Carbon Fuel Standard (LCFS) to be unconstitutional has denied a motion to continue implementation of the law.

On Monday, Judge Lawrence J. O’Neill denied the California Air Resources Board’s (CARB) motion to stay the decision he issued on December 29, 2011 that had halted the enforcement of the LCFS regulation because that regulation is unconstitutional.

On Friday, January 20, 2012, CARB filed papers asking the Court to reverse its decision and allow the state to continue implementing the LCFS in 2012. Judge O’Neill ruled that CARB “improperly seeks to relitigate issues this Court resolved in its order granting the preliminary injunction and orders on the summary judgment motions.” He further noted that CARB sought not to preserve the “status quo” but rather to “allow enforcement that imposes higher restrictions than had been imposed previously” without citing any authority to show why the Court would have jurisdiction to grant that type of relief.

“Judge O’Neill’s decision demonstrates the strength of our claims against the LCFS,” said Renewable Fuels Association President and CEO Bob Dinneen and Growth Energy CEO Tom Buis in a joint statement. “The California LCFS seeks to regulate conduct outside its borders and is blatantly discriminatory and unconstitutional. American ethanol advocates will continue to oppose CARB’s effort to reinstate this punitive policy that illegally seeks to dictate the production and transportion of ethanol and other fuels outside its border.”

CARB has appealed Judge O’Neill’s finding that the LCFS violates the Commerce Clause of the Constitution. That litigation is in the 9th Circuit Federal Court of Appeals.

The 2012 National Ethanol Conference, coming up February 22-24 in Orlando, is a must-attend for anyone in the ethanol industry.

Among the highlights of the conference will be opening general session keynoter Dr. James Canton, futurist and CEO of the Institute for Global Futures. For over 30 years, Canton has been insightfully predicting the key trends that have shaped our world and he will discuss the importance of engaging consumers to grow demand and improve the biofuels industry image.

The opening day luncheon address will feature presidential advisors Karl Rove and Robert Gibbs who will provide their “Insider Perspectives on Election 2012 – The Presidency and Congress.” Rove was one of President George W. Bush’s closest confidants and advisors, and Robert Gibbs has been a longtime advisor to President Obama.

With ethanol exports booming, speakers including former U.S. trade ambassador Mickey Kantor will address the trade opportunities and challenges facing U.S. producers as they seek to expand international markets.

Early registration and convention hotel rates both expire soon. Registration fees for the NEC increase by $100 after January 26. The room block at the Gaylord Palms Resort & Convention Center also expires on January 26.

The latest numbers show that November ethanol exports set another record and that means total exports for 2011 could well exceed a billion gallons.

“Exports have become an important part of the business model for American ethanol producers,” said Geoff Cooper, Vice President of Research and Analysis at the Renewable Fuels Association. “American ethanol producers are the lowest cost provider of motor fuel today and have ample supplies available to help meet ethanol demand around the globe. While the preference for American producers would be to use more ethanol domestically through use of higher ethanol blends like E15, E30 and E85, overseas markets will remain a viable and important part of America’s ethanol industry.”

Ethanol plants continued to crank up production right through the end of 2011, setting yet another record for the last week of the year after already setting new records for the two weeks prior.

According to the Energy Information Administration, ethanol production averaged 963,000 barrels per day – or 40.45 million gallons daily – for the week ending 12/30/2011. That’s 1,000 barrels more than the record set the previous week.

No doubt that ethanol production this year will be a record, although it will be a couple of months before the actual, official total is calculated. But, based on the weekly reports, production will be around 13.78 billion gallons, which beats the 2010 total of 13.23 billion. However, official monthly data tends to deviate slightly from the weekly data and those numbers for November and December have not yet been released.