Domestic Fuel

In this Ethanol Report, Renewable Fuels Association (RFA) president and CEO Bob Dinneen provides his naughty and nice list for Santa, talks about a new progress report on cellulosic biofuels, and promises 2013 will bring one of the biggest fights for the future of energy policy.

Dinneen says those who deserve coal include industries that have continued to relentlessly attack ethanol this year, while he puts the Obama administration on the nice list for upholding the Renewable Fuel Standard and finally allowing sales of 15% ethanol.

Listen to or download the Ethanol Report here: Ethanol Report on 2012 in Review

Subscribe to “The Ethanol Report” with this link.

The Antidumping Advisory Committee, composed of representatives from member states of the European Union, has reportedly endorsed a 9.6 percent penalty on U.S. ethanol exports to Europe.

In response to the announcement, a joint statement was released by Growth Energy and the Renewable Fuels Association.

“This is simply one step in an ongoing process. While the Antidumping Advisory Committee has voted in favor of imposing an anti-subsidy duty on U.S. ethanol exports, this is one committee making a recommendation to a larger body and the matter is not final. While we are troubled by the Commission’s preliminary decision, we remain convinced that this matter lacks the merit necessary for imposing such a duty and that, when all the facts are considered, the European Union will rightly decide not to impose any antidumping duties on imports of ethanol produced in the United States.”

The Advanced Ethanol Council has just released a detailed look at the progress made towards the commercial deployment of advanced cellulosic biofuels.

The Cellulosic Biofuels Industry Progress Report profiles production facilities and projects across the country and producing nations around the world. According to the report, all countries that were profiled are working toward developing production capacity in the U.S. to meet the Renewable Fuel Standard (RFS).

The new data includes each facility’s path to commercial deployment, capacity, feedstock and more, demonstrating that notwithstanding the global recession, the cellulosic biofuel industry is coming on line.

The report points to the industry’s enormous potential. According to the Sandia National Lab, the U.S. could produce 75 billion gallons per year of cellulosic biofuels without displacing food and feed crops, or more than half of the 134 billion gallons of gasoline consumed by the U.S. in 2011.
Read the rest of this post…

Linda DiVall, President and CEO of American Viewpoint will be the keynote speaker for the upcoming National Ethanol Conference: Driving Forward, taking place in Las Vegas February 5-7, 2013. She will discuss trends in public opinion related to ethanol in general, including its brand image as well as public support of the RFS, E15 and other mid-level blends, and other public policies. Her presentation will run the gambit from political analysis to the most effective consumer and grassroots messaging.

According to the Renewable Fuels Association, who hosts the annual ethanol conference, as American Viewpoint’s founder, DiVall has provided effective strategies to both political and corporate clients for 27 years. She has been a member of the polling team for every GOP Presidential candidate since 1988. Her strategic insight has been utilized on policy issues of energy, Social Security, Medicare, retirement security, and healthcare as well as providing guidance to the GOP on strategies to counter the gender gap. Linda frequently provides political commentary to CBS, NBC, ABC, CNN and PBS.

Registration is open. Click here to get more information about the conference agenda, speakers and to register.

USDA’s World Agricultural Supply and Demand Estimate (WASDE) out this week left corn stocks unchanged but lowered the season average price estimate by 20 cents to $7.40 per bushel.

USDA maintained corn ending stocks in the U.S. for the marketing year at a tight 647 million bushels, which is about three weeks worth of supply. Globally, USDA slightly lowered the projection for corn ending stocks in the current marketing year to 117.6 million metric tons, which is down 13.4 million from last marketing year. However, global coarse grains production was actually increased 7.9 million metric tons, as China reported a corn crop four percent larger than the November estimate.

“The drought reduced production by four billion bushels from what we thought earlier this year,” said USDA Chief Economist Joe Glauber. “No question that’s rationed demand and we’ve seen a really tight stock situation.”

Glauber says margins for ethanol producers have been very tight this year. “If you look at ethanol production, it’s been below 13 billion gallons on an annualized basis, if you look at weekly production numbers, and that reflects the lower margins for sure,” he said. Corn use for ethanol is forecast at 4.5 billion bushels, 10% lower than last year.

According to the Renewable Fuels Association, the U.S. ethanol industry is projected to use 78.9 million metric tons of grain (net distillers grains) or less than three percent of the world grain supply – the lowest rate in five years. “Further, more grain will be available for non-ethanol use than any other time in history with the single exception of last year,” said RFA Vice President, Research and Analysis Geoff Cooper. “In fact, grain available for non-ethanol use in 2012/13 will be 15% higher than 10 years ago in 2003/04. Meanwhile global population grew 9.8% during this period.”

Speakers for the National Ethanol Conference (NEC): Driving Forward being held Feburary 5-7, 2013 in Las Vegas have been announced. The conference will kick off with the Chairman of the Renewable Fuels Association (RFA) Neill McKinstray, who is the president, Ethanol Group, The Andersons. The line-up will then feature the much anticipated State of the Industry Address from RFA President and CEO Bob Dinneen.

Featured speakers will also include:

• Brooke Coleman, Executive Director of the Advanced Ethanol Council.
• Rick Tolman, CEO of the National Corn Growers Association
• Rob Vierhout, Secretary General, ePURE
• Scott Turlow, President, Canadian Renewable Fuels Association
• James Massie, Principal, The Alpine Group
• Marty Durbin, Executive Vice President, Government Affairs, American Petroleum Institute
• Shane Karr, Vice President, Federal Government Affairs, Alliance of Automobile Manufacturers
• Louis Finkel, Executive Vice President, Government Affairs, Grocery Manufacturers Association
• Linda DiVall, Founder, President and CEO, American Viewpoint
• Bruce Heine, Director Government Affairs, Magellan Midstream Partners LP
• Michael Pacheco, Ph.D., Associate Laboratory Director, NREL
• Scott Zaremba, President, Zarco 66, Inc….and many more.

Click here to see the full line-up and to register. We’ll see you there!

The European Commission today issued a “general disclosure document” setting forth its proposed ruling in the anti-dumping investigation involving U.S. ethanol exports to Europe.

Growth Energy and the Renewable Fuels Association (RFA) issued a joint statement on the issue:

“We continue to cooperate with the Commission’s investigation. We are troubled by news that the Commission is recommending a 9.6 percent anti-dumping duty to its Member States. We remain convinced that if all the facts are considered, the European Union will decide not to impose any anti-dumping duties on imports of ethanol produced in the United States.”

Last year, the European Union (EU) initiated anti-dumping and countervailing duty investigations regarding U.S. exports of ethanol to Europe and current U.S. policies surrounding ethanol production and use, specifically the expiring volumetric ethanol excise tax credit, or VEETC, available to blenders of ethanol and gasoline. Allegations by EU ethanol producers suggested that U.S. ethanol exports to Europe were taking advantage of the tax incentive before export, thus lowering its price and harming EU ethanol producers. However, by August of this year it appeared the issue had been resolved and the EU would not be taking any action.

The Renewable Fuels Association (RFA) is calling for the Environmental Protection Agency (EPA) to update their lifecycle greenhouse gas (GHG) analyses of corn and sugarcane ethanol for the Renewable Fuel Standard (RFS). The association made the request in a letter sent to the EPA Administrator Lisa Jackson.

RFA President and CEO Bob Dinneen wrote, “There have been literally dozens of new studies and modeling improvements since EPA finalized the RFS2 almost three years ago. Overwhelmingly, these new reports and data show that the corn ethanol process is far less carbon intensive than assumed by EPA. Corn ethanol is offering real and significant GHG savings today. Meanwhile, the carbon intensity of crude oil production continues to worsen, as we drill farther and deeper than ever before and get more of our energy from marginal crude sources like tar sands.”

Also noted in the letter is that recent GHG research has shown than lifecycle GHG emissions associated with Brazilian sugarcane ethanol production are worse than originally estimated by EPA. The letter cites since 2006, harvested sugarcane in Brazil has expanded 55 percent with at least 70 percent of the land formerly pasture land. However, when the lifecycle analysis was originally conducted, little land use change emissions were factored in to the data.

While RFA says the EPA underestimated land use change emissions for sugarcane, they also say the EPA overestimated ethanol plant energy use, corn farming energy use and land use change emissions for other forms of ethanol, primarily ethanol produced from corn.

Recent modeling and data improvements were presented in a peer-reviewed paper by researchers at Purdue University and the Department of Energy. According to the research, corn ethanol, on average, reduces GHG emissions today by at least 24 percent compared to gasoline even with speculative LUC emissions included. GHG reductions for ethanol from dry mill plants are even larger. Dinneen concluded that it is imperative that EPA recognizes this new science and data.

Click here to read the letter in full along with supporting charts and sources.

This morning, the AAA released a statement that the EPA should re-evaulate its approval of E15. The call to action was based on a recent survey conducted by AAA. The results found, “a strong likelihood of consumer confusion and the potential for voided warranties and vehicle damage.” The press release went on to state, “An overwhelming 95 percent of consumers surveyed have not heard of E15, a newly approved gasoline blend that contains up to 15 percent ethanol. With little consumer knowledge about E15 and less than five percent of cars on the road approved by automakers to use the fuel, AAA is urging regulators and the industry to stop the sale of E15 until motorists are better protected.”

The ethanol industry came out in response to the survey and subsequent press release and Tom Buis, CEO of Growth Energy said the survey lacked any substantive research or facts, has no scientific basis and is noting more than “hollow criticism lacking any facts to back up the irresponsible claims.”

“E15 is the most tested fuel to date and the Department of Energy (DOE), a true expert on the matter has studied the fuel extensively, more than six million miles, coming to the conclusion that, “the resulting Energy Department data showed no statistically significant loss of vehicle performance (emissions, fuel economy, and maintenance issues) attributable to the use of E15 fuel compared to straight gasoline,’” added Buis.

The industry has expressed frustration with the associations attitudes toward ethanol. Prior to the sale of the fuel, a retailer must provide adequate warning information to consumers to ensure only vehicles and light duty trucks manufactured after 2001 use the ethanol blend. It is estimated that nearly 80 percent of the vehicles on the road could use E15.

“If AAA weren’t so deep in the Big Oil politics, they would stop manufacturing concern about the efficacy of ethanol blend use and report enthusiastically about ethanol’s consumer gasoline price savings,” said Bob Dinneen, CEO And President of the Renewable Fuels Association (RFA). “Their misplaced concern today, that E15 should be further tested before being offered for sale reflects a pathetic ignorance of EPA’s unprecedented test program before approving E15 for commercial use. The miles driven on E15 equate to 12 round trips to the moon and back without a single failure, unless you want to count the deer that was killed on the test track! E15 is a safe fuel, as evidenced by the fact auto manufacturers are now providing warranty coverage for it.”

While the roll-out of E15 has been a bit slow out of the gate, the ethanol blend is now being legally sold in four states: Kansas, Nebraska, Iowa, and South Dakota. “While progress has been slow, it is progress,” said Robert White, director of market development for the Renewable Fuels Association (RFA) during an interview with Cindy Zimmerman on site at the National Association of Farm Broadcasting (NAFB) Trade Talk.

White noted that the healthy misinformation campaign that went along with the long wait from EPA on the approval, did its work and it was very successful. “So we’re having to go back and re-educate marketers, curb some of the concerns that are out there from liability concerns to I already have a product that those vehicles can use.”

One of the areas of education RFA is doing is showcasing the business case for E15. White said fortunately a few marketers have taken the first step and are setting an example, one that is in fact proving to be successful.

“Most retailers are seeing their sales in the 20 percent range. With premiums sales hovering in the single digits and E85 between 10-15 percent, this is a great feat, and one I personally, thought would take months,” said White. “With over 65 percent of the cars on the road able to use E15, it’s a large demographic. Almost 85 percent of sales could be E15, so the sales could add up very quickly.”

White added that what consumers are finding is that E15 is a higher octane, lower price product that has the same performance benefits. He added that today, most people are seeing no difference in fuel economy especially compared to E10.

Going into 2013, RFA is working state by state to ensure E15 is approved for sale and sold in a safe manner.

Listen to Cindy’s interview with Robert here: The Business Case for E15

The U.S. Senate repeal of a second provision in the military’s budget that would have blocked the developing the use biofuel alternatives is being welcomed by biofuel makers. Yesterday, The Senate voted 62-37 to pass an amendment by Senator Mark Udall (D-CO) repealing section 313 of the FY2013 National Defense Authorization Act (NDAA), which prohibited DOD from procuring alternative fuels if they cost more than their conventional counterparts. Today, they passed Senator Kay Hagan’s (D-NC) amendment to repeal section 2823 of the NDAA that prohibited defense officials from entering into a contract to plan, design, refurbish or build a biofuels plant or any facility used to refine biofuels unless it is specifically authorized by law. This amendment passed by a vote of 54-41.

Growth Energy CEO Tom Buis applauded the move:

“Today’s successful passage of Senator Hagan’s amendment is yet another example of the strong bipartisan support in the U.S. Senate for American made renewable energy. This is the second successful vote in two days supporting renewable fuels and the message lawmakers are sending is clear – biofuels play a critical role in developing a diversified energy portfolio to meet our growing energy needs and increase our energy independence.

Mike Breen, Executive Director of the Truman Project and spokesman for its clean energy campaign, Operation Free, was also pleased to see Hagan’s (D-NC) amendment pass.

“Today’s vote was a victory for our military’s energy security, helping ensure that we develop technology to diversify the fuels that power our military’s vehicles, ships, and aircraft…

The DoD has a long history of encouraging private-public partnerships that result in new opportunities for civilian industries. Advanced biofuels can be the next success story.”

Bob Dinneen, the President and CEO of the Renewable Fuels Association (RFA), added his congratulations to the Senate for repealing both measures in the defense spending bill:

“We now have two examples in two days of the strength and momentum behind renewable fuels. Americans believe in biofuels and see a future that is strong, bright and energy independent.”

A similar provision is also making its way through the House’s version of the defense spending bill.

The National Council of Chain Restaurants today joined the fight against the Renewable Fuel Standard (RFS) with the release of a new report on its impact on the chain restaurant industry, commodity prices and the food supply chain.

The study, which was conducted by PwC, “concluded that the RFS mandate could cost chain restaurants up to $3.2 billion annually, with quick-service restaurants witnessing cost increases upward of $2.5 billion, and full-service restaurants seeing increases upward of $691 million.”

Ethanol industry representatives called the study “flawed” and “misleading” and said it failed to take many factors into account. “The true culprit behind rising food prices is the cost of energy, and in particular oil,” said Growth Energy CEO Tom Buis. “Only 14 percent of the price of food is attributable to the cost of the commodity, while the rest can be attributed to energy costs and marketing. The processing, packaging, wrapping, storage, refrigeration and transportation costs are the true drivers in price increases.”

American Coalition for Ethanol Executive Vice President Brian Jennings says the council of chain restaurants is ‘out to lunch’ on the RFS. “Contrary to their claims, a recent fact-based analysis by the U.S. Department of Agriculture and EPA showed that the Renewable Fuel Standard (RFS) has virtually no impact on food prices, so we encourage the media to take this fast-food study with as much salt as you’d find in one of their meals,” said Jennings.

“They lost in their bid for a waiver of the RFS, so now they are resorting to super-sized myths about the impact of the RFS on food prices. Every reasonable analysis of the factors influencing food prices has concluded that the cost of diesel fuel, gasoline, and other energy inputs is the major driver. This study conveniently avoids that issue,” said Bob Dinneen, President of the Renewable Fuels Association.

Listen to Dinneen’s comments here: RFA president Bob Dinneen

Congressman Bob Goodlatte (R-VA) announced at the NCCR press conference this morning says the report supports his legislation “The Renewable Fuels Elimination Act” HR3098. “This is a bipartisan effort,” Goodlatte said, noting that a letter to EPA administrator Lisa Jackson encouraging a waiver of the RFS was signed by 156 members of the House. “That group provides a basis for moving forward with legislation that would do what unfortunately she chose not to do.”

Goodlatte says he is hopeful that the RFS will either be reformed or eliminated in the next Congress.

Listen to Goodlatte’s comments here: Congressman Bob Goodlatte

The ethanol industry is categorizing the latest attack on the Renewable Fuel Standard (RFS) by the American Petroleum Institute (API) as more of the same.

In response to API’s call this morning to eliminate the RFS “because it is not working well and because it will force higher concentrations of ethanol in gasoline that could harm vehicles,” Growth Energy CEO Tom Buis said, “This is a classic example of the fox guarding the chicken coop. Really? Special interests will stop at nothing to discredit the success of renewable fuels created right here at home to ensure their lock on the fuels market goes unchecked.”

Bob Dinneen, President and CEO of the Renewable Fuels Association, referred to the API position as the classic “dog bites man” journalism example. “API wants to repeal a highly successful program that has reduced gasoline imports and stimulated investment in renewable energy resources. API doesn’t like the RFS because it has taken ten percent of their barrel and reduced consumer costs. Americans like and support the RFS for exactly those reasons.”

Iowa Renewable Fuels Association Executive Director Monte Shaw was equally blunt. “The reason API is so concerned now is that E15 is poised to become widely available. Without the RFS, Big Oil can continue to hide behind its Century of Subsidies and the federal petroleum mandate to ignore lower cost ethanol blends like E15.”

Brent Erickson, executive vice president of the Biotechnology Industry Organization’s Industrial & Environmental Section, says the oil industry continues its efforts to undermine the success of the RFS. “Since the inception of the RFS, API has used every regulatory and legal ploy available to delay and block implementation of the law. Since these efforts appear to have failed, they are now mounting a public relations effort to convince lawmakers to repeal the RFS. Congress should see right through this effort.”

The Renewable Fuels Association (RFA) is calling on the Obama Administration to help remove certain trade distorting policies in Brazil that they say have contributed to the dramatic decline in exports of ethanol to Brazil. The organization’s President and CEO, Bob Dinneen, sent a letter to US Trade Ambassador Ron Kirk asking for assistance on the matter.

The letter seeks assistance from the USTR in convincing Brazil to reverse its decision to reduce blend volumes from 25 percent to 18 percent, and remove a tariff imposed by the state of Sao Paulo that is discriminating against a vast majority of exports to Brazil. While imports of ethanol from Brazil continue to flow into the U.S. at the rate of about 50 – 60 million gallons per month with the help of the RFS, exports to Brazil have been reduced significantly as a result of these trade barriers.

Most analysts expect the U.S. to export just 650-750 million gallons for the entire year, with only about 10-15 percent of the ethanol going to Brazil.

Click here to read the letter in its entirety.

The president and CEO of the Renewable Fuels Association (RFA) says they are very pleased with the decision today by the Environmental Protection Agency (EPA) to reject a request to waive the Renewable Fuel Standard (RFS).

In an interview immediately after the announcement was made by EPA, Bob Dinneen said he gave the agency credit for sticking to the science and doing sound analysis on the issue. “I was somewhat surprised that the petitioners never really presented EPA with a lot of analysis,” said Dinneen. “That was telling me all along that this was more about politics than about substance.”

Dinneen said the industry has maintained all along that it was not the RFS that caused higher prices for livestock feed this year. “It’s Mother Nature – it was this drought – and what we ought to be doing it sitting down and having a more constructive discussion about (this).”

Dinneen notes that the market has responded to the higher corn prices and lower supply. “The ethanol industry is down about 11 or 12% in terms of our production, our corn consumption, and you’re seeing exports being reduced some, other industrial uses being reduced some, and feeders looking for other sources of feed,” he said.

The ethanol industry is anticipating that the RFS will continue to face challenges by the oil industry and others opposed to the use of corn ethanol. “I don’t believe that they will be successful because in any objective review of this program, it has been an unmitigated success,” said Dinneen.

Listen to this edition of the Ethanol Report with Bob Dinneen. Ethanol Report on RFS Waiver Denial

Subscribe to “The Ethanol Report” with this link.