Domestic Fuel

Progress on a new farm bill is all well and good but defending the Renewable Fuel Standard remains the top priority for the ethanol industry.

“The attack on the Renewable Fuel Standard is first and foremost and coupled with it is the blend wall,” said Growth Energy CEO Tom Buis st the National Association of Farm Broadcasting annual Washington Watch issues forum this week. “Oil has never been a fan of the RFS and they knew this day was coming. As we’re up against the 10% blend wall, rather than doing what the law allows and blending higher blends or helping to build out the infrastructure for higher blends to give consumers choice at the pump, they’ve decided they just want to eliminate it and eliminate competition.”

Buis notes that, despite weather challenges this year, corn growers will continue to grow enough corn to meet all needs.

Listen to an interview with Buis here: Interview with Tom Buis, Growth Energy

It’s time for National Association of Farm Broadcasting members to gather in Washington, DC for their annual Washington Watch program.

Activities this afternoon with the Issues Forum, sponsored by the Renewable Fuels Association. Among the topics sure to be discussed will be what a new farm bill may hold for renewable energy and the latest on attacks to the Renewable Fuel Standard (RFS).

Tomorrow morning the farm broadcasters meet up at USDA and will be speaking with a number of department heads including Secretary of Agriculture Tom Vilsack. It looks like Wednesday morning will be all about the Farm Bill with input from various members of the Senate and House where their versions of the new legislation are going through mark ups this week.

The National Corn Growers Association recently submitted comments on the impact of the Renewable Fuel Standard to the House Committee on Energy and Commerce in response to their second white paper, “Agricultural Sector Impacts.” In these comments, NCGA addressed how the RFS affects commodity products including corn, agricultural output and economics, RFS flexibility, food prices, cellulosic feedstock and global impacts.

The comments began by noting that corn farmers have responded to the increased demand of ethanol from the Renewable Fuel Standard by producing more corn and doing so in a more environmentally friendly manner. “In the last 30 years, corn production has improved on all measures of resource efficiency, by decreasing per bushel: land use by 30 percent, soil erosion by 67 percent, irrigation by 53 percent, energy use by 43 percent and greenhouse gas emissions by 36 percent.”

The remainder of the comments directly addressed questions posed by the House Committee on Energy and Commerce about impacts of the RFS. Topics of particular interest included impacts attributable to the RFS on corn prices, food prices, job creation, economic growth and land use change. NCGA comments provided a detailed look at the myriad of factors involved in each area that are often overlooked in discussions about this standard including: the impact of export demand for soy from China; the direct impact of the drought on beef production; alternative models and theories concerning the idea of indirect land use change; the impact of rising global labor and diesel costs on food cost; and the inherent flexibility of the standard.

It’s down to the wire for the biofuel and agricultural industries to submit comments on the agricultural impact of the Renewable Fuel Standard (RFS), a second in an RFS series being published by the House Energy and Commerce Committee. Growth Energy, Fuels America, and the Renewable Fuels Association (RFA) all submitted input today.

The consensus among the biofuel industry is that the RFS is one of the most successful energy policies in the last 40 years. The industry cites the ethanol industry has been a direct benefit for farmers as well as Americans.

Bob Dinneen, CEO and president of RFA noted, “…it is important to remember that a central objective in developing a vibrant and robust ethanol industry was to increase demand for agricultural products and enhance farm income.” He points out that the emergence of ethanol has transformed the grain sector from a “stagnating, surplus-driven marketplace to one that is vibrant, high-tech and demand-driven.”

While opponents of ethanol say that the fuel has caused food prices to rise, Growth Energy CEO Tom Buis said that people need to better understand the relationship between corn and ethanol. “While our critics have said the ethanol industry uses a significant portion of the corn crop, if you look beyond simple volume of corn and into the net corn acreage used, the industry actually only utilizes 17.5 percent of the acres because of displacement of corn and soybean meal through the use of distiller grains as a high protein animal feed,” who also noted that biofuels have also been a benefit to farmers globally.

In a letter from Fuels America, the organization’s membership urged to keep the RFS in place because it is the framework upon which cellulosic and advanced biofuels are being built. “The future growth in the sector lies in the cellulosic and advanced spaces where billions of dollars have been invested in research and development, testing, and commercialization of an entire industry that did not exist in 2007. Today, the industry is putting steel in the ground on multiple commercial facilities led by companies including INEOS Bio in Vero Beach, Florida; KiOR in Columbus, Mississippi; Abengoa in Hugoton, Kansas; POET-DSM in Emmetsburg, Iowa; and DuPont in Nevada, Iowa.”

Ultimately, the biofuel industry is urging Congress to keep the course as set for the RFS.

Iowa Renewable Fuels Association (IRFA), American Coalition for Ethanol (ACE) and The Auto Channel are bringing together a panel of experts in the fields of renewable fuels, automotive and vehicle technology and fuel retailing to discuss important issues regarding E15 fuel, the so-called blend wall, and the Renewable Fuel Standard (RFS). The briefing will highlight how E15 and the RFS are key parts of an “all of the above” American energy solution.

The event is taking place on Thursday, May 2, 2013 from 9:30 am to 11:00 am EST in Washington, D.C. at the Congressional Meeting Room South CVC 217 in the Capitol Visitors Center.

Speakers include Bruce Vollan, Owner, Midway Service, Sioux Falls, South Dakota; Marc Rauch, Executive Vice President, the Auto Channel; Ron Lamberty, Senior Vice President, American Coalition for Ethanol; and Monte Shaw, Executive Director, Iowa Renewable Fuels Association.

Please RSVP to T.J. Page, with the IRFA at 515-252-6249 or via email.

A new partnership has been formed to give the biofuel industry Renewable Fuel Standard (RFS) solutions. The National Association of Shell Marketers and RINAlliance have partnered to aid petroleum marketers with renewable fuel blending and EPA compliance matters.

“RINAlliance is extremely excited and honored to have the support and endorsement of the National Association of Shell Marketers and we look forward to playing a role in the success of its fuel distributors,” said Dawn Carlson, president of RINAlliance, Inc. “NASM understands the regulatory burdens of petroleum marketers and recognizes the value RINAlliance brings to its members.”

As the past few months have demonstrated, RIN values are the driving factor when it comes to renewable fuel blending. The positive economics are easily assessed and the ultra-competitive petroleum industry has taken notice of blending benefits.

Jennifer Richards, president of NASM, added, “Our marketers across the U.S. benefit from the consulting expertise of RINAlliance as their professionals have the longest and most successful track record in understanding RINs and serving the needs of renewable fuel blenders.”

RINAlliance has established a network of qualified renewable fuel producers by working with EcoEngineers to qualify production and RINs. According to RINAlliance, this network allows its blenders access to top tier pricing of their RINs through negotiated contracts with obligated parties while protecting them from regulatory perils.

The House Energy and Commerce Committee on the Renewable Fuel Standard (RFS) recently released a second white paper, “Agricultural Sector Impacts,” in an effort to make decisions on the future of the RFS. Comments were due today and in response, Brian Jennings, Executive Vice President for the American Coalition for Ethanol (ACE) notes that the RFS is a catalyst for agricultural innovation worldwide.

Regarding the RFS and U.S. agriculture: “The RFS provides an economic incentive for scientists and technology firms to help farmers sustainably produce significantly more bushels of corn on an acre of existing cropland. Since the RFS was enacted in 2005, these advancements, such as new seed varieties and more sustainable tillage practices, have enabled U.S. farmers to produce, on average, nearly 20 additional bushels of corn per acre than before.  Still more innovations, like drought-tolerant genes, are being developed to improve corn yield further.  The 2012 drought-ravaged corn crop was twice as large as the drought-ravaged crop of 1988 and three-times larger than the U.S. corn crop 50 years ago.  None of this progress would have been possible without the RFS.”

Regarding the RFS and global agriculture: “From 2000 to 2011, a timeframe which includes when the idea for the RFS was developed by ACE, when it was enacted by Congress, and implemented by EPA, world corn production rose 12 billion bushels as 43 nations, mostly in Africa and the former Soviet Republic, doubled their production of corn. Repealing the RFS would simply discourage farmers around the world from planting corn, which runs contrary to what the meat and livestock groups supporting repeal want.”

Regarding the RFS and food prices: “Despite the hysteria created by oil companies who oppose the RFS because it enables renewable fuel to compete for market share with petroleum, and food manufacturers who oppose the RFS because they feel entitled to cheap corn forever, the facts indicate virtually no correlation between the RFS or prices farmers receive for corn and retail food prices.  When we pay $1 for groceries, about 14 cents goes to the farmer. About 35 cents of that dollar pays for the energy to make, transport, process, and preserve the food we buy. When oil prices rise, so do food prices. If policymakers genuinely want to reduce food prices, they should support the RFS because it replaces petroleum with renewable fuel.”

“Special interests who profited handsomely in the past from corn prices that averaged $2 per bushel and who are today heavily lobbying the Congress to repeal the RFS, profited on the backs of American taxpayers who were paying for multi-billion dollar commodity support programs under previous farm bills,” added Jennings. “With global oil demand on the rise and global oil prices at a new equilibrium, it is highly unlikely those special interests who feel entitled to cheap corn forever will get their wish.”

Trader CME Group will be offering nine new futures contracts for Renewable Identification Numbers (RINs) for biodiesel and ethanol, among other renewables. This company news release says they’ll be listed by and subject to the rules and regulations of NYMEX.

“With the recent increase in volatility in RINs prices, we’ve seen strong interest from our customers and other market participants for cost-effective ways to manage their risk in this market,” said Gary Morsches, Managing Director Global Energy, at CME Group.

• D6 Ethanol

They’ll be settled based on Argus Media’s prices for RINs and are touted as a useful hedge for the price risk associated with the Renewable Fuel Standard (RFS2).

The Iowa Renewable Fuels Association (IRFA) today congratulated the Iowa Senate for voting unanimously to pass Senate Concurrent Resolution No. 5 (SCR 5) that  urges the United States government to continue its commitment to energy independence and maintain its support of the federal Renewable Fuel Standard (RFS).

SCR 5, in part, states: “The United States government is urged to renew its commitment to this nation’s energy security, move the United States toward greater energy independence and security as required by the federal Energy Independence and Security Act, and use all efforts to meet the highest possible renewable fuel volume requirements set forth in RFS2 in order to ensure that this nation achieves energy independence.”

“I commend the Iowa Senate for showing solidarity with the Iowa Congressional delegation by urging the federal government to stand behind the federal RFS, our nation’s most successful energy policy,” stated IRFA Executive Director Monte Shaw. “The RFS forms the bedrock of Iowa’s economic resilience – creating good-paying Iowa jobs, boosting Iowa’s farm income, and reducing prices at the pump for Iowa consumers.  The RFS is vital to Iowa’s economic future and IRFA will oppose any effort to undermine it.”

Randy Olson, CEO of the Iowa Biodiesel Board said of the bill, “The legislature’s resolution makes clear our state’s commitment to renewable fuels like biodiesel, and shows backbone to the few but vocal opponents of the RFS-2. It is gratifying to see continued support from our state’s leaders, who recognize the RFS and federal tax incentive for biodiesel as smart energy policy living up to their promise.  On behalf of the biodiesel industry in Iowa, we thank the state legislature for standing up for biodiesel.  It’s not only in our state’s best interest, but also our nation’s, and we’re proud to see Iowa once again at the forefront of leadership in this important industry.”

The bill passed by a vote of 50-0 and now goes to the Iowa House for consideration.

How can we tell the Renewable Fuels Standard (RFS) is working? By how nervous it’s making the big oil companies. That was the message attendees at the Advanced Biofuels Leadership Conference near Washington, D.C. heard.

“We are disrupting an existing marketplace,” says Brooke Coleman, Executive Director of the Advanced Ethanol Council. “We are not social media. We are not creating a new search engine. We are not doing something new… we just happen to be doing what other people are doing, better.”

Brooke says that has made some pretty powerful enemies of biofuels, who are spending a lot of money to destroy the biofuel brand … from corn ethanol to biodiesel to cellulosic biofuels. But he’s confident their attempt to change the Clean Air Act, and thus the RFS, will fail, ultimately because of the political allies biofuels have made.

“You’ve got Republicans and Democrats who see this thing [RFS] work, create jobs … just shy of 400,000 … and it’s just hard to change,” adding the political environment is not conducive to wholesale changes to either the Clean Air Act or the RFS.

Brooke says the diverse group that makes up the biofuels coalition is more together than ever, with efforts like Fuels America, a coalition to protect the RFS and the renewable fuels industry, and more collaboration than ever … without getting hung up on differences within the biofuels sector.

“We don’t agree on everything, [but] the trick is not to get so focused on the one or two things we don’t agree on … and focus on what we DO agree on.”

Listen to more of my interview with Brooke here: Brooke Coleman, AEC

This afternoon, Reps. Bob Goodlatte (R-VA), Jim Costa (D-CA), Steve Womack (R-AR), and Peter Welch (D-VT) released the RFS Reform Act in the U.S. House of Representatives. During a press conference to “unveil:” the bill Goodlatte said, “The RFS debate is no longer just a debate about fuel or food. It is also a debate about jobs, small business, and economic growth. The federal government’s creation of an artificial market for the ethanol industry has quite frankly triggered a domino effect that is hurting American consumers, energy producers, livestock producers, food manufacturers, and retailers. The broad coalition of organizations supporting this legislation echo the same sentiment: the RFS is not working.”

The representatives say that the RFS is causing food prices to go up, and has not provided relief for consumers at the pump.  In fact, they say, citing the RFS, the EPA is setting the target for refiners to blend cellulosic biofuels into gasoline higher than the amount of cellulosic biofuels that exists. When these non-existent fuels cannot be blended refiners are financially penalized, which ultimately gets passed on to consumers at the pump.

Goodlatte added, “The RFS Reform Act will eliminate corn-based ethanol requirements, cap the amount of ethanol that can be blended into conventional gasoline at 10 percent, and require the EPA to set cellulosic biofuels levels at production levels. Renewable fuels play an important role in our energy policy but should compete fairly in the marketplace. This legislation will bring the fundamental reform this unworkable federal policy needs now.”

The RFS Reform Act is supported by a diverse group of more than 40 organizations.

The renewable fuels industry is aghast at the bill saying it would impede the progress of the renewable fuels industry and takes the choice out of the hands of consumers,  all while protecting the virtual monopoly that oil companies have over America’s transportation fuels.
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Growth Energy and its members are heading to Capitol Hill today to meet with legislators regarding the benefits of the ethanol industry. In particular, participants will discuss the value of E15, the Renewable Fuel Standard (RFS) and the issues surrounding Renewable Identification Numbers (RINs). This morning, the Growth Energy leadership team, CEO Tom Buis, and Co-Chairmen of the Board General (Ret.) Wesley Clark and Jeff Broin (POET) held a brief press call to discuss their efforts on the hill.

During the call, Jeff Broin explained that the RFS guarantees market access to renewable fuels because the volume of ethanol in the market is controlled by the competition, the oil industry. Today, the 10 percent goal that has been created by all the laws (10 percent of all fuel blended in the U.S. contains ethanol) but the potential is much larger. Broin said the country could be at 30 percent of the fuel by 2022 if we meet the RFS goals.

Broin noted that the oil industry has done everything it can to bar market access for E15 from erecting legal and regulatory challenges to a very expensive PR campaign with misinformation. But for the RFS to be successful, the blend wall must be scaled and this can be done by allowing consumer choice at the pump with E15.

General Clark noted that the RFS is the most successful energy policy the U.S. has seen in 40 years. It’s working. But people, such as the oil industry, food industry and the poultry industry would like consumers to believe this is not the case.

“When you open market access,” said Clark, “the market will sort itself out if given the chance. “But when you’re dealing in the fuels business you’re going against the greatest economic force on the planet, which is the petroleum industry. And they’re doing everything in their power, including working through non-governmental organizations, some governments, warning them,imploring them not to move away from their exclusive reliance on petroleum. It just shouldn’t be.”

“So the RFS is the lead effort in the move to break the monopolistic grip of the petroleum industry on liquid fuels. And we’re right now with the RFS where we’re really getting traction,” Clark concluded.

Listen to the press conference here:Growth Energy Heads to the Hill

The Iowa Renewable Fuels Association (IRFA) has submitted a letter responding to the House Energy and Commerce Committee’s request for stakeholder comment on the Committee’s white paper regarding the so-called blend wall.

IRFA Policy Director Grant Menke stated, “Our stakeholder comments focused on three main points. First, there is no valid E10 blend wall. The blend wall vanished as soon as EPA approved E15—in the most extensive testing of any fuel in history—for 2001 and newer vehicles. 

Second, the oil industry has taken specific actions and inactions to attempt to build a bogus blend wall, brick by brick, to undercut the RFS and protect its virtual monopoly over the transportation fuel marketplace. We detail these deliberate Big Oil obstruction efforts in our comments and explain how these ‘bogus blend wall bricks’ could be removed immediately by the oil companies if they chose to do so. 

Third, the RFS is working and must be preserved. To gut the RFS would preserve the oil monopoly, reward the bad actors who have spent years undermining the RFS instead of preparing for it, and deprive consumers of more choices at the pump—choices that are cleaner, cheaper and homegrown. The fundamental intent of the RFS was to crack the petroleum monopoly, and it is on the verge of doing so if Congress allows it to keep working.”

Click here to read IRFA’s full comments.

The renewable fuels industry is responding to the U.S. Environmental Protection Agency’s (EPA) notice of proposed rulemaking regarding 2013 Renewable Fuel Standard (RFS) required volumes. EPA proposes to set ethanol gallons at 14 million but where the real debate has lain is around the requirement for cellulosic gallons.

The Renewable Fuel Association (RFA) submitted comments with four key points:

1. EPA should revise its proposed 2013 cellulosic biofuel standard to better correspond with current expectations of actual 2013 cellulosic biofuel production volumes.

2. EPA should partially reduce the 2013 advanced biofuel standard, as sugarcane ethanol imports are unlikely to be available in sufficient volumes to meet the requirement.

3. Because there are legal and economical options available for surmounting the “blend wall”, the E10 saturation point should not be a factor in EPA’s decision-making process for 2013 RVO levels.

4. EPA should propose 2014 RFS standards as expeditiously as possible and ensure the 2014 RVOs are established no later than Nov. 30, 2013.

“To ensure the RFS continues to be implemented in the most effective way,” said Bob Dinneen, RFA CEO & president,
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The American Fuel and Petrochemical Manufacturers (AFPM) held teleconferences last week in an effort to discredit the Renewable Fuel Standard (RFS). During the call, AFPM blamed increased gas prices on renewable fuels, which, says, Tom Buis, CEO of Growth Energy, is false.

“Manipulating data and spreading misinformation is not the way to educate lawmakers and drive policy decisions. Our energy security is a matter of domestic and national security, and the fact is the fossil-fuel-only approach of oil companies and refiners will do nothing for our growing energy needs except continue to feed our addiction to foreign oil and line the pockets of oil executives,” said Buis, who released the following statement.

“It seems unconscionable that AFPM would state that the presence of E15, the most tested fuel ever, would limit consumer choice if offered in the marketplace. However, when it comes to oil companies and refiners, they will say and do anything to protect their interests and bottom line. While they pretend to advocate for the consumer, they are actually intentionally blocking a choice and savings at the pump, while taking in excessive profits at the consumer’s expense.

“With regards to RINs, what we have here is a classic example of unregulated market manipulated by oil companies running wild. The biofuels industry creates RINs, but they have no place in the trading market – that is between oil companies and refiners. They are the ones driving this entire process, intentionally driving up prices as a way to blame other industries for their increasing profits and unending costs at the pump. I welcome Congressional oversight and an investigation to shed some daylight on these questionable practices.

“It is time for oil companies and refiners to get out of the way and let consumers and retailers make the voluntary decision to use higher fuel blends, such as E15. I am confident that once E15 becomes widely available, consumers will chose the homegrown fuel that helps support our economy and is better for our environment. And that is exactly what oil companies and refiners are afraid of – losing market share through fair market competition. So, they will stop at nothing to distort the facts and bend the truth to maintain the near monopoly they have on the liquid fuels market.

“Enough is enough – it is time to identify this ongoing blame game for what it actually is – an orchestrated sham by the oil companies and refiners to manipulate markets, cause panic and attempt to use false data to blame an industry that has grown to be a threat to their record profits and bottom lines.

“Bottom line – ethanol saves consumers at the pump and any information stating otherwise is simply false.”