EPA Fools Ethanol Advocates – Merle Anderson

The following is a guest editorial by American Coalition for Ethanol founder Merle Anderson.

merle-headI just want to remind EPA and Big Oil that I am still around. Since organizing the American Coalition for Ethanol nearly 30 years ago I have just celebrated my 93rd birthday.

I am damn mad because I think we’ve let EPA fool us into letting the fraudulent 10 percent ethanol blend wall stand. It has collapsed grain markets by dishonestly ending ethanol’s growing demand for corn and they call that free enterprise. I call it stealing many, many billions of dollars from agricultural economies.

That blend wall exists because EPA fooled people into thinking it is legitimate because fueling standard cars with E30 illegally increases gasoline’s hazardous emissions. Ever try drinking gasoline? My friend Orrie Swayze’s research agrees that E30 reduces gasoline’s hazardous emissions by 30% because, unlike gasoline, ethanol does not produce known human carcinogenic tailpipe emissions.

I also find it laughable that EPA claims E30 can harm standard auto engines. Show me a legitimate warranty denial. I have never owned a flexible fuel vehicle and fueled my last 7 vehicles with half E85 or used E30 through blender pumps to travel over 600,000 miles. When I traded in the vehicles, the engines were still in top condition.

When blender pumps were installed for the first time, I started hearing many positive remarks about ethanol’s engine performance. EPA tries to deny that standard auto owners have successfully driven millions of miles annually on popular, high octane E30 since blender pumps were installed five years ago. Our typical report still is “more power and can’t tell any difference in mileage compared to E10.”

I challenge agricultural and ethanol leaders to dare and expose EPA’s lies that built the blend wall. I also urge that you use E30 in standard vehicles and openly endorse premium E30 as the legal, safest, best, lowest cost fuel choice on the market today for standard vehicle owners.

Merle Anderson
Climax, MN

Ethanol Advocacy App

ethanol-report-adIf you’re an ethanol advocate, there’s an app for that from the Renewable Fuels Association (RFA).

In this edition of the Ethanol Report, RFA president and CEO Bob Dinneen talks about the new app, what it does, who should use it, and why they developed it. He also comments on when we might yet see a final rule on the 2014 volume requirements under the Renewable Fuel Standard and how railway transportation issues continue to impact the industry.

Ethanol Report on New Advocacy App

Algal Industry Questions Focus on Biofuels, America

Matt Carr, joined the Algae Biomass Organization this past June as the executive director coming from the BIO (Biotechnology Industry Organization) where he was introduced to algae and the algae story and he thought this is where the country should be going in terms of sustainable fuels. Carr joined Joe Jobe, NBB and Michael McAdams, Advanced Biofuels Association on a panel to give attendees of the 2014 National Advanced Biofuels Conference a policy update and industry outlook for advanced biofuels.

“We’re in a tough spot,” said Carr when asked the state of the algal industry. “The advanced biofuels sector grew up on the backs of strong federal policy support, R&D funding from the Department of Energy in the early days along with the nabce-14-carrRenewable Fuel Standard (RFS) and tax policy. Right now all of those areas are uncertain and its causing our members and other across the advanced biofuels industry to question their focus on fuels and their focus on America and to look at other markets in other countries to potentially deploy that technology.”

With elections coming up, Carr was asked if he thinks the political environment will change. He said that the industry is at a point now where it has to see something change. “When we have conservative Republicans recognizing its Washington getting in the way of American innovation and job creation we’ve reached a tipping point.”

What stood out for Carr as part of the panel was the shared sense of frustration with Washington. But he is hopeful that both sides of the spectrum can come together and recognize the opportunity the country has in advanced biofuels.

Interview with Matt Carr, Algae Biomass Organization
Remarks from Matt Carr, Algae Biomass Organization

2014 National Advanced Biofuels Conference & Expo Photo Album

Coverage of The Advanced Biofuels Conference and Expo is sponsored by
Coverage of The Advanced Biofuels Conference and Expo is sponsored by New Holland

Tips for Biofuel Investment In Turbulent Times

As a biofuels plant, how do you make sound plant management and investment decisions in an environment of political turmoil? This was the theme of one of the panel discussions during the 2014 National Advanced Biofuels Conference that nabc plant management paneltook place in Minnesota this week. The conversation focused on how the uncertainty surrounding the Renewable Fuel Standard (RFS) that has not been finalized for 2014 as of this writing, affects decisions made for biofuels plants. The panelists discussed tips and strategies on how they try to keep their business healthy and growing while also trying to position themselves for continued, future success.

Insights were given by Mike Jerke, CEO, Guardian Energy Management LLC; Brian Kletscher, CEO/General Manager, Highwater Ethanol; and Randall Doyal, CEO/General Manager, AL-Corn Clean Fuel who all run currently operating ethanol production facilities. While each one pointed to the prices of feedstocks as being the number one cost of production (feedstock costs are 80 percent of a plant’s production costs) there are other ways to streamline efficiencies to stay competitive and one strategy is to diversify into bolt on advanced biofuels technologies.

Doyal noted that the big takeaway for the attendees was that the existing ethanol industry is looking at those next generation biofuel opportunities. “They look down the road all the time, and that the existing ethanol plants are not Gen 1 – we’re way down the road from Gen 1. We’re far more advanced than that and we look forward to bringing that type of thinking into advanced biofuels,” Doyal said.

When focusing on policy, Doyal said policy directly affects a plant when it decides how to deploy its capital. “If you have uncertainty in policy, it creates an uncertain environment in the lending community and it creates uncertainty in your own board room.”

Doyal stressed, “If you don’t have good, consistent, clear policy, it’s hard to figure out your path forward.”

Listen here to Chuck’s interview with Randall Doyal speaking about how policy uncertainty affects plant decisions: Interview with Randall Doyal, AL-Corn Clean Fuel

Click here to listen to the comments of the three panelists:
Remarks from Mike Jerke, Guardian Energy Management
Remarks from Brian Kletscher, Highwater Ethanol
Remarks from Randall Doyal, AL-Corn Clean Fuel

2014 National Advanced Biofuels Conference & Expo Photo Album

Coverage of The Advanced Biofuels Conference and Expo is sponsored by
Coverage of The Advanced Biofuels Conference and Expo is sponsored by New Holland

NBB Cautiously Optimistic About RFS

“We’ve exceeded the goals of advanced biofuels. Then we had the devastating proposed rule that has gone on for a year now. We are cautiously optimistic that we’ll have something here within the next few weeks and that it will be positive,” said Joe Jobe, CEO of the National Biodiesel Board (NBB) who was one of the panel members of panel that discussed federal biofuels policy and the long-term prognosis of the advanced biofuels industry. The discussion was part of the National Advanced Biofuels Conference that recently took place in Minnesota and also included a robust discussion on the Renewable Fuel Standard (RFS).

nabce-14-Joe Jobe NBBJobe noted that the biofuels industry and particularly the advanced biofuels industry is beleaguered. “We’ve been under attack by uncertain policy signals, but we need to keep up the fight and double down on the fight. We need to get more of our message out there. We need to get more involved in policy advocacy, we need to get the RFS working again,” said Jobe.

The industry has demonstrated the RFS can work well said Jobe. “We created it to be a stable energy policy.”

Last year was a record breaker for the biodiesel industry – it grew from producing just over one billion gallons in 2012 to just under 2 billion gallons in 2013. “Advanced biofuels are here. The industry has exceeded the goals of advanced biofuels,” Jobe stressed.

The policy discussion will continue during the 2015 National Biodiesel Board Conference & Expo taking place in Ft. Forth, Texas January 19-22. Registration is open.

Jobe urges the industry to step up its advocacy efforts and its policy efforts to ensure the future of the advanced biofuels industry.

Interview with Joe Jobe, National Biodiesel Board
Remarks from Joe Jobe, National Biodiesel Board

2014 National Advanced Biofuels Conference & Expo Photo Album

Coverage of The Advanced Biofuels Conference and Expo is sponsored by
Coverage of The Advanced Biofuels Conference and Expo is sponsored by New Holland

Small Biodiesel Maker Closing Indicative of RFS Problem

yokayo1While the closing of one small biodiesel maker in California might not seem like big news, it’s certainly indicative of the problems facing the industry, big and small producers alike. This story from the Ukiah (CA) Daily Journal says that Yokayo Biofuels, which turned waste cooking oil into biodiesel, has closed.

[Kumar Plocher, Yokayo Biofuels' CEO] says the biggest reason for their closure was due to a lack of government support both at the state and federal levels. He explains that the carbon credit programs, those where petroleum companies are required to buy a certain amount of renewable fuels, allowed his company to bank carbon credits, normally valued high based on demand. This year state and federal value levels were very low: the state’s due to tampering by global companies that flooded the market and at the federal’s due to the Obama administration and the EPA. “Every year the federal government is supposed to raise the requirement of renewable fuel that should be purchased. At the beginning of 2014, they did not do that; they kept it static. They waited until September to announce a tiny increase, and by that time the damage was done and carbon credits were worthless all year. Every mid-term election year, the dollar per gallon subsidy that goes to biofuels has been absent; they wait until after the election.”

Plocher’s complaint is a common one among advanced biofuel makers and their advocates this year. In fact, at the recent National Advanced Biofuels Conference & Expo, Michael McAdams, founder and president of the Advanced Biofuels Association, said the partnership between the federal government and industry has to have clarity and certainty, but that’s not been the case lately.

“What we haven’t had in the last two years is certainty for the people I represent in the advanced and cellulosic sector,” McAdams said.

Similarly, Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA), pointed to the U.S. Department of Agriculture’s estimates that corn prices will hit an eight-year low because of the government’s failure to follow through on the promises made in the Renewable Fuel Standard (RFS).

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments.”

There is a little good news in all of this. Plocher was able to sell Yokayo Biofuels’ biodiesel assets to like-minded Simple Fuels.

East Kansas’ Jeff Oestmann Featured on Car Clinic

Bobby Likis Car ClinicThe ethanol industry was well represented on the nationally syndicated car-talk program “Bobby Likis Car Clinic” when Bobby Likis spoke with East Kansas Agri-Energy’s President and CEO Jeff Oestmann. The show aired Saturday, October 11, 2014 and the two ethanol advocates chatted about local, regional and national issues surrounding ethanol production.

Oestmann, whose career spans 20 years in the bioenergy and grain processing industries, currently serves on the Board of Directors of both the Renewable Fuels Association (RFA) & Kansas Association of Ethanol Producers. During the program, Oestmann discussed the consumer benefits of ethanol production and its impact on local communities and the U.S. economy. Oestmann is a non-commissioned officer who served in the U.S. Marine Corps for 11 years, including service in the USMC’s elite Embassy Guard.

Jeff Oestmann East Kansas Agri-Energy“I have a question slate lined up for Jeff that addresses ethanol and the Renewable Fuel Standard (RFS), the U.S economy, engine performance and national security. Consumers – and American citizens – need to hear the message,” said Likis.

Oestmann shared many facts during the program. “We use cutting edge technology at East Kansas Agri-Energy to produce high-quality ethanol that helps consumers save an average of $1.00 per gallon at the gas station and also benefits our environment by reducing greenhouse gas emissions. We put a high priority on innovation, and the biofuels we produce – including next generation renewable diesel – help reduce America’s dependence on foreign oil, which in turn bolsters America’s national security.”

Click here to listen to Oestmann’s interview.

State of the Advanced Biofuels Industry

nabce-14The National Advanced Biofuels Conference & Expo opened with a conversation about the current state of important federal biofuels policies, including the status of the Renewable Fuel Standard (RFS).

Among those on the opening panel was Michael McAdams, founder and president of the Advanced Biofuels Association, who talked first about the state of his industry. “There’s an old expression ‘you’re either the bug or the windshield,'” he said. “Unfortunately, in my own association, about 15% (of my members) have become bugs.”

nabce-14-mcadamsThe reason for that, says McAdams, is the uncertainty surrounding federal biofuels policy. “The partnership between the federal government and industry has to have clarity and certainty,” he said. “What we haven’t had in the last two years is certainty for the people I represent in the advanced and cellulosic sector.”

In an interview after the panel, McAdams described the state of the advanced biofuels industry right now as being in “suspended animation” waiting for clarification on policy including volume obligations under the RFS and pathways for new technologies.

Regarding the RVO, McAdams notes that at this point, with no final numbers for this year yet, the administration needs to be focused on rulemaking for 2015. “I’m assuming the week after the election or maybe Friday before the election we’ll see the numbers (for ’14),” said McAdams. The problem with that is that the 2015 numbers are due November 30 “so one could make a rational case that the numbers they actually publish are the numbers for ’15, not for ’14.” He adds that the administration has already said they expect it will be February before they proposed the 2015 volume obligations.

McAdams urges the advanced biofuels industry to keep working “to deliver the innovative fuels of the future.”
Interview with Mike McAdams, Advanced Biofuels Association
Remarks from Mike McAdams, Advanced Biofuels Association

2014 National Advanced Biofuels Conference & Expo Photo Album

Coverage of The Advanced Biofuels Conference and Expo is sponsored by
Coverage of The Advanced Biofuels Conference and Expo is sponsored by New Holland

Crop Report Underscores Need for Market Certainty

The U.S. Department of Agriculture (USDA) has released new corn crop estimates that confirm another record setting corn crop and after accounting for the surplus after all demands are met, will hit a 10-year high. The WASDE report predicts the final 2014 corn crop at 14.48 billion bushels based on a record average yield of 174.2 bushels per acre In addition, WASDE estimated global grain stocks will reach a 14 year high.

While the corn crop is at record levels, corn prices are falling. USDA projected prices will average $3.40 per bushel – the lowest in eight years. This is also below the cost of production for more farmers.

“API [American Petroleum Institute] has spent millions upon millions of dollars on ad campaigns trying to sell people on the canard that ethanol drives up food prices in a misguided attCorn Harvestempt to garner opposition to the Renewable Fuel Standard (RFS),” said Bob Dinneen, CEO and president of the Renewable Fuels Association (RFA). “But their argument is bankrupt. Because of the RFS, farmers have invested in technology and increased yields to assure ample supply for all users. Today’s report demonstrates the API campaign is intellectually dishonest.

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments. The White House has an opportunity to help alleviate this situation simply by fixing the badly misguided 2014 RFS proposal and getting the program back on track.”

Fuels America Is Spilling the ‘Oil’

Fuels America is spilling the oil detailing the amount of money Big Oil has spent to “rig the political system” with lobbyists and campaign cash since 2008. Using data from opensecrets.org, the oil industry has spent more than $1.1 billion, $961 million lobbying Congress and $146 million in campaign contributions. This equates to more than $2 million for each member of Congress. The coalition said a significant amount of the funds were used to “block renewable fuels” and to “rig Congress and campaigns” across the U.S.

The oil industry reaped $93 billion in profits last year and continually receives sweetheart tax breaks upwards of $470 billion and counting, while renewable fuels generate $14.5 billion in tax revenue every year.

Meanwhile, said Fuels America, the oil lobby has continued to fight to kill the Renewable Fuel Standard (RFS), which would permanently outsource thousands of American jobs and increase our reliance on foreign oil from hostile and unstable regions. The coalition has urged President Obama to resist pressure from the oil lobby and reject an Environmental Protection Agency (EPA) proposal to gut the RFS.

Rigging the Tax Code ad

The ads, which will run for the next week, link to a page that breaks down the numbers and invites Americans to join the fight against oil industry efforts to rig the system and block competition from renewable fuels. They can be seen on sites such as POLITICO.com, RollCall.com and TheHill.com.

Minnesota Bio-Fuels Association Working for You

The Minnesota Bio-Fuels Association is working on behalf of the biofuels industry and consumers throughout Minnesota. With several successes under their belt, the Association has identified several more goals they would like to achieve on behalf of the biofuels industry over the next few years.

“We are hopeful the next two years will lead us into opportunities to develop higher usage of ethanol blends, in particular we will work hard on promoting usage of E15 in 2001 and newer vehicles,” said Brian Kletscher, CEO of Highwater Ethanol and President of the Highwater Ethanol Aerial PhotosBoard of the Minnesota Bio-Fuels Association. “To help accomplish this we have hired a Biofuels Marketing Manager, this will allow us to directly communicate with the many gas station owners in the State of Minnesota and give them guidance on how to bring in E15 to their gas station while providing and economic benefit to them as owners while also passing on a savings to their customers in lower cost for E15.”

Tim Rudnicki, executive director of the Minnesota Bio-Fuels Association echoes Kletscher’s goal. In addition, Rudnicki said they are continuing to increase the use of E85. “Sales of E85 in Minnesota have been on the rise but there is still plenty of room to grow. There are many flex-fuel vehicle owners who don’t know the benefits of using E85 or even the fact that it’s 80 cents cheaper per gallon on average in Minnesota.”

When asked if the biofuels industry would have seen as many successes without the Minnesota Bio-Fuels Association, Kletscher said while the industry was growing prior to the formation of the Association, by working with Minnesota Corn Growers Association, Soybean Growers Association and other ethanol related organization, the formation of the Association has allowed the ethanol industry and biofuels industry the opportunity to branch out and grow in supporting and promoting the usage of their products.

“While doing this we have maintained a strong relationship with the associations and related organizations that walked with and grew the biofuels industry to the point that it is today,” said Kletscher.

However, as Rudnicki identifies, the political landscape will have an effect on their work but for the most part, the view of biofuels is positive. “We are fortunate that many of our federal and state-level senators and representatives are supportive of biofuels and support measures to increase its usage,” he said. “We work closely with many of them and they understand how important biofuels are to the economy in Minnesota and its role in reducing prices at the pump, greenhouse gases and our dependence on foreign oil. Biofuels are the only viable solution to removing our dependence on harmful fossil fuels and many of them understand that.” Continue reading

Ethanol Report with New RFA Chairman

ethanol-report-adRandall Doyal, General Manager and CEO of Minnesota-based Al-Corn Clean Fuel, is the new Chairman of the Board of Directors for the Renewable Fuels Association (RFA).

rfa-doyal-1Doyal’s plant located in Claremont, Minnesota opened in 1996 and now produces 50 million gallons annually. In this interview, he talks about some of the challenges and opportunities facing the ethanol industry in the immediate future. Challenges include the lack of certainty surrounding the Renewable Fuel Standard (RFS) and railway transportation problems, while the importance of ethanol as a higher octane fuel and increasing exports are rising opportunities.

Ethanol Report with New RFA Chairman

Governors’ Biofuels Coalition: Restore RFS

The Governors’ Biofuels Coalition has sent a letter to the Obama Administration urging action on the Renewable Fuel Standard (RFS) and for the restoration of biofuel levels as designated by the mandate. This, the group said, will protect consumer choice, ensure jobs and reduce dependence on foreign oil. The initiative was led by Governor Pat Quinn and Iowa Governor Terry Branstad, chairman and vice chairman of the Governors’ Biofuels Coalition.

In the letter, the govegovernor-biofuelsrnors write, “The continued expansion of the biofuels industry is essential for our nation’s energy and economic future. Through continued expansion of biofuels plants, it will be possible to deliver millions of gallons of clean, renewable fuel, create thousands of jobs, lower imported oil expenditures, and reduce greenhouse gas emissions by more than 80 percent, compared to gasoline.”

The governors also expressed their concern about the impact the Environmental Protection Agency’s (EPA) proposed rule will have on biodiesel. “The EPA’s proposed volume cuts for biodiesel are creating turmoil, resulting in production cutbacks and layoffs. More than halfway through the year, many jobs are in jeopardy and many biodiesel plants have been negatively impacted.”

The letter highlights the impact that the EPA’s proposed rule has had on the emerging cellulosic industry: “[T] he proposed RFS rule has discouraged new investment in the newly emerging cellulosic ethanol industry and now threatens the many new plants about to go into commercial production.”

The letter concluded, “Amending the proposed rule to one that will build and restore America’s robust leadership in the development and production of domestically produced renewable fuels is crucial in ensuring a successful future in rural America.”

Fuels America Campaign Focuses on Nat’l Security

As the U.S. government fights ISIS, this week oil fields became a target in the war on terror Fuels America is running a new series of ads online, radio, cable and in the Washington, D.C. market. The ads tell the public and decision makers that the Renewable Fuel Standard (RFS) could end American’s addiction to foreign oil. The radio ads will run for one week, and the television ads will run during the Sunday morning talk shows as well as Sunday, Monday and Tuesday programming.

The ad warns that the Obama Administration’s proposal to gut the RFS would leave America’s renewable fuel industry—and the thousands of American jobs it supports—at the mercy of the oil industry. Meanwhile, maintaining a strong Renewable Fuel Standard would support American innovation and thousands of American jobs that can’t be outsourced.

The President’s decision on the EPA’s proposal is expected in the coming days. It is currently under review with the Office of Management and Budget and it is not actually known if the final volumes will be lower than the year before and lower than mandated by the legislation. Fuels America points out this the public unveiling of the final 2014 rule comes as oil producing regions around the world remain unstable. As a net importer of oil, every gallon of domestic biofuels the U.S. produces means less foreign oil we must import from hostile foreign regions.

Those ads come alongside a digital campaign that includes a Politico Morning Energy Sponsorship by the Fuels America coalition, which says “Despite the mess in the Middle East, the Obama Administration is calling for a 1.3 billion gallon cut in America’s renewable fuel production—making us even more foreign oil dependent,” and “With turmoil in the Middle East, this isn’t the time to cut back on the clean, domestic alternatives to foreign oil.”

EPA Inaction on RFS Increasing GHG Emissions

According to a new white paper, inaction by the Environmental Protection Agency (EPA) on finalizing the 2014 Renewable Fuel Standard (RFS) rules is increasing greenhouse gas emissions (GHG) equal to 4.4 million additional cars on American roads. The paper, published by the Biotechnology Industry Organization (BIO) updated earlier estimates of GHG emissions due to the proposal to reduce biofuel use during 2014.

Brent Erickson, executive vice president of BIO’s Industrial & Environmental Section, said, “During the U.N. Climate Summit this week, the Obama administration is sure to promote the regulatory actions it has taken to reduce climate change emissions from stationary sources such as power plants. But regulatory inaction on the RFS has opened the door to an increase in greenhouse gas emissions from the transportation sector.”

BIO logo“Last November, EPA proposed a steep reduction in the use of biofuels in order to avoid hitting the so-called blend wall – a proposal the administration still has not finalized,” continued Erickson. “What the agency failed to consider is that demand for transportation fuel has been increasing – the United States is now using several billion gallons more gasoline and diesel than projected. The so-called blend wall is an invention of the oil industry and has simply been a red herring.”

In March 2014, Erickson and coauthors published the study, “Estimating Greenhouse Gas Emissions from Proposed Changes to the Renewable Fuel Standard Through 2022.” That study demonstrated that if EPA reduced biofuel use under the RFS, as the agency proposed in November 2013, the U.S. would experience an increase in greenhouse gas emissions and forego an achievable decrease in emissions.

In the updated white paper uses new data on transportation fuel demand for 2013 and 2014. The U.S. is now projected to use 2 billion gallons more gasoline and 0.5 billion gallons more diesel in 2014 than previously projected.

Erickson concluded, “The administration must finalize the 2014 Renewable Fuel Standard using a methodology based on biofuel production and continue the program’s successful support for commercialization of advanced and cellulosic biofuels. The renewable fuel industry has already created hundreds of thousands of good jobs and boosted economic growth.”