Attempt to Preserve Petroleum Mandate Moves through Committee
The House Science Committee recently approved a bill that would require even more study of E15 blends than the millions of miles of testing already conducted by the Department of Energy and EPA. This would delay consumers from seeing E15 by dragging out EPA’s implementation through unneeded and duplicative regulation.
The following is in response to the Science, Space, and Technology Committee’s Energy and Environment Subcommittee markup on E15 legislation, which is sponsored by Rep. James Sensenbrenner (R-Wis.).
"With many members of Congress complaining about the federal government impeding the ability of small businesses to create jobs, this bill would inject parochial politics into the scientifically established process of approving new fuels,” Renewable Fuels Association President and CEO Bob Dinneen said. “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. To suggest more testing is needed is nothing more than a stall tactic that has but one outcome – our continued addiction to oil."
“This is a waste of time and a waste of taxpayer dollars. No fuel blend has been tested as thoroughly as E15. No fuel blend has undergone the level of scrutiny E15 has – and passed the tests like E15 did,” Growth Energy CEO Tom Buis said. “They’ve been looking at E15 for more than three years. Now Rep. Sensenbrenner wants to move the goal posts again – a move that would only add more red tape and regulation. This would do nothing to help the American consumer, but only continues our reliance on the OPEC monopoly.”
The Green Jobs Waiver for E15 was accompanied with more independently-gathered data, science and research in its support than any of the other 11 Clean Air Act waivers previously approved by the U.S. EPA. A full move to E15 creates a bigger market for American ethanol that could help create as many as 136,000 new jobs in the United States and eliminate as much as 8 million metric tons of GHG emissions from the air in a year — the equivalent of taking 1.35 million vehicles off the road.
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NBB Holds DC Fly-In to Advocate for 2013 RFS Program
Recently, National Biodiesel Board (NBB) members from nine states flew to Washington, DC and met with White House officials, agency representatives and members of Congress to promote the expanded role of biodiesel in the Renewable Fuel Standard (RFS) program. Specifically, members raised awareness on the importance of adopting EPA’s proposed RFS volume increase for biomass-based diesel to 1.28 billion gallons in 2013.
"We took the opportunity of the fly-in to arrange a meeting with White House officials and a handful of our members to talk about the industry's priorities," NBB spokesman Ben Evans explained to OPIS. "About a half dozen" NBB members took part in the White House meeting, he said, with a discussion on maintaining the biomass-based diesel portion of the renewable fuels standard and extending the $1/gal biodiesel tax incentive, which expired at the end of 2011.
The full NBB delegation consisted of more than two dozen members representing Iowa, North Carolina, Pennsylvania, Missouri, Rhode Island, Illinois, Kansas, South Dakota and Minnesota.
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Construction of Five-Acre Algae Farm Begins at Ethanol Plant
As reported by Ethanol Producer Magazine, BioProcess Algae LLC and Green Plains Renewable Energy Inc. recently announced that they have begun constructing a five-acre algae production facility in southwest Iowa at the site of Green Plains’ 65 MMgy ethanol plant near Shenandoah. Construction of the algae facility is expected to progress quickly and the facility is slated to begin operating in the third quarter of this year.
The five-acre facility is the next step in a long-term algae production project being carried out by BioProcess Algae, a joint venture between Green Plains, water filtration product manufacturer Clarcor Inc., clean-tech research and development company BioHoldings Ltd., and global renewable energy investment group NTR plc.
Last year, Green Plains CEO Todd Becker said that the project was progressing faster than market opportunities were being developed for algae. As a result, the company began participating in market development activities, supplying algae for feed trials and tests for other markets, such as pharmaceutical applications. That work continues to be conducted, with BioProcess Algae supplying product grown at a smaller scale at the Shenandoah plant.
Last fall, the company began operating commercial-scale horizontal bioreactors outdoors on less than an acre of property at the plant. Those bioreactors have run continuously throughout the winter, but they do not produce a large enough quantity to sell into the marketplace. That situation will soon change. The five-acre site, which will include vertical and horizontal bioreactors as well as a plant to de-water and process the algae into a dried product, will be able to produce 200 tons of algae biomass per year—enough production for BioProcess Algae to start selling its product. “We’re moving out of the research phase and into the phase where this algae will make it into people’s finished products,” Becker said.
Eventually, the company plans to expand its algae-growing capabilities to all of Green Plains’ nine ethanol plants and would likely also make its technology available to other ethanol plants and industrial facilities with significant CO2 streams, such as power plants and petroleum refineries.
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NBB Forming RIN Integrity Task Force
The National Biodiesel Board (NBB) is forming a RIN (renewable identification number) Integrity Task Force, because it (NBB) is "fully committed to addressing this issue head-on," NBB CEO Joe Jobe told attendees during the NBB’s annual conference in Orlando.
Under RFS2, companies are required to have a RIN for every gallon of gasoline or diesel they sell -- in effect, they must either create an E10 or buy RINs to cover their fuel production from others in the marketplace that have more RINs than they need.
In the past few months, the founder and CEO of Maryland-based Clean Green Fuel was charged in federal court with a scheme in which he allegedly sold $9 million in biodiesel-related RIN credits purportedly produced by his company, while the owner of Texas-based Absolute Fuels allegedly sold RINs from biodiesel that was never produced by his 50-million gal/yr plant. In November, EPA issued Notice of Violations (NOV) to 24 companies who used the allegedly fraudulent RINs from Clean Green Fuel and last week, EPA issued an NOV to the owner of Absolute Fuels.
"First, we want to commend the EPA enforcement division and the Secret Service for taking RIN fraud seriously and putting measures in place to stop it," Jobe said. "RIN fraud is not a victimless crime. Obligated parties were harmed significantly because they ultimately ended up with worthless RINs," he added.
Therefore, NBB is creating the RINs task force, which will be co-chaired by NBB Chairman Gary Haer, the vice president of Sales and Marketing for Renewable Energy Group, Jobe said. "Representatives of obligated parties, blenders, biodiesel producers and the EPA have already committed to serving on this task force," he said. "We are committed to finding solutions to prevent any further fraud from the system, and I am personally taking a lead role in staffing this effort along with our chairman," he added
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Cover Crops Boost Corn Yield up to 10 Percent According to ISU
According to Ethanol Producer Magazine, the most recent annual results from a four-year Iowa State University study on using cover crops between rows of corn reveals that higher yields – by 5 to 10 percent – are possible using the soil-saving approach to farming.
The results are the best yet in the ongoing research, according to Ken Moore, distinguished professor of agronomy and primary investigator on the project, who plans to carry on the trials for at least one more growing season. Planting living mulch – or ground cover – between rows of corn is intended to perform several functions – maintain soil moisture, slow soil erosion, and sequester carbon.
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ISU Professor Ken Moore |
There were factors in last year’s weather that made the higher yields possible, according to Moore. “This is really promising,” he said. “Last summer was hot, and the cover crop systems performed better because living mulch held the water in the soil better. It was the first year those ground covers went completely dormant. They weren’t transpiring any water at all and they were serving as a barrier to moisture moving out of the soil, and that’s good.”
In 2011, the three cropping systems tested included one that employed normal farming practices, a second system that used bluegrass as a cover crop and strip till practices, and a third that used red fescue as the cover crop and strip tilling. When the results were tallied, Moore found the control plots averaged 220 bushels per acre, the bluegrass plots netted 230 bushels per acre and the fescue plots yielded 240 bushels per acre. In 2010 and 2009, the bluegrass and fescue plots averaged about the same yield as the control plot. The rainy spring of 2008 caused yields for the control to be much better, as the no-till plots were planted late in the year. “This experiment wasn’t designed to develop management practices for the farm, it was designed to test the feasibility of using these perennial ground covers for producing corn,” said Moore. “We would conclude these systems are feasible, but we recognize that it could be a somewhat brittle system. We’ve only tried it in one location, with one corn hybrid for four years. We don’t know how it is going to perform in the entire state with different soils and different growing conditions.”
“Growing corn with a perennial cover crop promises to address many of the environmental concerns being expressed about corn production and will enable farmers to harvest stover for bioenergy as that market develops. It appears to be a win-win opportunity. These cover crop systems may eventually offer the farmer a profitable alternative that can ensure long term success, at least that’s my hope.”
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Five Richest Oil Companies Don't Need Tax Incentives, Group Says
As seen in a recent Los Angeles Times article, the five so-called "super major" oil companies --Exxon Mobil, Royal Dutch Shell, ConocoPhillips, Chevron and BP-- have just wrapped up their fourth quarter earnings reports, but not without inspiring disdain over how they made those billions in profits and over what they were doing with them.
Under the title "Big Oil's Banner Year," the Washington-based Center for American Progress recently, for example, pointed out that the five firms made a fourth-quarter record $137 billion in profits while producing less oil than they did the previous year.
The center said that the oil companies produced 15.6 million barrels a day in the fourth quarter compared to 16.2 million barrels a year earlier. The center also said that the oil giants were sitting on $58 billion in cash reserves while enjoying federal tax reductions they didn't deserve.
"Instead of using their additional earnings to increase production or investment in alternative fuels," the report said, the oil companies "used $38 billion, or 28% of annual net income, to repurchase their own stocks and invested in politicians to maintain the policies that led to their enormous profits over the past decade."
The center also complained that the profits were reported during a year in which Americans paid the highest fuel bills on record for products like retail gasoline. The Center for American Progress' data and its report can be found here.
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U.S. to Deploy Biofuel-Powered Ships in Naval Exercise
The Department of Defense is planning to send biofuel-powered warships to this year's Rim of the Pacific (RIMPAC) naval exercises. The U.S. Navy's "green strike group" will operate on a 50-50 blend of biofuel and conventional fuel during the seaborne exercises.
The home-grown biofuel program, which has been under way for several years, is part of a broader strategy to increase US military fuel security and reduce reliance on foreign oil by raising energy efficiency levels in the armed forces and finding cost-effective alternatives to fuel refined from oil.
To demonstrate the strides made, the US Navy says it will deploy a ''green strike group'' when the US and partner navies gather later this year for the biennial Rim of the Pacific exercise, the world's largest international maritime
maneuvers
. It involves 32 surface ships, five submarines, over 170 aircraft and 20,000 service men and women. This time, planes on the US nuclear-powered aircraft carrier, along with two escorting destroyers and a cruiser, will run on a 50-50 blend of biofuel and regular petroleum fuel during the sea exercises.
''We think that this represents a major step in energy independence for the US,'' said Navy Secretary Ray Mabus, when he announced the move last month. He added that it was also a step towards ''reducing our dependence on unstable sources of foreign energy, as well as reducing the budget shocks that come with buying fuel from potentially or actually unstable'' countries.
The Navy plans to follow the RIMPAC demonstration by sending a carrier group on a multi-month deployment in 2016 using 50 percent biofuel for surface ships and aircraft. Dubbed the Great Green Fleet, after the famous Great White Fleet that the US sent around the world in the early 1900s to vaunt its growing military power, the long-haul
dispatch
is intended to underscore the Navy's determination to cut its oil use in half by 2025.
The US Air Force, the Pentagon's biggest jet fuel user, is certifying fighters, bombers and cargo jets to run on a 50 per cent biofuel mix. It aims to switch half of the continental US jet fuel requirements to alternative fuels by 2016.
Combat and non-combat vehicles are next in line for biofuels and increased efficiency. The US military is also introducing solar power in place of diesel generators to provide electricity at its bases at home and abroad. The stated aim is to turn a profligate energy waster into the world's most energy efficient major military force. The task is huge, but so is the patronage and buying power that the military can bring to bear.
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Independents Seen Dominating US Refining Industry
According to Fox Business, analysts at Deloitte LLP determined that independent refiners are destined to be in the driver's seat of the U.S. refining industry as integrated oil companies increasingly shed refining assets.
In a recent report released by Deloitte LLP, the consultancy said by the end of 2013, over 70% of domestic refining capacity may be controlled by independent refiners, a radical shift from 1990, when most of the refining capacity in the U.S. was in the hands of integrated oil companies. That likely means a reduction in the cyclical profit margin swings normally seen by refiners, as independent companies are less likely to be able to weather downturns and therefore strive for more efficient and stable operations, Deloitte consultant Roger Ihne said.
Refiners operate on a very small margin," Ihne said. If it shrinks, "the amount of impact is greater" for an independent refiner than for an integrated oil company buoyed by profitable oil-and-gas production, he added.
For consumers, however, the smoothing of these profitability cycles is likely to have a relatively small impact, Ihne said, as profit margins account for a minuscule portion of the price at the pump. Independent refiners, however, likely are going to be more focused on the retail aspect, which has been neglected by the oil majors. "They're going to provide additional value to the consumer," Ihne said.
The restructuring of the U.S. refining industry comes as there are expectations for a long-term decline in domestic demand for fuel, driven mainly by gains in efficiency. That is triggering refinery sales and shutdowns, both among majors and independents.
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ADM to Close North Dakota Ethanol Plant, Siouxland Energy Cuts Production
Archer Daniels Midland (ADM) recently announced that it will permanently close its ethanol plant in Walhalla, North Dakota in April, while here in Iowa, Siouxland Energy and Livestock Cooperative (SELC) of Sioux Center reported that it has reduced its annual production rate of 60 million gallons to 40 million gallons. The ADM plant closure will result in the loss of 61 jobs, while the production slowdown at SELC is not expected to result in any staff reductions.
As reported by Reuters, "ADM determined that the Walhalla facility was not delivering sufficient returns because its geographic location and scale made it difficult to compete in the marketplace," ADM spokewoman Jessie McKinney said. "This closure is to optimize our U.S. corn processing operations. It is not related to the expiration of VEETC.”
The Volumetric Ethanol Excise Tax Credit (VEETC) was a tax incentive providing 45 cents per gallon to blenders who mixed ethanol with gasoline. The credit expired at the end of 2011.
According to a report from KTIV News, SELC Commodity Manager Tom Miller attributes the necessity of his plant’s production slowdown to refiners, who purchased as much ethanol as they could to benefit from VEETC before it expired January 1st.
"The amount of ethanol that they saved up caused an inventory problem come January after that tax credit expired," said Miller, who hopes that SELC will return to its full 60 million gallon annual production rate by 2013.
Ethanol futures slumped to the lowest levels in a year at the Chicago Board of Trade in the wake of the credit expiration, while ethanol inventories last week increased to 20.95 million barrels, a record high, the Energy Information Administration said.
At least three other ethanol plants are set to close or reduce production temporarily due to weak demand and EPA's delay in approving E15 for 2001 and newer vehicles. Those plants include Midwest Renewable Energy in Sutherland, Nebraska; Illinois River Energy in Rochelle, Illinois; and Pinal Energy in Maricopa, Arizona.
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4th Annual “Biofuels Beltway March”
The American Coalition for Ethanol will host the 4th Annual “Biofuels Beltway March” March 27-28, 2012 in Washington, DC. All ethanol industry supporters are invited to attend this event. ACE staff will arrange all meetings with Members of Congress and pertinent agencies on your behalf, and provide all materials for the event and meetings. The elimination of VEETC has not satisfied our opponents; they have set their sights on the RFS and we need ethanol grassroots supporters like you to play defense, defending the RFS and promoting the benefits of ethanol. Contact Shannon Gustafson at 605-334-3381 ext. 16 or sgustafson@ethanol.org for more information. |
Environmental Advocacy Groups End RFS-Related Challenge
Environmental advocacy groups Friends of the Earth and the National Wildlife Federation have withdrawn a challenge to EPA's Renewable Fuels Standard (RFS) regulations, Friends of the Earth's legal director Marcie Keever said.
The challenge involved a provision in the rules addressing ethanol plants built in 2008 and 2009 and the requirements they need in order to generate trading credits under the program.
The debate was to continue despite the groups' withdrawal, Keever said, as the U.S. Court of Appeals for the District of Columbia Circuit was scheduled to hear oral arguments in a lawsuit brought by the National Chicken Council, the National Meat Association and the National Turkey Federation.
Friends of the Earth and the National Wildlife Federation "voluntarily ended the challenge" and opted to leave the case, according to Keever.
"We were represented by Clean Air Task Force, and as their client it was recommended that we not continue with the case," she explained. "We took our attorney's advice, so the case was withdrawn."
Ethanol trade group Growth Energy weighed in on the situation Monday, opining that "the challenges must fail on both procedural and substantive grounds."
Tom Buis, CEO of Growth Energy stated, "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."
“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,” said RFA President and CEO Bob Dinneen.
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Mammoth Cave Receives Fleet Award
The Kentucky Clean Fuels Coalition recently named Mammoth Cave National Park one of the commonwealth’s greenest vehicle fleets and a pioneer in alternative fuels. Mammoth Cave is the first national park in the country to utilize 100% alternative fuels and advanced technologies in their fleet.
More than 90% of their vehicles run on either E10 or E85. Biodiesel is used with all heavy duty equipment, including the Green River ferry boats. Low speed electric vehicles are utilized by campground staff, and cave tour buses use propane. The park partners with concessionaire Forever Resorts to enable both park and hotel vehicles to share the park's refueling station. Mammoth Cave is a member of the Kentucky Clean Fuels Coalition.
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Husqvarna Kicks off Ethanol Awareness Effort
According to Ethanol Producer Magazine, Husqvarna, one of the world’s largest manufacturers of outdoor power equipment, has launched a new promotion focused on educating its customers about ethanol use in small engines. The Husqvarna Ethanol Challenge includes a brief educational video followed by an animated, online quiz which includes nine questions related to the proper storage and use of E10 for small engines such as chainsaws and lawnmowers. The promotion is scheduled to run through May with one participant each month being randomly chosen to receive their choice of a selection of Husqvarna equipment and fuel stabilizers.
In the informational video, available at www.ethanol.husqvarna.com, Husqvarna confirms that E10 is acceptable for use in its equipment, but it recommends that users purchase midgrade 89-octane E10 rather than 87-octane. According to the Husqvarna Technical Services Group, 89 octane use contributes to cleaner running engines and prevents piston ring sticking. “There are many conditions that would necessitate a higher octane, including higher compression, higher temperatures [and] leaner mixtures that alcohol fuel contributes to,” stated a group representative.
While E10 has been widely used as a transportation fuel for some time, Husqvarna continues to receive numerous inquires about ethanol and its effects on small engines, according to the company. Therefore, the company decided to launch the promotion in an effort to alert consumers to issues surrounding ethanol use in small engines and offer advice on how best to use the fuel.
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Noble Mansfield Renewable Energy Formed
The Mansfield Oil Co. and global agricultural and energy products supplier Noble Group have combined their ethanol plant marketing divisions to create a new joint venture known as Noble Mansfield Renewable Energy. The new company will streamline operations and open up new marketing opportunities for its ethanol and biodiesel customers, the companies said. Noble Mansfield will be based in Bloomington, Minn., where Mansfield’s C&N ethanol marketing segment is located, and will be led by Noble’s Bill Covey as CEO and Mansfield’s Jon Bjornstad as president.
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The Noble Group will benefit from Mansfield’s automated systems and will in turn contribute its extensive network of international market opportunities for the company’s clients, Covey said. “Noble Mansfield will offer plants a marketing plan which leverages the strengths of Noble’s global reach and Mansfield’s North American distribution system which has deep relations with refiners and retail blenders,” he said. “This combination of abilities will allow us to reach the best possible netbacks and crush margins for our plant partners.” Noble’s large capital reserves will also provide strong financial support to the new company, he said.
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