E85 Sales Set Iowa Record in 2011
The Iowa Renewable Fuels Association (IRFA) announced in a press release issued on Tuesday, March 13, that despite a sluggish end to the year, E85 sales in Iowa reached an all-time high in 2011. According to the Iowa Department of Revenue, sales of E85 by Iowa retailers reached 10,728,997 gallons last year, representing a 15 percent increase over 2010 sales despite third and fourth quarter sales being down compared to the year prior.
“E85 sales are up while overall gasoline sales are down – that shows progress,” stated IRFA Executive Director Monte Shaw. “Price is still an important factor. With ethanol prices closer to gasoline in the last half of 2011, we saw our growth streak curtailed somewhat. But today, wholesale ethanol prices are quite attractive and that translates into very enticing E85 prices. E85 is the best way for fuel consumers to boost the Iowa economy, reduce dependence on foreign oil and still save a few bucks.”
Iowa is the leader in renewable fuels production. Iowa has 41 ethanol refineries capable of producing nearly 3.7 billion gallons annually. In addition, Iowa has 13 biodiesel facilities with the capacity to produce 320 million gallons annually.
Iowa currently has 167 retail outlets offering E85. A list of all the E85 stations can be found at: www.iowarfa.org/ethanol_e85refueling.php.
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Senate Rejects Plan to Extend Renewable Energy Tax Incentives
As work on the Transportation Bill wrapped up in the U.S. Senate, two amendments that would have extended the biodiesel tax incentive retroactively through the end of 2012 were defeated on Tuesday, March 13, by nearly party-line votes.
An amendment offered by Sen. Debbie Stabenow (D-MI), which needed 60 votes, failed on a tie vote of 49-49. The amendment would have retroactively reinstated the $1.00 per gallon biodiesel tax credit (which expired at the end of 2011) for one year and extended other renewable energy incentives, including the Cellulosic Biofuels Producer Tax Credit (PTC), the Accelerated Depreciation Allowance for Cellulosic Biofuel Plant Property, and the Alternative Fuel Infrastructure Tax Credit available to blender pumps and other ethanol fueling infrastructure. Another amendment proposed by Sen. Pat Roberts (R-KS) that would have extended the biodiesel tax credit and these other incentives was also defeated by a vote of 41-67.
Iowa Renewable Fuels Association (IRFA) Biofuels Manager Grant Menke said, “We want to thank Sen. Stabenow and Sen. Roberts for their efforts to reinstate the biodiesel tax credit. IRFA remains hopeful that Congress will put partisanship aside and restore this important tax credit as soon as possible. Thousands of jobs in Iowa and across the nation depend on it.”
“Unfortunately the Senate missed an opportunity to put to bed the pressing need to extend expiring tax incentives for cellulosic biofuels and other sources of domestically produced clean energy,” said Advanced Ethanol Council (AEC) Executive Director Brooke Coleman.
Vice President of Federal Affairs for the National Biodiesel Board (NBB) Anne Steckel said, “We urge Congress to break this partisan gridlock and find a way to enact policies like the biodiesel tax credit that have strong bipartisan support.”
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Ethanol Plays Key Role in Reducing Gas Prices
According to an article by the Renewable Fuels Association’s (RFA) Geoff Cooper, released on Tuesday, March 6, retail gasoline prices are on the rise again, reaching their highest level since May 2011. The national average retail price for regular grade gasoline reached $3.76 per gallon, $0.27 per gallon higher than last year’s number for that week, and $1.04 higher than the same week in 2010 (as shown in the graph on the right). Prices along the coast are even higher, with California drivers paying $4.36 per gallon, and New York drivers paying $3.96 per gallon. With gas prices usually spiking in April and May, many analysts are concerned that gas prices will elevate even higher.
Source: RFA’s The E-XCHANGE Ethanol’s Role in Reducing Gas Prices by Geoff Cooper
Tensions in Iran and Syria have prompted speculative investors to raise their stakes in the oil market, which has translated to higher crude oil prices, with their prices reaching $109.77 per barrel on February 24, the highest prices since May 2011.
While recent gasoline prices have been the highest ever for this time of year, they would be substantially higher if it were not for the contribution of ethanol, with ethanol making up 10 percent of the U.S.’s gasoline supply. As noted by Cooper, in a 2011 paper published by the Center for Agriculture and Rural Development (CARD), economists from Iowa State University and the University of Wisconsin found that the use of more than 13 billion gallons of ethanol reduced gasoline prices by an average of $0.89 per gallon in 2010. Meaning, the average American household spent $800 less on gasoline than they would have without the contribution from ethanol. The researchers also found that ethanol production and use from 2000-2010 kept gasoline prices cheaper by an average of $0.25 per gallon, saving American drivers an average of $35 billion each year in that decade.
A gallon of ethanol at the wholesale level is currently selling for almost $1.00 less than a gallon of gasoline, meaning a gallon of E10 (gasoline containing 10 percent ethanol) is $0.10 less expensive than a gallon of conventional gasoline. If E15 blends were available today, the savings would be even greater.
Read the RFA’s Geoff Cooper’s full article here.
Download the full PDF version of RFA’s analysis here.
Download more RFA charts further analyzing ethanol and gas prices here.
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Free Biodiesel Workshop in Waterloo, Iowa on April 12
On Thursday, April 12, a free biodiesel workshop and luncheon for retailers and distributors will be held at the Elks Lodge located at 407 East Park Ave., Waterloo, Iowa. The program, offered to petroleum retailers and distributors, will be focused on the profitability opportunities of biodiesel. The registration deadline is Monday, April 9; online registration is available at: http://www.communication-insight.com/client/biodiesel/rsvp.html
At the workshop, attendees will:
- Learn how to maintain quality throughout the biodiesel supply chain.
- Gain insight on how to market biodiesel to fleet customers.
- Get the basics on RIN trading, pricing and extracting values.
- Learn how to complete new Iowa Department of Revenue tax incentive forms.
- Discover grant opportunities for biodiesel blending and storage equipment.
An afternoon session focused on biodiesel for fleets is also being offered.
This workshop is sponsored by:
- Iowa Renewable Fuels Association
- Iowa Biodiesel Board
- Iowa Clean Cities Coalition
- Iowa Soybean Association
- Renewable Energy Group
- Petroleum Marketers and Convenience Stores of Iowa
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Obama Administration Urged to Support Biodiesel
Sixty bipartisan members of Congress from around the nation have signed letters to the White House advocating for the follow through of the U.S. EPA's proposal to increase the biodiesel volume requirement under the renewable fuel standard (RFS) for the upcoming year.
Vice President of Federal Affairs at the National Biodiesel Board Anne Steckel said, “The skyrocketing gas prices we’re seeing should remind us all why Congress—with overwhelming bipartisan support—started the RFS in the first place, which was to diversify our energy supplies and limit our vulnerability to just these kinds of price spikes.” Steckel went on to note, “This is a strong energy policy and we shouldn’t shy away from it now.”
The EPA proposal brought before the Obama administration would increase the biodiesel volume requirement under the RFS to 1.28 billion gallons in 2013. In the previous year, Obama delayed the decision saying it needs further review.
Biodiesel has been a main feature of the RFS so far, exceeding its volume requirement in 2011 with record production of 1.1 billion gallons. An administration decision to rescind the modest increase to 1.28 billion gallons would stunt the industry’s growth, which could lead to plant closures and thousands of lost jobs.
Iowa Senator Charles Grassley said, “Regulation writers in the administration and tax policy makers in Congress should both act promptly to foster the opportunities in biodiesel for clean-burning, domestically produced energy and job creation.”
"This really should be an easy decision for the Obama administration," Steckel said. "We're talking about modest growth for the only EPA-designated advanced biofuel that's in commercial-scale production across the country today. It is directly in line with President Obama's call for an 'all of the above' energy approach and his focus on clean, domestic production. And it will create thousands of jobs across the country while improving air quality and reducing greenhouse gas emissions."
The biodiesel industry is seeking the volume increase as it also pushes Congress to reinstate the $1.00 per gallon biodiesel tax incentive, which expired on Dec. 31, 2011.
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Renewable Fuels Association and Advanced Ethanol Council Urge Action to Reduce Gas Prices
The Renewable Fuels Association (RFA) and the Advanced Ethanol Council (AEC) highlighted the gas price benefits of increased ethanol production and use, and urged action on key issues related to the industry in a letter to the House Subcommittee on Energy and Power Chairman Ed Whitfield and Ranking Member Bobby Rush.
The RFA and AEC called for immediate and concrete actions that Congress could take to aid the reduction of America’s exposure to the hostile world oil markets and the consequent rises in gasoline price we are witnessing today. The programs stated first that Congress must reaffirm its commitment to the Renewable Fuel Standard (RFS). This proactive policy displaces imports of oil and helps relieve pressure on an oil and gasoline market that is threatening to go unchecked. Since the implementation of the RFS, the U.S.’s reliance on imported oil has fallen from 60 percent to 45 percent. By no coincidence, in the same timeframe, the U.S. has seen its use of ethanol rise from 1 percent to 10 percent of the nation’s gasoline supply.
RFA President and CEO Bob Dinneen and AEC Executive Director Brooke Coleman argued that Congress must work to level the marketplace for alternatives to petroleum-based fuels. “This includes investment and support in alternative fuel infrastructure, such as blender pumps, which can offer a wide range of ethanol blends and give consumers a choice at the pump.” The letter notes that currently, a gallon of ethanol is selling for approximately $1.00 less than a conventional gallon of gasoline. “At the standard E10 ethanol blend, that is an immediate savings of $0.10 per gallon for American motorists. With increased ethanol blending, like levels up to E15, the savings would be even greater,” Dinneen and Coleman explained.
Read the entire letter here.
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Gov. Branstad Signs Amicus Brief Opposing California Fuel Standards Law
Gov. Terry Branstad (pictured on the right) signed an Amicus Brief in the Ninth Circuit Court of Appeals opposing California’s fuel standards law that discriminates against Iowa’s, and Midwestern, corn farmers. Gov. Branstad argues that allowing the California Air Resources Board’s unconstitutional fuel standards to be implemented would hurt Iowa’s corn farmers and ethanol markets.
The brief, filed by Nebraska Attorney General Jon Bruning and co-signed by the attorney generals of Iowa, Kansas, Michigan, Missouri, North Dakota and South Dakota, and Gov. Branstad, maintains the court should rule against the request for a stay based on the following three arguments:
- California is not likely to prevail on the merits because the state’s fuels standards discriminate against ethanol produced in Midwestern states in favor of ethanol produced in California.
- The fuel standards are an improper exercise of extra-territorial regulation, therefore violating the U.S. Constitution’s Commerce Clause.
- A stay of the district court’s preliminary injunction and judgments will greatly injure the economies of the Amici States and it’s the public interest.
“The Iowa Renewable Fuels Association (IRFA) commends the Governor’s action to protect the market for Iowa-produced ethanol,” said Monte Shaw, IRFA Executive Director. “As the largest ethanol producer, Iowa supplies 30 percent of ethanol sold nationwide, which accounts for $6 billion of Iowa GDP.”
Furthermore, an Iowa State University study conducted in May 2011 found that the past decade of growth in ethanol production reduced gas prices in the Midwest region by $0.39 per gallon.
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American Petroleum Institute Files Suit against Federal Cellulosic Ethanol Requirement
The American Petroleum Institute (API) filed a suit on Monday, March 12, against the federal government’s requirement for U.S. cellulosic ethanol consumption. The API and other fuel related groups argued that it is unrealistic and constitutes an illegitimate tax. The API said that it filed a petition in the U.S. Circuit Court for the District of Columbia (D.C.), asking the court to order the Environmental Protection Agency (EPA) to lower its cellulosic ethanol requirement to reflect actual availability of the biofuel.
The EPA issued its new Renewable Fuel Standard (RFS) on January 9, stating that U.S. refiners and importers of gasoline and diesel fuel must use more than 8.6 million gallons (32.6 million litres) of cellulosic ethanol in their transportation fuel blends. A $0.78 per gallon waiver fee must be paid to the EPA if refiners or importers fail to use the required volume of cellulosic ethanol.
The API argues they cannot be fairly forced to pay a fine for failing to use a fuel supplement that does not exist on a commercial scale capable of meeting the 8.6 million gallons per year standard. API downstream director Bob Greco said, “EPA’s standard is divorced from reality, there is a complete lack of commercial supply of the [cellulosic] fuel”.
The EPA’s U.S. cellulosic ethanol consumption requirement is authorized under the Clean Air Act (CAA).
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Weekly Ethanol Production Up from Previous Week
According to the Energy Information Administration (EIA), ethanol production for the last week in February (ending 3/2/12) averaged 906,000 barrels per day, or 38 million gallons each day. That is up 10,000 barrels per day from the previous week. The four week average for ethanol production was at 912,300 barrels per day, that’s an annual rate of 13.99 billion gallons, while stocks of ethanol remained at 22.1 million barrels.
Gasoline demand for the week averaged 347 million gallons a day. Daily ethanol production was 10.97 percent of daily gasoline demand.
When considering co-products, ethanol producers were using 13.737 million bushels of corn to produce ethanol and 101,969 metric tons of livestock feed, 91,997 of which were distillers grains. Additionally, ethanol producers were providing 4.17 million pounds of corn oil daily.
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U.S. Ethanol Exports Reach All-Time High for the Month of January
Geoff Cooper, Vice President of Research and Analysis for the Renewable Fuels Association (RFA), announced Friday, March 9, that the U.S. exported 76.3 million gallons of ethanol in January, which marks a new record high for the month of January. January 2012 exports were 33 percent higher than January 2011 totals, and almost six times more than January 2010 (shown in RFA’s graph below).
Exports to Brazil fell from previous months, but Brazil remained the top destination for U.S. ethanol exports, receiving a total of 26.4 million gallons. According to Cooper, the fall was mainly attributed to the nation's decision to reduce the mandatory ethanol blend level from 25 percent to 20 percent. However, exports to Brazil still represented one-third of all January shipments, which is consistent with the share of total exports to Brazil in 2011.
Canada was the second leading importer of U.S. ethanol in January, taking in 23.4 million gallons, while the Netherlands came in third, importing 4.9 million gallons of ethanol.
To read the full story click here..
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National Biodiesel Board’s First Phase of RIN Solution: Genscape’s RIN Integrity Network
The First phase, called the “audit option,” was introduced Thursday, March 8, by the National Biodiesel Board (NBB) to help restore integrity to the renewable identification number (RIN) credit market.
The “audit option” incorporates Genscape’s RIN Integrity Network, referred to as the “exclusive RIN solution endorsed by the NBB” on Genscape’s website. Genscape is a global provider of information for commodity and financial markets.
“As many of you know, cases of fraud have paralyzed the biodiesel RIN market,” Genscape’s website states. “On March 8, the NBB exclusively selected Genscape’s RIN Integrity Network to provide transparency and promote integrity for producers in this important and growing market.”
According to Genscape, obligated parties that subscribe to the service will view a health score of each participating facility and view details including photos and the status of key integrity documents. In a single view, all facilities promoting their integrity will be visible on an equal stage.
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RFA Says Ethanol has Potential to Assist Fuel Economy
President Obama’s establishment of the Corporate Average Fuel Economy (CAFE) standards and investment in alternative vehicle and fuel infrastructure has made fuels efficiency and alternative vehicles staples of his energy policy. Efficiency and alternative fuel vehicles are extremely important to extending fuel supplies and making better use of America’s available resources.
Emphasis has been placed on electronic vehicles, as these vehicles do have a role to play in America’s vehicle mix. So, too, do flex fuel vehicles (FFVs), capable of running on a wide range of ethanol blends—the most abundant, renewable, and domestic alternative to gasoline available today.
“The President’s plan…is the kind of initiative needed to expand fueling options available to American consumers,” said Renewable Fuels Association (RFA) President and CEO Bob Dinneen. “We look forward to working with the Obama Administration to implement this initiative, increase the proliferation of FFVs, and build upon the work of Agriculture Secretary Tom Vilsack and the U.S. Department of Agriculture to install 10,000 blender pumps across the nation.”
When considering fuel efficiency, it is important to realize that today’s internal combustion engine and its need for liquid transportation fuel will continue to encompass the greatest share of the vehicle and fuel markets for the foreseeable future.
Engines designed to increase fuel efficiency in compliance with the CAFE standards, like downsized, turbo-boosted engines, require higher octane fuels than those currently available at the pump. Additionally, of the current liquid transportation fuels widely available, only ethanol offers high octane at a cost-effective price. With a blending octane rating of 113, ethanol and higher ethanol blends are uniquely poised to help automakers achieve stricter fuel economy and emission requirements.
The auto industry’s top trade association agrees. In comments to the U.S. Environmental Protection Agency on pending vehicle and fuel guidelines known in the industry as Tier3/LEV III, the Auto Alliance stated, “to help achieve future requirements for the reduction of greenhouse gas emissions, we also recommend increasing the minimum market gasoline octane rate, commensurate with increased use of ethanol. Adding ethanol to gasoline increases its octane rating.”
As the RFA noted, the high octane rating of ethanol allows gasoline refiners to produce a sub-octane gasoline for blending with ethanol. Once blended, the new fuel meets the octane requirements for sale. Expanding the use of ethanol to meet new downsized, turbo-boosted engine needs, designed for better fuel efficiency, could satisfy the technical needs of the engines while keeping gasoline prices down.
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National Corn Growers Association World of Corn Report
As reported by Ethanol Producer Magazine, the National Corn Growers Association’s (NCGA) 2012 World of Corn Report reveals 5 billion bushels of the current supply of corn is being used for ethanol, and 1.547 billion bushels of the original 5 billion re-enters the feed market. This includes distillers grains and corn gluten for domestic use and a smaller amount of Dried Distillers Grains with Solubles (DDGS).
The NCGA’s annual report, co-sponsored by Monsanto, shows statistics about U.S. corn production, with the largest usage of corn as feed and residual, at 36.3 percent, the amount of corn used for ethanol production, was at 27.3 percent in 2011. The NCGA’s report shows that 12.2 percent of corn used for ethanol production went back into the feed market as distillers grains (as shown in the graph on the right).
|*Source: NCGA, 2012 World of Corn Report
Corn displaced by DDGS and corn gluten in livestock feed has dramatically grown in the past few years from 189 bushels in 2002 (according to figures from ProExporter Network, as cited in a World of Corn Chart) to 1.2 billion bushels in 2010.
The NGCA goes on to note in the report that the 2011 results of the corn harvest was successful despite a challenging year, with 91.9 million acres of corn being planted, 84 million harvested, and 12.4 billion bushels produced. With an average price of $6.20 per bushel, this amounted to $76.62 billion in corn crop value.
In comparison with 2010, 88.2 million acres were planted, and 81.4 million were harvested, with the same amount—12.4 billion bushels—being produced. The total corn crop value of 2010 was $65.97 billion, because of a lower average price of $5.30 per bushel.
NCGA President Garry Niemeyer and CEO Rick Tolman said, “The world of corn has come a long way since the single seed kernel was planted next to a fish for fertilizer…Given those humble beginnings, it’s incredible to imagine that 10 years from now, American will be producing 17 billion bushels annually…We can only imagine how much further it will go.” NCGA’s full report can be found here.
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White House Releases Progress Report on the “Blueprint for a Secure Energy Future”
According to a story by Domestic Fuel’s Cindy Zimmerman, on Monday, March 12, the White House released a one year progress report on the “Blueprint for a Secure Energy Future,” the Obama Administration’s all-of-the-above approach to American energy. Noted in the report is that the plan has resulted in a doubling of renewable energy generation from wind, solar, and geothermal sources since 2008.
When considering advanced alternative fuels, the report states that in 2010, “President Obama set a goal of breaking ground on at least four commercial scale cellulosic or advanced biorefineries by 2013. That goal has been accomplished, one year ahead of schedule. Together, these projects, and associated demonstration and pilot projects will produce a combined total of nearly 100 million gallons per year of advanced biofuels capacity.”
The progress report also noted that the Environmental Protection Agency’s (EPA) continued focus on the national Renewable Fuels Standard (RFS) has supported a growing domestic renewable fuels industry. In 2011, the industry reported production of approximately 14 billion gallons of renewable fuels, which represents about 8 percent of total U.S. highway vehicle fuel. Currently, biofuel production is at its highest level ever, as average monthly production increased more than 40 percent from 2008 to 2011. To help support the deployment of the advanced fuel infrastructure, in 2011, the Department of Agriculture provided over $4 million in grants to fund 265 flex fuel dispensers in 30 states across the nation.
Read Domestic Fuel’s full article by Cindy Zimmerman here.
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