Governor upset over lack of RFS decision

Iowa Governor Terry Branstad is upset that federal officials have failed to meet a promised deadline for a decision on the Renewable Fuels Standard.

“Why hasn’t the EPA decided on this issue of the Renewable Fuels Standard? We were promised that decision would be made at the end of June. Here we are, the middle of July, it’s still not been made.”

Governor Branstad says he has met with the EPA Administrator three times to make the case for keeping last year’s production levels. The E-P-A is considering a lower production requirement for 2014, adding, “You know what’s happened to the price of corn since they started this foolishness? Corn has gone from 5-and-a-half dollars a bushel to below $4 a bushel – I’m talking about below the cost of production.”

A 2005 federal law requires the EPA to set a yearly production goal for renewable fuels. The RFS has been increased every year since then but late last year the Obama Administration proposed a reduced amount of renewable fuels production for this year.

Last week, EPA Administrator Gina McCarthy told reporters a final decision on 2014 RFS volumes was coming “soon.”

~Radio Iowa contributed to this report~

EPA chief says RFS decision coming ‘soon’

In a conference call with reporters, EPA administrator Gina McCarthy was asked when she expects to announce a final decision on 2014 Renewable Fuels Standard volumes.

McCarthy’s answer was “soon”. She says the agency wants to make sure they get it right.

“It has become very clear to me that, in the comments we received on the proposed rule, there’s some general concern in two different ways—not only about what the volumes of the fuels are, but the way in which we’re adjusting those volumes—and whether or not the way we’re doing it is really going to continue to push our joint interest in getting biofuels more and more into the system,” McCarthy says.

The head of the Renewable Fuels Association, Bob Dinneen, offered this assessment.

“My interest is that they get it right more than they get it fast,” Dinneen says, “but everybody would benefit from some certainty.”

The RFS decision was expected to happen in June. There’s speculation in Washington that it could be September before it is announced.

RFA: Oil companies ‘covertly’ block increased ethanol use

The Renewable Fuels Association (RFA) accuses the major oil companies of using “strong arm tactics and covert practices” to prevent and discourage the sale of renewable fuels—especially at stations carrying their brand names.

RFA’s Geoff Cooper says, in many cases, the oil companies make it needlessly expensive or simply impossible for a retailer to offer consumers more ethanol-blend choices, like E15 or E85.

“They do this through highly restrictive franchise and branding agreements; they do this through highly prescriptive fuel supply contracts; and a host of other subversive tactics that essentially prevent or at least significantly discourage retailers from selling greater volumes of renewable fuels,” Cooper says.

RFA president and CEO Bob Dinneen says his group has filed complaints with the Federal Trade Commission, but to no avail. Dinneen says the best to way to ensure that consumers get access to the lower cost ethanol blends is for the EPA to enforce compliance with the Renewable Fuels Standard.

“The RFS was the mechanism that was designed to break the monopolistic hold over the gas pump that the major oil companies have,” Dinneen says. “If we back off from the RFS, we’re rewarding those companies.

“This is not the time to be rewarding those companies that are exercising their market power to deny Americans choice at the pump.”

RFA’s findings are part of new report entitled “Protecting the Monopoly: How Big Oil Covertly Blocks the Sale of Renewable Fuels”. The report includes a Consumer Choice Report Card, which grades some of the largest retail gasoline chains on how well they are doing in providing consumers with alternatives to regular gasoline.

AUDIO: Excerpt from RFA conference call with ag media (15:46 MP3)

Link to RFA news release

Continued rail delays concern ethanol industry

One of the nation’s leading ethanol advocacy groups, Growth Energy, is expressing concern over continued delays in rail shipments of ethanol.

In a letter to the Surface Transportation Board (STB), Growth Energy CEO Tom Buis says ethanol producers are still having problems getting enough rail cars to ship their product. He says the industry faced the same challenge earlier this year, which resulted in some plants having to reduce production

Buis expresses dismay that a recent STB decision requiring Canadian Pacific Railway and BNSF Railway to resolve backlogs of their grain car orders did not also address the shipment of ethanol. With over 61 percent of all ethanol delivered by rail, Buis says it is “imperative” that the issues be directly addressed and given the same priority as grain shipments.

Cellulosic ethanol made from corn fiber

An Iowa ethanol plant has produced the first gallons of “cellulosic” ethanol in the state and, perhaps, the world made from the fiber of corn kernels.  Delayne Johnson, the CEO of Quad County Corn Processors in Galva, Iowa, says the new technology is inserted halfway through the process of making ethanol.

“It’s the most simplistic way to make cellulosic ethanol out of any of them out there because the product is already here and the transportation and logistics of any cellulosic component is usually the most difficult,” Johnson says.

The first gallons of distilled cellulosic ethanol were produced on July 1st and Johnson expects the plant to make two million gallons of cellulosic ethanol a year.

“We’re hoping to license this technology to other plants be able to be more efficient at their facilities as well,” Johnson says. “If every plant that’s currently processing corn in the United States would adopt the technology, it would add one billion gallons of cellulosic ethanol to our fuel stream here in the United States without processing any more corn.”

Johnson says there’s triple the amount of corn oil from this new technology, plus the dried distillers grains contain less fiber and more protein, making it more attractive to livestock producers.  The farmer-owned plant opened 14 years ago and began producing ethanol 12 years ago.

~Radio Iowa contributed to this report~

CBO report on RFS criticized

A new analysis by the Congressional Budget Office on the Renewable Fuels Standard says gasoline will go up 9 percent in cost and diesel fuel will rise by as much as 14-percent by 2017 if Congress does not repeal the RFS.

The Advanced Ethanol Coalition says the CBO report is not worth reading. The coalition released a statement saying “you cannot assess the impacts of the RFS without looking at the benefits of reducing consumer demand for gasoline and diesel fuel.”

Forecast for ethanol is good for consumers

After it lost its government subsidies in 2011, corn-based ethanol became even more affordable than gasoline.   Dean Drake, founder and president of the Defour Group, a Michigan based consulting company says that surprises a lot of people.  “Most people don’t even recognize that ethanol doesn’t have subsidies anymore,” he says.  “Even more surprising – after the subsidies were lost, instead of the price of ethanol going up, ethanol producers were able to become much more efficient and ethanol became cheaper.”

Drake tells Brownfield that the price of ethanol is forecasted to continue to fall… And that, he says, is good for consumers.  “This will reduce the price of regular gasoline,” he says.  “It will reduce the price of blends like E-85 and also reduce the cost of driving.  It also opens up the opportunity for a brand new fuel that would have the octane rating of today’s premium, but cost less than today’s regular.”

As the conversation over renewable fuels moves forward, Drake says it should focus on the benefits the fuel provides to consumers.

AUDIO: Dean Drake, Defour Group (6:10mp3)

“Tear down the blend wall”

As the debate continues on the Renewable Fuels Standard, Growth Energy CEO Tom Buis says the argument to roll back the RFS still doesn’t hold water.  “When America’s farmers have demonstrated, as they did last year and are about to this year, we have plenty of capacity,” he says.  “As a matter of fact, the bigger problem in farming is usually over production.  Not only do we feed our great citizens, we feed the world.  And we’ll continue to do that.”

Which, he tells Brownfield weakens the food vs. fuel argument.  “Food vs. Fuel is the biggest lie I’ve ever heard in Washington – and I’ve heard some whoppers in my 27 years,” he says.  “It was made up from a PR firm in a multi-million dollar campaign to point the finger at America’s farmers to say that they were the cause of high food prices – and that wasn’t the case.”

The Environmental Protection Agency was expected to release its final RFS volume requirement in June, but industry sources say that because the Office of Management and Budget hasn’t completed a final review of the proposal, the announcement could be further delayed.

AUDIO: Tom Buis, Growth Energy (3:30mp3)

 

C3Bio receives DOE grant

Purdue University’s Discovery Park will receive a $12 million, four-year grant from the Department of Energy to accelerate scientific breakthroughs to develop the 21st century energy economy.  The Purdue-led Center for Direct Catalytic Conversion of Biomass to Biofuels (C3Bio) will use the funding for research on converting the bulk of the plant to biofuels and other bio-based products currently derived by oil.

The award was part of the second round of funding for Energy Frontier Research Centers announced by US Energy Secretary Ernest Moniz.

Purdue president Mitch Daniels says the success of C3Bio in this arena of high-risk, high-reward research is revolutionizing how we view biomass, essentially the leftovers of our crop production processes – as one solution to future global energy demands.”

Purdue’s Discovery Park received one of 32 grants from the DOE.

Developing the E-15 market

As the debate over the Renewable Fuels Standard continues, supporters of ethanol and biodiesel are working to educate consumers about the benefits of E-15.

Scott Zaremba, president of Zarco Inc., is one of the people carrying out that message.

In July of 2012, his fueling stations became the first in America to offer E-15.  “There was a lot hurdles to jump through with the EPA, with our fuel suppliers, and our dispensers,” he says.  “It took us probably 6 months to work through our issues.  But we were able to bring E-15 to our consumers in a safe environment and that E15 is saving our customers money today.”

He tells Brownfield the recent events in the Middle East make ethanol an even more logical fueling alternative.  “We’re going to see our prices go higher and we’re going to see a knee-jerk reaction with prices going higher for transportation energy prices in this country,” he says.  “One of the reasons is we don’t have enough competition for transportation energy.  We’re developing that with ethanol and biodiesel.  Here in Indiana they’re able to produce 1 billion gallons of ethanol is going to have an impact and going to give us that second choice so we have stability in the marketplace.”

Zaremba made his remarks at last week’s Indiana Ethanol Forum

AUDIO: Scott Zaremba, Zarco, Inc. (3:00mp3)