http://www.ethanolrfa.org/ en Copyright 2013 2013-10-16T14:14:20+00:00 http://www.ethanolrfa.org/exchange/entry/analyzing-the-impacts-of-big-oils-rfs-dream-scenario/ http://www.ethanolrfa.org/exchange/entry/analyzing-the-impacts-of-big-oils-rfs-dream-scenario/ The markets were abuzz last week with gossip about EPA’s pending proposal for 2014 renewable volume obligations (RVOs) under the RFS. One rumor suggested EPA was mulling the idea of cutting the “renewable fuel” portion (often called the “conventional biofuel” segment) of the 2014 RFS from the statutory level of 14.4 billion gallons (BG) to 13.0 BG. Of course, such a cut would be a dream come true for the oil industry and it coincides almost perfectly with the wish list API and AFPM submitted to EPA in August in the guise of a waiver petition. We discussed why such a proposal to cut this portion of the RFS would be unlawful and violative of EPA’s statutory authority here. But to underscore the importance of the RFS to the economy and environment, we wanted to examine the likely impacts of “Big Oil’s dream scenario.” Slashing the “renewable fuel” portion of the RFS from 14.4 BG to 13.0 BG could have the following impacts:   1.       Corn Prices Sink and Farm Income Falls Cutting the requirement by 1.4 BG would reduce demand for corn by some 500 million bushels. Corn ending stocks would be pushed to nearly 2.4 billion bushels.  This would be the highest level of stocks since 1987/88, when corn prices averaged $1.51/bushel. Corn prices are already at 37-month lows due to the production of a record crop in 2013. A large cut to the RFS would push prices even lower. According to an analysis last week by Deutsche Bank, “…such a dramatic cut in the conventional mandate (from 14.4 billion to 13) would be negative for corn. …Going forward, we see 20-25% lower corn prices than if the original mandate were left unchanged and met.” The report also noted that “…no reduction in the mandate is needed for 2014.” If a cut of 1.4 BG was made to the RFS, corn prices could fall by $0.80-1.10/bushel to a six-year low and the total value of the corn crop could plunge by $13 billion. Without a corresponding reduction in input/production costs (which is incredibly unlikely), such a decrease in corn prices would negatively affect profitability for U.S. farmers and reverse the trend toward higher net farm income. A shock of this magnitude to agriculture markets would be particularly unwelcome given the unsettled and uncertain future of the Farm Bill.   2.       Increased Demand for Gasoline and Higher Pump Prices Gasoline demand would increase to fill the 1.4 BG void in ethanol blending. The lost ethanol volume would likely be replaced with gasoline refined from a combination of imported oil and unconventional crude from tight oil (fracking) or tar sands. Approximately 22.5 million barrels of gasoline would be needed to replace the lost ethanol volume. More than 49 million barrels of crude oil would be needed to refine this amount of gasoline—that’s roughly equivalent to one year’s worth of oil imports from Libya, or two months’ worth of tight oil production from fracking in North Dakota. Increased demand for gasoline would obviously lead to higher gasoline prices. Marzoughi & Kennedy of Louisiana State University found that “…every billion gallons of increase in ethanol production decreases gasoline price as much as $0.06 cents. Adding ethanol to gasoline has the same impact on gasoline as a positive shock to gasoline supply.” Thus, removing 1.4 BG of ethanol from the marketplace would cause gas prices to increase by more than $0.08 per gallon. Accordingly, U.S. consumers would spend some $10.6 billion more on gasoline in 2014.   3.       Increased GHG emissions from Transportation Sector According to the latest GREET analysis published by Wang et al., average corn ethanol reduces greenhouse gas emissions by 34% compared to gasoline (including hypothetical land use change emissions). Thus, replacing 1.4 BG of ethanol with an energy-equivalent amount of gasoline would add 3.7 million metric tons of CO2-equivalent GHG to the atmosphere. That’s like adding 725,000 cars to the road overnight.   4.       Puts American Jobs at Risk Based on recent economic analysis, the production of 1.4 BG of ethanol would support 7,400 direct jobs and 30,000 indirect and induced jobs. Thus, these jobs would be lost if the Big Oil dream scenario were to become a reality.   5.       Discourages Investment in Biofuel Infrastructure Since the beginning of 2013, at least 195 retail gas stations have added E85 pumps. These investments were made because the 2013 RFS volumes sent a strong signal to the marketplace—via RIN values—to add infrastructure capable of dispensing higher-level blends. As detailed in a recent series of reports by the Center for Agricultural and Rural Development, the RIN mechanism and RFS policy signals are encouraging the market to breach the “blend wall” through the increased use of E85. However, investments in higher-level ethanol blend infrastructure would likely evaporate under Big Oil’s dream scenario for 2014. That’s because RFS requirements could be met simply by blending E10 and maintaining the status quo. The transformation of the liquid fuels market that is currently under way would slow to a crawl…or worse, it would come to a screeching halt.   6.       Deters Investment in Advanced and Cellulosic Biofuels Potential investors in advanced and cellulosic biofuels are watching the 2014 RVO discussion very closely. If the Big Oil dream scenario came true, it would unquestionably send a strong signal to the investment community that the Administration’s commitment to biofuels of all types is wavering. As described above, a significant reduction in the 2014 RVOs would slow or halt investments in the infrastructure needed to distribute and dispense larger volumes of ethanol. The future of the advanced and cellulosic ethanol sector depends in large part on the development of an infrastructure network capable of bringing higher-level ethanol blends to the consumer.   The Bottom Line While it is important to remember that EPA has not formally proposed the 2014 RVOs and last week’s drama was driven by unverified rumors, it is clear that the impacts of reversing course on the RFS would have real and severe consequences. Sharply lower farm income, the largest corn surplus in 25 years, higher gas prices, fewer jobs in rural America, increased GHG emissions, and stifled investment in biofuels may sound like a dream come true to Big Oil. But for the agriculture sector, investment community and U.S. consumers it would be nothing short of a nightmare. Corn prices, Ethanol, Gas Prices, Renewable Fuel Standard 2013-10-16T14:14:20+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-protects-against-repeat-of-devastating-effects-of-1973-oil-embargo/ http://www.ethanolrfa.org/exchange/entry/ethanol-protects-against-repeat-of-devastating-effects-of-1973-oil-embargo/ The gas lines of 1973 are iconic images in America’s collective memory. October 16th marks the 40th anniversary of the oil embargo imposed by the Organization of Arab Petroleum Exporting Countries (OAPEC) as punishment for America’s support of Israel during the Yom Kippur War. To be exact, on that date, the Organization of Petroleum Exporting Countries (OPEC) decided to raise the price of oil by 70 percent a barrel and cut production over time in 5 percent increments until they were satisfied that their political policies were understood and respected. If you are of a certain age, your mind is likely racing through past memories of gas rationing, long lines waiting to fill-up, odd and even number license plates determining what days you could go to the gas station, red and green flags designating whether stations had fuel at all, bans on Christmas tree lights, and real, but ridiculous, threats of toilet paper shortages as a result of the embargo. Now, with as much clarity, can you recall what this country has done to protect its economy from being similarly hijacked by Middle Eastern oil supply disruptions or price shocks induced by a global price-setting cartel? U.S. energy independence is at the heart of this country’s economic and national security. The modern industry was born from the energy crisis of 1973 and officially launched by energy legislation signed into law by President Jimmy Carter. The spirit and intent of that law to establish a domestic, renewable fuel alternative to foreign oil has been supported by Democratic and Republican Presidents ever since. Ethanol has the proven ability to not only displace foreign oil and stretch our existing domestic oil supply; it has proven to lower the price per gallon of gasoline, replace lead and other toxins, reduce green house gas emissions all while stimulating economic development and job creation here in the United States. The facts speak for themselves: Today, ethanol makes up 10% of the U.S. gasoline supply. That’s up from less than 1% just 20 years ago. (Energy Information Administration, Renewable Fuels Association) Last year, ethanol displaced an amount equivalent to the gasoline refined from 462 million barrels of imported crude oil. That is more oil than the U.S. imported from Saudi Arabia. (Energy Information Administration. Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013) As a result, the U.S. has reduced expenditures on imported oil by $44 billion last year. (Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013) Oil imports from OPEC are down 22% since the Renewable Fuel Standard was expanded in 2007.” (Energy Information Administration) And oil imports from the Persian Gulf are down 30%over the past decade.” (Energy Information Administration) Oil import dependence dropped to 41% in 2012 — the lowest since 1995. Without ethanol, oil import dependence would have been 48%. (Energy Information Administration, Renewable Fuels Association) Ethanol has reduced gasoline prices by an average of $1.00 per gallon in 2012 and 2013. (Philip K. Verleger, August Petroleum Economics Monthly) Currently, 211 ethanol plants produce over 13 billion gallons and support over 380,000 jobs while contributing more than $43.4 billion in U.S gross domestic product. (Cardno ENTRIX, “Contribution of the Ethanol Industry to the Economy of the United States”, January 2013) You would think accomplishments this noteworthy would merit cheering rather than jeering. Sadly, we live in a world where petty political theatrics, Big Oil corporate money, and small-minded misinformation undermine the single most effective energy policy this country has known, the Renewable Fuel Standard, a successor of the 1980 Energy Security Act. Economic times are hard enough as is; hopefully it won’t take another energy crisis to wake Congress up to the economic and national security importance of a domestically-produced, renewable fuel alternative. Now is not the time to roll back policies and undercut the progress this country has made. Ethanol is fueling a stronger, healthier, more independent nation. Gas Prices, OPEC, Oil, Renewable Fuels, Renewable Fuel Standard 2013-10-15T16:26:26+00:00 http://www.ethanolrfa.org/exchange/entry/burning-down-the-rumor-mill-on-2014-rfs-requirements/ http://www.ethanolrfa.org/exchange/entry/burning-down-the-rumor-mill-on-2014-rfs-requirements/ EPA’s proposed rule establishing 2014 renewable volume obligations (RVOs) under the Renewable Fuel Standard (RFS) is expected to be published soon. Many believe the 2014 RVO will, for the first time ever, require obligated parties to move beyond the status quo and blend volumes of renewable fuel above the so-called “E10 blend wall.” In August, however, EPA signaled that it intends to exercise its authority in the 2014 RVO rule to adjust “…both the advanced biofuel and total renewable fuel categories.” This announcement has sparked speculation, rumors, and questions about what adjustments EPA will make to the 2014 RVOs, what authority EPA has to make revisions, and what impacts any EPA action will have on the markets. Indeed, the market is already responding to a leaked draft document reflecting the ongoing debate within the Administration about the 2014 RVOs. Importantly, the leaked document does not represent a final determination and has not yet been subjected to interagency review. Moreover, the proposed 2014 RVOs will be subject to public review and comment. EPA’s Statutory Authority to Adjust RFS Requirements Section 211(o)(7) of the Clean Air Act provides EPA the authority to make adjustments to RFS blending requirements under specified conditions. Some stakeholders who have speculated on EPA’s proposed 2014 RVOs have apparently misinterpreted EPA’s waiver authorities, or are unaware of the specific conditions that must be present in order for a waiver to be effectuated. Section 211(o)(7)(D) requires EPA to adjust, by November 30 of the preceding year, the volume requirements for cellulosic biofuel if production is likely to be less than the minimum applicable volume established under EISA. The statute directs EPA to reduce the applicable cellulosic biofuel volume to “the projected volume available during that calendar year.” Importantly, if EPA reduces the cellulosic biofuel standard, it “…may also reduce the applicable volume of renewable fuel and advanced biofuels requirement…by the same or a lesser amount.” EPA was given this authority because the cellulosic biofuel requirement is nested within the advanced biofuel standard, which itself is nested within the total renewable fuel standard. Thus, it is important to understand that EPA may not use Section 211(o)(7)(D) to adjust the requirements for advanced biofuel or total renewable fuel by an amount greater than the reduction of cellulosic biofuels. In other words, the difference between the total renewable fuel volume and the advanced biofuel standard (14.4 billion gallons in 2014) cannot be affected by any adjustments made by EPA under the waiver authority granted 211(o)(7)(D). EPA also has “general” waiver authority under 211(o)(7)(A). This is the only waiver authority that would allow the Agency to reduce to the total required renewable fuel volume by an amount greater than the reduction of the cellulosic biofuel requirement. However, in order to effectuate such a waiver, EPA would have to determine, after public notice and comment, that implementation of the RFS would “…severely harm the economy or environment of a State, a region, or the United States.” Alternatively, EPA may use this waiver authority if it determines, after public notice and comment, that there is “inadequate domestic supply” of renewable fuels to meet the RFS requirements. EPA has twice received petitions from states requesting waivers of the RFS under this provision. Both requests were ultimately denied because the Agency correctly determined that sufficient supplies of renewable fuel and RIN credits were available for obligated parties to meet their requirements. The So-Called “Blend Wall” Is Not a Valid Basis for Adjusting the 2014 RVOs Oil industry trade associations have argued that in setting the 2014 RVOs, EPA should account for the so-called E10 “blend wall.” They have requested that EPA lower the 2014 RVOs to levels below the “blend wall,” such that compliance could be achieved simply by blending E10. Curiously, EPA stated in August that, as part of its RVO rulemaking process, it plans to “…assess the E10 blendwall and current infrastructure and market-based limitations to the consumption of ethanol in gasoline-ethanol blends above E10.” However, the “blend wall” and perceived “market-based limitations” are clearly not among the statutory criteria identified in Section 211(o)(7) for EPA to consider in adjusting the 2014 RVOs. As stated above, EPA’s authority to waive the total renewable fuel volume by an amount greater than the reduction of cellulosic biofuels is limited to circumstances where it determines there is “inadequate domestic supply” of renewable fuel, or that enforcement of the statutory volumes would result in “severe harm” to the economy or environment. There is no basis to suggest that the strict criteria for a general waiver are met today:  there can be no showing that the statutorily-mandated renewable fuel volumes “would severely harm the economy or environment” of a State, region, or the country, or that there is an “inadequate domestic supply” of total renewable fuel that would prevent the oil industry from meeting its total RVOs.   As much as the oil industry might wish it to be true, the requirement to blend beyond the “blend wall” or purchase RINs to meet their obligations is not a basis for changing the law—it is the very point of the law.  The Existing Vehicle Fleet and Current Refueling Infrastructure Can Easily Absorb at Least 14.4 Billion Gallons of Ethanol in 2014 The oil industry has argued that the existing vehicle fleet and current refueling infrastructure are incapable of absorbing significant volumes of ethanol above the E10 “blend wall.” This contention is completely false. EIA projects 2014 gasoline consumption will total 132.9 billion gallons, meaning 13.29 billion gallons of ethanol can be consumed via E10 blends. This leaves a need for 1.1 billion gallons of ethanol consumption above the E10 “blend wall” in order to fulfill the 14.4-billion-gallon difference between total renewable fuel and advanced biofuel. The light-duty vehicle fleet has the capacity to consume significantly larger volumes of ethanol: By 2014, roughly 9% of the light-duty vehicle fleet will be comprised of flex-fuel vehicles (FFVs) that are capable of operating on gasoline blends containing up to 85% ethanol (E85). These vehicles alone would have the annual capacity to consume 8-9 billion gallons of ethanol above the E10 “blend wall.” In addition, 80% of the fleet will be comprised of vehicles that were built in 2001 or later, meaning they are legally approved to consume E15. Further, roughly 45% of new vehicles sold in 2014 will be explicitly approved and warranted by the automakers to use up to E15. Overall, when FFVs and E15-approved vehicles are properly considered, the light-duty vehicle fleet will have the capacity to consume some 26-28 billion gallons of ethanol in 2014. Clearly, vehicles are not a limiting factor in meeting 2014 RFS requirements. The oil industry says it has not invested in infrastructure to distribute larger volumes of ethanol because there are supposedly not enough FFVs or E15-warranted vehicles on the road to justify such investments. The fallacy of that argument is demonstrated by the fact that oil companies have invested substantial resources in diesel and premium gasoline infrastructure when only a small fraction of the fleet uses these fuels. For example, diesel fuel is sold at 52% of retail service stations, yet less than 3% of light-duty cars and trucks can operate on diesel. Similarly, premium gasoline is sold at 87% of gas stations, but the fuel is recommended or required for only 10-15% of the fleet. Existing refueling infrastructure can easily distribute at least 14.4 billion gallons of ethanol: E85 is offered at approximately 3,190 retail gas stations nationwide. If E85 conservatively represents 25% of fuel sales at these stations in 2014, more than 950 million gallons of E85 will be sold (containing roughly 710 million gallons of ethanol). If E85 makes up 40% of fuel sales at these stations, more than 1.5 billion gallons of E85 would be consumed (containing more than 1.1 billion gallons of ethanol). Thus, increased E85 sales through existing stations could easily bridge the gap between the E10 blend wall and the 14.4-billion-gallon portion of the RFS open to non-advanced biofuels. A recent series of reports by the Center for Agriculture and Rural Development strongly supports the notion that E85 provides a ready option for RFS compliance in 2014 and beyond. It is important to recognize that E85 infrastructure has been expanding rapidly in response to evolving market dynamics driven by the RFS. E85 has been added as a new fuel offering at 195 retail stations just since the beginning of the year. E15 provides another readily available pathway to compliance with 2014 RFS blending requirements. Today, more than 40 stations in the Midwest are selling E15; growth in the number of stations offering the fuel can occur rapidly and at a low cost, provided the RFS sends the proper signals to do so. There Will be Sufficient Surplus RINs Available to Bridge Any “Gap” Between RFS Requirements and Actual Volumes Blended Approximately 2.5 billion surplus RINs generated in 2012 were carried forward and made available for compliance in 2013. Based on year-to-date RIN generation in 2013, it seems likely that 1.5-2.0 billion RINs generated this year will be carried into next year and made available for compliance with 2014 standards. EPA designed the RIN program to provide maximum compliance flexibility for obligated parties. Adjusting the RFS to Accommodate the Failure of Obligated Parties to Prepare for Higher Ethanol Blends Would Set a Negative Precedent, Defeat the Purpose of the Program, and Have Unintended Economic Effects The central purpose of the EISA was to expand the RFS and drive the usage of ethanol and other renewable fuels far beyond their historical role as low-level fuel additives (e.g., E10). The need to move beyond E10 in 2014 for the purposes of RFS compliance should hardly come as a surprise to obligated parties. When Congress expanded the RFS to 36 billion gallons as part of EISA, it was abundantly clear to regulated industries that such large volumes of renewable fuel could not be absorbed by the future gasoline market without incremental changes to the vehicle fleet and fuel distribution infrastructure. Whether it was foreseeable that gasoline demand would drop after passage of EISA in 2007 is irrelevant; there was absolutely an expectation that the RFS would soon push ethanol consumption well beyond the E10 level. As highlighted above, we believe it would be unlawful for EPA to waive the RFS based on the “blend wall.” But for the sake of argument, if EPA were to succumb to oil industry pressure and propose a waiver of the RFS requirements based on the so-called “blend wall,” the Agency would eliminate the incentive created by the policy to expand renewable fuels distribution capabilities. In this way, the oil industry’s argument that RFS requirements beyond the “blend wall” are unachievable would become a self-fulfilling prophecy and the long-term future of the RFS would be significantly undermined. A decision by EPA to adjust RFS requirements based on perceived “market constraints” would send devastating signals to the agriculture sector, investors in next-generation biofuels, automakers, fuel blenders, and other entities up and down the renewable fuels supply chain. Ethanol, EPA, Renewable Fuel Standard 2013-10-10T21:15:46+00:00 http://www.ethanolrfa.org/exchange/entry/nrel-analysis-affirms-the-soundness-of-e15-and-exposes-the-flaws-in-the-crc/ http://www.ethanolrfa.org/exchange/entry/nrel-analysis-affirms-the-soundness-of-e15-and-exposes-the-flaws-in-the-crc/ The National Renewable Energy Laboratory (NREL) has carefully completed reviewing 43 studies on the effects of E15 on engine durability, emissions, and other factors and issued a report finding that the available literature “…did not show meaningful differences between E15 and E10 in any performance category.” In specifically evaluating the Coordinating Research Council’s (CRC) controversial engine durability study, NREL found “…the conclusion that engines will experience mechanical engine failure when operating on E15 is not supported by the data.” The NREL report identified numerous flaws with the CRC engine durability study, including: Failure to use E10 as a control fuel. Engines that “failed” on E20 or E15 were subsequently tested on E0, but not on E10 (despite the fact that E10 is the predominant in-use fuel today). This approach presumes that failures were related to ethanol content, rather than any number of other factors that could have caused the failure. One of the engines that “failed” on E15 also failed the test on E0. Quite obviously, ethanol content had nothing to do with the failure for this engine. Yet, CRC discarded the data from this vehicle for the study’s statistical analysis. Cherry-picked engine sample. Despite the fact that most modern engines employ technologies that improve valve and valve set performance, CRC chose engines that do not use these technologies and, thus, were “most likely to have valve problems.” According to NREL, the vehicles chosen “…included several engines already known to have durability issues, including one that was subject to a recall involving valve problems when running on E0 and E10.” Lack of transparency in test cycle schematic. According to NREL, “[t]he durability test cycle schematic published in CRC’s report does not contain enough detail to allow it to be independently reproduced.” Test cycle’s maximum speed limit increased likelihood of valve damage. The CRC test cycle enforced a low maximum engine speed, which “…had the effect of increasing the likelihood of valve damage, because low speed operation may decrease valve rotation rates…” Faulty leakdown failure criteria. Most of the “failures” on E15 and E20 were related to engines that did not pass an arbitrary cylinder “leakdown” test. While other tests in the CRC study used established standards from OEMs and EPA, the leakdown test utilized arbitrary criteria with no scientific basis. According to NREL, “CRC selected a 10% leakdown failure limit, more restrictive (50% below) than that of the lowest value specified by OEMs for engines in the study.” Incorrect use of leakage tester tool. The manufacturer of the leakage tester used states that “no cylinder will maintain 0% leakage” and that “this tool is best used to compare a suspect cylinder to a known good cylinder on the same engine.” However, the CRC test used the tool to measure leakage compared to an arbitrary failure criterion of 10%. Inappropriate statistical analysis. The CRC study used assumed values (i.e., “dummy data”) for vehicles that were not actually tested. These dummy values demonstrated consistent bias in relation to the question that the analysis was intended to determine. The NREL study and Appendix were sponsored by the Renewable Fuels Association. E15, Engines, Ethanol 2013-10-10T21:10:25+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-debate-about-fairness-to-consumers-not-subsidies/ http://www.ethanolrfa.org/exchange/entry/ethanol-debate-about-fairness-to-consumers-not-subsidies/ Apparently, the Wall Street Journal’s zealous defense of the oil industry knows no bounds. In its most recent polemic criticizing biofuels (The Ethanol Enforcers, 10/08/13), the Journal’s Editorial Board takes the incongruous position that anti-competitive behavior by oil companies is a good thing, and takes Members of Congress to task for simply asking that such behavior be investigated. Really? Ethanol is less expensive than gasoline, and according to Phil Verleger, a petroleum industry analyst, it has saved consumers an average of $1.00 per gallon. Oil companies should be maximizing its use in gasoline, not limiting it. But that’s not what’s happening. To protect their market share, refiners are using their control of the fuel distribution infrastructure to deny consumers choice. The WSJ says that is happening because there is not enough demand. But here are the facts. Less than 2.5% of the light-duty passenger cars and trucks use diesel fuel. Yet diesel is sold at 52% of retail stations across the country. Premium fuel is required by ~10% of the fleet, but premium is sold at 87% of retail stations today. By contrast, 9-10% of the cars on the road today are flex-fuel vehicles capable of running on E85 (a blend of 85% ethanol). But E85 is only offered at 2.5% of the nation’s gas stations. This debate isn’t about subsidies. Ethanol receives NO subsidies, only oil companies enjoy taxpayer help for their drilling operations these days. This debate is about whether consumers will be provided choice at the pump. One brave retailer in Kansas actually paid Phillips 66 more than $450,000 to get out of a repressive supply agreement that prevented him from offering alternative fuels. Bravo to him and to the Members of Congress fighting for consumers and lower gasoline prices. Ethanol, Gas Prices, Oil 2013-10-10T13:30:01+00:00 http://www.ethanolrfa.org/exchange/entry/the-chicago-tribunes-about-face-is-giving-bob-dinneen-a-sore-neck/ http://www.ethanolrfa.org/exchange/entry/the-chicago-tribunes-about-face-is-giving-bob-dinneen-a-sore-neck/ Bob Dinneen submitted the following letter to the editor of the Chicago Tribune. The Chicago Tribune editorial, “Crop Politics: Government subsidies promote corn over common sense,” gave me whiplash. In July 2011, you cheered the prospect of a bumper corn crop as “good news for a hungry world.” You wrote “in years to come, more people will want more corn” and encouraged the agriculture sector and government to “prepare today for that increased demand.” Indeed, U.S. farmers took the market signal and today are in the midst of harvesting the largest corn crop in history. But rather than congratulating the American farmer for battling through adversity to produce a bin-busting crop, you—in an unbelievable twist—are now chastising the proactive market response it encouraged just two years ago. Apparently, you just can’t make up your mind. Perhaps your flip flop is the result of misinformation you’ve received. For example, you’re wrong about what fuels today are subsidized. Investments in oil extraction and fracking receive generous subsidies. Ethanol is NOT subsidized. You’re confused about the impact of the RFS on corn prices. On Dec. 19, 2007, the day President Bush signed the Energy Independence and Security Act into law, corn prices closed at $4.34/bushel. Corn prices last week were $4.35/bushel. And you’re obviously unaware of what's happening with food prices. This year, USDA expects meat prices to increase just 1.5% over last year—slightly less than the overall food inflation rate, less than general inflation and far below historical food inflation rates. A recent UN report noted that food prices are driven by skyrocketing oil prices, not biofuels. The RFS has been good for farmers and good for consumers. It has revitalized rural America, providing a value-added market for commodities and eliminated the need for federal crop subsidies, saving taxpayers money. It has displaced imported petroleum products and helped REDUCE the price of gasoline at the pump by as much as $1.00/gallon in 2012 and 2013 on average according to a recent report by Philip Verleger. It has also stimulated investment and innovation in renewable energy, allowing the U.S. to lead the world in biofuels commercialization. I understand consistency is the hobgoblin of little minds. But in this case it would have served you well. If you’re going to flip flop like this in the future, hand out a neck brace with your paper. Corn, Gas Prices, Renewable Fuel Standard 2013-10-10T13:23:33+00:00 http://www.ethanolrfa.org/exchange/entry/dinneen-rfs-an-economic-boon-for-america/ http://www.ethanolrfa.org/exchange/entry/dinneen-rfs-an-economic-boon-for-america/ Bob Dinneen submitted the following letter to the editor of the Daytona Beach News-Journal. I am writing in response to the editorial published in the Daytona Beach News-Journal entitled “Future Ethanol Mandates Would be Bad for Economy.” The Renewable Fuel Standard (RFS) was implemented by both Republicans and Democrats, with the support of the oil industry in 2005. It was later expanded in 2007 and is the most successful energy policy in American history. Under the RFS, ethanol has decreased American foreign oil dependence to 41%, as opposed to 48% without ethanol. Ethanol decreases greenhouse gas emissions by 40-50%. And last, but certainly not least, it has saved consumers money at the pump. A recent analysis by energy economist Philip K. Verleger shows that ethanol production saved consumers an average of $1.00/gallon in 2012 and 2013. Currently E10 (10% ethanol, 90% gasoline) is blended in 97% of America’s gasoline supply. The Environmental Protection Agency (EPA) has approved E15 (15% ethanol, 85% gasoline) as a fuel choice, not an obligation. Yet Big Oil is fighting the RFS and the implementation of the higher level fuel blend because more ethanol means less gasoline, leading to a sharp decrease in their profits. The RFS helps consumers, communities, and the nation as a whole. Don’t mess with the RFS! It has created 87,292 direct jobs and supported over 295,000 jobs. It has revitalized rural communities and gave back $7.9 billion in federal, state and local taxes, which goes towards roads, schools, and first responders. Last year, ethanol generated more than $43.4 billion towards the US Gross Domestic Product. The RFS saves consumers money, decreases foreign oil dependence, reduces greenhouse gas emissions, creates jobs, and helps local communities. What more do you want? Bob DinneenPresident and CEORenewable Fuels Association Gas Prices, Jobs, Renewable Fuel Standard 2013-10-04T13:33:10+00:00 http://www.ethanolrfa.org/exchange/entry/the-rfs-gives-consumers-what-they-want-choice/ http://www.ethanolrfa.org/exchange/entry/the-rfs-gives-consumers-what-they-want-choice/ Bob Dinneen submitted the following letter to the editor of The Hill. I am writing in response to Mark Perry’s article entitled “Consumers Don’t Want Ethanol.” Mr. Perry, you couldn’t be more wrong, what consumers want is choice. The Renewable Fuel Standard (RFS) gives consumers choice at the pump. The RFS offers Americans E85 (85% ethanol, 15% gasoline) for drivers with flex fuel vehicles. The RFS offers Americans E15 (15% ethanol, 85% gasoline) for cars 2001 and newer. And the RFS offers Americans E10 (10% ethanol, 90% gasoline). A recent poll by Fuels America shows that 82% of Americans support having E15 at their local gas station.  In fact, the same poll showed that 76% want access to even higher level blends such as E20 or E30. It’s obvious that people want options. The Renewable Fuel Standard is giving consumers more choice at the pump, and helping move America forward on many levels. On a national level, the RFS decreases America’s dependence on foreign oil to 41%. Without ethanol that number jumps to 48%. It reduces greenhouse gas emissions by 40-50% compared to gasoline and contributed over $43.4 billion to the United States gross domestic product (GDP) in 2012. On a local level, the RFS is revitalizing rural communities. It is creating jobs, often in rural communities, at a time when jobs are hard to find. It has created over 87,000 jobs and helped sustain another 295,000. It is supporting roads, schools, and first responders through more than $7.9 billion paid in federal, state and local taxes.  On an individual level, it saves drivers money at the pump. A recent analysis done by Philip Verleger showed that ethanol has saved consumers an average of $1.00/gallon in 2012 and 2013. One dollar a gallon adds up to very visible savings for drivers. That money can be used to pay the bills or enroll children in extracurricular activities instead of flowing into the gas tank.  After knowing all of this, why on earth would you want to repeal the Renewable Fuel Standard? As you mentioned, people can still get ethanol-free fuel, the RFS just gives them more choice. It’s time for people to stop attacking the most effective energy policy our nation has ever seen. The answer is crystal clear, don’t mess with the RFS!  Bob Dinneen President and CEO Renewable Fuels Association E15, Gas Prices, Jobs, Renewable Fuel Standard 2013-10-04T13:24:05+00:00 http://www.ethanolrfa.org/exchange/entry/bob-dinneen-fact-checks-the-fort-dodge-messenger/ http://www.ethanolrfa.org/exchange/entry/bob-dinneen-fact-checks-the-fort-dodge-messenger/ Bob Dinneen submitted the following letter to the editor of the Fort Dodge Messenger News. What happened to balanced reporting at the Fort Dodge Messenger News? On September 15th, you ran an article, or should I say advertorial, entitled “Valero: Fix the RFS”. There is not one fact check or even one dissenting voice in the entire piece.  With over 40 ethanol plants operating in Iowa, The Messenger missed an excellent opportunity to cover a robust conversation on the importance of maintaining the Renewable Fuel Standard (RFS). Valero’s RFS story has several holes in it. First of all, the letter they sent to the Environmental Protection Agency (EPA) did not expressly ask for a waiver from the 2013 RFS requirements. If Valero, the third largest producer of RINs, a renewable fuel credit, is struggling to meet their requirement, the problem is clearly their own lack of planning. Many oil companies with better business acumen are finding the required RINs and reporting very comfortable profit margins. Perhaps Valero should spend less time spinning the media and more time studying the business practices of their successful peers. The RFS is the single most effective energy policy this country has known. It is successfully lowering our dependence on foreign oil, stimulating investment and job creation in the United States, and improving our environment. The RFS is not broken, but Valero’s logic is. As for E15, approximately 75% of the cars on the road are 2001 or newer and thus able to use E15. Auto manufacturers such as Ford, GM, and Volkswagen have been adding language to their owner’s manuals which includes E15. There are also presently 15 million flex-fuel vehicles in use today which run on E15 and blends as high as E85. Clearly, American drivers know what they want. They want a low-cost, renewable alternative fuel at the pump. Gas stations offering E15 over the past year have experienced increasing consumer demand and increasing profits. Valero also has the data wrong on the costs of a retailer adding an E15 pump. According to the Petroleum Equipment Institute, the cost to retrofit a gas station for E15 could be as little as $1,200 — a cost quickly recouped by increased sales revenue. The RFS is not choosing winners or losers as Valero suggests. It is unfortunate that Valero views itself as a loser. However, by denying consumers access to more biofuels and money-saving, renewable alternatives at the pump, Valero is choosing profits over consumer benefits and choice. E15, Renewable Identification Numbers, Renewable Fuel Standard 2013-09-20T13:40:50+00:00 http://www.ethanolrfa.org/exchange/entry/look-no-further-than-the-numbers-for-proof-that-the-rfs-works/ http://www.ethanolrfa.org/exchange/entry/look-no-further-than-the-numbers-for-proof-that-the-rfs-works/ Bob Dinneen submitted the following letter to the editor of the Marietta Daily Journal. I am writing in response to Jay Ambrose’s article “Ethanol Push Makes Frighteningly Little Sense.” I will tell you, Mr. Ambrose, ethanol makes a lot of sense, and here’s why. The Renewable Fuel Standard (RFS) is the single most effective energy policy this country has ever seen. Need proof? It created more than 87,000 direct jobs while supporting an additional 295,000. It reduced greenhouse gas emissions by 40-50% compared to gasoline and decreased our dependence on foreign oil last year to 41% from an otherwise 48%. But most importantly, it saves you, and all drivers, money at the pump. In 2011, ethanol reduced gasoline by $1.09/gallon and saved families $1,200 in gasoline purchases. But we can start at the beginning. In 2005 the Renewable Fuel Standard was created by a bipartisan Congress and updated in 2007. As a part of the RFS, Renewable Identification Numbers (RINs) were created as a way to keep track of the amount of ethanol blended into gasoline. RINs are free. If you blend a gallon of ethanol, you get a RIN. It’s as simple as that. RINs can also be bought and sold as a back-up in case refiners fall short, but the cheaper and more economical solution is just to blend more ethanol. You claim that solution isn’t feasible, but I strongly disagree. I see it happening right now. E10 is blended in 97% of all U.S. gasoline. Higher level blends such as E85 are available to flex fuel vehicles and E15 is just coming back on the market for vehicles 2001 and newer. Your view on the program is terribly cynical and misguided, and your solution is all wrong. Natural gas and fracking are not the answer. We can’t frack our way to energy independence. But that is another story for another day. E15, Jobs, Renewable Identification Numbers, Renewable Fuel Standard 2013-09-20T13:34:50+00:00 http://www.ethanolrfa.org/exchange/entry/a-reality-check-on-apis-rfs-reality-gap-report/ http://www.ethanolrfa.org/exchange/entry/a-reality-check-on-apis-rfs-reality-gap-report/ On September 17, the American Petroleum Institute (API) released a brochure entitled “The RFS Reality Gap.” Through a series of charts, the API brochure unconvincingly attempts to make a case for repeal of the Renewable Fuel Standard (RFS). API rehashes disproven myths, uses manipulated charts and data, and omits key facts to suggest that the RFS is no longer necessary. In what has become a familiar refrain, API says the RFS should be repealed because of the so-called “blend wall,” falling gasoline demand, the recent boom in fracking, and slower-than-expected progress on cellulosic biofuels. It’s time for a reality check. As the centerpiece of the Energy Independence and Security Act (EISA) of 2007, the expanded RFS has been the nation’s most successful energy policy of the modern era. The program has reduced imports of petroleum products, lowered gas prices, enhanced farm income, and decreased emissions of greenhouse gases and tailpipe pollutants. The RFS has enabled ethanol to capture 10% of the gasoline pool—and that’s exactly why API wants to put a stop to the program. They fear, if given the chance, ethanol and other biofuels will continue to win favor with consumers and take more of Big Oil’s market share. This reality check on API’s “RFS Reality Gap” report offers rebuttals to API’s far-fetched arguments, tells the “rest of the story” that was conveniently omitted from the report’s misleading charts, and underscores the importance of staying the course with the RFS. Environment, Oil, Production, Renewable Fuel Standard 2013-09-19T17:06:03+00:00 http://www.ethanolrfa.org/exchange/entry/bob-dinneen-defends-the-rfs-in-a-letter-to-the-editor/ http://www.ethanolrfa.org/exchange/entry/bob-dinneen-defends-the-rfs-in-a-letter-to-the-editor/ I am responding to the Denver Post Editorial “Ease off throttle on fuel mandate.” The Renewable Fuel Standard (RFS) is singlehandedly the most effective energy policy in America’s history. It has supported over 380,000 direct and indirect jobs, reduced greenhouse gas emissions by 40-50% compared to gasoline, and decreased our dependence on foreign oil. It has also revitalized rural economies, given consumers choice at the pump, and saved drivers $1.09/gallon in 2011. The bipartisan law is now under attack by Big Oil because they do not want to lose their monopoly. But repeal or revision of the law is unnecessary because there is nothing wrong with the RFS that can’t be fixed with what’s right with the RFS. The RFS has a built in flexibility that allows the EPA to adjust targets yearly. It is working, and there is no reason for any congressional action. Don’t mess with the RFS! Bob Dinneen President and CEO Renewable Fuels Association Jobs, Renewable Fuel Standard 2013-09-05T20:46:48+00:00 http://www.ethanolrfa.org/exchange/entry/july-sees-flat-ethanol-exports-surge-in-imports-ddg-exports-second-highest-/ http://www.ethanolrfa.org/exchange/entry/july-sees-flat-ethanol-exports-surge-in-imports-ddg-exports-second-highest-/ July ethanol exports were up just 3% over June shipments, but remained well below the three-year monthly average. Exports totaled 35.1 million gallons (mg) in July, with the lion’s share again being sent to Canada, according to government data released today. Shipments to the European Union continued to be virtually non-existent in the wake of the EU implementing its tariff on U.S.-origin ethanol. Meanwhile, the U.S. imported 56.8 mg of ethanol in July, meaning the U.S. was a net importer for the second straight month. Exports of denatured fuel ethanol totaled 31.6 mg in July, up 9% from June and the highest in four months. Canada was the leading destination, receiving 29.1 mg (92% of the total), while Peru was second with 1.7 mg. Albania took in its first-ever shipment of U.S. ethanol, totaling 839,485 gallons. Exports of undenatured ethanol for fuel use tumbled to 39% to 2.5 mg in July, marking the lowest level since January 2010. Mexico was the top destination at 2.0 mg, followed by the United Kingdom at just 394,796 gallons. Year-to-date ethanol exports stood at 315.7 mg through July, implying an annualized total of 541.2 mg for the calendar year. Imports jumped to their highest level of the year, as Brazil shipped 56.2 mg of ethanol to the U.S. in July. An additional 631,718 gallons of denatured fuel ethanol came by way of Jamaica. Year-to-date imports through July totaled 251.2 mg, implying an annual total of 430.6 mg—well below the EPA estimate of 666 mg needed to meet the RFS advanced biofuel standard. Exports of distillers dried grains (DDG)—the animal feed co-product manufactured by dry mill ethanol plants—surged to its highest level of the year and second-highest monthly total on record. At 911,911 metric tons (mt), July DDG shipments trailed only the August 2010 export total of 1.00 million mt (mmt). China was the leading destination, receiving 468,601 mt, followed by Mexico (91,852 mt), Canada (55,559 mt), Japan (35,275 mt), and Vietnam (34,856 mt). Year-to-date exports tallied at 4.87 mmt through July, indicating an annualized total of 8.35 mmt. Enlarge this chart. DDGS, Ethanol, Exports 2013-09-04T17:01:07+00:00 http://www.ethanolrfa.org/exchange/entry/rfas-dinneen-writes-a-letter-in-response-to-article-by-sen.-inhofe/ http://www.ethanolrfa.org/exchange/entry/rfas-dinneen-writes-a-letter-in-response-to-article-by-sen.-inhofe/ The following letter was submitted this week to the editor. I am writing in response to Senator Inhofe’s article “Obama’s ethanol mandate causes fuel prices to soar”. Before we move into the specifics, we need to clear up one very important fact, the Renewable Fuel Standard (RFS) was passed with bi-partisan support and signed into law by President Bush. This legislation was created to decrease dependence on foreign oil and create a clean and environmentally friendly alternative to MTBE. It has succeeded on both accounts. Now, as I’m sure Senator Inhofe knows, there are two different kinds of corn. There is sweet corn that humans consume, and there is feed corn, which serves as livestock feed. Ethanol is made from feed corn, and a bi-product of ethanol creation is Dried Distillers Grain with Solubles (DDGS), a high protein feed stock. One bushel of corn goes to make 2.8 gallons of ethanol and 17 lbs of DDGS which makes its way back to the farm to feed livestock. I can promise Senator Inhofe, no one is taking food off anyone’s table. We produce both fuel & feed! Second, Senator Inhofe points to two outcomes for refiners under the RFS to either raise the price at the pump to cover RIN penalties, or to export abroad. There are many more options for refiners than that, but let’s look at the most logical one blending more ethanol. Ethanol is 50-60 cents cheaper than gasoline, so offering higher ethanol blends to consumers that want to use them would both save consumers money and allow refiners to meet their obligation without having to purchase credits. There, problem solved. Last, Senator Inhofe claims that “this big government mandate is disrupting the free market.” The free market he is talking about is dominated by Big Oil. There is no way to break into the market controlled by the petroleum industry without policy. The RFS helps create choice and options at the pump. In 2011, the RFS saved consumers $1.09/gallon and families $1,200 in gasoline costs that year. That is significant savings that Oklahomans should welcome. DDGS, Ethanol, Renewable Fuel Standard 2013-08-29T20:31:43+00:00 http://www.ethanolrfa.org/exchange/entry/n.d.-oil-industry-flares-off-1b-worth-of-natural-gasbut-balks-at-investment/ http://www.ethanolrfa.org/exchange/entry/n.d.-oil-industry-flares-off-1b-worth-of-natural-gasbut-balks-at-investment/ As it turns out, the oil and gas industry really does have “money to burn.” According to a recent study, government data show that nearly 30% of the natural gas extracted as a byproduct of fracking for oil in North Dakota is being burned off, or “flared.” That’s right, three out of every 10 cubic feet of natural gas extracted in North Dakota ends up being burned at the wellhead and released into the atmosphere. The study, released by Ceres in July, concludes that the practice of flaring in North Dakota “…is environmentally damaging, economically wasteful and a potential threat to the industry’s long-term license to operate.” No kidding? The report estimated natural gas flaring in North Dakota emitted 4.5 million metric tons of carbon dioxide (CO2) in 2012, which is equivalent to the annual emissions of approximately 1 million cars. In the lexicon of lifecycle greenhouse gas analysis, this means 3-5 grams of CO2-equivalent emissions per megajoule should be added to the carbon intensity score of gasoline/diesel produced from Bakken crude oil to account for flaring alone. Notably, there are several other aspects of fracking that make it considerably more carbon intensive than conventional oil production (e.g., most crude from the Bakken is shipped by rail instead of pipeline; significant emissions are related to transportation and disposal of fracking materials/process aids; increased refining intensity due to presence of high levels of naphthenic acid; etc.). Incredibly, current regulations like the RFS and LCFS assume the carbon intensity of crude oil from the Bakken is no different than light, sweet conventional crude oil. Enlarge this image. While the negative environmental impacts of flaring are obvious, there are tremendous economic consequences as well. As the report points out, “[t]he environmental impact of flaring is not its sole cost. The combustion of natural gas during production represents a significant economic cost for oil and gas producers…” Indeed, natural gas flaring in North Dakota represented roughly $3.6 million in lost revenue per day in May 2013—or more than $1.3 billion per year on an annualized basis. But oil and gas companies are making so much money on the crude oil they are producing via fracking that they don’t even miss the extra income that could be captured through efforts to curb flaring. To put the amount and value of natural gas flared in the North Dakota in context, consider the following: The amount of natural gas wasted in one year in North Dakota could power roughly 35 large ethanol plants (i.e., 100mgy capacity) for an entire year. The natural gas wasted in North Dakota last year is enough to meet the annual needs of nearly 1.3 million homes. That’s roughly the number of households in Los Angeles or Chicago. The value of the natural gas wasted in North Dakota last year is equivalent to the current value of approximately 1.5 billion ethanol RIN credits that can be used for RFS compliance by oil companies who refuse to blend ethanol beyond the E10 level. The value of the natural gas wasted in North Dakota last year is roughly equivalent to the cost of installing some 6,000 E85 pumps and the supporting infrastructure (underground tanks, etc.). Approximately 100,000 retail stations—about 75% of the U.S. total—could be outfitted to sell E15 for the amount of money that is going “up in smoke” via natural gas flaring in North Dakota. Clearly, the economic and environmental costs of natural gas flaring in the Bakken are staggering. If nothing else, the findings of the new Ceres report underscore the hypocrisy of Big Oil’s claim that it can’t afford to invest in the distribution infrastructure needed to bring larger volumes of renewable fuel to the consumer and comply with the RFS. If the oil and gas industry can afford to burn off $1 billion worth of natural gas in one state every year, it can certainly afford to make the infrastructure investments needed to meet the RFS and enhance consumer choice at the pump. Energy, Environment, Oil 2013-08-29T18:46:36+00:00 http://www.ethanolrfa.org/exchange/entry/aecs-coleman-to-wsj-stop-making-stuff-up/ http://www.ethanolrfa.org/exchange/entry/aecs-coleman-to-wsj-stop-making-stuff-up/ In response to a recent Wall Street Journal editorial, AEC Executive Director Brooke Coleman decided to write a letter to the editor in defense of cellulosic ethanol and the RFS. The letter is posted below.   Your editorial "Put A Corn Cob in Your Tank" (Aug. 17) calls cellulosic ethanol a failure and asserts that oil companies are being forced to blend a nonexistent fuel. The Journal also claims that ethanol blending increases pump prices. Whether you like ethanol or not, it certainly doesn't increase gas prices. It's not only 50 cents cheaper than gasoline, but at a more basic level it extends supply. When fuel supply goes up, price goes down. The allegedly failing cellulosic biofuels industry now has commercial plants up and running in Florida and Mississippi, with many more such plants under construction. No question, the worst recession in 100 years slowed us and most everyone else down. But Congress was smart enough to give EPA the authority to waive the obligation on oil companies to blend any cellulosic biofuel gallons not yet available. And that's what EPA has done. You ask why, if ethanol is so perfect, it needs to be mandated. The answer is pretty simple. Global motor fuel markets are so noncompetitive and consolidated, and price controlled by OPEC, that you need policy to achieve what a free market would otherwise do on its own: provide market opportunity for cheaper, better fuels. Pretending that motor fuel markets are working just fine doesn't serve the interests of readers who are getting gouged at the pump and want to know why. R. Brooke Coleman Director Advanced Ethanol Council Boston Ethanol, EPA 2013-08-23T16:20:17+00:00 http://www.ethanolrfa.org/exchange/entry/bob-dinneen-straightens-out-the-facts-in-a-letter-to-the-editor-of-the-wsj/ http://www.ethanolrfa.org/exchange/entry/bob-dinneen-straightens-out-the-facts-in-a-letter-to-the-editor-of-the-wsj/ Let’s get a few things straight. The Wall Street Journal has never liked ethanol and has probably written more editorials opposing ethanol than on most other issues. The latest diatribe (“Put a Corn Cob in Your Tank,” 8/16/2013) comes as no surprise. As in previous editorials, the Journal is long on opinion and short on fact. Let’s look at a few items the Journal ignores or denies: Ethanol reduces prices — With recent reductions in corn prices, ethanol now costs 68 cents a gallon less than gasoline. This cost savings is in keeping with the conclusions of a study by economists at the University of Wisconsin and Iowa State University, which found that, in 2011, ethanol reduced wholesale gasoline prices by $1.09 per gallon nationally. Oil raises food prices, not ethanol — Contrary to the fiction propagated by the Journal blaming higher food prices on ethanol, a recent study by the World Bank concluded that the primary driver of high food prices worldwide has been higher oil prices. Further, the cost of corn, while higher, remains a small component of America’s food bill. Oil gets subsidies, not ethanol — While subsidies for oil and gas average $4.86 billion per year, the Renewable Fuel Standard (RFS) is simply a guideline requiring gasoline blenders to use increasing amounts of renewable fuels. Oil companies pay no fines under the RFS — RFS offers credits for years refiners and blenders use more biofuels than the standard requires. The Journal claims that trading these credits raises the price of gasoline. Nonsense. Credits are traded among oil companies; they don’t raise consumer prices. Bottom line — ethanol and other biofuels compete with oil, but the Journal and Big Oil would rather have the status quo. Bob Dinneen President and CEO, Renewable Fuels Association Corn prices, Ethanol, Oil, Renewable Identification Numbers, Renewable Fuel Standard 2013-08-23T16:14:24+00:00 http://www.ethanolrfa.org/exchange/entry/june-ethanol-imports-fall-to-lowest-level-in-nearly-three-years/ http://www.ethanolrfa.org/exchange/entry/june-ethanol-imports-fall-to-lowest-level-in-nearly-three-years/ U.S. ethanol exports fell to 34 million gallons (mg) in June, down 17% from May and the lowest monthly total since August 2010. Meanwhile, ethanol imports were 35.7 mg in June, meaning the U.S. was a net importer for the first time in six months. Year-to-date exports stood at 280.6 mg, indicating annualized exports of 561.2 mg. Exports of denatured fuel ethanol totaled 29.1 mg in June, down marginally from May. Canada was again the leading destination by an overwhelming margin, accounting for 93% of shipments. Peru (1.7 mg) and the Netherlands (287,509 gals.) were other top markets. Exports of undenatured ethanol for fuel use plunged to 4.0 mg—less than half of May’s total and the lowest since July 2010. Brazil was the top customer for undenatured fuel product, bringing in 2.7 mg. At 1.3 mg, Mexico was the other top importer of U.S. undenatured fuel ethanol in June. U.S. exports of denatured and undenatured ethanol for non-fuel, non-beverage purposes totaled 846,390 gals. in June. U.S. imports of ethanol jumped to 35.7 mg in June, up 58% from May. More than 99% of the imports came directly from Brazil, with a trace amount coming from the United Kingdom. Year-to-date imports stood at 194.4 mg through June, far behind the pace envisioned by EPA to meet the 2013 advanced biofuel requirements. EPA expects 666 mg of imported sugarcane ethanol will be needed in 2013. Exports of distillers dried grains, the animal feed co-product generated by dry mill ethanol plants, were up 4% at 754,102 metric tons (mt). That marks the highest monthly total since May 2012. China was the top market in June, bringing in 306,373 mt. Mexico (109,023 mt) and Canada (50,725 mt) followed. Year-to-date DDG exports stood at 3.96 million mt through June. Enlarge this chart.   DDGS, E-Xchange, Ethanol, Exports 2013-08-06T16:40:03+00:00 http://www.ethanolrfa.org/exchange/entry/what-do-big-oils-quarterly-earnings-say-about-the-real-impact-of-rins-on-u/ http://www.ethanolrfa.org/exchange/entry/what-do-big-oils-quarterly-earnings-say-about-the-real-impact-of-rins-on-u/ It’s earnings time once again and quarterly financial results are pouring in from petroleum companies. It’s not surprising that many oil companies are yet again reporting big margins and huge profits. But what is somewhat surprising is what these companies are telling investors, analysts, and the SEC about the real impacts of the RFS and RINs on their bottom line and U.S. fuel prices. The information shared during earnings season has differed significantly from the American Petroleum Institute’s bombastic advertisements, embellished op-eds, and exaggerated Congressional testimony. In fact, many companies involved in petroleum refining, blending, marketing, and retail announced that RINs had little or no impact on their operations; and in many cases, these companies profited from the sale of RINs. As noted by OPIS, “…some refiners may be enjoying the higher RIN values despite the prevalent market perception that refiners are incurring rising RIN costs.”[1] Below are several revealing statements from companies involved in gasoline refining, blending and marketing.   BP With respect to RINs, BP told analysts and investors that the company is “…quite well positioned in the short term. We're net long RINs. We've been able to trade into this spike recently and done quite well out of it. I'm very pleased about that.” According to Reuters, “BP also blends a fair amount of ethanol with gasoline at its terminals on the U.S. East Coast and Gulf Coast, which generates RINs…”[2]   ExxonMobil The nation’s largest refiner stated during its earnings call that RINs have had little or no effect on the company’s financials. “We are a net purchaser of RINs, but I will tell you we are pretty well balanced. We do generate the majority of our credits by blending our biofuels directly. …it’s not real significant,” said David Rosenthal, Vice President of Investor Relations & Secretary. When asked by an analyst if RINs had any material impact on ExxonMobil’s quarterly financial performance, Rosenthal replied, “No, not at all.”[3]   Phillips66 Phillips66 CFO Greg Maxwell reported that RINs have not necessarily affected strong refining margins or refinery runs: “…with the market cracks where they are, they're still encouraging high run rates.” Maxwell also noted that while RINs may represent a cost for Phillips66’s refining business, they are a profit for the company’s blending and marketing business. “All of the RINs that are generating through our blending activities show up as a benefit in Marketing and Specialties, and then the cost of those RINs or the value, if you will, are transferred over to Refining.” As noted by OPIS, “…the company operates on both ends, getting RINs from blending through its terminal systems and buying RINs when it sells unblended gasoline.” OPIS further reported that Executive Vice President Tim Taylor said “…the company may increase [biofuel] blending to reduce its RIN exposure.”[4]   Hess Corporation According to Chief Financial Officer John Rielly, “Our retail and terminal networks generate more renewable credits than we require to meet our supply needs. We're generating around $20-million/month of excess RINs. [For the third quarter] if you were to take the current pricing in place right now and say you sold all the RINs at that price, you could expect us to record an after-tax benefit of $35-40 million.” Rielly also stated that “…the cost of RINs rising in recent months has led to some RIN sharing at wholesale levels, which is reducing our retail fuel margins and offsetting some of the direct benefit from selling the excess RINs.”[5] This means Hess is passing along some of the value of the RIN to customers.   Murphy Oil Murphy reported the increase in its refining/marketing income in the quarter was “…primarily due to better results for ethanol production operations and higher sales prices for ethanol renewable identification numbers (RINs) in the current period. …Profit from ethanol RIN sales was higher in 2013 due to significantly stronger sales prices for these credits.”[6]   Marathon Petroleum Company In Marathon’s quarterly earnings call, senior vice president of Finance and Commercial Services Garry Peiffer admitted that gasoline imports haven’t been affected by higher RIN prices, as has been threatened previously by some oil trade groups. Peiffer said, “…gasoline imports were similar to past years, so that means that importers—who have to acquire a RIN—were still making money bringing barrels to the U.S.….” Marathon also acknowledged the “zero-sum” nature of the RIN market, stating that RIN costs are not likely to be passed on to consumers. Peiffer said, “There are marketers out there…who are net sellers of RINs and then we have obligated parties who are buyers of RINs convening at the wholesale level, so it’s going to be very confusing for buyers of E10 and other biofuel [blends] to say is there a [pass-through RIN cost] added on or is it not added on…”   Casey’s General Stores As noted by OPIS, the latest quarterly earnings for Casey's General Stores “…would have been well under spring 2012 levels if not for the impact of renewable fuel credits, or RINs, generated by the Midwestern retailer. Casey's divulged that its margins benefited from the sale of 10.3-million RINs for $4.8-million in the period.”[7]   Western Refining Western Refining reported that increasing its wholesale and retail operations has allowed the company to obtain the RINs it needs to comply with the RFS: “As we have mentioned previously, our growing Wholesale and Retail businesses generate RINs which satisfy a significant portion of our renewable fuel obligations.”[8]     [1] OPIS Biofuels Update. 7-31-2013. [2] http://www.reuters.com/article/2013/07/30/bp-rins-idUSL1N0G01IT20130730 [3] ExxonMobil 2nd Quarter Earnings Call. 8-1-2013 [4] OPIS Biofuels Update. 7-31-2013. [5] http://www.platts.com/latest-news/oil/houston/volatile-crude-spreads-have-made-rail-attractive-21354880 [6] http://online.wsj.com/article/PR-CO-20130731-916461.html [7] Oil Express News Alert. 6-14-2013. [8] http://www.reuters.com/article/2013/08/01/idUSnGNX3lMHQD+1cf+GNW20130801 Gas Prices, Oil, Renewable Fuel Standard 2013-08-01T17:22:02+00:00 http://www.ethanolrfa.org/exchange/entry/bob-dinneen-to-wsj-stop-spreading-big-oils-misinformation.-rins-are-free/ http://www.ethanolrfa.org/exchange/entry/bob-dinneen-to-wsj-stop-spreading-big-oils-misinformation.-rins-are-free/ To the Editor -- RINs are free. I repeat RINs are free. In suggesting that RINs are driving up the price of gasoline (“The Ethanol Tax”, July 19th, Page A4) the WSJ is once again simply regurgitating the misinformation from Big Oil and ignoring the facts; anything to maintain oil’s death grip on its monopoly of the U.S. motor fuel market and consumers’ wallets. RINs are not raising gas prices because RINs are FREE. RINs (Renewable Identification Numbers) are the compliance mechanism oil companies use to demonstrate they have met their renewable fuel obligation. Refiners receive a free RIN for every gallon of ethanol purchased by a producer. Refiners and gasoline marketers can trade RINs amongst themselves to ease the compliance burden. A thinly traded market is now developing among refiners for these credits, but if refiners believe the price for a RIN offered by their competitor is too high, they could simply use more ethanol and get more free RINs! Indeed, given that ethanol is ~$0.70 cheaper than gasoline today, the sales of E85 and other higher ethanol blends is increasing exponentially. Recent trends show gasoline prices were falling when RIN prices spiked in March. And gasoline prices have been falling again since early June while RIN prices have continued to escalate. The correlation of RINs to gas prices since Feb. 1 has been -0.3, meaning increasing RIN prices correlate best to decreasing gas prices. Oops. It is time for refiners to do the right thing. Invest in infrastructure, offer higher level blends, and stop playing financial games in an opaque market in the name of avoidance. A recent poll by Research Now showed 75% of Americans want more renewable fuel options at gas stations and 73% favor the Renewable Fuel Standard. Three in five blame the oil industry for high gas prices. Apparently, consumers are smarter than the WSJ. Bob Dinneen President and CEO Renewable Fuels Association Ethanol, Gas Prices, Production, Renewable Fuel Standard 2013-07-24T17:52:27+00:00 http://www.ethanolrfa.org/exchange/entry/u.s.-ethanol-exports-firm-in-may-distillers-grains-exports-hit-1-year-high/ http://www.ethanolrfa.org/exchange/entry/u.s.-ethanol-exports-firm-in-may-distillers-grains-exports-hit-1-year-high/ U.S. ethanol exports totaled 40.8 million gallons (mg) in May, nearly identical to April’s total of 40.9 mg, according to recently released government data. Canada was again the leading destination, followed by the Philippines and Brazil. Year-to-date U.S. exports through May stood at 246.6 mg, implying an annualized total of 591.8 mg. Meanwhile, U.S. ethanol imports tallied at 22.6 mg in May, with all of the product coming directly from Brazil. Exports of denatured ethanol for fuel use were 29.9 mg in May, up slightly from the April total of 26.2 mg. Canada again received the lion’s share of denatured product (27.4 mg), followed by Peru (2.0 mg) and the Netherlands (467,534 gals.). Undenatured fuel ethanol exports totaled 9.9 mg, down 28% from April and the lowest since November 2012. The Philippines was the top customer for undenatured product in May (3.6 mg), followed by Brazil (2.9 mg), Mexico (1.7 mg) and the Netherlands (1.5 mg). Denatured and undenatured ethanol exports for non-fuel, non-beverage use tallied 1.0 mg. U.S. ethanol imports for the month were 22.6 mg, up from 17.1 mg in April. All of the imports came from Brazil. Year-to-date imports stood at 158.7 mg through May, implying an annual total of 380.9 mg. This would be far below the 666 mg of imports needed to meet the RFS2 advanced biofuel standard in 2013, as estimated by EPA. Year-to-date, the U.S. has been a net exporter of 87.9 mg in 2013. By comparison, net exports for Jan.-May 2012 were 318.8 mg. U.S. distillers grains exports jumped to 725,393 metric tons (mt) in May, up 6% from April and the highest monthly total in a year. China was again the top customer for DG exports, receiving 243,452 mt. Mexico (122,215 mt), Canada (54,362 mt), Viet Nam (50,459 mt), and Japan (33,095 mt) rounded out the top five destinations. Year-to-date DG exports stood at 3.21 million mt through May, implying an annual total of 7.7 mmt. Enlarge this chart. DDGS, Ethanol, Exports, Production 2013-07-08T16:20:33+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-on-two-wheels/ http://www.ethanolrfa.org/exchange/entry/ethanol-on-two-wheels/ I have been riding motorcycles for 23 years now, all on ethanol-blended fuel. I grew up in the State of Kansas in a rural community, and my family used ethanol because it was the right thing to do. Back then, you had to hunt for the ethanol blend, but now it is available at nearly every gas station in the country. In more than two decades, I have not had one issue with any motorcycle I have owned while using ethanol. I have been to Sturgis multiple years, all promoting ethanol, and have hosted promotional activities at the Legendary Buffalo Chip. I have talked with numerous riders at fuel stations along the way, and many while at the rally, all with differing opinions on ethanol. Those that speak negatively about the fuel rarely have experienced any issues personally. They are going off of warnings from organizations like AMA, the American Motorcycle Association, from a friend or colleague, or stories from their local mechanic. If they will allow you to answer questions, they usually become positive, or at least neutral. In fact, if they rode their motorcycle to Sturgis, there is a very strong chance they used ethanol along the way, and most don’t realize that. In this picture, riders are lining up to fuel with ethanol as part of a promotion in 2012 during the Sturgis Rally. E10 (10 percent ethanol, 90 percent gasoline) has become the standard fuel for most Americans. Ninety-six percent of all unleaded sold today is E10. Motorcycle manufacturers endorse it, and it appears in all late model owner’s manuals. The debate used to be that E10 was not acceptable for motorcycles, but that changed in the past couple of years with the idea of E15 (15 percent ethanol, 85 percent gasoline). Suddenly, the same organizations that wanted to stop E10 wanted to ensure its availability and overnight we had a change of thought. E15 was ultimately approved by the Environmental Protection Agency (EPA) for only 2001 and newer vehicles, along with all flex-fuel vehicles (FFVs). No motorcycles are approved to use E15, yet AMA has made it a top priority to stop. They are having a lobby day this week in Washington. Their pitch to Congress is to stop E15 until testing can be done to see if there will be any damage or harm to motorcycles should they use it. It is illegal for a motorcycle to use E15. How about we just follow the approval and the label, and we don’t use it. They also claim that the warning label, seen here, is not enough. Ironically, there are already fuels that motorcycles cannot use at many fuel retailers, and somehow we function with this issue daily. The only one of these fuels that provides any level of education to motorcyclists is E15. Just look at the label. No such label exists for diesel, 85 octane, E85 or kerosene. One would think a misfueling concern from AMA would encapsulate all fuels, not just one. In fact, E15 is now available at fewer than 30 stations nationwide, a drop in the bucket compared to these other fuels. We have managed to not use these other fuels in our motorcycles for decades. I think we can handle this one too. AMA also expressed concern with hose configurations for E15 at retail, and the amount of fuel left in the hose from a previous customer. The RFA worked with EPA to address their concern on more than one occasion and E15 can now be sold in one of three ways: Dedicated hose for E15. Common hose with E10/E0, with a 4-gallon minimum. Common hose with E10/E0, with at least one dedicated fueling position with a dedicated E10 hose. I thought I would share one more story, that of my Harley. I own a 2009 Harley Road King Classic. After purchasing it new, I took it to a Harley Master Technician, and asked what we could do to allow it to be flex-fuel, capable of using any fuel from E10 (10 percent ethanol, 90 percent gasoline) to E85 (85 percent ethanol, 15 percent gasoline). We ultimately agreed that we would not change the engine at all, but would change the computer, injector and oxygen sensor. We replaced the computer to give it a wider band on air/fuel ratio, as that needed mix varies greatly between E0 and E85. We replaced the oxygen sensor simply because it came with the new computer. Finally, we replaced the injector with one of a larger size allowing more fuel to be delivered if the computer asked for it. That is it. You can see in the picture some fine-tuning on the dyno. The Harley now has been ridden more than 10,000 miles since this project started, and without issue. I use E85 when available for two main reasons: octane and price. Our bikes require premium, and E85 is usually 96+ octane, but more than $1/gal cheaper than premium. I do have a slight fuel economy penalty, usually less than 10 percent, but it still pencils well. The point of this story is not to encourage others to do the same. I am sharing results from this project with Harley, and other manufacturers, in an attempt to show just how close to compatible these motorcycles are today with higher blends of ethanol. AMA wants you to believe that fueling your motorcycle once with E15 will destroy it, yet I have fueled nearly 50 times with E85 and found no problems. All that said, EPA says you cannot use it, it is not legal, so don’t. In closing, I thought I would share what is stated in the current Harley-Davidson owner’s manual regarding ethanol. “Fuels with an ethanol content of up to 10% may be used in your motorcycle without affecting vehicle performance. U.S. EPA regulations currently indicate that fuels with 15% ethanol (E15) are restricted from use in motorcycles at the time of this publication. Motorcycles delivered in some countries are calibrated to operate with higher ethanol concentrations to meet the fuel standards in those countries.” Pretty simple stuff here, use E10, have zero issues, avoid E15. Ethanol continues to be a discount to gasoline providing the least expensive octane source on the market, along with serving as a gasoline extender. This ultimately lowers the price at the pump for all of us. We at the Renewable Fuels Association continue to provide outreach to motorcyclists with an E15 handout and more information on our website, and stand ready to work with others in any constructive ways to ensure motorcycles use the correct fuel. Safety, E15, Engines, Ethanol, EPA 2013-06-18T12:58:45+00:00 http://www.ethanolrfa.org/exchange/entry/picture-thousand-words-crc-engine-durability-highlights-failures-on-fuel/ http://www.ethanolrfa.org/exchange/entry/picture-thousand-words-crc-engine-durability-highlights-failures-on-fuel/ There continues to be a large amount of chatter around the controversial Coordinating Research Council’s (CRC) Intermediate-Level Ethanol Blends Engine Durability Study (Report No. CM136-09-1B). What I haven’t seen is a visual representation of the test program ever make it into press releases, Congressional hearings, newspaper articles, or AAA publications. If indeed a picture is worth a thousand words, here are the test program results — in one thousand words. Below is the visual representation of the CRC’s Engine Durability Overall Results (from page 11 of the report.) Enlarge this image. Colorful picture isn’t it?  From the API/CRC press releases, one would gather the only failures in the test program were on ethanol blended fuels. That is far from factual. 33 percent of the vehicles tested failed on gasoline with no ethanol. 75 percent of the eight vehicle models (Vehicles 1, 3, 4, 5, 6, 7) tested passed on E20, however one of the duplicate models failed. The objective of the test program was “to identify possible engine component wear caused by additional ethanol content in the fuel…”  If incremental effects of ethanol were the research objective, then E10, which makes up over 95 percent of the gasoline available in the United States, should have been included in the evaluation. The test protocol selected for this test program was “employed by an original equipment manufacturer (OEM)…”  If the benchmark for acceptable engine durability is the protocol used in this research program, then why is a single original equipment manufacturer using this engine durability protocol? Several of the vehicles were “waived” of further testing and subsequently deemed acceptable as no further testing was completed.  It was known that a number of these vehicles were under recall at the time of the testing. What is not being discussed from this report is the engine failure on gasoline without any ethanol. What are the ramifications to consumers who purchase Vehicle 8? The inference from API and CRC is this protocol sets the minimum standard for engine durability for the entire fleet of cars in use today. Liberally apply this test program’s result to today’s fleet of 240 million vehicles, and 80 million vehicle owners are stranded today because their vehicles won’t even operate on gasoline! Enlarge this image. Why isn’t Senator Vitter, in protecting his 4 million constituents in the great state of Louisiana, investigating why this vehicle failed on EVERY fuel tested?  To parody the OEM representative in the New York Times, are the owners of Vehicle 8 already walking?? The Department of Energy (DOE) confirmed the test protocol used here is highly speculative. Further, there should be a detailed explanation of the failure of the control case, assumedly the gasoline with no ethanol. There is no explanation. Mum’s the word on the control failure ramifications.  Without scientific assessment of the failure on every test fuel, the research results should not, and importantly, cannot be applied broadly to any real instance. The Renewable Fuels Association did not participate in this study because the protocols chosen for this program were unusual, the pass/fail criteria questionable, the vehicles were geared to provoke engine failures, and the test fuels were not indicative of “incremental” amounts of ethanol.  In my assessment, the RFA and government agencies didn’t want to participate simply because they didn’t want to waste taxpayer money on political science. Engines, Ethanol, Test 2013-06-07T19:33:32+00:00 http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-e15-is-well-tested-and-safe-to-use/ http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-e15-is-well-tested-and-safe-to-use/ I’m writing in response to the guest opinion piece that ran on May 18 by Stephen Buck. It was addressed to Congresswoman Bustos and entitled “Stop Using E15 Fuel Until Further Study is Performed.” I can assure Mr. Buck and Congresswoman Bustos that E15 has been thoroughly tested by the Environmental Protection Agency (EPA) and the Department of Energy (DOE). In fact, E15 is the most tested fuel additive the EPA has ever approved. EPA does not take these tests lightly. DOE tested over 80 vehicles, amassing more than six million miles. EPA concluded the E15 blend is safe for cars 2001 and newer. E15 has been on the road for 10 months, racking up roughly 40 million miles, and there have been no reports of engine trouble. I can assure you, E15 was well tested both by the federal government and now, by consumers. The EPA E15 tests were strictly focused on light duty vehicles. E15 was not approved for motorcycles or other small engines. In fact, it is illegal to put E15 into a motorcycle. Gas stations offering E15, and there are only a handful today, are required by EPA to ensure at least one — clearly labeled — pump at each station has a fuel suitable for motorcycles and small engines. It is important to note that E15 is not mandated. Consumers have the option to pay more for a lower concentration of ethanol, even though E15 is cheaper and perfectly suited for vehicles 2001 and newer. We would never put a product into market that was unsafe or untested. E15 is both safe and tested, and I hope that it continues to be used by drivers throughout the country. Bob Dinneen E15, Ethanol, EPA, Safety, Test 2013-06-05T16:50:43+00:00 http://www.ethanolrfa.org/exchange/entry/u.s.-ethanol-exports-tumble-in-april-imports-lowest-in-11-months/ http://www.ethanolrfa.org/exchange/entry/u.s.-ethanol-exports-tumble-in-april-imports-lowest-in-11-months/ U.S. ethanol exports totaled 40.9 million gallons (mg) in April, down 30% from March and the lowest monthly total since November 2012, according to government data released today. Total exports through the first four months of 2013 stood at 205.8 mg, implying an annual total of 617.4 mg. Meanwhile, U.S. fuel ethanol imports in April hit their lowest point since May 2012, totaling just 17.1 mg. Exports of denatured ethanol for fuel use totaled 26.2 mg in April, the lowest in 2½ years (November 2010). Canada was again the leading destination, receiving 23.2 mg. Peru was the only other notable customer for denatured fuel ethanol exports in April, taking in 2.7 mg. Shipments of undenatured ethanol for fuel use tallied 13.8 mg for the month, with Finland the top destination at 5.2 mg. The Philippines (2.7 mg), Mexico (2.4 mg), Jamaica (2.2 mg), and Brazil (1.2 mg) were other top customers. Exports of denatured and undenatured ethanol for non-ethanol industrial uses were just over 900,000 gallons. Ethanol imports in April registered at 17.1 mg, with all of the product coming directly from Brazil. Year-to-date ethanol imports stood at 136.2 mg, implying an annualized total of 408 mg—well below the 666 mg EPA expects will be needed to meet the RFS2 advanced biofuels standard. Distillers grains exports jumped to their highest level of the year in April, up 16% from March. Shipments totaled 688,000 metric tons (mt) for the month, with China again serving as the top buyer (271,260 mt). Mexico (97,803), South Korea (58,507 mt), Canada (40,342 mt), and Turkey (37,004 mt) were other leading customers. Year-to-date distillers grains exports were 2.48 million mt, implying annual shipments of 7.45 million mt. Enlarge this chart. DDGS, Ethanol, Exports, Production 2013-06-04T14:33:35+00:00 http://www.ethanolrfa.org/exchange/entry/a-call-for-global-cooperation-in-spain/ http://www.ethanolrfa.org/exchange/entry/a-call-for-global-cooperation-in-spain/ Last week, I had the unique opportunity to participate in the World Biofuels Conference in Seville, Spain. The conference was held at the beautiful Hospital de los Venerables, an over 300 year old building that once housed a hospital for priests. The conference convened in the hospital’s chapel, adorned with frescos and artwork that leaves one breathless. I’ve never spoken in a more inspirational location. The hospital is close to the famous Seville Cathedral, the third largest in the world, where the great explorer Christopher Columbus is now entombed. Despite the beautiful location, it wasn’t all love for the European Union. I sat on a panel discussing “The Outlook for Global Ethanol Trade in 2013.” I was joined by other leaders in global biofuel production, including representatives from UNICA, the Brazilian ethanol trade association, and ePURE, the European producers’ trade group. We discussed the future of global trade in ethanol, and the recent European Union (EU) anti-dumping duties that were unfairly imposed on ethanol from the United States earlier this year. The European Renewable Ethanol Association, ePURE, argued that its recently imposed anti-dumping tariffs against the United States, as well as its other actions on biodiesel from Argentina and Indonesia, were not protectionism, but instead were just “defensive posturing”. While the room consisted of many individuals from all parts of the European industry, the position held by ePURE was met with strong opposition from those in attendance. Many criticized the European ethanol producers for ignoring their limited capacity and inability to meet the European demand on their own, and the chilling impact that such a posture would have on global biofuel trade. It is clear from the opposition in the room that most believe Europe’s industry would be better served with a more cooperative approach to trade relations. I informed the conference participants that the Renewable Fuels Association has been working hard to overturn this unfair and unwarranted EU decision. The RFA recently filed a complaint with the General Court in Luxembourg seeking to overturn the 9.6 percent duty on American imported ethanol, and is working with the U.S. government to encourage them to file a challenge before the World Trade Organization. I stressed the need to work together to increase the overall size of the ethanol market instead of fighting over current markets. Ethanol is not a finite market. Right now countries are fighting for pieces of the pie, but what we need is for countries to work together to create a bigger pie by increasing demand across the globe. There are emerging markets all over the world, including Peru, the Philippines, and Nigeria, that are working to establish effective pro-ethanol fuel policies. We must work as a group to support and assist in these efforts. There are also potential markets that will develop as the world continues to wean itself of more environmentally dangerous additives like MTBE. To expand the market, we as global ethanol leaders must work together to encourage and foster the demand for ethanol around the globe, and promote its benefits as a global commodity. While discussing the need to expand the global market, I met with Meghan Sapp, the Secretary General of Partners for Euro-African Green Energy (PANGEA). She is focusing on Africa and its desperate need for clean transportation, electricity and cooking fuel. She is out in front of the pack on this issue and believes ethanol is the answer. I am excited to see her work develop and look forward to working with her to use ethanol to help the African people and expand markets in this region.     I was encouraged that many in the room opposed the EU anti-dumping tariffs and showed interest in expanding global markets. The conference enhanced my understanding of the world ethanol market, and I was pleased to have the opportunity to challenge countries to think on a global scale. Ethanol, Environment, Exports, Tariff 2013-05-31T16:02:59+00:00 http://www.ethanolrfa.org/exchange/entry/john-stossels-a-coward-but-why-is-the-mainstream-media-afraid-of-the-facts/ http://www.ethanolrfa.org/exchange/entry/john-stossels-a-coward-but-why-is-the-mainstream-media-afraid-of-the-facts/ Recently I was invited to participate in a segment of John Stossel’s Fox Business show. He was dedicating his show to energy “myths” and intended to do a segment on ethanol. Knowing that Stossel has a history of being decidedly negative toward ethanol, I was originally skeptical. But I was convinced to go on the show because it would be taped in front of a live audience and I assumed I would at least be able to get my points out without editorial bias.  Last Thursday the show aired. I was wrong. Live to tape doesn’t mean they don’t edit. And edit they did. Gone was the explanation I gave for why it is gasoline and energy driving food prices, not ethanol. Gone was the bit I did explaining how ethanol has revitalized rural communities, created jobs and stimulated economic growth. Gone too were parts of my discussion about climate change. All that was left were abbreviated comments responding to biased charges like, “environmentalists don’t support ethanol” and “ethanol’s lower BTU content increases consumer gasoline costs.” Curiously, none of the comments from Stossel’s other guest, chosen for his antipathy toward ethanol, were similarly censored. I’ve been on numerous TV shows where both sides are treated fairly, without editing. Not here. With Stossel, it appears I was a prop, not a guest. I suppose I should have known better. I actually think Stossel’s audience might have benefited from the information I was trying to get out. There has been so much misinformation, people are surprised when I tell them how significant the feed products from ethanol plants are to livestock nutrition, they are stunned to learn that ethanol uses only 3 percent of the world’s grain supply, and they recognize the truth that energy prices affect every aspect of food production, transportation, storage and marketing. But Stossel was apparently afraid — afraid the truth would undermine the paradigm his show was attempting to reinforce — that ethanol is just another government boondoggle with no real societal benefit. I was off message. But Stossel’s not alone. Most of the mainstream media, particularly the oil industry apologist Wall Street Journal and other east coast elitists, genuinely don’t understand ethanol, value added agriculture, or farm economics. Their ignorance of what happens in those “fly-over” states is real, and it affects their thinking on everything they write or broadcast that might have some impact on rural America. I know of no major media outlet with a dedicated ag reporter. Agriculture contributes more than $400 billion to the national economy; how can they ignore it? It’s not like there aren’t dedicated professionals covering the topic. There are scores of knowledgeable hard-working ag-journalists that deserve a wider audience. I met with a bunch of them recently when the National Association of Farm Broadcasters came to Washington for a series of meetings with policy makers. Yeah, they actually still go out and report, seeking the story, not satisfied writing or broadcasting off of someone’s press release, talking points or pitch document. They provide some measure of hope that the entire profession hasn’t surrendered their integrity. But unless and until the mainstream media recognizes their failure to comprehend agriculture, the challenge of breaking through the bias so evident in the John Stossels of the world remains. Next time I’ll bring my own prop — an ear of #2 field corn — and invite Stossel to eat it! Agriculture, Ethanol, Food, Media 2013-05-29T15:02:47+00:00 http://www.ethanolrfa.org/exchange/entry/what-iluc-amazon-deforestation-rates-hit-lowest-point-since-at-least-1988/ http://www.ethanolrfa.org/exchange/entry/what-iluc-amazon-deforestation-rates-hit-lowest-point-since-at-least-1988/ Five years have passed since Timothy Searchinger famously wrote in Science magazine, “Higher [crop] prices triggered by biofuels will accelerate forest and grassland conversion [in Latin America] even if surplus croplands exist elsewhere.” Despite the fact that Searchinger’s speculative findings were roundly rejected by the scientific community, the paper continues to be used by biofuel opponents to perpetuate the myth that U.S. ethanol growth is somehow causing “indirect land use change” (or ILUC) in the Amazon. And, unfortunately, some policymakers and regulators rushed to judgment and included trumped-up ILUC penalties against biofuels in important policies like the Renewable Fuel Standard and California Low Carbon Fuel Standard. Time and experience have exposed Searchinger’s ILUC theory for what it really was—a pseudo-scientific hoax designed to cloud the policy debate over biofuels and stop their expansion. Just recently it was revealed that deforestation in the Amazon has fallen to its lowest rate since the Brazilian government began tracking it in 1988. Based on analysis of satellite imagery, Brazil’s National Institute for Space Research (INPE) recently announced deforestation in 2012 amounted to 1,798 squarer miles—down 27% from 2011 and less than one-fifth of the deforestation rates seen a decade ago. The 2012 data marked the fourth successive annual reduction in deforestation rates (and the seventh decline in the last eight years). After surging in 2004, deforestation in the Amazon has fallen dramatically in response to the enactment of government policies and agriculture industry-led protective measures. All of this has occurred as U.S. ethanol production has increased dramatically. In fact, ethanol production has more than quadrupled since the 2003-04 timeframe, when deforestation rates were at their highest. Indeed, the correlation between U.S. ethanol production and Amazon deforestation has been almost perfectly inverse since 2004—given the anti-ethanol crowd’s long history of assuming correlation implies causation, do you think they’ll actually credit U.S. ethanol expansion for the sharp decline in deforestation?! Sources: Brazil National Institute for Space Research & U.S. Energy Information Administration The latest deforestation figures are just one more example of the better information and data that is now available to policymakers and regulators regarding ethanol’s true land use impacts. As it did here and here, RFA will continue to encourage regulatory agencies to take notice of these new developments and make revisions to their obsolete ILUC analyses. Agriculture, Corn, Brazil, Ethanol, Energy, Environment, Land Use 2013-05-28T16:26:27+00:00 http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-dinneen-to-big-oil-focus-on-the-facts/ http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-dinneen-to-big-oil-focus-on-the-facts/ In an interview published on May 22, Charles Drevna, President of the American Fuels & Petrochemical Manufacturers, disparaged the Renewable Fuel Standard (RFS) and claimed it negatively effects consumers. He couldn’t be more wrong, and left out many key facts that would inform this debate. It is no surprise that the oil industry’s lobbyist fails to mention that when compared to gasoline, ethanol decreases greenhouse gas emissions by 40-50 percent. Mr. Drevna also fails to mention that the RFS has created and sustained more than 70,000 jobs in the United States while also indirectly supporting an additional 295,000. He fails to mention that the RFS decreased our dependence on foreign oil by replacing 462 million barrels of imported oil with ethanol last year. He fails to mention that in 2011, the RFS saved the average American family $1,200 in gas purchases. The oil industry can turn a blind eye to these facts, but the Orlando Sentinel should not. The RFS clearly strengthens America and puts the needs of drivers first. Florida recently passed state legislation that would repeal the state’s renewable fuel requirement. Even Mr. Drevna acknowledges that the Florida legislation is pointless. The federal RFS will still apply. Florida’s legislation is entirely for show and is clearly pandering to oil companies, really only sending a decidedly negative signal to investors not to build advanced biofuels here. That’s no justification for legislation, and no benefit to consumers in the state. Bob Dinneen Environment, Gas Prices, Jobs, Oil, Renewable Fuel Standard 2013-05-23T17:34:42+00:00 http://www.ethanolrfa.org/exchange/entry/expanding-trade-opportunities-in-south-korea-and-japan/ http://www.ethanolrfa.org/exchange/entry/expanding-trade-opportunities-in-south-korea-and-japan/ As part of the RFA’s commitment to increasing ethanol export markets, I recently had the unique opportunity to join the U.S. Grains Council on a trade mission to South Korea and Japan. We visited Seoul and Tokyo, where we discussed U.S. ethanol policy, import and export capabilities, trends in corn co-products, production of co-products, transportation and uses.  South Korea and Japan are sophisticated buyers of U.S. corn and co-products, so I was surprised to see how much of the livestock industry’s misinformation about ethanol and its impact on feed prices had made it to the Pacific Rim. Thus it became crystal clear to me why it is so vitally important to lend our voice to the overseas discourse and continue to build a relationship with these countries in order to expand the export opportunities for fuel ethanol. We began at a conference in Seoul, South Korea that was attended by more than 100 feed millers, distributers, and animal nutrition practitioners. They raised concerns over the drought and its impact on high corn prices, tight corn supply and U.S. corn exports. Additionally, members of the audience asked about the size of the new crop being planted in the United States and the current delay in planting. We were able to address their concerns, and there was a consensus among U.S. participants at the conference that of the 97 million acres projected to be put into production only about two million would be lost due to late planting. After the conference, we met with a dozen commodity feed buyers and the Korea Feed Association. There were several technical questions about DDGS regarding its composition and nutritional aspects. I was able to give more insight on DDGS and assured them the Renewable Fuels Association will work with the U.S. Grains Council to help provide any additional technical assistance that is needed. After easing concerns over corn production and prices in South Korea, we moved on to Tokyo and made contact with the embassy’s senior agriculture attaché discussing the continued importation of ethanol from the United States. We spoke about the United States’ ability to produce enough ethanol to continue exporting to Japan, and were encouraged by their desire to look into alternatives to nuclear energy. Additionally, we met with the Japan Feed Manufacturers Association and assured them the United States has enough capacity to produce and supply corn for both feed/food and fuel uses, while also having ethanol available for export. Japan has a mandatory target of ethanol use program. Today, most of Japan's ethanol comes from Brazil, but high sugar prices and reduced production there have opened the door to other sources of supply. Japan is expected to import about 400 million gallons by 2017. Additionally, South Korea is just beginning to explore the use of ethanol for fuel. They have a sizable industrial ethanol import market of roughly 70 million gallons annually. We also addressed roughly 200 Japanese trade associations, government employees, and media outlets. The United States is Japan’s largest corn supplier and DDGS has become an important part of feeding livestock in Japan. We promoted the use of DDGS and educated the attendees on its nutritional value. This was a substantive trip and gave me a unique opportunity to discuss and promote the trade of ethanol and its co-products overseas. U.S. agriculture has the ability to meet the food, feed, and fuel needs now and in the future and it is important that we continue to take that message abroad. Corn, DDGS, Brazil, Ethanol, Food, Exports 2013-05-17T17:44:46+00:00